Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion should be read in conjunction with the consolidated financial statements and accompanying notes for the year ended August 29, 2024*. All period references are to our fiscal periods unless otherwise indicated. Our fiscal year is the 52- or 53-week period ending on the Thursday closest to August 31. Fiscal 2025 and 2024 each contain 52 weeks. All tabular dollar amounts are in millions, except per share amounts.*

Overview

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, 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 (AI) and compute-intensive applications that unleash opportunities — from the data center to the intelligent edge and across the client and mobile user experience.

We manufacture our products at wholly-owned facilities and also utilize subcontractors for certain manufacturing processes. Our global network of manufacturing centers of excellence not only allows us to benefit from scale while streamlining processes and operations, but it also brings together some of the world’s brightest talent to work on the most advanced memory technology. Centers of excellence bring expertise together in one location, providing an efficient support structure for end-to-end manufacturing, with quicker cycle times, in partnership with teams such as research and development (“R&D”), product development, human resources, procurement, and supply chain. For our locations in Singapore and Taiwan, this is also a combination of bringing fabrication and back-end manufacturing together. We make significant investments to develop proprietary product and process technology, which generally increases bit density per wafer and reduces per-bit manufacturing costs of each generation of product. We continue to introduce new generations of products that offer improved performance characteristics, including higher data transfer rates, advanced packaging solutions, lower power consumption, improved read/write reliability, and increased memory density.

We face intense competition in the semiconductor memory and storage markets. To remain competitive we must continuously develop and implement new products and technologies and decrease manufacturing costs in spite of inflationary pressures and regulatory uncertainty. Our success is largely dependent on obtaining returns on our R&D investments, efficient utilization of our manufacturing infrastructure, development and integration of advanced product and process technologies, market acceptance of our diversified portfolio of semiconductor-based memory and storage solutions, and efficient capital spending.

Product Technologies

Our product portfolio of memory and storage solutions, advanced solutions, and storage platforms is based on our high-performance semiconductor memory and storage technologies, including DRAM, NAND, and NOR. We sell our products through our business units into various markets in numerous forms, including: components, modules, SSDs, managed NAND, multi-chip packages, and wafers. Many of our system-level solutions combine NAND, a controller, firmware, and in some cases DRAM.

DRAM: DRAM products are dynamic random access memory semiconductor devices with low latency that provide high-speed data retrieval with a variety of performance characteristics. DRAM products lose content when power is turned off (“volatile”) and are most commonly used in the data center, client PC, graphics, industrial, and automotive markets.

NAND**:** NAND products are non-volatile, re-writeable semiconductor storage devices that provide high-capacity, low-cost storage with a variety of performance characteristics. NAND is used in SSDs for the data center, client PC, consumer, and automotive markets and in removable storage markets. Managed NAND is used in smartphones and other mobile devices, and in consumer, automotive, and embedded markets. Low-density NAND is ideal for applications like automotive, surveillance, machine-to-machine, automation, printer, and home networking.

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NOR**:** NOR products are non-volatile, re-writable semiconductor memory devices that provide fast read speeds. NOR is most commonly used for reliable code storage (e.g., boot, application, operating system, and execute-in-place code in an embedded system) and for frequently changing small data storage and is ideal for automotive, industrial, and consumer applications.

Industry Conditions

In the third quarter of 2025, DRAM revenue improved from the prior quarter due to improvements across end markets, in particular strong sequential growth in consumer-oriented and data center markets, especially for HBM products. During the first nine months of 2025 compared to the first nine months of 2024, we have shifted our supply to meet the strong demand in data center DRAM resulting in a portfolio mix weighted more towards high-growth segments. In 2024 and for the first nine months of 2025, we experienced substantial improvements in revenue, pricing, and margins as compared to 2023, reflecting demand growth, driven in part by deployment of AI, which resulted in a substantially improved industry supply and demand balance.

In the third quarter of 2025, NAND revenue improved from the prior quarter due to improvements across end markets, in particular strong bit growth in consumer-oriented markets due to reduced customer inventories. We saw reduced demand from NAND customers in the first two quarters of 2025 as customers reduced inventory to align with their end customers. We continue to prudently manage our NAND supply, including the levels of our capital investment, the pace of ramp of our new technology node, and fab utilization consistent with our demand growth.

