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VMware gibt Zahlen für das vierte Quartal und das …

VMware gibt Zahlen für das vierte Quartal und das gesamte Jahr 2010 bekannt

  • Wachstum des Jahresertrags um 41 Prozent auf 2,9 Milliarden US-Dollar; Wachstum im vierten Quartal um 37 Prozent zum Vergleichszeitraum aus 2009 auf 836 Millionen US-Dollar
  • Jährliche Umsatzrendite von 15 Prozent; Nicht-GAAP-Umsatzrendite von 28,5 Prozent mit einer Umsatzrendite aus dem vierten Quartal von 15,6 Prozent; Nicht-GAAP-Umsatzrendite von 29,6 Prozent
  • Wachstum beim Cashflow aus laufender Geschäftstätigkeit in den vergangenen zwölf Monaten um 19 Prozent auf 1,2 Milliarden US-Dollar
  • Zunahme des freien Cashflows um 43 Prozent auf 1,2 Milliarden US-Dollar

München, 25. Januar 2011 – VMware, weltweiter Marktführer von Virtualisierungslösungen für Desktopsysteme, Rechenzentren und Cloud-Infrastrukturen, gibt seine Finanzergebnisse für das vierte Quartal und das gesamte Jahr 2010 bekannt.

„VMware profitierte im vierten Quartal 2010 sowohl von einem Aufwärtstrend bei den Ausgaben als auch von dem großen Momentum für Virtualisierung als zentrale Technologie moderner IT-Infrastrukturen“, sagt Paul Maritz, Präsident und CEO von VMware. „Unsere Aufgabe, unseren Kunden bei der Entwicklung einer hybriden Unternehmens-Cloud durch Lösungen zur Effizienz- und Flexibilitätssteigerung zu helfen, nehmen wir weiterhin sehr ernst.“

„Mit den Rekordergebnissen des viertel Quartals 2010 sind wir sind sehr zufrieden. Dies konnte durch die Stärke aller Produktkategorien und Märkte erreicht werden“, sagt Mark Peek, CFO bei VMware. „Während wir weiter investieren werden, um die Vorteile des Generationenwechsels in der IT nutzen zu können, erwarten wir kein weiteres Wachstum der Umsatzrendite in 2011.“

Die Details zu den Finanzzahlen entnehmen Sie bitte der englischsprachigen Pressemeldung wie folgt:

-- Revenues for the fourth quarter were $836 million, an increase of 37% from the fourth quarter of 2009.

-- Operating income for the fourth quarter was $131 million, an increase of 84% from the fourth quarter of 2009. Non-GAAP operating income for the fourth quarter was $248 million, an increase of 57% from the fourth quarter of 2009.

-- Net income for the fourth quarter was $120 million, or $0.28 per diluted share, compared to $56 million, or $0.14 per diluted share, for the fourth quarter of 2009. Non-GAAP net income for the quarter was $198 million, or $0.46 per diluted share, compared to $127 million, or $0.31 per diluted share, for the fourth quarter of 2009.

-- Operating cash flows for the fourth quarter were $407 million, an increase of 43% from the fourth quarter of 2009. Free cash flows for the quarter were $406 million, an increase of 57% from the fourth quarter of 2009.

-- Revenues for 2010 were $2.9 billion, an increase of 41% from 2009.

-- Operating income for 2010 was $428 million, an increase of 95% from 2009. Non-GAAP operating income for 2010 was $813 million, an increase of 68% from 2009.

-- Net income for 2010 was $357 million, or $0.84 per diluted share, compared to $197 million, or $0.49 per diluted share, for 2009. Non-GAAP net income for 2010 was $639 million, or $1.51 per diluted share, compared to $401 million, or $1.00 per diluted share, for 2009.

-- Operating cash flows for 2010 were $1.2 billion, an increase of 19% and free cash flows for the year were $1.2 billion, an increase of 43% from 2009.

-- Cash, cash equivalents and short-term investments were $3.3 billion and deferred revenue was $1.9 billion as of December 31, 2010.

U.S. revenues for 2010 grew 40% to $1.5 billion from 2009. International revenues grew 43% to $1.4 billion from 2009.

License revenues for 2010 were $1.4 billion, an increase of 36% from 2009. Service revenues, which include software maintenance and professional services, were $1.5 billion for 2010, an increase of 46% from 2009.

"VMware clearly benefited in the fourth quarter from both an uptick in spending and the momentum of virtualization as the central technology for modernizing infrastructures," said Paul Maritz, president and chief executive officer. "Our task remains to help our customers evolve to the enterprise hybrid cloud by delivering solutions that increase efficiency while improving business agility."

