Crucial 2011 Annual Report Download - page 31

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Results of Operations
Consolidated Results
Net Sales
Total net sales for 2011 increased 4%, as compared to 2010 primarily due to increases in WSG and ESG sales as a result of the acquisition of
Numonyx in May 2010. DSG sales for 2011 decreased 31% as compared to 2010 primarily due to declines in average selling prices mitigated by
increases in gigabit sales. NSG sales for 2011 increased 4% as compared to 2010 primarily due to increases in gigabit sales partially offset by
declines in average selling prices.
Total net sales for 2010 increased 77% as compared to 2009 as a result of improved sales across all reportable segments. Increases in DSG
and NSG sales for 2010 primarily reflect significant increases in gigabits sold for both segments and improved average selling prices for DSG
products. Increases in ESG and WSG sales for 2010 were primarily the result of the acquisition of Numonyx.
Gross Margin
Our overall gross margin percentage declined from 32% for 2010 to 20% for 2011 primarily due to a significant decline in the gross margin
for DSG as a result of the dramatic decreases in average selling prices mitigated by a reduction in costs per gigabit. Declines in the gross margins
of NSG, WSG and ESG, primarily due to declines in average selling prices, also contributed to the overall decrease in gross margin for 2011 as
compared to 2010. The impact of declines in average selling prices for 2011 was partially offset by cost reductions.
30
2011
2010
2009
(amounts in millions and as a percent of net sales)
Net sales
$
8,788
100
%
$
8,482
100
%
$
4,803
100
%
Cost of goods sold
7,030
80
%
5,768
68
%
5,243
109
%
Gross margin
1,758
20
%
2,714
32
%
(440
)
(9
)%
Selling, general and administrative
592
7
%
528
6
%
354
7
%
Research and development
791
9
%
624
7
%
647
13
%
Other operating (income) expense, net
(380
)
(4
)%
(27
)
—
%
235
5
%
Operating income (loss)
755
9
%
1,589
19
%
(1,676
)
(35
)%
Gain on acquisition of Numonyx
—
—
%
437
5
%
—
—
%
Interest income (expense), net
(101
)
(1
)%
(160
)
(2
)%
(160
)
(3
)%
Other non-operating income (expense), net
(103
)
(1
)%
54
1
%
(16
)
—
%
Income tax (provision) benefit
(203
)
(2
)%
19
—
%
(
1
)
—
%
Equity in net income (loss) of equity method investees
(158
)
(2
)%
(39
)
—
%
(
140
)
(3
)%
Net (income) loss attributable to noncontrolling interests
(23
)
—
%
(
50
)
(1
)%
111
2
%
Net income (loss) attributable to Micron
$
167
2
%
$
1,850
22
%
$
(1,882
)
(39
)%
2011
2010
2009
DSG
$
3,203
36
%
$
4,638
55
%
$
2,100
44
%
NSG
2,196
25
%
2,113
25
%
1,747
36
%
WSG
1,959
22
%
778
9
%
247
5
%
ESG
1,002
11
%
521
6
%
178
4
%
All Other
428
6
%
432
5
%
531
11
%
$
8,788
100
%
$
8,482
100
%
$
4,803
100
%