Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Consolidated Financial Statements

Consolidated Statements of Operations			57
Consolidated Statements of Comprehensive Income (Loss)			58
Consolidated Balance Sheets			59
Consolidated Statements of Changes in Equity			60
Consolidated Statements of Cash Flows			61
Notes to Consolidated Financial Statements			62
Report of Independent Registered Public Accounting Firm (PCAOB ID 238)			91

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Micron Technology, Inc.

Consolidated Statements of Operations

(In millions, except per share amounts)

For the year ended			August 31, 2023			September 1, 2022			September 2, 2021
Revenue			$	15,540		$	30,758		$	27,705
Cost of goods sold			16,956			16,860			17,282
Gross margin			(1,416)			13,898			10,423
Research and development			3,114			3,116			2,663
Selling, general, and administrative			920			1,066			894
Restructure and asset impairments			171			48			488
Other operating (income) expense, net			124			(34)			95
Operating income (loss)			(5,745)			9,702			6,283
Interest income			468			96			37
Interest expense			(388)			(189)			(183)
Other non-operating income (expense), net			7			(38)			81
			(5,658)			9,571			6,218
Income tax (provision) benefit			(177)			(888)			(394)
Equity in net income (loss) of equity method investees			2			4			37
Net income (loss)			$	(5,833)		$	8,687		$	5,861
Earnings (loss) per share
Basic			$	(5.34)		$	7.81		$	5.23
Diluted			(5.34)			7.75			5.14
Number of shares used in per share calculations
Basic			1,093			1,112			1,120
Diluted			1,093			1,122			1,141

See accompanying notes to consolidated financial statements.

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Micron Technology, Inc.

Consolidated Statements of Comprehensive Income (Loss)

(In millions)

For the year ended			August 31, 2023			September 1, 2022			September 2, 2021
Net income (loss)			$	(5,833)		$	8,687		$	5,861
Other comprehensive income (loss), net of tax
Gains (losses) on derivative instruments			234			(516)			(67)
Pension liability adjustments			11			3			3
Unrealized gains (losses) on investments			6			(48)			(7)
Foreign currency translation adjustments			(3)			(1)			2
Other comprehensive income (loss)			248			(562)			(69)
Total comprehensive income (loss)			$	(5,585)		$	8,125		$	5,792

See accompanying notes to consolidated financial statements.

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Micron Technology, Inc.

Consolidated Balance Sheets

(In millions, except par value amounts)

As of			August 31, 2023			September 1, 2022
Assets
Cash and equivalents			$	8,577		$	8,262
Short-term investments			1,017			1,069
Receivables			2,443			5,130
Inventories			8,387			6,663
Other current assets			820			657
Total current assets			21,244			21,781
Long-term marketable investments			844			1,647
Property, plant, and equipment			37,928			38,549
Operating lease right-of-use assets			666			678
Intangible assets			404			421
Deferred tax assets			756			702
Goodwill			1,150			1,228
Other noncurrent assets			1,262			1,277
Total assets			$	64,254		$	66,283
Liabilities and equity
Accounts payable and accrued expenses			$	3,958		$	6,090
Current debt			278			103
Other current liabilities			529			1,346
Total current liabilities			4,765			7,539
Long-term debt			13,052			6,803
Noncurrent operating lease liabilities			603			610
Noncurrent unearned government incentives			727			589
Other noncurrent liabilities			987			835
Total liabilities			20,134			16,376
Commitments and contingencies
Shareholders’ equity
Common stock, $0.10 par value, 3,000 shares authorized, 1,239 shares issued and 1,098 outstanding (1,226 shares issued and 1,094 outstanding as of September 1, 2022)			124			123
Additional capital			11,036			10,197
Retained earnings			40,824			47,274
Treasury stock, 141 shares held (132 shares as of September 1, 2022)			(7,552)			(7,127)
Accumulated other comprehensive income (loss)			(312)			(560)
Total equity			44,120			49,907
Total liabilities and equity			$	64,254		$	66,283

See accompanying notes to consolidated financial statements.

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Micron Technology, Inc.

Consolidated Statements of Changes in Equity

(In millions, except per share amounts)

			Common Stock						Additional Capital			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Total Shareholders’ Equity
			Number of Shares			Amount
Balance at September 3, 2020			1,194			$	119		$	8,917		$	33,384		$	(3,495)		$	71		$	38,996
Net income (loss)			—			—			—			5,861			—			—			5,861
Other comprehensive income (loss), net			—			—			—			—			—			(69)			(69)
Stock issued under stock plans			13			2			223			—			—			—			225
Stock-based compensation expense			—			—			378			—			—			—			378
Repurchase of stock - repurchase program			—			—			—			—			(1,200)			—			(1,200)
Repurchase of stock - withholdings on employee equity awards			(2)			—			(12)			(82)			—			—			(94)
Stock issued for convertible notes			11			1			(1)			—			—			—			—
Cash settlement of convertible notes			—			—			(52)			—			—			—			(52)
Dividends and dividend equivalents declared ($0.10 per share)			—			—			—			(112)			—			—			(112)
Balance at September 2, 2021			1,216			$	122		$	9,453		$	39,051		$	(4,695)		$	2		$	43,933
Net income (loss)			—			—			—			8,687			—			—			8,687
Other comprehensive income (loss), net			—			—			—			—			—			(562)			(562)
Stock issued under stock plans			12			1			244			—			—			—			245
Stock-based compensation expense			—			—			514			—			—			—			514
Repurchase of stock - repurchase program			—			—			—			—			(2,432)			—			(2,432)
Repurchase of stock - withholdings on employee equity awards			(2)			—			(14)			(112)			—			—			(126)
Dividends and dividend equivalents declared ($0.315 per share)			—			—			—			(352)			—			—			(352)
Balance at September 1, 2022			1,226			$	123		$	10,197		$	47,274		$	(7,127)		$	(560)		$	49,907
Net income (loss)			—			—			—			(5,833)			—			—			(5,833)
Other comprehensive income (loss), net			—			—			—			—			—			248			248
Stock issued under stock plans			15			1			262			—			—			—			263
Stock-based compensation expense			—			—			596			—			—			—			596
Repurchase of stock - repurchase program			—			—			—			—			(425)			—			(425)
Repurchase of stock - withholdings on employee equity awards			(2)			—			(19)			(108)			—			—			(127)
Dividends and dividend equivalents declared ($0.460 per share)			—			—			—			(509)			—			—			(509)
Balance at August 31, 2023			1,239			$	124		$	11,036		$	40,824		$	(7,552)		$	(312)		$	44,120

See accompanying notes to consolidated financial statements.

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Micron Technology, Inc.

Consolidated Statements of Cash Flows

(In millions)

For the year ended			August 31, 2023			September 1, 2022			September 2, 2021
Cash flows from operating activities
Net income (loss)			$	(5,833)		$	8,687		$	5,861
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation expense and amortization of intangible assets			7,756			7,116			6,214
Provision to write down inventories to net realizable value			1,831			—			—
Stock-based compensation			596			514			378
Goodwill impairment			101			—			—
Restructure and asset impairments			11			44			454
Loss on debt repurchases and conversions			—			83			1
Change in operating assets and liabilities:
Receivables			2,763			190			(1,446)
Inventories			(3,555)			(2,179)			866
Accounts payable and accrued expenses			(2,104)			744			210
Other			(7)			(18)			(70)
Net cash provided by operating activities			1,559			15,181			12,468
Cash flows from investing activities
Expenditures for property, plant, and equipment			(7,676)			(12,067)			(10,030)
Purchases of available-for-sale securities			(723)			(1,770)			(3,163)
Proceeds from maturities of available-for-sale securities			1,566			1,321			1,250
Proceeds from government incentives			710			115			495
Proceeds from sales of available-for-sale securities			25			294			856
Proceeds from sale of Lehi, Utah fab			—			888			—
Other			(93)			(366)			3
Net cash provided by (used for) investing activities			(6,191)			(11,585)			(10,589)
Cash flows from financing activities
Proceeds from issuance of debt			6,716			2,000			1,188
Repayments of debt			(761)			(2,032)			(1,520)
Payments of dividends to shareholders			(504)			(461)			—
Repurchases of common stock - repurchase program			(425)			(2,432)			(1,200)
Payments on equipment purchase contracts			(138)			(141)			(295)
Other			95			86			46
Net cash provided by (used for) financing activities			4,983			(2,980)			(1,781)
Effect of changes in currency exchange rates on cash, cash equivalents, and restricted cash			(34)			(106)			41
Net increase (decrease) in cash, cash equivalents, and restricted cash			317			510			139
Cash, cash equivalents, and restricted cash at beginning of period			8,339			7,829			7,690
Cash, cash equivalents, and restricted cash at end of period			$	8,656		$	8,339		$	7,829
Supplemental disclosures
Income taxes paid, net			$	(532)		$	(493)		$	(361)
Interest paid, net of amounts capitalized			(323)			(154)			(171)
Noncash equipment acquisitions on contracts payable			165			157			289

See accompanying notes to consolidated financial statements.

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Micron Technology, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All tabular amounts in millions, except per share amounts)

Significant Accounting Policies

Basis of Presentation

We are an industry leader in innovative memory and storage solutions transforming how the world uses information to enrich life for all. With a relentless focus on our customers, technology leadership, and manufacturing and operational excellence, Micron delivers a rich portfolio of high-performance DRAM, NAND, and NOR memory and storage products through our Micron® and Crucial® brands. Every day, the innovations that our people create fuel the data economy, enabling advances in artificial intelligence and 5G applications that unleash opportunities — from the data center to the intelligent edge and across the client and mobile user experience.

The accompanying consolidated financial statements include the accounts of Micron Technology, Inc. and our consolidated subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America. Intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made to prior period amounts to conform to current period presentation. See “Inventories” below for changes to our significant accounting policies, and the “Inventories” note for additional information.

Our fiscal year is the 52 or 53-week period ending on the Thursday closest to August 31. Fiscal 2023, 2022, and 2021 each contained 52 weeks. All period references are to our fiscal periods unless otherwise indicated.

Derivative and Hedging Instruments

We use derivative instruments to manage our exposure to changes in currency exchange rates from (1) our monetary assets and liabilities denominated in currencies other than the U.S. dollar and (2) forecasted cash flows for certain capital expenditures and manufacturing costs. We also use derivative instruments to manage our exposure to changes in commodity prices for manufacturing supplies and to minimize certain exposures to changes in the fair value of fixed-rate debt that result from fluctuations in benchmark interest rates. Derivative instruments are measured at their fair values and recognized as either assets or liabilities.

