What changed in this filing

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Item 9A. Controls and Procedures

2022-03-18 compared with 2021-02-26 · 314 added, 315 removed, 1035 unchanged (38% of the section changed)

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Changes in Internal Control Over Financial Reporting

Other than the acquisition of Mellanox that occurred during the second quarter of fiscal year 2021, there were no changes in our internal control over financial reporting during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting despite the fact that virtually all of our employees are working remotely due to the COVID-19 pandemic.

We are continually monitoring and assessing the COVID-19 situation on our internal controls to minimize the impact on their operating effectiveness.

We are in the process of integrating Mellanox into our systems and control environment.

We believe that we have taken the necessary steps to monitor and maintain appropriate internal control over financial reporting during this integration.

There have been no changes in our internal control over financial reporting during the quarter ended January 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

In fiscal year 2022, we began an upgrade of our enterprise resource planning, or ERP, system, which will update much of our existing core financial systems.

The ERP system is designed to accurately maintain the Company’s financial records used to report operating results.

The upgrade will occur in phases with the consolidated financial reporting and general ledger module to be implemented in fiscal year 2023.

We will evaluate each quarter whether there are changes that affect our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

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OTHER INFORMATION

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not Applicable

Certain information required by Part III is omitted from this report because we will file with the SEC a definitive proxy statement pursuant to Regulation 14A, or the 2022 Proxy Statement, no later than 120 days after the end of fiscal year 2022, and certain information included therein is incorporated herein by reference.

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Information regarding related transactions and director independence required by this item will be contained in our 2022 Proxy Statement under the captions “Review of Transactions with Related Persons” and “Information About the Board of Directors and Corporate Governance - Independence of the Members of the Board of Directors,” and is hereby incorporated by reference.

PRINCIPAL ACCOUNTING FEES AND SERVICES

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information regarding accounting fees and services required by this item will be contained in our 2022 Proxy Statement under the caption “Fees Billed by the Independent Registered Public Accounting Firm,” and is hereby incorporated by reference.

EXHIBITS, FINANCIAL STATEMENT SCHEDULE

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Financial Statements

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Statements of Income for the years ended January 3 0 , 202 2 , January 31, 2021, and January 26, 2020

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Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of NVIDIA Corporation and its subsidiaries (the "Company") as of January 31, 2021 and January 26, 2020, and the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended January 31, 2021, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

We have audited the accompanying consolidated balance sheets of NVIDIA Corporation and its subsidiaries (the “Company”) as of January 30, 2022 and January 31, 2021, and the related consolidated statements of income, of comprehensive income, of shareholders' equity and of cash flows for each of the three years in the period ended January 30, 2022, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of January 30, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January 30, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

As discussed in Note 3 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in fiscal year 2020.

Basis for Opinions

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A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of

management and directors of the company;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Acquisition of Mellanox Technologies Ltd.- Valuation of Developed Technology and In-process Research and Development Intangible Assets Acquired

As described in Note 2 to the consolidated financial statements, in fiscal year 2021 the Company completed the acquisition of Mellanox Technologies Ltd.

for consideration of approximately $7.13 billion, of which $1,640 million of developed technology and $630 million of in-process research and development intangible assets were recorded.

The fair values of developed technology and in-process research and development intangible assets were determined using the multi-period excess earnings method.

As disclosed by management, management applied significant judgment in estimating the fair value of the intangible assets acquired, which involved the use of certain estimates and assumptions, including future economic and market conditions, revenue growth, the technology migration curve, and risk-adjusted discount rates.

The principal considerations for our determination that performing procedures relating to the valuation of the developed technology and in-process research and development intangible assets acquired in the acquisition of Mellanox Technologies Ltd.

is a critical audit matter are (i) the high degree of auditor judgment and subjectivity in applying procedures relating to the fair value measurement of developed technology and in-process research and development intangible assets acquired due to the significant judgment by management when developing the estimate, (ii) significant audit effort in evaluating management’s assumptions relating to the estimate, such as revenue growth and the technology migration curve, and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of the intangible assets and controls over development of the assumptions related to the revenue growth and the technology migration curve.

These procedures also included, among others, reading the purchase agreement and testing management’s process for estimating the fair value of the developed technology and in-process research and development intangible assets acquired.

Testing management’s process included evaluating the appropriateness of the valuation method and the reasonableness of management’s assumptions related to the revenue growth and the technology migration curve for the intangible assets acquired, and using professionals with specialized skill and knowledge to assist with the evaluation.

Evaluating the reasonableness of the revenue growth involved considering the past performance of the acquired business as well as economic and industry forecasts.

The technology migration curve was evaluated by considering the revenue attribution between existing technology and in-process research and development based on the assessment of the separation of forecasted future revenue between developed products and new generation products and the technology carryover rate.

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of Inventories - Provisions for Excess or Obsolete Inventories

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Most of the Company’s inventory provisions relate to excess quantities of products, based on the Company’s inventory levels and future product purchase commitments compared to assumptions about future demand and market conditions.

disclosed by management, the inventory provisions developed include assumptions about future demand and market conditions.

As of January 30, 2022, the Company’s consolidated inventories balance was $2,605 million.

The principal considerations for our determination that performing procedures relating to the valuation of inventories, specifically the provisions for excess or obsolete inventories, is a critical audit matter are the significant judgments by management when developing provisions for excess or obsolete inventories, including developing assumptions related to future demand and market conditions.

The principal considerations for our determination that performing procedures relating to the valuation of inventories, specifically the provisions for excess or obsolete inventories, is a critical audit matter are the significant judgment by management when developing provisions for excess or obsolete inventories, including developing assumptions related to future demand and market conditions.

This in turn led to significant auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s assumptions related to future demand and market conditions.

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evaluating the appropriateness of management’s approach;

testing the completeness, accuracy, and relevance of underlying data used in the approach;

testing the completeness and accuracy of underlying data used in the approach;

and evaluating the reasonableness of management’s assumptions related to future demand and market conditions.

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San Jose, California

February 26, 2021

March 17, 2022

We have served as the Company’s auditor since 2004.

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Income before income tax 9,941 4,409 2,970

Income tax expense (benefit) 77 174 ( 245 )

Income tax expense 189 77 174

Net income $ 9,752 $ 4,332 $ 2,796

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Weighted average shares used in per share computation:

2,496 2,467 2,439

2,535 2,510 2,472

See accompanying notes to the consolidated financial statements.

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Net income $ 9,752 $ 4,332 $ 2,796

Other comprehensive income, net of tax

Other comprehensive income (loss), net of tax

Available-for-sale debt securities:

Net unrealized gain 2 8 10

Net unrealized gain (loss) ( 16 ) 2 8

Reclassification adjustments for net realized gain (loss) included in net income — ( 2 ) —

Net change in unrealized gain — 8 11

Net change in unrealized gain (loss) ( 16 ) — 8

Cash flow hedges:

Net unrealized gain 9 10 6

Net unrealized gain (loss) ( 43 ) 9 10

Reclassification adjustments for net realized gain (loss) included in net income 29 9 ( 5 )

Net change in unrealized gain (loss) ( 14 ) 18 5

Other comprehensive income, net of tax 18 13 6

Other comprehensive income (loss), net of tax ( 30 ) 18 13

Total comprehensive income $ 9,722 $ 4,350 $ 2,809

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Additional paid-in capital 10,385 8,719

Treasury stock, at cost ( 345 shares in 2021 and 342 shares in 2020)

( 10,756 ) ( 9,814 )

Accumulated other comprehensive income 19 1

Treasury stock, at cost ( No ne as of January 30, 2022 and 1,380 shares as of January 31, 2021)

Accumulated other comprehensive income (loss) ( 11 ) 19

Retained earnings 16,235 18,908

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Balances, January 27, 2019 2,423 $ 3 $ 6,049 $ ( 9,263 ) $ ( 12 ) $ 12,565 $ 9,342

606 $ 1 $ 5,351 $ ( 6,650 ) $ ( 18 ) $ 8,787 $ 7,471

Retained earnings adjustment due to adoption of an accounting standard related to income tax consequences of an intra-entity transfer of an asset — — — — — 8 8

Other comprehensive income — — — — 6 — 6

Net income — — — — — 2,796 2,796

Convertible debt conversion 1 — — — — — —

Other comprehensive income — — — — 13 — 13

Issuance of common stock from stock plans 39 — 149 — — — 149

Tax withholding related to vesting of restricted stock units ( 12 ) — — ( 551 ) — — ( 551 )

Share repurchase ( 9 ) — — ( 1,579 ) — — ( 1,579 )

Exercise of convertible note hedges ( 1 ) — 2 ( 2 ) — — —

Cash dividends declared and paid ($ 0.16 per common share)

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Balances, January 26, 2020 2,450 3 7,043 ( 9,814 ) 1 14,971 12,204

Other comprehensive income — — — — 13 — 13

Net income — — — — — 4,332 4,332

Other comprehensive income — — — — 18 — 18

Issuance of common stock from stock plans 40 — 194 — — — 194

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— — — — — ( 395 ) ( 395 )

Fair value of partially vested equity awards assumed in connection with acquisitions — — 86 — — — 86

