NVIDIA CORP, 10-K filed on 3/1/2017
Annual Report
Document and Entity Information Document (USD $)
12 Months Ended
Jan. 29, 2017
Feb. 24, 2017
Jul. 29, 2016
Document Information [Line Items]
 
 
 
Entity Registrant Name
NVIDIA CORP 
 
 
Entity Central Index Key
0001045810 
 
 
Current Fiscal Year End Date
--01-29 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
Document Type
10-K 
 
 
Document Period End Date
Jan. 29, 2017 
 
 
Document Fiscal Year Focus
2017 
 
 
Document Fiscal Period Focus
FY 
 
 
Amendment Flag
false 
 
 
Entity Common Stock, Shares Outstanding
 
588,632,086 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Public Float
 
 
$ 28,978,018,802 
CONSOLIDATED STATEMENTS OF INCOME (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Jan. 29, 2017
Jan. 31, 2016
Jan. 25, 2015
Revenue
$ 6,910 
$ 5,010 
$ 4,682 
Cost of revenue
2,847 
2,199 
2,083 
Gross profit
4,063 
2,811 
2,599 
Operating expenses
 
 
 
Research and development
1,463 
1,331 
1,360 
Sales, general and administrative
663 
602 
480 
Restructuring and other charges
3 
131 
0 
Total operating expenses
2,129 
2,064 
1,840 
Income from operations
1,934 
747 
759 
Interest income
54 
39 
28 
Interest expense
(58)
(47)
(46)
Other income (expense), net
(25)
4 
14 
Income before income tax expense
1,905 
743 
755 
Income tax expense
239 
129 
124 
Net income
$ 1,666 
$ 614 
$ 631 
Basic net income per share
$ 3.08 1
$ 1.13 1
$ 1.14 1
Diluted net income per share
$ 2.57 2
$ 1.08 2
$ 1.12 2
Weighted average shares used in basic per share computation
541 
543 
552 
Weighted average shares used in diluted per share computation
649 
569 
563 
Cash dividends declared and paid per common share
$ 0.485 
$ 0.395 
$ 0.340 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)
In Millions, unless otherwise specified
12 Months Ended
Jan. 29, 2017
Jan. 31, 2016
Jan. 25, 2015
Net income
$ 1,666 
$ 614 
$ 631 
Net unrealized gain (loss) on available-for-sale securities
(17)
(6)
3 
Reclassification adjustments for net realized gain (loss) included in net income on available-for-sale securities
1 
(2)
0 
Net change in unrealized gain (loss) on available-for-sale securities
(16)
(8)
3 
Net unrealized gain (loss) on cash flow hedges
2 
(4)
0 
Reclassification adjustments for net realized gain (loss) included in net income on cash flow hedges
2 
0 
0 
Net change in unrealized gain (loss) on cash flow hedges
4 
(4)
0 
Other comprehensive income (loss)
(12)
(12)
3 
Total comprehensive income
$ 1,654 
$ 602 
$ 634 
CONSOLIDATED BALANCE SHEETS (USD $)
In Millions, unless otherwise specified
Jan. 29, 2017
Jan. 31, 2016
Current assets:
 
 
Cash and cash equivalents
$ 1,766 
$ 596 
Marketable securities
5,032 
4,441 
Accounts receivable, net
826 
505 
Inventories
794 
418 
Prepaid expenses and other current assets
118 
93 
Total current assets
8,536 
6,053 
Property and equipment, net
521 
466 
Goodwill
618 
618 
Intangible assets, net
104 
166 
Other assets
62 
67 
Total assets
9,841 
7,370 
Current liabilities:
 
 
Accounts payable
485 
296 
Accrued and other current liabilities
507 
642 
Convertible debt, short-term
796 
1,413 
Total current liabilities
1,788 
2,351 
Long-term debt
1,983 
0 
Other long-term liabilities
271 
453 
Capital lease obligations, long term
6 
10 
Total Liabilities
4,048 
2,814 
Commitments and contingencies - see Note 12
   
   
Convertible debt conversion obligation
31 
87 
Shareholders' equity
 
 
Preferred stock
0 
0 
Common stock
1 
1 
Additional paid-in capital
4,708 
4,170 
Treasury stock, at cost
(5,039)
(4,048)
Accumulated other comprehensive loss
(16)
(4)
Retained earnings
6,108 
4,350 
Total shareholders' equity
5,762 
4,469 
Total liabilities, convertible debt conversion obligation and shareholders' equity
$ 9,841 
$ 7,370 
CONSOLIDATED BALANCE SHEETS (Parentheticals) (USD $)
In Millions, except Per Share data, unless otherwise specified
Jan. 29, 2017
Jan. 31, 2016
Allowance for Doubtful Accounts Receivable
$ 13 
$ 11 
Preferred stock, par value
$ 0.001 
$ 0.001 
Preferred Stock, Shares Authorized
2 
2 
Preferred Stock, Shares Issued
0 
0 
Common stock, par value
$ 0.001 
$ 0.001 
Common Stock, Shares Authorized
2,000 
2,000 
Common Stock, Shares, Issued
868 
780 
Common stock, Shares, outstanding
585 
539 
Treasury Stock, Shares
283 
242 
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $)
In Millions, except Per Share data, unless otherwise specified
Total
Common Stock Outstanding
Additional Paid-in Capital
Treasury Stock
Accumulated Other Comprehensive Income (Loss)
Retained Earnings
Beginning Balances, shareholders' equity at Jan. 26, 2014
$ 4,455 
$ 1 
$ 3,483 
$ (2,538)
$ 5 
$ 3,504 
Beginning common stock, shares, outstanding at Jan. 26, 2014
 
568 
 
 
 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
 
Other comprehensive income (loss)
3 
 
 
 
3 
 
Net income
631 
 
 
 
 
631 
Issuance of common stock from stock plans, shares
 
24 
 
 
 
 
Issuance of common stock from stock plans, value
197 
 
197 
 
 
 
Tax withholding related to vesting of restricted stock units, shares
 
(3)
 
 
 
 
Tax withholding related to vesting of restricted stock units, value
(43)
 
 
(43)
 
 
Tax benefit from stock-based compensation
17 
 
17 
 
 
 
Share repurchase, shares
 
(44)
 
 
 
 
Share repurchase, value
(814)
 
 
(814)
 
 
Cash dividends declared and paid
(186)
 
 
 
 
(186)
Stock-based compensation
158 
 
158 
 
 
 
Cash dividends declared and paid per common share
$ 0.340 
 
 
 
 
 
Ending Balances, shareholders' equity at Jan. 25, 2015
4,418 
1 
3,855 
(3,395)
8 
3,949 
Ending common stock, shares, outstanding at Jan. 25, 2015
 
545 
 
 
 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
 
Other comprehensive income (loss)
(12)
 
 
 
(12)
 
Net income
614 
 
 
 
 
614 
Issuance of common stock from stock plans, shares
 
22 
 
 
 
 
Issuance of common stock from stock plans, value
186 
 
186 
 
 
 
Tax withholding related to vesting of restricted stock units, shares
 
(3)
 
 
 
 
Tax withholding related to vesting of restricted stock units, value
(66)
 
 
(66)
 
 
Tax benefit from stock-based compensation
10 
 
10 
 
 
 
Share repurchase, shares
 
(25)
 
 
 
 
Share repurchase, value
(587)
 
 
(587)
 
 
Cash dividends declared and paid
(213)
 
 
 
 
(213)
Stock-based compensation
206 
 
206 
 
 
 
Reclassification of convertible debt conversion obligation
(87)
 
(87)
 
 
 
Cash dividends declared and paid per common share
$ 0.395 
 
 
 
 
 
Ending Balances, shareholders' equity at Jan. 31, 2016
4,469 
1 
4,170 
(4,048)
(4)
4,350 
Ending common stock, shares, outstanding at Jan. 31, 2016
539 
539 
 
 
 
 
Increase (Decrease) in Shareholders' Equity
 
 
 
 
 
 
Retained earnings adjustment due to adoption of an accounting standard related to stock-based compensation
353 
 
 
 
 
353 
Other comprehensive income (loss)
(12)
 
 
 
(12)
 
Net income
1,666 
 
 
 
 
1,666 
Issuance of common stock in exchange for warrants, shares
44 
44 
 
 
 
 
Issuance of common stock in exchange for warrants, value
(1)
 
(1)
 
 
 
Issuance of common stock from stock plans, shares
 
20 
 
 
 
 
Issuance of common stock from stock plans, value
167 
 
167 
 
 
 
Convertible debt conversion, shares
23 
23 
 
 
 
 
Convertible debt conversion, value
(6)
 
(6)
 
 
 
Tax withholding related to vesting of restricted stock units, shares
 
(3)
 
 
 
 
Tax withholding related to vesting of restricted stock units, value
(177)
 
 
(177)
 
 
Share repurchase, shares
 
(15)
 
 
 
 
Share repurchase, value
(739)
 
 
(739)
 
 
Exercise of convertible note hedges, shares
(23)
(23)
 
 
 
 
Exercise of convertible note hedges, value
 
 
75 
75 
 
 
Cash dividends declared and paid
(261)
 
 
 
 
(261)
Stock-based compensation
248 
 
248 
 
 
 
Reclassification of convertible debt conversion obligation
55 
 
55 
 
 
 
Cash dividends declared and paid per common share
$ 0.485 
 
 
 
 
 
Ending Balances, shareholders' equity at Jan. 29, 2017
$ 5,762 
$ 1 
$ 4,708 
$ (5,039)
$ (16)
$ 6,108 
Ending common stock, shares, outstanding at Jan. 29, 2017
585 
585 
 
 
 
 
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Millions, unless otherwise specified
12 Months Ended
Jan. 29, 2017
Jan. 31, 2016
Jan. 25, 2015
Cash flows from operating activities:
 
 
 
Net income
$ 1,666 
$ 614 
$ 631 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
187 
197 
220 
Stock-based compensation expense
247 
204 
158 
Restructuring and other charges
0 
45 
0 
Amortization of debt discount
25 
29 
28 
Net gain on sale and disposal of long-lived assets and investments
(3)
(6)
(17)
Loss on early debt conversions
21 
0 
0 
Deferred income taxes
197 
134 
83 
Tax benefit from stock-based compensation
0 
(10)
(18)
Other
11 
19 
24 
Changes in operating assets and liabilities, net of effects of acquisitions:
 
 
 
Accounts receivable
(321)
(32)
(49)
Inventories
(375)
66 
(95)
Prepaid expenses and other assets
(18)
(16)
4 
Accounts payable
184 
(11)
(27)
Accrued and other current liabilities
(135)
39 
5 
Other long-term liabilities
(14)
(97)
(41)
Net cash provided by operating activities
1,672 
1,175 
906 
Cash flows from investing activities:
 
 
 
Proceeds from sales of marketable securities
1,546 
2,102 
1,372 
Proceeds from maturities of marketable securities
969 
1,036 
865 
Proceeds from sale of long-lived assets and investments
7 
7 
21 
Purchases of marketable securities
(3,134)
(3,477)
(2,862)
Purchases of property and equipment and intangible assets
(176)
(86)
(122)
Reimbursement of headquarters building development costs from banks
0 
24 
0 
Other
(5)
(6)
(1)
Net cash used in investing activities
(793)
(400)
(727)
Cash flows from financing activities:
 
 
 
Proceeds from issuance of convertible notes, net
1,988 
0 
0 
Payments for Repurchase of Common Stock
(739)
(587)
(814)
Repayments of Convertible Debt
(673)
0 
0 
Dividends paid
(261)
(213)
(186)
Net proceeds (payments) related to employee stock plans
(9)
120 
154 
Payments of Debt Issuance Costs
(8)
0 
0 
Tax benefit from stock-based compensation
0 
10 
18 
Other
(7)
(6)
(6)
Net cash (used in) provided by financing activities
291 
(676)
(834)
Change in cash and cash equivalents
1,170 
99 
(655)
Cash and cash equivalents at beginning of period
596 
497 
1,152 
Cash and cash equivalents at end of period
1,766 
596 
497 
Supplemental disclosures of cash flow information:
 
 
 
Cash paid for income taxes, net
14 
14 
14 
Cash paid for interest
13 
17 
17 
Non-cash investing and financing activities:
 
 
 
Assets acquired by assuming related liabilities
16 
19 
10 
Goodwill adjustment related to previously acquired business
$ 0 
$ 0 
$ (25)
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Organization and Summary of Significant Accounting Policies
 
Our Company

Starting with a focus on PC graphics, NVIDIA invented the GPU to solve some of the most complex problems in computer science. We have extended our emphasis in recent years to the revolutionary field of artificial intelligence.

Our GPU product brands are aimed at specialized markets including GeForce for gamers; Quadro for designers; Tesla and DGX for AI data scientists and big data researchers; and GRID for cloud-based visual computing users. Our Tegra brand integrates an entire computer onto a single chip, and incorporates GPUs and multi-core CPUs to drive supercomputing for mobile gaming and entertainment devices, as well as autonomous robots, drones and cars.

Headquartered in Santa Clara, California, NVIDIA was incorporated in California in April 1993 and reincorporated in Delaware in April 1998.
   
All references to “NVIDIA,” “we,” “us,” “our” or the “Company” mean NVIDIA Corporation and its subsidiaries, except where it is made clear that the term means only the parent company.

Fiscal Year
 
We operate on a 52- or 53-week year, ending on the last Sunday in January. Fiscal years 2017 and 2015 were 52-week years and fiscal year 2016 was a 53-week year.

Reclassifications

Certain prior fiscal year balances have been reclassified to conform to the current fiscal year presentation.

Principles of Consolidation
 
Our consolidated financial statements include the accounts of NVIDIA Corporation and our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates
 
The preparation of financial statements in conformity with accounting principles generally accepted in the United States, or 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, 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.

Revenue Recognition
 
Product Revenue

We recognize revenue from product sales when persuasive evidence of an arrangement exists, the product has been delivered, the price is fixed or determinable and collection of the related receivable is reasonably assured. For most sales, we use a binding purchase order and in certain cases we use a contractual agreement as evidence of an arrangement. We consider delivery to occur upon shipment provided title and risk of loss have passed to the customer. At the point of sale, we assess whether the arrangement fee is fixed or determinable and whether collection is reasonably assured. If we determine that collection of a fee is not reasonably assured, we defer the fee and recognize revenue at the time collection becomes reasonably assured, which is generally upon receipt of payment.
 
For sales to certain distributors with rights of return for which the level of returns cannot be reasonably estimated, our policy is to defer recognition of revenue and related cost of revenue until the distributors resell the product and, in some cases, when customer return rights lapse.

Our customer programs primarily involve rebates, which are designed to serve as sales incentives to resellers of our products in various target markets. We account for rebates as a reduction of revenue and accrue for 100% of the potential rebates and do not apply a breakage factor. While we have a long history of rebate arrangements with original equipment manufacturers, or OEMs, we believe we are unable to apply our historical experience to reliably estimate the amount of rebates that will eventually be claimed by individual OEMs. In such cases, the OEMs may not be our direct customers and therefore the quantity and mix of demand they place on their contract equipment manufacturers, or CEMs, and original device manufacturers, or ODMs, may shift as we introduce new generations and iterations of products and as we experience changes in new competitor offerings. In addition, we typically find that approximately 95% of the rebates we accrue each year are eventually claimed, which is substantially close to 100%, and that this percentage varies by program and by customer. We recognize a liability for these rebates at the later of the date at which we record the related revenue or the date at which we offer the rebate. Rebates typically expire six months from the date of the original sale, unless we reasonably believe that the customer intends to claim the rebate. Unclaimed rebates are reversed to revenue, the amount of which typically represents less than 0.5% of total revenue.

Our customer programs also include marketing development funds, or MDFs. MDFs represent monies paid to retailers, system builders, OEMs, distributors, add-in card partners and other channel partners that are earmarked for market segment development and expansion and typically are designed to support our partners’ activities while also promoting NVIDIA products. Depending on market conditions, we may take actions to increase amounts offered under customer programs, possibly resulting in an incremental reduction of revenue at the time such programs are offered. We account for MDFs as a reduction of revenue and apply a breakage factor to certain types of MDF program accruals for which we believe we can make a reasonable and reliable estimate of the amount that will ultimately be unclaimed.

We also record a reduction to revenue by establishing a sales return allowance for estimated product returns at the time revenue is recognized, based primarily on historical return rates. However, if product returns for a particular fiscal period exceed historical return rates we may determine that additional sales return allowances are required to properly reflect our estimated exposure for product returns.

License and Development Revenue

For license arrangements that require significant customization of our intellectual property components, we generally recognize the related revenue over the period that services are performed. For most license and service arrangements, we determine progress to completion based on actual cost incurred to date as a percentage of the estimated total cost required to complete the project. A provision for estimated losses on contracts is made in the period in which the loss becomes probable and can be reasonably estimated. Costs incurred in advance of revenue recognized are recorded as deferred costs on uncompleted contracts. If the amount billed exceeds the amount of revenue recognized, the excess amount is recorded as deferred revenue.

For license arrangements that do not require significant customization but where we are obligated to provide further deliverables over the term of the license agreement, we record revenue over the life of the license term, with consideration received in advance of the performance period classified as deferred revenue.

Royalty revenue is recognized related to the distribution or sale of products that use our technologies under license agreements with third parties.  We recognize royalty revenue upon receipt of a confirmation of earned royalties and when collectability is reasonably assured from the applicable licensee.

Restructuring and Other Charges

Our restructuring and other charges include employee severance and related costs, the write-down of assets, and other exit costs. The severance and related costs 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.

Advertising Expenses

We expense advertising costs in the period in which they are incurred. Advertising expenses for fiscal years 2017, 2016, and 2015 were $17 million, $30 million, and $21 million, respectively. 

Rent Expense
 
We recognize rent expense on a straight-line basis over the lease period and accrue for rent expense incurred, but not paid.
 
Product Warranties
 
We generally offer limited warranty to end-users that ranges from one to three years for products in order to repair or replace products for any manufacturing defects or hardware component failures. 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. We also accrue for known warranty and indemnification issues if a loss is probable and can be reasonably estimated.

Stock-based Compensation
      
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 restricted stock units, or RSUs, and performance stock units that are based on our corporate financial performance targets, or PSUs. We use a Monte Carlo simulation on the date of grant to estimate the fair value of performance stock units that are based on market conditions, or market-based PSUs. The 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 is recognized using an accelerated amortization model. We estimate the fair value of shares to be issued under our employee stock purchase plan, or ESPP, using the Black-Scholes model at the commencement of an offering period in March and September of each year. Stock-based compensation for our ESPP is expensed using an accelerated amortization model. Additionally, we estimate forfeitures annually based on historical experience and revise the estimates of forfeiture in subsequent periods if actual forfeitures differ from those estimates. If factors change, the compensation expense that we record under these accounting standards may differ significantly from what we have recorded in the current period.

Litigation, Investigation and Settlement Costs

From time to time, we are involved in legal actions and/or investigations by regulatory bodies. We are aggressively defending our current litigation matters. However, there are many uncertainties associated with any litigation or investigation, and we cannot be certain that these actions or other third-party claims against us will be resolved without litigation, fines and/or substantial settlement payments. If that occurs, our business, financial condition and results of operations could be materially and adversely affected. If information becomes available that causes us to determine that a loss in any of our pending litigation, investigations or settlements is probable, and we can reasonably estimate the loss associated with such events, we will record the loss in accordance with U.S. GAAP. However, the actual liability in any such litigation or investigation may be materially different from our estimates, which could require us to record additional costs.

Foreign Currency Remeasurement
 
We use the United States dollar as our functional currency for all of our subsidiaries. Foreign currency monetary assets and liabilities are remeasured into United States dollars at end-of-period exchange rates. Non-monetary assets and liabilities such as property and equipment, and equity are remeasured at historical exchange rates. Revenue and expenses are remeasured at average exchange rates in effect during each period, except for those expenses related to the previously noted balance sheet amounts, which are remeasured at historical exchange rates. Gains or losses from foreign currency remeasurement are included in “Other income (expense), net” in our Consolidated Statements of Income and to date have not been significant.

The impact of gain or loss from foreign currency remeasurement included in determining other income (expense), net, was a $5 million loss for fiscal year 2017 and was not significant for fiscal years 2016 and 2015.

Income Taxes
 
We recognize federal, state and foreign current tax liabilities or assets based on our estimate of taxes payable or refundable in the current fiscal year by tax jurisdiction. We recognize federal, state and foreign deferred tax assets or liabilities, as appropriate, for our estimate of future tax effects attributable to temporary differences and carryforwards; and we record a valuation allowance to reduce any deferred tax assets by the amount of any tax benefits that, based on available evidence and judgment, are not expected to be realized.

United States income tax has not been provided on a portion of earnings of our non-U.S. subsidiaries to the extent that such earnings are considered to be indefinitely reinvested.

Our calculation of deferred tax assets and liabilities is based on certain estimates and judgments and involves dealing with uncertainties in the application of complex tax laws. Our estimates of deferred tax assets and liabilities may change based, in part, on added certainty or finality to an anticipated outcome, changes in accounting standards or tax laws in the United States, or foreign jurisdictions where we operate, or changes in other facts or circumstances. In addition, we recognize liabilities for potential United States and foreign income tax contingencies based on our estimate of whether, and the extent to which, additional taxes may be due. If we determine that payment of these amounts is unnecessary or if the recorded tax liability is less than our current assessment, we may be required to recognize an income tax benefit or additional income tax expense in our financial statements accordingly.

As of January 29, 2017, we had a valuation allowance of $353 million related to state and certain foreign deferred tax assets that management determined are not likely to be realized due, in part, to projections of future taxable income and potential utilization limitations of tax attributes acquired as a result of stock ownership changes. To the extent realization of the deferred tax assets becomes more-likely-than-not, we would recognize such deferred tax asset as an income tax benefit during the period.

We recognize the benefit from a tax position only if it is more-likely-than-not that the position would be sustained upon audit based solely on the technical merits of the tax position. Our policy is to include interest and penalties related to unrecognized tax benefits as a component of income tax expense. Please refer to Note 13 of these Notes to the Consolidated Financial Statements for additional information.

Comprehensive Income
 
Comprehensive income consists of net income and other comprehensive income (loss). Other comprehensive income (loss) components include unrealized gains (losses) on available-for-sale securities and unrealized gains (losses) on cash flow hedges.

Net Income Per Share
 
Basic net income per share is computed using the weighted average number of common shares outstanding during the period. Diluted net income per share is computed using the weighted average number of common and potentially dilutive shares outstanding during the period, using the treasury stock method. Under the treasury stock method, the effect of stock options outstanding is not included in the computation of diluted net income per share for periods when their effect is anti-dilutive. Additionally, we issued convertible notes with a net settlement feature that requires us, upon conversion, to settle the principal amount of debt for cash and the conversion premium for cash or shares of our common stock. Our convertible notes, note hedges, and related warrants contain various conversion features, which are further described in Note 11 of these Notes to the Consolidated Financial Statements. The potentially dilutive shares resulting from the convertible notes and warrants under the treasury stock method will be included in the calculation of diluted income per share when their inclusion is dilutive. However, unless actually exercised, the note hedges will not be included in the calculation of diluted net income per share, as their pre-exercised effect would be anti-dilutive under the treasury stock method.

Cash and Cash Equivalents
 
We consider all highly liquid investments that are readily convertible into cash and have an original maturity of three months or less at the time of purchase to be cash equivalents. As of January 29, 2017 and January 31, 2016, our cash and cash equivalents were $1.77 billion and $596 million, respectively, including $321 million and $43 million, respectively, invested in money market funds.

Marketable Securities
 
Marketable securities consist primarily of highly liquid investments with maturities of greater than three months when purchased. We generally classify our marketable securities at the date of acquisition as available-for-sale. These securities are reported at fair value with the related unrealized gains and losses included in accumulated other comprehensive income (loss), a component of shareholders’ equity, net of tax. The fair value of interest-bearing securities includes accrued interest. Any unrealized losses which are considered to be other-than-temporary impairments are recorded in the other income (expense), net, section of our Consolidated Statements of Income. Realized gains and losses on the sale of marketable securities are determined using the specific-identification method and recorded in the other income (expense), net, section of our Consolidated Statements of Income.

All of our available-for-sale investments are subject to a periodic impairment review. We record a charge to earnings when a decline in fair value is significantly below cost basis and judged to be other-than-temporary, or have other indicators of impairments. If the fair value of an available-for-sale debt instrument is less than its amortized cost basis, an other-than-temporary impairment is triggered in circumstances where (1) we intend to sell the instrument, (2) it is more likely than not that we will be required to sell the instrument before recovery of its amortized cost basis, or (3) a credit loss exists where we do not expect to recover the entire amortized cost basis of the instrument. In these situations, we recognize an other-than-temporary impairment in earnings equal to the entire difference between the debt instruments’ amortized cost basis and its fair value. For available-for-sale debt instruments that are considered other-than-temporarily impaired due to the existence of a credit loss, if we do not intend to sell and it is not more likely than not that we will not be required to sell the instrument before recovery of its remaining amortized cost basis (amortized cost basis less any current-period credit loss), we separate the amount of the impairment into the amount that is credit related and the amount due to all other factors. The credit loss component is recognized in earnings while loss related to all other factors is recorded in accumulated other comprehensive income (loss).
 
