What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-10-07 compared with 2021-10-08 · 253 added, 266 removed, 888 unchanged (37% of the section changed)

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Consolidated 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

Report of Independent Registered Public Accounting Firm (PCAOB ID 238 )

53 | 2022 10-K

Micron Technology, Inc.

3 unchanged sentences

2022 September 2,

2020 August 29,

2021 September 3,

Revenue $ 30,758 $ 27,705 $ 21,435

22 unchanged sentences

See accompanying notes to consolidated financial statements.

48 | 2021 10-K

Micron Technology, Inc.

3 unchanged sentences

2022 September 2,

2020 August 29,

2021 September 3,

Net income $ 8,687 $ 5,861 $ 2,710

2 unchanged sentences

Gains (losses) on investments ( 48 ) ( 7 ) 1

Pension liability adjustments 3 15 ( 6 )

Foreign currency translation adjustments ( 1 ) 2 —

Pension liability adjustments 3 3 15

Other comprehensive income (loss) ( 562 ) ( 69 ) 62

1 unchanged sentence

Comprehensive income attributable to noncontrolling interests

— ( 23 ) ( 45 )

Comprehensive income attributable to Micron $ 8,125 $ 5,792 $ 2,749

See accompanying notes to consolidated financial statements.

55 | 2022 10-K

Micron Technology, Inc.

29 unchanged sentences

Commitments and contingencies

Micron shareholders’ equity

Shareholders’ equity

Common stock, $ 0.10 par value, 3,000 shares authorized, 1,226 shares issued and 1,094 outstanding ( 1,216 shares issued and 1,119 outstanding as of September 2, 2021)

7 unchanged sentences

See accompanying notes to consolidated financial statements.

50 | 2021 10-K

Micron Technology, Inc.

6 unchanged sentences

Balance at August 29, 2019 1,182 $ 118 $ 8,214 $ 30,761 $ ( 3,221 ) $ 9 $ 35,881 $ 889 $ 36,770

Cumulative effect from adoption of new accounting standards — — — 92 — — 92 — 92

Net income — — — 2,687 — — 2,687 15 2,702

2 unchanged sentences

Stock-based compensation expense — — 328 — — — 328 — 328

Repurchase of stock ( 2 ) — 103 ( 39 ) ( 2,792 ) — ( 2,728 ) — ( 2,728 )

Repurchase of stock - repurchase program — — — — ( 176 ) — ( 176 ) — ( 176 )

Repurchase of stock - withholdings on employee equity awards ( 2 ) — ( 11 ) ( 64 ) — — ( 75 ) — ( 75 )

Settlement of capped calls — — 98 — ( 98 ) — — — —

Acquisitions of noncontrolling interest — — 120 — — — 120 ( 904 ) ( 784 )

Reclassification of redeemable convertible notes, net — — 3 — — — 3 — 3

Cash settlement of convertible notes — — ( 56 ) — — — ( 56 ) — ( 56 )

Balance at August 29, 2019 1,182 $ 118 $ 8,214 $ 30,761 $ ( 3,221 ) $ 9 $ 35,881 $ 889 $ 36,770

Balance at September 3, 2020 1,194 $ 119 $ 8,917 $ 33,384 $ ( 3,495 ) $ 71 $ 38,996 $ — $ 38,996

Net income — — — 5,861 — — 5,861 — 5,861

2 unchanged sentences

Stock-based compensation expense — — 378 — — — 378 — 378

Repurchase of stock ( 2 ) — ( 11 ) ( 64 ) ( 176 ) — ( 251 ) — ( 251 )

Settlement of capped calls — — 98 — ( 98 ) — — — —

Acquisitions of noncontrolling interest — — 120 — — — 120 ( 904 ) ( 784 )

Repurchase of stock - repurchase program — — — — ( 1,200 ) — ( 1,200 ) — ( 1,200 )

Repurchase of stock - withholdings on employee equity awards ( 2 ) — ( 12 ) ( 82 ) — ( 94 ) — ( 94 )

Stock issued for convertible notes 11 1 ( 1 ) — — — — — —

Cash settlement of convertible notes — — ( 52 ) — — — ( 52 ) ( 52 )

Dividends and dividend equivalents declared ($ 0.10 per share)

— — — ( 112 ) — — ( 112 ) — ( 112 )

Balance at September 2, 2021 1,216 $ 122 $ 9,453 $ 39,051 $ ( 4,695 ) $ 2 $ 43,933 $ — $ 43,933

3 unchanged sentences

Stock-based compensation expense — — 514 — — — 514 — 514

Repurchase of stock ( 2 ) — ( 12 ) ( 82 ) ( 1,200 ) — ( 1,294 ) — ( 1,294 )

Stock issued for convertible notes 11 1 ( 1 ) — — — — — —

Cash settlement of convertible notes — — ( 52 ) — — — ( 52 ) — ( 52 )

Cash dividends declared ($ 0.10 per share)

Repurchase of stock - repurchase program — — — — ( 2,432 ) — ( 2,432 ) — ( 2,432 )

Repurchase of stock - withholdings on employee equity awards ( 2 ) — ( 14 ) ( 112 ) — — ( 126 ) — ( 126 )

Dividends and dividend equivalents declared ($ 0.315 per share)

— — — ( 352 ) — — ( 352 ) — ( 352 )

1 unchanged sentence

See accompanying notes to consolidated financial statements.

57 | 2022 10-K

Micron Technology, Inc.

3 unchanged sentences

2022 September 2,

2020 August 29,

2021 September 3,

Cash flows from operating activities

2 unchanged sentences

Depreciation expense and amortization of intangible assets 7,116 6,214 5,650

Amortization of debt discount and other costs 30 26 49

Restructure and asset impairments 454 40 ( 97 )

Stock-based compensation 514 378 328

(Gains) losses on debt prepayments, repurchases, and conversions 1 ( 40 ) 396

(Gain) loss on debt repurchases and conversions 83 1 ( 40 )

Restructure and asset impairments 44 454 40

Change in operating assets and liabilities:

2 unchanged sentences

Accounts payable and accrued expenses 744 210 725

Deferred income taxes, net ( 50 ) 79 150

Other ( 18 ) ( 70 ) 51

4 unchanged sentences

Proceeds from maturities of available-for-sale securities 1,321 1,250 814

Proceeds from sale of Lehi, Utah fab 888 — —

Proceeds from sales of available-for-sale securities 294 856 1,458

3 unchanged sentences

Cash flows from financing activities

Repurchases of common stock - repurchase program ( 2,432 ) ( 1,200 ) ( 176 )

Repayments of debt ( 2,032 ) ( 1,520 ) ( 4,366 )

Payments to acquire treasury stock ( 1,294 ) ( 251 ) ( 2,729 )

Payments of dividends to shareholders ( 461 ) — —

Payments on equipment purchase contracts ( 141 ) ( 295 ) ( 63 )

Repurchases of common stock - withholdings on employee equity awards ( 125 ) ( 94 ) ( 75 )

Acquisition of noncontrolling interest in IMFT — — ( 744 )

9 unchanged sentences

Interest paid, net of amounts capitalized ( 154 ) ( 171 ) ( 165 )

Noncash equipment acquisitions on contracts payable and finance leases 684 278 119

Noncash equipment acquisitions on contracts payable 157 289 171

See accompanying notes to consolidated financial statements.

