SanDisk 2011 Annual Report Download - page 171

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This is a TAB type table. Insert
conts here. Annual Report
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
ancial 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 approximately $2.95 billion, $2.00 billion and $2.35 billion in
fiscal years 2011, 2010 and 2009, respectively. The Company received loan repayments from Flash Ventures of
$416.3 million, $59.7 million and $387.3 million in fiscal years 2011, 2010 and 2009, respectively. At January 1,
2012 and January 2, 2011, the Company had accounts payable balances due to Flash Ventures of $275.8 million
and $240.5 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).
January 1,
2012
January 2,
2011
Notes receivable ............................................................... $ 1,297 $ 1,232
Equity investments ............................................................. 646 501
Operating lease guarantees ....................................................... 732 879
Prepayments .................................................................. 50 —
Maximum loss exposure ..................................................... $ 2,725 $ 2,612
At January 1, 2012 and January 2, 2011, the Company’s retained earnings included approximately
$4.2 million and $2.5 million, respectively, of undistributed earnings of the Flash Ventures.
The following summarizes the aggregated financial information for Flash Ventures (in millions).
January 1,
2012
January 2,
2011
(Unaudited)
Current assets ................................................................. $ 1,125 $ 1,028
Property, plant, equipment and other assets .......................................... 5,089 4,187
Total assets ............................................................... $ 6,214 $ 5,215
Current liabilities .............................................................. $ 2,269 $ 1,632
Long-term liabilities ............................................................ 2,594 2,465
The following summarizes the aggregated financial information for Flash Ventures for fiscal years 2011,
2010 and 2009, respectively (in millions). Flash Ventures’ year-ends are March 31, with quarters ending on
March 31, June 30, September 30 and December 31.
Fiscal years ended
January 1,
2012
January 2,
2011
January 3,
2010
(Unaudited)
Net sales(1) ....................................................... $ 4,577 $ 3,467 $ 3,296
Gross profit (loss) .................................................. (2) 15 14
Net income (loss) .................................................. 5 (1) 68
(1) Net sales represent sales to both the Company and Toshiba.
F-47