Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

                               

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Investors and others should note that we announce material financial information to our investors using our investor relations website, press releases, SEC filings and public conference calls and webcasts. We also use the following social media channels as a means of disclosing information about the company, our products, our planned financial and other announcements and attendance at upcoming investor and industry conferences, and other matters and for complying with our disclosure obligations under Regulation FD:

In addition, investors and others can use the Pulse news reader to subscribe to the NVIDIA Daily News feed and can view NVIDIA videos on YouTube.

The information we post through these social media channels may be deemed material. Accordingly, investors should monitor these accounts and the blog, in addition to following our press releases, SEC filings and public conference calls and webcasts. This list may be updated from time to time. The information we post through these channels is not a part of this quarterly report on Form 10-Q. These channels may be updated from time to time on NVIDIA's investor relations website.

The accompanying unaudited condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Securities and Exchange Commission, or SEC, Regulation S-X. The January 25, 2015 consolidated balance sheet was derived from our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 25, 2015, as filed with the SEC, but does not include all disclosures required by U.S. GAAP. In the opinion of management, all adjustments, consisting only of normal recurring adjustments except as otherwise noted, considered necessary for a fair statement of results of operations and financial position have been included. The results for the interim periods presented are not necessarily indicative of the results expected for any future period. The following information should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 25, 2015.2015. 

Our condensed consolidated financial statements include the accounts of NVIDIA Corporation and itsour wholly-owned subsidiaries. All material inter-company balances and transactions have been eliminated in consolidation.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an on-going basis, we evaluate our estimates, including those related to revenue recognition, cash equivalents and marketable securities, accounts receivable, inventories, income taxes, goodwill, stock-based compensation, warranty liabilities, litigation, investigation and settlement costs, restructuring and other charges, and other contingencies. These estimates are based on historical facts and various other assumptions that we believe are reasonable.

In AprilJuly 2015, the Financial Accounting Standards Board, or FASB, issued a newan accounting standards update for the subsequent measurement of inventory. The amended guidance requires entities to measure inventory at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The requirement would replace the current lower of cost or market evaluation. The update is effective for us beginning in our first quarter of fiscal year 2018, with early adoption permitted to be applied prospectively. We are currently evaluating the impact of this accounting guidance on our consolidated financial statements.

In April 2015, the FASB issued an accounting standards update that requires an entity to present debt issuance costs on the balance sheet as a direct deduction from the related debt liability as opposed to an asset. Amortization of the costs will continue to be reported as interest expense. The update is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued, and the new guidance would be applied retrospectively to all prior periods presented. The update will be effective for us beginning in our first quarter of fiscal year 2017. The adoption of this standard updateaccounting guidance is not currently expected to have a material impact on our consolidated financial statements.

In May 2014, the FASB issued a newan accounting standards update that creates a single source of revenue guidance under U.S. GAAP for all companies, in all industries, effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. On April 29,July 9, 2015, the FASB issued a proposed accounting standards update that wouldvoted to defer the effective date of this new revenue recognition standard by one year, butsuch that the new standard will be effective for us beginning in our first quarter of fiscal year 2019. The FASB will also permit entities to adopt the standard one year earlier if they choose (i.e., the original effective date). Comments on the proposal are due by May 29, 2015. We will adopt this guidance either by using a full retrospective approach for all periods presented in the period of adoption or a modified retrospective approach. We are currently evaluating the impact of this accounting guidance on our consolidated financial statements and have not yet determined which transition method we will apply.

Our stock-based compensation expense is associated with stock options, restricted stock units, or RSUs, performance stock units that are based on the Company’sour corporate financial performance targets, or PSUs, performance stock units that are based on market conditions, or market-based PSUs, and our employee stock purchase plan, or ESPP.

We estimate the fair value of employee stock options on the date of grant using a binomial model and recognize the expense using a straight-line attribution method over the requisite employee service period. We use the closing trading price of our common stock on the date of grant, minus a dividend yield discount, as the fair value of awards of RSUs and PSUs, and we use a Monte Carlo simulation on the date of grant to estimate the fair value of market-based PSUs. We use a Black-Scholes valuation at the commencement of an offering period in March and September of each year to estimate the fair value of the shares to be issued under our ESPP.

