Micron Technology Inc 10-Q for FY2023 Q1

Micron Technology Inc (MU)

10-Q 2022-12-22 For: 2022-12-01

Added on April 02, 2026

About this 10-Q

Micron Technology Inc filed this 10-Q on December 22, 2022, covering the quarter ended December 1, 2022 (FY2023 Q1).

Headline figures

Quarter ended December 1, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $4.09B; down 46.9% from $7.69B a year earlier
Net loss: $195M; compared with net income of $2.31B a year earlier
Diluted EPS: -$0.18; compared with $2.04 a year earlier

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Introduction		4
PART I. Financial Information
Item 1.	Financial Statements:	6
	Consolidated Statements of Operations	6
	Consolidated Statements of Comprehensive Income (Loss)	7
	Consolidated Balance Sheets	8
	Consolidated Statements of Changes in Equity	9
	Consolidated Statements of Cash Flows	10
	Notes to Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
	Results of Operations	30
	Liquidity and Capital Resources	33
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	36
Item 4.	Controls and Procedures	36
PART II . Other Information
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	56
Item 6.	Exhibits	57
Signatures		58


Three months ended	December 1, 2022		December 2, 2021

Revenue	$	4,085	$	7,687
Cost of goods sold	3,192		4,122
Gross margin	893		3,565

Research and development	849		712
Selling, general, and administrative	251		259
Restructure and asset impairments	13		38
Other operating (income) expense, net	(11)		(75)
Operating income (loss)	(209)		2,631

Interest income	88		10
Interest expense	(51)		(45)
Other non-operating income (expense), net	(4)		(75)
	(176)		2,521

Income tax (provision) benefit	(8)		(219)
Equity in net income (loss) of equity method investees	(11)		4
Net income (loss)	$	(195)	$	2,306

Earnings (loss) per share
Basic	$	(0.18)	$	2.06
Diluted	(0.18)		2.04

Number of shares used in per share calculations
Basic	1,090		1,119
Diluted	1,090		1,130


Three months ended	December 1, 2022		December 2, 2021

Net income (loss)	$	(195)	$	2,306

Other comprehensive income (loss), net of tax
Gains (losses) on derivative instruments	108		(86)
Pension liability adjustments	1		—
Gains (losses) on investments	(19)		(7)
Foreign currency translation adjustments	(3)		—
Other comprehensive income (loss)	87		(93)
Total comprehensive income (loss)	$	(108)	$	2,213


As of	December 1, 2022		September 1, 2022

Assets
Cash and equivalents	$	9,574	$	8,262
Short-term investments	1,007		1,069
Receivables	3,318		5,130
Inventories	8,359		6,663
Other current assets	663		657
Total current assets	22,921		21,781
Long-term marketable investments	1,426		1,647
Property, plant, and equipment	39,335		38,549
Operating lease right-of-use assets	693		678
Intangible assets	428		421
Deferred tax assets	672		702
Goodwill	1,228		1,228
Other noncurrent assets	1,171		1,277
Total assets	$	67,874	$	66,283

Liabilities and equity
Accounts payable and accrued expenses	$	5,438	$	6,090
Current debt	171		103
Other current liabilities	916		1,346
Total current liabilities	6,525		7,539
Long-term debt	10,094		6,803
Noncurrent operating lease liabilities	625		610
Noncurrent unearned government incentives	516		589
Other noncurrent liabilities	808		835
Total liabilities	18,568		16,376

Commitments and contingencies

Shareholders’ equity
Common stock, $0.10 par value, 3,000 shares authorized, 1,232 shares issued and 1,091 outstanding (1,226 shares issued and 1,094 outstanding as of September 1, 2022)	123		123
Additional capital	10,335		10,197
Retained earnings	46,873		47,274
Treasury stock, 141 shares held (132 shares as of September 1, 2022)	(7,552)		(7,127)
Accumulated other comprehensive income (loss)	(473)		(560)
Total equity	49,306		49,907
Total liabilities and equity	$	67,874	$	66,283


	Common Stock			Additional Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Total Shareholders’ Equity
	Number of Shares	Amount

