¹ For fiscal 2019, the income tax adjustments represent the difference in GAAP tax expense and projected non-GAAP tax expense which is based on projected cash taxes for fiscal 2019, excluding transition tax payments under the Tax Cuts and Jobs Act.
² The tax impact of the non-GAAP adjustments is calculated using the applicable tax rates in the jurisdictions where the adjustments occurred in the three and six months ended September 30, 2017.

Microchip will host a conference call today, November 7, 2018 at 5:00 p.m. (Eastern Time) to discuss this release.  This call will be simulcast over the Internet at www.microchip.com.  The webcast will be available for replay until November 21, 2018.

A telephonic replay of the conference call will be available at approximately 8:00 p.m. (Eastern Time) on November 7, 2018 and will remain available until 5:00 p.m. (Eastern Time) on November 21, 2018.  Interested parties may listen to the replay by dialing 719-457-0820 and entering access code 9119657.

Cautionary Statement:          

The statements in this release relating to distributors holding the amount of inventory needed to support end market demand, the integration of Microsemi with Microchip is rapidly progressing, achieving synergies in the business units, sales, operations and support functions, relentlessly marching towards the synergy targets we have outlined, continuing to use substantially all of our excess cash generation after dividends to de-lever our balance sheet as quickly as possible, what we believe reflects true end-market demand as we measure revenue based on when product is sold by our distributors to an end customer, continuing to be cautious about the outlook for the December quarter, that we expect our non-GAAP total net sales in the December 2018 quarter to be between $1.362 billion and $1.438 billion, that our non-GAAP earnings per share are expected to be between $1.49 and $1.64, that our non-GAAP revenue will be based on what we believe reflects true end-market demand as we measure revenue based on when product is sold by our distributors to an end customer, our third quarter fiscal 2019 non-GAAP guidance including net sales, gross margin, operating expenses, operating income, other expense, income tax expense, net income, diluted common shares outstanding, earnings per diluted share, expected cash tax rate for fiscal 2019, inventory days expected to be in the range of 117 to 127 days, capital expenditures for the December 2018 quarter and for all of fiscal 2019, continuing to invest to support the growth of our production capabilities for fast-growing new products and technologies and to bring in-house more of the assembly and test operations that are currently outsourced, our focus on creating demand for our products in the end markets we serve, that non-GAAP results reflect the value of the end-market demand for our products, and assumed average stock price in the December 2018 quarter are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  These statements involve risks and uncertainties that could cause our actual results to differ materially, including, but not limited to: any economic uncertainty due to monetary policy, political, trade or other issues in the U.S. or internationally, any unexpected fluctuations or weakness in the U.S. and global economies (including China), changes in demand or market acceptance of our products and the products of our customers; our ability to successfully integrate the operations and employees, retain key employees and customers and otherwise realize the expected synergies and benefits of our acquisitions (including our recent acquisition of Microsemi Corporation); the impact of current and future changes in U.S. corporate tax laws (including the Tax Cuts and Jobs Act of 2017), foreign currency effects on our business; the mix of inventory we hold and our ability to satisfy short-term orders from our inventory; changes in utilization of our manufacturing capacity and our ability to effectively manage and expand our production levels; competitive developments including pricing pressures; the level of orders that are received and can be shipped in a quarter; changes or fluctuations in customer order patterns and seasonality; the impact of any future significant acquisitions that we may make; our ability to obtain a sufficient supply of wafers from third party wafer foundries and the cost of such wafers, the costs and outcome of any current or future tax audit or any litigation or other matters involving intellectual property, customers, or other issues; our actual average stock price in the December 2018 quarter and the impact such price will have on our share count; fluctuations in our stock price and trading volume which could impact the number of shares we acquire under our share repurchase program and the timing of such repurchases; disruptions in our business or the businesses of our customers or suppliers due to natural disasters (including any floods in Thailand), terrorist activity, armed conflict, war, worldwide oil prices and supply, public health concerns or disruptions in the transportation system; and general economic, industry or political conditions in the United States or internationally.