Micron Technology, Inc., Reports Results for the Fourth Quarter and Full Year of Fiscal 2018


In the third quarter of 2018, we prepaid debt with an aggregate principal amount of $2.08 billion and recognized non-operating losses of $42 million. In addition, we repurchased or settled convertible notes with an aggregate principal amount of $228 million for cash of $1.11 billion and recognized non-operating losses of $32 million. In the second quarter of 2018, we settled convertible notes with an aggregate principal amount of $65 million for cash of $295 million. In the first quarter of 2018, we redeemed notes with an aggregate principal amount of $2.25 billion for cash of $2.42 billion and recognized non-operating losses of $190 million.

During 2018, Intel Corporation provided non-interest bearing convertible debt financing of $1.01 billion to IM Flash Technologies, LLC ("IMFT") pursuant to the terms of the IMFT joint venture agreement.

  • 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 lowers the U.S. corporate income tax rate from 35% to 21% and significantly affects how income from foreign operations is taxed in the United States. As a result of our fiscal year-end, our U.S. statutory federal rate was 25.7% for 2018 (based on the 35% corporate rate through December 31, 2017 and 21% from that date through the end of fiscal year 2018) and will be 21% for subsequent years. The Tax Act imposed a one-time transition tax in 2018 on the higher of accumulated foreign income, as determined as of November 2, 2017 or December 31, 2017 (the "Repatriation Tax"); provided a U.S. federal tax exemption on foreign earnings distributed to the United States; and, beginning in 2019, creates a new minimum tax on certain foreign earnings in excess of a deemed return on tangible assets (the "Foreign Minimum Tax"). The Tax Act allows us to elect to pay any Repatriation Tax due in eight annual interest-free payments in increasing amounts beginning in December 2018.

    The Securities and Exchange Commission Staff Accounting Bulletin No. 118 allows the use of provisional amounts (reasonable estimates) if our analyses of the impacts of the Tax Act has not been completed when our financial statements are issued. The provisional amounts below were revised during 2018 and represent reasonable estimates of the effects of the Tax Act for which the analysis is not yet complete. Our income tax (provision) benefit consisted of the following:
  •    4th Qtr.  3rd Qtr.  4th Qtr.  Year Ended
       August 30,
     2018
      May 31,
     2018
      August 31,
     2017
      August 30,
    2018
      August 31,
    2017
    Provisional estimate for the Repatriation Tax, net of adjustments related to uncertain tax positions $83  $222  $  $(1,030) $ 
    Remeasurement of deferred tax assets and liabilities reflecting the lower U.S. corporate tax rates       (133)  
    Provisional estimate for the release of the valuation allowance on the net deferred tax assets of our U.S. operations       1,337   
    Utilization of and other changes in net deferred tax assets of MMJ, MMT, and MTTW 10  (35) 106  (68) 54 
    Other income tax (provision) benefit (113) (78) (59) (274) (168)
      $(20) $109  $47  $(168) $(114)
                         
    1. In October 2017, we issued 34 million shares of our common stock in a public offering for $41.00 per share for proceeds of $1.36 billion, net of underwriting fees and other offering costs.
     
    MICRON TECHNOLOGY, INC.
    RECONCILIATION OF GAAP TO NON-GAAP RESULTS
    (in millions, except per share amounts)
               
      4 th Qtr.   3 rd Qtr.   4 th Qtr.
      August 30, 2018   May 31, 2018   August 31, 2017
      GAAP Adj Non-GAAP   GAAP Adj Non-GAAP     GAAP Adj Non-GAAP
    Net sales $ 8,440   $   $ 8,440     $ 7,797   $   $ 7,797     $ 6,138   $   $ 6,138  
    Cost of goods sold 3,289   (28 ) 3,261     3,074   (27 ) 3,047     3,026   (35 ) 2,991  
    Gross margin 5,151   28   5,179     4,723   27   4,750     3,112   35   3,147  
    percent of revenue   61.0%       61.4%       60.6%       60.9%       50.7%       51.3%  
                                       
    Selling, general, and administrative 215   (13 ) 202     211   (14 ) 197     193   (22 ) 171  
    Research and development 567   (14 ) 553     603   (15 ) 588     447   (14 ) 433  
    Other operating (income) expense, net (8 ) (7 ) (15 )   (44 ) (8 ) (52 )   (30 ) 27   (3 )
    Operating expenses 774   (34 ) 740     770   (37 ) 733     610   (9 ) 601  
    Operating income (loss) 4,377   62   4,439     3,953   64   4,017     2,502   44   2,546  
    percent of revenue   51.9%       52.6%         50.7%       51.5%       40.8%       41.5%  
                                       
    Interest income (expense), net (16 ) 23   7     (44 ) 23   (21 )   (132 ) 32   (100 )
    Other non-operating income (expense), net (15 ) 14   (1 )   (193 ) 194   1     (49 ) 49    
      4,346   99   4,445     3,716   281   3,997     2,321   125   2,446  
                           
    Income tax (provision) benefit (20 ) (111 ) (131 )   109   (206 ) (97 )   47   (107 ) (60 )
    Equity in net income (loss) of equity method investees         (2 )   (2 )   1     1  
    Net income (loss) 4,326   (12 ) 4,314     3,823   75   3,898     2,369   18   2,387  
                           
    Net income (loss) attributable to noncontrolling interests (1 )   (1 )           (1 )   (1 )
    Net income (loss) attributable to Micron $ 4,325   $ (12 ) $ 4,313     $ 3,823   $ 75   $ 3,898     $ 2,368   $ 18   $ 2,386  
                           
    Shares used in calculations 1,216   4   1,220     1,235   3   1,238     1,187   (6 ) 1,181  
    Diluted earnings (loss) per share $ 3.56   $ (0.03 ) $ 3.53     $ 3.10   $ 0.05   $ 3.15     $ 1.99   $ 0.03   $ 2.02  
                                                               

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