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Results of Operations

Consolidated Results

Third QuarterSecond QuarterThird QuarterNine Months Ended
20252025202420252024
Revenue$9,301100%$8,053100%$6,811100%$26,063100%$17,361100%
Cost of goods sold5,79362%5,09063%4,97973%16,24462%14,48583%
Gross margin3,50838%2,96337%1,83227%9,81938%2,87617%
Research and development96510%89811%85012%2,75111%2,52715%
Selling, general, and administrative3183%2854%2914%8913%8345%
Other operating (income) expense, net561%7—%(28)—%61—%(267)(2)%
Operating income (loss)2,16923%1,77322%71911%6,11623%(218)(1)%
Interest income (expense), net12—%(4)—%(14)—%(3)—%(28)—%
Other non-operating income (expense), net(68)(1)%(11)—%10—%(90)—%(24)—%
Income tax (provision) benefit(235)(3)%(177)(2)%(377)(6)%(695)(3)%1721%
Equity in net income (loss) of equity method investees7—%2—%(6)—%10—%(11)—%
Net income (loss)$1,88520%$1,58320%$3325%$5,33820%$(109)(1)%

Total Revenue: Total revenue for the third quarter of 2025 and first nine months of 2025 was impacted by the factors described in the section titled “Industry Conditions” above.

Total revenue for the third quarter of 2025 increased 15% as compared to the second quarter of 2025 primarily due to increases in sales of both DRAM and NAND products.

  • Sales of DRAM products increased 15% primarily due to an over 20% increase in bit shipments, partially offset by a low-single-digit percent range decrease in average selling prices primarily due to a higher consumer-oriented revenue mix.

  • Sales of NAND products increased 16% primarily due to a mid-20% range increase in bit shipments, partially offset by a high-single-digit percent range decrease in average selling prices.

Total revenue for the third quarter of 2025 increased 37% as compared to the third quarter of 2024 primarily due to increases in sales of both DRAM and NAND products.

  • Sales of DRAM products increased 51% primarily due to a mid-20% range increase in average selling prices and an increase in bit shipments in the low-20% range.

  • Sales of NAND products increased 4% primarily due to a low-30% range increase in bit shipments, partially offset by a low-20% range decrease in average selling prices.

Total revenue for the first nine months of 2025 increased 50% as compared to the first nine months of 2024 due to increases in both DRAM and NAND sales.

  • Sales of DRAM products increased 60% primarily due to a high-40% range increase in average selling prices and a high-single-digit percent range increase in bit shipments.

  • Sales of NAND products increased 29% primarily due to a high-teen percentage range increase in bit shipments and a high-single-digit percent range increase in average selling prices.

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Consolidated Gross Margin**:** Our consolidated gross margin has been impacted by the factors described in the section titled “Industry Conditions” above. Our consolidated gross margin percentage increased to 38% for the third quarter of 2025 from 37% for the second quarter of 2025, primarily due to an improvement in margins for DRAM products, partially offset by a decrease in margins for NAND products. DRAM margins improved primarily due to an increased mix of HBM and manufacturing cost reductions driven by improvements in product and process technology. NAND margins declined primarily due to decreases in average selling prices. Our consolidated gross margin percentage improved to 38% for the third quarter of 2025 from 27% for the third quarter of 2024 and improved to 38% for the first nine months of 2025 from 17% for the first nine months of 2024. Improvements in our consolidated gross margins for the third quarter and first nine months of 2025 compared to corresponding periods of 2024 were primarily due to increases in average selling prices for DRAM products, manufacturing cost reductions, and an increased mix in sales of high-margin cloud products, particularly HBM. Our consolidated gross margin for the first nine months of 2024 reflected $987 million of benefit due to lower costs from the sale of inventories written down to their net realizable value in 2023.

Revenue by Business Unit

Third QuarterSecond QuarterThird QuarterNine Months Ended
20252025202420252024
CNBU$5,06954%$4,56457%$2,57338%$14,02854%$6,49537%
SBU1,45116%1,39217%1,35320%4,57418%2,91117%
MBU1,55117%1,06813%1,58823%4,14616%4,47926%
EBU1,22713%1,02513%1,29419%3,30413%3,44220%
All other3—%4—%3—%11—%34—%
$9,301$8,053$6,811$26,063$17,361

Percentages of total revenue may not total 100% due to rounding.

