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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 3, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from            to
Commission file number 1-10658
https://cdn.kscope.io/4f67d22aae75256b8994fdd4bcab5eff-mu-20201203_g1.jpg
Micron Technology, Inc.
(Exact name of registrant as specified in its charter)
Delaware75-1618004
(State or other jurisdiction of incorporation or organization)(IRS Employer Identification No.)
8000 S. Federal Way, Boise, Idaho
83716-9632
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code
(208) 368-4000
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, par value $0.10 per shareMUNasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.YesNo
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).YesNo
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated FilerAccelerated FilerNon-Accelerated FilerSmaller Reporting CompanyEmerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).YesNo
The number of outstanding shares of the registrants common stock as of January 4, 2021 was 1,118,671,492.




Micron Company Profile
https://cdn.kscope.io/4f67d22aae75256b8994fdd4bcab5eff-mu-20201203_g2.jpg

Founded over 40 years ago
on October 5, 1978

Headquartered in
Boise, Idaho, USA
 
4th
Largest semiconductor company
in the world, excluding IP/software revenue*

134
On the 2020 Fortune 500

44,000
Patents granted and growing**

17
Countries**

13
Manufacturing sites and
14 customer labs**

40,000
Team members**
It’s All About Data
Data is today’s new business currency, and memory and storage are emerging as strategic differentiators which will redefine how we extract value from data to learn, explore, communicate, and navigate our world.
Who We Are
Micron designs, develops, and manufactures industry-leading memory and storage products. By creating rapid advancements in artificial intelligence, 5G, machine learning, and autonomous vehicles, we unlock innovation in key market segments like mobile, data center, healthcare, automotive, and cloud networking. Our technology and expertise are central to cutting-edge computing applications and new business models which disrupt and advance the industry.
Our Vision
As a global leader in memory and storage solutions, we are transforming how the world uses information to enrich life for all. By advancing technologies to collect, store, and manage data with unprecedented speed and efficiency, we continue to lead the transformation of information intelligence. In a world of change, we remain nimble, allowing our products to continue inspiring the world to learn, communicate, and advance faster than ever.
Our Commitment
The world has come to expect our commitment to innovative solutions and people depend on our integrity. We rededicate ourselves daily to demonstrating our environmental conscience, an inclusive team culture where all voices are heard and respected, and sharing our philanthropic social giving for good.

*Gartner Market Share: Semiconductors by End Market, Worldwide, 2019 (April 2020)
**Micron data as of September 3, 2020.
Media Inquiries
mediarelations@micron.com

Government Inquiries
govaffairs@micron.com

Investor Inquiries
investorrelations@micron.com
Global Product Portfolio
DRAM | NAND | 3D XPointTM Memory | NOR | Solid-State Drives
High Bandwidth Memory (HBM) | Multichip Packages | AI Accelerators
Connect with us on micron.com
© 2021 Micron Technology, Inc. Micron, the Micron logo, the M orbit logo, Intelligence AcceleratedTM, and other Micron trademarks are the property of Micron Technology, Inc. All other trademarks are the property of their respective owners. Products and specifications are subject to change without notice. Rev 01/21 CCMMD-1707390403-3712




Table of Contents

Introduction
Part I. Financial Statements
Item 1.Financial Statements:
Consolidated Statements of Operations
Consolidated Statements of Comprehensive Income
Consolidated Balance Sheets
Consolidated Statements of Changes in Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations
Liquidity and Capital Resources
Item 3.Quantitative and Qualitative Disclosures about Market Risk
Item 4.Controls and Procedures
Part II. Other Information
Item 1.Legal Proceedings
Item 1A.Risk Factors
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
Item 6.Exhibits
Signatures


