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FORM 10−K
NVIDIA CORP − NVDA
Filed: March 16, 2006 (period: January 29, 2006)
Annual report which provides a comprehensive overview of the company for the past year

Table of contents

  • Page 1
    FORM 10âˆ'K NVIDIA CORP âˆ' NVDA Filed: March 16, 2006 (period: January 29, 2006) Annual report which provides a comprehensive overview of the company for the past year

  • Page 2
    ... SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS PART II ITEM 5. MARKET FOR REGISTRANT S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF E ITEM 6. SELECTED FINANCIAL DATA ITEM 7. MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ITEM 7A...

  • Page 3
    EXâˆ'23.1 (Consents of experts and counsel) EXâˆ'23.2 (Consents of experts and counsel) EXâˆ'31.1 EXâˆ'31.2 EXâˆ'32.1 EXâˆ'32.2

  • Page 4
    ... Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 2701 San Tomas Expressway Santa Clara, California 95050 (408) 486âˆ'2000 (Address, including zip code, and telephone number, including area code, of principal executive offices) Securities registered pursuant to...

  • Page 5
    ... company (as defined in Rule 12bâˆ'2 of the Act). o No x The aggregate market value of the voting stock held by nonâˆ'affiliates of the registrant as of July 29, 2005 was approximately $4,226,770,945 (based on the closing sales price of the registrant's common stock on July 29, 2005). Shares of...

  • Page 6
    ... 7A. Item 8. Item 9. Item 9A. Item 9B. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Selected Financial Data Management's Discussion and Analysis of Financial Condition and Results of Operations Quantitative and Qualitative Disclosures...

  • Page 7
    ... GPU, HD and Bluâˆ'ray video, use of our products by Apple Computer, Inc., Windows Vista, the importance and benefits of strategic relationships, customer demand, our reliance on a limited number of customers, platform innovations and solutions, stock option grants and our employee stock purchase...

  • Page 8
    ... of products that support desktop personal computers, or PCs, notebook PCs and professional workstations; our MCP Business is composed of NVIDIA nForce products that operate as a singleâˆ'chip or chipset that can offâˆ'load system functions, such as audio processing and network communications, and...

  • Page 9
    ... that enhance the overall operation and compatibility of each platform they support. GPUs. Our GPU products support desktop PCs, notebook PCs and professional workstations. We have three major families of GPUs: GeForce, Go and NVIDIA Quadro. GeForce. The GeForce family represents our desktop GPUs...

  • Page 10
    ... PCI, Express platform from Apple Computer, Inc., or Apple. In addition, the first ever Apple Power Mac will incorporate our Quadro Professionalâˆ'class GPU. MCPs. Our MCP product family, known as NVIDIA nForce, supports desktop PCs, notebook PCs, professional workstations and servers. NVIDIA nForce...

  • Page 11
    ... that the NVIDIA nForce4 SLI X16 Intel Edition technology featured in the Dell Dimension XPS 600 desktop PC was immediately available. In September 2005, we introduced our first motherboard graphics solutions in more than two years, the GeForce 6100 Series GPU and NVIDIA nForce 400 Series MCP...

  • Page 12
    ... wins with these industry leaders provide market validation of our products, increase brand awareness and enhance our ability to penetrate additional leading customer accounts. In addition, we believe that close relationships with OEMs and ODMs will allow us to better anticipate and address customer...

  • Page 13
    ..., to define product features, performance, price and timing of new products. Members of our sales team have a high level of technical expertise and product and industry knowledge to support a competitive and complex design win process. We also employ a highly skilled team of application engineers to...

  • Page 14
    ... and then ship them to CEMs, distributors, motherboard and addâˆ'in board manufacturer customers from our thirdâˆ'party warehouse in Hong Kong. Generally, these manufacturers assemble and test the boards based on our design kit and test specifications, and then ship the products to retailers...

  • Page 15
    ...competitive factors in this market are performance, breadth of product offerings, access to customers and distribution channels, backwardâˆ'forward software support, conformity to industry standard application programming interfaces, or APIs, manufacturing capabilities, price of processors and total...

  • Page 16
    ... in line with our strategy to position ourselves as the worldwide leader in programmable graphics processor technologies. We now report financial information for four productâˆ'line operating segments to our CODM: the GPU Business is composed of products that support desktop PCs, notebook PCs and...

