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F. Business Combinations, Goodwill and Intangible Assets, Net Business Combinations The results of operations of the acquired businesses mentioned below have been included in VMware's consolidated financial statements from the date of purchase. Pro forma results of operations have not been presented as the results of the acquired businesses were not material to VMware's consolidated results of operations in the three and six months ended June 30, 2011 and 2010.   In the six months ended June 30, 2011, VMware acquired four companies. The aggregate consideration for these acquisitions was $204.7 million, net of cash acquired, and includes cash of $204.1 million and the fair value of equity awards assumed attributed to pre-combination services of $0.6 million. The following table summarizes the allocation of the consideration to the fair value of the tangible and intangible assets acquired in the six months ended June 30, 2011, (table in thousands):   <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="68%" align="center"> <tr><td width="87%"> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Other current assets</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">3,492</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Intangible assets</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">66,800</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Goodwill</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">144,150</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Deferred tax assets</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">8,270</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Other assets</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">89</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr><td valign="top"> Total tangible and intangible assets acquired</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">222,801</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Unearned revenues</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(5,110</td> <td valign="bottom" nowrap="nowrap">) </td></tr> <tr><td valign="top"> Deferred tax liabilities</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(8,751</td> <td valign="bottom" nowrap="nowrap">) </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Accrued liabilities and other</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(4,218</td> <td valign="bottom" nowrap="nowrap">) </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr><td valign="top"> Total liabilities assumed</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(18,079</td> <td valign="bottom" nowrap="nowrap">) </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Fair value of tangible and intangible assets acquired and liabilities assumed</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">204,722</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr></table> Intangible Assets, Net The following table summarizes the fair value of the intangible assets acquired by VMware through both business combinations and asset purchases in the six months ended June 30, 2011, (table in thousands):   <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="76%" align="center"> <tr><td width="70%"> </td> <td valign="bottom" width="11%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="11%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" nowrap="nowrap" align="center">Weighted-Average Useful Lives (in years)</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" nowrap="nowrap" align="center">Fair Value Amount</td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Purchased technology</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">6.0</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">60,400</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Customer relationships and customer lists</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">6.6</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">18,700</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Total intangible assets, net, excluding goodwill</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">79,100</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr></table> Goodwill Changes in the carrying amount of goodwill for the six months ended June 30, 2011 consisted of the following (table in thousands):   <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="68%" align="center"> <tr><td width="85%"> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Balance, January 1, 2011</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,568,600</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Increase in goodwill related to business combinations</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">144,150</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Deferred tax adjustments to purchase price allocations on previous acquisitions</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,645</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Other adjustments to purchase price allocations on previous acquisitions</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(411</td> <td valign="bottom" nowrap="nowrap">) </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Balance, June 30, 2011</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,714,984</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr></table>

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188445000

M. Comprehensive Income The following table sets forth the components of comprehensive income for the three and six months ended June 30, 2011 and 2010, respectively (table in thousands):   <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="92%" align="center"> <tr><td width="65%"> </td> <td valign="bottom" width="3%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="3%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="3%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="3%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="6" align="center">For the three months ended June 30,</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="6" align="center">For the six months ended June 30,</td> <td valign="bottom"> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">2011</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">2010</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">2011</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">2010</td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Net income</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">220,158</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">74,538</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">345,970</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">152,959</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Other comprehensive income:</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Unrealized gains (losses) on available-for-sale securities, net of taxes of $1,352, $1,246, $1,196 and $1,504</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,029</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,019</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,794</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,441</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Reclassification of (gains) losses on available-for-sale securities recognized during the period, net of taxes of $(22,494), $0, $(12,788) and $0</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(33,742</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(19,181</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Total other comprehensive income</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(31,713</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,019</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(17,387</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,441</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr><td valign="top"> Total comprehensive income, net of taxes</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">188,445</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">76,557</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">328,583</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">155,400</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr></table> In each period presented on VMware's consolidated balance sheets, accumulated other comprehensive income consisted of unrealized gains and losses on available-for-sale securities, net of taxes. In the three months ended June 30, 2011, VMware realized a gross gain of $56.0 million from the sale of its investment in Terremark Worldwide, Inc., which was acquired by Verizon in a cash transaction. The gain was recorded to other income (expense), net on the consolidated statements of income.

3082000

66846000

146412000

31800000

77883000

14200000

197426000

42700000

103547000

18000000

0.0055

63200000

5400000

18400000

1270426000

1358225000

589668000

719931000

100689000

124595000

149126000

116917000

30096000

5378000

53700000

28200000

62000000

31300000

112344000

58556000

155658000

74709000

800000000

55481000

29994000

20900000

50900000

0.38

0.18

0.83

0.52

0.37

0.18

0.80

0.51

0.214

0.231

0.140

0.106

242180000

257785000

29000000

3600000

306182000

372438000

43363000

44484000

0.793

51800000

88501000

64583000

151264000

101256000

88501000

64583000

151264000

101256000

<table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="84%" align="center"> <tr><td width="64%"> </td> <td valign="bottom" width="4%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="4%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="4%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="10" align="center">June 30, 2011</td> <td valign="bottom"> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">Level 1</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">Level 2</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">Total</td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Money-market funds</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,617,954</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,617,954</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> U.S. government and agency obligations</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">177,308</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">243,990</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">421,298</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> U.S. and foreign corporate debt securities</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">786,613</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">786,613</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Foreign governments and multi-national agency obligations</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">62,249</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">62,249</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Municipal obligations</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">622,449</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">622,449</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Asset-backed securities</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">28,336</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">28,336</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Mortgage-backed securities</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">19,625</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">19,625</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr><td valign="top"> Total cash equivalents and investments</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,795,262</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,763,262</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">3,558,524</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr><td height="16"> </td> <td height="16" colspan="12"> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="10" align="center">December 31, 2010</td> <td valign="bottom"> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">Level 1</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">Level 2</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">Total</td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Money-market funds</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,436,319</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,436,319</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> U.S. government and agency obligations</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">66,762</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">312,543</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">379,305</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> U.S. and foreign corporate debt securities</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">537,544</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">537,544</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Foreign governments and multi-national agency obligations</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">63,161</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">63,161</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Municipal obligations</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">659,487</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">659,487</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Asset-backed securities</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">55,749</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">55,749</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Equity securities</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">51,800</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">51,800</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr><td valign="top"> Total cash equivalents and investments</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,554,881</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,628,484</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">3,183,365</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr></table>

