Micron Technology, Inc. (Nasdaq: MU) today announced results for
its third quarter of fiscal 2021, which ended June 3, 2021.
Fiscal Q3 2021 highlights
- Revenue of $7.42 billion versus $6.24 billion for the prior
quarter and $5.44 billion for the same period last year
- GAAP net income of $1.74 billion, or $1.52 per diluted
share
- Non-GAAP net income of $2.17 billion, or $1.88 per diluted
share
- Operating cash flow of $3.56 billion versus $3.06 billion for
the prior quarter and $2.02 billion for the same period last
year
“Micron set multiple market and product revenue
records in our third quarter and achieved the largest sequential
earnings improvement in our history,” said Micron Technology
President and CEO Sanjay Mehrotra. “Our industry-leading 1α DRAM
and 176-layer NAND now represent a meaningful portion of our
production, and Micron is in the best position ever to capitalize
on the long-term demand trends across the data center, intelligent
edge and user devices.”
Quarterly Financial Results |
|
|
|
GAAP(1) |
|
|
Non-GAAP(2) |
|
(in millions, except per share amounts) |
FQ3-21 |
FQ2-21 |
FQ3-20 |
FQ3-21 |
FQ2-21 |
FQ3-20 |
Revenue |
$ |
7,422 |
|
$ |
6,236 |
|
$ |
5,438 |
|
$ |
7,422 |
|
$ |
6,236 |
|
$ |
5,438 |
|
Gross
margin |
|
3,126 |
|
|
1,649 |
|
|
1,763 |
|
|
3,185 |
|
|
2,054 |
|
|
1,804 |
|
percent of
revenue |
|
42.1 |
% |
|
26.4 |
% |
|
32.4 |
% |
|
42.9 |
% |
|
32.9 |
% |
|
33.2 |
% |
Operating
expenses |
|
1,327 |
|
|
986 |
|
|
875 |
|
|
821 |
|
|
797 |
|
|
823 |
|
Operating
income |
|
1,799 |
|
|
663 |
|
|
888 |
|
|
2,364 |
|
|
1,257 |
|
|
981 |
|
percent of
revenue |
|
24.2 |
% |
|
10.6 |
% |
|
16.3 |
% |
|
31.9 |
% |
|
20.2 |
% |
|
18.0 |
% |
Net income
attributable to Micron |
|
1,735 |
|
|
603 |
|
|
803 |
|
|
2,173 |
|
|
1,128 |
|
|
941 |
|
Diluted
earnings per share |
|
1.52 |
|
|
0.53 |
|
|
0.71 |
|
|
1.88 |
|
|
0.98 |
|
|
0.82 |
|
Investments in capital expenditures, net(2) were
$2.04 billion for the third quarter of 2021, which resulted in
adjusted free cash flows(2) of $1.52 billion. Micron ended the
quarter with cash, marketable investments, and restricted cash of
$9.82 billion, for a net cash(2) position of $3.10 billion.
Business Outlook
The following table presents Micron’s guidance for
the fourth quarter of 2021:
FQ4-21 |
GAAP(1)
Outlook |
Non-GAAP(2)
Outlook |
Revenue |
$8.2 billion ± $200 million |
$8.2 billion ± $200 million |
Gross
margin |
46.0% ±
1% |
47.0% ±
1% |
Operating
expenses |
$955
million ± $25 million |
$900
million ± $25 million |
Diluted
earnings per share |
$2.23 ±
$0.10 |
$2.30 ±
$0.10 |
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,
June 30, 2021, at 2:30 p.m. MT, to discuss its third quarter
financial results and provide forward-looking guidance for its
fourth 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 transforming how the world uses information to
enrich life for all. With a relentless focus on our customers,
technology leadership, and manufacturing and operational
excellence, Micron delivers a rich portfolio of high-performance
DRAM, NAND, and NOR memory and storage products through our Micron®
and Crucial® brands. Every day, the innovations that our people
create fuel the data economy, enabling advances in artificial
intelligence and 5G applications that unleash opportunities — from
the data center to the intelligent edge and across the client and
mobile user experience. To learn more about Micron Technology, Inc.
(Nasdaq: MU), visit micron.com.
