Property, Plant, and Equipment

12 Months Ended

Sep. 02, 2021

Property, Plant and Equipment [Abstract]


As of	2021		2020

Land	$	280	$	352
Buildings	14,776		13,981
Equipment(1)	51,902		48,525
Construction in progress(2)	1,517		1,600
Software	987		873
	69,462		65,331
Accumulated depreciation	(36,249)		(34,300)
	$	33,213	$	31,031

(1)Includes costs related to equipment not placed into service of $1.99 billion as of September 2, 2021 and $1.63 billion as of September 3, 2020.

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

Depreciation expense was $6.13 billion, $5.57 billion, and $5.34 billion for 2021, 2020, and 2019, respectively. Interest capitalized as part of the cost of property, plant, and equipment was $66 million, $77 million, and $103 million for 2021, 2020, and 2019, 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.