[x] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
[_] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 94-3177549 |
(State or Other Jurisdiction of | (I.R.S. Employer |
Incorporation or Organization) | Identification No.) |
Large accelerated filer x | Accelerated filer o |
Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
Page | ||
Financial Statements (Unaudited) | ||
a) Condensed Consolidated Statements of Income for the three and nine months ended October 25, 2015 and October 26, 2014 | ||
b) Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended October 25, 2015 and October 26, 2014 | ||
c) Condensed Consolidated Balance Sheets as of October 25, 2015 and January 25, 2015 | ||
d) Condensed Consolidated Statements of Cash Flows for the nine months ended October 25, 2015 and October 26, 2014 | ||
e) Notes to Condensed Consolidated Financial Statements | ||
Management’s Discussion and Analysis of Financial Condition and Results of Operations | ||
Quantitative and Qualitative Disclosures About Market Risk | ||
Controls and Procedures | ||
Legal Proceedings | ||
Risk Factors | ||
Unregistered Sales of Equity Securities and Use of Proceeds | ||
Exhibits | ||
Three Months Ended | Nine Months Ended | ||||||||||||||
October 25, | October 26, | October 25, | October 26, | ||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Revenue | $ | 1,305 | $ | 1,225 | $ | 3,609 | $ | 3,431 | |||||||
Cost of revenue | 571 | 549 | 1,589 | 1,531 | |||||||||||
Gross profit | 734 | 676 | 2,020 | 1,900 | |||||||||||
Operating expenses | |||||||||||||||
Research and development | 329 | 340 | 987 | 1,011 | |||||||||||
Sales, general and administrative | 152 | 123 | 441 | 361 | |||||||||||
Restructuring and other charges | 8 | — | 97 | — | |||||||||||
Total operating expenses | 489 | 463 | 1,525 | 1,372 | |||||||||||
Income from operations | 245 | 213 | 495 | 528 | |||||||||||
Interest income | 9 | 7 | 28 | 20 | |||||||||||
Interest expense | (12 | ) | (11 | ) | (35 | ) | (35 | ) | |||||||
Other income, net | 3 | — | 1 | 14 | |||||||||||
Income before income tax | 245 | 209 | 489 | 527 | |||||||||||
Income tax expense (benefit) | (1 | ) | 36 | 83 | 90 | ||||||||||
Net income | $ | 246 | $ | 173 | $ | 406 | $ | 437 | |||||||
Net income per share: | |||||||||||||||
Basic | $ | 0.45 | $ | 0.32 | $ | 0.75 | $ | 0.79 | |||||||
Diluted | $ | 0.44 | $ | 0.31 | $ | 0.72 | $ | 0.77 | |||||||
Weighted average shares used in per share computation: | |||||||||||||||
Basic | 542 | 548 | 544 | 555 | |||||||||||
Diluted | 565 | 558 | 563 | 566 | |||||||||||
Cash dividends declared and paid per common share | $ | 0.0975 | $ | 0.0850 | $ | 0.2800 | $ | 0.2550 |
Three Months Ended | Nine Months Ended | ||||||||||||||
October 25, | October 26, | October 25, | October 26, | ||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Net income | $ | 246 | $ | 173 | $ | 406 | $ | 437 | |||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||
Net change in unrealized gains (losses) on available-for-sale securities | 3 | 5 | (1 | ) | 5 | ||||||||||
Change in fair value of interest rate swap | (3 | ) | — | (3 | ) | — | |||||||||
Reclassification adjustments for net realized losses on available-for-sale securities included in net income | — | — | (2 | ) | — | ||||||||||
Other comprehensive income (loss) | — | 5 | (6 | ) | 5 | ||||||||||
Total comprehensive income | $ | 246 | $ | 178 | $ | 400 | $ | 442 |
October 25, | January 25, | ||||||
2015 | 2015 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 471 | $ | 497 | |||
Marketable securities | 4,257 | 4,126 | |||||
Accounts receivable, net | 536 | 474 | |||||
Inventories | 425 | 483 | |||||
Prepaid expenses and other current assets | 93 | 70 | |||||
Deferred income taxes | 52 | 63 | |||||
Total current assets | 5,834 | 5,713 | |||||
Property and equipment, net | 477 | 557 | |||||
Goodwill | 618 | 618 | |||||
Intangible assets, net | 172 | 222 | |||||
Other assets | 73 | 91 | |||||
Total assets | $ | 7,174 | $ | 7,201 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 295 | $ | 293 | |||
Accrued and other current liabilities | 560 | 603 | |||||
Total current liabilities | 855 | 896 | |||||
Long-term debt | 1,406 | 1,384 | |||||
Other long-term liabilities | 437 | 489 | |||||
Capital lease obligations, long-term | 11 | 14 | |||||
Commitments and contingencies - see Note 12 | — | — | |||||
Shareholders’ equity: | |||||||
Preferred stock | — | — | |||||
Common stock | 1 | 1 | |||||
Additional paid-in capital | 4,170 | 3,855 | |||||
Treasury stock, at cost | (3,912 | ) | (3,395 | ) | |||
Accumulated other comprehensive income | 2 | 8 | |||||
Retained earnings | 4,204 | 3,949 | |||||
Total shareholders' equity | 4,465 | 4,418 | |||||
Total liabilities and shareholders' equity | $ | 7,174 | $ | 7,201 |
Nine Months Ended | |||||||
October 25, | October 26, | ||||||
2015 | 2014 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 406 | $ | 437 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 151 | 166 | |||||
Stock-based compensation expense | 145 | 115 | |||||
Restructuring and other charges | 37 | — | |||||
Amortization of debt discount | 22 | 21 | |||||
Net gain on sale and disposal of long-lived assets and investments | (7 | ) | (18 | ) | |||
Deferred income taxes | 107 | 62 | |||||
Tax benefits from stock-based compensation | (5 | ) | (12 | ) | |||
Other | 16 | 19 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (63 | ) | (138 | ) | |||
Inventories | 59 | (20 | ) | ||||
Prepaid expenses and other assets | (25 | ) | 5 | ||||
Accounts payable | 7 | 10 | |||||
Accrued and other current liabilities | (41 | ) | (23 | ) | |||
Other long-term liabilities | (145 | ) | (161 | ) | |||
Net cash provided by operating activities | 664 | 463 | |||||
Cash flows from investing activities: | |||||||
Purchases of marketable securities | (2,669 | ) | (2,126 | ) | |||
Proceeds from sale of marketable securities | 1,651 | 1,100 | |||||
Proceeds from maturities of marketable securities | 872 | 688 | |||||
Proceeds from sale of long-lived assets and investments | 7 | 21 | |||||
Reimbursement of headquarters building development costs from banks | 24 | — | |||||
Purchases of property and equipment and intangible assets | (71 | ) | (91 | ) | |||
Other | (1 | ) | (1 | ) | |||
Net cash used in investing activities | (187 | ) | (409 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from issuance of common stock under employee stock plans | 99 | 129 | |||||
Payments under capital lease obligations | (3 | ) | (2 | ) | |||
Tax benefits from stock-based compensation | 5 | 12 | |||||
Payments related to repurchases of common stock | (452 | ) | (810 | ) | |||
Dividends paid | (152 | ) | (140 | ) | |||
Net cash used in financing activities | (503 | ) | (811 | ) | |||
Change in cash and cash equivalents | (26 | ) | (757 | ) | |||
Cash and cash equivalents at beginning of period | 497 | 1,152 | |||||
Cash and cash equivalents at end of period | $ | 471 | $ | 395 | |||
Other non-cash activity: | |||||||
Assets acquired by assuming related liabilities | $ | — | $ | 14 |
Three Months Ended | Nine Months Ended | ||||||||||||||
October 25, 2015 | October 26, 2014 | October 25, 2015 | October 26, 2014 | ||||||||||||
(In millions) | |||||||||||||||
Cost of revenue | $ | 4 | $ | 4 | $ | 10 | $ | 8 | |||||||
Research and development | 28 | 22 | 82 | 65 | |||||||||||
Sales, general and administrative | 19 | 16 | 53 | 42 | |||||||||||
Total | $ | 51 | $ | 42 | $ | 145 | $ | 115 |
Awards Outstanding | Weighted Average Exercise Price | ||||
Stock Options | (In millions) | (Per share) | |||
Balances, January 25, 2015 | 21 | $14.61 | |||
Granted | — | — | |||
Exercised | (6 | ) | $14.48 | ||
Cancelled | — | — | |||
Balances, October 25, 2015 | 15 | $14.55 |
Awards Outstanding | Weighted Average Grant-Date Fair Value | |||
RSUs, PSUs and Market-based PSUs | (In millions) | (Per share) | ||
Balances, January 25, 2015 | 23 | $15.94 | ||
Granted (1) (2) | 13 | $21.61 | ||
Vested | (8 | ) | $15.53 | |
Cancelled | (2 | ) | $16.40 | |
Balances, October 25, 2015 | 26 | $18.84 |
(1) | Includes the total PSUs that become eligible to vest if the corporate financial performance maximum target level for fiscal year 2016 is achieved. Using an estimate for the level of achievement of the corporate performance target at the end of fiscal year 2016, we are estimating PSUs that become eligible to vest for fiscal year 2016 performance to be in the range of 0 to 2 million shares. We granted PSUs during the first quarter of fiscal year 2016 to our CEO and senior management as approved by our Compensation Committee. |
(2) | Includes the market-based PSUs that become eligible to vest if the maximum target for total shareholder return, or TSR, over the 3-year measurement period is achieved. Depending on the ranking of our TSR compared to the respective TSRs of the companies comprising the Standard & Poor’s 500 Index during a 3-year measurement period, the market-based PSUs that become eligible to vest could range from 0 to 0.4 million shares. We granted market-based PSUs during the first quarter of fiscal year 2016 to our CEO and senior management as approved by our Compensation Committee. |
October 25, | January 25, | ||
2015 | 2015 | ||
(In millions) | |||
Aggregate unearned stock-based compensation expense | $420 | $291 | |
Estimated weighted average amortization period | (In years) | ||
Stock options | 1.3 | 1.8 | |
RSUs, PSUs and market-based PSUs | 3.0 | 2.8 | |
ESPP | 0.8 | 0.5 |
Three Months Ended | Nine Months Ended | ||||||||||||||
October 25, | October 26, | October 25, | October 26, | ||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(In millions, except per share data) | |||||||||||||||
Numerator: | |||||||||||||||
Net income | $ | 246 | $ | 173 | $ | 406 | $ | 437 | |||||||
Denominator: | |||||||||||||||
Denominator for basic net income per share, weighted average shares | 542 | 548 | 544 | 555 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Equity awards outstanding | 13 | 10 | 13 | 11 | |||||||||||
Assumed conversion of 1% Convertible Senior Notes Due 2018 | 10 | — | 6 | — | |||||||||||
Denominator for diluted net income per share, weighted average shares | 565 | 558 | 563 | 566 | |||||||||||
Net income per share: | |||||||||||||||
Basic net income per share | $ | 0.45 | $ | 0.32 | $ | 0.75 | $ | 0.79 | |||||||
Diluted net income per share | $ | 0.44 | $ | 0.31 | $ | 0.72 | $ | 0.77 | |||||||
Potentially dilutive equity awards excluded from diluted net income per share because their effect would have been anti-dilutive | 9 | 11 | 13 | 16 |
October 25, 2015 | |||||||||||||||
Amortized Cost | Unrealized Gain | Unrealized Loss | Estimated Fair Value | ||||||||||||
(In millions) | |||||||||||||||
Corporate debt securities | $ | 1,975 | $ | 2 | $ | (2 | ) | $ | 1,975 | ||||||
Debt securities of U.S. government agencies | 994 | 1 | — | 995 | |||||||||||
Debt securities issued by the U.S. Treasury | 554 | 1 | — | 555 | |||||||||||
Asset-backed securities | 472 | — | — | 472 | |||||||||||
Mortgage-backed securities issued by U.S. government-sponsored enterprises | 240 | 4 | (1 | ) | 243 | ||||||||||
Foreign government bonds | 83 | — | — | 83 | |||||||||||
Money market funds | 30 | — | — | 30 | |||||||||||
Total | $ | 4,348 | $ | 8 | $ | (3 | ) | $ | 4,353 | ||||||
Classified as: | |||||||||||||||
Cash equivalents | $ | 96 | |||||||||||||
Marketable securities | 4,257 | ||||||||||||||
Total | $ | 4,353 |
January 25, 2015 | |||||||||||||||
Amortized Cost | Unrealized Gain | Unrealized Loss | Estimated Fair Value | ||||||||||||
(In millions) | |||||||||||||||
Corporate debt securities | $ | 2,185 | $ | 2 | $ | (1 | ) | $ | 2,186 | ||||||
Debt securities of U.S. government agencies | 750 | 1 | (1 | ) | 750 | ||||||||||
Debt securities issued by the U.S. Treasury | 534 | 3 | — | 537 | |||||||||||
Asset-backed securities | 453 | — | — | 453 | |||||||||||
Mortgage-backed securities issued by U.S. government-sponsored enterprises | 274 | 5 | (1 | ) | 278 | ||||||||||
Foreign government bonds | 85 | — | — | 85 | |||||||||||
Money market funds | 132 | — | — | 132 | |||||||||||