<table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="92%" align="center"> <tr style="line-height: 0pt; visibility: hidden; color: white;"><td width="62%"> </td> <td valign="bottom" width="3%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="3%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="3%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="3%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom">  </td> <td valign="bottom">   </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" valign="bottom" colspan="14" align="center">June 30, 2011 </td> <td valign="bottom">  </td></tr> <tr><td valign="bottom">  </td> <td valign="bottom">   </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" valign="bottom" colspan="2" align="center">Cost or Amortized Cost </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" valign="bottom" colspan="2" align="center">Unrealized Gains </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" valign="bottom" colspan="2" align="center">Unrealized Losses </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" valign="bottom" colspan="2" align="center">Aggregate Fair Value </td> <td valign="bottom">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> U.S. government and agency obligations</td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">405,940 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">1,620 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">(80 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">407,480 </td> <td valign="bottom">   </td></tr> <tr><td valign="top"> U.S. and foreign corporate debt securities</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">770,349 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">1,779 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">(158 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">771,970 </td> <td valign="bottom">   </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Foreign governments and multi-national agency obligations</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">62,186 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">77 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">(14 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">62,249 </td> <td valign="bottom">   </td></tr> <tr><td valign="top"> Municipal obligations</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">621,868 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">903 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">(322 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">622,449 </td> <td valign="bottom">   </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Asset-backed securities</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">28,324 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">18 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">(6 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">28,336 </td> <td valign="bottom">   </td></tr> <tr><td valign="top"> Mortgage-backed securities</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">19,695 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">63 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">(133 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">19,625 </td> <td valign="bottom">   </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td> <td valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Total investments</td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">1,908,362 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">4,460 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">(713 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">1,912,109 </td> <td valign="bottom">   </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td>  </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td>  </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td>  </td> <td valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td>  </td></tr> <tr><td height="16"> </td> <td height="16" colspan="16"> </td></tr> <tr><td valign="bottom">  </td> <td valign="bottom">   </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" valign="bottom" colspan="14" align="center">December 31, 2010 </td> <td valign="bottom">  </td></tr> <tr><td valign="bottom">  </td> <td valign="bottom">   </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" valign="bottom" colspan="2" align="center">Cost or Amortized Cost </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" valign="bottom" colspan="2" align="center">Unrealized Gains </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" valign="bottom" colspan="2" align="center">Unrealized Losses </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" valign="bottom" colspan="2" align="center">Aggregate Fair Value </td> <td valign="bottom">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> U.S. government and agency obligations</td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">379,288 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">326 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">(310 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">379,304 </td> <td valign="bottom">   </td></tr> <tr><td valign="top"> U.S. and foreign corporate debt securities</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">522,677 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">724 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">(286 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">523,115 </td> <td valign="bottom">   </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Foreign governments and multi-national agency obligations</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">63,101 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">72 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">(13 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">63,160 </td> <td valign="bottom">   </td></tr> <tr><td valign="top"> Municipal obligations</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">660,138 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">111 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">(762 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">659,487 </td> <td valign="bottom">   </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Asset-backed securities</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">17,800 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">9 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">—   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">17,809 </td> <td valign="bottom">   </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td> <td valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td></tr> <tr><td valign="top"> Total fixed income securities</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">1,643,004 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">1,242 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">(1,371 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">1,642,875 </td> <td valign="bottom">   </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Equity securities</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">20,000 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">31,800 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">—   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">51,800 </td> <td valign="bottom">   </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td> <td valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td></tr> <tr><td valign="top"> Total investments</td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">1,663,004 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">33,042 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">(1,371 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">1,694,675 </td> <td valign="bottom">   </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td>  </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td>  </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td>  </td> <td valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td>  </td></tr></table>

E. Fair Value Measurements and Derivative Instruments Fair Value Measurements Generally accepted accounting principles provide that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, generally accepted accounting principles established a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) inputs are quoted prices in active markets for identical assets or liabilities; (Level 2) inputs other than the quoted prices included within Level 1 that are observable for the assets or liabilities, either directly or indirectly; and (Level 3) unobservable inputs for the assets or liabilities in which there is little or no market data, which requires VMware to develop its own assumptions. VMware's Level 1 classification of the fair value hierarchy includes money market funds, available-for-sale equity securities and certain available-for-sale fixed income securities because these securities are valued using quoted prices in active markets for identical assets. VMware's Level 2 classification includes the remainder of the available-for-sale fixed income securities because these securities are priced using quoted market prices for similar instruments and non-binding market prices that are corroborated by observable market data. VMware does not have any material assets or liabilities that fall into Level 3 of the fair value hierarchy.   The following tables set forth the fair value hierarchy of VMware's money market funds and available-for-sale securities, including those securities classified within cash and cash equivalents on the consolidated balance sheet, that were required to be measured at fair value as of June 30, 2011 and December 31, 2010, (tables in thousands):   <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="84%" align="center"> <tr><td width="64%"> </td> <td valign="bottom" width="4%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="4%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="4%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="10" align="center">June 30, 2011</td> <td valign="bottom"> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">Level 1</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">Level 2</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">Total</td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Money-market funds</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,617,954</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,617,954</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> U.S. government and agency obligations</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">177,308</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">243,990</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">421,298</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> U.S. and foreign corporate debt securities</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">786,613</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">786,613</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Foreign governments and multi-national agency obligations</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">62,249</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">62,249</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Municipal obligations</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">622,449</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">622,449</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Asset-backed securities</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">28,336</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">28,336</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Mortgage-backed securities</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">19,625</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">19,625</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr><td valign="top"> Total cash equivalents and investments</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,795,262</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,763,262</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">3,558,524</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr><td height="16"> </td> <td height="16" colspan="12"> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="10" align="center">December 31, 2010</td> <td valign="bottom"> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">Level 1</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">Level 2</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">Total</td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Money-market funds</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,436,319</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,436,319</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> U.S. government and agency obligations</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">66,762</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">312,543</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">379,305</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> U.S. and foreign corporate debt securities</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">537,544</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">537,544</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Foreign governments and multi-national agency obligations</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">63,161</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">63,161</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Municipal obligations</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">659,487</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">659,487</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Asset-backed securities</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">55,749</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">55,749</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Equity securities</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">51,800</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">51,800</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr><td valign="top"> Total cash equivalents and investments</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,554,881</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,628,484</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">3,183,365</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr></table> VMware's valuation inputs for foreign currency forward contracts are based on quoted prices and quoted pricing intervals from public data sources. These contracts are typically classified within Level 2 of the fair value hierarchy and are discussed below in the derivative instruments section. Derivative Instruments In order to manage exposure to foreign currency fluctuations, VMware enters into foreign currency forward contracts to hedge a portion of its net outstanding monetary assets and liabilities against movements in certain foreign exchange rates. These forward contracts are not designated as hedging instruments under applicable accounting guidance, and therefore all changes in the fair value of the forward contracts are reported in other income (expense), net in the consolidated statements of income. The gains and losses on VMware's foreign currency forward contracts generally offset the majority of the gains and losses associated with the underlying foreign-currency denominated assets and liabilities that VMware hedges. VMware does not enter into speculative foreign exchange contracts for trading purposes. VMware's foreign currency forward contracts are generally traded on a monthly basis with a typical contractual term of one month. As of June 30, 2011, VMware had outstanding forward contracts with a total notional value of $226.1 million. The fair value of these forward contracts was immaterial as of June 30, 2011 and therefore excluded from the table above. The fair value was measured under Level 2 sources as discussed above.

