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VMWARE, INC.
FORM 10-K
(Annual Report)
Filed 02/24/12 for the Period Ending 12/31/11
Address 3401 HILLVIEW AVENUE
PALO ALTO, CA 94304
Telephone (650) 427-5000
CIK 0001124610
Symbol VMW
SIC Code 7372 - Prepackaged Software
Industry Software & Programming
Sector Technology
Fiscal Year 12/31
http://www.edgar-online.com
© Copyright 2012, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.

Table of contents

  • Page 1
    VMWARE, INC. FORM 10-K (Annual Report) Filed 02/24/12 for the Period Ending 12/31/11 Address Telephone CIK Symbol SIC Code Industry Sector Fiscal Year 3401 HILLVIEW AVENUE PALO ALTO, CA 94304 (650) 427-5000 0001124610 VMW 7372 - Prepackaged Software Software & Programming Technology 12/31 http://...

  • Page 2
    ... of the registrant (based upon the closing sale price of such shares on the New York Stock Exchange on June 30, 2011 ) was approximately $6,952,611,111 . Shares of the registrant's Class A common stock and Class B common stock held by each executive officer and director and by each entity or person...

  • Page 3

  • Page 4
    ... and Disagreements with Accountants on Accounting and Financial Disclosures Controls and Procedures Other Information PART III Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management, and Related Stockholder Matters...

  • Page 5
    ... for meeting product development objectives and introducing new products; our revenue outlook and mix; our plans for growing our business by broadening our product portfolio; customer demand for our products; trends in enterprise license agreement ("ELA") size and renewals and IT spending...

  • Page 6
    ... partners benefit greatly from the sale of our solutions through additional services, software and hardware sales opportunities. We have trained a large number of partners and end users to deploy and leverage our solutions. We incorporated in Delaware in 1998, were acquired by EMC Corporation ("EMC...

  • Page 7
    .... The VMware CIS of products includes the following: • • VMware vCenter Server provides the central management and control point for vSphere environments. VMware vCloud Director enables self-service access to logical pools of compute, network and storage resources with policy-driven controls and...

  • Page 8
    ... solutions are also designed to address the needs of corporate IT departments by managing and connecting end-user assets delivering them as a managed service. We also offer End-User Computing solutions that provide the ability to manage software as a service ("SaaS"), Windows, Mobile or enterprise...

  • Page 9
    ...-leading expertise. We offer four support and subscription programs that allow customers to pay a set amount over an annual or multi-year basis: Basic, Production, Business Critical and Mission Critical. Basic Support includes VMware technical support along with access to periodic updates, bug fixes...

  • Page 10
    ...also work closely with AMD, Intel and other IHVs to provide input on product development to enable them to deliver hardware advancements that benefit virtualization users. We coordinate with the leading storage and networking vendors to ensure joint interoperability and enable our software to access...

  • Page 11
    ... end-user customer accounts and new sales opportunities. In addition, our channel partner network includes certain systems integrators and resellers trained and certified to deliver consulting services and solutions leveraging VMware products. We generally do not have long-term contracts or minimum...

  • Page 12
    ... clustering, workload management and resource management. We also expect to compete with new entrants to the cloud computing, end-user computing and virtualization markets, which may include parties currently selling our products and/or our current technology partners. Existing and future...

  • Page 13
    ... current employee relations to be good. We contract with EMC to utilize personnel who are dedicated to work for VMware on a full-time basis. These individuals are located in countries in which we do not currently have an operating subsidiary and are predominantly dedicated to our sales and marketing...

  • Page 14
    ...-user computing. We are also investing in the development of products and services for the emerging platform as a service, or "PaaS," and software as a service, or "SaaS," markets. Our success depends on organizations and customers perceiving technological and operational benefits and cost savings...

  • Page 15
    ... Server product and has announced plans to offer built-in virtualization for future releases of the client version of Windows. As a result, existing VMware customers may elect to use products that are perceived to be "free" or "very low cost" instead of purchasing VMware products and services for...

