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 2, 2023
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
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||||||||
| (Registrant’s telephone number, including area code) | ( | |||||||||||||
| Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
| 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. | ☒ | No | ☐ | |||||||||||||||||||||||
| 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). | ☒ | No | ☐ | |||||||||||||||||||||||
| 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. | ||||||||||||||||||||||||||
| 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 | No | ☒ | |||||||||||||||||||||||
The number of outstanding shares of the registrant’s common stock as of March 23, 2023 was 1,094,394,354 .
Table of Contents
PART I. Financial Information | ||||||||
2 | 2023 Q2 10-Q
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, repaid November 2021 | DDR | Double data rate DRAM | |||||||||||
| 2024 Notes | 4.640% Senior Notes due February 2024, repaid November 2021 | EBITDA | Earnings before interest, taxes, depreciation, and amortization | |||||||||||
| 2024 Term Loan A | Senior Term Loan A due October 2024 | ESG | Environmental, social, and governance | |||||||||||
2025 Term Loan A | Senior Term Loan A due November 2025 | EUV | Extreme ultraviolet lithography | |||||||||||
2026 Term Loan A | Senior Term Loan A due November 2026 | GDDR | Graphics double data rate | |||||||||||
2027 Term Loan A | Senior Term Loan A due November 2027 | HBM | High-bandwidth memory, a stacked DRAM technology optimized for memory-bandwidth intensive applications | |||||||||||
| 2026 Notes | 4.975% Senior Notes due February 2026 | Inotera | Inotera Memories, Inc. | |||||||||||
| 2027 Notes | 4.185% Senior Notes due February 2027 | LIBOR | London Interbank Offered Rate | |||||||||||
2029 A Notes | 5.327% Senior Notes due February 2029 | LPDRAM | Low-power DRAM | |||||||||||
2029 B Notes | 6.750% Senior Notes due November 2029 | MCP | Multichip packaged solutions with managed NAND and LPDRAM | |||||||||||
| 2030 Notes | 4.663% Senior Notes due February 2030 | Micron | Micron Technology, Inc. (Parent Company) | |||||||||||
| 2032 Green Bonds | 2.703% Senior Notes due April 2032 | Qimonda | Qimonda AG | |||||||||||
| 2033 Notes | 5.875% Senior Notes due February 2033 | Revolving Credit Facility | $2.5 billion Revolving Credit Facility due May 2026 | |||||||||||
| 2041 Notes | 3.366% Senior Notes due November 2041 | SOFR | Secured Overnight Financing Rate | |||||||||||
| 2051 Notes | 3.477% Senior Notes due November 2051 | SSD | Solid state drive | |||||||||||
We are an industry leader in innovative memory and storage solutions transforming how the world uses information to enrich life for all. With a relentless focus on our customers, technology leadership, and manufacturing and operational excellence, Micron delivers a rich portfolio of high-performance DRAM, NAND, and NOR memory and storage products through our Micron® and Crucial® brands. Every day, the innovations that our people create fuel the data economy, enabling advances in artificial intelligence and 5G applications that unleash opportunities — from the data center to the intelligent edge and across the client and mobile user experience.
Micron, Crucial, any associated logos, and all other Micron trademarks are the property of Micron. 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.
3Available 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 (“SEC”), press releases, public conference calls, blog posts (micron.com/about/blog), 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," "plan," "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 restructure plans and expected related savings and charges; market conditions and profitability in our industry; potential write-downs of inventories in future quarters; reductions in our wafer starts and the corresponding impact on our costs in 2023; the timing for construction and ramping of production for new memory manufacturing fabs in the United States; the receipt of government grants and investment tax credits; the sufficiency of our cash and investments; capital spending in 2023; funding of sustainability-focused projects; and allocation and dispersal of the net proceeds of our 2032 Green Bonds. 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.”
4 | 2023 Q2 10-Q
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 2, 2023 | March 3, 2022 | March 2, 2023 | March 3, 2022 | ||||||||||||||
| Revenue | $ | $ | $ | $ | |||||||||||||
| Cost of goods sold | |||||||||||||||||
| Gross margin | ( | ( | |||||||||||||||
| Research and development | |||||||||||||||||
| Selling, general, and administrative | |||||||||||||||||
| Restructure and asset impairments | |||||||||||||||||
| Other operating (income) expense, net | ( | ( | ( | ||||||||||||||
| Operating income (loss) | ( | ( | |||||||||||||||
| Interest income | |||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||
| Other non-operating income (expense), net | ( | ( | |||||||||||||||
| ( | ( | ||||||||||||||||
| Income tax (provision) benefit | ( | ( | ( | ( | |||||||||||||
Equity in net income (loss) of equity method investees | |||||||||||||||||
| Net income (loss) | $ | ( | $ | $ | ( | $ | |||||||||||
| Earnings (loss) per share | |||||||||||||||||
| Basic | $ | ( | $ | $ | ( | $ | |||||||||||
| Diluted | ( | ( | |||||||||||||||
| Number of shares used in per share calculations | |||||||||||||||||
| Basic | |||||||||||||||||
| Diluted | |||||||||||||||||
See accompanying notes to consolidated financial statements.
5Micron Technology, Inc.