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Definitions of Commonly Used Terms
As used herein, “we,” “our,” “us,” and similar terms include Micron Technology, Inc. and its consolidated subsidiaries, unless the context indicates otherwise. Abbreviations, terms, or acronyms are commonly used or found in multiple locations throughout this report and include the following:
TermDefinitionTermDefinition
2023 Notes2.497% Senior Notes due 2023GDDRGraphics Double Data Rate
2024 Notes
4.640% Senior Notes due 2024
IMFTIM Flash Technologies, LLC
2024 Term Loan ASenior Term Loan A due 2024InoteraInotera Memories, Inc.
2025 Notes
5.500% Senior Notes due 2025
Intel
Intel Corporation
2026 Notes
4.975% Senior Notes due 2026
MCPMulti-Chip Package
2027 Notes
4.185% Senior Notes due 2027
Micron
Micron Technology, Inc. (Parent Company)
2029 Notes
5.327% Senior Notes due 2029
MMJMicron Memory Japan, G.K.
2030 Notes
4.663% Senior Notes due 2030
MTUMicron Technology Utah, LLC
2032D Notes
3.125% Convertible Senior Notes due 2032
Revolving Credit Facility$2.5 billion Revolving Credit Facility due July 2023
DDRDouble Data RateSSDSolid State Drive

Micron Technology, Inc., including its consolidated subsidiaries, is an industry leader in innovative memory and storage solutions. Through our global brands — Micron® and Crucial® — our broad portfolio of high-performance memory and storage technologies, including DRAM, NAND, 3D XPointTM memory, and NOR, is transforming how the world uses information to enrich life for all. Backed by more than 40 years of technology leadership, our memory and storage solutions enable disruptive trends, including artificial intelligence, 5G, machine learning, and autonomous vehicles, in key market segments like mobile, data center, client, consumer, industrial, graphics, automotive, and networking.

Micron, Crucial, any associated logos, and all other Micron trademarks are the property of Micron. Intel and 3D XPoint are trademarks of Intel Corporation or its subsidiaries. Other product names or trademarks that are not owned by Micron are for identification purposes only and may be the trademarks of their respective owners.

Available Information
Investors and others should note that we announce material financial information about our business and products through a variety of means, including our investor relations website (investors.micron.com), filings with the U.S. Securities and Exchange Commission (the “SEC”), press releases, public conference calls, and webcasts. We use these channels to achieve broad, non-exclusionary distribution of information to the public and for complying with our disclosure obligations under Regulation FD. Therefore, we encourage investors, the media, and others interested in our company to review the information we post on such channels.

Forward-Looking Statements
This Form 10-Q contains trend information and other forward-looking statements that involve a number of risks and uncertainties. Such forward-looking statements may be identified by words such as "anticipate," "expect," "intend," "pledge," "committed," "plans," "opportunities," "future," "believe," "target," "on track," "estimate," "continue," "likely," "may," "will," "would," "should," "could," and variations of such words and similar expressions. Specific forward-looking statements include, but are not limited to, statements such as those made regarding the impact of coronavirus disease 2019 (“COVID-19”) to our business; underutilization of MTU manufacturing capacity; the effect of a switch to the FIFO inventory accounting method and changes in our inventory cost absorption process in the second quarter of 2021; the sufficiency of our cash and investments; and capital spending in 2021. Our actual results could differ materially from our historical results and those discussed in the forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, those identified in “Part II. Other Information – Item 1A. Risk Factors.”
2 | 2021 Q1 10-Q



PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

Micron Technology, Inc.
Consolidated Statements of Operations
(In millions, except per share amounts)
(Unaudited)

Three months endedDecember 3,
2020
November 28,
2019
Revenue$5,773 $5,144 
Cost of goods sold4,037 3,778 
Gross margin1,736 1,366 
Research and development647 640 
Selling, general, and administrative214 211 
Other operating (income) expense, net9 (3)
Operating income866 518 
Interest income10 44 
Interest expense(48)(47)
Other non-operating income (expense), net13 46 
841 561 
Income tax (provision) benefit(51)(55)
Equity in net income (loss) of equity method investees
13 2 
Net income803 508 
Net income attributable to noncontrolling interests (17)
Net income attributable to Micron$803 $491 
Earnings per share
Basic$0.72 $0.44 
Diluted0.71 0.43 
Number of shares used in per share calculations
Basic1,115 1,107 
Diluted1,135 1,129 










See accompanying notes to consolidated financial statements.
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Micron Technology, Inc.
Consolidated Statements of Comprehensive Income
(In millions)
(Unaudited)

Three months endedDecember 3,
2020
November 28,
2019
Net income$803 $508 
Other comprehensive income (loss), net of tax
Gains (losses) on derivative instruments40 3 
Gains (losses) on investments(1)(5)
Pension liability adjustments (1)
Other comprehensive income (loss)39 (3)
Total comprehensive income842 505 
Comprehensive income attributable to noncontrolling interests
 (17)
Comprehensive income attributable to Micron$842 $488 



