  • Page 16
    ...open source technology position us in the enterprise and web application development markets. In 2011, we announced CloudFoundry, a VMware-operated developer cloud service and a new open source PaaS project for the development of applications designed to utilize cloud computing. Our 2010 acquisition...

  • Page 17
    ...size of enterprise license agreements ("ELAs") that customers will commit to, lowering prices for our products and services, reducing unit sales, reducing the rate of adoption of our products by new customers and the willingness of current customers to purchase upgrades to our existing products. The...

  • Page 18
    ... software purchases; fluctuations in demand, adoption rates, sales cycles and pricing levels for our products and services; fluctuations in foreign currency exchange rates; changes in customers' budgets for information technology purchases and in the timing of their purchasing decisions; the timing...

  • Page 19
    ... and to technological developments by our competitors and customers; renewal rates for ELAs as original ELA terms expire; the timing and amount of software development costs that are capitalized beginning when technological feasibility has been established and ending when the product is available...

  • Page 20
    ... costs to maintain the security of our networks and data. We increasingly depend upon our IT systems to conduct virtually all of our business operations, ranging from our internal operations and product development activities to our marketing and sales efforts and communications with our customers...

  • Page 21
    ... to return products, to reduce or delay future purchases or use competitive products. End users, who rely on our products and services for the interoperability of enterprise servers and applications that are critical to their information systems, may have a greater sensitivity to product errors and...

  • Page 22
    ... our international sales. If operating system and hardware vendors do not cooperate with us or we are unable to obtain early access to their new products, or access to certain information about their new products to ensure that our solutions interoperate with those products, our product development...

  • Page 23
    ... impact on our results of operations until such time as we arrange to replace these distribution services with the services of existing or new distributors. The concentration of our product sales among a limited number of distributors and the weakness in credit markets increases our potential...

  • Page 24
    ... collect contact and other personal or identifying information from our customers. Additionally, in connection with some of our new product initiatives, our customers may use our services to store and process personal information and other user data. We post, on our website, our privacy policies and...

  • Page 25
    ...-development, as well as for open APIs, formats and protocols. Though we generally control access to our source code and other intellectual property, and enter into confidentiality or license agreements with such partners, as well as with our employees and consultants, this combination of procedural...

  • Page 26
    ... customers or channel partners, which could negatively affect our results of operations. Our use of "open source" software in our products could negatively affect our ability to sell our products and subject us to possible litigation. A significant portion of the products, technologies or services...

  • Page 27
    ..., which may cause our operating results to fluctuate significantly. The timing of our revenues is difficult to predict. Our sales efforts involve educating our customers about the use and benefit of our products, including their technical capabilities, potential cost savings to an organization and...

  • Page 28
    ... relating to the challenges and costs of closing a transaction. Further, the risks described above may be exacerbated as a result of managing multiple acquisitions at the same time. We also seek to invest in businesses that offer complementary products, services or technologies. These investments...

  • Page 29
    ... Problems with our information systems could interfere with our business that could adversely impact our operations. We rely on our information systems and those of third parties for processing customer orders, delivery of products, providing services and support to our customers, billing and...

  • Page 30
    ... of our Class B common stock currently are entitled to elect 7 of our 8 directors. If EMC transfers shares of our Class B common stock to any party other than a successor-in-interest or a subsidiary of EMC prior to a distribution to its stockholders under Section 355 of the Internal Revenue Code of...

  • Page 31
    ... for their shares over the then-current market price. EMC is not prohibited from selling a controlling interest in us to a third party and may do so without the approval of the holders of our Class A common stock and without providing for a purchase of any shares of Class A common stock held by...

  • Page 32
    ... the consent of EMC or its successor-in-interest, as the holder of our Class B common stock, to issue stock or other VMware securities, excluding pursuant to employee benefit plans (provided that we obtain Class B common stockholder approval of the aggregate annual number of shares to be granted...

  • Page 33
    ... of our directors are executive officers or directors of EMC, and EMC, as the sole holder of our Class B common stock, is entitled to elect 7 of our 8 directors. Ownership of EMC common stock, restricted shares of EMC common stock and equity awards to purchase EMC common stock by our directors and...

