NVIDIA 2008 Annual Report Download

Download and view the complete annual report

Please find the complete 2008 NVIDIA annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 124

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124

ar5182 Electronic EDGAR Proof
Job Number:
-
NOT DEFINED
-
Filer:
-
NOT DEFINED
-
Form Type:
10
-
K
Reporting Period / Event Date:
01/25/09
Customer Service Representative:
-
NOT DEFINED
-
Revision Number:
-
NOT DEFINED
-
This proof may not fit on letter
-
sized (8.5 x 11 inch) paper. If copy is cut off, please print to a larger format, e.g., legal
-
sized (8.5 x 14 inch) paper or oversized (11 x 17 inch) paper.
Accuracy of proof is guaranteed ONLY if printed to a PostScript printer using the correct PostScript driver for that
printer make and model.
(this header is not part of the document)

Table of contents

  • Page 1
    ar5182 Electronic EDGAR Proof Job Number: Filer: Form Type: Reporting Period / Event Date: Customer Service Representative: Revision Number: -NOT DEFINED-NOT DEFINED10-K 01/25/09 -NOT DEFINED-NOT DEFINED- This proof may not fit on letter-sized (8.5 x 11 inch) paper. If copy is cut off, please print...

  • Page 2
    ... Summary Submission Type Live File Return Copy Submission Contact Submission Contact Phone Number Exchange Confirming Copy Filer CIK Filer CCC Period of Report Smaller Reporting Company Shell Company Voluntary Filer Well-Known Seasoned Issuer Notify via Filing website Only Emails 10-K on on Aarti...

  • Page 3
    ...sid="SubDocument_description_">FISCAL YEAR 2009 FORM 10-K

  • Page 4
    ... (Address, including zip code, and telephone number, including area code, of principal executive offices) Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Common Stock, $0.001 par value per share The NASDAQ Global Select Market...

  • Page 5

  • Page 6
    ...'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 about Market Risk Financial Statements and Supplementary Data...

  • Page 7
    ...equipment manufacturers, or OEMs, original design manufacturers, or ODMs, add-in-card manufacturers, system builders and consumer electronics companies worldwide utilize our processors as a core component of their entertainment, business and professional solutions. We were incorporated in California...

  • Page 8
    ...Software, have licensed PhysX technology as a development platform which will be available for use by each of the companies' studios worldwide. Our share of the standalone desktop GPU category decreased from 64% to 63% in fiscal year 2009, according to the December 2007 and December 2008 PC Graphics...

  • Page 9
    ... performance when paired with a GeForce 8 series desktop GPU. We also extended the reach of SLI technology into the performance category with the launch of our NVIDIA nForce 790i Ultra SLI MCP, a highly rated overclockable platform for Intel Corporation, or Intel, processors. During fiscal year 2009...

  • Page 10
    ... of high-tech wireless glasses, a high-power infrared emitter and advanced software that transforms hundreds of PC games into full stereoscopic 3D. Our Strategy We design our products to enable our PC OEMs, ODMs, system builders, motherboard and add-in board manufacturers, and cellular phone and...

  • Page 11
    ...: Build Award-Winning, Architecturally-Compatible 3D Graphics, HD Video, Media Communications and Ultra-Low Power Product Families for the PC, Handheld and Digital Entertainment Platforms. Our strategy is to achieve market segment leadership in these platforms by providing award-winning performance...

  • Page 12
    ... to as our Channel, 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 the competitive and complex design win process. We also employ a highly skilled team of...

  • Page 13
    ...these failures, testing suggests a weak material set of die/package combination, system thermal management designs, and customer use patterns are contributing factors. We have worked with our customers to develop and have made available for download a software driver to cause the system fan to begin...

  • Page 14
    ... that the continued introduction of new and enhanced products designed to deliver leading 3D graphics, HD video, audio, ultra-low power communications, storage, and secure networking performance and features is essential to our future success. Our research and development strategy is to focus on...

  • Page 15
    ... that the principal competitive factors in this market are performance, breadth of product offerings, access to customers and distribution channels, software support, conformity to industry standard Application Programming Interfaces, or APIs, manufacturing capabilities, processor pricing, and total...

