SEC Filing | Micron Technology

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mu-20220303

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 March 3, 2022


☐			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

Micron Technology, Inc.

(Exact name of registrant as specified in its charter)

Delaware

75-1618004

(State or other jurisdiction of incorporation or organization)

(I.R.S. 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 class

Trading Symbol

Name of each exchange on which registered

Common Stock, par value $0.10 per share

Nasdaq 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.

Yes

☒

☐

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).

Yes

☒

☐

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 Filer

Accelerated Filer

Non-Accelerated Filer

Smaller Reporting Company

Emerging 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).

Yes

☐

☒

The number of outstanding shares of the registrant’s common stock as of March 24, 2022 was 1,116,666,857.

Micron Corporate Profile

https://cdn.kscope.io/7b9d2fef6a146d94c8d07a17e5dda80c-mu-20220303_g2.jpg

Founded on October 5, 1978

Headquartered in

Boise, Idaho, USA

4th

Largest semiconductor company

in the world, excluding IP/software revenue*

135

On the 2021 Fortune 500

49,000+

Patents granted and growing**

Countries**

Manufacturing sites** and

18 customer labs**

~44,000

Team members**

It’s All About Data

Data is today’s new business currency, and memory and storage are a critical foundation for the data economy. Memory and storage innovations will help transform society and enable significant value for all.

Who We Are

Micron designs, develops and manufactures industry-leading memory and storage products. By providing foundational capability for AI and 5G across data center, the intelligent edge, and consumer devices, we unlock innovation across industries including healthcare, automotive and communications. Our technology and expertise are central to maximizing value from 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 lead the transformation of data to intelligence. In a world of change, we remain nimble, delivering products that help inspire the world to learn, communicate and advance faster than ever.

Our Commitment

*Gartner Market Share: Semiconductors by

End Market, Worldwide, 2020 (April 2021)

**Micron data as of March 3, 2022

Our customers depend on our innovative solutions every day. We dedicate ourselves to demonstrating our environmental conscience, an inclusive team culture where all voices are heard and respected, and engaging in our communities to enrich life for all.

Media Inquiries

mediarelations@micron.com

Government Inquiries

govaffairs@micron.com

Investor Inquiries

investorrelations@micron.com

Global Product Portfolio

Connect with us on micron.com

© 2022 Micron Technology, Inc. Micron, the Micron orbit 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 03/22 CCMMD-1707390403-3712

Table of Contents



Introduction		4
Part I. Financial Information
Item 1.	Financial Statements:
	Consolidated Statements of Operations	6
	Consolidated Statements of Comprehensive Income	7
	Consolidated Balance Sheets	8
	Consolidated Statements of Changes in Equity	9
	Consolidated Statements of Cash Flows	10
	Notes to Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
	Results of Operations	31
	Liquidity and Capital Resources	34
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	36
Item 4.	Controls and Procedures	36
Part II. Other Information
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	57
Item 6.	Exhibits	58
Signatures		59

Table of Contents

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:

Term

Definition

Term

Definition

2023 Notes

2.497% Senior Notes due April 2023

Inotera

Inotera Memories, Inc.

2024 Notes

4.640% Senior Notes due February 2024

Intel

Intel Corporation

2024 Term Loan A

Senior Term Loan A due October 2024

LIBOR

London Interbank Offered Rate

2026 Notes

4.975% Senior Notes due February 2026

LPDRAM

Low-power DRAM

2027 Notes

4.185% Senior Notes due February 2027

MCP

Multichip packaged solutions with managed NAND and LPDRAM

2029 Notes

5.327% Senior Notes due February 2029

Micron

Micron Technology, Inc. (Parent Company)

2030 Notes

4.663% Senior Notes due February 2030

MTU

Micron Technology Utah, LLC

2032 Green Bonds

2.703% Senior Notes due April 2032

NVMe

Hardware interface for SSDs that connect via a PCIe bus

2041 Notes

3.366% Senior Notes due November 2041

Qimonda

Qimonda AG

2051 Notes

3.477% Senior Notes due November 2051

Revolving Credit Facility

$2.5 billion revolving credit facility due May 2026

DDR

Double Data Rate DRAM

SOFR

Secured Overnight Financing Rate

EUV

Extreme ultraviolet lithography

SSD

Solid State Drive

IMFT

IM Flash Technologies, LLC

Texas Instruments Incorporated

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

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.

