NVIDIA 2013 Annual Report Download - page 233

NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
89
January 26,
2014 January 27, 2013
Other Long Term Liabilities: (In thousands)
Deferred income tax liability............................................................................................ $ 157,953 $ 192,950
Income tax payable........................................................................................................... 119,977 115,267
Asset retirement obligations............................................................................................. 11,056 10,165
Deferred revenue.............................................................................................................. 172,199 236,152
Other................................................................................................................................. 13,940 34,787
Total other long-term liabilities................................................................................... $ 475,125 $ 589,321
Note 10 - 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 estimated product returns and 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 that are calculated at the point of
revenue recognition. 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. During periods prior to fiscal year 2012, we recorded a cumulative net charge of $475.9 million, most of which
was charged against cost of revenue, to cover customer warranty, repair, return, replacement and other costs arising from
a weak die/packaging material set in certain versions of our previous generation MCP and GPU products used in notebook
configurations. During fiscal year 2014, we released the remaining $7.8 million unclaimed balance of that warranty accrual.
The estimated product returns and estimated product warranty liabilities for fiscal years 2014, 2013 and 2012 are as
follows:
January 26,
2014 January 27, 2013 January 29, 2012
(In thousands)
Balance at beginning of period (1) ....................................................... $ 14,874 $ 18,406 $ 107,896
Additions............................................................................................... 6,786 5,738 7,329
Deductions (2) ...................................................................................... (14,089)(9,270)(96,819)
Balance at end of period ....................................................................... $ 7,571 $ 14,874 $ 18,406
(1) Includes a balance of $9.6 million, $13.2 million and $103.7 million for fiscal years 2014, 2013 and 2012, respectively,
for the remaining amount of the warranty accrual associated with incremental repair and replacement costs from a weak
die/packaging material set, which we recorded prior to fiscal year 2012.
(2) Includes $1.8 million, $3.0 million and $73.3 million for fiscal years 2014, 2013 and 2012, respectively, in payments
related to weak die/packaging set warranty accrual recorded prior to fiscal year 2012, and $7.8 million related to the
release of the final unclaimed portion of that accrual during fiscal year 2014.
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