VMware 2014 Annual Report Download - page 88

Download and view the complete annual report

Please find page 88 of the 2014 VMware annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 128

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128

Table of Contents VMware, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
December 31, 2014 , 2013 and 2012 , respectively. Net gains and losses are recorded in other income (expense), net in the consolidated
statements of income.
H. Property and Equipment, Net
Property and equipment, net, as of December 31, 2014 and 2013 consisted of the following (table in millions):
Depreciation expense was $190 million , $141 million and $131 million during the years ended December 31, 2014 , 2013 and 2012 ,
respectively.
As of December 31, 2013 , construction in progress primarily represented buildings and site improvements related to VMware’s Palo Alto
campus expansion that had not yet been placed into service. As of December 31, 2014, this construction was substantially completed.
I. Accrued Expenses and Other
Accrued expenses and other as of December 31, 2014 and 2013 consisted of the following (table in millions):
Accrued partner liabilities relate to rebates and marketing development fund accruals for channel partners, system vendors and systems
integrators, as well as accrued royalties.
J. Unearned Revenues
Unearned revenues as of December 31, 2014 and 2013 consisted of the following (table in millions):
Unearned license revenues are generally recognized upon delivery of existing or future products or services, or they are otherwise
recognized ratably over the term of the arrangement. Future products include, in some cases, emerging products that are offered as part of
product promotions where the purchaser of an existing product is entitled to receive the future product at no additional charge. To the extent the
future product has not been delivered and vendor-specific objective evidence (“VSOE”) of fair value cannot be established, the revenue for the
entire order is deferred until such time as all product delivery obligations have been fulfilled. In the event the arrangement does not include
professional services, unearned license revenue may also be recognized ratably, if the customer is granted the right to receive unspecified future
products or VSOE of fair value on the
83
December 31,
2014
2013
Equipment and software
$
974
$
752
Buildings and improvements
753
584
Furniture and fixtures
92
77
Construction in progress
25
120
Total property and equipment
1,844
1,533
Accumulated depreciation
(809
)
(688
)
Total property and equipment, net
$
1,035
$
845
December 31,
2014
2013
Salaries, commissions, bonuses, and benefits
$
374
$
303
Accrued partner liabilities
148
135
Other
289
170
Total
$
811
$
608
December 31,
2014
2013
Unearned license revenues
$
488
$
465
Unearned software maintenance revenues
3,905
3,304
Unearned professional services revenues
440
323
Total unearned revenues
$
4,833
$
4,092