SanDisk 2007 Annual Report Download - page 135

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December 30,
2007
December 31,
2006
(Unaudited)
Current assets ........................................... $ 870,018 $ 448,520
Property, plant and equipment and other assets ................... 3,331,584 1,652,706
Total assets ............................................. 4,201,602 2,101,226
Current liabilities ......................................... 1,958,322 1,169,543
Long-term liabilities ....................................... $1,280,471 $ 262,063
The following summarizes the aggregated financial information for Flash Ventures for the fiscal years ended
December 30, 2007, December 31, 2006 and January 1, 2006, respectively (in thousands). Flash Ventures’ year-
ends are March 31, with quarters ending on March 31, June 30, September 30 and December 31.
December 30,
2007
December 31,
2006
January 1,
2006
Twelve Months Ended
(Unaudited)
Net sales
(1)
.................................... $2,435,114 $1,462,024 $795,464
Gross profit ................................... 13,587 8,894 4,027
Net income .................................... $ 927 $ 1,730 $ 763
(1)
Net sales represent sales to both the Company and Toshiba.
TwinSys. The Company assumed msystems’ ownership interest in the venture with Toshiba, TwinSys Ltd.
(“TwinSys”), designed to enable the parties to benefit from a portion of each party’s respective sales of USB flash
drives. The Company had a 50.1% beneficial ownership in TwinSys, consisting of (i) 49.9% ownership in TwinSys
and (ii) 0.2% interest held by TwinSys Ltd., in which the Company has a 51% ownership interest. The Company
consolidated the venture under FIN 46R. During the twelve months ended December 30, 2007, TwinSys had sales to
and purchases from Toshiba of $53.0 million and $28.5 million, respectively. The Company and Toshiba terminated
the operations of TwinSys as of March 31, 2007.
Tower Semiconductor. As of December 30, 2007, the Company owned approximately 12.8% of the
outstanding shares of Tower, one of its suppliers of wafers for its controller components, has prepaid wafer
credits issued by Tower, and has convertible debt and a warrant to purchase Tower ordinary shares. The Company’s
Chief Executive Officer is also a member of the Tower board of directors. As of December 30, 2007, the Company
owned approximately 14.1 million Tower shares with a market value of $20.1 million. In addition, the Company
holds a Tower convertible debenture with a market value of $5.5 million. As of December 30, 2007, the Company
had an outstanding loan of $8.6 million to Tower for expansion of Tower’s 0.13 micron logic wafer capacity. The
loan to Tower is secured by the equipment purchased. The Company purchased controller wafers and related non-
recurring engineering of approximately $65.8 million, $41.0 million and $31.3 million in the fiscal years ended
December 30, 2007, December 31, 2006 and January 1, 2006, respectively. These purchases of controller wafers are
ultimately reflected as a component of the Company’s cost of product revenues. At December 30, 2007 and
December 31, 2006, the Company had amounts payable to Tower of approximately $6.1 million and $7.7 million,
respectively.
Flextronics. The former Chairman of Flextronics International, Ltd., (“Flextronics”), who served on the
Flextronics board of directors from 1991 to January 10, 2008, has served on the Company’s board of directors since
September 2003. For the fiscal years ended December 30, 2007, December 31, 2006 and January 1, 2006 the
Company recorded revenues related to Flextronics and its affiliates of $75.5 million, $106.6 million and
$25.3 million, respectively, and at December 30, 2007 and December 31, 2006, the Company had receivables
from Flextronics and its affiliates of $0.6 million and $18.9 million, respectively. In addition, the Company
purchased from Flextronics and its affiliates $72.6 million, $53.5 million and $40.2 million of services for card
assembly and testing in the fiscal years ended December 30, 2007, December 31, 2006 and January 1, 2006,
F-39
Notes to Consolidated Financial Statements — (Continued)