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Table of Contents
VMWARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2009, 2008 and 2007, $6.5 million, $18.6 million and $26.6 million, respectively, of interest expense was recorded related to the
note payable. The note may be repaid, without penalty, at any time commencing July 2007. Subsequent to receiving the proceeds from the IPO
in August 2007, VMware repaid $350.0 million of principal on the note. No repayments of principal were made during 2009 and 2008.
H. Income Taxes
The domestic and foreign components of income before provisions for income taxes were as follows (table in thousands):
VMware’s provision for income taxes consists of the following (table in thousands):
A reconciliation of VMware’s income tax rate to the statutory federal tax rate is as follows:
87
For the Year Ended December 31,
2009
2008
2007
Domestic
$
31,690
$
63,588
$
42,877
International
191,759
255,697
197,601
Total
$
223,449
$
319,285
$
240,478
For the Year Ended December 31,
2009
2008
2007
Federal:
Current
$
41,114
$
(27,524
)
$
86,279
Deferred
(35,908
)
38,348
(74,640
)
5,206
10,824
11,639
State:
Current
6,070
(824
)
5,413
Deferred
(3,630
)
4,044
(3,846
)
2,440
3,220
1,567
Foreign:
Current
19,643
18,592
9,135
Deferred
(938
)
(3,484
)
—
18,705
15,108
9,135
Total provision for income taxes
$
26,351
$
29,152
$
22,341
For the Year Ended December 31,
2009
2008
2007
Statutory federal tax rate
35.0
%
35.0
%
35.0
%
State taxes, net of federal benefit
1.1
%
1.0
%
0.7
%
Tax rate differential for international jurisdictions
(21.5
%)
(23.3
%)
(25.0
%)
U.S. tax credits
(8.5
%)
(6.7
%)
(4.5
%)
Permanent items and other
5.7
%
3.1
%
3.1
%
Effective tax rate
11.8
%
9.1
%
9.3
%