Consolidated Statements of Comprehensive Income (Loss)
(In millions)
(Unaudited)
| Quarter ended | Six months ended | ||||||||||||||||
| March 2, 2023 | March 3, 2022 | March 2, 2023 | March 3, 2022 | ||||||||||||||
| Net income (loss) | $ | ( | $ | $ | ( | $ | |||||||||||
| Other comprehensive income (loss), net of tax | |||||||||||||||||
| Gains (losses) on derivative instruments | ( | ( | |||||||||||||||
| Gains (losses) on investments | ( | ( | ( | ||||||||||||||
| Foreign currency translation adjustments | ( | ||||||||||||||||
| Pension liability adjustments | ( | ( | |||||||||||||||
| Other comprehensive income (loss) | ( | ( | |||||||||||||||
| Total comprehensive income (loss) | $ | ( | $ | $ | ( | $ | |||||||||||
See accompanying notes to consolidated financial statements.
6 | 2023 Q2 10-Q
Micron Technology, Inc.
Consolidated Balance Sheets
(In millions, except par value amounts)
(Unaudited)
| As of | March 2, 2023 | September 1, 2022 | ||||||
| Assets | ||||||||
| Cash and equivalents | $ | $ | ||||||
| Short-term investments | ||||||||
| Receivables | ||||||||
| Inventories | ||||||||
| Other current assets | ||||||||
| Total current assets | ||||||||
| Long-term marketable investments | ||||||||
| Property, plant, and equipment | ||||||||
| Operating lease right-of-use assets | ||||||||
| Intangible assets | ||||||||
| Deferred tax assets | ||||||||
| Goodwill | ||||||||
| Other noncurrent assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and equity | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Current debt | ||||||||
| Other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Long-term debt | ||||||||
| Noncurrent operating lease liabilities | ||||||||
| Noncurrent unearned government incentives | ||||||||
| Other noncurrent liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies | ||||||||
| Shareholders’ equity | ||||||||
Common stock, $ | ||||||||
| Additional capital | ||||||||
| Retained earnings | ||||||||
Treasury stock, | ( | ( | ||||||
| Accumulated other comprehensive income (loss) | ( | ( | ||||||
| Total equity | ||||||||
| Total liabilities and equity | $ | $ | ||||||
See accompanying notes to consolidated financial statements.
7Micron 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 1, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||
| Net income (loss) | — | — | — | ( | — | — | ( | ||||||||||||||||
| Other comprehensive income (loss), net | — | — | — | — | — | ||||||||||||||||||
| Stock issued under stock plans | — | — | — | ||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | — | ||||||||||||||||||
| Repurchase of stock - repurchase program | — | — | — | — | ( | — | ( | ||||||||||||||||
| Repurchase of stock - withholdings on employee equity awards | ( | ( | ( | — | — | ( | |||||||||||||||||
Dividends and dividend equivalents declared ($ | — | — | — | ( | — | — | ( | ||||||||||||||||
| Balance at December 1, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||
| Net income (loss) | — | — | — | ( | — | — | ( | ||||||||||||||||
| Other comprehensive income (loss), net | — | — | — | — | — | ||||||||||||||||||
| Stock issued under stock plans | — | — | — | ||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | — | ||||||||||||||||||
| Repurchase of stock - withholdings on employee equity awards | ( | ( | — | — | ( | ||||||||||||||||||
Dividends and dividend equivalents declared ($ | — | — | — | ( | — | — | ( | ||||||||||||||||
| Balance at March 2, 2023 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||
See accompanying notes to consolidated financial statements.
8 | 2023 Q2 10-Q
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 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||
| Net income (loss) | — | — | — | — | — | ||||||||||||||||||
| Other comprehensive income (loss), net | — | — | — | — | — | ( | ( | ||||||||||||||||
| Stock issued under stock plans | — | — | — | ||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | — | ||||||||||||||||||
| Repurchase of stock - repurchase program | — | — | — | — | ( | — | ( | ||||||||||||||||
| Repurchase of stock - withholdings on employee equity awards | ( | ( | ( | — | — | ( | |||||||||||||||||
| Balance at December 2, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||
| Net income (loss) | — | — | — | — | — | ||||||||||||||||||
| Other comprehensive income (loss), net | — | — | — | — | — | ( | ( | ||||||||||||||||
| Stock issued under stock plans | — | — | — | ||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | — | ||||||||||||||||||
| Repurchase of stock - repurchase program | — | — | — | — | ( | — | ( | ||||||||||||||||
| Repurchase of stock - withholdings on employee equity awards | ( | ( | ( | — | — | ( | |||||||||||||||||
Dividends and dividend equivalents declared ($ | — | — | — | ( | — | — | ( | ||||||||||||||||
| Balance at March 3, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||
See accompanying notes to consolidated financial statements.
9Micron Technology, Inc.