  • Page 17
    ... Vice President, Worldwide Sales. Prior to NVIDIA, he held positions in sales, marketing, and general management over a 22âˆ'year career at Sun Microsystems, Inc. Mr. Puri previously held marketing, management consulting, and product development positions at Hewlettâˆ'Packard Development Company...

  • Page 18
    ... we are able to increase production levels to meet customer demand, we may not be able to do so in a cost effective manner. Inability to fill our customers' orders on a timely basis could damage our customer relationships, result in lost revenue, cause a loss in market share or damage our reputation...

  • Page 19
    ... of our executive officers and key employees. None of our executive officers or employees is bound by an employment agreement, meaning our relationships with our executive officers and employees are at will. We do not have "key person" life insurance policies on any of our employees. The loss of the...

  • Page 20
    ... us to accurately forecast revenue and profits or losses. As a result, it is possible that in some quarters our operating results could be below the expectations of securities analysts or investors, which could cause the trading price of our common stock to decline, perhaps substantially. We believe...

  • Page 21
    ... configuration. Therefore, we endeavor to develop close relationships with our OEMs and ODMs in an attempt to allow us to better anticipate and address customer needs in new products so that our products will achieve design wins. Our ability to achieve design wins also depends in part on our ability...

  • Page 22
    ...âˆ'edge technology on a rapid basis. We believe this approach assists us in meeting the new design schedules of PC OEMs and other manufacturers. If these relationships are not successful, we may not be able to develop new products in a timely manner, which could result in a loss of market share...

  • Page 23
    ... or strategic benefits of business acquisitions, which could hurt our ability to grow our business, develop new products or sell our products. In the past we have acquired and invested in other businesses that offered products, services and technologies that we believed would help expand or enhance...

  • Page 24
    ... the graphics supplier. Our sales process involves achieving key design wins with leading PC OEMs and major system builders and supporting the product design into high volume production with key CEMs, ODMs, motherboard and addâˆ'in board manufacturers. These design wins in turn influence the retail...

  • Page 25
    ... we are required to find alternative third parties to assemble or test our products or components. Any such delays could result in a loss of reputation or a decrease in sales to our customers. We rely on thirdâˆ'party vendors to supply software development tools to us for the development of our new...

  • Page 26
    ...rapid technological change, evolving industry standards and declining average selling prices. We believe that the principal competitive factors in this market are performance, breadth of product offerings, access to customers and distribution channels, backwardâˆ'forward software support, conformity...

  • Page 27
    ..., China, Hong Kong, India, France, Russia, Germany and England. During fiscal 2006, we substantially increased our international employee resources from 242 employees as of January 30, 2005 to 615 fullâˆ'time employees as of January 29, 2006. On February 20, 2006, we completed the acquisition of ULi...

  • Page 28
    ..., changes in pricing of dynamic randomâˆ'access memory devices and other changes in the total system cost of addâˆ'in boards, as well as by severe price competition and by frequent new technology and product introductions. Only a small number of products have achieved broad market acceptance and...

  • Page 29
    ... position as well. Since inception, we have used stock options and our employee stock purchase program as fundamental components of our compensation packages. To date we generally have not recognized compensation cost for employee stock options or shares sold pursuant to our employee stock purchase...

  • Page 30
    ...will continue to defend ourselves vigorously. In August 2004, a Texas limited partnership named American Video Graphics, LP, or AVG, filed three separate complaints for patent infringement against various corporate defendants, not including NVIDIA, in the United States District Court for the Eastern...

  • Page 31
    ... position and our business could suffer. Our ability to compete will be harmed if we are unable to adequately protect our intellectual property. We rely primarily on a combination of patents, trademarks, trade secrets, employee and thirdâˆ'party nondisclosure agreements and licensing arrangements...

  • Page 32
    ... additional management resources to Section 404 compliance. In the event that our chief executive officer, chief financial officer or our independent registered public accounting firm determine that our internal control over financial reporting is not effective as defined under Section 404, investor...

  • Page 33
    ... stock. The Microsoft provision and the other factors listed above could also delay or prevent a change in control of NVIDIA. ITEM 1B. UNRESOLVED STAFF COMMENTS None. ITEM 2. PROPERTIES Our headquarters complex is located on a leased site in Santa Clara, California and is comprised of five buildings...