The accounting for changes in the fair value of derivative instruments is based on the intended use of the derivative and the resulting designation. For derivative instruments that are not designated for hedge accounting, gains or losses from changes in fair values are recognized in other non-operating income (expense) and cash flows are classified as investing activities in the statement of cash flows. For derivative instruments designated as cash flow hedges, gains or losses are included as a component of accumulated other comprehensive income and reclassified into earnings in the same line items and in the same periods in which the underlying transactions affect earnings. For derivative instruments designated as cash flow hedges, time value is excluded from the assessment of effectiveness and the gains and losses attributable to time value are recognized in earnings through an amortization approach. For derivative instruments designated as fair value hedges, changes in the fair values of the derivative instruments and the offsetting changes in the fair values of the underlying hedged items are both recognized in earnings. Cash flows from derivative instruments designated as cash flow hedges or fair value hedges are classified in the same category as the items being hedged.

We enter into master netting arrangements with our counterparties to mitigate credit risk in derivative hedge transactions. These master netting arrangements allow us and our counterparties to net settle amounts owed to each other. Derivative assets and liabilities that can be net settled with each counterparty have been presented in our consolidated balance sheet on a net basis.

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Financial Instruments

Cash equivalents include highly liquid short-term investments with original maturities to us of three months or less that are readily convertible to known amounts of cash. Other investments with remaining maturities of less than one year are included in short-term investments. Investments with remaining maturities greater than one year are included in long-term marketable investments. The carrying value of investment securities sold is determined using the specific identification method.

Functional Currency

The U.S. dollar is the functional currency for us and all of our consolidated subsidiaries.

Goodwill

We perform an annual impairment assessment for goodwill in our fourth quarter each year.

Government Incentives

We receive incentives from governmental entities related to capital expenditures, expenses, and other activities. Our government incentives may require that we meet or maintain specified spending levels and other operational metrics and may be subject to reimbursement if such conditions are not met or maintained. Government incentives are recorded in the financial statements in accordance with their purpose: as a reduction of asset costs or a reduction of expenses. Incentives related to the acquisition or construction of fixed assets are recognized as a reduction in the carrying amounts of the related assets and reduce depreciation expense over the useful lives of the assets. Incentives related to specific operating activities are offset against the related expense in the period the expense is incurred. Government incentives received prior to being earned are recognized in current or noncurrent deferred income or restricted cash, whereas government incentives earned prior to being received are recognized in current or noncurrent receivables. Cash received from government incentives related to operating expenses is included as an operating activity in the statement of cash flows, whereas cash received from incentives related to the acquisition of property, plant, and equipment is included as an investing activity.

Inventories

Effective as of the beginning of the second quarter of 2021, we changed the method of inventory costing from average cost to FIFO. The difference between average cost and FIFO was not material to any previously reported financial statements. Therefore, we have recognized the cumulative effect of the change as a reduction of inventories and a charge to cost of goods sold of $133 million as of the beginning of the second quarter of 2021.

Inventories are stated at the lower of cost or net realizable value, with cost being determined on a FIFO basis. Cost includes depreciation, labor, material, and overhead costs, including product and process technology costs. Determining net realizable value of finished goods and work in process inventories requires projecting future average selling prices, sales volumes, and costs per part. When net realizable value is below cost, we record a charge to cost of goods sold to write down inventories to their estimated net realizable value in advance of when inventories are actually sold. We review the major characteristics of product type and markets in determining the unit of account for which we perform the lower of cost or net realizable value analysis and categorize all inventories (including DRAM, NAND, and other memory) as a single group.

Leases

We determine if an arrangement is a lease, or contains a lease, at the inception of the arrangement and evaluate whether the lease is an operating lease or a finance lease at the commencement date. We recognize right-of-use assets and lease liabilities for operating and finance leases with terms greater than 12 months. Right-of-use assets represent our right to use an asset for the lease term, while lease liabilities represent our obligation to make lease payments. We do not separate lease and non-lease components for real-estate and gas plant leases. Sublease income is included within lease expense.

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Product and Process Technology

Costs incurred to (1) acquire product and process technology, (2) patent technology, and (3) maintain patent technology, are capitalized and amortized on a straight-line basis over periods ranging up to 12.5 years. We capitalize a portion of costs incurred to patent technology based on historical data of patents issued as a percent of patents we file. Product and process technology costs are amortized over the shorter of (1) the estimated useful life of the technology, (2) the patent term, or (3) the term of the technology agreement. Fully-amortized assets are removed from product and process technology and accumulated amortization.

Product Warranty

We generally provide a limited warranty that our products are in compliance with applicable specifications existing at the time of delivery. Under our standard terms and conditions of sale, liability for certain failures of product during a stated warranty period is usually limited to repair or replacement of defective items or return of, or a credit with respect to, amounts paid for such items. Under certain circumstances, we provide more extensive limited warranty coverage than that provided under our standard terms and conditions. Our warranty obligations are not material.

Property, Plant, and Equipment

Property, plant, and equipment is stated at cost and depreciated using the straight-line method over estimated useful lives of generally 10 to 30 years for buildings, 7 years for production equipment, up to 7 years for other equipment, and 3 to 5 years for software. Assets held for sale are carried at the lower of estimated fair value or carrying value and are included in current assets. When property, plant, or equipment is retired or otherwise disposed, the net book value is removed and we recognize any gain or loss in results of operations.

We capitalize interest on borrowings during the period of time we carry out the activities necessary to bring assets to the condition of their intended use and location. Capitalized interest becomes part of the cost of assets.

Research and Development

Costs related to the conceptual formulation and design of products and processes are charged to R&D expense as incurred. Development of a product is deemed complete when it is qualified through reviews and tests for performance and reliability. Subsequent to product qualification, product costs are included in cost of goods sold. Amounts from cost-sharing arrangements are reflected as a reduction of R&D expense.

Revenue Recognition

Revenue is primarily recognized at a point in time when control of the promised goods is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those goods. Contracts with our customers are generally short-term in duration at fixed, negotiated prices with payment generally due shortly after delivery. We estimate a liability for returns using the expected value method based on historical returns. In addition, we generally offer price protection to our distributors, which is a form of variable consideration that decreases the transaction price. We use the expected value method, based on historical price adjustments and current pricing trends, to estimate the amount of revenue recognized from sales to distributors. Differences between the estimated and actual amounts are recognized as adjustments to revenue.

Stock-based Compensation

Stock-based compensation is measured at the grant date, based on the fair value of the award, and recognized as expense under the straight-line attribution method over the requisite service period. We account for forfeitures as they occur. We issue new shares upon the exercise of stock options, conversion of share units, or issuance of shares under our ESPP.

Treasury Stock

Treasury stock is carried at cost. When we retire our treasury stock, any excess of the repurchase price paid over par value is allocated between additional capital and retained earnings.

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Use of Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires our management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures. Estimates and judgments are based on historical experience, forecasted events, and various other assumptions that we believe to be reasonable under the circumstances. Estimates and judgments may differ under different assumptions or conditions. We evaluate our estimates and judgments on an ongoing basis. Actual results could differ from estimates.

Lehi, Utah Fab and 3D XPoint

In 2021, we updated our portfolio strategy to further strengthen our focus on memory and storage innovations for the data center market. In connection therewith, we determined that there was insufficient market validation to justify the ongoing investments required to commercialize 3D XPoint at scale. Accordingly, we ceased development of 3D XPoint technology and engaged in discussions for the sale of our facility located in Lehi, Utah that was dedicated to 3D XPoint production. As a result, we classified the property, plant, and equipment as held for sale in 2021, ceased depreciating the assets, and recognized a $435 million restructure and asset impairment charge and a $104 million tax benefit.

We closed the sale of our Lehi facility to TI in 2022 for $893 million and disposed of $918 million of net assets, consisting primarily of property, plant, and equipment, resulting in a $23 million loss, net of selling expenses and other adjustments.

Variable Interest Entities

A number of special purpose entities (the "Lease SPEs") were created by a third-party to facilitate equipment lease financing transactions between us and financial institutions that fund the lease financing transactions ("Financing Entities"). Neither we nor the Financing Entities have an equity interest in the Lease SPEs. The Lease SPEs are variable interest entities because their equity is not sufficient to permit them to finance their activities without additional support from the Financing Entities and because the third-party equity holder lacks characteristics of a controlling financial interest. By design, the arrangements with the Lease SPEs are merely financing vehicles and we do not bear any significant risks from variable interests with the Lease SPEs. We have determined that we do not have the power to direct the activities of the Lease SPEs that most significantly impact their economic performance and we do not consolidate the Lease SPEs.

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Cash and Investments

All of our short-term investments and long-term marketable investments were classified as available-for-sale as of the dates noted below. Cash and equivalents and the fair values of our available-for-sale investments, which approximated amortized costs, were as follows:

			As of August 31, 2023															As of September 1, 2022
			Cash and Equivalents			Short-term Investments			Long-term Marketable Investments(1)			Total Fair Value						Cash and Equivalents			Short-term Investments			Long-term Marketable Investments(1)			Total Fair Value
Cash			$	5,771		$	—		$	—		$	5,771					$	6,055		$	—		$	—		$	6,055
Level 1(2)
Money market funds			1,629			—			—			1,629						1,196			—			—			1,196
Level 2(3)
Certificates of deposit			1,172			25			—			1,197						976			50			—			1,026
Corporate bonds			—			737			437			1,174						—			759			995			1,754
Asset-backed securities			—			15			387			402						—			20			608			628
Government securities			5			131			20			156						2			155			44			201
Commercial paper			—			109			—			109						33			85			—			118
			8,577			$	1,017		$	844		$	10,438					8,262			$	1,069		$	1,647		$	10,978
Restricted cash(4)			79															77
Cash, cash equivalents, and restricted cash			$	8,656														$	8,339

*(1)*The maturities of long-term marketable investments primarily range from one to five years, except for asset-backed securities which are not due at a single maturity date.

(2)The fair value of Level 1 securities is measured based on quoted prices in active markets for identical assets.

*(3)*The fair value of Level 2 securities is measured using information obtained from pricing services, which obtain quoted market prices for similar instruments, non-binding market consensus prices that are corroborated by observable market data, or various other methodologies, to determine the appropriate value at the measurement date. We perform supplemental analysis to validate information obtained from these pricing services. No adjustments were made to the fair values indicated by such pricing information as of August 31, 2023 or September 1, 2022.

