VMware 2015 Annual Report Download - page 44

Download and view the complete annual report

Please find page 44 of the 2015 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 106

  • 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

TableofContents
andsizeofacquisitions,investmentsandstockrepurchases.Shouldwerequireadditionalliquidity,wemayseektoarrangedebtfinancingorenterintocredit
facilities.
OurcashflowssummarizedfortheyearsendedDecember31,2015,2014and2013wereasfollows(tableinmillions):
For the Year Ended December 31,
2015
2014
2013
Netcashprovidedby(usedin):
Operatingactivities $ 1,899
$ 2,180
$ 2,535
Investingactivities (336)
(2,785)
(1,472)
Financingactivities (1,141)
371
(367)
Netincrease(decrease)incashandcashequivalents $ 422
$ (234)
$ 696
Operating Activities
Cashprovidedbyoperatingactivitiesdecreasedby$281millionin2015comparedto2014,drivenbychangesinunearnedrevenuesandaccountsreceivable.
Whilecashcollectionsincreasedin2015,theywerenegativelyimpactedbythestrengtheningoftheU.S.dollaragainsttheforeigncurrenciesinwhichweinvoice.
Additionally,cashprovidedbyoperatingactivitiesin2015reflectspaymentsforlegalsettlements,primarily$76millionfortheGSAsettlement,approximately
$185millionofinstallmentpaymentsmadetocertainkeyemployeesofAirWatch,andincreasesinpayrollandoperatingexpensesresultingfromgrowthin
headcount-relatedexpensesdrivenbygrowthinheadcount.Cashflowsfromoperationswillcontinuetobeimpactedbyinstallmentpaymentsofapproximately
$29milliontocertainkeyemployeesofAirWatchthroughthefirstquarterof2016.
Cashprovidedbyoperatingactivitiesdecreasedby$356millionin2014from2013,mainlyasaresultofdecreasedprofitabilityduetoanincreasein
headcount-relatedexpensesdrivenbytheAirWatchacquisition,includinginstallmentpaymentsmadetocertainkeyemployeesofAirWatch.Thedecreasewas
alsodrivenbythechangeinincometaxespayableasaresultoftaxpaymentsmadetoEMCunderthetaxsharingagreement.Underthetaxsharingagreement,we
areobligatedtopayEMCanamountequaltothetaxexpensegeneratedbyusthatEMCmayrecognizeinagivenyearonitsconsolidatedtaxreturnandEMCis
obligatedtopayusanamountequaltoanytaxbenefitgeneratedbyus.In2014,wepaid$150milliontoEMCunderthetaxsharingagreement,andin2013we
benefitedfromthenetreceiptof$24million.
Investing Activities
Cashusedininvestingactivitiesisgenerallyattributabletothepurchaseofavailable-for-salesecurities,businessacquisitions,andcapitalexpenditures.Cash
providedbyinvestingactivitiesisimpactedbythesalesandmaturitiesofouravailable-for-salesecurities.
Cashusedininvestingactivitiesdecreasedin2015comparedto2014primarilyasaresultofouracquisitions,includingAirWatchfor$1,068millionduring
thefirstquarterof2014.Additionally,thenetcashusedrelatedtoouravailable-for-salesecuritiesdecreasedin2015compared2014.
Theincreaseinrestrictedcashduring2014included$75millionforamountsheldinescrowandpayabletocertainAirWatchemployees,subjectto
achievementofcertainemploymentconditions.During2015,$75millionwasreleasedfromescrowandpaidtotheemployees.Thereleasefromescrowis
reflectedasaninflowwithininvestingactivitieswhilethepaymenttotheemployeesisreflectedasanoutflowwithinoperatingactivities.
Cashusedininvestingactivitiesincreasedin2014comparedto2013primarilyduetoanincreaseinthenetcashusedrelatedtoouravailable-for-sale
securities.Additionally,cashusedininvestingactivitiesincreasedsignificantlyin2014comparedto2013primarilyasaresultofouracquisitionofAirWatch
duringthefirstquarterof2014.
Financing Activities
Netcashusedinfinancingactivitiesin2015changedcomparedtonetcashprovidedbyfinancingactivitiesin2014primarilyasaresultofthecashreceived
inconnectionwiththenotespayableexchangeagreementwithEMCduring2014andanincreaseinourrepurchaseofourcommonstockduring2015.
Netcashprovidedbyfinancingactivitiesin2014changedcomparedtonetcashusedinfinancingactivitiesin2013primarilyasaresultofthenotespayable
exchangeagreementweenteredintowithEMCinconnectionwithouracquisitionofAirWatch.Theproceedsfromthenotespayableexchangeagreementwith
EMCwerepartiallyoffsetbyanincreaseintherepurchaseofourcommonstockin2014.
43