Crucial 2012 Annual Report Download - page 29

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
As used herein, "we," "our," "us" and similar terms include Micron Technology, Inc. and its subsidiaries, unless the context
indicates otherwise. The following discussion contains trend information and other forward-looking statements that involve a
number of risks and uncertainties. Forward-looking statements include, but are not limited to, statements such as those made
in "Overview" regarding timing of the close of the Elpida transactions and expectations related to Elpida's future cash flows;
"Operating Results by Business Segment" regarding growth in NAND Flash production for 2013; in "Operating Results by
Product" regarding our share of future output from Inotera; in "Selling, General and Administrative" regarding SG&A costs for
the first quarter of 2013; in "Research and Development" regarding R&D costs for the first quarter of 2013; and in "Liquidity
and Capital Resources" regarding the sufficiency of our cash and investments, cash flows from operations and available
financing to meet our requirements at least through 2013 and regarding our pursuit of additional financing, capital spending in
2013, the timing of payments for certain contractual obligations and the timing of payments in connection with the Elpida
transactions. Our actual results could differ materially from our historical results and those discussed in the forward-looking
statements. Factors that could cause actual results to differ materially include, but are not limited to, those identified in "Item
1A. Risk Factors." This discussion should be read in conjunction with the Consolidated Financial Statements and
accompanying notes for the year ended August 30, 2012. All period references are to our fiscal periods unless otherwise
indicated. Our fiscal year is the 52 or 53-week period ending on the Thursday closest to August 31 and fiscal 2012, 2011 and
2010 each contained 52 weeks. All production data includes the production of our consolidated joint ventures and our other
partnering arrangements. All tabular dollar amounts are in millions.
Our Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is provided in
addition to the accompanying consolidated financial statements and notes to assist readers in understanding our results of
operations, financial condition and cash flows. MD&A is organized as follows:
• Overview: Highlights of key transactions and events.
• Results of Operations: An analysis of our financial results consisting of the following:
Consolidated results;
Operating results by business segment;
Operating results by product; and
Operating expenses and other.
• Liquidity and Capital Resources: An analysis of changes in our balance sheet and cash flows and discussion of our
financial condition and potential sources of liquidity.
• Critical Accounting Estimates: Accounting estimates that we believe are most important to understanding the
assumptions and judgments incorporated in our reported financial results and forecasts. Also includes changes in
accounting standards.
Overview
For an overview of our business, see "Item 1 – Business – Overview." Our results of operations for 2012 were impacted
by the following key transactions and events.
IM Flash Joint Ventures
On April 6, 2012, we entered into a series of agreements with Intel to restructure IM Flash. We acquired Intel's remaining
18% interest in IMFS for $466 million. In addition, we acquired IMFT's assets located at our Virginia wafer fabrication
facility, for which Intel received a distribution from IMFT of $139 million. For both transactions, the amounts Intel received
approximated the book values of Intel's interests in the assets acquired. Additionally, we received a $300 million deposit from
Intel which will be applied to Intel's future purchases of NAND Flash under a supply agreement or, under certain
circumstances, refunded.
The agreements also provided for the following:
• expansion of the scope of the IMFT joint venture to include certain emerging memory technologies;
• supply of NAND Flash memory products and certain emerging memory products to Intel on a cost-plus basis and
termination of IMFS's supply agreement with us and Intel;
• extension of IMFT's joint venture agreement through 2024;