SanDisk 2009 Annual Report Download - page 97

Download and view the complete annual report

Please find page 97 of the 2009 SanDisk annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 180

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180

This is a TAB type table. Insert
conts here. Annual Report
Sales and Marketing.
FY 2009
Percent
Change FY 2008
Percent
Change FY 2007
(In millions, except percentages)
Sales and marketing ................................... $208.5 (36)% $ 328.1 11% $ 294.6
Percent of revenue ..................................... 5.8% 9.8% 7.6%
Our fiscal year 2009 sales and marketing expense was reduced from the comparable period in fiscal year
2008 primarily due to decreased branding and merchandising costs of ($99) million and lower outside service
costs of ($19) million.
Our fiscal year 2008 sales and marketing expense growth over the comparable period in fiscal year 2007
was primarily due to increased branding and merchandising costs of $34 million and increased employee-related
costs of $13 million, partially offset by lower share-based compensation expense of ($12) million. The growth in
branding and merchandising and employee-related costs primarily reflected expansion of our international sales
channels.
General and Administrative.
FY 2009
Percent
Change FY 2008
Percent
Change FY 2007
(In millions, except percentages)
General and administrative .............................. $171.4 (16)% $ 204.8 13% $ 181.5
Percent of revenue ..................................... 4.8% 6.1% 4.7%
Our fiscal year 2009 general and administrative expense was reduced over the comparable period in fiscal
year 2008 primarily due to lower intellectual property legal costs of ($29) million and lower bad debt expense of
($9) million, partially offset by an increase in employee-related costs of $5 million.
Our fiscal year 2008 general and administrative expense growth over the comparable period in fiscal year
2007 was primarily related to increased legal and outside advisor costs of $30 million and bad debt expense of
$5 million, partially offset by lower share-based compensation costs of ($9) million and payroll and employee-
related costs of ($3) million. Our legal and outside advisor costs increased in fiscal year 2008 as compared to
fiscal year 2007 primarily due to increased patent and anti-trust litigation expenses as well as expenses incurred
in connection with strategic initiatives.
Impairment of Goodwill.
FY 2009
Percent
Change FY 2008
Percent
Change FY 2007
(In millions, except percentages)
Impairment of goodwill .................................. n/a n/a $845.5 n/a n/a
Percent of revenue ...................................... n/a 25.2% n/a
In the fourth quarter of fiscal year 2008, we concluded that there were sufficient indicators based on a
combination of factors, including the economic environment, current and forecasted operating results, NAND-
industry pricing conditions and a sustained decline in our market capitalization, to require an interim goodwill
impairment analysis. As a result of the interim goodwill impairment analysis, we recognized an impairment
charge of $846 million. As of December 28, 2008, we have no goodwill remaining on our Consolidated Balance
Sheet.
41