  • Page 34
    ..., 2000, NVIDIA Corporation and one of our indirect subsidiaries entered into an agreement to purchase certain graphics chip assets from 3dfx. The 3dfx asset purchase closed on April 18, 2001. In May 2002, we were served with a California state court complaint filed by the landlord of 3dfx's San Jose...

  • Page 35
    ... statements for such, if any, loss. American Video Graphics In August 2004, a Texas limited partnership named American Video Graphics, LP, or AVG, filed three separate complaints for patent infringement against various corporate defendants, not including NVIDIA, in the United States District Court...

  • Page 36
    ... First Quarter Dividend Policy We have never paid and do not expect to pay cash dividends for the foreseeable future. Issuer Purchases of Equity Securities On August 9, 2004 we announced that our Board of Directors, or the Board, had authorized a stock repurchase program to repurchase shares of our...

  • Page 37
    ... of Shares that Publicly May Yet Be Announced Purchased Plans or Under the Plans Programs or Programs (1 136,846,554 136,846,554 86,846,554 1,355,260 (3) $ 1,355,260 (1) We have an ongoing authorization from the Board, subject to certain specifications, to repurchase shares of our common stock up...

  • Page 38
    ... to our settlement of our arbitration with Microsoft regarding Xbox pricing. (E) Fiscal 2003 included a charge for stock option exchange expenses of $61.8 million related to personnel associated with cost of revenue (for manufacturing personnel), research and development and sales, general and...

  • Page 39
    ...and risks described elsewhere in this Annual Report on Form 10âˆ'K, before deciding to purchase, hold or sell shares of our common stock. Overview Our Company NVIDIA Corporation is the worldwide leader in programmable graphics processor technologies. Our products enhance the endâˆ'user experience on...

  • Page 40
    ...the NVIDIA nForce4 SLI X16 Intel Edition technology featured in the Dell Dimension XPS 600 desktop PC was immediately available. In September 2005, we introduced and shipped the NVIDIA nForce 400 MCP and GeForce 6100 integrated GPU family. This represents the first integrated GPU solution to support...

  • Page 41
    ... that we are well positioned to increase our share of the handheld segment in the upcoming year. Consumer Electronics Business In April 2005, we finalized our definitive agreement with SCE to jointly develop a custom GPU incorporating our nextâˆ'generation GeForce GPU and SCE's system solutions...

  • Page 42
    ... the completion of the stock split, NVIDIA will have approximately 360 million shares of common stock outstanding. Stock Repurchase. On March 6, 2006, we also announced that our Board of Directors approved an increase in our existing stock repurchase program. We announced a $400 million increase to...

  • Page 43
    ... is generally upon receipt of cash. Our policy on sales to distributors is to defer recognition of revenue and related cost of revenue until the distributors resell the product. We record estimated reductions to revenue for customer programs at the time revenue is recognized. Our customer programs...

  • Page 44
    ... our operating results. If actual market conditions are more favorable, we may have higher gross margins when products are sold. Sales to date of such products have not had a significant impact on our gross margin. As of January 29, 2006, our inventory reserve was $48.3 million. As a percentage...

  • Page 45
    ...resulting from the exercise of employee stock options. The tax benefit of these net operating loss and tax credit carryforwards, if and when realized, will be accounted for as a credit to stockholders' equity. Of the remaining valuation allowance at January 29, 2006, $19.5 million relates to federal...

  • Page 46
    ... 2006 compared to $1.4 billion for fiscal 2005. The increase was the result of increased sales of our GeForce 6 and GeForce 7 families of desktop GPUs that serve the highâˆ'end GPU segment, offset by a slight decline in sales of our mainstream GPU products. In addition, sales of our NVIDIA Quadro...

  • Page 47
    ...260.0 million for fiscal 2005 compared to $280.1 million for fiscal 2004. The decrease in our Consumer Electronics Business is due to unit sales volume increases offset by a lower average sales price. Sales of our Xbox products historically fluctuated based on the timing of orders from Microsoft. 41

  • Page 48
    ... and MCPs used in the Microsoft Xbox product, which were billed to Microsoft in the United States. Sales to our two largest customers accounted for approximately 26%, 31%, and 36% of our revenue during fiscal 2006, 2005 and 2004, respectively. Gross Profit Gross profit consists of total revenue, net...

  • Page 49
    ...2005 we realized a lower average sales price on our sales of Xbox processors. Consolidated Gross Margin The improvement in our gross margin reflects our continuing focus on delivering cost effective product architectures, enhancing business processes and delivering profitable growth. We expect gross...

