Micron Technology, Inc., Reports Results for the Second Quarter of Fiscal 2019
March 20, 2019
Strong execution drives healthy profitability and cash flow
BOISE, Idaho, March 20, 2019 (GLOBE NEWSWIRE) -- Micron Technology, Inc. (Nasdaq: MU), today announced results for its second quarter offiscal 2019, which ended Feb. 28, 2019.
Fiscal Q2 2019 Highlights

Revenue of $5.84 billion, versus $7.35 billion for the same period last year
GAAP net income of $1.62 billion, or $1.42 per diluted share
Non-GAAP net income of $1.97 billion, or $1.71 per diluted share
Operating cash flow of $3.44 billion versus $4.35 billion for the same period last year
Share repurchases of $702 million under the authorized buyback program"Micron continues to execute well across a range of product, operational and financial initiatives against the backdrop of a challenging market
environment," said Micron Technology President and CEO Sanjay Mehrotra. "These initiatives and our focus on high-value solutions, costcompetitiveness and innovation will enable us to emerge even stronger as the market environment improves."
Quarterly Financial Results
GAAP (1)(in millions, except per share amounts)

FQ2-19

Non-GAAP (2)FQ1-19

FQ2-18

FQ2-19

FQ1-19

FQ2-18

Revenue

$

5,835

$

7,913

$

7,351

$

5,835

$

7,913

$

7,351

Gross margin
percent of revenue

$

2,864
49.1%

$

4,615
58.3%

$

4,270
58.1%

$

2,928
50.2%

$

4,670
59.0%

$

4,296
58.4%

Operating income
percent of revenue

$

1,957
33.5%

$

3,759
47.5%

$

3,567
48.5%

$

2,110
36.2%

$

3,887
49.1%

$

3,630
49.4%

Net income attributable to Micron
Diluted earnings per share$$

1,619
1.42$
$

3,293
2.81$
$

3,309
2.67$
$

1,971
1.71$
$

3,508
2.97$
$

3,495
2.82

Investments in capital expenditures, net of amounts funded by partners, were $2.45 billion for the second quarter of 2019, which resulted in adjusted
free cash flow(3) of $988 million. Micron repurchased an aggregate of 21 million shares of its common stock for $702 million during the quarter inconnection with its $10 billion share repurchase authorization. The company ended the second quarter with cash, marketable investments, andrestricted cash of $9.22 billion for a net cash(4) position of $2.99 billion.
Micron will host a conference call on Wednesday, March 20, 2019 at 2:30 p.m. MT to discuss financial results and provide forward-looking guidance for
its fiscal third quarter. The call, audio, and slides will be available online at investors.micron.com. A webcast replay will be available on our website
until March 20, 2020. A taped audio replay of the conference call will also be available at 1-404-537-3406 or 1-855-859-2056 (conference number:7383577) beginning at 5:30 p.m. MT, March 20, 2019 and continuing through March 27, 2019. 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®, Crucial®, and Ballistix® – our broad
portfolio of high-performance memory and storage technologies, including DRAM, NAND, NOR Flash, and 3D XPoint™ memory, is transforming how
the world uses information to enrich life. Backed by 40 years of technology leadership, our memory and storage solutions enable disruptive trends,
including artificial intelligence, machine learning, and autonomous vehicles, in key market segments like data center, networking, automotive,industrial, mobile, graphics, and client. Our common stock is traded on the Nasdaq under the MU symbol. To learn more about Micron Technology,Inc., visit micron.com.
The Micron logo and Micron symbol are trademarks of Micron Technology, Inc. All other trademarks are the property of their respective owners.
This press release contains forward-looking statements regarding the industry and our strategic position and financial 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 filewith 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 arereasonable, we cannot guarantee future results, levels of activity, performance, or achievements. We are under no duty to update any of the forwardlooking 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 our management excludes in analyzing our operating results andunderstanding trends in our earnings. Non-GAAP shares used in per share calculations also include the impact of our outstanding capped calltransactions and the effect of stock-based compensation. For a reconciliation of GAAP to non-GAAP results, see the accompanying financial tables
and footnotes.
(3) Adjusted free cash flow consists of cash provided by operating activities of $3.44 billion for the second quarter of 2019 less investments in capital
expenditures, net of amounts funded by partners.
(4) Net cash consists of cash, marketable investments, and restricted cash less current and long-term debt of $6.24 billion.