through 2046

52613000

54733000

56000000

128909000

61153000

146277000

78042000

1568600000

1714984000

144150000

-411000

2645000

194583000

96944000

402388000

246274000

J. Income Taxes Although VMware files a consolidated federal tax return with EMC, VMware calculates its income tax provision on a stand-alone basis. The Company'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 different tax rates in foreign jurisdictions where income is earned and considered to be indefinitely reinvested.   VMware's effective income tax rate was 10.6% and 23.1% for the three months ended June 30, 2011 and 2010, respectively. The effective income tax rate was 14.0% and 21.4%, respectively, for the six months ended June 30, 2011 and 2010. The lower effective rate for the three and six months ended June 30, 2011, compared with the three and six months ended June 30, 2010, was primarily attributable to the following items: an increase in tax benefits from the federal R&D tax credit relative to income before tax, resulting from the reenactment of the federal R&D tax credit which occurred during the fourth quarter of 2010; the release of uncertain tax positions primarily attributable to the closure of a tax audit; and a decrease in unrecognized tax benefits from uncertain tax positions as a percentage of income before tax. These were partially offset by a jurisdictional shift of income from lower-tax non-U.S. jurisdictions to the United States. VMware's rate of taxation in foreign jurisdictions is lower than the U.S. tax rate. VMware's international income is primarily earned by VMware's subsidiaries in Ireland. Management does not believe that any recent or currently expected developments in non-U.S. tax jurisdictions are reasonably likely to have a material impact on VMware's effective rate. As of June 30, 2011, VMware's total cash, cash equivalents, and short-term investments were $3,703.1 million, of which $1,721.2 million was held outside the U.S. If these overseas funds are needed for its operations in the U.S., VMware would be required to accrue and pay U.S. taxes on related undistributed earnings to repatriate these funds. However, VMware's intent is to indefinitely reinvest its non-U.S. earnings in its foreign operations and VMware's current plans do not demonstrate a need to repatriate them to fund its U.S. operations. VMware will meet its U.S. liquidity needs through ongoing cash flows, external borrowings, or both. VMware utilizes a variety of tax planning and financing strategies in an effort to ensure that its worldwide cash is available in the locations in which it is needed. 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, 2011, VMware had $76.7 million of gross unrecognized tax benefits, which excludes $6.3 million of offsetting tax benefits not recognized on the consolidated balance sheets. VMware's net unrecognized tax benefits of $78.4 million as of June 30, 2011, if recognized, would benefit VMware's effective income tax rate. It is reasonably possible that VMware may pay an immaterial amount of the $78.4 million of net unrecognized tax benefits within the next 12 months. The $78.4 million of net unrecognized tax benefits was classified as a non-current liability on the consolidated balance sheet. It is reasonably possible within the next 12 months that audit resolutions could potentially reduce total unrecognized tax benefits by between approximately $10 million and $12 million. Audit outcomes and the timing of audit settlements are subject to significant uncertainty. Due to the closure of a tax audit in the three months ended June 30, 2011, approximately $20.8 million of unrecognized tax benefits were released, which were offset by approximately $3.5 million in additional tax provision resulting from the audit. VMware recognizes interest expense and penalties related to income tax matters in the income tax provision. VMware recognized approximately $0.4 million in interest and penalties for the three months ended June 30, 2011 and accrued $5.3 million of interest and penalties as of June 30, 2011, associated with the net unrecognized tax benefits. These amounts are included as components of the $78.4 million of net unrecognized tax benefits as of June 30, 2011.

