SanDisk 2009 Annual Report Download - page 156

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Notes To Consolidated Financial Statements
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 2010 through
fiscal year 2016. Future minimum lease payments at January 3, 2010 are presented below (in thousands):
Fiscal Year:
2010 .............................................................................. $ 9,561
2011 .............................................................................. 7,079
2012 .............................................................................. 5,081
2013 .............................................................................. 3,310
2014 .............................................................................. 2,360
2015 and thereafter ................................................................... 2,808
30,199
Sublease income to be received in the future under noncancelable subleases ...................... (3,277)
Net operating leases .................................................................. $26,922
Rent expense for the years ended January 3, 2010, December 28, 2008 and December 30, 2007 was
$7.9 million, $8.2 million and $7.7 million, respectively.
Note 14: Related Parties and Strategic Investments
Toshiba. The Company and Toshiba have collaborated in the development and manufacture of NAND flash
memory products. These NAND flash memory products are manufactured by Toshiba at Toshiba’s Yokkaichi,
Japan operations using the semiconductor manufacturing equipment owned or leased by FlashVision, Flash
Partners and Flash Alliance. See also Note 13, “Commitments, Contingencies and Guarantees.” The Company
purchased NAND flash memory wafers from FlashVision, Flash Partners, Flash Alliance and Toshiba, made
payments for shared research and development expenses, made loans to FlashVision, Flash Partners and Flash
Alliance and made investments in FlashVision, Flash Partners and Flash Alliance totaling approximately
$2.11 billion, $2.04 billion and $1.29 billion in the years ended January 3, 2010, December 28, 2008 and
December 30, 2007, respectively.
The purchases of NAND flash memory wafers are ultimately reflected as a component of the Company’s
cost of product revenues. During the fiscal years ended January 3, 2010, December 28, 2008 and December 30,
2007, the Company had revenue from Toshiba of $74.2 million, $39.7 million and $26.7 million, respectively. At
January 3, 2010 and December 28, 2008, the Company had no accounts payable balances due to Toshiba, and
accounts receivable balances from Toshiba of zero and $2.2 million, respectively. At January 3, 2010 and
December 28, 2008, the Company had accrued current liabilities due to Toshiba for shared research and
development expenses of zero and $4.0 million, respectively.
Flash Ventures with Toshiba. The Company owns 49.9% of each of the flash ventures with Toshiba
(FlashVision, Flash Partners and Flash Alliance) and accounts for its ownership position under the equity method
of accounting. The Company’s obligations with respect to Flash Partners and Flash Alliance master lease
agreements, take-or-pay supply arrangements and research and development cost sharing are described in Note
13, “Commitments, Contingencies and Guarantees.” Flash Partners and Flash Alliance are variable interest
entities; however the Company is not the primary beneficiary of either Flash Partners or Flash Alliance because it
absorbs less than a majority of the expected gains and losses of each entity. At January 3, 2010 and December 28,
2008, the Company had accounts payable balances due to FlashVision, Flash Partners and Flash Alliance of
$182.1 million and $370.4 million, respectively. For activity related to the wind-down of FlashVision, see Note
13, “Commitments, Contingencies and Guarantees.”
F-44