© 2021 Micron Technology, Inc. All rights
reserved. Micron, the Micron logo, and all other Micron trademarks
are the property 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 our industry, our strategic position, the
completion of and timing for closing the pending sale of our Lehi
facility, and our 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, net cash, and business outlook. 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)
|
3rd
Qtr. |
2nd
Qtr. |
3rd
Qtr. |
Nine Months
Ended |
|
June 3, 2021 |
March 4, 2021 |
May 28, 2020 |
June 3, 2021 |
May 28, 2020 |
|
|
|
|
|
|
Revenue |
$ |
7,422 |
|
$ |
6,236 |
|
$ |
5,438 |
|
$ |
19,431 |
|
$ |
15,379 |
|
Cost of
goods sold |
|
4,296 |
|
|
4,587 |
|
|
3,675 |
|
|
12,920 |
|
|
10,895 |
|
Gross margin |
|
3,126 |
|
|
1,649 |
|
|
1,763 |
|
|
6,511 |
|
|
4,484 |
|
|
|
|
|
|
|
Research and
development |
|
670 |
|
|
641 |
|
|
649 |
|
|
1,958 |
|
|
1,970 |
|
Selling,
general, and administrative |
|
230 |
|
|
214 |
|
|
216 |
|
|
658 |
|
|
650 |
|
Restructure
and asset impairments |
|
453 |
|
|
5 |
|
|
4 |
|
|
466 |
|
|
10 |
|
Other
operating (income) expense, net |
|
(26 |
) |
|
126 |
|
|
6 |
|
|
101 |
|
|
8 |
|
Operating income |
|
1,799 |
|
|
663 |
|
|
888 |
|
|
3,328 |
|
|
1,846 |
|
|
|
|
|
|
|
Interest
income |
|
8 |
|
|
10 |
|
|
23 |
|
|
28 |
|
|
101 |
|
Interest
expense |
|
(46 |
) |
|
(42 |
) |
|
(51 |
) |
|
(136 |
) |
|
(144 |
) |
Other
non-operating income (expense), net |
|
45 |
|
|
4 |
|
|
10 |
|
|
62 |
|
|
55 |
|
|
|
1,806 |
|
|
635 |
|
|
870 |
|
|
3,282 |
|
|
1,858 |
|
|
|
|
|
|
|
Income tax
(provision) benefit |
|
(65 |
) |
|
(48 |
) |
|
(68 |
) |
|
(164 |
) |
|
(144 |
) |
Equity in
net income (loss) of equity method investees |
|
(6 |
) |
|
16 |
|
|
3 |
|
|
23 |
|
|
6 |
|
Net income |
|
1,735 |
|
|
603 |
|
|
805 |
|
|
3,141 |
|
|
1,720 |
|
|
|
|
|
|
|
Net income
attributable to noncontrolling interests |
|
— |
|
|
— |
|
|
(2 |
) |
|
— |
|
|
(21 |
) |
Net income attributable to Micron |
$ |
1,735 |
|
$ |
603 |
|
$ |
803 |
|
$ |
3,141 |
|
$ |
1,699 |
|
|
|
|
|
|
|
Earnings per
share |
Basic |
$ |
1.55 |
|
$ |
0.54 |
|
$ |
0.72 |
|
$ |
2.81 |
|
$ |
1.53 |
|
Diluted |
|
1.52 |
|
|
0.53 |
|
|
0.71 |
|
|
2.75 |
|
|
1.50 |
|
|
|
|
|
|
|
Number of
shares used in per share calculations |
|
|
|
|
|
Basic |
|
1,121 |
|
|
1,120 |
|
|
1,111 |
|
|
1,119 |
|
|
1,110 |
|
Diluted |
|
1,145 |
|
|
1,144 |
|
|
1,129 |
|
|
1,141 |
|
|
1,131 |
|
MICRON TECHNOLOGY, INC. CONSOLIDATED
BALANCE SHEETS(In millions) (Unaudited)
|
June
3, |
March
4, |
September
3, |
|
As
of |
2021 |
2021 |
2020 |
|
Assets |
|
Cash and
equivalents |
$ |
7,759 |
$ |
6,507 |
$ |
7,624 |
|
Short-term
investments |
|
590 |
|
677 |
|
518 |
|
Receivables |
|
4,231 |
|
3,353 |
|
3,912 |
|
Inventories |
|
4,537 |
|
4,743 |
|
5,373 |
|
Assets held
for sale |
|
966 |
|
1,461 |
|
— |
|
Other
current assets |
|
478 |
|
538 |
|
538 |
|
Total current assets |
|
18,561 |
|
17,279 |
|
17,965 |
|
Long-term
marketable investments |
|
1,399 |
|
1,316 |
|
1,048 |
|
Property,
plant, and equipment |
|
32,209 |
|
31,848 |
|
31,031 |
|
Operating
lease right-of-use assets |
|
558 |
|
575 |
|
584 |
|
Intangible
assets |
|
350 |
|
342 |
|
334 |
|
Deferred tax
assets |
|
822 |
|
726 |
|
707 |
|
Goodwill |
|
1,228 |
|
1,228 |
|
1,228 |
|
Other
noncurrent assets |
|
816 |
|
821 |
|
781 |
|
Total assets |
$ |
55,943 |
$ |
54,135 |
$ |
53,678 |
|
|
|
|
|
Liabilities and equity |
|
|
|
Accounts
payable and accrued expenses |
$ |
4,427 |
$ |
4,550 |
$ |
5,817 |
|
Current
debt |
|
297 |
|
323 |
|
270 |
|
Other
current liabilities |
|
738 |
|
560 |
|
548 |
|
Total current liabilities |
|
5,462 |
|
5,433 |
|
6,635 |
|
Long-term
