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 IF 1934

For the quarterly period ended November 28, 2019

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

Micron Technology, Inc.

(Exact name of registrant as specified in its charter)

Delaware		75-1618004
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)
8000 S. Federal Way, Boise, Idaho		83716-9632
(Address of principal executive offices)		(Zip Code)
Registrant’s telephone number, including area code		(208) 368-4000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.10 per share	MU	NASDAQ Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x 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). Yes x 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.

Large Accelerated Filer	Accelerated Filer	Non-Accelerated Filer	Smaller Reporting Company	Emerging Growth Company
☒	☐	☐	☐	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No x

The number of outstanding shares of the registrant's common stock as of December 13, 2019 was 1,110,873,554.

Micron Company Profile
Founded over 40 years ago on October 5, 1978 Headquartered in Boise, Idaho, USA 4th Largest semiconductor company in the world* 18 Countries* 13 Manufacturing sites and 13 customer labs* 37,000 Team members*	It’s All About Data
	Data is today’s new business currency, and memory and storage are emerging as strategic differentiators that will redefine how we extract value from data to learn, explore, communicate, and experience.
	Who We Are
	For over 40 years, Micron’s memory and storage solutions have been foundational to innovations that have transformed the world in countless ways. Our technology and expertise are core to computers that boot up in an instant and work harder and faster; mobile phones with brilliant screen resolution and longer battery life; and new business models that are disrupting entire industries faster than ever – such as entertainment, manufacturing, and finance.
	Our Vision
	As a global leader in memory and storage solutions, we are transforming how the world uses information to enrich life by enabling technologies to collect, store, and manage data with unprecedented speed and efficiency. We are accelerating the transformation of information into intelligence – inspiring the world to learn, communicate, and advance faster than ever.
	Our Commitment
*Micron data as of August 29, 2019. Gartner Market Share: Semiconductors by End Market, Worldwide, 2018 (April 2019)	Micron’s dedication to employee health and safety, environmental quality, diversity and inclusion, and community engagement is part of our commitment worldwide. This dedication includes working toward building and maintaining sustainable operations, products, and supply chains around the globe. Through the Micron Foundation, we provide opportunities for learning and enrichment by sharing our resources and people in the communities where our team members live and work.
Media Inquiries mediarelations@micron.com Government Inquiries govaffairs@micron.com Investor Inquiries investorrelations@micron.com
	Global Product Portfolio
	DRAM | NAND | 3D XPointTM Memory | NOR | Solid-State Drives Multichip Packages | Advanced Solutions | High Bandwidth Memory (HBM)
	Connect with us on micron.com

© 2019 Micron Technology, Inc. All rights reserved. Micron and the Micron logo are trademarks of Micron Technology, Inc. All other trademarks are the property of their respective owners. Products are warranted only to meet Micron’s production data sheet specifications. Products and specifications are subject to change without notice. Rev 10/19

Table of Contents

Introduction		2
Part I. Financial Statements
Item 1.	Financial Statements:
	Consolidated Statements of Operations	3
	Consolidated Statements of Comprehensive Income	4
	Consolidated Balance Sheets	5
	Consolidated Statements of Changes in Equity	6
	Consolidated Statements of Cash Flows	7
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
	Results of Operations	26
	Liquidity and Capital Resources	29
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	31
Item 4.	Controls and Procedures	31
Part II. Other Information
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	48
Item 6.	Exhibits	48
Signatures		49