52 | 2021 10-K

Micron Technology, Inc.

3 unchanged sentences

Basis of Presentation

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 .

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.

6 unchanged sentences

Our fiscal year is the 52 or 53-week period ending on the Thursday closest to August 31.

Fiscal 2021 contained 52 weeks, fiscal 2020 contained 53 weeks, and fiscal 2019 contained 52 weeks.

Fiscal 2022 and 2021 each contained 52 weeks and fiscal 2020 contained 53 weeks.

Our fourth quarter of fiscal 2020 contained 14 weeks and all other fiscal quarters in the years presented contained 13 weeks.

13 unchanged sentences

Derivative assets and liabilities that can be net settled with each counterparty have been presented in our consolidated balance sheet on a net basis.

59 | 2022 10-K

Financial Instruments

14 unchanged sentences

Other incentives are recognized as other operating income.

Government incentives received prior to being earned are recognized in current or noncurrent deferred income, whereas government incentives earned prior to being received are recognized in current or noncurrent receivables.

Government incentives received prior to being earned are recognized in current or noncurrent deferred income or restricted cash, whereas government incentives earned prior to being received are recognized in current or noncurrent receivables.

Cash received from government incentives related to operating expenses is included as an operating activity in the statement of cash flows, whereas cash received from incentives related to the acquisition of property, plant, and equipment is included as an investing activity.

7 unchanged sentences

We remove amounts from inventory and charge such amounts to cost of goods sold on a FIFO basis.

54 | 2021 10-K

We adopted ASC 842 in the first quarter of 2020 under the modified retrospective method and elected to not recast prior periods.

We determine if an arrangement is a lease, or contains a lease, at the inception of the arrangement and evaluate whether the lease is an operating lease or a finance lease at the commencement date.

2 unchanged sentences

We do not separate lease and non-lease components for real-estate and gas plant leases.

Sublease income is presented within lease expense.

Sublease income is included within lease expense.

Product and Process Technology

26 unchanged sentences

Differences between the estimated and actual amounts are recognized as adjustments to revenue.

61 | 2022 10-K

Stock-based Compensation

1 unchanged sentence

We account for forfeitures as they occur.

We issue new shares upon the exercise of stock options or conversion of share units.

We issue new shares upon the exercise of stock options, conversion of share units, or issuance of shares under our ESPP.

Treasury Stock

7 unchanged sentences

Actual results could differ from estimates.

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.

Lehi, Utah Fab and 3D XPoint

1 unchanged sentence

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 that was dedicated to 3D XPoint production.

As a result, we classified the property, plant, and equipment as held for sale and ceased depreciating the assets.

On June 30, 2021, we announced a definitive agreement to sell our Lehi facility to TI for cash consideration of $ 900 million.

The sale is anticipated to close in the first quarter of 2022.

56 | 2021 10-K

In the third quarter of 2021, we recognized a charge of $ 435 million included in restructure and asset impairments (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, to be realized from the sale of these assets and liabilities.

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 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.

The impairment charge was based on Level 3 inputs including expected consideration and the composition of assets included in the sale, which were derived from the agreement with TI.

In the second quarter of 2021, we also recognized a charge of $ 49 million to cost of goods sold to write down 3D XPoint inventory due to our decision to cease further development of this technology.

We also recognized a charge of $ 49 million to cost of goods sold in 2021 to write down 3D XPoint inventory due to our decision to cease further development of this technology.

Our 3D XPoint technology development and Lehi facility operations were primarily included in our CNBU segment results.

As of September 2, 2021, the significant balances of assets held for sale in connection with our Lehi facility were as follows:

4 unchanged sentences

Lehi assets held for sale $ 949

As of September 2, 2021, we also had a $ 50 million finance lease obligation included in the current portion of long-term debt and $ 11 million of other liabilities that we expect to transfer with the sale.

The expected cash consideration, net of estimated selling expenses, approximates the carrying value of the net assets and liabilities expected to transfer in the sale, after giving effect to the impairment charge discussed above.

As of September 2, 2021, we also had a $ 50 million finance lease obligation included in the current portion of long-term debt and $ 11 million of other liabilities that were subsequently transferred with the sale.

As of September 2, 2021, the carrying value of the Lehi assets held for sale approximated the expected cash consideration, net of estimated selling expenses.

Variable Interest Entities

4 unchanged sentences

Our assessments of whether we are the primary beneficiary of our VIEs require significant assumptions and judgments.

Through October 31, 2019, IMFT was a VIE because all of its costs were passed to us and its other member, Intel, through product purchase agreements and because IMFT was dependent upon us or Intel for additional cash requirements.

Through the first quarter of 2020, IMFT, which operated a facility in Lehi, Utah, was a VIE because all of its costs were passed to us and its other member, Intel, through product purchase agreements and because IMFT was dependent upon us or Intel for additional cash requirements.

The primary activities of IMFT were driven by the constant introduction of product and process technology.

1 unchanged sentence

We consolidated IMFT due to this power and our obligation to absorb losses and the right to receive benefits from IMFT that could have been potentially significant to it.

On October 31, 2019, we paid $ 1.25 billion to acquire Intel’s noncontrolling interest in IMFT and settle IMFT’s debt obligations to Intel, at which time IMFT (now known as MTU) became a wholly-owned subsidiary.

In the first quarter of 2020, we paid $ 1.25 billion to acquire Intel’s noncontrolling interest in IMFT and settle IMFT’s debt obligations to Intel, at which time IMFT became a wholly-owned subsidiary.

In connection therewith, we recognized a $ 160 million adjustment to equity for the difference between the $ 744 million of cash consideration allocated to Intel’s noncontrolling interest and its $ 904 million carrying value.

IMFT manufactured semiconductor products exclusively for its members under a long-term supply agreement at prices approximating cost.

In 2018, IMFT discontinued production of NAND and subsequent to that time manufactured 3D XPoint memory.

IMFT sales to Intel were $ 158 million through the date of our purchase of Intel’s noncontrolling interest in 2020, and $ 731 million in 2019.

In 2020, IMFT manufactured 3D XPoint memory and its sales to Intel were $ 158 million through the date of our purchase of Intel’s noncontrolling interest.

63 | 2022 10-K

Cash and Investments

Substantially all of our marketable debt and equity investments were classified as available-for-sale as of the dates noted below.

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:

12 unchanged sentences

Cash, cash equivalents, and restricted cash $ 8,339 $ 7,829

(1) The maturities of long-term marketable securities range from one to four years .

(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.

2 unchanged sentences

No adjustments were made to the fair values indicated by such pricing information as of September 1, 2022 or September 2, 2021.

(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.

(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.

