SanDisk 2012 Annual Report Download - page 186

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The amount of income tax expense (benefit) allocated to available-for-sale investments, foreign currency
translation and hedging activities was as follows (in thousands):
Fiscal years ended
December 30,
2012
January 1,
2012
January 2,
2011
Available-for-sale investments ........................................ $ 3,121 $ 3,342 $ (6,301)
Foreign currency translation .......................................... (23,791) 10,315 20,979
Hedging activities .................................................. — 2,504 (2,776)
$ (20,670) $ 16,161 $ 11,902
Note 6: Goodwill and Intangible Assets
Goodwill. Goodwill balances are presented below (in thousands):
Carrying
Amount
Balance as of January 1, 2012 ................................................................. $ 154,899
Acquisitions ........................................................................... 42,979
Acquisition earn-out .................................................................... 3,857
Balance as of December 30, 2012 .............................................................. $ 201,735
Goodwill increased by $43.0 million due to the Company’s acquisition of 100% of the outstanding shares of
FlashSoft Corporation (“FlashSoft”) on February 13, 2012 and Schooner Information Technology, Inc.
(“Schooner”) on June 21, 2012. In addition, during the fiscal year ended December 30, 2012, the Company
recognized $3.9 million of goodwill under the resolution of an earn-out provision related to an acquisition
consummated in fiscal year 2004.
FlashSoft is a provider of software caching solutions that enable flash-based products to be configured as
high-performance cache. The acquisition of FlashSoft adds software caching solutions to the Company’s growing
portfolio of enterprise storage solutions. The goodwill resulted from expected synergies from the transaction,
including the Company’s resources and complementary products, and is not deductible for tax purposes. The
preliminary estimates of fair value for the liabilities assumed from the acquisition are subject to change as the
Company obtains additional information related to certain legal contingency matters during the measurement
period (up to one year from the acquisition date).
Schooner is an enterprise software company that develops flash-optimized database and data store solutions.
Schooner’s products complement the Company’s growing portfolio of enterprise storage solutions and flash-
optimized software offerings that enable customers to accelerate the performance of data-intensive applications
and reduce overall cost of ownership. The goodwill resulted from expected synergies from the transaction,
including the Company’s resources and complementary products, and is not deductible for tax purposes. The
preliminary estimates of fair value for the liabilities assumed from the acquisition are subject to change as the
Company obtains additional information related to certain legal contingency matters during the measurement
period (up to one year from the acquisition date).
Goodwill is not amortized, but is reviewed and tested for impairment at least annually, on the first day of the
Company’s fourth quarter and whenever events or circumstances occur that indicate that goodwill might be
impaired. Impairment of goodwill is tested at the Company’s reporting unit level. The Company has the option to
first assess qualitative factors to determine whether events and circumstances indicate that it is more likely than
not that the goodwill is impaired and determine whether further action is needed. For the year ended
F-22