þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
94-3292913
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification Number)
|
|
|
3401 Hillview Avenue
Palo Alto, CA
|
94304
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class
|
|
Name of each exchange on which registered
|
Class A Common Stock, par value $0.01
|
|
New York Stock Exchange
|
Large accelerated filer
|
þ
|
|
Accelerated filer
|
o
|
|
|
|
|
|
Non-accelerated filer
|
o
|
|
Smaller reporting company
|
o
|
|
|
|
|
|
|
|
|
Emerging growth company
|
o
|
|
|
Page
|
|
PART I
|
|
Item 1.
|
||
Item 1A.
|
||
Item 1B.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
|
PART II
|
|
Item 5.
|
||
Item 6.
|
||
Item 7.
|
||
Item 7A.
|
||
Item 8.
|
||
Item 9.
|
||
Item 9A.
|
||
Item 9B.
|
||
|
|
|
|
PART III
|
|
Item 10.
|
||
Item 11.
|
||
Item 12.
|
||
Item 13.
|
||
Item 14.
|
||
|
|
|
|
PART IV
|
|
Item 15.
|
||
Item 16.
|
||
|
|
|
|
ITEM 1.
|
BUSINESS
|
•
|
Compute
|
•
|
Cloud Management
|
•
|
Networking and Security
|
•
|
Storage and Availability
|
•
|
vRealize Operations
—provides performance, capacity and configuration management for virtual or physical infrastructure as well as transparency and control over the costs and quality of IT services.
|
•
|
vRealize Automation
—enables customers to rapidly deploy and provision cloud services.
|
•
|
Wavefront by VMware
—provides a Software-as-a-Service (“SaaS”) based metrics monitoring and analytics platform for modern cloud-native applications.
|
•
|
CloudHealth by VMware (“CloudHealth”)—
acquired during fiscal 2019 to further enhance our cloud management portfolio, CloudHealth delivers a consistent cloud operations platform across AWS, Azure and Google Cloud, enabling customers to analyze and manage cloud cost, usage, security and performance centrally for native public clouds.
|
•
|
VMware vSAN (“vSAN”)—
clusters server disks to create simple, shared storage designed for virtual machines in hyperconverged infrastructure.
|
•
|
VxRail—
a hyperconverged infrastructure solution comprised of a fully integrated and pre-configured Dell EMC Appliance powered by vSAN and vSphere software.
|
•
|
VMware vCloud Suite—
an integrated offering that brings together our vSphere hypervisor and our vRealize Suite multi-vendor hybrid cloud management platform.
|
•
|
VMware vRealize Suite—
an enterprise-ready cloud management platform that enables customers to manage heterogeneous, hybrid cloud environments.
|
•
|
Unified Endpoint Management—
a platform built to manage and secure endpoints across all major operating systems from a single management console, enabling customers to effectively manage, secure and benefit from “bring your own device” programs.
|
•
|
Horizon—
a virtual platform that provides a streamlined approach to delivering, protecting and managing virtual desktops and applications from one digital workspace, while containing costs and allowing end users to work anytime, anywhere and across any device.
|
•
|
our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports, as soon as reasonably practicable after we electronically file that material with or furnish it to the Securities and Exchange Commission (“SEC”);
|
•
|
announcements of investor conferences, speeches and events at which our executives discuss our products, services and competitive strategies;
|
•
|
webcasts of our quarterly earnings calls and links to webcasts of investor conferences at which our executives appear (archives of these events are also available for a limited time);
|
•
|
additional information on financial metrics, including reconciliations of non-GAAP financial measures discussed in our presentations to the nearest comparable GAAP measure;
|
•
|
press releases on quarterly earnings, product and service announcements, legal developments and international news;
|
•
|
corporate governance information including our certificate of incorporation, bylaws, corporate governance guidelines, board committee charters, business conduct guidelines (which constitutes our code of business conduct and ethics) and other governance-related policies;
|
•
|
other news, blogs and announcements that we may post from time to time that investors might find useful or interesting; and
|
•
|
opportunities to sign up for email alerts and RSS feeds to have information pushed in real time.
|
Name
|
|
Age
|
|
Position(s)
|
Patrick Gelsinger
|
|
58
|
|
Chief Executive Officer and Director
|
Zane Rowe
|
|
48
|
|
Chief Financial Officer and Executive Vice President
|
Maurizio Carli
|
|
60
|
|
Executive Vice President, Worldwide Sales and Services
|
Amy Fliegelman Olli
|
|
55
|
|
Senior Vice President, General Counsel and Secretary
|
Sanjay Poonen
|
|
49
|
|
Chief Operating Officer, Customer Operations
|
Rangarajan (Raghu) Raghuram
|
|
56
|
|
Chief Operating Officer, Products and Cloud Services
|
Rajiv Ramaswami
|
|
53
|
|
Chief Operating Officer, Products and Cloud Services
|
ITEM 1A.
|
RISK FACTORS
|
•
|
sensitive data regarding our business, including intellectual property and other proprietary data, could be stolen;
|
•
|
our electronic communications systems, including email and other methods, could be disrupted, and our ability to conduct our business operations could be seriously damaged until such systems can be restored and secured;
|
•
|
our ability to process customer orders and electronically deliver products and services could be degraded, and our distribution channels could be disrupted, resulting in delays in revenue recognition;
|
•
|
defects and security vulnerabilities could be exploited or introduced into our software products or our hybrid cloud and SaaS offerings and impair or disrupt their availability, thereby damaging the reputation and perceived reliability and security of our products and services and potentially making the data systems of our customers vulnerable to further data loss and cyber incidents; and
|
•
|
personally identifiable or confidential data of our customers, employees and business partners could be stolen or lost.
|
•
|
fluctuations in demand, adoption rates, sales cycles and pricing levels for our products and services;
|
•
|
changes in customers’ budgets for information technology purchases and in the timing of their purchasing decisions;
|
•
|
the timing of announcements or releases of new or upgraded products and services by us or by our competitors;
|
•
|
the timing and size of business realignment plans and restructuring charges;
|
•
|
our ability to maintain scalable internal systems for reporting, order processing, license fulfillment, product delivery, purchasing, billing and general accounting, among other functions;
|
•
|
our ability to control costs, including our operating expenses;
|
•
|
the credit risks associated with our distributors, who account for a significant portion of our product revenue and accounts receivable, and our customers;
|
•
|
the timing of when sales orders are processed, which can cause fluctuations in our backlog and impact our bookings and timing of revenue recognition;
|
•
|
seasonal factors such as the end of fiscal period budget expenditures by our customers and the timing of holiday and vacation periods;
|
•
|
renewal rates and the amounts of the renewals for EAs as original EA terms expire;
|
•
|
the timing and amount of internally developed software development costs that may be capitalized;
|
•
|
unplanned events that could affect market perception of the quality or cost-effectiveness of our products and solutions;
|
•
|
fluctuations in the fair value of our investment in Pivotal, which is primarily based on Pivotal’s closing stock price on the last trading day of each fiscal quarter;
|
•
|
the impact of new accounting pronouncements, for example, the adoption of Accounting Standards Update (“ASU”) 2016-16, which could result in increased volatility in the provision for income taxes in periods in which transfers of intellectual property between our legal entities occur; and
|
•
|
our ability to accurately predict the degree to which customers will elect to purchase our subscription-based offerings in place of licenses to our on-premises offerings.
|
•
|
difficulties in enforcing contracts and collecting accounts receivable and longer payment cycles, especially in emerging markets;
|
•
|
difficulties in delivering support, training and documentation in certain foreign markets;
|
•
|
tariffs and trade barriers, which could increase due to the current geopolitical climate, and other regulatory or contractual limitations on our ability to sell or develop our products and services in certain foreign markets;
|
•
|
changes and instability in government policies and international trade arrangements that could adversely affect the ability of U.S.-based companies to conduct business in non-U.S. markets;
|
•
|
economic or political instability and security concerns in countries that are important to our international sales and operations;
|
•
|
difficulties in transferring funds from certain countries;
|
•
|
increased compliance risks, particularly in emerging markets; and
|
•
|
difficulties in maintaining appropriate controls relating to revenue recognition practices.
|
•
|
requiring the dedication of a portion of our expected cash flow from operations to service our indebtedness, thereby reducing the amount of expected cash flow available for other purposes, including capital expenditures and acquisitions; and
|
•
|
limiting our flexibility in planning for, or reacting to, changes in our business and our industry.
|
•
|
pay significant damages;
|
•
|
stop distributing our products that contain the open source software;
|
•
|
revise or modify our product code to remove alleged infringing code;
|
•
|
release the source code of our proprietary software; or
|
•
|
take other steps to avoid or remedy an alleged infringement.
|
•
|
disrupting our ongoing operations, diverting management from day-to-day responsibilities, increasing our expenses, and adversely impacting our business, financial condition and operating results;
|
•
|
failure of an acquired business to further our business strategy;
|
•
|
uncertainties in achieving the expected benefits of an acquisition or disposition, including enhanced revenue, technology, human resources, cost savings, operating efficiencies and other synergies;
|
•
|
reducing cash available for operations, stock repurchase programs and other uses and resulting in potentially dilutive issuances of equity securities or the incurrence of debt;
|
•
|
incurring amortization expense related to identifiable intangible assets acquired that could impact our operating results;
|
•
|
difficulty integrating the operations, systems, technologies, products and personnel of acquired businesses effectively;
|
•
|
the need to provide transition services in connection with a disposition, such as the sale of vCloud Air, which may result in the diversion of resources and focus;
|
•
|
difficulty achieving expected business results due to a lack of experience in new markets, products or technologies or the initial dependence on unfamiliar distribution partners or vendors;
|
•
|
retaining and motivating key personnel from acquired companies;
|
•
|
declining employee morale and retention issues affecting employees of businesses that we acquire or dispose of, which may result from changes in compensation, or changes in management, reporting relationships, future prospects or the direction of the acquired or disposed business;
|
•
|
assuming the liabilities of an acquired business, including acquired litigation-related liabilities and regulatory compliance issues, and potential litigation or regulatory action arising from a proposed or completed acquisition;
|
•
|
lawsuits resulting from an acquisition or disposition;
|
•
|
maintaining good relationships with customers or business partners of an acquired business or our own customers as a result of any integration of operations or the divestiture of a business upon which our customers rely, such as our recent divestiture of our vCloud Air business;
|
•
|
unidentified issues not discovered during the diligence process, including issues with the acquired or divested business’s intellectual property, product quality, security, privacy practices, accounting practices, regulatory compliance or legal contingencies;
|
•
|
maintaining or establishing acceptable standards, controls, procedures or policies with respect to an acquired business;
|
•
|
risks relating to the challenges and costs of closing a transaction; and
|
•
|
the need to later divest acquired assets at a loss if an acquisition does not meet our expectations.
|
•
|
Dell is able to control matters requiring our stockholders’ approval, including the election of a majority of our directors as described in the risk factors below.
|
•
|
Dell could implement changes to our business, including changing our commercial relationship with Dell or taking other corporate actions, such as participating in business combinations, that our other stockholders may not view as beneficial.
|
•
|
We have arrangements with a number of companies that compete with Dell, and our relationship with Dell could adversely affect our relationships with these companies or other customers, suppliers and partners.
|
•
|
Since the Dell Acquisition, the portion of our bookings that are realized through Dell sales channels has grown more rapidly than our sales through non-Dell resellers and distributors, and we expect this trend to continue. To the extent that we find ourselves relying more heavily upon Dell for our channel sales, Dell’s leverage over our sales and marketing efforts may increase and our ability to negotiate favorable go-to-market arrangements with Dell and with other channel partners may decline.
|
•
|
Dell has a right to approve certain matters under our certificate of incorporation, including acquisitions or investments in excess of $100 million, and Dell may choose not to consent to matters that our board of directors believes are in the best interests of VMware.
|
•
|
Synergies and benefits that we expect from our relationship with Dell may not be realized.
|
•
|
Dell is highly leveraged and commits a substantial portion of its cash flows to servicing its indebtedness. Dell’s significant debt could create the perception that Dell may exercise its control over us to limit our growth in favor of its other businesses or cause us to transfer cash to Dell. In addition, if Dell defaults, or appears in danger of defaulting, on its indebtedness, uncertainty as to the impact of such a default on VMware could disrupt our business.
|
•
|
Investor perceptions of Dell’s performance, future plans and prospects could contribute to volatility in the price of our Class A common stock.
|
•
|
Some of our products compete directly with products sold or distributed by Dell, which could result in reduced sales.
|
•
|
that a majority of our board of directors consists of independent directors;
|
•
|
that we have a corporate governance and nominating committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities;
|
•
|
that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and
|
•
|
for an annual performance evaluation of the nominating and governance committee and compensation committee.
|
•
|
the division of our board of directors into three classes, with each class serving for a staggered three-year term, which prevents stockholders from electing an entirely new board of directors at any annual meeting;
|
•
|
the right of the board of directors to elect a director to fill a vacancy created by the expansion of the board of directors;
|
•
|
following a 355 Distribution of Class B common stock by Dell to its stockholders, the restriction that a beneficial owner of 10% or more of our Class B common stock may not vote in any election of directors unless such person or group also owns at least an equivalent percentage of Class A common stock or obtains approval of our board of directors prior to acquiring beneficial ownership of at least 5% of Class B common stock;
|
•
|
the prohibition of cumulative voting in the election of directors or any other matters, which would otherwise allow less than a majority of stockholders to elect director candidates;
|
•
|
the requirement for advance notice for nominations for election to the board of directors or for proposing matters that can be acted upon at a stockholders’ meeting;
|
•
|
the ability of the board of directors to issue, without stockholder approval, up to 100,000,000 shares of preferred stock with terms set by the board of directors, which rights could be senior to those of common stock; and
|
•
|
in the event that Dell or its successor-in-interest no longer owns shares of our common stock representing at least a majority of the votes entitled to be cast in the election of directors, stockholders may not act by written consent and may not call special meetings of the stockholders.
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS
|
ITEM 2.
|
PROPERTIES
|
Location
|
|
|
Approximate
Sq. Ft.
|
|
|
Principal Use(s)
|
|
Palo Alto, CA
|
owned:
|
|
1,604,769
|
|
(1)
|
|
Executive and administrative offices, sales and marketing, and R&D
|
North and Latin American region
|
leased:
|
|
1,238,212
|
|
(2)
|
|
Administrative offices, sales and marketing, R&D and data center
|
Asia Pacific region
|
leased:
|
|
1,339,174
|
|
|
|
Administrative offices, sales and marketing, R&D and data center
|
Europe, Middle East and Africa region
|
leased:
|
|
576,660
|
|
|
|
Administrative offices, sales and marketing, R&D and data center
|
(1)
|
Represents all of the right, title and interest purchased in ground leases, which expire in fiscal 2047, covering the property and improvements located at VMware’s Palo Alto, California campus.
|
(2)
|
Includes leased space for a Washington data center facility, for which VMware is considered to be the owner for accounting purposes.
