Debt



					June 2, 2016						September 3, 2015
Instrument⁽¹⁾	Stated Rate		Effective Rate		Current		Long-Term		Total		Current		Long-Term		Total
MMJ creditor installment payments	N/A		6.25	%	$	175	$	632	$	807	$	161	$	701	$	862
Capital lease obligations⁽²⁾	N/A		N/A		347		816		1,163		326		466		792
1.258% notes	1.258	%	1.97	%	87		175		262		87		217		304
2022 senior notes	5.875	%	6.14	%	—		590		590		—		589		589
2022 senior secured term loan B	6.460	%	6.91	%	3		732		735		—		—		—
2023 senior notes	5.250	%	5.43	%	—		989		989		—		988		988
2023 senior secured notes	7.500	%	7.67	%	—		1,238		1,238		—		—		—
2024 senior notes	5.250	%	5.38	%	—		545		545		—		545		545
2025 senior notes	5.500	%	5.56	%	—		1,139		1,139		—		1,138		1,138
2026 senior notes	5.625	%	5.73	%	—		446		446		—		446		446
2032C convertible senior notes⁽³⁾	2.375	%	5.95	%	—		202		202		—		197		197
2032D convertible senior notes⁽³⁾	3.125	%	6.33	%	—		153		153		—		150		150
2033E convertible senior notes⁽³⁾	1.625	%	4.50	%	—		167		167		217		—		217
2033F convertible senior notes⁽³⁾	2.125	%	4.93	%	—		269		269		264		—		264
2043G convertible senior notes	3.000	%	6.76	%	—		654		654		—		644		644
Other notes payable	2.705	%	2.90	%	100		172		272		34		171		205
					$	712	$	8,919	$	9,631	$	1,089	$	6,252	$	7,341


⁽¹⁾	We have either the obligation or the option to pay cash for the principal amount due upon conversion for all of our convertible notes. Since it is our current intent to settle in cash the principal amount of all of our convertible notes upon conversion, the dilutive effect of such notes on earnings per share is computed under the treasury stock method.


⁽²⁾	Weighted-average imputed rate of 3.3% and 3.7% as of June 2, 2016 and September 3, 2015, respectively.

⁽³⁾

Since the closing price of our common stock for at least 20 trading days in the 30 trading day period ending on March 31, 2016 did not exceed 130% of the conversion price per share, these notes were not convertible by the holders after March 31, 2016. The 2033 Notes were classified as current as of September 3, 2015 because the terms of these notes require us to pay cash for the principal amount of any converted notes and holders of these notes had the right to convert their notes at that date.

2022 Senior Secured Term Loan B

On April 26, 2016, we entered into the 2022 Term Loan B and drew an aggregate principal amount of $750 million, which is due April 2022. The 2022 Term Loan B is collateralized by substantially all of the assets of Micron and Micron Semiconductor Products, Inc. ("MSP"), a subsidiary of Micron, subject to certain exceptions and permitted liens on such assets. The assets collateralizing the 2022 Term Loan B had an aggregate carrying value of $6.26 billion as of June 2, 2016 and also collateralize the 2023 Secured Notes (described below) on an equal and ratable basis, subject to certain limitations. Issuance costs for the 2022 Term Loan B totaled $16 million, which included an original issue discount of 1% of the initial aggregate principal amount.

The 2022 Term Loan B bears interest, at our election, of either (1) a base rate plus 5.00%, which base rate is defined as the greatest of (a) the prime rate, (b) the federal funds rate plus 0.50%, or (c) a one-month London Interbank Offered Rate ("LIBOR") plus 1.0%, or (2) an up to twelve-month LIBOR, subject to certain adjustments, plus 6.00%. We may, from time to time, elect to convert outstanding term loans from one rate to another. Principal payments are due quarterly beginning on September 30, 2016 in an amount equal to 0.25% of the initial aggregate principal amount with the balance due at maturity and may be prepaid without penalty. Interest is payable at least quarterly, but may be monthly if we elect a monthly LIBOR rate. We are also obligated to pay certain customary fees for a credit facility of this size and type.