debt |
|
6,418 |
|
6,298 |
|
6,373 |
|
Noncurrent
operating lease liabilities |
|
513 |
|
528 |
|
533 |
|
Noncurrent
unearned government incentives |
|
722 |
|
661 |
|
643 |
|
Other
noncurrent liabilities |
|
569 |
|
552 |
|
498 |
|
Total liabilities |
|
13,684 |
|
13,472 |
|
14,682 |
|
|
|
|
|
Commitments
and contingencies |
|
|
|
Shareholders’
equity |
Common stock |
120 |
|
|
120 |
|
|
|
119 |
|
Additional capital |
9,285 |
|
|
9,234 |
|
|
|
8,917 |
|
Retained earnings |
36,452 |
|
|
34,723 |
|
|
|
33,384 |
|
Treasury stock |
(3,645 |
) |
|
(3,495 |
) |
|
|
(3,495 |
) |
Accumulated other comprehensive income (loss) |
|
|
47 |
|
|
81 |
|
|
|
71 |
|
Total equity |
|
|
42,259 |
|
|
40,663 |
|
|
|
38,996 |
|
Total liabilities and equity |
$ |
55,943 |
$ |
|
54,135 |
$ |
|
|
53,678 |
|
MICRON TECHNOLOGY, INC. CONSOLIDATED
STATEMENTS OF CASH FLOWS(In millions) (Unaudited)
|
|
June 3, |
|
|
May 28, |
|
Nine months ended |
|
2021 |
|
|
2020 |
|
Cash
flows from operating activities |
|
|
|
|
|
|
Net
income |
$ |
3,141 |
|
$ |
1,720 |
|
Adjustments to reconcile net income to net cash provided by
operating activities |
|
|
Depreciation expense and amortization of intangible assets |
|
4,593 |
|
|
4,083 |
|
Amortization of debt discount and other costs |
|
22 |
|
|
20 |
|
Noncash restructure and asset impairment |
|
446 |
|
|
(7 |
) |
Stock-based compensation |
|
285 |
|
|
239 |
|
(Gain) loss on debt prepayments, repurchases, and conversions |
|
1 |
|
|
(40 |
) |
Change in operating assets and liabilities |
|
|
Receivables |
|
(340 |
) |
|
(461 |
) |
Inventories |
|
814 |
|
|
(248 |
) |
Accounts payable and accrued expenses |
|
(309 |
) |
|
700 |
|
Deferred income taxes, net |
|
(94 |
) |
|
26 |
|
Other |
|
25 |
|
|
3 |
|
Net cash provided by operating activities |
|
8,584 |
|
|
6,035 |
|
|
|
|
Cash
flows from investing activities |
|
|
Expenditures
for property, plant, and equipment |
|
(8,015 |
) |
|
(5,943 |
) |
Purchases of
available-for-sale securities |
|
(1,919 |
) |
|
(793 |
) |
Proceeds
from maturities of available-for-sale securities |
|
1,024 |
|
|
636 |
|
Proceeds
from sales of available-for-sale securities |
|
473 |
|
|
1,157 |
|
Proceeds
from government incentives |
|
335 |
|
|
140 |
|
Other |
|
47 |
|
|
(48 |
) |
Net cash provided by (used for) investing activities |
|
(8,055 |
) |
|
(4,851 |
) |
|
|
|
Cash
flows from financing activities |
|
|
Repayments
of debt |
|
(1,344 |
) |
|
(4,286 |
) |
Payments on
equipment purchase contracts |
|
(139 |
) |
|
(49 |
) |
Acquisition
of noncontrolling interest in IMFT |
|
— |
|
|
(744 |
) |
Proceeds
from issuance of debt |
|
1,188 |
|
|
5,000 |
|
Other |
|
(142 |
) |
|
(56 |
) |
Net cash provided by (used for) financing activities |
|
(437 |
) |
|
(135 |
) |
|
|
|
Effect of
changes in currency exchange rates on cash, cash equivalents, and
restricted cash |
|
44 |
|
|
(8 |
) |
|
|
|
Net increase
(decrease) in cash, cash equivalents, and restricted cash |
|
136 |
|
|
1,041 |
|
Cash, cash
equivalents, and restricted cash at beginning of period |
|
7,690 |
|
|
7,279 |
|
Cash, cash
equivalents, and restricted cash at end of period |
$ |
7,826 |
|
$ |
8,320 |
|
MICRON TECHNOLOGY, INC. NOTES
(Unaudited)
Inventory
Effective as of the beginning of the second
quarter of 2021, we changed our method of inventory costing from
average cost to FIFO. This change in accounting principle is
preferable because in an environment with continuously changing
production costs FIFO more closely matches the actual cost of goods
sold with the revenues from sales of those specific units, better
represents the actual cost of inventories remaining on hand at any
