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27
Results of Operations
Consolidated Results
For the year ended 2015 2014 2013
Net sales $16,192 100 % $16,358 100 % $ 9,073 100 %
Cost of goods sold 10,977 68 % 10,921 67 % 7,226 80 %
Gross margin 5,215 32 % 5,437 33 % 1,847 20 %
Selling, general and administrative 719 4 % 707 4 % 562 6 %
Research and development 1,540 10 % 1,371 8 % 931 10 %
Restructure and asset impairments 3 — % 40 — % 126 1 %
Other operating (income) expense, net (45) — % 232 1 % (8) — %
Operating income 2,998 19 % 3,087 19 % 236 3 %
Interest income (expense), net (336) (2)% (329) (2)% (217) (2)%
Gain on MMJ Acquisition — — % (33) — % 1,484 16 %
Other non-operating income (expense), net (53) — % 8 — % (218) (2)%
Income tax (provision) benefit (157) (1)% (128) (1)% (8) — %
Equity in net income (loss) of equity method investees 447 3 % 474 3 % (83) (1)%
Net income attributable to noncontrolling interests — — % (34) — % (4) — %
Net income attributable to Micron $ 2,899 18 % $ 3,045 19 % $ 1,190 13 %
Business Segments
We have the following four business units, which are our reportable segments:
Compute and Networking Business Unit ("CNBU"): Includes memory products sold into compute, networking, graphics,
and cloud server markets.
Mobile Business Unit ("MBU"): Includes memory products sold into smartphone, tablet, and other mobile-device markets.
Storage Business Unit ("SBU"): Includes memory products sold into enterprise, client, cloud, and removable storage
markets. SBU also includes products sold to Intel through our IMFT joint venture.
Embedded Business Unit ("EBU"): Includes memory products sold into automotive, industrial, connected home, and
consumer electronics markets.
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.")
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 2015. 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.