  • Page 16
    ... of our GeForce products that support desktop and notebook PCs, plus memory products; the PSB which is comprised of our NVIDIA Quadro professional workstation products and other professional graphics products, including our NVIDIA Tesla high-performance computing products; the MCP business which is...

  • Page 17
    ... Vice President and Chief Financial Officer. From August 2004 to February 2009, Mr. White served as the Executive Vice President of Finance and Chief Financial Officer of Sanmina-SCI Corporation, a global provider of customized, integrated electronics manufacturing services to original equipment...

  • Page 18
    ... in this Annual Report on Form 10K. Before you buy our common stock, you should know that making such an investment involves some risks including, but not limited to, the risks described below. Additionally, any one of the following risks could seriously harm our business, financial condition and...

  • Page 19
    ... actions in time to counteract any negative impact on our gross margin. Additionally, during fiscal year 2009, the revenue and gross margins from our sale of desktop products decreased primarily due to a decline in the Standalone Desktop market segment as reported in the December 2008 PC Graphics...

  • Page 20
    ... significant market share. We believe other factors impacting our ability to compete are product performance; product bundling by competitors with multiple product lines; breadth and frequency of product offerings; access to customers and distribution channels; backward-forward software support...

  • Page 21
    ... example, in the case of our CPB, our Tegra and GoForce products primarily compete in architecture used in multimedia cellular phones and handheld devices. We believe that mobile devices like phones, music players, and portable navigation devices will increasingly become more consumer PC-like and be...

  • Page 22
    ... the timely development of new products or if we were unable to successfully and cost-effectively manufacture and deliver products that meet the requirements of the desktop PC, notebook PC, workstation, high-performance computing, netbook, PMP, PDA, cellular phone, and video game console markets, we...

  • Page 23
    ...year 2008, we introduced our NVIDIA Tesla family of products, which was our entry into the high-performance computing industry, a new market for us. We also offer our CUDA software development solution, which is a C language programming environment for GPUs, that allows parallel computing on the GPU...

  • Page 24
    ... new products or sell our products. We have acquired and invested in other businesses that offered products, services and technologies that we believe will help expand or enhance our existing products and business. We may enter into future acquisitions of, or investments in, businesses, in order...

  • Page 25
    ... value of publicly traded equity securities and $1.8 million related to debt securities held by us that were issued by companies that have filed for bankruptcy as of January 25, 2009. Please refer to Note 17 of these Notes to the Consolidated Financial Statements in Part IV, Item 15 of this Form 10...

  • Page 26
    ...third-party foundries. As a result, we continuously evaluate the benefits of migrating our products to smaller geometry process technologies in order to improve performance and reduce costs. We believe this strategy will help us remain competitive. Our current product families are manufactured using...

  • Page 27
    ... of market share, a decrease in revenue or negatively impact our operating results. We sell our products to a small number of customers and our business could suffer if we lose any of these customers. We have a limited number of customers and our sales are highly concentrated. For fiscal years 2009...

  • Page 28
    ... us, or a settlement of the litigation could adversely affect our cash flow and financial results. The ongoing civil actions or any new actions relating to the market for GPUs could adversely affect our business. In November 2006, we received a subpoena from the San Francisco Office of the Antitrust...

  • Page 29
    ... the direct purchasers, there can be no assurance that it will approved. If the settlement agreement is not approved we may be required to pay damages or penalties or have other remedies imposed on us that could harm our business. In addition, additional parties may bring claims against us relating...

  • Page 30
    ... relating to stock option grants. Please refer to Note 12 of the Notes to Consolidated Financial Statements in Part IV, Item 15 of this Form 10-K for further information regarding these lawsuits. Such lawsuits could result in the diversion of management's time and attention away from business...

  • Page 31
    ... MCP and GPU products and that we were revising financial guidance for our second fiscal quarter of 2009, the trading price of our common stock declined. In September, October and November 2008, several putative class action lawsuits were filed against us relating to this announcement. Please refer...

