SanDisk 2010 Annual Report Download - page 206

Notes To Consolidated Financial Statements
$63.0 million, respectively, as the fair value of these investments was determined to be less than the carrying
value. These impairments were based upon a comparison of the forecasted discounted cash flows to the carrying
value of each venture. The analyses considered several factors including the volatility in foreign currencies
resulting in an appreciation in the carrying value of these Japanese yen denominated assets and a reduced
business outlook primarily due to NAND flash memory industry pricing conditions. The impairment analyses
and measurement is a process that requires significant judgment and the use of significant estimates related to
valuation such as discount rates, long-term growth rates, foreign currency rates, and the level and timing of future
cash flows. The Flash Partners and Flash Alliance impairments were recorded in cost of product revenues due to
the operational nature of the ventures. See Note 12, “Commitments, Contingencies and Guarantees – Flash
Partners and Flash Alliance,” regarding equity method investments and Note 13, “Related Parties and Strategic
Investments,” for the Company’s maximum loss exposure related to these variable interest entities.
The Company assesses financing receivable credit quality through financial and operational reviews of the
borrower and creditworthiness, including credit rating agency ratings, of significant investors of the borrower,
where material or known. Impairments, when required, are recorded in other income (expense). The Company
makes or will make long-term loans to Flash Partners, Flash Alliance or Flash Forward Ltd. (“Flash Forward”),
hereinafter collectively referred to as “Flash Ventures,” to fund new process technologies and additional wafer
capacities. The Company aggregates its Notes Receivables to Flash Ventures into one class of financing
receivables due to the similar ownership interest in Flash Ventures and common structure. For all reporting
periods presented, no loans were past due and no loan impairments were recorded.
Other Current Accrued Liabilities. Other current accrued liabilities were as follows (in thousands):
January 2,
2011
January 3,
2010
Accrued payroll and related expenses ........................................ $ 143,260 $ 118,648
Accrued restructuring .................................................... 1,692 2,622
Derivative contract payables ............................................... 33,606 7,794
Income taxes payable .................................................... 9,751 7,136
Other accrued liabilities .................................................. 96,400 97,879
Total other current accrued liabilities .................................... $ 284,709 $ 234,079
Non-current liabilities. Non-current liabilities were as follows (in thousands):
January 2,
2011
January 3,
2010
Deferred tax liability ..................................................... $ 37,210 $ 35,470
Income tax liabilities ..................................................... 200,579 206,464
Accrued restructuring .................................................... 7,634 9,228
Other non-current liabilities ............................................... 80,753 36,316
Total non-current liabilities ............................................ $ 326,176 $ 287,478
As of January 2, 2011 and January 3, 2010, the current accrued restructuring liability was primarily
comprised of the current portion of the Company’s excess facility lease obligations. The non-current accrued
restructuring balance and activity from the prior year end was primarily related to excess lease obligations and
cash lease obligation payments. The facility lease obligations extend through the end of the lease term in fiscal
year 2016.
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