Consolidated Statements of Cash Flows
(In millions)
(Unaudited)
| Six months ended | March 2, 2023 | March 3, 2022 | ||||||
| Cash flows from operating activities | ||||||||
| Net income (loss) | $ | ( | $ | |||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
| Depreciation expense and amortization of intangible assets | ||||||||
| Provision to write-down inventories to net realizable value | ||||||||
| Stock-based compensation | ||||||||
| (Gain) loss on debt repurchases | ||||||||
| Change in operating assets and liabilities: | ||||||||
| Receivables | ( | |||||||
| Inventories | ( | ( | ||||||
| Accounts payable and accrued expenses | ( | |||||||
| Other | ( | |||||||
| Net cash provided by operating activities | ||||||||
| Cash flows from investing activities | ||||||||
| Expenditures for property, plant, and equipment | ( | ( | ||||||
| Purchases of available-for-sale securities | ( | ( | ||||||
| Proceeds from maturities of available-for-sale securities | ||||||||
| Proceeds from government incentives | ||||||||
| Proceeds from sales of available-for-sale securities | ||||||||
| Proceeds from sale of Lehi, Utah fab | ||||||||
| Other | ( | ( | ||||||
| Net cash provided by (used for) investing activities | ( | ( | ||||||
| Cash flows from financing activities | ||||||||
| Proceeds from issuance of debt | ||||||||
| Repurchases of common stock - repurchase program | ( | ( | ||||||
| Payments of dividends to shareholders | ( | ( | ||||||
| Payments on equipment purchase contracts | ( | ( | ||||||
| Repayments of debt | ( | ( | ||||||
| Other | ( | |||||||
| Net cash provided by (used for) financing activities | ( | |||||||
| Effect of changes in currency exchange rates on cash, cash equivalents, and restricted cash | ( | |||||||
| Net increase (decrease) in cash, cash equivalents, and restricted cash | ||||||||
| Cash, cash equivalents, and restricted cash at beginning of period | ||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | $ | ||||||
See accompanying notes to consolidated financial statements.
10 | 2023 Q2 10-Q
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 1, 2022. There have been no changes to our significant accounting policies since our Annual Report on Form 10-K for the year ended September 1, 2022.
Basis of Presentation
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.
11Cash and Investments
All of our short-term investments and long-term marketable investments were classified as available-for-sale as of the dates noted below. Cash and equivalents and the fair values of our available-for-sale investments, which approximated amortized costs, were as follows:
| March 2, 2023 | September 1, 2022 | ||||||||||||||||||||||||||||
| 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 | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Level 1(2) | |||||||||||||||||||||||||||||
| Money market funds | |||||||||||||||||||||||||||||
Level 2(3) | |||||||||||||||||||||||||||||
| Certificates of deposit | |||||||||||||||||||||||||||||
| Corporate bonds | |||||||||||||||||||||||||||||
| Asset-backed securities | |||||||||||||||||||||||||||||
| Government securities | |||||||||||||||||||||||||||||
| Commercial paper | |||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Restricted cash(4) | |||||||||||||||||||||||||||||
| Cash, cash equivalents, and restricted cash | $ | $ | |||||||||||||||||||||||||||
(1)The maturities of long-term marketable securities primarily range from 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 2, 2023 or September 1, 2022.
Gross realized gains and losses from sales of available-for-sale securities were not significant for any period presented.
Non-marketable Equity Investments
In addition to the amounts included in the table above, we had $218 million and $222 million of non-marketable equity investments without a readily determinable fair value that were included in other noncurrent assets as of March 2, 2023 and September 1, 2022, respectively.
12 | 2023 Q2 10-Q
Receivables
| As of | March 2, 2023 | September 1, 2022 | ||||||
| Trade receivables | $ | $ | ||||||
| Income and other taxes | ||||||||
| Other | ||||||||
| $ | $ | |||||||
Inventories
| As of | March 2, 2023 | September 1, 2022 | ||||||
| Finished goods | $ | $ | ||||||
| Work in process | ||||||||
| Raw materials and supplies | ||||||||
| $ | $ | |||||||
In the second quarter of 2023, we recorded a charge of $1.43 billion to cost of goods sold to write down the carrying value of work in process and finished goods inventories to their estimated net realizable values.
Property, Plant, and Equipment
| As of | March 2, 2023 | September 1, 2022 | ||||||
| Land | $ | $ | ||||||
| Buildings | ||||||||
Equipment(1) | ||||||||
Construction in progress(2) | ||||||||
| Software | ||||||||
| Accumulated depreciation | ( | ( | ||||||
| $ | $ | |||||||
(1)Includes costs related to equipment not placed into service of $3.43 billion as of March 2, 2023 and $3.35 billion as of September 1, 2022.
(2)Includes building-related construction, tool installation, and software costs for assets not placed into service.
13Intangible Assets
| March 2, 2023 | September 1, 2022 | ||||||||||||||||||||||
| As of | Gross Amount | Accumulated Amortization | Net Carrying Amount | Gross Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||
| Product and process technology | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||
In the first six months of 2023 and 2022, we capitalized $51 million and $105 million, respectively, for product and process technology with weighted-average useful lives of 10 years, and 7 years, respectively. Amortization expense was $45 million and $40 million for the first six months of 2023 and 2022, respectively. Expected amortization expense is $42 million for the remainder of 2023, $73 million for 2024, $52 million for 2025, $46 million for 2026, and $40 million for 2027.
Leases
The components of lease cost are presented below:
| Quarter ended | Six months ended | ||||||||||||||||
| March 2, 2023 | March 3, 2022 | March 2, 2023 | March 3, 2022 | ||||||||||||||
| Finance lease cost | |||||||||||||||||
| Amortization of right-of-use assets | $ | $ | $ | $ | |||||||||||||
| Interest on lease liabilities | |||||||||||||||||
Operating lease cost(1) | |||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||
(1)Operating lease cost includes short-term and variable lease expenses, which were not material for the periods presented.
