Micron Technology, Inc., Reports Results for the First Quarter of Fiscal 2019
December 18, 2018
Strong execution drives record revenue in mobile, automotive, and industrial markets
BOISE, Idaho, Dec. 18, 2018 (GLOBE NEWSWIRE) -- Micron Technology, Inc., (NASDAQ: MU) today announced results for its first quarter of fiscal
2019, which ended Nov. 29, 2018.
Fiscal Q1 2019 Highlights

Revenue of $7.91 billion, up 16 percent compared with the same period last year
GAAP net income of $3.29 billion, or $2.81 per diluted share
Non-GAAP net income of $3.51 billion, or $2.97 per diluted share
Operating cash flow of $4.81 billion compared with $3.64 billion for the same period last year
Share repurchases of $1.80 billion under the authorized buyback program“Micron reported strong profitability in the fiscal first quarter, highlighted by double-digit year-over-year revenue growth across our major markets andsolid business execution,” Micron Technology President and CEO Sanjay Mehrotra said. “Despite weak near-term industry supply-demand dynamics
entering calendar 2019, Micron is well-positioned to deliver healthy profitability throughout the year. We remain bullish on the long-term secular growthtrends driving the memory and storage industry.”
Quarterly Financial Results
GAAP (1)(in millions, except per share amounts)

FQ1-19

FQ4-18

Non-GAAP (2)FQ1-18

FQ1-19

FQ4-18

FQ1-18

Revenue$

7,913 $

8,440 $

6,803$

7,913 $

8,440 $

6,803

Gross margin
percent of revenue$

4,615 $
58.3%

5,151 $
61.0%

3,747
55.1%

$

4,670 $
59.0%

5,179 $
61.4%

3,769
55.4%

Operating income
percent of revenue$

3,759 $
47.5%

4,377 $
51.9%

3,09745.5%$

3,887 $
49.1%

4,439 $
52.6%

3,157
46.4%

Net income attributable to Micron
Diluted earnings per share$$

3,293 $
2.81 $

4,325 $
3.56 $

2,678
2.19$
$

3,508 $
2.97 $

4,313 $
3.53 $

2,994
2.45

Investments in capital expenditures, net of amounts funded by partners, were $2.48 billion for the first quarter of 2019, which resulted in adjusted free
cash flows(3) of $2.33 billion. Micron repurchased an aggregate of 42 million shares of its common stock for $1.80 billion during the quarter inconnection with its $10 billion share repurchase authorization. The company ended the first quarter in a record net cash position of $3.07 billion withcash, marketable investments, and restricted cash of $7.21 billion.
Micron will host a conference call on Tuesday, Dec. 18, 2018 at 2:30 p.m. MT to discuss financial results and provide forward-looking guidance forfiscal second quarter. The call, audio, and slides will be available online at investors.micron.com. A webcast replay will be available on our website
until Dec. 18, 2019. A taped audio replay of the conference call will also be available at 1-404-537-3406 or 1-855-859-2056 (conference number:3349486) beginning at 5:30 p.m. MT, Dec. 18, 2018 and continuing through Dec. 25, 2018. 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 cloud, data center, networking, mobile andautomotive. 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-lookingstatements 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. 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 atwww.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 our management excludes in analyzing our operating results andunderstanding trends in our earnings. Non-GAAP also includes the impact on shares used in per share calculations of our outstanding capped call

transactions and from the exclusion of stock-based compensation. For a reconciliation of GAAP to non-GAAP results, see the accompanying financialtables and footnotes.
(3) Adjusted free cash flow consists of cash provided by operating activities of $4.81 billion for the first quarter of 2019 less investments in capital
expenditures, net of amounts funded by partners.

MICRON TECHNOLOGY, INC.
CONSOLIDATED FINANCIAL SUMMARY(in millions except per share amounts)
1st Qtr.
November 29,
2018
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
Other non-operating income (expense), net (2)Income tax provision (3)Net income attributable to noncontrolling interests
Net income attributable to Micron

7,913
3,298

4th Qtr.
August 30,
2018$

1st Qtr.
November 30,
2017

8,440
3,289

$

6,803
3,056

4,615
209
611
36

5,151
215
567(8 )

3,747
191
448
11

3,759
54,377(16 )3,097(101 )

9(15 )(204 )(477 )
(3 )

(20 )
(1 )

(114 )
—$

3,293

$

4,325$

2,678$

2.91

$

3.73

$

2.36

Earnings per share

Basic
Diluted

2.81

3.56

2.19

1,133

1,159

1,134

1,174

1,216

1,225

Number of shares used in per share calculations

Basic
DilutedCONSOLIDATED FINANCIAL SUMMARY, Continued
November 29,
2018

As ofCash and short-term investments

$

5,563

August 30,
2018
$

6,802

Receivables (1)Inventories

5,418
3,876

5,478
3,595

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

15,0391,565
24,80778

16,039473
23,672
81

Total assets (1)44,59543,376

Accounts payable and accrued expenses

4,200

4,374

Current debt (2)Total current liabilities
Long-term debt

398
5,189
3,734

859
5,754
3,777

Total Micron shareholders' equity (1)Noncontrolling interests in subsidiaries
Total equity

33,869870
34,73932,294
870
33,164

Quarter Ended
November 29,November 30,2018
2017
Net cash provided by operating activities
Net cash provided by (used for) investing activities
Net cash provided by (used for) financing activities$

Depreciation and amortization
Investments in capital expenditures

4,810$(4,427 )(2,435 )3,636(1,434 )(1,282 )1,353(2,720 )1,119(2,089 )(577 )(2,744 )(1,836 )
15—