400000

41624000

22406000

56418000

26116000

6560000

9207000

-1707000

-11105000

-107688000

77543000

-26583000

54757000

31124000

16759000

37601000

4674000

26896000

78098000

34211000

102780000

4347000

126000

958000

-11119000

108401000

93311000

212952000

94566000

-2508000

-176444000

-141000000

24251000

23406000

34053000

16133000

-206000

-17054000

5142000

-39858000

210928000

429182000

1900000

1000000

1900000

1000000

1680000

995000

7121000

3715000

<font style="widows: 2; text-transform: none; text-indent: 0px; border-collapse: separate; font: medium 'Times New Roman'; white-space: normal; orphans: 2; letter-spacing: normal; color: rgb(0,0,0); word-spacing: 0px; webkit-border-horizontal-spacing: 0px; webkit-border-vertical-spacing: 0px; webkit-text-decorations-in-effect: none; webkit-text-size-adjust: auto; webkit-text-stroke-width: 0px;" class="_mt"> D. Investments Investments as of June 30, 2011 and December 31, 2010 consisted of the following (table in thousands):   <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="92%" align="center"> <tr style="line-height: 0pt; visibility: hidden; color: white;"><td width="62%"> </td> <td valign="bottom" width="3%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="3%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="3%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="3%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom">  </td> <td valign="bottom">   </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" valign="bottom" colspan="14" align="center">June 30, 2011 </td> <td valign="bottom">  </td></tr> <tr><td valign="bottom">  </td> <td valign="bottom">   </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" valign="bottom" colspan="2" align="center">Cost or Amortized Cost </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" valign="bottom" colspan="2" align="center">Unrealized Gains </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" valign="bottom" colspan="2" align="center">Unrealized Losses </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" valign="bottom" colspan="2" align="center">Aggregate Fair Value </td> <td valign="bottom">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> U.S. government and agency obligations</td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">405,940 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">1,620 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">(80 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">407,480 </td> <td valign="bottom">   </td></tr> <tr><td valign="top"> U.S. and foreign corporate debt securities</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">770,349 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">1,779 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">(158 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">771,970 </td> <td valign="bottom">   </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Foreign governments and multi-national agency obligations</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">62,186 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">77 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">(14 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">62,249 </td> <td valign="bottom">   </td></tr> <tr><td valign="top"> Municipal obligations</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">621,868 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">903 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">(322 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">622,449 </td> <td valign="bottom">   </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Asset-backed securities</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">28,324 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">18 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">(6 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">28,336 </td> <td valign="bottom">   </td></tr> <tr><td valign="top"> Mortgage-backed securities</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">19,695 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">63 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">(133 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">19,625 </td> <td valign="bottom">   </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td> <td valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Total investments</td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">1,908,362 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">4,460 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">(713 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">1,912,109 </td> <td valign="bottom">   </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td>  </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td>  </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td>  </td> <td valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td>  </td></tr> <tr><td height="16"> </td> <td height="16" colspan="16"> </td></tr> <tr><td valign="bottom">  </td> <td valign="bottom">   </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" valign="bottom" colspan="14" align="center">December 31, 2010 </td> <td valign="bottom">  </td></tr> <tr><td valign="bottom">  </td> <td valign="bottom">   </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" valign="bottom" colspan="2" align="center">Cost or Amortized Cost </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" valign="bottom" colspan="2" align="center">Unrealized Gains </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" valign="bottom" colspan="2" align="center">Unrealized Losses </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" valign="bottom" colspan="2" align="center">Aggregate Fair Value </td> <td valign="bottom">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> U.S. government and agency obligations</td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">379,288 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">326 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">(310 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">379,304 </td> <td valign="bottom">   </td></tr> <tr><td valign="top"> U.S. and foreign corporate debt securities</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">522,677 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">724 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">(286 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">523,115 </td> <td valign="bottom">   </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Foreign governments and multi-national agency obligations</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">63,101 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">72 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">(13 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">63,160 </td> <td valign="bottom">   </td></tr> <tr><td valign="top"> Municipal obligations</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">660,138 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">111 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">(762 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">659,487 </td> <td valign="bottom">   </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Asset-backed securities</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">17,800 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">9 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">—   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">17,809 </td> <td valign="bottom">   </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td> <td valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td></tr> <tr><td valign="top"> Total fixed income securities</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">1,643,004 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">1,242 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">(1,371 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">1,642,875 </td> <td valign="bottom">   </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Equity securities</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">20,000 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">31,800 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">—   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">51,800 </td> <td valign="bottom">   </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td> <td valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td></tr> <tr><td valign="top"> Total investments</td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">1,663,004 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">33,042 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">(1,371 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">1,694,675 </td> <td valign="bottom">   </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td>  </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td>  </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td>  </td> <td valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td>  </td></tr></table> <div> During the three months ended June 30, 2011, a realized gain of $56.0 million was recorded in other income (expense), net on the consolidated income statement for the sale of VMware's investment in Terremark Worldwide, Inc., which was acquired by Verizon in a cash transaction. All other realized gains and realized losses on investments were not material for the three and six months ended June 30, 2011 and 2010.   As of June 30, 2011 and December 31, 2010, VMware had no material investments that were in a continuous unrealized loss position for twelve months or greater. Unrealized losses on investments as of June 30, 2011, and December 31, 2010, which have been in a net loss position for less than twelve months were classified by investment category as follows (table in thousands): </div> <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="92%" align="center"> <tr style="line-height: 0pt; visibility: hidden; color: white;"><td width="64%"> </td> <td valign="bottom" width="4%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="4%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="4%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="4%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom">  </td> <td valign="bottom">   </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" valign="bottom" colspan="6" align="center">June 30, 2011 </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" valign="bottom" colspan="6" align="center">December 31, 2010 </td> <td valign="bottom">  </td></tr> <tr><td valign="bottom">  </td> <td valign="bottom">   </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" valign="bottom" colspan="2" align="center">Fair Value </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" valign="bottom" colspan="2" align="center">Unrealized Losses </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" valign="bottom" colspan="2" align="center">Fair Value </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" valign="bottom" colspan="2" align="center">Unrealized Losses </td> <td valign="bottom">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> U.S. government and agency obligations</td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">36,091 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">(80 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">109,932 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">(310 </td> <td valign="bottom">)  </td></tr> <tr><td valign="top"> U.S. and foreign corporate debt securities</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">159,702 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">(158 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">149,831 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">(286 </td> <td valign="bottom">)  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Foreign governments and multi-national agency obligations</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">13,021 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">(14 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">26,415 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">(13 </td> <td valign="bottom">)  </td></tr> <tr><td valign="top"> Municipal obligations</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">188,943 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">(322 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">412,882 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">(762 </td> <td valign="bottom">)  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Asset-backed securities</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">2,060 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">(6 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">—   </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">—   </td> <td valign="bottom">   </td></tr> <tr><td valign="top"> Mortgage-backed securities</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">11,061 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">(133 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">—   </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">—   </td> <td valign="bottom">   </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td> <td valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Total investments</td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">410,878 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">(713 </td> <td valign="bottom">)  </td> <td valign="bottom">  </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">699,060 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">(1,371 </td> <td valign="bottom">)  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td>  </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td>  </td> <td valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td>  </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td>  </td></tr></table> VMware evaluated its investments in fixed income securities as of June 30, 2011 and determined that there were no unrealized losses that indicated an other-than-temporary impairment. Contractual Maturities The contractual maturities of investments held at June 30, 2011 consisted of the following (table in thousands):   <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="76%" align="center"> <tr style="line-height: 0pt; visibility: hidden; color: white;"><td width="74%"> </td> <td valign="bottom" width="4%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="4%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom">  </td> <td valign="bottom">   </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" valign="bottom" colspan="2" align="center">Amortized Cost Basis </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" valign="bottom" colspan="2" align="center">Aggregate Fair Value </td> <td valign="bottom">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Due within one year</td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">810,860 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">811,399 </td> <td valign="bottom">   </td></tr> <tr><td valign="top"> Due after 1 year through 5 years</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">974,736 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">978,013 </td> <td valign="bottom">   </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Due after 5 years</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">122,766 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">122,697 </td> <td valign="bottom">   </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td></tr> <tr><td valign="top"> Total</td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">1,908,362 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">1,912,109 </td> <td valign="bottom">   </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td>  </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td>  </td></tr></table>