Non-marketable Equity Investments

In addition to the amounts included in the table above, we had $ 222 million and $ 153 million of non-marketable equity investments without a readily determinable fair value that were included in other noncurrent assets as of September 1, 2022 and September 2, 2021, respectively.

We recognized gains in other non-operating income on these non-marketable investments of $ 70 million and $ 13 million for 2021 and 2020, respectively.

We recognized net gains in other non-operating income on these non-marketable investments of $ 36 million and $ 70 million for 2022 and 2021, respectively.

These gains primarily resulted from adjustments of these investments to the value indicated by transactions in the same or similar investments.

4 unchanged sentences

$ 5,130 $ 5,311

58 | 2021 10-K

As of 2022 2021

8 unchanged sentences

This charge resulted in a corresponding reduction to operating income, a $ 128 million reduction to net income, and an $ 0.11 reduction to diluted earnings per share for both the second quarter and the year ended 2021.

Beginning in the second quarter of 2021, we changed the classification of spare parts for equipment to better align with the manner in which they are used in operations.

As a result, we now present spare parts as other current assets and no longer as a component of raw materials inventories.

This reclassification was applied on a retrospective basis.

As a result, $ 254 million of spare parts were presented in other current assets as of September 2, 2021, and we reclassified $ 234 million of spare parts from inventories to other current assets in the accompanying balance sheet as of September 3, 2020.

Property, Plant, and Equipment

13 unchanged sentences

Interest capitalized as part of the cost of property, plant, and equipment was $ 77 million, $ 66 million, and $ 77 million for 2022, 2021, and 2020, respectively.

We periodically assess the estimated useful lives of our property, plant, and equipment.

Based on our assessment of planned technology node transitions, capital spending, and re-use rates, we revised the estimated useful lives of the existing equipment in our NAND wafer fabrication facilities and our research and development (“R&D”) facilities from five years to seven years as of the beginning of the first quarter of 2020.

This revision reduced our aggregate depreciation expense by approximately $ 675 million in 2020, of which approximately $ 165 million remained capitalized in inventory as of the end of 2020.

After adjusting for the effect of the reduced amount of depreciation

expense remaining in inventory, the revision in estimated useful lives benefited both operating income and net income by approximately $ 510 million and diluted earnings per share by approximately $ 0.45 for 2020.

65 | 2022 10-K

Intangible Assets and Goodwill

7 unchanged sentences

Expected amortization expense is $ 83 million for 2023, $ 72 million for 2024, $ 52 million for 2025, $ 43 million for 2026, and $ 37 million for 2027.

We have finance and operating leases through which we obtain the right to use equipment and facilities in our manufacturing operations and R&D activities as well as office space and other facilities used in our SG&A functions.

Our finance leases consist primarily of gas or other supply agreements that are deemed to contain embedded leases in which we effectively control the underlying gas plants or other assets used to fulfill the supply agreements.

Our operating leases consist primarily of offices, other facilities, and land used in SG&A, R&D, and certain of our manufacturing operations.

We have finance and operating leases through which we obtain the right to use facilities, land, and equipment that support our business operations.

Our finance leases consist primarily of gas or other supply agreements that are deemed to contain embedded leases.

Our operating leases consist primarily of offices, laboratories, other facilities, and land.

Certain of our operating leases include one or more options to extend the lease term for periods from one year to 10 years for real estate and one year to 30 years for land.

Certain supply or service agreements require us to exercise significant judgment to determine whether the agreement contains a lease of a right-of-use asset.

Our assessment includes determining whether we or the supplier control the assets used to fulfill the supply or service agreement by identifying whether we or the supplier have the right to change the type, quantity, timing, or location of the output of the assets.

Certain supply or service agreements require us to exercise significant judgment to determine whether the agreement contains a lease.

Our assessment includes determining whether we or the supplier control the assets used to fulfill the agreements by identifying whether we or the supplier have the right to change the type, quantity, timing, or location of the output of the assets.

Our gas supply arrangements generally are deemed to contain a lease because we have the right to substantially all of the output of the assets used to produce the supply and we have the right to change the quantity and timing of the output of those assets.

In determining the lease term, we assess whether we are reasonably certain to exercise options to renew or terminate a lease, and when or whether we would exercise an option to purchase the right-of-use asset.

In determining the lease term, we assess whether we are reasonably certain to exercise any options to renew or terminate a lease or to purchase the right-of-use asset.

Measuring the present value of the initial lease liability requires judgment to determine the discount rate, which we base on interest rates for borrowings with similar terms and collateral issued by entities with credit ratings similar to ours.

Operating lease costs include short-term and variable lease expenses.

Short-term, variable leases, and sublease income are not material for the periods presented.

The components of lease expense are presented below:

The components of lease cost are presented below:

For the year ended 2022 2021 2020

3 unchanged sentences

Operating lease cost (1)

Operating lease expense under the previous ASC 840 lease accounting guidance was $ 93 million for 2019.

60 | 2021 10-K

$ 248 $ 197 $ 264

(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:

2 unchanged sentences

Finance leases

$ 23 $ 21 $ 24

Operating leases (1)

Cash flows used for financing activities from financing leases 85 248

Cash flows used for financing activities – Finance leases 103 85 248

Noncash acquisitions of right-of-use assets

14 unchanged sentences

2.90 % 2.63 %

Maturities of lease liabilities existing as of September 2, 2021 were as follows:

As of September 1, 2022, maturities of lease liabilities were as follows:

For the year ending Finance Leases Operating Leases

2 unchanged sentences

Less imputed interest ( 131 ) ( 140 )

The table above excludes any lease liabilities for leases that have been executed but have not yet commenced.

As of September 2, 2021, we had such lease liabilities relating to (1) operating lease payment obligations of $ 147 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 $ 553 million over a weighted-average period of 15 years for gas supply arrangements deemed to contain embedded leases.

The table above excludes obligations for leases that have been executed but have not yet commenced.

As of September 1, 2022, excluded obligations consisted of $ 212 million of finance lease obligations 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.

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Accounts Payable and Accrued Expenses

8 unchanged sentences

As of Stated Rate Effective Rate Principal Current Long-Term Total Principal Current Long-Term Total

Finance lease obligations

N/A 3.14 % $ 803 $ 154 $ 649 $ 803 $ 486 $ 76 $ 410 $ 486

2023 Notes 2.497 % 2.64 % 1,250 — 1,247 1,247 1,250 — 1,245 1,245

4.640 % 4.76 % 600 — 598 598 600 — 598 598

2024 Term Loan A 3.700 % 3.74 % $ 1,188 $ — $ 1,187 $ 1,187 $ 1,188 $ — $ 1,186 $ 1,186

4 unchanged sentences

4.663 % 4.73 % 850 — 846 846 850 — 846 846

2032 Green Bonds 2.703 % 2.77 % 1,000 — 994 994 — — — —

2041 Notes 3.366 % 3.41 % 500 — 496 496 — — — —

2051 Notes 3.477 % 3.52 % 500 — 496 496 — — — —

Finance lease obligations

N/A 2.65 % 886 103 783 886 804 155 649 804

2023 Notes N/A N/A — — — — 1,250 — 1,247 1,247

N/A N/A — — — — 600 — 598 598

Extinguished 2024 Term Loan A N/A N/A — — — — 1,250 62 1,186 1,248

Other N/A N/A 1 1 — 1 1 1 — 1

$ 7,024 $ 103 $ 6,803 $ 6,906 $ 6,792 $ 155 $ 6,621 $ 6,776

1 unchanged sentence

The resulting variable interest paid is at a rate equal to SOFR plus approximately 3.33 %.

