Crucial 2012 Annual Report Download - page 40

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Contractual Obligations
Payments Due by Period
As of August 30, 2012 Total Less than
1 year 1-3 years 3-5 years More than 5 years
Notes payable (1) $ 3,225 $ 93 $ 1,076 $ 259 $ 1,797
Capital lease obligations (1) 996 231 442 251 72
Operating leases 90 25 25 16 24
Purchase obligations 1,349 1,187 148 6 8
Other long-term liabilities (2) (3) 620 123 379 53 65
Total $ 6,280 $ 1,659 $ 2,070 $ 585 $ 1,966
(1) Amounts represent principal and interest cash payments over the life of the debt obligation, including anticipated interest
payments that are not recorded on our consolidated balance sheet. Any future redemption or conversion of convertible debt
could impact our cash payments.
(2) Amounts represent future cash payments to satisfy other long-term liabilities recorded on our consolidated balance sheet,
including $262 million for the short-term portion of these long-term liabilities.
(3) We are unable to reliably estimate the timing of future payments related to uncertain tax positions; therefore, $83 million of
long-term income taxes payable has been excluded from the preceding table. However, long-term income taxes payable
recorded on our consolidated balance sheet included these uncertain tax positions.
The obligations disclosed above do not include contractual obligations recorded on our balance sheet as current liabilities
except for the current portion of long-term debt. The expected timing of payment amounts of the obligations discussed above
is estimated based on current information. Timing and actual amounts paid may differ depending on the timing of receipt of
goods or services, market prices, changes to agreed-upon amounts or timing of certain events for some obligations.
Purchase obligations include all commitments to purchase goods or services of either a fixed or minimum quantity that
meet any of the following criteria: (1) they are noncancellable, (2) we would incur a penalty if the agreement was canceled, or
(3) we must make specified minimum payments even if we do not take delivery of the contracted products or services ("take-
or- pay"). If the obligation to purchase goods or services is noncancellable, the entire value of the contract was included in the
above table. If the obligation is cancellable, but we would incur a penalty if canceled, the dollar amount of the penalty was
included as a purchase obligation. Contracted minimum amounts specified in take-or-pay contracts are also included in the
above table as they represent the portion of each contract that is a firm commitment.
Pursuant to the Inotera Supply Agreement, we have an obligation to purchase 50% of Inotera’s semiconductor memory
capacity subject to specific terms and conditions. As purchase quantities are based on qualified production output, the Inotera
Supply Agreement does not contain a fixed or minimum purchase quantity and therefore we did not include our obligations
under the Inotera Supply Agreement in the contractual obligations table above. Our obligation under the Inotera Supply
Agreement also fluctuates due to pricing which is based on manufacturing costs and revenues associated with the resale of
DRAM products. We purchased $646 million of DRAM products from Inotera in 2012 under the Inotera Supply Agreement.
Off-Balance Sheet Arrangements
Concurrent with the offering of the 2032C and 2032D Notes in April 2012, we entered into capped call transactions that
have an initial strike price of approximately $9.80 and $10.16 per share, respectively, subject to certain adjustments, which was
set to be slightly higher than the initial conversion prices of approximately $9.63 for the 2032C Notes and $9.98 for the 2032D
Notes, and cap prices that range from $14.26 per share to $16.04 per share (the "2012 Capped Calls"). The 2012 Capped Calls
cover, subject to anti-dilution adjustments similar to those contained in the 2032 Notes, an approximate combined total of 100.6
million shares of common stock. The 2012 Capped Calls expire on various dates between May 2016 and May 2018. The 2012
Capped Calls are intended to reduce the potential dilution upon conversion of the 2032C and 2032D Notes.