Supplemental cash flow information related to leases was as follows:
| Six months ended | March 2, 2023 | March 3, 2022 | ||||||
| Cash flows used for operating activities | ||||||||
Finance leases | $ | $ | ||||||
Operating leases | ||||||||
| Cash flows used for financing activities – Finance leases | ||||||||
| Noncash acquisitions of right-of-use assets | ||||||||
| Finance leases | ||||||||
Operating leases | ||||||||
14 | 2023 Q2 10-Q
Supplemental balance sheet information related to leases was as follows:
| As of | March 2, 2023 | September 1, 2022 | ||||||
| $ | $ | |||||||
| Weighted-average remaining lease term (in years) | ||||||||
Finance leases | ||||||||
Operating leases | ||||||||
| Weighted-average discount rate | ||||||||
Finance leases | % | % | ||||||
Operating leases | % | % | ||||||
As of March 2, 2023, maturities of lease liabilities by fiscal year were as follows:
| For the year ending | Finance Leases | Operating Leases | ||||||
| Remainder of 2023 | $ | $ | ||||||
| 2024 | ||||||||
| 2025 | ||||||||
| 2026 | ||||||||
| 2027 | ||||||||
| 2028 and thereafter | ||||||||
| Less imputed interest | ( | ( | ||||||
| $ | $ | |||||||
The table above excludes obligations for leases that have been executed but have not yet commenced. As of March 2, 2023, excluded obligations consisted of $195 million of estimated finance lease payments over a weighted-average period of 11 years for gas supply arrangements deemed to contain embedded leases and equipment leases. We will recognize right-of-use assets and associated lease liabilities at the time such assets become available for our use.
Accounts Payable and Accrued Expenses
| As of | March 2, 2023 | September 1, 2022 | ||||||
| Accounts payable | $ | $ | ||||||
| Property, plant, and equipment | ||||||||
| Salaries, wages, and benefits | ||||||||
| Income and other taxes | ||||||||
| Other | ||||||||
| $ | $ | |||||||
15Debt
| March 2, 2023 | September 1, 2022 | ||||||||||||||||||||||||||||
| Net Carrying Amount | Net Carrying Amount | ||||||||||||||||||||||||||||
| As of | Stated Rate | Effective Rate | Current | Long-Term | Total | Current | Long-Term | Total | |||||||||||||||||||||
| 2024 Term Loan A | % | % | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| 2025 Term Loan A | % | % | |||||||||||||||||||||||||||
| 2026 Term Loan A | % | % | |||||||||||||||||||||||||||
| 2027 Term Loan A | % | % | |||||||||||||||||||||||||||
2026 Notes | % | % | |||||||||||||||||||||||||||
2027 Notes(1) | % | % | |||||||||||||||||||||||||||
| 2029 A Notes | % | % | |||||||||||||||||||||||||||
| 2029 B Notes | % | % | |||||||||||||||||||||||||||
2030 Notes | % | % | |||||||||||||||||||||||||||
| 2032 Green Bonds | % | % | |||||||||||||||||||||||||||
| 2033 Notes | % | % | |||||||||||||||||||||||||||
| 2041 Notes | % | % | |||||||||||||||||||||||||||
| 2051 Notes | % | % | |||||||||||||||||||||||||||
| N/A | % | ||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Debt Activity
The table below presents the effects of debt financing activities in the first six months of 2023.
| Increase in Principal | Increase in Carrying Value | Increase in Cash | |||||||||
| 2025 Term Loan A | $ | $ | $ | ||||||||
| 2026 Term Loan A | |||||||||||
| 2027 Term Loan A | |||||||||||
| 2029 B Notes | |||||||||||
| 2033 Notes | |||||||||||
| $ | $ | $ | |||||||||
Term Loan Agreements
On November 3, 2022, we entered into a term loan agreement consisting of three tranches and borrowed $2.60 billion in aggregate principal amount, including $927 million due November 3, 2025; $746 million due November 3, 2026; and $927 million due November 3, 2027 (the “Term Loan Agreement”). We incurred aggregate fees of $6 million in connection with these borrowings.
On January 5, 2023, we amended the Term Loan Agreement and borrowed an additional $600 million in aggregate principal amount, including $125 million due November 3, 2025, $250 million due November 3, 2026, and $225 million due November 3, 2027. The additional borrowings have terms that are identical to, and will be treated as a single class with, the three original tranches.
16 | 2023 Q2 10-Q
The 2026 Term Loan A and 2027 Term Loan A each require equal quarterly installment payments in an amount equal to 1.25 1.00 % to 2.00 %, varying by tranche and depending on our corporate credit ratings. The Term Loan Agreement requires us to maintain, on a consolidated basis, a leverage ratio of total indebtedness to adjusted EBITDA, as defined in the Term Loan Agreement and calculated as of the last day of each fiscal quarter, not to exceed 3.25 to 1.00, except as described below.
On March 27, 2023, we further amended the Term Loan Agreement to provide that in lieu of the foregoing leverage ratio, during the fourth quarter of 2023 and each quarter of 2024, we will be required to maintain, on a consolidated basis, a net leverage ratio of total net indebtedness to adjusted EBITDA, as defined in the Term Loan Agreement and calculated as of the last day of each fiscal quarter, not to exceed 3.25 5.0 3.75
On March 27, 2023, we also amended the agreement governing the 2024 Term Loan A to align the leverage ratio covenant with the corresponding covenant in the Term Loan Agreement described above.