Total | $ | 4,413 | $ | 11 | $ | (3 | ) | $ | 4,421 | ||||||
Classified as: | |||||||||||||||
Cash equivalents | $ | 295 | |||||||||||||
Marketable securities | 4,126 | ||||||||||||||
Total | $ | 4,421 |
Less than 12 months | 12 months or greater | Total | |||||||||||||||||||||
Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Corporate debt securities | $ | 798 | $ | (2 | ) | $ | 54 | $ | — | $ | 852 | $ | (2 | ) | |||||||||
Mortgage-backed securities issued by U.S. government-sponsored enterprises | 73 | (1 | ) | 26 | — | 99 | (1 | ) | |||||||||||||||
Total | $ | 871 | $ | (3 | ) | $ | 80 | $ | — | $ | 951 | $ | (3 | ) |
October 25, 2015 | January 25, 2015 | ||||||||||||||
Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | ||||||||||||
(In millions) | |||||||||||||||
Less than 1 year | $ | 1,453 | $ | 1,454 | $ | 1,570 | $ | 1,571 | |||||||
Due in 1 - 5 years | 2,811 | 2,815 | 2,720 | 2,726 | |||||||||||
Mortgage-backed securities issued by government-sponsored enterprises not due at a single maturity date | 84 | 84 | 123 | 124 | |||||||||||
Total | $ | 4,348 | $ | 4,353 | $ | 4,413 | $ | 4,421 |
Fair Value at | |||||||||
Pricing Category | October 25, 2015 | January 25, 2015 | |||||||
(In millions) | |||||||||
Assets | |||||||||
Cash equivalents and Marketable securities | |||||||||
Corporate debt securities (1) | Level 2 | $ | 1,975 | $ | 2,186 | ||||
Debt securities of U.S. government agencies (2) | Level 2 | $ | 995 | $ | 750 | ||||
Debt securities issued by the U.S. Treasury (3) | Level 2 | $ | 555 | $ | 537 | ||||
Asset-backed securities (4) | Level 2 | $ | 472 | $ | 453 | ||||
Mortgage-backed securities issued by government-sponsored enterprises (3) | Level 2 | $ | 243 | $ | 278 | ||||
Foreign government bonds (3) | Level 2 | $ | 83 | $ | 85 | ||||
Money market funds (5) | Level 1 | $ | 30 | $ | 132 | ||||
Liabilities | |||||||||
Other noncurrent liabilities | |||||||||
Interest rate swap (6) | Level 2 | $ | 3 | $ | — | ||||
1.00% Convertible Senior Notes Due 2018 (7) | Level 2 | $ | 2,198 | $ | 1,680 |
(1) | Includes $51 million and $147 million in cash equivalents as of October 25, 2015 and January 25, 2015, respectively, and $1.9 billion and $2.0 billion in marketable securities as of October 25, 2015 and January 25, 2015, respectively, on the Condensed Consolidated Balance Sheets. |
(2) | Includes $14 million and $15 million in cash equivalents as of October 25, 2015 and January 25, 2015, respectively, and $981 million and $735 million in marketable securities as of October 25, 2015 and January 25, 2015, respectively, on the Condensed Consolidated Balance Sheets. |
(3) | In marketable securities on the Condensed Consolidated Balance Sheets. |
(4) | Includes $1 million in cash equivalents as of October 25, 2015 and $471 million and $453 million in marketable securities as of October 25, 2015 and January 25, 2015, respectively, on the Condensed Consolidated Balance Sheets. |
(5) | In cash equivalents on the Condensed Consolidated Balance Sheets. |
(6) | Please refer to Note 9 of these Notes to Condensed Consolidated Financial Statements for a discussion regarding our interest rate swap. |
October 25, 2015 | January 25, 2015 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Acquisition-related intangible assets | $ | 193 | $ | (148 | ) | $ | 45 | $ | 189 | $ | (134 | ) | $ | 55 | |||||||||
Patents and licensed technology | 451 | (324 | ) | 127 | 449 | (282 | ) | 167 | |||||||||||||||
Total intangible assets | $ | 644 | $ | (472 | ) | $ | 172 | $ | 638 | $ | (416 | ) | $ | 222 |
October 25, | January 25, | ||||||
2015 | 2015 | ||||||
Inventories: | (In millions) | ||||||
Raw materials | $ | 117 | $ | 157 | |||
Work in-process | 91 | 92 | |||||
Finished goods | 217 | 234 | |||||
Total inventories | $ | 425 | $ | 483 |
October 25, | January 25, | ||||||
2015 | 2015 | ||||||
Accrued and Other Current Liabilities: | (In millions) | ||||||
Unearned revenue (1) | $ | 229 | $ | 296 | |||
Customer related liabilities (2) | 151 | 143 | |||||
Accrued payroll and related expenses | 98 | 112 | |||||
Professional service fees | 24 | 17 | |||||
Accrued restructuring and other charges (3) | 15 | — | |||||
Warranty accrual (4) | 13 | 8 | |||||
Taxes payable | 7 | 3 | |||||
Coupon interest on Notes | 6 | 3 | |||||
Facilities related liabilities | 1 | 8 | |||||
Other | 16 | 13 | |||||
Total accrued and other current liabilities | $ | 560 | $ | 603 |
(1) | Unearned revenue primarily includes deferred revenue. |
(2) | Customer related liabilities primarily includes accrued customer programs. Please refer to Note 1 of the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended January 25, 2015, for a discussion regarding the nature of accrued customer programs and their accounting treatment related to our revenue recognition policies and estimates. |
(3) | Please refer to Note 15 of these Notes to Condensed Consolidated Financial Statements for a discussion regarding the accrued restructuring and other charges. |
(4) | Please refer to Note 10 of these Notes to Condensed Consolidated Financial Statements for a discussion regarding the warranty accrual. |
October 25, | January 25, | ||||||
2015 | 2015 | ||||||
Other Long-Term Liabilities: | (In millions) | ||||||
Deferred income tax liability | $ | 325 | $ | 232 | |||
Income taxes payable | 76 | 121 | |||||
Asset retirement obligation | 7 | 7 | |||||
Interest rate swap (1) | 3 | — | |||||
Deferred revenue (2) | 1 | 108 | |||||
Other | 25 | 21 | |||||
Total other long-term liabilities | $ | 437 | $ | 489 |
(1) | Please refer to Note 9 of these Notes to Condensed Consolidated Financial Statements for a discussion regarding our interest rate swap. |
Notional Amount | Fair Value Asset (Liability) | ||||||||||||||
October 25, 2015 | January 25, 2015 | October 25, 2015 | January 25, 2015 | ||||||||||||
Cash Flow Hedge | |||||||||||||||
Interest rate swap | $ | 200 | $ | — | $ | (3 | ) | $ | — |
October 25, 2015 | January 25, 2015 | ||||||
Cash Flow Hedge | |||||||
Gain (loss) on interest rate swap | $ | (3 | ) | $ | — |
Three Months Ended | Nine Months Ended | ||||||||||||||
October 25, | October 26, | October 25, | October 26, | ||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(In millions) | |||||||||||||||
Balance at beginning of period | $ | 28 | $ | 8 | $ | 8 | $ | 8 | |||||||
Additions | — | 1 | 22 | 4 | |||||||||||
Deductions | (15 | ) | (2 | ) | (17 | ) | (5 | ) | |||||||
Balance at end of period | $ | 13 | $ | 7 | $ | 13 | $ | 7 |
October 25, | January 25, | |||||||
2015 | 2015 | |||||||
(In millions) | ||||||||
Amount of the equity component | $ | 126 | $ | 126 | ||||
1.00% Convertible Senior Notes Due 2018 | $ | 1,500 | $ | 1,500 | ||||
Unamortized debt discount (1) | (94 | ) | (116 | ) | ||||
Net carrying amount | $ | 1,406 | $ | 1,384 |
Three Months Ended | Nine Months Ended | |||||||||||||||
October 25, | October 26, | October 25, | October 26, | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
(In millions) | ||||||||||||||||
Contractual coupon interest expense | $ | 4 | $ | 4 | $ | 11 | $ | 11 | ||||||||
Amortization of debt discount and issuance costs | 7 | 7 | 22 | 21 | ||||||||||||
Total interest expense related to Notes | $ | 11 | $ | 11 | $ | 33 | $ | 32 |
GPU | Tegra Processor | All Other | Consolidated | ||||||||||||
(In millions) | |||||||||||||||
Three Months Ended October 25, 2015 | |||||||||||||||
Revenue | $ | 1,110 | $ | 129 | $ | 66 | $ | 1,305 | |||||||
Depreciation and amortization expenses | $ | 26 | $ | 11 | $ | 11 | $ | 48 | |||||||
Operating income (loss) | $ | 367 | $ | (65 | ) | $ | (57 | ) | $ | 245 | |||||
Three Months Ended October 26, 2014 | |||||||||||||||
Revenue | $ | 991 | $ | 168 | $ | 66 | $ | 1,225 | |||||||
Depreciation and amortization expenses | $ | 29 | $ | 15 | $ | 12 | $ | 56 | |||||||
Operating income (loss) | $ | 294 | $ | (53 | ) | $ | (28 | ) | $ | 213 | |||||
Nine Months Ended October 25, 2015 | |||||||||||||||
Revenue | $ | 3,009 | $ | 402 | $ | 198 | $ | 3,609 | |||||||
Depreciation and amortization expense | $ | 81 | $ | 36 | $ | 34 | $ | 151 | |||||||
Operating income (loss) | $ | 917 | $ | (164 | ) | $ | (258 | ) | $ | 495 | |||||
Nine Months Ended October 26, 2014 | |||||||||||||||
Revenue | $ | 2,767 | $ | 466 | $ | 198 | $ | 3,431 | |||||||
Depreciation and amortization expense | $ | 88 | $ | 43 | $ | 35 | $ | 166 | |||||||
Operating income (loss) | $ | 770 | $ | (169 | ) | $ | (73 | ) | $ | 528 |
Three Months Ended | Nine Months Ended | ||||||||||||||
October 25, 2015 | October 26, 2014 | October 25, 2015 | October 26, 2014 | ||||||||||||
(In millions) | |||||||||||||||
Reconciling items included in "All Other" category: | |||||||||||||||
Unallocated revenue | $ | 66 | $ | 66 | $ | 198 | $ | 198 | |||||||
Unallocated cost of revenue and operating expenses | (60 | ) | (42 | ) | (181 | ) | (128 | ) | |||||||
Stock-based compensation | (51 | ) | (42 | ) | (145 | ) | (115 | ) | |||||||
Acquisition-related costs | (4 | ) | (10 | ) | (18 | ) | (28 | ) | |||||||
Product warranty charge | — | — | (15 | ) | — | ||||||||||
Restructuring and other charges | (8 | ) | — | (97 | ) | — | |||||||||
Total | $ | (57 | ) | $ | (28 | ) | $ | (258 | ) | $ | (73 | ) |
Three Months Ended | Nine Months Ended | ||||||||||||||
October 25, | October 26, | October 25, | October 26, | ||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(In millions) | |||||||||||||||
Revenue: | |||||||||||||||
Taiwan | $ | 515 | $ | 406 | $ | 1,348 | $ | 1,109 | |||||||
China | 229 | 238 | 583 | 714 | |||||||||||
Other Asia Pacific | 181 | 170 | 554 | 475 | |||||||||||
United States | 156 | 215 | 474 | 595 | |||||||||||
Europe | 116 | 96 | 341 | 263 | |||||||||||
Other Americas | 108 | 100 | 309 | 275 | |||||||||||
Total revenue | $ | 1,305 | $ | 1,225 | $ | 3,609 | $ | 3,431 |
Three Months Ended | Nine Months Ended | ||||||
October 25, | October 25, | ||||||
2015 | 2015 | ||||||
(In millions) | |||||||
Employee severance and related costs | $ | 2 | $ | 58 | |||
Tax subsidy impairment | — | 17 | |||||
Fixed assets impairment | 3 | 14 | |||||
Facilities and related costs | 2 | 4 | |||||
Other exit costs | 1 | 4 | |||||
Restructuring and other charges | $ | 8 | $ | 97 |
Three Months Ended | Nine Months Ended | ||||||
October 25, | October 25, | ||||||
2015 | 2015 | ||||||
(In millions) | |||||||
Balance at beginning of period | $ | 18 | $ | — | |||
Restructuring and other charges | 8 | 97 | |||||
Cash payments | (7 | ) | (46 | ) | |||
Non-cash adjustments | (4 | ) | (36 | ) | |||
Balance at end of period | $ | 15 | $ | 15 |
Three Months Ended | Nine Months Ended | ||||||||||
October 25, 2015 | October 26, 2014 | October 25, 2015 | October 26, 2014 | ||||||||
Revenue | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||
Cost of revenue | 43.8 | 44.8 | 44.0 | 44.6 | |||||||
Gross profit | 56.2 | 55.2 | 56.0 | 55.4 | |||||||
Operating expenses: | |||||||||||
Research and development | 25.2 | 27.8 | 27.3 | 29.5 | |||||||
Sales, general and administrative | 11.6 | 10.1 | 12.2 | 10.5 | |||||||
Restructuring and other charges | 0.6 | — | 2.7 | — | |||||||
Total operating expenses | 37.4 | 37.9 | 42.2 | 40.0 | |||||||
Operating income | 18.9 | 17.3 | 13.8 | 15.4 | |||||||
Interest income | 0.7 | 0.6 | 0.8 | 0.6 | |||||||
Interest expense | (0.9 | ) | (0.9 | ) | (1.0 | ) | (1.0 | ) | |||
Other income, net | 0.2 | — | — | 0.4 | |||||||
Income before income tax | 18.9 | 17.0 | 13.6 | 15.4 | |||||||
Income tax expense (benefit) | (0.1 | ) | 2.9 | 2.3 | 2.6 | ||||||
Net income | 19.0 | % | 14.1 | % | 11.3 | % | 12.8 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
October 25, 2015 | October 26, 2014 | $ Change | % Change | October 25, 2015 | October 26, 2014 | $ Change | % Change | ||||||||||||||||||||||
(In millions) | (In millions) | ||||||||||||||||||||||||||||
GPU | $ | 1,110 | $ | 991 | $ | 119 | 12 | % | $ | 3,009 | $ | 2,767 | $ | 242 | 9 | % | |||||||||||||
Tegra Processor | 129 | 168 | (39 | ) | (23 | ) | 402 | 466 | (64 | ) | (14 | ) | |||||||||||||||||
All Other | 66 | 66 | — | — | 198 | 198 | — | — | |||||||||||||||||||||