MICRON TECHNOLOGY, INC.
CONSOLIDATED FINANCIAL SUMMARY(in millions except per share amounts)
2nd Qtr.
February 28,
2019
Revenue (1)$Cost of goods sold

Gross margin
Selling, general, and administrative
Research and development
Other operating (income) expense, net

Operating income
Interest income (expense), net

5,835
2,971

1st Qtr.
November 29,
2018$

2nd Qtr.
March 1,
2018

7,913
3,298

$

Six Months Ended
February 28,
March 1,
2019
2018

7,351
3,081

$

13,7486,269$

14,154
6,137

2,864
209
601
974,615
209
611
36

4,270
196
523
(16 )

7,479
418
1,212
133

8,017
387
971
(5 )

1,957
31

3,759
5

3,567
(61 )

5,716
36

6,664
(162 )

Other non-operating income (expense), net (2)(84 )9(53 )(75 )(257 )

Income tax provision (3)Equity in net income of equity method investees(280 )
1(6 )(477 )—(3 )(143 )
1(2 )(757 )
1(9 )(257 )1(2 )Net income attributable to noncontrolling interests
Net income attributable to Micron

$

1,619

$

3,293$

3,309$

4,912$

5,987$

1.45$

2.91$

2.86$

4.37$

5.23

Earnings per share

Basic
Diluted

1.42

2.81

2.67

4.24

4.86

1,114

1,133

1,156

1,123

1,145

1,141

1,174

1,238

1,157

1,232

Number of shares used in per share calculations

Basic
DilutedCONSOLIDATED FINANCIAL SUMMARY, Continued

February 28,
2019

As ofCash and short-term investments
Receivables (1)$7,533

November 29,
2018
$

5,563

August 30,
2018
$

6,802

Inventories

4,416
4,390

5,418
3,876

5,478
3,595

Total current assets (1)Long-term marketable investments
Property, plant, and equipment
Restricted cash

16,5501,61426,204
76

15,0391,565
24,80778

16,039473
23,672
81

Total assets (1)47,48744,59543,376

Accounts payable and accrued expenses

4,062

4,200

4,374

Current debt (2)(4)
Total current liabilities

2,634
7,361

398
5,189

859
5,754

Long-term debt (2)

3,604

3,734

3,777

Total Micron shareholders' equity (1)(2)(5)34,56733,86932,294

Noncontrolling interests in subsidiaries (4)863
35,430870
34,739870
33,164

Total equity

Six Months Ended
February 28,March 1,20192018
Net cash provided by operating activities
Net cash provided by (used for) investing activities
Net cash provided by (used for) financing activities$8,245(6,919 )(1,483 )$7,984(3,843 )(1,420 )Depreciation and amortization
Investments in capital expenditures
Repayments of debt

2,677
(5,386 )(705 )

2,296(4,370 )(3,379 )Payments to acquire treasury stock (5)Proceeds from issuance of stock(2,568 )92(67 )
1,554

Proceeds from issuance of debt (2)1,800650(1) In the first quarter of 2019, we adopted ASU 2014-09 – Revenue from Contracts with Customers (as amended, "ASC 606"), which supersedes
nearly all existing revenue recognition guidance under generally accepted accounting principles in the United States. The core principal of ASC 606 isthat an entity should recognize revenue when it transfers control of promised goods or services to customers in an amount that reflects theconsideration to which the entity expects to be entitled in exchange for those goods or services. We adopted ASC 606 in the first quarter of 2019 underthe modified retrospective method and, in connection therewith, made certain adjustments to our opening balances as of August 31, 2018.
Adjustments to opening balances included an increase to receivables of $114 million, reduction of deferred tax assets of $92 million, increase of othercurrent assets of $30 million, and an increase to retained earnings of $50 million.
(2) On February 6, 2019, we issued $600 million, $500 million, and $700 million in principal of senior unsecured notes due in 2024, 2026, and 2029,respectively. On February 8, 2019, we notified the holders of our convertible senior notes due in 2043 ("2043G Notes") that we would redeem all of theoutstanding 2043G Notes on March 13, 2019. In connection with our notice, we made an irrevocable election to settle any conversions in cash. As aresult, we reclassified $336 million from equity to a derivative debt liability. As of February 28, 2019, current debt included an aggregate of $1.11 billion
for the settlement obligation (including principal and amounts in excess of principal) of all of our 2043G Notes. In the second quarter of 2019, werecognized non-operating losses of $84 million related to the redemption of the 2043G notes. On March 13, 2019, we paid $1.43 billion to settle theconversions.
(3) On December 22, 2017, the United States enacted comprehensive tax legislation, commonly referred to as the Tax Cuts and Jobs Act (the "TaxAct"), which imposed a one-time transition tax in 2018 (the "Repatriation Tax") and created a new minimum tax on certain foreign earnings. Our
income tax provision consisted of the following:
2nd Qtr.
February28,2019
Income tax (provision) benefit, excluding items below$Utilization of and other changes in net deferred tax assets of MMJ, MMT, and MTTW
Repatriation Tax, net of adjustments related to uncertain tax positions
Release of the valuation allowance on the net deferred tax assets of our U.S.
operations
Remeasurement of deferred tax assets and liabilities reflecting the lower U.S.
corporate tax rates$