Balance at September 1, 2022	1,226	$	123	$	10,197	$	47,274	$	(7,127)	$	(560)	$	49,907
Net income (loss)	—	—		—		(195)		—		—		(195)
Other comprehensive income (loss), net	—	—		—		—		—		87		87
Stock issued under stock plans	8	—		7		—		—		—		7
Stock-based compensation expense	—	—		146		—		—		—		146
Repurchase of stock - repurchase program	—	—		—		—		(425)		—		(425)
Repurchase of stock - withholdings on employee equity awards	(2)	—		(15)		(80)		—		—		(95)
Dividends and dividend equivalents declared ($0.115 per share)	—	—		—		(126)		—		—		(126)
Balance at December 1, 2022	1,232	$	123	$	10,335	$	46,873	$	(7,552)	$	(473)	$	49,306


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


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


	December 1, 2022								September 1, 2022
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	$	6,706	$	—	$	—	$	6,706	$	6,055	$	—	$	—	$	6,055
Level 1(2)
Money market funds	925		—		—		925		1,196		—		—		1,196
Level 2(3)
Certificates of deposit	1,879		50		—		1,929		976		50		—		1,026
Corporate bonds	8		757		839		1,604		—		759		995		1,754
Asset-backed securities	—		20		547		567		—		20		608		628
Government securities	13		130		40		183		2		155		44		201
Commercial paper	43		50		—		93		33		85		—		118
	9,574		$	1,007	$	1,426	$	12,007	8,262		$	1,069	$	1,647	$	10,978
Restricted cash(4)	68								77
Cash, cash equivalents, and restricted cash	$	9,642							$	8,339


Three months ended	December 1, 2022		December 2, 2021

Finance lease cost
Amortization of right-of-use assets	$	24	$	25
Interest on lease liabilities	6		6
Operating lease cost(1)	36		29
	$	66	$	60


For the year ending	Finance Leases		Operating Leases

Remainder of 2023	$	96	$	34
2024	105		72
2025	94		71
2026	93		74
2027	93		72
2028 and thereafter	569		524
Less imputed interest	(136)		(161)
	$	914	$	686


	December 1, 2022										September 1, 2022
					Net Carrying Amount						Net Carrying Amount
As of	Stated Rate		Effective Rate		Current		Long-Term		Total		Current		Long-Term		Total

2024 Term Loan A	4.720	%	4.76	%	$	—	$	1,187	$	1,187	$	—	$	1,187	$	1,187
2025 Term Loan A	5.436	%	5.57	%	—		925		925		—		—		—
2026 Term Loan A	5.561	%	5.70	%	28		717		745		—		—		—
2027 Term Loan A	5.686	%	5.82	%	34		890		924		—		—		—
2026 Notes	4.975	%	5.07	%	—		499		499		—		498		498
2027 Notes(1)	4.185	%	4.27	%	—		796		796		—		806		806
2029 A Notes	5.327	%	5.40	%	—		697		697		—		697		697
2029 B Notes	6.750	%	6.89	%	—		744		744		—		—		—
2030 Notes	4.663	%	4.73	%	—		846		846		—		846		846
2032 Green Bonds	2.703	%	2.77	%	—		995		995		—		994		994
2041 Notes	3.366	%	3.41	%	—		497		497		—		496		496
2051 Notes	3.477	%	3.52	%	—		496		496		—		496		496
Finance lease obligations	N/A		2.67	%	109		805		914		103		783		886
					$	171	$	10,094	$	10,265	$	103	$	6,803	$	6,906


	Increase in Principal		Increase in Carrying Value		Increase in Cash

2025 Term Loan A	$	927	$	925	$	925
2026 Term Loan A	746		745		745
2027 Term Loan A	927		924		924
2029 B Notes	750		744		744
	$	3,350	$	3,338	$	3,338


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

As of September 1, 2022	$	(538)	$	(47)	$	25	$	—	$	(560)
Other comprehensive income (loss) before reclassifications	70		(7)				(3)		60
Amount reclassified out of accumulated other comprehensive income (loss)	68		1		1		—		70
Tax effects	(30)		(13)		—		—		(43)
Other comprehensive income (loss)	108		(19)		1		(3)		87
As of December 1, 2022	$	(430)	$	(66)	$	26	$	(3)	$	(473)