The fixed-to-floating interest rate swaps are accounted for as fair value hedges, as a result, the carrying value of our 2027 Notes reflects adjustments in fair value.

As of September 2, 2021, all of our debt, other than our finance leases, are unsecured obligations that rank equally in right of payment with all of our other existing and future unsecured indebtedness and are effectively subordinated to all of our other existing and future secured indebtedness, to the extent of the value of the assets securing such indebtedness.

As of September 2, 2021, Micron had $ 5.97 billion of unsecured debt (net of unamortized discount and debt issuance costs) that was structurally subordinated to all liabilities of its subsidiaries, including trade payables.

The fixed-to-floating interest rate swaps are accounted for as fair value hedges, as a result, the carrying values of our 2027 Notes reflect adjustments in fair value.

As of September 1, 2022, all of our debt, other than our finance leases, are unsecured obligations that rank equally in right of payment with all of our other existing and future unsecured indebtedness and are effectively subordinated to all future secured indebtedness, to the extent of the value of the assets securing such indebtedness.

As of September 1, 2022, Micron had unsecured debt with a carrying value of $ 6.02 billion that was structurally subordinated to all liabilities of its subsidiaries, including trade payables.

The terms of our indebtedness generally contain cross payment default and cross acceleration provisions.

Micron’s guarantees of its subsidiary debt obligations are unsecured obligations ranking equally in right of payment with all of Micron’s other existing and future unsecured indebtedness.

Micron’s guarantees of certain liabilities of its subsidiaries are unsecured obligations ranking equally in right of payment with all of Micron’s other existing and future unsecured indebtedness.

Senior Unsecured Notes

Our 2023 Notes, 2024 Notes, 2026 Notes, 2027 Notes, 2029 Notes, and 2030 Notes (the “Senior Unsecured Notes”) each 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;

On November 1, 2021, we issued $ 2.00 billion aggregate principal amount of unsecured 2032 Green Bonds, 2041 Notes, and 2051 Notes in a public offering.

Issuance costs for these notes were $ 14 million.

Over time, we plan to allocate an amount equal to the net proceeds of the 2032 Green Bonds to fund eligible sustainability-focused projects involving renewable energy, green buildings, energy efficiency, water management, waste abatement, and a circular economy.

We may redeem our 2026 Notes, 2027 Notes, 2029 Notes, 2030 Notes, 2032 Green Bonds, 2041 Notes, and 2051 Notes (the “Senior Unsecured Notes”), in whole or in part, at our option prior to their respective maturity date 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, in each case plus accrued interest.

We may also redeem any series of our Senior Unsecured Notes, in whole or in part, at a price equal to par between two and six months prior to maturity in accordance with the respective terms of such series.

Each series of Senior Unsecured Notes contains 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

62 | 2021 10-K

are subject to a number of limitations and exceptions.

These covenants are subject to a number of limitations and exceptions.

Additionally, if a change of control triggering event occurs, as defined in the indentures governing our senior unsecured 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

On May 14, 2021, we terminated our existing undrawn credit facility and entered into a new five -year unsecured Revolving Credit Facility.

In 2021, we terminated our existing undrawn credit facility and entered into a new five -year unsecured Revolving Credit Facility.

Under the Revolving Credit Facility, we can draw up to $ 2.50 billion which 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.

Any amounts outstanding under the Revolving Credit Facility would mature in May 2026 and amounts borrowed may be prepaid without penalty.

4 unchanged sentences

2024 Term Loans

On May 14, 2021, we drew $ 1.19 billion under an unsecured 2024 Term Loan A and used the proceeds to repay the $ 1.19 billion Extinguished 2024 Term Loan A.

In 2021, we drew $ 1.19 billion under an unsecured 2024 Term Loan A and used the proceeds to repay the $ 1.19 billion Extinguished 2024 Term Loan A.

The 2024 Term Loan A bears interest at a rate equal to LIBOR plus 0.625 % to 1.375 % based on our current corporate credit ratings.

The term loan agreement provides for a transition to SOFR or other alternate benchmark rate upon the retirement of LIBOR in 2023.

The principal amount is due October 2024 and may be prepaid without penalty.

The 2024 Term Loan A contains the same leverage ratio and substantially the same other covenants as the Revolving Credit Facility.

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Debt Activity

The table below presents the effects of issuances, prepayments, and settlements of debt conversions in 2021.

Increase (Decrease) in Principal Increase (Decrease) in Carrying Value Increase (Decrease) in Cash Decrease in Equity Gain (Loss)

Issuance of 2024 Term Loan A $ 1,188 $ 1,186 $ 1,186 $ — $ —

Prepayment of Extinguished 2024 Term Loan A ( 1,188 ) ( 1,186 ) ( 1,188 ) — ( 2 )

Settlement of Conversions of 2032D Notes (1)

( 134 ) ( 134 ) ( 185 ) ( 52 ) 1

The table below presents the effects of issuances and prepayments of debt in 2022:

Increase (Decrease) in Principal Increase (Decrease) in Carrying Value Increase (Decrease) in Cash Gain (Loss)

2032 Green Bonds $ 1,000 $ 994 $ 994 $ —

2041 Notes 500 496 496 —

2051 Notes 500 496 496 —

2023 Notes ( 1,250 ) ( 1,247 ) ( 1,281 ) ( 34 )

2024 Notes ( 600 ) ( 598 ) ( 647 ) ( 49 )

$ 150 $ 141 $ 58 $ ( 83 )

In 2021, substantially all holders of our 2032D Notes converted their notes.

We settled these conversions and all remaining 2032D Notes with $ 185 million in cash and 11.1 million shares of our stock.

We settled these conversions and all remaining 2032D Notes with $ 185 million in cash and 11.1 million shares of our stock, which approximated the carrying value of debt and equity for those notes.

In 2020, we recognized aggregate non-operating gains of $ 40 million in connection with debt prepayments and conversions of $ 3.77 billion of principal amount of notes (carrying value of $ 3.90 billion) for an aggregate of $ 3.92 billion in cash.

In 2019, we recognized aggregate non-operating losses of $ 396 million in connection with debt prepayments, repurchases, and conversions of $ 1.80 billion of principal amount of notes (carrying value of $ 1.60 billion) for an aggregate of $ 2.38 billion in cash.

Maturities of Notes Payable

As of September 2, 2021, maturities of notes payable were as follows:

As of September 1, 2022, maturities of notes payable by fiscal year were as follows:

2028 and thereafter 3,550

Unamortized discounts ( 27 )

Hedge accounting fair value adjustment ( 91 )

As of September 1, 2022, we had commitments of approximately $ 7.1 billion for purchase obligations, of which approximately $ 5.4 billion will be due within one year.

