Micron Technology, Inc. (Nasdaq: MU) today announced results for
its second quarter of fiscal 2020, which ended February 27,
2020.
Fiscal Q2 2020 highlights
- Revenue of $4.80 billion versus $5.14 billion for the prior
quarter and $5.84 billion for the same period last year
- GAAP net income of $405 million, or $0.36 per diluted
share
- Non-GAAP net income of $517 million, or $0.45 per diluted
share
- Operating cash flow of $2.00 billion versus $2.01 billion for
the prior quarter and $3.44 billion for the same period last
year
“Micron delivered solid second quarter results and revenue at
the high end of the guidance range, despite the unfolding COVID-19
pandemic,” said Micron Technology President and CEO Sanjay
Mehrotra. “I am grateful to our team for the excellent business
execution we have achieved during this unprecedented situation.
Their resilience, together with Micron’s technology leadership,
stronger product portfolio, and healthy balance sheet, give us
confidence that we will emerge from this challenging time
well-positioned to capture the robust long-term demand
opportunities for memory and storage.”
|
Quarterly
Financial Results |
(in millions,
except per share amounts) |
GAAP (1) |
|
Non-GAAP (2) |
FQ2-20 |
FQ1-20 |
FQ2-19 |
|
FQ2-20 |
FQ1-20 |
FQ2-19 |
|
|
|
|
|
|
|
|
Revenue |
$ |
4,797 |
|
$ |
5,144 |
|
$ |
5,835 |
|
|
$ |
4,797 |
|
$ |
5,144 |
|
$ |
5,835 |
|
Gross margin |
1,355 |
|
1,366 |
|
2,864 |
|
|
1,398 |
|
1,405 |
|
2,928 |
|
percent of revenue |
28.2 |
% |
26.6 |
% |
49.1 |
% |
|
29.1 |
% |
27.3 |
% |
50.2 |
% |
Operating expenses |
915 |
|
848 |
|
907 |
|
|
856 |
|
811 |
|
818 |
|
Operating income |
440 |
|
518 |
|
1,957 |
|
|
542 |
|
594 |
|
2,110 |
|
percent of revenue |
9.2 |
% |
10.1 |
% |
33.5 |
% |
|
11.3 |
% |
11.5 |
% |
36.2 |
% |
Net income attributable to
Micron |
405 |
|
491 |
|
1,619 |
|
|
517 |
|
548 |
|
1,971 |
|
Diluted earnings per
share |
0.36 |
|
0.43 |
|
1.42 |
|
|
0.45 |
|
0.48 |
|
1.71 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in capital expenditures, net(2) were $1.94 billion
for the second quarter of fiscal 2020, which resulted in adjusted
free cash flows(2) of $63 million. Micron repurchased approximately
785,000 shares of its common stock for $44 million during the
second quarter of fiscal 2020 and ended the quarter with cash,
marketable investments, and restricted cash of $8.12 billion, for a
net cash(2) position of $2.70 billion.
Business Outlook
The following table presents Micron’s guidance for the third
quarter of fiscal 2020:
|
|
|
FQ3-20 |
GAAP (1) Outlook |
Non-GAAP (2) Outlook |
|
|
|
Revenue |
$4.6 billion - $5.2 billion |
$4.6 billion - $5.2 billion |
Gross margin |
30% ± 1.5% |
31% ±1.5% |
Operating expenses |
$891 million ± $25 million |
$825 million ± $25 million |
Interest (income) expense,
net |
$38 million |
$35 million |
Diluted earnings per
share |
$0.41 ± $0.15 |
$0.55 ± $0.15 |
|
|
|
Further information regarding Micron’s business outlook is
included in the prepared remarks and slides, which have been posted
at investors.micron.com.
Investor Webcast
Micron will host a conference call on Wednesday, March 25,
2020 at 2:30 p.m. MT to discuss its second fiscal quarter financial
results and provide forward-looking guidance for its third fiscal
quarter. A live webcast of the call will be available online at
investors.micron.com. A webcast replay will be available for one
year after the call. For Investor Relations and other company
updates, follow @MicronTech on Twitter at
twitter.com/MicronTech.