period- end, and improves comparability with our semiconductor
industry peers. The change to FIFO was not material to any prior
periods, nor was the cumulative effect of $133 million material to
the second quarter of 2021. As such, prior periods were not
retrospectively adjusted, and the cumulative effect was reported as
an increase to cost of goods sold for the second quarter of 2021 of
$133 million, with an offsetting reduction to beginning
inventories. This charge resulted in a corresponding reduction to
operating income, a $128 million reduction to net income, and an
$0.11 reduction to diluted earnings per share for both the second
quarter and first nine months of 2021.
Beginning in the second quarter of 2021, we
changed the classification of spare parts for equipment to better
align with the manner in which they are used in operations. As a
result, we now present spare parts as other current assets and no
longer as a component of raw materials inventories. This
reclassification was applied on a retrospective basis. As a result,
$256 million of spare parts were presented in other current assets
as of June 3, 2021, and we reclassified spare parts from
inventories to other current assets of $270 million and $234
million in the accompanying balance sheets as of March 4, 2021 and
September 3, 2020, respectively.
Lehi, Utah, Fab and 3D
XPoint Change
In the second quarter of 2021, we updated our
portfolio strategy to further strengthen our focus on memory and
storage innovations for the data center market. In connection
therewith, we determined that there was insufficient market
validation to justify the ongoing investments required to
commercialize 3D XPointTM at scale. Accordingly, we ceased
development of 3D XPoint technology and engaged in discussions with
potential buyers for the sale of our facility located in Lehi that
was dedicated to 3D XPoint production. As a result, we classified
the property, plant, and equipment as held-for-sale and ceased
depreciating the assets. On June 30, 2021, we announced that we
have entered into a definitive agreement to sell our Lehi facility
to Texas Instruments for cash consideration of $900 million. The
sale is anticipated to close later this calendar year.
In the third quarter of 2021, we recognized a
charge of $435 million included in restructure and asset
impairments (and a tax benefit of $104 million included in income
tax (provision) benefit) to write down the assets held for sale to
the expected consideration, net of estimated selling costs, to be
realized from the sale of these assets and liabilities. The
impairment charge was based on Level 3 inputs including expected
consideration and the composition of assets included in the sale,
which were derived from the agreement with TI. In the second
quarter of 2021, we also recognized a charge of $49 million to cost
of goods sold to write down 3D XPoint inventory due to our decision
to cease further development of this technology.
As of June 3, 2021, the significant balances of
assets held-for-sale in connection with our Lehi facility were as
follows:
|
|
June 3, |
|
As of |
|
2021 |
|
Property, plant, and equipment |
$ |
1,343 |
|
Other
current assets |
|
52 |
|
Impairment |
|
(435 |
) |
Lehi assets held for sale |
$ |
960 |
|
As of June 3, 2021, we also had a $51 million
finance lease obligation included in the current portion of
long-term debt and $12 million of other liabilities that we expect
to transfer with the sale. The expected cash consideration, net of
estimated selling expenses, approximates the carrying value of the
net assets and liabilities expected to transfer in the sale, after
giving effect to the impairment charge discussed above.