Stock-based compensation — — 1,396 — — — 1,396

Balances, January 31, 2021 2,479 3 8,719 ( 10,756 ) 19 18,908 16,893

Other comprehensive income — — — — 18 — 18

Net income — — — — — 9,752 9,752

Other comprehensive loss — — — — ( 30 ) — ( 30 )

Issuance of common stock from stock plans 35 — 281 — — — 281

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Stock-based compensation — — 2,001 — — — 2,001

Retirement of Treasury Stock

— — ( 20 ) 12,046 — ( 12,026 ) —

Balances, January 30, 2022 2,506 $ 3 $ 10,385 $ — $ ( 11 ) $ 16,235 $ 26,612

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Deferred income taxes ( 406 ) ( 282 ) 18

(Gains) losses on investments in non-affiliates, net ( 100 ) — 1

Other 47 ( 20 ) 4

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Purchases of marketable securities ( 24,787 ) ( 19,308 ) ( 1,461 )

Acquisitions, net of cash acquired ( 8,524 ) ( 4 ) —

Purchases related to property and equipment and intangible assets ( 976 ) ( 1,128 ) ( 489 )

Acquisitions, net of cash acquired ( 263 ) ( 8,524 ) ( 4 )

Investments and other, net ( 24 ) ( 34 ) ( 10 )

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Payments related to tax on restricted stock units ( 1,904 ) ( 942 ) ( 551 )

Repayment of debt ( 1,000 ) — —

Dividends paid ( 399 ) ( 395 ) ( 390 )

Principal payments on property and equipment ( 83 ) ( 17 ) —

Payments related to repurchases of common stock

— — ( 1,579 )

Repayment of Convertible Notes — — ( 16 )

Other ( 7 ) ( 4 ) —

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All references to “NVIDIA,” “we,” “us,” “our” or the “Company” mean NVIDIA Corporation and its subsidiaries.

On July 19, 2021, we executed a four -for-one stock split of our common stock.

All share, equity award, and per share amounts and related shareholders' equity balances presented herein have been retroactively adjusted to reflect the Stock Split.

We operate on a 52- or 53-week year, ending on the last Sunday in January.

Fiscal year 2021 is a 53-week year.

Fiscal years 2022 and 2020 were both 52-week years.

Fiscal year 2021 was a 53-week year.

Reclassifications

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Revenue Recognition

We derive our revenue from product sales, including hardware and systems, license and development arrangements, and software licensing.

We derive our revenue from product sales, including hardware and systems, license and development arrangements, software licensing, and cloud services.

We determine revenue recognition through the following steps:

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Product Sales Revenue

Revenue from product sales is recognized upon transfer of control of promised products to customers in an amount that reflects the consideration we expect to receive in exchange for those products.

Certain products are sold along with support or extended warranty.

Revenue from product sales is recognized upon transfer of control of products to customers in an amount that reflects the consideration we expect to receive in exchange for those products.

Certain products are sold with support or an extended warranty for the incorporated system, hardware, and/or software.

Support and extended warranty revenue are recognized ratably over the service period, or as services are performed.

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However, if product returns for a fiscal period are anticipated to exceed historical return rates, we may determine that additional sales return allowances are required to properly reflect our estimated exposure for product returns.

Our customer programs involve rebates, which are designed to serve as sales incentives to resellers of our products in various target markets, and marketing development funds, or MDFs, which represent monies paid to our partners that are earmarked for market segment development and are designed to support our partners’ activities while also promoting NVIDIA products.

We account for customer programs as a reduction to revenue and accrue for potential rebates and MDFs based on the amount we expect to be claimed by customers.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

We account for customer programs as a reduction to revenue and accrue for potential rebates and MDFs based on the amount we expect to be claimed by customers.

License and Development Arrangements

Our license and development arrangements with customers typically require significant customization of our intellectual property components.

Our license and development arrangements with customers typically require significant customization of our IP components.

As a result, we recognize the revenue from the license and the revenue from the development services as a single performance obligation over the period in which the development services are performed.

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Customers may purchase either perpetual licenses or subscriptions to licenses, which differ mainly in the duration over which the customer benefits from the software.

Software licenses are frequently sold along with post-contract customer support, or PCS.

Software licenses are frequently sold along with the right to receive, on a when-and-if available basis, future unspecified software updates and upgrades.

Revenue from software licenses is recognized up front when the software is made available to the customer.

PCS revenue is recognized ratably over the service period, or as services are performed.

Software support revenue is recognized ratably over the service period, or as services are performed.

Cloud Services

Cloud services, which allow customers to use hosted software over the contract period without taking possession of the software, are provided on a subscription basis or a combination of subscription plus usage.

Revenue related to subscription-based cloud services is recognized ratably over the contract period.

Revenue related to cloud services based on usage is recognized as usage occurs.

Product Warranties

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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.

Additionally, we estimate forfeitures at least annually based on historical experience and revise the estimates of forfeiture in subsequent periods if actual forfeitures differ from those estimates.

Litigation, Investigation and Settlement Costs

From time to time, we are involved in legal actions and/or investigations by regulatory bodies.

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.

We currently, are, and will likely continue to be subject to claims, litigation, and other actions, including potential regulatory proceedings, involving patent and other intellectual property matters, taxes, labor and employment, competition and antitrust, commercial disputes, goods and services offered by us and by third parties, and other matters.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

settlement payments or judgements.

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.

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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 or expense in our Consolidated Statements of Income and to date have not been significant.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Revenue and expenses are remeasured at exchange rates in effect during each period, except for those expenses related to non-monetary balance sheet amounts, which are remeasured at historical exchange rates.

Gains or losses from foreign currency remeasurement are included in earnings in our Consolidated Statements of Income and to date have not been significant.

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.

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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 31, 2021, we had a valuation allowance of $ 728 million related to state and certain foreign deferred tax assets that management determined are not likely to be realized due to jurisdictional projections of future taxable income, tax attributes usage limitation by certain jurisdictions, and potential utilization limitations of tax attributes acquired as a result of stock ownership changes.

As of January 30, 2022, we had a valuation allowance of $ 907 million related to state and certain other deferred tax assets that management determined are not likely to be realized due to jurisdictional projections of future taxable income, tax attributes usage limitation by certain jurisdictions, 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 assets as an income tax benefit during the period.

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We currently classify our investments as current based on the nature of the investments and their availability for use in current operations.

We generally classify our cash equivalents and marketable securities related to debt securities at the date of acquisition as available-for-sale.

These available-for-sale debt securities are reported at fair value with the related unrealized gains and losses included in accumulated other comprehensive income or loss, a component of shareholders’ equity, net of tax.

We classify our cash equivalents and marketable securities related to debt securities at the date of acquisition as available-for-sale.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The fair value of interest-bearing debt securities includes accrued interest.

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All of our available-for-sale debt investments are subject to a periodic impairment review.

If the estimated fair value of an available-for-sale debt securities is less than its amortized cost basis, we determine if the difference, if any, is caused by expected credit losses and write-down the amortized cost basis of the securities if it is more likely than not we will be required or we intend to sell the securities before recovery of its amortized cost basis.

Allowances for credit losses and write-downs are recognized in other income (expense), net section of our Consolidated Statements of Income.

If the estimated fair value of available-for-sale debt securities is less than its amortized cost basis, we determine if the difference, if any, is caused by expected credit losses and write-down the amortized cost basis of the securities if it is more likely than not we will be required or we intend to sell the securities before recovery of its amortized cost basis.

Allowances for credit losses and write-downs are recognized in the other income (expense), net section of our Consolidated Statements of Income.

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 30, 2022 and January 31, 2021.

Marketable securities are comprised of available-for-sale securities that are reported at fair value with the related unrealized gains or losses

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

included in accumulated other comprehensive income or loss, a component of shareholders’ equity, net of tax.

Marketable securities are comprised of available-for-sale securities that are reported at fair value with the related unrealized gains or losses included in accumulated other comprehensive income or loss, a component of shareholders’ equity, net of tax.

Fair value of the marketable securities is determined based on quoted market prices.

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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 expected 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.

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.

Inventory costs consist primarily of the cost of semiconductors, 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 net realizable value or for obsolete or excess inventory.

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Once inventory has been written-off or written-down, it creates a new cost basis for the inventory that is not subsequently written-up.

We record a liability for noncancelable purchase commitments with suppliers for quantities in excess of our future demand forecasts consistent with our valuation of obsolete or excess inventory.

Property and Equipment

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Leasehold improvements and assets recorded under finance leases are amortized over the shorter of the expected lease term or the estimated useful life of the asset.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

We determine if an arrangement is or contains a lease at inception.

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Operating lease assets also include initial direct costs incurred and prepaid lease payments, minus any lease incentives.

Our lease terms include options to extend or terminate the lease

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

when it is reasonably certain that we will exercise that option.

Our lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.

Lease expense is recognized on a straight-line basis over the lease term.

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Intangible Assets and Other Long-Lived Assets

Intangible assets primarily represent acquired intangible assets including developed technology, in-process research and development, or IPR&D, and customer relationships, as well as rights acquired under technology licenses, patents, and acquired intellectual property.

We currently amortize our intangible assets with finite lives over periods ranging from two to twenty 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.

We currently amortize our intangible assets with finite lives over periods ranging from one to twenty 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.

