Item 1. FINANCIAL STATEMENTS

Micron Technology, Inc.

Consolidated Statements of Operations

(In millions, except per share amounts)

(Unaudited)

Three months ended			November 30, 2023			December 1, 2022
Revenue			$	4,726		$	4,085
Cost of goods sold			4,761			3,192
Gross margin			(35)			893
Research and development			845			849
Selling, general, and administrative			263			251
Restructure and asset impairments			—			13
Other operating (income) expense, net			(15)			(11)
Operating income (loss)			(1,128)			(209)
Interest income			132			88
Interest expense			(132)			(51)
Other non-operating income (expense), net			(27)			(4)
			(1,155)			(176)
Income tax (provision) benefit			(73)			(8)
Equity in net income (loss) of equity method investees			(6)			(11)
Net income (loss)			$	(1,234)		$	(195)
Earnings (loss) per share
Basic			$	(1.12)		$	(0.18)
Diluted			(1.12)			(0.18)
Number of shares used in per share calculations
Basic			1,100			1,090
Diluted			1,100			1,090

See accompanying notes to consolidated financial statements.

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Micron Technology, Inc.

Consolidated Statements of Comprehensive Income (Loss)

(In millions)

(Unaudited)

Three months ended			November 30, 2023			December 1, 2022
Net income (loss)			$	(1,234)		$	(195)
Other comprehensive income (loss), net of tax
Gains (losses) on derivative instruments			44			108
Unrealized gains (losses) on investments			7			(19)
Pension liability adjustments			2			1
Foreign currency translation adjustments			(1)			(3)
Other comprehensive income (loss)			52			87
Total comprehensive income (loss)			$	(1,182)		$	(108)

See accompanying notes to consolidated financial statements.

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Micron Technology, Inc.

Consolidated Balance Sheets

(In millions, except par value amounts)

(Unaudited)

As of			November 30, 2023			August 31, 2023
Assets
Cash and equivalents			$	8,075		$	8,577
Short-term investments			973			1,017
Receivables			2,943			2,443
Inventories			8,276			8,387
Other current assets			791			820
Total current assets			21,058			21,244
Long-term marketable investments			720			844
Property, plant, and equipment			37,677			37,928
Operating lease right-of-use assets			648			666
Intangible assets			416			404
Deferred tax assets			781			756
Goodwill			1,150			1,150
Other noncurrent assets			1,326			1,262
Total assets			$	63,776		$	64,254
Liabilities and equity
Accounts payable and accrued expenses			$	3,946		$	3,958
Current debt			908			278
Other current liabilities			1,108			529
Total current liabilities			5,962			4,765
Long-term debt			12,597			13,052
Noncurrent operating lease liabilities			601			603
Noncurrent unearned government incentives			705			727
Other noncurrent liabilities			1,026			987
Total liabilities			20,891			20,134
Commitments and contingencies
Shareholders’ equity
Common stock, $0.10 par value, 3,000 shares authorized, 1,245 shares issued and 1,104 outstanding (1,239 shares issued and 1,098 outstanding as of August 31, 2023)			124			124
Additional capital			11,217			11,036
Retained earnings			39,356			40,824
Treasury stock, 141 shares held (141 shares as of August 31, 2023)			(7,552)			(7,552)
Accumulated other comprehensive income (loss)			(260)			(312)
Total equity			42,885			44,120
Total liabilities and equity			$	63,776		$	64,254

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)

(Unaudited)

			Common Stock						Additional Capital			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Total Shareholders’ Equity
			Number of Shares			Amount
Balance at August 31, 2023			1,239			$	124		$	11,036		$	40,824		$	(7,552)		$	(312)		$	44,120
Net income (loss)			—			—			—			(1,234)			—			—			(1,234)
Other comprehensive income (loss), net			—			—			—			—			—			52			52
Stock issued under stock plans			8			—			9			—			—			—			9
Stock-based compensation expense			—			—			188			—			—			—			188
Repurchase of stock - withholdings on employee equity awards			(2)			—			(16)			(105)			—			—			(121)
Dividends and dividend equivalents declared ($0.115 per share)			—			—			—			(129)			—			—			(129)
Balance at November 30, 2023			1,245			$	124		$	11,217		$	39,356		$	(7,552)		$	(260)		$	42,885