Purchase obligations include payments for the acquisition of property, plant, and equipment, and other goods or services of either a fixed or minimum quantity and exclude any lease payments for leases that have been executed but have not yet commenced.

Purchase obligations include payments for the acquisition of property, plant, and equipment, and other goods or services of either a fixed or minimum quantity and exclude any payments for leases that have been executed but have not yet commenced.

Contingencies

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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.

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.

On July 14, 2021, the action was dismissed with prejudice pursuant to a stipulation of dismissal filed by the parties.

On December 15, 2014, Innovative Memory Solutions, Inc.

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(“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 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;

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to stop manufacturing, using, selling, and offering for sale the accused products in China;

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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 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;

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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.

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.

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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.

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.

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Court of Appeals for the Federal Circuit affirmed the ruling of invalidity.

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On April 28, 2021, Netlist, Inc.

filed two patent infringement actions against Micron, Micron Semiconductor Products, Inc.

and Micron Technology Texas, LLC in the U.S.

(“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 a single U.S.

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.

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 May 10, 2021, Vervain, LLC filed a patent infringement action against Micron, Micron Semiconductor Products, Inc., and Micron Technology Texas, LLC in the U.S.

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 and costs.

On June 24, 2022, Netlist amended its complaint to also seek 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.

The complaint seeks injunctive relief, damages, and attorneys’ fees.

On August 1, 2022, Netlist filed a second patent infringement complaint against Micron, MSP, and MTEC in E.D.

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 second complaint in E.D.

seeks 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.

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The complaint seeks injunctive relief, damages, attorneys’ fees, and costs.

On April 27, 2022, Bell Semiconductor, LLC (“Bell”) filed a patent infringement action against Micron in the U.S.

District Court for the District of Idaho.

The complaint alleges that one U.S.

patent is infringed by a certain SSD controller.

On April 28, 2022, Bell filed a complaint with the U.S.

International Trade Commission (“ITC”) alleging violations of Section 337 of the Tariff Act of 1930 based on alleged importation of articles and components that infringe the same U.S.

patent that Bell asserts in the complaint it filed in the District of Idaho.

At Bell’s request, the ITC investigation was terminated on August 30, 2022.

On August 26, 2022, Bell filed a second patent infringement complaint in the District of Idaho alleging that two U.S.

patents are infringed by a certain 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.

On October 5, 2022, Bell filed a third complaint against Micron in the District of Idaho alleging that one U.S.

patent is infringed by Micron’s process for designing a NAND flash device included in certain Micron SSD products.

Each of Bell’s complaints in the District Courts seeks 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 requests institution of an investigation 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.

On 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.

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.

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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.

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:

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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.

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 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.

On March 4, 2021, the Appeals Court issued an order setting forth a new legal view that whether the 2008 sale of Inotera Shares is voidable depends on the question whether, in October 2008, Qimonda had a restructuring plan in place, and whether Micron was aware of and reasonably relied on that restructuring plan sufficient to form a belief that Qimonda was not imminently illiquid.

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.

A hearing of the Appeals Court has been scheduled for December 2022.

Antitrust Matters

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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.

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On December 21, 2020, the District Court dismissed the plaintiffs’ claims and entered judgment against them.

On January 19, 2021, the plaintiffs filed a notice of appeal to the U.S.

The plaintiffs appealed to the U.S.

Court of Appeals for the Ninth Circuit.

On May 3, 2021, several plaintiffs filed a substantially identical complaint in the U.S.

District Court for the Northern District of California purportedly on behalf of a nationwide class of indirect purchasers of DRAM products.

On July 19, 2021, the District Court dismissed the May 3, 2021 complaint pursuant to an agreement between the plaintiffs and Micron providing that the plaintiffs may refile the complaint if the District Court’s December 21, 2020 dismissal order is not affirmed on appeal.

On March 7, 2022, the Court of Appeals affirmed the District Court’s ruling dismissing plaintiffs’ claims, and subsequently denied the plaintiffs’ request for rehearing.

The plaintiffs did not further appeal the ruling of the Court of Appeals.

On June 26, 2018, a complaint was filed against Micron and other DRAM suppliers in the U.S.

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The consolidated complaint asserted 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 sought 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 a further amended complaint.

On January 11, 2021, the plaintiffs filed a further amended complaint asserting substantially the same claims and seeking the same relief.

On September 3, 2021, the District Court granted Micron’s motion to dismiss the further amended complaint with prejudice.

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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.

On October 1, 2021, the plaintiffs filed a notice of appeal to the U.S.

Court of Appeals for the Ninth Circuit.

On June 29, 2022, the Court of Appeals granted a joint motion to dismiss the plaintiffs’ appeal.

Additionally, six cases have been filed in the following Canadian courts on the dates indicated:

Superior Court of Quebec (April 30, 2018 and May 3, 2018), the Federal Court of Canada (May 2, 2018), the Ontario Superior Court of Justice (May 15, 2018), and the Supreme Court of British Columbia (May 10, 2018).

The plaintiffs in these cases are individuals seeking certification of class actions on behalf of direct and indirect purchasers of DRAM in Canada (or regions of Canada) between June 1, 2016 and February 1, 2018.

The substantive allegations in these cases are similar to those asserted in the cases filed in the United States.

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We are cooperating with SAMR in its investigation.

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Securities Matters

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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.

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.

A trial is scheduled to begin on January 10, 2022.

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.

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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 matters, 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.

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.

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.

Micron Shareholders’ Equity

Common Stock Repurchases :

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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.

We repurchased 15.6 million shares of our common stock for $ 1.20 billion in 2021 and 3.6 million shares for $ 176 million in 2020.

We repurchased 35.4 million shares of our common stock for $ 2.43 billion in 2022 and 15.6 million shares for $ 1.20 billion in 2021.

Through September 1, 2022, we had repurchased an aggregate of $ 6.47 billion under the authorization.

Amounts repurchased are included in treasury stock.

On August 2, 2021, we announced that our Board of Directors had declared a quarterly dividend of $ 0.10 per share, payable in cash on October 18, 2021 , to shareholders of record as of the close of business on October 1, 2021 .

Accumulated Other Comprehensive Income :

Changes in accumulated other comprehensive income by component for the year ended September 2, 2021 were as follows:

Gains (Losses) on Derivative Instruments Pension Liability Adjustments Unrealized Gains (Losses) on Investments Cumulative Foreign Currency Translation Adjustment Total

On September 29, 2022, we announced that our Board of Directors had declared a quarterly dividend of $ 0.115 per share, payable in cash on October 26, 2022 , to shareholders of record as of the close of business on October 11, 2022 .