  • Page 34
    ... these corporate functions to VMware personnel, in certain geographic regions where we do not have an established legal entity, we contract with EMC subsidiaries for support services and EMC employees who are managed by VMware personnel. The costs incurred by EMC on VMware's behalf related to these...

  • Page 35
    ...reduce the price that investors might be willing to pay for shares of our common stock. ITEM 1B. None. ITEM 2. PROPERTIES UNRESOLVED STAFF COMMENTS As of December 31, 2011 , we owned or leased the facilities described below: Location Approximate Sq. Ft. (1) Principal Use(s) (2) Palo Alto, CA North...

  • Page 36
    ...consolidated financial statements for further information. We believe that our current facilities, including those under construction at our expanded headquarters, are suitable for our current employee headcount and will sustain us through 2012, but we intend to add new facilities or expand existing...

  • Page 37
    ... 2011. Prior to joining VMware, he served as President and Chief Executive Officer of Borland Software Corporation, an enterprise software company, from November 2005 to December 2008. From June 2005 to November 2005, Mr. Nielsen served as Senior Vice President, Marketing and Global Sales Support...

  • Page 38
    ... 664,333 shares purchased by EMC in open market transactions. In the three months ended March 31, 2010, EMC announced a stock purchase program of VMware's Class A common stock to maintain its approximate level of ownership in VMware over the long term. Inclusion of EMC's purchases in the above...

  • Page 39
    ...pursuant to the VMware 2011 Repurchase Authorization, from time to time, in the open market or through private transactions, subject to market conditions. In the three months ended December 31, 2011, we repurchased in open market transactions and retired 415,552 shares of our Class A common stock at...

  • Page 40
    ... S&P 500 Systems Software index for the period beginning on August 14, 2007 (the date our Class A common stock commenced trading on the New York Stock Exchange) through December 31, 2011, assuming an initial investment of $100. While the IPO price of our common stock was $29.00 per share, the graph...

  • Page 41
    ...we purchased our new headquarters facilities from EMC for $132.6 million, which is equal to the cost expended by EMC through the date of purchase. We also repaid $350.0 million of principal on the note payable to EMC. Also in August 2007, we sold 9,500,000 shares of our Class A common stock to Intel...

  • Page 42
    ... infrastructure software solutions technology and product portfolio, increasing product awareness, promoting the adoption of virtualization and building long-term relationships with our customers through the adoption of enterprise license agreements ("ELAs"). Since the introduction of VMware vSphere...

  • Page 43
    ... of support purchased. Customers who are party to software maintenance agreements with us are entitled to receive product updates and upgrades on a when-and-if-available basis. Professional services revenues Professional services include solution design, implementation and training. Professional...

  • Page 44
    ... 2009, license revenues benefited from the improving macroeconomic environment, resulting in strong customer demand for the vSphere platform and growing interest in our end-user computing and management solutions. We have promoted the adoption of virtualization and built long-term relationships with...

  • Page 45
    ... 2010, software maintenance revenues benefited from strong renewals, multiyear software maintenance contracts sold in previous periods, and additional maintenance contracts sold in conjunction with new software license sales. In 2011, 2010, and 2009, customers bought, on average, more than 24 months...

  • Page 46
    ...revenues and that it is a key indicator of the health and growth of our business. Operating Expenses Information about our operating expenses in the years ended 2011 , 2010 and 2009 is as follows: For the Year Ended December 31, 2011 Capitalized Software Other Development Operating Stock-Based Costs...

  • Page 47
    41

  • Page 48
    ... technology licensed from third-party providers that is used in our products. Additionally, cost of license revenues increased by $7.6 in 2011 for IT development costs. Cost of Services Revenues Core operating expenses in cost of services revenues increased by $92.5 or 32% in 2011 compared with 2010...

  • Page 49
    ... growth in employee-related expenses of $159.3 driven by incremental headcount from strategic hiring and business acquisitions as well as by higher commission expense due to increased sales volumes. In support of our expanding markets and sales efforts, the costs of marketing programs increased by...

