SanDisk 2012 Annual Report Download - page 188

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Amortization expense of intangible assets totaled $76.5 million, $65.5 million and $20.7 million in fiscal
years ended December 30, 2012, January 1, 2012 and January 2, 2011, respectively.
The annual expected amortization expense of intangible assets as of December 30, 2012, excluding acquired
in-process research and development, is presented below (in thousands):
Estimated Amortization Expense
Acquisition-related
Intangible Assets
Technology Licenses
and Patents
Fiscal year:
2013 ......................................................... $ 44,928 $ 23,599
2014 ......................................................... 40,545 21,231
2015 ......................................................... 40,380 20,056
2016 ......................................................... 15,322 3,333
Total intangible assets subject to amortization .................... $ 141,175 $ 68,219
Note 7: Financing Arrangements
The following table reflects the carrying value of the Company’s convertible debt (in thousands):
December 30,
2012
January 1,
2012
1% Notes due 2013 ............................................................. $ 928,061 $ 928,061
Less: Unamortized bond discount ................................................. (21,353) (75,915)
Net carrying amount of 1% Notes due 2013 ..................................... 906,708 852,146
1.5% Notes due 2017 ........................................................... 1,000,000 1,000,000
Less: Unamortized bond discount ................................................. (210,087) (247,235)
Net carrying amount of 1.5% Notes due 2017 .................................... 789,913 752,765
Total convertible debt ........................................................... 1,696,621 1,604,911
Less: Convertible short-term debt ................................................. (906,708) —
Convertible long-term debt ....................................................... $ 789,913 $ 1,604,911
1% Convertible Senior Notes Due 2013. In May 2006, the Company issued and sold $1.15 billion in
aggregate principal amount of 1% Convertible Senior Notes due May 15, 2013 (the “1% Notes due 2013”) at par
and has subsequently repurchased $221.9 million of principal amount of these notes. The 1% Notes due 2013
may be converted, under certain circumstances, based on an initial conversion rate of 12.1426 shares of common
stock per $1,000 principal amount of notes (which represents an initial conversion price of approximately $82.36
per share). The net proceeds to the Company from the offering of the 1% Notes due 2013 were $1.13 billion. As
of December 30, 2012, the Company had $928.1 million outstanding in aggregate principal amount at par.
The Company separately accounts for the liability and equity components of the 1% Notes due 2013. The
principal amount of the liability component of $753.5 million as of the date of issuance was recognized at the
present value of its cash flows using a discount rate of 7.4%, the Company’s borrowing rate at the date of the
issuance for a similar debt instrument without the conversion feature. The carrying value of the equity
component was $394.3 million as of December 30, 2012 and January 1, 2012.
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