Commitments Contingencies and Guarantees (Tables)

6 Months Ended

Jun. 29, 2014

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 (in billions) and U.S. dollar-equivalent (in thousands) based upon the exchange rate at June 29, 2014:



Master Lease Agreements by Execution Date	Lease Type	Lease Amounts				Expiration
		(Japanese yen)		(U.S. dollar)
Flash Partners
April 2010	Refinanced	¥	0.7	$	6,421	2014
January 2011	Refinanced	0.9		8,831		2014
November 2011	Refinanced	3.4		33,221		2014
March 2012	Refinanced	2.5		25,838		2015
March 2014	Initial	5.0		49,093		2019
		12.5		123,404
Flash Alliance
March 2012	Initial	6.2		60,753		2017
July 2012	Refinanced	11.6		114,612		2017
March 2014	Initial	5.0		49,513		2019
May 2014	Initial	6.5		64,096		2019
		29.3		288,974
Flash Forward
November 2011	Initial	9.4		92,227		2016
March 2012	Initial	5.9		58,484		2017
July 2012	Initial	2.3		22,977		2017
		17.6		173,688
Total guarantee obligations		¥	59.4	$	586,066

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 29, 2014 in U.S. dollars based upon the yen/dollar exchange rate at June 29, 2014 (in thousands):



Annual Installments	Payment of Principal Amortization		Purchase Option Exercise Price at Final Lease Terms		Guarantee Amount
Year 1	$	163,028	$	42,784	$	205,812
Year 2	122,072		11,278		133,350
Year 3	88,036		56,825		144,861
Year 4	33,367		24,370		57,737
Year 5	17,884		26,422		44,306
Total guarantee obligations	$	424,387	$	161,679	$	586,066

Contractual Obligations

Contractual cash obligations and commitments as of June 29, 2014 were as follows (in thousands):



	Total			1 Year (Remaining 6 months in Fiscal 2014)		2 – 3 Years (Fiscal 2015 and 2016)		4 – 5 Years (Fiscal 2017 and 2018)		More than 5 Years (Beyond Fiscal 2018)
Facility and other operating leases	$	22,764	⁽⁵⁾	$	4,218	$	10,582	$	4,307	$	3,657
Flash Partners⁽¹⁾	590,408		⁽⁵⁾⁽⁶⁾	90,020		281,295		159,510		59,583
Flash Alliance⁽¹⁾	1,810,485		⁽⁵⁾⁽⁶⁾	315,653		922,808		456,817		115,207
Flash Forward⁽¹⁾	732,517		⁽⁵⁾⁽⁶⁾	136,967		379,563		162,112		53,875
Toshiba research and development	108,776		⁽⁵⁾	64,918		43,858		—		—
Capital equipment purchase commitments	104,427			104,232		192		3		—
1.5% Notes due 2017 principal and interest⁽²⁾	1,052,500			7,500		30,000		1,015,000		—
0.5% Notes due 2020 principal and interest⁽³⁾	1,548,750			3,750		15,000		15,000		1,515,000
Operating expense commitments	60,474			58,112		2,278		84		—
Noncancelable production purchase commitments⁽⁴⁾	268,310		⁽⁵⁾	268,310		—		—		—
Total contractual cash obligations	$	6,299,411		$	1,053,680	$	1,685,576	$	1,812,833	$	1,747,322


⁽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⁾	In October 2013, the Company issued and sold $1.5 billion in aggregate principal amount of 0.5% Notes due 2020. The Company will pay cash interest on the outstanding notes at an annual rate of 0.5%, payable semi-annually on April 15 and October 15 of each year until October 15, 2020.


⁽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 June 29, 2014.


⁽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 (in thousands):



	June 29, 2014
Guarantee of Flash Ventures equipment leases ⁽¹⁾	$	586,066


⁽¹⁾	The Company’s guarantee obligation, net of cumulative lease payments, was 59.4 billion Japanese yen, or approximately $586 million based upon the exchange rate at June 29, 2014.

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 2022. Future minimum lease payments are presented below (in thousands):



	Future minimum lease payments
Fiscal year:
2014 (Remaining 6 months)	$	4,492
2015	7,374
2016	3,919
2017	2,570
2018	1,737
2019 and thereafter	3,657
Operating leases, gross	23,749
Sublease income to be received in the future under noncancelable subleases	(985		)
Operating leases, net	$	22,764

Net rent expense

Net rent expense was as follows (in thousands):



	Three months ended				Six months ended
	June 29, 2014		June 30, 2013		June 29, 2014		June 30, 2013
Rent expense, net	$	1,543	$	1,330	$	3,167	$	3,173

- 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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