  • Page 32
    ... of 2002 requires our management to report on, and our independent registered public accounting firm to audit, the effectiveness of our internal control structure and procedures for financial reporting. We have an ongoing program to perform the system and process evaluation and testing necessary to...

  • Page 33
    ... support our customers and operations and as sales and administrative offices. We also lease spaces in Wurselen, Germany; Shenzhen, China; Neihu, Taiwan; and Bangalore and Pune, India, which are used primarily as design centers. Additionally, we own buildings in Hyderabad, India and Shanghai, China...

  • Page 34
    ... on or before April 24, 2009, ordered Carlyle and CarrAmerica to file amended complaints by May 10, 2009, and set a further Case Management Conference for May 18, 2009. We continue to believe that there is no merit to Carlyle or CarrAmerica's remaining claims. Trustee Lawsuit In March 2003, the...

  • Page 35
    ... first three causes of action. On September 15, 2008, NVIDIA filed a cross-motion for summary judgment. On October 24, 2008, the Court held a hearing on the parties' cross-motions for summary judgment. On January 6, 2009, the Bankruptcy Court issued a Memorandum Decision granting NVIDIA's motion and...

  • Page 36
    ... in the underlying derivative cases brought on behalf of NVIDIA. The Special Litigation Committee has made substantial progress in completing its work, but has not yet issued a report. Between June 2007 and September 2008 the parties to the actions engaged in settlement discussions, including four...

  • Page 37
    ... for the direct purchasers but limited the direct purchaser class to individual purchasers that acquired graphics processing cards products directly from NVIDIA or ATI from their websites between December 4, 2002 and November 7, 2007. On September 16, 2008, we executed a settlement agreement, or the...

  • Page 38
    ... generation MCP and GPU products and that we were revising financial guidance for our second quarter of fiscal year 2009. The Actions purport to be brought on behalf of purchasers of NVIDIA stock and assert claims for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934...

  • Page 39
    ... 10, 2007. Dividend Policy We have never paid and do not expect to pay cash dividends for the foreseeable future. Issuer Purchases of Equity Securities During fiscal year 2005, we announced that our Board of Directors, or Board, had authorized a stock repurchase program to repurchase shares of our...

  • Page 40
    ... 500 Index and the S & P Semiconductors Index are calculated on month-end basis. Total return is based on historical results and is not intended to indicate future performance. 1/25/2004 1/30/2005 1/29/2006 1/28/2007 1/27/2008 NVIDIA Corporation $ 100.00 $ 99.09 $ 200.30 $ 272.59 $ 324.17 S & P 500...

  • Page 41
    ... the year ended January 25, 2009. The graph assumes that $100 was invested at our initial public offering on January 21, 1999 in our common stock or on December 31, 1998 in each of the S & P 500 Index and the S & P Semiconductors Index. Total return assumes reinvestment of dividends in each of the...

  • Page 42
    ... and the consolidated balance sheet data as of January 25, 2009 and January 27, 2008 have been derived from and should be read in conjunction with our audited consolidated financial statements and the notes thereto included elsewhere in this Annual Report on Form 10-K. The consolidated statement of...

  • Page 43
    ... are in Santa Clara, California. Our Internet address is www.nvidia.com. The contents of our website are not a part of this Form 10-K. Recent Developments, Future Objectives and Challenges GPU Business Our GPU business is comprised primarily of our GeForce products that support desktop and notebook...

  • Page 44
    ... NVIDIA nForce and GeForce mGPU families of products address the core logic market. During fiscal year 2008, we announced a new technology named Hybrid SLI, which combines a powerful yet energyefficient engine with our multi-GPU SLI technology. During fiscal year 2009, we shipped Hybrid SLI DirectX...

  • Page 45
    ...these failures, testing suggests a weak material set of die/package combination, system thermal management designs, and customer use patterns are contributing factors. We have worked with our customers to develop and have made available for download a software driver to cause the system fan to begin...

  • Page 46
    ... class action lawsuits were filed against us, asserting various claims related to the impacted MCP and GPU products. Please refer to Note 12 of the Notes to the Consolidated Financial Statements in Part IV, Item 15 of this Form 10-K for further information regarding this litigation. Common Stock...