Stock-based compensation expense for stock options, RSUs and market-based PSUs is recognized using a straight-line attribution method over the requisite employee service period, while compensation expense for PSUs and ESPP is recognized using an accelerated amortization model.

Our condensed consolidated statements of income include stock-based compensation expense, net of amounts capitalized as inventory, as follows:

Of the estimated total grant-date fair value of equity awards granted during the three and nine months ended October 25, 2015, the stock-based compensation expense related to the equity awards that are not expected to vest was $5$34 million and $10$43 million, forrespectively. Of the total fair value of equity awards granted during the three and nine months ended AprilOctober 26, 20152014, the stock-based compensation expense related to equity awards that are not expected to vest was $28 million and April 27, 2014,$35 million, respectively.

The following summarizes aggregatedthe aggregate unearned stock-based compensation expense and estimated weighted average amortization period as of April 26,October 25, 2015 and January 25, 2015:

The following is a reconciliation of the numerator and denominator of the basic and diluted net income per share computations for the periods presented:

The 1.00% Convertible Senior Notes, or the Notes, are included in the calculation of diluted net income per share if their inclusion is dilutive. The Notes will generally have a dilutive impact on net income per share if the Company'sour average stock price for the reporting period exceeds the conversion price of $20.16$20.1630 per share. For the three and nine months ended October 25, 2015, our average stock price for the reporting periods exceeded the conversion price, causing the Notes to have a dilutive impact for these periods.

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

The denominator for diluted net income per share will not include any effect from the warrants, which we entered into concurrently with the issuance of the Notes, unless the Company'sour average stock price for the reporting period exceeds the strike price of $27.14$27.1119 per share.

Please refer to Note 1011 of these Notes to Condensed Consolidated Financial Statements for additional discussion regarding the Notes.

We recognized income tax expensebenefit of $38 million and $26$1 million for the three months ended April 26,October 25, 2015 and April 27,income tax expense of $83 million, $36 million and $90 million for the nine months ended October 25, 2015 and three and nine months ended October 26, 2014, respectively. Income tax benefit as a percentage of income before tax was 0.5% for the three months ended October 25, 2015 and income tax expense as a percentage of income before taxes, or our effective tax rate, was 22.0%16.9%, 17.3% and 16.4%17.0% for the nine months ended October 25, 2015 and three and nine months ended October 26, 2014, respectively.

Our income tax benefit for the three months ended April 26,October 25, 2015 included a tax benefit of $49 million from a tax reserve release related to our Icera modem operations upon the expiration of applicable statutes of limitations. In addition to this benefit, our income tax expense for the nine months ended October 25, 2015 also included a $27 million charge for the write-down of a deferred tax asset related to our Icera modem operations, partially offset by the tax benefit related to restructuring and April 27, 2014, respectively.other charges.

The increasedecrease in our effective tax rate in the first quarter of fiscal year 2016three months ended October 25, 2015 as compared to the same period in the prior fiscal year was primarily relateddue to the favorable impact of the benefit from the expiration of the applicable statutes of limitations, partially offset by an increase in the amount of earnings subject to US tax and permanent tax differences related to stock-based compensation in the prior year's first three months.U.S. tax.

Our effective tax rate on income before tax for the first threenine months ended October 25, 2015 of fiscal year 2016 of 22.0%16.9% was lower than the United StatesU.S. federal statutory rate of 35% due primarily to income earned in jurisdictions where the tax rate is lower than the United StatesU.S. federal statutory tax rate. Further, our effective tax rate, for the first three months of fiscal year 2016 of 22.0% differs from our annual projected effective tax rate for the first three months of fiscal year 2016 of 24.0% due toand certain discrete events that occurred in the first three months of fiscal year 2016 primarily attributable toincluding the tax benefitsbenefit recognized upon the expiration of the applicable statutes of limitations in certain non-U.S. jurisdictions. and other tax benefits related to the Icera modem operations, partially offset by the write-down of a deferred tax asset related to Icera.

Our effective tax rate on income before tax for the first threenine months ended October 26, 2014 of fiscal year 2015 of 16.4%17.0% was lower than the United StatesU.S. federal statutory rate of 35% due primarily to income earned in jurisdictions where the tax rate is lower than the United StatesU.S. federal statutory tax.tax rate and favorable discrete events primarily attributable to the tax benefit recognized upon the expiration of applicable statutes of limitations.

