Analysis of Debt
Total Debt (Carrying Amount)
Micron Technology Inc., balance sheet: debt
US$ in millions
Based on: 10-K (reporting date: 2025-08-28), 10-K (reporting date: 2024-08-29), 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-09-01), 10-K (reporting date: 2021-09-02), 10-K (reporting date: 2020-09-03).
- Current Debt
- The current debt exhibited an overall increasing trend over the analyzed periods. It started at 270 million USD and decreased to a low of 103 million USD by the fiscal year ending September 1, 2022. Subsequently, it increased significantly, reaching 560 million USD by August 28, 2025. This pattern suggests short-term borrowing fluctuations, with a notable rise in recent years.
- Long-term Debt
- The long-term debt showed a steady upward trajectory throughout the time frame. Beginning at 6,373 million USD, it rose gradually each year, with a marked acceleration between the fiscal years ending September 1, 2022, and August 31, 2023, where it nearly doubled from 6,803 million to 13,052 million USD. Following this surge, it stabilized somewhat, slightly decreasing to 12,966 million USD before climbing again to 14,017 million USD by August 28, 2025. This indicates increased reliance on long-term borrowing, especially from 2023 onward.
- Total Debt (Carrying Amount)
- Total debt mirrored the movements of its components, demonstrating an overall growth pattern. Starting at 6,643 million USD, it remained relatively stable until 2022, followed by a sharp increase to 13,330 million USD in 2023. After a minor rise to 13,397 million USD, it continued increasing steadily to reach 14,577 million USD by 2025. This growth reflects the combined effect of rising current and long-term debt levels, with the firm's total debt more than doubling over the observed period.
Total Debt (Fair Value)
| Aug 28, 2025 | |
|---|---|
| Selected Financial Data (US$ in millions) | |
| Notes payable and term loans | 11,570) |
| Convertible notes | —) |
| Finance lease obligations | 3,044) |
| Total debt (fair value) | 14,614) |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | 1.00 |
Based on: 10-K (reporting date: 2025-08-28).
Weighted-average Interest Rate on Debt
Weighted-average effective interest rate on debt: 5.29%
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| 5.52% | 540) | 30) | |
| 5.49% | 982) | 54) | |
| 5.40% | 698) | 38) | |
| 6.54% | 1,168) | 76) | |
| 4.73% | 794) | 38) | |
| 5.41% | 995) | 54) | |
| 2.77% | 996) | 28) | |
| 5.79% | 496) | 29) | |
| 5.96% | 746) | 44) | |
| 6.01% | 892) | 54) | |
| 5.90% | 992) | 59) | |
| 6.14% | 1,241) | 76) | |
| 3.41% | 497) | 17) | |
| 3.52% | 496) | 17) | |
| 5.19% | 3,044) | 158) | |
| Total | 14,577) | 771) | |
| 5.29% | |||
Based on: 10-K (reporting date: 2025-08-28).
1 US$ in millions
2 Weighted-average interest rate = 100 × 771 ÷ 14,577 = 5.29%
Interest Costs Incurred
Micron Technology Inc., interest costs incurred
US$ in millions
Based on: 10-K (reporting date: 2025-08-28), 10-K (reporting date: 2024-08-29), 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-09-01), 10-K (reporting date: 2021-09-02), 10-K (reporting date: 2020-09-03).
The annual interest costs incurred by the company exhibit a notable upward trend over the observed periods, reflecting changing financial dynamics and possibly evolving capital structures or investment activities.
- Interest Expense
- The interest expense initially shows a modest decline from 194 million US dollars in 2020 to 183 million in 2021, followed by a slight increase to 189 million in 2022. However, from 2022 onwards, there is a substantial increase to 388 million in 2023 and peaking at 562 million in 2024 before slightly declining to 477 million in 2025. This pattern suggests a significant rise in borrowing costs or increased debt levels during the latter years, with the peak in 2024 indicating a possible maximum leverage or interest rate impact.
- Interest Capitalized as Part of Cost of Property, Plant, and Equipment
- The interest capitalized related to property, plant, and equipment starts at 77 million in 2020, decreases to 66 million in 2021, and then returns to 77 million in 2022. From 2022 forward, it exhibits a marked increase: to 208 million in 2023, 225 million in 2024, and a further rise to 321 million in 2025. This increase suggests a growing investment in capital assets or longer project durations with more interest being capitalized, indicating expansion or significant capital expenditures in recent years.
- Total Interest Costs Incurred
- The sum of interest expense and capitalized interest, representing total interest costs incurred, follows a similar upward trajectory: from 271 million in 2020, declining moderately to 249 million in 2021, and rising to 266 million in 2022. Thereafter, there is a sharp increase to 596 million in 2023, escalating further to 787 million in 2024, and slightly increasing again to 798 million in 2025. This sharp rise aligns with both increased borrowing costs and heightened capital investment activities.
Overall, the data reveals a period of relative stability in interest costs from 2020 through 2022, followed by a pronounced escalation starting in 2023, both in interest expense and capitalization. This trend may indicate increased leverage, higher interest rates, or substantial capital investments that have pushed the total interest costs to more than triple their earlier values within a few years. The slight decrease in interest expense in 2025, contrasted with continued growth in capitalized interest, could suggest a shift in the company's financing or investment strategy.
Adjusted Interest Coverage Ratio
Based on: 10-K (reporting date: 2025-08-28), 10-K (reporting date: 2024-08-29), 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-09-01), 10-K (reporting date: 2021-09-02), 10-K (reporting date: 2020-09-03).
2025 Calculations
1 Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense
= 10,140 ÷ 477 = 21.26
2 Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest costs incurred
= 10,140 ÷ 798 = 12.71
The analysis of the interest coverage ratios over the six-year period reveals significant fluctuations, indicating changes in the company's ability to service its interest obligations.
- Interest Coverage Ratio (without capitalized interest)
-
This ratio exhibited a rising trend from 16.41 in 2020 to a peak of 51.66 in 2022, suggesting improved earnings relative to interest expenses during this interval. However, it sharply declined to -13.58 in 2023, indicating that earnings before interest and taxes were insufficient to cover interest expenses that year. This negative value reflects a challenging financial position with regards to interest payments. Subsequently, the ratio recovered to 3.19 in 2024 and further increased to 21.26 in 2025, illustrating a partial restoration of the company’s capacity to meet interest obligations with operating earnings.
- Adjusted Interest Coverage Ratio (with capitalized interest)
-
The adjusted ratio, which accounts for capitalized interest, follows a similar pattern to the unadjusted ratio but remains consistently lower. It rose from 11.75 in 2020 to 36.71 in 2022, indicating strengthening earnings relative to interest costs. The ratio then dropped to -8.84 in 2023, still negative but somewhat less severe than the unadjusted figure, suggesting difficulties in covering interest expenses including those capitalized. A gradual improvement occurred in 2024 and 2025 with values of 2.28 and 12.71, respectively, signaling a recovering but still moderate ability to cover interest when capitalized costs are included.
Overall, the data indicates a period of strong financial performance through 2022, followed by a significant downturn in 2023 that impacted the company’s interest coverage adversely. The recovery observed in the last two years suggests efforts to stabilize earnings and improve financial health after a challenging year. The disparity between the adjusted and unadjusted ratios highlights the impact of capitalized interest on the coverage metrics, which should be considered when assessing debt servicing capability.