SanDisk 2013 Annual Report Download - page 215

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company has excluded $205.3 million of unrecognized tax benefits (which includes penalties and
interest) from the contractual obligation table above due to the uncertainty with respect to the timing of
associated future cash flows at December 29, 2013. The Company is unable to make reasonably reliable
estimates of the period of cash settlement with the respective taxing authorities.
Off-Balance Sheet Arrangements. Off-balance sheet arrangements are as follows (in thousands):
December 29,
2013
Guarantee of Flash Ventures equipment leases(1) ................................... $ 491,557
(1) The Company’s guarantee obligation, net of cumulative lease payments, was 51.6 billion Japanese yen, or
approximately $492 million based upon the exchange rate at December 29, 2013.
The Company leases many of its office facilities and operating equipment for various terms under
long-term, noncancelable operating lease agreements. The leases expire at various dates from fiscal year
2014 through fiscal year 2019. Future minimum lease payments are presented below (in thousands):
Future minimum
lease payments
Fiscal year:
2014 ............................................................ $ 7,717
2015 ............................................................ 6,083
2016 ............................................................ 2,695
2017 ............................................................ 1,370
2018 ............................................................ 539
2019 ............................................................ 77
18,481
Sublease income to be received in the future under noncancelable subleases ............... (1,251)
Net operating leases .................................................. $ 17,230
Net rent expense was as follows (in thousands):
Fiscal years ended
December 29, December 30, January 1,
2013 2012 2012
Rent expense, net .................................... $ 6,473 $ 6,366 $ 7,926
Note 13: Related Parties and Strategic Investments
Flash Ventures with Toshiba. The Company owns 49.9% of each entity within Flash Ventures and
accounts for its ownership position under the equity method of accounting. The Company’s obligations
with respect to the Flash Ventures master lease agreements, take-or-pay supply arrangements and R&D
cost sharing are described in Note 12, ‘‘Commitments, Contingencies and Guarantees.’’ The financial and
other support provided by the Company in all periods presented was either contractually required or the
result of a joint decision to expand wafer capacity, transition to new technologies or refinance existing
equipment lease commitments. Flash Ventures are variable interest entities (‘‘VIEs’’). The Company
evaluated whether it is the primary beneficiary of any of the entities within Flash Ventures for all periods
presented and determined that it is not the primary beneficiary of any of the entities within Flash Ventures
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Annual Report