1

Definitions of Commonly Used Terms

As used herein, “we,” “our,” “us,” and similar terms include Micron Technology, Inc. and our 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
2022 Term Loan B	Senior Secured Term Loan B due 2022	IMFT	IM Flash Technologies, LLC
2024 Term Loan A	Senior Term Loan A due 2024	Intel	Intel Corporation
2024 Notes	5.25% Senior Notes due 2024	MCP	Multi-Chip Package
2025 Notes	5.50% Senior Notes due 2025	Micron	Micron Technology, Inc. (Parent Company)
2026 Notes	5.63% Senior Notes due 2026	MMJ	Micron Memory Japan, G.K.
2027 Notes	4.19% Senior Notes due 2027	MMT	Micron Memory Taiwan Co., Ltd.
2029 Notes	5.33% Senior Notes due 2029	MTTW	Micron Technology Taiwan, Inc.
2030 Notes	4.66% Senior Notes due 2030	MTU	Micron Technology Utah, LLC
2032D Notes	3.13% Convertible Senior Notes due 2032	Qimonda	Qimonda AG
2033F Notes	2.13% Convertible Senior Notes due 2033	SSD	Solid State Drive
DDR	Double Data Rate	VIE	Variable Interest Entity
GDDR	Graphics Double Data Rate

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

Micron and the Micron orbit logo are trademarks of Micron Technology, Inc. 3D XPoint is a trademark of Intel in the United States and/or other countries. All other trademarks are the property of their respective owners.

Forward-Looking Statements

This Form 10-Q contains trend information and other forward-looking statements that involve a number of risks and uncertainties. Forward-looking statements include, but are not limited to, statements such as those made regarding changes in underutilization of our Lehi, Utah manufacturing capacity (previously known as IMFT and now known as MTU); the sufficiency of our cash and investments, cash flows from operations, and available financing; and capital spending in 2020. We are under no obligation to update these forward-looking statements. Our actual results could differ materially from our historical results and those discussed in the forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, those identified in “Part II, Other Information – Item 1A. Risk Factors.”

2 | 2020 Q1 10-Q

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Micron Technology, Inc.

Consolidated Statements of Operations

(In millions, except per share amounts)

(Unaudited)

Three months ended	November 28, 2019		November 29, 2018
Revenue	$	5,144	$	7,913
Cost of goods sold	3,778		3,298
Gross margin	1,366		4,615
Selling, general, and administrative	211		209
Research and development	640		611
Other operating (income) expense, net	(3)		36
Operating income	518		3,759
Interest income	44		38
Interest expense	(47)		(33)
Other non-operating income (expense), net	46		9
	561		3,773
Income tax (provision) benefit	(55)		(477)
Equity in net income (loss) of equity method investees	2		—
Net income	508		3,296
Net income attributable to noncontrolling interests	(17)		(3)
Net income attributable to Micron	$	491	$	3,293
Earnings per share
Basic	$	0.44	$	2.91
Diluted	0.43		2.81
Number of shares used in per share calculations
Basic	1,107		1,133
Diluted	1,129		1,174

See accompanying notes to consolidated financial statements.

3

Micron Technology, Inc.

Consolidated Statements of Comprehensive Income

(In millions)

(Unaudited)

Three months ended	November 28, 2019		November 29, 2018
Net income	$	508	$	3,296
Other comprehensive income (loss), net of tax
Gains (losses) on investments	(5)		(3)
Pension liability adjustments	(1)		—
Gains (losses) on derivative instruments	3		(12)
Other comprehensive income (loss)	(3)		(15)
Total comprehensive income	505		3,281
Comprehensive income attributable to noncontrolling interests	(17)		(3)
Comprehensive income attributable to Micron	$	488	$	3,278

See accompanying notes to consolidated financial statements.

4 | 2020 Q1 10-Q

Micron Technology, Inc.

Consolidated Balance Sheets

(In millions, except par value amounts)

(Unaudited)