"We are pleased with our record fourth quarter results, driven by strength across all product categories and geographies," said Mark Peek, chief financial officer. "As we continue to invest to take advantage of the generational shift underway in IT, we do not anticipate expansion of operating margins in 2011. First quarter 2011 revenues are expected to be in the range of $800 and $820 million, an increase of 26% to 29% from the first quarter 2010. Annual 2011 revenue is expected to be in the range of $3.45 and $3.55 billion, an increase of 21% to 24% from 2010, and annual license revenue is expected to grow between 14% and 19%."

Recent Highlights & Strategic Announcements

-- In October 2010, VMware announced expansion of VMware Ready(TM), a program to include mail security solutions that can easily extend the Zimbra(TM) solution with a virtual appliance running on top of VMware vSphere(R). Symantec and Trend Micro were among the first customers to deliver VMware Ready.

-- In October 2010, VMware announced plans to provide a complete suite of cloud-based development and collaboration tools aimed at simplifying the entire application development process. Part of VMware's Cloud Application Platform strategy, Code2Cloud is intended to build on leading open source development projects to deliver a completely unified, setup-free development infrastructure that delivers cloud as a service.

-- In November 2010, VMware announced intent to provide a desktop virtualization solution based on the Cisco Unified Computing System (UCS) and VMware View(TM) 4.5 that will help channel partners accelerate deployment of virtual desktop solutions, scaling to meet customers' business needs and regulatory requirements while reducing risk and total cost of ownership (TCO).

VMware plans to host a conference call today to review its fourth quarter and 2010 results and to discuss its financial outlook. The call is scheduled to begin at 2:00 p.m. PT/ 5:00 p.m. ET and can be accessed via the Web at http://ir.vmware.com. The webcast will be available live, and a replay will be available following completion of the live broadcast for approximately 30 days.

Use of Non-GAAP Financial Measures

Reconciliations of non-GAAP financial measures to VMware's financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. For a description of these non-GAAP financial measures, including the reasons management uses each measure, please see the section of the tables entitled "About Non-GAAP Financial Measures."

Forward-Looking Statements

This press release contains forward-looking statements including, among other things, statements regarding VMware's first quarter and annual revenue projections, expectations regarding 2011 operating margins, the expected role of virtualization and VMware products in efforts by customers to modernize and increase efficiency in IT infrastructures, expectations for the economic environment and opportunities for adjacencies to the VMware vSphere platform, VMware's plans for future investment, shifts in IT implementations, and VMware plans for certain cloud-based development and collaboration tools and desktop virtualization solutions. These forward-looking statements are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including but not limited to: (i) adverse changes in general economic or market conditions; (ii) delays or reductions in consumer or information technology spending; (iii) competitive factors, including but not limited to pricing pressures, industry consolidation, entry of new competitors into the virtualization market, and new product and marketing initiatives by our competitors; (iv) factors that affect timing of license revenue recognition such as product announcements and beta programs; (v) our customers' ability to develop, and to transition to, new products and computing strategies such as cloud computing and desktop virtualization; (vi) the uncertainty of customer acceptance of emerging technology; (vii) changes in the willingness of customers to enter into longer term licensing and support arrangements; (viii) rapid technological and market changes in virtualization software and platforms for cloud and desktop computing; (ix) changes to product development timelines; (x) VMware's relationship with EMC Corporation and EMC's ability to control matters requiring stockholder approval, including the election of VMware's board members; (xi) our ability to protect our proprietary technology; (xii) our ability to attract and retain highly qualified employees; (xiii) the successful integration of acquired companies and assets into VMware; and (xiv) fluctuating currency exchange rates. These forward looking statements are based on current expectations and are subject to uncertainties and changes in condition, significance, value and effect as well as other risks detailed in documents filed with the Securities and Exchange Commission, including our most recent reports on Form 10-K and Form 10-Q and current reports on Form 8-K that we may file from time to time, which could cause actual results to vary from expectations. VMware assumes no obligation to, and does not currently intend to, update any such forward-looking statements after the date of this release.

VMware, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

For the Three Months For the Year Ended

Ended December 31, December 31,

------------------------ ------------------------

2010 2009 2010 2009

----------- ----------- ----------- -----------

Cash flows from

operating activities:

Net income $ 119,880 $ 56,409 $ 357,439 $ 197,098

Adjustments to

reconcile net income

to net cash provided

by operating

activities:

Depreciation and

amortization 77,090 56,756 260,551 198,486

Stock-based

compensation,

excluding amounts

capitalized 86,501 67,833 291,691 231,456

Excess tax benefits

from stock-based

compensation (56,253) (13,376) (223,457) (26,214)

Other 6,963 5,435 13,083 2,816

Changes in assets and

liabilities, net of

acquisitions:

Accounts receivable (236,362) (279,392) (77,121) (193,610)