	Notional or Contractual Amount		Fair Value of
			Assets(1)		Liabilities(2)

As of December 1, 2022
Derivative instruments with hedge accounting designation
Cash flow currency hedges	$	4,604	$	59	$	(182)
Cash flow commodity hedges	111		1		(10)
Fair value interest rate hedges	900		—		(101)

Derivative instruments without hedge accounting designation
Non-designated currency hedges	2,042		16		(5)
			$	76	$	(298)

As of September 1, 2022
Derivative instruments with hedge accounting designation
Cash flow currency hedges	$	5,427	$	—	$	(330)
Cash flow commodity hedges	97		1		(6)
Fair value interest rate hedges	900		—		(91)

Derivative instruments without hedge accounting designation
Non-designated currency hedges	2,821		7		(13)
			$	8	$	(440)


	First Quarter				Fourth Quarter				First Quarter
	2023				2022				2022

Revenue	$	4,085	100	%	$	6,643	100	%	$	7,687	100	%
Cost of goods sold	3,192		78	%	4,021		61	%	4,122		54	%
Gross margin	893		22	%	2,622		39	%	3,565		46	%

Research and development	849		21	%	839		13	%	712		9	%
Selling, general, and administrative	251		6	%	280		4	%	259		3	%
Restructure and asset impairments	13		—	%	5		—	%	38		—	%
Other operating (income) expense, net	(11)		—	%	(23)		—	%	(75)		(1)	%
Operating income (loss)	(209)		(5)	%	1,521		23	%	2,631		34	%

Interest income (expense), net	37		1	%	9		—	%	(35)		—	%
Other non-operating income (expense), net	(4)		—	%	23		—	%	(75)		(1)	%
Income tax (provision) benefit	(8)		—	%	(56)		(1)	%	(219)		(3)	%
Equity in net income (loss) of equity method investees	(11)		—	%	(5)		—	%	4		—	%
Net income (loss)	$	(195)	(5)	%	$	1,492	22	%	$	2,306	30	%


As of	December 1, 2022		September 1, 2022

Finished goods	$	1,649	$	1,028
Work in process	5,839		4,830
Raw materials and supplies	871		805
	$	8,359	$	6,663


As of	December 1, 2022		September 1, 2022

Land	$	280	$	280
Buildings	17,133		16,676
Equipment(1)	63,450		61,354
Construction in progress(2)	1,828		1,897
Software	1,170		1,124
	83,861		81,331
Accumulated depreciation	(44,526)		(42,782)
	$	39,335	$	38,549


Three months ended	December 1, 2022		December 2, 2021

DRAM	$	2,829	$	5,587
NAND	1,103		1,878
Other (primarily NOR and 3D XPoint memory)	153		222
	$	4,085	$	7,687


Three months ended	December 1, 2022		December 2, 2021

Revenue
CNBU	$	1,746	$	3,406
MBU	655		1,907
EBU	1,000		1,220
SBU	680		1,150
All Other	4		4
	$	4,085	$	7,687

Operating income (loss)
CNBU	$	190	$	1,524
MBU	(195)		624
EBU	194		422
SBU	(257)		152
All Other	3		3
	(65)		2,725

Unallocated
Stock-based compensation	(126)		(116)
Restructure and asset impairments	(13)		(38)
Other	(5)		60
	(144)		(94)

Operating income (loss)	$	(209)	$	2,631


Period			Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Approximate dollar value of shares that may yet be purchased under publicly announced plans or programs (in millions)

September 2, 2022	—	October 6, 2022	8,577,145	$	49.58	8,577,145
October 7, 2022	–	November 3, 2022	—	—		—
November 4, 2022	–	December 1, 2022	—	—		—
			8,577,145	$	49.58	8,577,145	$3,106


			Micron Technology, Inc.
			(Registrant)


Date:	December 22, 2022	By:	/s/ Mark Murphy
			Mark Murphy
			Executive Vice President and Chief Financial Officer
			(Principal Financial Officer)

			/s/ Scott Allen
			Scott Allen
			Corporate Vice President and Chief Accounting Officer
			(Principal Accounting Officer)