We initially capitalize the fair value of IPR&D as an intangible asset with an indefinite life.

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Management’s estimates of fair value are based upon assumptions believed to be reasonable, but our estimates and assumptions are inherently uncertain and subject to refinement.

The estimates and assumptions used in valuing intangible assets include, but are not limited to, the amount and timing of projected future cash flows, discount rate used to determine the present value of these cash flows and asset lives.

The estimates and assumptions used in valuing intangible assets include, but are not limited to, the amount and timing of projected future cash flows, discount rate used

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

to determine the present value of these cash flows and asset lives.

These estimates are inherently uncertain and, therefore, actual results may differ from the estimates made.

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Acquisition-related expenses are recognized separately from the business combination and expensed as incurred.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Investment in Non-Affiliated Entities

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The estimated fair value is based on quantitative and qualitative factors including subsequent financing activities by the investee.

Marketable equity investments in publicly-held companies are recorded at fair value with the related unrealized and realized gains and losses recognized in other income (expense), net.

Adoption of New and Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncement

In June 2016, the Financial Accounting Standards Board issued a new accounting standard to replace the existing incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates for accounts receivable and other financial instruments, including available-for-sale debt securities.

We adopted the standard in the first quarter of fiscal year 2021 and the impact of the adoption was not material to our consolidated financial statements.

In October 2021, the Financial Accounting Standards Board issued a new accounting standard to require that an acquirer recognize and measure contract assets and liabilities acquired in a business combination in accordance with Accounting Standards Codification 606, Revenue from Contracts with Customers.

We early adopted this accounting standard in the third quarter of fiscal year 2022 and the impact was immaterial.

Note 2 - Business Combination

Pending Acquisition of Arm Limited

On September 13, 2020, we entered into a Purchase Agreement with Arm and SoftBank for us to acquire, from SoftBank all allotted and issued ordinary shares of Arm in a transaction valued at $ 40 billion.

We paid $ 2 billion in Signing Consideration and will pay upon closing of the acquisition $ 10 billion in cash and issue to SoftBank 44.3 million shares of our common stock with an aggregate value of $ 21.5 billion.

The transaction includes a potential earn out, which is contingent on the achievement of certain financial performance targets by Arm during the fiscal year ending March 31, 2022.

If the financial targets are achieved, SoftBank can elect to receive either up to an additional $ 5 billion in cash or up to an additional 10.3 million shares of our common stock.

We will issue up to $ 1.5 billion in restricted stock units to Arm employees after closing.

The $ 2 billion paid upon signing was allocated between advanced consideration for the acquisition of $ 1.36 billion and the prepayment of intellectual property licenses from Arm of $ 0.17 billion and royalties of $ 0.47 billion, both with a 20-year term.

The closing of the acquisition is subject to customary closing conditions, including receipt of specified governmental and regulatory consents and approvals and expiration of any related mandatory waiting period, and Arm's implementation of the reorganization and distribution of Arm’s IoT Services Group and certain other assets and liabilities.

We are engaged with regulators in the United States, the United Kingdom, the European Union, China and other jurisdictions.

If the Purchase Agreement is terminated under certain circumstances, we will be refunded $ 1.25 billion of the Signing Consideration.

The $ 2 billion payment upon signing was allocated on a fair value basis and any refund of the Signing Consideration will use stated values in the Purchase Agreement.

We believe the closing of the acquisition will likely occur in the first quarter of calendar year 2022.

Termination of the Arm Share Purchase Agreement

On February 8, 2022, NVIDIA and SoftBank announced the termination of the Share Purchase Agreement whereby NVIDIA would have acquired Arm from SoftBank.

The parties agreed to terminate because of significant regulatory challenges preventing the completion of the transaction.

We intend to record in operating expenses a $ 1.36 billion charge in the first quarter of fiscal year 2023 reflecting the write-off of the prepayment provided at signing in September 2020.

Acquisition of Mellanox Technologies, Ltd.

On April 27, 2020, we completed the acquisition of all outstanding shares of Mellanox for a total purchase consideration of $ 7.13 billion.

In April 2020, we completed the acquisition of all outstanding shares of Mellanox for a total purchase consideration of $ 7.13 billion.

Mellanox is a supplier of high-performance interconnect products for computing, storage and communications applications.

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Intangible Assets

The estimated fair value and useful life of the acquired intangible assets are as follows:

The estimated fair value and useful life of the acquired intangible assets at the time of the acquisition are as follows:

Fair Value Useful Lives

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The fair value of the finite-lived intangible assets will be amortized over the estimated useful lives based on the pattern in which the economic benefits are expected to be received to cost of revenue and operating expenses.

Mellanox had an IPR&D project associated with the next generation interconnect product that had not yet reached technological feasibility as of the acquisition date.

Accordingly, we recorded an indefinite-lived intangible asset of $ 630 million for the fair value of this project, which will initially not be amortized.

Instead, the project will be tested for impairment annually and whenever events or changes in circumstances indicate that the project may be impaired or may have reached technological feasibility.

Once the project reaches technological feasibility, we will begin to amortize the intangible asset over its estimated useful life.

Mellanox has an IPR&D project associated with the next generation interconnect product that had not yet reached technological feasibility as of the acquisition date.

Accordingly, we recorded an indefinite-lived intangible asset of $ 630 million for the fair value of this project, which was initially not amortized.

Instead, the project is tested for impairment annually and whenever events or changes in circumstances indicate that the project may be impaired or may have reached technological feasibility.

Once and if the project reaches technological feasibility, we will begin to amortize the intangible asset over its estimated useful life.

Supplemental Unaudited Pro Forma Information

The following unaudited pro forma financial information summarizes the combined results of operations for NVIDIA and Mellanox as if the companies were combined as of the beginning of fiscal year 2020:

2021 January 26,

January 31, 2021 January 26, 2020

(In millions)

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There were no other material nonrecurring adjustments.

Note 3 - Leases

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

On January 28, 2019, we adopted the new lease accounting standard using the optional transition method.

Note 3 - Leases

Our lease obligations primarily consist of operating leases for our headquarters complex, domestic and international office facilities, and data center space, with lease periods expiring between fiscal years 2023 and 2035.

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Long-term operating lease liabilities $ 741

In addition to our existing operating lease obligations, we have operating leases that are expected to commence within fiscal year 2023 with lease terms of 7 years for $ 169 million.

Operating lease expense for fiscal years 2022, 2021, and 2020 was $ 168 million, $ 145 million, $ 114 million, respectively.

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Other information related to leases was as follows:

January 31, 2021 January 26, 2020

January 30, 2022 January 31, 2021 January 26, 2020

(In millions)

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Operating lease assets obtained in exchange for lease obligations (1) $ 266 $ 200 $ 238

(1) Fiscal year 2021 includes $ 80 million of operating lease assets addition due to a business combination.

(1) Fiscal year 2021 includes $ 80 million of operating lease assets addition due to Mellanox.

As of January 30, 2022, our operating leases had a weighted average remaining lease term of 7.1 years and a weighted average discount rate of 2.51 %.

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

In addition, in connection with our acquisitions of various companies, we have assumed the stock-based awards granted under their stock incentive plans and substituted them with our RSUs.

In addition, in connection with our acquisitions of various companies, we have assumed certain stock-based awards granted under their stock incentive plans and converted them into our RSUs.

Amended and Restated 2007 Equity Incentive Plan

In 2007, our shareholders approved the NVIDIA Corporation 2007 Equity Incentive Plan, as most recently amended and restated, the 2007 Plan.

In 2007, our shareholders approved the NVIDIA Corporation 2007 Equity Incentive Plan, as most recently amended and restated, or the 2007 Plan.

The 2007 Plan authorizes the issuance of incentive stock options, non-statutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance stock awards, performance cash awards, and other stock-based awards to employees, directors and consultants.

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As of January 30, 2022, up to 50 million shares of our common stock could be issued pursuant to stock awards granted under the 2007 Plan, of which 6 million shares were issuable upon the exercise of outstanding stock options.

All options are fully vested, the last of which will expire by May 2024 if not exercised.

Currently, we grant RSUs, PSUs and market-based PSUs under the 2007 Plan, under which, as of January 31, 2021, there were 37 million shares available for future issuance.

Subject to certain exceptions, RSUs and PSUs granted to employees either vest (A) 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 6.25 % vesting quarterly thereafter, or (B) over a three-year period, subject to continued service, with 40 % vesting on a pre-determined date that is close to the anniversary of the date of grant and 7.5 % vesting quarterly thereafter.

All options are fully vested, the last of which will expire by December 2023 if not exercised.

Currently, we grant RSUs, PSUs and market-based PSUs under the 2007 Plan, under which, as of January 30, 2022, there were 131 million shares available for future grants.

Subject to certain exceptions, RSUs granted to employees either vest (A) 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 6.25 % vesting quarterly thereafter, or (B) over a three-year period, subject to continued service, with 40 % vesting on a pre-determined date that is close to the anniversary of the date of grant and 7.5 % vesting quarterly thereafter.

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 6.25 % vesting quarterly thereafter.

Market-based PSUs vest 100 % on approximately the three-year anniversary of the date of grant.