Changes in revenue for each business unit for the third quarter of 2025 as compared to the second quarter of 2025 were as follows:

  • CNBU revenue increased 11% primarily due to higher sales of HBM products, which increased nearly 50%, along with growth in our high-capacity DRAM and low-power server DRAM.

  • SBU revenue increased 4% primarily due to increases in bit shipments driven by increased demand in consumer markets.

  • MBU revenue increased 45% primarily due to increases in bit shipments driven by reduced customer inventories and strong demand from DRAM content growth, partially offset by declines in average selling prices for both mobile DRAM and NAND.

  • EBU revenue increased 20% primarily due to increases in bit shipments driven by demand in industrial and embedded consumer markets.

Changes in revenue for each business unit for the third quarter and the first nine months of 2025 as compared to the corresponding periods of 2024 were as follows:

  • CNBU revenue increased 97% and 116%, respectively, primarily due to increases in average selling prices and bit shipments driven by improved demand, particularly in cloud server markets, including HBM.

  • SBU revenue increased 7% for the third quarter of 2025 as compared to the third quarter of 2024 primarily due to increases in bit shipments, partially offset by declines in average selling prices for NAND. SBU revenue increased 57% for the first nine months of 2025 as compared to the first nine months of 2024 primarily due to increases in bit shipments and average selling prices for NAND.

  • MBU revenue decreased 2% for the third quarter of 2025 as compared to the third quarter of 2024 primarily due to declines in DRAM and NAND average selling prices, partially offset by increases in bit shipments. MBU revenue decreased 7% for the first nine months of 2025 as compared to the first nine months of 2024 primarily due to decreases in DRAM and NAND bit shipments, partially offset by in increases in average selling prices.

  • EBU revenue decreased 5% and 4%, respectively, primarily due to declines in average selling prices, partially offset by increases in bit shipments.

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Operating Income (Loss) by Business Unit

Third QuarterSecond QuarterThird QuarterNine Months Ended
20252025202420252024
CNBU$2,18243%$1,91942%$44217%$5,81241%$731%
SBU(9)(1)%242%766%3628%(631)(22)%
MBU21714%606%30119%60415%(395)(9)%
EBU988%3—%12410%1123%1334%
All other267%125%(2)(67)%19%2368%
$2,490$2,007$941$6,891$(797)

Percentages reflect operating income (loss) as a percentage of revenue for each business unit.

Changes in operating income or loss for each business unit for the third quarter of 2025 as compared to the second quarter of 2025 were as follows:

  • CNBU operating income increased primarily due to increases in sales of HBM products.

  • SBU operating income (loss) deteriorated primarily due to declines in average selling prices, partially offset by increases in bit shipments.

  • MBU operating income increased primarily due to increases in bit shipments and manufacturing cost reductions, partially offset by declines in average selling prices.

  • EBU operating income increased primarily due to increases in bit shipments and manufacturing cost reductions, partially offset by declines in average selling prices.

Changes in operating income or loss for each business unit for the third quarter and the first nine months of 2025 as compared to the corresponding periods of 2024 were as follows:

  • CNBU operating income improved primarily due to increases in average selling prices and increases in sales of HBM and other data center products.

  • SBU operating income (loss) deteriorated for the third quarter of 2025 as compared to the third quarter of 2024 primarily due to decreases in selling prices for NAND, partially offset by increases in bit shipments and manufacturing cost reductions. SBU operating income (loss) improved for the first nine months of 2025 as compared to the first nine months of 2024 primarily due to increases in bit shipments, increases in average selling prices, and manufacturing cost reductions.

  • MBU operating income decreased for the third quarter of 2025 as compared to the third quarter of 2024 primarily due to declines in selling prices, partially offset by increases in bit shipments and manufacturing cost reductions. MBU operating income (loss) improved for the first nine months of 2025 as compared to the first nine months of 2024 primarily due to increases in average selling prices and manufacturing cost reductions, partially offset by decreases in bit shipments.

  • EBU operating income decreased primarily due to decreases in average selling prices, partially offset by increases in bit shipments and manufacturing cost reductions.

We initiated a strategic reorganization of our business units to a market segment-focused business unit structure, with AI growth opportunities in every business unit. We completed reorganization of our operations and organizational structure and began to manage operations under our new segment structure effective in the fourth quarter of 2025. The changes will require us to recast our segment reporting and we will report financial results under this new structure starting with our 2025 Annual Report on Form 10-K. See “Item 1. Financial Statements – Notes to Consolidated Financial Statements – Segment and Other Information.”