Fair Value of Financial Instruments
 
The carrying value of cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair values due to their relatively short maturities as of January 29, 2017 and January 31, 2016. Marketable securities are comprised of available-for-sale securities that are reported at fair value with the related unrealized gains (losses) included in accumulated other comprehensive income (loss), a component of shareholders’ equity, net of tax. Fair value of the marketable securities is determined based on quoted market prices. Derivative instruments are recognized as either assets or liabilities and are measured at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. For derivative instruments designated as fair value hedges, the gains (losses) are recognized in earnings in the periods of change together with the offsetting losses (gains) on the hedged items attributed to the risk being hedged. For derivative instruments designated as cash-flow hedges, the effective portion of the gains (losses) on the derivatives is initially reported as a component of other comprehensive income (loss) and is subsequently recognized in earnings when the hedged exposure is recognized in earnings.

Concentration of Credit Risk
 
Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash equivalents, marketable securities, accounts receivable, note hedge and interest rate swap. Our investment policy requires the purchase of high grade investment securities, the diversification of asset type and includes certain limits on our portfolio duration. All marketable securities are held in our name, managed by several investment managers and held by one major financial institution under a custodial arrangement. Accounts receivable from significant customers, those representing 10% or more of total accounts receivable, aggregated approximately 29% of our accounts receivable balance from two customers as of January 29, 2017 and 28% of our account receivable balance from two customers as of January 31, 2016. We perform ongoing credit evaluations of our customers’ financial condition and maintain an allowance for potential credit losses. This allowance consists of an amount identified for specific customers and an amount based on overall estimated exposure. Our overall estimated exposure excludes amounts covered by credit insurance and letters of credit.

Accounts Receivable
 
We maintain an allowance for doubtful accounts receivable for estimated losses resulting from the inability of our customers to make required payments. We determine this allowance by identifying amounts for specific customer issues as well as amounts based on overall estimated exposure. Factors impacting the allowance include the level of gross receivables, the financial condition of our customers and the extent to which balances are covered by credit insurance or letters of credit.

Inventories

Inventory cost is computed on an adjusted standard basis, which approximates actual cost on an average or first-in, first-out basis. Inventory costs consist primarily of the cost of semiconductors purchased from subcontractors, including wafer fabrication, assembly, testing and packaging, manufacturing support costs, including labor and overhead associated with such purchases, final test yield fallout, and shipping costs, as well as the cost of purchased memory products and other component parts. We charge cost of sales for inventory provisions to write down our inventory to the lower of cost or estimated market value or to completely write off obsolete or excess inventory. Most of our inventory provisions relate to the write-off of excess quantities of products, based on our inventory levels and future product purchase commitments compared to assumptions about future demand and market conditions. Once inventory has been written-off or written-down, it creates a new cost basis for the inventory that is not subsequently written-up.

Property and Equipment
 
Property and equipment are stated at cost. Depreciation of property and equipment is computed using the straight-line method based on the estimated useful lives of the assets, generally three to five years. Once an asset is identified for retirement or disposition, the related cost and accumulated depreciation or amortization are removed, and a gain or loss is recorded. The estimated useful lives of our buildings are up to twenty five years. Depreciation expense includes the amortization of assets recorded under capital leases. Leasehold improvements and assets recorded under capital leases are amortized over the shorter of the expected lease term or the estimated useful life of the asset.

Goodwill

Goodwill is subject to our annual impairment test during the fourth quarter of our fiscal year, or earlier if indicators of potential impairment exist.  For the purposes of completing our impairment test, we perform either a qualitative or a quantitative analysis on a reporting unit basis. 

For those reporting units where a significant change or event has occurred, where potential impairment indicators exist, or for which we have not performed a quantitative assessment recently, we utilize a two-step quantitative assessment to testing goodwill for impairment. The first step tests for possible impairment by applying a fair value-based test by weighting the results from the income approach and the market approach. The second step, if necessary, measures the amount of such impairment by applying fair value-based tests to individual assets and liabilities. Please refer to Note 4 of these Notes to the Consolidated Financial Statements for additional information. 

Intangible Assets and Other Long-Lived Assets
 
Intangible assets primarily represent rights acquired under technology licenses, patents, acquired intellectual property, trademarks and customer relationships and are subject to an annual impairment test. We currently amortize our intangible assets with definitive lives over periods ranging from three to ten years using a method that reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up or, if that pattern cannot be reliably determined, using a straight-line amortization method.

Long-lived assets, such as property and equipment and intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset or asset group to estimated undiscounted future cash flows expected to be generated by the asset, or asset group. If the carrying amount of an asset or asset group exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset or asset group exceeds the estimated fair value of the asset or asset group. Fair value is determined based on the estimated discounted future cash flows expected to be generated by the asset or asset group. Assets and liabilities to be disposed of would be separately presented in the Consolidated Balance Sheet and the assets would be reported at the lower of the carrying amount or fair value less costs to sell, and would no longer be depreciated.

Adoption of New and Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncement

In fiscal year 2017, the Financial Accounting Standards Board, or FASB, issued an accounting standards update which simplifies certain aspects of stock-based compensation accounting. Among other elements, the new guidance eliminates additional paid in capital, or APIC, pools and requires excess tax benefits and tax deficiencies to be recorded in the income statement when the awards vest or are settled. In addition, cash flows related to excess tax benefits will no longer be separately classified as a financing activity apart from other income tax cash flows. We elected to early adopt this new guidance in the third quarter of fiscal year 2017, which required us to reflect any adjustments as of February 1, 2016.

Early adoption of this guidance resulted in the following:

•
We recorded an excess tax benefit from stock-based compensation within income tax expense, rather than in APIC, of $82 million for fiscal year 2017.

•
We recorded a cumulative-effect adjustment as of February 1, 2016 to increase retained earnings by $353 million, with a corresponding increase to deferred tax assets, to recognize the federal net operating loss and federal research tax credit carryforwards attributable to excess tax benefits on stock-based compensation that had not been previously recognized in APIC. We also recorded deferred tax assets of $63 million with a corresponding full valuation allowance related to state net operating loss and state research credit carryforwards.

•
The excess tax benefit from stock-based compensation is now included in net operating cash rather than net financing cash in our Consolidated Statements of Cash Flows. We elected to apply this change in presentation prospectively and thus prior periods have not been adjusted.

We elected not to change our policy on accounting for forfeitures, although the new guidance provides an option for us to account for forfeitures as they occur, and thus continued to estimate forfeitures expected to occur to determine the amount of compensation cost to be recognized in each period.

Recent Accounting Pronouncements Not Yet Adopted

In January 2017, the FASB issued an accounting standards update that simplifies the test for goodwill impairment. The update eliminates the second step in the goodwill impairment test that requires an entity to determine the implied fair value of the reporting unit’s goodwill. Instead, an entity should recognize an impairment loss if the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, with the impairment loss not to exceed the amount of goodwill allocated to the reporting unit. The update will be effective for us beginning in our fiscal year 2020, with early adoption permitted. The adoption of this accounting guidance is not currently expected to have a material impact on our consolidated financial statements.

In October 2016, the FASB issued an accounting standards update that requires the recognition of income tax consequences for intra-entity transfers of assets other than inventory when the transfer occurs. The update will be effective for us beginning in our first quarter of fiscal year 2019, with early adoption permitted. The adoption of this accounting guidance is not currently expected to have a material impact on our consolidated financial statements.

In August 2016, the FASB issued an accounting standards update that clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows. The update will be effective for us beginning in our first quarter of fiscal year 2019, with early adoption permitted. The adoption of this accounting guidance is not expected to have a material impact on our consolidated financial statements.

In June 2016, the FASB issued an accounting standards update that changes the accounting for recognizing impairments of financial assets. Under the new guidance, credit losses for certain types of financial instruments will be estimated based on expected losses. The update also modifies the impairment models for available-for-sale debt securities and for purchased financial assets with credit deterioration since their origination. The update will be effective for us beginning in our first quarter of fiscal 2021, with early adoption permitted. The adoption of this accounting guidance is not currently expected to have a material impact on our consolidated financial statements.

In February 2016, the FASB issued an accounting standards update regarding the accounting for leases by which we will begin recognizing lease assets and liabilities on the balance sheet for leases with a lease term of more than 12 months. The update will require additional disclosures regarding key information about leasing arrangements. Under existing guidance, operating leases are not recorded as lease assets and lease liabilities on the balance sheet. The update will be effective for us beginning in our first quarter of fiscal year 2020, with early adoption permitted. We are currently evaluating the impact of the adoption of this accounting guidance on our consolidated financial statements. However, we expect the adoption of this accounting guidance to result in an increase in lease assets and a corresponding increase in lease liabilities on our Consolidated Balance Sheets.

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, 2017, including interim periods within that reporting period. We expect to adopt this guidance beginning in our first quarter of fiscal year 2019 using the modified retrospective approach. While we are still finalizing our analysis to quantify the adoption impact of the provisions of the new standard, we do not expect it to have a material impact on our consolidated financial statements.
Stock Based Compensation
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.

Our Consolidated Statements of Income include stock-based compensation expense, net of amounts capitalized as inventory, as follows:
 
Year Ended
 
January 29,
2017
 
January 31,
2016
 
January 25,
2015
 
(In millions)
Cost of revenue
$
15

 
$
15

 
$
12

Research and development
134

 
115

 
88

Sales, general and administrative
98

 
74

 
58

Total
$
247

 
$
204

 
$
158



Stock-based compensation capitalized in inventories was not significant during fiscal years 2017, 2016, and 2015.

The following is a summary of equity awards granted under our equity incentive plans:
 
Year Ended
 
January 29,
2017
 
January 31,
2016
 
January 25,
2015
 
(In millions, except per share data)
RSUs, PSUs and Market-based PSUs
 
 
 
 
 
Awards granted
12

 
13

 
13

Estimated total grant-date fair value
$
591

 
$
296

 
$
228

Weighted average grant-date fair value (per share)
$
50.57

 
$
22.01

 
$
17.68

 
 
 
 
 
 
ESPP
 
 
 
 
 
Shares purchased
4

 
6

 
7

Weighted average price (per share)
$
18.51

 
$
13.67

 
$
10.99

Weighted average grant-date fair value (per share)
$
5.80

 
$
4.53

 
$
4.99



Beginning fiscal year 2015, we shifted away from granting stock options and toward granting RSUs, PSUs and market-based PSUs to reflect changing market trends for equity incentives at our peer companies. The number of PSUs that will ultimately vest is contingent on the Company’s level of achievement versus the corporate financial performance target established by our Compensation Committee in the beginning of each fiscal year.

Of the total fair value of equity awards, we estimated that the stock-based compensation expense related to the equity awards that are not expected to vest for fiscal years 2017, 2016, and 2015 was $98 million, $46 million, and $37 million, respectively. 
 
January 29,
2017
 
January 31,
2016
 
(In millions)
Aggregate unearned stock-based compensation expense
$
627

 
$
381

 
 
 
 
Estimated weighted average remaining amortization period
(In years)
Stock options
0.5

 
1.1

RSUs, PSUs and market-based PSUs
2.6

 
2.7

ESPP
0.6

 
0.7



The fair value of shares issued under our ESPP have been estimated with the following assumptions:
 
Year Ended
 
January 29,
2017
 
January 31,
2016
 
January 25,
2015
 
(Using the Black-Scholes model)
ESPP
 
 
 
 
 
Weighted average expected life (in years)
0.5-2.0
 
0.5-2.0
 
0.5-2.0
Risk-free interest rate
0.5%-0.9%
 
0.1%-0.7%
 
0.1%-0.5%
Volatility
30%-39%
 
24%-34%
 
23%-31%
Dividend yield
0.7%-1.4%
 
1.5%-1.8%
 
1.7%-1.9%


For ESPP shares, the expected term represents the average term from the first day of the offering period to the purchase date. The risk-free interest rate assumption used to value ESPP shares is based upon observed interest rates on Treasury bills appropriate for the expected term. Our expected stock price volatility assumption for ESPP is estimated using historical volatility. For awards granted, we use the dividend yield at grant date. Our RSU, PSU, and market-based PSU awards are not eligible for cash dividends prior to vesting; therefore, the fair values of RSUs, PSUs, and market-based PSUs are discounted for the dividend yield.

Additionally, for employee stock option, RSU, PSU, and market-based PSU awards, we estimate forfeitures annually and revise the estimates of forfeiture in subsequent periods if actual forfeitures differ from those estimates. Forfeitures are estimated based on historical experience.

Equity Incentive Program
 
We grant or have granted stock options, RSUs, PSUs, market-based PSUs, and stock purchase rights under the following equity incentive plans.

Amended and Restated 2007 Equity Incentive Plan

In 2007, our shareholders approved the NVIDIA Corporation 2007 Equity Incentive Plan, which was subsequently amended and restated, most recently in 2016, or the 2007 Plan.
The 2007 Plan authorizes the issuance of incentive stock options, non-statutory stock options, restricted stock, restricted stock unit, stock appreciation rights, performance stock awards, performance cash awards, and other stock-based awards to employees, directors and consultants. Only our employees may receive incentive stock options. Up to 207 million shares of our common stock may be issued pursuant to stock awards granted under the 2007 Plan. Currently, we grant RSUs, PSUs and market-based PSUs under the 2007 Plan, under which, as of January 29, 2017, there were 22 million shares available for future issuance.
Stock options previously granted to employees, subject to certain exceptions, vest over a four year period, subject to continued service, with 25% vesting on the anniversary of the hire date in the case of new hires or the anniversary of the date of grant in the case of grants to existing employees and 6.25% vesting at the end of each quarterly period thereafter. Stock options previously granted under the 2007 Plan generally expire ten years from the date of grant.
Subject to certain exceptions, RSUs granted to employees vest over a four year period, subject to continued service, with 25% vesting on a pre-determined date that is close to the anniversary of the date of grant and (i) for grants made prior to May 18, 2016, 12.5% vesting semi-annually thereafter until fully vested, and (ii) for grants made on or after May 18, 2016, 6.25% vesting quarterly thereafter until fully vested.
PSUs vest over a four year period, subject to continued service, with 25% vesting on a pre-determined date that is close to the anniversary of the date of grant and 12.5% vesting semi-annually thereafter until fully vested. Market-based PSUs vest 100% on approximately the three-year anniversary of the date of grant. However, the number of shares subject to both PSUs and market-based PSUs that are eligible to vest is generally determined by the Compensation Committee based on achievement of pre-determined criteria.
Unless terminated sooner, the 2007 Plan is scheduled to terminate on March 21, 2022. Our Board may suspend or terminate the 2007 Plan at any time. No awards may be granted under the 2007 Plan while the 2007 Plan is suspended or after it is terminated. The Board may also amend the 2007 Plan at any time. However, if legal, regulatory or listing requirements require shareholder approval, the amendment will not go into effect until the shareholders have approved the amendment.

2012 Employee Stock Purchase Plan

In 2012, our shareholders approved the 2012 Employee Stock Purchase Plan, which was subsequently amended and restated, most recently in 2016, or the 2012 Plan, as the successor to the 1998 Employee Stock Purchase Plan.
Up to 75 million shares of our common stock may be issued pursuant to purchases under the 2012 Plan. As of January 29, 2017, we had issued 23 million shares and reserved 52 million shares for future issuance under the 2012 Plan.
The 2012 Plan is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code. Under the current offerings adopted pursuant to the 2012 Plan, each offering period is 24 months, which is divided into four purchase periods of six months.
Employees are eligible to participate if they are employed by us or an affiliate of us as designated by the Board. Employees who participate in an offering may have up to 10% of their earnings withheld up to certain limitations and applied on specified dates determined by the Board to the purchase of shares of common stock. The Board may increase this percentage at its discretion, up to 15%. The price of common stock purchased under our ESPP will be equal to 85% of the lower of the fair market value of the common stock on the commencement date of each offering period and the fair market value on each purchase date within the offering. Employees may end their participation in the ESPP at any time during the offering period, and participation ends automatically on termination of employment with us. In each case, the employee’s contributions are refunded.


The following is a summary of our equity award transactions under our equity incentive plans: 
 
RSUs, PSUs and Market-based PSUs Outstanding
 
Options Outstanding
 
Number of
Shares
 
Weighted
Average
Grant-Date
Fair Value
 
Number of
Shares
 
Weighted
Average
Exercise Price
Per Share
 
Weighted
Average
Remaining  
Contractual
Life
 
Aggregate
Intrinsic
Value (3)
 
(In millions, except years and per share data)
Balances, January 31, 2016
26

 
$
19.12

 
13

 
$
14.49

 
 
 
 
Granted (1)(2)
12

 
$
50.57

 
—

 
—

 
 
 
 
Exercised
—

 
—

 
(6
)
 
$
14.52

 
 
 
 
Vested restricted stock
(10
)
 
$
17.93

 
—

 
—

 
 
 
 
Canceled and forfeited
(1
)
 
$
23.68

 
—

 
—

 
 
 
 
Balances, January 29, 2017
27

 
$
32.84

 
7

 
$
14.47

 
5.4
 
$
724

Exercisable as of January 29, 2017
 
 
 
 
7

 
$
14.39

 
5.3
 
$
667

Vested and expected to vest after January 29, 2017
23

 
$
32.74

 
7

 
$
14.46

 
5.4
 
$
715



(1)
Includes PSUs that will be issued and eligible to vest based on the corporate financial performance maximum target level achieved for fiscal year 2017.

(2)
Includes market-based PSUs that will be issued and 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 issued could range from 0 to 0.3 million shares.

(3)
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value for in-the-money options at January 29, 2017, based on the $111.77 closing price of our common stock on January 27, 2017.

As of January 29, 2017 and January 31, 2016, there were 22 million and 14 million shares, respectively, of common stock reserved for future issuance under our equity incentive plans.

The total intrinsic value of options exercised was $246 million, $75 million, and $62 million for fiscal years 2017, 2016, and 2015, respectively. Upon exercise of an option, we issue new shares of stock. The total fair value of options vested was $8 million, $17 million, and $33 million for fiscal years 2017, 2016, and 2015, respectively.
Net Income Per Share
Net Income Per Share
Net Income Per Share
 
The following is a reconciliation of the numerators and denominators of the basic and diluted net income per share computations for the periods presented:
 
Year Ended
 
January 29,
2017
 
January 31,
2016
 
January 25,
2015
 
(In millions, except per share data)
Numerator:
 
 
 
 
 
Net income
$
1,666

 
$
614

 
$
631

Denominator:
 
 
 
 
 
Basic weighted average shares
541

 
543

 
552

Dilutive impact of outstanding securities:
 
 
 
 
 
Equity awards
26

 
13

 
11

1.00% Convertible Senior Notes
44

 
13

 
—

Warrants issued with the 1.00% Convertible Senior Notes
38

 
—

 
—

Diluted weighted average shares
649

 
569

 
563

Net income per share:
 
 
 
 
 
Basic (1)
$
3.08

 
$
1.13

 
$
1.14

Diluted (2)
$
2.57

 
$
1.08

 
$
1.12

Equity awards excluded from diluted net income per share because their effect would have been anti-dilutive
8

 
10

 
12



(1)
Calculated as net income divided by basic weighted average shares.

(2)
Calculated as net income divided by diluted weighted average shares.

The 1.00% Convertible Senior Notes, or the Convertible Notes, are included in the calculation of diluted net income per share. The Convertible Notes have a dilutive impact on net income per share if our average stock price for the reporting period exceeds the adjusted conversion price of $20.0662 per share. The warrants associated with our Convertible Notes, or the Warrants, outstanding are also included in the calculation of diluted net income per share. The Warrants have a dilutive impact on net income per share if our average stock price for the quarter exceeds the adjusted strike price of $27.0122 per share. For fiscal year 2017, our average stock price was $59.30, which exceeded both the adjusted conversion price and the adjusted strike price, causing the Convertible Notes and the Warrants to have a dilutive impact.

The denominator for diluted net income per share does not include any effect from the convertible note hedge transactions, or the Note Hedges, that we entered into concurrently with the issuance of the Convertible Notes, as its effect would be anti-dilutive. In the event of conversion of the Convertible Notes, the shares delivered to us under the Note Hedges will offset the dilutive effect of the shares that we would issue under the Convertible Notes.

On December 12, 2016, we entered into an agreement with a counterparty bank to terminate 63 million of the 75 million Warrants outstanding. In consideration for the termination of these Warrants, we delivered a total of 48 million shares of common stock to the counterparty bank, the amount of which was determined each day based on the daily volume-weighted average price of the common stock during an observation period beginning December 13, 2016 and ending January 31, 2017. As of January 29, 2017, 44 million of the 48 million shares of our common stock had been issued related to the terminated Warrants. The remaining 4 million shares were issued in the beginning of fiscal year 2018.

Please refer to Note 11 of these Notes to the Consolidated Financial Statements for additional discussion regarding the Convertible Notes, Note Hedges, and Warrants.
Goodwill
Goodwill
Goodwill
 
The carrying amount of goodwill is from the following acquisitions:
 
January 29,
2017
 
January 31,
2016
 
(In millions)
Icera
$
271

 
$
271

PortalPlayer
105

 
105

Mental Images
59

 
59

3dfx
50

 
50

MediaQ
35

 
35

ULi
31

 
31

Hybrid Graphics
28

 
28

Ageia
19

 
19

Portland Group Inc.
2

 
2

Other
18

 
18

Total goodwill
$
618

 
$
618


 
The amount of goodwill allocated to our GPU and Tegra Processor reportable segments was $210 million and $408 million, respectively, as of both January 29, 2017 and January 31, 2016. Please refer to Note 16 of these Notes to the Consolidated Financial Statements for further discussion regarding segments.

We utilized a two-step quantitative analysis to complete our annual impairment test during the fourth quarter of fiscal year 2017 and concluded that there was no impairment, as the fair value of our reporting units exceeded their carrying values. The first step tests for possible impairment by applying a fair value-based test by weighing the results from the income approach and the market approach. The second step, if necessary, measures the amount of such impairment by applying fair value-based tests to individual assets and liabilities.

These income and market valuation approaches consider a number of factors that include, but are not limited to, prospective financial information, growth rates, residual values, discount rates and comparable multiples from publicly traded companies in our industry and require us to make certain assumptions and estimates regarding industry economic factors and the future profitability of our business. When performing an income approach valuation, we incorporate the use of projected financial information and a discount rate that are developed using market participant based assumptions to our discounted cash flow model. Our estimates of discounted cash flow were based upon, among other things, certain assumptions about our expected future operating performance, such as revenue growth rates, operating margins, risk-adjusted discount rates, and future economic and market conditions. The market method of determining the fair value of our reporting units requires us to use judgment in the selection of appropriate market comparables.
Intangible Assets
Intangible Assets
Amortizable Intangible Assets
 
The components of our amortizable intangible assets are as follows:
 
January 29, 2017
 
January 31, 2016
 
Gross 
Carrying
Amount
 
Accumulated
Amortization
 
Net 
Carrying
Amount
 
Gross 
Carrying
Amount
 
Accumulated
Amortization
 
Net 
Carrying
Amount
 
(In millions)
 
(In millions)
Acquisition-related intangible assets
$
193

 
$
(167
)
 
$
26

 
$
193

 
$
(152
)
 
$
41

Patents and licensed technology
468

 
(390
)
 
78

 
462

 
(337
)
 
125

Total intangible assets
$
661

 
$
(557
)
 
$
104

 
$
655

 
$
(489
)
 
$
166



Amortization expense associated with intangible assets for fiscal years 2017, 2016, and 2015 was $68 million, $73 million, and $77 million, respectively. Future amortization expense for the net carrying amount of intangible assets as of January 29, 2017 is estimated to be $54 million in fiscal year 2018, $26 million in fiscal year 2019, $16 million in fiscal year 2020, $7 million in fiscal year 2021, and $1 million in fiscal year 2022 until fully amortized.
Marketable Securities
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 (loss), a component of shareholders’ equity, net of tax, and net realized gains and losses recorded in other income (expense), net, on the Consolidated Statements of Income.

We performed an impairment review of our investment portfolio as of January 29, 2017. Factors considered included general market conditions, the duration and extent to which fair value is below cost, and our intent and ability to hold an investment for a sufficient period of time to allow for recovery in value. We also consider specific adverse conditions related to the financial health of and business outlook for an investee, including industry and sector performance, changes in technology, operational and financing cash flow factors, and changes in an investee’s credit rating. Investments that we identify as having an indicator of impairment are subject to further analysis to determine if the investment was other than temporarily impaired. 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 of available-for-sale investments as of January 29, 2017. 