1st Qtr.
November
29,
2018(216 ) $(78 )
14(378 )
(52 )
(47 )

——

2nd Qtr.
March
1,
2018

Six Months EndedFebruary
March
28,
1,20192018$

5 $(17 )(1,335 )(594 ) $ (83 )(130 )(43 )(33 ) (1,335 )

1,337——(133 )(280 ) $(477 )$ (143 ) $—1,337—(133 )(757 ) $ (257 )(4) On January 14, 2019, we exercised our option to acquire Intel's interest in our joint venture, IM Flash Technologies, LLC ("IMFT"). Intel can elect toset the closing date of the transaction to be any time between approximately six months to one year from the date we exercised our call option. At thetime of closing, we expect to pay Intel approximately $1.5 billion in cash for Intel's noncontrolling interest in IMFT and IMFT member debt. Current debt
as of February 28, 2019 included $1.0 billion for IMFT member debt.
(5) In the second quarter of 2019, we repurchased 21 million shares of our common stock for $702 million through a Rule 10b5-1 plan. The shareswere recorded as treasury stock. In the first quarter of 2019, we repurchased 42 million shares of our common stock for $1.80 billion.

MICRON TECHNOLOGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS(in millions except per share amounts)
2nd Qtr.
February 28,2019
GAAP gross margin

Stock-based compensation
Start-up and preproduction costs

$

2,864

1st Qtr.
November 29,2018$

2nd Qtr.
March 1,2018

4,615

$

4,270

23

26

22

158—

Employee severance
Other

13

1313

—

84

Non-GAAP gross margin

$

2,928

$

4,670

$

4,296

GAAP operating income

$

1,957

$

3,759

$

3,567

Stock-based compensation
Start-up and preproduction costs
Employee severance
Restructure and asset impairments
Other

57

61

52

15

8—

1720—

51

30

713

94

Non-GAAP operating income

$

2,110

$

3,887

$

3,630

GAAP net income attributable to Micron

$

1,619

$

3,293$

3,309

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

52

158—

1720—

51

30

711182683(14 )

23352713107(14 )

47

131

1,971

30$

1,141

Adjustment for capped calls and stock-based
compensation
Non-GAAP weighted-average common shares outstanding - Diluted$Effects of the above adjustments
Non-GAAP diluted earnings per share

61

116
$

GAAP weighted-average common shares outstanding - Diluted

GAAP diluted earnings per share

57(87 )
$

1,174

3,495
1,238

85

2

1,149

1,179

1,240

1.42$

0.29$

3,508

1.71

2.81

$

0.16$

2.97

2.67
0.15

$

2.82

The tables above reconcile GAAP to non-GAAP gross margin, operating income, net income attributable to Micron, diluted shares, and diluted
earnings per share. 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 to 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 usefulsupplemental 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 changes in currency exchange rates;
Gains and losses from business acquisition activities;
Impact of the U.S. income tax reform for the Repatriation Tax, release of U.S. valuation allowance, and remeasurement of
net deferred taxes reflecting the 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.
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.
Contacts: Farhan Ahmad Investor Relations farhanahmad@micron.com (408) 834-1927 Erica Rodriguez Pompen Media Relations
epompen@micron.com (408) 834-1873