2029 B Notes and 2033 Notes
On October 31, 2022, we issued $750 million principal amount of senior unsecured 2029 B Notes in a public offering. The 2029 B Notes bear interest at a rate of 6.750 % per year and will mature on November 1, 2029. Issuance costs and debt discount for these notes were $6 million.
On February 9, 2023, we issued an additional $500 million principal amount of 2029 B Notes at a $22 million premium. The additional notes have terms that are identical to the terms of the original 2029 B Notes other than the original offering price. Also on February 9, 2023, we issued $750 million principal amount of senior unsecured 2033 Notes. The 2033 Notes bear interest at a rate of 5.875 % per year and will mature on February 9, 2033. Aggregate issuance costs for the February 9, 2023 offerings were $7 million.
We may redeem the 2029 B Notes and the 2033 Notes (the “Notes”), in whole or in part, at our option prior to their maturity dates at a redemption price equal to the greater of (i) 100 % of the principal amount of the notes to be redeemed and (ii) the present value of the remaining scheduled payments of principal and interest, plus accrued interest in each case. We may also redeem the Notes, in whole or in part, at a price equal to par either two or three months prior to maturity in accordance with the terms of the Notes.
The Notes contain covenants that, among other things, limit, in certain circumstances, our ability and/or the ability of our restricted subsidiaries (which are generally domestic subsidiaries in which we own at least 80 % of the voting stock and which own principal property, as defined in the indenture governing such notes) to (1) create or incur certain liens; (2) enter into certain sale and lease-back transactions; and (3) consolidate with or merge with or into, or convey, transfer, or lease all or substantially all of our properties and assets, to another entity. These covenants are subject to a number of limitations and exceptions. Additionally, if a change of control triggering event occurs, as defined in the indenture governing the Notes, we will be required to offer to purchase such notes at 101 % of the outstanding aggregate principal amount plus accrued interest up to the purchase date.
Revolving Credit Facility
As of March 2, 2023, $2.50 billion was available to us under the Revolving Credit Facility and no amounts were outstanding. Any amounts outstanding under the Revolving Credit Facility would mature in May 2026 and amounts borrowed may be prepaid any time without penalty. Any amounts drawn under the Revolving Credit Facility would generally bear interest at a rate equal to LIBOR plus 1.00 % to 1.75 %, depending on our corporate credit ratings. The credit facility agreement provides for a transition to SOFR or other alternate benchmark rate upon the retirement of LIBOR in 2023.
On March 27, 2023, we amended the agreement governing the Revolving Credit Facility to align the leverage ratio covenant with the corresponding covenants in the Term Loan Agreement and 2024 Term Loan A described above.
17Maturities of Notes Payable
| Remainder of 2023 | $ | ||||
| 2024 | |||||
| 2025 | |||||
| 2026 | |||||
| 2027 | |||||
| 2028 and thereafter | |||||
| Unamortized issuance costs, discounts, and premium, net | ( | ||||
| Hedge accounting fair value adjustment | ( | ||||
| $ | |||||
Commitments
In the second quarter of 2023, we entered into an 18 -year power purchase agreement in Singapore to purchase up to 450 megawatts of power at variable prices. This contract, which begins in the fourth quarter of 2023, is expected to supply the majority of our power consumption needs in Singapore with more favorable pricing than our existing supply arrangements.
Contingencies
We are currently a party to legal actions other than those described below arising from the normal course of business, none of which are expected to have a material adverse effect on our business, results of operations, or financial condition.
Patent Matters
As is typical in the semiconductor and other high-tech industries, from time to time, others have asserted, and may in the future assert, that our products or manufacturing processes infringe upon their intellectual property rights.
On March 19, 2018, Micron Semiconductor (Xi’an) Co., Ltd. (“MXA”) was served with a patent infringement complaint filed by Fujian Jinhua Integrated Circuit Co., Ltd. (“Jinhua”) in the Fuzhou Intermediate People’s Court in Fujian Province, China (the “Fuzhou Court”). On April 3, 2018, Micron Semiconductor (Shanghai) Co. Ltd. (“MSS”) was served with the same complaint. The complaint alleges that MXA and MSS infringed one Chinese patent by manufacturing and selling certain Crucial DDR4 DRAM modules. The complaint seeks an order requiring MXA and MSS to destroy inventory of the accused products and equipment for manufacturing the accused products in China; to stop manufacturing, using, selling, and offering for sale the accused products in China; and to pay damages of 98 million Chinese yuan plus court fees incurred.
On March 21, 2018, MXA was served with a patent infringement complaint filed by United Microelectronics Corporation (“UMC”) in the Fuzhou Court. On April 3, 2018, MSS was served with the same complaint. The complaint alleges that MXA and MSS infringed one Chinese patent by manufacturing and selling certain Crucial DDR4 DRAM modules. The complaint seeks an order requiring MXA and MSS to destroy inventory of the accused products and equipment for manufacturing the accused products in China; to stop manufacturing, using, selling, and offering for sale the accused products in China; and to pay damages of 90 million Chinese yuan plus court fees incurred. On November 26, 2021, pursuant to a settlement agreement between UMC and Micron, UMC filed an application to the Fuzhou Court to withdraw its complaints against MXA and MSS.