*(4)*Restricted cash is included in other current assets and other noncurrent assets and primarily relates to certain government incentives received prior to being earned and for which restrictions lapse upon achieving certain performance conditions or which will be returned if performance conditions are not met.

Gross realized gains and losses from sales of available-for-sale securities were not significant for any period presented.

Non-marketable Equity Investments

In addition to the amounts included in the table above, we had $218 million and $222 million of non-marketable equity investments without a readily determinable fair value that were included in other noncurrent assets as of August 31, 2023 and September 1, 2022, respectively. For non-marketable investments, we recognized in other non-operating income (expense) a net loss of $7 million for 2023 and net gains of $36 million for 2022 and $70 million for 2021. Our non-marketable equity investments are recorded at fair value on a non-recurring basis and classified as Level 3.

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Receivables

As of			August 31, 2023			September 1, 2022
Trade receivables			$	2,048		$	4,765
Income and other taxes			194			251
Other			201			114
			$	2,443		$	5,130

Inventories

As of			August 31, 2023			September 1, 2022
Finished goods			$	1,616		$	1,028
Work in process			6,111			4,830
Raw materials and supplies			660			805
			$	8,387		$	6,663

In 2023, we recorded charges of $1.83 billion to cost of goods sold to write down the carrying value of work in process and finished goods inventories to their estimated net realizable value.

Effective as of the beginning of the second quarter of 2021, we changed our method of inventory costing from average cost to FIFO. This change in accounting principle is preferable because in an environment with continuously changing production costs FIFO more closely matches the actual cost of goods sold with the revenues from sales of those specific units, better represents the actual cost of inventories remaining on hand at any period-end, and improves comparability with our semiconductor industry peers. The change to FIFO was not material to any prior periods, nor was the cumulative effect of $133 million material to the second quarter of 2021. As such, prior periods were not retrospectively adjusted, and the cumulative effect was reported as an increase to cost of goods sold for the second quarter of 2021 of $133 million, with an offsetting reduction to beginning inventories. This charge resulted in a corresponding reduction to operating income (loss), a $128 million reduction to net income (loss), and an $0.11 reduction to diluted earnings per share for both the second quarter and the year ended 2021.

Property, Plant, and Equipment

As of			August 31, 2023			September 1, 2022
Land			$	283		$	280
Buildings			17,967			16,676
Equipment(1)			65,555			61,354
Construction in progress(2)			2,464			1,897
Software			1,316			1,124
			87,585			81,331
Accumulated depreciation			(49,657)			(42,782)
			$	37,928		$	38,549

*(1)*Includes costs related to equipment not placed into service of $2.91 billion as of August 31, 2023 and $3.35 billion as of September 1, 2022.

*(2)*Includes building-related construction, tool installation, and software costs for assets not placed into service.

Depreciation expense was $7.67 billion, $7.03 billion, and $6.13 billion for 2023, 2022, and 2021, respectively. Interest capitalized as part of the cost of property, plant, and equipment was $208 million, $77 million, and $66 million for 2023, 2022, and 2021, respectively.

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Intangible Assets

			As of August 31, 2023												As of September 1, 2022
			Gross Amount			Accumulated Amortization			Net Carrying Amount						Gross Amount			Accumulated Amortization			Net Carrying Amount
Product and process technology			$	613		$	(209)		$	404					$	742		$	(321)		$	421

In 2023, 2022, and 2021, we capitalized $87 million, $158 million, and $106 million, respectively, for product and process technology with weighted-average useful lives of 9 years. Amortization expense was $86 million, $85 million, and $82 million for 2023, 2022, and 2021, respectively. Expected amortization expense is $75 million for 2024, $51 million for 2025, $47 million for 2026, $43 million for 2027, and $42 million for 2028.

Goodwill

As of			August 31, 2023			September 1, 2022
Goodwill			$	1,150		$	1,228

In the fourth quarter of 2023, we recognized a charge of $101 million included in other operating income (loss) to impair all of the goodwill assigned to our SBU reporting unit based on a quantitative assessment for impairment. We evaluated the fair value of our reporting units for the assessment based on an income approach, which uses a discounted cash flow methodology. The impairment of SBU goodwill reflects lower forecasted cash flows for SBU as a result of adverse conditions in the storage industry environment due to weak demand in many end markets combined with global and macroeconomic challenges and lower demand resulting from customer actions to reduce elevated inventory levels. These conditions led to significant reductions in SBU’s average selling prices and bit shipments, driving declines in revenue and cash flows. The quantitative assessment for impairment indicated that the fair value for all of our other reporting units substantially exceeded their carrying value.

As of August 31, 2023, CNBU, MBU, and EBU had goodwill of $855 million, $198 million, and $97 million, respectively. As of September 1, 2022, CNBU, MBU, SBU, and EBU had goodwill of $832 million, $198 million, $101 million, and $97 million, respectively. The Company added $23 million of goodwill to CNBU from an acquisition in the third quarter of 2023.

Leases

We have finance and operating leases through which we obtain the right to use facilities, land, and equipment that support our business operations. Our finance leases consist primarily of (i) gas and other supply agreements that are deemed to contain embedded leases and (ii) equipment leases. Our operating leases consist primarily of offices, laboratories, other facilities, and land. Certain of our operating leases include one or more options to extend the lease term for periods from one year to 10 years for real estate and one year to 99 years for land.

Certain supply or service agreements require us to exercise significant judgment to determine whether the agreement contains a lease. Our assessment includes determining whether we or the supplier control the assets used to fulfill the agreements by identifying whether we or the supplier have the right to change the type, quantity, timing, or location of the output of the assets. Our gas supply arrangements generally are deemed to contain a lease because we have the right to substantially all of the output of the assets used to produce the supply and we have the right to change the quantity and timing of the output of those assets. In determining the lease term, we assess whether we are reasonably certain to exercise any options to renew or terminate a lease or to purchase the right-of-use asset. Measuring the present value of the initial lease liability requires judgment to determine the discount rate, which we base on interest rates for borrowings with similar terms and collateral issued by entities with credit ratings similar to ours.

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The components of lease cost are presented below:

For the year ended			2023			2022			2021
Finance lease cost
Amortization of right-of-use asset			$	105		$	99		$	69
Interest on lease liability			24			24			20
Operating lease cost(1)			137			125			108
			$	266		$	248		$	197

*(1)*Operating lease cost includes short-term and variable lease expenses, which were not material for the periods presented.

Supplemental cash flow information related to leases was as follows:

For the year ended			2023			2022			2021
Cash flows used for operating activities
Finance leases			$	24		$	23		$	21
Operating leases			139			110			106
Cash flows used for financing activities – Finance leases			109			103			85
Noncash acquisitions of right-of-use assets
Finance leases			508			309			395
Operating leases			57			197			27

Supplemental balance sheet information related to leases was as follows:

As of			August 31, 2023			September 1, 2022
Finance lease right-of-use assets (included in property, plant, and equipment)			$	1,311		$	904
Current operating lease liabilities (included in accounts payable and accrued expenses)			66			60
Weighted-average remaining lease term (in years)
Finance leases			9			12
Operating leases			11			12
Weighted-average discount rate
Finance leases			3.86		%	2.65		%
Operating leases			3.21		%	2.90		%

As of August 31, 2023, maturities of lease liabilities by fiscal year were as follows:

For the year ending			Finance Leases			Operating Leases
2024			$	219		$	62
2025			200			77
2026			190			76
2027			185			76
2028			178			74
2029 and thereafter			506			453
Less imputed interest			(197)			(149)
			$	1,281		$	669

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The table above excludes obligations for leases that have been executed but have not yet commenced. As of August 31, 2023, excluded obligations consisted of $170 million of finance lease obligations over a weighted-average period of 12 years for gas supply arrangements deemed to contain embedded leases and equipment leases. We will recognize right-of-use assets and associated lease liabilities at the time such assets become available for our use.

Accounts Payable and Accrued Expenses

As of			August 31, 2023			September 1, 2022
Accounts payable			$	1,725		$	2,142
Property, plant, and equipment			1,419			2,170
Salaries, wages, and benefits			367			877
Income and other taxes			67			420
Other			380			481
			$	3,958		$	6,090

Debt

			As of August 31, 2023																					As of September 1, 2022
												Net Carrying Amount															Net Carrying Amount
			Stated Rate			Effective Rate			Principal			Current			Long-Term			Total						Principal			Current			Long-Term			Total
2024 Term Loan A			6.146		%	6.18		%	$	588		$	—		$	587		$	587					$	1,188		$	—		$	1,187		$	1,187
2025 Term Loan A			6.681		%	6.82		%	1,052			—			1,050			1,050						—			—			—			—
2026 Term Loan A			6.806		%	6.94		%	971			49			921			970						—			—			—			—
2027 Term Loan A			6.931		%	7.07		%	1,123			57			1,063			1,120						—			—			—			—
2026 Notes			4.975		%	5.07		%	500			—			499			499						500			—			498			498
2027 Notes(1)			4.185		%	4.27		%	900			—			798			798						900			—			806			806
2028 Notes			5.375		%	5.52		%	600			—			596			596						—			—			—			—
2029 A Notes			5.327		%	5.40		%	700			—			697			697						700			—			697			697
2029 B Notes			6.750		%	6.54		%	1,250			—			1,263			1,263						—			—			—			—
2030 Notes			4.663		%	4.73		%	850			—			846			846						850			—			846			846
2032 Green Bonds			2.703		%	2.77		%	1,000			—			995			995						1,000			—			994			994
2033 A Notes			5.875		%	5.96		%	750			—			745			745						—			—			—			—
2033 B Notes			5.875		%	6.01		%	900			—			890			890						—			—			—			—
2041 Notes			3.366		%	3.41		%	500			—			497			497						500			—			496			496
2051 Notes			3.477		%	3.52		%	500			—			496			496						500			—			496			496
Finance lease obligations			N/A			3.86		%	1,281			172			1,109			1,281						886			103			783			886
									$	13,465		$	278		$	13,052		$	13,330					$	7,024		$	103		$	6,803		$	6,906

(1) In 2021, we entered into fixed-to-floating interest rate swaps on the 2027 Notes with an aggregate $900 million notional amount equal to the principal amount of the 2027 Notes. The resulting variable interest paid is at a rate equal to SOFR plus approximately 3.33%. The fixed-to-floating interest rate swaps are accounted for as fair value hedges, and as a result, the carrying values of our 2027 Notes reflect adjustments in fair value.