  • Page 50
    ... increase in salaries and benefits related to 423 additional personnel and a $5.3 million increase in computer software and equipment primarily due to increased allocation of information technology expenses. Other expenses increased $3.9 million primarily due to travel and other employee related...

  • Page 51
    ... from time to time to the extent we make periodic incremental investments in research and development and these investments may be independent of our level of revenue. Sales, General and Administrative Year Ended Jan. Jan. 29, 30, 2006 2005 Sales, General and Administrative: Salaries and benefits...

  • Page 52
    ... a reduction in certain marketing programs, tradeshow expenses, new product launches and customer samples, other marketing costs, travel related and employee recruitment expenses, and by a $4.5 million decrease in depreciation and amortization. Sales, general and administrative expenses increased...

  • Page 53
    ...losses on the sale of marketable securities. Other income decreased by $1.1 million from fiscal 2005 to fiscal 2006 primarily due to the liquidation of marketable securities during fiscal 2006 in order to obtain the cash needed for the repatriation of certain foreign earnings under the American Jobs...

  • Page 54
    ..., technology licenses, software, intangible assets and leasehold improvements at our headquarters facility in Santa Clara, California and at our international sites. In addition, we used cash of $12.1 million to acquire certain assets of a private company and $9.7 million related to investments we...

  • Page 55
    ... indicated in the applicable prospectus supplement, we intend to use the proceeds for working capital and general corporate purposes. 3dfx Asset Purchase The 3dfx asset purchase closed on April 18, 2001. Under the terms of the Asset Purchase Agreement, the cash consideration due at the closing...

  • Page 56
    ... with stock options granted and shares issued under our employee stock purchase plan in our first quarter of fiscal 2006. We determined that the use of implied volatility is expected to be more reflective of market conditions and, therefore, can reasonably be expected to be a better indicator of...

  • Page 57
    ... position, results of operations or cash flows. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk We invest in a variety of financial instruments, consisting principally of investments in commercial paper, money market funds and highly liquid debt securities...

  • Page 58
    ... by us in this Annual Report on Form 10âˆ'K was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and instructions for Form 10âˆ'K. Management's Annual Report on Internal Control Over Financial Reporting Our management is...

  • Page 59
    ... limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within NVIDIA have been detected. ITEM 9B. OTHER INFORMATION None. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Identification...

  • Page 60
    ..."Code of Ethics" in our 2006 Proxy Statement, which information is hereby incorporated by reference. The full text of our "Worldwide Code of Ethics" and "Financial Team Code of Ethics" are published on our Investor Relations web site, under Corporate Governance, at www.nvidia.com. ITEM 11. EXECUTIVE...

  • Page 61
    ..., FINANCIAL STATEMENT SCHEDULES Page (a) 1. Consolidated Financial Statements Report of Independent Registered Public Accounting Firm, PricewaterhouseCoopers LLP Report of Independent Registered Public Accounting Firm, KPMG LLP Consolidated Balance Sheets as of January 29, 2006 and January 30...

  • Page 62
    ... FIRM To the Stockholders and Board of Directors NVIDIA Corporation: We have completed integrated audits of NVIDIA Corporation's fiscal 2006 and 2005 consolidated financial statements and of its internal control over financial reporting as of January 29, 2006 in accordance with the standards...

  • Page 63
    ... and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control...

  • Page 64
    ... of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States...

  • Page 65
    NVIDIA CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) January 29, 2006 ASSETS Current assets: Cash and cash equivalents Marketable securities Accounts receivable, less allowances of $10,837 and $13,153 in 2006 and 2005, respectively ...

  • Page 66
    NVIDIA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) Year Ended January 29, 2006 Revenue Cost of revenue Gross profit Operating expenses: Research and development Sales, general and administrative Inâˆ'process research and development Settlement...

  • Page 67
    ... of $1,470 tax effect Reclassification adjustment for net losses included in net income, net of ($38) tax effect Net income Balances, January 30, 2005 Issuance of common stock from stock plans Stock repurchase Tax benefit from stock plans Cancellation of shares Reversal of deferred 157,790,022 $ 158...

