SanDisk 2014 Annual Report Download - page 192

SANDISK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Net rent expense was as follows (in thousands):
Fiscal years ended
December 28, December 29, December 30,
2014 2013 2012
Rent expense, net .................................... $ 13,022 $ 6,473 $ 6,366
Note 15. Related Parties and Strategic Investments
Flash Ventures with Toshiba. The Company owns 49.9% of each entity within Flash Ventures and
accounts for its ownership position under the equity method of accounting. The Company’s obligations
with respect to Flash Ventures’ master lease agreements, take-or-pay supply arrangements and R&D cost
sharing are described in Note 14, ‘‘Commitments, Contingencies and Guarantees.’’ The financial and other
support provided by the Company in all periods presented was either contractually required or the result
of a joint decision to expand wafer capacity, transition to new technologies or refinance existing equipment
lease commitments. Entities within Flash Ventures are VIEs. The Company evaluated whether it is the
primary beneficiary of any of the entities within Flash Ventures for all periods presented and determined
that it is not the primary beneficiary of any of the entities within Flash Ventures 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, the voting
structure and the manner in which the day-to-day operations are conducted for each entity within Flash
Ventures, that the Company lacked the power to direct most of the activities that most significantly impact
the economic performance of each entity within Flash Ventures.
The Company purchased NAND flash memory wafers from Flash Ventures and made prepayments,
investments and loans to Flash Ventures, totaling $1.91 billion, $1.87 billion and $2.71 billion during the
fiscal years ended December 28, 2014, December 29, 2013 and December 30, 2012, respectively. The
Company received loan repayments from Flash Ventures of $231.4 million, $124.8 million and
$511.3 million during the fiscal years ended December 28, 2014, December 29, 2013 and December 30,
2012, respectively. At December 28, 2014 and December 29, 2013, the Company had accounts payable
balances due to Flash Ventures of $136.1 million and $146.0 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). Flash Ventures’ 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 28, December 29,
2014 2013
Notes receivable ............................................... $ 467 $ 593
Equity investments .............................................. 496 541
Operating lease guarantees ........................................ 551 492
Prepayments .................................................. — 5
Maximum estimable loss exposure ................................ $ 1,514 $ 1,631
As of both December 28, 2014 and December 29, 2013, the Company’s retained earnings included
undistributed earnings of Flash Ventures of $8.1 million.
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