(Mark
One)
|
|
x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
□
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
Delaware
|
75-1618004
|
(State
or other jurisdiction of
|
(IRS
Employer
|
incorporation
or organization)
|
Identification
No.)
|
8000
S. Federal Way, Boise, Idaho
|
83716-9632
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Registrant’s
telephone number, including area code
|
(208)
368-4000
|
Large
Accelerated Filer x
|
Accelerated
Filer ¨
|
Non-Accelerated
Filer ¨
|
Quarter
ended
|
Six
months ended
|
||||||||||||
March
1,
2007
|
March
2,
2006
|
March
1,
2007
|
March
2,
2006
|
||||||||||
Net
sales
|
$
|
1,427
|
$
|
1,225
|
$
|
2,957
|
$
|
2,587
|
|||||
Cost
of goods sold
|
1,070
|
989
|
2,158
|
2,040
|
|||||||||
Gross
margin
|
357
|
236
|
799
|
547
|
|||||||||
Selling,
general and administrative
|
153
|
108
|
333
|
203
|
|||||||||
Research
and development
|
243
|
159
|
426
|
325
|
|||||||||
Other
operating (income), net
|
(5
|
)
|
(219
|
)
|
(36
|
)
|
(231
|
)
|
|||||
Operating
income (loss)
|
(34
|
)
|
188
|
76
|
250
|
||||||||
Interest
income
|
35
|
20
|
76
|
31
|
|||||||||
Interest
expense
|
(4
|
)
|
(7
|
)
|
(5
|
)
|
(18
|
)
|
|||||
Other
non-operating income (expense), net
|
5
|
(1
|
)
|
8
|
--
|
||||||||
Income
before taxes and noncontrolling interests
|
2
|
200
|
155
|
263
|
|||||||||
Income
tax (provision)
|
(6
|
)
|
(7
|
)
|
(15
|
)
|
(7
|
)
|
|||||
Noncontrolling
interests in net income
|
(48
|
)
|
--
|
(77
|
)
|
--
|
|||||||
Net
income (loss)
|
$
|
(52
|
)
|
$
|
193
|
$
|
63
|
$
|
256
|
||||
Earnings
(loss) per share:
|
|||||||||||||
Basic
|
$
|
(0.07
|
)
|
$
|
0.29
|
$
|
0.08
|
$
|
0.39
|
||||
Diluted
|
(0.07
|
)
|
0.27
|
0.08
|
0.37
|
||||||||
Number
of shares used in per share calculations:
|
|||||||||||||
Basic
|
768.7
|
661.5
|
767.9
|
655.8
|
|||||||||
Diluted
|
768.7
|
714.6
|
776.3
|
710.6
|
|||||||||
As
of
|
March
1,
2007
|
August
31,
2006
|
|||||
Assets
|
|||||||
Cash
and equivalents
|
$
|
1,566
|
$
|
1,431
|
|||
Short-term
investments
|
627
|
1,648
|
|||||
Receivables
|
943
|
956
|
|||||
Inventories
|
1,293
|
963
|
|||||
Prepaid
expenses
|
74
|
77
|
|||||
Deferred
income taxes
|
25
|
26
|
|||||
Total
current assets
|
4,528
|
5,101
|
|||||
Intangible
assets, net
|
416
|
388
|
|||||
Property,
plant and equipment, net
|
7,593
|
5,888
|
|||||
Deferred
income taxes
|
59
|
49
|
|||||
Goodwill
|
522
|
502
|
|||||
Other
assets
|
258
|
293
|
|||||
Total
assets
|
$
|
13,376
|
$
|
12,221
|
|||
Liabilities
and shareholders’ equity
|
|||||||
Accounts
payable and accrued expenses
|
$
|
1,376
|
$
|
1,319
|
|||
Deferred
income
|
70
|
53
|
|||||
Equipment
purchase contracts
|
148
|
123
|
|||||
Current
portion of long-term debt
|
183
|
166
|
|||||
Total
current liabilities
|
1,777
|
1,661
|
|||||
Long-term
debt
|
639
|
405
|
|||||
Deferred
income taxes
|
26
|
28
|
|||||
Other
liabilities
|
402
|
445
|
|||||
Total