  • Page 68
    ..., net of $845 tax effect Reclassification adjustment for net losses included in net income, net of ($407) tax effect Net income Balances, January 29, 2006 1,096 âˆ'âˆ' âˆ'âˆ' (120) 1,096 (120) (120) 171,477,456 $ 1,626 âˆ'âˆ' âˆ'âˆ' 302,586 1,626 302,586...

  • Page 69
    ... securities Acquisition of businesses Purchases of property and equipment and intangible assets Investments in nonâˆ'affiliates Net cash provided by (used in) investing activities Cash flows from financing activities: Redemption of convertible debenture Common stock issued under employee stock plans...

  • Page 70
    ... Acquisition of business âˆ' goodwill adjustment Assets recorded under capital lease arrangements Application of customer advance to accounts receivable Marketable security received from investment exchange Asset retirement obligation Unrealized gains/losses from marketable securities Deferred stock...

  • Page 71
    ... Accounting Policies Our Company NVIDIA Corporation is the worldwide leader in programmable graphics processor technologies. Our products enhance the endâˆ'user experience on consumer and professional computing devices. We have four major productâˆ'line operating segments: graphics processing units...

  • Page 72
    ... Task Force Issue No. 03âˆ'01, The Meaning of Otherâˆ'Thanâˆ'Temporary Impairment and Its Application to Certain Investments, in order to assess whether our investments with unrealized loss positions are other than temporarily impaired. Realized gains and losses on the sale of marketable securities...

  • Page 73
    ... is generally upon receipt of cash. Our policy on sales to distributors is to defer recognition of revenue and related cost of revenue until the distributors resell the product. We record estimated reductions to revenue for customer programs at the time revenue is recognized. Our customer programs...

  • Page 74
    ... improvements at our headquarters facility in Santa Clara, California and recorded a liability of $4.5 million to return the property to its original condition upon lease termination in fiscal year 2013. During fiscal 2006, we continued the expansion of our international facilities, and completed...

  • Page 75
    ... of cash, cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair values due to their relatively short maturities as of January 29, 2006 and January 30, 2005. Marketable securities are comprised of availableâˆ'forâˆ'sale securities that are reported at...

  • Page 76
    ...Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, to account for our stockâˆ'based employee compensation plans. As such, compensation expense is recorded if on the date of grant the current fair value per share of the underlying stock exceeds the exercise price per share. We...

  • Page 77
    ... with stock options granted and shares issued under our employee stock purchase plan in our first quarter of fiscal 2006. We determined that the use of implied volatility is expected to be more reflective of market conditions and, therefore, can reasonably be expected to be a better indicator of...

  • Page 78
    ... our reported earnings. We anticipate that our stockâˆ'based compensation expense will be approximately $18 to $22 million for the first quarter of fiscal 2007 and we are unsure how the market will react to this adverse affect on our operating results, which could impact our stock price. However...

  • Page 79
    ...design wins, and enhance MediaQ's PDA business through our existing OEM and original design manufacturer channels. The aggregate purchase price consisted of cash consideration of approximately $71.3 million, including $1.3 million of direct acquisition costs and $3.5 million of inâˆ'process research...

  • Page 80
    ...satisfaction of debts and liabilities owed to the general unsecured creditors of 3dfx. As such, during the three months ended October 30, 2005, we recorded $5.6 million as a charge to settlement costs and $25.0 million as additional purchase price for 3dfx. Please see Note 11 for further information...

  • Page 81
    ... for the acquisition of a small international company. The acquisition was accounted for under the purchase method of accounting and closed on December 30, 2005. During the third quarter of fiscal 2006, we recorded $25.0 million as goodwill related to the purchase of certain assets of 3dfx. Please...

  • Page 82
    ... into cash and have original maturities of three months or less at the time of acquisition. Marketable securities consist primarily of highly liquid investments with a maturity of greater than three months when purchased and some equity investments. We classify our marketable securities at...

  • Page 83
    ... our intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value. Our investment policy requires the purchase of topâˆ'tier investment grade securities, the diversification of asset type and certain limits on our portfolio duration...

  • Page 84
    ...two private companies. January 29, January 30, 2006 2005 (In thousands) $ 153,618 $ 125,310 88,468 86,883 106,061 82,428 88,376 79,160 2,260 3,264 21,618 18,777 460,401 395,822 (282,249) (216,867) $ 178,152 $ 178,955 Estimated Useful Life (Years) 3âˆ'5 3 3 (A) (B) 5 Property and Equipment: Software...