  • Page 47
    ...and add-in card partners that are earmarked for market segment development and expansion and typically are designed to support our partners' activities while also promoting our products. Depending on market conditions, we may take actions to increase amounts offered under customer programs, possibly...

  • Page 48
    ... financial markets, and extreme volatility in fixed income, credit, currency and equity markets. There could be a number of follow-on effects from the credit crisis on our business, including inability of customers, including channel partners, to obtain credit to finance purchases of our products...

  • Page 49
    ... other error, we may have to invest additional research and development efforts to find and correct the issue. Such efforts could divert our management's and engineers' attention from the development of new products and technologies and could increase our operating costs and reduce our gross margin...

  • Page 50
    ..., economic conditions, changes to our business model or changes in operating performance. Additionally, certain estimates of discounted cash flows involve businesses with limited financial history and developing revenue models, which increase the risk of differences between the projected and actual...

  • Page 51
    ... the money market funds held by the International Reserve Fund; $2.5 million related to a decline in the value of publicly traded equity securities and $1.8 million related to debt securities held by us that were issued by companies that have filed for bankruptcy as of January 25, 2009. Stock-based...

  • Page 52
    ... products. Sales of our notebook GPU products increased approximately 3% in fiscal year 2009 when compared to fiscal year 2008, due to higher unit sales aided by a market move toward notebook PCs over desktop PCs, offset by a slight decline in average selling prices. Additionally, the overall global...

  • Page 53
    ... 2007 PC Graphics Report from Mercury Research. Our leadership position in the Standalone Desktop market was driven by our GeForce 8-based products. Sales of our notebook GPU products increased by approximately 114% compared to fiscal year 2007. Notebook GPU revenue growth was primarily due to share...

  • Page 54
    ...notebook PCs and an overall market shift in the mix of products towards lower priced products. PSB. The gross margin of our PSB increased slightly during fiscal year 2009 as compared to fiscal year 2008. This increase was primarily due to increased sales of our GeForce 9-based NVIDIA Quadro products...

  • Page 55
    ..., prototype materials and internal board requests. Other increases in research and development expenses are primarily related to costs that were driven by personnel growth, including depreciation and amortization, facilities, and computer software and equipment. Fiscal Year 2008 vs. Fiscal Year 2007...

  • Page 56
    ... to ongoing litigation matters described in Note 12 of the Notes to the Consolidated Financial Statements in Part IV, Item 15 of this Form 10-K. Marketing and advertising expenses increased by $22.3 million, primarily due to increased advertising campaign related activities and trade shows in the...

  • Page 57
    ...the value of publicly traded equity securities and $1.8 million related to debt securities held by us that were issued by companies that have filed for bankruptcy as of January 25, 2009. Please refer to Note 17 of the Notes to the Consolidated Financial Statements in Part IV, Item 15 of this Form 10...

  • Page 58
    ... our growing employee headcount, new research and development equipment, testing equipment to support our increased production requirements, technology licenses, software, intangible assets and leasehold improvements at our facilities in various international locations. Investing activities for...

  • Page 59
    ...the value of publicly traded equity securities and $1.8 million related to debt securities held by us that were issued by companies that have filed for bankruptcy as of January 25, 2009. Please refer to Note 17 of the Notes to the Consolidated Financial Statements in Part IV, Item 15 of this Form 10...

  • Page 60
    ... March 11, 2009. The tender offer applied to outstanding stock options held by employees with an exercise price equal to or greater than $17.50 per share. None of the non-employee members of our Board of Directors or our officers who file reports under Section 16(a) of the Securities Exchange Act of...

  • Page 61
    ... property development, leasehold improvements, software licenses, emulation equipment, computers and engineering workstations. In addition, we may continue to use cash in connection with the acquisition of new businesses or assets. For additional factors see "Item 1A. Risk Factors - Risks Related to...

  • Page 62
    ... be required to record additional reserves, which would increase our cost of revenue and materially harm our financial results. In September, October and November 2008, several putative class action lawsuits were filed against us, asserting various claims related to the impacted MCP and GPU products...

