UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 27, 2020

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to

Commission file number 1-10658

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	☒	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	☒	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.								☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).					Yes	☐	No	☒

The number of outstanding shares of the registrant’s common stock as of March 19, 2020 was 1,112,186,006.

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*	Redefining What’s Possible
	The world is moving to a new economic model, where data is driving value creation in ways nobody had imagined just a few years ago.
	Who We Are
	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. Our more than 37,000 team members, in 18 different countries, work with countless customers to innovate every day and pursue the products that will shape how we live and work tomorrow.
	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)	Our day-to-day operations wouldn’t be possible without our team members’ commitment to business integrity and environmental sustainability. Whether it’s adhering to our professional values or valuing the communities we work in, for us, doing business better means doing business right.
Media Inquiries mediarelations@micron.com Government Inquiries govaffairs@micron.com Investor Inquiries investorrelations@micron.com
	Global Product Portfolio
	DRAM | NAND | 3D XPointTM Memory | NOR | Solid-State Drives High Bandwidth Memory (HBM) | Multichip Packages | Advanced Solutions
	Connect with us on micron.com

© 2020 Micron Technology, Inc. Micron, the Micron logo, the M orbit logo, Intelligence Accelerated^TM, and other Micron trademarks are the property of Micron Technology, Inc. All other trademarks are the property of their respective owners. Products and specifications are subject to change without notice. Rev 03/20

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	8
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
	Results of Operations	28
	Liquidity and Capital Resources	32
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	34
Item 4.	Controls and Procedures	34
Part II. Other Information
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	52
Item 6.	Exhibits	52
Signatures		53

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

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

Micron 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 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 Q2 10-Q

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Micron Technology, Inc.

Consolidated Statements of Operations

(In millions, except per share amounts)

(Unaudited)

	Quarter ended				Six months ended
	February 27, 2020		February 28, 2019		February 27, 2020		February 28, 2019
Revenue	$	4,797	$	5,835	$	9,941	$	13,748
Cost of goods sold	3,442		2,971		7,220		6,269
Gross margin	1,355		2,864		2,721		7,479
Selling, general, and administrative	223		209		434		418
Research and development	681		601		1,321		1,212
Other operating (income) expense, net	11		97		8		133
Operating income	440		1,957		958		5,716
Interest income	34		58		78		96
Interest expense	(46)		(27)		(93)		(60)
Other non-operating income (expense), net	(1)		(84)		45		(75)
	427		1,904		988		5,677
Income tax (provision) benefit	(21)		(280)		(76)		(757)
Equity in net income (loss) of equity method investees	1		1		3		1
Net income	407		1,625		915		4,921
Net income attributable to noncontrolling interests	(2)		(6)		(19)		(9)
Net income attributable to Micron	$	405	$	1,619	$	896	$	4,912
Earnings per share
Basic	$	0.37	$	1.45	$	0.81	$	4.37
Diluted	0.36		1.42		0.79		4.24
Number of shares used in per share calculations
Basic	1,111		1,114		1,109		1,123
Diluted	1,133		1,141		1,131		1,157

See accompanying notes to consolidated financial statements.

3

Micron Technology, Inc.

Consolidated Statements of Comprehensive Income

(In millions)

(Unaudited)

	Quarter ended				Six months ended
	February 27, 2020		February 28, 2019		February 27, 2020		February 28, 2019
Net income	$	407	$	1,625	$	915	4,921
Other comprehensive income (loss), net of tax
Gains (losses) on derivative instruments	(18)		6		(15)		(6)
Gains (losses) on investments	3		6		(2)		3
Foreign currency translation adjustments	—		(1)		—		(1)
Pension liability adjustments	—		—		(1)		—
Other comprehensive income (loss)	(15)		11		(18)		(4)
Total comprehensive income	392		1,636		897		4,917
Comprehensive income attributable to noncontrolling interests	(2)		(6)		(19)		(9)
Comprehensive income attributable to Micron	$	390	$	1,630	$	878	$	4,908

See accompanying notes to consolidated financial statements.

4 | 2020 Q2 10-Q

Micron Technology, Inc.

