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Table of Contents
37
Successor Company
Predecessor Company
Year Ended December 31,
Period from
January 9, 2004 to
December 31, 2004
Period from
February 1, 2003 to
January 8, 2004
2007
2006
2005
Cost of license revenues
Stock
-
based compensation
$
558
$
99
$
—
$
—
$
—
Acquisition-related intangible
amortization
21,172
21,840
23,357
25,487
—
Capitalized software development costs
amortization
36,407
22,299
6,159
1,317
—
Cost of services revenues
Stock
-
based compensation
6,070
2,384
1,299
1,061
—
Research and development
Stock-based compensation not
capitalized
42,934
26,342
14,656
10,292
—
Total capitalized software development
costs
(56,840
)
(43,012
)
(25,103
)
(8,155
)
—
Stock
-
based compensation included in
total capitalized software
development costs above
9,105
10,489
3,545
—
—
Sales and marketing
Stock
-
based compensation
26,288
12,020
5,341
4,672
—
Acquisition-related intangible
amortization
2,597
2,188
1,785
—
—
General and administrative
Stock
-
based compensation
16,556
10,381
5,775
3,518
—
Acquisition-related intangible
amortization
1,972
1,494
1,000
773
—
(2) In August 2007, VMware completed its IPO in which the Company sold 37,950,000 shares (including 4,950,000 shares pursuant to the
underwriters' full exercise of their over-allotment option) of its Class A common stock at a price to the public of $29.00 per share. The net
proceeds to the Company were $1,035.2 million. Subsequent to receiving the proceeds, the Company purchased its new headquarters
facilities from EMC for $132.6 million, which is equal to the cost expended by EMC through the date of purchase. The Company also
repaid $350.0 million of principal on the note payable to EMC. Also in August 2007, VMware sold 9.5 million shares of its Class A
common stock to Intel Capital at $23.00 per share. The net proceeds to the Company from that transaction were $218.3. See Note J to the
consolidated financial statements for additional information.
(3)
In April 2007, VMware declared an $800.0 million dividend to EMC paid in the form of a note. This dividend was given retroactive effect
as of December 31, 2006. Subsequent to receiving the proceeds from the IPO in August 2007, VMware repaid $350.0 million of principal
on the note. See Note F to the consolidated financial statements for additional information. In 2005, VMware declared and paid a cash
dividend of $190.0 million to EMC.