As of	November 28, 2019		August 29, 2019
Assets
Cash and equivalents	$	6,969	$	7,152
Short-term investments	619		803
Receivables	3,419		3,195
Inventories	4,943		5,118
Other current assets	217		235
Total current assets	16,167		16,503
Long-term marketable investments	599		1,164
Property, plant, and equipment	29,352		28,240
Intangible assets	333		340
Deferred tax assets	783		837
Goodwill	1,228		1,228
Operating lease right-of-use assets	608		—
Other noncurrent assets	579		575
Total assets	$	49,649	$	48,887
Liabilities and equity
Accounts payable and accrued expenses	$	5,408	$	4,626
Current debt	462		1,310
Other current liabilities	447		454
Total current liabilities	6,317		6,390
Long-term debt	5,188		4,541
Noncurrent operating lease liabilities	511		—
Noncurrent unearned government incentives	609		636
Other noncurrent liabilities	426		452
Total liabilities	13,051		12,019
Commitments and contingencies
Redeemable noncontrolling interest	98		98
Micron shareholders’ equity
Common stock, $0.10 par value, 3,000 shares authorized, 1,185 shares issued and 1,108 outstanding (1,182 shares issued and 1,106 outstanding as of August 29, 2019)	119		118
Additional capital	8,428		8,214
Retained earnings	31,218		30,761
Treasury stock, 77 shares held (76 shares as of August 29, 2019)	(3,271)		(3,221)
Accumulated other comprehensive income	6		9
Total Micron shareholders’ equity	36,500		35,881
Noncontrolling interest in subsidiary	—		889
Total equity	36,500		36,770
Total liabilities and equity	$	49,649	$	48,887

See accompanying notes to consolidated financial statements.

5

Micron Technology, Inc.

Consolidated Statements of Changes in Equity

(In millions)

(Unaudited)

	Micron Shareholders
	Common Stock			Additional Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Total Micron Shareholders’ Equity		Noncontrolling Interest in Subsidiary		Total Equity
	Number of Shares	Amount
Balance at August 29, 2019	1,182	$	118	$	8,214	$	30,761	$	(3,221)	$	9	$	35,881	$	889	$	36,770
Net income						491						491		15		506
Other comprehensive income (loss), net										(3)		(3)				(3)
Stock issued under stock plans	3	1		31								32				32
Stock-based compensation expense				72								72				72
Repurchase of stock	—	—		(6)		(34)		(50)				(90)				(90)
Acquisition of noncontrolling interest				123								123		(904)		(781)
Conversion and repurchase of convertible notes				(6)								(6)				(6)
Balance at November 28, 2019	1,185	$	119	$	8,428	$	31,218	$	(3,271)	$	6	$	36,500	$	—	$	36,500

	Micron Shareholders
	Common Stock			Additional Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Total Micron Shareholders’ Equity		Noncontrolling Interests in Subsidiaries		Total Equity
	Number of Shares	Amount
Balance at August 30, 2018	1,170	$	117	$	8,201	$	24,395	$	(429)	$	10	$	32,294	$	870	$	33,164
Cumulative effect of adopting new accounting standards						92						92				92
Net income						3,293						3,293		—		3,293
Other comprehensive income (loss), net										(15)		(15)				(15)
Stock issued under stock plans	3	—		15								15				15
Stock-based compensation expense				61								61				61
Repurchase of stock	(1)	—		108		(11)		(1,933)				(1,836)				(1,836)
Reclassification of redeemable convertible notes, net				1								1				1
Conversion and repurchase of convertible notes				(36)								(36)				(36)
Balance at November 29, 2018	1,172	$	117	$	8,350	$	27,769	$	(2,362)	$	(5)	$	33,869	$	870	$	34,739

See accompanying notes to consolidated financial statements.

6 | 2020 Q1 10-Q

Micron Technology, Inc.

Consolidated Statements of Cash Flows

(In millions)

(Unaudited)