<table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="76%" align="center"> <tr style="line-height: 0pt; visibility: hidden; color: white;"><td width="74%"> </td> <td valign="bottom" width="4%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="4%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom">  </td> <td valign="bottom">   </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" valign="bottom" colspan="2" align="center">Amortized Cost Basis </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td style="border-bottom: rgb(0,0,0) 1px solid;" valign="bottom" colspan="2" align="center">Aggregate Fair Value </td> <td valign="bottom">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Due within one year</td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">810,860 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">811,399 </td> <td valign="bottom">   </td></tr> <tr><td valign="top"> Due after 1 year through 5 years</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">974,736 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">978,013 </td> <td valign="bottom">   </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Due after 5 years</td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">122,766 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">  </td> <td valign="bottom" align="right">122,697 </td> <td valign="bottom">   </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 1px solid;" valign="bottom">  </td> <td>  </td></tr> <tr><td valign="top"> Total</td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">1,908,362 </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td valign="bottom">$ </td> <td valign="bottom" align="right">1,912,109 </td> <td valign="bottom">   </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td>  </td> <td valign="bottom">   </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td style="border-top: rgb(0,0,0) 3px double;" valign="bottom">  </td> <td>  </td></tr></table>

600000

2046

2988876000

3242122000

6797319000

7542557000

1789152000

1961358000

80390000

40269000

104946000

48928000

635842000

323665000

883805000

464806000

one month

114325000

22886000

1011000

30473000

-1103274000

-926903000

-779645000

-411159000

571075000

216123000

940713000

462796000

152959000

74538000

345970000

220158000

450000000

226100000

203367000

101181000

340394000

186892000

744942000

25866000

26576000

33457000

40905000

46341000

571797000

A. Overview and Basis of Presentation Company and Background VMware, Inc. ("VMware" or the "Company") is the leading provider of virtualization and virtualization-based cloud infrastructure solutions. VMware's virtualization infrastructure software solutions run on industry-standard desktop computers and servers and support a wide range of operating system and application environments, as well as networking and storage infrastructures. Accounting Principles The financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America. Unaudited Interim Financial Information These accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") for interim financial reporting. In the opinion of management, these unaudited consolidated financial statements include all adjustments, consisting of normal recurring adjustments and accruals, for a fair statement of VMware's consolidated cash flows, results of operations and financial condition for the periods presented. Results of operations are not necessarily indicative of the results that may be expected for the full year 2011. Certain information and footnote disclosures typically included in annual consolidated financial statements have been condensed or omitted. Accordingly, these unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in VMware's 2010 Annual Report on Form 10-K. VMware was incorporated as a Delaware corporation in 1998 and continues to operate in large measure as a stand-alone company following the Company's acquisition by EMC Corporation ("EMC") in 2004 and following VMware's initial public offering of VMware's Class A common stock in August 2007. As of June 30, 2011, EMC holds 79.3% of VMware's outstanding common stock, including 34.1 million shares of VMware's Class A common stock and all of VMware's Class B common stock. VMware is considered a "controlled company" under the rules of the New York Stock Exchange. VMware historically has received, and continues to receive, certain administrative services from EMC, and VMware and EMC engage in certain intercompany transactions. Costs incurred by EMC for the direct benefit of VMware, such as salaries and benefits, travel and rent, plus a mark-up intended to approximate third-party costs, are included in VMware's consolidated financial statements. In addition, beginning in the three months ended June 30, 2011, VMware incurs costs to operate the Mozy service on behalf of EMC. These costs, plus a mark-up intended to approximate third party costs, are reimbursed to VMware by EMC and recorded as a reduction to the costs VMware incurred on the consolidated statements of income. Management believes the assumptions underlying the consolidated financial statements are reasonable. However, the amounts recorded for VMware's intercompany transactions with EMC would not be considered arm's length with an unrelated third party by nature of EMC's majority ownership of VMware. Therefore, the financial statements included herein may not necessarily reflect the cash flows, results of operations and financial condition had VMware engaged in such transactions with an unrelated third party during all periods presented. Accordingly, VMware's historical financial information is not necessarily indicative of what the Company's cash flows, results of operations and financial condition will be in the future if and when VMware contracts at arm's length with unrelated third parties for services the Company receives from and provides to EMC. Principles of Consolidation The consolidated financial statements include the accounts of VMware and its subsidiaries. All intercompany transactions and balances between VMware and its subsidiaries have been eliminated. All intercompany transactions with EMC in the consolidated statements of cash flows will be settled in cash, and changes in the intercompany balances are presented as a component of cash flows from operating activities. Use of Accounting Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenues and expenses during the reporting periods, and the disclosure of contingent liabilities at the date of the financial statements. Estimates are used for, but not limited to, capitalized software development costs, trade receivable valuation, certain accrued liabilities, useful lives of fixed assets and intangible assets, valuation of acquired intangibles, revenue reserves, income taxes, stock-based compensation and contingencies. Actual results could differ from those estimates.   New Accounting Pronouncements In June 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2011-05, Presentation of Comprehensive Income ("ASU 2011-05"). ASU 2011-05 eliminates the current option to report other comprehensive income and its components in the statement of changes in equity. Comprehensive income will either have to be presented in one continuous statement of comprehensive income or two separate consecutive statements. ASU 2011-05 is effective as of the beginning of each reporting entity's first annual reporting period that begins after December 15, 2011. VMware plans to adopt ASU 2011-05 on January 1, 2012 and will present comprehensive income in accordance with the requirements of the standard.