liabilities
|
2,844
|
2,539
|
|||||
Commitments
and contingencies
|
|||||||
Noncontrolling
interests in subsidiaries
|
2,283
|
1,568
|
|||||
Common
stock, $0.10 par value, authorized 3 billion shares,
issued and
outstanding 755.8 million and 749.4 million shares
|
76
|
75
|
|||||
Additional
capital
|
6,628
|
6,555
|
|||||
Retained
earnings
|
1,548
|
1,486
|
|||||
Accumulated
other comprehensive (loss)
|
(3
|
)
|
(2
|
)
|
|||
Total
shareholders’ equity
|
8,249
|
8,114
|
|||||
Total
liabilities and shareholders’ equity
|
$
|
13,376
|
$
|
12,221
|
Six
months
ended
|
March
1,
2007
|
March
2,
2006
|
|||||
Cash
flows from operating activities
|
|||||||
Net
income
|
$
|
63
|
$
|
256
|
|||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|||||||
Depreciation
and amortization
|
800
|
595
|
|||||
Stock-based
compensation
|
20
|
10
|
|||||
Loss
(gain) from write-down or disposition of equipment
|
(10
|
)
|
9
|
||||
Gain
from sale of product and process technology
|
(30
|
)
|
--
|
||||
Change
in operating assets and liabilities:
|
|||||||
Decrease
in receivables
|
59
|
39
|
|||||
(Increase)
decrease in inventories
|
(331
|
)
|
86
|
||||
Increase
in accounts payable and accrued expenses
|
62
|
127
|
|||||
Deferred
income taxes
|
(6
|
)
|
(12
|
)
|
|||
Other
|
89
|
196
|
|||||
Net
cash provided by operating activities
|
716
|
1,306
|
|||||
Cash
flows from investing activities
|
|||||||
Expenditures
for property, plant and equipment
|
(2,180
|
)
|
(455
|
)
|
|||
Purchases
of available-for-sale securities
|
(1,003
|
)
|
(1,274
|
)
|
|||
Proceeds
from maturities of available-for-sale securities
|
1,723
|
1,000
|
|||||
Proceeds
from sales of available-for-sale securities
|
307
|
--
|
|||||
Proceeds
from sale of product and process technology
|
30
|
--
|
|||||
Proceeds
from sales of property, plant and equipment
|
24
|
17
|
|||||
Decrease
in restricted cash
|
14
|
36
|
|||||
Other
|
(110
|
)
|
(18
|
)
|
|||
Net
cash used for investing activities
|
(1,195
|
)
|
(694
|
)
|
|||
Cash
flows from financing activities
|
|||||||
Capital
contribution from noncontrolling interest in IMFT
|
647
|
500
|
|||||
Proceeds
from equipment sale-leaseback transactions
|
309
|
--
|
|||||
Proceeds
from issuance of common stock
|
50
|
47
|
|||||
Payments
on equipment purchase contracts
|
(287
|
)
|
(77
|
)
|
|||
Repayments
of debt
|
(104
|
)
|
(70
|
)
|
|||
Other
|
(1
|
)
|
--
|
||||
Net
cash provided by financing activities
|
614
|
400
|
|||||
Net
increase in cash and equivalents
|
135
|
1,012
|
|||||
Cash
and equivalents at beginning of period
|
1,431
|
524
|
|||||
Cash
and equivalents at end of period
|
$
|
1,566
|
$
|
1,536
|
|||
Supplemental
disclosures
|
|||||||
Income
taxes paid, net
|
$
|
(25
|
)
|
$
|
(4
|
)
|
|
Interest
paid, net of amounts capitalized
|
(4
|
)
|
(24
|
)
|
|||
Noncash
investing and financing activities:
|
|||||||
Conversion
of notes to stock, net of unamortized issuance costs