Three months ended	November 28, 2019		November 29, 2018
Cash flows from operating activities
Net income	$	508	$	3,296
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation expense and amortization of intangible assets	1,296		1,335
Amortization of debt discount and other costs	10		18
Stock-based compensation	72		61
Gain on debt prepayments, repurchases, and conversions	(42)		(14)
Change in operating assets and liabilities
Receivables	(208)		189
Inventories	175		(286)
Accounts payable and accrued expenses	178		(46)
Deferred income taxes, net	19		192
Other	3		65
Net cash provided by operating activities	2,011		4,810
Cash flows from investing activities
Expenditures for property, plant, and equipment	(1,943)		(2,700)
Purchases of available-for-sale securities	(407)		(2,047)
Proceeds from sales of available-for-sale securities	988		77
Proceeds from maturities of available-for-sale securities	163		60
Proceeds from government incentives	22		236
Other	(12)		(53)
Net cash provided by (used for) investing activities	(1,189)		(4,427)
Cash flows from financing activities
Repayments of debt	(1,415)		(577)
Acquisition of noncontrolling interest in IMFT	(744)		—
Payments to acquire treasury stock	(89)		(1,836)
Payments on equipment purchase contracts	(11)		(20)
Proceeds from issuance of debt	1,250		—
Other	17		(2)
Net cash provided by (used for) financing activities	(992)		(2,435)
Effect of changes in currency exchange rates on cash, cash equivalents, and restricted cash	(14)		(10)
Net decrease in cash, cash equivalents, and restricted cash	(184)		(2,062)
Cash, cash equivalents, and restricted cash at beginning of period	7,279		6,587
Cash, cash equivalents, and restricted cash at end of period	$	7,095	$	4,525

See accompanying notes to consolidated financial statements.

7

Micron Technology, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(All tabular amounts in millions, except per share amounts)

(Unaudited)

Basis of Presentation

The accompanying consolidated financial statements include the accounts of Micron and our consolidated subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America consistent in all material respects with those applied in our Annual Report on Form 10-K for the year ended August 29, 2019, except for changes related to recently adopted accounting standards. See “Recently Adopted Accounting Standards” note. Prior year information is presented in accordance with the accounting guidance in effect during that period and has not been recast for recently adopted accounting standards. In the opinion of our management, the accompanying unaudited consolidated financial statements contain all necessary adjustments, consisting of a normal recurring nature, to fairly state the financial information set forth herein. Certain reclassifications have been made to prior period amounts to conform to current period presentation.

Our fiscal year is the 52 or 53-week period ending on the Thursday closest to August 31. Fiscal year 2020 contains 53 weeks and the fourth quarter of 2020 will contain 14 weeks. The first quarters of fiscal 2020 and 2019 each contained 13 weeks. All period references are to our fiscal periods unless otherwise indicated. These interim financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended August 29, 2019.

Significant Accounting Policies

For a discussion of our significant accounting policies, see "Part I – 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 August 29, 2019. Except for the significant accounting policy associated with leases as discussed below, there have been no material changes to our significant accounting policies since our Annual Report on Form 10-K for the year ended August 29, 2019.

Leases

In the first quarter of 2020, we elected new accounting policies in connection with the adoption of ASC 842 – Leases. We do not recognize a right-of-use asset or lease liability for leases with a term of 12 months or less. For real estate and gas plant leases entered into after adoption, we do not separate lease and non-lease components. Sublease income is presented within lease expense.

Variable Interest Entities

We have interests in entities that are VIEs. If we are the primary beneficiary of a VIE, we are required to consolidate it. To determine if we are the primary beneficiary, we evaluate whether we have the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. Our evaluation includes identification of significant activities and an assessment of our ability to direct those activities based on governance provisions and arrangements to provide or receive product and process technology, product supply, operations services, equity funding, financing, and other applicable agreements and circumstances. Our assessments of whether we are the primary beneficiary of our VIEs require significant assumptions and judgments.

8 | 2020 Q1 10-Q

Unconsolidated VIE

PTI Xi’an: Powertech Technology Inc. Xi’an (“PTI Xi’an”) is a wholly-owned subsidiary of Powertech Technology Inc. (“PTI”) and was created to provide assembly services to us at our manufacturing site in Xi’an, China. We do not have an equity interest in PTI Xi’an. PTI Xi’an is a VIE because of the terms of its service agreement with us and its dependency on PTI to finance its operations. We do not have the power to direct the activities of PTI Xi’an that most significantly impact its economic performance, primarily because we do not have governance rights. Therefore, we do not consolidate PTI Xi’an. In connection with our assembly services with PTI, as of November 28, 2019 and August 29, 2019, we had net property, plant, and equipment of $47 million and $50 million, respectively, and capital lease obligations of $44 million and $47 million, respectively.