Total | $ | 1,305 | $ | 1,225 | $ | 80 | 7 | % | $ | 3,609 | $ | 3,431 | $ | 178 | 5 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
October 25, 2015 | October 26, 2014 | $ Change | % Change | October 25, 2015 | October 26, 2014 | $ Change | % Change | ||||||||||||||||||||||
(In millions) | (In millions) | ||||||||||||||||||||||||||||
Research and development expenses | $ | 329 | $ | 340 | $ | (11 | ) | (3 | )% | $ | 987 | $ | 1,011 | $ | (24 | ) | (2 | )% | |||||||||||
Sales, general and administrative expenses | 152 | 123 | 29 | 24 | 441 | 361 | 80 | 22 | |||||||||||||||||||||
Restructuring and other charges | 8 | — | 8 | 100 | 97 | — | 97 | 100 | |||||||||||||||||||||
Total operating expenses | $ | 489 | $ | 463 | $ | 26 | 6 | % | $ | 1,525 | $ | 1,372 | $ | 153 | 11 | % | |||||||||||||
Research and development as a percentage of net revenue | 25 | % | 28 | % | 27 | % | 29 | % | |||||||||||||||||||||
Sales, general and administrative as a percentage of net revenue | 12 | % | 10 | % | 12 | % | 11 | % | |||||||||||||||||||||
Restructuring and other charges as a percentage of net revenue | 1 | % | — | % | 3 | % | — | % |
Three Months Ended | Nine Months Ended | ||||||
October 25, | October 25, | ||||||
2015 | 2015 | ||||||
(In millions) | |||||||
Employee severance and related costs | $ | 2 | $ | 58 | |||
Tax subsidy impairment | — | 17 | |||||
Fixed assets impairment | 3 | 14 | |||||
Facilities and related costs | 2 | 4 | |||||
Other exit costs | 1 | 4 | |||||
Restructuring and other charges | $ | 8 | $ | 97 |
As of | |||||||
October 25, 2015 | January 25, 2015 | ||||||
(In millions) | |||||||
Cash and cash equivalents | $ | 471 | $ | 497 | |||
Marketable securities | 4,257 | 4,126 | |||||
Cash, cash equivalents, and marketable securities | $ | 4,728 | $ | 4,623 |
Nine Months Ended | |||||||
October 25, 2015 | October 26, 2014 | ||||||
(In millions) | |||||||
Net cash provided by operating activities | $ | 664 | $ | 463 | |||
Net cash used in investing activities | $ | (187 | ) | $ | (409 | ) | |
Net cash used in financing activities | $ | (503 | ) | $ | (811 | ) |
Period | Total Number of Shares Purchased | Average Price Paid per Share (1) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | ||||||||||
July 27, 2015 - August 23, 2015 | — | $ | — | — | $ | 1,600 | ||||||||
August 24, 2015 - September 20, 2015 | — | — | — | $ | 1,600 | |||||||||
September 21, 2015 - October 25, 2015 | 4 | — | 4 | $ | 1,600 | |||||||||
Total | 4 | $ | — | 4 |
Exhibit No. | Exhibit Description | Schedule /Form | File Number | Exhibit | Filing Date | |||||
31.1* | Certification of Chief Executive Officer as required by Rule 13a-14(a) of the Securities Exchange Act of 1934 | |||||||||
31.2* | Certification of Chief Financial Officer as required by Rule 13a-14(a) of the Securities Exchange Act of 1934 | |||||||||
32.1#* | Certification of Chief Executive Officer as required by Rule 13a-14(b) of the Securities Exchange Act of 1934 | |||||||||
32.2#* | Certification of Chief Financial Officer as required by Rule 13a-14(b) of the Securities Exchange Act of 1934 | |||||||||
101.INS* | XBRL Instance Document | |||||||||
101.SCH* | XBRL Taxonomy Extension Schema Document | |||||||||
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||||
101.LAB* | XBRL Taxonomy Extension Labels Linkbase Document | |||||||||
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||||
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document |
NVIDIA Corporation | |||
By: | /s/ Colette M. Kress | ||
Colette M. Kress | |||
Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer) |
Exhibit No. | Exhibit Description | Schedule /Form | File Number | Exhibit | Filing Date | |||||
31.1* | Certification of Chief Executive Officer as required by Rule 13a-14(a) of the Securities Exchange Act of 1934 | |||||||||
31.2* | Certification of Chief Financial Officer as required by Rule 13a-14(a) of the Securities Exchange Act of 1934 | |||||||||
32.1#* | Certification of Chief Executive Officer as required by Rule 13a-14(b) of the Securities Exchange Act of 1934 | |||||||||
32.2#* | Certification of Chief Financial Officer as required by Rule 13a-14(b) of the Securities Exchange Act of 1934 | |||||||||
101.INS* | XBRL Instance Document | |||||||||
101.SCH* | XBRL Taxonomy Extension Schema Document | |||||||||
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||||
101.LAB* | XBRL Taxonomy Extension Labels Linkbase Document | |||||||||
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||||
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document |
Intangible Assets (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Oct. 25, 2015 |
Oct. 26, 2014 |
Oct. 25, 2015 |
Oct. 26, 2014 |
Jan. 25, 2015 |
|
Amortizable intangible assets components | |||||
Amortization expense | $ 18 | $ 19 | $ 56 | $ 58 | |
Future amortization expense associated with intangible assets | |||||
Remainder of fiscal 2016 | 19 | 19 | |||
Fiscal 2017 | 63 | 63 | |||
Fiscal 2018 | 50 | 50 | |||
Fiscal 2019 | 22 | 22 | |||
Fiscal 2020 | 13 | 13 | |||
Fiscal 2021 and beyond | 5 | 5 | |||
Acquisition-related intangible assets | |||||
Amortizable intangible assets components | |||||
Gross Carrying Amount | 193 | 193 | $ 189 | ||
Accumulated Amortization | (148) | (148) | (134) | ||
Net Carrying Amount | 45 | 45 | 55 | ||
Patents and Licensed Technology | |||||
Amortizable intangible assets components | |||||
Gross Carrying Amount | 451 | 451 | 449 | ||
Accumulated Amortization | (324) | (324) | (282) | ||
Net Carrying Amount | 127 | 127 | 167 | ||
Total intangible assets | |||||
Amortizable intangible assets components | |||||
Gross Carrying Amount | 644 | 644 | 638 | ||
Accumulated Amortization | (472) | (472) | (416) | ||
Net Carrying Amount | $ 172 | $ 172 | $ 222 |
Subsequent Events (Details) - Subsequent Event [Member] shares in Millions, $ in Millions |
Nov. 09, 2015
USD ($)
shares
|
---|---|
Subsequent Event [Line Items] | |
Payments for repurchase of common stock | $ 135 |
Stock Repurchased During Period, Shares | shares | 3 |
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Restructuring and Other Charges (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 25, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Other Charges [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and other charges |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the restructuring activities and related accrued liabilities |
|
Marketable Securities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 25, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Available-for-sale Securities [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash Equivalents and Marketable Securities |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Unrealized Loss on Investments [Table Text Block] |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash Equivalents and Marketable Securities Available for Sale |
|
Guarantees (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 25, 2015 |
Oct. 26, 2014 |
Oct. 25, 2015 |
Oct. 26, 2014 |
|
Estimated product warranty liabilities | ||||
SHIELD warranty charge | $ 21 | |||
Balance at beginning of period | $ 28 | $ 8 | 8 | $ 8 |
Additions | 0 | 1 | 22 | 4 |
Deductions | (15) | (2) | (17) | (5) |
Balance at end of period | $ 13 | $ 7 | $ 13 | $ 7 |
Restructuring and Other Charges (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Oct. 25, 2015 |
Oct. 26, 2014 |
Oct. 25, 2015 |
Oct. 26, 2014 |
|||
Restructuring and Other Charges [Abstract] | ||||||
Severance Costs | $ 2 | $ 58 | ||||
Tax subsidy impairment - restructuring charge | 0 | 17 | ||||
Fixed assets impairment - restructuring charge | 3 | 14 | ||||
Facilities and related costs - restructuring charge | 2 | 4 | ||||
Other exit costs | 1 | 4 | ||||
Restructuring and other charges | $ 8 | $ 0 | 97 | $ 0 | ||
Additional restructuring charges in FY16 - minimum | 25 | |||||
Additional restructuring charges in FY16 - maximum | $ 35 | |||||
Restructuring impact on workforce | 5.00% | 5.00% | ||||
Restructuring reserve beg balance | $ 18 | $ 0 | ||||
Payments for Restructuring | (7) | (46) | ||||
Restructuring Reserve, Settled without Cash | (4) | (36) | ||||
Restructuring reserve end balance | [1] | $ 15 | $ 15 | |||
|
Income Taxes |
9 Months Ended |
---|---|
Oct. 25, 2015 | |
Notes to financial statements [Abstract] | |
Income Taxes | Income Taxes We recognized income tax benefit of $1 million for the three months ended October 25, 2015 and income tax expense of $83 million, $36 million and $90 million for the nine months ended October 25, 2015 and three and nine months ended October 26, 2014, respectively. Income tax benefit as a percentage of income before tax was 0.5% for the three months ended October 25, 2015 and income tax expense as a percentage of income before tax was 16.9%, 17.3% and 17.0% for the nine months ended October 25, 2015 and three and nine months ended October 26, 2014, respectively. Our income tax benefit for the three months ended October 25, 2015 included a tax benefit of $49 million from a tax reserve release related to our Icera modem operations upon the expiration of applicable statutes of limitations. In addition to this benefit, our income tax expense for the nine months ended October 25, 2015 also included a $27 million charge for the write-down of a deferred tax asset related to our Icera modem operations, partially offset by the tax benefit related to restructuring and other charges. The decrease in our effective tax rate in the three months ended October 25, 2015 as compared to the same period in the prior fiscal year was primarily due to the favorable impact of the benefit from the expiration of the applicable statutes of limitations, partially offset by an increase in the amount of earnings subject to U.S. tax. Our effective tax rate for the nine months ended October 25, 2015 of 16.9% was lower than the U.S. federal statutory rate of 35% due primarily to income earned in jurisdictions where the tax rate is lower than the U.S. federal statutory tax rate, and certain discrete events including the tax benefit recognized upon the expiration of the applicable statutes of limitations and other tax benefits related to the Icera modem operations, partially offset by the write-down of a deferred tax asset related to Icera. Our effective tax rate for the nine months ended October 26, 2014 of 17.0% was lower than the U.S. federal statutory rate of 35% due primarily to income earned in jurisdictions where the tax rate is lower than the U.S. federal statutory tax rate and favorable discrete events primarily attributable to the tax benefit recognized upon the expiration of applicable statutes of limitations. For the nine months ended October 25, 2015, there have been no material changes to our tax years that remain subject to examination by major tax jurisdictions. Additionally, there have been no other material changes to our unrecognized tax benefits and any related interest or penalties since the fiscal year ended January 25, 2015, other than the aforementioned recognition of tax benefits upon the expiration of applicable statutes of limitations in the nine months ended October 25, 2015. While we believe that we have adequately provided for all uncertain tax positions, or tax positions where we believe it is not more-likely-than-not that the position will be sustained upon examination, 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 with the respective tax authorities. As of October 25, 2015, 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. |
Long-term debt (Details) |
3 Months Ended | 9 Months Ended | |||||||
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Oct. 25, 2015
USD ($)
$ / shares
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Oct. 26, 2014
USD ($)
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Oct. 25, 2015
USD ($)
$ / shares
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Oct. 26, 2014
USD ($)
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Jan. 25, 2015
USD ($)
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Debt Instrument [Line Items] | |||||||||
