2.2.0.7 false Income Taxes 11001 - Disclosure - Income Taxes true false false false 1 USD false false Unit12 Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 Unit13 Divide http://www.xbrl.org/2003/iso4217 USD iso4217 http://www.xbrl.org/2003/instance shares xbrli 0 Unit1 Standard http://www.xbrl.org/2003/instance shares xbrli 0 $ 5 Income Taxes 3 us-gaap_IncomeTaxDisclosureTextBlock us-gaap true na duration No definition available. false false false false false false false false false false false false 1 false false false false 0 0 <div> J. Income Taxes Although VMware files a consolidated federal tax return with EMC, VMware calculates its income tax provision on a stand-alone basis. VMware's effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. The rate at which the provision for income taxes is calculated differs from the U.S. federal statutory income tax rate primarily due to differential tax rates in foreign jurisdictions where income is earned and considered to be indefinitely reinvested. VMware's effective income tax rate was 23.1% and 16.3%, respectively, for the three months ended June 30, 2010 and 2009. The effective income tax rate was 21.4% and 17.6%, respectively, for the six months ended June 30, 2010 and 2009. The increase in the effective rate for the three and six months ended June 30, 2010 compared to the three and six months ended June 30, 2009 was mainly attributable to the expiration of the U.S. Federal R&D tax credit, an increase in foreign withholding taxes and an increase in other non-deductible expenses. These increases were partially offset by a decrease in unrecognized tax benefits from uncertain tax positions as a percentage of income before tax, as well as by discrete tax benefits related to foreign exchange rates and employee stock purchase plan disqualifying dispositions. All income earned abroad, except for previously taxed income for U.S. tax purposes, is considered indefinitely reinvested in VMware's foreign operations and no provision for U.S. taxes has been provided with respect thereto. As of June 30, 2010, VMware had $83.4 million of gross unrecognized tax benefits and $80.4 million of net unrecognized tax benefits. The gross unrecognized tax benefits do not take into account $8.1 million of offsetting tax benefits, as these are not recognized on the consolidated balance sheets. VMware's net unrecognized tax benefits of $80.4 million include $70.0 million that, if recognized, would benefit VMware's effective income tax rate; the remaining $10.4 million could be a reduction to goodwill if recognized within the measurement period in accordance with generally accepted accounting principles. Any portion of the $10.4 million recognized outside the measurement period will be a reduction to tax expense. VMware cannot reasonably estimate the amounts that would be recorded to goodwill or to the consolidated statements of income. It is reasonably possible that VMware may pay an immaterial amount of the $80.4 million of net unrecognized tax benefits within the next 12 months. However, based on the status of audit examinations and the protocol of finalizing audits, it is not possible to accurately estimate the amount to be paid within the next 12 months. The net unrecognized tax benefits of $80.4 million were classified as a non-current liability on the consolidated balance sheet as of June 30, 2010. VMware recognizes interest expense and penalties related to income tax matters in the income tax provision. VMware recognized approximately $2.1 million in interest and penalties for the six months ended June 30, 2010 and as of June 30, 2010, had $6.0 million of interest associated with the net unrecognized tax benefits accrued on the consolidated balance sheet. These amounts are not included as components of the $80.4 million of net unrecognized tax benefits at June 30, 2010. </div> J. Income Taxes Although VMware files a consolidated federal tax return with EMC, VMware calculates its income tax provision on a stand-alone basis. VMware's false false false us-types:textBlockItemType textblock Description containing the entire income tax disclosure. Examples include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. This element may be used as a single block of text to encapsulate the entire disclosure including data and tables. Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 false 1 1 false UnKnown UnKnown UnKnown false true