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Amended and Restated 2012 Employee Stock Purchase Plan

In 2012, our shareholders approved the 2012 Employee Stock Purchase Plan, as most recently amended and restated, the 2012 Plan.

Employees who participate may have up to 10 % of their earnings withheld to the purchase of shares of common stock.

Starting in March 2021, employees who participate may have up to 15 % of their earnings withheld to purchase shares of common stock.

In 2012, our shareholders approved the NVIDIA Corporation 2012 Employee Stock Purchase Plan, as most recently amended and restated, or the 2012 Plan.

Employees who participate in the 2012 Plan may have up to 15 % of their earnings withheld to purchase shares of common stock.

The Board may decrease this percentage at its discretion.

Each offering period is approximately 24 months, which is generally divided into four purchase periods of six months .

The price of common stock purchased under our 2012 Plan 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.

The price of common stock purchased under our 2012 Plan 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 or the fair market value of the common stock on each purchase date within the offering.

As of January 30, 2022, we had 233 million shares reserved for future issuance under the 2012 Plan.

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Number of Shares Weighted Average Grant-Date Fair Value

(In millions, except years and per share data)

(In millions, except per share data)

Balances, January 31, 2021 59 $ 66.17

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Vested and expected to vest after January 30, 2022 46 $ 113.84

As of January 31, 2021 and January 26, 2020, there were 37 million and 29 million shares, respectively, of common stock reserved for future issuance under our equity incentive plans.

As of January 30, 2022 and January 31, 2021, there were 131 million and 148 million shares, respectively, of common stock available for future grants under our equity incentive plans.

As of January 30, 2022, the total intrinsic value of options currently exercisable and outstanding was $ 1.38 billion, with an average exercise price of $ 3.55 per share and an average remaining term of 1.1 years.

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Note 6 - Goodwill

We changed our reportable segments to "Graphics" and "Compute & Networking" starting with the first quarter of fiscal year 2021, as discussed in Note 17 of these Notes to the Consolidated Financial Statements.

As a result, our reporting units also changed, and we reassigned the goodwill balance to the new reporting units based on their relative fair values.

Comparative periods presented reflect this change.

We determined there was no goodwill impairment immediately prior to the reorganization.

As of January 31, 2021, the total carrying amount of goodwill was $ 4.19 billion and the amount of goodwill allocated to our Graphics and Compute & Networking reporting units was $ 347 million and $ 3.85 billion, respectively.

As of January 26, 2020, the total carrying amount of goodwill was $ 618 million and the amount of goodwill allocated to our Graphics and Compute & Networking reporting units was $ 347 million and $ 271 million, respectively.

Goodwill increased by $ 3.57 billion in fiscal year 2021 due to goodwill of $ 3.43 billion arising from the Mellanox acquisition, and goodwill of $ 143 million from other acquisition activities, all of which were allocated to the Compute & Networking reporting unit.

As of January 30, 2022, the total carrying amount of goodwill was $ 4.35 billion, consisting of goodwill balances allocated to our Graphics and Compute & Networking reporting units of $ 361 million and $ 3.99 billion, respectively.

As of January 31, 2021, the total carrying amount of goodwill was $ 4.19 billion, consisting of goodwill balances allocated to our Graphics and Compute & Networking reporting units of $ 347 million and $ 3.85 billion, respectively.

Goodwill increased by $ 156 million in fiscal year 2022 from acquisitions.

We assigned $ 143 million of the increase in goodwill to our Compute & Networking segment and assigned $ 13 million of the increase to our Graphics segment.

During the fourth quarters of fiscal years 2022, 2021, and 2020, we completed our annual impairment tests and concluded that goodwill was no t impaired in any of these years.

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Total intangible assets $ 4,135 $ ( 1,796 ) $ 2,339 $ 3,986 $ ( 1,249 ) $ 2,737

(1) As of January 31, 2021, acquisition-related intangible assets include the fair value of a Mellanox IPR&D project of $ 630 million, which has not been amortized.

Once the project reaches technological feasibility, we will begin to amortize the intangible asset over its estimated useful life.

Refer to Note 2 of these Notes to the Consolidated Financial Statements for further details.

(1) As of January 30, 2022, acquisition-related intangible assets include the fair value of a Mellanox in-process research and development project of $ 630 million, which has not yet commenced amortization.

Amortization expense associated with intangible assets for fiscal years 2022, 2021, and 2020 was $ 563 million, $ 612 million, and $ 25 million, respectively.

Future amortization expense related to the net carrying amount of intangible assets as of January 31, 2021 is estimated to be $ 548 million in fiscal year 2022, $ 545 million in fiscal year 2023, $ 423 million in fiscal year 2024, $ 367 million in fiscal year 2025, $ 97 million in fiscal year 2026, and $ 757 million in fiscal year 2027 and thereafter.

Future amortization expense related to the net carrying amount of intangible assets, excluding in-process research and development, as of January 30, 2022 is estimated to be $ 585 million in fiscal year 2023, $ 461 million in fiscal year 2024, $ 405 million in fiscal year 2025, $ 121 million in fiscal year 2026, $ 16 million in fiscal year 2027, and $ 121 million in fiscal year 2028 and thereafter.

Note 8 - Cash Equivalents and Marketable Securities

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Corporate debt securities $ 9,977 $ — $ ( 3 ) $ 9,974 $ 1,102 $ 8,872

Debt securities issued by United States government agencies 2,975 1 — 2,976 28 2,948

Debt securities issued by the United States Treasury 7,314 — ( 14 ) 7,300 — 7,300

Debt securities issued by United States government agencies 1,612 — — 1,612 256 1,356

Certificates of deposit 1,561 — — 1,561 21 1,540

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(In millions)

Money market funds $ 7,507 $ — $ — $ 7,507 $ 7,507 $ —

Debt securities issued by the United States Treasury 1,358 — — 1,358 1,358 —

Debt securities issued by United States government agencies 1,096 — — 1,096 1,096 —

Corporate debt securities $ 4,442 $ 2 $ — $ 4,444 $ 234 $ 4,210

Foreign government bonds 200 — — 200 200 —

Debt securities issued by United States government agencies 2,975 1 — 2,976 28 2,948

Debt securities issued by the United States Treasury 2,846 — — 2,846 25 2,821

Certificates of deposit 705 — — 705 37 668

Asset-backed securities 1 — — 1 — 1

Money market funds 313 — — 313 313 —

Foreign government bonds 67 — — 67 — 67

Total $ 11,348 $ 3 $ — $ 11,351 $ 637 $ 10,714

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The following table provides the breakdown of unrealized losses as of January 30, 2022, aggregated by investment category and length of time that individual securities have been in a continuous loss position:

Less than 12 Months 12 Months or Greater Total

Estimated Fair Value Gross Unrealized Loss Estimated Fair Value Gross Unrealized Loss Estimated Fair Value Gross Unrealized Loss

(In millions)

Corporate debt securities $ 2,445 $ ( 3 ) $ 19 $ — $ 2,464 $ ( 3 )

Debt securities issued by the United States Treasury 5,292 ( 14 ) — — 5,292 ( 14 )

Total $ 7,737 $ ( 17 ) $ 19 $ — $ 7,756 $ ( 17 )

Net realized gains and unrealized gains and losses were not significant for all periods presented.

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Total $ 20,930 $ 20,913 $ 11,348 $ 11,351

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 9 - Fair Value of Financial Assets and Liabilities

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We review fair value hierarchy classification on a quarterly basis.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Fair Value at

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Corporate debt securities Level 2 $ 9,974 $ 4,444

Debt securities issued by United States government agencies Level 2 $ 2,976 $ 1,096

Debt securities issued by the United States Treasury Level 2 $ 7,300 $ 2,846

Debt securities issued by United States government agencies Level 2 $ 1,612 $ 2,976

Certificates of deposit Level 2 $ 1,561 $ 705

Foreign government bonds Level 2 $ 150 $ 67

Asset-backed securities Level 2 $ — $ 1

Investment in non-affiliated entities (1) Level 3 $ 144 $ 77

Other assets (Investment in non-affiliated entities):

Publicly-held equity securities (1) Level 1 $ 58 $ —

Privately-held equity securities Level 3 $ 208 $ 144

Liabilities (2)

2.20 % Notes Due 2021

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Level 2 $ 1,542 $ 1,654

(1) Investment in private non-affiliated entities is recorded at fair value on a non-recurring basis only if an impairment or observable price adjustment occurs in the period with changes in fair value recorded through net income.

The amount recorded as of January 31, 2021 has not been significant.

(2) These liabilities 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.

Refer to Note 12 of these Notes to the Consolidated Financial Statements for additional information .

2.00 % Notes Due 2031

Level 2 $ 1,200 $ —

3.50 % Notes Due 2040

Level 2 $ 1,066 $ 1,152

3.50 % Notes Due 2050

Level 2 $ 2,147 $ 2,308

3.70 % Notes Due 2060

Level 2 $ 551 $ 602

(1) Unrealized gains of $ 48 million from an investment in a publicly-traded equity security were recorded in other income (expense), net, in fiscal year 2022.

(2) These liabilities are carried on our Consolidated Balance Sheets at their original issuance value, net of unamortized debt discount and issuance costs.

