Analysis of Debt
Total Debt (Carrying Amount)
Micron Technology Inc., balance sheet: debt
US$ in millions
Based on: 10-K (reporting date: 2026-09-03), 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).
The total debt profile exhibits a period of aggressive expansion followed by a substantial deleveraging event. Total obligations remained relatively stable between 2021 and 2022 before experiencing a sharp increase in 2023, peaking in 2025, and subsequently declining significantly by 2026.
- Total Debt Progression
- Total debt increased from 6,776 million USD in 2021 to a peak of 14,577 million USD in 2025. The most significant surge occurred between 2022 and 2023, where the carrying amount nearly doubled from 6,906 million USD to 13,330 million USD. This upward trajectory is reversed in 2026, with total debt falling to 5,179 million USD, representing the lowest level within the analyzed timeframe.
- Long-term Debt Dynamics
- Long-term debt constitutes the primary driver of the overall debt trend. A substantial increase is observed in 2023, rising to 13,052 million USD from 6,803 million USD in the previous year. This elevated level of leverage persisted through 2025, reaching 14,017 million USD, before a sharp reduction to 4,688 million USD occurred in 2026, suggesting a large-scale repayment or restructuring of long-term obligations.
- Current Debt Analysis
- Current debt represents a small fraction of the total debt structure but demonstrates a steady growth pattern from 2022 to 2025. After a dip to 103 million USD in 2022, short-term obligations rose consistently to reach 560 million USD by 2025. A slight reduction to 491 million USD is noted in 2026, aligning with the broader deleveraging trend observed in long-term liabilities.
- Debt Composition and Leverage Shift
- The debt structure remains heavily weighted toward long-term instruments throughout the period. The volatility in the total carrying amount is almost exclusively attributable to fluctuations in long-term debt, while current debt remained relatively marginal in scale, indicating that the company's financing strategy focused on long-term capital rather than short-term liquidity instruments.
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Total Debt (Fair Value)
| Sep 3, 2026 | |
|---|---|
| Selected Financial Data (US$ in millions) | |
| Notes payable | 2,430) |
| Finance lease obligations | 2,387) |
| Total debt (fair value) | 4,817) |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | 0.93 |
Based on: 10-K (reporting date: 2026-09-03).
Weighted-average Interest Rate on Debt
Weighted-average effective interest rate on debt: 4.30%
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| 2.77% | 997) | 28) | |
| 5.79% | 70) | 4) | |
| 5.96% | 175) | 10) | |
| 6.01% | 213) | 13) | |
| 5.90% | 135) | 8) | |
| 6.14% | 219) | 13) | |
| 3.41% | 497) | 17) | |
| 3.52% | 486) | 17) | |
| 4.71% | 2,387) | 112) | |
| Total | 5,179) | 223) | |
| 4.30% | |||
Based on: 10-K (reporting date: 2026-09-03).
1 US$ in millions
2 Weighted-average interest rate = 100 × 223 ÷ 5,179 = 4.30%
Interest Costs Incurred
Micron Technology Inc., interest costs incurred
US$ in millions
Based on: 10-K (reporting date: 2026-09-03), 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).
Total interest costs incurred exhibited a significant upward trajectory from 2021 to 2025, followed by a notable contraction in 2026. The total cost of borrowing rose from 249 million US dollars in 2021 to a peak of 798 million US dollars in 2025, representing a substantial increase in financing burdens over a four-year period.
- Total Interest Costs Incurred
- The total cost of borrowing experienced a sharp escalation starting in 2023, increasing from 266 million US dollars in 2022 to 596 million US dollars in 2023. This trend continued through 2025, before declining to 489 million US dollars in 2026.
- Interest Expense
- Interest recognized as an expense in the income statement followed a growth pattern that peaked in 2024 at 562 million US dollars. A subsequent and steep decline is observed, with the expense falling to 477 million US dollars in 2025 and dropping further to 106 million US dollars in 2026.
- Capitalized Interest
- Interest capitalized as part of the cost of property, plant, and equipment demonstrated a consistent and uninterrupted increase over the entire period. This figure rose from 66 million US dollars in 2021 to 383 million US dollars in 2026, indicating a steady growth in the allocation of borrowing costs to long-term assets.
A divergence in the accounting treatment of interest costs is evident in the final years of the period. While total interest costs and interest expenses declined sharply in 2026, capitalized interest reached its highest point. This suggests that a significantly larger proportion of the remaining interest costs is being capitalized rather than expensed, which may reflect an increase in large-scale capital expenditures or a strategic shift in debt management.
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Adjusted Interest Coverage Ratio
Based on: 10-K (reporting date: 2026-09-03), 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).
2026 Calculations
1 Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense
= 99,836 ÷ 106 = 941.85
2 Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest costs incurred
= 99,836 ÷ 489 = 204.16
The interest coverage metrics exhibit significant volatility over the analyzed period, characterized by a severe contraction in 2023 followed by an aggressive recovery through 2026. Both the standard and adjusted ratios track the same trajectory, reflecting systemic shifts in the ability to service debt obligations.
- Adjusted Interest Coverage Ratio (with capitalized interest)
- This ratio demonstrated an initial increase from 25.86 in 2021 to 36.71 in 2022, before collapsing to -8.84 in 2023, indicating a period where earnings were insufficient to cover interest expenses. A recovery phase commenced in 2024 with a ratio of 2.28, which strengthened to 12.71 in 2025 and surged to 204.16 by 2026.
- Interest Coverage Ratio (without capitalized interest)
- A similar pattern is observed in the non-adjusted ratio, which rose to 51.66 in 2022 before falling to a trough of -13.58 in 2023. The subsequent recovery was more pronounced than the adjusted metric, moving from 3.19 in 2024 to 21.26 in 2025, and reaching an exceptional peak of 941.85 in 2026.
The consistent gap between the two metrics indicates that capitalized interest exerts a downward pressure on the adjusted coverage capacity. The transition from negative values in 2023 to exponentially higher values by 2026 suggests a rapid reversal of financial distress and a substantial increase in operating profitability relative to interest costs.
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