The following is a summary of cash equivalents and marketable securities as of January 29, 2017 and January 31, 2016:

 
January 29, 2017
 
Amortized
Cost
 
Unrealized
Gain
 
Unrealized
Loss
 
Estimated
Fair Value
 
(In millions)
Corporate debt securities
$
2,397

 
$
1

 
$
(10
)
 
$
2,388

Debt securities of United States government agencies
1,193

 
—

 
(5
)
 
1,188

Debt securities issued by the United States Treasury
852

 
—

 
(2
)
 
850

Asset-backed securities
490

 
—

 
(1
)
 
489

Money market funds
321

 
—

 
—

 
321

Mortgage backed securities issued by United States government-sponsored enterprises
161

 
2

 
(1
)
 
162

Foreign government bonds
70

 
—

 
—

 
70

Total
$
5,484

 
$
3

 
$
(19
)
 
$
5,468

Classified as:
 
 
 
 
 
 
 
Cash equivalents
 
 
 
 
 
 
$
436

Marketable securities
 
 
 
 
 
 
5,032

Total
 
 
 
 
 
 
$
5,468

 
 
January 31, 2016
 
Amortized
Cost
 
Unrealized
Gain
 
Unrealized
Loss
 
Estimated
Fair Value
 
(In millions)
Corporate debt securities
$
1,903

 
$
1

 
$
(3
)
 
$
1,901

Debt securities of United States government agencies
1,170

 
1

 
(1
)
 
1,170

Debt securities issued by the United States Treasury
800

 
1

 
—

 
801

Asset-backed securities
435

 
—

 
—

 
435

Mortgage backed securities issued by United States government-sponsored enterprises
229

 
3

 
(1
)
 
231

Foreign government bonds
92

 
—

 
—

 
92

Money market funds
43

 
—

 
—

 
43

Total
$
4,672

 
$
6

 
$
(5
)
 
$
4,673

Classified as:
 
 
 
 
 
 
 
Cash equivalents
 
 
 
 
 
 
$
232

Marketable securities
 
 
 
 
 
 
4,441

Total
 
 
 
 
 
 
$
4,673

  
The following table provides the breakdown of the investments with unrealized losses as of January 29, 2017:

 
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
$
1,721

 
$
(10
)
 
$
55

 
$
—

 
$
1,776

 
$
(10
)
Debt securities issued by United States government agencies
906

 
(5
)
 
28

 
—

 
934

 
(5
)
Debt securities issued by the US Treasury
629

 
(2
)
 
—

 
—

 
629

 
(2
)
Mortgage backed securities issued by United States government-sponsored enterprises
43

 
—

 
35

 
(1
)
 
78

 
(1
)
Asset-backed securities
383

 
(1
)
 
3

 
—

 
386

 
(1
)
Total
$
3,682

 
$
(18
)
 
$
121

 
$
(1
)
 
$
3,803

 
$
(19
)

 
The gross unrealized losses related to fixed income securities and were due to changes in interest rates. We have determined that the gross unrealized losses on investment securities as of January 29, 2017 are temporary in nature. Currently, we have the intent and ability to hold our investments with impairment indicators until maturity. Net realized gains were not significant for fiscal years 2017, 2016, and 2015.

The amortized cost and estimated fair value of cash equivalents and marketable securities, which are primarily debt instruments, are classified as available-for-sale as of January 29, 2017 and January 31, 2016 and are shown below by contractual maturity.

 
January 29, 2017
 
January 31, 2016
 
Amortized
Cost
 
Estimated
Fair Value
 
Amortized
Cost
 
Estimated
Fair Value
 
(In millions)
Less than one year
$
2,209

 
$
2,209

 
$
1,619

 
$
1,619

Due in 1 - 5 years
3,210

 
3,194

 
3,019

 
3,020

Mortgage-backed securities issued by government-sponsored enterprises not due at a single maturity date
65

 
65

 
34

 
34

Total
$
5,484

 
$
5,468

 
$
4,672

 
$
4,673

Fair Value of Financial Assets and Liabilities
Fair Value of Financial Assets and Liabilities
Fair Value of Financial Assets and Liabilities

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 fiscal year 2017. Level 3 assets are based on unobservable inputs to the valuation methodology and include our own data about assumptions market participants would use in pricing the asset or liability based on the best information available under the circumstances. Most of our cash equivalents and marketable securities are valued based on Level 2 inputs. We did not have any investments classified as Level 3 as of January 29, 2017. 
 
 
Fair Value at
 
Pricing Category
 
January 29, 2017
 
January 31, 2016
 
 
 
(In millions)
Assets
 
 
 
 
 
Cash equivalents and marketable securities:
 
 
 
 
 
Corporate debt securities (1)
Level 2
 
$
2,388

 
$
1,901

Debt securities of U.S. government agencies (2)
Level 2
 
$
1,188

 
$
1,170

Debt securities issued by the United States Treasury (3)
Level 2
 
$
850

 
$
801

Asset-backed securities (4)
Level 2
 
$
489

 
$
435

Money market funds (5)
Level 1
 
$
321

 
$
43

Mortgage-backed securities issued by United States government-sponsored enterprises (4)
Level 2
 
$
162

 
$
231

Foreign government bonds (4)
Level 2
 
$
70

 
$
92

 
 
 
 
 
 
Liabilities
 
 
 
 
 
Current liability:
 
 
 
 
 
1.00% Convertible Senior Notes (6)
Level 2
 
$
4,474

 
$
2,273

Other noncurrent liabilities:
 
 
 
 
 
2.20% Notes Due 2021 (6)
Level 2
 
$
975

 
$
—

3.20% Notes Due 2026 (6)
Level 2
 
$
961

 
$
—

Interest rate swap (7)
Level 2
 
$
2

 
$
7


(1)
Included $33 million and $51 million in cash equivalents as of January 29, 2017 and January 31, 2016, respectively, and $2.35 billion and $1.85 billion in marketable securities as of January 29, 2017 and January 31, 2016, respectively, on the Consolidated Balance Sheets.

(2)
Included $27 million and $90 million in cash equivalents as of January 29, 2017 and January 31, 2016, respectively, and $1.16 billion and $1.08 billion in marketable securities as of January 29, 2017 and January 31, 2016, respectively, on the Consolidated Balance Sheets.

(3)
Included $55 million in cash equivalents as of January 29, 2017 and $795 million and $801 million in marketable securities as of January 29, 2017 and January 31, 2016, respectively, on the Consolidated Balance Sheets.

(4)
Reported in marketable securities on the Consolidated Balance Sheets.

(5)
Reported in cash equivalents on the Consolidated Balance Sheets.

(6)
The 1.00% Convertible Notes, 2.20% Notes Due 2021, and 3.20% Notes Due 2026 are carried on our Consolidated Balance Sheets at their original issuance value, net of unamortized debt discount and issuance costs, and are not marked to fair value each period. See Note 11 of these Notes to the Consolidated Financial Statements for additional information.

(7)
Please refer to Note 9 of these Notes to Consolidated Financial Statements for a discussion regarding our interest rate swap.
Balance Sheet Components
Balance Sheet Components
Balance Sheet Components
 
Certain balance sheet components are as follows:
 
January 29,
2017
 
January 31,
2016
 
(In millions)
Inventories:
 
 
 
Raw materials
$
252

 
$
105

Work in-process
176

 
103

Finished goods
366

 
210

     Total inventories
$
794

 
$
418



As of January 29, 2017, we had outstanding inventory purchase obligations totaling $1.00 billion.

 
January 29,
2017
 
January 31,
2016
 
Estimated
Useful Life
 
(In millions)
 
(In years)
Property and Equipment:
 
 
 
 
 
Land
$
218

 
$
218

 
(A)
Building
13

 
13

 
25-30
Test equipment
427

 
354

 
3-5
Computer equipment
188

 
155

 
3-5
Leasehold improvements
176

 
174

 
(B)
Software and licenses
63

 
98

 
3-5
Office furniture and equipment
49

 
48

 
5
Capital leases
28

 
28

 
(B)
Construction in process
29

 
12

 
(C)
Total property and equipment, gross
1,191

 
1,100

 
 
Accumulated depreciation and amortization
(670
)
 
(634
)
 
 
     Total property and equipment, net
$
521

 
$
466

 
 
(A) Land is a non-depreciable asset.
(B) Leasehold improvements and capital leases are amortized based on the lesser of either the asset’s estimated useful life or the remaining expected lease term.
(C) Construction in process represents assets that are not in service as of the balance sheet date.

Depreciation expense for fiscal years 2017, 2016, and 2015 was $118 million, $124 million, and $143 million, respectively.

Accumulated amortization of leasehold improvements and capital leases was $164 million and $155 million as of January 29, 2017 and January 31, 2016, respectively. Amortization of leasehold improvements and capital leases is included in depreciation and amortization expense.
 
January 29,
2017
 
January 31,
2016
 
(In millions)
Accrued Liabilities:
 
 
 
Customer related liabilities (1)
$
197

 
$
160

Accrued payroll and related expenses
137

 
79

Deferred revenue (2)
85

 
322

Coupon interest on debt obligations
21

 
3

Accrued restructuring and other charges (3)
13

 
23

Professional service fees
13

 
23

Warranty accrual (4)
8

 
11

Accrued royalties
7

 
1

Leases payable
4

 
4

Taxes payable
4

 
2

Contributions payable
4

 
3

Other
14

 
11

Total accrued and other current liabilities
$
507

 
$
642


(1)  Customer related liabilities primarily includes accrued rebates and marketing development funds.
(2)
Deferred revenue under our patent cross licensing agreement with Intel Corporation will expire in March 2017. We will be recognizing revenue under this agreement through the first quarter of fiscal year 2018.
(3) Please refer to Note 17 of these Notes to the Consolidated Financial Statements for a discussion regarding restructuring and other charges.
(4)  Please refer to Note 10 of these Notes to the Consolidated Financial Statements for a discussion regarding warranties.
 
January 29,
2017
 
January 31,
2016
 
(In millions)
Other Long Term Liabilities:
 
 
 
Deferred income tax liability (1)
$
141

 
$
301

Income tax payable
96

 
78

Contributions payable
10

 
13

Deferred revenue (2)
4

 
44

Other
20

 
17

Total other long-term liabilities
$
271

 
$
453



(1)  Please refer to the “Recently Adopted Accounting Pronouncement” section of Note 1 of these Notes to the Consolidated Financial Statements for a discussion regarding the impact of a recently adopted accounting pronouncement related to stock-based compensation.

(2)  Deferred revenue under our patent cross licensing agreement with Intel Corporation is now located in short term deferred revenue as less than twelve months remains on the agreement.
Derivative Financial Instrument (Notes)
Derivative Instruments and Hedging Activities Disclosure
Derivative Financial Instruments

In fiscal year 2016, we entered into an interest rate swap for a portion of the operating lease financing arrangement for our new headquarters building that 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 (loss) 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.

In fiscal year 2017, we entered into foreign currency forward contracts with a total U.S. dollar equivalent notional value of $227 million to mitigate the impact of foreign currency exchange rate movements on our operating expenses. We designate these contracts as cash flow hedges and assess the effectiveness of the hedge relationships on a spot to spot basis. Gains or losses on the contracts are recorded in accumulated other comprehensive income (loss) and reclassified to operating expense when the related operating expenses are recognized in earnings or ineffectiveness should occur. The fair value of the contracts as of January 29, 2017 was not significant. We also entered into foreign currency forward contracts with a total U.S. dollar equivalent notional value of $99 million to mitigate the impact of foreign currency movements on monetary assets and liabilities that are denominated in currencies other than our reporting currency. These foreign currency forward contracts were not designated for hedge accounting treatment. Therefore, the change in fair value of these contracts is recorded as a component of other income (expense), net, and offsets the change in fair value of the foreign currency denominated monetary assets and liabilities, which is also recorded in other income (expense), net.

Under the master netting agreements with the respective counterparties to our foreign currency forward contracts, we are allowed to net settle transactions with the same counterparty, subject to applicable requirements. However, we present our derivative assets and liabilities at their gross fair values on our Consolidated Balance Sheets. We are not required to pledge, and are not entitled to receive, cash collateral related to these derivative instruments.

As of January 29, 2017, the maturities of the designated foreign currency forward contracts were three months or less.

We formally assess, both at inception and on an ongoing basis, whether derivative financial instruments designated for hedge accounting treatment are highly effective. During fiscal year 2017, all derivative financial instruments designated for hedge accounting treatment were determined to be highly effective and there were no gains or losses associated with ineffectiveness.

For fiscal years 2017 and 2016, we recognized a net change in unrealized gains (losses) on derivative financial instruments designated for hedge accounting treatment of $4 million and $(4) million, respectively, net of tax, in other comprehensive income (loss).

We expect to realize all gains and losses deferred into accumulated other comprehensive income (loss) related to foreign currency forward contracts within the next twelve months. However, we do not expect to reclassify any amount from accumulated other comprehensive income (loss) into earnings related to the interest rate swap as the underlying operating lease financing payments for our new headquarters building will not start within the next twelve months.
Guarantees
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.

In fiscal year 2016, 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 did not affect any other NVIDIA products. In fiscal year 2016, we recorded a $26 million charge against cost of revenue to cover anticipated customer warranty, repair, return, replacement and other associated costs.

The estimated product returns and estimated product warranty liabilities are as follows:
 
January 29,
2017
 
January 31,
2016
 
January 25,
2015
 
(In millions)
Balance at beginning of period
$
11

 
$
8

 
$
8

Additions
2

 
27

 
5

Deductions
(5
)
 
(24
)
 
(5
)
Balance at end of period 
$
8

 
$
11

 
$
8

 
In connection with certain agreements that we have entered into in the past, we have provided indemnities to cover the indemnified party for matters such as tax, product, and employee liabilities. We have 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. We have not recorded any liability in our Consolidated Financial Statements for such indemnifications.
Debt
Debt Disclosure
Debt

Convertible Debt

1.00 % Convertible Senior Notes Due 2018

In fiscal year 2014, we issued $1.50 billion of 1.00% Convertible Senior Notes due 2018. The Convertible Notes are unsecured, unsubordinated obligations of the Company, which pay interest in cash semi-annually at a rate of 1.00% per annum. The Convertible Notes will mature on December 1, 2018 unless repurchased or converted prior to such date. Upon conversion, we will pay cash up to the aggregate principal amount of the Convertible Notes and may pay or deliver cash, shares of our common stock or a combination thereof, at our election, of our conversion obligation in excess of the aggregate principal amount of the Convertible Notes being converted. As of January 29, 2017, the conversion rate, after adjusting for dividend increases, was 49.8351 shares of common stock per $1,000 principal amount of the Convertible Notes (equivalent to an adjusted conversion price of $20.0662 per share of common stock).

Holders may convert all or any portion of their Convertible Notes at their option at any time prior to August 1, 2018 under certain circumstances. For example, during any fiscal quarter, if the last reported sale price of the common stock for at least 20 trading days during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day, the Notes become convertible at the holders' option. As this condition was met, the Convertible Notes first became convertible at the holders' option beginning on the first day of fiscal year 2017 and continued to be convertible at the holders’ option through April 30, 2017.

During fiscal year 2017, we paid cash to settle an aggregate of $673 million in principal amount of the Convertible Notes and have $827 million in principal amount outstanding as of January 29, 2017. We issued 23 million shares of our common stock for the excess conversion value, and recognized a loss of $21 million on early conversions, of the Convertible Notes. Based on the closing price of our common stock of $111.77 on the last trading day of fiscal year 2017, the if-converted value of the remaining outstanding Convertible Notes exceeded their principal amount by approximately $3.78 billion.

Subsequent to January 29, 2017, we have settled an additional $502 million in principal amount of Convertible Notes and issued 20 million additional shares of our common stock for the excess conversion value. Based on additional conversion requests we have received, we expect to settle an additional $103 million in principal amount of Convertible Notes and issue additional shares of our common stock for the excess conversion value during the remainder of the first quarter of fiscal year 2018 and to settle another additional $55 million in principal amount of Convertible Notes and issue additional shares of our common stock for the excess conversion value during the second quarter of fiscal year 2018. The actual number of shares issuable upon conversion will be determined based upon the terms of the Convertible Notes, and we expect to receive an equal number of shares of our common stock under the terms of the Note Hedges.

We separately accounted for the liability and equity components of the Convertible Notes at issuance, since our conversion obligation in excess of the aggregate principal could be fully or partially settled in cash. The liability component was assigned by estimating the fair value of a similar debt without the conversion feature. The difference between the net cash proceeds and the liability component was assigned as the equity component. The initial liability component of the Convertible Notes was valued at $1.35 billion and the initial carrying value of the equity component recorded in additional paid-in-capital was valued at $126 million. This equity component, together with the $23 million purchaser's discount to the par value of the Convertible Notes, represented the initial aggregate unamortized debt discount of $148 million. The debt discount is amortized as interest expense over the contractual term of the Convertible Notes using the effective interest method and an interest rate of 3.15%.

As of January 29, 2017, the carrying value of the Convertible Notes was classified as a current liability and the difference between the principal amount and the carrying value of the Convertible Notes was classified as convertible debt conversion obligation in the mezzanine equity section of our Consolidated Balance Sheet.

The following table presents the carrying value of the liability of the Convertible Notes:
 
January 29, 2017
 
January 31, 2016
 
(In millions)
1.00% Convertible Senior Notes
$
827

 
$
1,500

Unamortized debt discount (1)
(31
)
 
(87
)
Net carrying amount
$
796

 
$
1,413

(1) As of January 29, 2017, the remaining period over which the unamortized debt discount will be amortized is 1.8 years.
The following table presents interest expense for the contractual interest and the accretion of debt discount and issuance costs related to the Convertible Notes:
 
Year Ended
 
January 29, 2017
 
January 31, 2016
 
January 25, 2015
 
(In millions)
Contractual coupon interest expense
$
9

 
$
15

 
$
15

Amortization of debt discount
24

 
29

 
28

Total interest expense related to Convertible Notes
$
33

 
$
44

 
$
43


Note Hedges and Warrants

Concurrently with the issuance of the Convertible Notes, we entered into a convertible note hedge transaction, or the Note Hedges. The Note Hedges have an adjusted strike price of $20.0662 per share and allow us to receive shares of our common stock and/or cash related to the excess conversion value that we would deliver and/or pay, respectively, to the holders of the Convertible Notes upon conversion. Through January 29, 2017, we had received 23 million shares of our common stock from the exercise of a portion of the Note Hedges related to the settlement of $673 million in principal amount of the Convertible Notes. Subsequently, we have received 20 million shares of our common stock from the exercise of a portion of the Note Hedges related to the settlement of an additional $502 million in principal amount, and we expect to receive additional shares of our common stock related to an additional $103 million in principal amount that is expected to settle during the first quarter of fiscal year 2018 and at least $55 million in principal amount that is expected to settle during the second quarter of fiscal year 2018.

In addition, concurrent with the offering of the Convertible Notes and the purchase of the Note Hedges, we entered into a separate warrant transaction, or the Warrants, with an adjusted strike price of $27.0122 per share. On December 12, 2016, we entered into an agreement with a counterparty bank to terminate 63 million of the 75 million warrants outstanding. In consideration for the termination of these warrants, we delivered a total of 48 million shares of common stock to the counterparty bank, the amount of which was determined each day based on the daily volume-weighted average price of the common stock during an observation period beginning December 13, 2016 and ending January 31, 2017. As of January 29, 2017, 44 million of the 48 million shares of our common stock had been issued related to the terminated Warrants. The remaining 4 million shares were issued in the beginning of fiscal year 2018.

Long-Term Debt

2.20% Notes Due 2021 and 3.20% Notes Due 2026

On September 16, 2016, we issued $1.00 billion of the 2.20% Notes Due 2021, and $1.00 billion of the 3.20% Notes Due 2026 (collectively, the Notes). Interest on the Notes is payable on March 16 and September 16 of each year, beginning on March 16, 2017. Upon 30 days' notice to holders of the Notes, we may redeem the Notes for cash prior to maturity, at redemption prices that include accrued and unpaid interest, if any, and a make-whole premium. However, no make-whole premium will be paid for redemptions of the Notes Due 2021 on or after August 16, 2021, or for redemptions of the Notes Due 2026 on or after June 16, 2026. The net proceeds from the Notes were $1.98 billion, after deducting debt discount and issuance costs.

The Notes are our unsecured senior obligations and rank equally in right of payment with all of our existing and future unsecured and unsubordinated indebtedness. The Notes are structurally subordinated to the liabilities of our subsidiaries and are effectively subordinated to any secured indebtedness to the extent of the value of the assets securing such indebtedness. All existing and future liabilities of our subsidiaries will be effectively senior to the Notes.

The carrying value of our long-term debt and the associated interest rates were as follows:
 
 
Expected
Remaining Term (years)
 
Effective
Interest Rate
 
January 29, 2017
 
 
 
 
 
 
(In millions)
2.20% Notes Due 2021
 
4.6
 
2.38%
 
$
1,000

3.20% Notes Due 2026
 
9.6
 
3.31%
 
1,000

Unamortized debt discount and issuance costs
 
 
 
 
 
(17
)
Net carrying amount
 
 
 
 
 
$
1,983



Revolving Credit Facility

On October 7, 2016, we entered into a credit agreement, or the Credit Agreement, under which we may borrow, repay and re-borrow amounts from time to time, up to $575 million, for working capital and other general corporate purposes. The commitments under the Credit Agreement are available for a 5-year period ending on October 7, 2021, on which all outstanding obligations would be due and payable. The Credit Agreement also permits us to obtain additional revolving loan commitments up to $425 million, subject to certain conditions. As of January 29, 2017, we had not borrowed any amounts under the Credit Agreement.
Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies
 
Inventory Purchase Obligations
 
As of January 29, 2017, we had outstanding inventory purchase obligations totaling $1.00 billion.

Capital Purchase Obligations
 
As of January 29, 2017, we had outstanding capital purchase obligations totaling $38 million.
 
Lease Obligations

Our headquarters complex is located in Santa Clara, California and includes eight buildings that are leased properties. Future minimum lease payments related to headquarters operating leases total $50 million over the remaining terms of the leases, including predetermined rent escalations, and are included in the future minimum lease payment schedule below.
    
In addition to the commitment of our headquarters, we have other domestic and international office facilities under operating leases expiring through fiscal year 2026. We also include non-cancelable obligations under certain software licensing arrangements as operating leases.

Future minimum lease payments under our non-cancelable operating leases as of January 29, 2017, are as follows:   
 
Future Minimum Lease Obligations
 
(In millions)
Fiscal Year:
 
2018
$
42

2019
36

2020
20

2021
17

2022
12

2023 and thereafter
13

Total
$
140


 
Rent expense for fiscal years 2017, 2016, and 2015 was $46 million, $45 million, and $47 million, respectively.

Capital lease obligations include building and office equipment lease obligations. The building lease relates to our datacenter in Santa Clara, California. Future minimum lease payments under the building capital lease total $11 million over the remaining lease term, including predetermined rent escalations, and are included in the future minimum lease payment schedule below:
 
Future Capital Lease Obligations
 
(In millions)
Fiscal Year:
 

2018
$
5

2019
6

Total
$
11

Present value of minimum lease payments
$
10

 
 
Current portion
$
4

Long-term portion
$
6


 
Operating Lease Financing Arrangement

In 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 3.5 to 1.0. If certain events of default occur and are continuing under the operative agreements, the banks may accelerate repayment of their investment under the lease.

Litigation

Qualcomm, Inc. and various Samsung Entities

In September 2014, NVIDIA filed complaints against Qualcomm, Inc. 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 certain patents relating to graphics processing. In November 2014, Samsung filed complaints against NVIDIA in the ITC and the United States District Court for the Eastern District of Virginia, alleging that NVIDIA infringed certain patents.

NVIDIA and Samsung, and NVIDIA and Qualcomm, also challenged the validity of certain of each other’s patents through inter partes review before the United States Patent and Trademark Office.

On April 28, 2016, NVIDIA and Samsung entered a binding memorandum of understanding which resolved all existing intellectual property disputes between the parties, and requires the immediate dismissal of all pending litigation between them. As a result of this agreement, on May 5, 2016, Samsung filed a Stipulation of Dismissal in the United States District Court for the Eastern District of Virginia. On May 11, 2016, NVIDIA voluntarily dismissed its petition to the United States Court of Appeals for the Federal Circuit to review the ITC’s decision in Investigation No. 337-TA-932. On May 12, 2016, NVIDIA voluntarily dismissed its Complaint in the United States District Court for the District of Delaware. On May 19, 2016, Samsung filed a Corrected Joint Motion to Terminate Investigation No. 337-TA-941. On June 16, 2016, the ITC granted the joint motion and terminated the ITC investigation. The parties have also moved to dismiss all pending inter partes reviews. Also as part of this agreement, NVIDIA and Samsung each received a license to a small number of patents of the other, but no portfolio license was granted nor was any compensation paid by either party. On June 28, 2016, NVIDIA and Samsung executed a settlement agreement based on the April 28, 2016 memorandum of understanding.

NVIDIA’s dismissals on May 11, 2016 and May 12, 2016 also terminated its claims against Qualcomm.

Advanced Silicon Technologies LLC

In December 2015, Advanced Silicon Technologies LLC filed complaints in the ITC and the United States District Court for the District of Delaware alleging infringement of certain patents relating to graphics processing and memory management. NVIDIA and Advanced Silicon Technologies resolved this litigation on April 22, 2016 and NVIDIA agreed to license the patents asserted and other patents owned and controlled by Advanced Silicon Technologies and certain of its affiliates. On April 27, 2016, NVIDIA and Advanced Silicon Technologies jointly moved to terminate the investigation as to NVIDIA. The Office of Unfair Import Investigations supported the motion, and none of the other parties opposed it. On May 10, 2016, the Administrative Law Judge issued an Initial Determination granting the joint request to terminate the investigation as to NVIDIA. On June 1, 2016, the ITC issued a Notice determining not to review the Administrative Law Judge’s determination, thereby finalizing termination of the investigation as to NVIDIA. Pursuant to the license agreement, $10 million was recorded as a charge to cost of revenue during fiscal year 2017.

Polaris Innovations Limited

On May 16, 2016, Polaris Innovations Limited filed a complaint in the United States District Court for the Western District of Texas alleging that NVIDIA has infringed and is continuing to infringe on six of its U.S. patents related generally to control of DRAM memory. The complaint seeks unspecified monetary damages, enhanced damages, interest, fees, expenses, and costs against NVIDIA.

