VMware 2010 Annual Report Download - page 97

Table of Contents
VMware, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
The components of the current and non-current deferred tax assets and liabilities were as follows (table in thousands):
VMware has U.S. federal net operating loss carryforwards of $117.9 million from acquisitions made since 2006. These carryforwards
expire at different periods through 2030. Portions of these carryforwards are subject to annual limitations. VMware expects to be able to fully
use these net operating losses against future income. Also resulting from acquisitions since 2006, VMware has state net operating loss
carryforwards of $200.7 million expiring at different periods through 2030. A valuation allowance was recorded to reduce gross deferred tax
assets to an amount VMware believes is more likely than not to be realized. The valuation allowance is attributable to the uncertainty regarding
the realization of state tax credit carryforward benefits. VMware has non-U.S. net operating losses of $12.1 million resulting from a non-U.S.
acquisition in 2009. These net operating losses have an unlimited carryforward period. VMware expects to be able to fully use these net
operating losses against future non-U.S. income. Also resulting from an acquisition in 2009, VMware has non-U.S. net operating losses of $15.5
million that are subject to a full valuation allowance as VMware believes it is more likely than not that no tax benefit will be realized from these
losses.
U.S. income taxes have not been provided on certain undistributed earnings of non-U.S. subsidiaries of approximately $900.3 million and
$620.6 million at December 31, 2010 and 2009, respectively, because such earnings are considered to be reinvested indefinitely outside of the
U.S., and it is not practicable to estimate the amount of tax that may be payable upon repatriation.
As of December 31, 2010, VMware had a net income tax receivable of $144.3 million, which was comprised of amounts due from EMC
for VMware’s stand-alone federal taxable loss for the fiscal year ending December 31, 2010 and for a refund of an overpayment related to the
consolidated federal and state income taxes for the fiscal year ended December 31, 2009. The receivable for 2010 arose because VMware had a
stand-alone taxable loss for the year ended December 31, 2010, which was primarily attributable to tax deductions arising from both non-
qualified stock option exercises and from restricted stock when the restrictions lapsed. Under the
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December 31,
2010
2009
Deferred Tax
Asset
Deferred Tax
Liability
Deferred Tax
Asset
Deferred Tax
Liability
Current:
Accruals and allowances
$
30,673
$
—
$
20,990
$
—
Unearned revenue
82,557
—
52,507
—
Net operating loss carryforwards
292
—
—
—
Valuation allowance
(12,833
)
—
(
10,137
)
—
Total current
100,689
—
63,360
—
Non
-
current:
Property, plant and equipment, net
—
(
20,227
)
—
(
19,665
)
Intangible and other, net
—
(
1,551
)
—
(
40,635
)
Stock
-
based compensation
52,095
—
49,135
—
Unearned revenue
24,755
—
19,785
—
Other non
-
current liabilities
—
(
8,318
)
—
—
Tax credit and net operating loss carryforwards
95,316
—
52,324
—
Valuation allowance
(23,040
)
—
(
18,715
)
—
Total non
-
current
149,126
(30,096
)
102,529
(60,300
)
Total deferred tax assets and liabilities
$
249,815
$
(30,096
)
$
165,889
$
(60,300
)