Other assets 3,999 (6,257) (79,431) (14,181)

Due to/from EMC,

net (44,439) (49,706) (28,508) (64,762)

Accounts payable 4,292 12,699 8,881 (17,886)

Accrued expenses 92,353 90,393 120,880 124,685

Income taxes

receivable from -- -- 2,508 107,927

Income taxes

payable 46,618 21,509 89,439 32,779

Deferred income

taxes, net (48,513) (14,281) (56,948) (40,476)

Deferred revenue 354,486 335,669 495,382 447,498

----------- ----------- ----------- -----------

Net cash provided by

operating activities 406,615 283,691 1,174,389 985,616

----------- ----------- ----------- -----------

Cash flows from

investing activities:

Additions to property

and equipment (40,450) (23,462) (131,695) (103,375)

Capitalized software

development costs (15,955) (15,087) (64,149) (68,611)

Purchases of

available-for-sale

securities (477,201) -- (2,101,907) --

Sales and maturities of

available-for-sale

securities 361,193 -- 516,305 --

Purchase of strategic

investments (4,800) (3,200) (4,800) (34,665)

Sale of strategic

investments -- -- 2,648 --

Business acquisitions,

net of cash acquired -- -- (292,970) (356,278)

Transfer of net assets

under common control (10,580) -- (185,580) --

Decrease in restricted

cash -- -- 206 549

----------- ----------- ----------- -----------

Net cash used in

investing activities (187,793) (41,749) (2,261,942) (562,380)

----------- ----------- ----------- -----------

Cash flows from

financing activities:

Proceeds from issuance

of common stock 75,460 61,143 431,306 227,666

Repurchase of common

stock (52,587) -- (338,527) --

Excess tax benefits

from stock-based

compensation 56,253 13,376 223,457 26,214

Shares repurchased for

tax withholdings on

vesting of restricted

stock (16,063) (6,161) (86,179) (31,467)

----------- ----------- ----------- -----------

Net cash provided by

financing activities 63,063 68,358 230,057 222,413

----------- ----------- ----------- -----------

Net increase (decrease)

in cash and cash

equivalents 281,885 310,300 (857,496) 645,649

Cash and cash

equivalents at

beginning of the

period 1,347,080 2,176,161 2,486,461 1,840,812

----------- ----------- ----------- -----------

Cash and cash

equivalents at end of

the period $ 1,628,965 $ 2,486,461 $ 1,628,965 $ 2,486,461

=========== =========== =========== ===========

VMware, Inc.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

(unaudited)

For the Three Months For the Year Ended

Ended December 31, December 31,

------------------------ ------------------------

2010 2009 2010 2009

----------- ----------- ----------- -----------

Revenues:

License $ 422,343 $ 304,206 $ 1,401,424 $ 1,029,442

Services 413,318 303,995 1,455,919 994,495

----------- ----------- ----------- -----------

835,661 608,201 2,857,343 2,023,937

Operating expenses (1):

Cost of license

revenues 50,735 40,945 177,458 126,686

Cost of services

revenues 89,616 66,561 316,257 233,042

Research and

development 177,671 136,262 652,968 496,552

Sales and marketing 313,045 229,596 1,013,281 736,383

General and

administrative 73,980 63,680 269,386 211,979

----------- ----------- ----------- -----------

Operating income 130,614 71,157 427,993 219,295

Investment income 2,604 1,054 6,633 8,233

Interest expense with

EMC, net (966) (966) (4,069) (6,958)

Other income (expense),

net (7,205) (4,008) (14,182) 2,879

----------- ----------- ----------- -----------

Income before income

taxes 125,047 67,237 416,375 223,449

Income tax provision 5,167 10,828 58,936 26,351

----------- ----------- ----------- -----------

Net income $ 119,880 $ 56,409 $ 357,439 $ 197,098

=========== =========== =========== ===========

Net income per

weighted-average

share, basic for Class

A and Class B $ 0.29 $ 0.14 $ 0.87 $ 0.50

Net income per

weighted-average

share, diluted for

Class A and Class B $ 0.28 $ 0.14 $ 0.84 $ 0.49

Weighted-average

shares, basic for

Class A and Class B 414,919 400,708 409,805 394,269

Weighted-average

shares, diluted for

Class A and Class B 427,883 410,973 423,446 399,776

______

(1) Includes stock-based

compensation as follows:

Cost of license

revenues $ 483 $ 320 $ 1,653 $ 1,293

Cost of services

revenues 5,877 3,933 18,478 14,874

Research and

development 47,143 37,183 164,435 121,770

Sales and marketing 23,545 15,702 73,146 58,610

General and

administrative 9,453 10,695 33,979 34,909

VMware, Inc.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

(unaudited)

December 31,

-----------------------

2010 2009

----------- -----------

ASSETS

Current assets:

Cash and cash equivalents $ 1,628,965 $ 2,486,461

Short-term investments 1,694,675 27,360

Accounts receivable, net 614,726 534,196

Due from EMC, net 55,481 26,402

Deferred tax asset, current portion 100,689 63,360

Other current assets 203,119 44,701

----------- -----------

Total current assets 4,297,655 3,182,480

Property and equipment, net 419,065 402,356

Capitalized software development costs, net and

other 151,945 169,293

Deferred tax asset, net of current portion 149,126 102,529

Intangible assets, net 210,928 94,557

Goodwill 1,568,600 1,115,769

----------- -----------

Total assets $ 6,797,319 $ 5,066,984

=========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable $ 58,913 $ 50,566

Accrued expenses and other 459,813 334,523

Deferred revenue, current portion 1,270,426 908,953

----------- -----------

Total current liabilities 1,789,152 1,294,042

Note payable to EMC 450,000 450,000

Deferred revenue, net of current portion 589,668 416,345

Deferred tax liability 30,096 60,300

Other liabilities 129,960 103,346

----------- -----------

Total liabilities 2,988,876 2,324,033

Commitments and contingencies

Stockholders' equity:

Class A common stock, par value $.01; authorized

2,500,000 shares; issued and outstanding 116,701

and 102,785 shares 1,167 1,028

Class B convertible common stock, par value $.01;

authorized 1,000,000 shares; issued and

outstanding 300,000 shares 3,000 3,000

Additional paid-in capital 2,955,971 2,263,129

Accumulated other comprehensive income 19,635 4,563

Retained earnings 828,670 471,231

----------- -----------

Total stockholders' equity 3,808,443 2,742,951

----------- -----------

Total liabilities and stockholders' equity $ 6,797,319 $ 5,066,984

=========== ===========

VMware, Inc.

RECONCILIATION OF GAAP TO NON-GAAP DATA

For the Three Months Ended December 31, 2010

(in thousands, except per share amounts)

(unaudited)

Employer

Payroll

Stock- Tax on

Based Employee Intangible Acquisition

Compen- Stock Amortiz- Related

GAAP sation Transactions ation Items

--------- --------- --------- --------- ---------

Operating expenses:

Cost of license

revenues $ 50,735 (483) (21) (8,375) --

Cost of services

revenues $ 89,616 (5,877) (228) (1,471) --

Research and

development $ 177,671 (47,143) (3,299) (627) --

Sales and marketing $ 313,045 (23,545) (1,496) (1,664) --

General and

administrative $ 73,980 (9,453) (342) (38) (325)

Operating income $ 130,614 86,501 5,386 12,175 325

Operating margin 15.6% 10.4% 0.6% 1.5% --

Income before income

taxes $ 125,047 86,501 5,386 12,175 325

Income tax provision $ 5,167

Tax rate 4.1%

Net income $ 119,880 86,501 5,386 12,175 325

Net income per

weighted-average

share, basic for

Class A and Class B

(3) $ 0.29 $ 0.21 $ 0.01 $ 0.03 $ --

Net income per

weighted-average

share, diluted for

Class A and Class B

(4) $ 0.28 $ 0.20 $ 0.01 $ 0.03 $ --

tables continue below

Stock-Based

Compensation

Capitalized Included in

Software Capitalized Tax

Development Software Adjustment Non-GAAP,

Costs (1) Development (2) as adjusted

--------- --------- --------- ---------

Operating expenses:

Cost of license

revenues (28,465) -- -- $ 13,391

Cost of services

revenues -- -- -- $ 82,040

Research and

development 18,776 (2,821) -- $ 142,557

Sales and marketing -- -- -- $ 286,340

General and

administrative -- -- -- $ 63,822

Operating income 9,689 2,821 -- $ 247,511

Operating margin 1.2% 0.3% -- 29.6%

Income before income

taxes 9,689 2,821 -- $ 241,944

Income tax provision 38,383 $ 43,550

Tax rate 18.0%

Net income 9,689 2,821 (38,383) $ 198,394

Net income per

weighted-average

share, basic for

Class A and Class B

(3) $ 0.02 $ 0.01 $ (0.09) $ 0.48

Net income per

weighted-average

share, diluted for

Class A and Class B

(4) $ 0.02 $ 0.01 $ (0.09) $ 0.46

(1) For the fourth quarter of 2010, we capitalized $18.8 million (including $2.8 million of stock-based compensation) of costs incurred for the development of software products. Amortization expense from capitalized amounts was $28.5 million for the fourth quarter of 2010.

(2) Non-GAAP financial information for the quarter is adjusted for a tax rate equal to our annual estimated tax rate on non-GAAP income. This rate is based on our estimated annual GAAP income tax rate forecast, adjusted to account for items excluded from GAAP income in calculating the non-GAAP financial measures presented above. Our estimated tax rate on non-GAAP income is determined annually and may be re-calculated during the year to take into account events or trends that we believe materially impact the estimated annual rate including, but not limited to, significant changes resulting from tax legislation, tax audit closures, material changes in the geographic mix of revenues and expenses and other significant events. Due to the differences in the tax treatment of items excluded from non-GAAP earnings, as well as the methodology applied to our estimated annual tax rates as described above, our estimated tax rate on non-GAAP income may differ from our GAAP tax rate and from our actual tax liabilities.

(3) Calculated based upon 414,919 basic weighted-average shares for Class A and Class B.

(4) Calculated based upon 427,883 diluted weighted-average shares for Class A and Class B.

VMware, Inc.

RECONCILIATION OF GAAP TO NON-GAAP DATA

For the Three Months Ended December 31, 2009

(in thousands, except per share amounts)

(unaudited)

Employer

Payroll

Tax on

Employee

Stock Intangible

Stock-Based Trans- Amortiz-

GAAP Compensation actions ation

--------- --------- --------- ---------

Operating expenses:

Cost of license revenues $ 40,945 (320) (6) (3,262)

Cost of services revenues $ 66,561 (3,933) (135) (266)

Research and development $ 136,262 (37,183) (626) (67)

Sales and marketing $ 229,596 (15,702) (283) (390)

General and administrative $ 63,680 (10,695) (122) (124)

Operating income $ 71,157 67,833 1,172 4,109

Operating margin 11.7% 11.2% 0.2% 0.7%

Income before income taxes $ 67,237 67,833 1,172 4,109

Income tax provision $ 10,828 9,463 135 1,562

Tax rate 16.1%

Net income $ 56,409 58,370 1,037 2,547

Net income per weighted-average

share, basic for Class A and

Class B (2) $ 0.14 $ 0.15 $ -- $ 0.01

Net income per weighted-average

share, diluted for Class A and

Class B (3) $ 0.14 $ 0.14 $ -- $ 0.01

tables continue below

Stock-Based

Compensation

Capitalized Included in

Acquisition Software Capitalized Non-GAAP,

Related Development Software as

Items Costs (1) Development adjusted

--------- --------- --------- ---------

Operating expenses:

Cost of license revenues -- (27,604) -- $ 9,753

Cost of services revenues -- -- -- $ 62,227

Research and development -- 18,148 (3,061) $ 113,473

Sales and marketing -- -- -- $ 213,221

General and administrative (828) -- -- $ 51,911

Operating income 828 9,456 3,061 $ 157,616

Operating margin -- 1.6% 0.5% 25.9%

Income before income taxes 828 9,456 3,061 $ 153,696

Income tax provision -- 4,738 339 $ 27,065

Tax rate 17.6%

Net income 828 4,718 2,722 $ 126,631

Net income per weighted-average

share, basic for Class A and

Class B (2) $ -- $ 0.01 $ 0.01 $ 0.32

Net income per weighted-average

share, diluted for Class A and

Class B (3) $ -- $ 0.01 $ 0.01 $ 0.31

(1) For the fourth quarter of 2009, we capitalized $18.1 million

(including $3.1 million of stock-based compensation) of costs incurred for

the development of software products. Amortization expense from capitalized

amounts was $27.6 million for the fourth quarter of 2009.

(2) Calculated based upon 400,708 basic weighted-average shares for Class A

and Class B.

(3) Calculated based upon 410,973 diluted weighted-average shares for Class

A and Class B.

VMware, Inc.

RECONCILIATION OF GAAP TO NON-GAAP DATA

For the Year Ended December 31, 2010

(in thousands, except per share amounts)

(unaudited)

Employer

Payroll

Stock- Tax on

Based Employee Intangible Acquisition

Compen- Stock Amortiz- Related

GAAP sation Transactions ation Items

---------- ---------- ---------- ---------- ----------

Operating expenses:

Cost of license

revenues $ 177,458 (1,653) (84) (23,785) --

Cost of services

revenues $ 316,257 (18,478) (791) (4,670) --

Research and

development $ 652,968 (164,435) (9,101) (2,354) --

Sales and

marketing $1,013,281 (73,146) (4,633) (3,797) --

General and

administrative $ 269,386 (33,979) (1,689) (152) (3,499)

Operating

income $ 427,993 291,691 16,298 34,758 3,499

Operating margin 15.0% 10.2% 0.6% 1.2% 0.1%

Income before

income taxes $ 416,375 291,691 16,298 34,758 3,499

Income tax

provision $ 58,936

Tax rate 14.2%

Net income $ 357,439 291,691 16,298 34,758 3,499

Net income per

weighted-average

share, basic for

Class A and

Class B (3) $ 0.87 $ 0.71 $ 0.04 $ 0.08 $ 0.01

Net income per

weighted-average

share, diluted for

Class A and

Class B (4) $ 0.84 $ 0.69 $ 0.04 $ 0.08 $ --

tables continue below

Stock-Based

Compensation

Capitalized Included in

Software Capitalized Tax

Development Software Adjustment Non-GAAP,

Costs (1) Development (2) as adjusted

---------- ---------- ---------- ----------

Operating expenses:

Cost of license

revenues (99,522) -- -- $ 52,414

Cost of services

revenues -- -- -- $ 292,318

Research and

development 71,666 (10,924) -- $ 537,820

Sales and

marketing -- -- -- $ 931,705

General and

administrative -- -- -- $ 230,067

Operating income 27,856 10,924 -- $ 813,019

Operating margin 1.0% 0.4% -- 28.5%

Income before

income taxes 27,856 10,924 -- $ 801,401

Income tax

provision 103,558 $ 162,494

Tax rate 20.3%

Net income 27,856 10,924 (103,558) $ 638,907

Net income per

weighted-average

share, basic for

Class A and

Class B (3) $ 0.07 $ 0.03 $ (0.25) $ 1.56

Net income per

weighted-average

share, diluted for

Class A and

Class B (4) $ 0.07 $ 0.03 $ (0.24) $ 1.51

(1) For the year ended December 31, 2010, we capitalized $71.7 million including $10.9 million of stock-based compensation) of costs incurred for the development of software products. Amortization expense from capitalized amounts was $99.5 million for the year ended December 31, 2010.

(2) We calculate non-GAAP financial information for each fiscal quarter by adjusting for a tax rate equal to our annual estimated tax rate on non-GAAP income. This rate is based on our estimated annual GAAP income tax rate forecast, adjusted to account for items excluded from GAAP income in calculating the non-GAAP financial measures presented above. Our estimated tax rate on non-GAAP income is determined annually and may be re-calculated during the year to take into account events or trends that we believe materially impact the estimated annual rate including, but not limited to, significant changes resulting from tax legislation, tax audit closures, material changes in the geographic mix of revenues and expenses and other significant events. For the full fiscal year, the tax rate on non-GAAP income shown in the above table represents the weighted-average of the estimated tax rates that were applied to our quarterly non-GAAP financial results during the fiscal year. Due to the differences in the tax treatment of items excluded from non-GAAP earnings, as well as the methodology applied to our estimated annual tax rates as described above, our estimated tax rate on non-GAAP income may differ from our GAAP tax rate and from our actual tax liabilities.

(3) Calculated based upon 409,805 basic weighted average shares for Class A and Class B.

(4) Calculated based upon 423,446 diluted weighted average shares for Class A and Class B.

VMware, Inc.

RECONCILIATION OF GAAP TO NON-GAAP DATA

For the Year Ended December 31, 2009

(in thousands, except per share amounts)

(unaudited)

Employer

Payroll

Tax on

Employee

Stock Intangible

Stock-Based Trans- Amortiz-

GAAP Compensation actions ation

--------- --------- --------- ---------

Operating expenses :

Cost of license revenues $ 126,686 (1,293) (17) (11,669)

Cost of services revenues $ 233,042 (14,874) (182) (266)

Research and development $ 496,552 (121,770) (1,684) (107)

Sales and marketing $ 736,383 (58,610) (647) (1,594)

General and administrative $ 211,979 (34,909) (404) (498)

Operating income $ 219,295 231,456 2,934 14,134

Operating margin 10.8% 11.4% 0.2% 0.7%

Other income, net $ 2,879 -- -- --

Income before income taxes $ 223,449 231,456 2,934 14,134

Income tax provision $ 26,351 43,170 669 5,018

Tax rate 11.8%

Net income $ 197,098 188,286 2,265 9,116

Net income per weighted-average

share, basic for Class A and

Class B (2) $ 0.50 $ 0.48 $ 0.01 $ 0.02

Net income per weighted-average

share, diluted for Class A and

Class B (3) $ 0.49 $ 0.47 $ 0.01 $ 0.02

tables continue below

Stock-Based

Compensation

Capitalized Included in

Acquisition Software Capitalized Non-GAAP,

Related Development Software as

Items Costs (1) Development adjusted

--------- --------- --------- ---------

Operating expenses :

Cost of license revenues -- (82,915) -- $ 30,792

Cost of services revenues -- -- -- $ 217,720

Research and development -- 83,514 (14,903) $ 441,602

Sales and marketing -- -- -- $ 675,532

General and administrative (1,601) -- -- $ 174,567

Operating income 1,601 (599) 14,903 $ 483,724

Operating margin 0.1% -- 0.7% 23.9%

Other income, net (5,859) -- -- $ (2,980)

Income before income taxes (4,258) (599) 14,903 $ 482,019

Income tax provision -- 3,002 2,779 $ 80,989

Tax rate 16.8%

Net income (4,258) (3,601) 12,124 $ 401,030

Net income per weighted-average

share, basic for Class A and

Class B (2) $ (0.01) $ (0.01) $ 0.03 $ 1.02

Net income per weighted-average

share, diluted for Class A and

Class B (3) $ (0.01) $ (0.01) $ 0.03 $ 1.00

(1) For the year ended December 31, 2009, we capitalized $83.5 million including $14.9 million of stock-based compensation) of costs incurred for the development of software products. Amortization expense from capitalized amounts was $82.9 million for the year ended December 31, 2009.

(2) Calculated based upon 394,269 basic weighted-average shares for Class A and Class B.

(3) Calculated based upon 399,776 diluted weighted-average shares for Class A and Class B.

VMware, Inc.

REVENUE BY TYPE

(in thousands)

(unaudited)

For the Three Months For the Year Ended

Ended December 31, December 31,

---------------------- ----------------------

2010 2009 2010 2009

---------- ---------- ---------- ----------

Revenues:

License $ 422,343 $ 304,206 $1,401,424 $1,029,442

Services:

Software maintenance 345,260 246,236 1,217,064 823,789

Professional services 68,058 57,759 238,855 170,706

---------- ---------- ---------- ----------

Total services 413,318 303,995 1,455,919 994,495

---------- ---------- ---------- ----------

$ 835,661 $ 608,201 $2,857,343 $2,023,937

========== ========== ========== ==========

Percentage of revenues:

License 50.5% 50.0% 49.0% 50.9%

Services:

Software maintenance 41.3% 40.5% 42.6% 40.7%

Professional services 8.2% 9.5% 8.4% 8.4%

---------- ---------- ---------- ----------

Total services 49.5% 50.0% 51.0% 49.1%

---------- ---------- ---------- ----------

100.0% 100.0% 100.0% 100.0%

========== ========== ========== ==========

VMware, Inc.

RECONCILIATION OF GAAP CASH FLOWS FROM OPERATING ACTIVITIES

TO FREE CASH FLOWS

(A NON-GAAP FINANCIAL MEASURE)

For the Three Months Ended December 31, 2010 and 2009

(in thousands)

(unaudited)

For the Three Months

Ended December 31,

--------------------

2010 2009

--------- ---------

GAAP cash flows from operating activities $ 406,615 $ 283,691

Capitalized software development costs (15,955) (15,087)

Excess tax benefits from stock-based compensation 56,253 13,376

Capital expenditures (40,450) (23,462)

--------- ---------

Free cash flows $ 406,463 $ 258,518

========= =========

VMware, Inc.

RECONCILIATION OF GAAP CASH FLOWS FROM OPERATING ACTIVITIES

TO FREE CASH FLOWS

(A NON-GAAP FINANCIAL MEASURE)

For the Year Ended December 31, 2010 and 2009

(in thousands)

(unaudited)

For the Year Ended

December 31,

------------------------

2010 2009

----------- -----------

GAAP cash flows from operating activities $ 1,174,389 $ 985,616

Capitalized software development costs (64,149) (68,611)

Excess tax benefits from stock-based compensation 223,457 26,214

Capital expenditures (131,695) (103,375)

----------- -----------

Free cash flows $ 1,202,002 $ 839,844

=========== ===========

About Non-GAAP Financial Measures

To provide investors and others with additional information regarding VMware's results, we have disclosed in this press release the following non-GAAP financial measures: non-GAAP operating income, non-GAAP net income, non-GAAP operating margin and trailing twelve-month and fourth quarter free cash flows. VMware has provided a reconciliation of each non-GAAP financial measure used in this earnings release to the most directly comparable GAAP financial measure. These non-GAAP financial measures differ from GAAP in that they exclude stock-based compensation, employer payroll tax on employee stock transactions, amortization of intangible assets, acquisition related items, and the net effect of the amortization and capitalization of software development costs, each as discussed below.

VMware's management uses these non-GAAP financial measures to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, for short- and long-term operating plans, to calculate bonus payments and to evaluate VMware's financial performance, the performance of its individual functional groups and the ability of operations to generate cash. Management believes these non-GAAP financial measures reflect VMware's ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in VMware's business, as they exclude expenses that are not reflective of ongoing operating results. Management also believes that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating VMware's operating results and future prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies. Additionally, management believes information regarding free cash flows provides investors and others with an important perspective on the cash available to make strategic acquisitions and investments, to repurchase shares, to fund ongoing operations and to fund other capital expenditures.

Management believes these non-GAAP financial measures are useful to investors and others in assessing VMware's operating performance due to the following factors:

-- Stock-based compensation. Although stock-based compensation is an

important aspect of the compensation of VMware's employees and

executives, determining the fair value of the stock-based instruments

involves a high degree of judgment and estimation and the expense

recorded may bear little resemblance to the actual value realized upon

the future exercise or termination of the related stock-based awards.

Furthermore, unlike cash compensation, the value of stock-based

compensation is determined using a complex formula that incorporates

factors, such as market volatility, that are beyond our control.

Management believes it is useful to exclude stock-based compensation

in order to better understand the long-term performance of our core

business and to facilitate comparison of our results to those of peer

companies. In addition, we account for stock-based compensation under

GAAP, which requires that we report the excess income tax benefit from

stock-based compensation as a financing cash flow rather than as an

operating cash flow. We have added this benefit back to our

calculation of free cash flows in order to generally classify cash

flows arising from income taxes as operating cash flows.

-- Employer payroll tax on employee stock transactions. The amount of

employer payroll taxes on stock-based compensation is dependent on

VMware's stock price and other factors that are beyond our control and

do not correlate to the operation of the business.

-- Amortization of intangible assets. A portion of the purchase price of

VMware's acquisitions is generally allocated to intangible assets,

such as intellectual property, and is subject to amortization.

However, VMware does not acquire businesses on a predictable cycle.

Additionally, the amount of an acquisition's purchase price allocated

to intangible assets and the term of its related amortization can vary

significantly and are unique to each acquisition. Therefore, VMware

believes that the presentation of non-GAAP financial measures that

adjust for the amortization of intangible assets, provides investors

and others with a consistent basis for comparison across accounting

periods.

-- Acquisition related items. Acquisition related items include direct

costs of acquisitions, such as transaction fees, which vary

significantly and are unique to each acquisition. Additionally, VMware

does not acquire businesses on a predictable cycle.

-- Amortization and capitalization of software development costs.

Amortization and capitalization of software development costs can vary

significantly depending upon the timing of products reaching

technological feasibility and being made generally available. In

addition, we exclude the capitalization of software from our free cash

flows to better convey management's view of operating cash flows. If

we did not capitalize costs under generally accepted accounting

guidance, our GAAP operating cash flows would be lower as a result of

additional expense recognized within net income and paid out in cash

during the period.

Additionally, we believe that the non-GAAP financial measure, free cash flows, is meaningful to investors because we review cash flows generated from operations after taking into consideration capital expenditures due to the fact that these expenditures are considered to be a necessary component of ongoing operations. As discussed above, we also exclude capitalization of software development costs and the excess income tax benefit from stock-based compensation from our measure of free cash flows.

The use of non-GAAP financial measures has certain limitations because they do not reflect all items of income and expense that affect VMware's operations. Specifically, in the case of stock-based compensation, if VMware did not pay out a portion of its compensation in the form of stock-based compensation and related employer payroll taxes, the cash salary expense included in costs of revenues and operating expenses would be higher, which would affect VMware's cash position. VMware compensates for these limitations by reconciling the non-GAAP financial measures to the most comparable GAAP financial measures. These non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from, measures prepared in accordance with GAAP and should not be considered measures of VMware's liquidity. Further, these non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore comparability may be limited. Management encourages investors and others to review VMware's financial information in its entirety and not rely on a single financial measure.

Über VMware

VMware bildet mit seinen Lösungen für die Virtualisierung von Unternehmensinfrastrukturen die Basis für das Computing von morgen. Unternehmen jeder Größe haben mit Virtualisierungslösungen von VMware die Möglichkeit, ihre IT zu verschlanken und im Management zu vereinfachen sowie im Hinblick auf Prozesse und künftige Geschäftsentwicklungen flexibel und hochverfügbar zu gestalten – egal ob auf externen oder eigenen Plattformen. Kunden vertrauen der führenden Virtualisierungsplattform VMware vSphere, um Investitionen und laufende Ausgaben einzusparen, Business Continuity zu garantieren, ein höheres Sicherheitsniveau zu erreichen und ökologische Ziele wie Energieeinsparung umzusetzen. Mit mehr als 190.000 Kunden, über 25.000 Partnern und einem Umsatz von 2,0 Milliarden US-Dollar in 2009 ist VMware weltweiter Marktführer für Virtualisierung, das Thema mit fortwährend oberster Priorität für CIOs.

VMware hat seinen Firmenhauptsitz in Palo Alto, Kalifornien. Die deutsche Niederlassung des Unternehmens befindet sich in München. Weitere Informationen finden Sie unter www.vmware.de.

Weitere Informationen

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VMware Global, Inc.
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www.vmware.de

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