			Common Stock						Additional Capital			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Total Shareholders’ Equity
			Number of Shares			Amount
Balance at September 1, 2022			1,226			$	123		$	10,197		$	47,274		$	(7,127)		$	(560)		$	49,907
Net income (loss)			—			—			—			(195)			—			—			(195)
Other comprehensive income (loss), net			—			—			—			—			—			87			87
Stock issued under stock plans			8			—			7			—			—			—			7
Stock-based compensation expense			—			—			146			—			—			—			146
Repurchase of stock - repurchase program			—			—			—			—			(425)			—			(425)
Repurchase of stock - withholdings on employee equity awards			(2)			—			(15)			(80)			—			—			(95)
Dividends and dividend equivalents declared ($0.115 per share)			—			—			—			(126)			—			—			(126)
Balance at December 1, 2022			1,232			$	123		$	10,335		$	46,873		$	(7,552)		$	(473)		$	49,306

See accompanying notes to consolidated financial statements.

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Micron Technology, Inc.

Consolidated Statements of Cash Flows

(In millions)

(Unaudited)

Three months ended			November 30, 2023			December 1, 2022
Cash flows from operating activities
Net income (loss)			$	(1,234)		$	(195)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation expense and amortization of intangible assets			1,915			1,921
Stock-based compensation			188			146
Change in operating assets and liabilities:
Receivables			(501)			1,842
Inventories			111			(1,697)
Accounts payable and accrued expenses			271			(630)
Other current liabilities			579			(430)
Other			72			(14)
Net cash provided by operating activities			1,401			943
Cash flows from investing activities
Expenditures for property, plant, and equipment			(1,796)			(2,449)
Purchases of available-for-sale securities			(199)			(90)
Proceeds from maturities and sales of available-for-sale securities			374			362
Proceeds from government incentives			85			2
Other			(22)			(91)
Net cash provided by (used for) investing activities			(1,558)			(2,266)
Cash flows from financing activities
Payments of dividends to shareholders			(129)			(126)
Payments on equipment purchase contracts			(56)			(47)
Repayments of debt			(53)			(20)
Repurchases of common stock - repurchase program			—			(425)
Proceeds from issuance of debt			—			3,349
Other			(114)			(99)
Net cash provided by (used for) financing activities			(352)			2,632
Effect of changes in currency exchange rates on cash, cash equivalents, and restricted cash			(1)			(6)
Net increase (decrease) in cash, cash equivalents, and restricted cash			(510)			1,303
Cash, cash equivalents, and restricted cash at beginning of period			8,656			8,339
Cash, cash equivalents, and restricted cash at end of period			$	8,146		$	9,642

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)

(Unaudited)

Significant Accounting Policies

For a discussion of our significant accounting policies, see “Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Significant Accounting Policies” of our Annual Report on Form 10-K for the year ended August 31, 2023. There have been no changes to our significant accounting policies since our Annual Report on Form 10-K for the year ended August 31, 2023.

Basis of Presentation

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 (“U.S. GAAP”) consistent in all material respects with those applied in our Annual Report on Form 10-K for the year ended August 31, 2023.

In the opinion of our management, the accompanying unaudited consolidated financial statements contain all necessary adjustments, consisting of a normal recurring nature, to fairly state the financial information set forth herein. Certain reclassifications have been made to prior period amounts to conform to current period presentation.

Our fiscal year is the 52 or 53-week period ending on the Thursday closest to August 31. Fiscal years 2024 and 2023 each contain 52 weeks. All period references are to our fiscal periods unless otherwise indicated. These interim financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended August 31, 2023.

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. As of November 30, 2023, we had approximately $250 million of financial lease liabilities and right-of-use assets under these arrangements.

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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 November 30, 2023															As of August 31, 2023
			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			$	5,400		$	—		$	—		$	5,400					$	5,771		$	—		$	—		$	5,771
Level 1(2)
Money market funds			1,570			—			—			1,570						1,629			—			—			1,629
Level 2(3)
Certificates of deposit			1,090			26			—			1,116						1,172			25			—			1,197
Corporate bonds			—			681			359			1,040						—			737			437			1,174
Asset-backed securities			—			16			349			365						—			15			387			402
Government securities			15			152			12			179						5			131			20			156
Commercial paper			—			98			—			98						—			109			—			109
			8,075			$	973		$	720		$	9,768					8,577			$	1,017		$	844		$	10,438
Restricted cash(4)			71															79
Cash, cash equivalents, and restricted cash			$	8,146														$	8,656

*(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 November 30, 2023 or August 31, 2023.