On September 14, 2016, NVIDIA answered the Polaris Complaint and asserted various defenses including non-infringement and invalidity of the six Polaris patents. On December 5, 2016, the Texas Court granted NVIDIA’s motion to transfer and transferred the case to the Northern District of California. An initial scheduling conference has been set for March 16, 2017. A trial date has not yet been set.

On December 7, 2016, NVIDIA filed an inter partes review request with the United States Patent and Trademark Office, or USPTO, challenging the validity of U.S. Patent No. 7,886,122, which is asserted by Polaris in that California district court litigation. On December 19, 2016, NVIDIA filed an inter partes review request with the USPTO challenging the validity of U.S. Patent No. 7,124,325, another patent asserted by Polaris. An institution decision is expected in both of these matters in June 2017. If instituted, the USPTO will conduct a trial on the validity of each of these patents.

On December 30, 2016, NVIDIA received notice that Polaris had filed a complaint for patent infringement in Germany. The German case alleges infringement of European Patent No. EP1428225 and German Patent Nos. DE 10223167 and DE 1020066043668. NVIDIA has retained counsel in Germany to defend this case. A trial date has not yet been set.

Accounting for Loss Contingencies

While there can be no assurance of favorable outcomes, we believe the claims made by other party in the above ongoing matters are without merit and we intend to vigorously defend the actions. As of January 29, 2017, 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.
Income Taxes
Income Taxes
Income Taxes
 
The income tax expense applicable to income before income taxes consists of the following:
 
Year Ended
 
January 29,
2017
 
January 31,
2016
 
January 25,
2015
 
(In millions)
Current income taxes:
 
 
 
 
 
Federal
$
7

 
$
(43
)
 
$
8

State
1

 
1

 
1

Foreign
34

 
25

 
17

Total current
42

 
(17
)
 
26

Deferred taxes:
 
 
 
 
 
Federal
199

 
134

 
84

State
—

 
—

 
—

Foreign
(2
)
 
—

 
(1
)
Total deferred
197

 
134

 
83

Charge in lieu of taxes attributable to employer stock option plans
—

 
12

 
15

Income tax expense
$
239

 
$
129

 
$
124


 
Income before income tax consists of the following:
 
Year Ended
 
January 29,
2017
 
January 31,
2016
 
January 25,
2015
 
(In millions)
Domestic
$
600

 
$
129

 
$
174

Foreign
1,305

 
614

 
581

Income before income tax
$
1,905

 
$
743

 
$
755


 
The income tax expense differs from the amount computed by applying the federal statutory income tax rate of 35% to income before income taxes as follows:
 
Year Ended
 
January 29,
2017
 
January 31,
2016
 
January 25,
2015
 
(In millions)
Tax expense computed at federal statutory rate
$
667

 
$
260

 
$
264

Tax expense related to intercompany transaction
10

 
10

 
10

State income taxes, net of federal tax effect
4

 
1

 
1

Foreign tax rate differential
(315
)
 
(95
)
 
(120
)
Stock-based compensation (1)
(70
)
 
13

 
4

U.S. federal R&D tax credit
(52
)
 
(38
)
 
(34
)
Restructuring and expiration of statute of limitations
—

 
(21
)
 
—

Other
(5
)
 
(1
)
 
(1
)
Income tax expense
$
239

 
$
129

 
$
124


(1)
We adopted an accounting standard related to stock-based compensation effective February 1, 2016, which required the excess tax benefit to be reflected in our provision for income taxes rather than in additional paid-in-capital. The total related excess tax benefit recognized for fiscal year 2017 was $82 million. Please refer to Note 1 of these Notes to the Consolidated Financial Statements for additional information.
The tax effect of temporary differences that gives rise to significant portions of the deferred tax assets and liabilities are presented below:  
 
January 29,
2017
 
January 31,
2016
 
(In millions)
Deferred tax assets:
 
Net operating loss carryforwards (1)
$
199

 
$
57

Accruals and reserves, not currently deductible for tax purposes
40

 
58

Property, equipment and intangible assets
50

 
50

Research and other tax credit carryforwards (1)
728

 
404

Stock-based compensation
34

 
29

Convertible debt
6

 
9

Gross deferred tax assets
1,057

 
607

Less valuation allowance (1)
(353
)
 
(272
)
Total deferred tax assets
704

 
335

Deferred tax liabilities:
 
 
 
Acquired intangibles
(11
)
 
(17
)
Unremitted earnings of foreign subsidiaries
(827
)
 
(615
)
Gross deferred tax liabilities
(838
)
 
(632
)
Net deferred tax liability
$
(134
)
 
$
(297
)


(1)
Balances as of January 29, 2017 reflect the adoption of an accounting standard related to stock-based compensation. Please refer to Note 1 of these Notes to the Consolidated Financial Statements for additional information.
We recognized income tax expense of $239 million, $129 million, and $124 million for fiscal years 2017, 2016, and 2015, respectively. Our annual effective tax rate was 12.5%, 17.3%, and 16.5% for fiscal years 2017, 2016, and 2015, respectively. The decrease in the effective tax rate in fiscal year 2017 as compared to fiscal years 2016 and 2015 was primarily due to the recognition of excess tax benefits from our adoption of a new accounting standard related to the simplification of certain aspects of stock-based compensation accounting. The higher effective tax rate in fiscal year 2016 as compared to fiscal years 2017 and 2015 was due to an additional amount of earnings subject to United States tax in fiscal year 2016, partially offset by a net income tax benefit related to the Icera modem restructuring in fiscal year 2016.

Our effective tax rate for each of the fiscal years was lower than the U.S. federal statutory rate of 35% due primarily to income earned in jurisdictions, including British Virgin Islands, Hong Kong, China, Taiwan and United Kingdom, where the tax rate is lower than the United States federal statutory tax rate of 35%, favorable recognition in these fiscal years of the U.S. federal research tax credit and favorable discrete events primarily attributable to the tax benefit recognized upon the expiration of the applicable statutes of limitations, and adoption of an accounting standard related to stock-based compensation during fiscal year 2017.

As of January 29, 2017 and January 31, 2016, we had a valuation allowance of $353 million and $272 million, respectively, related to state and certain foreign deferred tax assets that management determined not likely to be realized due, in part, to projections of future taxable income. To the extent realization of the deferred tax assets becomes more-likely-than-not, we would recognize such deferred tax asset as an income tax benefit during the period.

As of January 29, 2017, we had federal, state and foreign net operating loss carryforwards of $448 million, $446 million and $219 million, respectively. The federal and state carryforwards will expire beginning in fiscal year 2022 and 2018, respectively. The foreign net operating loss carryforwards of $219 million may be carried forward indefinitely. As of January 29, 2017, we had federal research tax credit carryforwards of $541 million that will begin to expire in fiscal year 2018. We have state research tax credit carryforwards of $476 million, of which $457 million is attributable to the State of California and may be carried over indefinitely, and $19 million is attributable to various other states and will expire beginning in fiscal year 2018. Our tax attributes, net operating loss and tax credit carryforwards, remain subject to audit and may be adjusted for changes or modification in tax laws, other authoritative interpretations thereof, or other facts and circumstances. Utilization of federal, state, and foreign net operating losses and tax credit carryforwards may also be subject to limitations due to ownership changes and other limitations provided by the Internal Revenue Code and similar state and foreign tax provisions. If any such limitations apply, the federal, states, or foreign net operating loss and tax credit carryforwards, as applicable, may expire or be denied before utilization.

As of January 29, 2017, U.S. federal and state income taxes have not been provided on approximately $3.13 billion of undistributed earnings of non-United States subsidiaries as such earnings are considered to be indefinitely reinvested. We have not provided the amount of unrecognized deferred tax liabilities for temporary differences related to investments in our foreign subsidiaries as the determination of such amount is not practicable.

As of January 29, 2017, we had $224 million of gross unrecognized tax benefits, of which $209 million would affect our effective tax rate if recognized. However, approximately $27 million of the unrecognized tax benefits were related to state income tax positions taken, that, if recognized, would be in the form of a carryforward deferred tax asset that would likely attract a full valuation allowance. The $209 million of unrecognized tax benefits as of January 29, 2017 consisted of $83 million recorded in non-current income taxes payable and $126 million reflected as a reduction to the related deferred tax assets.

A reconciliation of gross unrecognized tax benefits is as follows:
 
January 29,
2017
 
January 31,
2016
 
January 25,
2015
 
(In millions)
Balance at beginning of period
$
230

 
$
254

 
$
238

Increases in tax positions for prior years
3

 
—

 
—

Decreases in tax positions for prior years
—

 
(1
)
 
(1
)
Increases in tax positions for current year
46

 
28

 
23

Settlements
(48
)
 
—

 
—

Lapse in statute of limitations
(7
)
 
(51
)
 
(6
)
Balance at end of period
$
224

 
$
230

 
$
254



We classify an unrecognized tax benefit as a current liability, or amount refundable, to the extent that we anticipate payment or receipt of cash for income taxes within one year. The amount is classified as a long-term liability, or reduction of long-term deferred tax assets or amount refundable, if we anticipate payment or receipt of cash for income taxes during a period beyond a year.

Our policy is to include interest and penalties related to unrecognized tax benefits as a component of income tax expense. As of January 29, 2017, January 31, 2016, and January 25, 2015, we had accrued $13 million, $11 million, and $14 million, respectively, for the payment of interest and penalties related to unrecognized tax benefits, which is not included as a component of our unrecognized tax benefits. As of January 29, 2017, non-current income taxes payable of $96 million consisted of unrecognized tax benefits of $83 million and the related interest and penalties of $13 million.

While we believe that we have adequately provided for all tax positions, 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. As of January 29, 2017, 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.

We are subject to taxation by a number of taxing authorities both in the United States and throughout the world. As of January 29, 2017, the significant tax jurisdictions that may be subject to examination include the United States, Hong Kong, Taiwan, China, United Kingdom, Germany, and India for fiscal years 2003 through 2016. As of January 29, 2017, the significant tax jurisdictions for which we are currently under examination include India, Taiwan, and Germany for fiscal years 2003 through 2016.
Stockholders' Equity
Stockholders' Equity
Shareholders’ Equity

Capital Return Program

Beginning August 2004, our Board of Directors authorized us, subject to certain specifications, to repurchase shares of our common stock. On November 7, 2016, the Board authorized an additional $2.00 billion under our repurchase program and extended it through December 2020.

During fiscal year 2017, we repurchased a total of 15 million shares for $739 million and paid $261 million in cash dividends to our shareholders, equivalent to $0.485 per share on an annual basis.

Through January 29, 2017, we have repurchased an aggregate of 245 million shares under our share repurchase program for a total cost of $4.59 billion. All shares delivered from these repurchases have been placed into treasury stock. As of January 29, 2017, we were authorized, subject to certain specifications, to repurchase additional shares of our common stock up to $2.73 billion through December 2020.

Convertible Preferred Stock

As of January 29, 2017 and January 31, 2016, there were 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.
Employee Retirement Plans
Pension and Other Postretirement Benefits Disclosure
Employee Retirement Plans
 
We have a 401(k) retirement plan covering substantially all of our United States employees. Under the plan, participating employees may defer up to 100% of their pre-tax earnings, subject to the Internal Revenue Service annual contribution limits. Effective January 2013, we began matching a portion of the employee contributions. Our contribution expense for fiscal years 2017, 2016, and 2015 was $12 million, $8 million, and $6 million, respectively. We also have defined contribution retirement plans outside of the United States to which we contributed $23 million, $21 million, and $20 million for fiscal years 2017, 2016, and 2015, respectively.
Segment Information
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 reportable segments - the GPU business and the Tegra Processor business - based on a single underlying graphics architecture.

Our GPU product brands are aimed at specialized markets including GeForce for gamers; Quadro for designers; Tesla and DGX for AI data scientists and big data researchers; and GRID for cloud-based visual computing users. Our Tegra brand integrates an entire computer onto a single chip, and incorporates GPUs and multi-core CPUs to drive supercomputing for mobile gaming and entertainment devices, as well as autonomous robots, drones and cars.

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 reportable segments, our CODM assigns 100% of those expenses to the reportable 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 stock-based compensation expense, corporate infrastructure and support costs, acquisition-related costs, legal settlement costs, contributions, restructuring and other charges, product warranty charge, 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 reportable segment basis. Reportable 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.
 
GPU
 
Tegra Processor
 
All Other
 
Consolidated
 
(In millions)
Year Ended January 29, 2017:
 
 
 
 
 
 
 
Revenue
$
5,822

 
$
824

 
$
264

 
$
6,910

Depreciation and amortization expense
$
116

 
$
29

 
$
42

 
$
187

Operating income (loss)
$
2,180

 
$
(9
)
 
$
(237
)
 
$
1,934

Year Ended January 31, 2016:
 
 
 
 
 
 
 
Revenue
$
4,187

 
$
559

 
$
264

 
$
5,010

Depreciation and amortization expense
$
110

 
$
43

 
$
44

 
$
197

Operating income (loss)
$
1,344

 
$
(239
)
 
$
(358
)
 
$
747

Year Ended January 25, 2015:
 
 
 
 
 
 
 
Revenue
$
3,839

 
$
579

 
$
264

 
$
4,682

Depreciation and amortization expense
$
117

 
$
57

 
$
46

 
$
220

Operating income (loss)
$
1,113

 
$
(254
)
 
$
(100
)
 
$
759

 
 
Year Ended
 
 
January 29,
2017
 
January 31,
2016
 
January 25,
2015
 
 
(In millions)
Reconciling items included in "All Other" category:
 
 
 
 
Unallocated revenue
 
$
264

 
$
264

 
$
264

Stock-based compensation
 
(247
)
 
(204
)
 
(158
)
Unallocated cost of revenue and operating expenses
 
(215
)
 
(244
)
 
(169
)
Acquisition-related costs
 
(16
)
 
(22
)
 
(37
)
Legal settlement costs
 
(16
)
 
—

 
—

Contributions
 
(4
)
 
—

 
—

Restructuring and other charges
 
(3
)
 
(131
)
 
—

Product warranty charges
 
—

 
(21
)
 
—

Total
 
$
(237
)
 
$
(358
)
 
$
(100
)

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 the invoicing address by geographic regions: 
 
Year Ended
 
January 29,
2017
 
January 31,
2016
 
January 25,
2015
Revenue:
(In millions)
Taiwan
$
2,546

 
$
1,912

 
$
1,594

China
1,305

 
806

 
922

Other Asia Pacific
1,010

 
749

 
638

United States
904

 
643

 
791

Europe
659

 
482

 
369

Other Americas
486

 
418

 
368

Total revenue
$
6,910

 
$
5,010

 
$
4,682



The following table summarizes information pertaining to our revenue by each of the specialized markets we serve:
 
Year Ended
 
January 29,
2017
 
January 31,
2016
 
January 25,
2015
Revenue:
(In millions)
Gaming
$
4,060

 
$
2,818

 
$
2,058

Professional Visualization
835

 
750

 
795

Datacenter
830

 
339

 
317

Automotive
487

 
320

 
183

OEM & IP
698

 
783

 
1,329

Total revenue
$
6,910

 
$
5,010

 
$
4,682



The following table presents summarized information for long-lived assets by geographic region. Long-lived assets consist of property and equipment and deposits and other assets, and exclude goodwill and intangible assets.
 
January 29,
2017
 
January 31,
2016
Long-lived assets:
(In millions)
United States
$
440

 
$
414

Taiwan
52

 
39

India
47

 
45

China
34

 
25

Europe
9

 
9

Other Asia Pacific
1

 
1

Total long-lived assets
$
583

 
$
533



Revenue from significant customers, those representing 10% or more of total revenue for the respective dates, is summarized as follows:
 
Year Ended
 
January 29,
2017
 
January 31,
2016
 
January 25,
2015
Revenue:
 
 
 
 
 
Customer A
12
%
 
11
%
 
11
%

Revenue was attributable to the GPU business.

Accounts receivable from significant customers, those representing 10% or more of total accounts receivable for the respective periods, is summarized as follows: 
 
January 29,
2017
 
January 31,
2016
Accounts Receivable:
 
 
 
Customer B
19
%
 
21
%
Customer C
10
%
 
7
%
Restructuring and Other Charges (Notes)
Restructuring and Related Activities Disclosure
Restructuring and Other Charges
 
In fiscal year 2016, we began the wind down of our Icera modem operations. Our operating expenses for fiscal years 2017 and 2016 included $3 million and $131 million, respectively, of restructuring and other charges.
 
Year Ended
 
January 29,
 
January 31,
 
2017
 
2016
 
(In millions)
Employee severance and related costs
$
5

 
$
82

Tax subsidy (refund) impairment
(3
)
 
17

Facilities and related costs
—

 
27

Other exit costs
1

 
5

Restructuring and other charges
$
3

 
$
131



The following table provides a summary of the restructuring activities and related liabilities recorded in accrued liabilities on our Consolidated Balance Sheets as of January 29, 2017 and January 31, 2016:
 
January 29,
 
January 31,
 
2017
 
2016
 
(In millions)
Balance at beginning of period
$
23

 
$
—

Restructuring and other charges
3

 
131

Cash payments
(13
)
 
(63
)
Non-cash adjustments
—

 
(45
)
Balance at end of period
$
13

 
$
23



The majority of the remaining balance of $13 million as of January 29, 2017 is expected to be paid during fiscal year 2018.
Quartely Summary
Quarterly Financial Information
Quarterly Summary (Unaudited)
 
The following table sets forth our unaudited consolidated financial results, for the last eight fiscal quarters:
 
Fiscal Year 2017
Quarters Ended
 
January 29,
2017
 
October 30,
2016
 
July 31,
2016
 
May 1,
2016
 
(In millions, except per share data)
Statements of Income Data:
 
 
 
 
 
 
 
Revenue
$
2,173

 
$
2,004

 
$
1,428

 
$
1,305

Cost of revenue
$
870

 
$
821

 
$
602

 
$
554

Gross profit
$
1,303

 
$
1,183

 
$
826

 
$
751

Net income (1)
$
655

 
$
542

 
$
261

 
$
208

Net income per share (1):
 
 
 
 
 
 
 
Basic
$
1.18

 
$
1.01

 
$
0.49

 
$
0.39

Diluted
$
0.99

 
$
0.83

 
$
0.41

 
$
0.35


(1)
In the third quarter of fiscal year 2017, we adopted an accounting standard related to stock-based compensation, which requires adjustments to be reflected beginning in fiscal year 2017. The adoption of the new accounting standard impacted our previously reported quarterly results for fiscal year 2017 as follows:

 
Three Months Ended
 
Six Months Ended
 
July 31, 2016
 
May 1, 2016
 
July 31, 2016
 
As reported
 
As adjusted
 
As reported
 
As adjusted
 
As reported
 
As adjusted
 
(In millions, except per share data)
Condensed Consolidated Statements of Income:
 
 
 
 
 
 
 
 
 
 
 
Income tax expense
$
64

 
$
56

 
$
45

 
$
33

 
$
109

 
$
89

Net income
$
253

 
$
261

 
$
196

 
$
208

 
$
449

 
$
469

Basic net income per share
$
0.47

 
$
0.49

 
$
0.36

 
$
0.39

 
$
0.84

 
$
0.88

Diluted net income per share
$
0.40

 
$
0.41

 
$
0.33

 
$
0.35

 
$
0.73

 
$
0.76

Weighted average shares used in diluted net income per share computation
631

 
634

 
597

 
599

 
617

 
620

 
 
 
 
 
 
 
 
 
 
 
 
Condensed Consolidated Statements of Cash Flows:
 
 
 
 
 
 
 
 
 
 
 
Net cash provided by operating activities
$
184

 
$
201

 
$
309

 
$
318

 
$
493

 
$
519

Net cash used in financing activities
$
(35
)
 
$
(52
)
 
$
(534
)
 
$
(545
)
 
$
(570
)
 
$
(597
)

 
Fiscal Year 2016
Quarters Ended
 
January 31,
2016
 
October 25,
2015
 
July 26,
2015
 
April 26,
2015
 
(In millions, except per share data)
Statements of Income Data:
 
 
 
 
 
 
 
Revenue
$
1,401

 
$
1,305

 
$
1,153

 
$
1,151

Cost of revenue
$
610

 
$
572

 
$
519

 
$
498

Gross profit
$
791

 
$
733

 
$
634

 
$
653

Net income
$
207

 
$
247

 
$
26

 
$
134

Net income per share:
 
 
 
 
 
 
 
Basic
$
0.38

 
$
0.45

 
$
0.05

 
$
0.24

Diluted
$
0.35

 
$
0.44

 
$
0.05

 
$
0.24

Schedule II
Schedule of Valuation and Qualifying Accounts Disclosure
SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS
 
Description
 
Balance at
Beginning of Period
 
Additions
 
Deductions
 
Balance at
End of Period
 
 
(In millions)
Fiscal year 2017
 
 
 
 
 
 
 
 
Allowance for doubtful accounts
 
$
2

 
$
1

(1)
$
—

(1)
$
3

Sales return allowance
 
$
9

 
$
9

(2)
$
(8
)
(4)
$
10

Deferred tax valuation allowance
 
$
272

 
$
81

(3)
$
—

 
$
353

Fiscal year 2016
 
 
 
 
 
 
 
 
Allowance for doubtful accounts
 
$
3

 
$
—

(1)
$
(1
)
(1)
$
2

Sales return allowance
 
$
14

 
$
9

(2)
$
(14
)
(4)
$
9

Deferred tax valuation allowance
 
$
261

 
$
11

(3)
$
—

 
$
272

Fiscal year 2015
 
 
 
 
 
 
 
 
Allowance for doubtful accounts
 
$
1


$
3

(1)
$
(1
)
(1)
$
3

Sales return allowance
 
$
14


$
12

(2)
$
(12
)
(4)
$
14

Deferred tax valuation allowance
 
$
244


$
17

(3)
$
—

 
$
261

 
(1)  Additions represent allowance for doubtful accounts charged to expense and deductions represent amounts recorded as reduction to expense upon reassessment of allowance for doubtful accounts at period end.
(2) Represents allowance for sales returns estimated at the time revenue is recognized primarily based on historical return rates and is charged as a reduction to revenue.
(3)  Represents change in valuation allowance primarily related to state and certain foreign deferred tax assets that management has determined not likely to be realized due, in part, to projections of future taxable income of the respective jurisdictions.
(4) Represents sales returns.
Summary of Significant Accounting Policies (Policies)
Nature of Operations 
Our Company

Starting with a focus on PC graphics, NVIDIA invented the GPU to solve some of the most complex problems in computer science. We have extended our emphasis in recent years to the revolutionary field of artificial intelligence.

Our GPU product brands are aimed at specialized markets including GeForce for gamers; Quadro for designers; Tesla and DGX for AI data scientists and big data researchers; and GRID for cloud-based visual computing users. Our Tegra brand integrates an entire computer onto a single chip, and incorporates GPUs and multi-core CPUs to drive supercomputing for mobile gaming and entertainment devices, as well as autonomous robots, drones and cars.

Headquartered in Santa Clara, California, NVIDIA was incorporated in California in April 1993 and reincorporated in Delaware in April 1998.
   
All references to “NVIDIA,” “we,” “us,” “our” or the “Company” mean NVIDIA Corporation and its subsidiaries, except where it is made clear that the term means only the parent company.

Fiscal Period, Policy 
Fiscal Year
 
We operate on a 52- or 53-week year, ending on the last Sunday in January. Fiscal years 2017 and 2015 were 52-week years and fiscal year 2016 was a 53-week year.

Reclassification, Policy [Policy Text Block] 
Reclassifications

Certain prior fiscal year balances have been reclassified to conform to the current fiscal year presentation.
Consolidation, Policy 
Principles of Consolidation
 
Our consolidated financial statements include the accounts of NVIDIA Corporation and our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates, Policy 
Use of Estimates
 
The preparation of financial statements in conformity with accounting principles generally accepted in the United States, or 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, 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.
Revenue Recognition 
Revenue Recognition
 
Product Revenue

We recognize revenue from product sales when persuasive evidence of an arrangement exists, the product has been delivered, the price is fixed or determinable and collection of the related receivable is reasonably assured. For most sales, we use a binding purchase order and in certain cases we use a contractual agreement as evidence of an arrangement. We consider delivery to occur upon shipment provided title and risk of loss have passed to the customer. At the point of sale, we assess whether the arrangement fee is fixed or determinable and whether collection is reasonably assured. If we determine that collection of a fee is not reasonably assured, we defer the fee and recognize revenue at the time collection becomes reasonably assured, which is generally upon receipt of payment.
 
For sales to certain distributors with rights of return for which the level of returns cannot be reasonably estimated, our policy is to defer recognition of revenue and related cost of revenue until the distributors resell the product and, in some cases, when customer return rights lapse.

Our customer programs primarily involve rebates, which are designed to serve as sales incentives to resellers of our products in various target markets. We account for rebates as a reduction of revenue and accrue for 100% of the potential rebates and do not apply a breakage factor. While we have a long history of rebate arrangements with original equipment manufacturers, or OEMs, we believe we are unable to apply our historical experience to reliably estimate the amount of rebates that will eventually be claimed by individual OEMs. In such cases, the OEMs may not be our direct customers and therefore the quantity and mix of demand they place on their contract equipment manufacturers, or CEMs, and original device manufacturers, or ODMs, may shift as we introduce new generations and iterations of products and as we experience changes in new competitor offerings. In addition, we typically find that approximately 95% of the rebates we accrue each year are eventually claimed, which is substantially close to 100%, and that this percentage varies by program and by customer. We recognize a liability for these rebates at the later of the date at which we record the related revenue or the date at which we offer the rebate. Rebates typically expire six months from the date of the original sale, unless we reasonably believe that the customer intends to claim the rebate. Unclaimed rebates are reversed to revenue, the amount of which typically represents less than 0.5% of total revenue.