About Micron Technology, Inc.
We are an industry leader in innovative memory and storage
solutions. Through our global brands — Micron® and Crucial® — our
broad portfolio of high-performance memory and storage
technologies, including DRAM, NAND, 3D XPoint™ memory, and NOR, is
transforming how the world uses information to enrich life. Backed
by more than 40 years of technology leadership, our memory and
storage solutions enable disruptive trends, including artificial
intelligence, 5G, machine learning, and autonomous vehicles, in key
market segments like mobile, data center, client, consumer,
industrial, graphics, automotive, and networking. Our common stock
is traded on the Nasdaq under the MU symbol. To learn more about
Micron Technology, Inc., visit micron.com.
Micron and the Micron orbit logo are trademarks of Micron
Technology, Inc. All other trademarks are the property of their
respective owners.
Forward-Looking Statements
This press release contains forward-looking statements regarding
the industry, our strategic position, and financial and operating
results. These forward-looking statements are subject to a number
of risks and uncertainties that could cause actual results to
differ materially. Please refer to the documents we file with the
Securities and Exchange Commission, specifically our most recent
Form 10-K and Form 10-Q. These documents contain and identify
important factors that could cause our actual results to differ
materially from those contained in these forward-looking
statements. These certain factors can be found at
www.micron.com/certainfactors. Although we believe that the
expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity,
performance, or achievements. We are under no duty to update any of
the forward-looking statements after the date of this release to
conform these statements to actual results.
|
|
(1) |
GAAP represents U.S. Generally Accepted Accounting
Principles. |
(2) |
Non-GAAP represents GAAP excluding the impact of certain
activities, which management excludes in analyzing our operating
results and understanding trends in our earnings, adjusted free
cash flow, and net cash. Further information regarding Micron’s use
of non-GAAP measures and reconciliations between GAAP and non-GAAP
measures are included within this press release. |
|
|
MICRON TECHNOLOGY,
INC.CONSOLIDATED STATEMENTS OF
OPERATIONS(In millions, except per share
amounts)(Unaudited)
|
2nd Qtr. |
1st Qtr. |
2nd Qtr. |
Six Months Ended |
|
February 27, 2020 |
November 28, 2019 |
February 28, 2019 |
February 27, 2020 |
February 28, 2019 |
|
|
|
|
|
|
Revenue |
$ |
4,797 |
|
|
$ |
5,144 |
|
|
$ |
5,835 |
|
|
$ |
9,941 |
|
|
$ |
13,748 |
|
|
Cost of goods sold |
3,442 |
|
|
3,778 |
|
|
2,971 |
|
|
7,220 |
|
|
6,269 |
|
|
Gross margin |
1,355 |
|
|
1,366 |
|
|
2,864 |
|
|
2,721 |
|
|
7,479 |
|
|
|
|
|
|
|
|
Selling, general, and
administrative |
223 |
|
|
211 |
|
|
209 |
|
|
434 |
|
|
418 |
|
|
Research and development |
681 |
|
|
640 |
|
|
601 |
|
|
1,321 |
|
|
1,212 |
|
|
Other operating (income)
expense, net |
11 |
|
|
(3 |
) |
|
97 |
|
|
8 |
|
|
133 |
|
|
Operating income |
440 |
|
|
518 |
|
|
1,957 |
|
|
958 |
|
|
5,716 |
|
|
|
|
|
|
|
|
Interest income |
34 |
|
|
44 |
|
|
58 |
|
|
78 |
|
|
96 |
|
|
Interest expense |
(46 |
) |
|
(47 |
) |
|
(27 |
) |
|
(93 |
) |
|
(60 |
) |
|
Other non-operating income