  • Page 50
    ... software development costs increased by $14.7 in 2011 as compared with 2010 primarily due to an increase of $52.8 for the development of VMware vSphere 5 year-over-year, which was partially offset by a decrease of $39.7 due to the timing of when certain products, including prior versions of vSphere...

  • Page 51
    ...000,000 shares of Class B common stock, representing 79.7% of our total outstanding shares of common stock and 97.2% of the combined voting power of our outstanding common stock. In April 2011, we acquired certain assets relating to EMC's Mozy cloud-based data storage and data services, including 45

  • Page 52
    ... EMC. As of December 31, 2011, all contingent payments under the agreement had been made. Pursuant to the ongoing reseller arrangement with EMC that commenced in 2009, EMC bundles our products and services with EMC's hardware and sells them to end users. In the years ended December 31, 2011 , 2010...

  • Page 53
    ...activities less capitalized software development costs plus the excess tax benefits from stock-based compensation. We define free cash flows, also a nonGAAP financial measure, as non-GAAP operating cash flows less capital expenditures. See "Non-GAAP Financial Measures" for additional information. 47

  • Page 54
    ... software development costs Excess tax benefits from stock-based compensation Non-GAAP operating cash flows Capital expenditures Free cash flows $ $ Free cash flows increased by $744.0 or 62% to $1,946.0 for the year ended December 31, 2011 from $1,202.0 for the year ended December 31, 2010...

  • Page 55
    ... software development costs. Cash provided by investing activities is primarily attributable to the sales or maturities of fixed income securities. In 2011, we closed an agreement to purchase all of the right, title and interest in a ground lease covering the property and improvements located...

  • Page 56
    ... to have key components that interoperate with our other product offerings, the costs incurred subsequent to achievement of technological feasibility are expected to be immaterial in future periods. For additional information, see "Results of Operations - Capitalized Software Development Costs, Net...

  • Page 57
    ... as net cash provided by operating activities less capitalized software development costs plus the excess tax benefits from stock-based compensation. We define free cash flows as non-GAAP operating cash flows less capital expenditures. Management uses non-GAAP operating cash flows as another measure...

  • Page 58
    ...December 31, 2011, we had $92.6 of non-current net unrecognized tax benefits under generally accepted accounting guidance. We are not able to provide a reasonably reliable estimate of the timing of future payments relating to these obligations. Critical Accounting Policies Our consolidated financial...

  • Page 59
    ... and amount of revenue we report. With limited exceptions, VMware's return policy does not allow product returns for a refund. Certain distributors and resellers may rotate stock when new versions of a product are released. We estimate future product returns at the time of sale. Our estimate is...

  • Page 60
    ... annual amortization expense of capitalized software development costs to be the greater of the amounts computed using the ratio of current gross revenue to a product's total current and anticipated revenues, or the straight-line method over the product's remaining estimated economic life. To date...

  • Page 61
    ... income taxes payable that is calculated on a separate return basis and the amount actually paid to EMC pursuant to our tax sharing agreement with EMC is presented as a component of additional paid-in capital. New Accounting Pronouncements In September 2011, the Financial Accounting Standards, Board...

  • Page 62
    ...their respective regions. Additionally, a portion of our operating expenses, primarily the cost of personnel to deliver technical support on our products and professional services, sales and sales support and research and development, are denominated in foreign currencies, primarily those currencies...

  • Page 63
    ... information. Note Payable to EMC As of December 31, 2011 , $450.0 million was outstanding on our consolidated balance sheet in relation to the note payable to EMC. The interest rate on the note payable was 0.92% as of December 31, 2011 and 0.84% as of both December 31, 2010 and 2009. In 2011 , 2010...

  • Page 64
    ... DATA VMware, Inc. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE Report of Independent Registered Public Accounting Firm Consolidated Statements of Cash Flows for the years ended December 31, 2011, 2010 and 2009 Consolidated Statements of Income for the years ended December 31, 2011, 2010...

  • Page 65
    ... of financial statements for external purposes in accordance with generally accepted accounting principles. 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...

  • Page 66
    Table of Contents VMware, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)

  • Page 67
    ...EMC Income taxes payable Deferred income taxes, net Unearned revenue Net cash provided by operating activities Investing activities: Additions to property and equipment Purchase of leasehold interest (see Note G) Capitalized software development costs Purchases of available-for-sale securities Sales...