Accumulated Other Comprehensive Income (Loss) :

Changes in accumulated other comprehensive income (loss) by component for the year ended September 1, 2022 were as follows:

Gains (Losses) on Derivative Instruments Unrealized Gains (Losses) on Investments Pension Liability Adjustments Cumulative Foreign Currency Translation Adjustment Total

As of September 2, 2021 $ ( 22 ) $ 1 $ 22 $ 1 $ 2

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As of September 1, 2022 $ ( 538 ) $ ( 47 ) $ 25 $ — $ ( 560 )

68 | 2021 10-K

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:

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

Value Carrying

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Notes $ 5,472 $ 6,020 $ 6,584 $ 5,973

Convertible notes — — 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 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.

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.

Assets classified as held for sale are carried at the lower of estimated fair value or carrying value.

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Actual selling prices could vary significantly from our estimated fair value and we could recognize additional losses in the event that the sales prices of assets classified as held for sale are lower than their carrying values.

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Derivative Instruments

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2,821 7 ( 13 )

$ 8 $ ( 440 )

As of September 2, 2021

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$ 3,601 $ 10 $ ( 66 )

Cash flow commodity hedges 45 2 —

Fair value interest rate hedges 900 5 —

Derivative instruments without hedge accounting designation

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$ 20 $ ( 68 )

(1) Included in receivables – other and other noncurrent assets.

(2) Included in accounts payable and accrued expenses – other and other noncurrent liabilities.

(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 for 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 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 do not use derivative instruments for speculative purposes.

We recognized losses of $ 52 million and gains of $ 51 million for 2021 and 2020, respectively, in accumulated other comprehensive income from cash flow hedges.

The amounts recognized in 2019 were not significant.

We recognized losses of $ 14 million in 2021 in cost of goods sold related to the amounts excluded from hedge effectiveness testing.

The amounts recognized in 2020 and 2019 were not significant.

We reclassified $ 41 million of gains in 2021 from accumulated other comprehensive income to earnings, primarily to cost of goods sold.

The reclassifications were not significant in 2020 or 2019.

We recognized losses from cash flow hedges of $ 735 million and $ 52 million for 2022 and 2021, respectively, and gains of $ 51 million for 2020, in accumulated other comprehensive income.

We reclassified $ 53 million of losses and $ 41 million of gains in 2022 and 2021, respectively, from accumulated other comprehensive income to earnings, primarily to cost of goods sold.

The reclassifications were not significant in 2020.

As of September 1, 2022, we expect to reclassify $ 263 million of pre-tax losses related to cash flow hedges from accumulated other comprehensive income into earnings in the next 12 months.

Substantially all of the cash flow hedging relates to foreign currency contracts for all periods presented, and the commodity hedges had an immaterial impact.

Fair Value Hedges :

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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.

We recognized interest expense of $ 96 million for changes in the fair value of our interest rate swaps in 2022.

We also recognized offsetting interest expense of the same amounts related to the changes in the fair value of the hedged portion of the underlying debt for these periods.

The amounts recognized for 2021 were not significant.

Derivative Instruments without Hedge Accounting Designation

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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 $ 21 million and losses of $ 32 million for 2020 and 2019, respectively.

The amounts recognized in 2021 were not significant.

Convertible Notes Settlement Obligations :

For settlement obligations associated with our convertible notes subject to mark-to-market accounting treatment, the fair values of the underlying derivative settlement obligations were initially determined using the Black-Scholes option valuation model (Level 2), which requires inputs of stock price, expected stock-price volatility, estimated option life, risk-free interest rate, and dividend rate.

The subsequent measurement amounts were based on the volume-weighted-average trading price of our common stock (Level 2).

(See “Debt.”) We recognized losses $ 14 million and $ 58 million for 2020 and 2019, respectively, in other non-operating income (expense), net for the changes in fair value of the derivative settlement obligations.

The amounts recognized in 2021 were not significant.

The amounts recognized for derivative instruments without hedge accounting designation were not significant for the periods presented.

Derivative Counterparty Credit Risk and Master Netting Arrangements

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As of September 1, 2022 and September 2, 2021, amounts netted under our master netting arrangements were not significant.

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As of September 1, 2022, 90 million shares of our common stock were available for future awards under our equity plans, including 18 million shares approved for issuance under our employee stock purchase plan (“ESPP”).

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As of September 1, 2022, there were 23 million shares of Restricted Stock Awards outstanding, 20 million of which contained only service conditions.

For service-based Restricted Stock Awards, restrictions generally lapse in one-fourth or one-third increments during each year of employment after the grant date.

For service-based Restricted Stock Awards granted through October 2021, restrictions generally lapse in one-fourth or one-third increments during each year of employment after the grant date.

For service-based Restricted Stock Awards granted beginning in November 2021, restrictions generally lapse on 25 % of the units granted after the first year and on 6.25 % each quarter thereafter over the remaining three years of employment.

Restrictions generally lapse on Restricted Stock with performance or market conditions as conditions are met over a 3 -year period.

At the end of the performance period, the number of actual shares to be awarded will vary between 0 % and 200 % of target amounts, depending upon the achievement level.

In 2022, our Board of Directors approved dividend equivalent rights for unvested restricted stock units awarded on or after October 13, 2021.

Restricted Stock Awards activity for 2022 is summarized as follows:

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Outstanding as of September 1, 2022 23 60.93

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For the year ended 2022 2021 2020

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Employee Stock Purchase Plan (“ESPP”)

Our ESPP was offered to substantially all employees beginning in August 2018 and permitted eligible employees to purchase shares of our common stock through payroll deductions of up to 10 % of their eligible compensation, subject to certain limitations prior to August 2021.

Our ESPP is offered to substantially all employees and permitted eligible employees to purchase shares of our common stock through payroll deductions of up to 10 % of their eligible compensation, subject to certain limitations prior to August 2021.

Beginning in August 2021, employees are permitted to deduct up to 15 % of their eligible compensation to purchase shares under the ESPP.

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Average expected life in years 0.5 0.5 0.5

Weighted-average expected volatility 41 % 45 % 45 %

Weighted-average expected volatility (based on implied volatility) 43 % 41 % 45 %

Weighted-average risk-free interest rate 2.0 % 0.1 % 0.8 %

Expected dividend yield 0.6 % 0.3 % 0.0 %

Under the ESPP, employees purchased 3 million shares of common stock for $ 140 million in 2021 and 3 million shares for $ 118 million in 2020.

Under the ESPP, employees purchased 4 million shares of common stock for $ 215 million in 2022, 3 million shares for $ 140 million in 2021, and 3 million shares for $ 118 million in 2020.

Stock Options

As of September 2, 2021, stock options of 4 million shares were outstanding, which are generally exercisable in increments of either one-fourth or one-third per year beginning one year from the date of grant.

As of September 1, 2022, stock options of 3 million shares were outstanding, all of which were fully exercisable.

Stock options expire 8 years from the date of grant.

We did not grant any stock options in 2021 or 2020 and options granted in 2019 were not material.

We did not grant any stock options in 2022, 2021, or 2020.

Stock options of 1 million shares were exercised in 2022.

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Selling, general, and administrative 133 99 103

Restructure ( 5 ) — —

$ 496 $ 395 $ 328

7 unchanged sentences

Stock-based compensation expense of $ 48 million and $ 30 million was capitalized and remained in inventory as of September 1, 2022 and September 2, 2021, respectively.