(expense), net |
(1 |
) |
|
46 |
|
|
(84 |
) |
|
45 |
|
|
(75 |
) |
|
|
427 |
|
|
561 |
|
|
1,904 |
|
|
988 |
|
|
5,677 |
|
|
|
|
|
|
|
|
Income tax (provision)
benefit |
(21 |
) |
|
(55 |
) |
|
(280 |
) |
|
(76 |
) |
|
(757 |
) |
|
Equity in net income (loss) of
equity method investees |
1 |
|
|
2 |
|
|
1 |
|
|
3 |
|
|
1 |
|
|
Net income |
407 |
|
|
508 |
|
|
1,625 |
|
|
915 |
|
|
4,921 |
|
|
|
|
|
|
|
|
Net income attributable to
noncontrolling interests |
(2 |
) |
|
(17 |
) |
|
(6 |
) |
|
(19 |
) |
|
(9 |
) |
|
Net income attributable to Micron |
$ |
405 |
|
|
$ |
491 |
|
|
$ |
1,619 |
|
|
$ |
896 |
|
|
$ |
4,912 |
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
Basic |
$ |
0.37 |
|
|
$ |
0.44 |
|
|
$ |
1.45 |
|
|
$ |
0.81 |
|
|
$ |
4.37 |
|
|
Diluted |
0.36 |
|
|
0.43 |
|
|
1.42 |
|
|
0.79 |
|
|
4.24 |
|
|
|
|
|
|
|
|
Number of shares used in per
share calculations |
|
|
|
|
|
Basic |
1,111 |
|
|
1,107 |
|
|
1,114 |
|
|
1,109 |
|
|
1,123 |
|
|
Diluted |
1,133 |
|
|
1,129 |
|
|
1,141 |
|
|
1,131 |
|
|
1,157 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MICRON TECHNOLOGY,
INC.CONSOLIDATED BALANCE SHEETS(In
millions)(Unaudited)
As of |
February 27, 2020 |
November 28, 2019 |
August 29, 2019 |
|
|
|
|
Assets |
|
|
|
Cash and equivalents |
$ |
7,118 |
|
|
$ |
6,969 |
|
|
$ |
7,152 |
|
|
Short-term investments |
363 |
|
|
619 |
|
|
803 |
|
|
Receivables |
3,049 |
|
|
3,419 |
|
|
3,195 |
|
|
Inventories |
5,208 |
|
|
4,943 |
|
|
5,118 |
|
|
Other current assets |
238 |
|
|
217 |
|
|
235 |
|
|
Total current assets |
15,976 |
|
|
16,167 |
|
|
16,503 |
|
|
Long-term marketable
investments |
586 |
|
|
599 |
|
|
1,164 |
|
|
Property, plant, and
equipment |
29,647 |
|
|
29,352 |
|
|
28,240 |
|
|
Intangible assets |
332 |
|
|
333 |
|
|
340 |
|
|
Deferred tax assets |
764 |
|
|
783 |
|
|
837 |
|
|
Goodwill |
1,228 |
|
|
1,228 |
|
|
1,228 |
|
|
Operating lease right-of-use
assets |
605 |
|
|
608 |
|
|
— |
|
|
Other noncurrent assets |
510 |
|
|
579 |
|
|
575 |
|
|
Total assets |
$ |
49,648 |
|
|
$ |
49,649 |
|
|
$ |
48,887 |
|
|
|
|
|
|
Liabilities and
equity |
|
|
|
Accounts payable and accrued
expenses |
$ |
5,077 |
|
|
$ |
5,408 |
|
|
$ |
4,626 |
|
|
Current debt |
237 |
|
|
462 |
|
|
1,310 |
|
|
Other current liabilities |
508 |
|
|
447 |
|
|
454 |
|
|
Total current liabilities |
5,822 |
|
|
6,317 |
|
|
6,390 |
|
|
Long-term debt |
5,188 |
|
|
5,188 |
|
|
4,541 |
|
|
Noncurrent operating lease
liabilities |
548 |
|
|
511 |
|
|
— |
|
|
Noncurrent unearned government
incentives |
586 |
|
|
609 |
|
|
636 |
|
|
Other noncurrent
liabilities |
383 |
|
|
426 |
|
|
452 |
|
|
Total liabilities |
12,527 |
|
|
13,051 |
|
|
12,019 |
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
Redeemable noncontrolling
interest |
98 |
|
|
98 |
|
|
98 |
|
|
|
|
|
|
Micron shareholders’
equity |
|
|
|
Common stock |
119 |
|
|
119 |
|
|
118 |
|
|
Additional capital |
8,725 |
|
|
8,428 |
|
|
8,214 |
|
|
Retained earnings |
31,602 |
|
|
31,218 |
|
|
30,761 |
|
|
Treasury stock |
(3,414 |
) |
|
(3,271 |
) |
|
(3,221 |
) |
|
Accumulated other comprehensive income |
(9 |
) |
|
6 |
|
|
9 |
|
|
Total Micron shareholders’ equity |
37,023 |
|
|
36,500 |
|
|
35,881 |
|
|
Noncontrolling interest in
subsidiary |
— |
|
|
— |
|
|
889 |
|
|
Total equity |
37,023 |
|
|
36,500 |
|
|
36,770 |
|
|
Total liabilities and equity |
$ |
49,648 |