[Performance Metric]			Payout Factor: % of Target Award Earned(1)


Grant Number:
Date of Grant:
Target Number of Shares Subject to Performance Units:
Maximum Number of Shares Subject to Performance Units:			[ ]% of Target Number of Shares Subject to Performance Unit


Adder Goal	Fiscal Year	Required Achievement Level	Percentage Added to Payout Factor Determined Above
			[ ]x adder
			[ ]x adder


			Page
Section 1 Definitions			1
1.1 Defined Terms			1
1.2 Other Definitional Provisions			28
1.3 Delivery Notices			29
1.4 Divisions			29

Section 2 The Credits			29
2.1 Term Commitments			29
2.2 Term Loans			29
2.3 Requests for Term Loan Borrowings			30
2.4 [Reserved]			30
2.5 Funding of Term Loan Borrowings			30
2.6 Termination and Reduction of Term Commitments			31
2.7 Repayment of Term Loan; Evidence of Debt			31
2.8 Interest Rates and Payment Dates			32
2.9 Computation of Interest and Fees			32
2.10 Benchmark Replacement Setting			33
2.11 Prepayment of Term Loans			35
2.12 Conversion and Continuation of Options			35
2.13 Limitations on Adjusted Term SOFR Tranches			36
2.14 Pro Rata Treatments, etc.			36
2.15 Requirements of Law			37
2.16 Taxes			38
2.17 Indemnity			41
2.18 Change of Lending Office			42
2.19 Fees			42
2.20 Nature of Fees			42
2.21 Incremental Facilities			42
2.22 Replacement of Lenders			43
2.23 [Reserved]			43
2.24 Defaulting Lenders			44

Section 3 Representations and Warranties			45
3.1 Existence; Compliance with Law			45
3.2 Power; Authorizations; Enforceable Obligations			45
3.3 No Legal Bar			45


3.4 Accuracy of Information			45
3.5 No Material Adverse Effect			46
3.6 Title to Assets; Liens			46
3.7 Intellectual Property			46
3.8 Use of Proceeds			46
3.9 Litigation			46
3.10 Federal Reserve Regulations			46
3.11 Solvency			46
3.12 Taxes			46
3.13 ERISA			47
3.14 Environmental Matters; Hazardous Material			47
3.15 Investment Company Act; Other Regulations			47
3.16 Labor Matters			47
3.17 Anti-Corruption Laws and Sanctions			47
3.18 Affected Financial Institutions			47
3.19 Disclosure			48
3.20 ERISA Event			48

Section 4 Conditions Precedent			48
4.1 Conditions to the Closing Date			48
4.2 Each Credit Event			49

Section 5 Affirmative Covenants			49
5.1 Financial Statements, etc.			49
5.2 Compliance Certificate; Reporting			50
5.3 Maintenance of Existence			50
5.4 Maintenance of Insurance			50
5.5 Use of Proceeds			50
5.6 Compliance with Laws			50
5.7 Designation of Subsidiaries			50

Section 6 Negative Covenants			51
6.1 Limitation on Indebtedness			51
6.2 Limitation on Liens			52
6.3 Merger, Consolidation, or Sale of Assets			53
6.4 Limitation on Sale and Leaseback Transactions			53
6.5 Anti-Corruption Laws and Sanctions			54
6.6 Financial Covenants			54

Section 7 Events of Default			54
7.1 Events of Default			54



Section 8 The Agents			56
8.1 Appointments			56
8.2 Delegation of Duties			57
8.3 Exculpatory Provisions			57
8.4 Reliance by the Administrative Agent			57
8.5 Notice of Default			58
8.6 Non-Reliance on the Agent and Other Lenders			58
8.7 Indemnification			58
8.8 Agent in Its Individual Capacity			59
8.9 Successor Administrative Agent			59
8.10 [Reserved]			59
8.11 Payments			59
8.12 Other Terms			61
8.13 Enforcement by the Administrative Agent			61
8.14 Withholding Tax			61
8.15 Certain ERISA Matters			62