For the threenine months ended April 26,October 25, 2015, there have been no material changes to our tax years that remain subject to examination by major tax jurisdictions. Additionally, there have been no other material changes to our unrecognized tax benefits and any related interest or penalties since the fiscal year ended January 25, 2015, other than the aforementioned recognition of tax benefits upon the expiration of statuteapplicable statutes of limitation in certain non-U.S. jurisdictionslimitations in the threenine months ended April 26,October 25, 2015.

While we believe that we have adequately provided for all uncertain tax positions, or tax positions where we believe it is believed not more-likely-than-not that the position will be sustained upon examination, amounts asserted by tax authorities could be greater or less than our accrued position. Accordingly, our provisions on federal, state and foreign tax related matters to be recorded in the future may change as revised estimates are made or the underlying matters are settled or otherwise resolved with the respective tax authorities. As of April 26,October 25, 2015, we do not believe that our estimates, as otherwise provided for, on such tax positions will significantly increase or decrease within the next twelve months.

All of our cash equivalents and marketable securities are classified as “available-for-sale” securities. These securities are reported at fair value, with the related unrealized gains and losses included in accumulated other comprehensive income, a component of shareholders’ equity, net of tax, and net realized gains and losses recorded in other income, net, on the Condensed Consolidated Statements of Income.

The following table provides the breakdown of the investments with unrealized losses at April 26,October 25, 2015: 

 

Net realized gains for the three months ended April 26, 2015 were $3 million, and were not significant for the three months ended April 27,October 25, 2015 and for the three and nine months ended October 26, 2014. Net realized gains were $3 million for the nine months ended October 25, 2015.

The components of our amortizable intangible assets are as follows:

Certain balance sheet components are as follows:

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.

In connection with certain agreements that we have executedentered into in the past, we have at times provided indemnities to cover the indemnified party for matters such as tax, product, and employee liabilities. We have also on occasion included intellectual property indemnification provisions in our technology related agreements with third parties. Maximum potential future payments cannot be estimated because many of these agreements do not have a maximum stated liability. As such, we have not recorded any liability in our Condensed Consolidated Financial Statements for such indemnifications. 

The following table presents the carrying amounts of the liability and equity components:

In September 2008, three putative securities class actions were filed in the United States District Court for the Northern District of California arising out of our announcements on July 2, 2008, that we would take a charge against cost of revenue to cover anticipated costs and expenses arising from a weak die/packaging material set in certain versions of our previous generation MCP and GPU products and that we were revising financial guidance for our second quarter of fiscal year 2009.2016, 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 actions purportlease 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 be brought on behalf of purchasers of NVIDIA stock and assert claimsrenew this lease for violations of Sections 10(b) and 20(a)up to three additional 5 year periods, subject to approval by the banks.

We will oversee the construction of the Securities Exchange Actheadquarters building. The banks have committed to fund up to $380 million of 1934, as amended, orcosts relating to construction. Advances will be made periodically to reimburse us for construction costs we incur. Once construction is complete, the Securities Exchange Act.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.

On January 22, 2010, Plaintiffs filed a Consolidated Amended Class Action Complaint, asserting claims for violations of Section 10(b), Rule 10b-5, and Section 20(a)During the term of the Securities Exchange Act and seeking unspecified compensatory damages. We movedlease, we may elect to dismisspurchase the consolidated complaint and on October 19, 2010, Judge Seeborg granted our motion with leave to amend. On December 2, 2010, Plaintiffs filed a Second Consolidated Amended Complaint. We again moved to dismiss and on October 12, 2011, Judge Seeborg again granted our motion to dismiss, this time denying Plaintiffs leave to amend. On November 8, 2011, Plaintiffs filed a Notice of Appeal toheadquarters building for the Ninth Circuit. Oral argument was held on January 14, 2014. On October 2, 2014, the Ninth Circuit issued an order affirming the dismissal. On October 16, 2014, Plaintiffs requested a rehearing or en banc reviewamount of the Ninth Circuit’s opinion affirmingbanks’ investment in the dismissal. Plaintiffs’ request was deniedbuilding 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 November 10, 2014. On February 9, 2015, Plaintiffs filedthe 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 petition for writcovenant to maintain a maximum total leverage ratio not to exceed 3.0 to 1.0 and a minimum interest coverage ratio in excess of certiorari3.5 to 1.0 during the United States Supreme Court. On April 15, 2015, we filed an opposition to Plaintiffs’ petition.term. If certain events of default occur and are continuing under the operative agreements, the banks may accelerate repayment of their investment under the lease.

