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48
MICRON TECHNOLOGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All tabular amounts in millions except per share amounts)
Significant Accounting Policies
Basis of Presentation: We are a global leader in advanced semiconductor systems. Our broad portfolio of high-
performance memory technologies, including DRAM, NAND Flash, and NOR Flash, is the basis for solid-state drives,
modules, multi-chip packages, and other system solutions. Our memory solutions enable the world's most innovative
computing, consumer, enterprise storage, networking, mobile, embedded, and automotive applications. The accompanying
consolidated financial statements include the accounts of Micron Technology, Inc. and its consolidated subsidiaries and have
been prepared in accordance with accounting principles generally accepted in the United States of America.
Certain reclassifications have been made to prior period amounts to conform to current period presentation. In addition,
amounts for certain equipment purchases were reclassified from financing to investing within the statement of cash flows to
better reflect the current nature of these transactions and to improve comparability with our industry peers. In the fourth
quarter of 2015, we adopted, on a retrospective basis, Accounting Standards Update 2015-03 – Simplifying the Presentation of
Debt Issuance Costs. (See "Debt – Retrospective Application of a New Accounting Standard" note.)
Our fiscal year is the 52 or 53-week period ending on the Thursday closest to August 31. Fiscal year 2015 contained 53
weeks and fiscal years 2014 and 2013 each contained 52 weeks. All period references are to our fiscal periods unless otherwise
indicated.
Derivative and Hedging Instruments: We use derivative instruments to manage a portion of our exposure to changes in
currency exchange rates from our monetary assets and liabilities or future cash flows and to reduce volatility in our earnings
caused by changes in interest rates that affect our variable-rate debt. Our derivatives have consisted of forward and option
contracts and we have also entered into interest rate swap contracts. We do not use derivative instruments for trading or
speculative purposes. Derivative instruments are measured at their fair values and recognized as either assets or liabilities. The
accounting for changes in the fair value of derivative instruments is based on the intended use of the derivative and the
resulting designation. For derivative instruments that are not designated as hedges for accounting purpose, gains or losses from
changes in fair values are recognized in other non-operating income (expense). For derivative instruments designated as cash-
flow hedges, the effective portion of the gain or loss is included as a component of other comprehensive income (loss), and the
ineffective or excluded portion of the gain or loss is included in other non-operating income (expense). The amounts in
accumulated other comprehensive income (loss) from these cash flow hedges are reclassified into earnings in the same line
items of the consolidated statements of operation and in the same periods in which the underlying transactions affect earnings.
Effectiveness is measured by comparing the cumulative change in the fair value of the hedge contract with the cumulative
change in the forecasted cash flows of the hedged item. For the effectiveness assessment of our cash-flow hedges, changes in
the time value are excluded for forward contracts.
We enter into master netting arrangements with our counterparties to mitigate credit risk in derivative hedge transactions.
These master netting arrangements allow us and our counterparties to net settle amounts owed to each other. Derivative assets
and liabilities that can be net settled with each counterparty have been presented in our consolidated balance sheet on a net
basis.
(See "Derivative Instruments" note.)
Financial Instruments: Cash equivalents include highly liquid short-term investments with original maturities to us of
three months or less that are readily convertible to known amounts of cash. Investments with maturities greater than three
months and less than one year are included in short-term investments. Investments with remaining maturities greater than one
year are included in long-term marketable investments. The carrying value of investment securities sold is determined using
the specific identification method.
Functional Currency: The U.S. dollar is the functional currency for all of our consolidated subsidiaries.