As of September 2, 2021, $ 691 million of total unrecognized compensation costs for unvested awards, before the effect of any future forfeitures, was expected to be recognized through the fourth quarter of 2025, resulting in a weighted-average period of 1.2 years.

As of September 1, 2022, $ 1.02 billion of total unrecognized compensation costs for unvested awards, before the effect of any future forfeitures, was expected to be recognized through the fourth quarter of 2026, resulting in a weighted-average period of 1.3 years.

Employee Benefit Plans

12 unchanged sentences

Pension expense was not material for 2022, 2021, or 2020.

72 | 2021 10-K

Revenue and Customer Contract Liabilities

Revenue is primarily recognized at a point in time when control of the promised goods is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those goods.

Substantially all contracts with our customers are short-term in duration at fixed, negotiated prices with payment generally due shortly after delivery.

From time to time, we have contracts with initial terms that include performance obligations that extend beyond one year.

As of September 1, 2022, our future performance obligations beyond one year were not significant.

As of September 1, 2022 and September 2, 2021, other current liabilities included $ 1.26 billion and $ 846 million for estimates of consideration payable to customers, respectively, including estimates for pricing adjustments and returns.

Revenue by Technology

Revenue by technology is presented in the table below:

For the year ended 2022 2021 2020

3 unchanged sentences

$ 30,758 $ 27,705 $ 21,435

Beginning in 2020, revenues for MCPs and SSDs, which contain both DRAM and NAND, are disaggregated into DRAM and NAND based on the relative values of each component.

The amounts for 2019 in the table above have been conformed to the current period presentation.

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

Customer Contract Liabilities

Our contract liabilities from customer advances are for advance payments received from customers to secure product in future periods.

Other contract liabilities consist of amounts received in advance of satisfying performance obligations.

These balances are reported within other current liabilities and other noncurrent liabilities.

Revenue recognized during 2021 from the ending balance of 2020 included $ 64 million from meeting performance obligations of other contract liabilities and shipments against customer advances.

The following table presents contract liabilities:

As of 2021 2020

Contract liabilities from customer advances $ 74 $ 40

Other contract liabilities — 25

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 September 2, 2021, our future performance obligations were $ 117 million , substantially all of which are expected to be recognized as revenue within one year .

As of September 2, 2021 and September 3, 2020, other current liabilities included $ 846 million and $ 466 million for estimates of consideration payable to customers, respectively, including estimates for pricing adjustments and returns.

79 | 2022 10-K

Restructure and Asset Impairments

1 unchanged sentence

Restructure and asset impairments $ 48 $ 488 $ 60

Restructure and asset impairments for 2021 are primarily due to the planned sale of our Lehi, Utah facility.

Restructure and asset impairments for 2022 and 2021 are primarily related to the sale of our Lehi, Utah facility.

See “Lehi, Utah Fab and 3D XPoint.” Restructure and asset impairments for 2020 primarily related to asset impairments and employee relocation and severance costs related to right-sizing our Lehi, Utah facility.

In 2019, we finalized the sale of our 200mm fabrication facility in Singapore and recognized restructure gains of $ 128 million.

Other restructure and asset impairments for 2019 primarily related to our continued emphasis to centralize certain key functions.

Other Operating (Income) Expense, Net

11 unchanged sentences

$ ( 38 ) $ 81 $ 60

74 | 2021 10-K

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

19 unchanged sentences

$ ( 2,010 ) 21.0 % $ ( 1,306 ) 21.0 % $ ( 626 ) 21.0 %

Change in unrecognized tax benefits ( 238 ) 3.8 % ( 33 ) 1.1 % ( 59 ) 0.8 %

tax on foreign operations ( 322 ) 3.4 % ( 226 ) 3.6 % ( 14 ) 0.5 %

Change in valuation allowance ( 241 ) 2.5 % 54 ( 0.9 ) % ( 20 ) 0.7 %

Change in unrecognized tax benefits ( 67 ) 0.7 % ( 238 ) 3.8 % ( 33 ) 1.1 %

Foreign tax rate differential 1,601 ( 16.7 ) % 951 ( 15.3 ) % 253 ( 8.5 ) %

Debt premium deductions 130 ( 2.1 ) % — — % — — %

Research and development tax credits 66 ( 0.7 ) % 123 ( 2.0 ) % 62 ( 2.1 ) %

Change in valuation allowance 54 ( 0.9 ) % ( 20 ) 0.7 % ( 40 ) 0.6 %

State taxes, net of federal benefit 59 ( 0.9 ) % 23 ( 0.8 ) % 102 ( 1.4 ) %

Foreign derived intangible income deduction 41 ( 0.4 ) % 18 ( 0.3 ) % 67 ( 2.2 ) %

State taxes, net of federal benefit — — % 59 ( 0.9 ) % 23 ( 0.8 ) %

Debt premium deductions — — % 130 ( 2.1 ) % — — %

Other 44 ( 0.5 ) % 41 ( 0.6 ) % 8 ( 0.3 ) %

2 unchanged sentences

These incentives expire, in whole or in part, at various dates through 2034 and are conditional, in part, upon meeting certain business operations and employment thresholds.

The effect of tax incentive arrangements reduced our tax provision by $ 758 million (benefiting our diluted earnings per share by $ 0.66 ) for 2021, by $ 215 million ($ 0.19 per diluted share) for 2020, and by $ 756 million ($ 0.66 per diluted share) for 2019.

The effect of tax incentive arrangements reduced our tax provision by $ 1.12 billion (benefiting our diluted earnings per share by $ 1.00 ) for 2022, by $ 758 million ($ 0.66 per diluted share) for 2021, and by $ 215 million ($ 0.19 per diluted share) for 2020.

As of September 1, 2022, certain non-U.S.

2 unchanged sentences

Determination of the amount of unrecognized deferred tax liabilities related to investments in these foreign subsidiaries is not practicable.

Pursuant to SEC Staff Accounting Bulletin No.

118, measurement period adjustments in 2019 related to the Tax Cuts and Jobs Act included $ 47 million of benefit for the repatriation tax, net of adjustments related to uncertain tax positions.

We recognize the foreign minimum tax in the period the tax is incurred.

81 | 2022 10-K

Deferred income taxes reflect the net tax effects of temporary differences between the bases of assets and liabilities for financial reporting and income tax purposes as well as carryforwards.

5 unchanged sentences

Operating lease liabilities 138 109

Inventories 77 —

Property, plant, and equipment 44 37

Other 142 115

Gross deferred tax assets 1,354 1,250

4 unchanged sentences

Product and process technology — ( 12 )

Property, plant, and equipment — ( 50 )

Other ( 68 ) ( 143 )

5 unchanged sentences

We assess positive and negative evidence for each jurisdiction to determine whether it is more likely than not that existing deferred tax assets will be realized.

As of September 2, 2021, and September 3, 2020, we had a valuation allowance of $ 233 million and $ 294 million, respectively, against our net deferred tax assets, primarily related to carryforwards in Malaysia and Japan.