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share
(1)
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Publicly Announced Plans or Programs
(2)
|
||||||
November 3 – November 30, 2018
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
876,272,615
|
|
December 1 – December 28, 2018
|
—
|
|
|
—
|
|
|
—
|
|
|
876,272,615
|
|
||
December 29, 2018 – February 1, 2019
|
286,000
|
|
|
148.05
|
|
|
286,000
|
|
|
833,929,476
|
|
||
|
286,000
|
|
|
$
|
148.05
|
|
|
286,000
|
|
|
833,929,476
|
|
(1)
|
The average price paid per share excludes commissions.
|
|
Base Period
12/31/2013
|
|
12/31/2014
|
|
12/31/2015
|
|
12/31/2016
|
|
2/3/2017
|
|
2/2/2018
|
|
2/1/2019
|
||||||||||||||
VMware, Inc.
|
$
|
100.00
|
|
|
$
|
91.99
|
|
|
$
|
63.06
|
|
|
$
|
87.76
|
|
|
$
|
99.15
|
|
|
$
|
136.80
|
|
|
$
|
201.96
|
|
S&P 500 Index
|
100.00
|
|
|
113.69
|
|
|
115.26
|
|
|
129.05
|
|
|
132.61
|
|
|
162.63
|
|
|
162.54
|
|
|||||||
S&P 500 Systems Software Index
|
100.00
|
|
|
123.01
|
|
|
135.89
|
|
|
153.87
|
|
|
159.37
|
|
|
225.93
|
|
|
253.38
|
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
|
|
Transition Period
|
||||||||||||||||||||
|
For the Year Ended
|
|
January 1 to
|
||||||||||||||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
February 3,
|
||||||||||||
|
2019
|
|
2018
(1)(2)
|
|
2016
(1)(2)
|
|
2015
(2)
|
|
2014
(2)
|
|
2017
(1)(2)
|
||||||||||||
Results of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
License
|
$
|
3,788
|
|
|
$
|
3,200
|
|
|
$
|
2,799
|
|
|
$
|
2,720
|
|
|
$
|
2,591
|
|
|
$
|
134
|
|
Services
|
5,186
|
|
|
4,662
|
|
|
4,274
|
|
|
3,927
|
|
|
3,444
|
|
|
378
|
|
||||||
GSA settlement
|
—
|
|
|
—
|
|
|
—
|
|
|
(76
|
)
|
|
—
|
|
|
—
|
|
||||||
Total revenue
|
$
|
8,974
|
|
|
$
|
7,862
|
|
|
$
|
7,073
|
|
|
$
|
6,571
|
|
|
$
|
6,035
|
|
|
$
|
512
|
|
Operating income (loss)
|
2,050
|
|
|
1,702
|
|
|
1,469
|
|
|
1,197
|
|
|
1,027
|
|
|
(42
|
)
|
||||||
Net income (loss)
|
2,422
|
|
|
659
|
|
|
1,223
|
|
|
997
|
|
|
886
|
|
|
(5
|
)
|
||||||
Net income (loss) per weighted average share, basic, for Classes A and B
|
$
|
5.94
|
|
|
$
|
1.62
|
|
|
$
|
2.91
|
|
|
$
|
2.35
|
|
|
$
|
2.06
|
|
|
$
|
(0.01
|
)
|
Net income (loss) per weighted average share, diluted, for Classes A and B
|
$
|
5.85
|
|
|
$
|
1.59
|
|
|
$
|
2.87
|
|
|
$
|
2.34
|
|
|
$
|
2.04
|
|
|
$
|
(0.01
|
)
|
Weighted average shares, basic, for Classes A and B
|
407,766
|
|
|
406,738
|
|
|
420,520
|
|
|
424,003
|
|
|
430,355
|
|
|
408,625
|
|
||||||
Weighted average shares, diluted, for Classes A and B
|
414,267
|
|
|
413,368
|
|
|
423,994
|
|
|
426,547
|
|
|
434,513
|
|
|
408,625
|
|
||||||
Cash Flow Data:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net cash provided by operating activities
|
$
|
3,663
|
|
|
$
|
3,218
|
|
|
$
|
2,379
|
|
|
$
|
1,898
|
|
|
$
|
2,184
|
|
|
$
|
361
|
|
|
February 1,
|
|
February 2,
|
|
February 3,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
||||||||||||
|
2019
|
|
2018
(1)
|
|
2017
(1)
|
|
2016
(1)
|
|
2015
(1)
|
|
2014
|
||||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash, cash equivalents and short-term investments
(3)
|
$
|
2,849
|
|
|
$
|
11,653
|
|
|
$
|
8,393
|
|
|
$
|
7,985
|
|
|
$
|
7,509
|
|
|
$
|
7,075
|
|
Working capital
(3)(4)
|
(45
|
)
|
|
9,026
|
|
|
5,908
|
|
|
6,114
|
|
|
5,581
|
|
|
4,886
|
|
||||||
Total assets
|
14,662
|
|
|
21,206
|
|
|
16,837
|
|
|
17,090
|
|
|
16,130
|
|
|
15,216
|
|
||||||
Total unearned revenue
|
6,978
|
|
|
5,839
|
|
|
4,885
|
|
|
5,168
|
|
|
4,634
|
|
|
4,833
|
|
||||||
Long-term obligations
(5)(6)
|
4,242
|
|
|
4,234
|
|
|
1,500
|
|
|
1,500
|
|
|
1,500
|
|
|
1,500
|
|
||||||
Total stockholders’ equity
|
551
|
|
|
8,624
|
|
|
8,975
|
|
|
8,853
|
|
|
8,642
|
|
|
7,586
|
|
(1)
|
Amounts reflect the impact of our retrospective adoption of Accounting Standards Codification 606, Revenue from Contracts with Customers (“Topic 606”).
|
(2)
|
Amounts reflect the impact of our retrospective adoption of Accounting Standards Update (“ASU”) 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash.
|
(3)
|
On July 1, 2018, VMware’s board of directors declared a conditional
$11 billion
Special Dividend, payable pro-rata to VMware stockholders as of the record date. The Special Dividend was paid on December 28, 2018 to stockholders of record as of the close of business on December 27, 2018 in the amount of
$26.81
per outstanding share of VMware common stock. Refer to Note P to the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for further information.
|
(4)
|
Working capital as of February 1, 2019 was impacted by a decrease in cash, cash equivalents and short-term investments and an increase in the current portion of unearned revenue when compared to February 2, 2018.
|
(5)
|
On January 21, 2014, in connection with our agreement to acquire A.W.S. Holding, LLC, the sole member and equity holder of AirWatch LLC, we entered into a note exchange agreement with Dell Technologies Inc. (“Dell”) (formerly EMC) providing for the issuance of three
|
(6)
|
On August 21, 2017, we issued three series of unsecured senior notes pursuant to a public debt offering in an aggregate principal amount of $4,000 million, which consisted of outstanding principal due on the following dates: $1,250 million due August 21, 2020, $1,500 million due August 21, 2022 and $1,250 million due August 21, 2027. Upon closing, a portion of the net proceeds from the offering was used to repay two of the notes payable to Dell due May 1, 2018 and May 1, 2020 in the aggregate principal amount of $1,230 million. Refer to Note H to the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for further information.
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
For the Year Ended
|
|
Fiscal Year
|
|
Fiscal Year
|
||||||||||||||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
|
2019 vs. 2018
|
|
2018 vs. 2016
|
||||||||||||||||
|
2019
|
|
2018
(1)
|
|
2016
(1)
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
License
|
$
|
3,788
|
|
|
$
|
3,200
|
|
|
$
|
2,799
|
|
|
$
|
588
|
|
|
18
|
%
|
|
$
|
401
|
|
|
14
|
%
|
Services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Software maintenance
|
4,506
|
|
|
4,032
|
|
|
3,722
|
|
|
474
|
|
|
12
|
|
|
310
|
|
|
8
|
|
|||||
Professional services
|
680
|
|
|
630
|
|
|
552
|
|
|
49
|
|
|
8
|
|
|
78
|
|
|
14
|
|
|||||
Total services
|
5,186
|
|
|
4,662
|
|
|
4,274
|
|
|
523
|
|
|
11
|
|
|
388
|
|
|
9
|
|
|||||
Total revenue
|
$
|
8,974
|
|
|
$
|
7,862
|
|
|
$
|
7,073
|
|
|
$
|
1,112
|
|
|
14
|
|
|
$
|
789
|
|
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United States
|
$
|
4,205
|
|
|
$
|
3,834
|
|
|
$
|
3,538
|
|
|
$
|
371
|
|
|
10
|
%
|
|
$
|
296
|
|
|
8
|
%
|
International
|
4,769
|
|
|
4,028
|
|
|
3,535
|
|
|
741
|
|
|
18
|
|
|
493
|
|
|
14
|
|
|||||
Total revenue
|
$
|
8,974
|
|
|
$
|
7,862
|
|
|
$
|
7,073
|
|
|
$
|
1,112
|
|
|
14
|
|
|
$
|
789
|
|
|
11
|
|
|
February 1,
|
|
February 2,
|
||||
|
2019
|
|
2018
(1)
|
||||
Unearned license revenue
|
$
|
255
|
|
|
$
|
184
|
|
Unearned software maintenance revenue
|
5,972
|
|
|
5,082
|
|
||
Unearned professional services revenue
|
751
|
|
|
573
|
|
||
Total unearned revenue
|
$
|
6,978
|
|
|
$
|
5,839
|
|
|
For the Year Ended
|
|
Fiscal Year
|
|
Fiscal Year
|
||||||||||||||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
|
2019 vs. 2018
|
|
2018 vs. 2016
|
||||||||||||||||
|
2019
|
|
2018
|
|
2016
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
Cost of license revenue
|
$
|
190
|
|
|
$
|
155
|
|
|
$
|
157
|
|
|
$
|
35
|
|
|
23
|
%
|
|
$
|
(2
|
)
|
|
(1
|
)%
|
Stock-based compensation
|
1
|
|
|
2
|
|
|
2
|
|
|
(1
|
)
|
|
(50
|
)
|
|
—
|
|
|
(21
|
)
|
|||||
Total expenses
|
$
|
191
|
|
|
$
|
157
|
|
|
$
|
159
|
|
|
$
|
34
|
|
|
22
|
|
|
$
|
(2
|
)
|
|
(1
|
)
|
% of License revenue
|
5
|
%
|
|
5
|
%
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
For the Year Ended
|
|
Fiscal Year
|
|
Fiscal Year
|
||||||||||||||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
|
2019 vs. 2018
|
|
2018 vs. 2016
|
||||||||||||||||
|
2019
|
|
2018
|
|
2016
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
Cost of services revenue
|
$
|
1,016
|
|
|
$
|
934
|
|
|
$
|
842
|
|
|
$
|
83
|
|
|
9
|
%
|
|
$
|
91
|
|
|
11
|
%
|
Stock-based compensation
|
51
|
|
|
50
|
|
|
52
|
|
|
1
|
|
|
1
|
|
|
(1
|
)
|
|
(2
|
)
|
|||||
Total expenses
|
$
|
1,067
|
|
|
$
|
984
|
|
|
$
|
894
|
|
|
$
|
83
|
|
|
8
|
|
|
$
|
90
|
|
|
10
|
|
% of Services revenue
|
21
|
%
|
|
21
|
%
|
|
21
|
%
|
|
|
|
|
|
|
|
|
|
For the Year Ended
|
|
Fiscal Year
|
|
Fiscal Year
|
||||||||||||||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
|
2019 vs. 2018
|
|
2018 vs. 2016
|
||||||||||||||||
|
2019
|
|
2018
|
|
2016
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
Research and development
|
$
|
1,604
|
|
|
$
|
1,400
|
|
|
$
|
1,198
|
|
|
$
|
204
|
|
|
15
|
%
|
|
$
|
203
|
|
|
17
|
%
|
Stock-based compensation
|
371
|
|
|
355
|
|
|
305
|
|
|
16
|
|
|
5
|
|
|
49
|
|
|
16
|
|
|||||
Total expenses
|
$
|
1,975
|
|
|
$
|
1,755
|
|
|
$
|
1,503
|
|
|
$
|
220
|
|
|
13
|
|
|
$
|
252
|
|
|
17
|
|
% of Total revenue
|
22
|
%
|
|
22
|
%
|
|
21
|
%
|
|
|
|
|
|
|
|
|
|
For the Year Ended
|
|
Fiscal Year
|
|
Fiscal Year
|
||||||||||||||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
|
2019 vs. 2018
|
|
2018 vs. 2016
|
||||||||||||||||
|
2019
|
|
2018
(1)
|
|
2016
(1)
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
Sales and marketing
|
$
|
2,715
|
|
|
$
|
2,309
|
|
|
$
|
2,112
|
|
|
$
|
404
|
|
|
17
|
%
|
|
$
|
199
|
|
|
9
|
%
|
Stock-based compensation
|
203
|
|
|
197
|
|
|
195
|
|
|
7
|
|
|
3
|
|
|
1
|
|
|
1
|
|
|||||
Total expenses
|
$
|
2,918
|
|
|
$
|
2,506
|
|
|
$
|
2,307
|
|
|
$
|
410
|
|
|
16
|
|
|
$
|
201
|
|
|
9
|
|
% of Total revenue
|
33
|
%
|
|
32
|
%
|
|
33
|
%
|
|
|
|
|
|
|
|
|
|
For the Year Ended
|
|
Fiscal Year
|
|
Fiscal Year
|
||||||||||||||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
|
2019 vs. 2018
|
|
2018 vs. 2016
|
||||||||||||||||
|
2019
|
|
2018
|
|
2016
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
General and administrative
|
$
|
659
|
|
|
$
|
575
|
|
|
$
|
607
|
|
|
$
|
85
|
|
|
15
|
%
|
|
$
|
(32
|
)
|
|
(5
|
)%
|
Stock-based compensation
|
105
|
|
|
79
|
|
|
82
|
|
|
25
|
|
|
32
|
|
|
(2
|
)
|
|
(3
|
)
|
|||||
Total expenses
|
$
|
764
|
|
|
$
|
654
|
|
|
$
|
689
|
|
|
$
|
110
|
|
|
17
|
|
|
$
|
(35
|
)
|
|
(5
|
)
|
% of Total revenue
|
9
|
%
|
|
8
|
%
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
For the Year Ended
|
|
Fiscal Year
|
|
Fiscal Year
|
||||||||||||||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
|
2019 vs. 2018
|
|
2018 vs. 2016
|
||||||||||||||||
|
2019
|
|
2018
(1)
|
|
2016
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
Realignment and loss on disposition
|
$
|
9
|
|
|
$
|
104
|
|
|
$
|
52
|
|
|
$
|
(95
|
)
|
|
(91
|
)%
|
|
$
|
52
|
|
|
99
|
%
|
% of Total revenue
|
—
|
%
|
|
1
|
%
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
For the Year Ended
|
|
Fiscal Year
|
|
Fiscal Year
|
||||||||||||||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
|
2019 vs. 2018
|
|
2018 vs. 2016
|
||||||||||||||||
|
2019
|
|
2018
|
|
2016
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
Investment income
|
$
|
161
|
|
|
$
|
120
|
|
|
$
|
77
|
|
|
$
|
41
|
|
|
35
|
%
|
|
$
|
42
|
|
|
55
|
%
|
% of Total revenue
|
2
|
%
|
|
2
|
%
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
For the Year Ended
|
|
Fiscal Year
|
|
Fiscal Year
|
||||||||||||||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
|
2019 vs. 2018
|
|
2018 vs. 2016
|
||||||||||||||||
|
2019
|
|
2018
|
|
2016
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
Interest expense
|
$
|
134
|
|
|
$
|
74
|
|
|
$
|
26
|
|
|
$
|
60
|
|
|
80
|
%
|
|
$
|
48
|
|
|
183
|
%
|
% of Total revenue
|
1
|
%
|
|
1
|
%
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
For the Year Ended
|
|
Fiscal Year
|
|
Fiscal Year
|
||||||||||||||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
|
2019 vs. 2018
|
|
2018 vs. 2016
|
||||||||||||||||
|
2019
|
|
2018
|
|
2016
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
Other income (expense), net
|
$
|
806
|
|
|
$
|
66
|
|
|
$
|
(17
|
)
|
|
$
|
739
|
|
|
1,110
|
%
|
|
$
|
84
|
|
|
479
|
%
|
% of Total revenue
|
9
|
%
|
|
1
|
%
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
Transition Period
|
|
Comparable Period
|
||||
|
January 1 to
|
|
January 1 to
|
||||
|
February 3,
|
|
January 31,
|
||||
|
2017
|
|
2016
|
||||
Total revenue
|
$
|
512
|
|
|
$
|
469
|
|
Operating income (loss)
|
(42
|
)
|
|
25
|
|
||
Income tax provision (benefit)
|
(30
|
)
|
|
5
|
|
||
Net income (loss)
|
(5
|
)
|
|
24
|
|
•
|
Pursuant to original equipment manufacturer (“OEM”) and reseller arrangements, Dell integrates or bundles our products and services with Dell’s products and sells them to end users. Dell also acts as a distributor, purchasing our standalone products and services for resale to end-user customers through VMware-authorized resellers. Revenue under these arrangements is presented net of related marketing development funds and rebates paid to Dell. In addition, we provide professional services to end users based upon contractual agreements with Dell.
