SanDisk 2013 Annual Report Download - page 216

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
because it does not have a controlling financial interest in any of those entities. In determining whether the
Company is the primary beneficiary, the Company analyzed the primary purpose and design of Flash
Ventures, the activities that most significantly impact Flash Ventures’ economic performance, and whether
the Company had the power to direct those activities. The Company concluded based upon its 49.9%
ownership in Flash Ventures, the voting structure of Flash Ventures and the manner in which the
day-to-day operations of Flash Ventures are conducted that the Company lacked the power to direct most
of the activities that most significantly impact Flash Ventures’ economic performance.
The Company purchased NAND flash memory wafers from Flash Ventures and made prepayments,
investments and loans to Flash Ventures totaling $1.87 billion, $2.71 billion and $2.95 billion during fiscal
years 2013, 2012 and 2011, respectively. The Company received loan repayments from Flash Ventures of
$124.8 million, $511.3 million and $416.3 million during fiscal years 2013, 2012 and 2011, respectively. At
December 29, 2013 and December 30, 2012, the Company had accounts payable balances due to Flash
Ventures of $146.0 million and $214.5 million, respectively.
The Company’s maximum reasonably estimable loss exposure (excluding lost profits), based upon the
exchange rate at each respective balance sheet date, as a result of its involvement with Flash Ventures is
presented below (in millions). The Flash Venture investments are denominated in Japanese yen and the
maximum possible loss exposure excludes any cumulative translation adjustment due to revaluation from
the Japanese yen to the U.S. dollar.
December 29, December 30,
2013 2012
Notes receivable ............................................... $ 593 $ 820
Equity investments .............................................. 541 640
Operating lease guarantees ........................................ 492 926
Prepayments .................................................. 5 26
Maximum loss exposure ....................................... $ 1,631 $ 2,412
At December 29, 2013 and December 30, 2012, the Company’s retained earnings included
approximately $8.1 million and ($0.6) million, respectively, of undistributed earnings (deficit) of Flash
Ventures.
The following summarizes the aggregated financial information for Flash Ventures, which includes
both the Company and Toshiba’s portions (in millions).
December 29, December 30,
2013 2012
(Unaudited)
Current assets ................................................. $ 631 $ 683
Property, plant, equipment and other assets ............................. 2,802 2,902
Total assets ................................................ $ 3,433 $ 3,585
Current liabilities ............................................... $ 1,144 $ 653
Long-term liabilities ............................................. 1,186 1,640
F-50