|
--
|
623
|
|||||
Equipment
acquisitions on contracts payable and capital leases
|
667
|
144
|
Receivables
|
March
1,
2007
|
August
31,
2006
|
|||||
Trade
receivables
|
$
|
724
|
$
|
811
|
|||
Taxes
other than income
|
30
|
18
|
|||||
Other
|
194
|
131
|
|||||
Allowance
for doubtful accounts
|
(5
|
)
|
(4
|
)
|
|||
$
|
943
|
$
|
956
|
Inventories
|
March
1,
2007
|
August
31,
2006
|
|||||
Finished
goods
|
$
|
451
|
$
|
273
|
|||
Work
in process
|
657
|
530
|
|||||
Raw
materials and supplies
|
237
|
195
|
|||||
Allowance
for obsolescence
|
(52
|
)
|
(35
|
)
|
|||
$
|
1,293
|
$
|
963
|
Goodwill
and Intangible Assets
|
|||||||||||||
March
1, 2007
|
August
31, 2006
|
||||||||||||
Gross
Amount
|
Accumulated
Amortization
|
Gross
Amount
|
Accumulated
Amortization
|
||||||||||
Intangible
assets:
|
|||||||||||||
Product
and process technology
|
$
|
522
|
$
|
(244
|
)
|
$
|
460
|
$
|
(219
|
)
|
|||
Customer
relationships
|
127
|
(11
|
)
|
127
|
(4
|
)
|
|||||||
Other
|
29
|
(7
|
)
|
27
|
(3
|
)
|
|||||||
$
|
678
|
$
|
(262
|
)
|
$
|
614
|
$
|
(226
|
)
|
Property,
Plant and Equipment
|
March
1,
2007
|
August
31,
2006
|
|||||
Land
|
$
|
107
|
$
|
107
|
|||
Buildings
|
3,425
|
2,763
|
|||||
Equipment
|
11,235
|
9,528
|
|||||
Construction
in progress
|
329
|
484
|
|||||
Software
|
263
|
251
|
|||||
15,359
|
13,133
|
||||||
Accumulated
depreciation
|
(7,766
|
)
|
(7,245
|
)
|
|||
$
|
7,593
|
$
|
5,888
|
Accounts
Payable and Accrued Expenses
|
March
1,
2007
|
August
31,
2006
|
|||||
Accounts
payable
|
$
|
835
|
$
|
854
|
|||
Salaries,
wages and benefits
|
240
|
220
|
|||||
Taxes
other than income
|
22
|
23
|
|||||
Income
taxes
|
14
|
20
|
|||||
Other
|
265
|
202
|
|||||
$
|
1,376
|
$
|
1,319
|
Debt
|
March
1,
2007
|
August
31,
2006
|
|||||
Capital
lease obligations payable in monthly installments through August
2021,
weighted-average imputed interest rate of 6.5% and 6.6%
|
$
|
565
|
$
|
264
|
|||
Notes
payable in periodic installments through July 2015, weighted-average
interest rate of 1.4% and 1.5%
|
187
|
237
|
|||||
Convertible
subordinated notes payable, interest rate of 5.6%, due April
2010
|
70
|
70
|
|||||
822
|
571
|
||||||
Less
current portion
|
(183
|
)
|
(166
|
)
|
|||
$
|
639
|
$
|
405
|
Quarter
ended
|
Six
months ended
|
||||||||||||
March
1,
2007
|
March
2,
2006
|
March
1,
2007
|
March
2,
2006
|
||||||||||
Average
expected life in years
|
4.25
|
4.25
|
4.25
|
4.25
|
|||||||||
Expected
volatility
|
38%-40
|
%
|
47
|
%
|
38%-42
|
%
|
47%-48
|
%
|
|||||
Weighted-average
volatility
|
38
|
%
|
47
|
%
|
39
|
%
|
47
|
%
|
|||||
Risk-free
interest rate
|
4.6
|
%
|
4.4
|
%
|
4.7
|
%
|
4.4
|
%
|
Quarter
ended
|
Six
months ended
|
||||||||||||
March
1,
2007
|
March
2,
2006
|
March
1,
2007
|
March
2,
2006
|
||||||||||
Stock-based
compensation expense by caption:
|
|||||||||||||
Cost
of goods sold
|
$
|
3
|
$
|
2
|
$
|
5
|
$
|
3
|
|||||
Selling,