MICRON TECHNOLOGY, INC. RECONCILIATION OF
GAAP TO NON-GAAP MEASURES(In millions, except per share
amounts)
|
3rd Qtr. June 3,
2021 |
2nd Qtr. March 4,
2021 |
3rd Qtr. May 28,
2020 |
GAAP gross margin |
$ |
3,126 |
|
$ |
1,649 |
|
$ |
1,763 |
|
Stock-based compensation |
|
45 |
|
|
57 |
|
|
34 |
|
Inventory accounting policy change to FIFO |
|
— |
|
|
133 |
|
|
— |
|
Change in inventory cost absorption |
|
— |
|
|
160 |
|
|
— |
|
3D XPoint inventory write-down |
|
— |
|
|
49 |
|
|
— |
|
Other |
|
14 |
|
|
6 |
|
|
7 |
|
Non-GAAP gross margin |
$ |
3,185 |
|
$ |
2,054 |
|
$ |
1,804 |
|
|
|
|
|
GAAP
operating expenses |
$ |
1,327 |
|
$ |
986 |
|
$ |
875 |
|
Stock-based compensation |
|
(53 |
) |
|
(55 |
) |
|
(48 |
) |
Patent license charges |
|
— |
|
|
(128 |
) |
|
— |
|
Restructure and asset impairments |
|
(453 |
) |
|
(5 |
) |
|
(4 |
) |
Other |
|
— |
|
|
(1 |
) |
|
— |
|
Non-GAAP operating expenses |
$ |
821 |
|
$ |
797 |
|
$ |
823 |
|
|
|
|
|
GAAP
operating income |
$ |
1,799 |
|
$ |
663 |
|
$ |
888 |
|
Stock-based compensation |
|
98 |
|
|
112 |
|
|
82 |
|
Inventory accounting policy change to FIFO |
|
— |
|
|
133 |
|
|
— |
|
Change in inventory cost absorption |
|
— |
|
|
160 |
|
|
— |
|
3D XPoint inventory write-down |
|
— |
|
|
49 |
|
|
— |
|
Patent license charges |
|
— |
|
|
128 |
|
|
— |
|
Restructure and asset impairments |
|
453 |
|
|
5 |
|
|
4 |
|
Other |
|
14 |
|
|
7 |
|
|
7 |
|
Non-GAAP operating income |
$ |
2,364 |
|
$ |
1,257 |
|
$ |
981 |
|
|
|
|
|
GAAP
net income attributable to Micron |
$ |
1,735 |
|
$ |
603 |
|
$ |
803 |
|
Stock-based compensation |
|
98 |
|
|
112 |
|
|
82 |
|
Inventory accounting policy change to FIFO |
|
— |
|
|
133 |
|
|
— |
|
Change in inventory cost absorption |
|
— |
|
|
160 |
|
|
— |
|
3D XPoint inventory write-down |
|
— |
|
|
49 |
|
|
— |
|
Patent license charges |
|
— |
|
|
128 |
|
|
— |
|
Restructure and asset impairments |
|
453 |
|
|
5 |
|
|
4 |
|
Amortization of debt discount and other costs |
|
7 |
|
|
8 |
|
|
4 |
|
Other |
|
15 |
|
|
7 |
|
|
9 |
|
Estimated tax effects of above and other tax adjustments |
|
(135 |
) |
|
(77 |
) |
|
39 |
|
Non-GAAP net income attributable to Micron |
$ |
2,173 |
|
$ |
1,128 |
|
$ |
941 |
|
|
|
|
|
GAAP
weighted-average common shares outstanding - Diluted |
|
1,145 |
|
|
1,144 |
|
|
1,129 |
|
Adjustment for stock-based compensation and capped calls |
|
9 |
|
|
10 |
|
|
13 |
|
Non-GAAP weighted-average common shares outstanding -
Diluted |
|
1,154 |
|
|
1,154 |
|
|
1,142 |
|
|
|
|
|
GAAP
diluted earnings per share |
$ |
1.52 |
|
$ |
0.53 |
|
$ |
0.71 |
|
Effects of the above adjustments |
|
0.36 |
|
|
0.45 |
|
|
0.11 |
|
Non-GAAP diluted earnings per share |
$ |
1.88 |
|
$ |
0.98 |
|
$ |
0.82 |
|
RECONCILIATION OF GAAP TO NON-GAAP
MEASURES, Continued
|
|
3rd Qtr. June 3,
2021 |
|
2nd Qtr. March 4,
2021 |
3rd Qtr. May 28,
2020 |
|
|
|
|
GAAP net cash provided by operating
activities |
$ |
3,560 |
|
$ |
3,057 |
|
$ |
2,023 |
|
Investments
in capital expenditures, net |
|
|
|
Expenditures for property, plant, and equipment, net(1) |
|
(2,185 |
) |
|
(3,000 |
) |
|
(1,937 |
) |
Payments on equipment purchase contracts |
