Micron Technology, Inc. Reports Results for the Third Quarter of Fiscal 2020
June 29, 2020
Strong execution drives higher profitability
BOISE, Idaho, June 29, 2020 (GLOBE NEWSWIRE) -- Micron Technology, Inc. (Nasdaq: MU) today announced results for its third quarter of fiscal
2020, which ended May 28, 2020.
Fiscal Q3 2020 highlights

Revenue of $5.44 billion versus $4.80 billion for the prior quarter and $4.79 billion for the same period last year
GAAP net income of $803 million, or $0.71 per diluted share
Non-GAAP net income of $941 million, or $0.82 per diluted share
Operating cash flow of $2.02 billion versus $2.00 billion for the prior quarter and $2.71 billion for the same period last year
“Micron’s exceptional execution in the fiscal third quarter drove strong sequential revenue and EPS growth, despite challenges in the macro
environment,” said Micron Technology President and CEO Sanjay Mehrotra. “We are ramping the industry’s most advanced DRAM technology into
production and have delivered more than 75% of our NAND volume as high-value solutions, supported by record SSD revenue in the quarter. Our
portfolio momentum positions us exceedingly well to leverage the long-term growth across our end markets.”

Quarterly Financial Results
GAAP(1)(in millions, except per share amounts)
Revenue
Gross margin
percent of revenue
Operating expenses
Operating income
percent of revenue
Net income attributable to Micron
Diluted earnings per share

FQ3-20
$

5,438
$
1,763
32.4 %
875
888
16.3 %
803
0.71

Non-GAAP(2)FQ2-20

FQ3-19

4,797
$
1,355
28.2 %
915
440
9.2 %
405
0.36

4,788
1,828
38.2 %
818
1,010
21.1 %
840
0.74

FQ3-20
$

5,438
$
1,804
33.2 %
823
981
18.0 %
941
0.82

FQ2-20
4,797
$
1,398
29.1 %
856
542
11.3 %
517
0.45

FQ3-194,788
1,884
39.3 %
774
1,110
23.2 %
1,198
1.05

Investments in capital expenditures, net(2) were $1.92 billion for the third quarter of fiscal 2020, which resulted in adjusted free cash flows(2) of $101
million. Micron repurchased approximately 929,000 shares of its common stock for $40 million during the third quarter of fiscal 2020 and ended thequarter with cash, marketable investments, and restricted cash of $9.29 billion, for a net cash(2) position of $2.60 billion.
Business Outlook
The following table presents Micron’s guidance for the fourth quarter of fiscal 2020:
FQ4-20
Revenue
Gross margin
Operating expenses
Interest (income) expense, net
Diluted earnings per share

GAAP(1) Outlook

Non-GAAP(2) Outlook$5.75 billion - $6.25 billion
34.5% ± 1.5%$900 million ± $25 million$33 million$0.88 ± $0.10$5.75 billion - $6.25 billion
35.5% ± 1.5%$850 million ± $25 million$30 million$1.05 ± $0.10

Further information regarding Micron’s business outlook is included in the prepared remarks and slides, which have been posted atinvestors.micron.com.
Investor Webcast
Micron will host a conference call on Monday, June 29, 2020 at 2:30 p.m. MT to discuss its third fiscal quarter financial results and provide forwardlooking guidance for its fourth fiscal quarter. A live webcast of the call will be available online at investors.micron.com. A webcast replay will beavailable 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 containand identify important factors that could cause our actual results to differ materially from those contained in these forward-looking statements. Thesecertain 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 theforward-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 andunderstanding 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.
May 28,2020
Revenue$

Cost of goods sold
Gross margin
Selling, general, and administrative
Research and development
Other operating (income) expense, net
Operating income
Interest income
Interest expense
Other non-operating income (expense), net

Income tax (provision) benefit
Equity in net income (loss) of equity method investees
Net income

Earnings per share
Basic
DilutedNumber of shares used in per share calculations
Basic
Diluted

$

4,797
3,442

3rd Qtr.
May 30,
2019
$

4,788
2,960

Nine Months Ended
May 28,
May 30,
2020
2019
$

15,37910,895$

18,536
9,229

1,763

1,355

1,828

4,484

9,307

216
649
10

223
681
11

206
606
6

650
1,970
18

624
1,818
139

888

440

1,010

1,846

6,726

23
(51)
10

34
(46)
(1)

52
(29)
(317)

101
(144)
55

148
(89)
(392)

870

427

716

1,858

6,393

(68)
3

(21)
1

135
—

(144)
6

(622)
1

805

407

851

1,720

5,772

(2)

Net income attributable to noncontrolling interests
Net income attributable to Micron

5,438
3,675

2nd Qtr.
February 27,
2020

(2)

(11)

(21)

