SanDisk 2012 Annual Report Download - page 207

This is a TAB type table. Insert
conts here. Annual Report
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
been accrued in the accompanying Consolidated Financial Statements with respect to these indemnification
guarantees.
As permitted under Delaware law and the Company’s certificate of incorporation and bylaws, the Company
has agreements, or has assumed agreements in connection with its acquisitions, whereby it indemnifies certain of
its officers and employees, and each of its directors for certain events or occurrences while the officer, employee
or director is, or was, serving at the Company’s or the acquired company’s request in such capacity. The term of
the indemnification period is for the officer’s, employee’s or director’s lifetime. The maximum potential amount
of future payments the Company could be required to make under these indemnification agreements is generally
unlimited; however, the Company has a Director and Officer insurance policy that may reduce its exposure and
enable it to recover all or a portion of any future amounts paid. As a result of its insurance coverage, the
Company believes the estimated fair value of these indemnification agreements is minimal. The Company has no
liabilities recorded for these agreements as of December 30, 2012 or January 1, 2012, as these liabilities are not
reasonably estimable even though liabilities under these agreements are not remote.
The Company and Toshiba have agreed to mutually contribute to, and indemnify each other and Flash
Ventures for, environmental remediation costs or liability resulting from Flash Ventures’ manufacturing
operations in certain circumstances. The Company and Toshiba have also entered into a Patent Indemnification
Agreement under which, in many cases, the Company will share in the expenses associated with the defense and
cost of settlement associated with such claims. This agreement provides limited protection for the Company
against third-party claims that NAND flash memory products manufactured and sold by Flash Ventures infringe
third-party patents. The Company has not made any indemnification payments under any such agreements. As of
December 30, 2012, no amounts have been accrued in the accompanying Consolidated Financial Statements with
respect to these indemnification guarantees.
Contractual Obligations and Off-Balance Sheet Arrangements
The following tables summarize the Company’s contractual cash obligations, commitments and off-balance
sheet arrangements at December 30, 2012, and the effect such obligations are expected to have on its liquidity
and cash flows in future periods.
Contractual Obligations. Contractual cash obligations and commitments as of December 30, 2012 are as
follows (in thousands):
Total
1 Year (Fiscal
2013)
2 - 3 Years
(Fiscal 2014
and 2015)
4 - 5 Years
(Fiscal 2016
and 2017)
More than 5
Years (Beyond
Fiscal 2017)
Facility and other operating leases ....... $ 14,499(5) $ 6,157 $ 7,283 $ 1,059 $ —
Flash Partners (1) ..................... 626,011(5)(6) 228,648 262,966 107,433 26,964
Flash Alliance (1) ..................... 1,160,953(5)(6) 412,995 536,461 144,860 66,637
Flash Forward (1) ..................... 693,304(5)(6) 155,890 355,448 150,532 31,434
Toshiba research and development ...... 68,051(5) 38,051 30,000 — —
Capital equipment purchase
commitments ..................... 37,561 37,561 — — —
1% Convertible senior notes principal and
interest (2) ........................ 932,701 932,701 — — —
1.5% Convertible senior notes principal
and interest (3) ..................... 1,075,000 15,000 30,000 1,030,000 —
Operating expense commitments ........ 53,061 50,161 2,900 — —
Noncancelable production purchase
commitments (4) ................... 294,526(5) 294,526 — — —
Total contractual cash obligations . . . $ 4,955,667 $ 2,171,690 $ 1,225,058 $ 1,433,884 $ 125,035
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