4 | 2022 Q2 10-Q

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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. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. Specific forward-looking statements include, but are not limited to, statements such as those made regarding the impact of the new Idaho tax law; potential increases in our effective tax rate; the impact of coronavirus disease 2019, including variant strains (“COVID-19”) to our business; the sufficiency of our cash and investments; the payment of future cash dividends; capital spending in 2022; and funding of sustainability-focused projects. 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.”

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Micron Technology, Inc.

Consolidated Statements of Operations

(In millions, except per share amounts)

(Unaudited)


	Quarter ended				Six months ended
	March 3, 2022		March 4, 2021		March 3, 2022		March 4, 2021

Revenue	$	7,786	$	6,236	$	15,473	$	12,009
Cost of goods sold	4,110		4,587		8,232		8,624
Gross margin	3,676		1,649		7,241		3,385

Research and development	792		641		1,504		1,288
Selling, general, and administrative	263		214		522		428
Restructure and asset impairments	5		5		43		13
Other operating (income) expense, net	70		126		(5)		127
Operating income	2,546		663		5,177		1,529

Interest income	12		10		22		20
Interest expense	(55)		(42)		(100)		(90)
Other non-operating income (expense), net	6		4		(69)		17
	2,509		635		5,030		1,476

Income tax (provision) benefit	(255)		(48)		(474)		(99)
Equity in net income (loss) of equity method investees	9		16		13		29
Net income	$	2,263	$	603	$	4,569	$	1,406

Earnings per share
Basic	$	2.02	$	0.54	$	4.08	$	1.26
Diluted	2.00		0.53		4.04		1.23

Number of shares used in per share calculations
Basic	1,119		1,120		1,119		1,118
Diluted	1,130		1,144		1,130		1,139

See accompanying notes to consolidated financial statements.

6 | 2022 Q2 10-Q

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Micron Technology, Inc.

Consolidated Statements of Comprehensive Income

(In millions)

(Unaudited)


	Quarter ended				Six months ended
	March 3, 2022		March 4, 2021		March 3, 2022		March 4, 2021

Net income	$	2,263	$	603	$	4,569	$	1,406

Other comprehensive income (loss), net of tax
Gains (losses) on derivative instruments	(34)		(28)		(120)		12
Gains (losses) on investments	(13)		(3)		(20)		(4)
Pension liability adjustments	(1)		1		(1)		1
Cumulative translation adjustments	1		1		1		1
Other comprehensive income (loss)	(47)		(29)		(140)		10
Total comprehensive income	$	2,216	$	574	$	4,429	$	1,416

See accompanying notes to consolidated financial statements.

Table of Contents

Micron Technology, Inc.

Consolidated Balance Sheets

(In millions, except par value amounts)

(Unaudited)


As of	March 3, 2022		September 2, 2021

Assets
Cash and equivalents	$	9,116	$	7,763
Short-term investments	1,006		870
Receivables	5,384		5,311
Inventories	5,383		4,487
Assets held for sale	13		974
Other current assets	600		502
Total current assets	21,502		19,907
Long-term marketable investments	1,717		1,765
Property, plant, and equipment	36,171		33,213
Operating lease right-of-use assets	587		551
Intangible assets	414		349
Deferred tax assets	762		782
Goodwill	1,228		1,228
Other noncurrent assets	1,315		1,054
Total assets	$	63,696	$	58,849

Liabilities and equity
Accounts payable and accrued expenses	$	5,650	$	5,325
Current debt	123		155
Other current liabilities	1,145		944
Total current liabilities	6,918		6,424
Long-term debt	6,953		6,621
Noncurrent operating lease liabilities	535		504
Noncurrent unearned government incentives	704		808
Other noncurrent liabilities	741		559
Total liabilities	15,851		14,916

Commitments and contingencies

Shareholders’ equity
Common stock, $0.10 par value, 3,000 shares authorized, 1,223 shares issued and 1,118 outstanding (1,216 shares issued and 1,119 outstanding as of September 2, 2021)	122		122
Additional capital	9,816		9,453
Retained earnings	43,407		39,051
Treasury stock, 105 shares held (97 shares as of September 2, 2021)	(5,362)		(4,695)
Accumulated other comprehensive income (loss)	(138)		2
Total equity	47,845		43,933
Total liabilities and equity	$	63,696	$	58,849

See accompanying notes to consolidated financial statements.