  • Page 68
    ...Cost of services revenues Research and development Sales and marketing General and administrative Operating income Investment income Interest expense with EMC Other income (expense), net Income before income taxes Income tax provision Net income Net income per weighted-average share, basic for Class...

  • Page 69
    ... assets: Cash and cash equivalents Short-term investments Accounts receivable, net of allowance for doubtful accounts of $3,794 and $4,519 Due from EMC, net Deferred tax asset Other current assets Total current assets Property and equipment, net Capitalized software development costs, net and other...

  • Page 70
    ... on vesting of restricted stock Stock-based compensation Excess tax benefits from stock-based compensation Credit from tax sharing arrangement (see Note K) Total other comprehensive loss (see Note N) Capital distribution to EMC, net (see Note F) Net income Balance, December 31, 2011 90,448 10,423...

  • Page 71
    ... the rules of the New York Stock Exchange. VMware historically has received, and continues to receive, certain administrative services from EMC, and VMware and EMC engage in certain intercompany transactions. Costs incurred by EMC for the direct benefit of VMware, such as salaries, benefits, travel...

  • Page 72
    ... and resellers may rotate stock when new versions of a product are released. VMware estimates future product returns at the time of sale based on historical return rates. Returns have not been material to date. VMware offers rebates to certain channel partners. When rebates are based on a set...

  • Page 73
    ...that upgrade as part of a current software maintenance contract, a specified upgrade is deemed created. As a result of the specified upgrade, product revenues are deferred on purchases made after the announcement date until delivery of the upgrade for those purchases that include the current version...

  • Page 74
    ... software development costs to be the greater of the amounts computed using the ratio of current gross revenue to a product's total current and anticipated revenues, or the straight-line method over the product's remaining estimated economic life. To date, VMware has amortized these costs using...

  • Page 75
    ...December 31, 2011 and 2010 , respectively, and are included in capitalized software development costs, net and other on the consolidated balance sheets. For the years ended December 31, 2011 , 2010 and 2009 , VMware capitalized $86.4 million (including $12.4 million of stock-based compensation), $71...

  • Page 76
    ...VMware's current plans do not demonstrate a need to repatriate them to fund its U.S. operations. The difference between the income taxes payable or receivable that is calculated on a separate return basis and the amount actually paid to or received from EMC pursuant to VMware's tax sharing agreement...

  • Page 77
    ...) VMware provides credit to distributors, resellers, and certain end-user customers in the normal course of business. Credit is generally extended to new customers based upon a credit evaluation. Credit is extended to existing customers based on ongoing credit evaluations, prior payment history and...

  • Page 78
    ...-average share, basic for Class A and Class B Net income per weighted-average share, diluted for Class A and Class B $ For the years ended December 31, 2011 , 2010 and 2009 , stock options to purchase 0.8 million , 2.9 million and 20.6 million shares, respectively, of VMware Class A common stock...

  • Page 79
    ... Due after 5 years Total D. Fair Value Measurements Generally accepted accounting principles provide that fair value is an exit price, representing the amount that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. As...

  • Page 80
    ...of income related to VMware's cash flow hedging program were immaterial. VMware generally enters into cash flow hedges semi-annually with maturities of six months or less. As of December 31, 2011 , VMware had forward contracts to purchase currency designated as cash flow hedges with a total notional...

  • Page 81

  • Page 82
    ... denominated assets and liabilities that VMware hedges. VMware's foreign currency forward contracts are generally traded on a monthly basis with a typical contractual term of one month. As of December 31, 2011 and 2010 , VMware had outstanding forward contracts with a total notional value of $324...

  • Page 83
    ... Control In April 2010, VMware acquired certain software product technology and expertise from EMC's Ionix information technology ("IT") management business for cash consideration of $175.0 million . The acquired software product technology and expertise complemented VMware's existing development...