  • Page 85
    ... of the changes of the entity's product warranty liabilities. We record a reduction to revenue for estimated product returns at the time revenue is recognized primarily based on historical return rates. The reductions to revenue for estimated product returns for fiscal 2006, 2005 and 2004 are as...

  • Page 86
    ... repurchase program we had announced in August 2004. As a result of this increase, the amount of common stock the Board of Directors has authorized to be repurchased has now been increased to a total of $700 million. The repurchases will be made from time to time in the open market, in privately...

  • Page 87
    NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS âˆ' (Continued) Convertible Preferred Stock As of January 29, 2006, there were no shares of preferred stock outstanding. 2000 Nonstatutory Equity Incentive Plan On August 1, 2000, our Board of Directors approved the 2000 ...

  • Page 88
    NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS âˆ' (Continued) Under the amended Directors Plan, each nonâˆ'employee director who is elected or appointed to our Board of Directors for the first time is automatically granted an option to purchase 75,000 shares, which ...

  • Page 89
    ... each offering period at 85% at the fair market value of the common stock on the relevant purchase date. Employees may end their participation in the Purchase Plan at any time during the offering period, and participation ends automatically on termination of employment with us and in each case their...

  • Page 90
    ...were also convertible at the option of the holder at any time prior to the close of business on the maturity date, unless previously redeemed or repurchased, into shares of common stock at a conversion price of $46.36 per share, subject to adjustment in certain circumstances. On October 24, 2003, we...

  • Page 91
    ... premium and $5.5 million for the writeâˆ'off of unamortized issuance costs. Lease Obligations Our headquarters complex is located on a leased site in Santa Clara, California and is comprised of five buildings. The related leases expire in 2012 and each includes two sevenâˆ'year renewals at our...

  • Page 92
    ...'s San Jose, California commercial real estate lease. In December 2002, we were served with a California state court complaint filed by the landlord of 3dfx's Austin, Texas commercial real estate lease. The landlords' complaints both assert claims for, among other things, interference with contract...

  • Page 93
    ... statements for such, if any, loss. American Video Graphics In August 2004, a Texas limited partnership named American Video Graphics, LP, or AVG, filed three separate complaints for patent infringement against various corporate defendants, not including NVIDIA, in the United States District Court...

  • Page 94
    ...Deferred: Federal State Foreign Total deferred Charge in lieu of taxes attributable to employer stock option plans Provision for income taxes Income before income taxes consists of the following: Year Ended January 29, 2006 Domestic Foreign $ $ Year Year Ended Ended January January 30, 25, 2005 2004...

  • Page 95
    .... If such a limitation applies, the net operating loss and tax credit carryforwards may expire before full utilization. The American Jobs Creation Act of 2004, or Act, was signed into law on October 22, 2004. The Act provided a temporary incentive for United States multinational corporations to...

  • Page 96
    ... in line with our strategy to position ourselves as the worldwide leader in programmable graphics processor technologies. We now report financial information for four productâˆ'line operating segments to our CODM: the GPU Business is composed of products that support desktop PCs, notebook PCs and...

  • Page 97
    NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS âˆ' (Continued) GPU Twelve Months Ended January 29, 2006: Revenue Depreciation and amortization expense Operating income (loss) Twelve Months Ended January 30, 2005: Revenue Depreciation and amortization expense Operating...

  • Page 98
    ... 29, 2006 Accounts Receivable: Customer A Customer B Customer C Note 16 âˆ' Quarterly Summary (Unaudited) Fiscal 2006 Quarters Ended Jan. 29, Oct. 30, July 31, 2006 2005 2005 May 1, 2005 (In thousands, except per share data) Statement of Operations Data: Revenue Cost of revenue Gross profit Net...

  • Page 99
    ... repurchase program we had announced in August 2004. As a result of this increase, the amount of common stock the Board of Directors has authorized to be repurchased has now been increased to a total of $700 million. The repurchases will be made from time to time in the open market, in privately...

  • Page 100
    NVIDIA CORPORATION AND SUBSIDIARIES SCHEDULE II âˆ' VALUATION AND QUALIFYING ACCOUNTS Balance at Beginning of Period Additions (3) Deductions (In thousands) $ $ Balance at End of Period Description Year ended January 29, 2006 Allowance for sales returns and allowances Allowance for doubtful ...

