SanDisk 2011 Annual Report Download - page 153

This is a TAB type table. Insert
conts here. Annual Report
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
hedge transaction, the number of net shares potentially received by the Company will depend upon 1)
the then existing overall market conditions, 2) the Company’s stock price, 3) the volatility of the
Company’s stock, and 4) the amount of time remaining before expiration of the convertible bond
hedge. The convertible bond hedge transaction cost of $292.9 million has been accounted for as an
equity transaction. The Company initially recorded approximately $1.7 million in stockholders’ equity
from the deferred tax asset related to the convertible bond hedge at inception of the transaction. As of
January 1, 2012, the Company had not purchased any shares under this convertible bond hedge
agreement.
•Warrants. The Company received $188.1 million from the same counterparties from the sale of
warrants to purchase up to approximately 19.1 million shares of the Company’s common stock at an
exercise price of $73.33 per share. As of January 1, 2012, the warrants (separated into 40 separate
components) had an average expected life of 6.0 years and expire over 40 different dates from
November 13, 2017 through January 10, 2018. At each expiration date, the Company may, at its option,
elect to settle the warrants on a net share basis. As of January 1, 2012, the warrants had not been
exercised and remained outstanding. The value of the warrants was initially recorded in equity and
continues to be classified as equity.
1% Convertible Notes Due 2035. On February 11, 2010, the Company notified the holders of its 1%
Convertible Notes due 2035 that it would exercise its option to redeem the $75.0 million principal amount
outstanding on March 15, 2010 for a redemption price of $1,000 per $1,000 principal amount of the notes, plus
accrued interest. On March 15, 2010, the Company completed the redemption of the 1% Convertible Notes due
2035 through an all-cash transaction of $75.0 million plus accrued interest of $0.4 million. As of the date of the
completion of the redemption, the Company had no further obligations related to the 1% Convertible Notes due
2035.
Note 8: Concentrations of Risk and Segment Information
Geographic Information and Major Customers. The Company markets and sells flash memory products in
the U.S. and in foreign countries through its sales personnel, dealers, distributors, retailers and subsidiaries. The
Company’s Chief Operating Decision Maker, its President and Chief Executive Officer, evaluates performance
of the Company and makes decisions regarding allocation of resources based on total Company results. Since the
Company operates in one segment, all financial segment information can be found in the accompanying
Consolidated Financial Statements.
Other than sales in the U.S.; South Korea; Taiwan; Europe, Middle East and Africa (“EMEA”); and Other
Asia-Pacific, which includes Japan, international sales were not material individually in any other international
locality. Intercompany sales between geographic areas have been eliminated.
Revenue by geographic areas for fiscal years 2011, 2010 and 2009 are as follows (in thousands):
Fiscal years ended
January 1,
2012
January 2,
2011
January 3,
2010
United States ..................................................... $ 853,830 $ 809,037 $ 940,596
South Korea ...................................................... 374,662 334,173 428,411
Taiwan .......................................................... 1,419,836 993,787 397,338
Other Asia-Pacific ................................................. 2,101,967 1,822,853 1,010,125
Europe, Middle East and Africa ....................................... 688,538 714,378 707,758
Other foreign countries .............................................. 223,312 152,579 82,578
Total ........................................................ $ 5,662,145 $ 4,826,807 $ 3,566,806
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