NVIDIA 2013 Annual Report Download - page 198

54
portfolio, while the financial sector accounted for approximately 27% of our total investment portfolio. Substantially all
of our investments are with A/A3 or better rated securities.
We performed an impairment review of our investment portfolio as of January 26, 2014. Based on our quarterly
impairment review, we concluded that our investments were appropriately valued and did not record any impairment during
fiscal year 2014.
Net realized gains were $2.4 million, $0.5 million and $0.4 million for fiscal years 2014, 2013 and 2012, respectively. As
of January 26, 2014, we had a net unrealized gain of $4.8 million, which was comprised of gross unrealized gains of $7.2
million, offset by $2.4 million of gross unrealized losses. As of January 27, 2013, we had a net unrealized gain of $10.9
million, which was comprised of gross unrealized gains of $11.7 million, offset by $0.8 million of gross unrealized losses.
Our accounts receivable are highly concentrated. One customer accounted for approximately 23% of our accounts
receivable balance at January 26, 2014. We maintain an allowance for doubtful accounts for estimated losses resulting from
the inability of our customers to make required payments. This allowance consists of an amount identified for specific
customers and an amount based on overall estimated exposure. As of January 26, 2014, our allowance for doubtful accounts
receivable was 0.2% of our gross accounts receivable balance.
Our cash balances are held in numerous locations throughout the world, including substantial amounts held outside
of the United States. As of January 26, 2014, we had cash, cash equivalents and marketable securities of $2.06 billion held
within the United States and $2.61 billion held outside of the United States. Most of the amounts held outside the United
States may be repatriated to the United States but, under current law, would be subject to U.S. federal income taxes, less
applicable foreign tax credits. Further, repatriation of some foreign balances may be restricted by local laws. As of January
26, 2014, we have not provided for U.S. federal and state income taxes on approximately $1.96 billion of undistributed
earnings of non-United States subsidiaries, as such earnings are considered indefinitely reinvested outside the United States.
Although we have no current need to do so, if we repatriate foreign earnings for cash requirements in the United States, we
would incur U.S. federal and state income tax, less applicable foreign tax credits, and reduced by the current amount of our
U.S. federal and state net operating loss and tax credit carryforwards. Further, in addition to the $2.06 billion of cash, cash
equivalents and marketable securities held within the United States and available to fund our U.S. operations and any other
U.S. cash needs, we have access to external sources of financing if cash is needed in the United States other than by
repatriation of foreign earnings where U.S. income tax may otherwise be due. Accordingly, we do not reasonably expect
any material effect on our business, as a whole, or to our financial flexibility with respect to our current cash balances held
outside of the United States.
Convertible Notes
On December 2, 2013, we issued $1.5 billion of 1.00% Convertible Senior Notes, or the Notes, due in 2018 and
concurrently entered into separate note hedge and warrant transactions and used $14.3 million to repurchase shares of our
common stock from purchasers of the Notes in privately negotiated transactions. In addition to using the net proceeds to
fund the transaction costs, note hedge and warrant transactions, we further intend to use the proceeds to repurchase of shares
of our common stock and pay cash dividends pursuant to our recently announced fiscal year 2015 capital return program,
and for general corporate purposes.
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 earlier repurchased or converted in accordance
with their terms prior to such date. As of January 26, 2014, none of the conditions allowing holders of the Notes to convert
had been met and the Notes are therefore classified as a long-term liability on our consolidated balance sheets. Please refer
to Note 11 of the Notes to the Consolidated Financial Statements in Part IV, Item 15 of this Annual Report on Form 10-K
for further discussion.