SanDisk 2011 Annual Report Download - page 111

This is a TAB type table. Insert
conts here. Annual Report
Other Income (Expense), net.
FY 2011
Percent
Change FY 2010
Percent
Change FY 2009
(In millions, except percentages)
Interest income ....................... $ 60.4 13% $ 53.4 (16%) $ 63.3
Interest expense ....................... (123.3) 37% (90.0) 30% (69.4)
Other income (expense), net ............. 9.6 (70%) 32.4 441% (9.5)
Total other income (expense), net ..... $ (53.3) 1,169% $ (4.2) 73% $ (15.6)
Our fiscal year 2011 “Total other income (expense), net” was a higher net expense compared to fiscal year
2010 primarily due to a full year of interest expense related to the issuance of the 1.5% Notes due 2017 in August
2010. “Other income (expense), net” for fiscal year 2011 primarily included a net gain on sale of equity securities
of $19 million, offset by the expense of ($11) million incurred from the change in fair value of the liability
component of the repurchased portion of the 1% Notes due 2013. “Other income (expense), net” for fiscal year
2010 was primarily comprised of a non-recurring gain of $13 million related to the sale of the net assets of our
SIM business and a gain on sales of equity securities of $16 million.
Our fiscal year 2010 “Total other income (expense), net” was a lower net expense compared to fiscal year
2009 primarily due to non-recurring gains on the sale of assets and investments reflected in “Other income
(expense), net,” offset by increased interest expense related to the issuance of the 1.5% Notes due 2017 in August
2010 and lower interest income due to lower interest rates earned on our cash investments. “Other income
(expense), net” in fiscal year 2010 included a gain of $13 million related to the sale of the net assets of our
mobile phone SIM card business and the sale of certain public equity securities. “Other income (expense), net”
was a net expense for fiscal year 2009 due to bank charges and fees of ($11) million related to the restructuring
of Flash Ventures’ master equipment leases and impairment of our equity investment in FlashVision of
($8) million.
Provision for Income Taxes.
FY 2011
Percent
Change FY 2010
Percent
Change FY 2009
(In millions, except percentages)
Provision for income taxes .............. $ 489.8 211% $ 157.3 78% $ 88.5
Effective income tax rates ............... 33.2% 10.8% 17.6%
Our fiscal year 2011 provision for income taxes differs from the U.S. statutory tax rate primarily due to the
tax impact of earnings from foreign operations, state taxes, tax-exempt interest income and benefit from federal
and California research and development credits. Earnings and taxes resulting from foreign operations are largely
attributable to our Irish, Chinese, Israeli and Japanese entities.
Our fiscal year 2010 provision for income taxes was primarily related to income taxes on our U.S. and
foreign operations, partially offset by the release of valuation allowances that were previously recorded against
our U.S. federal and state deferred tax assets and favorable adjustments to uncertain tax positions related to
specific tax jurisdictions.
Our fiscal year 2009 provision for income taxes was primarily related to withholding taxes on license and
royalty income from certain foreign licensees and income tax provisions recorded by foreign subsidiaries while
income taxes for U.S. federal and state were substantially offset by the reduction of valuation allowance related
to the utilization of tax credits.
In October 2009, the I.R.S. commenced an examination of our federal income tax returns for fiscal years
2005 through 2008. It is not certain that a complete resolution of this examination will occur within the next
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