The 2022 Term Loan B contains covenants that, among other things, limit, in certain circumstances, the ability of Micron and/or its domestic restricted subsidiaries, which are generally subsidiaries in the U.S. in which Micron owns at least 80% of the voting stock, to (1) create or incur certain liens and enter into sale-leaseback financing transactions; (2) in the case of domestic restricted subsidiaries, create, assume, incur, or guarantee additional indebtedness; and (3) in the case of Micron, consolidate or merge with or into, or sell, assign, convey, transfer, lease, or otherwise dispose of all or substantially all of its assets, to another entity. These covenants are subject to a number of limitations, exceptions, and qualifications.

Subsidiary Guarantee: The 2022 Term Loan B is guaranteed by MSP and substantially all of the assets of MSP are also collateral for the 2022 Term Loan B.

2023 Senior Secured Notes

On April 26, 2016, we issued $1.25 billion in principal amount of 2023 Secured Notes due September 2023. The 2023 Secured Notes are collateralized by substantially all of the assets of Micron and MSP, subject to certain exceptions and permitted liens on such assets, on an equal and ratable basis with the 2022 Term Loan B (described above), subject to certain exceptions. Issuance costs for the 2023 Secured Notes totaled $13 million.

The 2023 Secured Notes contain covenants that, among other things, limit, in certain circumstances, the ability of Micron and/or its domestic restricted subsidiaries to (1) create or incur certain liens and enter into sale-leaseback financing transactions; (2) in the case of domestic restricted subsidiaries, create, assume, incur, or guarantee additional indebtedness; and (3) in the case of Micron, consolidate or merge with or into, or sell, assign, convey, transfer, lease, or otherwise dispose of all or substantially all of its assets, to another entity. These covenants are subject to a number of limitations, exceptions, and qualifications.

Cash Redemption at Our Option: Prior to April 15, 2019, we may redeem the 2023 Secured Notes at a price equal to the principal amount thereof, plus a "make-whole" premium as described in the indenture governing the 2023 Secured Notes, together with accrued and unpaid interest. On or after April 15, 2019, we may redeem the 2023 Secured Notes, in whole or in part, at prices above the principal amount that decline over time, as specified in the indenture, together with accrued and unpaid interest. Additionally, prior to April 15, 2019, we may use the net cash proceeds of one or more equity offerings to redeem up to 35% of the aggregate principal amount of the 2023 Secured Notes at a price equal to 107.5% of the principal amount together with accrued and unpaid interest.

Subsidiary Guarantee: The 2023 Secured Notes are guaranteed by MSP and substantially all of the assets of MSP are also collateral for the 2023 Secured Notes.

Debt Restructure

During the first quarter of 2016, we repurchased $57 million in aggregate principal amount of our 2033E Notes, which had a carrying value of $54 million, for $94 million in cash. The liability and equity components of the repurchased notes had previously been stated separately within debt and equity in our consolidated balance sheet. As a result, our accounting for the repurchased notes decreased the carrying value of debt by $54 million and equity by $38 million.

Throughout 2015, we consummated a number of transactions to restructure our debt, including conversions, settlements and repurchases of convertible notes, the issuance of non-convertible senior notes, and the early repayment of a note. The following table presents the effect of each of the actions in the first nine months of 2015:



	Increase (Decrease) in Principal			Increase (Decrease) in Carrying Value			Increase (Decrease) in Cash			(Decrease) in Equity			(Loss)⁽¹⁾
Conversions and settlements	$	(121	)	$	(367	)	$	(408	)	$	(15	)	$	(22	)
Repurchases	(305		)	(261		)	(907		)	(624		)	(21		)
Issuance	2,000			1,979			1,979			—			—
Early repayment	(121		)	(115		)	(122		)	—			(5		)
	$	1,453		$	1,236		$	542		$	(639	)	$	(48	)


⁽¹⁾	Included in other non-operating expense.

