Why did Micron's tax expenses fluctuate in 2024?

Micron Technology's tax expenses fluctuated in 2024 due to several factors related to inventory management and financial performance:

1. **Inventory NRV Write-Downs**: Micron Technology experienced inventory NRV write-downs, which significantly impacted its financial results, including tax expenses. These write-downs reflect inventory values below the net realizable value (NRV), which are offset by lower costs from the sale of inventory written down in prior periods. The fluctuating inventory levels and costs directly influence the calculation of tax expenses.
2. **Revenue and Profitability**: The company's revenue and profitability also affected its tax expenses. For instance, in the third quarter of fiscal 2024, Micron reported robust AI demand and a 17% sequential revenue growth, which exceeded their guidance range. This increase in revenue likely led to higher taxable income, resulting in increased tax expenses. Conversely, in the second quarter, revenue was lower, which may have led to lower tax expenses due to reduced taxable income.
3. **Capital Expenditures (CapEx)**: Micron's capital expenditures, particularly in the third quarter, were significant, with an expectation of full-year fiscal 2024 CapEx of around $8 billion. These expenditures can affect tax expenses as they influence the depreciation and amortization expenses, which are tax-deductible. Higher CapEx may lead to higher depreciation expenses and, consequently, lower taxable income and tax expenses in the period.
4. **Tax Forecast Adjustments**: Micron's tax forecast for fiscal year 2024 increased due to an improved taxable income outlook. This adjustment in the tax forecast reflects changes in the company's financial performance and the resulting impact on tax expenses.

In summary, Micron's tax expenses fluctuated in 2024 primarily due to inventory NRV write-downs, revenue and profitability changes, capital expenditures, and adjustments in tax forecasts based on the company's financial performance. These factors collectively contribute to the variability in Micron's tax expenses throughout the year.