Commitments Contingencies and Guarantees (Tables)

6 Months Ended

Jun. 30, 2013

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 June 30, 2013.



Master Lease Agreements by Execution Date	Lease Type	Lease Amounts				Expiration
		(Yen in billions)		(Dollars in thousands)
Flash Partners
April 2010	Refinanced	¥	1.2	$	12,174	2014
January 2011	Refinanced	1.9		18,822		2014
November 2011	Refinanced	5.6		56,209		2014
March 2012	Refinanced	3.5		35,885		2015
		12.2		123,090
Flash Alliance
June 2008	Original	4.0		40,659		2013
March 2012	Original	7.6		76,367		2017
July 2012	Refinanced	14.3		144,107		2017
		25.9		261,133
Flash Forward
November 2011	Original	12.3		124,205		2016
March 2012	Original	7.5		75,680		2017
July 2012	Original	2.8		28,262		2017
		22.6		228,147
Total guarantee obligations		¥	60.7	$	612,370

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 June 30, 2013 in U.S. dollars based upon the yen/dollar exchange rate at June 30, 2013 (in thousands).



Annual Installments	Payment of Principal Amortization		Purchase Option Exercise Price at Final Lease Terms		Guarantee Amount
Year 1	$	134,938	$	51,826	$	186,764
Year 2	137,240		35,962		173,202
Year 3	90,591		11,544		102,135
Year 4	58,465		63,714		122,179
Year 5	8,691		19,399		28,090
Total guarantee obligations	$	429,925	$	182,445	$	612,370

Contractual Obligations

Contractual cash obligations and commitments as of June 30, 2013 are as follows (in thousands):



	Total			1 Year or Less (Remaining 6 months in Fiscal 2013)		2 – 3 Years (Fiscal 2014 and 2015)		4 – 5 Years (Fiscal 2016 and 2017)		More than 5 Years (Beyond Fiscal 2017)
Facility and other operating leases	$	15,744	⁽⁴⁾	$	3,379	$	9,712	$	2,371	$	282
Flash Partners⁽¹⁾	459,073		⁽⁴⁾⁽⁵⁾	92,683		247,061		108,555		10,774
Flash Alliance⁽¹⁾	1,469,113		⁽⁴⁾⁽⁵⁾	175,833		885,333		317,414		90,533
Flash Forward⁽¹⁾	587,723		⁽⁴⁾⁽⁵⁾	151,266		262,247		142,993		31,217
Toshiba research and development	57,405		⁽⁴⁾	27,405		30,000		—		—
Capital equipment purchase commitments	47,345			46,167		1,070		108		—
1.5% Convertible senior notes principal and interest⁽²⁾	1,067,500			7,500		30,000		1,030,000		—
Operating expense commitments	51,601			44,587		7,014		—		—
Noncancelable production purchase commitments⁽³⁾	255,705		⁽⁴⁾	255,705		—		—		—
Total contractual cash obligations	$	4,011,209		$	804,525	$	1,472,437	$	1,601,441	$	132,806

————


⁽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 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.


⁽³⁾	Includes Flash Ventures, related party vendors and other silicon source vendor purchase commitments.


⁽⁴⁾	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 June 30, 2013.


⁽⁵⁾	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):



	June 30, 2013
Guarantee of Flash Ventures equipment leases ⁽¹⁾	$	612,370

————


⁽¹⁾	The Company’s guarantee obligation, net of cumulative lease payments, was 60.7 billion Japanese yen, or approximately $612 million based upon the exchange rate at June 30, 2013.

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 2014 through fiscal year 2018. Future minimum lease payments are presented below (in thousands):



	June 30, 2013
Fiscal year:
2013 (remaining six months)	$	3,640
2014	5,960
2015	4,857
2016	1,837
2017	680
2018	282
	17,256
Sublease income to be received in the future under noncancelable subleases	(1,512		)
Net operating leases	$	15,744

Net rent expense

Net rent expense was as follows (in thousands):



	Three months ended				Six months ended
	June 30, 2013		July 1, 2012		June 30, 2013		July 1, 2012
Rent expense, net	$	1,330	$	1,685	$	3,173	$	2,798

- 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.

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- 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.

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