See accompanying notes to consolidated financial statements.
4 | 2021 Q1 10-Q



Micron Technology, Inc.
Consolidated Balance Sheets
(In millions, except par value amounts)
(Unaudited)
As ofDecember 3,
2020
September 3,
2020
Assets
Cash and equivalents$5,985 $7,624 
Short-term investments1,047 518 
Receivables3,691 3,912 
Inventories5,521 5,607 
Other current assets285 304 
Total current assets16,529 17,965 
Long-term marketable investments1,264 1,048 
Property, plant, and equipment32,229 31,031 
Operating lease right-of-use assets577 584 
Intangible assets336 334 
Deferred tax assets726 707 
Goodwill1,228 1,228 
Other noncurrent assets802 781 
Total assets$53,691 $53,678 
Liabilities and equity
Accounts payable and accrued expenses$4,856 $5,817 
Current debt273 270 
Other current liabilities559 548 
Total current liabilities5,688 6,635 
Long-term debt6,356 6,373 
Noncurrent operating lease liabilities529 533 
Noncurrent unearned government incentives656 643 
Other noncurrent liabilities555 498 
Total liabilities13,784 14,682 
Commitments and contingencies
Shareholders’ equity
Common stock, $0.10 par value, 3,000 shares authorized, 1,198 shares issued and 1,117 outstanding (1,194 shares issued and 1,113 outstanding as of September 3, 2020)
120 119 
Additional capital9,034 8,917 
Retained earnings34,138 33,384 
Treasury stock, 81 shares held (81 shares held as of September 3, 2020)
(3,495)(3,495)
Accumulated other comprehensive income (loss)110 71 
Total equity39,907 38,996 
Total liabilities and equity$53,691 $53,678 



See accompanying notes to consolidated financial statements.
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Micron Technology, Inc.
Consolidated Statements of Changes in Equity
(In millions)
(Unaudited)


Common StockAdditional CapitalRetained EarningsTreasury StockAccumulated Other Comprehensive
Income (Loss)
Total Shareholders’ Equity
Number
of Shares
Amount
Balance at September 3, 20201,194 $119 $8,917 $33,384 $(3,495)$71 $38,996 
Net income— — — 803 — — 803 
Other comprehensive income (loss), net— — — — — 39 39 
Stock issued under stock plans5 1 33 — — — 34 
Stock-based compensation expense— — 92 — — — 92 
Repurchase of stock(1) (8)(49)— — (57)
Balance at December 3, 20201,198 $120 $9,034 $34,138 $(3,495)$110 $39,907 


Micron Shareholders  
Common StockAdditional CapitalRetained EarningsTreasury StockAccumulated Other Comprehensive
Income (Loss)
Total Micron Shareholders’ EquityNoncontrolling Interest in SubsidiaryTotal Equity
Number
of Shares
Amount
Balance at August 29, 20191,182 $118 $8,214 $30,761 $(3,221)$9 $35,881 $889 $36,770 
Net income— — — 491 — — 491 15 506 
Other comprehensive income (loss), net— — — — — (3)(3)— (3)
Stock issued under stock plans3 1 31 — — — 32 — 32 
Stock-based compensation expense— — 72 — — — 72 — 72 
Repurchase of stock  (6)(34)(50)— (90)— (90)
Acquisition of noncontrolling interest— — 123 — — — 123 (904)(781)
Cash settlement of convertible notes— — (6)— — — (6)— (6)
Balance at November 28, 20191,185 $119 $8,428 $31,218 $(3,271)$6 $36,500 $ $36,500 

















