SanDisk 2014 Annual Report Download - page 131

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.
On January 21, 2015, our Board of Directors declared a dividend of $0.30 per share for holders of
record as of March 2, 2015. We expect to pay approximately $66 million to these holders of record on
March 23, 2015. We expect to continue to pay quarterly dividends subject to declaration by our Board of
Directors.
Our short-term liquidity is impacted in part by our ability to maintain compliance with covenants in
the outstanding Flash Ventures’ master lease agreements. Flash Ventures’ master lease agreements contain
customary covenants for Japanese lease facilities as well as an acceleration clause for certain events of
default related to us as guarantor, including, among other things, our failure to maintain stockholder
equity of at least $1.51 billion. As of December 28, 2014, Flash Ventures was in compliance with all of its
master lease covenants, including the stockholder equity covenant of $1.51 billion with our stockholders’
equity at $6.53 billion as of December 28, 2014. If our stockholders’ equity falls below $1.51 billion or other
events of default occur, Flash Ventures would become non-compliant with certain covenants under certain
master equipment lease agreements and would be required to negotiate a resolution to the
non-compliance to avoid acceleration of the obligations under such agreements, which as of December 28,
2014 were approximately $551 million based upon the exchange rate at December 28, 2014.
As of December 28, 2014, the amount of cash and cash equivalents and short and long-term
marketable securities held by non-U.S. subsidiaries was $899 million. Of the $899 million held by our
non-U.S. subsidiaries, approximately $773 million was available for use in the U.S. without incurring
additional income taxes in excess of the tax amounts already accrued in our Consolidated Financial
Statements as of December 28, 2014. The remaining amount of non-U.S. cash and cash equivalents and
short and long-term marketable securities has been indefinitely reinvested.
As of December 28, 2014, we had not made a provision for U.S. income taxes or foreign withholding
taxes on $969 million of undistributed earnings of foreign subsidiaries as we intend to indefinitely reinvest
these earnings outside the U.S. to fund our international capital expenditures and operating requirements.
We determined that it is not practicable to calculate the amount of unrecognized deferred tax liability
related to these cumulative unremitted earnings. If these earnings were distributed to the U.S., we would
be subject to additional U.S. income taxes and foreign withholding taxes reduced by any available foreign
tax credits.
Of the aggregate $3.75 billion authorized for share repurchases by our Board of Directors since the
fourth quarter of fiscal year 2011 through December 28, 2014, approximately $627 million remained
available for share repurchases as of December 28, 2014. In January 2015, our Board of Directors
increased the existing stock repurchase program by an additional $2.5 billion for share repurchases. Since
the fourth quarter of fiscal year 2011 through December 28, 2014, we have spent an aggregate $3.12 billion
to repurchase 45.3 million shares. Included in the aggregate repurchase activity are 14 million shares that
were repurchased for an aggregate amount of $1.3 billion during the fiscal year ended December 28, 2014.
In addition to repurchases under our repurchase program, during the fiscal year ended December 28, 2014,
we spent $41 million to settle employee tax withholding obligations due upon the vesting of restricted stock
units and withheld an equivalent value of shares from the shares provided to the employees upon vesting.
We are committed to purchase land and a building shell in Bangalore, India, if the seller is able to
obtain necessary third-party and government approvals by June 1, 2015. Our purchase obligation was
approximately $25 million based upon the exchange rate at December 28, 2014. We are currently making
building improvements on the facility and have received a bank guarantee of up to approximately
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Annual Report