Debt Instrument, Face Amount | $ 1,500,000,000 | $ 1,500,000,000 | $ 1,500,000,000 | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | 1.00% | |||||||
Debt Instrument, Convertible, Conversion Ratio | 49.5958 | ||||||||
Principal amount of Notes | $ 1,000 | $ 1,000 | |||||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 20.1630 | $ 20.1630 | |||||||
Debt Instrument, Convertible, Initial Liability Amount | $ 1,350,000,000 | ||||||||
Debt Instrument, Effective Interest Rate | 3.15% | 3.15% | |||||||
Debt Instrument, Convertible, Carrying Amount of Equity Component | $ 126,000,000 | $ 126,000,000 | 126,000,000 | ||||||
Purchaser's Discount of Convertible Notes | 23,000,000 | ||||||||
Initial unamortized debt discount at issuance | 149,000,000 | ||||||||
Debt Instrument, Unamortized Discount | (94,000,000) | [1] | (94,000,000) | [1] | (116,000,000) | ||||
Long-term debt | 1,406,000,000 | $ 1,406,000,000 | $ 1,384,000,000 | ||||||
Debt Instrument, Convertible, Remaining Discount Amortization Period | 3 years 1 month 6 days | ||||||||
Coupon Interest Expense | 4,000,000 | $ 4,000,000 | $ 11,000,000 | $ 11,000,000 | |||||
Amortization of debt discount | 7,000,000 | 7,000,000 | 22,000,000 | 21,000,000 | |||||
Debt Instrument, Convertible, Interest Expense | $ 11,000,000 | $ 11,000,000 | $ 33,000,000 | $ 32,000,000 | |||||
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Derivative Financial Instrument (Tables) |
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Notional Amount and Fair Value of the Interest Rate Swap [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Interest Rate Derivatives | A summary of the notional amount and fair value of the interest rate swap recorded on the Condensed Consolidated Balance Sheets at October 25, 2015 and January 25, 2015 is as follows (in millions):
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Derivative, Gain (Loss) on Derivative, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments, Gain (Loss) | The effect of the interest rate swap on other comprehensive income is as follows (in millions):
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Balance Sheet Components (Tables) |
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Notes to financial statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories |
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Accrued Liabilities |
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Other Long-term Liabilities |
(2) Consists primarily of consideration received in advance of our performance obligations under the patent cross licensing agreement that we entered into with Intel Corporation in January 2011. The decrease in deferred revenue, long-term, is a result of revenue recognized during the nine months ended October 25, 2015. |
Commitments and Contingencies (Details) $ in Millions |
3 Months Ended | 9 Months Ended |
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Oct. 25, 2015
USD ($)
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Oct. 25, 2015
USD ($)
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Loss Contingencies [Line Items] | ||
Ground lease to a syndicate of banks - Synthetic Lease | 99 years | |
Total Synthetic Lease term | 7 years 6 months | |
Estimated construction period | 2 years 6 months | |
Lease term - Synthetic Lease | 5 years | |
Maximum number of renewal options | 3 | 3 |
Lessee Leasing Arrangements, Operating Leases, Renewal Term | 5 years | |
Expected construction costs for Synthetic lease financing | $ 380 | $ 380 |
Maximum residual value guarantee percentage | 87.50% | 87.50% |
Maximum total leverage ratio | 3.0 | 3.0 |
Minimum interest coverage ratio | 3.5 | 3.5 |
Guarantees (Tables) |
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Notes to financial statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Guarantees |
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Long-term debt (Tables) |
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Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments [Table Text Block] |
(1) As of October 25, 2015, the unamortized debt discount will be amortized over a remaining period of 3.1 years. The following table presents interest expense for the contractual interest and the accretion of debt discount and issuance costs:
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Net Income Per Share |
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Notes to financial statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Share | Net Income Per Share The following is a reconciliation of the numerator and denominator of the basic and diluted net income per share computations for the periods presented:
The 1.00% Convertible Senior Notes, or the Notes, are included in the calculation of diluted net income per share if their inclusion is dilutive. The Notes will generally have a dilutive impact on net income per share if our average stock price for the reporting period exceeds the conversion price of $20.1630 per share. For the three and nine months ended October 25, 2015, our average stock price for the reporting periods exceeded the conversion price, causing the Notes to have a dilutive impact for these periods. The denominator for diluted net income per share does not include any effect from the convertible note hedge transaction, or the Note Hedges, that we entered into concurrently with the issuance of the Notes, as its effect would be anti-dilutive. In the event an actual conversion of any or all of the Notes occurs, the shares that would be delivered to us under the Note Hedges are designed to neutralize the dilutive effect of the shares that we would issue under the Notes. The denominator for diluted net income per share will not include any effect from the warrants, which we entered into concurrently with the issuance of the Notes, unless our average stock price for the reporting period exceeds the strike price of $27.1119 per share. Please refer to Note 11 of these Notes to Condensed Consolidated Financial Statements for additional discussion regarding the Notes. |
Segment Information (Tables) |
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Notes to financial statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Information by Operating Segment |
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Reconciliation of Other Significant Reconciling Items from Segments to Consolidated [Table Text Block] |
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Revenue from customers based in different geographic regions |
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Balance Sheet Components (Details) - USD ($) $ in Millions |
Oct. 25, 2015 |
Jul. 26, 2015 |
Jan. 25, 2015 |
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Inventories | |||||||||||||||||
Raw materials | $ 117 | $ 157 | |||||||||||||||
Work in-process | 91 | 92 | |||||||||||||||
Finished goods | 217 | 234 | |||||||||||||||
Total inventories | 425 | 483 | |||||||||||||||
Outstanding Inventory Purchase Obligations | 442 | ||||||||||||||||
Accrued Liabilities and Other Current Liabilities | |||||||||||||||||
Unearned Revenue | [1] | 229 | 296 | ||||||||||||||
Customer related liabilities | [2] | 151 | 143 | ||||||||||||||
Accrued payroll and related expenses | 98 | 112 | |||||||||||||||
Professional service fees | 24 | 17 | |||||||||||||||
Accrued restructuring and other charges | 15 | [3] | $ 18 | 0 | |||||||||||||
Warranty accrual | [4] | 13 | 8 | ||||||||||||||
Taxes payable | 7 | 3 | |||||||||||||||
Coupon interest on Notes | 6 | 3 | |||||||||||||||
Facilities related liabilities | 1 | 8 | |||||||||||||||
Other | 16 | 13 | |||||||||||||||
Total accrued and other current liabilities | 560 | 603 | |||||||||||||||
Other Long-Term Liabilities | |||||||||||||||||
Deferred income tax liability | 325 | 232 | |||||||||||||||
Income taxes payable, long-term | 76 | 121 | |||||||||||||||
Asset retirement obligation | 7 | 7 | |||||||||||||||
Derivative Liability, Noncurrent | 3 | [5] | 0 | ||||||||||||||
Deferred Revenue, long-term | 1 | [6] | 108 | ||||||||||||||
Other | 25 | 21 | |||||||||||||||
Total other long-term liabilities | $ 437 | $ 489 | |||||||||||||||
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | ||
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Oct. 25, 2015 |
Oct. 26, 2014 |
Oct. 25, 2015 |
Oct. 26, 2014 |
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Revenue | $ 1,305 | $ 1,225 | $ 3,609 | $ 3,431 |
Cost of revenue | 571 | 549 | 1,589 | 1,531 |
Gross profit | 734 | 676 | 2,020 | 1,900 |
Operating expenses | ||||
Research and development | 329 | 340 | 987 | 1,011 |
Sales, general and administrative | 152 | 123 | 441 | 361 |
Restructuring and other charges | 8 | 0 | 97 | 0 |
Total operating expenses | 489 | 463 | 1,525 | 1,372 |
Income from operations | 245 | 213 | 495 | 528 |
Interest income | 9 | 7 | 28 | 20 |
Interest expense | (12) | (11) | (35) | (35) |
Other income (expense), net | 3 | 0 | 1 | 14 |
Income before income tax | 245 | 209 | 489 | 527 |
Income tax expense (benefit) | (1) | 36 | 83 | 90 |
Net income | $ 246 | $ 173 | $ 406 | $ 437 |
Basic net income per share | $ 0.45 | $ 0.32 | $ 0.75 | $ 0.79 |
Diluted net income per share | $ 0.44 | $ 0.31 | $ 0.72 | $ 0.77 |
Weighted average shares used in basic per share computation | 542 | 548 | 544 | 555 |
Weighted average shares used in diluted per share computation | 565 | 558 | 563 | 566 |
Cash dividends declared and paid per common share | $ 0.0975 | $ 0.0850 | $ 0.2800 | $ 0.2550 |
Stockholders' Equity (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | |||
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Oct. 25, 2015 |
Jul. 26, 2015 |
Oct. 26, 2014 |
Oct. 25, 2015 |
Oct. 26, 2014 |
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Accelerated Share Repurchases [Line Items] | |||||
Stock repurchase program, additional authorized amount | $ 1,620 | ||||
Accelerated Share Repurchases, Payment | $ 400 | $ 400 | |||
Stock Repurchased During Period, Shares | 4 | 14 | 18 | ||
Accelerated Share Repurchases, Final Price Paid Per Share | $ 21.63 | ||||
Aggregate number of shares repurchased under stock repurchase program (in shares) | 226 | ||||
Aggregated cost of shares repurchased | $ 3,720 | $ 3,720 | |||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | 1,600 | 1,600 | |||
Dividends, Cash [Abstract] | |||||
Payments of Dividends | $ 53 | $ 152 | $ 140 | ||
Cash dividends declared and paid per common share | $ 0.0975 | $ 0.0850 | $ 0.2800 | $ 0.2550 | |
Authorized number of shares of common stock (in shares) | 2,000 | 2,000 | |||
Par value of common stock | $ 0.001 | $ 0.001 |
Summary of Significant Accounting Policies |
9 Months Ended |
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Oct. 25, 2015 | |
