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Micron Technology, Inc., Reports Results For The Fourth Quarter Of Fiscal 2013

Revenues from sales of DRAM products in the fourth quarter of fiscal 2013 were 50 percent higher compared to the third quarter due to a 42 percent increase in sales volume and a 5 percent increase in average selling prices. Revenues from sales of NAND Flash products were 5 percent higher in the fourth quarter of fiscal 2013 compared to the third quarter primarily due to a 17 percent increase in sales volume offset by an 11 percent decrease in average selling prices.

The company's consolidated gross margin improved to 25 percent in the fourth quarter of fiscal 2013 compared to 24 percent in the third quarter of fiscal 2013. Gross margins for DRAM benefitted from the improved average selling prices. Gross margins for NAND Flash products were unchanged as an 11 percent improvement in manufacturing costs was offset by the decrease in average selling prices.

Cash flows from operations for the fourth quarter of fiscal 2013 were $717 million, while investments in capital expenditures were $332 million. The company ended the fourth fiscal quarter with cash and investments of $4.2 billion, which includes $556 million, reflected as current restricted cash, set aside for payment of the first Elpida creditor installment.

The company will host a conference call Thursday, October 10 at 2:30 p.m. MDT to discuss its financial results. The call, audio and slides will be available online at http://investors.micron.com/events.cfm . A webcast replay will be available on the company's website until October 17, 2014. A taped audio replay of the conference call will also be available at 1-404-537-3406 or 1-855-859-2056 (conference number: 71010239) beginning at 5:30 p.m. MDT, Thursday, October 10, 2013 and continuing until 5:30 p.m. MDT, Thursday, October 17, 2013.

Micron Technology, Inc., is one of the world's leading providers of advanced semiconductor solutions. Through its worldwide operations, Micron manufactures and markets a full range of DRAM, NAND Flash and NOR Flash memory, as well as other innovative memory technologies, packaging solutions and semiconductor systems for use in leading-edge computing, consumer, networking, embedded and mobile products. Micron's common stock is traded on the NASDAQ under the MU symbol. To learn more about Micron Technology, Inc., visit www.micron.com .  

         
MICRON TECHNOLOGY, INC.  CONSOLIDATED FINANCIAL SUMMARY  (in millions except per share amounts)        
         
   4th Qtr. 3rd Qtr.  4th Qtr.   Year Ended
  Aug. 29, May 30, Aug. 30, Aug. 29, Aug. 30,
  2013 2013 2012 2013 2012
Net sales $ 2,843 $ 2,318 $ 1,963 $ 9,073 $ 8,234
Cost of goods sold  2,135  1,762  1,744  7,226  7,266
Gross margin  708  556  219  1,847  968
Selling, general and administrative  193  127  139  562  620
Research and development   267  226  235  931  918
Restructure and asset impairments (1)  32  55  (1)  126  10
Other operating (income) expense, net (2)  9  (1)  (5)  (8)  32
Operating income (loss)  207  149  (149)  236  (612)
Interest income (expense), net  (58)  (52)  (52)  (217)  (171)
Gain on acquisition of Elpida (3)  1,484  --  --  1,484  --
Other non-operating income (expense), net (4)  45  (45)  5  (218)  29
Income tax (provision) benefit (5)  (5)  1  (14)  (8)  17
Equity in net income (losses) of equity method investees 37  (10)  (32)  (83)  (294)
Net income attributable to noncontrolling interests  (2) -- (1)  (4)  (1)
Net income (loss) attributable to Micron $ 1,708 $ 43 $ (243) $ 1,190 $ (1,032)
           
Earnings (loss) per share:          
Basic $ 1.65 $ 0.04 $ (0.24) $ 1.16 $ (1.04)
Diluted  1.51  0.04  (0.24)  1.13  (1.04)
           
Number of shares used in per share calculations:          
 Basic  1,033.2  1,024.0  1,013.1  1,021.7  991.2
 Diluted  1,129.4  1,046.6  1,013.1  1,056.3  991.2
   