Changes in 2021 in the valuation allowance were due to loss expirations during the year, offset by adjustments based on management’s assessment of tax credits, allowances and net operating losses that are more likely than not to be realized.

As of September 1, 2022, and September 2, 2021, we had a valuation allowance of $ 471 million and $ 233 million, respectively, against our net deferred tax assets, primarily related to carryforwards in U.S.

states and Malaysia.

Changes in 2022 in the valuation allowance were due to adjustments based on management's assessment of the realizability of tax credits, allowances and net operating losses based on a level that is more likely than not to be realized.

On March 16, 2022, the Idaho governor signed a new law that changed the way corporations calculate Idaho taxable income.

This new law is expected to reduce our Idaho taxable income, and consequently, we do not expect to utilize our tax credits in Idaho for the foreseeable future.

As a result, we recorded a valuation allowance against our Idaho deferred tax assets and an increase to tax expense of $ 189 million in 2022.

As of September 1, 2022, our net operating loss carryforward amounts and expiration periods, as reported to tax authorities, were as follows:

Year of Expiration State Japan Malaysia Singapore Other Total

Year of Expiration State Japan Malaysia Other Total

2023 - 2027 $ 44 $ 418 $ — $ 12 $ 474

4 unchanged sentences

$ 873 $ 652 $ 851 $ 16 $ 2,392

76 | 2021 10-K

As of September 1, 2022, our federal and state tax credit carryforward amounts and expiration periods, as reported to tax authorities, were as follows:

14 unchanged sentences

Ending unrecognized tax benefits $ 731 $ 660 $ 411

As of September 2, 2021, gross unrecognized tax benefits were $ 660 million, substantially all of which would affect our effective tax rate in the future, if recognized.

Increases to unrecognized tax benefits were primarily due to tax return positions taken during 2021.

As of September 1, 2022, gross unrecognized tax benefits were $ 731 million, which would have an impact of approximately $ 564 million on our effective tax rate in the future, if recognized.

Amounts accrued for interest and penalties related to uncertain tax positions were not significant for any period presented.

21 unchanged sentences

Diluted 7.75 5.14 2.37

83 | 2022 10-K

Antidilutive potential common shares excluded from the computation of diluted earnings per share, that could dilute basic earnings per share in the future, were as follows at the end of the periods shown:

8 unchanged sentences

Includes memory and storage products sold into smartphone and other mobile-device markets.

Storage Business Unit (“SBU”) :

Includes SSDs and component-level solutions sold into enterprise and cloud, client, and consumer storage markets, and other discrete storage products sold in component and wafer form.

Embedded Business Unit (“EBU”) :

Includes memory and storage products sold into automotive, industrial, and consumer markets.

Storage Business Unit (“SBU”) :

Includes SSDs and component-level solutions sold into enterprise and cloud, client, and consumer storage markets, and other discrete storage products sold in component and wafer form.

Certain operating expenses directly associated with the activities of a specific segment are charged to that segment.

2 unchanged sentences

As of September 1, 2022 and September 2, 2021, CNBU, MBU, SBU, and EBU had goodwill of $ 832 million, $ 198 million, $ 101 million, and $ 97 million, respectively.

78 | 2021 10-K

For the year ended 2022 2021 2020

1 unchanged sentence

MBU 7,260 7,203 5,702

SBU 3,973 3,765 3,826

EBU 5,235 4,209 2,759

SBU 4,553 3,973 3,765

All Other 17 40 25

3 unchanged sentences

MBU 2,160 2,173 1,074

SBU 173 36 ( 386 )

EBU 1,752 1,006 301

SBU 513 173 36

All Other 12 20 ( 2 )

6 unchanged sentences

Patent license charges — ( 128 ) —

Employee severance — — ( 116 )

Other ( 30 ) ( 31 ) ( 28 )

5 unchanged sentences

MBU 1,725 1,553 1,436

SBU 1,028 1,115 1,555

EBU 1,280 1,028 741

SBU 1,323 1,101 1,115

All Other 2 8 12

1 unchanged sentence

$ 7,116 $ 6,214 $ 5,650

85 | 2022 10-K

Certain Concentrations

6 unchanged sentences

Automotive, industrial, and consumer 15 % 15 % 15 %

Revenue from WPG Holdings Limited was 13 % of total revenue in 2021.

Revenue from Kingston Technology Company, Inc.

was 11 % of total revenue for 2020 and 2019.

Revenue from Huawei Technologies Co.

was 12 % of total revenue for 2019.

Our sales to WPG were included in our MBU, CNBU, EBU, and SBU segments;

our sales to Kingston were included in our CNBU, MBU, and SBU segments;

and our sales to Huawei were included in our MBU, CNBU, SBU, and EBU segments.

was 12 % and 11 % of total revenue for 2022 and 2020, respectively.

Revenue from WPG Holdings Limited was 11 % and 13 % of total revenue in 2022 and 2021, respectively.

Sales to Kingston were primarily included in our CNBU and SBU segments;

and sales to WPG were primarily included in our MBU, CNBU, and EBU segments.

We generally have multiple sources of supply for our raw materials and production equipment;

13 unchanged sentences

Mainland China (excluding Hong Kong) 3,311 2,456 2,337

Hong Kong 2,582 1,792 1,614

Japan 1,696 1,652 1,387

Hong Kong 1,665 2,582 1,792

Other Asia Pacific 1,223 1,420 1,157

1 unchanged sentence

$ 30,758 $ 27,705 $ 21,435

80 | 2021 10-K

Long-lived assets by geographic area consisted of property, plant, and equipment and right-of-use assets and were as follows:

9 unchanged sentences

(1) Included $ 899 million (net of impairment) as of September 2, 2021 of property, plant, and equipment for our Lehi facility that was classified as held for sale and presented in other current assets.

87 | 2022 10-K

Report of Independent Registered Public Accounting Firm

6 unchanged sentences

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 1, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the COSO.

Changes in Accounting Principle

As discussed in the Significant Accounting Policies and Inventories notes to the consolidated financial statements, the Company changed the manner in which it accounts for inventory costing from the average cost inventory accounting method to the first-in, first-out inventory accounting method and the manner in which it classifies spare parts for equipment from raw materials inventories to other current assets in 2021, and the manner in which it accounts for leases in 2020.

Change in Accounting Principle

Basis for Opinions

11 unchanged sentences

We believe that our audits provide a reasonable basis for our opinions.

82 | 2021 10-K

Definition and Limitations of Internal Control over Financial Reporting

19 unchanged sentences

Evaluating management's assumptions related to future average selling prices and future sales volumes involved evaluating whether the assumptions used by management were reasonable considering (i) current and past results, including recent sales, (ii) the consistency with external market, industry data and current contract prices, (iii) a comparison of the prior year estimates to actual results in the current year, and (iv) whether these assumptions were consistent with evidence obtained in other areas of the audit.

89 | 2022 10-K

/s/ PricewaterhouseCoopers LLP

2 unchanged sentences

We have served as the Company’s auditor since 1984.

84 | 2021 10-K

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data