  • Page 84
    75

  • Page 85
    ... with the following weighted-average assumptions: i) market price of $40.00 per share, which was the closing price of VMware's Class A common stock on the acquisition date; ii) expected term of 1.6 years; iii) risk-free interest rate of 0.7% ; iv) annualized volatility of 38.1% ; and v) no dividend...

  • Page 86
    ... of the following (table in thousands): WeightedAverage Useful Lives (in years) 5.1 7.3 6.3 34.9 3.0 2011 Purchased technology Customer relationships and customer lists Trademarks and tradenames Leasehold interest Other Total intangible assets, net, excluding goodwill Gross Carrying Amount...

  • Page 87
    ....3 million in the years ended December 31, 2011 , 2010 and 2009 , respectively. In the year ended December 31, 2011 , VMware purchased all of the right, title and interest in a ground lease covering the property and improvements located adjacent to VMware's existing Palo Alto, California campus for...

  • Page 88
    ... Unearned software maintenance revenues are attributable to VMware's growing base of maintenance contracts and are recognized ratably over terms of one to five years with a weighted-average remaining term at December 31, 2011 of approximately 1.9 years. Unearned professional services revenues result...

  • Page 89
    ...,351 A reconciliation of VMware's income tax rate to the statutory federal tax rate is as follows: For the Year Ended December 31, 2011 2010 2009 Statutory federal tax rate State taxes, net of federal benefit Tax rate differential for international jurisdictions U.S. tax credits Permanent items and...

  • Page 90
    ...tax rate is 12.5% . Management does not believe that any recent or currently expected developments in non-U.S. tax jurisdictions are reasonably likely to have a material impact on VMware's effective tax rate. As of December 31, 2011 , VMware's total cash, cash equivalents, and short-term investments...

  • Page 91
    ...tax calculated per the tax sharing agreement was recorded as a decrease in stockholders' equity of $8.0 million . As of December 31, 2011 , VMware had gross unrecognized tax benefits totaling $85.4 million , which excludes $9.3 million of offsetting tax benefits. As of December 31, 2010 , VMware had...

  • Page 92
    82

  • Page 93
    ... for the ground lease on VMware's Palo Alto, California headquarter facilities, which expire in 2046 . As several of VMware's operating leases are payable in foreign currencies, the operating lease payments may fluctuate in response to changes in the exchange rate between the U.S. Dollar and the...

  • Page 94
    ... all shares issued under the 2007 Plan. VMware Stock Repurchase Program In March 2010, VMware's Board of Directors approved a stock repurchase program, authorizing the purchase of up to $400.0 million of its Class A common stock through the end of 2011 . Purchases under the March 2010 authorization...

  • Page 95
    ...was purchased pursuant to these programs in the open market or through private transactions as permitted by securities laws and other legal requirements. In the year ended December 31, 2011 , VMware repurchased and retired 6.0 million shares of its Class A common stock at a weighted-average price of...

  • Page 96
    ... based on EMC's closing stock price of $21.54 as of December 31, 2011 , which would have been received by the option holders had all in-the-money options been exercised as of that date. Cash proceeds from the exercise of VMware stock options for the years ended December 31, 2011 , 2010 and 2009...

  • Page 97
    ... shares of VMware were outstanding, with an aggregate intrinsic value of $793.6 million based on VMware's closing share price as of December 31, 2011 . These shares are scheduled to vest through 2015 . The VMware restricted stock unit awards are valued based on the VMware stock price on the date...

  • Page 98
    ... 2009 (table in thousands): For the Year Ended December 31, 2011 2010 2009 Cost of license revenues Cost of services revenues Research and development Sales and marketing General and administrative Stock-based compensation expense Income tax benefit Total stock-based compensation expense, net of tax...

  • Page 99
    ...December 31, 2011, all contingent payments under the agreement had been made. Pursuant to the ongoing reseller arrangement with EMC that commenced in 2009, EMC bundles VMware's products and services with EMC's hardware and sells them to end users. In the years ended December 31, 2011 , 2010 and 2009...

  • Page 100
    ... VMware's contractual agreements with EMC. As of December 31, 2011 and 2010 , $23.4 million and $19.3 million , respectively, of revenues from server and desktop products and services purchased by EMC for internal use were included in unearned revenues. VMware purchased storage systems and software...