  • Page 101
    ... Agreement between NVIDIA Corporation and each of its directors and officers 1998 Equity Incentive Plan, as amended 1998 Equity Incentive Plan ISO, as amended 1998 Equity Incentive Plan NSO, as amended Certificate of Stock Option Grant 1998 Employee Stock Purchase Plan, as amended Form of Employee...

  • Page 102
    ... or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference. Copies of above exhibits not contained herein are available to any stockholder upon written request to: Investor Relations: NVIDIA Corporation, 2701 San Tomas Expressway, Santa Clara, CA 95050.

  • Page 103
    94

  • Page 104
    ... 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 16, 2006. NVIDIA Corporation By /s/ JENâˆ'HSUN HUANG Jenâˆ'Hsun Huang President and Chief Executive Officer POWER OF ATTORNEY...

  • Page 105
    Signature /s/ JAMES C. GAITHER James C. Gaither /s/ HARVEY C. JONES Harvey C. Jones /s/ MARK L. PERRY Mark L. Perry /s/ WILLIAM J. MILLER William J. Miller /s/ A. BROOKE SEAWELL A. Brooke Seawell Title Date Director March 16, 2006 March 13, 2006 Director Director March 16, 2006 Director ...

  • Page 106
    ... Agreement between NVIDIA Corporation and each of its directors and officers 1998 Equity Incentive Plan, as amended 1998 Equity Incentive Plan ISO, as amended 1998 Equity Incentive Plan NSO, as amended Certificate of Stock Option Grant 1998 Employee Stock Purchase Plan, as amended Form of Employee...

  • Page 107
    ... or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference. Copies of above exhibits not contained herein are available to any stockholder upon written request to: Investor Relations: NVIDIA Corporation, 2701 San Tomas Expressway, Santa Clara, CA 95050.

  • Page 108
    EXHIBIT 3.3 BYLAWS OF NVIDIA CORPORATION (A DELAWARE CORPORATION) (Amended and Restated as of March 9, 2006)

  • Page 109
    ... Duties of Officers Delegation of Authority Resignations Removal Execution Of Corporate Instruments And Voting Of Securities Owned By The Corporation Execution of Corporate Instruments Voting of Securities Owned by the Corporation Shares Of Stock Form and Execution of Certificates Lost Certificates...

  • Page 110
    ... Of The Corporation Execution of Other Securities CERTAIN TRANSACTIONS Transactions with Interested Parties Quorum Dividends Declaration of Dividends Dividend Reserve Fiscal Year Fiscal Year Indemnification Indemnification of Directors, Executive Officers, Other Officers, Employees and Other...

  • Page 111
    .... The Board of Directors may, in its sole discretion, determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication as provided under the Delaware General Corporation Law (the "DGCL"). Section 5. Annual Meetings. (a) The annual meeting of...

  • Page 112
    ... Board of Directors made by the corporation at least one hundred (100) days prior to the first anniversary of the preceding year's annual meeting, a stockholder's notice required by this Section 5 shall also be considered timely, but only with respect to nominees for any new positions created...

  • Page 113
    ... the stockholders of the corporation may be called, for any purpose or purposes, by (i) the Chairman of the Board of Directors, (ii) the Chief Executive Officer, or (iii) the Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized directors (whether or not...

  • Page 114
    ... Stock Market, or by the Certificate of Incorporation or these Bylaws, in all matters other than the election of directors, the affirmative vote of the majority of shares present in person, by remote communication, if applicable, or represented by proxy at the meeting and entitled to vote generally...

  • Page 115
    ... as the chairman shall permit, restrictions on entry to the meeting after the time fixed for the commencement thereof, limitations on the time allotted to questions or comments by participants and regulation of the opening and closing of the polls for balloting on matters which are to be voted on by...

  • Page 116
    ... qualified or until his death, resignation or removal. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director. In case of any increase or decrease, from time to time, in the number of persons serving as directors, other than those...

  • Page 117
    ...the Board of Directors shall be delivered orally or in writing, by telephone, including a voice messaging system or other system or technology designed to record and communicate messages, facsimile, telegraph or telex, or by electronic mail or other electronic means, during normal business hours, at...

  • Page 118
    ...from the Board of Directors. The Board of Directors may at any time for any reason remove any individual committee member and the Board of Directors may fill any committee vacancy created by death, resignation, removal or increase in the number of members of the committee. The Board of Directors may...

