Crucial 2015 Annual Report Download - page 31

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29
Operating Results by Business Segments
CNBU
For the year ended 2015 2014 2013
Net sales $ 6,725 $ 7,333 $ 3,462
Operating income 1,481 1,957 160
CNBU sales and operating results are significantly impacted by average selling prices, gigabit sales volumes, and cost per
gigabit of our DRAM products. (See "Operating Results by Product – DRAM" for further detail.) CNBU sales for 2015
decreased 8% as compared to 2014 primarily due to declines in average selling prices as a result of continued weakness in the
PC sector, partially offset by increases in gigabits sold. CNBU operating income for 2015 declined from 2014 as decreases in
average selling prices outpaced manufacturing cost reductions.
CNBU sales for 2014 increased 112% as compared to 2013 primarily due to (1) the MMJ Acquisition, (2) higher average
selling prices, (3) increased DRAM supply from Inotera as a result of the restructuring of our supply agreement, and (4) higher
output due to improvements in product and process technologies. CNBU sales for 2014 as compared to 2013 were adversely
impacted by the transition of production at one of our Singapore wafer fabrication facilities from DRAM to NAND Flash.
CNBU operating income for 2014 improved from 2013 primarily due to the MMJ Acquisition, higher average selling prices,
and manufacturing cost reductions.
MBU
For the year ended 2015 2014 2013
Net sales $ 3,692 $ 3,627 $ 1,214
Operating income (loss) 1,126 683 (265)
In 2015 and 2014, MBU sales were comprised primarily of DRAM, NAND Flash, and NOR Flash, in decreasing order of
revenue, with mobile DRAM products accounting for a significant majority of the sales. MBU sales for 2015 increased 2% as
compared to 2014 primarily due to significant increases in gigabit sales volumes for managed NAND Flash and MCP products
partially offset by lower sales of mobile DRAM products as a result of declines in average selling prices and sales volumes.
MBU operating income for 2015 improved from 2014 as manufacturing cost reductions outpaced declines in average selling
prices.
MBU sales for 2014 increased 199% as compared to 2013 primarily due to significant increases in mobile DRAM sales
as a result of the MMJ Acquisition. MBU operating margin for 2014 also improved from 2013 primarily due to the MMJ
Acquisition and manufacturing cost reductions, which significantly outpaced declines in average selling prices.
SBU
For the year ended 2015 2014 2013
Net sales $ 3,687 $ 3,480 $ 2,824
Operating income (loss) (89) 255 173
SBU sales and operating results are significantly impacted by average selling prices, gigabit sales volumes, and cost per
gigabit of our NAND Flash products. (See "Operating Results by Product – Non-Volatile Memory" for further details.) SBU
sales for 2015 increased 6% from 2014 primarily due to increases in gigabits sold partially offset by declines in average selling
prices. SBU sells a portion of its products to Intel through our IMFT joint venture at long-term negotiated prices
approximating cost. SBU sales of products to Intel under this arrangement were $420 million, $423 million, and $387 million
for 2015, 2014, and 2013, respectively. All other SBU products are sold to OEMs, resellers, retailers, and other customers
(including Intel), which we collectively refer to as "trade customers."