Our customer programs also include marketing development funds, or MDFs. MDFs represent monies paid to retailers, system builders, OEMs, distributors, add-in card partners and other channel partners that are earmarked for market segment development and expansion and typically are designed to support our partners’ activities while also promoting NVIDIA products. Depending on market conditions, we may take actions to increase amounts offered under customer programs, possibly resulting in an incremental reduction of revenue at the time such programs are offered. We account for MDFs as a reduction of revenue and apply a breakage factor to certain types of MDF program accruals for which we believe we can make a reasonable and reliable estimate of the amount that will ultimately be unclaimed.

We also record a reduction to revenue by establishing a sales return allowance for estimated product returns at the time revenue is recognized, based primarily on historical return rates. However, if product returns for a particular fiscal period exceed historical return rates we may determine that additional sales return allowances are required to properly reflect our estimated exposure for product returns.

License and Development Revenue

For license arrangements that require significant customization of our intellectual property components, we generally recognize the related revenue over the period that services are performed. For most license and service arrangements, we determine progress to completion based on actual cost incurred to date as a percentage of the estimated total cost required to complete the project. A provision for estimated losses on contracts is made in the period in which the loss becomes probable and can be reasonably estimated. Costs incurred in advance of revenue recognized are recorded as deferred costs on uncompleted contracts. If the amount billed exceeds the amount of revenue recognized, the excess amount is recorded as deferred revenue.

For license arrangements that do not require significant customization but where we are obligated to provide further deliverables over the term of the license agreement, we record revenue over the life of the license term, with consideration received in advance of the performance period classified as deferred revenue.

Royalty revenue is recognized related to the distribution or sale of products that use our technologies under license agreements with third parties.  We recognize royalty revenue upon receipt of a confirmation of earned royalties and when collectability is reasonably assured from the applicable licensee.

Restructuring and Other Charges, Policy 
Restructuring and Other Charges

Our restructuring and other charges include employee severance and related costs, the write-down of assets, and other exit costs. The severance and related costs 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.

Advertising Costs, Policy 
Advertising Expenses

We expense advertising costs in the period in which they are incurred. Advertising expenses for fiscal years 2017, 2016, and 2015 were $17 million, $30 million, and $21 million, respectively.
Lease, Policy 
Rent Expense
 
We recognize rent expense on a straight-line basis over the lease period and accrue for rent expense incurred, but not paid.
Commitments and Contingencies, Policy 
Product Warranties
 
We generally offer limited warranty to end-users that ranges from one to three years for products in order to repair or replace products for any manufacturing defects or hardware component failures. 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. We also accrue for known warranty and indemnification issues if a loss is probable and can be reasonably estimated.
Compensation Related Costs, Policy 
Stock-based Compensation
      
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 restricted stock units, or RSUs, and performance stock units that are based on our corporate financial performance targets, or PSUs. We use a Monte Carlo simulation on the date of grant to estimate the fair value of performance stock units that are based on market conditions, or market-based PSUs. The 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 is recognized using an accelerated amortization model. We estimate the fair value of shares to be issued under our employee stock purchase plan, or ESPP, using the Black-Scholes model at the commencement of an offering period in March and September of each year. Stock-based compensation for our ESPP is expensed using an accelerated amortization model. Additionally, we estimate forfeitures annually based on historical experience and revise the estimates of forfeiture in subsequent periods if actual forfeitures differ from those estimates. If factors change, the compensation expense that we record under these accounting standards may differ significantly from what we have recorded in the current period.
Legal Costs, Policy 
Litigation, Investigation and Settlement Costs

From time to time, we are involved in legal actions and/or investigations by regulatory bodies. We are aggressively defending our current litigation matters. However, there are many uncertainties associated with any litigation or investigation, and we cannot be certain that these actions or other third-party claims against us will be resolved without litigation, fines and/or substantial settlement payments. If that occurs, our business, financial condition and results of operations could be materially and adversely affected. If information becomes available that causes us to determine that a loss in any of our pending litigation, investigations or settlements is probable, and we can reasonably estimate the loss associated with such events, we will record the loss in accordance with U.S. GAAP. However, the actual liability in any such litigation or investigation may be materially different from our estimates, which could require us to record additional costs.
Foreign Currency Transactions and Translations Policy 
Foreign Currency Remeasurement
 
We use the United States dollar as our functional currency for all of our subsidiaries. Foreign currency monetary assets and liabilities are remeasured into United States dollars at end-of-period exchange rates. Non-monetary assets and liabilities such as property and equipment, and equity are remeasured at historical exchange rates. Revenue and expenses are remeasured at average exchange rates in effect during each period, except for those expenses related to the previously noted balance sheet amounts, which are remeasured at historical exchange rates. Gains or losses from foreign currency remeasurement are included in “Other income (expense), net” in our Consolidated Statements of Income and to date have not been significant.

The impact of gain or loss from foreign currency remeasurement included in determining other income (expense), net, was a $5 million loss for fiscal year 2017 and was not significant for fiscal years 2016 and 2015.

Income Tax, Policy 
Income Taxes
 
We recognize federal, state and foreign current tax liabilities or assets based on our estimate of taxes payable or refundable in the current fiscal year by tax jurisdiction. We recognize federal, state and foreign deferred tax assets or liabilities, as appropriate, for our estimate of future tax effects attributable to temporary differences and carryforwards; and we record a valuation allowance to reduce any deferred tax assets by the amount of any tax benefits that, based on available evidence and judgment, are not expected to be realized.

United States income tax has not been provided on a portion of earnings of our non-U.S. subsidiaries to the extent that such earnings are considered to be indefinitely reinvested.

Our calculation of deferred tax assets and liabilities is based on certain estimates and judgments and involves dealing with uncertainties in the application of complex tax laws. Our estimates of deferred tax assets and liabilities may change based, in part, on added certainty or finality to an anticipated outcome, changes in accounting standards or tax laws in the United States, or foreign jurisdictions where we operate, or changes in other facts or circumstances. In addition, we recognize liabilities for potential United States and foreign income tax contingencies based on our estimate of whether, and the extent to which, additional taxes may be due. If we determine that payment of these amounts is unnecessary or if the recorded tax liability is less than our current assessment, we may be required to recognize an income tax benefit or additional income tax expense in our financial statements accordingly.

As of January 29, 2017, we had a valuation allowance of $353 million related to state and certain foreign deferred tax assets that management determined are not likely to be realized due, in part, to projections of future taxable income and potential utilization limitations of tax attributes acquired as a result of stock ownership changes. To the extent realization of the deferred tax assets becomes more-likely-than-not, we would recognize such deferred tax asset as an income tax benefit during the period.

We recognize the benefit from a tax position only if it is more-likely-than-not that the position would be sustained upon audit based solely on the technical merits of the tax position. Our policy is to include interest and penalties related to unrecognized tax benefits as a component of income tax expense. Please refer to Note 13 of these Notes to the Consolidated Financial Statements for additional information.

Comprehensive Income, Policy 
Comprehensive Income
 
Comprehensive income consists of net income and other comprehensive income (loss). Other comprehensive income (loss) components include unrealized gains (losses) on available-for-sale securities and unrealized gains (losses) on cash flow hedges.
Earnings Per Share, Policy 
Net Income Per Share
 
Basic net income per share is computed using the weighted average number of common shares outstanding during the period. Diluted net income per share is computed using the weighted average number of common and potentially dilutive shares outstanding during the period, using the treasury stock method. Under the treasury stock method, the effect of stock options outstanding is not included in the computation of diluted net income per share for periods when their effect is anti-dilutive. Additionally, we issued convertible notes with a net settlement feature that requires us, upon conversion, to settle the principal amount of debt for cash and the conversion premium for cash or shares of our common stock. Our convertible notes, note hedges, and related warrants contain various conversion features, which are further described in Note 11 of these Notes to the Consolidated Financial Statements. The potentially dilutive shares resulting from the convertible notes and warrants under the treasury stock method will be included in the calculation of diluted income per share when their inclusion is dilutive. However, unless actually exercised, the note hedges will not be included in the calculation of diluted net income per share, as their pre-exercised effect would be anti-dilutive under the treasury stock method.
Cash and Cash Equivalents, Policy 
Cash and Cash Equivalents
 
We consider all highly liquid investments that are readily convertible into cash and have an original maturity of three months or less at the time of purchase to be cash equivalents. As of January 29, 2017 and January 31, 2016, our cash and cash equivalents were $1.77 billion and $596 million, respectively, including $321 million and $43 million, respectively, invested in money market funds.
Marketable Securities, Policy 
Marketable Securities
 
Marketable securities consist primarily of highly liquid investments with maturities of greater than three months when purchased. We generally classify our marketable securities at the date of acquisition as available-for-sale. These securities are reported at fair value with the related unrealized gains and losses included in accumulated other comprehensive income (loss), a component of shareholders’ equity, net of tax. The fair value of interest-bearing securities includes accrued interest. Any unrealized losses which are considered to be other-than-temporary impairments are recorded in the other income (expense), net, section of our Consolidated Statements of Income. Realized gains and losses on the sale of marketable securities are determined using the specific-identification method and recorded in the other income (expense), net, section of our Consolidated Statements of Income.

All of our available-for-sale investments are subject to a periodic impairment review. We record a charge to earnings when a decline in fair value is significantly below cost basis and judged to be other-than-temporary, or have other indicators of impairments. If the fair value of an available-for-sale debt instrument is less than its amortized cost basis, an other-than-temporary impairment is triggered in circumstances where (1) we intend to sell the instrument, (2) it is more likely than not that we will be required to sell the instrument before recovery of its amortized cost basis, or (3) a credit loss exists where we do not expect to recover the entire amortized cost basis of the instrument. In these situations, we recognize an other-than-temporary impairment in earnings equal to the entire difference between the debt instruments’ amortized cost basis and its fair value. For available-for-sale debt instruments that are considered other-than-temporarily impaired due to the existence of a credit loss, if we do not intend to sell and it is not more likely than not that we will not be required to sell the instrument before recovery of its remaining amortized cost basis (amortized cost basis less any current-period credit loss), we separate the amount of the impairment into the amount that is credit related and the amount due to all other factors. The credit loss component is recognized in earnings while loss related to all other factors is recorded in accumulated other comprehensive income (loss).
 
Investment, Policy 
Fair Value of Financial Instruments
 
The carrying value of cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair values due to their relatively short maturities as of January 29, 2017 and January 31, 2016. Marketable securities are comprised of available-for-sale securities that are reported at fair value with the related unrealized gains (losses) included in accumulated other comprehensive income (loss), a component of shareholders’ equity, net of tax. Fair value of the marketable securities is determined based on quoted market prices. Derivative instruments are recognized as either assets or liabilities and are measured at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. For derivative instruments designated as fair value hedges, the gains (losses) are recognized in earnings in the periods of change together with the offsetting losses (gains) on the hedged items attributed to the risk being hedged. For derivative instruments designated as cash-flow hedges, the effective portion of the gains (losses) on the derivatives is initially reported as a component of other comprehensive income (loss) and is subsequently recognized in earnings when the hedged exposure is recognized in earnings.
Concentration Risk, Credit Risk, Policy 
Concentration of Credit Risk
 
Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash equivalents, marketable securities, accounts receivable, note hedge and interest rate swap. Our investment policy requires the purchase of high grade investment securities, the diversification of asset type and includes certain limits on our portfolio duration. All marketable securities are held in our name, managed by several investment managers and held by one major financial institution under a custodial arrangement. Accounts receivable from significant customers, those representing 10% or more of total accounts receivable, aggregated approximately 29% of our accounts receivable balance from two customers as of January 29, 2017 and 28% of our account receivable balance from two customers as of January 31, 2016. We perform ongoing credit evaluations of our customers’ financial condition and maintain an allowance for potential credit losses. This allowance consists of an amount identified for specific customers and an amount based on overall estimated exposure. Our overall estimated exposure excludes amounts covered by credit insurance and letters of credit.
Receivables, Policy 
Accounts Receivable
 
We maintain an allowance for doubtful accounts receivable for estimated losses resulting from the inability of our customers to make required payments. We determine this allowance by identifying amounts for specific customer issues as well as amounts based on overall estimated exposure. Factors impacting the allowance include the level of gross receivables, the financial condition of our customers and the extent to which balances are covered by credit insurance or letters of credit.
Inventories 
Inventories

Inventory cost is computed on an adjusted standard basis, which approximates actual cost on an average or first-in, first-out basis. Inventory costs consist primarily of the cost of semiconductors purchased from subcontractors, including wafer fabrication, assembly, testing and packaging, manufacturing support costs, including labor and overhead associated with such purchases, final test yield fallout, and shipping costs, as well as the cost of purchased memory products and other component parts. We charge cost of sales for inventory provisions to write down our inventory to the lower of cost or estimated market value or to completely write off obsolete or excess inventory. Most of our inventory provisions relate to the write-off of excess quantities of products, based on our inventory levels and future product purchase commitments compared to assumptions about future demand and market conditions. Once inventory has been written-off or written-down, it creates a new cost basis for the inventory that is not subsequently written-up.

Property, Plant and Equipment, Policy 
Property and Equipment
 
Property and equipment are stated at cost. Depreciation of property and equipment is computed using the straight-line method based on the estimated useful lives of the assets, generally three to five years. Once an asset is identified for retirement or disposition, the related cost and accumulated depreciation or amortization are removed, and a gain or loss is recorded. The estimated useful lives of our buildings are up to twenty five years. Depreciation expense includes the amortization of assets recorded under capital leases. Leasehold improvements and assets recorded under capital leases are amortized over the shorter of the expected lease term or the estimated useful life of the asset.
Goodwill and Intangible Assets, Policy 
Goodwill

Goodwill is subject to our annual impairment test during the fourth quarter of our fiscal year, or earlier if indicators of potential impairment exist.  For the purposes of completing our impairment test, we perform either a qualitative or a quantitative analysis on a reporting unit basis. 

For those reporting units where a significant change or event has occurred, where potential impairment indicators exist, or for which we have not performed a quantitative assessment recently, we utilize a two-step quantitative assessment to testing goodwill for impairment. The first step tests for possible impairment by applying a fair value-based test by weighting the results from the income approach and the market approach. The second step, if necessary, measures the amount of such impairment by applying fair value-based tests to individual assets and liabilities. Please refer to Note 4 of these Notes to the Consolidated Financial Statements for additional information. 

Impairment or Disposal of Long-Lived Assets, Policy 
Long-Lived Assets
 
Intangible assets primarily represent rights acquired under technology licenses, patents, acquired intellectual property, trademarks and customer relationships and are subject to an annual impairment test. We currently amortize our intangible assets with definitive lives over periods ranging from three to ten years using a method that reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up or, if that pattern cannot be reliably determined, using a straight-line amortization method.

Long-lived assets, such as property and equipment and intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset or asset group to estimated undiscounted future cash flows expected to be generated by the asset, or asset group. If the carrying amount of an asset or asset group exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset or asset group exceeds the estimated fair value of the asset or asset group. Fair value is determined based on the estimated discounted future cash flows expected to be generated by the asset or asset group. Assets and liabilities to be disposed of would be separately presented in the Consolidated Balance Sheet and the assets would be reported at the lower of the carrying amount or fair value less costs to sell, and would no longer be depreciated.
New Accounting Pronouncements, Policy 
Adoption of New and Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncement

In fiscal year 2017, the Financial Accounting Standards Board, or FASB, issued an accounting standards update which simplifies certain aspects of stock-based compensation accounting. Among other elements, the new guidance eliminates additional paid in capital, or APIC, pools and requires excess tax benefits and tax deficiencies to be recorded in the income statement when the awards vest or are settled. In addition, cash flows related to excess tax benefits will no longer be separately classified as a financing activity apart from other income tax cash flows. We elected to early adopt this new guidance in the third quarter of fiscal year 2017, which required us to reflect any adjustments as of February 1, 2016.

Early adoption of this guidance resulted in the following:

•
We recorded an excess tax benefit from stock-based compensation within income tax expense, rather than in APIC, of $82 million for fiscal year 2017.

•
We recorded a cumulative-effect adjustment as of February 1, 2016 to increase retained earnings by $353 million, with a corresponding increase to deferred tax assets, to recognize the federal net operating loss and federal research tax credit carryforwards attributable to excess tax benefits on stock-based compensation that had not been previously recognized in APIC. We also recorded deferred tax assets of $63 million with a corresponding full valuation allowance related to state net operating loss and state research credit carryforwards.

•
The excess tax benefit from stock-based compensation is now included in net operating cash rather than net financing cash in our Consolidated Statements of Cash Flows. We elected to apply this change in presentation prospectively and thus prior periods have not been adjusted.

We elected not to change our policy on accounting for forfeitures, although the new guidance provides an option for us to account for forfeitures as they occur, and thus continued to estimate forfeitures expected to occur to determine the amount of compensation cost to be recognized in each period.

Recent Accounting Pronouncements Not Yet Adopted

In January 2017, the FASB issued an accounting standards update that simplifies the test for goodwill impairment. The update eliminates the second step in the goodwill impairment test that requires an entity to determine the implied fair value of the reporting unit’s goodwill. Instead, an entity should recognize an impairment loss if the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, with the impairment loss not to exceed the amount of goodwill allocated to the reporting unit. The update will be effective for us beginning in our fiscal year 2020, with early adoption permitted. The adoption of this accounting guidance is not currently expected to have a material impact on our consolidated financial statements.

In October 2016, the FASB issued an accounting standards update that requires the recognition of income tax consequences for intra-entity transfers of assets other than inventory when the transfer occurs. The update will be effective for us beginning in our first quarter of fiscal year 2019, with early adoption permitted. The adoption of this accounting guidance is not currently expected to have a material impact on our consolidated financial statements.

In August 2016, the FASB issued an accounting standards update that clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows. The update will be effective for us beginning in our first quarter of fiscal year 2019, with early adoption permitted. The adoption of this accounting guidance is not expected to have a material impact on our consolidated financial statements.

In June 2016, the FASB issued an accounting standards update that changes the accounting for recognizing impairments of financial assets. Under the new guidance, credit losses for certain types of financial instruments will be estimated based on expected losses. The update also modifies the impairment models for available-for-sale debt securities and for purchased financial assets with credit deterioration since their origination. The update will be effective for us beginning in our first quarter of fiscal 2021, with early adoption permitted. The adoption of this accounting guidance is not currently expected to have a material impact on our consolidated financial statements.

In February 2016, the FASB issued an accounting standards update regarding the accounting for leases by which we will begin recognizing lease assets and liabilities on the balance sheet for leases with a lease term of more than 12 months. The update will require additional disclosures regarding key information about leasing arrangements. Under existing guidance, operating leases are not recorded as lease assets and lease liabilities on the balance sheet. The update will be effective for us beginning in our first quarter of fiscal year 2020, with early adoption permitted. We are currently evaluating the impact of the adoption of this accounting guidance on our consolidated financial statements. However, we expect the adoption of this accounting guidance to result in an increase in lease assets and a corresponding increase in lease liabilities on our Consolidated Balance Sheets.

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, 2017, including interim periods within that reporting period. We expect to adopt this guidance beginning in our first quarter of fiscal year 2019 using the modified retrospective approach. While we are still finalizing our analysis to quantify the adoption impact of the provisions of the new standard, we do not expect it to have a material impact on our consolidated financial statements.
Stock Based Compensation (Tables)
Stock-based compensation expense, net of amounts capitalized as inventory 
 
Year Ended
 
January 29,
2017
 
January 31,
2016
 
January 25,
2015
 
(In millions)
Cost of revenue
$
15

 
$
15

 
$
12

Research and development
134

 
115

 
88

Sales, general and administrative
98

 
74

 
58

Total
$
247

 
$
204

 
$
158

Summary of equity awards granted under equity incentive plans 
 
Year Ended
 
January 29,
2017
 
January 31,
2016
 
January 25,
2015
 
(In millions, except per share data)
RSUs, PSUs and Market-based PSUs
 
 
 
 
 
Awards granted
12

 
13

 
13

Estimated total grant-date fair value
$
591

 
$
296

 
$
228

Weighted average grant-date fair value (per share)
$
50.57

 
$
22.01

 
$
17.68

 
 
 
 
 
 
ESPP
 
 
 
 
 
Shares purchased
4

 
6

 
7

Weighted average price (per share)
$
18.51

 
$
13.67

 
$
10.99

Weighted average grant-date fair value (per share)
$
5.80

 
$
4.53

 
$
4.99

Summary of unearned stock-based compensation expense 
 
January 29,
2017
 
January 31,
2016
 
(In millions)
Aggregate unearned stock-based compensation expense
$
627

 
$
381

 
 
 
 
Estimated weighted average remaining amortization period
(In years)
Stock options
0.5

 
1.1

RSUs, PSUs and market-based PSUs
2.6

 
2.7

ESPP
0.6

 
0.7

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions 
 
Year Ended
 
January 29,
2017
 
January 31,
2016
 
January 25,
2015
 
(Using the Black-Scholes model)
ESPP
 
 
 
 
 
Weighted average expected life (in years)
0.5-2.0
 
0.5-2.0
 
0.5-2.0
Risk-free interest rate
0.5%-0.9%
 
0.1%-0.7%
 
0.1%-0.5%
Volatility
30%-39%
 
24%-34%
 
23%-31%
Dividend yield
0.7%-1.4%
 
1.5%-1.8%
 
1.7%-1.9%
Schedule of Share-based Compensation, Activity 
 
RSUs, PSUs and Market-based PSUs Outstanding
 
Options Outstanding
 
Number of
Shares
 
Weighted
Average
Grant-Date
Fair Value
 
Number of
Shares
 
Weighted
Average
Exercise Price
Per Share
 
Weighted
Average
Remaining  
Contractual
Life
 
Aggregate
Intrinsic
Value (3)
 
(In millions, except years and per share data)
Balances, January 31, 2016
26

 
$
19.12

 
13

 
$
14.49

 
 
 
 
Granted (1)(2)
12

 
$
50.57

 
—

 
—

 
 
 
 
Exercised
—

 
—

 
(6
)
 
$
14.52

 
 
 
 
Vested restricted stock
(10
)
 
$
17.93

 
—

 
—

 
 
 
 
Canceled and forfeited
(1
)
 
$
23.68

 
—

 
—

 
 
 
 
Balances, January 29, 2017
27

 
$
32.84

 
7

 
$
14.47

 
5.4
 
$
724

Exercisable as of January 29, 2017
 
 
 
 
7

 
$
14.39

 
5.3
 
$
667

Vested and expected to vest after January 29, 2017
23

 
$
32.74

 
7

 
$
14.46

 
5.4
 
$
715



(1)
Includes PSUs that will be issued and eligible to vest based on the corporate financial performance maximum target level achieved for fiscal year 2017.

(2)
Includes market-based PSUs that will be issued and 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 issued could range from 0 to 0.3 million shares.

