SanDisk 2009 Annual Report Download - page 152

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Notes To Consolidated Financial Statements
Off-Balance Sheet Liabilities
The following table details the Company’s portion of the remaining guarantee obligations under each of
Flash Ventures’ master lease facilities in both Japanese yen and the U.S. dollar equivalent based upon the
exchange rate at January 3, 2010.
Master Lease Agreements by Execution Date Lease Amounts Expiration
(Yen in billions) (Dollars in thousands)
Flash Partners
December 2004 ................................ ¥ 6.0 $ 64,757 2010
December 2005 ................................ 3.6 39,630 2011
June 2006 .................................... 5.8 62,436 2011
September 2006 ............................... 20.2 218,878 2011
March 2007 ................................... 10.2 110,162 2012
February 2008 ................................. 4.0 42,830 2013
¥ 49.8 $ 538,693
Flash Alliance
November 2007 ............................... ¥ 21.4 $ 232,035 2013
June 2008 .................................... 27.7 299,035 2013
¥ 49.1 $ 531,070
Total guarantee obligations .......................... ¥ 98.9 $1,069,763
The following table details the breakdown of the Company’s remaining guarantee obligations between the
principal amortization and the purchase option exercise price at the term of the master lease agreements, in
annual installments as of January 3, 2010 in U.S. dollars based upon the exchange rate at January 3, 2010.
Annual Installments
Payment of
Principal
Amortization
Purchase Option
Exercise Price at
Final Lease
Terms
Guarantee
Amount
(In thousands)
Year 1 ............................................ $ 293,922 $ 46,776 $ 340,698
Year 2 ............................................ 212,372 163,936 376,308
Year 3 ............................................ 109,227 85,582 194,809
Year 4 ............................................ 32,348 125,600 157,948
Total guarantee obligations ....................... $ 647,869 $ 421,894 $1,069,763
Flash Partners. Flash Partners sells and leases back from a consortium of financial institutions (“lessors”) a
portion of its tools and has entered into six equipment master lease agreements totaling 300.0 billion Japanese
yen, or approximately $3.24 billion based upon the exchange rate at January 3, 2010, of which 99.6 billion
Japanese yen, or approximately $1.08 billion based upon the exchange rate at January 3, 2010, was outstanding at
January 3, 2010. The Company and Toshiba have each guaranteed 50%, on a several basis, of Flash Partners’
obligations under the master lease agreements. In addition, these master lease agreements are secured by the
underlying equipment. As of January 3, 2010, the amount of the Company’s guarantee obligation of the Flash
Partners master lease agreements, which reflects future payments and any lease adjustments, was 49.8 billion
Japanese yen, or approximately $538.7 million based upon the exchange rate at January 3, 2010. Certain lease
payments are due quarterly and certain lease payments are due semi-annually, and are scheduled to be completed
in stages through fiscal year 2013. At each lease payment date, Flash Partners has the option of purchasing the
tools from the lessors. Flash Partners is obligated to insure the equipment, maintain the equipment in accordance
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