18 | 2023 Q2 10-Q
On April 3, 2018, MSS was served with another patent infringement complaint filed by Jinhua and an additional complaint filed by UMC in the Fuzhou Court. The additional complaints allege that MSS infringes two Chinese patents by manufacturing and selling certain Crucial MX300 SSDs. The complaint filed by UMC seeks an order requiring MSS to destroy inventory of the accused products and equipment for manufacturing the accused products in China; to stop manufacturing, using, selling, and offering for sale the accused products in China; and to pay damages of 90 million Chinese yuan plus court fees incurred. The complaint filed by Jinhua seeks an order requiring MSS to destroy inventory of the accused products and equipment for manufacturing the accused products in China; to stop manufacturing, using, selling, and offering for sale the accused products in China; and to pay damages of 98 million Chinese yuan plus court fees incurred. On November 26, 2021, pursuant to a settlement agreement between UMC and Micron, UMC filed an application to the Fuzhou Court to withdraw its complaint against MSS.
On July 5, 2018, MXA and MSS were notified that the Fuzhou Court granted a preliminary injunction against those entities that enjoins them from manufacturing, selling, or importing certain Crucial and Ballistix-branded DRAM modules and solid-state drives in China. We are complying with the ruling and have requested the Fuzhou Court to reconsider or stay its decision.
On May 4, 2020, Flash-Control, LLC 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 XPoint, and/or SSD products that incorporate memory controllers and flash memory. The complaint seeks damages, attorneys’ fees, and costs. On July 21, 2020, in a separate matter, the District Court ruled that two of the four asserted patents are invalid, and on July 14, 2021, the U.S. Court of Appeals for the Federal Circuit affirmed the ruling of invalidity.
On April 28, 2021, Netlist, Inc. (“Netlist”) filed two patent infringement actions against Micron, Micron Semiconductor Products, Inc. (“MSP”), and Micron Technology Texas, LLC (“MTEC”) in the U.S. District Court for the Western District of Texas. The first complaint alleges that one U.S. patent is infringed by certain of our non-volatile dual in-line memory modules. The second complaint alleges that three U.S. patents are infringed by certain of our load-reduced dual in-line memory modules (“LRDIMMs”). Each complaint seeks injunctive relief, damages, attorneys’ fees, and costs. On March 31, 2022, Netlist filed a patent infringement complaint against Micron and Micron Semiconductor Germany, GmbH in Dusseldorf Regional Court alleging that two German patents are infringed by certain of our LRDIMMs. The complaint seeks damages, costs, and injunctive relief. On June 10, 2022, Netlist filed a patent infringement complaint against Micron, MSP, and MTEC in the U.S. District Court for the Eastern District of Texas (“E.D. Tex.”) alleging that six U.S. patents are infringed by certain of our memory modules and HBM products. On August 1, 2022, Netlist filed a second patent infringement complaint against the same defendants in E.D. Tex. alleging that one U.S. patent is infringed by certain of our LRDIMMs. On August 15, 2022, Netlist amended the second complaint to assert that two additional U.S. patents are infringed by certain of our LRDIMMs. The complaints in E.D. Tex. seek injunctive relief, damages, and attorneys’ fees.
On May 10, 2021, Vervain, LLC filed a patent infringement action against Micron, MSP, and MTEC in the U.S. District Court for the Western District of Texas. The complaint alleges that four U.S. patents are infringed by certain SSD products. The complaint seeks injunctive relief, damages, attorneys’ fees, and costs.
Between April 27, 2022 and October 18, 2022, Bell Semiconductor, LLC (“Bell”) filed four patent infringement complaints against Micron in the U.S. District Court for the District of Idaho. These complaints allege that a total of six U.S. patents are infringed by certain SSDs, a process for designing a NAND flash device included in certain SSDs, and an SSD controller. On September 30, 2022, Bell filed a complaint against Micron in the U.S. District Court for the District of Delaware alleging that six U.S. patents are infringed by certain SSD, GDDR5, GDDR6, GDDR6X, and DDR3 SDRAM products. Each of Bell’s complaints in the District Courts sought damages, injunctive relief, attorneys’ fees, and costs. On October 6, 2022, Bell filed a complaint with the ITC alleging violations of Section 337 of the Tariff Act of 1930 based on alleged importation of certain SSDs that infringe two U.S. patents also asserted by Bell in two of the lawsuits pending in the District of Idaho. The complaint requested institution of an investigation, which was granted on November 8, 2022, and, after the investigation, issuance of a limited exclusion order and cease and desist orders prohibiting Micron from importing, selling, offering for sale, or marketing the accused products in the United States. Pursuant to a December 31, 2022 agreement, all of Bell’s complaints against Micron have been dismissed, and the ITC investigation was dismissed as to Micron.
19On August 16, 2022, Sonrai Memory Ltd. filed a patent infringement action against Micron in the U.S. District Court for the Western District of Texas. The complaint alleges that two U.S. patents are infringed by certain SSD and NAND flash products. The complaint seeks damages, attorneys’ fees, and costs.
On January 23, 2023, Besang Inc. filed a patent infringement complaint against Micron, MSP, and MTEC in the U.S. District Court for the Eastern District of Texas. The complaint alleges that one U.S. patent is infringed by certain of our 3D NAND and SSD products. The complaint seeks an injunction, damages, attorneys’ fees, and costs.