See accompanying notes to consolidated financial statements.
6 | 2021 Q1 10-Q



Micron Technology, Inc.
Consolidated Statements of Cash Flows
(In millions)
(Unaudited)
Three months endedDecember 3,
2020
November 28,
2019
Cash flows from operating activities
Net income$803 $508 
Adjustments to reconcile net income to net cash provided by operating activities  
Depreciation expense and amortization of intangible assets1,487 1,296 
Amortization of debt discount and other costs7 10 
Stock-based compensation92 72 
(Gain) loss on debt prepayments, repurchases, and conversions (42)
Change in operating assets and liabilities  
Receivables251 (208)
Inventories86 175 
Accounts payable and accrued expenses(753)178 
Deferred income taxes, net(24)19 
Other18 3 
Net cash provided by operating activities1,967 2,011 
Cash flows from investing activities  
Expenditures for property, plant, and equipment(2,738)(1,943)
Purchases of available-for-sale securities(1,002)(407)
Proceeds from maturities of available-for-sale securities216 163 
Proceeds from sales of available-for-sale securities45 988 
Proceeds from government incentives40 22 
Other21 (12)
Net cash provided by (used for) investing activities(3,418)(1,189)
Cash flows from financing activities  
Payments on equipment purchase contracts(97)(11)
Repayments of debt(84)(1,415)
Acquisition of noncontrolling interest in IMFT (744)
Proceeds from issuance of debt 1,250 
Other(33)(72)
Net cash provided by (used for) financing activities(214)(992)
Effect of changes in currency exchange rates on cash, cash equivalents, and restricted cash27 (14)
Net increase (decrease) in cash, cash equivalents, and restricted cash(1,638)(184)
Cash, cash equivalents, and restricted cash at beginning of period7,690 7,279 
Cash, cash equivalents, and restricted cash at end of period$6,052 $7,095 




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)

Basis of Presentation

The accompanying consolidated financial statements include the accounts of Micron and our consolidated subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America consistent in all material respects with those applied in our Annual Report on Form 10-K for the year ended September 3, 2020. 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 2021 contains 52 weeks and our fiscal 2020 contained 53 weeks. The first quarters of fiscal 2021 and 2020 each contained 13 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 September 3, 2020.

Through October 31, 2019, IMFT was a consolidated variable interest entity. We acquired Intel’s noncontrolling interest in IMFT on October 31, 2019, at which time IMFT, now known as MTU, became a wholly-owned subsidiary.


Recently Adopted Accounting Standards

In November 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-18 – Collaborative Arrangements, which clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue when the collaborative arrangement participant is a customer in the context of a unit of account and precludes recognizing as revenue consideration received from a collaborative arrangement participant if the participant is not a customer. We adopted ASU 2018-18 in the first quarter of 2021 under the retrospective adoption method to the date we adopted ASC 606, which was August 31, 2018. The adoption of this ASU did not have a significant impact on our financial statements.

In June 2016, the FASB issued ASU 2016-13 – Measurement of Credit Losses on Financial Instruments, which requires a financial asset (or a group of financial assets) measured on the basis of amortized cost to be presented at the net amount expected to be collected. This ASU requires that the income statement reflect the measurement of credit losses for newly recognized financial assets as well as the increases or decreases of expected credit losses that have taken place during the period. This ASU requires that credit losses of debt securities designated as available-for-sale be recorded through an allowance for credit losses and limits the credit loss to the amount by which fair value is below amortized cost. We adopted ASU 2016-13 in the first quarter of 2021 under the modified retrospective adoption method. The adoption of this ASU did not have a significant impact on our financial statements.


Recently Issued Accounting Standards

In August 2020, the FASB issued ASU 2020-06 – Debt - Debt with Conversion and Other Options and Derivatives and Hedging - Contracts in Entity’s Own Equity, which simplifies the accounting for convertible debt instruments by reducing the number of accounting models and the number of embedded conversion features that could be recognized separately from the primary contract. This ASU requires a convertible debt instrument to be accounted for as a single liability measured at its amortized cost, as long as no other features require bifurcation and
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recognition as derivatives. This ASU requires an entity to use the if-converted method in the diluted earnings per share calculation for convertible instruments. This ASU will be effective for us in the first quarter of 2023, with early adoption permitted beginning in the first quarter of 2022, and permits the use of either the modified retrospective or fully retrospective method of transition. We are evaluating the timing and effects of our adoption of this ASU on our financial statements.


