SanDisk 2013 Annual Report Download - page 200

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(‘‘Toshiba’’) that produce Flash Ventures’ products are covered by collective bargaining agreements and
any strike or other job action by those employees could interrupt the Company’s wafer supply from
Toshiba’s Yokkaichi, Japan operations.
In addition, some key components are purchased from single source vendors for which alternative
sources are currently not available. Shortages could occur in these essential materials due to an
interruption of supply or increased demand in the industry. If the Company were unable to procure certain
of such materials, it could reduce sales, which could have a material adverse effect upon its results of
operations. The Company also relies on third-party subcontractors to assemble and test a portion of its
products. The Company does not have long-term contracts with some of these subcontractors and cannot
directly control product delivery schedules or manufacturing processes. This could lead to product
shortages or quality assurance problems that could increase the manufacturing costs of the Company’s
products and have material adverse effects on the Company’s operating results.
Concentration of Credit Risk. The Company’s concentration of credit risk consists principally of cash,
cash equivalents, short and long-term marketable securities and trade receivables. The Company’s
investment policy restricts investments to high-credit quality investments and limits the amounts invested
with any one issuer. The Company sells to Commercial and Retail customers in the Americas; Europe,
Middle East and Africa (‘‘EMEA’’); and Asia-Pacific, and performs ongoing credit evaluations of its
customers’ financial condition, and generally requires no collateral. As of end of fiscal years 2013 and 2012,
the Company’s top 10 customers or licensees accounted for approximately 64% of the Company’s net
accounts receivable in each of these fiscal years. As of end of fiscal year 2013, Apple and Best Buy Co., Inc.
accounted for 32% and 11% of the Company’s net accounts receivable, respectively. As of the end of fiscal
year 2012, Apple accounted for 34% of the Company’s net accounts receivable.
Off-Balance Sheet Risk. The Company has off-balance sheet financial obligations. See Note 12,
‘‘Commitments, Contingencies and Guarantees.’’
Note 9: Stockholders’ Equity and Share-based Compensation
Dividends
Through December 29, 2013, the Company’s Board of Directors declared the following dividends:
Total Amount Declared
Declaration Date Dividend per Share Record Date (in millions) Payment Date
July 30, 2013 ..... $0.225 August 12, 2013 $51.6 August 30, 2013
October 15, 2013 . . 0.225 November 4, 2013 51.5 November 25, 2013
No dividends were declared or paid by the Company during the first two quarters of fiscal year 2013.
On January 21, 2014, the Company’s Board of Directors declared a dividend of $0.225 per share for
holders of record as of February 3, 2014, to be paid on February 24, 2014. Future dividends are subject to
declaration by the Company’s Board of Directors.
Share-based Benefit Plans
2013 Incentive Plan. On June 12, 2013, the Company’s stockholders approved the 2013 Incentive Plan
(‘‘2013 Plan’’). Shares of the Company’s common stock may be issued under the 2013 Plan pursuant to two
separate equity incentive programs: (i) the discretionary grant program under which stock options and
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