Property, Plant, and Equipment

12 Months Ended

Sep. 03, 2020

Property, Plant and Equipment [Abstract]


As of	2020		2019

Land	$	352	$	352
Buildings	13,981		10,931
Equipment⁽¹⁾	48,525		44,051
Construction in progress⁽²⁾	1,600		1,700
Software	873		790
	65,331		57,824
Accumulated depreciation	(34,300)		(29,584)
	$	31,031	$	28,240

⁽¹⁾Included costs related to equipment not placed into service of $1.63 billion as of September 3, 2020 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.

Depreciation expense was $5.57 billion, $5.34 billion, and $4.66 billion for 2020, 2019, and 2018, respectively. Interest capitalized as part of the cost of property, plant, and equipment was $77 million, $103 million, and $44 million for 2020, 2019, and 2018, 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.