VMware 2015 Annual Report Download - page 74

Download and view the complete annual report

Please find page 74 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
VMware, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
consideranyofitsfixedincomeinvestmentstobeother-than-temporarilyimpaired.Therealizedgainsandlossesoninvestmentsduringtheyearended
December31,2015,2014and2013werenotmaterial.
Unrealizedlossesoncashequivalentsandavailable-for-saleinvestmentsasofDecember31,2015and2014,whichhavebeeninanetlosspositionforless
thantwelvemonths,wereclassifiedbyassetclassasfollows(tableinmillions):
December 31, 2015
December 31, 2014
Fair Value
Unrealized Losses
Fair Value
Unrealized Losses
U.S.Governmentandagencyobligations $ 657
$(3)
$ 275
$ —
U.S.andforeigncorporatedebtsecurities 2,564
(11)
1,964
(5)
Mortgage-backedsecurities 171
(1)
107
(1)
Total $ 3,392
$ (15)
$ 2,346
$(6)
Unrealizedlossesoncashequivalentsandavailable-for-saleinvestments,whichhavebeeninanetlosspositionfortwelvemonthsorgreater,werenot
materialasofDecember31,2015and2014.
Contractual Maturities
Thecontractualmaturitiesofshort-terminvestmentsheldatDecember31,2015consistedofthefollowing(tableinmillions):
Amortized
Cost Basis
Aggregate
Fair Value
Duewithinoneyear $ 1,617
$ 1,616
Dueafter1yearthrough5years 3,157
3,146
Dueafter5yearsthrough10years 83
82
Dueafter10years 174
172
Totalshort-terminvestments $ 5,031
$ 5,016
F. Fair Value Measurements
Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis
Certainfinancialassetsandliabilitiesaremeasuredatfairvalueonarecurringbasis.VMwaredeterminesfairvalueusingthefollowinghierarchy:
•Level1-Quotedpricesinactivemarketsforidenticalassetsorliabilities
• Level2-InputsotherthanLevel1thatareobservable,eitherdirectlyorindirectly,suchasquotedpricesforsimilarassetsorliabilities;quotedpricesin
marketsthatarenotedactive;orotherinputsthatareobservableorcanbecorroboratedbyobservablemarketdataforsubstantiallythefulltermofthe
assetsorliabilities
• Level3-Unobservableinputsthataresupportedbylittleornomarketactivityandthataresignificanttothefairvalueoftheassetsorliabilities
VMware’sfixedincomesecuritiesareprimarilyclassifiedasLevel2,withtheexceptionofsomeoftheU.S.Governmentandagencyobligationswhichare
classifiedasLevel1.Additionally,VMware’sLevel2classificationincludesforwardcontractsandnotespayabletoEMC.AtDecember31,2015and2014,
VMware’sLevel2securitiesweregenerallypricedusingnon-bindingmarketconsensuspricesthatarecorroboratedbyobservablemarketdata,quotedmarket
pricesforsimilarinstruments,orpricingmodelssuchasdiscountedcashflowtechniques.VMware’sproceduresincludecontrolstoensurethatappropriatefair
valuesarerecordedsuchascomparingpricesobtainedfrommultipleindependentsources.
VMwaredidnothaveanymaterialassetsorliabilitiesthatfellintoLevel3ofthefairvaluehierarchyasofDecember31,2015and2014,andtherehavebeen
notransfersbetweenfairvaluemeasurementlevelsduringtheyearendedDecember31,2015and2014.
71