|
•
|
Dell purchases products and services from us for its internal use.
|
•
|
Pursuant to an ongoing distribution agreement, we act as the selling agent for certain products and services of Pivotal, a subsidiary of Dell, in exchange for an agency fee. Under this agreement, cash is collected from the end user by us and remitted to Pivotal, net of the contractual agency fee.
|
•
|
From time to time, VMware and Dell enter into agreements to collaborate on technology projects, and Dell pays VMware for services or reimburses VMware for costs incurred by VMware, in connection with such projects.
|
|
Revenue and Receipts
|
|
|
||||||||||||||||||||
|
|
|
Transition Period
|
|
Unearned Revenue
|
||||||||||||||||||
|
For the Year Ended
|
|
January 1 to
|
|
As of
|
||||||||||||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
|
February 3,
|
|
February 1,
|
|
February 2,
|
||||||||||||
|
2019
|
|
2018
(1)
|
|
2016
(1)
|
|
2017
(1)
|
|
2019
|
|
2018
(1)
|
||||||||||||
Reseller revenue
|
$
|
2,180
|
|
|
$
|
1,315
|
|
|
$
|
612
|
|
|
$
|
44
|
|
|
$
|
2,375
|
|
|
$
|
1,236
|
|
Internal-use revenue
|
22
|
|
|
34
|
|
|
28
|
|
|
7
|
|
|
13
|
|
|
12
|
|
||||||
Agency fee revenue
|
5
|
|
|
2
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Collaborative technology project receipts
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
n/a
|
|
|
n/a
|
|
•
|
We purchase and lease products and purchase services from Dell.
|
•
|
From time to time, we and Dell enter into agreements to collaborate on technology projects, and we pay Dell for services provided to us by Dell related to such projects.
|
•
|
In certain geographic regions where we do not have an established legal entity, we contract with Dell subsidiaries for support services and support from Dell personnel who are managed by us. The costs incurred by Dell on our behalf related to these employees are charged to us with a mark-up intended to approximate costs that would have been incurred had we contracted for such services with an unrelated third party. These costs are included as expenses on our consolidated statements of income (loss) and primarily include salaries, benefits, travel and occupancy expenses. Dell also incurs certain administrative costs on our behalf in the U.S. that are recorded as expenses on our consolidated statements of income (loss).
|
•
|
In certain geographic regions, Dell files a consolidated indirect tax return, which includes value added taxes and other indirect taxes collected by us from our customers. We remit the indirect taxes to Dell and Dell remits the tax payment to the foreign governments on our behalf.
|
•
|
From time to time, we invoice end users on behalf of Dell for certain services rendered by Dell. Cash related to these services is collected from the end user by us and remitted to Dell.
|
|
|
|
|
|
|
|
Transition Period
|
||||||||
|
For the Year Ended
|
|
January 1 to
|
||||||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
|
February 3,
|
||||||||
|
2019
|
|
2018
|
|
2016
|
|
2017
|
||||||||
Purchases and leases of products and purchases of services
(1)
|
$
|
198
|
|
|
$
|
142
|
|
|
$
|
97
|
|
|
$
|
14
|
|
Dell subsidiary support and administrative costs
|
106
|
|
|
123
|
|
|
105
|
|
|
13
|
|
|
February 1,
|
|
February 2,
|
||||
|
2019
|
|
2018
|
||||
Due from related parties
|
$
|
1,079
|
|
|
$
|
638
|
|
Due to related parties
|
142
|
|
|
106
|
|
||
Due from related parties, net
|
$
|
937
|
|
|
$
|
532
|
|
|
For the Year Ended
|
||
|
February 2,
|
||
|
2018
|
||
Aggregate purchase price
|
$
|
725
|
|
Class A common shares repurchased
(1)
|
7,572
|
|
|
Weighted-average price per share
|
$
|
95.75
|
|
|
February 1,
|
|
February 2,
|
||||
|
2019
|
|
2018
|
||||
Cash and cash equivalents
|
$
|
2,830
|
|
|
$
|
5,971
|
|
Short-term investments
|
19
|
|
|
5,682
|
|
||
Total cash, cash equivalents and short-term investments
|
$
|
2,849
|
|
|
$
|
11,653
|
|
|
|
|
|
|
|
|
Transition Period
|
||||||||
|
For the Year Ended
|
|
January 1 to
|
||||||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
|
February 3,
|
||||||||
|
2019
|
|
2018
(1)
|
|
2016
(1)
|
|
2017
(1)
|
||||||||
Net cash provided by (used in):
|
|
|
|
|
|
|
|
||||||||
Operating activities
|
$
|
3,663
|
|
|
$
|
3,218
|
|
|
$
|
2,379
|
|
|
$
|
361
|
|
Investing activities
|
4,447
|
|
|
(1,512
|
)
|
|
(463
|
)
|
|
7
|
|
||||
Financing activities
|
(11,219
|
)
|
|
1,058
|
|
|
(1,619
|
)
|
|
62
|
|
||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
$
|
(3,109
|
)
|
|
$
|
2,764
|
|
|
$
|
297
|
|
|
$
|
430
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
Total
|
|
Less than 1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5 years
|
||||||||||
Senior Notes
(1)
|
$
|
4,674
|
|
|
$
|
122
|
|
|
$
|
1,465
|
|
|
$
|
1,642
|
|
|
$
|
1,445
|
|
Note payable to Dell
(2)
|
288
|
|
|
5
|
|
|
9
|
|
|
274
|
|
|
—
|
|
|||||
Operating leases
(3)
|
870
|
|
|
109
|
|
|
143
|
|
|
95
|
|
|
523
|
|
|||||
Purchase obligations
|
339
|
|
|
143
|
|
|
188
|
|
|
8
|
|
|
—
|
|
|||||
Tax obligations
(4)
|
671
|
|
|
57
|
|
|
117
|
|
|
168
|
|
|
329
|
|
|||||
Other contractual commitments
(5)
|
23
|
|
|
5
|
|
|
8
|
|
|
6
|
|
|
4
|
|
|||||
Sub-Total
|
6,865
|
|
|
441
|
|
|
1,930
|
|
|
2,193
|
|
|
2,301
|
|
|||||
Uncertain tax positions
(6)
|
382
|
|
|
|
|
|
|
|
|
|
|||||||||
Total
|
$
|
7,247
|
|
|
|
|
|
|
|
|
|
(1)
|
Consists of principal and interest payments on the Senior Notes. Refer to “Liquidity and Capital Resources” for a discussion of the public debt offering we issued on August 21, 2017 in the aggregate principal amount of $4,000 million.
|
(2)
|
Consists of principal and interest payments on the outstanding note payable to Dell. Refer to “Liquidity and Capital Resources” for a discussion of the $270 million note payable we entered into with Dell per the note exchange agreement from January 21, 2014.
|
(3)
|
Our operating leases are primarily for facility space and land. Amounts in the table above exclude legally binding minimum lease payments for leases signed but not yet commenced of $164 million, as well as expected sublease income.
|
(4)
|
Consists of future cash payments related to the Transition Tax.
|
(5)
|
Consists of various contractual agreements, which include commitments on the lease for our Washington data center facility and asset retirement obligations.
|
(6)
|
As of
February 1, 2019
, we had
$382 million
of gross uncertain tax benefits, excluding interest and penalties. The timing of future payments relating to these obligations is highly uncertain. Based on the timing and outcome of examinations of our subsidiaries, the result of the expiration of statutes of limitations for specific jurisdictions or the timing and result of ruling requests from taxing authorities, it is reasonably possible that within the next 12 months total unrecognized tax benefits could be potentially reduced by approximately
$84 million
.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
|
|
Transition Period
|
||||||||||||
|
For the Year Ended
|
|
January 1 to
|
||||||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
|
February 3,
|
||||||||
|
2019
|
|
2018
(1)
|
|
2016
(1)
|
|
2017
(1)
|
||||||||
Net income (loss)
|
$
|
2,422
|
|
|
$
|
659
|
|
|
$
|
1,223
|
|
|
$
|
(5
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Changes in market value of available-for-sale securities:
|
|
|
|
|
|
|
|
||||||||
Unrealized gains (losses), net of tax provision (benefit) of $—, ($5), ($4) and $1
|
—
|
|
|
(12
|
)
|
|
(6
|
)
|
|
2
|
|
||||
Reclassification of (gains) losses realized during the period, net of tax (provision) benefit of $10, $2, $3 and $—
|
31
|
|
|
3
|
|
|
5
|
|
|
—
|
|
||||
Net change in market value of available-for-sale securities
|
31
|
|
|
(9
|
)
|
|
(1
|
)
|
|
2
|
|
||||
Changes in market value of effective foreign currency forward contracts:
|
|
|
|
|
|
|
|
||||||||
Unrealized gains (losses), net of tax provision (benefit) of $— for all periods
|
2
|
|
|
1
|
|
|
1
|
|
|
3
|
|
||||
Reclassification of (gains) losses realized during the period, net of tax (provision) benefit of $— for all periods
|
(1
|
)
|
|
(3
|
)
|
|
(1
|
)
|
|
—
|
|
||||
Net change in market value of effective foreign currency forward contracts
|
1
|
|
|
(2
|
)
|
|
—
|
|
|
3
|
|
||||
Total other comprehensive income (loss)
|
32
|
|
|
(11
|
)
|
|
(1
|
)
|
|
5
|
|
||||
Total comprehensive income, net of taxes
|
$
|
2,454
|
|
|
$
|
648
|
|
|
$
|
1,222
|
|
|
$
|
—
|
|
__________
|
|
|
|
|
|
|
|
||||||||
(1)
Adjusted to reflect the retrospective adoption of Topic 606.
|
|
|
|
February 1,
|
|
February 2,
|
||||
|
2019
|
|
2018
(1)
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,830
|
|
|
$
|
5,971
|
|
Short-term investments
|
19
|
|
|
5,682
|
|
||
Accounts receivable, net of allowance for doubtful accounts of $2 and $2
|
1,576
|
|
|
1,394
|
|
||
Due from related parties, net
|
937
|
|
|
532
|
|
||
Other current assets
|
289
|
|
|
257
|
|
||
Total current assets
|
5,651
|
|
|
13,836
|
|
||
Property and equipment, net
|
1,133
|
|
|
1,074
|
|
||
Other assets
|
1,853
|
|
|
924
|
|
||
Deferred tax assets
|
103
|
|
|
227
|
|
||
Intangible assets, net
|
541
|
|
|
548
|
|
||
Goodwill
|
5,381
|
|
|
4,597
|
|
||
Total assets
|
$
|
14,662
|
|
|
$
|
21,206
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
135
|
|
|
$
|
15
|
|
Accrued expenses and other
|
1,593
|
|
|
1,357
|
|
||
Unearned revenue
|
3,968
|
|
|
3,438
|
|
||
Total current liabilities
|
5,696
|
|
|
4,810
|
|
||
Notes payable to Dell
|
270
|
|
|
270
|
|
||
Long-term debt
|
3,972
|
|
|
3,964
|
|
||
Unearned revenue
|
3,010
|
|
|
2,401
|
|
||
Income tax payable
|
889
|
|
|
954
|
|
||
Other liabilities
|
274
|
|
|
183
|
|
||
Total liabilities
|
14,111
|
|
|
12,582
|
|
||
Contingencies (refer to Note L)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Class A common stock, par value $0.01; authorized 2,500,000 shares; issued and outstanding 110,715 and 103,776 shares
|
1
|
|
|
1
|
|
||
Class B convertible common stock, par value $0.01; authorized 1,000,000 shares; issued and outstanding 300,000 shares
|
3
|
|
|
3
|
|
||
Additional paid-in capital
|
531
|
|
|
844
|
|
||
Accumulated other comprehensive income (loss)
|
2
|
|
|
(15
|
)
|
||
Retained earnings
|
14
|
|
|
7,791
|
|
||
Total stockholders’ equity
|
551
|
|
|
8,624
|
|
||
Total liabilities and stockholders’ equity
|
$
|
14,662
|
|
|
$
|
21,206
|
|
__________
|
|
|
|
||||
(1)
Adjusted to reflect the retrospective adoption of Topic 606.