Among other things, the above lawsuits pertain to substantially all of our DRAM, NAND, and other memory and storage products we manufacture, which account for substantially all of our revenue.
Qimonda
On January 20, 2011, Dr. Michael Jaffé, administrator for Qimonda’s insolvency proceedings, filed suit against Micron and Micron Semiconductor B.V. (“Micron B.V.”), in the District Court of Munich, Civil Chamber. The complaint 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, 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. Micron and Micron B.V. appealed the judgments to the German Appeals Court, which thereafter appointed an independent expert to perform an evaluation of Dr. Jaffé’s claims that the amount Micron paid for Qimonda was less than fair market value. On March 31, 2020, the expert presented an opinion to the Appeals Court concluding that the amount paid by Micron was within an acceptable range of fair value. On October 5, 2022, the Appeals Court ruled that the relevant issue to be addressed is whether Qimonda's creditors were prejudiced such that the original transaction should be voided. The Appeals Court set a date of May 23, 2023 for issuing a decision.
Antitrust Matters
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.
20 | 2023 Q2 10-Q
Securities Matters
On February 9, 2021, a derivative complaint was filed by a shareholder against Sanjay Mehrotra and other current and former directors of Micron, allegedly on behalf of and for the benefit of Micron, in the U.S. District Court for the District of Delaware alleging violations of securities laws, breaches of fiduciary duties, and other violations of law involving allegedly false and misleading statements about Micron’s commitment to diversity and progress in diversifying its workforce, executive leadership, and Board of Directors. The complaint seeks damages, fees, interest, costs, and an order requiring Micron to take various actions to allegedly improve its corporate governance and internal procedures.
Other Matters
In the normal course of business, we are a party to a variety of agreements pursuant to which we may be obligated to indemnify another party. It is not possible to predict the maximum potential amount of future payments under these types of agreements due to the conditional nature of our obligations and the unique facts and circumstances involved in each particular agreement. Historically, our payments under these types of agreements have not had a material adverse effect on our business, results of operations, or financial condition.
Contingency Assessment
We are unable to predict the outcome of any of the matters noted above and cannot make a reasonable estimate of the potential loss or range of possible losses. A determination that our products or manufacturing processes infringe the intellectual property rights of others or entering into a license agreement covering such intellectual property could result in significant liability and/or require us to make material changes to our products and/or manufacturing processes. Any of the foregoing, as well as the resolution of any other legal matter noted above, could have a material adverse effect on our business, results of operations, or financial condition.
Equity
Common Stock Repurchases: Our Board of Directors has authorized the discretionary repurchase of up to $10 billion of our outstanding common stock through open-market purchases, block trades, privately-negotiated transactions, derivative transactions, and/or pursuant to Rule 10b5-1 trading plans. The repurchase authorization has no expiration date, does not obligate us to acquire any common stock, and is subject to market conditions and our ongoing determination of the best use of available cash. No shares were repurchased in the second quarter of 2023. In the first quarter of 2023, we repurchased 8.6 million shares of our common stock for $425 million. Through March 2, 2023, we had repurchased an aggregate of $6.89 billion under the authorization. Amounts repurchased are included in treasury stock.
Dividends: We declared and paid dividends of $126 0.115
21| Gains (Losses) on Derivative Instruments | Unrealized Gains (Losses) on Investments | Pension Liability Adjustments | Cumulative Foreign Currency Translation Adjustment | Total | |||||||||||||
| As of September 1, 2022 | $ | ( | $ | ( | $ | $ | $ | ( | |||||||||
| Other comprehensive income (loss) before reclassifications | ( | ||||||||||||||||
| Amount reclassified out of accumulated other comprehensive income (loss) | |||||||||||||||||
Tax effects | ( | ( | ( | ||||||||||||||
| Other comprehensive income (loss) | ( | ( | |||||||||||||||
| As of March 2, 2023 | $ | ( | $ | ( | $ | $ | ( | $ | ( | ||||||||
Fair Value Measurements
The estimated fair values and carrying values of our outstanding debt instruments were as follows:
| March 2, 2023 | September 1, 2022 | ||||||||||||||||
| As of | Fair Value | Carrying Value | Fair Value | Carrying Value | |||||||||||||
| Notes | $ | $ | $ | $ | |||||||||||||
The fair values of our debt instruments were estimated based on Level 2 inputs, including the trading price of our notes when available, discounted cash flows, and interest rates based on similar debt issued by parties with credit ratings similar to ours.
22 | 2023 Q2 10-Q
Derivative Instruments
| Notional or Contractual Amount | Fair Value of | ||||||||||
Assets(1) | Liabilities(2) | ||||||||||
| As of March 2, 2023 | |||||||||||
| Derivative instruments with hedge accounting designation | |||||||||||
Cash flow currency hedges | $ | $ | $ | ( | |||||||
| Cash flow commodity hedges | ( | ||||||||||
| Fair value interest rate hedges | ( | ||||||||||
| Derivative instruments without hedge accounting designation | |||||||||||
Non-designated currency hedges | ( | ||||||||||
| $ | $ | ( | |||||||||
| As of September 1, 2022 | |||||||||||
| Derivative instruments with hedge accounting designation | |||||||||||
Cash flow currency hedges | $ | $ | $ | ( | |||||||
| Cash flow commodity hedges | ( | ||||||||||
| Fair value interest rate hedges | ( | ||||||||||
| Derivative instruments without hedge accounting designation | |||||||||||
Non-designated currency hedges | ( | ||||||||||
| $ | $ | ( | |||||||||
(1)Included in receivables and other noncurrent assets.
