SanDisk 2007 Annual Report Download - page 89

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Amortization of Acquisition-Related Intangible Assets.
FY 2007
Percent
Change FY 2006
Percent
Change FY 2005
(In millions, except percentages)
Amortization of acquisition-related intangible
assets ............................... $25.3 45% $17.4 — n/a
Percent of revenue........................ 0.6% 0.5% n/a
The increase of amortization of acquisition-related intangible assets for the year ended December 31, 2007 was
directly related to twelve months of amortization in fiscal year 2007 from our acquisition of msystems compared to
less than two months of amortization in fiscal year 2006.
Our expense from the amortization of acquisition-related intangible assets for the year ended December 31,
2006 was directly related to our acquisition of Matrix in January 2006 and msystems in November 2006.
Restructuring.
FY 2007
Percent
Change FY 2006
Percent
Change FY 2005
(In millions, except percentages)
Restructuring ........................... $6.7 100% n/a — n/a
Percent of revenue........................ 0.2% n/a n/a
During the first quarter of fiscal year 2007, we implemented a restructuring plan which included reductions of
our workforce in all functions of the organization worldwide and closure of redundant facilities in order to reduce
our cost structure. A restructuring charge of $7 million was recorded, of which $6 million related to severance and
benefits to 149 terminated employees and the remaining was primarily for excess lease obligations. This
restructuring resulted in a reduction to our annual expenses of approximately $22 million in operations, research
and development, sales and marketing, and general and administrative expense. We do not expect additional
charges relating to this restructuring plan. For further discussion on our restructuring plans, please refer to Note 9,
“Restructuring,” to our consolidated financial statements included in Item 8 of this report.
Other Income.
FY 2007
Percent
Change FY 2006
Percent
Change FY 2005
(In millions, except percentages)
Interest income .......................... $133.4 32% $101.1 136% $42.8
Interest expense ......................... (16.9) 59% (10.6) 1667% (0.6)
Income (loss) in equity investments ........... (9.9) (248)% 6.7 186% (7.8)
Other income, net ........................ 15.3 113% 7.2 213% 2.3
Total other income, net .................... $121.9 17% $104.4 184% $36.7
The increase in other income from fiscal year 2006 to fiscal year 2007 was primarily due to interest income of
$133 million offset by full year interest expense of ($17) million resulting from our $1.15 billion debt offering in
May 2006 and the acquired msystems’ $75 million debt offering, and an impairment charge of ($10) million to our
FlashVision investment included in “Income (loss) in equity investments.”
Other income for fiscal year 2006 was comprised primarily of interest income of $101 million offset by interest
expense of ($11) million resulting from our $1.15 billion debt offering in May 2006. See Note 5, “Financing
Arrangements,” to our consolidated financial statements included in Item 8 of this report.
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