|
|
$ |
49,649 |
|
|
$ |
48,887 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MICRON TECHNOLOGY,
INC.CONSOLIDATED STATEMENTS OF CASH
FLOWS(In millions)(Unaudited)
Six months
ended |
February 27, 2020 |
February 28, 2019 |
|
|
|
Cash flows from
operating activities |
|
|
Net income |
$ |
915 |
|
|
$ |
4,921 |
|
|
Adjustments to reconcile net
income to net cash provided by operating activities |
|
|
Depreciation expense and amortization of intangible assets |
2,661 |
|
|
2,648 |
|
|
Amortization of debt discount and other costs |
16 |
|
|
29 |
|
|
Stock-based compensation |
157 |
|
|
118 |
|
|
Gain on debt prepayments, repurchases, and conversions |
(42 |
) |
|
69 |
|
|
Change in operating assets and liabilities |
|
|
Receivables |
104 |
|
|
1,202 |
|
|
Inventories |
(90 |
) |
|
(800 |
) |
|
Accounts payable and accrued expenses |
257 |
|
|
(326 |
) |
|
Deferred income taxes, net |
38 |
|
|
320 |
|
|
Other |
(4 |
) |
|
64 |
|
|
Net cash provided by operating activities |
4,012 |
|
|
8,245 |
|
|
|
|
|
Cash flows from
investing activities |
|
|
Expenditures for property,
plant, and equipment |
(3,999 |
) |
|
(5,349 |
) |
|
Purchases of
available-for-sale securities |
(566 |
) |
|
(2,566 |
) |
|
Proceeds from sales of
available-for-sale securities |
1,059 |
|
|
160 |
|
|
Proceeds from maturities of
available-for-sale securities |
523 |
|
|
391 |
|
|
Proceeds from government
incentives |
105 |
|
|
455 |
|
|
Other |
(21 |
) |
|
(10 |
) |
|
Net cash provided by (used for) investing activities |
(2,899 |
) |
|
(6,919 |
) |
|
|
|
|
Cash flows from
financing activities |
|
|
Repayments of debt |
(1,676 |
) |
|
(705 |
) |
|
Acquisition of noncontrolling
interest in IMFT |
(744 |
) |
|
— |
|
|
Payments to acquire treasury
stock |
(159 |
) |
|
(2,568 |
) |
|
Payments on equipment purchase
contracts |
(29 |
) |
|
(37 |
) |
|
Proceeds from issuance of
debt |
1,250 |
|
|
1,800 |
|
|
Other |
151 |
|
|
27 |
|
|
Net cash provided by (used for) financing activities |
(1,207 |
) |
|
(1,483 |
) |
|
|
|
|
Effect of changes in currency
exchange rates on cash, cash equivalents, and restricted cash |
(14 |
) |
|
(1 |
) |
|
|
|
|
Net decrease in cash, cash
equivalents, and restricted cash |
(108 |
) |
|
(158 |
) |
|
Cash, cash equivalents, and
restricted cash at beginning of period |
7,279 |
|
|
6,587 |
|
|
Cash, cash equivalents, and
restricted cash at end of period |
$ |
7,171 |
|
|
$ |
6,429 |
|
|
|
|
|
|
|
|
|
|
|
MICRON TECHNOLOGY,
INC.NOTES (Unaudited)
Property, Plant, and Equipment
We periodically assess the estimated useful lives of our
property, plant, and equipment. Based on our assessment of planned
technology node transitions, capital spending, and re-use rates, we
revised the estimated useful lives of equipment in our NAND wafer
fabrication facilities and our research and development facilities
from five years to seven years as of the beginning of the first
quarter of fiscal 2020. As a result, we estimate the reduction in
non-cash depreciation expense for assets existing at that time
benefited operating income and net income by approximately
$125 million and diluted earnings per share by approximately
$0.11 for the second quarter of fiscal 2020, and benefited
operating income and net income by approximately $200 million
and diluted earnings per share by approximately $0.17 for the first
six months of fiscal 2020.