Notes to financial statements [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Securities and Exchange Commission, or SEC, Regulation S-X. The January 25, 2015 consolidated balance sheet was derived from our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 25, 2015, as filed with the SEC, but does not include all disclosures required by U.S. GAAP. In the opinion of management, all adjustments, consisting only of normal recurring adjustments except as otherwise noted, considered necessary for a fair statement of results of operations and financial position have been included. The results for the interim periods presented are not necessarily indicative of the results expected for any future period. The following information should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 25, 2015. Significant Accounting Policies For a description of significant accounting policies, see Note 1, Organization and Summary of Significant Accounting Policies, of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended January 25, 2015. There have been no material changes to our significant accounting policies since the filing of the Annual Report on Form 10-K. Fiscal Year We operate on a 52- or 53-week year, ending on the last Sunday in January. Fiscal year 2016 is a 53-week year and fiscal year 2015 was a 52-week year. The third quarters of fiscal years 2016 and 2015 were both 13-week quarters. Principles of Consolidation Our condensed consolidated financial statements include the accounts of NVIDIA Corporation and our wholly-owned subsidiaries. All material inter-company balances and transactions have been eliminated in consolidation. Restructuring and Other Charges Our restructuring and other charges primarily comprise of employee severance and related costs, write-down of assets, and other exit costs. The severance and related costs could include one-time termination benefits as well as certain statutory termination benefits or employee terminations under ongoing benefit arrangements. One-time termination benefits are recognized as a liability at estimated fair value when the approved plan of termination has been communicated to employees, unless employees must provide future service, in which case the benefits are recognized ratably over the future service period. Ongoing termination benefits arrangements are recognized as a liability at estimated fair value when the amount of such benefits becomes estimable and payment is probable. Any contract termination costs are recognized at estimated fair value when we terminate the contract in accordance with the contract terms. Other associated costs are recognized in the period the liability is incurred. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an on-going basis, we evaluate our estimates, including those related to revenue recognition, cash equivalents and marketable securities, accounts receivable, inventories, income taxes, goodwill, stock-based compensation, warranty liabilities, litigation, investigation and settlement costs, restructuring and other charges, and other contingencies. These estimates are based on historical facts and various other assumptions that we believe are reasonable. Adoption of New and Recently Issued Accounting Pronouncements In July 2015, the Financial Accounting Standards Board, or FASB, issued an accounting standards update for the subsequent measurement of inventory. The amended guidance requires entities to measure inventory at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The requirement would replace the current lower of cost or market evaluation. The update is effective for us beginning in our first quarter of fiscal year 2018, with early adoption permitted to be applied prospectively. We are currently evaluating the impact of this accounting guidance on our consolidated financial statements. In April 2015, the FASB issued an accounting standards update that requires an entity to present debt issuance costs on the balance sheet as a direct deduction from the related debt liability as opposed to an asset. Amortization of the costs will continue to be reported as interest expense. The update is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued, and the new guidance would be applied retrospectively to all prior periods presented. The update will be effective for us beginning in our first quarter of fiscal year 2017. The adoption of this accounting guidance is not currently expected to have a material impact on our consolidated financial statements. In April 2015, the FASB issued an accounting standards update that provides clarification on whether a cloud computing arrangement includes a software license. If a software license is included, the customer should account for the license consistent with its accounting for other software licenses. If a software license is not included, the arrangement should be accounted for as a service contract. The update is effective for reporting periods beginning after December 15, 2015, with early adoption permitted. Companies can elect to adopt the standard update prospectively or retrospectively to arrangements entered into, or materially modified, after the effective date. The update will be effective for us beginning in our first quarter of fiscal year 2017. We expect the adoption of this accounting guidance to result in an increase in software license assets and related depreciation expense, and a corresponding decrease in prepaid service contract assets and related service contract expense in our consolidated financial statements. In May 2014, the FASB issued an accounting standards update that creates a single source of revenue guidance under U.S. GAAP for all companies, in all industries, effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. On July 9, 2015, the FASB voted to defer the effective date by one year, such that the new standard will be effective for us beginning in our first quarter of fiscal year 2019. The FASB will also permit entities to adopt the standard one year earlier if they choose (i.e., the original effective date). We will adopt this guidance either by using a full retrospective approach for all periods presented in the period of adoption or a modified retrospective approach. We are currently evaluating the impact of this accounting guidance on our consolidated financial statements and have not yet determined which transition method we will apply. |
Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 25, 2015 |
Oct. 26, 2014 |
Oct. 25, 2015 |
Oct. 26, 2014 |
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Numerator: | ||||
Net income | $ 246 | $ 173 | $ 406 | $ 437 |
Denominator: | ||||
Denominator for basic net income per share, weighted average shares | 542 | 548 | 544 | 555 |
Effect of dilutive securities: | ||||
Equity awards outstanding | 13 | 10 | 13 | 11 |
Incremental Common Shares Attributable to Dilutive Effect of Conversion of Debt Securities | 10 | 0 | 6 | 0 |
Denominator for diluted net income per share, weighted average shares | 565 | 558 | 563 | 566 |
Net income per share: | ||||
Basic net income per share | $ 0.45 | $ 0.32 | $ 0.75 | $ 0.79 |
Diluted net income per share | $ 0.44 | $ 0.31 | $ 0.72 | $ 0.77 |
Antidilutive equity awards excluded from computation of earnings per share | 9 | 11 | 13 | 16 |
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | 1.00% | ||
Debt Instrument, Convertible, Conversion Price | $ 20.1630 | $ 20.1630 | ||
Warrant Strike Price | $ 27.1119 |
Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
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Oct. 25, 2015 | |
Notes to financial statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Securities and Exchange Commission, or SEC, Regulation S-X. The January 25, 2015 consolidated balance sheet was derived from our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 25, 2015, as filed with the SEC, but does not include all disclosures required by U.S. GAAP. In the opinion of management, all adjustments, consisting only of normal recurring adjustments except as otherwise noted, considered necessary for a fair statement of results of operations and financial position have been included. The results for the interim periods presented are not necessarily indicative of the results expected for any future period. The following information should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 25, 2015. Significant Accounting Policies For a description of significant accounting policies, see Note 1, Organization and Summary of Significant Accounting Policies, of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended January 25, 2015. There have been no material changes to our significant accounting policies since the filing of the Annual Report on Form 10-K. |
New Accounting Pronouncements | Adoption of New and Recently Issued Accounting Pronouncements In July 2015, the Financial Accounting Standards Board, or FASB, issued an accounting standards update for the subsequent measurement of inventory. The amended guidance requires entities to measure inventory at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The requirement would replace the current lower of cost or market evaluation. The update is effective for us beginning in our first quarter of fiscal year 2018, with early adoption permitted to be applied prospectively. We are currently evaluating the impact of this accounting guidance on our consolidated financial statements. In April 2015, the FASB issued an accounting standards update that requires an entity to present debt issuance costs on the balance sheet as a direct deduction from the related debt liability as opposed to an asset. Amortization of the costs will continue to be reported as interest expense. The update is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued, and the new guidance would be applied retrospectively to all prior periods presented. The update will be effective for us beginning in our first quarter of fiscal year 2017. The adoption of this accounting guidance is not currently expected to have a material impact on our consolidated financial statements. In April 2015, the FASB issued an accounting standards update that provides clarification on whether a cloud computing arrangement includes a software license. If a software license is included, the customer should account for the license consistent with its accounting for other software licenses. If a software license is not included, the arrangement should be accounted for as a service contract. The update is effective for reporting periods beginning after December 15, 2015, with early adoption permitted. Companies can elect to adopt the standard update prospectively or retrospectively to arrangements entered into, or materially modified, after the effective date. The update will be effective for us beginning in our first quarter of fiscal year 2017. We expect the adoption of this accounting guidance to result in an increase in software license assets and related depreciation expense, and a corresponding decrease in prepaid service contract assets and related service contract expense in our consolidated financial statements. In May 2014, the FASB issued an accounting standards update that creates a single source of revenue guidance under U.S. GAAP for all companies, in all industries, effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. On July 9, 2015, the FASB voted to defer the effective date by one year, such that the new standard will be effective for us beginning in our first quarter of fiscal year 2019. The FASB will also permit entities to adopt the standard one year earlier if they choose (i.e., the original effective date). We will adopt this guidance either by using a full retrospective approach for all periods presented in the period of adoption or a modified retrospective approach. We are currently evaluating the impact of this accounting guidance on our consolidated financial statements and have not yet determined which transition method we will apply. |
Fiscal Period, Policy [Policy Text Block] | Fiscal Year We operate on a 52- or 53-week year, ending on the last Sunday in January. Fiscal year 2016 is a 53-week year and fiscal year 2015 was a 52-week year. The third quarters of fiscal years 2016 and 2015 were both 13-week quarters. |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation Our condensed consolidated financial statements include the accounts of NVIDIA Corporation and our wholly-owned subsidiaries. All material inter-company balances and transactions have been eliminated in consolidation. |
Restructuring and Other Charges | Restructuring and Other Charges Our restructuring and other charges primarily comprise of employee severance and related costs, write-down of assets, and other exit costs. The severance and related costs could include one-time termination benefits as well as certain statutory termination benefits or employee terminations under ongoing benefit arrangements. One-time termination benefits are recognized as a liability at estimated fair value when the approved plan of termination has been communicated to employees, unless employees must provide future service, in which case the benefits are recognized ratably over the future service period. Ongoing termination benefits arrangements are recognized as a liability at estimated fair value when the amount of such benefits becomes estimable and payment is probable. Any contract termination costs are recognized at estimated fair value when we terminate the contract in accordance with the contract terms. Other associated costs are recognized in the period the liability is incurred. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an on-going basis, we evaluate our estimates, including those related to revenue recognition, cash equivalents and marketable securities, accounts receivable, inventories, income taxes, goodwill, stock-based compensation, warranty liabilities, litigation, investigation and settlement costs, restructuring and other charges, and other contingencies. These estimates are based on historical facts and various other assumptions that we believe are reasonable. |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
