NVIDIA 2016 Annual Report Download - page 185

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these increases were a decrease in outside professional fees of $9 million as well as more favorable international taxes and
government subsidies.
Restructuring and Other Charges
In May 2015, we announced our intent to wind down our Icera modem operations and that we were open to a sale of
the technology or operations. We pursued the sale of Icera’s technology and operations but were unable to identify a viable
buyer with genuine interest. As a result, we began the wind-down of Icera modem operations in the second quarter of fiscal
year 2016. The wind-down of Icera modem operations allows for continued investment in strategic growth areas, including
our growth initiatives of deep learning, self-driving cars, and gaming.
Our operating expenses for fiscal year 2016 included $131 million of restructuring and other charges, as follows:
Year Ended
January 31,
2016
(In millions)
Employee severance and related costs ................................................................................................. $82
Tax subsidy impairment ....................................................................................................................... 17
Fixed assets impairment ....................................................................................................................... 18
Facilities and related costs.................................................................................................................... 9
Other exit costs..................................................................................................................................... 5
Restructuring and other charges........................................................................................................... $ 131
We expect to incur additional restructuring charges to operating expense of approximately $1 million to $2 million per
quarter for each of the first two quarters of fiscal year 2017, after which we expect the restructuring to be substantially
complete. Please refer to Note 17 of the Notes to the Consolidated Financial Statements in Part IV, Item 15 of this Annual
Report on Form 10-K for further discussion.
Interest Income and Interest Expense
Interest income consists of interest earned on cash, cash equivalents and marketable securities. Interest expense is
primarily comprised of coupon interest and debt discount amortization related to the convertible notes issued in the fourth
quarter of fiscal year 2014.
Interest income was $39 million, $28 million and $17 million in fiscal years 2016, 2015 and 2014, respectively. The
increase in fiscal year 2016 compared to fiscal year 2015 was primarily due to higher average cash balances invested in
interest bearing securities, as well as higher purchased yields. The increase in fiscal year 2015 compared to fiscal year 2014
was primarily due to higher average cash balances as we invested the proceeds from the convertible notes we issued in the
fourth quarter of fiscal year 2014 in interest bearing securities.
Interest expense was $47 million, $46 million and $10 million in fiscal years 2016, 2015 and 2014, respectively. The
increases in fiscal years 2016 and 2015 compared to fiscal years 2015 and 2014, respectively, were primarily due to coupon
interest and debt discount amortization related to the convertible notes we issued in the fourth quarter of fiscal 2014.
Other Income and Expense
Other income and expense primarily consists of realized gains and losses from the sale of marketable securities, sales
or impairments of investments in non-affiliated companies, and the impact of changes in foreign currency rates.