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As of August 31, 2023, all of our debt, other than finance lease obligations, were unsecured obligations that rank equally in right of payment with all of our other existing and future unsecured indebtedness and were effectively subordinated to all future secured indebtedness, to the extent of the value of the assets securing such indebtedness. All our unsecured debt were obligations of our parent company, Micron, and were structurally subordinated to all liabilities of its subsidiaries, including trade payables. The terms of our indebtedness generally contain cross payment default and cross acceleration provisions. Micron’s guarantees of certain liabilities of its subsidiaries are unsecured obligations ranking equally in right of payment with all of Micron’s other existing and future unsecured indebtedness.

Debt Activity

The table below presents the effects of debt financing and prepayment activities in 2023:

			Transaction Date			Increase (Decrease) in Principal			Increase (Decrease) in Carrying Value			Increase (Decrease) in Cash
Issuances
2029 B Notes			October 31, 2022			$	750		$	744		$	744
2025 Term Loan A			November 3, 2022			927			925			925
2026 Term Loan A			November 3, 2022			746			745			745
2027 Term Loan A			November 3, 2022			927			924			924
2025 Term Loan A			January 5, 2023			125			125			125
2026 Term Loan A			January 5, 2023			250			249			249
2027 Term Loan A			January 5, 2023			225			225			225
2029 B Notes			February 9, 2023			500			520			520
2033 A Notes			February 9, 2023			750			745			745
2028 Notes			April 11, 2023			600			596			596
2033 B Notes			April 11, 2023			900			890			890
Prepayments
2024 Term Loan A			April 13, 2023			(600)			(600)			(600)
						$	6,100		$	6,088		$	6,088

In 2022, we issued $2.00 billion of senior unsecured notes and received cash of $1.99 billion. The approximate $1.00 billion of net proceeds from the issuance of the 2032 Green Bonds are being used to fund eligible sustainability-focused projects. The remaining proceeds, along with cash on hand, were used to repay $1.85 billion of principal amount of notes (carrying value of $1.85 billion) for $1.93 billion in cash. We recognized losses of $83 million in connection with these repayments.

In 2021, substantially all holders of our 2032D Notes converted their notes. We settled these conversions and all remaining 2032D Notes with $185 million in cash and 11.1 million shares of our stock, which approximated the carrying value of debt and equity for those notes.

Senior Unsecured Notes

We may redeem our 2026 Notes, 2027 Notes, 2028 Notes, 2029 A Notes, 2029 B Notes, 2030 Notes, 2032 Green Bonds, 2033 A Notes, 2033 B Notes, 2041 Notes, and 2051 Notes (the “Senior Unsecured Notes”), in whole or in part, at our option prior to their respective maturity dates at a redemption price equal to the greater of (i) 100% of the principal amount of the notes to be redeemed and (ii) the present value of the remaining scheduled payments of principal and interest, in each case plus accrued interest. We may also redeem any series of our Senior Unsecured Notes, in whole or in part, at a price equal to par between one and six months prior to maturity in accordance with the respective terms of such series.

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Each series of Senior Unsecured Notes contains covenants that, among other things, limit, in certain circumstances, our ability and/or the ability of our restricted subsidiaries (which are generally domestic subsidiaries in which we own at least 80% of the voting stock and which own principal property, as defined in the indenture governing such series) to (1) create or incur certain liens; (2) enter into certain sale and lease-back transactions; and (3) consolidate with or merge with or into, or convey, transfer, or lease all or substantially all of our properties and assets, to another entity. These covenants are subject to a number of limitations and exceptions. Additionally, if a change of control triggering event, as defined in the indentures governing our Senior Unsecured Notes, occurs with respect to a series of Senior Unsecured Notes, we will be required to offer to purchase such Senior Unsecured Notes at 101% of the outstanding aggregate principal amount plus accrued interest up to the purchase date.

2032 Green Bonds: We plan to allocate an amount equal to the approximate $1.00 billion of net proceeds of our unsecured 2032 Green Bonds by November 1, 2023, to fund eligible sustainability-focused projects involving renewable energy, green buildings, energy efficiency, water management, waste abatement, and a circular economy.

Multi-Tranche Term Loan A

In 2023, we entered into a term loan agreement consisting of three tranches (the “Multi-Tranche Term Loan Agreement”) and borrowed $3.20 billion in aggregate principal amount. The tranches mature on November 3, 2025 (“2025 Term Loan A”); November 3, 2026 (“2026 Term Loan A”); and November 3, 2027 (“2027 Term Loan A”).

The 2026 Term Loan A and 2027 Term Loan A each require equal quarterly installment payments in an amount equal to 1.25% of the original principal amount. The 2025 Term Loan A does not require quarterly installment payments. Borrowings under the Multi-Tranche Term Loan Agreement will generally bear interest at adjusted term SOFR plus an applicable interest rate margin ranging from 1.00% to 2.00%, varying by tranche and depending on our corporate credit ratings. Adjusted term SOFR for the Multi-Tranche Term Loan Agreement is the SOFR benchmark plus 0.10%.

The Multi-Tranche Term Loan Agreement requires us to maintain, on a consolidated basis, a leverage ratio of total indebtedness to adjusted EBITDA, as defined in the Multi-Tranche Term Loan Agreement and calculated as of the last day of each fiscal quarter, not to exceed 3.25 to 1.00. On March 27, 2023, we amended the Multi-Tranche Term Loan Agreement to provide that in lieu of the foregoing leverage ratio, during the fourth quarter of 2023 and each quarter of 2024, we will be required to maintain, on a consolidated basis, a net leverage ratio of total net indebtedness to adjusted EBITDA, as defined in the Multi-Tranche Term Loan Agreement and calculated as of the last day of each fiscal quarter, not to exceed 3.25 to 1.00. Alternatively, for up to three of such five quarters, we may elect to comply with a requirement of minimum liquidity, as defined in the Multi-Tranche Term Loan Agreement, of not less than $5.0 billion. In the fourth quarter of 2023, we complied with the net leverage ratio. Each of the leverage ratio and net leverage ratio maximums, as applicable, is subject to a temporary four quarter increase in such ratio to 3.75 to 1.00 following certain material acquisitions.

The Multi-Tranche Term Loan Agreement contains other covenants that, among other things, limit, in certain circumstances, our ability and/or the ability of our restricted subsidiaries to (1) create or incur certain liens and enter into sale and lease-back transactions, (2) create, assume, incur, or guarantee certain additional secured indebtedness and unsecured indebtedness of our restricted subsidiaries, and (3) consolidate with or merge with or into, or convey, transfer, lease, or otherwise dispose of all or substantially all of our assets, to another entity. These covenants are subject to a number of limitations, exceptions, and qualifications. Our obligations under the Multi-Tranche Term Loan Agreement are unsecured.

2024 Term Loan A

On April 13, 2023, we used a portion of the proceeds from our April 2023 issuance of senior unsecured notes to prepay $600 million principal amount of our 2024 Term Loan A.

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On June 7, 2023, the 2024 Term Loan A agreement was amended, pursuant to its transition provisions, to replace LIBOR-based benchmark rates with SOFR-based benchmark rates effective July 1, 2023. Subsequent to this amendment, borrowings under the 2024 Term Loan Agreement generally bear interest at adjusted term SOFR plus an applicable interest rate margin ranging from 0.625% to 1.375% depending on our corporate credit ratings. Adjusted term SOFR for the 2024 Term Loan A is the SOFR benchmark plus a credit spread adjustment ranging from approximately 0.11% to 0.43% depending on the applicable interest period selected. Prior to July 1, 2023, the 2024 Term Loan A bore interest at a rate equal to LIBOR plus 0.625% to 1.375% based on our corporate credit ratings.

The 2024 Term Loan A agreement contains the same leverage ratio, as amended, and substantially the same other covenants as the Multi-Tranche Term Loan Agreement. Our obligations under the 2024 Term Loan A agreement are unsecured.

Revolving Credit Facility

As of August 31, 2023, no amounts were outstanding under the Revolving Credit Facility and $2.50 billion was available to us. Under the Revolving Credit Facility, borrowings would generally bear interest at a rate equal to adjusted term SOFR plus 1.00% to 1.75%, depending on our corporate credit ratings. Adjusted term SOFR for the Revolving Credit Facility agreement is the SOFR benchmark plus a credit spread adjustment ranging from approximately 0.11% to 0.43% depending on the applicable interest period selected. Any amounts outstanding under the Revolving Credit Facility would mature in May 2026 and amounts borrowed may be prepaid without penalty.

The Revolving Credit Facility contains the same leverage ratio, as amended, and substantially the same other covenants as the Multi-Tranche Term Loan Agreement.

Maturities of Notes Payable

As of August 31, 2023, maturities of notes payable by fiscal year were as follows:

2024			$	107
2025			695
2026			1,659
2027			1,780
2028			1,493
2029 and thereafter			6,450
Unamortized issuance costs, discounts, and premium, net			(35)
Hedge accounting fair value adjustment			(100)
			$	12,049

Commitments

As of August 31, 2023, we had noncancelable commitments with remaining contractual terms in excess of one year of approximately $6.7 billion for purchase obligations, of which approximately $1.2 billion will be due in 2024, $1.4 billion due in 2025, $1.0 billion due in 2026, $1.0 billion due in 2027, $700 million due in 2028, and $1.4 billion due in 2029 and thereafter. Purchase obligations primarily include payments for goods or services with either a fixed or minimum quantity and price, which includes payments for the acquisition of property, plant, and equipment. Payments for leases that have been executed but have not yet commenced are excluded.

In 2023, we entered into an 18-year power purchase agreement in Singapore to purchase up to 450 megawatts of power at predominantly variable prices. This contract is expected to supply the majority of our power consumption needs in Singapore with more favorable pricing than our previous supply arrangements.

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Contingencies

We are currently a party to legal actions other than those described below arising from the normal course of business, none of which are expected to have a material adverse effect on our business, results of operations, or financial condition.

Patent Matters

As is typical in the semiconductor and other high-tech industries, from time to time, others have asserted, and may in the future assert, that our products or manufacturing processes infringe upon their intellectual property rights.

