SanDisk 2012 Annual Report Download - page 143

This is a TAB type table. Insert
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Overview
Fiscal years ended
December 30,
2012
%of
Revenue
January 1,
2012
%of
Revenue
January 2,
2011
%of
Revenue
(In millions, except percentages)
Product revenues ............. $ 4,678.5 92.6% $ 5,287.6 93.4% $ 4,462.9 92.5%
License and royalty revenues .... 374.0 7.4% 374.5 6.6% 363.9 7.5%
Total revenues ............... 5,052.5 100.0% 5,662.1 100.0% 4,826.8 100.0%
Cost of product revenues ....... 3,326.7 65.8% 3,183.3 56.2% 2,552.2 52.9%
Amortization of acquisition-
related intangible assets ...... 42.6 0.9% 39.7 0.7% 12.5 0.2%
Total cost of product revenues . . . 3,369.3 66.7% 3,223.0 56.9% 2,564.7 53.1%
Gross profit ................. 1,683.2 33.3% 2,439.1 43.1% 2,262.1 46.9%
Operating expenses
Research and development .... 602.7 11.9% 547.4 9.7% 422.6 8.7%
Sales and marketing ......... 224.1 4.4% 199.4 3.5% 209.8 4.4%
General and administrative . . . 150.4 3.0% 157.8 2.8% 166.5 3.5%
Amortization and write-off of
acquisition-related intangible
assets .................. 9.9 0.2% 4.4 0.1% 1.6 0.0%
Total operating expenses ....... 987.1 19.5% 909.0 16.1% 800.5 16.6%
Operating income ............. 696.1 13.8% 1,530.1 27.0% 1,461.6 30.3%
Other income (expense), net .... (69.2) (1.4%) (53.3) (0.9%) (4.2) (0.1%)
Income before provision for
taxes ..................... 626.9 12.4% 1,476.8 26.1% 1,457.4 30.2%
Provision for income taxes ...... 209.5 4.1% 489.8 8.7% 157.3 3.3%
Net income .................. $ 417.4 8.3% $ 987.0 17.4% $ 1,300.1 26.9%
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. Our flash-based products enable businesses and
consumers to efficiently and effectively capture, share, use and preserve digital content. Our solutions include
SSDs, removable cards, embedded products, USB drives, digital media players, wafers and components. Our
SSD products are used in client computing platforms and enterprise data centers to provide high-speed, high-
capacity storage solutions that can be used in lieu of, or in conjunction with, hard disk drives. Our removable
cards are used in a wide range of consumer electronics devices such as mobile phones, tablets, digital cameras,
gaming devices and PCs. Our embedded flash products are used in mobile phones, tablets, thin-and-light laptops,
eReaders, global positioning system, or GPS, devices, gaming systems, imaging devices and computing
platforms.
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