|
|
|
|
|
|
Transition Period
|
||||||||||
|
For the Year Ended
|
|
January 1 to
|
||||||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
|
February 3,
|
||||||||
|
2019
|
|
2018
(1)
|
|
2016
(1)
|
|
2017
(1)
|
||||||||
Operating activities:
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
2,422
|
|
|
$
|
659
|
|
|
$
|
1,223
|
|
|
$
|
(5
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
630
|
|
|
565
|
|
|
542
|
|
|
46
|
|
||||
Stock-based compensation
|
731
|
|
|
683
|
|
|
636
|
|
|
62
|
|
||||
Excess tax benefits from stock-based compensation
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
(5
|
)
|
||||
Deferred income taxes, net
|
113
|
|
|
310
|
|
|
(15
|
)
|
|
(258
|
)
|
||||
Unrealized (gain) loss on equity securities, net
|
(799
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Loss on disposition
|
7
|
|
|
95
|
|
|
—
|
|
|
—
|
|
||||
(Gain) loss on disposition of assets, revaluation and impairment, net
|
6
|
|
|
(45
|
)
|
|
30
|
|
|
—
|
|
||||
Gain on extinguishment of debt
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
||||
(Gain) loss on Dell stock purchase
|
—
|
|
|
2
|
|
|
(8
|
)
|
|
(1
|
)
|
||||
Other
|
7
|
|
|
3
|
|
|
(2
|
)
|
|
—
|
|
||||
Changes in assets and liabilities, net of acquisitions:
|
|
|
|
|
|
|
|
||||||||
Accounts receivable
|
(178
|
)
|
|
(102
|
)
|
|
(216
|
)
|
|
651
|
|
||||
Other current assets and other assets
|
(350
|
)
|
|
(446
|
)
|
|
(475
|
)
|
|
197
|
|
||||
Due to/from related parties, net
|
(405
|
)
|
|
(440
|
)
|
|
(54
|
)
|
|
39
|
|
||||
Accounts payable
|
104
|
|
|
(35
|
)
|
|
(9
|
)
|
|
(68
|
)
|
||||
Accrued expenses and other liabilities
|
281
|
|
|
330
|
|
|
223
|
|
|
(52
|
)
|
||||
Income taxes payable
|
(40
|
)
|
|
660
|
|
|
(15
|
)
|
|
38
|
|
||||
Unearned revenue
|
1,134
|
|
|
985
|
|
|
534
|
|
|
(283
|
)
|
||||
Net cash provided by operating activities
|
3,663
|
|
|
3,218
|
|
|
2,379
|
|
|
361
|
|
||||
Investing activities:
|
|
|
|
|
|
|
|
||||||||
Additions to property and equipment
|
(245
|
)
|
|
(263
|
)
|
|
(153
|
)
|
|
(18
|
)
|
||||
Purchases of available-for-sale securities
|
(780
|
)
|
|
(4,269
|
)
|
|
(3,725
|
)
|
|
(38
|
)
|
||||
Sales of available-for-sale securities
|
3,999
|
|
|
2,195
|
|
|
2,227
|
|
|
43
|
|
||||
Maturities of available-for-sale securities
|
2,393
|
|
|
1,573
|
|
|
1,307
|
|
|
20
|
|
||||
Purchases of strategic investments
|
(8
|
)
|
|
(37
|
)
|
|
(49
|
)
|
|
—
|
|
||||
Proceeds from disposition of assets
|
38
|
|
|
13
|
|
|
4
|
|
|
—
|
|
||||
Business combinations, net of cash acquired, and purchases of intangible assets
|
(938
|
)
|
|
(671
|
)
|
|
(74
|
)
|
|
—
|
|
||||
Net cash paid on disposition of a business
|
(12
|
)
|
|
(53
|
)
|
|
—
|
|
|
—
|
|
||||
Net cash provided by (used in) investing activities
|
4,447
|
|
|
(1,512
|
)
|
|
(463
|
)
|
|
7
|
|
||||
Financing activities:
|
|
|
|
|
|
|
|
||||||||
Proceeds from issuance of common stock
|
188
|
|
|
122
|
|
|
109
|
|
|
61
|
|
||||
Net proceeds from issuance of long-term debt
|
—
|
|
|
3,961
|
|
|
—
|
|
|
—
|
|
||||
Repayment of notes payable to Dell
|
—
|
|
|
(1,225
|
)
|
|
—
|
|
|
—
|
|
||||
Payment to acquire non-controlling interests
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
||||
Repurchase of common stock
|
(42
|
)
|
|
(1,449
|
)
|
|
(1,575
|
)
|
|
—
|
|
||||
Excess tax benefits from stock-based compensation
|
—
|
|
|
—
|
|
|
15
|
|
|
5
|
|
||||
Shares repurchased for tax withholdings on vesting of restricted stock
|
(357
|
)
|
|
(351
|
)
|
|
(164
|
)
|
|
(4
|
)
|
||||
Payment for Special Dividend
|
(11,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Payment for common control transaction with Dell
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net cash provided by (used in) financing activities
|
(11,219
|
)
|
|
1,058
|
|
|
(1,619
|
)
|
|
62
|
|
||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
(3,109
|
)
|
|
2,764
|
|
|
297
|
|
|
430
|
|
||||
Cash, cash equivalents and restricted cash at beginning of the period
|
6,003
|
|
|
3,239
|
|
|
2,512
|
|
|
2,809
|
|
||||
Cash, cash equivalents and restricted cash at end of the period
|
$
|
2,894
|
|
|
$
|
6,003
|
|
|
$
|
2,809
|
|
|
$
|
3,239
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
|
||||||||
Cash paid for interest
|
$
|
129
|
|
|
$
|
21
|
|
|
$
|
29
|
|
|
$
|
—
|
|
Cash paid for taxes, net
|
398
|
|
|
177
|
|
|
467
|
|
|
3
|
|
||||
Non-cash items:
|
|
|
|
|
|
|
|
||||||||
Changes in capital additions, accrued but not paid
|
$
|
9
|
|
|
$
|
10
|
|
|
$
|
(7
|
)
|
|
$
|
(6
|
)
|
Changes in tax withholdings on vesting of restricted stock, accrued but not paid
|
17
|
|
|
(4
|
)
|
|
3
|
|
|
3
|
|
||||
__________
|
|
|
|
|
|
|
|
||||||||
(1)
Adjusted to reflect the retrospective adoption of Topic 606 and Accounting Standards Update (“ASU”) 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The adoption of Topic 606 had no impact to net cash provided by or used in operating, investing and financing activities.
|
|
Class A
Common Stock
|
|
Class B
Convertible
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
(1)
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Non-controlling Interests
|
|
Stockholders’
Equity
(1)
|
||||||||||||||||||||
Shares
|
|
Par Value
|
|
Shares
|
|
Par Value
|
|
||||||||||||||||||||||||||
Balance, January 1, 2016
|
122
|
|
|
$
|
1
|
|
|
300
|
|
|
$
|
3
|
|
|
$
|
2,728
|
|
|
$
|
5,914
|
|
|
$
|
(8
|
)
|
|
$
|
4
|
|
|
$
|
8,642
|
|
Proceeds from issuance of common stock
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
109
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
109
|
|
|||||||
Repurchase and retirement of common stock
|
(21
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,575
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,575
|
)
|
|||||||
Issuance of restricted stock, net of cancellations
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Shares withheld for tax withholdings on vesting of restricted stock
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(167
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(167
|
)
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
636
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
636
|
|
|||||||
Tax shortfall from stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
|||||||
Credit from tax sharing arrangement
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|||||||
Total other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||||
Activities with non-controlling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(5
|
)
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,223
|
|
|
—
|
|
|
—
|
|
|
1,223
|
|
|||||||
Balance, December 31, 2016
|
108
|
|
|
1
|
|
|
300
|
|
|
3
|
|
|
1,721
|
|
|
7,137
|
|
|
(9
|
)
|
|
—
|
|
|
8,853
|
|
|||||||
Proceeds from issuance of common stock
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61
|
|
|||||||
Shares withheld for tax withholdings on vesting of restricted stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
62
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
62
|
|
|||||||
Excess tax benefits from stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||||
Credit from tax sharing arrangement
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||||
Total other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||||||
Balance, February 3, 2017
|
110
|
|
|
1
|
|
|
300
|
|
|
3
|
|
|
1,843
|
|
|
7,132
|
|
|
(4
|
)
|
|
—
|
|
|
8,975
|
|
|||||||
Proceeds from issuance of common stock
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
122
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
122
|
|
|||||||
Issuance of stock-based awards in acquisition
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||||
Repurchase and retirement of common stock
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,456
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,456
|
)
|
|||||||
Issuance of restricted stock, net of cancellations
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Shares withheld for tax withholdings on vesting of restricted stock
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(348
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(348
|
)
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
683
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
683
|
|
|||||||
Amount due from tax sharing arrangement
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||||||
Total other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
(11
|
)
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
659
|
|
|
—
|
|
|
—
|
|
|
659
|
|
|||||||
Balance, February 2, 2018
|
104
|
|
|
1
|
|
|
300
|
|
|
3
|
|
|
844
|
|
|
7,791
|
|
|
(15
|
)
|
|
—
|
|
|
8,624
|
|
|||||||
Cumulative effect of adoption of new accounting pronouncements
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
(15
|
)
|
|
—
|
|
|
(30
|
)
|
|||||||
Proceeds from issuance of common stock
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
188
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
188
|
|
|||||||
Issuance of stock-based awards in acquisition
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||||
Repurchase and retirement of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42
|
)
|
|||||||
Issuance of restricted stock, net of cancellations
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Shares withheld for tax withholdings on vesting of restricted stock
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(373
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(373
|
)
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
731
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
731
|
|
|||||||
Credit from tax sharing arrangement
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||||
Total other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|
—
|
|
|
32
|
|
|||||||
Common control transaction with Dell
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|||||||
Special Dividend
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(822
|
)
|
|
(10,178
|
)
|
|
—
|
|
|
—
|
|
|
(11,000
|
)
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,422
|
|
|
—
|
|
|
—
|
|
|
2,422
|
|
|||||||
Balance, February 1, 2019
|
111
|
|
|
$
|
1
|
|
|
300
|
|
|
$
|
3
|
|
|
$
|
531
|
|
|
$
|
14
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
551
|
|
__________
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
(1)
Adjusted to reflect the retrospective adoption of Topic 606.
|
Buildings
|
|
Term of underlying land lease
|
Land improvements
|
|
15 years
|
Furniture and fixtures
|
|
7 years
|
Equipment
|
|
3 to 6 years
|
Software
|
|
3 to 8 years
|
Leasehold improvements
|
|
20 years, not to exceed the shorter of the estimated useful life or remaining lease term
|
|
For the Year Ended February 2, 2018
|
||||||||||
|
As Reported
|
|
Topic 606 Adjustments
|
|
As Adjusted
|
||||||
Selected Captions from the Consolidated Statements of Income (Loss)
|
|
|
|
|
|
||||||
Revenue:
|
|
|
|
|
|
||||||
License
|
$
|
3,195
|
|
|
$
|
5
|
|
|
$
|
3,200
|
|
Services
|
4,727
|
|
|
(65
|
)
|
|
4,662
|
|
|||
Total revenue
|
7,922
|
|
|
(60
|
)
|
|
7,862
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Sales and marketing
|
2,593
|
|
|
(87
|
)
|
|
2,506
|
|
|||
Realignment and loss on disposition
|
90
|
|
|
14
|
|
|
104
|
|
|||
Operating income
|
1,689
|
|
|
13
|
|
|
1,702
|
|
|||
Income before income tax
|
1,801
|
|
|
13
|
|
|
1,814
|
|
|||
Income tax provision
|
1,231
|
|
|
(76
|
)
|
|
1,155
|
|
|||
Net income
|
570
|
|
|
89
|
|
|
659
|
|
|
For the Year Ended December 31, 2016
|
||||||||||
|
As Reported
|
|
Topic 606 Adjustments
|
|
As Adjusted
|
||||||
Selected Captions from the Consolidated Statements of Income (Loss)
|
|
|
|
|
|
||||||
Revenue:
|
|
|
|
|
|
||||||
License
|
$
|
2,794
|
|
|
$
|
5
|
|
|
$
|
2,799
|
|
Services
|
4,299
|
|
|
(25
|
)
|
|
4,274
|
|
|||
Total revenue
|
7,093
|
|
|
(20
|
)
|
|
7,073
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Sales and marketing
|
2,357
|
|
|
(50
|
)
|
|
2,307
|
|
|||
Operating income
|
1,439
|
|
|
30
|
|
|
1,469
|
|
|||
Income before income tax
|
1,473
|
|
|
30
|
|
|
1,503
|
|
|||
Income tax provision
|
287
|
|
|
(7
|
)
|
|
280
|
|
|||
Net income
|
1,186
|
|
|
37
|
|
|
1,223
|
|
|
Transition Period
|
||||||||||
|
January 1 to February 3, 2017
|
||||||||||
|
As Reported
|
|
Topic 606 Adjustments
|
|
As Adjusted
|
||||||
Selected Captions from the Consolidated Statements of Income (Loss)
|
|
|
|
|
|
||||||
Revenue:
|
|
|
|
|
|
||||||
License
|
$
|
125
|
|
|
$
|
9
|
|
|
$
|
134
|
|
Services
|
371
|
|
|
7
|
|
|
378
|
|
|||
Total revenue
|
496
|
|
|
16
|
|
|
512
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Sales and marketing
|
231
|
|
|
17
|
|
|
248
|
|
|||
Operating income (loss)
|
(41
|
)
|
|
(1
|
)
|
|
(42
|
)
|
|||
Income (loss) before income tax
|
(34
|
)
|
|
(1
|
)
|
|
(35
|
)
|
|||
Income tax provision (benefit)
|
(26
|
)
|
|
(4
|
)
|
|
(30
|
)
|
|||
Net income (loss)
|
(8
|
)
|
|
3
|
|
|
(5
|
)
|
|
February 2, 2018
|
||||||||||
|
As Reported
|
|
Topic 606 Adjustments
|
|
As Adjusted
|
||||||
Selected Captions from the Consolidated Balance Sheets
|
|
|
|
|
|
||||||
Accounts receivable, net of allowance for doubtful accounts
|
$
|
1,312
|
|
|
$
|
82
|
|
|
$
|
1,394
|
|
Other current assets
|
237
|
|
|
20
|
|
|
257
|
|
|||
Total current assets
|
13,734
|
|
|
102
|
|
|
13,836
|
|
|||
Other assets
|
323
|
|
|
601
|
|
|
924
|
|
|||
Deferred tax assets
|
346
|
|
|
(119
|
)
|
|
227
|
|
|||
Total assets
|
20,622
|
|
|
584
|
|
|
21,206
|
|
|||
Accrued expenses and other
|
1,241
|
|
|
116
|
|
|
1,357
|
|
|||
Unearned revenue
|
3,777
|
|
|
(339
|
)
|
|
3,438
|
|
|||
Total current liabilities
|
5,033
|
|
|
(223
|
)
|
|
4,810
|
|
|||
Unearned revenue
|
2,473
|
|
|
(72
|
)
|
|
2,401
|
|
|||
Other liabilities
|
152
|
|
|
31
|
|
|
183
|
|
|||
Total liabilities
|
12,846
|
|
|
(264
|
)
|
|
12,582
|
|
|||
Retained earnings
|
6,943
|
|
|
848
|
|
|
7,791
|
|
|||
Total stockholders’ equity
|
7,776
|
|
|
848
|
|
|
8,624
|
|
|||
Total liabilities and stockholders’ equity
|
20,622
|
|
|
584
|
|
|
21,206
|
|
•
|
Pursuant to OEM and reseller arrangements, Dell integrates or bundles VMware’s products and services with Dell’s products and sells them to end users. Dell also acts as a distributor, purchasing VMware’s standalone products and services for resale to end-user customers through VMware-authorized resellers. Revenue under these arrangements is presented net of related marketing development funds and rebates paid to Dell. In addition, VMware provides professional services to end users based upon contractual agreements with Dell.