general and administrative
|
5
|
2
|
10
|
4
|
|||||||||
Research
and development
|
2
|
2
|
5
|
3
|
|||||||||
$
|
10
|
$
|
6
|
$
|
20
|
$
|
10
|
||||||
Stock-based compensation expense by type of award: | |||||||||||||
Stock
options
|
$
|
5
|
$
|
4
|
$
|
11
|
$
|
6
|
|||||
Restricted
stock
|
5
|
2
|
9
|
4
|
|||||||||
$
|
10
|
$
|
6
|
$
|
20
|
$
|
10
|
Quarter
ended
|
Six
months ended
|
||||||||||||
March
1,
2007
|
March
2,
2006
|
March
1,
2007
|
March
2,
2006
|
||||||||||
Net
income (loss) available to common shareholders - Basic
|
$
|
(52
|
)
|
$
|
193
|
$
|
63
|
$
|
256
|
||||
Net
effect of assumed conversion of debt
|
--
|
3
|
--
|
6
|
|||||||||
Net
income (loss) available to common shareholders - Diluted
|
$
|
(52
|
)
|
$
|
196
|
$
|
63
|
$
|
262
|
||||
Weighted-average
common shares outstanding − Basic
|
768.7
|
661.5
|
767.9
|
655.8
|
|||||||||
Net
effect of dilutive stock options and assumed conversion of
debt
|
--
|
53.1
|
8.4
|
54.8
|
|||||||||
Weighted-average
common shares outstanding − Diluted
|
768.7
|
714.6
|
776.3
|
710.6
|
|||||||||
Earnings
(loss) per share:
|
|||||||||||||
Basic
|
$
|
(0.07
|
)
|
$
|
0.29
|
$
|
0.08
|
$
|
0.39
|
||||
Diluted
|
(0.07
|
)
|
0.27
|
0.08
|
0.37
|
Quarter
ended
March
2,
2006
|
Six
months ended
March
2,
2006
|
||||||
Net
sales
|
$
|
1,347
|
$
|
2,946
|
|||
Net
income
|
151
|
185
|
|||||
Earnings
per share - diluted
|
$
|
0.20
|
$
|
0.25
|
Quarter
ended
|
Six
months ended
|
||||||||||||
March
1,
2007
|
March
2,
2006
|
March
1,
2007
|
March
2,
2006
|
||||||||||
Net
sales:
|
|||||||||||||
Memory
|
$
|
1,271
|
$
|
1,066
|
$
|
2,557
|
$
|
2,274
|
|||||
Imaging
|
156
|
159
|
400
|
313
|
|||||||||
Total
consolidated net sales
|
$
|
1,427
|
$
|
1,225
|
$
|
2,957
|
$
|
2,587
|
|||||
Operating
income:
|
|||||||||||||
Memory
|
$
|
(24
|
)
|
$
|
161
|
$
|
36
|
$
|
182
|
||||
Imaging
|
(10
|
)
|
27
|
40
|
68
|
||||||||
Total
consolidated operating income (loss)
|
$
|
(34
|
)
|
$
|
188
|
$
|
76
|
$
|
250
|
Second
Quarter
|
First
Quarter
|
Six
Months
|
||||||||||||||||||||||||||||||||||||||
2007
|
%
of net sales
|
2006
|
%
of net sales
|
2007
|
%
of net sales
|
2007
|
%
of net sales
|
2006
|
%
of net sales
|
|||||||||||||||||||||||||||||||
(amounts
in millions and as a percent of net sales)
|
||||||||||||||||||||||||||||||||||||||||
Net
sales:
|
||||||||||||||||||||||||||||||||||||||||
Memory
|
$
|
1,271
|
89
|
%
|
$
|
1,066
|
87
|
%
|
$
|
1,286
|
84
|
%
|
$
|
2,557
|
86
|
%
|
$
|
2,274
|
88
|
%
|
||||||||||||||||||||
Imaging
|
156
|
11
|
%
|
159
|
13
|
%
|
244
|
16
|
%
|
400
|
14
|
%
|
313
|
12
|
%
|
|||||||||||||||||||||||||
$
|
1,427
|
100
|
%
|
$
|
1,225
|
100
|
%
|
$
|
1,530
|
100
|
%
|
$
|
2,957
|
100
|
%
|
$
|
2,587
|
100
|
%
|
|||||||||||||||||||||
Gross
margin:
|
||||||||||||||||||||||||||||||||||||||||
Memory
|
$
|
302
|
24
|
%
|
$
|
166
|
16
|
%
|
$
|
340
|
26
|
%
|
$
|
642
|
25
|
%
|
$
|
404
|
18
|
%
|
||||||||||||||||||||
