SanDisk 2006 Annual Report Download - page 114

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Allowance for Doubtful Accounts. The activity in the allowance for doubtful accounts was as follows (in
thousands):
December 31,
2006
January 1,
2006
January 2,
2005
Balance, beginning of period ......................... $ 8,050 $8,462 $4,882
Additions charged to costs and expenses ................ 6,142 376 4,581
Deductions (write-offs) ............................. (2,740) (788) (1,001)
Balance, end of period ............................ $11,452 $8,050 $ 8,462
Inventory. Inventories were as follows (in thousands):
December 31,
2006
January 1,
2006
Rawmaterial.............................................. $157,163 $ 99,006
Work-in-process............................................ 64,009 61,900
Finished goods ............................................ 274,812 170,678
Totalinventories ........................................... $495,984 $331,584
In 2006, 2005 and 2004, the Company sold $13.5 million, $12.4 million and $10.2 million, respectively, of
inventory that had been fully written-off in previous periods.
Other Current Assets. Other current assets were as follows (in thousands):
December 31,
2006
January 1,
2006
Royalty and other receivables.................................. $ 82,569 $ 77,310
Interest receivable .......................................... 14,561 6,976
Prepaid expenses ........................................... 22,276 5,047
Investment in foundries ...................................... 22,720 18,338
Other current assets ......................................... 6,531 14,251
Total other non-current assets .................................. $148,657 $121,922
Property and Equipment. Property and equipment consisted of the following (in thousands):
December 31,
2006
January 1,
2006
Machinery and equipment .................................... $507,282 $ 318,336
Software ................................................ 54,411 35,990
Capital land lease .......................................... 3,197 —
Furniture and fixtures ....................................... 5,604 1,682
Leasehold improvements..................................... 13,957 8,881
Property and equipment, at cost ............................... 584,451 364,889
Accumulated depreciation and amortization ....................... (266,486) (153,797)
Property and equipment, net .................................. $317,965 $ 211,092
Depreciation expense of property, plant and equipment totaled $102.5 million, $63.1 million and $38.1 million
in fiscal 2006, 2005 and 2004, respectively. Amortization expense of intangible assets and totaled $29.8 million,
$2.7 million and $0.8 million in fiscal 2006, 2005 and 2004, respectively.
Annual Report
F-15
Notes to Consolidated Financial Statements — (Continued)