8 | 2022 Q2 10-Q

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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 September 2, 2021	1,216	$	122	$	9,453	$	39,051	$	(4,695)	$	2	$	43,933
Net income	—	—		—		2,306		—		—		2,306
Other comprehensive income (loss), net	—	—		—		—		—		(93)		(93)
Stock issued under stock plans	5	—		5		—		—		—		5
Stock-based compensation expense	—	—		118		—		—		—		118
Repurchase of stock - repurchase program	—	—		—		—		(259)		—		(259)
Repurchase of stock - withholdings on employee equity awards	(1)	—		(12)		(90)		—		—		(102)

Balance at December 2, 2021	1,220	$	122	$	9,564	$	41,267	$	(4,954)	$	(91)	$	45,908
Net income	—	—		—		2,263		—		—		2,263
Other comprehensive income (loss), net	—	—		—		—		—		(47)		(47)
Stock issued under stock plans	4	—		124		—		—		—		124
Stock-based compensation expense	—	—		129		—		—		—		129
Repurchase of stock - repurchase program	—	—		—		—		(408)		—		(408)
Repurchase of stock - withholdings on employee equity awards	(1)	—		(1)		(10)		—		—		(11)
Dividends and dividend equivalents declared ($0.10 per share)	—	—		—		(113)		—		—		(113)
Balance at March 3, 2022	1,223	$	122	$	9,816	$	43,407	$	(5,362)	$	(138)	$	47,845


	Common Stock			Additional Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Total Shareholders’ Equity
	Number of Shares	Amount

Balance at September 3, 2020	1,194	$	119	$	8,917	$	33,384	$	(3,495)	$	71	$	38,996
Net income	—	—		—		803		—		—		803
Other comprehensive income (loss), net	—	—		—		—		—		39		39
Stock issued under stock plans	5	1		33		—		—		—		34
Stock-based compensation expense	—	—		92		—		—		—		92
Repurchase of stock - withholdings on employee equity awards	(1)	—		(8)		(49)		—		—		(57)
Balance at December 3, 2020	1,198	$	120	$	9,034	$	34,138	$	(3,495)	$	110	$	39,907
Net income	—	—		—		603		—		—		603
Other comprehensive income (loss), net	—	—		—		—		—		(29)		(29)
Stock issued under stock plans	4	—		105		—		—		—		105
Stock-based compensation expense	—	—		97		—		—		—		97
Repurchase of stock - withholdings on employee equity awards	—	—		(2)		(18)		—		—		(20)
Balance at March 4, 2021	1,202	$	120	$	9,234	$	34,723	$	(3,495)	$	81	$	40,663

See accompanying notes to consolidated financial statements.

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Micron Technology, Inc.

Consolidated Statements of Cash Flows

(In millions)

(Unaudited)


Six months ended	March 3, 2022		March 4, 2021

Cash flows from operating activities
Net income	$	4,569	$	1,406
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation expense and amortization of intangible assets	3,413		3,036
Stock-based compensation	247		189
(Gain) loss on debt repurchases and conversions	83		—
Change in operating assets and liabilities
Receivables	(44)		533
Inventories	(900)		629
Accounts payable and accrued expenses	107		(777)
Other	91		8
Net cash provided by operating activities	7,566		5,024

Cash flows from investing activities
Expenditures for property, plant, and equipment	(5,876)		(5,756)
Purchases of available-for-sale securities	(922)		(1,349)
Proceeds from sale of Lehi, Utah fab	893		—
Proceeds from maturities of available-for-sale securities	631		746
Proceeds from sales of available-for-sale securities	172		178
Proceeds from government incentives	66		176
Other	(140)		31
Net cash provided by (used for) investing activities	(5,176)		(5,974)

