NVIDIA 2006 Annual Report Download - page 86

NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS − (Continued)
Description
Balance at
Beginning
of Period Additions (1) Deductions (2)
Balance at
End of
Period
(In thousands)
Year ended January 29, 2006
Allowance for sales returns $ 11,687 $ 35,127 $ (36,575) $ 10,239
Year ended January 30, 2005
Allowance for sales returns $ 9,421 $ 22,463 $ (20,197) $ 11,687
Year ended January 25, 2004
Allowance for sales returns $ 13,228 $ 23,796 $ (27,603) $ 9,421
(1) Allowances for sales returns are charged as a reduction to revenue.
(2) Represents amounts written off against the allowance for sales returns.
In connection with certain agreements that we have executed in the past, we have at times provided indemnities to cover the
indemnified party for matters such as tax, product and employee liabilities. We have also on occasion included intellectual property
indemnification provisions in our technology related agreements with third parties. Maximum potential future payments cannot be
estimated because many of these agreements do not have a maximum stated liability. As such, we have not recorded any liability in
our consolidated financial statements for such indemnifications.
Note 9 − Stockholders' Equity
Stock Repurchase Program
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 common stock, subject to certain specifications, up to an aggregate maximum amount of $300.0 million. 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. During the fourth quarter of fiscal 2006, we
repurchased 1.3 million shares of our common stock for $50.0 million under a structured share repurchase transaction, which we
recorded on the trade date of the transaction. Through the end of the fourth quarter of fiscal 2006, we have repurchased 8.5 million
shares under our stock repurchase program for a total cost of $213.2 million. During the first quarter of fiscal 2007, we entered into a
structured share repurchase transaction to repurchase shares of our common stock for $50.0 million that we expect to settle prior to the
end of our first fiscal quarter.
On March 6, 2006, we announced that our Board of Directors had approved an increase in our existing stock repurchase program.
We announced a $400 million increase to the original stock 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 negotiated transactions, or in structured
stock repurchase transactions, in compliance with the Securities and Exchange Commission Rule 10b−18, 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.
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