SanDisk 2006 Annual Report Download - page 116

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Accumulated Other Comprehensive Income. Accumulated other comprehensive income presented in the
accompanying consolidated balance sheets consists of the foreign currency translation and accumulated gains and
losses on available-for-sale marketable securities, net of taxes, for all periods presented (in thousands):
December 31,
2006
January 1,
2006
Accumulated net unrealized gain (loss) on:
Available-for-sale investments ................................ $(1,918) $(4,233)
Available-for-sale investments in foundries ...................... (610) (383)
Foreign currency translation ................................. 8,021 7,251
Total accumulated other comprehensive income .................... $5,493 $2,635
The amount of income tax expense allocated to unrealized gain on available-for-sale securities was immaterial
at December 31, 2006 and January 1, 2006, respectively.
Note 4: Goodwill and Other Intangible Assets
Goodwill. Goodwill balance is as follows (in thousands):
Balance at January 1, 2006 ............................................... $ 5,415
Goodwill adjustment .................................................. 97
Matrix goodwill acquired (Note 10)....................................... 145,492
msystems goodwill acquired (Note 10) .................................... 759,250
Balance at December 31, 2006 ............................................ $910,254
In accordance with Statement of Financial Accounting Standards No. 142, or SFAS 142, Goodwill and Other
Intangible Assets, goodwill is not amortized, but instead is reviewed and tested for impairment at least annually and
whenever events or circumstances occur which indicate that goodwill might be impaired. Impairment of goodwill is
tested at the Company’s reporting unit level by comparing the carrying amount, including goodwill, to the fair
value. In performing the analysis, the Company uses the best information available, including reasonable and
supportable assumptions and projections. If the carrying amount of the reporting unit exceeds its implied fair value,
goodwill is considered impaired and a second step is performed to measure the amount of impairment loss, if any.
The Company performs an annual goodwill impairment test with an effective date of the first day of the fourth fiscal
quarter.
Other Intangible Assets. Other intangible assets balances were as follows (in thousands):
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
December 31, 2006 January 1, 2006
Core technology ................. $311,801 $(18,135) $293,666 $ — $ — $ —
Developed product technology ....... 12,900 (2,103) 10,797 1,500 (542) 958
Trademarks .................... 4,000 (911) 3,089 — — —
Backlog ....................... 5,000 (1,139) 3,861 — — —
Supply agreement ................ 2,000 (46) 1,954 — — —
Customer relationships ............ 80,100 (6,008) 74,092 — — —
Acquisition-related intangible assets . . 415,801 (28,342) 387,459 1,500 (542) 958
Technology licenses .............. 7,388 (5,769) 1,619 7,389 (3,739) 3,650
Total ......................... $423,189 $(34,111) $389,078 $8,889 $(4,281) $4,608
Annual Report
F-17
Notes to Consolidated Financial Statements — (Continued)