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TableofContents
VMware, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
DuringtheyearendedDecember31,2015and2014,VMwarerecognizedagainof$36millionand$48million,respectively,relatingtothesettlementof
forwardcontracts.DuringtheyearendedDecember31,2013,VMwarerecognizedalossof$4million.Gainsandlossesarerecordedinotherincome(expense),
netontheconsolidatedstatementsofincome.
Thecombinedgainsandlossesderivedfromthesettlementofforwardcontractsandtheunderlyingforeigncurrencydenominatedassetsandliabilities
resultedinanetlossof$14million,$9millionand$4million,respectively,duringtheyearsendedDecember31,2015,2014and2013.Netgainsandlossesare
recordedinotherincome(expense),netontheconsolidatedstatementsofincome.
H. Property and Equipment, Net
Propertyandequipment,net,asofDecember31,2015and2014consistedofthefollowing(tableinmillions):
December 31,
2015
2014
Equipmentandsoftware $ 1,180
$ 974
Buildingsandimprovements 792
753
Furnitureandfixtures 100
92
Constructioninprogress 30
25
Totalpropertyandequipment 2,102
1,844
Accumulateddepreciation (974)
(809)
Totalpropertyandequipment,net $ 1,128
1,035
Depreciationexpensewas$190million,$190millionand$141millionduringtheyearsendedDecember31,2015,2014and2013,respectively.
I. Accrued Expenses and Other
AccruedexpensesandotherasofDecember31,2015and2014consistedofthefollowing(tableinmillions):
December 31,
2015
2014
Salaries,commissions,bonuses,andbenefits $ 388
$ 374
Accruedpartnerliabilities 146
148
Other 212
289
Total $ 746
$ 811
Accruedpartnerliabilitiesrelatetorebatesandmarketingdevelopmentfundaccrualsforchannelpartners,systemvendorsandsystemsintegrators,aswellas
accruedroyalties.
J. Unearned Revenues
UnearnedrevenuesasofDecember31,2015and2014consistedofthefollowing(tableinmillions):
December 31,
December 31,
2015
2014
Unearnedlicenserevenues $ 428
$ 488
Unearnedsoftwaremaintenancerevenues 4,174
3,905
Unearnedprofessionalservicesrevenues 474
440
Totalunearnedrevenues $ 5,076
$ 4,833
Unearnedlicenserevenuesaregenerallyrecognizedupondeliveryofexistingorfutureproductsorservices,orareotherwiserecognizedratablyovertheterm
ofthearrangement.Futureproductsinclude,insomecases,emergingproductsthatareofferedaspartofproductpromotionswherethepurchaserofanexisting
productisentitledtoreceivethefutureproductatnoadditionalcharge.Totheextentthefutureproducthasnotbeendeliveredandvendor-specificobjective
evidence(“VSOE”)offairvaluecannotbeestablished,therevenuefortheentireorderisdeferreduntilsuchtimeasallproductdeliveryobligations
74