(20)

$

803

$

405

$

840

$

1,699

$

5,752

$

0.72
0.71

$

0.37
0.36

$

0.76
0.74

$

1.53
1.50

$

5.15
5.01

1,111
1,129

1,111
1,133

MICRON TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS

1,105
1,129

1,110
1,131

1,117
1,148

(In millions)(Unaudited)
May 28,2020

As ofAssetsCash and equivalents
Short-term investments
Receivables
Inventories$

Other current assets
Total current assets
Long-term marketable investments
Property, plant, and equipment
Intangible assets
Deferred tax assets
Goodwill
Operating lease right-of-use assets

February 27,
2020

8,267
391
3,603
5,405
233

$

7,118
363
3,049
5,208
238

17,899577
30,081
332
775
1,228
599
514

Other noncurrent assets
Total assets
Liabilities and equity
Accounts payable and accrued expenses
Current debt

August 29,
2019$

15,976586
29,647
332
764
1,228
605
510

7,152
803
3,195
5,118
235
16,503
1,164
28,240
340
837
1,228
—
575

$

52,005$49,648$48,887

$

5,364
330
491

$

5,077
237
508

$

4,626
1,310
454

Other current liabilities
Total current liabilities
Long-term debt
Noncurrent operating lease liabilities
Noncurrent unearned government incentives
Other noncurrent liabilities

6,185
6,356
540
553
453

5,822
5,188
548
586
383

6,390
4,541
—
636
452

Total liabilities

14,087

12,527

12,019

98

98

98

119
8,764
32,402(3,454)
(11)

119
8,725
31,602(3,414)
(9)

118
8,214
30,761(3,221)
937,820—37,023—35,881
889

Commitments and contingencies
Redeemable noncontrolling interest
Micron shareholders’ equity
Common stock
Additional capital
Retained earnings
Treasury stock
Accumulated other comprehensive income (loss)
Total Micron shareholders’ equity
Noncontrolling interest in subsidiary

37,820Total equity$

Total liabilities and equity

52,00537,023$36,77049,648$48,887

MICRON TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS(In millions)(Unaudited)
May 28,2020

Nine months ended
Cash flows from operating activities
Net income
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation expense and amortization of intangible assets
Amortization of debt discount and other costs
Stock-based compensation

$

1,720
4,083
20
239

May 30,
2019

$

5,772
4,008
39
176

(Gain) loss on debt prepayments, repurchases, and conversions
Change in operating assets and liabilities
Receivables
Inventories
Accounts payable and accrued expenses
Deferred income taxes, net

(40)

386

Other

(461)
(286)
700
26
34

2,373
(1,315)
(703)
195
25

Net cash provided by operating activities

6,035

10,956(5,943)
(793)
1,157
636
140
(48)

(7,752)(3,814)
1,271
626
668
16

(4,851)(8,985)(4,286)
(744)
(203)
(49)
5,000
147

(2,376)—(2,727)
(54)
1,800
27

(135)

(3,330)

(8)

6

1,041
7,279

(1,353)
6,587

Cash flows from investing activities
Expenditures for property, plant, and equipment
Purchases of available-for-sale securities
Proceeds from sales of available-for-sale securities
Proceeds from maturities of available-for-sale securities
Proceeds from government incentives
Other
Net cash provided by (used for) investing activities
Cash flows from financing activities
Repayments of debt
Acquisition of noncontrolling interest in IMFT
Payments to acquire treasury stock
Payments on equipment purchase contracts
Proceeds from issuance of debt
Other
Net cash provided by (used for) financing activities
Effect of changes in currency exchange rates on cash, cash equivalents, and restricted cash
Net increase (decrease) in cash, cash equivalents, and restricted cash
Cash, cash equivalents, and restricted cash at beginning of period
Cash, cash equivalents, and restricted cash at end of period

$

8,320

$

5,234

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 nodetransitions, capital spending, and re-use rates, we revised the estimated useful lives of the existing 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. This revision reduced
our aggregate depreciation expense by approximately $510 million in the first nine months of fiscal 2020, of which approximately $150 million
remained capitalized in inventory as of the end of the third quarter of fiscal 2020. Adjusting for the effect of the reduced amount of depreciation
expense remaining in inventory, the revision in estimated useful lives benefited both operating income and net income by approximately $160 million
and diluted earnings per share by approximately $0.14 for the third quarter of fiscal 2020, and benefited both operating income and net income byapproximately $360 million and diluted earnings per share by approximately $0.32 for the first nine 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 leaseaccounting, 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 andelected 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
On April 24, 2020, we issued $1.25 billion aggregate principal amount of our 2.497% senior notes due 2023 in a public offering.
On March 13, 2020, we drew the $2.50 billion available under our revolving credit facility and on April 24, 2020, we repaid the $2.50 billion outstanding
principal amount under our revolving credit facility. As of May 28, 2020, $2.50 billion was available to us under the revolving credit facility.