Consolidated Balance Sheets

(In millions, except par value amounts)

(Unaudited)

As of	February 27, 2020		August 29, 2019
Assets
Cash and equivalents	$	7,118	$	7,152
Short-term investments	363		803
Receivables	3,049		3,195
Inventories	5,208		5,118
Other current assets	238		235
Total current assets	15,976		16,503
Long-term marketable investments	586		1,164
Property, plant, and equipment	29,647		28,240
Intangible assets	332		340
Deferred tax assets	764		837
Goodwill	1,228		1,228
Operating lease right-of-use assets	605		—
Other noncurrent assets	510		575
Total assets	$	49,648	$	48,887
Liabilities and equity
Accounts payable and accrued expenses	$	5,077	$	4,626
Current debt	237		1,310
Other current liabilities	508		454
Total current liabilities	5,822		6,390
Long-term debt	5,188		4,541
Noncurrent operating lease liabilities	548		—
Noncurrent unearned government incentives	586		636
Other noncurrent liabilities	383		452
Total liabilities	12,527		12,019
Commitments and contingencies
Redeemable noncontrolling interest	98		98
Micron shareholders’ equity
Common stock, $0.10 par value, 3,000 shares authorized, 1,191 shares issued and 1,112 outstanding (1,182 shares issued and 1,106 outstanding as of August 29, 2019)	119		118
Additional capital	8,725		8,214
Retained earnings	31,602		30,761
Treasury stock, 79 shares held (76 shares as of August 29, 2019)	(3,414)		(3,221)
Accumulated other comprehensive income	(9)		9
Total Micron shareholders’ equity	37,023		35,881
Noncontrolling interest in subsidiary	—		889
Total equity	37,023		36,770
Total liabilities and equity	$	49,648	$	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
Net income						405						405		—		405
Other comprehensive income (loss), net										(15)		(15)				(15)
Stock issued under stock plans	7	—		121								121				121
Stock-based compensation expense				85								85				85
Repurchase of stock	(1)	—		(4)		(21)		(45)				(70)				(70)
Settlement of capped calls				98				(98)				—				—
Conversion and repurchase of convertible notes				(3)								(3)				(3)
Balance at February 27, 2020	1,191	$	119	$	8,725	$	31,602	$	(3,414)	$	(9)	$	37,023	$	—	$	37,023

See accompanying notes to consolidated financial statements.

6 | 2020 Q2 10-Q

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 30, 2018	1,170	$	117	$	8,201	$	24,395	$	(429)	$	10	$	32,294	$	870	$	33,164
Cumulative effect of adoption new accounting standard						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
Net income						1,619						1,619		5		1,624
Other comprehensive income (loss), net										11		11				11
Stock issued under stock plans	7	1		76								77				77
Stock-based compensation expense				57								57				57
Repurchase of stock	(1)	—		(5)		(24)		(702)				(731)				(731)
Acquisition of noncontrolling interest												—		(12)		(12)
Reclassification of redeemable convertible notes, net				1								1				1
Conversion and repurchase of convertible notes				(336)								(336)				(336)
Balance at February 28, 2019	1,178	$	118	$	8,143	$	29,364	$	(3,064)	$	6	$	34,567	$	863	$	35,430

See accompanying notes to consolidated financial statements.

7

Micron Technology, Inc.

Consolidated Statements of Cash Flows

(In millions)

(Unaudited)

Six months ended	February 27, 2020		February 28, 2019
Cash flows from operating activities
Net income	$	915	$	4,921
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation expense and amortization of intangible assets	2,661		2,648
Amortization of debt discount and other costs	16		29
Stock-based compensation	157		118
(Gain) loss on debt prepayments, repurchases, and conversions	(42)		69
Change in operating assets and liabilities
Receivables	104		1,202
Inventories	(90)		(800)
Accounts payable and accrued expenses	257		(326)
Deferred income taxes, net	38		320
Other	(4)		64
Net cash provided by operating activities	4,012		8,245
Cash flows from investing activities
Expenditures for property, plant, and equipment	(3,999)		(5,349)
Purchases of available-for-sale securities	(566)		(2,566)
Proceeds from sales of available-for-sale securities	1,059		160
Proceeds from maturities of available-for-sale securities	523		391
Proceeds from government incentives	105		455
Other	(21)		(10)
Net cash provided by (used for) investing activities	(2,899)		(6,919)
Cash flows from financing activities
Repayments of debt	(1,676)		(705)
Acquisition of noncontrolling interest in IMFT	(744)		—
Payments to acquire treasury stock	(159)		(2,568)
Payments on equipment purchase contracts	(29)		(37)
Proceeds from issuance of debt	1,250		1,800
Other	151		27
Net cash provided by (used for) financing activities	(1,207)		(1,483)
Effect of changes in currency exchange rates on cash, cash equivalents, and restricted cash	(14)		(1)
Net decrease in cash, cash equivalents, and restricted cash	(108)		(158)
Cash, cash equivalents, and restricted cash at beginning of period	7,279		6,587
Cash, cash equivalents, and restricted cash at end of period	$	7,171	$	6,429

See accompanying notes to consolidated financial statements.

8 | 2020 Q2 10-Q

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. 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.</