The Guarantee With No Number

Kioxia Holdings' annual securities report, filed on 24 June 2026, describes a guarantee. The three manufacturing joint ventures the group runs with Sandisk lease production equipment, and Kioxia Corporation and Sandisk Corporation each separately guarantee 50 percent of those lease obligations. The report sets out the consequences in sequence: if Sandisk cannot perform its guarantee, Kioxia Corporation may inherit Sandisk's guarantee obligations, or the joint venture agreement may be terminated on that default, and Kioxia may buy Sandisk's interest at a price reflecting the residual book value of the equipment the three ventures own. The report carries no amount for the guarantee. The term 債務保証, debt guarantee, occurs twice in 192 pages, both times in that one risk-factor passage. Item 33, contingent liabilities, records pending lawsuits and no guarantee amount. The listing document of November 2024 is built the same way — the 50 percent guarantee described in the risk factors, the counterparty then Western Digital Corporation, no amount there and none in the contingent-liabilities note — so the shape is not particular to this year. A figure for the other half of the same obligation is in Sandisk's Form 10-K, as of its fiscal year-end on 27 June 2025, nine months before Kioxia's: a table captioned as the company's portion of the remaining guarantee obligations under the Flash Ventures lease facilities, ¥203 billion (US$1.24 billion), which Sandisk itself translates at ¥144.73 into $1,404 million. Sandisk's own text says it guarantees half of all outstanding obligations under each lease agreement. Kioxia's half is printed by neither company.

The holders of record are, in the main, in the foreign categories of the report's own table. As of 31 March 2026, foreign corporations and other foreign entities held 68.45 percent of Kioxia's shares measured in trading units, and foreign individuals another 0.02 percent; the table gives the two on separate lines. Together they are 3,736,064 of the 5,455,953 units in the table, which is 68.48 percent; adding the two printed ratios, each carried to two decimal places, gives 68.47. The table classifies the holder on the register, counts in units of 100 shares and leaves out the 490,990 shares held in odd lots. The register is not the same thing as beneficial ownership, and the report says so on the facing page: a large-shareholding report made available for public inspection on 25 March 2026, stating holdings as of 18 March 2026, put BCPE Pangea Cayman 1A at 6.14 percent and BCPE Pangea Cayman 1B at 5.69 percent of share certificates, where the register at 31 March 2026 showed 4.91 percent and 1.41 percent of issued shares excluding treasury. The company states that it could not confirm beneficial holdings as of its own year-end date and so tabulated the register.

A year earlier the same line read 56.14 percent, and what sat behind it was different. On the basis the major-shareholder table uses — shares held as a percentage of issued shares excluding treasury — four Cayman vehicles controlled by the sponsor, Bain Capital, held 51.11 percent at 31 March 2025: three limited partnerships and one company, BCPE Pangea Cayman2, over substantially all of whose voting rights SK hynix holds convertible bonds. Toshiba held 30.50 percent. By 31 March 2026 the four vehicles totalled 21.87 percent and Toshiba 17.59 percent. The major-shareholder table splits the four vehicles onto separate lines; the totals are printed in the risk factors, at 51.11 percent for the seventh term and 21.87 for the eighth, alongside Toshiba at 30.50 and then 17.59. The composition table counts units and excludes odd lots, the major-shareholder table counts shares and excludes treasury, so subtracting one from the other is approximate, and no like-for-like split is given. Approximately, then, and taking the Cayman vehicles to sit in the foreign-corporation category: foreign holders other than the sponsor's vehicles went from around 5 percent of the register to around 47 percent in twelve months. The headline ratio rose by twelve points. What it was made of changed almost entirely.

This piece began from the premise that the annual report exists only in Japanese. That is half wrong. An English version exists: 107 pages, carrying the same date as the Japanese filing, 24 June 2026, on the company's English IR page — the file's internal creation timestamp reads 24 June 2026 at 09:12 Japan time, and the earnings release of 15 May had named 24 June as the filing date. It is not itself a filed document. Its first page states that it is a partial translation of the original Japanese document, provided for reference purposes only, and that the Japanese original prevails in the event of any discrepancy. Its contents page lists four items: the consolidated financial statements and related notes, management's discussion and analysis, the risk factors, and an independent auditor's report. The auditor's report occupies the last four pages as embedded images with no text layer — run through an extractor, those four pages return zero characters, which is to say the audit opinion is in the file but not searchable in it. The other two English documents on the same page, last year's report and the semi-annual one, carry cover dates matching the Japanese filing dates; nothing beyond the cover dates was checked.