Operating Expenses and Other

Research and Development: R&D expenses vary primarily with the number of development and pre-qualification wafers processed, the cost of advanced equipment dedicated to new product and process development, and personnel costs. Because of the lead times necessary to manufacture our products, we typically begin to process wafers before completion of performance and reliability testing. Development of a product is deemed complete when it is qualified through internal reviews and tests for performance and reliability. R&D expenses can vary significantly depending on the timing of product qualification.

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R&D expenses for the third quarter of 2025 increased 7% as compared to the second quarter of 2025 primarily due to an increase in employee compensation and higher volumes of development and pre-qualification wafers. R&D expenses for the third quarter of 2025 increased 14% as compared to the third quarter of 2024 primarily due to an increase in employee compensation and higher volumes of development and pre-qualification wafers. R&D expenses for the first nine months of 2025 increased 9% as compared to the first nine months of 2024 primarily due to increases in employee compensation and depreciation expense, partially offset by lower volumes of development and pre-qualification wafers.

Selling, General, and Administrative: SG&A expenses for the third quarter of 2025 increased 12% as compared to the second quarter of 2025 primarily due to an increase in employee compensation. SG&A expenses for the third quarter and first nine months of 2025 increased 9% and 7%, respectively, as compared to the corresponding periods of 2024 primarily due to an increase in employee compensation.

Other Operating (Income) Expense, Net: See “Item 1. Financial Statements – Notes to Consolidated Financial Statements – Other Operating (Income) Expense, Net.”

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

Third QuarterSecond QuarterThird QuarterNine Months Ended
20252025202420252024
Income (loss) before taxes$2,113$1,758$715$6,023$(270)
Income tax (provision) benefit(235)(177)(377)(695)172
Effective tax rate11.1%10.1%52.7%11.5%63.7%

The change in our effective tax rate for the third quarter of 2025 as compared to the second quarter of 2025 was primarily due to discrete items related to tax return filings during the second quarter of 2025. The change in our effective tax rate for the third quarter of 2025 and the first nine months of 2025 as compared to the respective periods in 2024 was primarily due to changes in profitability.

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. The effect of tax incentive arrangements reduced our tax provision by $240 million (benefiting our diluted earnings per share by $0.21) for the third quarter of 2025, $171 million (benefiting our diluted earnings per share by $0.15) for the second quarter of 2025, and $623 million (benefiting our diluted earnings per share by $0.55) for the first nine months of 2025, respectively. As a result of the low level of profitability and geographic mix of income, the benefit from tax incentive arrangements was not material for the periods presented for 2024.

Further changes in the tax laws of foreign jurisdictions could arise as a result of the base erosion and profit shifting project, including Pillar Two Model Rules (“Pillar Two”), undertaken by the Organisation for Economic Co-operation and Development (“OECD”). Nearly all European Union member states have enacted the Pillar Two legislation, which will be effective for us in 2025. We do not expect these enacted laws to materially impact our effective tax rate for 2025. On November 27, 2024, Singapore enacted legislation to implement Pillar Two, which will apply to us starting in 2026. While we are still evaluating the impacts, we expect our effective tax rate for 2026 to be in the high-teens percentage range. We also continue to monitor for additional guidance and legislative changes to Pillar Two in the jurisdictions where we operate.

Various tax reforms are being considered in multiple jurisdictions that, if enacted, contain provisions that could materially impact our tax expense. We continue to monitor the potential impact of these various tax reform proposals to our overall global effective tax rate and financial statements.

Other: Further information related to our operating expenses and other can be found in “Item 1. Financial Statements – Notes to Consolidated Financial Statements”:

  • Debt

  • Equity Compensation Plans

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Liquidity and Capital Resources

Our primary sources of liquidity are cash generated from operations and financing obtained from capital markets and financial institutions. Cash generated from operations is highly dependent on selling prices for our products, which can vary significantly from period to period. Cash and marketable investments totaled $12.21 billion as of May 29, 2025, and $9.15 billion as of August 29, 2024. Our cash and investments consist primarily of bank deposits, money market funds, and liquid investment-grade, fixed-income securities, which are diversified among industries and individual issuers. To mitigate credit risk, we invest through high-credit-quality financial institutions and by policy generally limit the concentration of credit exposure by restricting the amount of investments with any single obligor. As of May 29, 2025, $4.80 billion of our cash and marketable investments was held by our foreign subsidiaries.