NVIDIA CORPORATION AND SUBSIDIARIES

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Land $ 218 $ 218 (A)

Building 341 340 25 - 30

Test equipment 782 532 3 - 5

Computer equipment and software 1,187 908 3 - 5

Leasehold improvements 385 293 (B)

Office furniture and equipment 86 74 5

Buildings, leasehold improvements, and furniture 874 796 (B)

Equipment, compute hardware, and software 2,852 1,985 3 - 5

Construction in process 737 558 (C)

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(A) Land is a non-depreciable asset.

(B) Leasehold improvements and finance leases are amortized based on the lesser of either the asset’s estimated useful life or the expected lease term.

(B) The estimated useful lives of our buildings are up to thirty years .

Leasehold improvements and finance leases are amortized based on the lesser of either the asset’s estimated useful life or the expected lease term.

(C) Construction in process represents assets that are not available for their intended use as of the balance sheet date.

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Accumulated amortization of leasehold improvements and finance leases was $ 265 million and $ 223 million as of January 30, 2022 and January 31, 2021, respectively.

Property, equipment and intangible assets acquired by assuming related liabilities during fiscal years 2022, 2021, and 2020 were $ 258 million, $ 157 million, and $ 212 million, respectively.

2022 January 31,

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(In millions)

Prepaid supply agreements $ 1,747 $ —

Advanced consideration for acquisition (1) 1,357 1,357

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Investment in non-affiliated entities 266 144

Deposits 136 8

Total other assets $ 3,841 $ 2,144

(1) Refer to Note 2 - Business Combination for further details on the Arm acquisition.

NVIDIA CORPORATION AND SUBSIDIARIES

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Deferred revenue (1) 300 288

Licenses and royalties 128 66

Operating leases 121 91

Coupon interest on debt obligations 74 20

Taxes payable 61 61

Product warranty and return provisions 39 24

Professional service fees 26 18

Excess inventory purchase obligations 196 52

Other 647 510

Total accrued and other current liabilities $ 2,552 $ 1,777

(1) Deferred revenue primarily includes customer advances and deferrals related to license and development arrangements and PCS.

(1) Deferred revenue primarily includes customer advances and deferrals related to license and development arrangements, support for hardware and software, and cloud services.

2022 January 31,

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Deferred revenue (2) 202 163

Licenses payable 56 110

Employee benefits 33 22

Other 126 135

Total other long-term liabilities $ 1,553 $ 1,375

(1) As of January 31, 2021, income tax payable represents the long-term portion of the one-time transition tax payable of $ 284 million, long-term portion of the unrecognized tax benefits of $ 352 million, related interest and penalties of $ 43 million, and other foreign long-term tax payable of $ 157 million.

(2) Deferred revenue primarily includes deferrals related to PCS.

(1) As of January 30, 2022, income tax payable represents the long-term portion of the one-time transition tax payable of $ 251 million, long-term portion of the unrecognized tax benefits of $ 670 million, and related interest and penalties of $ 59 million.

(2) Deferred revenue primarily includes deferrals related to support for hardware and software.

Deferred Revenue

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Balance at end of period $ 502 $ 451

Revenue related to remaining performance obligations represents the contracted license and development arrangements and support for hardware and software.

This includes deferred revenue currently recorded and amounts that will be invoiced in future periods.

As of January 30, 2022, $ 624 million of revenue related to performance obligations had not been recognized, of which we expect to recognize approximately 49 % over the next twelve months and the remainder thereafter.

This excludes revenue related to performance obligations for contracts with a length of one year or less.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Revenue related to remaining performance obligations represents the remaining contracted license, development arrangements and PCS that has not been recognized.

This includes related deferred revenue currently recorded and amounts that will be invoiced in future periods.

As of January 31, 2021, the amount of our remaining performance that has not been recognized as revenue was $ 683 million, of which we expect to recognize approximately 44 % as revenue over the next twelve months and the remainder thereafter.

This amount excludes the value of remaining performance obligations for contracts with an original expected length of one year or less.

Note 11 - Derivative Financial Instruments

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Designated as cash flow hedges $ 1,023 $ 840

Not designated for hedge accounting $ 441 $ 287

Non-designated hedges $ 408 $ 441

As of January 30, 2022, all designated foreign currency forward contracts mature within eighteen months .

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During fiscal years 2022 and 2021, the impact of derivative financial instruments designated for hedge accounting treatment on other comprehensive income or loss was not significant and all such instruments were determined to be highly effective.

Therefore, there were no gains or losses associated with ineffectiveness.

Note 12 - Debt

Long-Term Debt

In March 2020, we issued $ 1.50 billion of the 2.85 % Notes Due 2030, $ 1.00 billion of the 3.50 % Notes Due 2040, $ 2.00 billion of the 3.50 % Notes Due 2050, and $ 500 million of the 3.70 % Notes Due 2060, or collectively, the March 2020 Notes.

Interest on the March 2020 Notes is payable on April 1 and October 1 of each year, beginning on October 1, 2020.

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 2030 on or after January 1, 2030, the Notes Due 2040 on or after October 1, 2039, the Notes Due 2050 on or after October 1, 2049, or the Notes Due 2060 on or after October 1, 2059.

The net proceeds from the March 2020 Notes were $ 4.97 billion, after deducting debt discount and issuance costs.

In September 2016, we issued $ 1.00 billion of the 2.20 % Notes Due 2021, and $ 1.00 billion of the 3.20 % Notes Due 2026, or collectively, the September 2016 Notes.

Interest on the September 2016 Notes is payable on March 16 and September 16 of each year.

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 September 2016 Notes were $ 1.98 billion, after deducting debt discount and issuance costs.

In June 2021, March 2020, and September 2016, we issued a total of $ 5.00 billion, $ 5.00 billion, and $ 2.00 billion aggregate principal of senior notes, respectively.

The net proceeds from these offerings were $ 4.98 billion, $ 4.97 billion, and $ 1.98 billion, respectively, after deducting debt discount and issuance costs.

On August 16, 2021, we repaid the $ 1.00 billion of 2.20 % Notes Due 2021.

All of our notes are unsecured senior obligations.

All existing and future liabilities of our subsidiaries will be effectively senior to the notes.

Our notes pay interest semi-annually.

We may redeem each of our notes prior to maturity, subject to a make-whole premium as defined in the applicable form of note.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Both the September 2016 Notes and the March 2020 Notes, or collectively, the Notes, are our unsecured senior obligations and rank equally in right of payment with all 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 the Notes and the associated interest rates were as follows:

The carrying value of the Notes, the calendar year of maturity, and the associated interest rates were as follows:

Remaining Term (years) Effective

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8.2 2.93 % 1,500 1,500

2.00 % Notes Due 2031

9.4 2.09 % 1,250 —

3.50 % Notes Due 2040

18.2 3.54 % 1,000 1,000

3.50 % Notes Due 2050

28.2 3.54 % 2,000 2,000

3.70 % Notes Due 2060

38.2 3.73 % 500 500

Unamortized debt discount and issuance costs ( 54 ) ( 37 )

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As of January 30, 2022, we were in compliance with the required covenants under the Notes.

Credit Facilities

We have a Credit Agreement under which we may borrow up to $ 575 million for general corporate purposes and can obtain revolving loan commitments up to $ 425 million.

As of January 31, 2021, we had no t borrowed any amounts and were in compliance with the required covenants under this agreement.

The Credit Agreement expires October 2021.

Commercial Paper

We have a $ 575 million commercial paper program to support general corporate purposes.

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Purchase Obligations

As of January 31, 2021, we had outstanding inventory purchase obligations totaling $ 2.54 billion, which are expected to occur over the next 12 months, and other purchase obligations totaling $ 317 million, which are primarily expected to occur over the next 18 months.

Our purchase obligations primarily include our commitments to purchase components used to manufacture our products, including long-term supply agreements, certain software and technology licenses, other goods and services and long-lived assets.

We have entered into several long-term supply agreements, under which we have made advance payments and have $ 1.58 billion remaining unpaid.

As of January 30, 2022, we had outstanding inventory purchase and long-term supply obligations totaling $ 9.00 billion, inclusive of the $ 1.58 billion, and other purchase obligations totaling $ 1.30 billion.

Total future unconditional purchase commitments as of January 30, 2022, are as follows:

(In millions)

Total $ 10,296

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

In March 2022, we entered into a supply agreement with payments of $ 670 million to be paid over nine years .

Accrual for Product Warranty Liabilities

The estimated amount of product warranty liabilities was $ 46 million and $ 22 million as of January 30, 2022 and January 31, 2021, respectively.

In connection with certain agreements that we have entered 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.

In connection with certain agreements that we have entered in the past, we have provided indemnities for matters such as tax, product, and employee liabilities.

We have included IP 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.

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Securities Class Action and Derivative Lawsuits

The plaintiffs in the putative securities class action lawsuit, captioned 4:18-cv-07669-HSG, initially filed on December 21, 2018 in the United States District Court for the Northern District of California, and titled In Re NVIDIA Corporation

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Securities Litigation, filed an amended complaint on May 13, 2020.

The amended complaint asserts that NVIDIA and certain NVIDIA executives violated Section 10(b) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and SEC Rule 10b-5, by making materially false or misleading statements related to channel inventory and the impact of cryptocurrency mining on GPU demand between May 10, 2017 and November 14, 2018.

