SanDisk 2012 Annual Report Download - page 206

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table details the Company’s portion of the remaining guarantee obligations under each of
Flash Ventures’ master lease facilities (both original and refinanced leases) in both Japanese yen and U.S. dollar
equivalent based upon the exchange rate at December 30, 2012.
Master Lease Agreements by Execution Date Lease Type Lease Amounts Expiration
(Yen in billions) (Dollars in thousands)
Flash Partners
February 2008 ..................... Original ¥ 1.3 $ 15,451 2013
April 2010 ........................ Refinanced 1.5 17,136 2014
January 2011 ...................... Refinanced 2.5 29,464 2014
November 2011 .................... Refinanced 6.7 77,482 2014
March 2012 ....................... Refinanced 4.2 48,900 2015
16.2 188,433
Flash Alliance
November 2007 .................... Original 3.2 37,177 2013
June 2008 ......................... Original 10.0 116,545 2013
March 2012 ....................... Original 8.5 99,144 2017
July 2012 ......................... Refinanced 16.0 185,800 2017
37.7 438,666
Flash Forward
November 2011 .................... Original 14.0 163,093 2016
March 2012 ....................... Original 8.5 99,021 2017
July 2012 ......................... Original 3.2 36,632 2017
25.7 298,746
Total guarantee obligations ....... ¥ 79.6 $ 925,845
The following table details the breakdown of the Company’s remaining guarantee obligations between the
principal amortization and the purchase option exercise price at the end of the term of the master lease
agreements, in annual installments as of December 30, 2012 in U.S. dollars based upon the yen/dollar exchange
rate at December 30, 2012 (in thousands).
Annual Installments
Payment of
Principal
Amortization
Purchase Option
Exercise Price
at Final Lease
Terms
Guarantee
Amount
Year 1 ............................................... $ 190,936 $ 134,491 $ 325,427
Year 2 ............................................... 180,734 52,001 232,735
Year 3 ............................................... 126,746 21,136 147,882
Year 4 ............................................... 87,072 31,361 118,433
Year 5 ............................................... 36,973 64,395 101,368
Total guarantee obligations ........................... $ 622,461 $ 303,384 $ 925,845
Guarantees
Indemnification Agreements. The Company has agreed to indemnify suppliers and customers for alleged
patent infringement. The scope of such indemnity varies, but may, in some instances, include indemnification for
damages and expenses, including attorneys’ fees. The Company may periodically engage in litigation as a result
of these indemnification obligations. The Company’s insurance policies exclude coverage for third-party claims
for patent infringement. Although the liability is not remote, the nature of the patent infringement
indemnification obligations prevents the Company from making a reasonable estimate of the maximum potential
amount it could be required to pay to its suppliers and customers. Historically, the Company has not made any
significant indemnification payments under any such agreements. As of December 30, 2012, no amounts had
F-42