*(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 $188 million and $218 million of non-marketable equity investments without a readily determinable fair value that were included in other noncurrent assets as of November 30, 2023 and August 31, 2023, respectively. We recognized losses in other non-operating income (expense) on our non-marketable investments of $31 million for the first quarter of 2024 and net losses of $7 million for the first quarter of 2023. 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			November 30, 2023			August 31, 2023
Trade receivables			$	2,478		$	2,048
Income and other taxes			217			194
Other			248			201
			$	2,943		$	2,443

Inventories

As of			November 30, 2023			August 31, 2023
Finished goods			$	1,282		$	1,616
Work in process			6,334			6,111
Raw materials and supplies			660			660
			$	8,276		$	8,387

Property, Plant, and Equipment

As of			November 30, 2023			August 31, 2023
Land			$	283		$	283
Buildings			18,652			17,967
Equipment(1)			66,392			65,555
Construction in progress(2)			2,215			2,464
Software			1,377			1,316
			88,919			87,585
Accumulated depreciation			(51,242)			(49,657)
			$	37,677		$	37,928

*(1)*Includes costs related to equipment not placed into service of $2.88 billion as of November 30, 2023 and $2.91 billion as of August 31, 2023.

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

Intangible Assets

			As of November 30, 2023												As of August 31, 2023
			Gross Amount			Accumulated Amortization			Net Carrying Amount						Gross Amount			Accumulated Amortization			Net Carrying Amount
Product and process technology			$	631		$	(226)		$	405					$	613		$	(209)		$	404
Other			11			—			11						—			—			—
			$	642		$	(226)		$	416					$	613		$	(209)		$	404

In the first quarters of 2024 and 2023, we capitalized $22 million and $30 million, respectively, for product and process technology with weighted-average useful lives of 9 years and 10 years, respectively. Amortization expense was $20 million and $23 million for the first three months of 2024 and 2023, respectively. Expected amortization expense is $59 million for the remainder of 2024, $54 million for 2025, $50 million for 2026, $46 million for 2027, and $44 million for 2028.

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Leases

The components of lease cost are presented below:

Three months ended			November 30, 2023			December 1, 2022
Finance lease cost
Amortization of right-of-use asset			$	32		$	24
Interest on lease liability			6			6
Operating lease cost(1)			33			36
			$	71		$	66

*(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:

Three months ended			November 30, 2023			December 1, 2022
Cash flows used for operating activities
Finance leases			$	6		$	5
Operating leases			33			33
Cash flows used for financing activities – Finance leases			27			20
Noncash acquisitions of right-of-use assets
Finance leases			217			43
Operating leases			—			35

Supplemental balance sheet information related to leases was as follows:

As of			November 30, 2023			August 31, 2023
Finance lease right-of-use assets (included in property, plant, and equipment)			$	1,497		$	1,311
Current operating lease liabilities (included in accounts payable and accrued expenses)			62			66
Weighted-average remaining lease term (in years)
Finance leases			8			9
Operating leases			11			11
Weighted-average discount rate
Finance leases			4.25		%	3.86		%
Operating leases			3.23		%	3.21		%

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As of November 30, 2023, maturities of lease liabilities by fiscal year were as follows:

For the year ending			Finance Leases			Operating Leases
Remainder of 2024			$	204		$	50
2025			255			77
2026			241			76
2027			235			76
2028			225			74
2029 and thereafter			541			453
Less imputed interest			(220)			(143)
			$	1,481		$	663

The table above excludes obligations for leases that have been executed but have not yet commenced. As of November 30, 2023, excluded obligations consisted of $122 million of finance lease obligations over a weighted-average period of 8 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			November 30, 2023			August 31, 2023
Accounts payable			$	1,721		$	1,725
Property, plant, and equipment			1,197			1,419
Salaries, wages, and benefits			621			367
Income and other taxes			97			67
Other			310			380
			$	3,946		$	3,958