Cash and Investments

Substantially all of our marketable debt and equity 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:
December 3, 2020September 3, 2020
As ofCash and EquivalentsShort-term Investments
Long-term Marketable Investments(1)
Total Fair ValueCash and EquivalentsShort-term Investments
Long-term Marketable Investments(1)
Total Fair Value
Cash$3,082 $ $ $3,082 $3,996 $ $ $3,996 
Level 1(2)
Money market funds699   699 1,828   1,828 
Level 2(3)
Certificates of deposit2,155 431  2,586 1,740 10 2 1,752 
Corporate bonds 249 746 995 3 266 592 861 
Government securities3 217 220 440 6 115 243 364 
Asset-backed securities 36 298 334 1 31 211 243 
Commercial paper46 114  160 50 96  146 
5,985 $1,047 $1,264 $8,296 7,624 $518 $1,048 $9,190 
Restricted cash(4)
67 66 
Cash, cash equivalents, and restricted cash$6,052 $7,690 
(1)The maturities of long-term marketable securities range from one to four years.
(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 December 3, 2020 or September 3, 2020.
(4)Restricted cash is included in 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.

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


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Receivables

As ofDecember 3,
2020
September 3,
2020
Trade receivables$3,182 $3,494 
Income and other taxes295 232 
Other214 186 
$3,691 $3,912 


Inventories

As ofDecember 3,
2020
September 3,
2020
Finished goods$878 $1,001 
Work in process3,878 3,854 
Raw materials and supplies765 752 
$5,521 $5,607 


Property, Plant, and Equipment

As ofDecember 3,
2020
September 3,
2020
Land$352 $352 
Buildings14,447 13,981 
Equipment(1)
50,291 48,525 
Construction in progress(2)
1,814 1,600 
Software919 873 
 67,823 65,331 
Accumulated depreciation(35,594)(34,300)
 $32,229 $31,031 
(1)Included costs related to equipment not placed into service of $2.41 billion as of December 3, 2020 and $1.63 billion as of September 3, 2020.
(2)Included building-related construction, tool installation, and software costs for assets not placed into service.


Intangible Assets and Goodwill

December 3, 2020September 3, 2020
As ofGross
Amount
Accumulated
Amortization
Gross
Amount
Accumulated
Amortization
Product and process technology$628 $(292)$616 $(282)
Goodwill1,228 1,228 

In the first quarters of 2021 and 2020, we capitalized $22 million and $12 million, respectively, for product and process technology with weighted-average useful lives of 10 years and 11 years, respectively. Expected
10 | 2021 Q1 10-Q



amortization expense is $57 million for the remainder of 2021, $60 million for 2022, $53 million for 2023, $47 million for 2024, and $26 million for 2025.


Leases

Short-term and variable lease expenses were not significant and are presented within operating lease costs in the table below. Sublease income was not significant in the first quarters of 2021 or 2020. The components of lease expense are presented below:
Three months endedDecember 3,
2020
November 28,
2019
Finance lease cost
Amortization of right-of-use assets$16 $40 
Interest on lease liabilities5 6 
Operating lease cost27 24 
$48 $70 

Other information related to our leases was as follows:
Three months endedDecember 3,
2020
November 28,
2019
Cash flows used for operating activities
Finance leases
$6 $6 
Operating leases
27 17 
Cash flows used for financing activities from financing leases21 64 
Noncash acquisitions of right-of-use assets
Finance leases61  
Operating leases
7 13 

As ofDecember 3,
2020
September 3,
2020
Finance lease right-of-use assets (included in property, plant, and equipment)$471 $426 
Weighted-average remaining lease term (in years)
Finance leases
55
Operating leases
77
Weighted-average discount rate
Finance leases
4.13 %4.51 %
Operating leases
2.66 %2.67 %

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Maturities of lease liabilities existing as of December 3, 2020 were as follows:
For the year endingFinance LeasesOperating Leases
Remainder of 2021$71 $53 
202297 71 
202385 67 
202459 59 
202544 48 
2026 and thereafter282 402 
Less imputed interest(107)(116)
$531 $584 

The table above excludes any lease liabilities for leases that have been executed but have not yet commenced. As of December 3, 2020, we had such lease liabilities relating to 1) operating lease payment obligations of $152 million for the initial 10-year lease term for a building, which may, at our election, be terminated after 3 years or extended for an additional 10 years, and 2) finance lease obligations of $812 million over a weighted-average period of 15 years for leases embedded in gas supply arrangements. 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 ofDecember 3,
2020
September 3,
2020
Accounts payable$1,656 $2,191 
Property, plant, and equipment2,180 2,374 
Salaries, wages, and benefits636 849 
Income and other taxes180 237 
Other204 166 
$4,856 $5,817 


