SanDisk 2011 Annual Report Download - page 103

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This is a TAB type table. Insert
conts here. Annual Report
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Overview
Fiscal years ended
January 1,
2012
%of
Revenue
January 2,
2011
%of
Revenue
January 3,
2010
%of
Revenue
(In millions, except percentages)
Product revenues ............. $ 5,287.6 93.4% $ 4,462.9 92.5% $ 3,154.3 88.4%
License and royalty revenues .... 374.5 6.6% 363.9 7.5% 412.5 11.6%
Total revenues ............... 5,662.1 100.0% 4,826.8 100.0% 3,566.8 100.0%
Cost of product revenues ....... 3,183.3 56.2% 2,552.2 52.9% 2,269.7 63.6%
Amortization of acquisition-
related intangible assets ...... 39.7 0.7% 12.5 0.2% 12.5 0.4%
Total cost of product revenues . . . 3,223.0 56.9% 2,564.7 53.1% 2,282.2 64.0%
Gross profit ................. 2,439.1 43.1% 2,262.1 46.9% 1,284.6 36.0%
Operating expenses
Research and
development ........... 547.4 9.7% 422.6 8.7% 384.2 10.8%
Sales and marketing ....... 199.4 3.5% 209.8 4.4% 208.5 5.8%
General and
administrative .......... 157.8 2.8% 166.5 3.5% 171.3 4.8%
Amortization of acquisition-
related intangible
assets ................ 4.4 0.1% 1.6 0.0% 1.2 0.0%
Total operating expenses ....... 909.0 16.1% 800.5 16.6% 765.2 21.4%
Operating income ............. 1,530.1 27.0% 1,461.6 30.3% 519.4 14.6%
Other income (expense), net .... (53.3) (0.9%) (4.2) (0.1%) (15.6) (0.5%)
Income before provision for
taxes ..................... 1,476.8 26.1% 1,457.4 30.2% 503.8 14.1%
Provision for income taxes ...... 489.8 8.7% 157.3 3.3% 88.5 2.5%
Net income .................. $ 987.0 17.4% $ 1,300.1 26.9% $ 415.3 11.6%
General
We are a global leader in flash memory storage solutions. Our goal is to provide simple, reliable and
affordable storage solutions for consumer and enterprise use in a wide variety of formats and devices. We sell
our products globally to OEM and retail customers.
We design, develop and manufacture data storage solutions in a variety of form factors using our flash
memory, proprietary controller and firmware technologies. We purchase the vast majority of our NAND flash
memory supply requirements through our significant flash venture relationships with Toshiba, which produce
and provide us with leading-edge, low-cost memory wafers. Our removable card products are used in a wide
range of consumer electronics devices such as mobile phones, digital cameras, gaming devices and laptop
computers. Our embedded flash products are used in mobile phones, tablets, ultrabooks, eReaders, GPS devices,
gaming systems, imaging devices and computing platforms. For computing platforms, we provide high-speed,
high-capacity storage solutions such as SSDs, that can be used in lieu of hard disk drives.
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