Plaintiffs also allege that the NVIDIA executives who they named as defendants violated Section 20(a) of the Exchange Act.

Plaintiffs seek class certification, an award of unspecified compensatory damages, an award of reasonable costs and expenses, including attorneys’ fees and expert fees, and further relief as the Court may deem just and proper.

On June 29, 2020, NVIDIA moved to dismiss the amended complaint on the basis that plaintiffs failed to state any claims for violations of the securities laws by NVIDIA or the individual defendants.

As of September 14, 2020, the motion was fully briefed but the Court has not yet issued a decision.

The putative derivative lawsuit pending in the United States District Court for the Northern District of California, captioned 4:19-cv-00341-HSG, initially filed January 18, 2019 and titled In re NVIDIA Corporation Consolidated Derivative Litigation, remains stayed pending resolution of NVIDIA’s motion to dismiss the complaint in the In Re NVIDIA Corporation Securities Litigation action.

The lawsuit asserts claims for breach of fiduciary duty, unjust enrichment, waste of corporate assets, and violations of Sections 14(a), 10(b), and 20(a) of the Exchange Act based on the dissemination of allegedly false and misleading statements related to channel inventory and the impact of cryptocurrency mining on GPU demand.

The amended complaint asserted that NVIDIA and certain NVIDIA executives violated Section 10(b) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and SEC Rule 10b-5, by making materially false or misleading statements related to channel inventory and the impact of cryptocurrency mining on GPU demand between May 10, 2017 and November 14, 2018.

Plaintiffs also alleged that the NVIDIA executives who they named as defendants violated Section 20(a) of the Exchange Act.

Plaintiffs sought class certification, an award of unspecified compensatory damages, an award of reasonable costs and expenses, including attorneys’ fees and expert fees, and further relief as the Court may deem just and proper.

On March 2, 2021, the district court granted NVIDIA’s motion to dismiss the complaint without leave to amend, entered judgment in favor of NVIDIA and closed the case.

On March 30, 2021, plaintiffs filed an appeal from judgment in the United States Court of Appeals for the Ninth Circuit, case number 21-15604.

Oral argument is scheduled for May 10, 2022.

The putative derivative lawsuit pending in the United States District Court for the Northern District of California, captioned 4:19-cv-00341-HSG, initially filed January 18, 2019 and titled In re NVIDIA Corporation Consolidated Derivative Litigation , was stayed pending resolution of the plaintiffs’ appeal in the In Re NVIDIA Corporation Securities Litigation action.

On February 22, 2022, the court administratively closed the case, but stated that it would reopen the case once the appeal in the In Re NVIDIA Corporation Securities Litigation action is resolved.

The lawsuit asserts claims, purportedly on behalf of us, against certain officers and directors of the Company for breach of fiduciary duty, unjust enrichment, waste of corporate assets, and violations of Sections 14(a), 10(b), and 20(a) of the Exchange Act based on the dissemination of allegedly false and misleading statements related to channel inventory and the impact of cryptocurrency mining on GPU demand.

The plaintiffs are seeking unspecified damages and other relief, including reforms and improvements to NVIDIA’s corporate governance and internal procedures.

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1:19-cv-01795-UNA) and Nelson v.

1:19-cv-01798- UNA), remain stayed pending resolution of NVIDIA’s motion to dismiss the complaint in the In Re NVIDIA Corporation Securities Litigation action.

The lawsuits assert claims for breach of fiduciary duty, unjust enrichment, insider trading, misappropriation of information, corporate waste and violations of Sections 14(a), 10(b), and 20(a) of the Exchange Act based on the dissemination of allegedly false, and misleading statements related to channel inventory and the impact of cryptocurrency mining on GPU demand.

1:19-cv-01798- UNA), remain stayed pending resolution of the plaintiffs’ appeal in the In Re NVIDIA Corporation Securities Litigation action.

The lawsuits assert claims, purportedly on behalf of us, against certain officers and directors of the Company for breach of fiduciary duty, unjust enrichment, insider trading, misappropriation of information, corporate waste and violations of Sections 14(a), 10(b), and 20(a) of the Exchange Act based on the dissemination of allegedly false, and misleading statements related to channel inventory and the impact of cryptocurrency mining on GPU demand.

The plaintiffs seek unspecified damages and other relief, including disgorgement of profits from the sale of NVIDIA stock and unspecified corporate governance measures.

It is possible that additional suits will be filed, or allegations received from shareholders, with respect to these same or other matters, naming NVIDIA and/or its officers and directors as defendants.

Accounting for Loss Contingencies

17 unchanged sentences

Total deferred ( 406 ) ( 282 ) 18

Income tax expense (benefit) $ 77 $ 174 $ ( 245 )

Income tax expense $ 189 $ 77 $ 174

Income before income tax consists of the following:

5 unchanged sentences

Income before income tax $ 9,941 $ 4,409 $ 2,970

(1) Fiscal year 2022 domestic income before income tax increased as compared to fiscal years 2021 and 2020 due to the Domestication in the second quarter of fiscal year 2022.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The income tax expense (benefit) differs from the amount computed by applying the U.S.

6 unchanged sentences

State income taxes, net of federal tax effect 42 10 12

Foreign-derived intangible income ( 520 ) — —

Foreign tax rate differential ( 497 ) ( 561 ) ( 301 )

federal R&D tax credit ( 173 ) ( 110 ) ( 141 )

Stock-based compensation ( 337 ) ( 136 ) ( 60 )

Tax Cuts and Jobs Act of 2017 — — ( 368 )

federal R&D tax credit ( 289 ) ( 173 ) ( 110 )

IP domestication ( 244 ) — —

Other ( 54 ) 11 9

Income tax expense (benefit) $ 77 $ 174 $ ( 245 )

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Income tax expense $ 189 $ 77 $ 174

The tax effect of temporary differences that gives rise to significant portions of the deferred tax assets and liabilities are presented below:

2 unchanged sentences

Deferred tax assets:

GILTI deferred tax assets $ 709 $ 428

Research and other tax credit carryforwards $ 798 $ 650

Property, equipment and intangible assets 530 32

GILTI deferred tax assets 378 709

Accruals and reserves, not currently deductible for tax purposes 258 59

Operating lease liabilities 125 120

Net operating loss carryforwards 118 100

Accruals and reserves, not currently deductible for tax purposes 59 39

Stock-based compensation 86 36

Property, equipment and intangible assets 32 12

Other deferred tax assets 22 —

Gross deferred tax assets 2,315 1,706

7 unchanged sentences

Net deferred tax asset (1) $ 976 $ 565

(1) Net deferred tax asset includes long-term deferred tax assets of $ 806 million and $ 548 million and long-term deferred tax liabilities of $ 241 million and $ 29 million for fiscal years 2021 and 2020, respectively.

(1) Net deferred tax asset includes long-term deferred tax assets of $ 1.22 billion and $ 806 million and long-term deferred tax liabilities of $ 245 million and $ 241 million for fiscal years 2022 and 2021, respectively.

Long-term deferred tax liabilities are included in other long-term liabilities on our Consolidated Balance Sheets.

We recognized an income tax expense of $ 77 million and $ 174 million for fiscal years 2021 and 2020, respectively, and income tax benefit of $ 245 million for fiscal year 2019.

We recognized income tax expense of $ 189 million, $ 77 million, and $ 174 million for fiscal years 2022, 2021, and 2020 respectively.

Our annual effective tax rate was 1.9 %, 1.7 %, and 5.9 % for fiscal years 2022, 2021, and 2020, respectively.

The increase in our effective tax rate in fiscal year 2022 as compared to fiscal year 2021 was primarily due to an

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

increase in the amount of earnings subject to U.S.

tax, and a decreased impact of tax benefits from the U.S.

federal research tax credit, partially offset by the benefit of the foreign-derived intangible income deduction and the discrete benefit of the Domestication.

The decrease in our effective tax rate in fiscal year 2021 as compared to fiscal year 2020 was primarily due to a decrease in the proportional amount of earnings subject to United States tax and an increase of tax benefits from stock-based compensation.

The increase in our effective tax rate in fiscal year 2021 and fiscal year 2020 as compared to fiscal year 2019 was primarily due to an absence of tax benefits related to the enactment of the TCJA and a decrease of tax benefits from stock-based compensation.

Our effective tax rate for fiscal years 2021, 2020, and 2019 was lower than the U.S.

On June 28, 2021, we simplified our corporate structure by repatriating the economic rights of certain non-U.S.

IP to the United States via domestication of a foreign subsidiary, or the Domestication.

The Domestication more closely aligns our corporate structure to our operating structure in accordance with the Organization for Economic Cooperation and Development’s Base Erosion and Profit Shifting conclusions and changes to U.S.

and European tax laws.

The impact of the Domestication, which is regarded as a change in tax status, resulted in a discrete benefit primarily from re-valuing certain deferred tax assets, net of deferred tax liabilities, of $ 244 million in fiscal year 2022.

Our effective tax rate for fiscal year 2022 was lower than the U.S.

federal statutory rate of 21% due to tax benefits from the foreign-derived intangible income deduction, income earned in jurisdictions, including the British Virgin Islands and Israel, that are subject to taxes lower than the U.S.

federal statutory tax rate, excess tax benefits related to stock-based compensation, recognition of U.S.

federal research tax credits and the one-time benefits of the Domestication.