(3)
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value for in-the-money options at January 29, 2017, based on the $111.77 closing price of our common stock on January 27, 2017.
Net Income Per Share (Tables)
Reconciliation of numerators and denominators of basic and diluted net income (loss) per share computations
 
Year Ended
 
January 29,
2017
 
January 31,
2016
 
January 25,
2015
 
(In millions, except per share data)
Numerator:
 
 
 
 
 
Net income
$
1,666

 
$
614

 
$
631

Denominator:
 
 
 
 
 
Basic weighted average shares
541

 
543

 
552

Dilutive impact of outstanding securities:
 
 
 
 
 
Equity awards
26

 
13

 
11

1.00% Convertible Senior Notes
44

 
13

 
—

Warrants issued with the 1.00% Convertible Senior Notes
38

 
—

 
—

Diluted weighted average shares
649

 
569

 
563

Net income per share:
 
 
 
 
 
Basic (1)
$
3.08

 
$
1.13

 
$
1.14

Diluted (2)
$
2.57

 
$
1.08

 
$
1.12

Equity awards excluded from diluted net income per share because their effect would have been anti-dilutive
8

 
10

 
12

Goodwill (Tables)
Goodwill
 
January 29,
2017
 
January 31,
2016
 
(In millions)
Icera
$
271

 
$
271

PortalPlayer
105

 
105

Mental Images
59

 
59

3dfx
50

 
50

MediaQ
35

 
35

ULi
31

 
31

Hybrid Graphics
28

 
28

Ageia
19

 
19

Portland Group Inc.
2

 
2

Other
18

 
18

Total goodwill
$
618

 
$
618

Intangible Assets (Tables)
Amortizable Intangible Assets Components
 
January 29, 2017
 
January 31, 2016
 
Gross 
Carrying
Amount
 
Accumulated
Amortization
 
Net 
Carrying
Amount
 
Gross 
Carrying
Amount
 
Accumulated
Amortization
 
Net 
Carrying
Amount
 
(In millions)
 
(In millions)
Acquisition-related intangible assets
$
193

 
$
(167
)
 
$
26

 
$
193

 
$
(152
)
 
$
41

Patents and licensed technology
468

 
(390
)
 
78

 
462

 
(337
)
 
125

Total intangible assets
$
661

 
$
(557
)
 
$
104

 
$
655

 
$
(489
)
 
$
166

Marketable Securities (Tables)
Cash Equivalents and Marketable Securities 
 
January 29, 2017
 
Amortized
Cost
 
Unrealized
Gain
 
Unrealized
Loss
 
Estimated
Fair Value
 
(In millions)
Corporate debt securities
$
2,397

 
$
1

 
$
(10
)
 
$
2,388

Debt securities of United States government agencies
1,193

 
—

 
(5
)
 
1,188

Debt securities issued by the United States Treasury
852

 
—

 
(2
)
 
850

Asset-backed securities
490

 
—

 
(1
)
 
489

Money market funds
321

 
—

 
—

 
321

Mortgage backed securities issued by United States government-sponsored enterprises
161

 
2

 
(1
)
 
162

Foreign government bonds
70

 
—

 
—

 
70

Total
$
5,484

 
$
3

 
$
(19
)
 
$
5,468

Classified as:
 
 
 
 
 
 
 
Cash equivalents
 
 
 
 
 
 
$
436

Marketable securities
 
 
 
 
 
 
5,032

Total
 
 
 
 
 
 
$
5,468

 
 
January 31, 2016
 
Amortized
Cost
 
Unrealized
Gain
 
Unrealized
Loss
 
Estimated
Fair Value
 
(In millions)
Corporate debt securities
$
1,903

 
$
1

 
$
(3
)
 
$
1,901

Debt securities of United States government agencies
1,170

 
1

 
(1
)
 
1,170

Debt securities issued by the United States Treasury
800

 
1

 
—

 
801

Asset-backed securities
435

 
—

 
—

 
435

Mortgage backed securities issued by United States government-sponsored enterprises
229

 
3

 
(1
)
 
231

Foreign government bonds
92

 
—

 
—

 
92

Money market funds
43

 
—

 
—

 
43

Total
$
4,672

 
$
6

 
$
(5
)
 
$
4,673

Classified as:
 
 
 
 
 
 
 
Cash equivalents
 
 
 
 
 
 
$
232

Marketable securities
 
 
 
 
 
 
4,441

Total
 
 
 
 
 
 
$
4,673

  
The following table provides the breakdown of the investments with unrealized losses as of January 29, 2017:

 
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
$
1,721

 
$
(10
)
 
$
55

 
$
—

 
$
1,776

 
$
(10
)
Debt securities issued by United States government agencies
906

 
(5
)
 
28

 
—

 
934

 
(5
)
Debt securities issued by the US Treasury
629

 
(2
)
 
—

 
—

 
629

 
(2
)
Mortgage backed securities issued by United States government-sponsored enterprises
43

 
—

 
35

 
(1
)
 
78

 
(1
)
Asset-backed securities
383

 
(1
)
 
3

 
—

 
386

 
(1
)
Total
$
3,682

 
$
(18
)
 
$
121

 
$
(1
)
 
$
3,803

 
$
(19
)
Schedule of Cash Equivalents and Marketable Securities Available for Sale 
 
January 29, 2017
 
January 31, 2016
 
Amortized
Cost
 
Estimated
Fair Value
 
Amortized
Cost
 
Estimated
Fair Value
 
(In millions)
Less than one year
$
2,209

 
$
2,209

 
$
1,619

 
$
1,619

Due in 1 - 5 years
3,210

 
3,194

 
3,019

 
3,020

Mortgage-backed securities issued by government-sponsored enterprises not due at a single maturity date
65

 
65

 
34

 
34

Total
$
5,484

 
$
5,468

 
$
4,672

 
$
4,673

Fair Value of Cash Equivalents and Marketable Securities (Tables)
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]
 
 
Fair Value at
 
Pricing Category
 
January 29, 2017
 
January 31, 2016
 
 
 
(In millions)
Assets
 
 
 
 
 
Cash equivalents and marketable securities:
 
 
 
 
 
Corporate debt securities (1)
Level 2
 
$
2,388

 
$
1,901

Debt securities of U.S. government agencies (2)
Level 2
 
$
1,188

 
$
1,170

Debt securities issued by the United States Treasury (3)
Level 2
 
$
850

 
$
801

Asset-backed securities (4)
Level 2
 
$
489

 
$
435

Money market funds (5)
Level 1
 
$
321

 
$
43

Mortgage-backed securities issued by United States government-sponsored enterprises (4)
Level 2
 
$
162

 
$
231

Foreign government bonds (4)
Level 2
 
$
70

 
$
92

 
 
 
 
 
 
Liabilities
 
 
 
 
 
Current liability:
 
 
 
 
 
1.00% Convertible Senior Notes (6)
Level 2
 
$
4,474

 
$
2,273

Other noncurrent liabilities:
 
 
 
 
 
2.20% Notes Due 2021 (6)
Level 2
 
$
975

 
$
—

3.20% Notes Due 2026 (6)
Level 2
 
$
961

 
$
—

Interest rate swap (7)
Level 2
 
$
2

 
$
7


(1)
Included $33 million and $51 million in cash equivalents as of January 29, 2017 and January 31, 2016, respectively, and $2.35 billion and $1.85 billion in marketable securities as of January 29, 2017 and January 31, 2016, respectively, on the Consolidated Balance Sheets.

(2)
Included $27 million and $90 million in cash equivalents as of January 29, 2017 and January 31, 2016, respectively, and $1.16 billion and $1.08 billion in marketable securities as of January 29, 2017 and January 31, 2016, respectively, on the Consolidated Balance Sheets.

(3)
Included $55 million in cash equivalents as of January 29, 2017 and $795 million and $801 million in marketable securities as of January 29, 2017 and January 31, 2016, respectively, on the Consolidated Balance Sheets.

(4)
Reported in marketable securities on the Consolidated Balance Sheets.

(5)
Reported in cash equivalents on the Consolidated Balance Sheets.

(6)
The 1.00% Convertible Notes, 2.20% Notes Due 2021, and 3.20% Notes Due 2026 are carried on our Consolidated Balance Sheets at their original issuance value, net of unamortized debt discount and issuance costs, and are not marked to fair value each period. See Note 11 of these Notes to the Consolidated Financial Statements for additional information.

(7)
Please refer to Note 9 of these Notes to Consolidated Financial Statements for a discussion regarding our interest rate swap.
Balance Sheet Components (Tables)
Inventories 
 
January 29,
2017
 
January 31,
2016
 
(In millions)
Inventories:
 
 
 
Raw materials
$
252

 
$
105

Work in-process
176

 
103

Finished goods
366

 
210

     Total inventories
$
794

 
$
418

Property, Plant and Equipment 
 
January 29,
2017
 
January 31,
2016
 
Estimated
Useful Life
 
(In millions)
 
(In years)
Property and Equipment:
 
 
 
 
 
Land
$
218

 
$
218

 
(A)
Building
13

 
13

 
25-30
Test equipment
427

 
354

 
3-5
Computer equipment
188

 
155

 
3-5
Leasehold improvements
176

 
174

 
(B)
Software and licenses
63

 
98

 
3-5
Office furniture and equipment
49

 
48

 
5
Capital leases
28

 
28

 
(B)
Construction in process
29

 
12

 
(C)
Total property and equipment, gross
1,191

 
1,100

 
 
Accumulated depreciation and amortization
(670
)
 
(634
)
 
 
     Total property and equipment, net
$
521

 
$
466

 
 
(A) Land is a non-depreciable asset.
(B) Leasehold improvements and capital leases are amortized based on the lesser of either the asset’s estimated useful life or the remaining expected lease term.
(C) Construction in process represents assets that are not in service as of the balance sheet date.
Accrued Liabilities 
 
January 29,
2017
 
January 31,
2016
 
(In millions)
Accrued Liabilities:
 
 
 
Customer related liabilities (1)
$
197

 
$
160

Accrued payroll and related expenses
137

 
79

Deferred revenue (2)
85

 
322

Coupon interest on debt obligations
21

 
3

Accrued restructuring and other charges (3)
13

 
23

Professional service fees
13

 
23

Warranty accrual (4)
8

 
11

Accrued royalties
7

 
1

Leases payable
4

 
4

Taxes payable
4

 
2

Contributions payable
4

 
3

Other
14

 
11

Total accrued and other current liabilities
$
507

 
$
642


(1)  Customer related liabilities primarily includes accrued rebates and marketing development funds.
(2)
Deferred revenue under our patent cross licensing agreement with Intel Corporation will expire in March 2017. We will be recognizing revenue under this agreement through the first quarter of fiscal year 2018.
(3) Please refer to Note 17 of these Notes to the Consolidated Financial Statements for a discussion regarding restructuring and other charges.
(4)  Please refer to Note 10 of these Notes to the Consolidated Financial Statements for a discussion regarding warranties.
Other Long-term Liabilities 
 
January 29,
2017
 
January 31,
2016
 
(In millions)
Other Long Term Liabilities:
 
 
 
Deferred income tax liability (1)
$
141

 
$
301

Income tax payable
96

 
78

Contributions payable
10

 
13

Deferred revenue (2)
4

 
44

Other
20

 
17

Total other long-term liabilities
$
271

 
$
453



(1)  Please refer to the “Recently Adopted Accounting Pronouncement” section of Note 1 of these Notes to the Consolidated Financial Statements for a discussion regarding the impact of a recently adopted accounting pronouncement related to stock-based compensation.

(2)  Deferred revenue under our patent cross licensing agreement with Intel Corporation is now located in short term deferred revenue as less than twelve months remains on the agreement.
Guarantees (Tables)
Estimated Product Warranty Liabilities
 
January 29,
2017
 
January 31,
2016
 
January 25,
2015
 
(In millions)
Balance at beginning of period
$
11

 
$
8

 
$
8

Additions
2

 
27

 
5

Deductions
(5
)
 
(24
)
 
(5
)
Balance at end of period 
$
8

 
$
11

 
$
8

 
Debt (Table)
Convertible Debt 

The following table presents the carrying value of the liability of the Convertible Notes:
 
January 29, 2017
 
January 31, 2016
 
(In millions)
1.00% Convertible Senior Notes
$
827

 
$
1,500

Unamortized debt discount (1)
(31
)
 
(87
)
Net carrying amount
$
796

 
$
1,413

(1) As of January 29, 2017, the remaining period over which the unamortized debt discount will be amortized is 1.8 years.
The following table presents interest expense for the contractual interest and the accretion of debt discount and issuance costs related to the Convertible Notes:
 
Year Ended
 
January 29, 2017
 
January 31, 2016
 
January 25, 2015
 
(In millions)
Contractual coupon interest expense
$
9

 
$
15

 
$
15

Amortization of debt discount
24

 
29

 
28

Total interest expense related to Convertible Notes
$
33

 
$
44

 
$
43

Long-term Debt 
The carrying value of our long-term debt and the associated interest rates were as follows:
 
 
Expected
Remaining Term (years)
 
Effective
Interest Rate
 
January 29, 2017
 
 
 
 
 
 
(In millions)
2.20% Notes Due 2021
 
4.6
 
2.38%
 
$
1,000

3.20% Notes Due 2026
 
9.6
 
3.31%
 
1,000

Unamortized debt discount and issuance costs
 
 
 
 
 
(17
)
Net carrying amount
 
 
 
 
 
$
1,983

Commitments and Contingencies (Tables)
Schedule of Future Minimum Rental Payments for Operating Leases 
 
Future Minimum Lease Obligations
 
(In millions)
Fiscal Year:
 
2018
$
42

2019
36

2020
20

2021
17

2022
12

2023 and thereafter
13

Total
$
140

Schedule of Future Minimum Lease Payments for Capital Leases 
 
Future Capital Lease Obligations
 
(In millions)
Fiscal Year:
 

2018
$
5

2019
6

Total
$
11

Present value of minimum lease payments
$
10

 
 
Current portion
$
4

Long-term portion
$
6

Income Taxes Income Taxes (Tables)
Schedule of Components of Income Tax Expense (Benefit) 
 
Year Ended
 
January 29,
2017
 
January 31,
2016
 
January 25,
2015
 
(In millions)
Current income taxes:
 
 
 
 
 
Federal
$
7

 
$
(43
)
 
$
8

State
1

 
1

 
1

Foreign
34

 
25

 
17

Total current
42

 
(17
)
 
26

Deferred taxes:
 
 
 
 
 
Federal
199

 
134

 
84

State
—

 
—

 
—

Foreign
(2
)
 
—

 
(1
)
Total deferred
197

 
134

 
83

Charge in lieu of taxes attributable to employer stock option plans
—

 
12

 
15

Income tax expense
$
239

 
$
129

 
$
124

Schedule of Income before Income Tax, Domestic and Foreign 
 
Year Ended
 
January 29,
2017
 
January 31,
2016
 
January 25,
2015
 
(In millions)
Domestic
$
600

 
$
129

 
$
174

Foreign
1,305

 
614

 
581

Income before income tax
$
1,905

 
$
743

 
$
755

Schedule of Effective Income Tax Rate Reconciliation 
 
Year Ended
 
January 29,
2017
 
January 31,
2016
 
January 25,
2015
 
(In millions)
Tax expense computed at federal statutory rate
$
667

 
$
260

 
$
264

Tax expense related to intercompany transaction
10

 
10

 
10

State income taxes, net of federal tax effect
4

 
1

 
1

Foreign tax rate differential
(315
)
 
(95
)
 
(120
)
Stock-based compensation (1)
(70
)
 
13

 
4

U.S. federal R&D tax credit
(52
)
 
(38
)
 
(34
)
Restructuring and expiration of statute of limitations
—

 
(21
)
 
—

Other
(5
)
 
(1
)
 
(1
)
Income tax expense
$
239

 
$
129

 
$
124

Schedule of Deferred Tax Assets and Liabilities 
 
January 29,
2017
 
January 31,
2016
 
(In millions)
Deferred tax assets:
 
Net operating loss carryforwards (1)
$
199

 
$
57

Accruals and reserves, not currently deductible for tax purposes
40

 
58

Property, equipment and intangible assets
50

 
50

Research and other tax credit carryforwards (1)
728

 
404

Stock-based compensation
34

 
29

Convertible debt
6

 
9

Gross deferred tax assets
1,057

 
607

Less valuation allowance (1)
(353
)
 
(272
)
Total deferred tax assets
704

 
335

Deferred tax liabilities:
 
 
 
Acquired intangibles
(11
)
 
(17
)
Unremitted earnings of foreign subsidiaries
(827
)
 
(615
)
Gross deferred tax liabilities
(838
)
 
(632
)
Net deferred tax liability
$
(134
)
 
$
(297
)
Summary of Income Tax Contingencies 
 
January 29,
2017
 
January 31,
2016
 
January 25,
2015
 
(In millions)
Balance at beginning of period
$
230

 
$
254

 
$
238

Increases in tax positions for prior years
3

 
—

 
—

Decreases in tax positions for prior years
—

 
(1
)
 
(1
)
Increases in tax positions for current year
46

 
28

 
23

Settlements
(48
)
 
—

 
—

Lapse in statute of limitations
(7
)
 
(51
)
 
(6
)
Balance at end of period
$
224

 
$
230

 
$
254

Segment Information (Tables)
Schedule of Segment Reporting Information, by Segment 
 
GPU
 
Tegra Processor
 
All Other
 
Consolidated
 
(In millions)
Year Ended January 29, 2017:
 
 
 
 
 
 
 
Revenue
$
5,822

 
$
824

 
$
264

 
$
6,910

Depreciation and amortization expense
$
116

 
$
29

 
$
42

 
$
187

Operating income (loss)
$
2,180

 
$
(9
)
 
$
(237
)
 
$
1,934

Year Ended January 31, 2016:
 
 
 
 
 
 
 
Revenue
$
4,187

 
$
559

 
$
264

 
$
5,010

Depreciation and amortization expense
$
110

 
$
43

 
$
44

 
$
197

Operating income (loss)
$
1,344

 
$
(239
)
 
$
(358
)
 
$
747

Year Ended January 25, 2015:
 
 
 
 
 
 
 
Revenue
$
3,839

 
$
579

 
$
264

 
$
4,682

Depreciation and amortization expense
$
117

 
$
57

 
$
46

 
$
220

Operating income (loss)
$
1,113

 
$
(254
)
 
$
(100
)
 
$
759

 
 
Year Ended
 
 
January 29,
2017
 
January 31,
2016
 
January 25,
2015
 
 
(In millions)
Reconciling items included in "All Other" category:
 
 
 
 
Unallocated revenue
 
$
264

 
$
264

 
$
264

Stock-based compensation
 
(247
)
 
(204
)
 
(158
)
Unallocated cost of revenue and operating expenses
 
(215
)
 
(244
)
 
(169
)
Acquisition-related costs
 
(16
)
 
(22
)
 
(37
)
Legal settlement costs
 
(16
)
 
—

 
—

Contributions
 
(4
)
 
—

 
—

Restructuring and other charges
 
(3
)
 
(131
)
 
—

Product warranty charges
 
—

 
(21
)
 
—

Total
 
$
(237
)
 
$
(358
)
 
$
(100
)
Schedule of Revenue by Geographical Areas 
 
Year Ended
 
January 29,
2017
 
January 31,
2016
 
January 25,
2015
Revenue:
(In millions)
Taiwan
$
2,546

 
$
1,912

 
$
1,594

China
1,305

 
806

 
922

Other Asia Pacific
1,010

 
749

 
638

United States
904

 
643

 
791

Europe
659

 
482

 
369

Other Americas
486

 
418

 
368

Total revenue
$
6,910

 
$
5,010

 
$
4,682

Schedule of Revenue by Markets 
 
Year Ended
 
January 29,
2017
 
January 31,
2016
 
January 25,
2015
Revenue:
(In millions)
Gaming
$
4,060

 
$
2,818

 
$
2,058

Professional Visualization
835

 
750

 
795

Datacenter
830

 
339

 
317

Automotive
487

 
320

 
183

OEM & IP
698

 
783

 
1,329

Total revenue
$
6,910

 
$
5,010

 
$
4,682

Long-lived Assets by Geographic Areas [Table Text Block] 
 
January 29,
2017
 
January 31,
2016
Long-lived assets:
(In millions)
United States
$
440

 
$
414

Taiwan
52

 
39

India
47

 
45

China
34

 
25

Europe
9

 
9

Other Asia Pacific
1

 
1

Total long-lived assets
$
583

 
$
533

Schedule of Revenue by Major Customers by Reporting Segments 
 
Year Ended
 
January 29,
2017
 
January 31,
2016
 
January 25,
2015
Revenue:
 
 
 
 
 
Customer A
12
%
 
11
%
 
11
%

Schedule Of Accounts Receivable, Major Customers 
 
January 29,
2017
 
January 31,
2016
Accounts Receivable:
 
 
 
Customer B
19
%
 
21
%
Customer C
10
%
 
7
%
Restructuring and Other Charges (Tables)
Restructuring and Other Charges 
 
Year Ended
 
January 29,
 
January 31,
 
2017
 
2016
 
(In millions)
Employee severance and related costs
$
5

 
$
82

Tax subsidy (refund) impairment
(3
)
 
17

Facilities and related costs
—

 
27

Other exit costs
1

 
5

Restructuring and other charges
$
3

 
$
131

Summary of the restructuring activities and related accrued liabilities 
 
January 29,
 
January 31,
 
2017
 
2016
 
(In millions)
Balance at beginning of period
$
23

 
$
—

Restructuring and other charges
3

 
131

Cash payments
(13
)
 
(63
)
Non-cash adjustments
—

 
(45
)
Balance at end of period
$
13

 
$
23

Quartely Summary (Tables)
Schedule of Quarterly Financial Information
 
Fiscal Year 2017
Quarters Ended
 
January 29,
2017
 
October 30,
2016
 
July 31,
2016
 
May 1,
2016
 
(In millions, except per share data)
Statements of Income Data:
 
 
 
 
 
 
 
Revenue
$
2,173

 
$
2,004

 
$
1,428

 
$
1,305

Cost of revenue
$
870

 
$
821

 
$
602

 
$
554

Gross profit
$
1,303

 
$
1,183

 
$
826

 
$
751

Net income (1)
$
655

 
$
542

 
$
261

 
$
208

Net income per share (1):
 
 
 
 
 
 
 
Basic
$
1.18

 
$
1.01

 
$
0.49

 
$
0.39

Diluted
$
0.99

 
$
0.83

 
$
0.41

 
$
0.35


(1)
In the third quarter of fiscal year 2017, we adopted an accounting standard related to stock-based compensation, which requires adjustments to be reflected beginning in fiscal year 2017. The adoption of the new accounting standard impacted our previously reported quarterly results for fiscal year 2017 as follows:

 
Three Months Ended
 
Six Months Ended
 
July 31, 2016
 
May 1, 2016
 
July 31, 2016
 
As reported
 
As adjusted
 
As reported
 
As adjusted
 
As reported
 
As adjusted
 
(In millions, except per share data)
Condensed Consolidated Statements of Income:
 
 
 
 
 
 
 
 
 
 
 
Income tax expense
$
64

 
$
56

 
$
45

 
$
33

 
$
109

 
$
89

Net income
$
253

 
$
261

 
$
196

 
$
208

 
$
449

 
$
469

Basic net income per share
$
0.47

 
$
0.49

 
$
0.36

 
$
0.39

 
$
0.84

 
$
0.88

Diluted net income per share
$
0.40

 
$
0.41

 
$
0.33

 
$
0.35

 
$
0.73

 
$
0.76

Weighted average shares used in diluted net income per share computation
631

 
634

 
597

 
599

 
617

 
620

 
 
 
 
 
 
 
 
 
 
 
 
Condensed Consolidated Statements of Cash Flows:
 
 
 
 
 
 
 
 
 
 
 
Net cash provided by operating activities
$
184

 
$
201

 
$
309

 
$
318

 
$
493

 
$
519

Net cash used in financing activities
$
(35
)
 
$
(52
)
 
$
(534
)
 
$
(545
)
 
$
(570
)
 
$
(597
)

 
Fiscal Year 2016
Quarters Ended
 
January 31,
2016
 
October 25,
2015
 
July 26,
2015
 
April 26,
2015
 
(In millions, except per share data)
Statements of Income Data:
 
 
 
 
 
 
 
Revenue
$
1,401

 
$
1,305

 
$
1,153

 
$
1,151

Cost of revenue
$
610

 
$
572

 
$
519

 
$
498

Gross profit
$
791

 
$
733

 
$
634

 
$
653

Net income
$
207

 
$
247

 
$
26

 
$
134

Net income per share:
 
 
 
 
 
 
 
Basic
$
0.38

 
$
0.45

 
$
0.05

 
$
0.24

Diluted
$
0.35

 
$
0.44

 
$
0.05

 
$
0.24



Summary of Significant Accounting Policies (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Jan. 29, 2017
Jan. 31, 2016
Jan. 25, 2015
Jan. 26, 2014
Schedule of Available-for-sale Securities [Line Items]
 
 
 
 
Advertising Expense
$ 17 
$ 30 
$ 21 
 
Foreign Currency Transaction Loss, Realized
5 
 
 
 
Deferred Tax Assets, Valuation Allowance
353 1
272 
 
 
Cash and cash equivalents
1,766 
596 
497 
1,152 
Available-for-sale Securities, Amortized Cost
5,484 
4,672 
 
 
Accounts receivable from significant customers (in percent)
29.00% 
28.00% 
 
 
Number of customers that exceeded 10% of total consolidated accounts receivable
2 
2 
 
 
New Accounting Pronouncement, Early Adoption [Line Items]
 
 
 
 
Retained earnings adjustment due to adoption of an accounting standard related to stock-based compensation
353 
 
 
 
Excess Tax Benefit Related To Stock Based Compensation
82 
 
 
 
Full valuation allowance related to state net operating loss and state research credit carryforwards
63 
 
 
 
Retained Earnings
 
 
 
 
New Accounting Pronouncement, Early Adoption [Line Items]
 
 
 
 
Retained earnings adjustment due to adoption of an accounting standard related to stock-based compensation
353 
 
 
 
Adjustments for New Accounting Principle, Early Adoption [Member] |
Accounting Standards Update 2016-09 [Member] |
Retained Earnings
 
 
 
 
New Accounting Pronouncement, Early Adoption [Line Items]
 
 
 
 
Retained earnings adjustment due to adoption of an accounting standard related to stock-based compensation
 
353 
 
 
Money Market Funds
 
 
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
 
 
Available-for-sale Securities, Amortized Cost
$ 321 
$ 43 
 
 
Stock Based Compensation (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Jan. 29, 2017
Jan. 31, 2016
Jan. 25, 2015
Stock based compensation
 
 
 
Cost of revenue
$ 15 
$ 15 
$ 12 
Research and development
134 
115 
88 
Sales, general and administrative
98 
74 
58 
Stock-based compensation expense
247 
204 
158 
Summary of equity awards granted
 
 
 
RSUs, PSUs and Market-based PSUs, granted (in shares)
12 1 2
13 
13 
Estimated total grant-date fair value of RSUs, PSUs and Market-based PSUs
591 
296 
228 
Weighted average grant date fair value, RSUs, PSUs, and Market-based PSUs, granted
$ 50.57 
$ 22.01 
$ 17.68 
Shares purchased under ESPP
4 
6 
7 
Weighted Average Price (Per Share), ESPP
$ 18.51 
$ 13.67 
$ 10.99 
Weighted average grant date fair value of ESPP
$ 5.80 
$ 4.53 
$ 4.99 
Share Based Compensation Expense Related To Equity Awards Not Expected To Vest
98 
46 
37 
Summary of unearned SBC expense
 
 
 