Cash flows from financing activities
Repayments of debt	(1,981)		(103)
Repurchases of common stock - repurchase program	(667)		—
Payments of dividends to shareholders	(224)		—
Repurchases of common stock - withholdings on employee equity awards	(112)		(78)
Payments on equipment purchase contracts	(105)		(123)
Proceeds from issuance of debt	2,000		—
Other	110		95
Net cash provided by (used for) financing activities	(979)		(209)

Effect of changes in currency exchange rates on cash, cash equivalents, and restricted cash	(16)		43

Net increase (decrease) in cash, cash equivalents, and restricted cash	1,395		(1,116)
Cash, cash equivalents, and restricted cash at beginning of period	7,829		7,690
Cash, cash equivalents, and restricted cash at end of period	$	9,224	$	6,574

See accompanying notes to consolidated financial statements.

10 | 2022 Q2 10-Q

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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 September 2, 2021. There have been no changes to our significant accounting policies since our Annual Report on Form 10-K for the year ended September 2, 2021.

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 (“U.S. GAAP”) consistent in all material respects with those applied in our Annual Report on Form 10-K for the year ended September 2, 2021.

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 2022 and 2021 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 September 2, 2021.

Lehi, Utah Fab and 3D XPoint

In the second quarter of 2021, we updated our portfolio strategy to further strengthen our focus on memory and storage innovations for the data center market. In connection therewith, we determined that there was insufficient market validation to justify the ongoing investments required to commercialize 3D XPoint at scale. Accordingly, we ceased development of 3D XPoint technology and engaged in discussions with potential buyers for the sale of our facility located in Lehi, Utah that was dedicated to 3D XPoint production. As a result, we classified the property, plant, and equipment as held for sale as of the second quarter of 2021 and ceased depreciating the assets. On June 30, 2021, we announced a definitive agreement to sell our Lehi facility to TI and closed the sale on October 22, 2021.

In the first quarter of 2022, we received $893 million from TI for the sale of the Lehi facility and disposed of $918 million of net assets, consisting primarily of property, plant, and equipment of $921 million; $55 million of other assets, consisting primarily of a receivable for reimbursement of property taxes, equipment spare parts, and raw materials; and $58 million of liabilities, consisting primarily of a finance lease obligation. As a result of the disposition of the Lehi facility and other related adjustments, we recognized a loss of $23 million included in restructure and asset impairments in the first quarter of 2022.

In the third quarter of 2021, we recognized a charge of $435 million included in restructure and asset impairments in connection with the definitive agreement with TI (and a tax benefit of $104 million included in income tax (provision) benefit) to write down the assets held for sale to the expected consideration, net of estimated selling costs. In the second quarter of 2021, we also recognized a charge of $49 million in cost of goods sold to write down 3D XPoint inventory in connection with our decision to cease further development of this technology.

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Cash and Investments

Substantially all of our marketable debt 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:


	March 3, 2022								September 2, 2021
As of	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	$	7,810	$	—	$	—	$	7,810	$	5,796	$	—	$	—	$	5,796
Level 1(2)
Money market funds	103		—		—		103		38		—		—		38
Level 2(3)
Corporate bonds	—		616		1,126		1,742		9		429		1,134		1,572
Certificates of deposits	1,158		54		—		1,212		1,907		69		—		1,976
Asset-backed securities	—		72		504		576		8		95		509		612
Government securities	9		183		87		279		1		190		122		313
Commercial paper	36		81		—		117		4		87		—		91
	9,116		$	1,006	$	1,717	$	11,839	7,763		$	870	$	1,765	$	10,398
Restricted cash(4)	108								66
Cash, cash equivalents, and restricted cash	$	9,224							$	7,829

(1)The maturities of long-term marketable securities primarily 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 March 3, 2022 or September 2, 2021.

(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.

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

In addition to the amounts included in the table above, we had $196 million and $153 million of non-marketable equity investments without a readily determinable fair value that were included in other noncurrent assets as of March 3, 2022 and September 2, 2021, respectively.

Receivables


As of	March 3, 2022		September 2, 2021

Trade receivables	$	5,061	$	4,920
Income and other taxes	189		264
Other	134		127
	$	5,384	$	5,311

12 | 2022 Q2 10-Q

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Inventories


As of	March 3, 2022		September 2, 2021

Finished goods	$	540	$	513
Work in process	4,222		3,469
Raw materials and supplies	621		505
	$	5,383	$	4,487

Effective as of the beginning of the second quarter of 2021, we changed our method of inventory costing from average cost to FIFO. The change to FIFO was not material to any prior periods, and as such, prior periods were not retrospectively adjusted.