CONSOLIDATED FINANCIAL SUMMARY, Continued  
       
  As of
  Aug. 29, May 30, Aug. 30,
  2013 2013 2012
Cash and short-term investments $ 3,101 $ 2,552 $ 2,559
Receivables 2,329 1,503 1,289
Inventories 2,649 1,732 1,812
Current restricted cash 556 -- --
Total current assets 8,911 5,886 5,758
Long-term marketable investments 499 347 374
Property, plant and equipment, net 7,626 6,830 7,103
Total assets 19,118 14,055 14,328
       
Accounts payable and accrued expenses 2,115 1,590 1,641
Current portion of long-term debt 1,585 357 224
Total current liabilities 4,125 2,342 2,243
Long-term debt (6) 4,452 3,267 3,038
       
Total Micron shareholders' equity 9,142 7,328 7,700
Noncontrolling interests in subsidiaries 864 698 717
Total equity (6) 10,006 8,026 8,417
       
  Year Ended  
  Aug. 29, Aug. 30,  
  2013 2012  
Net cash provided by operating activities $ 1,811 $ 2,114  
Net cash used for investing activities (1,712) (2,312)  
Net cash provided by financing activities 322 497  
       
Depreciation and amortization 1,926 2,222  
Expenditures for property, plant and equipment (1,244) (1,699)  
Payments on equipment purchase contracts (214) (172)  
Net contributions from (distributions to/acquisitions of) noncontrolling interests (26) (660)  
       
Noncash equipment acquisitions on contracts payable and capital leases 443 897

(1)   Restructure and asset impairments consisted of the following:

   4th Qtr. 3rd Qtr.  4th Qtr. Year Ended
   Aug. 29 ,  May 30 ,  Aug. 30 ,  Aug. 29,  Aug. 30,
  2013 2013 2012 2013 2012
Loss from global workforce reduction $ 17 $ -- $ -- $ 17 $ --
Loss on impairment of Israel assets  14  --  --  14  --
Loss on impairment of LED assets  4  25  --  33  --
Loss on restructure of consortium agreement  --  26  --  26  --
Loss on impairment of MIT assets  --  --  --  62  --
Gain on termination of Transform lease  --  --  --  (25)  --
Other  (3)  4  (1)  (1)  10
  $ 32 $ 55 $ (1) $ 126 $ 10

In order to optimize operations, improve efficiency and increase focus on the company's core memory operations, the company has initiated various restructure activities. In the fourth quarter of fiscal 2013, the company incurred charges in connection with a global workforce reduction. Separately, the company wrote down the value of certain assets in connection with its plans to discontinue 200mm production in Israel and exit the facility. In the third quarter of fiscal 2013, the company discontinued the development activities of its Light-emitting Diode ("LED") operations. In connection therewith, the company recognized a charge of $25 million primarily to write down certain production assets used in the development of LED technology. In the third quarter of fiscal 2013, the company also restructured a consortium agreement, which provides R&D and manufacturing activities to the company, with STMicroelectronics S.r.l. ("ST") whereby certain assets and approximately 500 employees from the company's Agrate, Italy fabrication facility were transferred to ST. In connection therewith, the company recognized a charge of $26 million in the third quarter of fiscal 2013. In the second quarter of fiscal 2013, the company entered into an agreement to sell Micron Technology Italia, S.r.l. ("MIT"), a wholly-owned subsidiary, including its 200 millimeter wafer fabrication facility assets in Avezzano, Italy, to LFoundry Marsica S.r.l. ("LFoundry"). The transaction closed in the third quarter of fiscal 2013. In exchange for the shares of MIT, the company received a long-term note from LFoundry. Under the terms of the agreements, the company assigned to LFoundry its supply agreement with Aptina Imaging Corporation ("Aptina") for CMOS image sensors manufactured at the Avezzano facility. The assets and liabilities of MIT were written down to their estimated fair values and, as a result, the company recorded an impairment loss of $62 million in the second quarter of fiscal 2013.

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