SanDisk 2014 Annual Report Download - page 34
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• Completed the strategic acquisition of Fusion-io, a leading developer of flash-based PCIe hardware
and software solutions, enhancing the Company’s portfolio addressing enterprise and hyperscale
data centers.
• Began the volume ramp of the Company’s 15-nanometer memory technology, the industry’s most
advanced NAND flash manufacturing node.
Non-GAAP operating margin differs from what is reported under GAAP. See Annex A for
information on the rationale for the use of non-GAAP financial measures and for a reconciliation of
non-GAAP financial measures to the Company’s results as reported under GAAP.
The Company measures free cash flow as cash flow from operations less investments in property and
equipment and net cash flows related to investments in, and loans to, the Company’s manufacturing
ventures with Toshiba.
The Company uses non-GAAP measures to establish financial and strategic goals and to measure
performance for executive officer compensation because the Company believes that non-GAAP measures
allow management to better evaluate the core operating performance of the Company especially when
comparing to the results of previous periods and to the Company’s business model objectives. For
reconciliation of non-GAAP to GAAP financial measures, see Item 7, ‘‘Management’s Discussion and
Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures,’’ of the
Company’s Form 10-K for the fiscal year ended December 28, 2014.
Fiscal Year 2014 Named Executive Officer Compensation Highlights. During fiscal year 2014, a significant
percentage of each Named Executive Officer’s total compensation (as reported in the Summary
Compensation Table) was at-risk, having included (1) annual performance-based cash bonus opportunities,
which become payable only upon the achievement of certain financial and strategic objectives established
by the Compensation Committee, which advance the Company’s near-, medium- and long-term business
objectives and are designed to create sustainable long-term stockholder value, (2) RSUs, the value of
which is directly tied to the value of the Company’s Common Stock over time, and (3) stock options, with
exercise prices equal to the fair market value of the Company’s Common Stock on the grant date, which
become valuable only upon realized share appreciation after the grant date. Information regarding the
compensation mix for the Company’s Chief Executive Officer and the other Named Executive Officers, as
a group, for fiscal year 2014 is set forth below.
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