Our effective tax rates for fiscal years 2021 and 2020 were lower than the U.S.

federal statutory rate of 21% due primarily to income earned in jurisdictions, including the British Virgin Islands, Israel and Hong Kong, where the tax rate was lower than the U.S.

federal statutory tax rate, recognition of U.S.

federal research tax credits, excess tax benefits related to stock-based compensation, and the finalization of the enactment-date income tax effects of the TCJA in 2019.

federal research tax credits, and excess tax benefits related to stock-based compensation.

During the second quarter of fiscal year 2021, we completed the acquisition of Mellanox.

1 unchanged sentence

We also recorded $ 153 million of long-term tax liabilities related to tax basis differences in Mellanox.

The net deferred tax liabilities and long-term tax liabilities are based upon certain assumptions underlying our purchase price allocation.

As a result of the acquisition, as of January 31, 2021, we intend to indefinitely reinvest approximately $ 1.16 billion of cumulative undistributed earnings held by Mellanox non-U.S.

subsidiaries.

We have not provided the amount of unrecognized deferred tax liabilities for temporary differences related to investments in Mellanox non-U.S.

subsidiaries as the determination of such amount is not practicable.

As of January 31, 2021 and January 26, 2020, we had a valuation allowance of $ 728 million and $ 621 million, respectively, related to state and certain foreign deferred tax assets that management determined not likely to be realized due, in part, to jurisdictional projections of future taxable income.

To the extent realization of the deferred tax

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

assets becomes more-likely-than-not, we would recognize such deferred tax asset as an income tax benefit during the period.

As of January 30, 2022, we intend to indefinitely reinvest approximately $ 1.05 billion and $ 232 million of cumulative undistributed earnings held by certain subsidiaries in Israel and the United Kingdom, respectively.

We have not provided the amount of unrecognized deferred tax liabilities for temporary differences related to these investments as the determination of such amount is not practicable.

As of January 30, 2022 and January 31, 2021, we had a valuation allowance of $ 907 million and $ 728 million, respectively, related to state and certain other deferred tax assets that management determined not likely to be realized due, in part, to jurisdictional 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 assets as income tax benefits during the period.

As of January 30, 2022, we had federal, state and foreign net operating loss carryforwards of $ 397 million, $ 345 million and $ 341 million, respectively.

The federal and state carryforwards will begin to expire in fiscal year 2023 and 2022, respectively.

The federal and state carryforwards will begin to expire in fiscal year 2023.

The foreign net operating loss carryforwards of $ 341 million may be carried forward indefinitely.

As of January 30, 2022, we had federal research tax credit carryforwards of $ 102 million that will begin to expire in fiscal year 2042.

We have state research tax credit carryforwards of $ 987 million, of which $ 944 million is attributable to the State of California and may be carried over indefinitely, and $ 43 million is attributable to various other states and will begin to expire in fiscal year 2022.

We have state research tax credit carryforwards of $ 1.24 billion, of which $ 1.18 billion is attributable to the State of California and may be carried over indefinitely, and $ 55 million is attributable to various other states and will begin to expire in fiscal year 2023.

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.

1 unchanged sentence

If any such limitations apply, the federal, state, or foreign net operating loss and tax credit carryforwards, as applicable, may expire or be denied before utilization.

As of January 31, 2021, we had $ 776 million of gross unrecognized tax benefits, of which $ 606 million would affect our effective tax rate if recognized.

As of January 30, 2022, we had $ 1.01 billion of gross unrecognized tax benefits, of which $ 808 million would affect our effective tax rate if recognized.

However, $ 181 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 $ 606 million of unrecognized tax benefits as of January 31, 2021 consisted of $ 352 million recorded in non-current income taxes payable, $ 5 million recorded in current income taxes payable, and $ 249 million reflected as a reduction to the related deferred tax assets.

The $ 808 million of net unrecognized tax benefits as of January 30, 2022 consisted of $ 670 million recorded in non-current income taxes payable and $ 138 million reflected as a net reduction to the deferred tax assets.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

A reconciliation of gross unrecognized tax benefits is as follows:

12 unchanged sentences

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.

We include interest and penalties related to unrecognized tax benefits as a component of income tax expense.

As of January 30, 2022, January 31, 2021, and January 26, 2020, we had accrued $ 59 million, $ 44 million, and $ 31 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 31, 2021, unrecognized tax benefits of $ 352 million and the related interest and penalties of $ 43 million are included in non-current income taxes payable, and unrecognized tax benefits of $ 5 million and the related interest and penalties of $ 1 million are included in current income taxes payable.

As of January 30, 2022, unrecognized tax benefits of $ 670 million and the related interest and penalties of $ 59 million are included in non-current income taxes payable.

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.

1 unchanged sentence

As of January 30, 2022, 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.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

We are subject to taxation by taxing authorities both in the United States and other countries.

As of January 31, 2021, the significant tax jurisdictions that may be subject to examination include the United States, Hong Kong, Taiwan, China, United Kingdom, Germany, Israel, and India for fiscal years 2005 through 2020.

As of January 31, 2021, the significant tax jurisdictions for which we are currently under examination include the United States, United Kingdom, Germany, Israel and India, for fiscal years 2005 through 2019.

As of January 30, 2022, the significant tax jurisdictions that may be subject to examination include China, Germany, Hong Kong, India, Israel, Taiwan, United Kingdom, and the United States for fiscal years 2005 through 2021.

As of January 30, 2022, the significant tax jurisdictions for which we are currently under examination include Germany, India, Israel, and the United States for fiscal years 2005 through 2019.

Note 15 - Shareholders’ Equity

1 unchanged sentence

Beginning August 2004, our Board of Directors authorized us to repurchase our stock.

Through January 31, 2021, we have repurchased an aggregate of 260 million shares under our share repurchase program for a total cost of $ 7.08 billion.

All shares delivered from these repurchases have been placed into treasury stock.

As of January 31, 2021, we are authorized, subject to certain specifications, to repurchase shares of our common stock up to $ 7.24 billion through December 2022.

During fiscal year 2021, we paid $ 395 million in cash dividends to our shareholders.

Through January 30, 2022, we have repurchased an aggregate of 1.04 billion shares under our share repurchase program for a total cost of $ 7.08 billion.

As of January 30, 2022, we have a remaining authorization, subject to certain specifications, to repurchase shares of our common stock up to $ 7.24 billion through December 2022.

From January 31, 2022 through March 17, 2022, we repurchased 7.7 million shares of our common stock for $ 1.75 billion.

During fiscal years 2022, 2021, and 2020, we paid $ 399 million, $ 395 million, and $ 390 million in cash dividends to our shareholders, respectively.

During the fourth quarter of fiscal year 2022, our Board of Directors approved the retirement of our existing 349 million treasury shares.

These shares assumed the status of authorized and unissued shares upon retirement.

The excess of repurchase price over par value was allocated between additional paid-in capital and retained earnings, resulting in a reduction in additional paid-in capital by $ 20 million and retained earnings by $ 12.0 billion.

Any future repurchased shares will assume the status of authorized and unissued shares.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 16 - Employee Retirement Plans

4 unchanged sentences

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 decisions and assessing financial performance.

In the prior fiscal year, we had reported two operating segments:

GPU and Tegra Processor.

During the first quarter of fiscal year 2021, we changed our operating segments to be consistent with the revised manner in which our CODM reviews our financial performance and allocates resources.

The two new operating segments are "Graphics" and "Compute & Networking".

Comparative periods presented reflect this change.

Our operating segments are equivalent to our reportable segments.

Our Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms;

Quadro/NVIDIA RTX GPUs for enterprise design;

GRID software for cloud-based visual and virtual computing;

and automotive platforms for infotainment systems.

Quadro/NVIDIA RTX GPUs for enterprise workstation graphics;

vGPU software for cloud-based visual and virtual computing;

automotive platforms for infotainment systems;

and Omniverse software for building 3D designs and virtual worlds.

Our Compute & Networking segment includes Data Center platforms and systems for AI, HPC, and accelerated computing;

1 unchanged sentence

automotive AI Cockpit, autonomous driving development agreements, and autonomous vehicle solutions;

and Jetson for robotics and other embedded platforms.

Jetson for robotics and other embedded platforms;

and NVIDIA AI Enterprise and other software.

Operating results by segment include costs or expenses that are directly attributable to each segment, and costs or expenses that are leveraged across our unified architecture and therefore allocated between our two segments.

The “All Other” category includes the expenses that our CODM does not assign to either Graphics or Compute & Networking for purposes of making operating decisions or assessing financial performance.

The expenses include stock-based compensation expense, corporate infrastructure and support costs, acquisition-related costs, legal settlement costs, and other non-recurring charges and benefits that our CODM deems to be enterprise in nature.

The expenses include stock-based compensation expense, corporate infrastructure and support costs, acquisition-related costs, IP-related costs, 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.