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Oct. 25, 2015 |
Oct. 26, 2014 |
Oct. 25, 2015 |
Oct. 26, 2014 |
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Income Taxes | ||||
Income tax expense (benefit) | $ (1) | $ 36 | $ 83 | $ 90 |
Effective Income Tax Rate, Continuing Operations | (0.50%) | 17.30% | 16.90% | 17.00% |
Tax reserve release related to Icera | $ 49 | |||
Icera deferred tax asset write-off | $ 27 | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate | 35.00% |
Net Income Per Share (Tables) |
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Notes to financial statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of numerators and denominators of basic and diluted net income (loss) per share computations |
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Stock Based Compensation |
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Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation Our stock-based compensation expense is associated with stock options, restricted stock units, or RSUs, performance stock units that are based on our corporate financial performance targets, or PSUs, performance stock units that are based on market conditions, or market-based PSUs, and our employee stock purchase plan, or ESPP. We estimate the fair value of employee stock options on the date of grant using a binomial model and recognize the expense using a straight-line attribution method over the requisite employee service period. We use the closing trading price of our common stock on the date of grant, minus a dividend yield discount, as the fair value of awards of RSUs and PSUs, and we use a Monte Carlo simulation on the date of grant to estimate the fair value of market-based PSUs. We use a Black-Scholes valuation at the commencement of an offering period in March and September of each year to estimate the fair value of the shares to be issued under our ESPP. Stock-based compensation expense for stock options, RSUs and market-based PSUs is recognized using a straight-line attribution method over the requisite employee service period, while compensation expense for PSUs and ESPP is recognized using an accelerated amortization model. Our condensed consolidated statements of income include stock-based compensation expense, net of amounts capitalized as inventory, as follows:
Equity Award Activity The following summarizes the stock option, RSU, PSU and market-based PSU activity under our equity incentive plans:
Of the total fair value of equity awards granted during the three and nine months ended October 25, 2015, the stock-based compensation expense related to equity awards that are not expected to vest was $34 million and $43 million, respectively. Of the total fair value of equity awards granted during the three and nine months ended October 26, 2014, the stock-based compensation expense related to equity awards that are not expected to vest was $28 million and $35 million, respectively. The following summarizes the aggregate unearned stock-based compensation expense and estimated weighted average amortization period as of October 25, 2015 and January 25, 2015:
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CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 25, 2015 |
Oct. 26, 2014 |
Oct. 25, 2015 |
Oct. 26, 2014 |
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Net income | $ 246 | $ 173 | $ 406 | $ 437 |
Net change in unrealized gains (losses) on available-for-sale securities, net of tax | 3 | 5 | (1) | 5 |
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax | (3) | 0 | (3) | 0 |
Reclassification adjustments for net realized gains (losses)on available-for-sale securities included in net income, net of tax | 0 | 0 | (2) | 0 |
Other comprehensive income (loss) | 0 | 5 | (6) | 5 |
Total comprehensive income | $ 246 | $ 178 | $ 400 | $ 442 |
Commitments and Contingencies |
9 Months Ended |
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Oct. 25, 2015 | |
Notes to financial statements [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Lease Financing Arrangement In the second quarter of fiscal year 2016, we began to construct a new headquarters building in Santa Clara, California, which is currently targeted for completion in the fourth quarter of fiscal year 2018. We are financing this construction under an off-balance sheet, build-to-suit operating lease arrangement. As a part of this arrangement, we leased the real property we own where the building will be constructed under a 99 year ground lease to a syndicate of banks and concurrently leased back the building under a real property lease. Under the real property lease, we pay rent, taxes, maintenance costs, utilities, insurance and other property related costs. The lease has an initial 7.5 year term expiring on December 19, 2022, consisting of an approximately 2.5 year construction period followed by a 5 year lease term. We have the option to renew this lease for up to three additional 5 year periods, subject to approval by the banks. We will oversee the construction of the headquarters building. The banks have committed to fund up to $380 million of costs relating to construction. Advances will be made periodically to reimburse us for construction costs we incur. Once construction is complete, the lease balance will remain static at the completed cost for the remaining duration of the lease term. During construction, accrued interest will be capitalized into the lease balance. Following construction, we will pay rent in the form of interest. We have guaranteed the obligations under the lease held by our subsidiary. During the term of the lease, we may elect to purchase the headquarters building for the amount of the banks’ investment in the building and any accrued but unpaid rent. At the end of the lease term, we may elect to buy the building for the outstanding balance on the maturity date or arrange for the cash sale of the building to an unaffiliated third party. The aggregate guarantee made by us under the lease is no more than 87.5% of the costs incurred in connection with the construction of the building. However, under certain default circumstances, the lease guarantee may be 100% of the banks’ investment in the building plus any and all accrued but unpaid interest and all other rent due and payable under the operative agreements. The operative agreements are subject to customary default provisions, including, for example, those relating to payment and performance defaults, and events of bankruptcy. We are also subject to financial covenants including a covenant to maintain a maximum total leverage ratio not to exceed 3.0 to 1.0 and a minimum interest coverage ratio in excess of 3.5 to 1.0 during the term. If certain events of default occur and are continuing under the operative agreements, the banks may accelerate repayment of their investment under the lease. Patent Infringement Cases On September 4, 2014, NVIDIA filed complaints against Qualcomm, Inc., or Qualcomm, and various Samsung entities in both the United States International Trade Commission, or ITC, and the United States District Court for the District of Delaware alleging infringement of seven patents relating to graphics processing. In the ITC action, NVIDIA seeks to exclude importation of Samsung Galaxy mobile phones and tablets and other consumer electronics and display devices containing Qualcomm’s Adreno, ARM’s Mali or Imagination’s PowerVR graphics architectures, or the Accused Products. On October 6, 2014, the ITC instituted an investigation of NVIDIA’s claim. On February 2 and 3, 2015, the court conducted a claim construction hearing on certain claim language from five of the seven patents at issue. In June 2015, NVIDIA moved to terminate all asserted claims on four patents and these motions were granted. The ITC held an evidentiary hearing on certain asserted claims of the three remaining patents from June 22 through June 26, 2015. On October 9, 2015, the ITC Administrative Law Judge rendered an initial determination that importation of the Samsung Accused Products did not violate U.S. law. NVIDIA is currently seeking review of the decision by the full commission of the ITC. The commission will decide whether to review parts of the initial determination on or before December 14, 2015 and the target date for the final decision is February 10, 2016. In the Delaware action, NVIDIA seeks unspecified damages for Samsung and Qualcomm’s alleged patent infringement. On October 22, 2014, Samsung and Qualcomm exercised their statutory right to stay the Delaware proceedings in light of the pending ITC action and the court granted the motion to stay on October 23, 2014. On November 10, 2014, Samsung filed a complaint against NVIDIA and Velocity Micro, Inc., in the United States District Court for the Eastern District of Virginia, alleging that NVIDIA infringed six patents and falsely advertised that the Tegra K1 processor is the world’s fastest mobile processor. Samsung amended its complaint twice, first on December 19, 2014, and then on April 10, 2015, without changing its legal claims. Samsung seeks monetary damages and certain injunctive relief as to some of the asserted patents. NVIDIA answered the second amended complaint on April 16, 2015, and asserted counter-claims against Samsung for infringing four of NVIDIA’s patents and for non-infringement and invalidity of the six patents asserted in Samsung’s second amended complaint. On April 24, 2015, Samsung moved to sever NVIDIA’s counter-claims for patent infringement and its motion was granted on May 19, 2015. NVIDIA voluntarily withdrew its counter-claims on May 19, 2015. On June 17, 2015, Velocity Micro, Inc. voluntarily agreed to a permanent injunction preventing it from infringing two of the asserted patents and those patents were dismissed from the case with prejudice. Samsung’s false advertising claim was dismissed with prejudice on July 30, 2015. On October 15, 2015, NVIDIA’s Motion for Entry of Judgment of Noninfringement was granted as to one of Samsung’s patents. Five patents currently asserted against NVIDIA remain and a jury trial is currently scheduled to begin January 19, 2016. On November 23, 2014, Samsung filed a complaint against NVIDIA, among others, in the ITC claiming infringement of four United States patents and seeking an exclusion order barring importation of NVIDIA products alleged to infringe Samsung’s patents. On December 23, 2014, the ITC instituted an investigation of Samsung’s claims. On June 5, 2015, Samsung withdrew one patent from the case. A hearing on Samsung’s three remaining patents was held from August 18 through August 21, 2015. Post-hearing briefing is complete and the Administrative Law Judge is scheduled to issue his initial determination by December 22, 2015. The target date for the final determination by the ITC is April 22, 2016. NVIDIA and Samsung have also challenged the validity of certain of each other’s patents through inter partes review before the United States Patent and Trademark Office. NVIDIA has filed eleven requests for inter partes review on eight of Samsung’s asserted patents. Samsung has filed six requests for inter partes review on six patents asserted by NVIDIA, and Qualcomm has filed three additional requests for inter partes review on two patents asserted by NVIDIA. The United States Patent and Trademark Office has, to date, decided to review three patents owned by NVIDIA, and three patents owned by Samsung. All other requests are currently pending. Accounting for Loss Contingencies While there can be no assurance of favorable outcomes, we believe the claims made by other parties in the above ongoing matters are without merit and we intend to vigorously defend the actions. As of October 25, 2015, we have not recorded any accrual for contingent liabilities associated with the legal proceedings described above based on our belief that liabilities, while possible, are not probable. Further, any possible range of loss in these matters cannot be reasonably estimated at this time. We are engaged in other legal actions not described above arising in the ordinary course of its business and, while there can be no assurance of favorable outcomes, we believe that the ultimate outcome of these actions will not have a material adverse effect on our operating results, liquidity or financial position. |