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G. Property and Equipment, Net Property and equipment, net, as of June 30, 2011 and December 31, 2010 consisted of the following (table in thousands):   <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="76%" align="center"> <tr><td width="74%"> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">June 30, 2011</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">December 31, 2010</td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Equipment and software</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">486,722</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">438,384</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Buildings and improvements</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">283,882</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">270,786</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Furniture and fixtures</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">54,733</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">52,613</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Construction in progress</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">66,846</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">3,082</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Total property and equipment</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">892,183</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">764,865</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Accumulated depreciation</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(406,233</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(345,800</td> <td valign="bottom" nowrap="nowrap">) </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Total property and equipment, net</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">485,950</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">419,065</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr></table>   Depreciation expense was $31.3 million and $28.2 million in the three months ended June 30, 2011 and 2010, respectively and $62.0 million and $53.7 million in the six months ended June 30, 2011 and 2010, respectively. In the three months ended June 30, 2011, VMware closed an agreement to purchase all of the right, title and interest in a ground lease covering the property and improvements adjacent to VMware's Palo Alto, California campus for $225.0 million. VMware paid the seller $45.0 million in the three months ended March 31, 2011 as a good faith deposit and in the three months ended June 30, 2011, VMware paid the remaining $180.0 million. Based upon the respective fair values, $51.9 million of the purchase price was recorded to property and equipment, net on the consolidated balance sheet for the fair value of the buildings and site improvements. As of June 30, 2011, $40.9 million of this amount was classified in construction in progress as the buildings had not yet been placed into service. The remaining $173.1 million of the purchase price was recorded to intangible assets, net on the consolidated balance sheet for the fair value of the ground lease and the right to develop additional square footage on the parcel. Concurrent with the closing of the transaction, VMware entered into an amended and restated ground lease for the property with the Board of Trustees of the Leland Stanford Junior University ("Stanford"), the lessor of both the new property and VMware's existing campus. VMware will possess the title to the interest and buildings during the duration of the lease. Upon termination of the lease, all title will revert to Stanford. The $51.9 million of buildings and site improvements will be depreciated from the date they are placed into service through the term of the Amended and Restated Ground Lease. Amortization of the $173.1 million of intangible assets began in the three months ended June 30, 2011 and will continue through 2046. At the closing, VMware also entered into an amendment to the ground lease for its existing campus so that the terms of both leases will be 34 years and 11 months from the closing of the purchase agreement. Annual rent payments to Stanford for the new property will initially be approximately $6.8 million, and will increase by 3% annually. VMware is also responsible for paying all taxes, insurance and other expenses necessary to operate the parcel. Additional rent of approximately $1.1 million per year will become payable in connection with the effectiveness of a right to construct additional improvements on the parcel, which is currently expected to begin no earlier than January 1, 2014. Such additional rent would subsequently increase by 2% annually.

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<table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="76%" align="center"> <tr><td width="74%"> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">June 30, 2011</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">December 31, 2010</td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Equipment and software</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">486,722</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">438,384</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Buildings and improvements</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">283,882</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">270,786</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Furniture and fixtures</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">54,733</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">52,613</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Construction in progress</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">66,846</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">3,082</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Total property and equipment</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">892,183</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">764,865</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Accumulated depreciation</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(406,233</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(345,800</td> <td valign="bottom" nowrap="nowrap">) </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Total property and equipment, net</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">485,950</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">419,065</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr></table>