  • Page 63
    ... settlement of tax positions. Off-Balance Sheet Arrangements As of January 25, 2009, we had no material off-balance sheet arrangements as defined in Regulation S-K 303(a)(4)(ii). Adoption of New Accounting Pronouncements Please see Note 1 of the Notes to the Consolidated Financial Statements...

  • Page 64
    ...the value of publicly traded equity securities and $1.8 million related to debt securities held by us that were issued by companies that have filed for bankruptcy as of January 25, 2009. Please refer to Note 17 of the Notes to the Consolidated Financial Statements in Part IV, Item 15 of this Form 10...

  • Page 65
    ... The information required by this Item is set forth in our Consolidated Financial Statements and Notes thereto included in this Annual Report on Form 10-K. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable. ITEM 9A. CONTROLS AND PROCEDURES...

  • Page 66
    ...the Board of Directors and Corporate Governance - Code of Conduct" in our 2009 Proxy Statement, which information is hereby incorporated by reference. The full text of our "Worldwide Code of Conduct" and "Financial Team Code of Conduct" are published on the Investor Relations portion of our web site...

  • Page 67
    ... "Review of Transactions with Related Persons" and "Information about the Board of Directors and Corporate Governance - Independence of the Members of the Board of Directors" in our 2009 Proxy Statement. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The information required by this item is hereby...

  • Page 68
    ...Notes to the Consolidated Financial Statements (a) 2. Financial Statement Schedule Schedule II Valuation and Qualifying Accounts (a) 3. Exhibits The exhibits listed in the accompanying index to exhibits are filed or incorporated by reference as a part of this Annual Report on Form 10K. 113 109 66 67...

  • Page 69
    ... schedule, and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain...

  • Page 70
    ... CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Revenue Cost of revenue Gross profit Operating expenses: Research and development Sales, general and administrative Restructuring charges and other Total operating expenses Income (loss) from...

  • Page 71
    NVIDIA CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) January 25, 2009 ASSETS Current assets : Cash and cash equivalents Marketable securities Accounts receivable, less allowances of $18,399 and $19,693 in 2009 and 2008, respectively ...

  • Page 72
    ..., 2009 538,460,766 $ 629 $ 1,889,257 $ - $ (1,463,268 ) $ 3,865 $ 1,964,169 $ 2,394,652 $ (34,210 ) (1) Reflects a three-for-two stock split effective on September 10, 2007 and a two-for-one stock split effective on April 6, 2006. See accompanying notes to the consolidated financial statements. 69

  • Page 73
    ... receivable Inventories Prepaid expenses and other current assets Deposits and other assets Accounts payable Accrued liabilities and other long-term liabilities Net cash provided by operating activities Cash flows from investing activities: Purchases of marketable securities Proceeds from sales...

  • Page 74
    ... NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 1 - Organization and Summary of Significant Accounting Policies Our Company NVIDIA Corporation is the worldwide leader in visual computing technologies and the inventor of the graphics processing unit, or GPU. Our products are designed to generate...

  • Page 75
    ... add-in card partners that are earmarked for market segment development and expansion and typically are designed to support our partners' activities while also promoting NVIDIA products. Depending on market conditions, we may take actions to increase amounts offered under customer programs, possibly...

  • Page 76
    ... an extended limited warranty to customers for certain products. We also accrue for known warranty and indemnification issues if a loss is probable and can be reasonably estimated. Stock-based Compensation Effective January 30, 2006, we adopted the provisions of Statement of Financial Accounting...

  • Page 77
    ... required to recognize an income tax benefit or additional income tax expense in our financial statements, accordingly. On January 29, 2007, we adopted FASB Interpretation No. 48, or FIN 48, Accounting for Uncertainty in Income Taxes, issued in July 2006. FIN 48 applies to all tax positions related...

  • Page 78
    ..., accounts receivable, accounts payable and accrued liabilities approximate their fair values due to their relatively short maturities as of January 25, 2009 and January 27, 2008. Marketable securities are comprised of available-for-sale securities that are reported at fair value with the related...