(2)Included in accounts payable and accrued expenses and other noncurrent liabilities.
Derivative Instruments with Hedge Accounting Designation
Cash Flow Hedges: We utilize forward and swap contracts that generally mature within two years designated as cash flow hedges to minimize our exposure to changes in currency exchange rates or commodity prices for certain capital expenditures and manufacturing costs. Forward and swap contracts are measured at fair value based on market-based observable inputs including market spot and forward rates, interest rates, and credit-risk spreads (Level 2). We recognized gains from cash flow hedges of $75 million and $128 million for the second quarter and first six months of 2023, respectively, and losses of $70 million and $170 million for the second quarter and first six months of 2022, respectively, in accumulated other comprehensive income (loss). We reclassified losses of $54 million and $122 million for the second quarter and first six months of 2023, respectively, from accumulated other comprehensive income (loss) to earnings, primarily to cost of goods sold. The reclassifications for the second quarter and first six months of 2022 were not significant. As of March 2, 2023, we expect to reclassify $220 million of pre-tax losses related to cash flow hedges from accumulated other comprehensive income (loss) into earnings in the next 12 months.
Fair Value Hedges: We utilize fixed-to-floating interest rate swaps designated as fair value hedges to minimize certain exposures to changes in the fair value of fixed-rate debt that result from fluctuations in benchmark interest rates. Interest rate swaps are measured at fair value based on market-based observable inputs including interest rates and credit-risk spreads (Level 2). The changes in the fair values of derivatives designated as fair value hedges and the offsetting changes in the underlying fair values of the hedged items are both recognized in earnings. When a derivative is no longer designated as a fair value hedge for any reason, including termination and maturity, the remaining unamortized difference between the carrying value of the hedged item at that time and the face value of the hedged item is amortized to earnings over the remaining life of the hedged item, or immediately if the hedged item has matured or been extinguished. The effects of fair value hedges on our consolidated statements of operations, recognized in interest expense, were not significant for the periods presented.
23Equity Plans
As of March 2, 2023, 50 million shares of our common stock were available for future awards under our equity plans, including 16 million shares approved for issuance under our employee stock purchase plan (“ESPP”).
Restricted Stock and Restricted Stock Units (“Restricted Stock Awards”)
Restricted Stock Awards activity is summarized as follows:
| Six months ended | March 2, 2023 | March 3, 2022 | ||||||
| Restricted stock award shares granted | ||||||||
| Weighted-average grant-date fair value per share | $ | $ | ||||||
Employee Stock Purchase Plan (“ESPP”)
For each six-month ESPP offering period that ended in the second quarter of 2023 and 2022, employees purchased 3 million and 2 million shares, respectively, at a per share price of $52.45 and $65.94 , respectively.
24 | 2023 Q2 10-Q
Stock-based Compensation Expense
Stock-based compensation expense recognized in our statements of operations is presented below. Stock-based compensation expense of $92 million and $48 million was capitalized and remained in inventory as of March 2, 2023 and September 1, 2022, respectively.
| Quarter ended | Six months ended | ||||||||||||||||
| March 2, 2023 | March 3, 2022 | March 2, 2023 | March 3, 2022 | ||||||||||||||
| Stock-based compensation expense by caption | |||||||||||||||||
| Research and development | $ | $ | $ | $ | |||||||||||||
| Cost of goods sold | |||||||||||||||||
| Selling, general, and administrative | |||||||||||||||||
| Restructure | ( | ( | ( | ||||||||||||||
| $ | $ | $ | $ | ||||||||||||||
| Stock-based compensation expense by type of award | |||||||||||||||||
| Restricted stock awards | $ | $ | $ | $ | |||||||||||||
| ESPP | |||||||||||||||||
| Stock options | |||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||
As of March 2, 2023, $1.43 billion of total unrecognized compensation costs for unvested awards, before the effect of any future forfeitures, was expected to be recognized through the second quarter of 2027, resulting in a weighted-average period of 1.4 years.
Revenue
Revenue is primarily recognized at a point in time when control of the promised goods is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those goods. Substantially all contracts with our customers are short-term in duration at fixed, negotiated prices with payment generally due shortly after delivery. From time to time, we have contracts with initial terms that include performance obligations that extend beyond one year. As of March 2, 2023, our future performance obligations beyond one year were not significant.
As of March 2, 2023 and September 1, 2022, other current liabilities included $605 million and $1.26 billion, respectively, for estimates of consideration payable to customers including estimates for pricing adjustments and returns.
In the second quarter of 2023, we received $120 million in cash as settlement of an insurance claim involving an operational disruption in 2017, of which $114 million was for business interruption and recognized in revenue.
25Revenue by Technology
| Quarter ended | Six months ended | ||||||||||||||||
| March 2, 2023 | March 3, 2022 | March 2, 2023 | March 3, 2022 | ||||||||||||||
| DRAM | $ | $ | $ | $ | |||||||||||||
| NAND | |||||||||||||||||
| Other (primarily NOR) | |||||||||||||||||