Balance Sheet Information

6 Months Ended

Jun. 30, 2013

Balance Sheet Information [Abstract]

Balance Sheet Information

Balance Sheet Information

Accounts Receivable, net. Accounts receivable, net was as follows (in thousands):

	June 30, 2013			December 30, 2012
Accounts receivable from product revenues	$	763,246		$	766,583
Accounts receivable from license and royalty revenues	42,737			37,638
Allowance for doubtful accounts	(7,536		)	(6,627		)
Price protection, promotions and other activities	(162,354		)	(171,569		)
Total accounts receivable, net	$	636,093		$	626,025

Inventory. Inventory was as follows (in thousands):

	June 30, 2013		December 30, 2012
Raw material	$	400,078	$	404,634
Work-in-process	110,509		102,249
Finished goods	212,816		243,192
Total inventory	$	723,403	$	750,075

Other Current Assets. Other current assets were as follows (in thousands):

	June 30, 2013		December 30, 2012
Tax-related receivables	$	189,059	$	186,223
Other non-trade receivable	11,668		—
Prepayment to Flash Forward Ltd.	15,433		20,577
Derivative contract receivables	7,754		19,064
Prepaid expenses	13,118		13,221
Other current assets	14,899		21,794
Total other current assets	$	251,931	$	260,879

Notes Receivable and Investments in Flash Ventures. Notes receivable and investments in Flash Partners Ltd., Flash Alliance Ltd. and Flash Forward Ltd. (collectively referred to as “Flash Ventures”) were as follows (in thousands):

	June 30, 2013		December 30, 2012
Notes receivable, Flash Partners Ltd.	$	156,455	$	180,254
Notes receivable, Flash Alliance Ltd.	343,192		476,800
Notes receivable, Flash Forward Ltd.	141,314		162,810
Investment in Flash Partners Ltd.	202,796		232,547
Investment in Flash Alliance Ltd.	302,285		342,048
Investment in Flash Forward Ltd.	58,698		65,653
Total notes receivable and investments in Flash Ventures	$	1,204,740	$	1,460,112

Equity-method investments and the Company’s maximum loss exposure related to Flash Ventures are discussed further in Note 11, “Commitments, Contingencies and Guarantees – Flash Ventures” and Note 12, “Related Parties and Strategic Investments.”

The Company assesses financing receivable credit quality through financial and operational reviews of the borrower and creditworthiness, including credit rating agency ratings, of significant investors of the borrower, where material or known. Impairments, when required for credit worthiness, are recorded in other income (expense). The Company makes or will make long-term loans to Flash Ventures to fund new process technologies and additional wafer capacities. The Company aggregates its Flash Ventures notes receivable into one class of financing receivables due to the similar ownership interest and common structure in each Flash Venture entity. For all reporting periods presented, no loans were past due and no loan impairments were recorded.

Other Non-current Assets. Other non-current assets were as follows (in thousands):

	June 30, 2013		December 30, 2012
Prepaid tax onintercompany transactions	$	39,932	$	42,118
Prepayment to Flash Forward Ltd.	—		5,144
Convertible note issuance costs	7,767		8,708
Long-term prepaid income tax	63,008		63,008
Other non-current assets	38,939		34,832
Total other non-current assets	$	149,646	$	153,810

Other Current Accrued Liabilities. Other current accrued liabilities were as follows (in thousands):

	June 30, 2013		December 30, 2012
Accrued payroll and related expenses	$	139,927	$	102,269
Derivative contract payables	10,351		13,584
Taxes payable	116,062		25,476
Other accrued liabilities	147,131		116,210
Total other current accrued liabilities	$	413,471	$	257,539

Non-current Liabilities. Non-current liabilities were as follows (in thousands):

	June 30, 2013		December 30, 2012
Deferred tax liabilities	$	10,178	$	28,672
Income tax liabilities	197,202		208,629
Deferred credits on intercompany transactions	50,147		58,548
Other non-current liabilities	99,054		112,098
Total non-current liabilities	$	356,581	$	407,947

Warranties. The liability for warranty expense is included in Other current accrued liabilities and Non-current liabilities in the accompanying Condensed Consolidated Balance Sheets and the activity was as follows (in thousands):

	Three months ended						Six months ended
	June 30, 2013			July 1, 2012			June 30, 2013			July 1, 2012
Balance, beginning of period	$	38,972		$	32,119		$	38,787		$	26,957
Additions and adjustments to cost of revenues	6,040			3,073			10,918			13,479
Usage	(6,657		)	(3,552		)	(11,350		)	(8,796		)
Balance, end of period	$	38,355		$	31,640		$	38,355		$	31,640

The majority of the Company’s products have a warranty of less than three years, with a small number of products having a warranty ranging up to ten years or more. For warranties ten years or greater, including lifetime warranties, the Company uses the estimated useful life of the product to calculate the warranty exposure. A provision for the estimated future cost related to warranty expense is recorded at the time of customer invoice. The Company’s warranty liability is affected by customer and consumer returns, product failures, number of units sold and repair or replacement costs incurred. Should actual product failure rates, or repair or replacement costs, differ from the Company’s estimates, increases or decreases to its warranty liability would be required.

Comprehensive Income (Loss) Note

Accumulated Other Comprehensive Income (Loss). AOCI presented in the accompanying Condensed Consolidated Balance Sheets consists of unrealized gains and losses on available-for-sale investments, foreign currency translation and hedging activities, net of tax, for all periods presented (in thousands):

	June 30, 2013			December 30, 2012
Accumulated net unrealized gain (loss) on:
Available-for-sale investments	$	6,765		$	15,919
Foreign currency translation	6,255			155,389
Hedging activities	(24,706		)	(6,187		)
Total accumulated other comprehensive income (loss)	$	(11,686	)	$	165,121

The amount of income tax (benefit) expense allocated to the unrealized gain (loss) on available-for-sale investments and foreign currency translation was as follows (in thousands):

	Three months ended					Six months ended
	June 30, 2013			July 1, 2012		June 30, 2013			July 1, 2012
Available-for-sale investments	$	(7,525	)	$	841	$	(5,472	)	$	3,834
Foreign currency translation	(9,549		)	7,353		(27,860		)	(6,842		)
	$	(17,074	)	$	8,194	$	(33,332	)	$	(3,008	)

The significant amounts reclassified out of each component of AOCI were as follows (in thousands):

	Three months ended						Six months ended
AOCI Component	June 30, 2013			July 1, 2012			June 30, 2013			July 1, 2012			Income Statement Line Item
Unrealized gain on available-for-sale investments	$	865		$	679		$	551		$	1,202		Interest (expense) and other income (expense), net
Tax impact	(308		)	(248		)	(483		)	(417		)	Tax expense
Unrealized gain on available-for-sale investments, net of tax	557			431			68			785			Net of tax
Gain (loss) on hedging activities	(17,933		)	(1,529		)	(19,374		)	4,785			Cost of revenues
Tax impact	—			—			—			—			Tax expense
Gain (loss) on hedging activities, net of tax	(17,933		)	(1,529		)	(19,374		)	4,785			Net of tax
Total reclassifications for the period, net of tax	$	(17,376	)	$	(1,098	)	$	(19,306	)	$	5,570		Net of tax