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Debt

December 3, 2020September 3, 2020
Net Carrying AmountNet Carrying Amount
As ofStated RateEffective RateCurrentLong-TermTotalCurrentLong-TermTotal
Finance lease obligations
N/A4.13 %$78 $453 $531 $76 $410 $486 
2023 Notes2.497 %2.64 % 1,246 1,246  1,245 1,245 
2024 Notes
4.640 %4.76 % 598 598  598 598 
2024 Term Loan A1.400 %1.45 %62 1,124 1,186 62 1,186 1,248 
2026 Notes
4.975 %5.07 % 498 498  498 498 
2027 Notes
4.185 %4.27 % 896 896  895 895 
2029 Notes
5.327 %5.40 % 696 696  696 696 
2030 Notes
4.663 %4.73 % 845 845  845 845 
2032D Notes
3.125 %6.33 %132  132 131  131 
MMJ Creditor PaymentsN/AN/A1  1 1  1 
 
$273 $6,356 $6,629 $270 $6,373 $6,643 

Revolving Credit Facility

As of December 3, 2020, no amounts were outstanding under the Revolving Credit Facility and $2.50 billion was available to us. Any amounts outstanding under the Revolving Credit Facility would mature in July 2023 and we may repay amounts borrowed any time without penalty. The Revolving Credit Facility bears interest at a rate equal to LIBOR plus 1.25% based on our current corporate credit rating and leverage ratio.

2032D Convertible Senior Notes

The closing price of our common stock exceeded 130% of the conversion price for the 2032D Notes for at least 20 trading days in the 30 consecutive trading days ended on December 31, 2020. As a result, the 2032D Notes are convertible by the holders through March 31, 2021. As of December 3, 2020, based on the $69.90 trading price of our common stock and the $9.98 conversion price, the aggregate conversion value of $936 million exceeded the aggregate principal amount of $134 million by $802 million.


Contingencies

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 August 12, 2014, MLC Intellectual Property, LLC filed a patent infringement action against Micron in the U.S. District Court for the Northern District of California. The complaint alleges that Micron infringes a single U.S. patent and seeks damages, attorneys’ fees, and costs.

On November 21, 2014, Elm 3DS Innovations, LLC (“Elm”) filed a patent infringement action against Micron; Micron Semiconductor Products, Inc.; and Micron Consumer Products Group, Inc. in the U.S. District Court for the District of Delaware. On March 27, 2015, Elm filed an amended complaint against the same entities. The amended complaint alleges that unspecified semiconductor products of ours that incorporate multiple stacked die infringe 13 U.S. patents and seeks damages, attorneys’ fees, and costs.

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On December 15, 2014, Innovative Memory Solutions, Inc. (“IMS”) filed a patent infringement action against Micron in the U.S. District Court for the District of Delaware. The complaint alleges that a variety of our NAND products infringe eight U.S. patents and seeks damages, attorneys’ fees, and costs. Subsequently, six patents were invalidated or withdrawn, leaving two asserted patents in the District Court.

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 infringe a 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 infringe a 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 April 3, 2018, MSS was served with another patent infringement complaint filed by Jinhua and two additional complaints filed by UMC in the Fuzhou Court. The three additional complaints allege that MSS infringes three Chinese patents by manufacturing and selling certain Crucial MX300 SSDs and certain GDDR5 memory chips. The two complaints filed by UMC each seek 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 for each complaint 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 October 9, 2018, UMC withdrew its complaint that alleged MSS infringed a Chinese patent by manufacturing and selling certain GDDR5 memory chips.

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. The affected products made up slightly more than 1% of our annualized revenue in 2018. We are complying with the ruling and have requested the Fuzhou Court to reconsider or stay its decision.

On May 4, 2020, Flash-Control, LLC (“Flash-Control”) filed a patent infringement action against Micron in the U.S. District Court for the Western District of Texas. The complaint alleges that four U.S. patents are infringed by unspecified DDR4 SDRAM, NVRDIMM, NVDIMM, 3D XPointTM, and/or SSD products that incorporate memory controllers and flash memory. The complaint seeks 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 seeks 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 seeks an order requiring us to re-transfer those shares to the Qimonda estate. The complaint also seeks, among other things, to recover damages for the alleged value of the joint venture relationship with Inotera and to terminate,
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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, has been able to continue to operate with full control of the Inotera Shares subject to further developments in the case. On April 17, 2014, Micron and Micron B.V. filed a notice of appeal with the German Appeals Court challenging the District Court’s decision. After opening briefs, the Appeals Court held a hearing on the matter on July 9, 2015, and 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 January 25, 2018, the court-appointed expert issued a report concluding that the amount paid by Micron was within an acceptable fair-value range. The Appeals Court held a subsequent hearing on April 30, 2019, and on May 28, 2019, the Appeals Court remanded the case to the expert for supplemental expert opinion. On March 31, 2020, the expert presented a revised opinion to the Appeals Court which reaffirmed the earlier view that the amount paid by Micron was still within an acceptable range of fair value.

