SanDisk 2010 Annual Report Download - page 223

This is a TAB type table. Insert
conts here. Annual Report
Notes To Consolidated Financial Statements
benefits in income tax expense. Accrued interest and penalties included in the Company’s liability related to
unrecognized tax benefits at January 2, 2011 and January 3, 2010 was $29.7 million and $31.9 million,
respectively. Interest and penalties included in the Company’s tax expense for the fiscal years ended January 2,
2011 and January 3, 2010 was ($2.4) million and $6.4 million, respectively.
It is reasonably possible that the unrecognized tax benefits could decrease by approximately $6.5 million within
the next 12 months as a result of the expiration of statutes of limitation. The Company is currently under audit by
several tax authorities. Because timing of the resolution and/or closure of these audits is highly uncertain it is not
possible to estimate other changes to the amount of unrecognized tax benefits for positions existing at January 2, 2011.
The Company is subject to U.S. federal income tax as well as income taxes in many state and foreign
jurisdictions. In October 2009, the Internal Revenue Service commenced an examination of the Company’s
federal income tax returns for fiscal years 2005 through 2008. The Company does not expect a resolution to be
reached during the next twelve months. In addition, the Company is currently under audit by various state and
international tax authorities. The Company cannot reasonably estimate the outcome of these examinations, or that
it will not have a material effect on the Company’s financial position, results of operations or liquidity. The
statutes of limitation in state jurisdictions remain open in general for tax years 2002 through 2009. The major
foreign jurisdictions remain open for examination in general for tax years 2004 through 2009.
In 2010, certain foreign subsidiaries of the Company were under income tax holidays. The aggregate dollar
and per share effects of these tax holidays was immaterial to the Company’s financial results for fiscal years
2010, 2009 and 2008.
Note 11: Net Income (Loss) per Share
The following table sets forth the computation of basic and diluted net income (loss) per share (in
thousands, except per share amounts):
Fiscal Years Ended
January 2,
2011
January 3,
2010
December 28,
2008
Numerator for basic net income (loss) per share:
Net income (loss) ..................................... $ 1,300,142 $ 415,310 $(1,986,624)
Denominator for basic net income (loss) per share:
Weighted average common shares outstanding .............. 232,531 227,435 225,292
Basic net income (loss) per share ......................... $ 5.59 $ 1.83 $ (8.82)
Numerator for diluted net income (loss) per share:
Net income (loss) ..................................... $ 1,300,142 $ 415,310 $(1,986,624)
Interest on the 1% Convertible Notes due 2035, net of tax ..... 98 468 —
Net income (loss) for diluted net income (loss) per share ...... $ 1,300,240 $ 415,778 $(1,986,624)
Denominator for diluted net income (loss) per share:
Weighted average common shares ........................ 232,531 227,435 225,292
Incremental common shares attributable to exercise of outstanding
employee stock options, SARs, and warrants (assuming proceeds
wouldbeusedtopurchasecommonstock)andRSUs ......... 5,977 2,512 —
Effect of dilutive 1% Convertible Notes due 2035 ............ 393 2,012 —
Shares used in computing diluted net income (loss) per share . . . 238,901 231,959 225,292
Diluted net income (loss) per share .................... $ 5.44 $ 1.79 $ (8.82)
Anti-dilutive shares excluded from net income (loss) per share
calculation ............................................. 75,079 47,911 54,844
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