On March 19, 2018, Micron Semiconductor (Xi’an) Co., Ltd. (“MXA”) was served with a patent infringement complaint filed by Fujian Jinhua Integrated Circuit Co., Ltd. (“Jinhua”) in the Fuzhou Intermediate People’s Court in Fujian Province, China (the “Fuzhou Court”). On April 3, 2018, Micron Semiconductor (Shanghai) Co. Ltd. (“MSS”) was served with the same complaint. The complaint alleges that MXA and MSS infringed one Chinese patent by manufacturing and selling certain Crucial DDR4 DRAM modules. The complaint seeks an order requiring MXA and MSS to destroy inventory of the accused products and equipment for manufacturing the accused products in China; to stop manufacturing, using, selling, and offering for sale the accused products in China; and to pay damages of 98 million Chinese yuan plus court fees incurred.

On March 21, 2018, MXA was served with a patent infringement complaint filed by United Microelectronics Corporation (“UMC”) in the Fuzhou Court. On April 3, 2018, MSS was served with the same complaint. The complaint alleges that MXA and MSS infringed one Chinese patent by manufacturing and selling certain Crucial DDR4 DRAM modules. The complaint seeks an order requiring MXA and MSS to destroy inventory of the accused products and equipment for manufacturing the accused products in China; to stop manufacturing, using, selling, and offering for sale the accused products in China; and to pay damages of 90 million Chinese yuan plus court fees incurred. On November 26, 2021, pursuant to a settlement agreement between UMC and Micron, UMC filed an application to the Fuzhou Court to withdraw its complaints against MXA and MSS.

On April 3, 2018, MSS was served with another patent infringement complaint filed by Jinhua and an additional complaint filed by UMC in the Fuzhou Court. The additional complaints allege that MSS infringes two Chinese patents by manufacturing and selling certain Crucial MX300 SSDs. The complaint filed by UMC seeks an order requiring MSS to destroy inventory of the accused products and equipment for manufacturing the accused products in China; to stop manufacturing, using, selling, and offering for sale the accused products in China; and to pay damages of 90 million Chinese yuan plus court fees incurred. The complaint filed by Jinhua seeks an order requiring MSS to destroy inventory of the accused products and equipment for manufacturing the accused products in China; to stop manufacturing, using, selling, and offering for sale the accused products in China; and to pay damages of 98 million Chinese yuan plus court fees incurred. On November 26, 2021, pursuant to a settlement agreement between UMC and Micron, UMC filed an application to the Fuzhou Court to withdraw its complaint against MSS.

On July 5, 2018, MXA and MSS were notified that the Fuzhou Court granted a preliminary injunction against those entities that enjoins them from manufacturing, selling, or importing certain Crucial and Ballistix-branded DRAM modules and solid-state drives in China. We are complying with the ruling and have requested the Fuzhou Court to reconsider or stay its decision.

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On April 28, 2021, Netlist, Inc. (“Netlist”) filed two patent infringement actions against Micron, Micron Semiconductor Products, Inc. (“MSP”), and Micron Technology Texas, LLC (“MTEC”) in the U.S. District Court for the Western District of Texas. The first complaint alleges that one U.S. patent is infringed by certain of our non-volatile dual in-line memory modules. The second complaint alleges that three U.S. patents are infringed by certain of our load-reduced dual in-line memory modules (“LRDIMMs”). Each complaint seeks injunctive relief, damages, attorneys’ fees, and costs. On March 31, 2022, Netlist filed a patent infringement complaint against Micron and Micron Semiconductor Germany, GmbH in Dusseldorf Regional Court alleging that two German patents are infringed by certain of our LRDIMMs. The complaint seeks damages, costs, and injunctive relief. On June 10, 2022, Netlist filed a patent infringement complaint against Micron, MSP, and MTEC in the U.S. District Court for the Eastern District of Texas (“E.D. Tex.”) alleging that six U.S. patents are infringed by certain of our memory modules and HBM products. On August 1, 2022, Netlist filed a second patent infringement complaint against the same defendants in E.D. Tex. alleging that one U.S. patent is infringed by certain of our LRDIMMs. On August 15, 2022, Netlist amended the second complaint to assert that two additional U.S. patents are infringed by certain of our LRDIMMs. The complaints in E.D. Tex. seek injunctive relief, damages, and attorneys’ fees.

On August 16, 2022, Sonrai Memory Ltd. filed a patent infringement action against Micron in the U.S. District Court for the Western District of Texas. The complaint alleges that two U.S. patents are infringed by certain SSD and NAND flash products. The complaint seeks damages, attorneys’ fees, and costs.

On January 23, 2023, Besang Inc. filed a patent infringement complaint against Micron in the U.S. District Court for the Eastern District of Texas. The complaint alleges that one U.S. patent is infringed by certain of our 3D NAND and SSD products. The complaint seeks an injunction, damages, attorneys’ fees, and costs.

Among other things, the above lawsuits pertain to substantially all of our DRAM, NAND, and other memory and storage products we manufacture, which account for substantially all of our revenue.

Qimonda

On January 20, 2011, Dr. Michael Jaffé, administrator for Qimonda’s insolvency proceedings, filed suit against Micron and Micron Semiconductor B.V. (“Micron B.V.”), in the District Court of Munich, Civil Chamber. The complaint sought to void, under Section 133 of the German Insolvency Act, a share purchase agreement between Micron B.V. and Qimonda signed in fall 2008, pursuant to which Micron B.V. purchased substantially all of Qimonda’s shares of Inotera (the “Inotera Shares”), representing approximately 18% of Inotera’s outstanding shares at that time, and sought an order requiring us to re-transfer those shares to the Qimonda estate. The complaint also sought, among other things, to recover damages for the alleged value of the joint venture relationship with Inotera and to terminate, under Sections 103 or 133 of the German Insolvency Code, a patent cross-license between us and Qimonda entered into at the same time as the share purchase agreement.

Following a series of hearings with pleadings, arguments, and witnesses on behalf of the Qimonda estate, on March 13, 2014, the court issued judgments: (1) ordering Micron B.V. to pay approximately $1 million in respect of certain Inotera Shares sold in connection with the original share purchase; (2) ordering Micron B.V. to disclose certain information with respect to any Inotera Shares sold by it to third parties; (3) ordering Micron B.V. to disclose the benefits derived by it from ownership of the Inotera Shares, including in particular, any profits distributed on the Inotera Shares and all other benefits; (4) denying Qimonda’s claims against Micron for any damages relating to the joint venture relationship with Inotera; and (5) determining that Qimonda’s obligations under the patent cross-license agreement are canceled. In addition, the court issued interlocutory judgments ordering, among other things: (1) that Micron B.V. transfer to the Qimonda estate the Inotera Shares still owned by Micron B.V. and pay to the Qimonda estate compensation in an amount to be specified for any Inotera Shares sold to third parties; and (2) that Micron B.V. pay the Qimonda estate as compensation an amount to be specified for benefits derived by Micron B.V. from ownership of the Inotera Shares. The interlocutory judgments had no immediate, enforceable effect and Micron, accordingly, was able to continue to operate with full control of the Inotera Shares subject to further developments in the case. Micron and Micron B.V. appealed the judgments to the German Appeals Court, which thereafter appointed an independent expert to perform an evaluation of Dr. Jaffé’s claims that the amount Micron paid for Qimonda was less than fair market value. On March 31, 2020, the expert presented an opinion to the Appeals Court concluding that the amount paid by Micron was within an acceptable range of fair value. On October 5, 2022, the Appeals Court ruled that the relevant issue to be addressed is whether Qimonda's creditors were prejudiced such that the original transaction should be voided.

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On May 9, 2023, Micron and Dr. Jaffé reached an agreement to dismiss the case in exchange for a one-time payment by Micron to the Qimonda estate and a waiver of each party’s claims. The agreement was formally entered by the Appeals Court in July 2023 and the case was dismissed.

Antitrust Matters

Six cases have been filed against Micron alleging price fixing of DRAM products in the following Canadian courts on the dates indicated: Superior Court of Quebec (April 30, 2018 and May 3, 2018), the Federal Court of Canada (May 2, 2018), the Ontario Superior Court of Justice (May 15, 2018), and the Supreme Court of British Columbia (May 10, 2018). The plaintiffs in these cases are individuals seeking certification of class actions on behalf of direct and indirect purchasers of DRAM in Canada (or regions of Canada) between June 1, 2016 and February 1, 2018.

On May 15, 2018, the Chinese State Administration for Market Regulation (“SAMR”) notified Micron that it was investigating potential collusion and other anticompetitive conduct by DRAM suppliers in China. On May 31, 2018, SAMR made unannounced visits to our sales offices in Beijing, Shanghai, and Shenzhen to seek certain information as part of its investigation. We are cooperating with SAMR in its investigation.

Securities Matters

On February 9, 2021, a derivative complaint was filed by a shareholder against Sanjay Mehrotra and other current and former directors of Micron, allegedly on behalf of and for the benefit of Micron, in the U.S. District Court for the District of Delaware alleging violations of securities laws, breaches of fiduciary duties, and other violations of law involving allegedly false and misleading statements about Micron’s commitment to diversity and progress in diversifying its workforce, executive leadership, and Board of Directors. The complaint seeks damages, fees, interest, costs, and an order requiring Micron to take various actions to allegedly improve its corporate governance and internal procedures.

Other Matters

In the normal course of business, we are a party to a variety of agreements pursuant to which we may be obligated to indemnify another party. It is not possible to predict the maximum potential amount of future payments under these types of agreements due to the conditional nature of our obligations and the unique facts and circumstances involved in each particular agreement. Historically, our payments under these types of agreements have not had a material adverse effect on our business, results of operations, or financial condition.

Contingency Assessment

We are unable to predict the outcome of any of the matters noted above and cannot make a reasonable estimate of the potential loss or range of possible losses. A determination that our products or manufacturing processes infringe the intellectual property rights of others or entering into a license agreement covering such intellectual property could result in significant liability and/or require us to make material changes to our products and/or manufacturing processes. Any of the foregoing, as well as the resolution of any other legal matter noted above, could have a material adverse effect on our business, results of operations, or financial condition.

Equity

Common Stock Repurchases

Our Board of Directors has authorized the discretionary repurchase of up to $10 billion of our outstanding common stock through open-market purchases, block trades, privately-negotiated transactions, derivative transactions, and/or pursuant to Rule 10b5-1 trading plans. The repurchase authorization has no expiration date, does not obligate us to acquire any common stock, and is subject to market conditions and our ongoing determination of the best use of available cash. We repurchased 8.6 million shares of our common stock for $425 million in 2023 and 35.4 million shares for $2.43 billion in 2022. Through August 31, 2023, we had repurchased an aggregate of $6.89 billion under the authorization. Amounts repurchased are included in treasury stock.

