SanDisk 2010 Annual Report Download - page 226

Notes To Consolidated Financial Statements
forecasts. The purchase orders placed under these arrangements are generally binding and cannot be canceled.
These outstanding purchase commitments for other sources of silicon wafers are included as part of the total
“Noncancelable production purchase commitments” in the “Contractual Obligations” table.
Subcontractors. In the normal course of business, the Company’s subcontractors periodically procure
production materials based on the forecast the Company provides to them. The Company’s agreements with
these subcontractors require that the Company reimburse them for materials that are purchased on the
Company’s behalf in accordance with such forecast. Accordingly, the Company may be committed to certain
costs over and above its open noncancelable purchase orders with these subcontractors. These commitments for
production materials to subcontractors are included as part of the total “Noncancelable production purchase
commitments” in the “Contractual Obligations” table.
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 2, 2011.
Master Lease Agreements by Execution Date Lease Amounts Expiration
(Yen in billions) (Dollars in thousands)
Flash Partners
December 2005 ........................ ¥ 2.5 $ 30,857 2011
June 2006 ............................ 3.9 49,237 2011
September 2006 ........................ 14.1 173,064 2011
March 2007 ........................... 7.5 91,936 2012
February 2008 ......................... 2.9 35,563 2013
April 2010 ............................ 4.0 48,976 2014
34.9 429,633
Flash Alliance
November 2007 ........................ 15.7 193,736 2013
June 2008 ............................ 20.8 255,464 2013
36.5 449,200
Total guarantee obligations ............... ¥ 71.4 $ 878,833
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 2, 2011 in U.S. dollars based upon the exchange rate at January 2, 2011.
Annual Installments
Payment of
Principal
Amortization
Purchase Option
Exercise Price at
Final Lease
Terms
Guarantee
Amount
(In thousands)
Year 1 ............................................. $ 259,627 $ 186,600 $ 446,227
Year 2 ............................................. 137,009 97,413 234,422
Year 3 ............................................. 42,304 142,964 185,268
Year 4 ............................................. 2,484 10,432 12,916
Total guarantee obligations ........................ $ 441,424 $ 437,409 $ 878,833
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