Adoption of Lease Accounting Standard
In the first quarter of fiscal 2020, we adopted ASU 2016-02 –
Leases (as amended, “ASC 842”), which amends a number of aspects of
lease accounting, including requiring lessees to recognize
operating leases with a term greater than one year on their balance
sheet as a right-of-use asset and corresponding lease liability,
measured at the present value of lease payments. In adoption, we
applied the modified retrospective method and elected to not recast
prior periods. As a result, we recognized $567 million for
operating lease liabilities and right-of-use assets and
reclassified an additional $66 million of other balances to
right-of-use assets to conform to the new presentation requirements
of ASC 842.
Debt Activity
Subsequent to the second quarter of fiscal 2020, on March 13,
2020, we drew the $2.5 billion available under our revolving credit
facility. Borrowings under the revolving credit facility are
scheduled to mature on July 3, 2023, and we may repay amounts
borrowed any time without penalty. The revolving credit facility
bears interest at a rate equal to LIBOR plus 1.25% based on our
current corporate credit rating and leverage ratio.
MICRON TECHNOLOGY,
INC.RECONCILIATION OF GAAP TO NON-GAAP
MEASURES(In millions, except per share amounts)
|
2nd Qtr. |
1st Qtr. |
2nd Qtr. |
|
February 27, 2020 |
November 28, 2019 |
February 28, 2019 |
|
|
|
|
GAAP gross margin |
$ |
1,355 |
|
|
$ |
1,366 |
|
|
$ |
2,864 |
|
|
Stock-based compensation |
37 |
|
|
31 |
|
|
23 |
|
|
Start-up and preproduction costs |
— |
|
|
— |
|
|
15 |
|
|
Employee severance |
— |
|
|
1 |
|
|
13 |
|
|
Other |
6 |
|
|
7 |
|
|
13 |
|
|
Non-GAAP gross
margin |
$ |
1,398 |
|
|
$ |
1,405 |
|
|
$ |
2,928 |
|
|
|
|
|
|
GAAP operating
expenses |
$ |
915 |
|
|
$ |
848 |
|
|
$ |
907 |
|
|
Stock-based compensation |
(48 |
) |
|
(41 |
) |
|
(34 |
) |
|
Employee severance |
— |
|
|
— |
|
|
(4 |
) |
|
Restructure and asset impairments |
(10 |
) |
|
4 |
|
|
(51 |
) |
|
Other |
(1 |
) |
|
— |
|
|
— |
|
|
Non-GAAP operating
expenses |
$ |
856 |
|
|
$ |
811 |
|
|
$ |
818 |
|
|
|
|
|
|
GAAP operating
income |
$ |
440 |
|
|
$ |
518 |
|
|
$ |
1,957 |
|
|
Stock-based compensation |
85 |
|
|
72 |
|
|
57 |
|
|
Start-up and preproduction costs |
— |
|
|
— |
|
|
15 |
|
|
Employee severance |
— |
|
|
1 |
|
|
17 |
|
|
Restructure and asset impairments |
10 |
|
|
(4 |
) |
|
51 |
|
|
Other |
7 |
|
|
7 |
|
|
13 |
|
|
Non-GAAP operating
income |
$ |
542 |
|
|
$ |
594 |
|
|
$ |
2,110 |
|
|
|
|
|
|
GAAP net income
attributable to Micron |
$ |
405 |
|
|
$ |
491 |
|
|
$ |
1,619 |
|
|
Stock-based compensation |
85 |
|
|
72 |
|
|
57 |
|
|
Start-up and preproduction costs |
— |
|
|
— |
|
|
15 |
|
|
Employee severance |
— |
|
|
1 |
|
|
17 |
|
|
Restructure and asset impairments |
10 |
|
|
(4 |
) |
|
51 |
|
|
Amortization of debt discount and other costs |
6 |
|
|
10 |
|
|
11 |
|
|
(Gain) loss on debt repurchases and conversions |
— |
|
|
(42 |
) |
|
83 |
|
|
Other |
7 |
|
|
7 |
|
|
16 |
|
|
Impact of U.S. income tax reform |
— |
|
|
— |
|
|
(14 |
) |
|
Estimated tax effects of above, non-cash changes in net deferred