|
•
|
Dell purchases products and services from VMware for its internal use.
|
•
|
Pursuant to an ongoing distribution agreement, VMware acts as the selling agent for certain products and services of Pivotal Software, Inc. (“Pivotal”), a subsidiary of Dell, in exchange for an agency fee. Under this agreement, cash is collected from the end user by VMware and remitted to Pivotal, net of the contractual agency fee.
|
•
|
From time to time, VMware and Dell enter into agreements to collaborate on technology projects, and Dell pays VMware for services or reimburses VMware for costs incurred by VMware, in connection with such projects.
|
|
Revenue and Receipts
|
|
|
||||||||||||||||||||
|
|
|
Transition Period
|
|
Unearned Revenue
|
||||||||||||||||||
|
For the Year Ended
|
|
January 1 to
|
|
As of
|
||||||||||||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
|
February 3,
|
|
February 1,
|
|
February 2,
|
||||||||||||
|
2019
|
|
2018
|
|
2016
|
|
2017
|
|
2019
|
|
2018
|
||||||||||||
Reseller revenue
|
$
|
2,180
|
|
|
$
|
1,315
|
|
|
$
|
612
|
|
|
$
|
44
|
|
|
$
|
2,375
|
|
|
$
|
1,236
|
|
Internal-use revenue
|
22
|
|
|
34
|
|
|
28
|
|
|
7
|
|
|
13
|
|
|
12
|
|
||||||
Agency fee revenue
|
5
|
|
|
2
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Collaborative technology project receipts
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
n/a
|
|
|
n/a
|
|
•
|
VMware purchases and leases products and purchases services from Dell.
|
•
|
From time to time, VMware and Dell enter into agreements to collaborate on technology projects, and VMware pays Dell for services provided to VMware by Dell related to such projects.
|
•
|
In certain geographic regions where VMware does not have an established legal entity, VMware contracts with Dell subsidiaries for support services and support from Dell personnel who are managed by VMware. The costs incurred by Dell on VMware’s behalf related to these employees are charged to VMware with a mark-up intended to approximate costs that would have been incurred had VMware contracted for such services with an unrelated third party. These costs are included as expenses on VMware’s consolidated statements of income (loss) and primarily include salaries, benefits, travel and occupancy expenses. Dell also incurs certain administrative costs on VMware’s behalf in the U.S. that are recorded as expenses on VMware’s consolidated statements of income (loss).
|
•
|
In certain geographic regions, Dell files a consolidated indirect tax return, which includes value added taxes and other indirect taxes collected by VMware from its customers. VMware remits the indirect taxes to Dell and Dell remits the tax payment to the foreign governments on VMware’s behalf.
|
•
|
From time to time, VMware invoices end users on behalf of Dell for certain services rendered by Dell. Cash related to these services is collected from the end user by VMware and remitted to Dell.
|
|
|
|
|
|
|
|
Transition Period
|
||||||||
|
For the Year Ended
|
|
January 1 to
|
||||||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
|
February 3,
|
||||||||
|
2019
|
|
2018
|
|
2016
|
|
2017
|
||||||||
Purchases and leases of products and purchases of services
(1)
|
$
|
198
|
|
|
$
|
142
|
|
|
$
|
97
|
|
|
$
|
14
|
|
Dell subsidiary support and administrative costs
|
106
|
|
|
123
|
|
|
105
|
|
|
13
|
|
|
February 1,
|
|
February 2,
|
||||
|
2019
|
|
2018
|
||||
Due from related parties
|
$
|
1,079
|
|
|
$
|
638
|
|
Due to related parties
|
142
|
|
|
106
|
|
||
Due from related parties, net
|
$
|
937
|
|
|
$
|
532
|
|
|
For the Year Ended
|
||
|
February 2,
|
||
|
2018
|
||
Aggregate purchase price
|
$
|
725
|
|
Class A common shares repurchased
(1)
|
7,572
|
|
|
Weighted-average price per share
|
$
|
95.75
|
|
|
February 1,
|
|
February 2,
|
||||
|
2019
|
|
2018
|
||||
Balance, beginning of the year
|
$
|
548
|
|
|
$
|
507
|
|
Additions to intangible assets related to business combinations
|
154
|
|
|
178
|
|
||
Amortization expense
|
(161
|
)
|
|
(137
|
)
|
||
Balance, end of the year
|
$
|
541
|
|
|
$
|
548
|
|
|
February 1, 2019
|
||||||||||||
|
Weighted-Average Useful Lives
(in years) |
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Book Value
|
||||||
Purchased technology
|
6.3
|
|
$
|
781
|
|
|
$
|
(503
|
)
|
|
$
|
278
|
|
Leasehold interest
|
34.9
|
|
149
|
|
|
(33
|
)
|
|
116
|
|
|||
Customer relationships and customer lists
|
7.5
|
|
193
|
|
|
(96
|
)
|
|
97
|
|
|||
Trademarks and tradenames
|
7.9
|
|
86
|
|
|
(40
|
)
|
|
46
|
|
|||
Other
|
3.9
|
|
7
|
|
|
(3
|
)
|
|
4
|
|
|||
Total definite-lived intangible assets
|
|
|
$
|
1,216
|
|
|
$
|
(675
|
)
|
|
$
|
541
|
|
|
February 2, 2018
|
||||||||||||
|
Weighted-Average Useful Lives
(in years) |
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Book Value
|
||||||
Purchased technology
|
6.4
|
|
$
|
750
|
|
|
$
|
(466
|
)
|
|
$
|
284
|
|
Leasehold interest
|
34.9
|
|
149
|
|
|
(29
|
)
|
|
120
|
|
|||
Customer relationships and customer lists
|
7.8
|
|
177
|
|
|
(74
|
)
|
|
103
|
|
|||
Trademarks and tradenames
|
8.4
|
|
70
|
|
|
(31
|
)
|
|
39
|
|
|||
Other
|
5.7
|
|
5
|
|
|
(3
|
)
|
|
2
|
|
|||
Total definite-lived intangible assets
|
|
|
$
|
1,151
|
|
|
$
|
(603
|
)
|
|
$
|
548
|
|
2020
|
$
|
155
|
|
2021
|
97
|
|
|
2022
|
82
|
|
|
2023
|
59
|
|
|
2024
|
42
|
|
|
Thereafter
|
106
|
|
|
Total
|
$
|
541
|
|
|
February 1,
|
|
February 2,
|
||||
|
2019
|
|
2018
|
||||
Balance, beginning of the year
|
$
|
4,597
|
|
|
$
|
4,032
|
|
Increase in goodwill related to business combinations
|
784
|
|
|
565
|
|
||
Balance, end of the year
|
$
|
5,381
|
|
|
$
|
4,597
|
|
|
For the Year Ended December 31, 2016
|
||||||||||||||
|
Balance as of
January 1, 2016
|
|
Realignment
|
|
Utilization
|
|
Balance as of
December 31, 2016
|
||||||||
Severance-related costs
|
$
|
3
|
|
|
$
|
50
|
|
|
$
|
(52
|
)
|
|
$
|
1
|
|
Costs to exit facilities
|
—
|
|
|
2
|
|
|
(1
|
)
|
|
1
|
|
||||
Total
|
$
|
3
|
|
|
$
|
52
|
|
|
$
|
(53
|
)
|
|
$
|
2
|
|
|
|
|
|
|
|
|
Transition Period
|
||||||||
|
For the Year Ended
|
|
January 1 to
|
||||||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
|
February 3,
|
||||||||
|
2019
|
|
2018
|
|
2016
|
|
2017
|
||||||||
Net income (loss)
|
$
|
2,422
|
|
|
$
|
659
|
|
|
$
|
1,223
|
|
|
$
|
(5
|
)
|
Gain on stock purchase with Dell, net of tax
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
||||
Net income (loss), as adjusted
|
$
|
2,422
|
|
|
$
|
659
|
|
|
$
|
1,215
|
|
|
$
|
(5
|
)
|
Weighted-average shares, basic for Classes A and B
|
407,766
|
|
|
406,738
|
|
|
420,520
|
|
|
408,625
|
|
||||
Effect of stock purchase with Dell
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
||||
Effect of other dilutive securities
|
6,501
|
|
|
6,630
|
|
|
3,467
|
|
|
—
|
|
||||
Weighted-average shares, diluted for Classes A and B
|
414,267
|
|
|
413,368
|
|
|
423,994
|
|
|
408,625
|
|
||||
Net income (loss) per weighted-average share, basic for Classes A and B
|
$
|
5.94
|
|
|
$
|
1.62
|
|
|
$
|
2.91
|
|
|
$
|
(0.01
|
)
|
Net income (loss) per weighted-average share, diluted for Classes A and B
|
$
|
5.85
|
|
|
$
|
1.59
|
|
|
$
|
2.87
|
|
|
$
|
(0.01
|
)
|
|
|
|
|
|
|
|
Transition Period
|
||||
|
For the Year Ended
|
|
January 1 to
|
||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
|
February 3,
|
||||
|
2019
|
|
2018
|
|
2016
|
|
2017
|
||||
Anti-dilutive securities:
|
|
|
|
|
|
|
|
||||
Employee stock options
|
50
|
|
|
51
|
|
|
1,817
|
|
|
2,353
|
|
Restricted stock units
|
255
|
|
|
140
|
|
|
652
|
|
|
3,259
|
|
Total
|
305
|
|
|
191
|
|
|
2,469
|
|
|
5,612
|
|
|
February 1, 2019
|
||||||||||||||
|
Cost or Amortized Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Aggregate Fair Value
|
||||||||
Cash
|
$
|
461
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
461
|
|
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money-market funds
|
$
|
2,316
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,316
|
|
Demand deposits and time deposits
|
53
|
|
|
—
|
|
|
—
|
|
|
53
|
|
||||
Total cash equivalents
|
$
|
2,369
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,369
|
|
|
February 2, 2018
|
||||||||||||||
|
Cost or Amortized Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Aggregate Fair Value
|
||||||||
Cash
|
$
|
423
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
423
|
|
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money-market funds
|
$
|
5,460
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,460
|
|
U.S. and foreign corporate debt securities
|
88
|
|
|
—
|
|
|
—
|
|
|
88
|
|
||||
Total cash equivalents
|
$
|
5,548
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,548
|
|
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
U.S. Government and agency obligations
|
$
|
965
|
|
|
$
|
—
|
|
|
$
|
(8
|
)
|
|
$
|
957
|
|
U.S. and foreign corporate debt securities
|
4,503
|
|
|
1
|
|
|
(31
|
)
|
|
4,473
|
|
||||
Foreign governments and multi-national agency obligations
|
99
|
|
|
—
|
|
|
(1
|
)
|
|
98
|
|
||||
Mortgage-backed securities
|
123
|
|
|
—
|
|
|
(2
|
)
|
|
121
|
|
||||
Marketable available-for-sale equity securities
|
15
|
|
|
18
|
|
|
—
|
|
|
33
|
|
||||
Total short-term investments
|
$
|
5,705
|
|
|
$
|
19
|
|
|
$
|
(42
|
)
|
|
$
|
5,682
|
|
|
February 2, 2018
|
||||||
|
Fair Value
|
|
Unrealized
Losses |
||||
U.S. and foreign corporate debt securities
|
$
|
3,100
|
|
|
$
|
(22
|
)
|
|
February 1,
|
|
February 2,
|
||||
|
2019
|
|
2018
|
||||
Cash and cash equivalents
|
$
|
2,830
|
|
|
$
|
5,971
|
|
Restricted cash within other current assets
|
35
|
|
|
22
|
|
||
Restricted cash within other assets
|
29
|
|
|
10
|
|
||
Total cash, cash equivalents and restricted cash
|
$
|
2,894
|
|
|
$
|
6,003
|
|
|
February 1,
|
|
February 2,
|
|
Effective Interest Rate
|
||||
|
2019
|
|
2018
|
|
|||||
Long-term debt:
|
|
|
|
|
|
||||
2.30% Senior Note Due August 21, 2020
|
$
|
1,250
|
|
|
$
|
1,250
|
|
|
2.56%
|
2.95% Senior Note Due August 21, 2022
|
1,500
|
|
|
1,500
|
|
|
3.17%
|
||
3.90% Senior Note Due August 21, 2027
|
1,250
|
|
|
1,250
|
|
|
4.05%
|
||
Total principal amount
|
4,000
|
|
|
4,000
|
|
|
|
||
Less: unamortized discount
|
(7
|
)
|
|
(8
|
)
|
|
|
||
Less: unamortized debt issuance costs
|
(21
|
)
|
|
(28
|
)
|
|
|
||
Net carrying amount
|
$
|
3,972
|
|
|
$
|
3,964
|
|
|
|
•
|
Level 1 - Quoted prices in active markets for identical assets or liabilities;
|
•
|
Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are noted as being active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
|
•
|
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
|
February 1, 2019
|
||||||||||
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
Cash equivalents:
|
|
|
|
|
|
|
|||||
Money-market funds
|
$
|
2,316
|
|
|
$
|
—
|
|
|
$
|
2,316
|
|
Demand deposits and time deposits
|
—
|
|
|
53
|
|
|
53
|
|
|||
Total cash equivalents
|
$
|
2,316
|
|
|
$
|
53
|
|
|
$
|
2,369
|
|
Short-term investments:
|
|
|
|
|
|
||||||
Marketable equity securities
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
19
|
|
Total short-term investments
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
19
|
|
|
February 2, 2018
|
||||||||||
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
Cash equivalents:
|
|
|
|
|
|
||||||
Money-market funds
|
$
|
5,460
|
|
|
$
|
—
|
|
|
$
|
5,460
|
|
U.S. and foreign corporate debt securities
|
—
|
|
|
88
|
|
|
88
|
|
|||
Total cash equivalents
|
$
|
5,460
|
|
|
$
|
88
|
|
|
$
|
5,548
|
|
Short-term investments:
|
|
|
|
|
|
||||||
U.S. Government and agency obligations
|
$
|
684
|
|
|
$
|
273
|
|
|
$
|
957
|
|
U.S. and foreign corporate debt securities
|
—
|
|
|
4,473
|
|
|
4,473
|
|
|||
Foreign governments and multi-national agency obligations
|
—
|
|
|
98
|
|
|
98
|
|
|||
Mortgage-backed securities
|
—
|
|
|
121
|
|
|
121
|
|
|||
Marketable available-for-sale equity securities
|
33
|
|
|
—
|
|
|
33
|
|
|||
Total short-term investments
|
$
|
717
|
|
|
$
|
4,965
|
|
|
$
|
5,682
|
|
|
Nine Months Ended
|
||
|
November 2,
|
||
|
2018
|
||
Results of Operations Data:
|
|
||
Revenue
|
$
|
488
|
|
Gross profit
|
307
|
|
|
Loss from operations
|
(105
|
)
|
|
Net loss
|
(103
|
)
|
|
Net loss attributable to Pivotal
|
(103
|
)
|
|
November 2,
|
||
|
2018
|
||
Balance Sheet Data:
|
|
||
Current assets
|
$
|
880
|
|
Total assets
|
1,654
|
|
|
Current liabilities
|
331
|
|
|
Total liabilities
|
401
|
|
|
Non-controlling interest
|
1
|
|
|
February 1,
|
|
February 2,
|
||||
|
2019
|
|
2018
|
||||
Equipment and software
|
$
|
1,419
|
|
|
$
|
1,262
|
|
Buildings and improvements
|
951
|
|
|
824
|
|
||
Furniture and fixtures
|
109
|
|
|
101
|
|
||
Construction in progress
|
55
|
|
|
129
|
|
||
Total property and equipment
|
2,534
|
|
|
2,316
|
|
||
Accumulated depreciation
|
(1,401
|
)
|
|
(1,242
|
)
|
||
Total property and equipment, net
|
$
|
1,133
|
|
|
$
|
1,074
|
|
|
Future Lease Commitments
(1)
|
|
Purchase Obligations
|
|
Other Contractual Commitments
(2)
|
|
Total
|
||||||||
2020
|
$
|
109
|
|
|
$
|
143
|
|
|
$
|
5
|
|
|
$
|
257
|
|
2021
|
79
|
|
|
95
|
|
|
3
|
|
|
177
|
|
||||
2022
|
64
|
|
|
93
|
|
|
5
|
|
|
162
|
|
||||
2023
|
54
|
|
|
8
|
|
|
3
|
|
|
65
|
|
||||
2024
|
41
|
|
|
—
|
|
|
3
|
|
|
44
|
|
||||
Thereafter
|
523
|
|
|
—
|
|
|
4
|
|
|
527
|
|
||||
Total
|
$
|
870
|
|
|
$
|
339
|
|
|
$
|
23
|
|
|
$
|
1,232
|
|
(1)
|
Amounts in the table above exclude legally binding minimum lease payments for leases signed but not yet commenced of
$164 million
, as well as expected sublease income.