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N. Related Party Transactions In April 2011, VMware acquired certain assets relating to EMC's Mozy cloud-based data storage and data center services, including certain data center assets and a license to certain intellectual property, for approximately $8.0 million. VMware also entered into an operational support agreement with EMC pursuant to which VMware took over responsibility to operate the Mozy service on behalf of EMC. VMware hired more than 300 Mozy employees and, pursuant to the support agreement, costs incurred by VMware to support EMC's Mozy services, plus a mark-up intended to approximate third-party costs, are reimbursed to VMware by EMC. On the consolidated statements of income, such amounts were approximately $12.2 million in the three months ended June 30, 2011 and were recorded as a reduction to the costs VMware incurred. EMC retained ownership of the Mozy business and its remaining assets. EMC continues to be responsible to Mozy customers for Mozy products and services, and continues to recognize revenue from such products and services. As such, the assets acquired from EMC did not constitute a business and were accounted for as an asset purchase between entities under common control pursuant to generally accepted accounting principles. Accordingly, VMware included the carrying value of the transferred assets as of the date of transfer in its consolidated financial statements. In April 2010, VMware acquired certain software product technology and expertise from EMC's Ionix IT 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. No contingent amounts were paid to EMC in the three months ended June 30, 2011. In the six months ended June 30, 2011, $12.5 million of contingent amounts were paid to EMC in accordance with the asset purchase agreement. This amount was recorded as a reduction to the capital contribution from EMC. See VMware's Annual Report on Form 10-K for the fiscal year ended December 31, 2010 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, 2011 and 2010, VMware recognized revenues of $14.2 million and $10.4 million, respectively, from products and services sold pursuant to VMware's reseller arrangement with EMC. In the six months ended June 30, 2011 and 2010, VMware recognized revenues of $34.2 million and $17.0 million, respectively, from products sold pursuant to VMware's reseller arrangement with EMC. As of June 30, 2011, $63.2 million of revenues from products and services sold under the reseller arrangement were included in unearned revenues. In the three months ended June 30, 2011 and 2010, VMware recognized professional services revenues of $16.4 million and $12.9 million, respectively, for services provided to EMC's customers pursuant to VMware's contractual agreements with EMC. In the six months ended June 30, 2011 and 2010, VMware recognized professional services revenues of $30.8 million and $22.0 million, respectively, from such contractual arrangements with EMC. As of June 30, 2011, $5.4 million of revenues from professional services to EMC customers were included in unearned revenues. In the three months ended June 30, 2011 and 2010, VMware recognized revenues of $0.5 million and $0.8 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, 2011 and 2010, VMware recognized $1.0 million and $2.2 million, respectively, from such contractual arrangements with EMC. As of June 30, 2011, $18.4 million of revenues from server and desktop products and services purchased by EMC for internal use were included in unearned revenues. VMware purchased storage systems and software, as well as consulting services, from EMC for $7.5 million and $2.1 million in the three months ended June 30, 2011 and 2010, respectively, and for $13.3 million and $6.4 million in the six months ended June 30, 2011 and 2010, 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, from time to time, EMC incurs certain administrative costs on VMware's behalf in the U.S. The total cost of the services provided to VMware by EMC as described above was $18.0 million and $14.2 million in the three months ended June 30, 2011 and 2010, respectively, and $42.7 million and $31.8 million in the six months ended June 30, 2011 and 2010, respectively. As calculated under VMware's tax sharing agreement with EMC, EMC paid VMware $141.0 million and $176.4 million in the three and six months ended June 30, 2011, respectively, resulting from VMware's stand-alone federal taxable loss estimated for both fiscal year 2010 and the three months ended March 31, 2011, as well as a refund of VMware's overpayment related to fiscal year 2009. Under the tax sharing agreement, EMC paid VMware $2.5 million for the three and six months ended June 30, 2010, resulting from VMware's stand-alone federal and state taxable losses for 2008. VMware paid $5.1 million to EMC in the six months ended June 30, 2010 for VMware's portion of EMC's 2009 consolidated federal income taxes. No payments were made to EMC by VMware in the three and six months ended June 30, 2011 and in three months ended June 30, 2010. 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 material. In both the three months ended June 30, 2011 and 2010, $1.0 million, respectively, of interest expense was recorded related to the note payable to EMC and included in interest expense with EMC on VMware's consolidated statements of income. In both the six months ended June 30, 2011 and 2010, $1.9 million, respectively, of interest expense was recorded related to the note payable. VMware's interest expense as a separate, stand-alone company may be higher or lower than the amounts reflected in the consolidated financial statements. In June 2011, VMware and EMC amended the note to extend its maturity date from April 16, 2012 to April 16, 2015.   As of June 30, 2011, VMware had $30.0 million due from EMC, which consisted of $50.9 million due from EMC, partially offset by $20.9 million due to EMC. These amounts resulted from the related party transactions described above. In addition to the $30.0 million due from EMC as of June 30, 2011, VMware had $95.4 million of income taxes receivable due from EMC, which is included in other current assets and $15.3 million of income taxes payable, which was included in accrued expenses and other, on VMware's consolidated balance sheets. The income tax receivable is related to 2011 federal income taxes and is expected to be received from EMC in the third quarter of 2011. 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.

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<table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="92%" align="center"> <tr><td width="65%"> </td> <td valign="bottom" width="3%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="3%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="3%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="3%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="6" align="center">For the three months ended June 30,</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="6" align="center">For the six months ended June 30,</td> <td valign="bottom"> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">2011</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">2010</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">2011</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">2010</td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Net income</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">220,158</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">74,538</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">345,970</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">152,959</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Other comprehensive income:</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Unrealized gains (losses) on available-for-sale securities, net of taxes of $1,352, $1,246, $1,196 and $1,504</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,029</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,019</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,794</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,441</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Reclassification of (gains) losses on available-for-sale securities recognized during the period, net of taxes of $(22,494), $0, $(12,788) and $0</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(33,742</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(19,181</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Total other comprehensive income</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(31,713</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,019</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(17,387</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,441</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr><td valign="top"> Total comprehensive income, net of taxes</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">188,445</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">76,557</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">328,583</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">155,400</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr></table>

<table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="76%" align="center"> <tr><td width="70%"> </td> <td valign="bottom" width="11%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="11%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" nowrap="nowrap" align="center">Weighted-Average Useful Lives (in years)</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" nowrap="nowrap" align="center">Fair Value Amount</td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Purchased technology</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">6.0</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">60,400</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Customer relationships and customer lists</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">6.6</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">18,700</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Total intangible assets, net, excluding goodwill</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">79,100</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr></table>

<table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="68%" align="center"> <tr><td width="85%"> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Balance, January 1, 2011</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,568,600</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Increase in goodwill related to business combinations</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">144,150</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Deferred tax adjustments to purchase price allocations on previous acquisitions</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,645</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Other adjustments to purchase price allocations on previous acquisitions</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(411</td> <td valign="bottom" nowrap="nowrap">) </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Balance, June 30, 2011</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,714,984</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr></table>

<table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="76%" align="center"> <tr><td width="73%"> </td> <td valign="bottom" width="8%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="8%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">Number of Shares</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">Weighted- Average Grant Date Fair Value (per share)</td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Outstanding, January 1, 2011</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">9,752</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">54.17</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Granted</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">3,852</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">91.19</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Vested</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(2,230</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">47.86</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Forfeited</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(437</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">57.70</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Outstanding, June 30, 2011</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">10,937</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">68.35</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td></tr></table>

<table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="68%" align="center"> <tr><td width="87%"> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Other current assets</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">3,492</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Intangible assets</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">66,800</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Goodwill</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">144,150</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Deferred tax assets</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">8,270</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Other assets</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">89</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr><td valign="top"> Total tangible and intangible assets acquired</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">222,801</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Unearned revenues</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(5,110</td> <td valign="bottom" nowrap="nowrap">) </td></tr> <tr><td valign="top"> Deferred tax liabilities</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(8,751</td> <td valign="bottom" nowrap="nowrap">) </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Accrued liabilities and other</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(4,218</td> <td valign="bottom" nowrap="nowrap">) </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr><td valign="top"> Total liabilities assumed</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(18,079</td> <td valign="bottom" nowrap="nowrap">) </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Fair value of tangible and intangible assets acquired and liabilities assumed</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">204,722</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr></table>

<table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="76%" align="center"> <tr><td width="52%"> </td> <td valign="bottom" width="4%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="4%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="4%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="4%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="6" align="center">For the Three Months Ended June 30,</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="6" align="center">For the Six Months Ended June 30,</td> <td valign="bottom"> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">2011</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">2010</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">2011</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">2010</td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> United States</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">450,327</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">333,717</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">849,877</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">650,915</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> International</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">470,883</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">340,187</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">915,054</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">656,522</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Total</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">921,210</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">673,904</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,764,931</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,307,437</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr></table>

