VMware 2009 Annual Report Download - page 63

Download and view the complete annual report

Please find page 63 of the 2009 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 125

  • 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
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125

Table of Contents
It is not possible to determine the maximum potential amount under these indemnification agreements due to our limited history with prior
indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, payments made by us under
these agreements have not had a material effect on our consolidated financial position, results of operations, or cash flows.
Contractual Obligations
We have various contractual obligations impacting our liquidity. The following represents our contractual obligations as of December 31,
2009:
Critical Accounting Policies
Our consolidated financial statements are based on the selection and application of accounting principles generally accepted in the United
States of America that require us to make estimates and assumptions about future events that affect the amounts reported in our financial
statements and the accompanying notes. Future events and their effects cannot be determined with certainty. Therefore, the determination of
estimates requires the exercise of judgment. Actual results could differ from those estimates, and any such differences may be material to our
financial statements. We believe that the critical accounting policies set forth below may involve a higher degree of judgment and complexity in
their application than our other significant accounting policies and represent the critical accounting policies used in the preparation of our
financial statements. If different assumptions or conditions were to prevail, the results could be materially different from our reported results.
Our significant accounting policies are presented within Note A to our consolidated financial statements.
Accounting for Stock Options
Generally accepted accounting principles require recognizing compensation costs for all share-based payment awards made to employees
based upon the awards’ estimated grant date fair value.
We elected to estimate the fair value of employee stock option awards and options under our Employee Stock Purchase Plan using the
Black-Scholes option pricing model. The determination of the fair value of our share-based payment awards on the date of grant using the Black-
Scholes option pricing model is affected by our
60
Payments Due by Period
Total
Less than
1 year
1-3
years
3-5
years
More than
5 years
Note payable to EMC
$
450.0
$
—
$
450.0
$
—
$
—
Operating leases
388.6
31.6
47.7
30.6
278.7
Uncertain tax positions
84.3
—
—
—
—
Other agreements
69.2
17.6
20.8
7.1
23.7
Total
$
992.1
$
49.2
$
518.5
$
37.7
$
302.4
(1)
Includes payments from January 1, 2011 through December 31, 2012.
(2)
Includes payments from January 1, 2013 through December 31, 2014.
(3)
The note is due and payable in full on April 6, 2012, however, we can pay down the note at an earlier date in full or in part at our election.
(4)
Our operating leases are primarily for office space around the world.
(5) As of December 31, 2009, we had $84.3 of non-current net unrecognized tax benefits under generally accepted accounting guidance. We
are not able to provide a reasonably reliable estimate of the timing of future payments relating to these obligations.
(6)
Consisting of various contractual agreements, which include commitments on the lease for our Washington data center facility.
(1) (2)
(3)
(4)
(5)
(6)