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Debt

			As of November 30, 2023																		As of August 31, 2023
									Net Carrying Amount												Net Carrying Amount
			Stated Rate			Effective Rate			Current			Long-Term			Total						Current			Long-Term			Total
2024 Term Loan A			6.163		%	6.20		%	$	587		$	—		$	587					$	—		$	587		$	587
2025 Term Loan A			6.698		%	6.83		%	—			1,050			1,050						—			1,050			1,050
2026 Term Loan A			6.823		%	6.96		%	49			909			958						49			921			970
2027 Term Loan A			6.948		%	7.09		%	57			1,049			1,106						57			1,063			1,120
2026 Notes			4.975		%	5.07		%	—			499			499						—			499			499
2027 Notes(1)			4.185		%	4.27		%	—			797			797						—			798			798
2028 Notes			5.375		%	5.52		%	—			597			597						—			596			596
2029 A Notes			5.327		%	5.40		%	—			697			697						—			697			697
2029 B Notes			6.750		%	6.54		%	—			1,263			1,263						—			1,263			1,263
2030 Notes			4.663		%	4.73		%	—			847			847						—			846			846
2032 Green Bonds			2.703		%	2.77		%	—			995			995						—			995			995
2033 A Notes			5.875		%	5.96		%	—			745			745						—			745			745
2033 B Notes			5.875		%	6.01		%	—			890			890						—			890			890
2041 Notes			3.366		%	3.41		%	—			497			497						—			497			497
2051 Notes			3.477		%	3.52		%	—			496			496						—			496			496
Finance lease obligations			N/A			4.25		%	215			1,266			1,481						172			1,109			1,281
									$	908		$	12,597		$	13,505					$	278		$	13,052		$	13,330

(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.

Revolving Credit Facility

As of November 30, 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 requires us to maintain, on a consolidated basis, a leverage ratio of total indebtedness to adjusted EBITDA, as defined in the Revolving Credit Facility 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 Revolving Credit Facility 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 Revolving Credit Facility 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 Revolving Credit Facility, of not less than $5.0 billion. In the fourth quarter of 2023 and first quarter of 2024, we complied with the net leverage ratio requirement. 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.

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Maturities of Notes Payable

As of November 30, 2023, maturities of notes payable by fiscal year were as follows:

Remainder of 2024			$	81
2025			695
2026			1,659
2027			1,780
2028			1,492
2029 and thereafter			6,450
Unamortized issuance costs, discounts, and premium, net			(32)
Hedge accounting fair value adjustment			(101)
			$	12,024

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 alleged that MXA and MSS infringed one Chinese patent by manufacturing and selling certain Crucial DDR4 DRAM modules. The complaint sought 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 December 4, 2023, Micron and Jinhua entered a settlement agreement under which Jinhua will file an application to the Fuzhou Court to withdraw its complaints against MXA and MSS.

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.

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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 alleged that MSS infringed two Chinese patents by manufacturing and selling certain Crucial MX300 SSDs. The complaint filed by UMC sought 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 sought 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 December 4, 2023, Micron and Jinhua entered a settlement agreement under which Jinhua will file 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. On December 4, 2023, Micron and Jinhua entered a settlement agreement under which Jinhua will file an application to the Fuzhou Court to withdraw the injunction.

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 complaint 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.

On November 9, 2023, Yangtze Memory Technologies Company, Ltd. (“YMTC”) filed a patent infringement complaint against Micron and one of its subsidiaries in the U.S. District Court for the Northern District of California. The complaint alleges that eight U.S. patents are infringed by certain of our 3D NAND 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.

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.

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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 sought damages, fees, interest, costs, and an order requiring Micron to take various actions to allegedly improve its corporate governance and internal procedures. On November 2, 2023, the District Court granted the defendants’ motion to dismiss the complaint.

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. No shares were repurchased in the first quarter of 2024. Through November 30, 2023, we had repurchased an aggregate of $6.89 billion under the authorization. Amounts repurchased are included in treasury stock.

Dividends

In the first quarter of 2024, we declared and paid dividends of $129 million ($0.115 per share). On December 20, 2023, our Board of Directors declared a quarterly dividend of $0.115 per share, payable in cash on January 18, 2024, to shareholders of record as of the close of business on January 2, 2024.

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Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) by component for the three months ended November 30, 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 August 31, 2023			$	(304)		$	(41)		$	36		$	(3)		$	(312)
Other comprehensive income (loss) before reclassifications			14			7			—			(1)			20
Amount reclassified out of accumulated other comprehensive income (loss)			44			—			2			—			46
Tax effects			(14)			—			—			—			(14)
Other comprehensive income (loss)			44			7			2			(1)			52
As of November 30, 2023			$	(260)		$	(34)		$	38		$	(4)		$	(260)

Fair Value Measurements

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

			As of November 30, 2023									As of August 31, 2023
			Fair Value			Carrying Value						Fair Value			Carrying Value
Notes			$	11,651		$	12,024					$	11,549		$	12,049

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 November 30, 2023
Derivative instruments with hedge accounting designation
Cash flow currency hedges			$	4,057		$	34		$	(139)
Cash flow commodity hedges			310			25			(2)
Fair value interest rate hedges			900			—			(101)
Derivative instruments without hedge accounting designation
Non-designated currency hedges			1,860			23			(20)
						$	82		$	(262)
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)

*(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 $53 million for the first quarter of 2023 in accumulated other comprehensive income (loss). The amounts recognized in the first quarter of 2024 were not significant. As of November 30, 2023, we expect to reclassify $153 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. The effects of fair value hedges on our consolidated statements of operations, recognized in interest expense, were not significant for the periods presented.