Imaging
|
55
|
35
|
%
|
70
|
44
|
%
|
102
|
42
|
%
|
157
|
39
|
%
|
143
|
46
|
%
|
|||||||||||||||||||||||||
$
|
357
|
25
|
%
|
$
|
236
|
19
|
%
|
$
|
442
|
29
|
%
|
$
|
799
|
27
|
%
|
$
|
547
|
21
|
%
|
|||||||||||||||||||||
SG&A
|
$
|
153
|
11
|
%
|
$
|
108
|
9
|
%
|
$
|
180
|
12
|
%
|
$
|
333
|
11
|
%
|
$
|
203
|
8
|
%
|
||||||||||||||||||||
R&D
|
243
|
17
|
%
|
159
|
13
|
%
|
183
|
12
|
%
|
426
|
14
|
%
|
325
|
13
|
%
|
|||||||||||||||||||||||||
Other
operating
(income)
expense,
net
|
(5
|
)
|
(0
|
)
|
%
|
(219
|
)
|
(18
|
)
|
%
|
(31
|
)
|
(2
|
)
|
%
|
(36
|
)
|
(1
|
)
|
%
|
(231
|
)
|
(9
|
)
|
%
|
|||||||||||||||
Net
income (loss)
|
(52
|
)
|
(4
|
)
|
%
|
193
|
16
|
%
|
115
|
8
|
%
|
63
|
2
|
%
|
256
|
10
|
%
|
Total
|
Remainder
of 2007
|
2008
|
2009
|
2010
|
2011
|
2012
and
thereafter
|
||||||||||||||||
Notes
payable (including interest)
|
$
|
275
|
$
|
34
|
$
|
67
|
$
|
50
|
$
|
119
|
$
|
4
|
$
|
1
|
||||||||
Capital
lease obligations
|
672
|
80
|
146
|
140
|
79
|
145
|
82
|
|||||||||||||||
Operating
leases
|
112
|
18
|
38
|
19
|
8
|
6
|
23
|
· |
increasing
our exposure to changes in average selling prices for NAND
Flash;
|
· |
difficulties
in establishing new production operations at multiple
locations;
|
· |
increasing
capital expenditures to increase production capacity and modify existing
processes to produce NAND Flash;
|
· |
increasing
debt to finance future investments;
|
· |
diverting
management’s attention from DRAM and CMOS Image sensor
operations;
|
· |
managing
larger operations and facilities and employees in separate geographic
areas; and
|
· |
hiring
and retaining key employees.
|
· |
development
of products that maintain a technological advantage over the products
of
our competitors;
|
· |
accurate
prediction of market requirements and evolving standards, including
pixel
resolution, output interface standards, power requirements, optical
lens
size, input standards and other
requirements;
|
· |
timely
completion and introduction of new Imaging products that satisfy
customer
requirements;
|
· |
timely
achievement of design wins with prospective customers, as manufacturers
may be reluctant to change their source of components due to the
significant costs, time, effort and risk associated with qualifying
a new
supplier; and
|
· |
efficient,
cost-effective manufacturing as we transition to new products and
higher
volumes.
|
· |
currency
exchange rate fluctuations,
|
· |
export
and import duties, changes to import and export regulations, and
restrictions on the transfer of funds,
|
· |
political
and economic instability,
|
· |
problems
with the transportation or delivery of our
products,
|
· |
issues
arising from cultural or language differences and labor
unrest,
|
· |
longer
payment cycles and greater difficulty in collecting accounts receivable,
and
|
· |
compliance
with trade and other laws in a variety of
jurisdictions.