O. Segment Information VMware operates in one reportable segment. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assessing performance. Since VMware operates in one operating segment, all required financial segment information can be found in the consolidated financial statements. Revenues by geographic area for the three and six months ended June 30, 2011 and 2010 were as follows (table in thousands):   <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="76%" align="center"> <tr><td width="52%"> </td> <td valign="bottom" width="4%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="4%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="4%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="4%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="6" align="center">For the Three Months Ended June 30,</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="6" align="center">For the Six Months Ended June 30,</td> <td valign="bottom"> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">2011</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">2010</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">2011</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">2010</td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> United States</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">450,327</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">333,717</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">849,877</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">650,915</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> International</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">470,883</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">340,187</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">915,054</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">656,522</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Total</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">921,210</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">673,904</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,764,931</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,307,437</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr></table> No country other than the United States had material revenues for the three months ended June 30, 2011 or 2010. Long-lived assets by geographic area, which primarily include property and equipment, net, as of June 30, 2011 and December 31, 2010 were as follows (table in thousands):   <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="76%" align="center"> <tr><td width="74%"> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="6%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">June 30, 2011</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">December 31, 2010</td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> United States</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">372,438</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">306,182</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> International</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">44,484</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">43,363</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Total</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">416,922</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">349,545</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr></table> No country other than the United States accounted for 10% or more of these assets at June 30, 2011 or December 31, 2010, respectively.

448491000

231662000

617484000

314560000

131533000

67836000

166015000

85442000

437000

57.70

3852000

91.19

54.17

68.35

2230000

47.86

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10937000

1100000000

24.45

65.90

1694675000

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10000000

12000000

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4300435000

L. Stockholders' Equity VMware Stock Repurchase Programs In February 2011, a committee of VMware's Board of Directors authorized the repurchase of up to an additional $550.0 million of VMware's Class A common stock through the end of 2012. From time to time, stock repurchases may be made pursuant to the February 2011 authorization in open market transactions or privately negotiated transactions as permitted by securities laws and other legal requirements. Purchases under the March 2010 authorization were completed in March 2011. In the three months ended June 30, 2011, VMware repurchased and retired 1.4 million shares of its Class A common stock at a weighted-average price of $91.60 per share for an aggregate purchase price of $132.7 million, including commissions. In the six months ended June 30, 2011, VMware repurchased and retired 3.2 million shares of its Class A common stock at a weighted-average price of $88.50 per share for an aggregate purchase price of $280.4 million, including commissions. The amount of repurchased shares was classified as a reduction to additional paid-in capital. VMware is not obligated to purchase any shares under its stock repurchase programs. The timing of any repurchases and the actual number of shares repurchased will depend on a variety of factors, including VMware's stock price, corporate and regulatory requirements and other market and economic conditions. Purchases can be discontinued at any time that VMware feels additional purchases are not warranted. As of June 30, 2011, the authorized amount remaining for repurchase was $331.1 million. VMware Restricted Stock VMware restricted stock primarily consists of restricted stock units granted to employees and also includes restricted stock awards and other restricted stock. The following table summarizes restricted stock activity since January 1, 2011 (shares in thousands):   <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="76%" align="center"> <tr><td width="73%"> </td> <td valign="bottom" width="8%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="8%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">Number of Shares</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">Weighted- Average Grant Date Fair Value (per share)</td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Outstanding, January 1, 2011</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">9,752</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">54.17</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Granted</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">3,852</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">91.19</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Vested</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(2,230</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">47.86</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Forfeited</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(437</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">57.70</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Outstanding, June 30, 2011</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">10,937</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">68.35</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td></tr></table> The total fair value of VMware restricted stock-based awards that vested in the six months ended June 30, 2011 was $204.5 million. As of June 30, 2011, restricted stock unit awards and other restricted stock representing 10.9 million shares of VMware were outstanding, with an aggregate intrinsic value of $1.1 billion based on the closing share price as of June 30, 2011. Shares underlying restricted stock unit awards are not issued until the restricted stock units vest. These shares are scheduled to vest through 2015.   VMware Employee Stock Purchase Plan In June 2007, VMware adopted its 2007 Employee Stock Purchase Plan (the "ESPP"), which is intended to be qualified under Section 423 of the Internal Revenue Code. A total of 6.4 million shares of VMware Class A common stock were reserved for future issuance. Under the ESPP, eligible VMware employees are granted options to purchase shares at the lower of 85% of the fair market value of the stock at the time of grant or 85% of the fair market value at the time of exercise. Options to purchase shares are generally granted on February 1 and August 1 and exercisable on the succeeding July 31 and January 31, respectively, of each year. For the purchase period ended January 31, 2011, 0.4 million shares of Class A common stock were purchased under the ESPP at a weighted-average purchase price per share of $65.90. For the purchase period ended January 31, 2010, 0.9 million shares of Class A common stock were purchased under the ESPP at a weighted-average purchase price per share of $24.45. The total cash proceeds from the purchases of these shares under the ESPP were $26.8 million and $22.8 million, respectively. As of June 30, 2011, $29.0 million of ESPP withholdings were recorded as a liability on the consolidated balance sheet for the next purchase in July 2011. VMware Shares Repurchased for Tax Withholdings During the three months ended June 30, 2011 and 2010, VMware repurchased or withheld and retired 0.6 million and 0.5 million shares of Class A common stock for $52.3 million and $34.7 million, respectively, to cover tax withholding obligations. During the six months ended June 30, 2011 and 2010, VMware repurchased or withheld and retired 0.8 million shares and 0.8 million shares of Class A common stock for $73.5 million and $45.6 million, respectively. As of June 30, 2011, $3.6 million of tax withholding obligations were recorded as a liability on the consolidated balance sheet. Pursuant to the respective award agreements, these shares were repurchased or withheld in conjunction with the net share settlement upon the vesting of restricted stock and restricted stock units during the period. The value of the repurchased or withheld shares, including restricted stock units, was classified as a reduction to additional paid-in capital as of June 30, 2011 and 2010, respectively.

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