SanDisk 2011 Annual Report Download - page 144

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Property and Equipment. Property and equipment were as follows (in thousands):
January 1,
2012
January 2,
2011
Machinery and equipment ...................................................... $ 870,117 $ 708,358
Software .................................................................... 139,388 128,095
Buildings and building improvements ............................................. 70,036 58,661
Capital land lease ............................................................. 6,588 6,634
Furniture and fixtures .......................................................... 6,333 6,247
Leasehold improvements ....................................................... 24,068 23,070
Property and equipment, at cost .............................................. 1,116,530 931,065
Accumulated depreciation and amortization ........................................ (771,633) (664,344)
Property and equipment, net ................................................ $ 344,897 $ 266,721
Depreciation expense of property and equipment totaled $115.0 million, $132.8 million and $152.6 million
in fiscal years 2011, 2010 and 2009, respectively.
Notes Receivable and Investments in Flash Ventures. Notes receivable and investments in Flash Ventures
were as follows (in thousands):
January 1,
2012
January 2,
2011
Notes receivable, Flash Partners Ltd............................................... $ 291,564 $ 578,604
Notes receivable, Flash Alliance Ltd. ............................................. 973,176 653,699
Notes receivable, Flash Forward Ltd. ............................................. 32,396 —
Investment in Flash Partners Ltd. ................................................ 258,184 238,601
Investment in Flash Alliance Ltd. ................................................ 368,459 262,587
Investment in Flash Forward Ltd. ................................................ 19,516 —
Total notes receivable and investments in Flash Ventures ......................... $ 1,943,295 $ 1,733,491
Equity-method investments and the Company’s maximum loss exposure related to Flash Partners Ltd., Flash
Alliance Ltd. and Flash Forward Ltd. (collectively referred to as “Flash Ventures”) are discussed further in
Note 12, “Commitments, Contingencies and Guarantees—Flash Partners, Flash Alliance and Flash Forward” and
Note 13, “Related Parties and Strategic Investments.”
The Company assesses financing receivable credit quality through financial and operational reviews of the
borrower and creditworthiness, including credit rating agency ratings, of significant investors of the borrower,
where material or known. Impairments, when required, are recorded in other income (expense). The Company
makes or will make long-term loans to Flash Ventures to fund new process technologies and additional wafer
capacities. The Company aggregates its Notes Receivables to Flash Ventures into one class of financing
receivables due to the similar ownership interest in Flash Ventures and common structure. For all reporting
periods presented, no loans were past due and no loan impairments were recorded.
F-20