Document and Entity Information Document - USD ($) |
9 Months Ended | ||
---|---|---|---|
Oct. 25, 2015 |
Nov. 13, 2015 |
Jul. 27, 2014 |
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Document Information [Line Items] | |||
Entity Registrant Name | NVIDIA CORP | ||
Entity Central Index Key | 0001045810 | ||
Current Fiscal Year End Date | --01-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-Q | ||
Document Period End Date | Oct. 25, 2015 | ||
Document Fiscal Year Focus | 2016 | ||
Document Fiscal Period Focus | Q3 | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 538,450,118 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 9,375,465,755 |
Stockholders' Equity |
9 Months Ended |
---|---|
Oct. 25, 2015 | |
Notes to financial statements [Abstract] | |
Stockholders' Equity | Shareholders’ Equity Share Repurchase Program Beginning August 2004, our Board of Directors authorized us, subject to certain specifications, to repurchase shares of our common stock. In May 2015, the Board extended the previously authorized repurchase program through December 2018 and authorized an additional $1.62 billion under the repurchase program. In May 2015 we entered into a $400 million accelerated share repurchase, or ASR, agreement with an investment bank that was completed in October 2015. Under the ASR, we repurchased 18 million shares at an average price of $21.63 per share, of which 14 million shares were delivered in the second quarter of fiscal year 2016 and 4 million shares were delivered in the third quarter of fiscal year 2016. The shares delivered resulted in a reduction, on the delivery date, of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted earnings per share. Through October 25, 2015, we have repurchased an aggregate of 226 million shares under our share repurchase program for a total cost of $3.72 billion. All shares delivered from these repurchases have been placed into treasury stock. As of October 25, 2015, we were authorized, subject to certain specifications, to repurchase additional shares of our common stock up to $1.60 billion. Cash Dividends During the three and nine months ended October 25, 2015, we paid $53 million and $152 million, respectively, in cash dividends to our common shareholders. These dividends were equivalent to $0.0975 per share for the six months ended October 25, 2015 and $0.085 per share for the three months ended April 26, 2015. Convertible Preferred Stock There are no shares of preferred stock outstanding. Common Stock We are authorized to issue up to 2.00 billion shares of our common stock at $0.001 per share par value. |
Intangible Assets |
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Intangible Assets | Intangible Assets The components of our amortizable intangible assets are as follows:
Amortization expense associated with intangible assets was $18 million and $56 million for the three and nine months ended October 25, 2015, respectively, and $19 million and $58 million for the three and nine months ended October 26, 2014, respectively. Future amortization expense related to the net carrying amount of intangible assets at October 25, 2015 is estimated to be $19 million for the remainder of fiscal year 2016, $63 million in fiscal year 2017, $50 million in fiscal year 2018, $22 million in fiscal year 2019, $13 million in fiscal year 2020 and a total of $5 million in fiscal year 2021 and beyond. |
Fair Value of Financial Assets and Liabilities |
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Notes to financial statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Assets and Liabilities | Fair Value of Financial Assets and Liabilities We measure our cash equivalents and marketable securities at fair value. The fair values of our financial assets and liabilities are determined using quoted market prices of identical assets or quoted market prices of similar assets from active markets. Our Level 1 assets consist of our money market funds. We classify securities within Level 1 assets when the fair value is obtained from real time quotes for transactions in active exchange markets involving identical assets. Our available-for-sale securities are classified as having Level 2 inputs. Our Level 2 assets are valued utilizing a market approach where the market prices of similar assets are provided by a variety of independent industry standard data providers to our investment custodian. We review the fair value hierarchy classification on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. There were no significant transfers between Levels 1 and 2 assets for the three and nine months ended October 25, 2015.
(7) The Notes are carried on our Condensed Consolidated Balance Sheets at their original issuance value, net of unamortized debt discount, and are not marked to fair value each period. See Note 11 for additional information on the Notes. |
Stock Based Compensation (Tables) |
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Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense, net of amounts capitalized as inventory |
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Disclosure of Share-based Compensation Arrangements by Share-based Payment Award |
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Summary of unearned stock-based compensation expense |
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Segment Information |
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Segment Information | Segment Information Our Chief Executive Officer, who is considered to be our chief operating decision maker, or CODM, reviews financial information presented on an operating segment basis for purposes of making operating decisions and assessing financial performance. Our operating segments are equivalent to our reportable segments. We report our business in two primary reporting segments - the GPU business and the Tegra Processor business - based on a single underlying graphics architecture. Our GPU product brands aimed at specialized markets include GeForce for gamers; Quadro for designers; Tesla for researchers, deep learning and big-data analysts; and GRID for cloud-based visual computing users. We also integrate our GPUs into mobile chips called system-on-a-chip (SOC) processors, which power tablets, and automotive infotainment and safety systems. Our Tegra brand integrates an entire computer onto a single chip, incorporating GPUs and multi-core CPUs with audio, video and input/output capabilities. They can also be integrated with baseband processors to add voice and data communication. Tegra conserves power while delivering state-of-the-art graphics and multimedia processing. We have a single unifying architecture for our GPU and Tegra Processors. This architecture unification leverages our visual computing expertise by charging the operating expenses of certain core engineering functions to the GPU business, while charging the Tegra Processor business for the incremental cost of the teams working directly for that business. In instances where the operating expenses of certain functions benefit both reporting segments, our CODM assigns 100% of those expenses to the reporting segment that benefits the most. The “All Other” category presented below represents the revenue and expenses that our CODM does not assign to either the GPU business or the Tegra Processor business for purposes of making operating decisions or assessing financial performance. The revenue includes primarily patent licensing revenue and the expenses include corporate infrastructure and support costs, stock-based compensation costs, amortization of acquisition-related intangible assets, other acquisition-related costs, product warranty charge, restructuring and other charges, and other non-recurring charges and benefits that our CODM deems to be enterprise in nature. Our CODM does not review any information regarding total assets on a reporting segment basis. Reporting segments do not record intersegment revenue, and, accordingly, there is none to be reported. The accounting policies for segment reporting are the same as for NVIDIA as a whole. The table below presents details of our reportable segments and the “All Other” category.
Revenue by geographic region is allocated to individual countries based on the location to which the products are initially billed even if our customers’ revenue is attributable to end customers that are located in a different location. The following table summarizes information pertaining to our revenue from customers based on invoicing address in different geographic regions:
Revenue from significant customers, those representing 10% or more of total revenue, aggregated approximately 10% of our total revenue from one customer for the three months ended October 25, 2015 and October 26, 2014. Revenue from significant customers, those representing 10% or more of total revenue, aggregated approximately 11% and 10% of our total revenue from one customer for the nine months ended October 25, 2015 and October 26, 2014, respectively. Accounts receivable from significant customers, those representing 10% or more of total accounts receivable, aggregated approximately 19% of our accounts receivable balance from one customer at October 25, 2015 and approximately 30% of our accounts receivable balance from two customers at January 25, 2015. |
Guarantees |
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Guarantees | Guarantees U.S. GAAP requires that upon issuance of a guarantee, the guarantor must recognize a liability for the fair value of the obligation it assumes under that guarantee. In addition, U.S. GAAP requires disclosures about the guarantees that an entity has issued, including a tabular reconciliation of the changes of the entity’s product warranty liabilities. Accrual for 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. Cost of revenue includes the estimated cost of product warranties. Under limited circumstances, we 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. On July 31, 2015, we announced a voluntary recall and replacement of our SHIELD 8-inch tablets that were sold between July 2014 and July 2015. We have determined that the battery in these tablets can overheat, posing a fire hazard. The recall does not affect any other NVIDIA products. During the nine months ended October 25, 2015, we recorded a $21 million charge against cost of revenue to cover anticipated customer warranty, repair, return, replacement and other associated costs. The estimated product warranty liabilities for the three and nine months ended October 25, 2015 and October 26, 2014 were as follows:
In connection with certain agreements that we have entered into 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 Condensed Consolidated Financial Statements for such indemnifications. |
Balance Sheet Components |
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Balance Sheet Components | Balance Sheet Components Certain balance sheet components are as follows:
At October 25, 2015, we had outstanding inventory purchase obligations totaling $442 million.