|
· |
we
may replace product or otherwise compensate customers for costs incurred
or damages caused by defective or incompatible product,
and
|
· |
we
may encounter adverse publicity, which could cause a decrease in
sales of
our products.
|
· |
difficulties
in integrating the operations, technologies and products of the acquired
companies,
|
· |
increasing
capital expenditures to upgrade and maintain
facilities,
|
· |
increasing
debt to finance any acquisition,
|
· |
diverting
management’s attention from normal daily
operations,
|
· |
managing
larger operations and facilities and employees in separate geographic
areas, and
|
· |
hiring
and retaining key employees.
|
Period
|
(a)
Total number of shares purchased
|
(b)
Average price paid per share
|
(c)
Total number of shares (or units) purchased as part of publicly
announced
plans or programs
|
(d)
Maximum number (or approximate dollar value) of shares (or units)
that may
yet be purchased under the plans or programs
|
||
December
1 - January 4
|
53,374
|
$13.64
|
N/A
|
N/A
|
||
January
5 - February 1
|
--
|
--
|
N/A
|
N/A
|
||
February
2 - March 1
|
19,165
|
$12.36
|
N/A
|
N/A
|
||
Total
|
72,539
|
$13.30
|
Exhibit
|
||
Number
|
Description
of Exhibit
|
|
3.1
|
Articles
of Incorporation of Registrant, Restated (1)
|
|
3.7
|
Bylaws
of the Registrant, As Amended (2)
|
|
4.15
|
Indenture,
dated March 30, 2005 by and between Lexar Media, Inc. (“Lexar”) and U.S.
Bank National Association (the “Lexar Indenture”) (3)
|
|
4.16
|
First
Supplemental Indenture to the Lexar Indenture dated as of June
21, 2006
between Lexar and U.S. Bank National Association.
|
|
10.62
|
2004
Equity Incentive Plan Forms of Agreement and Terms and
Conditions
|
|
10.67*
|
Omnibus
Agreement, dated as of February 27, 2007, between Micron Technology,
Inc.
and Intel Corporation
|
|
10.68*
|
Limited
Liability Partnership Agreement, dated as of February 27, 2007,
between
Micron Semiconductor Asia Pte. Ltd. and Intel Technology Asia Pte.
Ltd.
|
|
10.69*
|
Supply
Agreement, dated as of February 27, 2007, between Micron Semiconductor
Asia Pte. Ltd. and IM Flash Singapore, LLP
|
|
10.156*
|
Amended
and Restated Limited Liability Company Operating Agreement of IM
Flash
Technologies, LLC, dated as of February 27, 2007, between Micron
Technology, Inc. and Intel Corporation
|
|
10.164*
|
Supply
Agreement, dated as of February 27, 2007, between Intel Technology
Asia
Pte. Ltd.
|
|
31.1
|
Rule
13a-14(a) Certification of Chief Executive Officer
|
|
31.2
|
Rule
13a-14(a) Certification of Chief Financial Officer
|
|
32.1
|
Certification
of Chief Executive Officer Pursuant to 18 U.S.C. 1350
|
|
32.2
|
Certification
of Chief Financial Officer Pursuant to 18 U.S.C.
1350
|
*
|
Portions
of this exhibit have been omitted pursuant to a request for confidential
treatment filed with the Commission.
|
(1)
|
Incorporated
by reference to Quarterly Report on Form 10-Q for the fiscal quarter
ended
May 31, 2001
|
(2)
|
Incorporated
by reference to Current Report on Form 8-K dated December 5,
2006
|
(3)
|
Incorporated
by reference to Lexar’s Current Report on Form 8-K dated March 30,
2005
|
Micron
Technology, Inc.
|
|
(Registrant)
|
|
Date:
April 10, 2007
|
/s/
W. G. Stover, Jr.
|
W.
G. Stover, Jr., Vice President of Finance and Chief Financial Officer
(Principal Financial and Accounting
Officer)
|