The English file contains those four sections. Major shareholders, the employee headcount, the company history, corporate governance, the dividend policy and the multi-year selected financial data have no counterpart in it; compensation for principal management personnel does appear, in the related-party note, at ¥5,353 million ($33 million) against ¥441 million ($3 million) the year before. What survives of ownership is inside the risk factors: Toshiba at 17.59 percent, the Bain Capital vehicles at 21.87 percent, and SK hynix's convertible bonds over substantially all the voting rights of the entity that holds 14.17 percent. The ten-name table, the unit-based composition, the headcount of 15,218 at 31 March 2026, the plant book values stated on Japanese GAAP — ¥340,788 million ($2,081 million) at Yokkaichi, ¥284,129 million ($1,735 million) at Kitakami — and the five-year selected data are in the Japanese document, the one that prevails.

The rule sits to one side of all this. Tokyo's English-disclosure obligation, effective for Prime-listed companies from 1 April 2025, covers earnings information and timely disclosure; the documents the exchange's FAQ enumerates are the earnings release, the quarterly release, and the supplementary materials prepared to explain them. The securities report is not among them. The exchange has also stated that English disclosure of summary information alone from an earnings release is not a rule violation, and that there is no uniform standard for what "part or summary" means — each company decides, in dialogue with overseas investors. Kioxia publishes in English beyond that list: its English IR library carries earnings releases, earnings presentations, the annual and semi-annual securities reports, the integrated report and IR events. The Japanese IR navigation runs to ten items against the English page's nine; the item without an English counterpart is the electronic public notice. The register sits in the document the rule does not reach.

The year itself was large. Revenue for the twelve months to March 2026 was ¥2,337,628 million ($14,271 million), up 37.0 percent from ¥1,706,460 million ($10,418 million). Operating profit under IFRS was ¥870,369 million ($5,314 million), up 92.7 percent. The earnings release's summary table places another number ahead of it: Non-GAAP operating profit of ¥876,170 million ($5,349 million), up 93.4 percent from ¥453,015 million ($2,766 million). The ¥5,801 million ($35 million) difference is purchase-price-allocation effects of ¥1.1 billion and share-based compensation of ¥4.7 billion, the latter absent in the prior year, which is why the two growth rates differ by seven-tenths of a point. The company states that the Non-GAAP measures are internal, are not accounting items under IFRS, and have not been audited or reviewed by auditors.

Operating margin went from 26.5 percent to 37.2 percent. The incremental margin is arithmetic, run against the prior-year operating profit of ¥451,748 million ($2,758 million) that the earnings release and the previous annual report both carry: (¥870,369m − ¥451,748m) ÷ (¥2,337,628m − ¥1,706,460m), or ¥418,621 million ($2,556 million) of additional operating profit on ¥631,168 million ($3,853 million) of additional revenue, which is 66.3 percent. What produced it does not separate out of the filing. The MD&A names two drivers, average selling prices, described as rising significantly, and bit shipments, described as increasing, and quantifies neither, so the relative contribution of the two is not determinable from the document. The production section sets out no capacity and no output, in money or in units, on the stated grounds that products of the same kind differ in performance, structure and form and that the company does not produce to order. The only figure in the report denominated in bits of production is some twenty pages earlier, in the section on management policy and operating environment: a 29 percent share of world flash-memory bit production for the year to March 2026, attributed to TechInsights' NAND Market Report Q1 2026 and stated to include the Sandisk group's volume.

The application split does not move with the aggregate. SSD and storage rose 37.5 percent to ¥1,362,638 million ($8,319 million); smart devices rose 51.6 percent to ¥759,978 million ($4,640 million); "other" rose 0.4 percent, from ¥214,171 million ($1,308 million) to ¥215,012 million ($1,313 million). The three lines sum to the revenue total. "Other" is defined to include retail cards and drives plus the sales that reach the Sandisk group through the three joint ventures, and the results presentation gives the venture component for both years, rounded to a tenth of a billion yen: ¥198.6 billion ($1,212 million) falling to ¥193.4 billion ($1,181 million), the later figure including ¥3.4 billion ($21 million) of consideration for the contract extension. Taking that component out of the "other" line, at the same rounding, leaves ¥15.6 billion ($95.2 million) rising to ¥21.6 billion ($132 million). The line carrying the partner's half of the output fell 2.6 percent in a year the company's total rose 37.0 percent, and 4.3 percent excluding the extension consideration.

