Commitments Contingencies and Guarantees (Tables)

6 Months Ended

Jul. 01, 2012

Commitments Contingencies and Guarantees [Abstract]

Company's portion of the remaining guarantee obligations under each of Flash Ventures' master lease facilities

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 July 1, 2012.



Master Lease Agreements by Execution Date	Lease Type	Lease Amounts				Expiration
		(Yen in billions)		(Dollars in thousands)
Flash Partners
March 2007	Original	¥	2.1	$	25,896	2012
February 2008	Original	1.6		20,046		2013
April 2010	Refinanced	1.9		24,280		2014
January 2011	Refinanced	3.4		42,358		2014
November 2011	Refinanced	7.8		98,501		2014
March 2012	Refinanced	3.1		38,628		2015
		19.9		249,709
Flash Alliance
November 2007	Original	8.9		111,550		2013
June 2008	Original	12.0		151,812		2013
March 2012	Original	9.5		119,557		2017
		30.4		382,919
Flash Forward
November 2011	Original	15.8		198,191		2016
March 2012	Original	9.5		119,512		2017
		25.3		317,703
Total guarantee obligations		¥	75.6	$	950,331

Remaining guarantee obligations

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 July 1, 2012 in U.S. dollars based upon the yen/dollar exchange rate at July 1, 2012 (in thousands).



Annual Installments	Payment of Principal Amortization		Purchase Option Exercise Price at Final Lease Terms		Guarantee Amount
Year 1	$	243,882	$	173,530	$	417,412
Year 2	146,637		65,700		212,337
Year 3	103,508		45,080		148,588
Year 4	64,208		—		64,208
Year 5	35,327		72,459		107,786
Total guarantee obligations	$	593,562	$	356,769	$	950,331

Contractual Obligations

Contractual cash obligations and commitments as of July 1, 2012 are as follows (in thousands):



	Total			1 Year or Less (Remaining 6 months in Fiscal 2012)		2 –3 Years (Fiscal 2013 and 2014)		4 –5 Years (Fiscal 2015 and 2016)		More than 5 Years (Beyond Fiscal 2016)
Facility and other operating leases	$	20,058	⁽⁵⁾	$	4,585	$	10,021	$	4,561	$	891
Flash Partners⁽¹⁾	796,962		⁽⁵⁾⁽⁶⁾	114,737		464,114		153,320		64,791
Flash Alliance⁽¹⁾	1,552,973		⁽⁵⁾⁽⁶⁾	286,066		799,390		366,016		101,501
Flash Forward⁽¹⁾	583,633		⁽⁵⁾⁽⁶⁾	68,103		270,144		209,728		35,658
Toshiba research and development	146,163		⁽⁵⁾	78,643		52,520		15,000		—
Capital equipment purchase commitments	115,416			115,405		11		—		—
1% Convertible senior notes principal and interest⁽²⁾	937,341			4,640		932,701		—		—
1.5% Convertible senior notes principal and interest⁽³⁾	1,082,500			7,500		30,000		30,000		1,015,000
Operating expense commitments	55,283			49,047		6,236		—		—
Noncancelable production purchase commitments⁽⁴⁾	310,115		⁽⁵⁾	310,024		91		—		—
Total contractual cash obligations	$	5,600,444		$	1,038,750	$	2,565,228	$	778,625	$	1,217,841

————


⁽¹⁾	Includes reimbursement for depreciation and lease payments on owned and committed equipment, funding commitments for loans and equity investments and reimbursement for other committed expenses. Funding commitments assume no additional operating lease guarantees; new operating lease guarantees can reduce funding commitments.


⁽²⁾	In May 2006, the Company issued and sold $1.15 billion in aggregate principal amount of 1% Notes due 2013. The Company will pay cash interest on the outstanding notes at an annual rate of 1.0%, payable semi-annually on May 15 and November 15 of each year until May 15, 2013. In fiscal year 2011, the Company redeemed $221.9 million of the outstanding notes.


⁽³⁾	In August 2010, the Company issued and sold $1.0 billion in aggregate principal amount of 1.5% Notes due 2017. The Company will pay cash interest on the outstanding notes at an annual rate of 1.5%, payable semi-annually on August 15 and February 15 of each year until August 15, 2017.


⁽⁴⁾	Includes Flash Ventures, related party vendors and other silicon source vendor purchase commitments.


⁽⁵⁾	Includes amounts denominated in a currency other than the U.S. dollar, which are subject to fluctuation in exchange rates prior to payment and have been translated using the exchange rate at July 1, 2012.


⁽⁶⁾	Excludes amounts related to the master lease agreements’ purchase option exercise price at final lease term.

Off Balance Sheet Arrangements

Off-balance sheet arrangements are as follows (in thousands):



	July 1, 2012
Guarantee of Flash Ventures equipment leases ⁽¹⁾	$	950,331

————


⁽¹⁾	The Company’s guarantee obligation, net of cumulative lease payments, was 75.6 billion Japanese yen, or approximately $950 million based upon the exchange rate at July 1, 2012.

Operating leases future minimum payments

The Company leases many of its office facilities and operating equipment for various terms under long-term, noncancelable operating lease agreements. The leases expire at various dates from fiscal year 2012 through fiscal year 2020. Future minimum lease payments are presented below (in thousands):



	July 1, 2012
Fiscal year:
2012 (remaining 6 months)	$	4,834
2013	6,393
2014	4,683
2015	3,862
2016	1,410
2017 and thereafter	891
	22,073
Sublease income to be received in the future under noncancelable subleases	(2,015		)
Net operating leases	$	20,058

Net rent expense

Net rent expense was as follows (in thousands):



	Three months ended				Six months ended
	July 1, 2012		July 3, 2011		July 1, 2012		July 3, 2011
Rent expense, net	$	1,685	$	1,951	$	2,798	$	3,847

- Definition

Tabular disclosure of a lessee's leasing arrangements including: (1) the basis on which contingent rental payments are determined, (2) the existence and terms of renewal or purchase options and escalation clauses, (3) restrictions imposed by lease arrangements, such as those concerning dividends, additional debt, and further leasing, (4) rent holidays, rent concessions, or leasehold improvement incentives and unusual provisions or conditions. Disclosure may also include the specific period used to amortize material leasehold improvements made at the inception of the lease or during the lease term. Additionally, for operating leases having initial or remaining noncancelable lease terms in excess of one year: (a) future minimum rental payments required as of the date of the latest balance sheet presented, in the aggregate and for each of the five succeeding fiscal years, (b) the total of minimum rentals to be received in the future under noncancelable subleases as of the date of the latest balance sheet presented, and (c) for all operating leases, rental expense for each period for which an income statement is presented, with separate amounts for minimum rentals, contingent rentals, and sublease rentals. Rental payments under leases with terms of a month or less that were not renewed need not be included.

+ References+ Details

- Definition

Tabular disclosure of each guarantee obligation, or each group of similar guarantee obligations, including (a) the nature of the guarantee, including its term, how it arose, and the events or circumstances that would require the guarantor to perform under the guarantee; (b) the maximum potential amount of future payments (undiscounted) the guarantor could be required to make under the guarantee; (c) the current carrying amount of the liability, if any, for the guarantor's obligations under the guarantee; and (d) the nature of any recourse provisions under the guarantee, and any assets held either as collateral or by third parties, and any relevant related party disclosure. Excludes disclosures about product warranties.

+ References+ Details