SanDisk 2010 Annual Report Download - page 230

Notes To Consolidated Financial Statements
(1) In May 2006, the Company issued and sold $1.15 billion in aggregate principal amount of 1% Notes due
2013. The Company will pay cash interest at an annual rate of 1%, payable semi-annually on May 15 and
November 15 of each year until calendar year 2013.
(2) In August 2010, the Company issued and sold $1.00 billion in aggregate principal amount of 1.5% Notes
due 2017. The Company will pay cash interest at an annual rate of 1.5%, payable semi-annually on
August 15 and February 15 of each year until calendar year 2017.
(3) Includes Flash Ventures, related party vendors and other silicon source vendor purchase commitments.
(4) Includes amounts denominated in Japanese yen, which are subject to fluctuation in exchange rates prior to
payment and have been translated using the exchange rate at January 2, 2011.
(5) Excludes amounts related to the master lease agreements’ purchase option exercise price at final lease term.
(6) Includes estimated timing and amounts of investments; however, timing is dependent upon future decisions
including finalization of Flash Forward’s capacity plan.
(7) The Company’s guarantee obligation, net of cumulative lease payments, is 71.4 billion Japanese yen, or
approximately $879 million based upon the exchange rate at January 2, 2011.
The Company has excluded $200.6 million of unrecognized tax benefits (which includes penalties and
interest) from the contractual obligation table above due to the uncertainty with respect to the timing of
associated future cash flows at January 2, 2011. The Company is unable to make reasonably reliable estimates of
the period of cash settlement with the respective taxing authorities.
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 2011 through
fiscal year 2016. Future minimum lease payments at January 2, 2011 are presented below (in thousands):
Fiscal Year:
2011 ........................................................................... $ 9,228
2012 ........................................................................... 9,563
2013 ........................................................................... 5,340
2014 ........................................................................... 3,490
2015 ........................................................................... 2,882
2016 and thereafter ................................................................ 569
31,072
Sublease income to be received in the future under noncancelable subleases ................... (2,719)
Net operating leases ............................................................... $ 28,353
Net rent expense for the years ended January 2, 2011, January 3, 2010 and December 28, 2008 was
$7.5 million, $7.9 million and $8.2 million, respectively.
Note 13: Related Parties and Strategic Investments
Flash Ventures with Toshiba. The Company owns 49.9% of each of the flash ventures with Toshiba and
accounts for its ownership position under the equity method of accounting. The Company’s obligations with
respect to Flash Ventures master lease agreements, take-or-pay supply arrangements and research and
development cost sharing are described in Note 12, “Commitments, Contingencies and Guarantees.” Flash
Ventures are variable interest entities. The Company evaluated whether it is the primary beneficiary of any of the
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