Property, Plant, and Equipment


As of	March 3, 2022		September 2, 2021

Land	$	280	$	280
Buildings	15,701		14,776
Equipment(1)	56,578		51,902
Construction in progress(2)	1,740		1,517
Software	1,115		987
	75,414		69,462
Accumulated depreciation	(39,243)		(36,249)
	$	36,171	$	33,213

(1)Includes costs related to equipment not placed into service of $2.69 billion as of March 3, 2022 and $1.99 billion as of September 2, 2021.

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

Intangible Assets and Goodwill


	March 3, 2022				September 2, 2021
As of	Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization

Product and process technology	$	718	$	(304)	$	633	$	(284)
Goodwill	1,228				1,228

In the first six months of 2022 and 2021, we capitalized $105 million and $49 million, respectively, for product and process technology with weighted-average useful lives of 7 years and 9 years, respectively. Amortization expense was $40 million and $41 million for the first six months of 2022 and 2021, respectively. Expected amortization expense is $42 million for the remainder of 2022, $75 million for 2023, $67 million for 2024, $47 million for 2025, and $38 million for 2026.

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Leases

The components of lease expense are presented below:


	Quarter ended				Six months ended
	March 3, 2022		March 4, 2021		March 3, 2022		March 4, 2021

Finance lease cost
Amortization of right-of-use asset	$	27	$	17	$	52	$	33
Interest on lease liability	6		5		12		10
Operating lease cost	30		27		59		54
	$	63	$	49	$	123	$	97

Supplemental cash flow information related to leases was as follows:


Six months ended	March 3, 2022		March 4, 2021

Cash flows used for operating activities
Finance leases	$	11	$	11
Operating leases	56		53
Cash flows used for financing activities from financing leases	52		41
Noncash acquisitions of right-of-use assets
Finance leases	304		68
Operating leases	68		21

Supplemental balance sheet information related to leases was as follows:


As of	March 3, 2022			September 2, 2021

Finance lease right-of-use assets (included in property, plant, and equipment and assets held for sale)	$	968		$	766
Current operating lease liabilities (included in accounts payable and accrued expenses)	58			55

Weighted-average remaining lease term (in years)
Finance leases	12			11
Operating leases	12			12
Weighted-average discount rate
Finance leases	2.65		%	3.14		%
Operating leases	2.62		%	2.63		%

As of March 3, 2022, maturities of lease liabilities were as follows:


For the year ending	Finance Leases		Operating Leases

Remainder of 2022	$	74	$	34
2023	131		62
2024	106		68
2025	91		56
2026	91		53
2027 and thereafter	649		440
Less imputed interest	(147)		(120)
	$	995	$	593

14 | 2022 Q2 10-Q

Table of Contents

The table above excludes any lease liabilities for leases that have been executed but have not yet commenced. As of March 3, 2022, we had such lease liabilities relating to (1) operating lease payment obligations of $148 million for the initial 10-year lease term for a building, and (2) finance lease obligations of $218 million over a weighted-average period of 14 years for gas supply arrangements deemed to contain embedded 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	March 3, 2022		September 2, 2021

Accounts payable	$	1,924	$	1,744
Property, plant, and equipment	2,300		1,887
Salaries, wages, and benefits	705		984
Income and other taxes	367		364
Other	354		346
	$	5,650	$	5,325

Debt


	March 3, 2022										September 2, 2021
					Net Carrying Amount						Net Carrying Amount
As of	Stated Rate		Effective Rate		Current		Long-Term		Total		Current		Long-Term		Total

2024 Term Loan A	0.920	%	0.96	%	$	—	$	1,186	$	1,186	$	—	$	1,186	$	1,186
2026 Notes	4.975	%	5.07	%	—		498		498		—		498		498
2027 Notes(1)	4.185	%	4.27	%	—		868		868		—		901		901
2029 Notes	5.327	%	5.40	%	—		697		697		—		696		696
2030 Notes	4.663	%	4.73	%	—		846