Unearned stock-based compensation expense
$ 627 
$ 381 
 
Stock Options
 
 
 
Summary of unearned SBC expense
 
 
 
Estimated weighted average amortization period
0 years 6 months 0 days 
1 year 1 month 6 days 
 
RSUs, PSUs and Market-based PSUs
 
 
 
Summary of unearned SBC expense
 
 
 
Estimated weighted average amortization period
2 years 7 months 2 days 
2 years 8 months 12 days 
 
Employee Stock Purchase Plan
 
 
 
Summary of unearned SBC expense
 
 
 
Estimated weighted average amortization period
0 years 7 months 5 days 
0 years 8 months 12 days 
 
Fair Value Assumptions
 
 
 
Expected life, minimum
0 years 6 months 0 days 
0 years 6 months 0 days 
0 years 6 months 0 days 
Expected life, maximum
2 years 0 months 0 days 
2 years 0 months 0 days 
2 years 0 months 0 days 
Risk free interest rate, minimum
0.50% 
0.10% 
0.10% 
Risk free interest rate, maximum
0.90% 
0.70% 
0.50% 
Volatility rate, minimum
30.00% 
24.00% 
23.00% 
Volatility rate, maximum
39.00% 
34.00% 
31.00% 
Dividend yield minimum
0.70% 
1.50% 
1.70% 
Dividend Yield maximum
1.40% 
1.80% 
1.90% 
Stock Based Compensation Equity Incentive Plans (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Jan. 29, 2017
Jan. 31, 2016
Jan. 25, 2015
Amended and Restated 2007 Equity Incentive Plan
 
 
 
Number of shares may be issued under the Restated 2007 Plan
207 
 
 
Number of Shares Available for Grant
22 
14 
 
Vesting percentage on the anniversary
25.00% 
 
 
Quarterly vesting schedule - options
6.25% 
 
 
Semi-annual vesting schedule - RSUs for grants made prior to 5/18/16
12.50% 
 
 
Quarterly vesting schedule - RSUs for grants made on or after 5/18/16
6.25% 
 
 
Semi-annual vesting schedule - PSUs
12.50% 
 
 
Maximum issuable shares of Market-based PSUs, percentage
100.00% 
 
 
2012 employee Stock Purchase Plan
 
 
 
Maximum Aggregated Number of Shares under 2012 ESPP
75 
 
 
Total shares purchased under ESPP
23 
 
 
Shares reserved for future issuance under 2012 Plan
52 
 
 
Maximum employee subscription rate
10.00% 
 
 
Potential maximum employee subscription rate by BOD approval
15.00% 
 
 
Purchase price of ESPP, percent
85.00% 
 
 
Stock Options
 
 
 
Options, Outstanding, Number
7 
13 
 
Options, Exercises in Period
(6)
 
 
Options, Outstanding, Weighted Average Exercise Price
$ 14.47 
$ 14.49 
 
Options, Exercises in Period, Weighted Average Exercise Price
$ 14.52 
 
 
Options, Exercisable, Number
7 
 
 
Options, Exercisable, Weighted Average Exercise Price
$ 14.39 
 
 
Options, Vested and Expected to Vest, Outstanding, Number
7 
 
 
Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price
$ 14.46 
 
 
Options, Outstanding, Weighted Average Remaining Contractual Term
5 years 4 months 24 days 
 
 
Options,Exercisable Options, Weighted Average Remaining Contractual Term
5 years 3 months 21 days 
 
 
Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term
5 years 4 months 20 days 
 
 
Options, Outstanding, Intrinsic Value
$ 724 1
 
 
Options, Exercisable, Intrinsic Value
667 1
 
 
Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value
715 1
 
 
RSUs, PSUs, and Market-Based PSUs
 
 
 
RSUs, PSUs and Market-based PSUs, outstanding, Number
27 
26 
 
RSUs, PSUs and Market-based PSUs, granted (in shares)
12 2 3
13 
13 
RSUs, PSUs and Market-based PSUs, Vested in Period
(10)
 
 
RSUs, PSUs and Market-based PSUs, Forfeited in Period
(1)
 
 
Weighted average grant date fair value, RSUs, PSUs and Market-based PSUs, Outstanding
$ 32.84 
$ 19.12 
 
Weighted average grant date fair value, RSUs, PSUs, and Market-based PSUs, granted
$ 50.57 
$ 22.01 
$ 17.68 
RSUs, PSUs and Market-based PSUs, Vested in Period, Weighted Average Grant Date Fair Value
$ 17.93 
 
 
RSUs, PSUs and Market-based PSUs, Forfeited in Period, Weighted Average Grant Date Fair Value
$ 23.68 
 
 
Vested and expected to vest, RSUs, PSUs and Market-based PSUs
23 
 
 
Weighted Average Grant Date Fair Value, RSUs, PSUs and Market-based PSUs, Vested and expected to vest
$ 32.74 
 
 
Minimum number of Market-based PSUs issuable
0 
 
 
Maximum number of market-based PSUs issuable
0.3 
 
 
Closing stock price
$ 111.77 
 
 
Number of Shares Available for Grant
22 
14 
 
Options, Exercises in Period, Total Intrinsic Value
246 
75 
62 
Total fair value of Options, Vested in Period
$ 8 
$ 17 
$ 33 
Net Income Per Share (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended 12 Months Ended
Jan. 29, 2017
Oct. 30, 2016
Jul. 31, 2016
May 1, 2016
Jan. 31, 2016
Oct. 25, 2015
Jul. 26, 2015
Apr. 26, 2015
Jul. 31, 2016
Jan. 29, 2017
Jan. 31, 2016
Jan. 25, 2015
Dec. 12, 2016
Apr. 30, 2017
Subsequent Event [Member]
Notes to financial statements [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of warrants terminated
63 
 
 
 
 
 
 
 
 
63 
 
 
 
 
Warrants outstanding
 
75 
 
 
 
 
 
 
 
 
 
 
75 
 
Total number of shares issued in Q4'17 and Q1'18 related to terminated Warrants
48 
 
 
 
 
 
 
 
 
48 
 
 
 
 
Number of shares issued in Q4'17 related to terminated Warrants
44 
 
 
 
 
 
 
 
 
44 
 
 
 
 
Number of shares issued in Q1'18 related to terminated warrants
 
 
 
 
 
 
 
 
 
 
 
 
 
4 
Stated interest rate - Convertible Notes
1.00% 
 
 
 
 
 
 
 
 
1.00% 
 
 
 
 
Conversion price - Convertible Notes
$ 20.0662 
 
 
 
 
 
 
 
 
$ 20.0662 
 
 
 
 
Warrant Strike Price
 
 
 
 
 
 
 
 
 
$ 27.0122 
 
 
 
 
Average stock price
 
 
 
 
 
 
 
 
 
$ 59.30 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
$ 655 
$ 542 
$ 261 
$ 208 
$ 207 
$ 247 
$ 26 
$ 134 
$ 469 
$ 1,666 
$ 614 
$ 631 
 
 
Denominator:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Denominator for basic net income per share, weighted average shares
 
 
 
 
 
 
 
 
 
541 
543 
552 
 
 
Effect of dilutive securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity awards outstanding (in shares)
 
 
 
 
 
 
 
 
 
26 
13 
11 
 
 
Incremental Common Shares Attributable to Dilutive Effect of Conversion of Debt Securities
 
 
 
 
 
 
 
 
 
44 
13 
0 
 
 
Incremental Common Shares Attributable to Dilutive Effect of Call Options and Warrants
 
 
 
 
 
 
 
 
 
38 
0 
0 
 
 
Denominator for diluted net income per share, weighted average shares (in shares)
 
 
634 
599 
 
 
 
 
620 
649 
569 
563 
 
 
Net income per share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic net income per share
$ 1.18 
$ 1.01 
$ 0.49 
$ 0.39 
$ 0.38 
$ 0.45 
$ 0.05 
$ 0.24 
$ 0.88 
$ 3.08 1
$ 1.13 1
$ 1.14 1
 
 
Diluted net income per share
$ 0.99 
$ 0.83 
$ 0.41 
$ 0.35 
$ 0.35 
$ 0.44 
$ 0.05 
$ 0.24 
$ 0.76 
$ 2.57 2
$ 1.08 2
$ 1.12 2
 
 
Anti-dilutive common equivalent shares from stock options and RSUs (in shares)
 
 
 
 
 
 
 
 
 
8 
10 
12 
 
 
Goodwill (Details) (USD $)
In Millions, unless otherwise specified
Jan. 29, 2017
Jan. 31, 2016
Goodwill [Line Items]
 
 
Goodwill
$ 618 
$ 618 
Icera
 
 
Goodwill [Line Items]
 
 
Goodwill
271 
271 
Portal Player
 
 
Goodwill [Line Items]
 
 
Goodwill
105 
105 
Mental Images
 
 
Goodwill [Line Items]
 
 
Goodwill
59 
59 
3dfx
 
 
Goodwill [Line Items]
 
 
Goodwill
50 
50 
MediaQ
 
 
Goodwill [Line Items]
 
 
Goodwill
35 
35 
ULi
 
 
Goodwill [Line Items]
 
 
Goodwill
31 
31 
Hybrid Graphics
 
 
Goodwill [Line Items]
 
 
Goodwill
28 
28 
Ageia
 
 
Goodwill [Line Items]
 
 
Goodwill
19 
19 
Portland Group, Inc.
 
 
Goodwill [Line Items]
 
 
Goodwill
2 
2 
Other
 
 
Goodwill [Line Items]
 
 
Goodwill
18 
18 
GPU
 
 
Goodwill [Line Items]
 
 
Goodwill
210 
210 
Tegra processor
 
 
Goodwill [Line Items]
 
 
Goodwill
$ 408 
$ 408 
Intangible Assets (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Jan. 29, 2017
Jan. 31, 2016
Jan. 25, 2015
Amortizable intangible assets components [Line Items]
 
 
 
Gross Carrying Amount
$ 661 
$ 655 
 
Accumulated Amortization
(557)
(489)
 
Net Carrying Amount
104 
166 
 
Amortization expense associated with intangible assets
 
 
 
Amortization expense
68 
73 
77 
Future amortization expense associated with intangible assets
 
 
 
Fiscal 2018
54 
 
 
Fiscal 2019
26 
 
 
Fiscal 2020
16 
 
 
Fiscal 2021
7 
 
 
Fiscal 2022
1 
 
 
Acquisition-related intangible assets
 
 
 
Amortizable intangible assets components [Line Items]
 
 
 
Gross Carrying Amount
193 
193 
 
Accumulated Amortization
(167)
(152)
 
Net Carrying Amount
26 
41 
 
Patents and Licensed Technology [Member]
 
 
 
Amortizable intangible assets components [Line Items]
 
 
 
Gross Carrying Amount
468 
462 
 
Accumulated Amortization
(390)
(337)
 
Net Carrying Amount
$ 78 
$ 125 
 
Marketable Securities (Details) (USD $)
In Millions, unless otherwise specified
Jan. 29, 2017
Jan. 31, 2016
Classified as:
 
 
Cash equivalents
$ 436 
$ 232 
Marketable securities
5,032 
4,441 
Estimated Fair Value
5,468 
4,673 
Available-for-sale Securities, Amortized Cost
5,484 
4,672 
Available-for-sale Debt Securities, Unrealized Gain
3 
6 
Available-for-sale Debt Securities, Unrealized Loss
(19)
(5)
Amortized Cost Basis
 
 
Less than one year
2,209 
1,619 
Due in 1-5 years
3,210 
3,019 
Mortgage-backed securities issued by government-sponsored enterprises not due to a single maturity date
65 
34 
Total
5,484 
4,672 
Estimated Fair Value
 
 
Less than one year
2,209 
1,619 
Due in 1-5 years
3,194 
3,020 
Mortgage-backed securities issued by government-sponsored enterprises not due to a single maturity date
65 
34 
Total
5,468 
4,673 
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value
3,682 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value
121 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
3,803 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Losses
 
 
Available-for-sale Securities, Gross Unrealized Losses, Less than 12 Months
(18)
 
Available-for-sale Securities, Gross Unrealized Losses,12 Months or Longer
(1)
 
Available-for-sale Securities, Gross Unrealized Losses
(19)
 
Corporate Debt Securities
 
 
Classified as:
 
 
Estimated Fair Value
2,388 
1,901 
Available-for-sale Securities, Amortized Cost
2,397 
1,903 
Available-for-sale Debt Securities, Unrealized Gain
1 
1 
Available-for-sale Debt Securities, Unrealized Loss
(10)
(3)
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value
1,721 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value
55 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
1,776 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Losses
 
 
Available-for-sale Securities, Gross Unrealized Losses, Less than 12 Months
(10)
 
Available-for-sale Securities, Gross Unrealized Losses,12 Months or Longer
0 
 
Available-for-sale Securities, Gross Unrealized Losses
(10)
 
US Government Agencies Debt Securities
 
 
Classified as:
 
 
Estimated Fair Value
1,188 
1,170 
Available-for-sale Securities, Amortized Cost
1,193 
1,170 
Available-for-sale Debt Securities, Unrealized Gain
0 
1 
Available-for-sale Debt Securities, Unrealized Loss
(5)
(1)
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value
906 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value
28 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
934 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Losses
 
 
Available-for-sale Securities, Gross Unrealized Losses, Less than 12 Months
(5)
 
Available-for-sale Securities, Gross Unrealized Losses,12 Months or Longer
0 
 
Available-for-sale Securities, Gross Unrealized Losses
(5)
 
US Treasury Securities
 
 
Classified as:
 
 
Estimated Fair Value
850 
801 
Available-for-sale Securities, Amortized Cost
852 
800 
Available-for-sale Debt Securities, Unrealized Gain
0 
1 
Available-for-sale Debt Securities, Unrealized Loss
(2)
0 
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value
629 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value
0 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
629 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Losses
 
 
Available-for-sale Securities, Gross Unrealized Losses, Less than 12 Months
(2)
 
Available-for-sale Securities, Gross Unrealized Losses,12 Months or Longer
0 
 
Available-for-sale Securities, Gross Unrealized Losses
(2)
 
Asset-backed Securities
 
 
Classified as:
 
 
Estimated Fair Value
489 
435 
Available-for-sale Securities, Amortized Cost
490 
435 
Available-for-sale Debt Securities, Unrealized Gain
0 
0 
Available-for-sale Debt Securities, Unrealized Loss
(1)
0 
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value
383 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value
3 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
386 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Losses
 
 
Available-for-sale Securities, Gross Unrealized Losses, Less than 12 Months
(1)
 
Available-for-sale Securities, Gross Unrealized Losses,12 Months or Longer
0 
 
Available-for-sale Securities, Gross Unrealized Losses
(1)
 
Mortgage backed securities issued by United Sates government-sponsored enterprises
 
 
Classified as:
 
 
Estimated Fair Value
162 
231 
Available-for-sale Securities, Amortized Cost
161 
229 
Available-for-sale Debt Securities, Unrealized Gain
2 
3 
Available-for-sale Debt Securities, Unrealized Loss
(1)
(1)
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value
43 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value
35 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
78 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Losses
 
 
Available-for-sale Securities, Gross Unrealized Losses, Less than 12 Months
0 
 
Available-for-sale Securities, Gross Unrealized Losses,12 Months or Longer
(1)
 
Available-for-sale Securities, Gross Unrealized Losses
(1)
 
Money Market Funds
 
 
Classified as:
 
 
Estimated Fair Value
321 
43 
Available-for-sale Securities, Amortized Cost
321 
43 
Available-for-sale Debt Securities, Unrealized Gain
0 
0 
Available-for-sale Debt Securities, Unrealized Loss
0 
0 
Foreign Government Debt
 
 
Classified as:
 
 
Estimated Fair Value
70 
92 
Available-for-sale Securities, Amortized Cost
70 
92 
Available-for-sale Debt Securities, Unrealized Gain
0 
0 
Available-for-sale Debt Securities, Unrealized Loss
$ 0 
$ 0 
Fair Value of Financial Assets and Liabilities (Details) (USD $)
In Millions, unless otherwise specified
Jan. 29, 2017
Jan. 31, 2016
Financial assets and liabilities measured at fair value
 
 
Stated interest rate - Convertible Notes
1.00% 
 
Corporate Debt Securities
 
 
Financial assets and liabilities measured at fair value
 
 
Cash and Cash Equivalents, Fair Value Disclosure
$ 33 
$ 51 
Marketable Securities
2,350 
1,850 
US Government Agencies Debt Securities
 
 
Financial assets and liabilities measured at fair value
 
 
Cash and Cash Equivalents, Fair Value Disclosure
27 
90 
Marketable Securities
1,160 
1,080 
US Treasury Securities
 
 
Financial assets and liabilities measured at fair value
 
 
Cash and Cash Equivalents, Fair Value Disclosure
55 
 
Marketable Securities
795 
801 
Fair Value, Inputs, Level 1 |
Money Market Funds
 
 
Financial assets and liabilities measured at fair value
 
 
Estimated Fair Value
321 1
43 1
Fair Value, Inputs, Level 2
 
 
Financial assets and liabilities measured at fair value
 
 
Convertible Debt, Fair Value Disclosures
4,474 2
2,273 2
Interest Rate Swap, at Fair Value
2 
7 
Fair Value, Inputs, Level 2 |
Corporate Debt Securities
 
 
Financial assets and liabilities measured at fair value
 
 
Estimated Fair Value
2,388 3
1,901 3
Fair Value, Inputs, Level 2 |
US Government Agencies Debt Securities
 
 
Financial assets and liabilities measured at fair value
 
 
Estimated Fair Value
1,188 4
1,170 4
Fair Value, Inputs, Level 2 |
US Treasury Securities
 
 
Financial assets and liabilities measured at fair value
 
 
Estimated Fair Value
850 5
801 5
Fair Value, Inputs, Level 2 |
Asset-backed Securities
 
 
Financial assets and liabilities measured at fair value
 
 
Estimated Fair Value
489 6
435 6
Fair Value, Inputs, Level 2 |
Mortgage backed securities issued by United Sates government-sponsored enterprises
 
 
Financial assets and liabilities measured at fair value
 
 
Estimated Fair Value
162 6
231 6
Fair Value, Inputs, Level 2 |
Foreign Government Debt Securities
 
 
Financial assets and liabilities measured at fair value
 
 
Estimated Fair Value
70 6
92 6
2021 Notes [Member]
 
 
Financial assets and liabilities measured at fair value
 
 
Long-term Debt, Stated interest rate
2.20% 
 
2021 Notes [Member] |
Fair Value, Inputs, Level 2
 
 
Financial assets and liabilities measured at fair value
 
 
Long-term Debt, Fair Value
975 2
0 2
2026 Notes [Member]
 
 
Financial assets and liabilities measured at fair value
 
 
Long-term Debt, Stated interest rate
3.20% 
 
2026 Notes [Member] |
Fair Value, Inputs, Level 2
 
 
Financial assets and liabilities measured at fair value
 
 
Long-term Debt, Fair Value
$ 961 2
$ 0 2
Balance Sheet Components (Details) (USD $)
12 Months Ended
Jan. 29, 2017
Jan. 31, 2016
Jan. 25, 2015
Jan. 26, 2014
Inventories
 
 
 
 
Raw Materials
$ 252,000,000 
$ 105,000,000 
 
 
Work in-process
176,000,000 
103,000,000 
 
 
Finished goods
366,000,000 
210,000,000 
 
 
Total inventories
794,000,000 
418,000,000 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
Property, Plant and Equipment, Gross
1,191,000,000 
1,100,000,000 
 
 
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment
(670,000,000)
(634,000,000)
 
 
Property, Plant and Equipment, Net
521,000,000 
466,000,000 
 
 
Outstanding Inventory Purchase Obligation
1,000,000,000 
 
 
 
Depreciation Expenses
118,000,000 
124,000,000 
143,000,000 
 
Accumulated amortization of LHI and capital lease
164,000,000 
155,000,000 
 
 
Accrued Liabilities
 
 
 
 
Deferred revenue
85,000,000 1
322,000,000 1
 
 
Customer related liabilities
197,000,000 2
160,000,000 2
 
 
Accrued payroll and related expenses
137,000,000 
79,000,000 
 
 
Accrued restructuring and other charges
13,000,000 3
23,000,000 3
0 
 
Professional service fees
13,000,000 
23,000,000 
 
 
Warranty Accrual
8,000,000 4
11,000,000 4
8,000,000 
8,000,000 
Accrued Royalties, Current
7,000,000 
1,000,000 
 
 
Capital Lease Obligations, Current
4,000,000 
4,000,000 
 
 
Coupon interest on Notes
21,000,000 
3,000,000 
 
 
Taxes payable, short-term
4,000,000 
2,000,000 
 
 
Charitable contribution payable
4,000,000 
3,000,000 
 
 
Other
14,000,000 
11,000,000 
 
 
Total accrued liabilities and other
507,000,000 
642,000,000 
 
 
Other Long-term Liabilities
 
 
 
 
Deferred income tax liability
141,000,000 5
301,000,000 5
 
 
Income taxes payable
96,000,000 
78,000,000 
 
 
Charitable Contribution Payable, Long-term
10,000,000 
13,000,000 
 
 
Deferred Revenue
4,000,000 6
44,000,000 6
 
 
Other
20,000,000 
17,000,000 
 
 
Total other long-term liabilities
271,000,000 
453,000,000 
 
 
Land
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
Property, Plant and Equipment, Gross
218,000,000 7
218,000,000 7
 
 
Building
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
Property, Plant and Equipment, Gross
13,000,000 
13,000,000 
 
 
Property, Plant and Equipment, Estimated Useful Lives
25-30 
 
 
 
Test equipment
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
Property, Plant and Equipment, Gross
427,000,000 
354,000,000 
 
 
Property, Plant and Equipment, Estimated Useful Lives
3-5 
 
 
 
Software and licenses
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
Property, Plant and Equipment, Gross
63,000,000 
98,000,000 
 
 
Property, Plant and Equipment, Estimated Useful Lives
3-5 
 
 
 
Leasehold improvements
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
Property, Plant and Equipment, Gross
176,000,000 8
174,000,000 8
 
 
Computer equipment
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
Property, Plant and Equipment, Gross
188,000,000 
155,000,000 
 
 
Property, Plant and Equipment, Estimated Useful Lives
3-5 
 
 
 
Office furniture and equipment
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
Property, Plant and Equipment, Gross
49,000,000 
48,000,000 
 
 
Property, Plant and Equipment, Estimated Useful Lives
5 
 
 
 
Capital leases
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
Property, Plant and Equipment, Gross
28,000,000 8
28,000,000 8
 
 
Construction in process
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
Property, Plant and Equipment, Gross
$ 29,000,000 9
$ 12,000,000 9
 
 
Derivative Financial Instrument (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Jan. 29, 2017
Jan. 31, 2016
Jan. 25, 2015
Summary of Derivative Instruments [Abstract]
 
 
 
Notional amount of Interest rate swap
$ 200 
 
 
Notional amount of FX forward contract, designated as hedge
227 
 
 
Notional amount of FX forward contract, non-designated as hedge
99 
 
 
Net change in unrealized gains (losses) on cash flow hedges
$ 4 
$ (4)
$ 0 
Guarantees (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Jan. 29, 2017
Jan. 31, 2016
Jan. 25, 2015
Notes to financial statements [Abstract]
 
 
 
SHIELD warranty charge
 
$ 26 
 
Estimated product warranty liabilities
 
 
 
Balance at beginning of period
11 1
8 
8 
Additions
2 
27 
5 
Deductions
(5)
(24)
(5)
Balance at end of period
$ 8 1
$ 11 1
$ 8 
Debt (Details) (USD $)
Share data in Millions, except Per Share data, unless otherwise specified
12 Months Ended 12 Months Ended 1 Months Ended 3 Months Ended 6 Months Ended
Jan. 29, 2017
Jan. 31, 2016
Jan. 25, 2015
Dec. 12, 2016
Oct. 30, 2016
Jan. 29, 2017
2021 Notes [Member]
Jan. 29, 2017
2026 Notes [Member]
Mar. 1, 2017
Subsequent Event [Member]
Apr. 30, 2017
Subsequent Event [Member]
Jul. 30, 2017
Subsequent Event [Member]
Debt Instrument
 
 
 
 
 
 
 
 
 
 
Convertible Notes - Initial face value
$ 1,500,000,000 
 
 
 
 
 
 
 
 
 
Stated interest rate - Convertible Notes
1.00% 
 
 
 
 
 
 
 
 
 
Principal amount of Convertible Notes
1,000 
 
 
 
 
 
 
 
 
 
Conversion ratio - Convertible Notes
49.8351 
 
 
 
 
 
 
 
 
 
Conversion price - Convertible Notes
$ 20.0662 
 
 
 
 
 
 
 
 
 
Terms of conversion feature - Convertible Notes
during any fiscal quarter, if the last reported sale price of the common stock for at least 20 trading days during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day, the Notes become convertible at the holders' option 
 
 
 
 
 
 
 
 
 
Repayment of Convertible Notes
673,000,000 
 
 
 
 
 
 
 
 
 
Closing stock price
$ 111.77 
 
 
 
 
 
 
 
 
 
If-converted value in excess of principal - Convertible Notes
3,780,000,000 
 
 
 
 
 
 
 
 
 
Convertible debt conversion, shares
23 
 
 
 
 
 
 
20 
 
 
Subsequent repayment of Convertible debt
 
 
 
 
 
 
 
502,000,000 
103,000,000 
55,000,000 
Loss on early debt conversions
21,000,000 
0 
0 
 