We continuously evaluate alternatives for efficiently funding our capital expenditures and ongoing operations. We expect to engage in a variety of financing transactions, from time to time, for such purposes as well as to refinance our existing indebtedness, including the issuance of securities. As of May 29, 2025, $3.50 billion was available to draw under our Revolving Credit Facility. Funding of certain significant capital projects is also dependent on the receipt of government incentives, which are subject to various conditions and may not be obtained.

To develop new product and process technology, support future growth, achieve operating efficiencies, and maintain product quality, we must continue to invest in manufacturing technologies, facilities and equipment, and R&D. We estimate capital expenditures in 2025 for property, plant, and equipment, net of proceeds from government incentives, to be approximately $14 billion. Actual amounts for 2025 will vary depending on market conditions and may vary from quarter to quarter due to the timing of expenditures and proceeds from government incentives. As of May 29, 2025, we had purchase obligations of approximately $1.69 billion for the acquisition of property, plant, and equipment, substantially all of which is expected to be paid within one year. For a description of other contractual obligations, such as leases and debt, see “Item 1. Financial Statements – Notes to Consolidated Financial Statements – Leases,” and “ – Debt.”

To support projected memory demand in the second half of the decade, we will need to add new DRAM wafer capacity. Following the enactment of the CHIPS Act, we announced plans to invest in leading-edge memory manufacturing sites in Idaho and New York, based on CHIPS Act support through grants and investment tax credits.

As part of this plan, in September 2022, we broke ground on a leading-edge memory manufacturing fab in Boise, Idaho. Construction of the fab began in October 2023, with first DRAM wafer output projected in the second half of calendar 2027. In June 2025, in connection with certain amendments to our CHIPS Act agreements, we announced plans for a second leading-edge memory manufacturing fab in Idaho to serve growing market demand fueled by AI.

Our announced plan for New York includes construction of a leading-edge DRAM memory manufacturing site, consisting of up to four fabs to be built over the next 20-plus years, in Clay, New York. We expect site preparation to begin in calendar 2025, with production anticipated to ramp after the completion of the second Idaho fab. We expect these new fabs to be key to meeting our requirements for additional wafer capacity, in line with industry demand trends and our objective of maintaining stable bit share.

On December 9, 2024, we entered into direct funding agreements with the U.S. Department of Commerce for up to $6.1 billion in direct funding pursuant to the CHIPS Act for a planned fab in Boise, Idaho and two planned fabs in Clay, New York. On June 11, 2025, we entered into amendments to the direct funding agreements to add a second planned fab in Boise, Idaho and allocate certain award funding to the second planned Idaho fab from the $6.1 billion grants previously awarded. The direct funding for up to $6.1 billion remains unchanged. We elected not to pursue the federal loans previously disclosed as included in the non-binding preliminary memorandum of terms for the Boise, Idaho and Clay, New York fabs. On June 11, 2025, we also entered into a direct funding agreement with the U.S. Department of Commerce for up to $275 million in direct funding to expand and modernize our fab in Manassas, Virginia. The grants under the funding agreements represent total CHIPS Act grants of up to $6.4 billion in connection with our U.S. manufacturing expansion and modernization projects. In addition, we announced plans to bring advanced HBM packaging capabilities to the U.S. See “Item 1. Financial Statements – Notes to Consolidated Financial Statements – CHIPS Act Funding Agreements.”

In addition to the CHIPS Act direct funding, we receive a 25% investment tax credit on qualified investments in U.S. semiconductor manufacturing under the CHIPS Act. We have also signed a non-binding term sheet with the State of

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New York that provides for up to $5.5 billion in funding for the planned four-fab facility over the next 20-plus years through a combination of tax credits for qualified capital investments and incentives for eligible new job wages.

Additionally, we have established cleanroom space within our existing manufacturing fab in Hiroshima, Japan, and have recently received the EUV lithography tool that will support production of advanced DRAM. We are expanding our production capacity in Taiwan for DRAM and HBM products to meet rising market demand. We also continue to advance our global back-end assembly and test network in order to support our product portfolio and extend our ability to deliver on global customer demand in the future. We are expanding our existing assembly and test facility in Xi’an, China, to provide space to add more product capability, to allow us over time to serve more of the demand from our customers in China. Construction is also progressing for the assembly and test facility in Gujarat, India to address demand in the latter half of this decade. In January 2025, we broke ground on an HBM advanced packaging facility in Singapore to meaningfully expand our total advanced packaging capacity beginning in calendar 2027.

