SanDisk 2012 Annual Report Download - page 184

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Property and Equipment. Property and equipment were as follows (in thousands):
December 30,
2012
January 1,
2012
Machinery and equipment ....................................................... $1,124,701 $ 870,117
Software ..................................................................... 148,014 139,388
Buildings and building improvements .............................................. 227,651 70,036
Capital land lease .............................................................. 31,030 6,588
Furniture and fixtures ........................................................... 10,106 6,333
Leasehold improvements ........................................................ 11,979 24,068
Property and equipment, at cost ............................................... 1,553,481 1,116,530
Accumulated depreciation and amortization ......................................... (887,939) (771,633)
Property and equipment, net .................................................. $ 665,542 $ 344,897
Depreciation expense of property and equipment totaled $161.9 million, $115.0 million and $132.8 million
in fiscal years 2012, 2011 and 2010, respectively.
Notes Receivable and Investments in Flash Ventures. Notes receivable and investments in Flash Partners
Ltd., Flash Alliance Ltd. and Flash Forward Ltd. (collectively referred to as “Flash Ventures”) were as follows
(in thousands):
December 30,
2012
January 1,
2012
Notes receivable, Flash Partners Ltd. ............................................... $ 180,254 $ 291,564
Notes receivable, Flash Alliance Ltd. ............................................... 476,800 973,176
Notes receivable, Flash Forward Ltd. ............................................... 162,810 32,396
Investment in Flash Partners Ltd. .................................................. 232,547 258,184
Investment in Flash Alliance Ltd. .................................................. 342,048 368,459
Investment in Flash Forward Ltd. .................................................. 65,653 19,516
Total notes receivable and investments in Flash Ventures ........................... $ 1,460,112 $ 1,943,295
Equity-method investments and the Company’s maximum loss exposure related to Flash Ventures are
discussed further in Note 13, “Commitments, Contingencies and Guarantees – Flash Partners, Flash Alliance and
Flash Forward” and Note 14, “Related Parties and Strategic Investments.”
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 Ventures to fund new process technologies and additional wafer
capacities. The Company aggregates its Flash Ventures notes receivable into one class of financing receivables
due to the similar ownership interest and common structure in each Flash Ventures entity. For all reporting
periods presented, no loans were past due and no loan impairments were recorded.
Other Non-Current Assets. Other non-current assets were as follows (in thousands):
December 30,
2012
January 1,
2012
Prepaid tax on intercompany transactions ........................................... $ 42,118 $ 46,489
Prepayment to Flash Forward Ltd. ................................................. 5,144 29,396
Convertible note issuance costs ................................................... 8,708 12,992
Long-term prepaid income tax .................................................... 63,008 3,956
Other non-current assets ......................................................... 34,832 29,782
Total other non-current assets ................................................. $ 153,810 $ 122,615
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