Crucial 2012 Annual Report Download - page 32

31
Results of Operations
Consolidated Results
For the year ended 2012 2011 2010
Net sales $ 8,234 100 % $ 8,788 100 % $ 8,482 100 %
Cost of goods sold 7,266 88 % 7,030 80 % 5,768 68 %
Gross margin 968 12 % 1,758 20 % 2,714 32 %
SG&A 620 8 % 592 7 % 528 6 %
R&D 918 11 % 791 9 % 624 7 %
Other operating (income) expense, net 48 1 % (380) (4)% (27) — %
Operating income (loss) (618) (8)% 755 9 % 1,589 19 %
Interest income (expense), net (171) (2)% (101) (1)% (160) (2)%
Gain on acquisition of Numonyx — — % — — % 437 5 %
Other non-operating income (expense), net 35 — % (103) (1)% 54 1 %
Income tax (provision) benefit 17 — % (203) (2)% 19 — %
Equity in net loss of equity method investees (294) (4)% (158) (2)% (39) — %
Net income attributable to noncontrolling interests (1) — % (23) — % (50) (1)%
Net income (loss) attributable to Micron $ (1,032) (13)% $ 167 2 % $ 1,850 22 %
Our net income (loss) attributable to Micron shareholders for 2012 declined from 2011 primarily due to significant
decreases in average selling prices for our principal products. Market selling prices for NAND Flash products declined for
2012 as compared to 2011 primarily due to large increases in supply from improvements in product and process technologies as
well as expansions in production capacity which outpaced relatively healthy growth in demand. Market selling prices for
DRAM products declined for 2012 as compared to 2011 primarily due to relatively low demand growth, particularly for high-
volume DDR3 DRAM, as a result of weakness in the personal computer market. Our improvements in product and process
technologies in 2012 enabled significant increases in sales volumes that mitigated reductions in net sales from price declines.
Our improvements in product and process technologies and our cost structure in 2012 produced cost reductions for NAND
Flash products sold to trade customers and for DRAM products, partially offsetting the impact of the declines in average selling
prices on our operating margins. In 2011, we recognized gains of $275 million from a 10-year patent cross-license agreement
with Samsung Electronics Co. Ltd. ("Samsung").
Net Sales
For the year ended 2012 2011 2010
NSG $ 2,853 35% $ 2,196 25% $ 2,113 25%
DSG 2,691 33% 3,203 36% 4,638 55%
WSG 1,184 14% 1,959 22% 778 9%
ESG 1,054 13% 1,002 11% 521 6%
All Other 452 5% 428 6% 432 5%
$ 8,234 100% $ 8,788 100% $ 8,482 100%
Total net sales decreased 6% for 2012 as compared to 2011, reflecting declines in average selling prices across all
reportable segments partially offset by increases in sales volumes. WSG sales decreased for 2012 as compared to 2011
primarily due to declines in average selling prices and in NOR Flash sales volumes, as a result of weakness in market demand
and our customer group in particular, as well as a continued transition by customers from NOR Flash to NAND Flash. DSG
sales decreased primarily due to lower average selling prices partially offset by increases in sales volumes. NSG and ESG sales
increased due to increases in sales volumes partially offset by declines in average selling prices.