income taxes, and assessments of tax exposures |
4 |
|
|
13 |
|
|
116 |
|
|
Non-GAAP net income
attributable to Micron |
$ |
517 |
|
|
$ |
548 |
|
|
$ |
1,971 |
|
|
|
|
|
|
GAAP weighted-average
common shares outstanding - Diluted |
1,133 |
|
|
1,129 |
|
|
1,141 |
|
|
Adjustment for capped calls and stock-based compensation |
11 |
|
|
9 |
|
|
8 |
|
|
Non-GAAP
weighted-average common shares outstanding - Diluted |
1,144 |
|
|
1,138 |
|
|
1,149 |
|
|
|
|
|
|
GAAP diluted earnings
per share |
$ |
0.36 |
|
|
$ |
0.43 |
|
|
$ |
1.42 |
|
|
Effects of the above adjustments |
0.09 |
|
|
0.05 |
|
|
0.29 |
|
|
Non-GAAP diluted
earnings per share |
$ |
0.45 |
|
|
$ |
0.48 |
|
|
$ |
1.71 |
|
|
RECONCILIATION OF GAAP TO NON-GAAP MEASURES,
Continued
|
2nd Qtr. |
1st Qtr. |
2nd Qtr. |
|
February 27, 2020 |
November 28, 2019 |
February 28, 2019 |
|
|
|
|
GAAP net cash provided by operating
activities |
$ |
2,001 |
|
|
$ |
2,011 |
|
|
$ |
3,435 |
|
|
Investments in capital
expenditures, net |
|
|
|
Expenditures for property, plant, and equipment, net (1) |
(2,013 |
) |
|
(1,936 |
) |
|
(2,629 |
) |
|
Payments on equipment purchase contracts |
(18 |
) |
|
(11 |
) |
|
(17 |
) |
|
Amounts funded by partners |
93 |
|
|
22 |
|
|
225 |
|
|
Adjusted free cash
flow |
$ |
63 |
|
|
$ |
86 |
|
|
$ |
1,014 |
|
|
|
|
(1) |
Expenditures for property, plant and equipment, net include
proceeds from sales of property, plant, and equipment of $43
million for the second quarter of fiscal 2020, $7 million for the
first quarter of fiscal 2020, and $20 million for the second
quarter of fiscal 2019. |
|
|
As of |
February 27, 2020 |
November 28, 2019 |
August 29, 2019 |
|
|
|
|
Cash and short-term investments |
$ |
7,481 |
|
|
$ |
7,588 |
|
|
$ |
7,955 |
|
|
Current and noncurrent
restricted cash |
53 |
|
|
126 |
|
|
127 |
|
|
Long-term marketable
investments |
586 |
|
|
599 |
|
|
1,164 |
|
|
Current and long-term
debt |
(5,425 |
) |
|
(5,650 |
) |
|
(5,851 |
) |
|
Net cash |
$ |
2,695 |
|
|
$ |
2,663 |
|
|
$ |
3,395 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The tables above reconcile GAAP to non-GAAP measures of gross
margin, operating expenses, operating income, net income
attributable to Micron, diluted shares, diluted earnings per share,
adjusted free cash flow, and net cash. The non-GAAP adjustments
above may or may not be infrequent or nonrecurring in nature, but
are a result of periodic or non-core operating activities. We
believe this non-GAAP information is helpful in understanding
trends and in analyzing our operating results and earnings. We are
providing this information to investors to assist in performing
analysis of our operating results. When evaluating performance and
making decisions on how to allocate our resources, management uses
this non-GAAP information and believes investors should have access
to similar data when making their investment decisions. We believe
these non-GAAP financial measures increase transparency by
providing investors with useful supplemental information about the
financial performance of our business, enabling enhanced comparison
of our operating results between periods and with peer companies.
