Commitments Contingencies and Guarantees (Tables)

3 Months Ended

Apr. 03, 2016

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 initial and refinanced leases) in both Japanese yen and U.S. dollar-equivalent based upon the exchange rate at April 3, 2016:



Master Lease Agreements by Execution Date	Lease Type	Lease Amounts				Expiration
		(Japanese yen, in billions)		(U.S. dollar, in thousands)
Flash Partners:
March 2014	Initial	¥	3.0	$	27,047	2019
December 2014	Initial	2.4		21,485		2019
February 2016	Initial	9.8		87,759		2021
		15.2		136,291
Flash Alliance:
March 2012	Initial	2.8		24,683		2017
July 2012	Refinanced	4.4		39,213		2017
March 2014	Initial	3.1		27,502		2019
May 2014	Initial	4.0		36,008		2019
August 2014	Initial	4.4		40,269		2019
December 2014	Initial	3.7		33,108		2019
March 2015	Initial	7.8		69,879		2020
June 2015	Initial	6.0		53,263		2020
August 2015	Initial	4.1		36,180		2020
September 2015	Initial	3.6		31,844		2020
December 2015	Initial	1.9		16,890		2020
		45.8		408,839
Flash Forward:
November 2011	Initial	4.4		39,172		2016
March 2012	Initial	2.5		22,649		2017
July 2012	Initial	1.1		9,382		2017
December 2014	Initial	3.8		33,637		2019
June 2015	Initial	4.2		37,845		2020
August 2015	Initial	6.8		60,207		2020
September 2015	Initial	2.2		19,937		2020
December 2015	Initial	9.5		84,320		2020
February 2016	Initial	9.8		87,600		2021
March 2016	Initial	5.0		44,602		2021
		49.3		439,351
Total guarantee obligations		¥	110.3	$	984,481

Remaining guarantee obligations by year

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 April 3, 2016 in U.S. dollars based upon the Japanese yen to U.S. dollar exchange rate at April 3, 2016:



Annual Installments	Payment of Principal Amortization		Purchase Option Exercise Price at Final Lease Terms		Guarantee Amount
	(In thousands)
Year 1	$	249,406	$	51,407	$	300,813
Year 2	188,937		22,043		210,980
Year 3	156,281		34,865		191,146
Year 4	104,591		53,090		157,681
Year 5	41,387		82,474		123,861
Total guarantee obligations	$	740,602	$	243,879	$	984,481

Contractual Obligations

Contractual cash obligations and commitments as of April 3, 2016 were as follows:



	Total			1 Year (Remaining 9 months in 2016)		2 - 3 Years (2017 and 2018)		4 - 5 Years (2019 and 2020)		More than 5 Years (Beyond 2020)
	(In thousands)
Facility and other operating leases	$	51,192	⁽⁵⁾	$	10,088	$	20,651	$	13,901	$	6,552
Flash Ventures and other related commitments⁽¹⁾	5,079,659		⁽⁵⁾⁽⁶⁾	1,575,378		1,983,656		1,083,671		436,954
Convertible senior notes⁽²⁾	2,556,641			14,975		1,026,666		1,515,000		—
Warrant liability⁽³⁾	417,934			—		417,934		—		—
Noncancelable production purchase commitments⁽⁴⁾	318,278		⁽⁵⁾	318,278		—		—		—
Capital equipment purchase commitments	60,113			59,973		140		—		—
Operating expense commitments	53,108			50,514		2,594		—		—
Total contractual cash obligations	$	8,536,925		$	2,029,206	$	3,451,641	$	2,612,572	$	443,506


⁽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, including research and development. Funding commitments assume no additional operating lease guarantees; additional operating lease guarantees can reduce funding commitments.


⁽²⁾	Includes principal and interest on both the 1.5% Notes due 2017 and the 0.5% Notes due 2020 based upon the original maturities and does not give effect to the potential conversion by the holders. If the merger with Western Digital closes, the Company expects the holders of these notes to exercise their rights to convert. See Note 7, “Financing Arrangements.”


⁽³⁾	Represents the liability for the terminated warrants associated with the 1.5% Notes due 2017. The liability is due by August 2017, but will be accelerated if the Western Digital merger is completed and payable shortly thereafter. See Note 7, “Financing Arrangements.”


⁽⁴⁾	Includes production purchase commitments to Flash Ventures and other suppliers.


⁽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 April 3, 2016.


⁽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 were as follows:



	April 3, 2016
	(In thousands)
Guarantee of Flash Ventures equipment leases ⁽¹⁾	$	984,481


⁽¹⁾	The Company’s guarantee obligation, net of cumulative lease payments, was 110.3 billion Japanese yen, or approximately $984 million based upon the exchange rate at April 3, 2016.

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 2016 through 2024. Future minimum lease payments are presented below:



	Future minimum lease payments
	(In thousands)
Year:
2016 (Remaining 9 months)	$	10,218
2017	11,747
2018	9,232
2019	7,013
2020	6,888
2021 and thereafter	6,552
Operating leases, gross	51,650
Sublease income to be received in the future under noncancelable subleases	(458		)
Operating leases, net	$	51,192

Net rent expense

Net rent expense was as follows:



	Three months ended
	April 3, 2016		March 29, 2015
	(In thousands)
Rent expense, net	$	2,777	$	4,080

- 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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