MICRON TECHNOLOGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES(In millions, except per share amounts)
3rd Qtr.
May 28,2020
GAAP gross margin
Stock-based compensation
Start-up and preproduction costs

2nd Qtr.
February 27,
2020

3rd Qtr.
May 30,
2019

$

1,763
34
—
7

$

1,355
37
—
6

$

1,828
24
23
9

Non-GAAP gross margin

$

1,804

$

1,398

$

1,884

GAAP operating expenses
Stock-based compensation
Restructure and asset impairments

$

875
(48)
(4)
—

$

915
(48)
(10)
(1)

$

818
(34)
(9)
(1)

Non-GAAP operating expenses

$

823

$

856

$

774

GAAP operating income
Stock-based compensation
Start-up and preproduction costs
Restructure and asset impairments

$

888
82
—
4
7

$

440
85
—
10
7

$

1,010
58
23
9
10

Non-GAAP operating income

$

981

$

542

$

1,110

GAAP net income attributable to Micron
Stock-based compensation
Start-up and preproduction costs
Restructure and asset impairments
Amortization of debt discount and other costs(Gain) loss on debt repurchases and conversions
Other
Impact of U.S. income tax reform
Estimated tax effects of above, non-cash changes in net deferred income taxes, andassessments of tax exposures

$

803
82
—
4
4
2
7
—

$

405
85
—
10
6
—
7
—

$

840
58
23
9
10
317
13
(42)

Non-GAAP net income attributable to Micron

$

941

$

517

$

1,198

Other

Other

Other

39

GAAP weighted-average common shares outstanding - Diluted
Adjustment for stock-based compensation and capped calls
Non-GAAP weighted-average common shares outstanding - Diluted
GAAP diluted earnings per share

(30)

1,129
13

1,133
11

1,129
6

1,142

1,144

1,135

$

0.71
0.11

$

0.36
0.09

$

0.74
0.31

$

0.82

$

0.45

$

1.05

Effects of the above adjustments
Non-GAAP diluted earnings per share

4

RECONCILIATION OF GAAP TO NON-GAAP MEASURES, Continued
3rd Qtr.
May 28,2020
GAAP net cash provided by operating activities
Investments in capital expenditures, net$

Expenditures for property, plant, and equipment, net(1)Payments on equipment purchase contracts(1)$(1,937)(20)
35

Amounts funded by partners
Adjusted free cash flow

2,023

2nd Qtr.
February 27,
2020

$

101

2,001

3rd Qtr.
May 30,2019$(2,013)
(18)
93
$

63

2,711
(2,345)
(17)
213

$

Expenditures for property, plant, and equipment, net include proceeds from sales of property, plant, and equipment of $7 million for the third562

quarter of fiscal 2020, $43 million for the second quarter of fiscal 2020, and $58 million for the third quarter of fiscal 2019.

May 28,2020

As ofCash and short-term investments
Current and noncurrent restricted cash
Long-term marketable investments

August 29,
2019

$

8,658
53
577
(6,686)

$

7,481
53
586
(5,425)

$

7,955
127
1,164
(5,851)

$

2,602

$

2,695

$

3,395

Current and long-term debt
Net cashFebruary 27,
2020

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 ouroperating 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 ourconvertible 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 remeasurementof net deferred taxes reflecting lower U.S. corporate tax rates; andThe estimated tax effects of above, non-cash changes in net deferred income taxes, and assessments of tax exposures.
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 tomitigate 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(In millions, except per share amounts)

GAAP Outlook

Revenue
Gross margin

Operating expenses
Interest (income) expense, net
Diluted earnings per share(1)Non-GAAP
Outlook

Adjustments$5.75 billion - $6.25 billion—

34.5% ± 1.5%

1%A$900 million ± $25 million$33 million$50 million$3 million

BC$0.88 ± $0.10$0.17

A, B, C, D

$5.75
billion $6.25
billion35.5% ±
1.5%
$850
million ±$25 million$30 million$1.05 ±
$0.10

Non-GAAP Adjustments
A
A
B
B
C

Stock-based compensation – cost of goods sold
Other – cost of goods sold
Stock-based compensation – sales, general, and administrative
Stock-based compensation – research and development
Amortization of debt discount and other costsD

Tax effects of the above items and non-cash changes in net deferred income taxes

(1)

$

37
7
27
23
3
99

$

196

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 outsideof our control.
Contacts: Farhan Ahmad Investor Relations farhanahmad@micron.com (408) 834-1927 Erica Rodriguez Pompen Media Relations
epompen@micron.com (408) 834-1873