Antitrust Matters

On April 27, 2018, a complaint was filed against Micron and other DRAM suppliers in the U.S. District Court for the Northern District of California. Subsequently, two substantially identical cases were filed in the same court. The lawsuits purported to be on behalf of a nationwide class of indirect purchasers of DRAM products. On September 3, 2019, the District Court granted Micron’s motion to dismiss and allowed the plaintiffs the opportunity to file a consolidated, amended complaint. On October 28, 2019, the plaintiffs filed a consolidated amended complaint that purported to be on behalf of a nationwide class of indirect purchasers of DRAM products. The amended complaint asserted claims based on alleged price-fixing of DRAM products under federal and state law during the period from June 1, 2016 to at least February 1, 2018, and sought treble monetary damages, costs, interest, attorneys’ fees, and other injunctive and equitable relief. On December 21, 2020, the District Court dismissed the plaintiffs’ claims and entered judgment against them.

On June 26, 2018, a complaint was filed against Micron and other DRAM suppliers in the U.S. District Court for the Northern District of California. Subsequently, four substantially identical cases were filed in the same court. On October 28, 2019, the plaintiffs filed a consolidated, amended complaint. The consolidated complaint purports to be on behalf of a nationwide class of direct purchasers of DRAM products. The consolidated complaint asserts claims based on alleged price-fixing of DRAM products under federal and state law during the period from June 1, 2016 through at least February 1, 2018, and seeks treble monetary damages, costs, interest, attorneys’ fees, and other injunctive and equitable relief. On December 21, 2020, the District Court granted Micron’s motion to dismiss and granted the plaintiffs permission to file an amended complaint.

Additionally, six cases have been filed in the following Canadian courts: Superior Court of Quebec, the Federal Court of Canada, the Ontario Superior Court of Justice, and the Supreme Court of British Columbia. The substantive allegations in these cases are similar to those asserted in the cases filed in the United States.

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.

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Securities Matter

On March 5, 2019, a derivative complaint was filed by a shareholder against certain current and former officers and 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 securities fraud, breaches of fiduciary duties, and other violations of law involving misrepresentations about purported anticompetitive behavior in the DRAM industry. The complaint seeks damages, fees, interest, costs, and other appropriate relief.

Other

On December 5, 2017, Micron filed a complaint against UMC and Jinhua in the U.S. District Court for the Northern District of California. The complaint alleges that UMC and Jinhua violated the Defend Trade Secrets Act, the civil provisions of the Racketeer Influenced and Corrupt Organizations Act, and California’s Uniform Trade Secrets Act by misappropriating Micron’s trade secrets and other misconduct. Micron’s complaint seeks damages, restitution, disgorgement of profits, injunctive relief, and other appropriate relief.

On June 13, 2019, current Micron employee, Chris Manning, filed a putative class action lawsuit on behalf of Micron employees subject to the Idaho Wage Claim Act who earned a performance-based bonus after the conclusion of 2018 whose performance rating was calculated based upon a mandatory percentage distribution range of performance ratings. On July 12, 2019, Manning and three other Company employees filed an amended complaint as putative class action representatives. On behalf of themselves and the putative class, Manning and the three other plaintiffs assert claims for violation of the Idaho Wage Claim Act, breach of contract, breach of the covenant of good faith and fair dealing, and fraud. On June 24, 2020, the court entered judgment in favor of Micron based on the statute of limitations, and the plaintiffs filed a notice of appeal on July 23, 2020.

On July 31, 2020, Micron and Intel entered into a binding arbitration agreement under which the parties agreed to present to an arbitral panel various financial disputes related to the IMFT joint venture between Micron and Intel, which ended October 31, 2019, and to other agreements relating to the joint development, production, and sale of non-volatile memory products. Each party alleges that the other owes damages relating to allegations of breach of one or more agreements.