  • Page 119
    ... any one time unless specifically prohibited therefrom by law. The salaries and other compensation of the officers of the corporation shall be fixed by or in the manner designated by the Board of Directors. Section 29. Tenure and Duties of Officers. (a) General. All officers shall hold office at the...

  • Page 120
    ...Directors, have general supervision, direction and control of the business and officers of the corporation. The President shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors shall designate from time...

  • Page 121
    ...instruments or documents requiring the corporate seal, if any, and certificates of shares of stock owned by the corporation, shall be executed, signed or endorsed by the Chairman of the Board of Directors, or the Chief Executive Officer or the President or any Vice President, and by the Secretary or...

  • Page 122
    ...Record Dates. (a) In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix, in advance, a record date, which record date shall not precede the date upon which the resolution...

  • Page 123
    ... 40. Execution of Other Securities. All bonds, debentures and other corporate securities of the corporation, other than stock certificates (covered in Section 35), may be signed by the Chairman of the Board of Directors, the Chief Executive Officer, the President or any Vice President, or such other...

  • Page 124
    ... by individual contracts with its directors and executive officers. (b) Other Officers, Employees and Other Agents. The corporation shall have power to indemnify its other officers, employees and other agents as set forth in the DGCL or any other applicable law. The Board of Directors shall have...

  • Page 125
    ... his or her capacity as a director or an executive officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the corporation of an undertaking (hereinafter an...

  • Page 126
    ... action in his official capacity and as to action in another capacity while holding office. The corporation is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advances, to the fullest extent not...

  • Page 127
    ... such filing, to the last known post office address of such director. (c) Affidavit of Mailing. An affidavit of mailing, executed by a duly authorized and competent employee of the corporation or its transfer agent appointed with respect to the class of stock affected, or other agent, specifying the...

  • Page 128
    ... affirmative vote of the holders of at least sixtyâˆ'six and twoâˆ'thirds percent (66âˆ'T%) of the voting power of all of the thenâˆ'outstanding shares of the capital stock of the corporation entitled to vote generally in the election of directors, voting together as a single class. 18

  • Page 129
    ...NVIDIA Corporation NVIDIA International Holdings, Inc. 100% NVIDIA Development, Inc. 100% NVIDIA US Holding Company 100% NVIDIA International, Inc. 100% NVIDIA US Investment Company 100% NVIDIA Singapore Pte Ltd 100% NVIDIA Pty Limited 100% NVIDIA Ltd. 100% NVIDIA GmbH 100% NVIDIA Hong Kong Holdings...

  • Page 130
    ... REGISTRANT'S SUBSIDIARIES (CONTINUED) Percentage Owned by NVIDIA Corporation NVIDIA Semiconductor Shanghai Co. Ltd. 100% Blue Ash Holdings Limited 100% NVIDIA BVI Holdings Limited 100% NVIDIA Semiconductor Shenzhen Holding Company 100% NVIDIA Semiconductor Shenzhen Co., Ltd. 100% NVIDIA Hong Kong...

  • Page 131
    ...âˆ'54406) of NVIDIA Corporation of our report dated March 16, 2006, relating to the financial statements, financial statement schedule, management's assessment of the effectiveness of internal control over financial reporting and the effectiveness of internal control over financial reporting, which...

  • Page 132
    ... income, and cash flows of NVIDIA Corporation and subsidiaries for the year ended January 25, 2004 and the related financial statement schedule, which report appears in the January 29, 2006 annual report on Form 10âˆ'K of NVIDIA Corporation. /s/ KPMG LLP Mountain View, California March 16...

  • Page 133
    ... reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's independent registered public accounting firm and the audit committee of the registrant's board of directors...

  • Page 134
    ... reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's independent registered public accounting firm and the audit committee of the registrant's board of directors...

  • Page 135
    ... § 1350, as adopted), Jenâˆ'Hsun Huang, the President and Chief Executive Officer of NVIDIA Corporation (the "Company"), hereby certifies that, to the best of his knowledge: 1. The Company's annual report on Form 10âˆ'K for the year ended January 29, 2006, to which this Certification is attached as...

  • Page 136
    ... § 1350, as adopted), Marvin D. Burkett, the Chief Financial Officer of NVIDIA Corporation (the "Company"), hereby certifies that, to the best of his knowledge: 1. The Company's annual report on Form 10âˆ'K for the year ended January 29, 2006, to which this Certification is attached as Exhibit 32...