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Table of Contents
VMWARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
VMware’s provision for income taxes consists of (table in thousands):
A reconciliation of VMware’s income tax rate to the statutory federal tax rate is as follows:
The components of the current and non-current deferred tax assets and liabilities are as follows (table in thousands):
73
For the Year Ended December 31,
2007
2006
2005
Federal:
Current
$
86,279
$
53,101
$
47,088
Deferred
(74,640
)
(20,083
)
(20,840
)
11,639
33,018
26,248
State:
Current
5,413
3,096
2,942
Deferred
(3,846
)
(2,184
)
(1,653
)
1,567
912
1,289
Foreign:
Current
9,135
2,902
1,028
Deferred
—
—
—
9,135
2,902
1,028
Total provision for income taxes
$
22,341
$
36,832
$
28,565
For the Year Ended December 31,
2007
2006
2005
Statutory federal tax rate
35.0
%
35.0
%
35.0
%
State taxes, net of federal benefit
0.7
%
0.7
%
1.4
%
Tax rate differential for international jurisdictions
(25.0
%)
(21.0
%)
(16.7
%)
U.S. tax credits
(4.5
%)
(4.9
%)
(3.9
%)
Permanent items and other
3.1
%
20.3
%
14.2
%
Effective tax rate
9.3
%
30.1
%
30.0
%
For the Year Ended December 31,
2007
2006
Deferred Tax
Asset
Deferred Tax
Liability
Deferred Tax
Asset
Deferred Tax
Liability
Current:
Accruals and allowances
$
8,839
$
—
$
10,032
$
—
Deferred revenue
44,683
—
16,778
—
Net operating loss carryforwards
864
—
846
—
Total current
54,386
—
27,656
—
Non
-
current:
Property and equipment, net
—
(
571
)
2,749
—
Intangible and other assets, net
—
(
26,756
)
—
(
30,579
)
Equity
23,434
—
—
—
Deferred revenue
44,068
—
15,698
—
Tax credit and net operating loss carryforwards
4,747
—
2,488
—
Total non
-
current
72,249
(27,327
)
20,935
(30,579
)
Total deferred tax assets and liabilities
$
126,635
$
(27,327
)
$
48,591
$
(30,579
)