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Dividends

In each quarter of 2023, we declared and paid dividends of $126 million ($0.115 per share). On September 27, 2023, our Board of Directors declared a quarterly dividend of $0.115 per share, payable in cash on October 25, 2023, to shareholders of record as of the close of business on October 10, 2023.

Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) by component for the year ended August 31, 2023 were as follows:

			Gains (Losses) on Derivative Instruments			Unrealized Gains (Losses) on Investments			Pension Liability Adjustments			Cumulative Foreign Currency Translation Adjustment			Total
As of September 1, 2022			$	(538)		$	(47)		$	25		$	—		$	(560)
Other comprehensive income (loss) before reclassifications			19			18			17			(3)			51
Amount reclassified out of accumulated other comprehensive income (loss)			261			1			(2)			—			260
Tax effects			(46)			(13)			(4)			—			(63)
Other comprehensive income (loss)			234			6			11			(3)			248
As of August 31, 2023			$	(304)		$	(41)		$	36		$	(3)		$	(312)

Fair Value Measurements

The estimated fair values and carrying values of our outstanding debt instruments were as follows:

			As of August 31, 2023									As of September 1, 2022
			Fair Value			Carrying Value						Fair Value			Carrying Value
Notes			$	11,549		$	12,049					$	5,472		$	6,020

The fair values of our debt instruments were estimated based on Level 2 inputs, including the trading price of our notes when available, discounted cash flows, and interest rates based on similar debt issued by parties with credit ratings similar to ours.

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Derivative Instruments

			Notional or Contractual Amount			Fair Value of
Assets**(1)**			Liabilities**(2)**
As of August 31, 2023
Derivative instruments with hedge accounting designation
Cash flow currency hedges			$	3,873		$	16		$	(180)
Cash flow commodity hedges			331			45			—
Fair value interest rate hedges			900			—			(100)
Derivative instruments without hedge accounting designation
Non-designated currency hedges			1,839			2			(17)
						$	63		$	(297)
As of September 1, 2022
Derivative instruments with hedge accounting designation
Cash flow currency hedges			$	5,427		$	—		$	(330)
Cash flow commodity hedges			97			1			(6)
Fair value interest rate hedges			900			—			(91)
Derivative instruments without hedge accounting designation
Non-designated currency hedges			2,821			7			(13)
						$	8		$	(440)

*(1)*Included in receivables and other noncurrent assets.

*(2)*Included in accounts payable and accrued expenses and other noncurrent liabilities.

Derivative Instruments with Hedge Accounting Designation

Cash Flow Hedges**:** We utilize forward and swap contracts that generally mature within two years designated as cash flow hedges to minimize our exposure to changes in currency exchange rates or commodity prices for certain capital expenditures and manufacturing costs. Forward and swap contracts are measured at fair value based on market-based observable inputs including market spot and forward rates, interest rates, and credit-risk spreads (Level 2). We recognized gains from cash flow hedges of $30 million for 2023, and losses of $735 million and $52 million for 2022 and 2021, respectively, in accumulated other comprehensive income (loss). We recognized losses related to amounts excluded from hedge effectiveness testing on our cash flow hedges of $101 million in 2023 in cost of goods sold through an amortization approach. The amounts recognized in 2022 and 2021 were not significant. We reclassified losses of $261 million and $53 million in 2023 and 2022, respectively, and gains of $41 million in 2021, from accumulated other comprehensive income (loss) to earnings, primarily to cost of goods sold. As of August 31, 2023, we expect to reclassify $177 million of pre-tax losses related to cash flow hedges from accumulated other comprehensive income (loss) into earnings in the next 12 months.

Fair Value Hedges**:** We utilize fixed-to-floating interest rate swaps designated as fair value hedges to minimize certain exposures to changes in the fair value of fixed-rate debt that result from fluctuations in benchmark interest rates. Interest rate swaps are measured at fair value based on market-based observable inputs including interest rates and credit-risk spreads (Level 2). The changes in the fair values of derivatives designated as fair value hedges and the offsetting changes in the underlying fair values of the hedged items are both recognized in earnings. When a derivative is no longer designated as a fair value hedge for any reason, including termination and maturity, the remaining unamortized difference between the carrying value of the hedged item at that time and the face value of the hedged item is amortized to earnings over the remaining life of the hedged item, or immediately if the hedged item has matured or been extinguished. We recognized interest expense of $96 million for changes in the fair value of our interest rate swaps in 2022 and the impact to interest expense was not significant for 2023 or 2021. We also recognized offsetting reductions in interest expense of the same amounts related to the changes in the fair value of the hedged portion of the underlying debt for these periods.

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Derivative Instruments without Hedge Accounting Designation

Currency Derivatives**:** We generally utilize a rolling hedge strategy with currency forward contracts that mature within three months to hedge our exposures of monetary assets and liabilities from changes in currency exchange rates. At the end of each reporting period, monetary assets and liabilities denominated in currencies other than the U.S. dollar are remeasured into U.S. dollars and the associated outstanding forward contracts are marked to market. Currency forward contracts are valued at fair values based on the middle of bid and ask prices of dealers or exchange quotations (Level 2). Realized and unrealized gains and losses on derivative instruments without hedge accounting designation as well as the changes in the underlying monetary assets and liabilities from changes in currency exchange rates are included in other non-operating income (expense), net. The amounts recognized for derivative instruments without hedge accounting designation were not significant for the periods presented. We do not use derivative instruments for speculative purposes.

Derivative Counterparty Credit Risk and Master Netting Arrangements

Our derivative instruments expose us to credit risk to the extent counterparties may be unable to meet the terms of the contracts. Our maximum exposure to loss due to credit risk if counterparties fail completely to perform according to the terms of the contracts would generally equal the fair value of assets for these contracts as listed in the tables above. We seek to mitigate such risk by limiting our counterparties to major financial institutions and by spreading risk across multiple financial institutions. As of August 31, 2023 and September 1, 2022, amounts netted under our master netting arrangements were not significant.

Equity Plans

As of August 31, 2023, 95 million shares of our common stock were available for future awards under our equity plans, including 14 million shares approved for issuance under our employee stock purchase plan (“ESPP”).

Restricted Stock and Restricted Stock Units (“Restricted Stock Awards”)

As of August 31, 2023, there were 29 million shares of Restricted Stock Awards outstanding, 26 million of which contained only service conditions. For service-based Restricted Stock Awards granted through October 2021, restrictions generally lapse in one-fourth or one-third increments during each year of employment after the grant date. For service-based Restricted Stock Awards granted beginning in November 2021, restrictions generally lapse on 25% or 33% of the units granted after the first year and on 6.25% or 8.33% each quarter thereafter over the remaining three or two years of employment. Restrictions generally lapse on Restricted Stock with performance or market conditions as conditions are met over a 3-year period. At the end of the performance period, the number of actual shares to be awarded will vary between 0% and 200% of target amounts, depending upon the achievement level. In 2022, our Board of Directors approved dividend equivalent rights for unvested restricted stock units awarded on or after October 13, 2021.

Restricted Stock Awards activity for 2023 is summarized as follows:

			Number of Shares			Weighted-Average Grant Date Fair Value Per Share
Outstanding as of September 1, 2022			23			$	60.93
Granted			17			55.99
Restrictions lapsed			(9)			58.23
Canceled			(2)			58.00
Outstanding as of August 31, 2023			29			59.11

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For the year ended			2023			2022			2021
Restricted stock award shares granted			17			13			11
Weighted-average grant-date fair value per share			$	55.99		$	70.81		$	53.58
Aggregate vesting-date fair value of shares vested			$	514		$	498		$	385

Employee Stock Purchase Plan (“ESPP”)

Our ESPP is offered to substantially all employees and permitted eligible employees to purchase shares of our common stock through payroll deductions of up to 10% of their eligible compensation, subject to certain limitations prior to August 2021. Beginning in August 2021, employees are permitted to deduct up to 15% of their eligible compensation to purchase shares under the ESPP. The purchase price of the shares under the ESPP equals 85% of the lower of the fair market value of our common stock on either the first or last day of each six-month offering period. Compensation expense is calculated as of the beginning of the offering period as the fair value of the employees’ purchase rights utilizing the Black-Scholes option valuation model and is recognized over the offering period. Grant-date fair value and assumptions used in the Black-Scholes option valuation model were as follows:

For the year ended			2023			2022			2021
Weighted-average grant-date fair value per share			$	17.06		$	18.87		$	20.71
Average expected life in years			0.5			0.5			0.5
Weighted-average expected volatility (based on implied volatility)			37		%	43		%	41		%
Weighted-average risk-free interest rate			5.1		%	2.0		%	0.1		%
Expected dividend yield			0.7		%	0.6		%	0.3		%

Under the ESPP, employees purchased 5 million, 4 million, and 3 million shares of common stock in 2023, 2022, and 2021, respectively, at a per share weighted average price of $51.93, $58.52, and $51.42, respectively.

Stock Options

As of August 31, 2023, stock options of 2 million shares were outstanding, all of which were fully exercisable. Stock options expire 8 years from the date of grant. We did not grant any stock options in 2023, 2022, or 2021. Stock options of 1 million shares were exercised in 2023. The total intrinsic value for options exercised was $30 million, $54 million, and $143 million in 2023, 2022, and 2021, respectively.

Stock-based Compensation Expense

For the year ended			2023			2022			2021
Stock-based compensation expense by caption
Research and development			$	226		$	175		$	110
Cost of goods sold			201			193			186
Selling, general, and administrative			137			133			99
Restructure			(7)			(5)			—
			$	557		$	496		$	395
Stock-based compensation expense by type of award
Restricted stock awards			$	488		$	429		$	333
ESPP			69			66			52
Stock options			—			1			10
			$	557		$	496		$	395

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Income tax benefits related to the tax deductions for share-based awards are recognized only upon the settlement of the related share-based awards. Income tax benefits for share-based awards were $68 million, $77 million, and $83 million for 2023, 2022, and 2021, respectively. Stock-based compensation expense of $88 million and $48 million was capitalized and remained in inventory as of August 31, 2023 and September 1, 2022, respectively. As of August 31, 2023, $1.26 billion of total unrecognized compensation costs for unvested awards, before the effect of any future forfeitures, was expected to be recognized through the fourth quarter of 2027, resulting in a weighted-average period of 1.3 years.

