Crucial 2013 Annual Report Download - page 39

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In the second quarter of 2013, we reclassified (gains) losses from changes in currency exchange rates from other operating
(income) expense, net to other non-operating income (expense), net in the consolidated statements of income. As a result,
segment operating income (loss) for the comparative periods presented no longer includes the (gains) losses from changes in
currency exchange rates to conform to current period presentation. (See "Item 8. Financial Statements and Supplementary
Data – Notes to Consolidated Financial Statements – Business and Basis of Presentation" and "Segment Information".)
Net Sales
For the year ended 2013 2012 2011
DSG $ 3,519 39% $ 2,691 33% $ 3,203 36%
NSG 2,841 31% 2,853 35% 2,196 25%
WSG 1,221 13% 1,184 14% 1,959 22%
ESG 1,194 13% 1,054 13% 1,002 11%
All Other 298 4% 452 5% 428 6%
$ 9,073 100% $ 8,234 100% $ 8,788 100%
Total net sales for 2013 increased 10% as compared to 2012 reflecting increases in DSG, ESG and WSG sales primarily
due to higher levels of DRAM and NAND Flash gigabit sales volumes partially offset by declines in average selling prices.
The increases in gigabit sales volumes for 2013 were primarily attributable to manufacturing efficiencies driven by
improvements in product and process technology, increased DRAM supply from Inotera due to the restructuring of our supply
agreement and $355 million of DRAM sales from Elpida since its acquisition on July 31, 2013.
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.
Sales for All Other segments, were primarily composed of sales of CMOS image sensors. On May 3, 2013, we sold
Micron Technology Italia, S.r.l., ("MIT") a wholly-owned subsidiary, including its 200mm wafer fabrication facility assets in
Avezzano, Italy, to LFoundry Marsica S.r.l. ("LFoundry"). In connection with the sale, we assigned to LFoundry our supply
agreement with Aptina Imaging Corporation ("Aptina") for CMOS image sensors manufactured at the Avezzano facility. Since
the sale, we have had no sales of CMOS image sensors. For 2013, 2012 and 2011, we recognized net sales of $182 million,
$372 million and $349 million, respectively, from products sold to Aptina, and cost of goods sold of $219 million, $395 million
and $358 million, respectively. (See "Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial
Statements – Restructure and Asset Impairments.")
Gross Margin
Our overall gross margin percentage improved to 20% for 2013 from 12% for 2012 due to improvements in the gross
margin percentage for DSG, and to a lesser extent WSG, ESG and NSG primarily due to manufacturing cost reductions
partially offset by declines in average selling prices. Manufacturing cost reductions for 2013 primarily resulted from
improvements in product and process technologies.
Our overall gross margin percentage declined to 12% for 2012 from 20% for 2011 primarily due to decreases in the gross
margin percentage for DSG and WSG as a result of significant declines in average selling prices. Cost reductions from
improvements in product and process technologies in 2012 mitigated the effect of significant declines in average selling prices
for all reportable operating segments.