  • Page 101
    ... of devices and locations, while also addressing the needs of corporate IT departments, and include the products VMware View, VMware ThinApp, VMware Zimbra, VMware Workstation and VMware Fusion. Revenues by class of products or services for the years ended December 31, 2011 , 2010 and 2009 were...

  • Page 102
    ... and Management Other products License revenues Services revenues Total $ $ $ $ Q. Selected Quarterly Financial Data (unaudited) Quarterly financial data for 2011 and 2010 were as follows (tables in millions, except per share amounts): 2011 Revenues Net income Net income per share, basic Net...

  • Page 103
    ...participation of our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act, as of the end of the period covered by this report. Based on this evaluation...

  • Page 104
    ... of Contents PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE We will furnish to the Securities and Exchange Commission a definitive Proxy Statement no later than 120 days after the close of the fiscal year ended December 31, 2011. The information required by this item is...

  • Page 105
    ...of Real Estate License Agreement between VMware, Inc. and EMC Corporation Letter Agreement between VMware, Inc. and Mark Peek dated March 16, 2007 Form of Indemnification Agreement for directors and executive officers 2007 Equity and Incentive Plan, as amended and restated March 15, 2011 Amended and...

  • Page 106
    10.14 10.15 2007 Employee Stock Purchase Plan, as amended and restated February 24, 2010 Form of Early Exercise Option Agreement 10-Q S-1/A-2 5/5/2010 7/27/2007 95

  • Page 107
    ... First Amendment to Tax Sharing Agreement between VMware, Inc. and EMC Corporation effective as of January 1, 2011 Executive Bonus Program, adopted February 14, 2011 Agreement of Purchase and Sale Agreement between Roche Palo Alto LLC and VMware, Inc. dated March 16, 2011 Amended and Restated Ground...

  • Page 108
    101.DEF 101.LAB XBRL Taxonomy Extension Definition Linkbase XBRL Taxonomy Extension Label Linkbase X X X 101.PRE XBRL Taxonomy Extension Presentation Linkbase + Management contract or compensatory plan or arrangement. 96

  • Page 109
    ... Paul A. Maritz Chief Executive Officer Dated: February 24, 2012 By: /S/ R OBYNNE D. S ISCO Robynne D. Sisco Chief Accounting Officer and Corporate Controller (Principal Accounting Officer and Controller) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been...

  • Page 110
    ... 35,873 28,852 (1) For the year ended December 31, 2010, VMware reduced the valuation allowance in connection with state tax credits assigned to other corporations within the combined reporting group. VMware did not credit the income tax provision because the credits assigned were subject to a full...

  • Page 111
    ... SAS VMware Global, Inc. VMware Hong Kong Limited VMware Information Technology (China) Co. Ltd VMware International Limited VMware International Marketing Limited VMware Israel Ltd. VMware Italy S.r.l. VMware Marketing Austria GmbH VMware Netherlands B.V. VMware Singapore Pte Ltd. VMware Software...

  • Page 112
    ... 333-169537) of VMware, Inc. of our report dated February 24, 2012 relating to the financial statements, financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this Form 101K. /s/ PricewaterhouseCoopers LLP San Jose, California February 24...

  • Page 113
    ...and report financial information; and Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. By: /S/ PAUL A. MARITZ b. Date: February 24, 2012 Paul A. Maritz Chief Executive Officer...

  • Page 114
    ... financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to...

  • Page 115
    ... Exchange Act of 1934 and the information contained in such Form 10-K fairly presents, in all material respects, the financial condition and results of operations of VMware, Inc. Date: February 24, 2012 By: /S/ PAUL A. MARITZ Paul A. Maritz Chief Executive Officer (Principal Executive Officer...

  • Page 116
    ... Exchange Act of 1934 and the information contained in such Form 10-K fairly presents, in all material respects, the financial condition and results of operations of VMware, Inc. Date: February 24, 2012 By: /S/ MARK S. PEEK Mark S. Peek Chief Financial Officer and Co-President, Business Operations...