On July 13, 2015, Allied Telesis, Inc. and Allied Telesis International (Asia) Pte Ltd. filed a complaint against Micron in the Superior Court of California in Santa Clara alleging breach of implied and express warranties and fraudulent inducement to contract arising from plaintiffs’ purchase of certain allegedly defective DDR1 products between 2008 and 2010. Through subsequent amendments to the complaint, the plaintiffs substituted Allied Telesis K.K. as plaintiff, withdrew the warranty claims, and added claims of fraudulent concealment, negligent misrepresentation, negligence, and strict products liability. The plaintiff’s amended complaint seeks an unspecified award of damages, including punitive damages and lost profits. On September 3, 2020, the Superior Court granted summary judgment dismissing the claims for negligence and strict products liability and denied summary judgment as to the claims for negligent misrepresentation, fraudulent concealment, and fraudulent inducement to contract. No trial date has been set; however, trial is expected to occur in the first half of calendar 2021.

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.

We are unable to predict the outcome of the patent matters, Qimonda matter, antitrust matters, securities matter, binding arbitration with Intel, or any other 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.

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We are currently a party to legal actions other than those described in this note 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.


Equity

Micron Shareholders’ Equity

Accumulated Other Comprehensive Income: Changes in accumulated other comprehensive income by component for the three months ended December 3, 2020 were as follows:
Gains (Losses) on Derivative InstrumentsPension Liability AdjustmentsUnrealized Gains (Losses) on InvestmentsCumulative Foreign Currency Translation AdjustmentTotal
As of September 3, 2020$45 $19 $8 $(1)$71 
Other comprehensive income before reclassifications47  (2) 45 
Amount reclassified out of accumulated other comprehensive income(1)   (1)
Tax effects
(6) 1  (5)
Other comprehensive income (loss)40  (1) 39 
As of December 3, 2020$85 $19 $7 $(1)$110 


Fair Value Measurements

The estimated fair values and carrying values of our outstanding debt instruments (excluding the carrying value of equity components of our convertible notes) were as follows:
December 3, 2020September 3, 2020
As ofFair
Value
Carrying
Value
Fair
Value
Carrying
Value
Notes$6,701 $5,966 $6,710 $6,026 
Convertible notes939 132 634 131 

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


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Derivative Instruments

Gross Notional AmountFair Value of
Assets(1)
Liabilities(2)
As of December 3, 2020
Derivative instruments with hedge accounting designation
Cash flow currency hedges
$3,618 $57 $(2)
Derivative instruments without hedge accounting designation
Non-designated currency hedges
1,331 5 (3)
$62 $(5)
As of September 3, 2020
Derivative instruments with hedge accounting designation
Cash flow currency hedges
$1,845 $41 $(2)
Derivative instruments without hedge accounting designation
Non-designated currency hedges
1,587 4 (1)
$45 $(3)
(1)Included in receivables – other and other noncurrent assets.
(2)Included in accounts payable and accrued expenses – other and other noncurrent liabilities.

Derivative Instruments with Hedge Accounting Designation

We utilize currency forward contracts that generally mature within two years to hedge our exposure to changes in currency exchange rates. Currency forward contracts are measured at fair value based on market-based observable inputs including currency exchange spot and forward rates, interest rates, and credit-risk spreads (Level 2). We do not use derivative instruments for speculative purposes.

Cash Flow Hedges: We utilize cash flow hedges for our exposure from changes in currency exchange rates for certain capital expenditures and manufacturing costs. We recognized gains of $47 million and $3 million for the first quarters of 2021 and 2020, respectively, in accumulated other comprehensive income from cash flow hedges. Neither the amount excluded from hedge effectiveness nor the reclassifications from accumulated other comprehensive income to earnings was significant in the first quarters of 2021 or 2020. As of December 3, 2020, we expect to reclassify $60 million of pre-tax gains related to cash flow hedges from accumulated other comprehensive income into earnings in the next 12 months.

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. For derivative instruments without hedge accounting designation, we recognized gains of $11 million and $5 million for the first quarters of 2021 and 2020, respectively.


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Equity Plans

As of December 3, 2020, 71 million shares of our common stock were available for future awards under our equity plans.

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