SanDisk 2005 Annual Report Download - page 147

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as current other assets at January 1, 2006 and January 2, 2005, and $11.3 million and $22.5 million was classified as
non-current other assets in the accompanying consolidated balance sheets as of January 1, 2006 and January 2,
2005, respectively. These amounts are secured by irrevocable standby letters of credit issued by the International
Commercial Bank of China, or ICBC. Further, Lee and Li extended a credit to the Company in the amount of
$18.3 million to be applied against future legal services provided by Lee and Li and to be spread equally over
18 years. This amount was reduced by $6.2 million as a result of a recovery from a third party brokerage firm in
2004. As a result of the recovery, the credit has been reduced to approximately $12 million to be spread equally over
approximately 12 years. If any of the stolen assets are recovered, the net amount after recovery of expenses will be
split between the Company and Lee and Li, in specified proportions until the Company receives a maximum amount
of $106.6 million, including all amounts described above.
Contractual Obligations and Off Balance Sheet Arrangements
The following summarizes the Company’s contractual cash obligations, commitments and off balance sheet
arrangements at January 1, 2006, and the effect such obligations are expected to have on its liquidity and cash flows
in future periods (in thousands).
Total
Less Than
1 Year
2 - 3 Years
(Fiscal 2007
and 2008)
3 - 5 Years
(Fiscal 2009
and 2010)
More Than 5
Years
(Beyond
Fiscal 2011)
Contractual Obligations:
Operating leases(1) ........ $ 4,095 $ 2,758 $ 1,147 $ 190 $ —
FlashVision, fabrication
capacity expansion costs,
and reimbursement for
certain other costs
including depreciation .... 303,559 98,966 135,713 66,536 2,344
Flash Partners fabrication
capacity expansion and
start-up costs, and
reimbursement for certain
other costs including
depreciation(2) ......... 1,756,798 734,725 481,137 351,176 189,760
Toshiba research and
development ........... 104,483 36,483 68,000 — —
Capital equipment purchases
commitments .......... 62,548 62,548 — — —
Operating expense
commitments .......... 67,998 67,998 — — —
Noncancelable production
purchase
commitments(3) ........ 356,594(4) 356,594 — — —
Total contractual cash
obligations ............ $2,656,075 $1,360,072 $685,997 $417,902 $192,104
As of
January 1,
2006
Off Balance Sheet Arrangements:
Indemnification of FlashVision foundry equipment lease(5) ...................... $ 75,048
Guarantee of Flash Partners lease(2)(6) ..................................... $203,207
F-28
Notes to Consolidated Financial Statements — (Continued)