The customer table shows the same effect from the other side. Apple accounted for ¥476,014 million ($2,906 million), or 20.4 percent, against ¥300,512 million ($1,835 million) and 17.6 percent a year earlier — yen sales up 58.4 percent against a total up 37.0 percent, so the concentration rose on an expanding base rather than a static one. Sandisk (11.6 percent) and Dell (10.0 percent) are absent from the current-year table, the threshold for inclusion being 10 percent, and the report states that both fell below it. Their prior-year amounts, ¥198,572 million ($1,212 million) and ¥171,157 million ($1,045 million), measured against the new denominator, would come to 8.5 percent and 7.3 percent. Their absence from the table is arithmetically consistent with having sold exactly as much as before.

The geographic split is disclosed on a stated basis: the location of the operating sites of the group's subsidiaries — not the customer, not the ship-to. Revenue splits into Japan ¥263,252 million ($1,607 million), North America and Europe ¥1,217,643 million ($7,434 million), and Asia ¥856,733 million ($5,230 million), the three summing to the revenue total, with the United States alone at ¥1,098,832 million ($6,708 million). Kioxia America's standalone revenue, disclosed in the affiliated-companies section on Japanese GAAP and excluding intra-group sales, is ¥1,100,899 million ($6,721 million) — ¥2,067 million ($13 million) above the entire "United States" figure, or two-tenths of a percent: two different bases, close but not the same number. The geographic disclosure covers revenue and non-current assets; profit is not among its items, so regional margins do not exist in this document.

Which brings us to the joint ventures, where the same three companies are accounted for two different ways depending on which filing you open. Kioxia holds 50.1 percent of the voting rights in Flash Partners, Flash Alliance and Flash Forward, and recognises 50 percent of their assets, liabilities, income and expenses line by line, as IFRS joint operations, on the basis that the two parents hold equal decision rights. Sandisk holds 49.9 percent, applies the equity method, and states that the entities are variable interest entities of which it is not the primary beneficiary, having concluded that it lacks the power to direct most of the activities that most significantly affect their economic performance. Neither parent consolidates them: one takes proportionate halves of every line, the other carries notes receivable and an investment balance. Their combined net equity was $1,110 million at 30 June 2025 — a figure whose scope covers Flash Ventures together with two other ventures. On the prior year's narrower scope and earlier date, Flash Ventures alone were $1,023 million.

The mechanics explain where the halves are drawn. The ventures fund equipment by borrowing from the two parents or by leasing it, and the equipment is installed in Kioxia's Yokkaichi and Kitakami plants, then lent back to Kioxia at no charge. Kioxia manufactures on consignment, sells the processed wafers to the ventures, and the ventures sell to the two parents in equal halves. Kioxia runs the plants and holds the manufacturing know-how; the ventures hold title to the tools. The related-party note in the listing document records no material transactions in each of three consecutive years, which is what proportionate recognition leaves behind, having already absorbed them line by line.

Sandisk discloses these ventures' financials on a 100 percent basis, as Rule 4-08(g) of Regulation S-X requires for unconsolidated ventures: net sales $2,315 million, gross loss $(101) million, net loss $(63) million, total assets $7,608 million, total liabilities $6,498 million, for and as of the year ended 30 June 2025 — the ventures' own period, three days after Sandisk's. Each venture buys wafers from Kioxia at cost and resells them to the two parents at cost plus a markup, as the filing describes. Half of $2,315 million is $1,158 million, against the $1,181 million of venture-routed sales in Kioxia's "other" line, which is close enough to be suggestive and too loose to be a reconciliation: the fiscal years end nine months apart, the current-year scope adds two ventures the prior years excluded, and Sandisk's share of venture results is recognised one quarter in arrears.

The obligations attached to that structure appear in one filing and not in the other. Sandisk discloses, as of 27 June 2025, that it must pay half of the ventures' fixed costs regardless of how much output it takes, that purchase orders placed for up to three months are binding and cannot be cancelled, that it is committed to fund 49.9 to 50.0 percent of each venture's capital investments where the venture's own operating cash flow will not cover them, that Flash Ventures related commitments total $4,539 million, that research-and-development commitments due for 2026 are $130 million, and that $946 million of prepaid building depreciation remains to be credited against future charges — the buildings being Kioxia's, the tools the ventures'. Kioxia's commitments note, item 35, consists of contracted purchases of property, plant and equipment and intangible assets: ¥260,759 million ($1,592 million), against ¥140,489 million ($858 million) a year earlier. Offtake obligations and research-cost-sharing amounts are not among the items that note sets out. The economics are symmetrical by construction. The disclosure requirements are not: commitments, offtake and the Rule 4-08(g) venture summary are items the U.S. filer's regime enumerates, and the Japanese filer's regime enumerates a different set. Each report contains what its own regime asks for, and on this structure the two sets do not overlap.

