SanDisk 2013 Annual Report Download - page 156

The decrease in cash provided by operations in fiscal year 2012, compared to fiscal year 2011, resulted
primarily from lower net income. Cash flow from accounts receivable was a lower usage of cash compared
with the prior year due to lower sales in fiscal year 2012 compared to the prior year. Cash flow from
inventory was a lower usage of cash compared to the prior year due to inventory increasing at a slower rate
compared to the prior year. Cash flow from other assets was a lower usage of cash compared to the prior
year primarily due to a prior year prepayment of building-related costs for Flash Forward. Cash flow
related to accounts payable to related parties decreased primarily due to the timing of payments to Flash
Ventures as compared to the prior year. Cash flow from other liabilities was a usage of cash compared to
an inflow of cash in the prior year primarily due to higher tax payments in fiscal year 2012 related to fiscal
year 2011 higher profitability.
Investing Activities. Net cash used in investing activities for fiscal year 2013 was primarily related to
acquisition of property and equipment of $213 million, net purchases of short and long-term marketable
securities of $472 million and the acquisition of SMART Storage, net of cash acquired of $304 million,
partially offset by net proceeds from Flash Ventures of $75 million.
Net cash used in investing activities for fiscal year 2012 was primarily related to acquisition of property
and equipment of $488 million, net purchases of short and long-term marketable securities of $331 million
and acquisitions of FlashSoft and Schooner, net of cash acquired of $70 million, partially offset by net
proceeds from Flash Ventures of $319 million.
Financing Activities. Net cash used in financing activities for fiscal year 2013 was primarily related to
stock repurchases of $1.59 billion, repayment of our 1% Notes due 2013 of $928 million, and dividends
paid of $101 million, offset by net cash received of $1.48 billion from the issuance of our 0.5% Notes due
2020, and related transactions including the purchase of a convertible bond hedge for $332 million and
proceeds from the sale of warrants of $218 million.
Net cash used in financing activities for fiscal year 2012 was primarily related to stock repurchases of
$230 million, partially offset by cash received from employee stock programs of $86 million.
Liquid Assets. At December 29, 2013, we had cash, cash equivalents and short-term marketable
securities of $2.91 billion. We had $3.18 billion of long-term marketable securities, which we believe are
also liquid assets, but are classified as long-term marketable securities due to the remaining maturity of
each marketable security being greater than one year.
Short-Term Liquidity. As of December 29, 2013, our working capital balance was $3.42 billion. During
fiscal year 2014, we expect our total capital investment to be $1.5 billion to $1.7 billion, including our net
capital investments in Flash Ventures and our investment in non-fab property and equipment. We expect
these fiscal year 2014 investments to be funded approximately half by our cash and half by the Flash
Ventures’ working capital and equipment leases.
Depending on the forecasted demand for our products, we may decide to make additional
investments, which could be substantial, in wafer fabrication capacity and assembly and test manufacturing
equipment. We may also engage in merger or acquisition transactions, make equity investments in other
companies or purchase or license technologies. These activities may require us to raise additional
financing, which could be difficult to obtain, and which if not obtained in satisfactory amounts, could
prevent us from funding Flash Ventures, increasing our wafer supply, developing or enhancing our
products, taking advantage of future opportunities, engaging in acquisitions of or investments in
companies, growing our business, or responding to competitive pressures or unanticipated industry
changes, any of which could harm our business.
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