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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.

Equity Plans

As of November 30, 2023, 74 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”)

Restricted Stock Awards activity is summarized as follows:

Three months ended			November 30, 2023			December 1, 2022
Restricted stock award shares granted			12			14
Weighted-average grant-date fair value per share			$	67.36		$	53.94

Stock-based Compensation Expense

Stock-based compensation expense recognized in our statements of operations is presented below. Stock-based compensation expense of $94 million and $88 million was capitalized and remained in inventory as of November 30, 2023 and August 31, 2023, respectively.

Three months ended			November 30, 2023			December 1, 2022
Stock-based compensation expense by caption
Research and development			$	68		$	53
Cost of goods sold			67			36
Selling, general, and administrative			47			37
			$	182		$	126
Stock-based compensation expense by type of award
Restricted stock awards			$	163		$	109
ESPP			19			17
			$	182		$	126

As of November 30, 2023, $1.84 billion of total unrecognized compensation costs for unvested awards, before the effect of any future forfeitures, was expected to be recognized through the first quarter of 2028, resulting in a weighted-average period of 1.4 years.

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Revenue and Customer Contract Liabilities

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 November 30, 2023, our future performance obligations beyond one year were not significant.

Revenue by Technology

Three months ended			November 30, 2023			December 1, 2022
DRAM			$	3,427		$	2,829
NAND			1,230			1,103
Other (primarily NOR)			69			153
			$	4,726		$	4,085

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

Customer Contract Liabilities

Contract liabilities from customer prepayments made to secure product supply in future periods were approximately $600 million as of November 30, 2023 and were reported within other current liabilities.

As of November 30, 2023 and August 31, 2023, other current liabilities also included $455 million and $453 million, respectively, for estimates of consideration payable to customers including estimates for pricing adjustments and returns.

Income Taxes

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

Three months ended			November 30, 2023			December 1, 2022
Income (loss) before taxes			$	(1,155)		$	(176)
Income tax (provision) benefit			(73)			(8)
Effective tax rate			(6.3)		%	(4.5)		%

For the first quarter of 2024, we recorded tax expense based on actual first quarter results for jurisdictions where small changes in our projected pre-tax income may cause significant changes in the estimated annual effective tax rate.

The change in our effective tax rate for the first quarter of 2024 as compared to the first quarter of 2023 was primarily due to changes in levels of profitability, interim tax expense methodology, and our geographic mix of earnings. Despite a consolidated pre-tax loss on a worldwide basis, we have taxes payable in certain geographies due to minimum taxable income reportable in those geographies.

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 the first quarters of 2024 and 2023.

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Earnings Per Share

Three months ended			November 30, 2023			December 1, 2022
Net income (loss) – Basic and Diluted			$	(1,234)		$	(195)
Weighted-average common shares outstanding – Basic and Diluted			1,100			1,090
Earnings (loss) per share
Basic			$	(1.12)		$	(0.18)
Diluted			(1.12)			(0.18)

Antidilutive potential common shares excluded from the computation of diluted earnings per share, that could dilute basic earnings per share in the future, were 35 million for the first quarter of 2024 and 2023.

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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Three months ended			November 30, 2023			December 1, 2022
Revenue
CNBU			$	1,737		$	1,746
MBU			1,293			655
EBU			1,037			1,000
SBU			653			680
All Other			6			4
			$	4,726		$	4,085
Operating income (loss)
CNBU			$	(397)		$	190
MBU			(687)			(195)
EBU			10			194
SBU			(490)			(257)
All Other			4			3
			(1,560)			(65)
Unallocated
Lower costs from sale of inventory written down in prior periods			605			—
Stock-based compensation			(182)			(126)
Restructure and asset impairments			—			(13)
Other			9			(5)
			432			(144)
Operating income (loss)			$	(1,128)		$	(209)

Certain Concentrations

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

Three months ended			November 30, 2023			December 1, 2022
Mobile			25		%	15		%
Automotive, industrial, and consumer			20		%	25		%
Client and graphics			20		%	15		%
Enterprise and cloud server			15		%	20		%
SSDs and other storage			15		%	15		%

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