NVIDIA (NVDA) 10-K/A 2006 FY Annual report (amended)

Exhibit 99.1

NVIDIA CORPORATION AND SUBSIDIARIES

SELECTED CONSOLIDATED

FINANCIAL DATA

In May 2006, following media reports of stock option accounting investigations at other companies, the management of NVIDIA decided to conduct a review of stock option grants made by NVIDIA. Management advised our Board of Directors of the review at a regularly-scheduled meeting of the Board of Directors on May 25, 2006. The Board of Directors directed management to report its findings to the Audit Committee. Management presented its findings to the Audit Committee in late June 2006. Following that presentation, the Audit Committee determined that it should perform its own independent review of stock option grants made by NVIDIA. The Audit Committee, with the assistance of outside legal counsel, began its review on approximately June 29, 2006.

We will restate our October 30, 2005 financial statements in the filing of our October 29, 2006 Form 10-Q; however, in advance of that filing, we have provided the accompanying unaudited condensed consolidated financial information as of, and for the three and nine month periods ended, October 30, 2005 in this exhibit. As a result of the restatement, for the three and nine month periods ended October 30, 2005, we have recorded $2.0 million and $1.8 million, respectively, of incremental stock-based compensation expense, net of associated payroll taxes, in the accompanying “as restated” presentation of our condensed consolidated statements of income. For the three month period ended October 30, 2005, we included $0.9 million and $0.9 million in research and development expenses and selling, general and administrative expenses, respectively. For the nine month period ended October 30, 2005, we included $4.1 million and a credit of $3.0 million in research and development expenses and selling, general and administrative expenses, respectively. We have also included the tax benefit of these adjustments of $1.2 million and $1.0 million for the three and nine month periods ended October 30, 2005, respectively. We have also restated our condensed consolidated statement of cash flows for these adjustments, as well as our condensed consolidated balance sheet at October 30, 2005 for the cumulative impact of the effect of these adjustments. The cumulative effect of the restatement adjustments as of October 30, 2005 increased additional paid-in capital by $177.9 million, decreased retained earnings by $126.7 million and impacted total stockholders’ equity by $47.9 million. The additional non-cash charges for stock-based compensation expense and related tax effects had no impact on our condensed consolidated statement of cash flows. See Note 2, “Restatement of Consolidated Financial Statements, Audit Committee and Company Findings” of the Notes to the Consolidated Financial Statements included in Item 8 for further information surrounding the nature of the errors which gave rise to the restatement of our financial statements.

NVIDIA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

	October 30, 2005
	As Previously Reported			Adjustments			As Restated(1)
ASSETS
Current assets:
Cash and cash equivalents	$	364,308		$	—		$	364,308
Marketable securities		421,870			—			421,870
Accounts receivable, net		351,737						351,737
Inventories		284,847			127			284,974
Prepaid expenses and other current assets		23,949						23,949
Deferred income taxes		3,265			1,712			4,977
Total current assets		1,449,976			1,839			1,451,815
Property and equipment, net		178,505			—			178,505
Deposits and other assets		24,713			—			24,713
Goodwill		133,107			—			133,107
Intangible assets, net		19,207			—			19,207
Deferred income taxes, non-current		—			33,035			33,035
	$	1,805,508		$	34,874		$	1,840,382
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	179,777		$	—		$	179,777
Accrued liabilities		247,390			(1,049	)		246,341
Current portion of capital lease obligations		—						—
Total current liabilities		427,167			(1,049	)		426,118
Deferred income tax liabilities		20,754			(20,754	)		—
Long-term liabilities		8,146			8,794			16,940
Stockholders’ equity:
Common stock		178			—			178
Additional paid-in capital		740,665			177,850			918,515
Deferred compensation		(1,943	)		(3,276	)		(5,219	)
Treasury stock		(162,142	)		—			(162,142	)
Accumulated other comprehensive loss, net		(4,365	)		—			(4,365	)
Retained earnings		777,048			(126,691	)		650,357
Total stockholders’ equity		1,349,441			47,883			1,397,324
	$	1,805,508		$	34,874		$	1,840,382

(1) See Note 2, “Restatement of Consolidated Financial Statement, Audit Committee and Company Findings” of the Notes to “Consolidated Financial Statements.”

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NVIDIA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

	Three Months Ended October 30, 2005		Nine Months Ended October 30, 2005
	(As Restated)(1)		(As Restated)(1)
Revenue	$	583,415	$	1,742,073
Cost of revenue		355,420		1,086,842
Gross profit		227,995		655,231
Operating expenses:
Research and development		88,829		263,777
Sales, general and administrative		55,436		151,322
Settlement costs		14,158		14,158
Total operating expenses		158,423		429,257
Operating income		69,572		225,974
Interest income		5,380		14,143
Interest expense		—		(13	)
Other income, net		766		1,608
Income before income tax expense		75,718		241,712
Income tax expense		11,271		37,910
Net income	$	64,447	$	203,802
Basic net income per share	$	0.38	$	1.20
Diluted net income per share	$	0.35	$	1.12
Shares used in basic per share computation		170,127		169,239
Shares used in diluted per share computation		183,429		181,608

(1) See Note 2, “Restatement of Consolidated Financial Statement, Audit Committee and Company Findings” of the Notes to “Consolidated Financial Statements.”

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NVIDIA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(In thousands)

(Unaudited)

	Nine Months Ended October 30, 2005
	(As Restated)(1)
Cash flows from operating activities:
Net income	$	203,802
Adjustments to reconcile net income to net cash provided by operating activities:
Non-cash realized gain on investment exchange		(96	)
Depreciation and amortization		74,189
Stock-based compensation		6,763
Bad debt expense		163
Other		85
Changes in operating assets and liabilities:
Accounts receivable		(55,621	)
Inventories		30,671
Prepaid expenses and other current assets		(3,956	)
Deposits and other assets		(5,995	)
Accounts payable		(62,494	)
Accrued liabilities		33,514
Net cash provided by operating activities		221,025
Cash flows from investing activities:
Purchases of marketable securities		(182,531	)
Sales and maturities of marketable securities		217,286
Purchases of property, equipment and intangible assets		(56,155	)
Investments in non-affiliates		(9,684	)
Net cash used in investing activities		(31,084	)
Cash flows from financing activities:
Common stock issued under employee stock plans		104,729
Stock repurchases		(138,509	)
Principal payments on capital leases		(856	)
Retirement of common stock		491
Net cash provided by (used in) financing activities		(34,145	)
Change in cash and cash equivalents		155,796
Cash and cash equivalents at beginning of period		208,512
Cash and cash equivalents at end of period	$	364,308
Supplemental disclosures of cash flow information:
Cash paid for interest	$	12
Net payment of income taxes	$	2,659
Non cash activities:
Acquisition of business - goodwill adjustment	$	25,000
Application of customer advance to accounts receivable	$	—
Marketable security received from investment exchange	$	96
Asset retirement obligation	$	1,611
Deferred stock-based compensation	$	(153	)
Unrealized losses from marketable securities	$	1,127
Assets acquired by assuming related liabilities	$	4,048

(1) See Note 2, “Restatement of Consolidated Financial Statement, Special Committee and Company Findings” of the Notes to “Consolidated Financial Statements.”

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