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30
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
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 "Operating
Expenses and Other" regarding SG&A and R&D expenses for the first quarter of 2015 and future Restructure and Asset
Impairment costs; and in "Liquidity and Capital Resources" regarding our pursuit of additional financing and debt
restructuring, regarding the use of cash on hand to fund any repurchases of common stock, regarding the sufficiency of our
cash and investments, cash flows from operations and available financing to meet our requirements for at least the next 12
months, regarding capital spending in 2015 and regarding the timing of payments for certain contractual obligations. 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 "Part I, Item 1A. Risk
Factors." This discussion should be read in conjunction with the consolidated financial statements and accompanying notes
for the year ended August 28, 2014. 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 2014, 2013 and 2012 each contained 52
weeks. Our fiscal 2015 will contain 53 weeks and the first quarter of fiscal 2015 will contain 14 weeks. All production data
includes the production of IMFT and Inotera. All tabular dollar amounts are in millions.
Our Management's Discussion and Analysis ("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.
• Off-Balance Sheet Arrangements: Description of off-balance sheet arrangements.
• 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.
Overview
For an overview of our business, see "Item 1 – Business – Overview." Our results of operations for 2014 were affected by
the following key transaction.
Acquisition of Micron Memory Japan, Inc.
On July 31, 2013, we completed the MMJ Acquisition, in which we acquired Elpida, now known as MMJ, and a
controlling interest in Rexchip, now known as MMT. In 2014, we purchased additional interests in MMT, increasing our
ownership interest to 99.5%. In connection with the MMJ Acquisition, we recorded net assets of $2.60 billion, noncontrolling
interests of $168 million and a gain on the transaction of $1.48 billion in 2013. In the second quarter of 2014, the provisional
amounts recorded in connection with the MMJ Acquisition were adjusted, primarily for pre-petition liabilities. As a result,
other non-operating expense for 2014 included these measurement period adjustments of $33 million. (See "Item 8. Financial
Statements – Notes to Consolidated Financial Statements – Micron Memory Japan, Inc." note.)
The MMJ Acquisition included a 300mm DRAM wafer fabrication facility located in Hiroshima, Japan, a 300mm DRAM
wafer fabrication facility in Taichung City, Taiwan and an assembly and test facility located in Akita, Japan. These wafer
fabrication facilities together represented approximately 30% of our total wafer capacity for 2014. The MMJ Group's products
include mobile DRAM targeted to mobile phones and tablets, and computing DRAM targeted to desktop PCs, servers,
notebooks and workstations. The operations from the MMJ Acquisition are included primarily in the MBU and CNBU
segments.