Consolidated VIE

IMFT: Through the date we acquired Intel's noncontrolling interest in IMFT, 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. The primary activities of IMFT were driven by the constant introduction of product and process technology. Because we performed a significant majority of the technology development, we had the power to direct its key activities. Prior to October 31, 2019, we consolidated IMFT because we had the power to direct the activities of IMFT that most significantly impacted its economic performance and because we had the 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 acquired Intel’s interest in IMFT at which time IMFT, now known as MTU, became a wholly-owned subsidiary. (See “Equity – Noncontrolling Interest in Subsidiary” note.)

Recently Adopted Accounting Standards

In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-02 – Leases (as amended, “ASC 842”), which amends a number of aspects of lease accounting, including requiring lessees to recognize operating leases with a term greater than one year on their balance sheet as a right-of-use asset and corresponding lease liability, measured at the present value of lease payments. We adopted ASC 842 in the first quarter of 2020 under the modified retrospective method and elected to not recast prior periods. We elected the practical expedients available under the transition guidance, including but not limited to, not reassessing past lease accounting or using hindsight to evaluate lease term. In addition, we elected to not separate lease and non-lease components for real estate or gas plant leases. As a result of adopting ASC 842, we recognized $567 million for operating lease liabilities and right-of-use assets and reclassified an additional $66 million of other balances to right-of-use assets to conform to the new presentation requirements of ASC 842.

Recently Issued Accounting Standards

In November 2018, the 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. This ASU will be effective for us in the first quarter of 2021 with early adoption permitted. This ASU requires retrospective adoption to the date we adopted ASC 606, which was August 31, 2018, by recognizing a cumulative-effect adjustment to the opening balance of retained earnings of the earliest annual period presented. We do not anticipate the adoption of this ASU will have a material 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

9

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. This ASU will be effective for us in the first quarter of 2021 with early adoption permitted. This ASU requires modified retrospective adoption, with prospective adoption for debt securities for which an other-than-temporary impairment had been recognized before the effective date. We are evaluating the timing and effects of our adoption of this ASU on our financial statements.

Cash and Investments

Substantially all of our marketable debt and equity investments were classified as available-for-sale as of the dates noted below. Cash and equivalents and the fair values of our available-for-sale investments, which approximated amortized costs, were as follows:

	November 28, 2019								August 29, 2019
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	$	2,319	$	—	$	—	$	2,319	$	2,388	$	—	$	—	$	2,388
Level 1 (2)
Money market funds	2,565		—		—		2,565		3,418		—		—		3,418
Level 2 (3)
Certificates of deposits	2,063		223		5		2,291		1,292		13		1		1,306
Corporate bonds	—		271		299		570		—		550		689		1,239
Government securities	—		80		159		239		36		149		232		417
Asset-backed securities	—		30		136		166		—		67		242		309
Commercial paper	22		15		—		37		18		24		—		42
	6,969		$	619	$	599	$	8,187	7,152		$	803	$	1,164	$	9,119
Restricted cash (4)	126								127
Cash, cash equivalents, and restricted cash	$	7,095							$	7,279

⁽¹⁾The maturities of long-term marketable investments range from one year 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 analyses to validate information obtained from these pricing services. No adjustments were made to the fair values indicated by such pricing information as of November 28, 2019 or August 29, 2019.

⁽⁴⁾Restricted cash is included in other noncurrent assets and primarily relates to the MMJ Creditor Payments and certain government incentives received prior to being earned. The restrictions lapse on the MMJ Creditor Payments upon approval by the trustees and/or Tokyo District Court and for the government incentives upon achieving certain performance conditions.

Gross realized gains and losses from sales of available-for-sale securities were not significant for any period presented. As of November 28, 2019, there were no available-for-sale securities that had been in a loss position for longer than 12 months.