Employee Benefit Plans

We have employee retirement plans at our U.S. and international sites. Details of significant plans are as follows:

Employee Savings Plan for U.S. Employees

We have a 401(k) retirement plan under which U.S. employees may contribute up to 75% of their eligible pay, subject to Internal Revenue Service annual contribution limits, to various savings alternatives, none of which include direct investment in our stock. We match in cash eligible contributions from employees up to 5% of the employee’s annual eligible earnings. Contribution expense for the 401(k) plan was $59 million, $66 million, and $77 million in 2023, 2022, and 2021, respectively.

Retirement Plans

We have pension plans available to employees at various foreign sites. As of August 31, 2023, the projected benefit obligations of our plans were $175 million and plan assets were $232 million. As of September 1, 2022, the projected benefit obligations of our plans were $186 million and plan assets were $221 million. Pension expense was not material for 2023, 2022, or 2021.

Government Incentives

We receive incentives from governmental entities primarily in India, Japan, Singapore, Taiwan, and the United States principally in the form of cash grants and tax credits. These incentives primarily relate to capital expenditures, have initial terms ranging from one year to 15 years, and may be subject to reimbursement if certain conditions are not met or maintained. The conditions attached to these incentives require us to incur expenditures related to the construction of new manufacturing facilities, the purchase and installation of specialized tools and equipment, R&D expenditures, and/or maintain certain levels of fixed asset investment or employee headcount during the incentive terms.

The line items on the balance sheet affected by government incentives were as follows:

As of			August 31, 2023
Receivables			$	105
Other noncurrent assets			179
Other current liabilities			11
Noncurrent unearned government incentives			727

As of August 31, 2023, we had aggregate commitments from various governmental entities of up to $2 billion to be received through 2033 (in addition to the receivables and other noncurrent assets in the table above), subject to achievement of certain performance conditions. We also receive a 25% investment tax credit on qualified investments in U.S. semiconductor manufacturing under the CHIPS Act. Subsequent to August 31, 2023, we finalized an incentive arrangement under which we will receive additional grants of up to $1.3 billion.

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Government incentives related to capital expenditures have reduced property, plant and equipment by $1.57 billion as of August 31, 2023, of which $584 million pertained to 2023 expenditures.

In 2023, operating income (loss) benefited by $318 million (approximately 93% in COGS and 7% in R&D) from government incentives recognized as a reduction of expense, primarily in the form of reduced depreciation expense.

Revenue

Revenue is primarily recognized at a point in time when control of the promised goods is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those goods. Substantially all contracts with our customers are short-term in duration at fixed, negotiated prices with payment generally due shortly after delivery. From time to time, we have contracts with initial terms that include performance obligations that extend beyond one year. As of August 31, 2023, our future performance obligations beyond one year were not significant.

As of August 31, 2023 and September 1, 2022, other current liabilities included $453 million and $1.26 billion, respectively, for estimates of consideration payable to customers including estimates for pricing adjustments and returns.

In 2023, we received an aggregate of $228 million from settlements of insurance claims involving a power disruption in 2022 and an operational disruption in 2017, of which $186 million was for business interruption and recognized in revenue.

Revenue by Technology

For the year ended			2023			2022			2021
DRAM			$	10,978		$	22,386		$	20,039
NAND			4,206			7,811			7,007
Other (primarily NOR)			356			561			659
			$	15,540		$	30,758		$	27,705

See “Segment and Other Information” for disclosure of disaggregated revenue by market segment.

Restructure and Asset Impairments

For the year ended			2023			2022			2021
Employee severance			$	163		$	—		$	3
Asset impairments and other asset-related costs			14			63			478
Other			(6)			(15)			7
			$	171		$	48		$	488

In 2023, we initiated the 2023 Restructure Plan in response to challenging industry conditions. Under the 2023 Restructure Plan, we expect our headcount reduction to approach 15% by the end of calendar 2023 through a combination of voluntary attrition and personnel reductions. In connection with the plan, we incurred restructure charges of $171 million in 2023, primarily related to employee severance costs. The plan was substantially completed in the third quarter of 2023. As of August 31, 2023, we had paid $167 million in 2023 in connection with the 2023 Restructure Plan and the remaining liability was $4 million.

Restructure and asset impairments for 2022 and 2021 are primarily related to the sale of our Lehi, Utah facility. See “Lehi, Utah Fab and 3D XPoint.”

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Other Operating (Income) Expense, Net

For the year ended			2023			2022			2021
Goodwill impairment			$	101		$	—		$	—
Litigation settlement			68			—			—
Patent license charges			—			—			128
(Gain) loss on disposition of property, plant, and equipment			(54)			(41)			(24)
Other			9			7			(9)
			$	124		$	(34)		$	95

Other Non-Operating Income (Expense), Net

For the year ended			2023			2022			2021
Gain (loss) on investments			$	(8)		$	26		$	82
Loss on debt repurchases and conversions			—			(83)			(1)
Other			15			19			—
			$	7		$	(38)		$	81

Income Taxes

Our income tax (provision) benefit consisted of the following:

For the year ended			2023			2022			2021
Income (loss) before income taxes and equity in net income (loss) of equity method investees
U.S.			$	235		$	112		$	(211)
Foreign			(5,893)			9,459			6,429
			$	(5,658)		$	9,571		$	6,218
Income tax (provision) benefit
Current
U.S. federal			$	(5)		$	(65)		$	(42)
State			(1)			(1)			(1)
Foreign			(178)			(528)			(370)
			(184)			(594)			(413)
Deferred
U.S. federal			(84)			(166)			(9)
State			—			(225)			28
Foreign			91			97			—
			7			(294)			19
Income tax (provision) benefit			$	(177)		$	(888)		$	(394)

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The table below reconciles our tax (provision) benefit based on the U.S. federal statutory rate to our effective rate:

For the year ended			2023						2022						2021
U.S. federal income tax (provision) benefit at statutory rate			$	1,188		21.0		%	$	(2,010)		21.0		%	$	(1,306)		21.0		%
U.S. tax on foreign operations			6			0.1		%	(322)			3.4		%	(226)			3.6		%
Change in valuation allowance			(50)			(0.9)		%	(241)			2.5		%	54			(0.9)		%
Change in unrecognized tax benefits			(30)			(0.5)		%	(67)			0.7		%	(238)			3.8		%
Foreign tax rate differential			(1,285)			(22.8)		%	1,601			(16.7)		%	951			(15.4)		%
Research and development tax credits			43			0.8		%	66			(0.7)		%	123			(2.0)		%
State taxes, net of federal benefit			37			0.7		%	—			—		%	59			(0.9)		%
Debt premium deductions			—			—		%	—			—		%	130			(2.1)		%
Other			(86)			(1.5)		%	85			(0.9)		%	59			(0.8)		%
Income tax (provision) benefit			$	(177)		(3.1)		%	$	(888)		9.3		%	$	(394)		6.3		%

We operate in a number of jurisdictions outside the United States, including Singapore, where we have tax incentive arrangements. These incentives expire, in whole or in part, at various dates through 2034 and are conditional, in part, upon meeting certain business operations and employment thresholds. As a result of a loss before taxes and geographic mix of income, the benefit from tax incentive arrangements was not material for 2023. These arrangements reduced our tax provision by $1.12 billion (benefiting our diluted earnings per share by $1.00) for 2022 and by $758 million ($0.66 per diluted share) for 2021.

As of August 31, 2023, certain non-U.S. subsidiaries had cumulative undistributed earnings of $4.28 billion that were deemed to be indefinitely reinvested. A provision has not been recognized to the extent that distributions from such subsidiaries are subject to additional foreign withholding or state income tax. Determination of the amount of unrecognized deferred tax liabilities related to investments in these foreign subsidiaries is not practicable.

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Deferred income taxes reflect the net tax effects of temporary differences between the bases of assets and liabilities for financial reporting and income tax purposes as well as carryforwards. Deferred tax assets and liabilities consist of the following:

As of			August 31, 2023			September 1, 2022
Deferred tax assets
Net operating loss and tax credit carryforwards			$	1,112		$	796
Accrued salaries, wages, and benefits			39			157
Operating lease liabilities			135			138
Inventories			52			77
Property, plant, and equipment			—			44
Other			75			142
Gross deferred tax assets			1,413			1,354
Less valuation allowance			(528)			(471)
Deferred tax assets, net of valuation allowance			885			883
Deferred tax liabilities
Right-of-use assets			(115)			(126)
Property, plant, and equipment			(31)			—
Other			(100)			(68)
Deferred tax liabilities			(246)			(194)
Net deferred tax assets			$	639		$	689
Reported as
Deferred tax assets			$	756		$	702
Deferred tax liabilities (included in other noncurrent liabilities)			(117)			(13)
Net deferred tax assets			$	639		$	689

We assess positive and negative evidence for each jurisdiction to determine whether it is more likely than not that existing deferred tax assets will be realized. As of August 31, 2023, and September 1, 2022, we had a valuation allowance of $528 million and $471 million, respectively, against our net deferred tax assets, primarily related to carryforwards in U.S. states and Malaysia. Changes in 2023 in the valuation allowance were due to adjustments based on management's assessment of the realizability of tax credits, allowances and net operating losses based on a level that is more likely than not to be realized.

As of August 31, 2023, our net operating loss carryforward amounts and expiration periods, as reported to tax authorities, were as follows:

Year of Expiration			Singapore			Malaysia			State			Japan			Other			Total
2024 - 2028			$	—		$	—		$	47		$	336		$	25		$	408
2029 - 2033			—			—			348			321			109			778
2034 - 2038			—			—			237			—			—			237
2039 - 2043			—			—			183			—			—			183
Indefinite			1,688			1,025			60			—			202			2,975
			$	1,688		$	1,025		$	875		$	657		$	336		$	4,581

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As of August 31, 2023, our federal and state tax credit carryforward amounts and expiration periods, as reported to tax authorities, were as follows:

Year of Tax Credit Expiration			U.S. Federal			State			Total
2024 - 2028			$	—		$	51		$	51
2029 - 2033			—			120			120
2034 - 2038			—			137			137
2039 - 2043			306			5			311
Indefinite			—			131			131
			$	306		$	444		$	750

Below is a reconciliation of the beginning and ending amount of our unrecognized tax benefits:

For the year ended			2023			2022			2021
Beginning unrecognized tax benefits			$	731		$	660		$	411
Increases related to tax positions from prior years			2			14			2
Increases related to prior year tax positions taken in current year			27			—			—
Increases related to tax positions taken in current year			17			80			260
Decreases related to tax positions from prior years			(33)			(23)			(13)
Ending unrecognized tax benefits			$	744		$	731		$	660

As of August 31, 2023, gross unrecognized tax benefits were $744 million, which would have an impact of approximately $581 million on our effective tax rate in the future, if recognized. Amounts accrued for interest and penalties related to uncertain tax positions were not significant for any period presented. The resolution of tax audits or expiration of statute of limitations could also reduce our unrecognized tax benefits. Although the timing of final resolution is uncertain, the estimated potential reduction in our unrecognized tax benefits in the next 12 months would not be significant.