•

Conversions and Settlements: Holders of substantially all of our then remaining 2031B Notes with an aggregate principal amount of $114 million converted their notes in August 2014. As a result of our election to settle the conversion amounts entirely in cash, the settlement obligations became derivative debt liabilities, increasing the carrying value of the 2031B Notes by $275 million in 2014 before being settled in 2015 for an aggregate of $389 million in cash. Additionally, holders converted $7 million principal amount of our 2033E Notes and we settled the conversions in cash for $19 million in 2015.


•	Repurchases: Repurchased $305 million in aggregate principal amount of our 2032C and 2032D Notes.


•	Issuance: Issued $2.00 billion in aggregate principal amounts of 2023 senior notes, 2024 senior notes, and 2026 senior notes.

Capital Lease Obligations

In the third quarter of 2016, we recorded capital lease obligations aggregating $130 million, including $114 million related to equipment sale-leaseback transactions, at a weighted-average effective interest rate of 3.5%, with a weighted-average expected term of five years. In the first nine months of 2016, we recorded capital lease obligations aggregating $574 million, including $538 million related to equipment sale-leaseback transactions.

Convertible Senior Notes

As of June 2, 2016, the trading price of our common stock was higher than the initial conversion prices of our 2032 Notes and our 2033 Notes. As a result, the conversion values were in excess of principal amounts for such notes. The following table summarizes our convertible notes outstanding as of June 2, 2016:



	Holder Put Date⁽¹⁾	Outstanding Principal		Underlying Shares	Conversion Price Per Share		Conversion Price Per Share Threshold⁽²⁾		Conversion Value in Excess of Principal⁽³⁾
2032C Notes	May 2019	$	223	23	$	9.63	$	12.52	$	81
2032D Notes	May 2021	177		18	9.98		12.97		56
2033E Notes	February 2018	176		16	10.93		14.21		35
2033F Notes	February 2020	297		27	10.93		14.21		59
2043G Notes⁽⁴⁾	November 2028	1,025		35	29.16		37.91		—
		$	1,898	119					$	231


⁽¹⁾	The terms of our convertible notes give holders the right to require us to repurchase all or a portion of their notes at a date prior to the contractual maturity at a price equal to the principal amount thereof plus accrued interest.

⁽²⁾

Holders have the right to convert all or a portion of their notes at a date prior to the contractual maturity if, during any calendar quarter, the closing price of our common stock for at least 20 trading days in the 30 consecutive trading days ending on the last trading day of the preceding calendar quarter is more than 130% of the conversion price. The closing price of our common stock did not exceed the thresholds for the calendar quarter ended March 31, 2016; therefore, the notes were not convertible by the holders after March 31, 2016.


⁽³⁾	Based on our closing share price of $13.11 as of June 2, 2016.


⁽⁴⁾	The original principal amount of $820 million accretes up to $917 million in November 2028 and $1.03 billion at maturity in 2043.

Other Facilities

In connection with entering into the 2022 Term Loan B, on April 25, 2016, we terminated our revolving credit facility that was entered into on December 2, 2014, and repaid the $50 million outstanding principal amount.

On December 1, 2015, we drew the remaining $174 million under our term loan agreement entered into on May 28, 2015. Amounts drawn are collateralized by certain property, plant, and equipment and are subject to a three-year loan with equal quarterly principal payments beginning December 2015 and accrue interest at a variable rate equal to the three-month LIBOR plus a margin not to exceed 2.2%. As of June 2, 2016, the outstanding balance was $174 million.

Maturities of Notes Payable and Future Minimum Lease Payments

The following presents, as of June 2, 2016, maturities of notes payable (including the MMJ Creditor Installment Payments) and future minimum lease payments under capital lease obligations.



	Notes Payable			Capital Lease Obligations
Remainder of 2016	$	71		$	118
2017	376			334
2018	535			286
2019	547			242
2020	677			130
2021 and thereafter	6,815			151
Unamortized amounts and interest, respectively	(553		)	(98		)
	$	8,468		$	1,163