Micron Technology, Inc. · NASDAQ:MU
Micron Technology — Q3 FY2017 Earnings Presentation
24 slides from Micron Technology's earnings presentation, Jun 29, 2017
Slide 1: Financial Results Third Quarter Fiscal 2017
Financial Results Third Quarter Fiscal 2017 (©2017 Micron Technology, Inc. All rights reserved. Information, products, andlor specifications are subjed to change withoutnotice. All information is provided on an“AS IS" basis withoutwarranties of any kind. ‘Statements regarding products, including reg
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 res
Slide 3: Sanjay Mehrotra, President and CEO
Sania Mehretra President and CEO
Slide 4: Business Unit Update
4 Business Unit Update Compute & Networking Embedded Storage June 29, 2017 Revenue from Cloud customers 4 times higher Y/Y Increased Enterprise demand from analytics workloads Successfully ramped GDDR65X to high-volume production Planning to introduce nearly 20 new 1x designs in next 12 months Devel
Slide 5: Technology and Industry Outlook
Technology and Industry Outlook = Ramping 64-layer 3D NAND and 1x DRAM and technologies = Expect to achieve meaningful output by end of FY-17 = Initial revenue shipments recognized = Progressing development of 3" generation 3D NAND and 1y DRAM = 3" generation 3D NAND will be based on CMOS Under Arra
Slide 6: Ernie Maddock, SVP and CFO
Ernie Maddock SVP and CFO
Slide 7: DRAM
DRAM Represented 64% of Micron Total Revenue in FQ3-17 = Mobile was in the mid-20% range = PC was in the low-20% range, down from the prior quarter = Server was approximately 30%, up from 25% the prior quarter = Specialty DRAM was in the mid-20% range — Includes Networking, Graphics, Automotive and
Slide 8: Trade NAND
Trade NAND Represented 31% of Micron Total Revenue in FQ3-17 = Consumer represented approximately 40% — Consists primarily of component sales to partners and customers = Mobile was in the mid-teens % range — Includes managed NAND solutions and the majority of our MCPs = SSDs were in the mid-20% rang
Slide 9: Compute & Networking Business Unit
Compute & Networking Business Unit Revenue $2.39B $1.92B % of total company revenue 43% 41% CNBU Non-GAAP operating income $1.22B $736M Non-GAAP operating income % 51.0% 38.4% = Increased DRAM content per server drove Enterprise revenue growth = Recognized initial 1x DRAM revenue = Double-digit reve
Slide 10: Mobile Business Unit
Mobile Business Unit FQ3-17 FQ2-17 Revenue $1.13B $1.08B % of total company revenue 20% 23% Non-GAAP operating income $304M $170M Non-GAAP operating income % 26.9% 15.7% = Revenue up 4% Q/Q, primarily driven by stronger pricing ® Significant margin expansion Q/Q, reflecting transition to 20nm LPDRAM
Slide 11: Embedded Business Unit
Embedded Business Unit Revenue $700M $590M % of total company revenue 13% 13% Non-GAAP operating income $256M $193M Non-GAAP operating income % 36.6% 32.7% = Strong bit demand and pricing strength in DRAM = Record shipments of SLC and MLC NAND in Consumer/Connected Home = Record shipments of DRAM to
Slide 12: Storage Business Unit
Storage Business Unit FQ3-17 FQ2-17 Revenue $1.32B $1.04B % of total company revenue 24% 22% Non-GAAP operating income $276M $71M Non-GAAP operating income % 21.0% 6.8% = Revenue up 26% Q/Q on strong SSD growth = SSD sales to Cloud customers doubled Q/Q = Continue to increase sales of our TLC 3D NAN
Slide 13: FQ3 2017 Summary
FQ3 2017 Summary = Revenue of $5.57 billion = GAAP results — Gross margin of 46.9% — Net income of $1.65 billion — Diluted earnings per share of $1.40 = Non-GAAP results — Gross margin of 48.0% — Net income of $1.90 billion — Diluted earnings per share of $1.62 = Operating cash flow of $2.41 billion
Slide 14: Financial Summary
Financial Summary Non-GAAP Net sales $5,566 100% $4,648 100% Gross margin 2,671 48% 1,789 38% Operating income 2,071 37% 1,177 25% Income tax (provision) benefit (64) (31) Net income attributable to Micron shareholders 1,896 34% 1,031 22% Diluted earnings per share 62 0.90 Cash provided by operating
Slide 15: FQ4 2017 Guidance
FQ4 2017 Guidance Non-GAAP a Revenue $5.70 — $6.10 billion Gross margin 47% — 51% Operating expenses $575 — $625 million Operating income $2.20 — $2.40 billion Diluted EPS* $1.73 — $1.87 *Based on 1,179 million diluted shares 18 June29, 2017 daicron
Slide 16: Q&A
Q&A
Slide 17: Non-GAAP Reconciliations
Non-GAAP Reconciliations
Slide 18: Consolidated Results
18 Consolidated Results Non-GAAP Reconciliation /Amount: millions, except per share amounts GAAP net income attributable to Micron Non-GAAP adjustments: Flow-through of Inotera inventory step up Stock-based compensation Inotera acquisition costs Restructure and asset impairments Amortization of debt
Slide 19: Consolidated Statement of Operations
19 Consolidated Statement of Operations FQ3 2017 Non-GAAP Reconciliation Amounts GAAP Net sales $ 5,566 Cost of goods sold 2957 Gross margin 2,609 Selling, general, and administrative 204 (20) ¢ 184 Research and development 434 (144) DI 420 Restructure and asset impairments 12 (12) £ = Other operati
Slide 20: Consolidated Statement of Operations (continued)
20 Consolidated Statement of Operations FQ3 2017 Non-GAAP Reconciliation (continued) Amounts in millions Flow-through of Inotera inventory step up Stock-based compensation — cost of goods sold ‘Stock-based compensation ~ sales, general, and administrative Stock-based compensation — research and deve
Slide 21: Summary Key Data
Summary Key Data
Slide 22: Non-GAAP Financial Data and Guidance
Non-GAAP Financial Data and Guidance FQ3-17 Non-GAAP (amounts in millions, FQ4-17 Non-GAAP Guidance DRAM 64% except per share) ‘Trade NAND* 31% Revenue $5,566 $5.70 — $6.10 billion Gi 48% 41% — 51% Sales Bit Growth QiQ FQ3-17 ee BAU = Operating expenses $600 $575 — $625 million nn a Operating income
Slide 23: Convertible Notes Dilution Overview
Convertible Notes Dilution Overview FQ3 2017 (shares in millions) Stock Price $25 $26 $27 $28 $29 $30 $31 $32 $33 $34 $35 2032 C Notes 14 15 15 15 16 16 16 16 16 17 17 2032 D Notes 11 11 11 11 12 12 12 12 12 13 13 2033 E Notes 9 9 9 10 10 10 10 10 11 11 11 “2033FNotes = ——S—=<“<~S~s*‘“‘“‘<‘wSSCGS~“<
Slide 24: Micron
Micron