On September 4, 2014, NVIDIA filed complaints against Qualcomm, Inc., or Qualcomm, and various Samsung entities within both the United States International Trade Commission, or ITC, and the United States District Court for the District of Delaware for allegedalleging infringement of seven patents relating to graphics processing. In the ITC action, NVIDIA seeks to block shipmentsexclude importation of Samsung Galaxy mobile phones and tablets and smart TVsother consumer electronics and display devices containing Qualcomm’s Adreno, ARM’s Mali or Imagination’s PowerVR graphics architectures.architectures, or the Accused Products. On October 6, 2014, the ITC initiatedinstituted an investigation of NVIDIA’s claim and the investigation is currently underway.claim. On February 2 and 3, 2015, the court conducted a claim construction hearing on certain claim language from five of the seven patents at issue. In June 2015, NVIDIA moved to terminate all asserted claims on four patents and these motions were granted. The ITC held an evidentiary hearing on NVIDIA’scertain asserted claims of the three remaining patents infrom June 22 through June 26, 2015. On October 9, 2015, the ITC actionAdministrative Law Judge rendered an initial determination that importation of the Samsung Accused Products did not violate U.S. law. NVIDIA is currently scheduledseeking review of the decision by the full commission of the ITC. The commission will decide whether to beginreview parts of the initial determination on June 22, 2015.or before December 14, 2015 and the target date for the final decision is February 10, 2016.

In the Delaware action, NVIDIA seeks unspecified damages for Samsung and Qualcomm’s alleged patent infringement. On October 22, 2014, Samsung and Qualcomm movedexercised their statutory right to stay the Delaware proceedings in light of the pending ITC action and NVIDIA did not oppose the motion. The court granted the motion to stay on October 23, 2014.

On November 10, 2014, Samsung filed a complaint against NVIDIA and Velocity Micro, Inc., in the United States District Court for the Eastern District of Virginia, alleging that NVIDIA infringed six patents and falsely advertised that the Tegra K1 processor is the world’s fastest mobile processor. OnSamsung amended its complaint twice, first on December 19, 2014, and then on April 10, 2015, Samsung filed amended, longer complaints, but which continued to assert the same claims against NVIDIA.without changing its legal claims. Samsung seeks unspecifiedmonetary damages and an injunction prohibiting NVIDIA from any future violations.certain injunctive relief as to some of the asserted patents. NVIDIA answered the second amended complaint on April 16, 2015, and asserted counter-claims against Samsung for infringing four of NVIDIA’s patents and for non-infringement and invalidity of the six patents asserted in Samsung’s second amended complaint. On April 24, 2015, Samsung moved to sever NVIDIA’s counter-claims for patent infringement. Oninfringement and its motion was granted on May 19, 2015. NVIDIA voluntarily withdrew its counter-claims on May 19, 2015. On June 17, 2015, Velocity Micro, Inc. voluntarily agreed to a permanent injunction preventing it from infringing two of the court severed NVIDIA's counter-claimsasserted patents and those patents were dismissed from the main actioncase with prejudice. Samsung’s false advertising claim was dismissed with prejudice on July 30, 2015. On October 15, 2015, NVIDIA’s Motion for Entry of Judgment of Noninfringement was granted as to one of Samsung’s patents. Five patents currently asserted against NVIDIA remain and set a jury trial date on those counter-claims for June 2016. On the same day, NVIDIA voluntarily dismissed its counter-claims from the case. Trial on Samsung’s claims is currently setscheduled to begin on January 11,19, 2016.