(23 )
1,472
150

Repayments of debt (2)Cash paid to acquire treasury stock (4)Proceeds from issuance of stock
Proceeds from issuance of debt

1. In the first quarter of 2019, we adopted ASU 2014-09 – Revenue from Contracts with Customers (as amended, "ASC606"), which supersedes nearly all existing revenue recognition guidance under generally accepted accounting principles in
the United States. The core principal of ASC 606 is that an entity should recognize revenue when it transfers promised
goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled inexchange for those goods or services. In adoption, we applied the 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. In the first quarter of 2019, we settled conversions of debt with an aggregate principal amount of $38 million for cash of$164 million and recognized non-operating losses of $13 million.
3. On December 22, 2017, the United States enacted comprehensive tax legislation commonly referred to as the Tax Cuts
and Jobs Act (the "Tax Act") which imposed a one-time transition tax in 2018 (the "Repatriation Tax") and created a newminimum tax on certain foreign earnings. Our accounting for the effects of the Tax Act was completed during the firstquarter of 2019.
Our income tax provision consisted of the following:
November 29,
2018

Quarter ended
Income tax provision, excluding items below
Utilization of and other changes in net deferred tax assets of MMJ, MMT, andMTTW$

November 30,
2017(378 ) $(113 ) $

(88 )

(52 )
(47 )

1083

(26 )
—(477 ) $(20 ) $(114 )Repatriation Tax, net of adjustments related to uncertain tax positions$August 30,2018

4. In the first quarter of 2019, we repurchased 42 million shares of our common stock for $1.80 billion through a combinationof repurchases pursuant to an accelerated share repurchase agreement, Rule 10b5-1 plan, and through open market
repurchases. The shares were recorded as treasury stock.

MICRON TECHNOLOGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP RESULTS(in millions, except per share amounts)
1st Qtr.
November 29, 2018
GAAPRevenue
Cost of goods sold

Gross margin
percent of revenue
Selling, general, and administrative
Research and development$ 7,913 $
3,298
4,615

Adj

— $ 7,913
(55 )
3,243
5558.3%209611

NonGAAP

(21 )
(22 )

4th Qtr.
August 30, 2018
GAAP
$ 8,440 $
3,289

4,670

5,151

59.0%

61.0%

188589215567Adj

1st Qtr.
November 30, 2017

NonGAAP— $ 8,440
(28 )
3,261
28(13 )
(14 )GAAP
$ 6,803 $
3,056

5,179

3,747

61.4%

55.1%

202
553

191448Adj

NonGAAP— $ 6,803
(22 )
3,034
223,769
55.4%(18 )
(14 )

173
434

Other operating (income) expense, net

Operating expenses
Operating income
percent of revenue

36(30 )

6(8 )

(7 )

(15 )

11(6 )

5856

(73 )

783

774

(34 )

740

650

(38 )

612

3,759

128

3,887

4,377

62

4,439

3,097

60

3,157

49.1%

51.9%

52.6%

45.5%

47.5%

Interest income (expense), net

46.4%

59

18(8 )

23
1(16 )
(15 )

23
14

7(1 )

(101 )(204 )

29
204

(72 )
—

3,773

138

3,911

4,346

99

4,445

2,792

293

3,085

Income tax provision(477 )

77(400 )(20 )(111 )(131 )(114 )

23(91 )Net income

3,296

215

3,511

4,326

(12 )

4,314

2,678

316

2,994

(3 )

—

(3 )

(1 )

—

(1 )

—

—

—

Other non-operating income (expense), net

Net income attributable to noncontrolling interests

Net income attributable to Micron
Shares used in calculations
Diluted earnings per share$ 3,293 $ 215 $ 3,508$

1,174
5
1,179
2.81 $ 0.16 $2.97$ 4,325 $$(12 ) $ 4,313

1,216
41,2203.56 $ (0.03 ) $3.53$ 2,678 $ 316 $ 2,994$1,225(5 )1,220
2.19 $ 0.26 $2.45

MICRON TECHNOLOGY, INC.
NON-GAAP ADJUSTMENTS(in millions)
1st Qtr.
November29,
2018

4th Qtr.
August30,
2018

1st Qtr.
November
30,
2017

$$

$

Non-GAAP adjustments

Cost of goods sold
Stock-based compensation
Employee severance, start-up costs, and other

Selling, general, and administrative
Stock-based compensation
Employee severance and other

26

21

20

29

7255

28

22

19

13

18

2——

21

13

18

16

13

13

61

122

14

14

Other operating (income) expense, net
Restructure and asset impairments

30

76Interest income (expense), net
Amortization of debt discount and other costs

182329(14 )

(1 )

195

51591——

Research and development
Stock-based compensation
Employee severance and other

Other non-operating income (expense)(Gain) loss on debt repurchases and conversions(Gain) loss from changes in currency exchange rates
OtherIncome taxes
Impact of U.S. income tax reform
Estimated tax effects of above, including tax benefits from stock-based
compensation, and non-cash changes in net deferred income taxes
$(8 )

14204

47(83 )

—30(28 )2377(111 )23(12 ) $316

215$

The tables above reconcile GAAP to non-GAAP results, 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 inperforming 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 ofour 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 othercompanies.
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;
Employee severance, start-up costs, and other;
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 changes in currency exchange rates;
Gains and losses loss 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, including tax benefits from stock-based compensation, and non-cash changes in net
deferred taxes.
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 the capped calls, based on theaverage 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