Micron Technology, Inc. Reports Results for the Third Quarter of Fiscal 2019

The decrease in our income tax provision in the third quarter of 2019 as compared to the second quarter of 2019 was due primarily to a reduction in profit before tax and a related reduction in the foreign minimum tax. The Repatriation Tax and our deferred tax liabilities on unremitted earnings were also reduced in the third quarter of 2019 due to Tax Act-related law changes. Our provision for income tax and the effective tax rate increased in the first nine months of 2019 as compared to the corresponding period of 2018 primarily as a result of the foreign minimum tax.

4. In January 2019, we exercised our option to acquire Intel's interest in our joint venture, IM Flash Technologies, LLC ("IMFT") and, in the third quarter of 2019, Intel set the closing date of the transaction to occur on October 31, 2019. At closing, we expect to pay Intel approximately $1.4 billion in cash for Intel's noncontrolling interest in IMFT and IMFT member debt. As of May 30, 2019, current debt included $858 million of IMFT member debt.

5. In the third quarter and first nine months of 2019, we repurchased 4 million shares of our common stock for $157 million and 67 million shares of our common stock for $2.66 billion, respectively, under an accelerated share repurchase agreement, Rule 10b5-1 plans, 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)
       
   3rd Qtr.  2nd Qtr.  3rd Qtr.
   May 30,
 2019
  February 28,
 2019
  May 31,
 2018
GAAP gross margin $1,828  $2,864  $4,723 
Stock-based compensation 24  23  20 
Start-up and preproduction costs 23  15   
Employee severance   13   
Other 9  13  7 
Non-GAAP gross margin $1,884  $2,928  $4,750 
        
GAAP operating income   $ 1,010     $ 1,957     $ 3,953  
Stock-based compensation   58     57     48  
Start-up and preproduction costs   23     15      
Employee severance       17      
Restructure and asset impairments   9     51     8  
Other   10     13     8  
Non-GAAP operating income   $ 1,110     $ 2,110     $ 4,017  
             
GAAP net income attributable to Micron   $ 840     $ 1,619     $ 3,823  
Stock-based compensation   58     57     48  
Start-up and preproduction costs   23     15      
Employee severance       17      
Restructure and asset impairments   9     51     8  
Amortization of debt discount and other costs   10     11     23  
(Gain) loss on debt repurchases and conversions   317     83     168  
(Gain) loss from changes in currency exchange rates   1     3     24  
Other   12     13     10  
Impact of U.S. income tax reform   (42 )   (14 )   (222 )
Estimated tax effects of above, non-cash changes in net deferred income taxes, and assessments of tax exposures   (30 )   116     16  
Non-GAAP net income attributable to Micron   $ 1,198     $ 1,971     $ 3,898  
             
GAAP weighted-average common shares outstanding - Diluted   1,129     1,141     1,235  
Adjustment for capped calls and stock-based compensation   6     8     3  
Non-GAAP weighted-average common shares outstanding - Diluted   1,135     1,149     1,238  
             
GAAP diluted earnings per share   $ 0.74     $ 1.42     $ 3.10  
Effects of the above adjustments   0.31     0.29     0.05  
Non-GAAP diluted earnings per share   $ 1.05     $ 1.71     $ 3.15  

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