  • Page 79
    ... estimated amounts related to lower of cost or market, obsolescence or unmarketable inventory equal to the difference between the cost of inventory and the estimated market value based upon assumptions about future demand, future product purchase commitments, estimated manufacturing yield levels and...

  • Page 80
    ... on our consolidated financial statements. In June 2007, the FASB ratified Emerging Issues Task Force Issue No. 07-3, or EITF 07-3, Accounting for Nonrefundable Advance Payments for Goods or Services to Be Used in Future Research and Development Activities. EITF 07-3 requires non-refundable advance...

  • Page 81
    ... the factors that should be considered in developing the renewal or extension assumptions used to determine the useful life of a recognized intangible asset under Statement of Financial Accounting Standards No. 142, or SFAS No. 142, Goodwill and Other Intangible Assets. FSP No. 142-3 also requires...

  • Page 82
    ... (in years) Risk free interest rate Volatility Dividend yield Employee Stock Purchase Plan Weighted average expected life of stock options (in years) Risk free interest rate Volatility Dividend yield Year Ended January 25, January 27, January 28, 2009 2008 2007 (Using the Black-Scholes model...

  • Page 83
    ... stock split now totals 152,767,766 shares, of our common stock may be issued pursuant to stock awards granted under the 2007 Plan or the Prior Plans. As of January 25, 2009, 29.5 million shares were available for future issuance under the 2007 Plan. Options granted to new employees generally...

  • Page 84
    ... January 25, 2009, 33,395,699 shares had been issued under the Purchase Plan and 44,604,301 shares were available for future issuance. The Purchase Plan is intended to qualify as an "employee stock purchase plan" under Section 423 of the Internal Revenue Code. Under the Purchase Plan, the Board has...

  • Page 85
    ... for in-the-money options at January 25, 2009, based on the $7.71 closing stock price of our common stock on the NASDAQ Global Select Market, which would have been received by the option holders had all in-the-money option holders exercised their options as of that date. The total number of in-the...

  • Page 86
    ..., 2008 Charges Cash payments Non-cash charges Balance at January 25, 2009 (In thousands) $ 7,956 (7,440) (330) $ 186 Restructuring and other expenses for fiscal year 2009 also included a non-recurring charge of $18.9 million associated with the termination of a development contract related to a new...

  • Page 87
    .... Please refer to Note 12 of these Notes to the Consolidated Financial Statements for further information regarding this litigation. Straight-Line Fair Market Amortization Value Period (In thousands) (Years) Property and equipment $ 2,433 1-2 Trademarks 11,310 5 Goodwill 85,418 -Total $ 99,161

  • Page 88
    ... equivalents Marketable securities Accounts receivable Prepaid and other current assets Property and equipment In-process research and development Goodwill Intangible assets: Existing technology Customer relationships Patents Trademark Total assets acquired Current liabilities Acquisition related...

  • Page 89
    ..., economic conditions, changes to our business model or changes in operating performance. Additionally, certain estimates of discounted cash flows involve businesses with limited financial history and developing revenue models, which increase the risk of differences between the projected and actual...

  • Page 90
    ...and $25.0 million towards the purchase of a non-exclusive license related to advanced power management and other computing technologies that we entered into during fiscal year 2009. These increases were offset by amortization for fiscal year 2009. Additionally, the increase in the net carrying value...

  • Page 91
    ... with Statement of Financial Accounting Standards No. 115, or SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities. All of our cash equivalents and marketable securities are treated as "available-for-sale" under SFAS No. 115. Our investment policy requires the purchase of...

  • Page 92
    ... in the value of publicly traded equity securities and $1.8 million related to debt securities held by us that were issued by companies that have filed for bankruptcy as of January 25, 2009. Please refer to Note 17 of these Notes to the Consolidated Financial Statements for further details. We...

  • Page 93
    ... $ 358,521 January 25, January 27, 2009 2008 (In thousands) Estimated Useful Life (Years) (A) 3-25 3 3-5 (B) 3 5 (C) (D) Property and Equipment: Land Building Test equipment Software and licenses Leasehold improvements Computer equipment Office furniture and equipment Capital leases Construction in...