 
 
 
 
 
 
Initial debt component - Convertible Notes
1,350,000,000 
 
 
 
 
 
 
 
 
 
Initial carrying amount of equity component
126,000,000 
 
 
 
 
 
 
 
 
 
Purchaser's discount of Convertible Notes
23,000,000 
 
 
 
 
 
 
 
 
 
Initial unamortized debt discount at issuance
148,000,000 
 
 
 
 
 
 
 
 
 
Effective interest rate - Convertible Notes
3.15% 
 
 
 
 
 
 
 
 
 
Convertible debt conversion obligation
31,000,000 
87,000,000 
 
 
 
 
 
 
 
 
Convertible debt, short-term
796,000,000 
1,413,000,000 
 
 
 
 
 
 
 
 
Convertible Notes - Face Amount
827,000,000 
1,500,000,000 
 
 
 
 
 
 
 
 
Unamortized debt discount - Convertible Notes
(31,000,000)
(87,000,000)
 
 
 
 
 
 
 
 
Convertible Notes
796,000,000 
1,413,000,000 
 
 
 
 
 
 
 
 
Remaining discount amortization period
1 year 10 months 1 day 
 
 
 
 
 
 
 
 
 
Coupon interest expense
9,000,000 
15,000,000 
15,000,000 
 
 
 
 
 
 
 
Amortization of Debt Issuance Costs and Discounts
24,000,000 
29,000,000 
28,000,000 
 
 
 
 
 
 
 
Total interest expense related to Convertible Notes
33,000,000 
44,000,000 
43,000,000 
 
 
 
 
 
 
 
Note Hedges Strike Price
$ 20.0662 
 
 
 
 
 
 
 
 
 
Exercise of convertible note hedges, shares
23 
 
 
 
 
 
 
 
20 
 
Warrant Strike Price
$ 27.0122 
 
 
 
 
 
 
 
 
 
Number of warrants terminated
63 
 
 
 
 
 
 
 
 
 
Warrants outstanding
 
 
 
75 
75 
 
 
 
 
 
Total number of shares issued in Q4'17 and Q1'18 related to terminated Warrants
48 
 
 
 
 
 
 
 
 
 
Number of shares issued in Q4'17 related to terminated Warrants
44 
 
 
 
 
 
 
 
 
 
Number of shares issued in Q1'18 related to terminated warrants
 
 
 
 
 
 
 
 
4 
 
Long-term Debt, Stated interest rate
 
 
 
 
 
2.20% 
3.20% 
 
 
 
Proceeds from Issuance of Long-term Debt
1,980,000,000 
 
 
 
 
 
 
 
 
 
Expected remaining term - Long-term debt
 
 
 
 
 
4 years 7 months 17 days 
9 years 7 months 18 days 
 
 
 
Effective interest rate - Long-term debt
 
 
 
 
 
2.38% 
3.31% 
 
 
 
Long-term Debt, Gross
 
 
 
 
 
1,000,000,000 
1,000,000,000 
 
 
 
Unamortized discount and issuance costs
(17,000,000)
 
 
 
 
 
 
 
 
 
Long-term debt
1,983,000,000 
0 
 
 
 
 
 
 
 
 
Revoling credit facility, Current borrowing capacity
575,000,000 
 
 
 
 
 
 
 
 
 
Additional borrowing capacity from Revolving Credit Facility
$ 425,000,000 
 
 
 
 
 
 
 
 
 
Commitments and Contingencies (Details) (USD $)
12 Months Ended
Jan. 29, 2017
Jan. 31, 2016
Jan. 25, 2015
Operating Lease Financing Arrangement
 
 
 
Ground lease to a syndicate of banks Synthetic Lease
99 years 0 months 0 days 
 
 
Total Synthetic Lease term
7 years 6 months 0 days 
 
 
Estimated construction period Synthetic Lease
2 years 6 months 0 days 
 
 
Maximum number of renewal options
3 
 
 
Lessee Leasing Arrangements, Operating Leases, Renewal Term
5 years 0 months 0 days 
 
 
Expected construction costs for Synthetic lease financing
$ 380,000,000 
 
 
Maximum residual value guarantee percentage
87.50% 
 
 
Maximum total leverage ratio
3.5 
 
 
Commitments and Contingencies Disclosure [Abstract]
 
 
 
Outstanding Inventory Purchase Obligation
1,000,000,000 
 
 
Outstanding Capital Purchase Obligations
38,000,000 
 
 
Legal settlement recorded as COGS
10,000,000 
 
 
Operating Leases, Future Minimum Payments Due [Abstract]
 
 
 
Future minimum operating lease payments - HQ
50,000,000 
 
 
Operating Leases, Future Minimum Payments Due, Current
42,000,000 
 
 
Operating Leases, Future Minimum Payments, Due in Two Years
36,000,000 
 
 
Operating Leases, Future Minimum Payments, Due in Three Years
20,000,000 
 
 
Operating Leases, Future Minimum Payments, Due in Four Years
17,000,000 
 
 
Operating Leases, Future Minimum Payments, Due in Five Years
12,000,000 
 
 
Operating Leases, Future Minimum Payments, Due Thereafter
13,000,000 
 
 
Operating Leases, Future Minimum Payments Due
140,000,000 
 
 
Operating Leases, Rent Expense
46,000,000 
45,000,000 
47,000,000 
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
 
 
 
Future minimum capital lease payments - HQ
11,000,000 
 
 
Capital Leases, Future Minimum Payments Due, Current
5,000,000 
 
 
Capital Leases, Future Minimum Payments Due in Two Years
6,000,000 
 
 
Capital Leases, Future Minimum Payments Due
11,000,000 
 
 
Capital Leases, Future Minimum Payments, Present Value of Net Minimum Payments
10,000,000 
 
 
Capital Lease Obligations, Current
4,000,000 
4,000,000 
 
Capital Lease Obligations, Noncurrent
$ 6,000,000 
$ 10,000,000 
 
Income Taxes (Details) (USD $)
3 Months Ended 6 Months Ended 12 Months Ended
Jul. 31, 2016
May 1, 2016
Jul. 31, 2016
Jan. 29, 2017
Jan. 31, 2016
Jan. 25, 2015
Current Income Tax Expense
 
 
 
 
 
 
Federal
 
 
 
$ 7,000,000 
$ (43,000,000)
$ 8,000,000 
State
 
 
 
1,000,000 
1,000,000 
1,000,000 
Foreign
 
 
 
34,000,000 
25,000,000 
17,000,000 
Total current
 
 
 
42,000,000 
(17,000,000)
26,000,000 
Deferred Income Tax Expense (Benefit), Continuing Operations [Abstract]
 
 
 
 
 
 
Federal
 
 
 
199,000,000 
134,000,000 
84,000,000 
State
 
 
 
0 
0 
0 
Foreign
 
 
 
(2,000,000)
0 
(1,000,000)
Total deferred
 
 
 
197,000,000 
134,000,000 
83,000,000 
Charge in lieu of taxes attributable to employer stock option plans
 
 
 
0 
12,000,000 
15,000,000 
Income tax expense
56,000,000 
33,000,000 
89,000,000 
239,000,000 
129,000,000 
124,000,000 
Income before Income Taxes
 
 
 
 
 
 
Domestic
 
 
 
600,000,000 
129,000,000 
174,000,000 
Foreign
 
 
 
1,305,000,000 
614,000,000 
581,000,000 
Income before income tax expense
 
 
 
1,905,000,000 
743,000,000 
755,000,000 
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate
 
 
 
35.00% 
 
 
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation [Abstract]
 
 
 
 
 
 
Tax expense computed at federal statutory rate
 
 
 
667,000,000 
260,000,000 
264,000,000 
State income taxes, net of federal tax effect
 
 
 
4,000,000 
1,000,000 
1,000,000 
Foreign tax rate differential
 
 
 
(315,000,000)
(95,000,000)
(120,000,000)
U.S. federal R&D tax credit
 
 
 
(52,000,000)
(38,000,000)
(34,000,000)
Stock-based compensation
 
 
 
(70,000,000)1
13,000,000 
4,000,000 
Tax expense related to inter-company transaction
 
 
 
10,000,000 
10,000,000 
10,000,000 
Restructuring and expiration of statute of limitations
 
 
 
0 
(21,000,000)
0 
Other
 
 
 
(5,000,000)
(1,000,000)
(1,000,000)
Income tax expense
56,000,000 
33,000,000 
89,000,000 
239,000,000 
129,000,000 
124,000,000 
Excess Tax Benefit Related To Stock Based Compensation
 
 
 
82,000,000 
 
 
Components of Deferred Tax Assets [Abstract]
 
 
 
 
 
 
Net operating loss carryforwards
 
 
 
199,000,000 2
57,000,000 
 
Accruals and reserves, not currently deductible for tax purposes
 
 
 
40,000,000 
58,000,000 
 
Property, equipment and intangible assets
 
 
 
50,000,000 
50,000,000 
 
Research and other tax credit carryforwards
 
 
 
728,000,000 2
404,000,000 
 
Stock-based compensation
 
 
 
34,000,000 
29,000,000 
 
Convertible debt
 
 
 
6,000,000 
9,000,000 
 
Gross deferred tax assets
 
 
 
1,057,000,000 
607,000,000 
 
Less valuation allowance
 
 
 
(353,000,000)2
(272,000,000)
 
Deferred Tax Assets, Net
 
 
 
704,000,000 
335,000,000 
 
Components of Deferred Tax Liabilities [Abstract]
 
 
 
 
 
 
Acquired intangibles
 
 
 
(11,000,000)
(17,000,000)
 
Unremitted earnings of foreign subsidiaries
 
 
 
(827,000,000)
(615,000,000)
 
Deferred Tax Liabilities, Gross
 
 
 
(838,000,000)
(632,000,000)
 
Net deferred tax asset (liability)
 
 
 
(134,000,000)
(297,000,000)
 
Effective tax rate
 
 
 
12.50% 
17.30% 
16.50% 
Operating Loss Carryforwards [Line Items]
 
 
 
 
 
 
Unrecognized tax benefit related to state tax positions
 
 
 
27,000,000 
 
 
Deferred Tax Assets, Operating Loss Carryforwards, Foreign
 
 
 
219,000,000 
 
 
Undistributed Earnings Of Non United States Subsidiaries
 
 
 
3,130,000,000 
 
 
UNITED STATES
 
 
 
 
 
 
Operating Loss Carryforwards [Line Items]
 
 
 
 
 
 
Operating Loss Carryforwards
 
 
 
448,000,000 
 
 
Deferred Tax Assets, Tax Credit Carryforwards, Research
 
 
 
541,000,000 
 
 
State and Local Jurisdiction
 
 
 
 
 
 
Operating Loss Carryforwards [Line Items]
 
 
 
 
 
 
Operating Loss Carryforwards
 
 
 
446,000,000 
 
 
Deferred Tax Assets, Tax Credit Carryforwards, Research
 
 
 
476,000,000 
 
 
CALIFORNIA
 
 
 
 
 
 
Operating Loss Carryforwards [Line Items]
 
 
 
 
 
 
Deferred Tax Assets, Tax Credit Carryforwards, Research
 
 
 
457,000,000 
 
 
Other states
 
 
 
 
 
 
Operating Loss Carryforwards [Line Items]
 
 
 
 
 
 
Deferred Tax Assets, Tax Credit Carryforwards, Research
 
 
 
19,000,000 
 
 
Foreign Country
 
 
 
 
 
 
Operating Loss Carryforwards [Line Items]
 
 
 
 
 
 
Operating Loss Carryforwards
 
 
 
$ 219,000,000 
 
 
Income Taxes Unrecognized Tax Benefits (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Jan. 29, 2017
Jan. 31, 2016
Jan. 25, 2015
Income Tax Contingency [Line Items]
 
 
 
Unrecognized Tax Benefits that Would Impact Effective Tax Rate
$ 209 
 
 
Unrecognized tax benefit related to state tax positions
27 
 
 
Reduction of deferred tax asset included in unrecognized tax benefit
126 
 
 
Income Tax Reconciliation, Tax Contingencies [Abstract]
 
 
 
Balance at beginning of period
230 
254 
238 
Increases in tax positions for prior years
3 
0 
0 
Decreases in tax positions for prior years
0 
(1)
(1)
Increases in tax positions for current year
46 
28 
23 
Unrecognized Tax Benefits, Decrease Resulting from Settlements with Taxing Authorities
(48)
0 
0 
Lapse in statute of limitations
(7)
(51)
(6)
Balance at end of period
224 
230 
254 
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued [Abstract]
 
 
 
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued
13 
11 
14 
Accrued Income Taxes, Noncurrent
96 
78 
 
Unrecognized tax benefit (non current)
$ 83 
 
 
Stockholders' Equity (Details) (USD $)
Share data in Millions, except Per Share data, unless otherwise specified
12 Months Ended
Jan. 29, 2017
Jan. 31, 2016
Jan. 25, 2015
Notes to financial statements [Abstract]
 
 
 
Stock repurchase program, additional authorized amount
$ 2,000,000,000 
 
 
Stock Repurchased During Period, Shares
15 
 
 
Payments for Repurchase of Common Stock
739,000,000 
587,000,000 
814,000,000 
Dividends paid
261,000,000 
213,000,000 
186,000,000 
Cash dividends declared and paid per common share
$ 0.485 
$ 0.395 
$ 0.340 
Aggregate number of shares repurchased under stock repurchase program
245 
 
 
Aggregated cost of shares repurchased
4,590,000,000 
 
 
Remaining authorized shares repurchase amount
$ 2,730,000,000 
 
 
Common Stock, Shares Authorized
2,000 
2,000 
 
Common stock, par value
$ 0.001 
$ 0.001 
 
Employee Retirement Plans (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Jan. 29, 2017
Jan. 31, 2016
Jan. 25, 2015
Employee Retirement Plans [Abstract]
 
 
 
Employee Retirement Plans Maximum Contribution Percentage Of Earnings
100.00% 
 
 
401K Plan employer contribution expense in US
$ 12 
$ 8 
$ 6 
Defined Contribution Plan, Cost Recognized, outside US
$ 23 
$ 21 
$ 20 
Segment Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Jan. 29, 2017
Oct. 30, 2016
Jul. 31, 2016
May 1, 2016
Jan. 31, 2016
Oct. 25, 2015
Jul. 26, 2015
Apr. 26, 2015
Jan. 29, 2017
Jan. 31, 2016
Jan. 25, 2015
Segment Reporting
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization expense
 
 
 
 
 
 
 
 
$ 187 
$ 197 
$ 220 
Revenue
2,173 
2,004 
1,428 
1,305 
1,401 
1,305 
1,153 
1,151 
6,910 
5,010 
4,682 
Operating income (loss)
 
 
 
 
 
 
 
 
1,934 
747 
759 
Reconciliation from Segment Totals to Consolidated
 
 
 
 
 
 
 
 
 
 
 
Unallocated cost of revenue and operating expenses
 
 
 
 
 
 
 
 
(215)
(244)
(169)
Stock-based compensation expense
 
 
 
 
 
 
 
 
(247)
(204)
(158)
Restructuring and other charges
 
 
 
 
 
 
 
 
(3)
(131)
0 
Acquisition-related costs
 
 
 
 
 
 
 
 
(16)
(22)
(37)
Payments for Legal Settlements
 
 
 
 
 
 
 
 
(16)
0 
0 
Contribution expense
 
 
 
 
 
 
 
 
(4)
0 
0 
Product warranty charges
 
 
 
 
 
 
 
 
0 
(21)
0 
Reconciliation total in All other
 
 
 
 
 
 
 
 
(237)
(358)
(100)
GPU
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization expense
 
 
 
 
 
 
 
 
116 
110 
117 
Revenue
 
 
 
 
 
 
 
 
5,822 
4,187 
3,839 
Operating income (loss)
 
 
 
 
 
 
 
 
2,180 
1,344 
1,113 
Tegra processor
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization expense
 
 
 
 
 
 
 
 
29 
43 
57 
Revenue
 
 
 
 
 
 
 
 
824 
559 
579 
Operating income (loss)
 
 
 
 
 
 
 
 
(9)
(239)
(254)
All Other
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization expense
 
 
 
 
 
 
 
 
42 
44 
46 
Revenue
 
 
 
 
 
 
 
 
264 
264 
264 
Operating income (loss)
 
 
 
 
 
 
 
 
$ (237)
$ (358)
$ (100)
Segment Information Revenue and Long-lived assets by region (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Jan. 29, 2017
Oct. 30, 2016
Jul. 31, 2016
May 1, 2016
Jan. 31, 2016
Oct. 25, 2015
Jul. 26, 2015
Apr. 26, 2015
Jan. 29, 2017
Jan. 31, 2016
Jan. 25, 2015
Revenues and Long-Lived Assets
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 2,173 
$ 2,004 
$ 1,428 
$ 1,305 
$ 1,401 
$ 1,305 
$ 1,153 
$ 1,151 
$ 6,910 
$ 5,010 
$ 4,682 
Long-Lived Assets
583 
 
 
 
533 
 
 
 
583 
533 
 
TAIWAN
 
 
 
 
 
 
 
 
 
 
 
Revenues and Long-Lived Assets
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
2,546 
1,912 
1,594 
Long-Lived Assets
52 
 
 
 
39 
 
 
 
52 
39 
 
CHINA
 
 
 
 
 
 
 
 
 
 
 
Revenues and Long-Lived Assets
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
1,305 
806 
922 
Long-Lived Assets
34 
 
 
 
25 
 
 
 
34 
25 
 
Other Asia Pacific
 
 
 
 
 
 
 
 
 
 
 
Revenues and Long-Lived Assets
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
1,010 
749 
638 
Long-Lived Assets
1 
 
 
 
1 
 
 
 
1 
1 
 
UNITED STATES
 
 
 
 
 
 
 
 
 
 
 
Revenues and Long-Lived Assets
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
904 
643 
791 
Long-Lived Assets
440 
 
 
 
414 
 
 
 
440 
414 
 
Europe
 
 
 
 
 
 
 
 
 
 
 
Revenues and Long-Lived Assets
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
659 
482 
369 
Long-Lived Assets
9 
 
 
 
9 
 
 
 
9 
9 
 
INDIA
 
 
 
 
 
 
 
 
 
 
 
Revenues and Long-Lived Assets
 
 
 
 
 
 
 
 
 
 
 
Long-Lived Assets
47 
 
 
 
45 
 
 
 
47 
45 
 
Other Americas
 
 
 
 
 
 
 
 
 
 
 
Revenues and Long-Lived Assets
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
$ 486 
$ 418 
$ 368 
Segment Information Revenue and Accounts Receivable by major customer (Details) (Customer A (REV))
12 Months Ended
Jan. 29, 2017
Jan. 31, 2016
Jan. 25, 2015
Customer A (REV)
 
 
 
Revenue, Major Customer [Line Items]
 
 
 
Revenue from significant customers (in percent)
12.00% 
11.00% 
11.00% 
Segment Information Schedule of Accounts Receivable by Major Customers (Details)
Jan. 29, 2017
Jan. 31, 2016
Accounts Receivable by Major Customers
 
 
Accounts receivable from significant customers (in percent)
29.00% 
28.00% 
Customer B (AR)
 
 
Accounts Receivable by Major Customers
 
 
Accounts receivable from significant customers (in percent)
19.00% 
21.00% 
Customer C (AR)
 
 
Accounts Receivable by Major Customers
 
 
Accounts receivable from significant customers (in percent)
10.00% 
7.00% 
Segment Information Schedule of Revenue by Market (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Jan. 29, 2017
Oct. 30, 2016
Jul. 31, 2016
May 1, 2016
Jan. 31, 2016
Oct. 25, 2015
Jul. 26, 2015
Apr. 26, 2015
Jan. 29, 2017
Jan. 31, 2016
Jan. 25, 2015
Revenue by Markets
 
 
 
 
 
 
 
 
 
 
 
Revenue
$ 2,173 
$ 2,004 
$ 1,428 
$ 1,305 
$ 1,401 
$ 1,305 
$ 1,153 
$ 1,151 
$ 6,910 
$ 5,010 
$ 4,682 
Gaming
 
 
 
 
 
 
 
 
 
 
 
Revenue by Markets
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
4,060 
2,818 
2,058 
Professional Visualization
 
 
 
 
 
 
 
 
 
 
 
Revenue by Markets
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
835 
750 
795 
Data Center
 
 
 
 
 
 
 
 
 
 
 
Revenue by Markets
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
830 
339 
317 
Automotive
 
 
 
 
 
 
 
 
 
 
 
Revenue by Markets
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
487 
320 
183 
OEM and IP
 
 
 
 
 
 
 
 
 
 
 
Revenue by Markets
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
$ 698 
$ 783 
$ 1,329 
Restructuring and Other Charges (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Jan. 29, 2017
Jan. 31, 2016
Jan. 25, 2015
Restructuring and Other Charges [Abstract]
 
 
 
Restructuring and other charges
$ 3 
$ 131 
$ 0 
Employee severance and related costs
5 
82 
 
Tax subsidy (refund) impairment
(3)
17 
 
Facilities and related costs
0 
27 
 
Other exit costs
1 
5 
 
Restructuring Reserve, Beginning Balance
23 1
0 
 
Cash payments
(13)
(63)
 
Non-cash adjustments
0 
(45)
 
Restructuring Reserve, Ending Balance
$ 13 1
$ 23 1
$ 0 
Quartely Summary (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended 12 Months Ended
Jan. 29, 2017
Oct. 30, 2016
Jul. 31, 2016
May 1, 2016
Jan. 31, 2016
Oct. 25, 2015
Jul. 26, 2015
Apr. 26, 2015
Jul. 31, 2016
Jan. 29, 2017
Jan. 31, 2016
Jan. 25, 2015
Selected Quarterly Financial Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
Income tax expense
 
 
$ 56 
$ 33 
 
 
 
 
$ 89 
$ 239 
$ 129 
$ 124 
Revenue
2,173 
2,004 
1,428 
1,305 
1,401 
1,305 
1,153 
1,151 
 
6,910 
5,010 
4,682 
Cost of revenue
870 
821 
602 
554 
610 
572 
519 
498 
 
2,847 
2,199 
2,083 
Gross profit
1,303 
1,183 
826 
751 
791 
733 
634 
653 
 
4,063 
2,811 
2,599 
Net income
655 
542 
261 
208 
207 
247 
26 
134 
469 
1,666 
614 
631 
Basic net income per share
$ 1.18 
$ 1.01 
$ 0.49 
$ 0.39 
$ 0.38 
$ 0.45 
$ 0.05 
$ 0.24 
$ 0.88 
$ 3.08 1
$ 1.13 1
$ 1.14 1
Diluted net income per share
$ 0.99 
$ 0.83 
$ 0.41 
$ 0.35 
$ 0.35 
$ 0.44 
$ 0.05 
$ 0.24 
$ 0.76 
$ 2.57 2
$ 1.08 2
$ 1.12 2
Weighted average shares used in diluted per share computation
 
 
634 
599 
 
 
 
 
620 
649 
569 
563 
Net cash provided by operating activities
 
 
201 
318 
 
 
 
 
519 
1,672 
1,175 
906 
Net cash used in financing activities
 
 
(52)
(545)
 
 
 
 
(597)
291 
(676)
(834)
As reported
 
 
 
 
 
 
 
 
 
 
 
 
Selected Quarterly Financial Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
Income tax expense
 
 
64 
45 
 
 
 
 
109 
 
 
 
Net income
 
 
253 
196 
 
 
 
 
449 
 
 
 
Basic net income per share
 
 
$ 0.47 
$ 0.36 
 
 
 
 
$ 0.84 
 
 
 
Diluted net income per share
 
 
$ 0.40 
$ 0.33 
 
 
 
 
$ 0.73 
 
 
 
Weighted average shares used in diluted per share computation
 
 
631 
597 
 
 
 
 
617 
 
 
 
Net cash provided by operating activities
 
 
184 
309 
 
 
 
 
493 
 
 
 
Net cash used in financing activities
 
 
$ (35)
$ (534)
 
 
 
 
$ (570)
 
 
 
Schedule II (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Jan. 29, 2017
Jan. 31, 2016
Jan. 25, 2015
Allowance for Trade Receivables
 
 
 
Valuation and Qualifying Accounts Disclosure [Line Items]
 
 
 
Valuation Allowances and Reserves, Balance
$ 2 
$ 3 
$ 1 
Valuation Allowances and Reserves, Additions
1 1
0 1
3 1
Valuation Allowances and Reserves, Deductions
0 1
(1)1
(1)1
Valuation Allowances and Reserves, Balance
3 
2 
3 
Allowance for Sales Returns
 
 
 
Valuation and Qualifying Accounts Disclosure [Line Items]
 
 
 
Valuation Allowances and Reserves, Balance
9 
14 
14 
Valuation Allowances and Reserves, Additions
9 2
9 2
12 2
Valuation Allowances and Reserves, Deductions
(8)3
(14)3
(12)3
Valuation Allowances and Reserves, Balance
10 
9 
14 
Valuation Allowance of Deferred Tax Assets
 
 
 
Valuation and Qualifying Accounts Disclosure [Line Items]
 
 
 
Valuation Allowances and Reserves, Balance
272 
261 
244 
Valuation Allowances and Reserves, Additions
81 4
11 4
17 4
Valuation Allowances and Reserves, Deductions
0 
0 
0 
Valuation Allowances and Reserves, Balance
$ 353 
$ 272 
$ 261