On November 23, 2014, Samsung filed a complaint against NVIDIA, among others, in the ITC claiming infringement of four United States patents. Samsung seekspatents and seeking an exclusion order barring importation of NVIDIA products alleged to permanently bar several products purportedly relying on these allegedly infringed patents in the United States.infringe Samsung’s patents. On December 23, 2014, the ITC initiatedinstituted an investigation of Samsung’s claims. On June 5, 2015, Samsung withdrew one patent from the case. A hearing on Samsung’s three remaining patents was held from August 18 through August 21, 2015. Post-hearing briefing is complete and the Administrative Law Judge is scheduled to begin on August 18,issue his initial determination by December 22, 2015. The target date for the final determination by the ITC is April 22, 2016.

NVIDIA and Samsung have also challenged the validity of certain of each other’s patents through inter partes review before the United States Patent and Trademark Office. NVIDIA has filed threeeleven requests for inter partes review on threeeight of Samsung’s asserted patents. Samsung has filed threesix requests for inter partes review on six patents asserted by NVIDIA, and Qualcomm has filed three additional requests for inter partes review on two patents asserted by NVIDIA. The United States Patent and Trademark Office has, not yetto date, decided whether to institute review as to any of the patents.

While there can be no assurance of favorable outcomes, we believe the claims made by other parties in the above ongoing matters are without merit and we intend to vigorously defend the actions. As of April 26,October 25, 2015, we have not recorded any accrual for contingent liabilities associated with the legal proceedings described above based on our belief that liabilities, while possible, are not probable. Further, any possible range of loss in these matters cannot be reasonably estimated at this time. We are engaged in other legal actions not described above arising in the ordinary course of its business and, while there can be no assurance of favorable outcomes, we believe that the ultimate outcome of these actions will not have a material adverse effect on our operating results, liquidity or financial position.

Beginning August 2004, our Board of Directors authorized us, subject to certain specifications, to repurchase shares of our common stock. Most recently, inIn May 2015, the Board extended the previously authorized repurchase program through December 2018 and authorized an additional $1.62 billion under the repurchase program.

As part of ourIn May 2015 we entered into a $400 million accelerated share repurchase, program,or ASR, agreement with an investment bank that was completed in October 2015. Under the ASR, we repurchased a total of 2.418 million shares at an average price of our common stock during$21.63 per share, of which 14 million shares were delivered in the first three monthssecond quarter of fiscal year 2016 and 4 million shares were delivered in the third quarter of fiscal year 2016. The shares delivered resulted in a reduction, on the delivery date, of the outstanding shares used to calculate the weighted-average common shares outstanding for $53 million.basic and diluted earnings per share.

Through April 26,October 25, 2015, we have repurchased an aggregate of 208226 million shares under our share repurchase program for a total cost of $3.32$3.72 billion. All shares delivered from these repurchases have been placed into treasury stock. As of April 26,October 25, 2015, we were authorized, subject to certain specifications, to repurchase additional shares of our common stock up to $382 million. However, as noted above, in May 2015, the Board authorized an additional $1.62 billion under the repurchase program for an aggregate of $2.00 billion available for future repurchases.$1.60 billion.

WeDuring the three and nine months ended October 25, 2015, we paid $46$53 million and $152 million, respectively, in cash dividends to our common shareholdersshareholders. These dividends were equivalent to $0.0975 per share for each ofthe six months ended October 25, 2015 and $0.085 per share for the three months ended April 26, 2015 and April 27, 2014. These dividends were equivalent to $0.085 per share on a quarterly basis.2015.

There are no shares of preferred stock outstanding.

We are authorized to issue up to 2.00 billion shares of our common stock at $0.001 per share par value.

We also integrate our GPUs into mobile chips called system-on-a-chip (SOC) processors, which power tablets, and automotive infotainment and safety systems. Our Tegra brand integrates an entire computer onto a single chip, incorporating GPUs and multi-core CPUs with audio, video and input/output capabilities. They can also be integrated with baseband processors to add voice and data communication. Tegra conserves power while delivering state-of-the-art graphics and multimedia processing.

Our CODM does not review any information regarding total assets on a reporting segment basis. Reporting segments do not record intersegment revenue, and, accordingly, there is none to be reported. The accounting policies for segment reporting are the same as for NVIDIA as a whole. The table below presents details of our reportable segments and the “All Other” category.