|
(2)
|
Consisting of various contractual agreements, which include commitments on the lease for VMware’s Washington data center facility and asset retirement obligations.
|
|
February 1,
|
|
February 2,
|
||||
|
2019
|
|
2018
|
||||
Accrued employee related expenses
|
$
|
732
|
|
|
$
|
634
|
|
Accrued partner liabilities
|
207
|
|
|
241
|
|
||
Customer Deposits
|
238
|
|
|
126
|
|
||
Other
|
416
|
|
|
356
|
|
||
Total
|
$
|
1,593
|
|
|
$
|
1,357
|
|
|
February 1,
|
|
February 2,
|
||||
|
2019
|
|
2018
|
||||
Unearned license revenue
|
$
|
255
|
|
|
$
|
184
|
|
Unearned software maintenance revenue
|
5,972
|
|
|
5,082
|
|
||
Unearned professional services revenue
|
751
|
|
|
573
|
|
||
Total unearned revenue
|
$
|
6,978
|
|
|
$
|
5,839
|
|
|
Three Months Ended
|
||||||||||||||
|
May 4,
|
|
August 3,
|
|
November 2,
|
|
February 1,
|
||||||||
|
2018
|
|
2018
|
|
2018
|
|
2019
|
||||||||
Balance, beginning of the period
|
$
|
5,839
|
|
|
$
|
5,756
|
|
|
$
|
6,030
|
|
|
$
|
6,201
|
|
Current period billings
|
1,210
|
|
|
1,507
|
|
|
1,464
|
|
|
2,094
|
|
||||
Revenue recognized from amounts previously classified as unearned revenue
(1)
|
(1,215
|
)
|
|
(1,233
|
)
|
|
(1,299
|
)
|
|
(1,317
|
)
|
||||
Other
|
(78
|
)
|
|
—
|
|
|
6
|
|
|
—
|
|
||||
Balance, end of the period
|
$
|
5,756
|
|
|
$
|
6,030
|
|
|
$
|
6,201
|
|
|
$
|
6,978
|
|
|
|
|
|
|
|
|
Transition Period
|
||||||||
|
For the Year Ended
|
|
January 1 to
|
||||||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
|
February 3,
|
||||||||
|
2019
|
|
2018
|
|
2016
|
|
2017
|
||||||||
Domestic
|
$
|
1,650
|
|
|
$
|
636
|
|
|
$
|
455
|
|
|
$
|
(60
|
)
|
Foreign
|
1,233
|
|
|
1,178
|
|
|
1,048
|
|
|
25
|
|
||||
Total income (loss) before income tax
|
$
|
2,883
|
|
|
$
|
1,814
|
|
|
$
|
1,503
|
|
|
$
|
(35
|
)
|
|
|
|
|
|
|
|
Transition Period
|
||||||||
|
For the Year Ended
|
|
January 1 to
|
||||||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
|
February 3,
|
||||||||
|
2019
|
|
2018
|
|
2016
|
|
2017
|
||||||||
Federal:
|
|
|
|
|
|
|
|
||||||||
Current
|
$
|
181
|
|
|
$
|
688
|
|
|
$
|
145
|
|
|
$
|
198
|
|
Deferred
|
103
|
|
|
281
|
|
|
(1
|
)
|
|
(225
|
)
|
||||
|
284
|
|
|
969
|
|
|
144
|
|
|
(27
|
)
|
||||
State:
|
|
|
|
|
|
|
|
||||||||
Current
|
31
|
|
|
8
|
|
|
22
|
|
|
25
|
|
||||
Deferred
|
18
|
|
|
22
|
|
|
(9
|
)
|
|
(32
|
)
|
||||
|
49
|
|
|
30
|
|
|
13
|
|
|
(7
|
)
|
||||
Foreign:
|
|
|
|
|
|
|
|
||||||||
Current
|
136
|
|
|
152
|
|
|
128
|
|
|
5
|
|
||||
Deferred
|
(8
|
)
|
|
4
|
|
|
(5
|
)
|
|
(1
|
)
|
||||
|
128
|
|
|
156
|
|
|
123
|
|
|
4
|
|
||||
Total provision (benefit) for income taxes
|
$
|
461
|
|
|
$
|
1,155
|
|
|
$
|
280
|
|
|
$
|
(30
|
)
|
|
|
|
|
|
|
|
Transition Period
|
||||
|
For the Year Ended
|
|
January 1 to
|
||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
|
February 3,
|
||||
|
2019
|
|
2018
|
|
2016
|
|
2017
|
||||
Statutory federal tax rate
(1)
|
21
|
%
|
|
34
|
%
|
|
35
|
%
|
|
35
|
%
|
State taxes, net of federal benefit
|
2
|
%
|
|
1
|
%
|
|
1
|
%
|
|
14
|
%
|
Tax rate differential for non-U.S. jurisdictions
|
(5
|
)%
|
|
(13
|
)%
|
|
(16
|
)%
|
|
9
|
%
|
U.S. tax credits
|
(7
|
)%
|
|
(4
|
)%
|
|
(3
|
)%
|
|
—
|
%
|
Excess tax benefits from stock-based compensation
(2)
|
(3
|
)%
|
|
(6
|
)%
|
|
—
|
%
|
|
—
|
%
|
Transition Tax due to 2017 Tax Act
(3)
|
—
|
%
|
|
44
|
%
|
|
—
|
%
|
|
—
|
%
|
Rate Change due to 2017 Tax Act
(3)
|
—
|
%
|
|
6
|
%
|
|
—
|
%
|
|
—
|
%
|
Permanent items
|
8
|
%
|
|
2
|
%
|
|
3
|
%
|
|
27
|
%
|
Other
|
—
|
%
|
|
—
|
%
|
|
(1
|
)%
|
|
2
|
%
|
Effective tax rate
|
16
|
%
|
|
64
|
%
|
|
19
|
%
|
|
87
|
%
|
(2)
|
VMware adopted ASU 2016-09 during the first quarter of fiscal 2018. As a result, net excess tax benefits recognized in connection with stock-based awards are included in the income tax provision on the consolidated statements of income (loss). Prior to adopting the updated standard, such amounts were recognized in additional paid-in capital on the Company’s consolidated balance sheets.
|
|
February 1,
|
|
February 2,
|
||||
2019
|
|
2018
|
|||||
Deferred tax assets:
|
|
|
|
||||
Accruals and other
|
$
|
78
|
|
|
$
|
48
|
|
Unearned revenue
|
287
|
|
|
187
|
|
||
Stock-based compensation
|
64
|
|
|
52
|
|
||
Tax credit and net operating loss carryforwards
|
273
|
|
|
254
|
|
||
Other assets, net
|
32
|
|
|
27
|
|
||
Basis difference on investment in business
|
—
|
|
|
13
|
|
||
Gross deferred tax assets
|
734
|
|
|
581
|
|
||
Valuation allowance
|
(229
|
)
|
|
(200
|
)
|
||
Total deferred tax assets
|
505
|
|
|
381
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Deferred commissions
|
(129
|
)
|
|
(115
|
)
|
||
Property, plant and equipment, net
|
(89
|
)
|
|
(67
|
)
|
||
Intangibles and other assets, net
|
(28
|
)
|
|
(4
|
)
|
||
Basis difference on investment in business
|
(187
|
)
|
|
—
|
|
||
Total deferred tax liabilities
|
(433
|
)
|
|
(186
|
)
|
||
Net deferred tax assets
|
$
|
72
|
|
|
$
|
195
|
|
|
|
|
|
|
|
|
Transition Period
|
||||||||
|
For the Year Ended
|
|
January 1 to
|
||||||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
|
February 3,
|
||||||||
|
2019
|
|
2018
|
|
2016
|
|
2017
|
||||||||
Payments from VMware to Dell, net
|
$
|
243
|
|
|
$
|
54
|
|
|
$
|
373
|
|
|
$
|
—
|
|
|
February 1,
|
|
February 2,
|
||||
|
2019
|
|
2018
|
||||
Income tax due to Dell
|
$
|
646
|
|
|
$
|
781
|
|
|
|
|
|
|
|
|
Transition Period
|
||||||||
|
For the Year Ended
|
|
January 1 to
|
||||||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
|
February 3,
|
||||||||
|
2019
|
|
2018
|
|
2016
|
|
2017
|
||||||||
Balance, beginning of the year/period
|
$
|
302
|
|
|
$
|
263
|
|
|
$
|
245
|
|
|
$
|
260
|
|
Tax positions related to current year/period:
|
|
|
|
|
|
|
|
||||||||
Additions
|
57
|
|
|
63
|
|
|
45
|
|
|
3
|
|
||||
Tax positions related to prior years/period:
|
|
|
|
|
|
|
|
||||||||
Additions
|
43
|
|
|
1
|
|
|
9
|
|
|
—
|
|
||||
Reductions
|
—
|
|
|
(2
|
)
|
|
(8
|
)
|
|
(1
|
)
|
||||
Settlements
|
(4
|
)
|
|
(9
|
)
|
|
(16
|
)
|
|
—
|
|
||||
Reductions resulting from a lapse of the statute of limitations
|
(8
|
)
|
|
(24
|
)
|
|
(14
|
)
|
|
—
|
|
||||
Foreign currency effects
|
(8
|
)
|
|
10
|
|
|
(1
|
)
|
|
1
|
|
||||
Balance, end of the year/period
|
$
|
382
|
|
|
$
|
302
|
|
|
$
|
260
|
|
|
$
|
263
|
|
Announcement Date
|
|
Amount Authorized
|
|
Expiration Date
|
|
Status
|
August 14, 2017
|
|
$1,000
|
|
August 31, 2019
|
|
Open
|
January 26, 2017
|
|
1,200
|
|
February 2, 2018
|
|
Completed in fiscal 2018
|
April 18, 2016
|
|
1,200
|
|
December 31, 2016
|
|
Completed in fiscal 2016
|
January 27, 2015
|
|
1,000
|
|
December 31, 2017
|
|
Completed in fiscal 2016
|
|
For the Year Ended
|
||||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
|
2016
|
||||||
Aggregate purchase price
(1)
|
$
|
42
|
|
|
$
|
1,449
|
|
|
$
|
1,575
|
|
Class A common shares repurchased
|
286
|
|
|
13,977
|
|
|
21,281
|
|
|||
Weighted-average price per share
|
$
|
148.07
|
|
|
$
|
103.66
|
|
|
$
|
73.99
|
|
|
Number of Units
|
|
Weighted-Average Grant Date Fair Value
(per unit)
|
|||
Outstanding, January 1, 2016
|
18,693
|
|
|
$
|
77.29
|
|
Granted
|
12,742
|
|
|
60.90
|
|
|
Vested
|
(7,188
|
)
|
|
77.18
|
|
|
Forfeited
|
(3,381
|
)
|
|
75.93
|
|
|
Outstanding, December 31, 2016
|
20,866
|
|
|
67.54
|
|
|
Vested
|
(256
|
)
|
|
77.07
|
|
|
Forfeited
|
(159
|
)
|
|
68.11
|
|
|
Outstanding, February 3, 2017
|
20,451
|
|
|
67.41
|
|
|
Granted
|
7,838
|
|
|
93.84
|
|
|
Vested
|
(9,070
|
)
|
|
67.89
|
|
|
Forfeited
|
(1,859
|
)
|
|
72.68
|
|
|
Outstanding, February 2, 2018
|
17,360
|
|
|
78.62
|
|
|
Granted
|
6,663
|
|
|
146.61
|
|
|
Special Dividend adjustment
|
3,236
|
|
|
n/a
|
|
|
Vested
|
(7,370
|
)
|
|
75.45
|
|
|
Forfeited
|
(1,674
|
)
|
|
86.90
|
|
|
Outstanding, February 1, 2019
(1)
|
18,215
|
|
|
90.06
|
|
(1)
|
The weighted-average grant date fair value of outstanding RSU awards as of
February 1, 2019
reflects the adjustments to the awards as a result of the Special Dividend.