(2) Consists primarily of consideration received in advance of our performance obligations under the patent cross licensing agreement that we entered into with Intel Corporation in January 2011. The decrease in deferred revenue, long-term, is a result of revenue recognized during the nine months ended October 25, 2015. |
Derivative Financial Instrument |
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Derivative Instruments and Hedging Activities Disclosure [Text Block] | Derivative Financial Instrument In August 2015, we entered into an interest rate swap for a portion of the operating lease financing arrangement for our new headquarters building, which entitles us to pay amounts based on a fixed interest rate in exchange for receipt of amounts based on variable interest rates. The objective of this interest rate swap is to mitigate variability in the benchmark interest rate on the first $200 million of existing operating lease financing payments. This interest rate swap is designated as a cash flow hedge, will have settlements beginning in the second quarter of fiscal year 2019, and will terminate in the fourth quarter of fiscal year 2023. Gains or losses on this swap are recorded in accumulated other comprehensive income and will subsequently be recorded in earnings at the point when the related operating lease financing expense begins to affect earnings or if ineffectiveness of the swap should occur. A summary of the notional amount and fair value of the interest rate swap recorded on the Condensed Consolidated Balance Sheets at October 25, 2015 and January 25, 2015 is as follows (in millions):
We formally assess, both at inception and on an ongoing basis, whether the interest rate swap is highly effective. For the three and nine months ended October 25, 2015, the interest rate swap was determined to be highly effective and there were no gains or losses associated with ineffectiveness. The effect of the interest rate swap on other comprehensive income is as follows (in millions):
Over the next twelve months, we do not expect to reclassify any amount from accumulated other comprehensive income or loss to income as the underlying operating lease financing payments for our new headquarters building will not start within the next twelve months. |
Long-term debt |
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Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Text Block] | Long-Term Debt 1.00 % Convertible Senior Notes Due 2018 On December 2, 2013, we issued $1.50 billion in Notes. The Notes are unsecured, unsubordinated obligations of the Company, which pay interest in cash semi-annually at a rate of 1.00% per annum. The Notes will mature on December 1, 2018 unless repurchased or converted earlier in accordance with their terms prior to such date. Under the terms of the Notes, they may be converted based on an initial conversion rate of 49.5958 shares of common stock per $1,000 principal amount of Notes (equivalent to an initial conversion price of $20.1630 per share of common stock), subject to adjustment as described in the indenture governing the Notes. As of October 25, 2015, none of the conditions allowing holders of the Notes to convert had been met. The determination of whether or not the Notes are convertible must be performed quarterly. If the Notes become convertible at the option of the holder, the carrying value of the Notes would be classified as a current liability and the difference between the principal amount and the carrying value of the Notes would be reflected as convertible debt in the mezzanine equity section on our Condensed Consolidated Balance Sheets. The initial debt component of the Notes was valued at $1.35 billion based on the contractual cash flows discounted at an appropriate market rate for a non-convertible debt at the date of issuance, which was determined to be 3.15%. The carrying value of the permanent equity component reported in additional paid-in-capital was valued at $126 million and recorded as a debt discount. This amount, together with the $23 million purchaser's discount to the par value of the Notes represents the total unamortized debt discount of $149 million we recorded at the time of issuance of the Notes. The aggregate debt discount is amortized as interest expense over the contractual term of the Notes using the effective interest method and an interest rate of 3.15%. The following table presents the carrying amounts of the liability and equity components:
(1) As of October 25, 2015, the unamortized debt discount will be amortized over a remaining period of 3.1 years. The following table presents interest expense for the contractual interest and the accretion of debt discount and issuance costs:
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Subsequent Events |
9 Months Ended |
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Oct. 25, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Subsequent Event On November 9, 2015, as part of our stock repurchase program, we entered into an ASR with an investment bank, under which we made an upfront payment of $135 million to purchase shares of our common stock and received an initial delivery of 3 million shares. Upon final settlement of the ASR, we may either (1) receive additional shares of our common stock, or (2) be required to deliver shares of our common stock or elect to make a cash payment to the investment bank, based on the terms and conditions under the ASR. The shares we receive result in a reduction, on the delivery date, of the outstanding shares used to calculate the weighted-average common shares outstanding for basic and diluted earnings per share. |
Fair Value of Financial Assets and Liabilities (Tables) |
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Fair Value Measurements, Recurring and Nonrecurring |
(7) The Notes are carried on our Condensed Consolidated Balance Sheets at their original issuance value, net of unamortized debt discount, and are not marked to fair value each period. See Note 11 for additional information on the Notes. |
Derivative Financial Instrument (Details) - USD ($) $ in Millions |
Oct. 25, 2015 |
Jan. 25, 2015 |
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Notional Amount and Fair Value of the Interest Rate Swap [Abstract] | ||
Derivative, Notional Amount | $ 200 | $ 0 |
Fair value of interest rate swap liability | (3) | 0 |
Gain (loss) on interest rate swap in AOCI | $ (3) | $ 0 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions |
9 Months Ended | |
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Oct. 25, 2015 |
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Cash flows from operating activities: | ||
Net income | $ 406 | $ 437 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 151 | 166 |
Stock-based compensation expense | 145 | 115 |
Restructuring and other charges | 37 | 0 |
Amortization of debt discount | 22 | 21 |
Net gain on sale and disposal of long-lived assets and investments | (7) | (18) |
Deferred income taxes | 107 | 62 |
Tax benefits from stock-based compensation | (5) | (12) |
Other | 16 | 19 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (63) | (138) |
Inventories | 59 | (20) |
Prepaid expenses and other assets | (25) | 5 |
Accounts payable | 7 | 10 |
Accrued and other current liabilities | (41) | (23) |
Other long-term liabilities | (145) | (161) |
Net cash provided by operating activities | 664 | 463 |
Cash flows from investing activities: | ||
Purchases of marketable securities | (2,669) | (2,126) |
Proceeds from sale of marketable securities | 1,651 | 1,100 |
Proceeds from maturities of marketable securities | 872 | 688 |
Proceeds from sale of long-lived assets and investments | 7 | 21 |
Reimbursement of headquarters building development costs from banks | 24 | 0 |
Purchases of property and equipment and intangible assets | (71) | (91) |
Other | (1) | (1) |
Net cash used in investing activities | (187) | (409) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock under employee stock plans | 99 | 129 |
Payments under capital lease obligations | (3) | (2) |
Tax benefits from stock-based compensation | 5 | 12 |
Payments for repurchase of common stock | (452) | (810) |
Dividends paid | (152) | (140) |
Net cash used in financing activities | (503) | (811) |
Change in cash and cash equivalents | (26) | (757) |
Cash and cash equivalents at beginning of period | 497 | 1,152 |
Cash and cash equivalents at end of period | 471 | 395 |
Other non-cash activity: | ||
Assets acquired by assuming related liabilities | $ 0 | $ 14 |
Marketable Securities |
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Notes to financial statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities | Marketable Securities All of our cash equivalents and marketable securities are classified as “available-for-sale” securities. These securities are reported at fair value, with the related unrealized gains and losses included in accumulated other comprehensive income, a component of shareholders’ equity, net of tax, and net realized gains and losses recorded in other income, net, on the Condensed Consolidated Statements of Income. We performed an impairment review of our investment portfolio as of October 25, 2015. Based on our quarterly impairment review, we concluded that our investments were appropriately valued and that no other-than-temporary impairment charges were necessary on our portfolio as of October 25, 2015. The following is a summary of cash equivalents and marketable securities at October 25, 2015 and January 25, 2015:
The following table provides the breakdown of the investments with unrealized losses at October 25, 2015:
The gross unrealized losses related to fixed income securities were due to changes in interest rates. We have determined that the gross unrealized losses on investment securities at October 25, 2015 are temporary in nature. Currently, we have the intent and ability to hold our investments with impairment indicators until maturity. The amortized cost and estimated fair value of cash equivalents and marketable securities, which are primarily debt instruments, are classified as available-for-sale at October 25, 2015 and January 25, 2015 and are shown below by contractual maturity:
Net realized gains were not significant for the three months ended October 25, 2015 and for the three and nine months ended October 26, 2014. Net realized gains were $3 million for the nine months ended October 25, 2015. |
Intangible Assets (Tables) |
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Notes to financial statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortizable Intangible Assets Components |
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Fair Value of Financial Assets and Liabilities (Details) - USD ($) $ in Millions |
Oct. 25, 2015 |
Jan. 25, 2015 |
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Financial assets and liabilities measured at fair value: | ||||||||||||||||||
Fair value of interest rate swap liability | $ 3 | $ 0 | ||||||||||||||||
Cash equivalents | 96 | 295 | ||||||||||||||||
Corporate debt securities | ||||||||||||||||||
Financial assets and liabilities measured at fair value: | ||||||||||||||||||
Cash equivalents | 51 | 147 | ||||||||||||||||
Marketable securities | 1,900 | 2,000 | ||||||||||||||||
Debt securities of United States government agencies | ||||||||||||||||||
Financial assets and liabilities measured at fair value: | ||||||||||||||||||
Cash equivalents | 14 | 15 | ||||||||||||||||
Marketable securities | 981 | 735 | ||||||||||||||||
Asset-backed Securities | ||||||||||||||||||
Financial assets and liabilities measured at fair value: | ||||||||||||||||||
Cash equivalents | 1 | |||||||||||||||||
Marketable securities | 471 | 453 | ||||||||||||||||
Fair Value, Inputs, Level 1 | Money market funds | ||||||||||||||||||
Financial assets and liabilities measured at fair value: | ||||||||||||||||||
Assets, Fair Value Disclosure, Recurring | [1] | 30 | 132 | |||||||||||||||
Fair Value, Inputs, Level 2 | ||||||||||||||||||
Financial assets and liabilities measured at fair value: | ||||||||||||||||||
Fair value of interest rate swap liability | 3 | [2] | 0 | |||||||||||||||
Convertible Debt, Fair Value Disclosures | [3] | 2,198 | 1,680 | |||||||||||||||
Fair Value, Inputs, Level 2 | Corporate debt securities | ||||||||||||||||||
Financial assets and liabilities measured at fair value: | ||||||||||||||||||
Assets, Fair Value Disclosure, Recurring | [4] | 1,975 | 2,186 | |||||||||||||||
Fair Value, Inputs, Level 2 | Debt securities of United States government agencies | ||||||||||||||||||
Financial assets and liabilities measured at fair value: | ||||||||||||||||||
Assets, Fair Value Disclosure, Recurring | [5] | 995 | 750 | |||||||||||||||
Fair Value, Inputs, Level 2 | Debt securities issued by the United States Treasury | ||||||||||||||||||
Financial assets and liabilities measured at fair value: | ||||||||||||||||||
Assets, Fair Value Disclosure, Recurring | [6] | 555 | 537 | |||||||||||||||
Fair Value, Inputs, Level 2 | Asset-backed Securities | ||||||||||||||||||
Financial assets and liabilities measured at fair value: | ||||||||||||||||||
Assets, Fair Value Disclosure, Recurring | [7] | 472 | 453 | |||||||||||||||
Fair Value, Inputs, Level 2 | Mortgage backed securities issued by United Sates government-sponsored enterprises | ||||||||||||||||||
Financial assets and liabilities measured at fair value: | ||||||||||||||||||
Assets, Fair Value Disclosure, Recurring | [6] | 243 | 278 | |||||||||||||||
Fair Value, Inputs, Level 2 | Foreign government bonds | ||||||||||||||||||
Financial assets and liabilities measured at fair value: | ||||||||||||||||||
Assets, Fair Value Disclosure, Recurring | [6] | $ 83 | $ 85 | |||||||||||||||
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Restructuring and Other Charges |
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Restructuring and Other Charges [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities Disclosure [Text Block] | 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 results of any remaining ongoing Icera modem operations are reported in the Tegra Processor reporting segment, however, restructuring and other charges associated with the wind-down of the Icera modem operations are separately reported with other non-recurring charges and benefits that our CODM deems to be enterprise in nature. Please refer to Note 14 of these Notes to Condensed Consolidated Financial Statements for a discussion regarding our reporting segments. Our operating expenses for the three and nine months ended October 25, 2015 included $8 million and $97 million, respectively, of restructuring and other charges. Please refer to Note 4 of these Notes to Condensed Consolidated Financial Statements for a discussion regarding the income tax charges associated with the wind-down of Icera modem operations.
We expect to incur additional restructuring charges to operating expense of $25 million to $35 million in the fourth quarter of fiscal year 2016. These restructuring activities will impact approximately 5% of our global workforce, and we expect them to be substantially completed by the end of fiscal year 2016. The following table provides a summary of the restructuring activities and related liabilities recorded in accrued liabilities on our Consolidated Balance Sheets as of October 25, 2015:
The remaining balance of $15 million as of October 25, 2015 is expected to be paid during the fourth quarter of fiscal year 2016. |
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