NVIDIA 2005 Annual Report Download - page 77

Download and view the complete annual report

Please find page 77 of the 2005 NVIDIA annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 117

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

NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS − (Continued)
Note 8 − Guarantees
FASB Interpretation No. 45, or FIN 45, Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others, 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, FIN 45 requires disclosures about the guarantees that an entity has
issued, including a tabular reconciliation of the changes of the entity's product warranty liabilities.
We record a reduction to revenue for estimated product returns at the time revenue is recognized primarily based on historical return
rates. The reductions to revenue for estimated product returns for fiscal 2005, fiscal 2004 and fiscal 2003 are as follows:
Description
Balance at
Beginning of
Period Additions (1) Deductions (2) Balance at
End of Period
(In thousands)
Year ended January 30, 2005
Allowance for sales returns $ 9,421 $ 22,463 $ (20,197) $ 11,687
Year ended January 25, 2004
Allowance for sales returns $ 13,228 $ 23,796 $ (27,603) $ 9,421
Year ended January 26, 2003
Allowance for sales returns $ 15,586 $ 20,147 $ (22,505) $ 13,228
(1) Allowances for sales returns are charged as a reduction to revenue.
(2) Represents amounts written off against the allowance for sales returns.
In connection with certain agreements that we have executed in the past, we have at times provided indemnities to cover the
indemnified party for matters such as tax, product and employee liabilities. We have also on occasion included intellectual property
indemnification provisions in our technology related agreements with third parties. Maximum potential future payments cannot be
estimated because many of these agreements do not have a maximum stated liability. However, historically costs related to these
indemnification provisions have not been significant. As such, we have not recorded any liability in our consolidated financial
statements for such indemnifications.
Note 9 − Stockholders' Equity
Stock Repurchase Program
On August 9, 2004 we announced that our Board of Directors had authorized a stock repurchase program to repurchase shares of our
common stock, subject to certain specifications, up to an aggregate maximum amount of $300.0 million. During fiscal 2005, we
repurchased 2.1 million shares for a total cost of approximately $24.6 million.
Convertible Preferred Stock
As of January 30, 2005, there were no shares of preferred stock outstanding.
71