|
|
Number of Units
|
|
Weighted-Average Remaining Contractual Term
(in years)
|
|
Aggregate Intrinsic Value
(1)
|
|||
Expected to vest
|
16,196
|
|
|
2.30
|
|
$
|
2,438
|
|
(1)
|
The aggregate intrinsic value represents the total pre-tax intrinsic values based on VMware's closing stock price of
$150.51
as of
February 1, 2019
, which would have been received by the RSU holders had the RSUs been issued as of
February 1, 2019
.
|
|
|
|
|
|
|
|
Transition Period
|
||||||||
|
For the Year Ended
|
|
January 1 to
|
||||||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
|
February 3,
|
||||||||
|
2019
|
|
2018
|
|
2016
|
|
2017
|
||||||||
Cash proceeds
|
$
|
161
|
|
|
$
|
65
|
|
|
$
|
103
|
|
|
$
|
60
|
|
Class A common shares purchased
|
1,895
|
|
|
903
|
|
|
2,657
|
|
|
1,468
|
|
||||
Weighted-average price per share
|
$
|
84.95
|
|
|
$
|
72.40
|
|
|
$
|
38.78
|
|
|
$
|
40.65
|
|
|
VMware Stock Options
|
|
EMC Stock Options
|
||||||||||
|
Number of Shares
|
|
Weighted-Average Exercise Price
(per share)
|
|
Number of Shares
|
|
Weighted-Average Exercise Price
(per share)
|
||||||
Outstanding, January 1, 2016
|
3,164
|
|
|
$
|
64.56
|
|
|
1,063
|
|
|
$
|
16.54
|
|
Options relating to employees transferred (to) from EMC
|
—
|
|
|
—
|
|
|
19
|
|
|
15.90
|
|
||
Granted
|
66
|
|
|
6.53
|
|
|
—
|
|
|
—
|
|
||
Forfeited
|
(259
|
)
|
|
77.42
|
|
|
—
|
|
|
—
|
|
||
Expired
|
(476
|
)
|
|
80.52
|
|
|
(17
|
)
|
|
14.44
|
|
||
Exercised
|
(418
|
)
|
|
13.41
|
|
|
(1,065
|
)
|
|
16.56
|
|
||
Outstanding, December 31, 2016
|
2,077
|
|
|
67.75
|
|
|
—
|
|
|
—
|
|
||
Forfeited
|
(9
|
)
|
|
79.45
|
|
|
—
|
|
|
—
|
|
||
Exercised
|
(77
|
)
|
|
23.72
|
|
|
—
|
|
|
—
|
|
||
Outstanding, February 3, 2017
|
1,991
|
|
|
69.38
|
|
|
—
|
|
|
—
|
|
||
Granted
|
745
|
|
|
13.79
|
|
|
—
|
|
|
—
|
|
||
Forfeited
|
(36
|
)
|
|
55.44
|
|
|
—
|
|
|
—
|
|
||
Expired
|
(3
|
)
|
|
93.87
|
|
|
—
|
|
|
—
|
|
||
Exercised
|
(1,050
|
)
|
|
53.50
|
|
|
—
|
|
|
—
|
|
||
Outstanding, February 2, 2018
|
1,647
|
|
|
54.63
|
|
|
—
|
|
|
—
|
|
||
Granted
|
574
|
|
|
16.07
|
|
|
—
|
|
|
—
|
|
||
Special Dividend adjustment
|
348
|
|
|
n/a
|
|
|
—
|
|
|
—
|
|
||
Forfeited
|
(31
|
)
|
|
24.44
|
|
|
—
|
|
|
—
|
|
||
Exercised
|
(569
|
)
|
|
46.73
|
|
|
—
|
|
|
—
|
|
||
Outstanding, February 1, 2019
(1)
|
1,969
|
|
|
36.50
|
|
|
—
|
|
|
—
|
|
(1)
|
The weighted-average exercise price of options outstanding as of
February 1, 2019
reflects the adjustments to the options as a result of the Special Dividend.
|
|
VMware Stock Options
|
|||||||||||
|
Outstanding Options
|
|
Weighted- Average Exercise Price
|
|
Weighted- Average Remaining Contractual Term
(in years)
|
|
Aggregate Intrinsic Value
(1)
|
|||||
Exercisable
|
1,084
|
|
|
$
|
55.49
|
|
|
3.15
|
|
$
|
103
|
|
Vested and expected to vest
|
1,969
|
|
|
36.50
|
|
|
5.55
|
|
224
|
|
(1)
|
The aggregate intrinsic values represent the total pre-tax intrinsic values based on VMware's closing stock price of
$150.51
as of
February 1, 2019
, which would have been received by the option holders had all in-the-money options been exercised as of that date.
|
|
|
|
|
|
|
|
Transition Period
|
||||||||
|
For the Year Ended
|
|
January 1 to
|
||||||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
|
February 3,
|
||||||||
|
2019
|
|
2018
|
|
2016
|
|
2017
|
||||||||
Cost of license revenue
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
—
|
|
Cost of services revenue
|
51
|
|
|
50
|
|
|
52
|
|
|
5
|
|
||||
Research and development
|
371
|
|
|
355
|
|
|
305
|
|
|
31
|
|
||||
Sales and marketing
|
203
|
|
|
197
|
|
|
195
|
|
|
19
|
|
||||
General and administrative
|
105
|
|
|
79
|
|
|
82
|
|
|
7
|
|
||||
Stock-based compensation
|
731
|
|
|
683
|
|
|
636
|
|
|
62
|
|
||||
Income tax benefit
|
(228
|
)
|
|
(232
|
)
|
|
(183
|
)
|
|
(19
|
)
|
||||
Total stock-based compensation, net of tax
|
$
|
503
|
|
|
$
|
451
|
|
|
$
|
453
|
|
|
$
|
43
|
|
|
For the Year Ended
|
||||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
||||||
VMware Stock Options
|
2019
|
|
2018
|
|
2016
|
||||||
Dividend yield
|
None
|
|
|
None
|
|
|
None
|
|
|||
Expected volatility
|
31.9
|
%
|
|
29.1
|
%
|
|
31.9
|
%
|
|||
Risk-free interest rate
|
2.9
|
%
|
|
1.7
|
%
|
|
0.9
|
%
|
|||
Expected term (in years)
|
3.2
|
|
|
3.3
|
|
|
3.1
|
|
|||
Weighted-average fair value at grant date
|
$
|
143.01
|
|
|
$
|
83.62
|
|
|
$
|
49.64
|
|
|
|
|
|
|
|
|
Transition Period
|
||||||||
|
For the Year Ended
|
|
January 1 to
|
||||||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
|
February 3,
|
||||||||
VMware Employee Stock Purchase Plan
|
2019
|
|
2018
|
|
2016
|
|
2017
|
||||||||
Dividend yield
|
None
|
|
|
None
|
|
|
None
|
|
|
None
|
|
||||
Expected volatility
|
33.5
|
%
|
|
22.6
|
%
|
|
38.3
|
%
|
|
25.0
|
%
|
||||
Risk-free interest rate
|
2.0
|
%
|
|
1.2
|
%
|
|
0.5
|
%
|
|
0.8
|
%
|
||||
Expected term (in years)
|
0.8
|
|
|
0.9
|
|
|
0.7
|
|
|
0.8
|
|
||||
Weighted-average fair value at grant date
|
$
|
34.72
|
|
|
$
|
21.93
|
|
|
$
|
13.57
|
|
|
$
|
21.18
|
|
|
Unrealized Gain (Loss) on
Available-for-Sale Securities |
|
Unrealized Gain (Loss) on
Forward Contracts |
|
Total
|
||||||
Balance, February 3, 2017
|
$
|
(6
|
)
|
|
$
|
2
|
|
|
$
|
(4
|
)
|
Unrealized gains (losses), net of tax provision (benefit) of ($5), $— and ($5)
|
(12
|
)
|
|
1
|
|
|
(11
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income (loss) to the consolidated statements of income (loss), net of tax (provision) benefit of $2, $— and $2
|
3
|
|
|
(3
|
)
|
|
—
|
|
|||
Other comprehensive income (loss), net
|
(9
|
)
|
|
(2
|
)
|
|
(11
|
)
|
|||
Balance, February 2, 2018
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
|||
Adjustments related to adoption of ASU 2016-01 and 2018-02
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
|||
Unrealized gains (losses), net of tax (benefit) of $—, $—, and $—
|
—
|
|
|
2
|
|
|
2
|
|
|||
Amounts reclassified from accumulated other comprehensive income (loss) to the consolidated statements of income (loss), net of tax (provision) benefit of $10, $— and $10
|
31
|
|
|
(1
|
)
|
|
30
|
|
|||
Other comprehensive income (loss), net
|
31
|
|
|
1
|
|
|
32
|
|
|||
Balance, February 1, 2019
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
|
|
|
|
|
|
Transition Period
|
||||||||
|
For the Year Ended
|
|
January 1 to
|
||||||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
|
February 3,
|
||||||||
|
2019
|
|
2018
|
|
2016
|
|
2017
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
License
|
$
|
3,788
|
|
|
$
|
3,200
|
|
|
$
|
2,799
|
|
|
$
|
134
|
|
Services:
|
|
|
|
|
|
|
|
||||||||
Software maintenance
|
4,506
|
|
|
4,032
|
|
|
3,722
|
|
|
353
|
|
||||
Professional services
|
680
|
|
|
630
|
|
|
552
|
|
|
25
|
|
||||
Total services
|
5,186
|
|
|
4,662
|
|
|
4,274
|
|
|
378
|
|
||||
Total revenue
(1)
|
$
|
8,974
|
|
|
$
|
7,862
|
|
|
$
|
7,073
|
|
|
$
|
512
|
|
|
|
|
|
|
|
|
Transition Period
|
||||||||
|
For the Year Ended
|
|
January 1 to
|
||||||||||||
|
February 1,
|
|
February 2,
|
|
December 31,
|
|
February 3,
|
||||||||
|
2019
|
|
2018
|
|
2016
|
|
2017
|
||||||||
United States
|
$
|
4,205
|
|
|
$
|
3,834
|
|
|
$
|
3,538
|
|
|
$
|
250
|
|
International
|
4,769
|
|
|
4,028
|
|
|
3,535
|
|
|
262
|
|
||||
Total
|
$
|
8,974
|
|
|
$
|
7,862
|
|
|
$
|
7,073
|
|
|
$
|
512
|
|
|
February 1,
|
|
February 2,
|
||||
|
2019
|
|
2018
|
||||
United States
|
$
|
831
|
|
|
$
|
784
|
|
International
|
106
|
|
|
117
|
|
||
Total
|
$
|
937
|
|
|
$
|
901
|
|
•
|
Software-Defined Data Center
|
•
|
Hybrid Cloud Computing
|
•
|
End-User Computing
|
|
|
|
Comparable Period
|
||||
|
Transition Period
|
|
January 1 to
|
||||
|
January 1 to
|
|
January 31,
|
||||
|
February 3,
|
|
2016
|
||||
|
2017
|
|
(Unaudited)
|
||||
Total revenue
|
$
|
512
|
|
|
$
|
469
|
|
Operating income (loss)
|
(42
|
)
|
|
25
|
|
||
Income tax provision (benefit)
|
(30
|
)
|
|
5
|
|
||
Net income (loss)
|
(5
|
)
|
|
24
|
|
||
|
|
|
|
||||
Net income (loss) per weighted-average share, basic for Classes A and B
|
$
|
(0.01
|
)
|
|
$
|
0.05
|
|
Net income (loss) per weighted-average share, diluted for Classes A and B
|
$
|
(0.01
|
)
|
|
$
|
0.05
|
|
|
|
|
|
||||
Weighted-average shares, basic for Classes A and B
|
408,625
|
|
|
422,067
|
|
||
Weighted-average shares, diluted for Classes A and B
(1)
|
408,625
|
|
|
423,092
|
|
Fiscal 2019
|
Q1 2019
|
|
Q2 2019
|
|
Q3 2019
|
|
Q4 2019
|
||||||||
Total Revenue
|
$
|
2,008
|
|
|
$
|
2,174
|
|
|
$
|
2,200
|
|
|
$
|
2,591
|
|
Net income
|
942
|
|
|
664
|
|
|
334
|
|
|
502
|
|
||||
Net income per share, basic
|
$
|
2.33
|
|
|
$
|
1.58
|
|
|
$
|
0.82
|
|
|
$
|
1.22
|
|
Net income per share, diluted
|
$
|
2.29
|
|
|
$
|
1.56
|
|
|
$
|
0.81
|
|
|
$
|
1.21
|
|
Fiscal 2018
|
Q1 2018
|
|
Q2 2018
|
|
Q3 2018
|
|
Q4 2018
|
||||||||
Total Revenue
|
$
|
1,765
|
|
|
$
|
1,932
|
|
|
$
|
1,938
|
|
|
$
|
2,226
|
|
Net income (loss)
|
245
|
|
|
406
|
|
|
395
|
|
|
(387
|
)
|
||||
Net income (loss) per share, basic
|
$
|
0.60
|
|
|
$
|
0.99
|
|
|
$
|
0.97
|
|
|
$
|
(0.96
|
)
|
Net income (loss) per share, diluted
|
$
|
0.59
|
|
|
$
|
0.98
|
|
|
$
|
0.96
|
|
|
$
|
(0.96
|
)
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT, AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
|
|
|
|
|
Incorporated by Reference
|
||||||
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit
|
|
Filing Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.1
|
|
|
|
10-Q
|
|
001-33622
|
|
3.1
|
|
6/9/17
|
|
3.2
|
|
|
|
8-K
|
|
001-33622
|
|
3.1
|
|
2/23/17
|
|
4.1
|
|
|
|
S-1/A-4
|
|
333-142368
|
|
4.1
|
|
7/27/07
|
|
4.2
|
|
|
|
8-K
|
|
001-33622
|
|
4.1
|
|
8/21/17
|
|
4.3
|
|
|
|
8-K
|
|
001-33622
|
|
4.2
|
|
8/21/17
|
|
4.4
|
|
|
|
8-K
|
|
001-33622
|
|
4.3
|
|
8/21/17
|
|
4.5
|
|
|
|
8-K
|
|
001-33622
|
|
4.4
|
|
8/21/17
|
|
10.1
|
|
|
|
10-K
|
|
001-33622
|
|
10.1
|
|
3/29/18
|
|
10.2*
|
|
|
|
|
|
|
|
|
|
|
|
10.3
|
|
|
|
10-Q
|
|
001-33622
|
|
10.32
|
|
11/7/16
|
|
10.4
|
|
|
|
S-1/A-1
|
|
333-142368
|
|
10.4
|
|
6/11/07
|
|
10.5
|
|
|
|
10-Q
|
|
001-33622
|
|
10.5
|
|
11/9/15
|
|
10.6*+
|
|
|
|
|
|
|
|
|
|
|
|
10.7+
|
|
|
|
10-Q
|
|
001-33622
|
|
10.7
|
|
6/9/17
|
|
10.8
|
|
|
|
10-K
|
|
001-33622
|
|
10.8
|
|
3/29/18
|
|
10.9+
|
|
|
|
10-Q
|
|
001-33622
|
|
10.9
|
|
8/5/15
|
|
10.10+
|
|
|
|
10-Q
|
|
001-33622
|
|
10.10
|
|
9/7/17
|
|
10.11+
|
|
|
|
10-Q
|
|
001-33622
|
|
10.11
|
|
6/9/17
|
|
10.12+
|
|
|
|
10-Q
|
|
001-33622
|
|
10.12
|
|
6/11/18
|
|
|
|
|
|
Incorporated by Reference
|
||||||
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit
|
|
Filing Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.13
|
|
|
|
10-Q
|
|
001-33622
|
|
10.24
|
|
8/3/11
|
|
10.14
|
|
|
|
10-Q
|
|
001-33622
|
|
10.25
|
|
8/3/11
|
|
10.15
|
|
|
|
10-Q
|
|
001-33622
|
|
10.26
|
|
8/3/11
|
|
10.16+
|
|
|
|
10-Q
|
|
001-33622
|
|
10.16
|
|
9/7/17
|
|
10.17+
|
|
|
|
10-K
|
|
001-33622
|
|
10.26
|
|
2/25/14
|
|
10.18+
|
|
|
|
10-Q
|
|
001-33622
|
|
10.18
|
|
12/10/18
|
|
10.19+
|
|
|
|
10-K
|
|
001-33622
|
|
10.19
|
|