The presentation of these adjusted amounts varies from numbers
presented in accordance with U.S. GAAP and therefore may not be
comparable to amounts reported by other companies. Our management
excludes the following items in analyzing our operating results and
understanding trends in our earnings:
- Stock-based compensation;
- Flow-through of business acquisition-related inventory
adjustments;
- Acquisition-related costs;
- Start-up and preproduction costs;
- Employee severance;
- Restructure and asset impairments;
- Amortization of debt discount and other costs, including the
accretion of non-cash interest expense associated with our
convertible debt and MMJ creditor debt;
- Gains and losses from debt repurchases and conversions;
- Gains and losses from business acquisition activities;
- Impact of U.S. income tax reform for the one-time transition
tax, release of U.S. valuation allowance, and remeasurement of net
deferred taxes reflecting lower U.S. corporate tax rates; and
- The estimated tax effects of above, non-cash changes in net
deferred income taxes, and assessments of tax exposures.
Our outstanding capped call transactions are anti-dilutive in
GAAP earnings per share but are expected to mitigate the dilutive
effect of our convertible notes. In periods with non-GAAP income
attributable to Micron, non-GAAP diluted shares include the impact
of capped calls based on the average share price for the period the
capped calls are outstanding. Non-GAAP diluted shares are also
adjusted for the impact of additional shares resulting from the
exclusion of stock-based compensation from non-GAAP income.
MICRON TECHNOLOGY,
INC.RECONCILIATION OF GAAP TO NON-GAAP
OUTLOOK(In millions, except per share amounts)
|
|
GAAP Outlook |
|
Adjustments |
|
Non-GAAP Outlook |
|
|
|
|
|
|
|
|
|
Revenue |
$4.6 billion - $5.2 billion |
|
— |
|
$4.6 billion - $5.2 billion |
Gross margin |
30% ± 1.5% |
|
1% |
|
A |
|
31% ±1.5% |
Operating
expenses |
$891 million ± $25 million |
|
$66 million |
|
B |
|
$825 million ± $25 million |
Interest (income)
expense, net |
$38 million |
|
$3 million |
|
C |
|
$35 million |
Diluted earnings
per share (1) |
$0.41 ± $0.15 |
|
$0.14 |
|
A, B, C, D |
|
$0.55 ± $0.15 |
|
|
|
|
|
|
|
|
Non-GAAP
Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A |
Stock-based
compensation – cost of goods sold |
|
$ |
41 |
|
A |
Other – cost of
goods sold |
|
7 |
|
B |
Stock-based
compensation – sales, general, and administrative |
|
26 |
|
B |
Stock-based
compensation – research and development |
|
21 |
|
B |
Other –
operating expenses |
|
19 |
|
C |
Amortization of
debt discount and other costs |
|
3 |
|
D |
Tax effects of the
above items and non-cash changes in net deferred income taxes |
|
41 |
|
|
|
|
|
|
|
|
$ |
158 |
|
|
|
(1) |
GAAP earnings per share based on approximately 1.13 billion diluted
shares and non-GAAP earnings per share based on approximately 1.14
billion diluted shares. |
|
|
The tables above reconcile our GAAP to non-GAAP guidance based
on the current outlook. The guidance does not incorporate the
impact of any potential business combinations, divestitures,
restructuring activities, balance sheet valuation adjustments,
strategic investments, financing transactions, and other
significant transactions. The timing and impact of such items are
dependent on future events that may be uncertain or outside of our
control.
Contacts:
Farhan Ahmad
Investor Relations
farhanahmad@micron.com
(408) 834-1927
Erica Rodriguez Pompen
Media Relations
epompen@micron.com
(408) 834-1873
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