Micron Technology, Inc. · NASDAQ:MU
Micron Technology — Q2 2017 Earnings Presentation
24 slides from Micron Technology's earnings presentation, Mar 23, 2017
Slide 1: Financial Results Second Quarter Fiscal 2017
Financial Results Second Quarter Fiscal 2017 ©2017 Micron Technology, Inc.All rights reserved. Information, products, and/or specifications are subject to change without notice. All information is provided on an “ASIS" basis without warranties of any kind. Statements regarding products, including re
Slide 2: Safe Harbor Statement
Safe Harbor Statement During the course of this meeting, we may make projections or other forward-looking statements regarding future events or the future financial performance of the Company and the industry. We wish to caution you that such statements are predictions and that actual events or resu
Slide 3: Mark Durcan, Chief Executive Officer
Mark Durcan Chief Executive Officer d4icron
Slide 4: FQ2 2017 Summary
FQ2 2017 Summary = Revenue of $4.65 billion = GAAP results ~Gross margin of 36.7% ~Net income of $894 million ~ Diluted earnings per share of $0.77 = Non-GAAP results ~Gross margin of 38.5% ~Net income of $1.03 billion ~ Diluted earnings per share of $0.90 = Operating cash flow of $1.77 billion dAic
Slide 5: Business Unit Update
Compute & Networking Mobile Embedded Storage Business Unit Update Revenue growth driven by strength across all market segments Began enablement of 1Xnm products Extended graphics technology leadership with next-generation GDDR5X Broad market tightness resulted in increased ASPs Continued focus on MC
Slide 6: Technology Transitions
Technology Transitions = Driving deployment of 1Xnm DRAM ~ Meaningful output expected by end of FY-17 = Proliferating 32-layer 3D NAND throughout product lines = Driving deployment of 64-layer 3D NAND ~ Meaningful output expected by end of FY-17 ~ CMOS circuitry under the array to enable industry's
Slide 7: Ernie Maddock, Chief Financial Officer
~ Ernie Maddock Chief Financial Officer d4icron
Slide 8: DRAM
DRAM REPRESENTED 64% OF MICRON TOTAL REVENUE IN FQ2-17 = Mobile was in the high-20% range = PC represented 25% = Server was 25%, up from high-teens the prior quarter = Specialty DRAM, which includes networking, graphics, automotive and other embedded technologies, was in the low-20s % range dAicron:
Slide 9: Trade Non-Volatile
Trade Non-Volatile REPRESENTED 30% OF MICRON TOTAL REVENUE IN FQ2-17 = Consumer, which includes memory cards, USB and components, represented approximately 40% = Mobile was 20% * Asareminder, eMCPs are primarily in the Mobile segment = SSDs were in the mid-20s % range, up from mid-teens in FQ1-17 »
Slide 10: Compute and Networking Business Unit (CNBU)
Compute and Networking Business Unit (CNBU) FQ2-17 FQU-17 Revenue $1.92B $1.47B sie () oO % of total company revenue 41% 37% A =; Non-GAAP operating income $736M $204M Non-GAAP operating income % 38.4% 13.9% = Revenue up 30% Q/Q due to strong demand and robust pricing * Operating income improvement
Slide 11: Mobile Business Unit (MBU)
Mobile Business Unit (MBU) FQ2-17 FQI-17 Revenue $1.08B $1.03B 0 QO (S) 23% 26% % of total company revenue Non-GAAP operating income $170M $89M Non-GAAP operating income % 15.7% 8.6% = Revenue up 5% Q/Q driven by a stronger pricing environment * Operating income improvement Q/Q enhanced by reduced c
Slide 12: Embedded Business Unit (EBU)
Embedded Business Unit (EBU) FQ2-17 FQU-17 Revenue $590M $578M AA y 4 % of total company revenue 13% 15% fa) l l l Non-GAAP operating income $193M $178M Non-GAAP operating income % 32.7% 30.8% = Revenue up 2% Q/Q ~Increased Automotive product unit shipments ~Increased ASPs of DDR3 and NAND in Consum
Slide 13: Storage Business Unit (SBU)
Storage Business Unit (SBU) FQ2-17 FQU-17 Revenue $1.04B $860M — = % of total company revenue 22% 22% [J = — Non-GAAP operating income/(loss) $71M ($45M) Non-GAAP operating income/(loss) % 6.8% (5.2%) = Revenue up 21% Q/Q, driven by Client and Cloud SSD shipments " Operating income improvement Q/Q e
Slide 14: Non-GAAP
NON-GAAP Dollars in millions, except per share FQ2-17 % of FQ1-17 % of Sales Sales Net sales $4,648 100% $3,970 100% Gross margin 1,789 38% 1,032 26% Operating income 1177 25% 438 11% Income tax (provision) benefit (31) (18) Net income attributable to Micron shareholders 1,031 22% 335 8% Diluted ear
Slide 15: FQ3 2017 Guidance
FQ3 2017 Guidance NON-GAAP Revenue $5.20- $5.60 billion Gross margin 44% - 48% Operating expenses $560- $610 million Operating income $1.8 - $2.0 billion Diluted EPS* $1.43 - $1.57 * Based on 1,155 million diluted shares
Slide 16: Questions
QD ox d&4icron
Slide 17: Non-GAAP Reconciliations
Non-GAAP Reconciliations
Slide 18: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION xcept per share amounts GAAP net income attributable to Micron Non-GAAP adjustments: Flow-through of Inotera inventory step up 60 = Stock-based compensation 55 46 Inotera acquisition costs 12 1 Restructure and asset impairments 4 45 Amortization of debt discount and other cos
Slide 19: Consolidated Statement of Operations
Consolidated Statement of Operations FQ2 2017 NON-GAAP RECONCILIATION Amounts in ions GAAP Adjustments Net sales $ 4,648 $ = Cost of goods sold 2,944 (85) A,B,H 2,859 Gross margin 1,704 85 1,789 Selling, general and administrative 187 (30) B,C 157 Research and development 473 (14) B 459 Restructure
Slide 20: Consolidated Statement of Operations (Continued)
Consolidated Statement of Operations FQ2 2017 NON-GAAP RECONCILIATION (CONTINUED) Amouni ns A Flow-through of Inotera inventory step up $ 60 B_ Stock-based compensation 55 C__Inotera acquisition costs a2 D__ Restructure and asset impairments 4 E Amortization of debt discount and other costs Bll F (G
Slide 21: Summary Key Data
Summary Key Data
Slide 22: Non-GAAP Financial Data and Guidance
Non-GAAP Financial Data and Guidance DRAM 64% Non-Volatile* 30% Revenue $ 4648 $5.20- $5.60 billion Gross Margin 38% 44% - 48% DEAR 3 Operating expenses $612 $560 $610 million Non-Volatile* ce Operating income $ 4177 $18 - $20 billion Earnings per share $090 $143- $157 DRAM 21% pense | Net interest
Slide 23: Convertible Notes Dilution Overview
Convertible Notes Dilution Overview FQ2 2017 (Shares in millions) Stock Price $20 $21 $22 $23, $24 $25 $26 $27 $28 $29 $30 2032 C Notes 12 13 13 14 14 14.15 15 15 16 16 2032 D Notes 9 9 10 10 10 1 dt ll lL 12 12 2033 E Notes 7 8 8 8 9 9 9 10 aT) 10 10 2033 F Notes 12 13 4 14 15 is..16 16 7, 7 v7, 20
Slide 24: Micron
Micron