NVIDIA 2011 Annual Report Download - page 91

NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
A reconciliation of unrecognized tax benefits is as follows:
January 30,
2011 January 31,
2010 January 25,
2009
(In thousands)
Balance at beginning of period $ 109,765 $ 95,319 $ 77,791
Increases in tax positions for prior years - 351 6,297
Decreases in tax positions for prior years (3,585) (131) (272)
Increases in tax positions for current year 18,628 18,342 13,622
Settlements (358) - (181)
Lapse in statute of limitations (3,416) (4,116) (1,938)
Balance at end of period $ 121,034 $ 109,765 $ 95,319
We classify an unrecognized tax benefit as a current liability, or as a reduction of the amount of a net operating loss carryforward or amount
refundable, to the extent that we anticipate payment or receipt of cash for income taxes within one year. Likewise, the amount is classified as a long-term
liability if we anticipate payment or receipt of cash for income taxes during a period beyond a year.
Our policy is to include interest and penalties related to unrecognized tax benefits as a component of income tax expense. As of January 30, 2011 and
January 31, 2010, and January 25, 2009, we had accrued $11.2 million, $11.2 million, and $11.8 million, respectively, for the payment of interest and
penalties related to unrecognized tax benefits, which is not included as a component of our unrecognized tax benefits. As of January 30, 2011, non-current
income taxes payable of $57.6 million consists of unrecognized tax benefits of $46.4 million and the related interest and penalties of $11.2 million.
While we believe that we have adequately provided for all tax positions, amounts asserted by tax authorities could be greater or less than our accrued
position. Accordingly, our provisions on federal, state and foreign tax-related matters to be recorded in the future may change as revised estimates are made or
the underlying matters are settled or otherwise resolved. As of January 30, 2011, we do not believe that our estimates, as otherwise provided for, on such tax
positions will significantly increase or decrease within the next twelve months.
We are subject to taxation by a number of taxing authorities both in the United States and throughout the world. As of January 30, 2011, the material
tax jurisdictions that are subject to examination include the United States, Hong Kong, Taiwan, China, India, and Germany and include our fiscal years 2004
through 2011. As of January 30, 2011, the material tax jurisdiction for which we are currently under examination include India for fiscal years 2003 through
2007.
Note 15 - Stockholders’ Equity
Stock Repurchase Program
Our Board of Directors has authorized us, subject to certain specifications, to repurchase shares of our common stock up to an aggregate maximum
amount of $2.7 billion through May 2013. The repurchases will be made from time to time in the open market, in privately negotiated transactions, or in
structured stock repurchase programs, and may be made in one or more larger repurchases, in compliance with Rule 10b-18 of the Securities Exchange Act,
subject to market conditions, applicable legal requirements, and other factors. The program does not obligate NVIDIA to acquire any particular amount of
common stock and the program may be suspended at any time at our discretion. As part of our share repurchase program, we have entered into, and we may
continue to enter into, structured share repurchase transactions with financial institutions. These agreements generally require that we make an up-front
payment in exchange for the right to receive a fixed number of shares of our common stock upon execution of the agreement, and a potential incremental
number of shares of our common stock, within a pre-determined range, at the end of the term of the agreement.
We did not enter into any structured share repurchase transactions or otherwise purchase any shares of our common stock during the twelve months
ended January 30, 2011. Through January 30, 2011, we have repurchased an aggregate of 90.9 million shares under our stock repurchase program for a total
cost of $1.46 billion. As of January 30, 2011, we are authorized, subject to certain specifications, to repurchase shares of our common stock up to $1.24
billion through May 2013.
Apart from our Board authorized stock repurchases, we withhold common stock shares associated with net share settlements to cover tax withholding
obligations upon the vesting of restricted stock unit awards under our equity incentive program. During the twelve months ending January 30, 2011, we
withheld approximately 1.1 million shares at a total cost of $16.1 million through net share settlements. Please refer to Note 3 of the Notes to the
Consolidated Financial Statements for further discussion regarding our equity incentive plans.
Convertible Preferred Stock
As of January 30, 2011 and January 31, 2010, there were no shares of preferred stock outstanding.
Common Stock
At the Annual Meeting of Stockholders held on June 19, 2008, our stockholders approved an increase in our authorized number of shares of common
stock to 2,000,000,000. The par value of our common stock remained unchanged at $0.001 per share.
Please refer to Note 2 of these Notes to the Consolidated Financial Statements for further discussion regarding the cash tender offer for certain
employee stock options completed in March 2009.
88