  • Page 94
    ... compensation accruals in fiscal year 2009. (1) Please refer to Note 1 of these Notes to these Consolidated Financial Statements for discussion regarding the nature of accrued customer programs and their accounting treatment related to our revenue recognition policies and estimates. (2) Please refer...

  • Page 95
    ..., October and November 2008, several putative class action lawsuits were filed against us, asserting various claims related to the impacted MCP and GPU products. Please refer to Note 12 of these Notes to these Consolidated Financial Statements for further information regarding this litigation. 92

  • Page 96
    ... may offer an extended limited warranty to customers for certain products. Additionally, we accrue for known warranty and indemnification issues if a loss is probable and can be reasonably estimated. The estimated product returns and estimated product warranty liabilities for fiscal years 2009, 2008...

  • Page 97
    NVIDIA CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) Lease Obligations Our headquarters complex is located in Santa Clara, California and is comprised of eleven buildings that are a combination of owned and leased properties. The lease agreements for five of...

  • Page 98
    ... on or before April 24, 2009, ordered Carlyle and CarrAmerica to file amended complaints by May 10, 2009, and set a further Case Management Conference for May 18, 2009. We continue to believe that there is no merit to Carlyle or CarrAmerica's remaining claims. Trustee Lawsuit In March 2003, the...

  • Page 99
    ...Equity Securities Holders' Committee, or the Equity Committee. The Equity Committee thereafter sought and obtained an order granting it standing to bring suit against NVIDIA, for the benefit of the bankruptcy estate, to compel NVIDIA to pay the stock consideration then unpaid from the APA, and filed...

  • Page 100
    ..., 2009, and the judgment is now final. Proceedings, SEC inquiry and lawsuits related to our historical stock option granting practices In June 2006, the Audit Committee of the Board of NVIDIA ("Audit Committee"), began a review of our stock option practices based on the results of an internal review...

  • Page 101
    ... for the direct purchasers but limited the direct purchaser class to individual purchasers that acquired graphics processing cards products directly from NVIDIA or ATI from their websites between December 4, 2002 and November 7, 2007. On September 16, 2008, we executed a settlement agreement, or the...

  • Page 102
    ... generation MCP and GPU products and that we were revising financial guidance for our second quarter of fiscal year 2009. The Actions purport to be brought on behalf of purchasers of NVIDIA stock and assert claims for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934...

  • Page 103
    ...deferred Charge in lieu of taxes attributable to employer stock option plans Income tax expense (benefit) Income (loss) before income taxes consists of the following: January 25, 2009 Domestic Foreign $ $ (174,412) 131,458 (42,954) Year Ended January 27, 2008 (In thousands) $ 6,416 894,925 $ 901,341...

  • Page 104
    ...-not, recognition of these acquired tax benefits would be reported as a reduction to income tax expense in accordance with the recent accounting pronouncement, Statement of Financial Accounting Standards No. 141(R), or SFAS No. 141(R), Business Combinations, issued by the FASB in December 2007. We...

  • Page 105
    ...a tax holiday in effect for its business operations in India which will terminate in March 2010. This tax holiday provides for a lower rate of taxation on certain classes of income based on various thresholds of investment and employment in such jurisdiction. For fiscal year 2009, the tax savings of...

  • Page 106
    ... 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...

  • Page 107
    ... of our GeForce products that support desktop and notebook PCs, plus memory products; the PSB which is comprised of our NVIDIA Quadro professional workstation products and other professional graphics products, including our NVIDIA Tesla high-performance computing products; the MCP business which is...

  • Page 108
    ... location. The following tables summarize information pertaining to our revenue from customers based on invoicing address in different geographic regions: Year Ended January 27, 2008 (In thousands) $ 1,256,209 1,293,645 662,448 438,321 341,670 105,567 $ 4,097,860 January 25, 2009 Revenue: China...

  • Page 109
    ...circumstances. Financial assets and liabilities measured at fair value are summarized below: Fair value measurement at reporting date using Quoted Prices in Significant Active Markets Other for Identical Observable High Level of Assets Inputs Judgment January 25, 2009 Other debt securities issued by...