|
(16 |
) |
|
(26 |
) |
|
(20 |
) |
Amounts funded by partners |
|
159 |
|
|
143 |
|
|
35 |
|
Adjusted free cash flow |
$ |
1,518 |
|
$ |
174 |
|
$ |
101 |
|
(1) Expenditures for property, plant, and
equipment, net include proceeds from sales of property, plant, and
equipment of $74 million for the third quarter of 2021, $18 million
for the second quarter of 2021, and $7 million for the third
quarter of 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 3, |
|
|
March 4, |
|
|
September 3, |
|
As of |
|
2021 |
|
|
2021 |
|
|
2020 |
|
Cash and short-term investments |
$ |
8,349 |
|
$ |
7,184 |
|
$ |
8,142 |
|
Current and
noncurrent restricted cash |
|
67 |
|
|
67 |
|
|
66 |
|
Long-term
marketable investments |
|
1,399 |
|
|
1,316 |
|
|
1,048 |
|
Current and
long-term debt |
|
(6,715 |
) |
|
(6,621 |
) |
|
(6,643 |
) |
Net
cash |
$ |
3,100 |
|
$ |
1,946 |
|
$ |
2,613 |
|
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 amounts 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;
- Patent license charges;
- Restructure and asset impairments;
- Amortization of debt discount and other costs, including the
accretion of non-cash interest expense associated with our
convertible notes and other debt;
- Gains and losses from debt repurchases and conversions;
- Gains and losses from business acquisition activities;
- Initial impact of inventory accounting policy change to FIFO
and change in inventory cost absorption in the second quarter of
2021; and
- The estimated tax effects of above, non-cash changes in net
deferred income taxes, assessments of tax exposures, certain tax
matters related to prior fiscal periods, and significant changes in
tax law.
Non-GAAP diluted shares are adjusted for the
impact of additional shares resulting from the exclusion of stock-
based compensation from non-GAAP income. Non-GAAP diluted shares
also include the impact of capped calls, which are anti-dilutive in
GAAP earnings per share but are expected to mitigate the dilutive
effect of convertible notes, based on the average share price for
the period the capped calls were outstanding.
MICRON TECHNOLOGY, INC. RECONCILIATION OF
GAAP TO NON-GAAP OUTLOOK
FQ4-21 |
GAAP Outlook |
|
Adjustments |
|
Non-GAAP Outlook |
Revenue |
|
$8.2 billion ± $200 million |
|
— |
|
|
$8.2 billion ± $200 million |
Gross margin |
46.0% ± 1% |
|
1% |
A |
|
47.0% ± 1% |
Operating
expenses |
$955 million ± $25 million |
|
$55 million |
B |
|
$900 million ± $25 million |
Diluted earnings
per share(1) |
$2.23 ± $0.10 |
|
$0.07 |
A, B, C |
|
$2.30 ± $0.10 |
|
|
|
|
|
|
|
|
Non-GAAP Adjustments |
|
|
|
|
|
(in
millions) |
|
|
|
|
|
|
A Stock-based compensation – cost of goods
sold |
$ |
45 |
A Other – cost of goods sold |
|
|
|
6 |
B
Stock-based compensation – research and development |
30 |
B
Stock-based compensation – sales, general, and
administrative |
25 |
C Tax
effects of the above items and non-cash changes in net deferred
income taxes |
|
|
|
|
(25) |
|
|
|
|
|
|
$ |
81 |
(1) GAAP and non-GAAP earnings per share based on
approximately 1.15 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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