2/24/17
|
|
10.20
|
|
|
|
10-Q
|
|
001-33622
|
|
10.30
|
|
5/1/14
|
|
10.21
|
|
|
|
10-Q
|
|
001-33622
|
|
10.34
|
|
5/1/14
|
|
10.22+
|
|
|
|
10-Q
|
|
001-33622
|
|
10.22
|
|
12/10/18
|
|
10.23+
|
|
|
|
10-Q
|
|
001-33622
|
|
10.23
|
|
6/11/18
|
|
10.24+
|
|
|
|
10-Q
|
|
001-33622
|
|
10.30
|
|
9/7/17
|
|
10.25+
|
|
|
|
10-K
|
|
001-33622
|
|
10.32
|
|
2/24/17
|
|
10.26+
|
|
|
|
10-K
|
|
001-33622
|
|
10.33
|
|
2/24/17
|
|
10.27
|
|
|
|
8-K
|
|
001-33622
|
|
10.1
|
|
3/30/17
|
|
10.28+
|
|
|
|
10-Q
|
|
001-33622
|
|
10.34
|
|
9/7/17
|
|
10.29
|
|
|
|
8-K
|
|
001-33622
|
|
10.1
|
|
7/2/18
|
|
10.30+
|
|
|
|
8-K
|
|
001-33622
|
|
99.1
|
|
9/18/18
|
|
10.31
|
|
|
|
8-K
|
|
001-33622
|
|
10.1
|
|
11/15/18
|
|
21*
|
|
|
|
|
|
|
|
|
|
|
|
23*
|
|
|
|
|
|
|
|
|
|
|
|
31.1*
|
|
|
|
|
|
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
||||||
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit
|
|
Filing Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.1ǂ
|
|
|
|
|
|
|
|
|
|
|
|
32.2ǂ
|
|
|
|
|
|
|
|
|
|
|
|
101.INS*
|
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
|
101.SCH*
|
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
|
|
|
|
|
101.CAL*
|
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
|
|
|
|
|
101.DEF*
|
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
|
|
|
|
|
101.LAB*
|
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
|
|
|
|
|
101.PRE*
|
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
|
|
|
|
|
|
ITEM 16.
|
FORM 10-K SUMMARY
|
|
|
VMWARE, INC.
|
|
|
|
|
|
Dated:
|
March 29, 2019
|
By:
|
/s/ Patrick Gelsinger
|
|
|
|
Patrick Gelsinger
Chief Executive Officer
|
|
|
|
|
Dated:
|
March 29, 2019
|
By:
|
/s/ Kevan Krysler
|
|
|
|
Kevan Krysler
Senior Vice President, Chief Accounting Officer
(Principal Accounting Officer)
|
Date
|
|
Signature
|
|
Title
|
|
|
|
|
|
March 29, 2019
|
|
/s/ Patrick Gelsinger
|
|
Chief Executive Officer and Director
(Principal Executive Officer)
|
|
|
Patrick Gelsinger
|
|
|
|
|
|
|
|
March 29, 2019
|
|
/s/ Zane Rowe
|
|
Chief Financial Officer and Executive Vice President
(Principal Financial Officer)
|
|
|
Zane Rowe
|
|
|
|
|
|
|
|
March 29, 2019
|
|
/s/ Michael Dell
|
|
Chairman
|
|
|
Michael Dell
|
|
|
|
|
|
|
|
March 29, 2019
|
|
/s/ Anthony Bates
|
|
Director
|
|
|
Anthony Bates
|
|
|
|
|
|
|
|
March 29, 2019
|
|
/s/ Michael Brown
|
|
Director
|
|
|
Michael Brown
|
|
|
|
|
|
|
|
March 29, 2019
|
|
/s/ Donald Carty
|
|
Director
|
|
|
Donald Carty
|
|
|
|
|
|
|
|
March 29, 2019
|
|
/s/ Egon Durban
|
|
Director
|
|
|
Egon Durban
|
|
|
|
|
|
|
|
March 29, 2019
|
|
/s/ Karen Dykstra
|
|
Director
|
|
|
Karen Dykstra
|
|
|
|
|
|
|
|
March 29, 2019
|
|
/s/ Paul Sagan
|
|
Director
|
|
|
Paul Sagan
|
|
Tax Valuation Allowance
|
Balance at Beginning of Period
|
|
Tax Valuation Allowance Charged to Income Tax Provision
|
|
Tax Valuation Allowance Credited to Income Tax Provision
|
|
Balance at End of Period
|
||||||||
Year ended February 1, 2019 income tax valuation allowance
|
$
|
200
|
|
|
$
|
56
|
|
|
$
|
(27
|
)
|
|
$
|
229
|
|
Year ended February 2, 2018 income tax valuation allowance
|
161
|
|
|
68
|
|
|
(29
|
)
|
|
200
|
|
||||
Transition Period from January 1, 2017 to February 3, 2017 income tax valuation allowance
|
166
|
|
|
1
|
|
|
(6
|
)
|
|
161
|
|
||||
Year ended December 31, 2016 income tax valuation allowance
|
144
|
|
|
31
|
|
|
(9
|
)
|
|
166
|
|
TABLE OF CONTENTS
|
||
PAGE
|
||
ARTICLE I
|
||
DEFINITIONS
|
||
Section 1.01
|
Definitions.................................................................................................................
|
1
|
Section 1.02
|
Internal References....................................................................................................
|
2
|
ARTICLE II
|
||
PURCHASE AND SALE OF SERVICES
|
||
Section 2.01
|
Purchase and Sale of Overseas Entity Services........................................................
|
3
|
Section 2.02
|
Additional Services...................................................................................................
|
3
|
Section 2.03
|
Dell Technologies Employees...................................................................................
|
3
|
ARTICLE III
|
||
SERVICE COSTS; OTHER CHARGES
|
||
Section 3.01
|
Service Costs.............................................................................................................
|
3
|
Section 3.02
|
Payment.....................................................................................................................
|
4
|
Section 3.03
|
Financial Responsibility for Dell Technologies Personnel.......................................
|
4
|
ARTICLE IV
|
||
STANDARD OF PERFORMANCE AND INDEMNIFICATION
|
||
Section 4.01
|
General Standard of Service......................................................................................
|
4
|
Section 4.02
|
Limitation of Liability...............................................................................................
|
4
|
Section 4.03
|
Indemnification.........................................................................................................
|
5
|
ARTICLE V
|
||
TERM AND TERMINATION
|
||
Section 5.01
|
Term..........................................................................................................................
|
6
|
Section 5.02
|
Termination...............................................................................................................
|
6
|
Section 5.03
|
Effect of Termination................................................................................................
|
6
|
ARTICLE VI
|
||
MISCELLANEOUS
|
||
Section 6.01
|
Ownership.................................................................................................................
|
7
|
Section 6.02
|
Other Agreements......................................................................................................
|
7
|
Section 6.03
|
No Agency.................................................................................................................
|
8
|
Section 6.04
|
Subcontractors...........................................................................................................
|
8
|
Section 6.05
|
Force Majeure...........................................................................................................
|
8
|
Section 6.06
|
Entire Agreement.......................................................................................................
|
8
|
Section 6.07
|
Information................................................................................................................
|
8
|
Section 6.08
|
Notices.......................................................................................................................
|
9
|
Section 6.09
|
Governing Law..........................................................................................................
|
9
|
Section 6.10
|
Severability................................................................................................................
|
9
|
Section 6.11
|
Third Party Beneficiary.............................................................................................
|
9
|
Section 6.12
|
Amendment...............................................................................................................
|
10
|
Section 6.13
|
Counterparts..............................................................................................................
|
10
|
Section 6.14
|
Authority....................................................................................................................
|
10
|
Section 6.15
|
Data Protection..........................................................................................................
|
10
|
|
SUBSIDIARIES
|
|
STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION
|
|
3401 Hillview LLC
|
|
Delaware
|
|
A.W.S. Holding, LLC
|
|
Delaware
|
|
AetherPal (INDIA) Private Limited
|
|
India
|
|
AetherPal Inc.
|
|
Delaware
|
|
AirWatch LLC
|
|
Delaware
|
|
Arkinnet Software Private Limited
|
|
India
|
|
CloudHealth Technologies (Singapore) Pte. Ltd.
|
|
Singapore
|
|
CloudHealth Technologies Australia Pty. Ltd
|
|
Australia
|
|
CloudHealth Technologies France SARL
|
|
France
|
|
CloudHealth Technologies Germany GmbH
|
|
Germany
|
|
CloudHealth Technologies UK Ltd.
|
|
United Kingdom
|
|
CloudHealth Technologies, LLC
|
|
Delaware
|
|
Heptio LLC
|
|
Delaware
|
|
Heptio UK Limited
|
|
United Kingdom
|
|
Nicira, Inc.
|
|
Delaware
|
|
Taiwan VMware Information Technology LLC
|
|
Taiwan
|
|
VeloCloud Networks Private Limited
|
|
India
|
|
Velocloud Networks, LLC
|
|
Delaware
|
|
VMware Australia Pty Ltd
|
|
Australia
|
|
VMware Belgium
|
|
Belgium
|
|
VMware Bermuda Unlimited
|
|
Ireland
|
|
VMware Bulgaria EOOD
|
|
Bulgaria
|
|
VMware Canada Inc.
|
|
Canada
|
|
VMware Costa Rica Ltda.
|
|
Costa Rica
|
|
VMware Denmark ApS
|
|
Denmark
|
|
VMware Eastern Europe
|
|
Armenia
|
|
VMware France SAS
|
|
France
|
|
VMware Global, Inc.
|
|
Delaware
|
|
VMware Hong Kong Limited
|
|
Hong Kong
|
|
VMware Information Technology (China) Co. Ltd
|
|
China
|
|
VMware International Limited
|
|
Ireland
|
|
VMware International Marketing Limited
|
|
Ireland
|
|
VMware Israel Ltd.
|
|
Israel
|
|
VMware Italy S.r.l.
|
|
Italy
|
|
VMware Korea Co., Ltd.
|
|
South Korea
|
|
VMware Malaysia SDN. BHD.
|
|
Malaysia
|
|
VMware Marketing Austria GmbH
|
|
Austria
|
|
VMware Mexico S. de R.L. de C.V.
|
|
Mexico
|
|
VMware Middle East FZ-LLC
|
|
Dubai
|
|
VMware Netherlands B.V.
|
|
Netherlands
|
|
VMware NZ Company
|
|
New Zealand
|
|
VMware Rus LLC
|
|
Russia
|
|
VMware Saudi Limited
|
|
Saudi Arabia
|
|
VMware Singapore Pte. Ltd.
|
|
Singapore
|
|
VMware Software e Serviços Brasil Ltda.
|
|
Brazil
|
|
VMware Software India Private Limited
|
|
India
|
|
VMware South Africa (Pty) Ltd
|
|
South Africa
|
|
VMware Spain, S.L.
|
|
Spain
|
|
VMware Sweden AB
|
|
Sweden
|
|
VMware Switzerland GmbH
|
|
Switzerland
|
|
VMware (Thailand) Co., Ltd.
|
|
Thailand
|
|
VMware Turkey Software Solutions and Services Company Limited
|
|
Turkey
|
|
VMware UK Limited
|
|
United Kingdom
|
|
VMware, K.K.
|
|
Japan
|
1.
|
I have reviewed this annual report on Form 10-K of VMware, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
March 29, 2019
|
By:
|
|
/s/ Patrick P. Gelsinger
|
|
|
|
|
Patrick P. Gelsinger
Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this annual report on Form 10-K of VMware, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
March 29, 2019
|
By:
|
|
/s/ Zane Rowe
|
|
|
|
|
Zane Rowe
Chief Financial Officer and Executive Vice President
(Principal Financial Officer)
|
Date:
|
March 29, 2019
|
By:
|
|
/s/ Patrick P. Gelsinger
|
|
|
|
|
Patrick P. Gelsinger
Chief Executive Officer
(Principal Executive Officer)
|
Date:
|
March 29, 2019
|
By:
|
|
/s/ Zane Rowe
|
|
|
|
|
Zane Rowe
Chief Financial Officer and Executive Vice President
(Principal Financial Officer)
|