Capacity is disclosed in percentages, without a denominator. About 80 percent of the combined capacity of the two plants sits in the ventures, split about 40 percent each, with the remaining 20 percent held by Kioxia alone, so roughly 60 percent of what the two plants make is Kioxia's to sell. No wafer count appears in the report's 192 pages; the counter for wafers occurs three times, each time in a description of process technology. The counts appear instead in a Ministry of Economy, Trade and Industry approval dated 6 February 2024, the approval the report cites by number: 60,000 wafers per month at Yokkaichi and 25,000 at Kitakami, twelve-inch equivalent, for three-dimensional flash memory of 218 layers or more. In the same form, the site-area and building-area rows carry a whole-plant qualifier and the capacity row does not, so the figures on that page cannot be summed with confidence.

In January 2026 the Yokkaichi joint venture agreements were extended from 31 December 2029 to 31 December 2034, and the announcement states that the agreement for the Kitakami plant is aligned with the Yokkaichi one through the same date. Sandisk will pay Kioxia US$1.165 billion for manufacturing services and continued availability of supply, in instalments over the years 2026 to 2029; Kioxia's report records the same consideration as receivable across those four years. The instalments run to 2029; the extended term runs to 2034. Sandisk's 10-K, filed on 21 August 2025, five months before the extension and covering a fiscal year that ended seven months before it, still lists 31 December 2029 for Flash Partners and Flash Alliance and 31 December 2034 for Flash Forward, and records that the two parents have extended the term of all three ventures before. The two documents describe the same arrangement from different afternoons.

Capital spending appears in three sizes. The year to March 2026 was ¥283,674 million ($1,732 million) on a payments basis including intangibles — ¥281,062 million ($1,716 million) of property plus ¥2,612 million ($16 million) — and ¥221.0 billion ($1,349 million) on the company's own net definition, which subtracts both ¥56,396 million ($344 million) of government grants received and ¥6,254 million ($38 million) of proceeds from asset sales. The plan for the year to March 2027, set out in the report as payments-basis investment in front-end equipment and buildings at the two plants, is ¥450.0 billion ($2,747 million) gross, up 58.6 percent on the year just closed. The ministry approval puts the funding needed for the facilities it covers at approximately ¥450 billion as well, for different things over a different period. The company names fiscal years by their starting calendar year: the year ending March 2027 is FY2026, and the English translation of the March 2026 report is posted as FY2025.

Operating cash flow was ¥616,540 million ($3,764 million); the investing outflow ¥221,512 million ($1,352 million), or 36 percent of it, with gross capital spending at 46 percent. Financing is presented with both gross and net lines: a net outflow of ¥96,074 million ($587 million), and behind it ¥616,429 million ($3,763 million) of loan repayments, ¥322,996 million ($1,972 million) of preferred-share redemption and ¥30,528 million ($186 million) of lease repayments against ¥535,637 million ($3,270 million) of new borrowing and ¥326,656 million ($1,994 million) of bond proceeds. Those five lines come to an outflow of ¥107,660 million ($657 million); the ¥11,586 million ($71 million) difference is ¥11,588 million ($71 million) of share issuance against ¥2 million of treasury purchases. Working capital absorbed ¥400,296 million ($2,444 million): trade and other receivables ¥397,696 million ($2,428 million) and inventories ¥55,765 million ($340 million), against a ¥53,165 million ($325 million) increase in trade and other payables. No dividend on common shares is recorded in any of the five periods shown. The dividend-policy section runs five sentences and states that the company has begun considering a progressive dividend policy for part of shareholder returns.

There are only two of these reports. Kioxia listed on 18 December 2024; the seventh-term report filed on 26 June 2025 was the first, and its consolidated selected-data table runs four periods rather than the customary five, the fourth term through the seventh. The table's notes record that the IFRS consolidated statements from the fourth term onward were audited under Article 193-2, paragraph 1 of the Financial Instruments and Exchange Act. A holder assembling a longer series has to go elsewhere: three IFRS years in the listing document, and carve-out figures inside the 10-K of a partner that only separated from Western Digital in February 2025. The English translation, which is not a filed document, covers both periods that exist.

On currency: yen amounts are converted at ¥163.8 = US$1, the rate on 24 July 2026, applied uniformly to every period in this piece regardless of when the amount arose, with dollar figures carried to the significant figures of the yen original. Each yen amount is converted on its own and rounded on its own, so a set of converted components can differ from a converted total by one unit in the last place. Ratios, percentages, multiples and counts are not converted. Dollar amounts taken from Sandisk's filings are that company's own, translated at ¥144.73 in the case of yen-denominated balances, which is why the same guarantee balance appears here as US$1.24 billion and there as $1,404 million; the yen figure is printed rounded to the nearest ¥1 billion, so neither dollar figure divides back to it exactly.