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Table of Contents VMware, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
software maintenance element of the arrangement does not exist. Total unearned license revenues may vary over periods for a variety of factors,
including the type and level of promotions offered, and the timing of when the products are delivered upon general availability.
Unearned software maintenance revenues are attributable to VMware’s maintenance contracts and are generally recognized ratably over the
contract period. The weighted-average remaining term at December 31, 2014 was approximately 2 years . Unearned professional services
revenues result primarily from prepaid professional services, including training, and are generally recognized as the services are delivered.
K. Income Taxes
The domestic and foreign components of income before provisions for income taxes were as follows (table in millions):
VMware’s provision for income taxes consisted of the following (table in millions):
A reconciliation of VMware’s income tax rate to the statutory federal tax rate is as follows:
84
For the Year Ended December 31,
2014
2013
2012
Domestic
$
174
$
160
$
177
International
874
987
716
Total
$
1,048
$
1,147
$
893
For the Year Ended December 31,
2014
2013
2012
Federal:
Current
$
188
$
1
$
161
Deferred
(116
)
57
(71
)
72
58
90
State:
Current
15
2
13
Deferred
(12
)
6
(7
)
3
8
6
Foreign:
Current
87
72
44
Deferred
—
(
5
)
7
87
67
51
Total provision for income taxes
$
162
$
133
$
147
For the Year Ended December 31,
2014
2013
2012
Statutory federal tax rate
35
%
35
%
35
%
State taxes, net of federal benefit
1
%
1
%
1
%
Tax rate differential for international jurisdictions
(21
)%
(22
)%
(22
)%
U.S. tax credits
(1)
(3
)%
(7
)%
—
%
Permanent items and other
4
%
5
%
3
%
Effective tax rate
16
%
12
%
17
%
(1) Amounts presented for 2013 include the federal research tax credit for 2012 as the credit was enacted retroactively through December 31,
2013, and passed by the United States Congress during January 2013.