10 | 2020 Q1 10-Q

Receivables

As of	November 28, 2019		August 29, 2019
Trade receivables	$	3,030	$	2,778
Income and other taxes	194		242
Other	195		175
	$	3,419	$	3,195

Inventories

As of	November 28, 2019		August 29, 2019
Finished goods	$	630	$	757
Work in process	3,724		3,825
Raw materials and supplies	589		536
	$	4,943	$	5,118

Property, Plant, and Equipment

As of	November 28, 2019		August 29, 2019
Land	$	352	$	352
Buildings	11,441		10,931
Equipment (1)	45,637		44,051
Construction in progress (2)	1,795		1,700
Software	793		790
	60,018		57,824
Accumulated depreciation	(30,666)		(29,584)
	$	29,352	$	28,240

⁽¹⁾Included costs related to equipment not placed into service of $1.80 billion as of November 28, 2019 and $2.33 billion as of August 29, 2019.

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

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 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 in the first quarter of 2020. As a result, we estimate the reduction in non-cash depreciation expense benefited operating income and net income by approximately $74 million and diluted earnings per share by approximately $0.07 for the first quarter of 2020.

Intangible Assets and Goodwill

	November 28, 2019				August 29, 2019
As of	Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization
Product and process technology	$	584	$	(251)	$	583	$	(243)
Goodwill	1,228		N/A		1,228		N/A

11

In the first quarters of 2020 and 2019, we capitalized $12 million and $49 million, respectively, for product and process technology with weighted-average useful lives of 11 years and 7 years, respectively. Expected amortization expense for our intangible assets is $56 million for the remainder of 2020, $63 million for 2021, $51 million for 2022, $45 million for 2023, and $41 million for 2024.

Leases

We have finance and operating leases through which we acquire or utilize equipment and facilities in our manufacturing operations and R&D activities as well as office space and other facilities used in our selling, general, and administrative ("SG&A") functions.

Our finance leases consist primarily of equipment used in our manufacturing operations and gas or other supply agreements that are deemed to be 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. 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. 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. Measuring the present value of the initial lease liability requires exercising judgment to determine the discount rate, which we base on interest rates for similar borrowings issued by entities with credit ratings similar to ours at the time of issuance.

Measuring the initial lease liability and corresponding right-of-use asset also requires us to exercise judgment to estimate the present value of lease payments.

Short-term and variable lease expenses were not significant and are presented within operating lease costs in the table below. Sublease income was not significant in the period presented below. The components of lease expenses are presented below:

Three months ended	November 28, 2019
Finance lease cost
Amortization of right-of-use asset	$	40
Interest on lease liability	6
Operating lease cost	24
	$	70

12 | 2020 Q1 10-Q

Other information related to our leases were as follows:

Three months ended	November 28, 2019
Cash flows used for operating activities
Finance leases	$	6
Operating leases	17
Cash flows used for financing activities
Finance leases (1)	64
Noncash acquisitions of right of use assets
Operating leases	13

⁽¹⁾Included in repayments of debt in the accompanying statement of cash flows.

As of	November 28, 2019
Weighted-average remaining lease term (in years)
Finance leases	3.6
Operating leases	7.8
Weighted-average discount rate
Finance leases	4.84	%
Operating leases	2.66	%

Maturities of lease liabilities were as follows:

For the year ending	Operating Leases		Finance Leases
Remainder of 2020	$	49	$	174
2021	66		107
2022	64		75
2023	61		48
2024	52		37
2025 and thereafter	436		191
Less imputed interest and reimbursement of tenant improvements (1)	(178)		(103)
	$	550	$	529

⁽¹⁾Includes $50 million under operating leases for the reimbursement due in 2020 of tenant improvements.

Prior to adopting ASC 842, future minimum operating lease commitments under all noncancelable operating leases with an initial term in excess of one year as of August 29, 2019 were as follows:

For the year ending