4 unchanged sentences

The table below presents details of our reportable segments and the “All Other” category.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Graphics Compute & Networking All Other Consolidated

9 unchanged sentences

Operating income (loss) $ 3,267 $ 751 $ ( 1,172 ) $ 2,846

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2022 January 31,

3 unchanged sentences

Stock-based compensation expense $ ( 2,004 ) $ ( 1,397 ) $ ( 844 )

Acquisition-related intangible asset amortization ( 591 ) ( 6 ) ( 6 )

Acquisition-related intangible asset amortization, inventory step-up charge, and other costs ( 636 ) ( 836 ) ( 31 )

Unallocated cost of revenue and operating expenses ( 399 ) ( 357 ) ( 283 )

Acquisition-related inventory step-up charge ( 161 ) — —

Acquisition-related and other costs ( 84 ) ( 25 ) 4

IP-related costs ( 10 ) ( 38 ) ( 14 )

Legal settlement costs — — ( 9 )

Total $ ( 3,049 ) $ ( 2,628 ) $ ( 1,172 )

7 unchanged sentences

United States 4,349 3,214 886

Other Asia Pacific 3,093 2,685 2,368

Europe 1,118 992 914

Other countries 6,910 5,044 4,276

Total revenue $ 26,914 $ 16,675 $ 10,918

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

No customer represented 10% or more of total revenue for fiscal years 2022 and 2021.

One customer represented 11 % of our total revenue for fiscal year 2020 and was attributable primarily to the Graphics segment.

Two customers represented 22 % of our accounts receivable balance as of January 30, 2022.

One customer represented 16 % of our accounts receivable balance as of January 31, 2021.

The following table summarizes information pertaining to our revenue by each of the specialized markets we serve:

3 unchanged sentences

Gaming $ 12,462 $ 7,759 $ 5,518

Professional Visualization 1,053 1,212 1,130

Data Center 10,613 6,696 2,983

Professional Visualization 2,111 1,053 1,212

Automotive 566 536 700

1 unchanged sentence

Total revenue $ 26,914 $ 16,675 $ 10,918

The following table presents summarized information for long-lived assets by geographic region.

NVIDIA CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The following table presents summarized information for long-lived assets by country.

Long-lived assets consist of property and equipment and exclude other assets, operating lease assets, goodwill, and intangible assets.

4 unchanged sentences

Taiwan 379 183

China (including Hong Kong) 71 28

Israel 185 147

Other countries 191 176

Total long-lived assets $ 2,778 $ 2,149

No customer represented 10% or more of total revenue for fiscal years 2021 and 2019.

One customer represented 11 % of our total revenue for fiscal year 2020 and was attributable primarily to the Graphics segment.

One customer represented 16 % and 21 % of our accounts receivable balance as of January 31, 2021 and January 26, 2020, respectively.

NVIDIA CORPORATION AND SUBSIDIARIES

16 unchanged sentences

Deferred tax valuation allowance $ 562 $ 59 (3) $ — $ 621

(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.

(1) Additions represent either expense or acquired balances and deductions represent write-offs.

(2) Additions represent estimated product returns charged as a reduction to revenue or an acquired balance.

(3) Additional valuation allowance on deferred tax assets not likely to be realized.

Refer to Note 14 of the Notes to the Consolidated Financial Statements in Part IV, Item 15 of this Annual Report on Form 10-K for additional information.

4 unchanged sentences

2.1 Agreement and Plan of Merger, dated March 10, 2019, by and among NVIDIA Corporation, NVIDIA International Holdings Inc., Mellanox Technologies Ltd.

a nd Teal Barvaz Ltd.

and Teal Barvaz Ltd.

8-K 0-23985 2.1 3/11/2019

1 unchanged sentence

8-K 0-23985 2.1 9/14/2020

3.1 Amended and Restated Certificate of Incorporation

S-8 333-74905 4.1 3/23/1999

3.2 Certificate of Amendment of Amended and Restated Certificate of Incorporation

10-Q 0-23985 3.1 8/21/2008

3.3 Certificate of Amendment of Amended and Restated Certificate of Incorporation

8-K 0-23985 3.1 5/24/2011

3.4 Bylaws of NVIDIA Corporation, Amended and Restated as of November 29, 2016

3.1* Restated Certificate of Incorporation

3.2 Bylaws of NVIDIA Corporation, Amended and Restated as of March 3, 2022

8-K 0-23985 3.1 3/9/2022

21 unchanged sentences

8-K 0-23985 Annex D-1 to Exhibit 4.2 3/31/2020

4.13 Officers' Certificate, dated as of June 16, 2021

8-K 0-23985 4.2 6/16/2021

4.14 Form of 2023 Note

8-K 0-23985 Annex A to Exhibit 4.2 6/16/2021

4.15 Form of 2024 Note

8-K 0-23985 Annex B to Exhibit 4.2 6/16/2021

4.16 Form of 2028 Note

8-K 0-23985 Annex C to Exhibit 4.2 6/16/2021

4.17 Form of 2031 Note

8-K 0-23985 Annex D to Exhibit 4.2 6/16/2021

10.1 Form of Indemnity Agreement between NVIDIA Corporation and each of its directors and officers

8 unchanged sentences

10-Q 0-23985 10.4 5/23/2012

10.6+ 2007 Equity Incentive Plan - Non Statutory Stock Option

8-K 0-23985 10.20 9/13/2010

10.7+ 2007 Equity Incentive Plan - Incentive Stock Option

8-K 0-23985 10.21 9/13/2010

10.6+ Amended and Restated 2007 Equity Incentive Plan - Non Statutory Stock Option

2 unchanged sentences

10-Q 0-23985 10.2 8/22/2012

10.10+ Amended and Restated 2007 Equity Incentive Plan - Non-Employee Director Restricted Stock Unit (with deferral option)

10-Q 0-23985 10.3 5/23/2012

10.11+ Amended and Restated 2007 Equity Incentive Plan - Non Statutory Stock Option (Initial Grant - Board Service)

8-K 0-23985 10.1 7/23/2013

10.8+ Amended and Restated 2007 Equity Incentive Plan - Non-Employee Director Deferred Restricted Stock Unit Grant Notice and Deferred Restricted Stock Unit Agreement (2016)

10-K 0-23985 10.26 3/12/2015

10.13+ Amended and Restated 2007 Equity Incentive Plan - Non-Employee Director Deferred Restricted Stock Unit Grant Notice and Deferred Restricted Stock Unit Agreement (2016)

10-K 0-23985 10.26 3/12/2015

10.9+ Amended and Restated 2007 Equity Incentive Plan - Non-Employee Director Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement (2016)

10 unchanged sentences

10-Q 0-23985 10.2 5/21/2020

10.15+ Amended and Restated 2007 Equity Incentive Plan – Global Restricted Stock Unit Grant Notice and Global Restricted Stock Unit Agreement (2021)

10-Q 0-23985 10.2 5/26/2021

10.16+* Amended and Restated 2007 Equity Incentive Plan – Global Restricted Stock Unit Grant Notice and Global Restricted Stock Unit Agreement (2022)

10.17+ Amended and Restated 2012 Employee Stock Purchase Plan

10-Q 0-23985 10.2 8/20/2021

10.18+ Fiscal Year 2021 Variable Compensation Plan

8-K 0-23985 10.1 3/10/2020

26 unchanged sentences

101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document

104 XBRL Taxonomy Extension Presentation Linkbase Document

104 Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

* Filed herewith.

10 unchanged sentences

Not Applicable.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on February 26, 2021.

NVIDIA Corporation

8 unchanged sentences

/s/ JEN-HSUN HUANG President, Chief Executive Officer and Director

(Principal Executive Officer) February 26, 2021

(Principal Executive Officer) March 17, 2022

Jen-Hsun Huang

1 unchanged sentence

KRESS Executive Vice President and Chief Financial Officer

(Principal Financial Officer) February 26, 2021

(Principal Financial Officer) March 17, 2022

/s/ DONALD ROBERTSON Vice President and Chief Accounting Officer

(Principal Accounting Officer) February 26, 2021

(Principal Accounting Officer) March 17, 2022

Donald Robertson

/s/ ROBERT BURGESS Director February 26, 2021

/s/ ROBERT BURGESS Director March 17, 2022

Robert Burgess

/s/ TENCH COXE Director February 26, 2021

DABIRI Director February 26, 2021

/s/ PERSIS DRELL Director February 26, 2021

/s/ DAWN HUDSON Director February 26, 2021

/s/ TENCH COXE Director March 17, 2022

DABIRI Director March 17, 2022

/s/ PERSIS DRELL Director March 17, 2022

/s/ DAWN HUDSON Director March 17, 2022

/s/ HARVEY C.

JONES Director February 26, 2021

/s/ MICHAEL MCCAFFERY Director February 26, 2021

JONES Director March 17, 2022

/s/ MICHAEL MCCAFFERY Director March 17, 2022

Michael McCaffery

/s/ STEPHEN C.

NEAL Director February 26, 2021

PERRY Director February 26, 2021

BROOKE SEAWELL Director February 26, 2021

NEAL Director March 17, 2022

PERRY Director March 17, 2022

BROOKE SEAWELL Director March 17, 2022

Brooke Seawell

/s/ AARTI SHAH Director February 26, 2021

/s/ MARK STEVENS Director February 26, 2021

/s/ AARTI SHAH Director March 17, 2022

/s/ MARK STEVENS Director March 17, 2022

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures