2.2.0.7 false Related Party Transactions 11401 - Disclosure - Related Party Transactions 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 Related Party Transactions 3 us-gaap_RelatedPartyTransactionsDisclosureTextBlock 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> N. Related Party Transactions In the three months ended June 30, 2010, VMware acquired certain software product technology and expertise from EMC's Ionix information technology management business for cash consideration of $175.0 million. EMC retained the Ionix brand and will continue to offer customers the products acquired by VMware, pursuant to the ongoing reseller agreement between EMC and VMware. See Note F for further information. Pursuant to the ongoing reseller arrangement with EMC that commenced in 2009, EMC bundles VMware's products and services with EMC's hardware and sells them to end users. In the three months ended June 30, 2010 and 2009, VMware recognized revenues of $10.4 million and $0.5 million, respectively, from products sold pursuant to VMware's reseller arrangement with EMC. In the six months ended June 30, 2010 and 2009, VMware recognized revenues of $17.0 million and $2.6 million, respectively, from products sold pursuant to VMware's reseller arrangement with EMC. As of June 30, 2010, $31.7 million of revenues from products sold under the reseller arrangement were included in deferred revenue. In the three months ended June 30, 2010 and 2009, VMware recognized professional services revenues of $12.9 million and $5.6 million, respectively, for services provided to EMC's customers pursuant to VMware's contractual agreements with EMC. In the six months ended June 30, 2010 and 2009, VMware recognized professional services revenues of $22.0 million and $10.1 million, respectively, from such contractual arrangements with EMC. As of June 30, 2010, $2.2 million of revenues from professional services to EMC customers were included in deferred revenue. In the three months ended June 30, 2010 and 2009, VMware recognized revenues of $0.8 million and $0.7 million, respectively, from server and desktop products and services purchased by EMC for internal use pursuant to VMware's contractual agreements with EMC. In the six months ended June 30, 2010 and 2009, VMware recognized $2.2 million and $1.3 million, respectively, from such contractual arrangements with EMC. As of June 30, 2010, $5.2 million of revenues from server and desktop products and services purchased by EMC for internal use were included in deferred revenue. VMware purchased storage systems and software, as well as consulting services, from EMC for $2.1 million in both the three months ended June 30, 2010 and 2009, respectively, and for $6.4 million and $7.2 million in the six months ended June 30, 2010 and 2009, respectively. In certain geographic regions where VMware does not have an established legal entity, VMware contracts with EMC subsidiaries for support services and EMC employees who are managed by VMware's personnel. The costs incurred by EMC on VMware's behalf related to these employees are passed on to VMware and VMware is charged a mark-up intended to approximate costs that would have been charged had VMware contracted for such services with an unrelated third party. These costs are included as expenses in VMware's consolidated statements of income and primarily include salaries and benefits, travel and rent. Additionally, EMC incurs certain costs on VMware's behalf in the U.S., which historically primarily related to a shared system for travel. In the fourth quarter of 2009, VMware implemented its own travel system in the U.S. and is now incurring these costs directly. The total cost of these services provided to VMware by EMC was $14.2 million and $28.6 million in the three months ended June 30, 2010 and 2009, respectively, and $31.8 million and $53.1 million in the six months ended June 30, 2010 and 2009, respectively. As calculated under VMware's tax sharing agreement with EMC, VMware paid EMC $5.1 million in the six months ended June 30, 2010 for its portion of EMC's 2009 consolidated federal income taxes. No payments were made by VMware to EMC during the three months ended June 30, 2010. During the three and six months ended June 30, 2009, VMware paid $2.5 million for its portion of EMC's 2007 consolidated state income taxes. Under the same tax sharing agreement, EMC paid VMware $2.5 million during the three and six months ended June 30, 2010 for a refund of an overpayment related to the consolidated federal and state income taxes for the fiscal year ended December 31, 2008. EMC paid VMware $87.9 million during the three and six months ended June 30, 2009 for the VMware stand-alone federal taxable loss for the fiscal year ended December 31, 2008 and for a refund of an overpayment related to VMware's portion of EMC's 2007 federal consolidated tax return. The amounts that VMware pays to EMC for its portion of federal income taxes on EMC's consolidated tax return differ from the amounts VMware would owe on a stand-alone basis, and the difference is presented as a component of stockholders' equity. For all periods presented, the difference was not significant. Interest expense with EMC, net, primarily consists of interest expense on the note payable to EMC. In the three months ended June 30, 2010 and 2009, $1.0 million and $2.0 million, respectively, of interest expense was recorded related to the note payable to EMC and included in interest expense with EMC, net, recorded on the consolidated statements of income. In the six months ended June 30, 2010 and 2009, $1.9 million and $4.2 million, respectively, of interest expense was recorded related to the note payable. VMware's interest income and expenses as a separate, stand-alone company may be higher or lower than the amounts reflected in the consolidated financial statements. As of June 30, 2010, VMware had $43.0 million due from EMC, which was partially offset by $20.1 million due to EMC. The net amount due from EMC as of June 30, 2010 was $22.9 million and resulted from the related party transactions described above. In addition to the $22.9 million due from EMC, as of June 30, 2010, VMware had $57.5 million of income taxes receivable due from EMC, which is included in other current assets, and $6.2 million of income taxes payable due to EMC, which is included in accrued expenses and other, on VMware's consolidated balance sheets. A large portion of the income tax receivable is related to 2010 federal income taxes and is expected to be received from EMC after the 2010 consolidated federal tax return extension is filed. Balances due to or from EMC which are unrelated to tax obligations are generally settled in cash within 60 days of each quarter-end. The timing of the tax payments due to and from EMC is governed by the tax sharing agreement with EMC. </div> N. Related Party Transactions In the three months ended June 30, 2010, VMware acquired certain software product technology and expertise from EMC's Ionix false false false us-types:textBlockItemType textblock This element may be used for the entire related party transactions disclosure as a single block of text. Disclosure may include: the nature of the relationship(s), a description of the transactions, the amount of the transactions, the effects of any change in the method of establishing the terms of the transaction from the previous period, stated interest rate, expiration date, terms and manner of settlement per the agreement with the related party, and amounts due to or from related parties. If the entity and one or more other entities are under common ownership or management control and this control affects the operating results or financial position, disclosure includes the nature of the control relationship even if there are no transactions between the entities. Disclosure may also include the aggregate amount of current and deferred tax expense for each statement of earnings presented where the entity is a member of a group that files a consolidated tax return, the amount of any tax related balances due to or from affiliates as of the date of each statement of financial position presented, the principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to the members of the group and the nature and effect of any changes in that method. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates. 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