SanDisk 2014 Annual Report Download - page 166

SANDISK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Acquired IPR&D is accounted for as an indefinite-lived intangible asset. Indefinite-lived intangible
assets are reviewed for impairment at least annually until technological feasibility is achieved or
development is complete. Upon completion of development, the acquired IPR&D is considered an
amortizable finite-lived intangible asset. Amortization expense of technology licenses and patents is
recorded to cost of revenue or R&D based upon the use of the technology.
Amortization expense of intangible assets totaled $148.6 million, $84.3 million and $76.5 million in
fiscal years 2014, 2013 and 2012, respectively.
The annual expected amortization expense of intangible assets subject to amortization as of
December 28, 2014 was as follows (in thousands):
Acquisition-related Technology Licenses
Intangible Assets and Patents
Fiscal year:
2015 ............................................ $ 152,375 $ 20,056
2016 ............................................ 109,971 3,333
2017 ............................................ 90,916 —
2018 ............................................ 66,260 —
2019 ............................................ 38,440 —
Total intangible assets subject to amortization ............. $ 457,962 $ 23,389
Note 7. Financing Arrangements
The following table reflects the carrying values of the Company’s convertible debt (in thousands):
December 28, December 29,
2014 2013
1.5% Notes due 2017 ............................................ $ 996,788 $ 1,000,000
Less: Unamortized bond discount ................................... (127,143) (170,208)
Net carrying amount of 1.5% Notes due 2017 ........................ 869,645 829,792
0.5% Notes due 2020 ............................................ 1,500,000 1,500,000
Less: Unamortized bond discount ................................... (300,304) (344,429)
Net carrying amount of 0.5% Notes due 2020 ........................ 1,199,696 1,155,571
Total convertible debt ............................................ 2,069,341 1,985,363
Less: Convertible short-term debt ................................... (869,645) —
Convertible long-term debt ..................................... $ 1,199,696 $ 1,985,363
1% Convertible Senior Notes Due 2013. On May 15, 2013, the maturity date for the 1% Convertible Senior
Notes due May 15, 2013 (‘‘1% Notes due 2013’’), the Company settled the 1% Notes due 2013 through an
all-cash transaction for principal and accrued interest of $928.1 million and $4.6 million, respectively. As of
the date of the redemption, the Company had no further obligations related to the 1% Notes due 2013. In
connection with the maturity of the 1% Notes due 2013, the associated convertible bond hedge and
warrant transactions also terminated, with no shares purchased under the convertible bond hedge
agreement and no exercises of the warrants.
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