Microchip Technology Announces Financial Results for Second

Microchip Technology Announces Financial Results for Second Quarter of Fiscal Year 2019

RECONCILIATION OF GAAP INCOME TAX BENEFIT TO NON-GAAP INCOME TAX PROVISION

For the three and six months ended September 30, 2018, non-GAAP income tax expense is presented based on cash taxes for fiscal 2019, excluding transition tax payments under the Tax Cuts and Jobs Act.

	Three and Six Months Ended
	September 30, 2018
Income tax benefit, as reported	$	(135.7	)	$	(133.7	)
Income tax rate, as reported	344.4		%	7,864.7		%
Other non-GAAP tax adjustment ¹	152.2			165.0
Non-GAAP income tax provision	$	16.5		$	31.3
Non-GAAP income tax rate	3.5		%	3.5		%

For the three and six months ended September 30, 2017, non-GAAP income tax expense is presented as the tax impact of non-GAAP adjustments calculated using the applicable tax rates in the jurisdictions where the adjustments occurred.

	Three and Six Months Ended
	September 30, 2017
Income tax benefit, as reported	$	(3.0	)	$	(7.3	)
Income tax rate, as reported	(1.6		)%	(2.1		)%
Share-based compensation expense ²	7.8			15.2
Manufacturing excursion ²	—			(0.2		)
Acquisition-related costs ²	0.3			1.3
Amortization of acquired intangible assets ²	9.8			19.7
Special charges and other, net ²	7.2			6.0
Loss on settlement of debt ²	—			5.1
Non-cash other expense, net ²	10.0			19.8
Non-recurring tax events ²	5.6			11.2
Tax adjustment in accordance with ASC 740-270 ²	(3.3		)	(5.8		)
Non-GAAP income tax provision	$	34.4		$	65.0
Non-GAAP income tax rate	9.1		%	8.9		%

RECONCILIATION OF GAAP NET INCOME AND GAAP DILUTED NET INCOME PER COMMON SHARE TO NON-GAAP NET INCOME AND NON-GAAP DILUTED NET INCOME PER COMMON SHARE

	Three and Six Months Ended
	September 30, 2018
Net income, as reported	$	96.3		$	132.0
Impact of changes in distributor inventory levels	56.1			59.5
Share-based compensation expense	41.4			70.8
Acquisition-related costs	6.6			33.7
Excess capacity charges to normalize acquired inventory levels	2.3			2.3
Acquired inventory valuation costs	182.1			289.6
Amortization of acquired intangible assets	169.9			303.6
Special charges and other, net	18.2			58.3
Loss on settlement of debt	4.1			4.1
Non-cash other expense	28.9			65.4
Losses on available-for-sale investments	0.9			6.1
Other non-GAAP tax adjustment ¹	(152.2		)	(165.0		)
Non-GAAP net income	$	454.6		$	860.4
Non-GAAP net income as a percentage of net sales	30.0		%	31.5		%
GAAP net income as a percentage of net sales	6.7		%	5.0		%
Diluted net income per common share, as reported	$	0.38		$	0.52
Non-GAAP diluted net income per common share	$	1.81		$	3.41
Diluted common shares outstanding, as reported	251.8			252.0
Diluted common shares outstanding non-GAAP	251.8			252.0

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