  • Page 110
    ...) The following table sets forth our unaudited consolidated financial, for the last eight fiscal quarters ended January 25, 2009. Fiscal Year 2009 Quarters Ended January 25, October 26, July 27, 2008 2009 (A,B) 2008 (C, D) (E) (In thousands, except per share data) Statement of Operations Data...

  • Page 111
    ... March 11, 2009. The tender offer applied to outstanding stock options held by employees with an exercise price equal to or greater than $17.50 per share. None of the non-employee members of our Board of Directors or our officers who file reports under Section 16(a) of the Securities Exchange Act of...

  • Page 112
    ... Additions to allowance for doubtful accounts includes $0.5 million related to our acquisitions of ULi Electronics, Inc., Hybrid Graphics Ltd. and PortalPlayer, Inc. (4) Represents change in valuation allowance primarily related to state deferred tax assets that management has determined not likely...

  • Page 113
    ... Plan - Non Statutory Stock Option (Annual Grant 10.16 + Board Service) 10-Q 2007 Equity Incentive Plan - Non Statutory Stock Option (Annual Grant 10.17 + Committee Service) 10-Q 10.18 + 2007 Equity Incentive Plan - Non Statutory Stock Option (Initial Grant) 10-Q File Number 0-23985 333-74905...

  • Page 114
    ... III for Building D Amended and Restated Agreement of Purchase and Sale by and between Harvest-Granite San Tomas LLC and Harvest 2400, LLC dated January 31, 2008 Offer Letter, dated January 28, 2009, with David White List of Registrant's Subsidiaries Consent of PricewaterhouseCoopers LLP Power of...

  • Page 115
    ...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 13, 2009. NVIDIA Corporation By: /s/ Jen-Hsun Huang Jen-Hsun Huang President and Chief Executive Officer POWER OF ATTORNEY KNOW...

  • Page 116
    ... Statutory Stock Option (Annual Grant - Board 10.16 + Service) 2007 Equity Incentive Plan - Non Statutory Stock Option (Annual Grant 10.17 + Committee Service) 10.18 + 2007 Equity Incentive Plan - Non Statutory Stock Option (Initial Grant) Incorporated by Reference File Schedule/Form Number Exhibit...

  • Page 117
    ... Corporation and Sobrato Interests III for 10.27 Building D 10.28 Amended and Restated Agreement of Purchase and Sale by and between HarvestGranite San Tomas LLC and Harvest 2400, LLC dated January 31, 2008 10.29 + Offer Letter, dated January 28, 2009, with David White 21.1 * List of Registrant...

  • Page 118

  • Page 119
    ..., Inc. NVIDIA International, Inc. NVIDIA US Investment Company NVIDIA Singapore Pte Ltd NVIDIA Pty Limited NVIDIA Ltd. NVIDIA GmbH NVIDIA Hong Kong Holdings Limited NVIDIA GK NVIDIA Graphics Holding Company NVIDIA Semiconductor Holding Company NVIDIA Graphics Private Limited NVIDIA Semiconductor...

  • Page 120
    .... 333-54406) of NVIDIA Corporation of our report dated March 13, 2009 relating to the financial statements, financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this Form 10-K. /s/ PricewaterhouseCoopers LLP San Jose, California March 13...

  • Page 121
    ... financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 13, 2009 /s/ JEN-HSUN HUANG Jen-Hsun Huang President and Chief Executive Officer

  • Page 122
    ... and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 12, 2009 /s/ DAVID L. WHITE David L. White Chief Financial Officer

  • Page 123
    ... 13, 2009 /s/ JEN-HSUN HUANG Jen-Hsun Huang President and Chief Executive Officer A signed original of this written statement required by Section 906 of 18 U.S.C. § 1350 has been provided to NVIDIA Corporation and will be retained by NVIDIA Corporation and furnished to the Securities and Exchange...

  • Page 124
    .... Date: March 12, 2009 /s/ DAVID L. WHITE David L. White Chief Financial Officer A signed original of this written statement required by Section 906 of 18 U.S.C. § 1350 has been provided to NVIDIA Corporation and will be retained by NVIDIA Corporation and furnished to the Securities and Exchange...