SanDisk 2008 Annual Report Download - page 90

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Notes To Consolidated Financial Statements
The 1% Notes due 2035 are convertible, at the option of the holders at any time before the maturity date,
into shares of the Company at a conversion rate of 26.8302 shares per one thousand dollars principal amount of
the 1% Notes due 2035, representing a conversion price of approximately $37.27 per share.
Beginning on March 15, 2008 and until March 14, 2010, the Company may redeem for cash the notes, in
whole or in part at any time at a redemption price equal to 100% of the principal amount of the notes to be
redeemed, plus accrued but unpaid interest, if any, to but excluding the redemption date, if the last reported sales
price of the Company ordinary shares has exceeded 130% of the conversion price for at least 20 trading days in
any consecutive 30-day trading period ending on the trading day prior to the date of mailing of the notice of
redemption.
At any time on or after March 15, 2010, the Company may redeem the notes in whole or in part at a
redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid
interest, if any, to but excluding the optional redemption date.
Holders of the notes have the right to require the Company to purchase all or a portion of their notes on
March 15, 2010, March 15, 2015, March 15, 2020, March 15, 2025 and March 15, 2030. The purchase price
payable will be equal to 100% of the principal amount of the notes to be purchased, plus accrued and unpaid
interest, if any, to but excluding the purchase date.
In accordance with Accounting Principle Board Opinion No. 14, (“APBO 14”), Accounting for Convertible
Debt and Debt Issued with Stock Purchase Warrants, the Company determined the existence of a substantial
premium over par value for the 1% Notes due 2035 based upon quoted market prices at the msystems acquisition
date and recorded the notes at par value with the resulting excess of fair value over par (the substantial premium)
recorded in Capital in Excess of Par Value in Stockholders’ Equity in the amount of $26.4 million.
Note 8: Concentrations of Risk and Segment Information
Geographic Information and Major Customers. The Company markets and sells flash memory products in
the U.S. and in foreign countries through its sales personnel, dealers, distributors, retailers and subsidiaries. The
Company’s Chief Operating Decision Maker, the President and Chief Operating Officer, evaluates performance
of the Company and makes decisions regarding allocation of resources based on total Company results. Since the
Company operates in one segment, all financial segment information can be found in the accompanying
Consolidated Financial Statements.
Other than sales in the U.S., Japan, Europe, Middle East and Africa (“EMEA”), and Asia Pacific (“APAC”),
international sales were not material individually in any other international locality. Intercompany sales between
geographic areas have been eliminated.
F-25