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Table of Contents
VMWARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Operating Lease Commitments
VMware leases office facilities and equipment under various operating leases. Facility leases generally include renewal options. Rent
expense for 2007, 2006 and 2005 was $20.2 million, $14.0 million and $5.8 million, respectively. VMware’s future lease commitments at
December 31, 2007 are as follows (table in thousands):
The amount of the future lease commitments after 2012 is primarily for the ground lease on the Company’s Palo Alto headquarters
facilities, which expires in 2057.
Outstanding Obligations
At December 31, 2007, VMware had outstanding purchase orders aggregating $110.2 million. While the purchase orders are generally
cancelable without penalty, certain vendor agreements provide for percentage-based cancellation fees or minimum restocking charges based on
the nature of the product or service.
Guarantees and Indemnification Obligations
VMware enters into agreements in the ordinary course of business with, among others, customers, distributors, resellers, x86 system
vendors and systems integrators. Most of these agreements require VMware to indemnify the other party against third-party claims alleging that
a VMware product infringes or misappropriates a patent, copyright, trademark, trade secret and/or other intellectual property right. Certain of
these agreements require VMware to indemnify the other party against certain claims relating to property damage, personal injury or the acts or
omissions of VMware, its employees, agents or representatives.
VMware has agreements with certain vendors, financial institutions, lessors and service providers pursuant to which VMware has agreed to
indemnify the other party for specified matters, such as acts and omissions of VMware, its employees, agents or representatives.
VMware has procurement or license agreements with respect to technology that is used in VMware’s products and agreements in which
VMware obtains rights to a product from an x86 system vendor. Under some of these agreements, VMware has agreed to indemnify the supplier
for certain claims that may be brought against such party with respect to VMware’s acts or omissions relating to the supplied products or
technologies.
VMware has agreed to indemnify the directors and officers of VMware and VMware’s subsidiaries, to the extent legally permissible,
against all liabilities reasonably incurred in connection with any action in which such individual may be involved by reason of such individual
being or having been a director or officer.
In connection with certain acquisitions, VMware has agreed to indemnify the current and former directors, officers and employees of the
acquired company in accordance with the acquired company’s by-
laws and charter in effect immediately prior to the acquisition or in accordance
with indemnification or similar agreements entered into by the acquired company and such persons. VMware has maintained the acquired
company’s directors’ and officers’ insurance, which should enable VMware to recover a portion of any future amounts paid.
76
2008
$
26,525
2009
27,408
2010
25,167
2011
23,281
2012
12,293
Thereafter
280,096
Total minimum lease payments
$
394,770