Section 9 Miscellaneous			63
9.1 Amendments and Waivers			63
9.2 Notices			64
9.3 No Waiver; Cumulative Remedies			66
9.4 Survival of Representations and Warranties			66
9.5 Payment of Expenses			66
9.6 Successors and Assigns; Participations			67
9.7 Adjustments; Setoff			70
9.8 Counterparts			71
9.9 Severability			71
9.10 Integration			71
9.11 Governing Law			71
9.12 Submission To Jurisdiction; Waivers			71
9.13 Acknowledgements			72
9.14 Guarantors; Release of Guarantors			72
9.15 Confidentiality			73
9.16 Waivers of Jury Trial			74
9.17 Patriot Act			74
9.18 No Fiduciary Duty			74
9.19 Acknowledgement and Consent to Bail-In of Affected Financial Institutions			75
9.20 Interest Rate Limitations			75


Schedule 1.1			Term Commitment Amounts
Schedule 1.2			Unrestricted Subsidiaries


Exhibit A			Form of Closing Certificate for the Borrower
Exhibit B			Form of Borrowing Request
Exhibit C			Form of Compliance Certificate
Exhibit D			Form of Assignment and Acceptance
Exhibit E-1			Form of United States Tax Compliance Certificate (For Non-U.S. Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Exhibit E-2			Form of United States Tax Compliance Certificate (For Non-U.S. Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)
Exhibit E-3			Form of United States Tax Compliance Certificate (For Non-U.S. Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Exhibit E-4			Form of United States Tax Compliance Certificate (For Non-U.S. Participants That Are Partnerships For U.S. Federal Income Tax Purposes)
Exhibit F			Form of Notice of Continuation/Conversion
Exhibit G			Form of Acceptance and Prepayment Notice


Term A-1 Loans
Pricing Level	Corporate Ratings	Adjusted Term SOFR Spread	Base Rate Spread
Level 1	≥ A- / A3 / A-	1.000%	0.000%
Level 2	BBB+ / Baa1 / BBB+	1.125%	0.125%
Level 3	BBB / Baa2 / BBB	1.250%	0.250%
Level 4	BBB- / Baa3 / BBB-	1.500%	0.500%
Level 5	≤ BB+ / Ba1 / BB+	1.750%	0.750%


Term A-2 Loans
Pricing Level	Corporate Ratings	Adjusted Term SOFR Spread	Base Rate Spread
Level 1	≥ A- / A3 / A-	1.125%	0.125%
Level 2	BBB+ / Baa1 / BBB+	1.250%	0.250%
Level 3	BBB / Baa2 / BBB	1.375%	0.375%
Level 4	BBB- / Baa3 / BBB-	1.625%	0.625%
Level 5	≤ BB+ / Ba1 / BB+	1.875%	0.875%


Term A-3 Loans
Pricing Level	Corporate Ratings	Adjusted Term SOFR Spread	Base Rate Spread
Level 1	≥ A- / A3 / A-	1.250%	0.250%
Level 2	BBB+ / Baa1 / BBB+	1.375%	0.375%
Level 3	BBB / Baa2 / BBB	1.500%	0.500%
Level 4	BBB- / Baa3 / BBB-	1.750%	0.750%
Level 5	≤ BB+ / Ba1 / BB+	2.000%	1.000%



The Borrower:			Micron Technology, Inc.
			8000 S. Federal Way
			Boise, ID 83716-9632
			Attention: General Counsel

			with copies (which shall not constitute notice) to:

			Wilson Sonsini Goodrich & Rosati
			650 Page Mill Road
			Palo Alto, CA 94304
			Attention: Erik Franks
			Email: efranks@wsgr.com
			Telecopier No.: 650-493-6811

The Administrative Agent:			Wells Fargo Bank, National Association
			MAC D1109-019
			1525 West W.T. Harris Blvd.
			Charlotte, NC 28262
			Attention: Syndication Agency Services
			Facsimile Number: (888) 879-5899
			Email: Agencyservices.requests@wellsfargo.com

			with copies (which shall not constitute notice) to:
			Simpson Thacher & Bartlett LLP
			425 Lexington Ave New York, NY 10017
			Attention: Justin M. Lungstrum
			Telecopier No.: 212-455-2502


Date:	December 22, 2022	/s/ Sanjay Mehrotra
		Sanjay Mehrotra President and Chief Executive Officer and Director