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, restrictions applicable under our CHIPS Act direct funding agreements, and our ongoing determination of the best use of available cash. Through May 29, 2025, we had repurchased an aggregate of $7.19 billion of the authorized amount. See “Item 1. Financial Statements – Notes to Consolidated Financial Statements – Equity” and “Item 1. Financial Statements – Notes to Consolidated Financial Statements – CHIPS Act Funding Agreements.”

On June 25, 2025, our Board of Directors declared a quarterly dividend of $0.115 per share, payable in cash on July 22, 2025, to shareholders of record as of the close of business on July 7, 2025. The declaration and payment of any future cash dividends are at the discretion and subject to the approval of our Board of Directors. Our Board of Directors’ decisions regarding the amount and payment of dividends will depend on many factors, including, but not limited to, our financial condition, results of operations, capital requirements, business conditions, debt service obligations, contractual restrictions, industry practice, legal requirements, regulatory constraints, and other factors that our Board of Directors may deem relevant.

We expect that our cash and investments, cash flows from operations, funding from government incentives, and available financing will be sufficient to meet our requirements at least through the next 12 months and thereafter for the foreseeable future.

Cash Flows

Nine Months EndedMay 29, 2025May 30, 2024
Net cash provided by operating activities$11,795$5,102
Net cash used for investing activities(8,889)(4,711)
Net cash provided by (used for) financing activities214(1,368)
Effect of changes in currency exchange rates on cash, cash equivalents, and restricted cash(3)(15)
Net increase (decrease) in cash, cash equivalents, and restricted cash$3,117$(992)

Operating Activities: Cash provided by operating activities reflects net income (loss) adjusted for certain non-cash items, including depreciation expense, amortization of intangible assets, and stock-based compensation, and the effects of changes in operating assets and liabilities.

The increase in cash provided by operating activities for the first nine months of 2025 as compared to the first nine months of 2024 was primarily due to net income in the current year adjusted for non-cash items and the effect of changes in receivables, partially offset by a decrease in other current liabilities.

Investing Activities: For the first nine months of 2025, net cash used for investing activities consisted primarily of $10.20 billion of expenditures for property, plant, and equipment; partially offset by $1.29 billion received from government incentives to offset capital expenditures and $46 million of net inflows from maturities, sales, and purchases of available-for-sale securities.

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For the first nine months of 2024, net cash used for investing activities consisted primarily of $5.27 billion of expenditures for property, plant, and equipment; partially offset by $267 million received from government incentives to offset capital expenditures and $323 million of net inflows from maturities, sales, and purchases of available-for-sale securities.

Financing Activities: For the first nine months of 2025, net cash provided by financing activities consisted primarily of $1.68 billion of proceeds from the issuance of the 2029 Term Loan A; approximately $1.25 billion of proceeds from the issuance of the 2035 B Notes; approximately $1.00 billion of proceeds from the issuance of the 2035 A Notes; and $499 million of proceeds from the issuance of the 2032 Notes; partially offset by $3.60 billion of repayments of debt, which included the prepayment of the 2026 Notes, 2026 Term Loan A, 2027 Notes, and 2027 Term Loan A borrowings; and $392 million for payments of dividends to shareholders. See “Item 1. Financial Statements – Notes to Consolidated Financial Statements – Debt.”

For the first nine months of 2024, net cash used for financing activities consisted primarily of $1.82 billion of repayments of debt, which included the prepayment of the 2024 Term Loan A and the 2025 Term Loan A borrowings; $384 million for payments of dividends to shareholders; and $127 million of payments on equipment purchase contracts; partially offset by approximately $1.00 billion of proceeds from the issuance of the 2031 Notes.

Critical Accounting Estimates

For a discussion of our critical accounting estimates, see “Part II – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates” of our Annual Report on Form 10-K for the year ended August 29, 2024. There have been no significant changes to our critical accounting estimates since our Annual Report on Form 10-K for the year ended August 29, 2024.

Recently Issued Accounting Standards

See “Part I. Financial Information – Item 1. Financial Statements – Notes to Consolidated Financial Statements – Recently Issued Accounting Standards.”

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