We and our subsidiaries file income tax returns with the U.S. federal government, various U.S. states, and various foreign jurisdictions throughout the world. We regularly engage in discussions and negotiations with tax authorities regarding tax matters, including transfer pricing, and we continue to defend any and all such claims presented. Our U.S. federal and state tax returns remain open to examination for 2018 through 2023. We are currently under audit by the Internal Revenue Service for our 2018 and 2019 tax years. In addition, tax returns that remain open to examination in Singapore, Taiwan and Japan range from the years 2014 to 2023. We believe that adequate amounts of taxes and related interest and penalties have been provided, and any adjustments as a result of examinations are not expected to materially adversely affect our business, results of operations, or financial condition.

Earnings Per Share

For the year ended			2023			2022			2021
Net income (loss) – Basic and Diluted			$	(5,833)		$	8,687		$	5,861
Weighted-average common shares outstanding – Basic			1,093			1,112			1,120
Dilutive effect of equity plans and convertible notes			—			10			21
Weighted-average common shares outstanding – Diluted			1,093			1,122			1,141
Earnings (loss) per share
Basic			$	(5.34)		$	7.81		$	5.23
Diluted			(5.34)			7.75			5.14

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Antidilutive potential common shares excluded from the computation of diluted earnings per share, that could dilute basic earnings per share in the future, were as follows at the end of the periods shown:

For the year ended			2023			2022			2021
Equity plans			33			5			2

Segment and Other Information

Segment information reported herein is consistent with how it is reviewed and evaluated by our chief operating decision maker. We have the following four business units, which are our reportable segments:

Compute and Networking Business Unit (“CNBU”)****: Includes memory products and solutions sold into client, cloud server, enterprise, graphics, and networking markets.

Mobile Business Unit (“MBU”)****: Includes memory and storage products sold into smartphone and other mobile-device markets.

Embedded Business Unit (“EBU”)****: Includes memory and storage products and solutions sold into automotive, industrial, and consumer markets.

Storage Business Unit (“SBU”)****: Includes SSDs and component-level solutions sold into enterprise and cloud, client, and consumer storage markets.

Certain operating expenses directly associated with the activities of a specific segment are charged to that segment. Other indirect operating income and expenses are generally allocated to segments based on their respective percentage of cost of goods sold or forecasted wafer production. We do not identify or report internally our assets (other than goodwill) or capital expenditures by segment, nor do we allocate gains and losses from equity method investments, interest, other non-operating income or expense items, or taxes to segments.

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For the year ended			2023			2022			2021
Revenue
CNBU			$	5,710		$	13,693		$	12,280
MBU			3,630			7,260			7,203
EBU			3,637			5,235			4,209
SBU			2,553			4,553			3,973
All Other			10			17			40
			$	15,540		$	30,758		$	27,705
Operating income (loss)
CNBU			$	(585)		$	5,844		$	4,295
MBU			(1,750)			2,160			2,173
EBU			382			1,752			1,006
SBU			(1,887)			513			173
All Other			8			12			20
			(3,832)			10,281			7,667
Unallocated
Provision to write down inventories to net realizable value			(1,831)			—			—
Lower costs from sale of inventory written down in prior periods			844			—			—
Stock-based compensation			(564)			(501)			(395)
Inventory accounting policy change to FIFO			—			—			(133)
Change in inventory cost absorption			—			—			(160)
3D XPoint inventory write-down			—			—			(49)
Restructure and asset impairments			(171)			(48)			(488)
Goodwill impairment			(101)			—			—
Litigation settlement			(68)			—			—
Patent license charges			—			—			(128)
Other			(22)			(30)			(31)
			(1,913)			(579)			(1,384)
Operating income (loss)			$	(5,745)		$	9,702		$	6,283

Depreciation and amortization expense included in operating income (loss) was as follows:

For the year ended			2023			2022			2021
CNBU			$	2,512		$	2,766		$	2,497
MBU			2,149			1,725			1,553
EBU			1,324			1,280			1,028
SBU			1,751			1,323			1,101
All Other			1			2			8
Unallocated			19			20			27
			$	7,756		$	7,116		$	6,214

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Certain Concentrations

Revenue by market segment as an approximate percent of total revenue is presented in the table below:

For the year ended			2023			2022			2021
Automotive, industrial, and consumer			25		%	15		%	15		%
Mobile			25		%	25		%	25		%
Client and graphics			15		%	20		%	20		%
Enterprise and cloud server			15		%	20		%	20		%
SSDs and other storage			15		%	15		%	15		%

No customer accounted for 10% or more of total revenue in 2023. Revenue from Kingston Technology Company, Inc. was 12% of total revenue in 2022 and revenue from WPG Holdings Limited was 11% and 13% of total revenue in 2022 and 2021, respectively. Sales to Kingston were primarily included in our CNBU and SBU segments and sales to WPG were primarily included in our MBU, CNBU, and EBU segments.

We generally have multiple sources of supply for our raw materials and production equipment; however, only a limited number of suppliers are capable of delivering certain raw materials and production equipment that meet our standards and, in some cases, materials or production equipment are provided by a single supplier.

Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash, money market accounts, certificates of deposit, fixed-rate debt securities, trade receivables, share repurchase, and derivative contracts. We invest through high-credit-quality financial institutions and, by policy, generally limit the concentration of credit exposure by restricting investments with any single obligor and monitoring credit risk of bank counterparties on an ongoing basis. A concentration of credit risk may exist with respect to receivables of certain customers. We perform ongoing credit evaluations of customers worldwide and generally do not require collateral from our customers. Historically, we have not experienced material losses on receivables. A concentration of risk may also exist with respect to our foreign currency hedges as the number of counterparties to our hedges is limited and the notional amounts are relatively large. We seek to mitigate such risk by limiting our counterparties to major financial institutions and through entering into master netting arrangements.

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Geographic Information

Revenue based on the geographic location of our customers’ headquarters was as follows:

For the year ended			2023			2022			2021
United States			$	7,805		$	16,026		$	12,155
Taiwan			2,697			6,185			6,606
Mainland China (excluding Hong Kong)			2,181			3,311			2,456
Japan			987			1,696			1,652
Other Asia Pacific			752			1,223			1,420
Europe			682			505			573
Hong Kong			340			1,665			2,582
Other			96			147			261
			$	15,540		$	30,758		$	27,705

Long-lived assets by geographic area consisted of property, plant, and equipment and operating lease right-of-use assets and were as follows:

As of			August 31, 2023			September 1, 2022
Taiwan			$	12,926		$	13,143
Singapore			11,283			12,045
Japan			7,323			7,113
United States			5,196			5,155
Malaysia			1,124			994
China			395			440
Other			347			337
			$	38,594		$	39,227

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Micron Technology, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Micron Technology, Inc. and its subsidiaries (the “Company”) as of August 31, 2023 and September 1, 2022, and the related consolidated statements of operations, of comprehensive income (loss), of changes in equity and of cash flows for each of the three years in the period ended August 31, 2023, including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended August 31, 2023 appearing under Item 15 (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of August 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of August 31, 2023 and September 1, 2022**,** and the results of its operations and its cash flows for each of the three years in the period ended August 31, 2023 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of August 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

As discussed in the Significant Accounting Policies and Inventories notes to the consolidated financial statements, the Company changed the manner in which it accounts for inventory costing from the average cost inventory accounting method to the first-in, first-out inventory accounting method in 2021.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

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Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Net Realizable Value of Finished Goods and Work in Process Inventories

As described in the Inventories note to the consolidated financial statements, as of August 31, 2023, the Company had net finished goods and work in process inventories totaling $7.7 billion. As disclosed by management, determining the net realizable value of the Company's finished goods and work in process inventories involves significant judgments, including projecting future average selling prices, future sales volumes, and future cost per part. The memory and storage industry environment deteriorated sharply in the fourth quarter of 2022 and throughout 2023 due to weak demand in many end markets combined with global and macroeconomic challenges and lower demand resulting from customer actions to reduce elevated inventory levels. This led to significant reductions in average selling prices for both DRAM and NAND, resulting in declines in revenue across all of the Company’s business segments and nearly all end markets. The Company recorded charges of $1.83 billion to cost of goods sold to write down the carrying value of work in process and finished goods inventories to their estimated net realizable value.

The principal considerations for our determination that performing procedures relating to the net realizable value of finished goods and work in process inventories is a critical audit matter are (i) the significant judgment by management in determining the net realizable value of finished goods and work in process inventories and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to future average selling prices and future cost per part.

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Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s determination of the net realizable value of finished goods and work in process inventories, including controls over significant assumptions and data utilized. These procedures also included, among others (i) testing management's process for determining the net realizable value of finished goods and work in process inventories; (ii) evaluating the appropriateness of management’s methodology; (iii) testing the completeness and accuracy of underlying data used in determining the net realizable value; and (iv) evaluating the reasonableness of management's significant assumptions related to future average selling prices and future cost per part. Evaluating management's assumption related to future average selling prices for certain products involved evaluating whether the assumption used by management was reasonable considering (i) current and past results, including recent sales; (ii) the consistency with external market, industry data or current contract prices; (iii) a comparison of the prior year estimates to actual results in the current fiscal year; and (iv) whether the assumption was consistent with evidence obtained in other areas of the audit. Evaluating management's assumption related to future cost per part for certain products involved evaluating whether the assumption used by management was reasonable considering (i) current and past results; (ii) a comparison of the prior year estimates to actual results in the current fiscal year; and (iii) whether the assumption was consistent with evidence obtained in other areas of the audit.

/s/ PricewaterhouseCoopers LLP

San Jose, California

October 6, 2023

We have served as the Company’s auditor since 1984.

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