Cover Page
Cover Page - shares | 6 Months Ended | |
Aug. 02, 2019 | Aug. 30, 2019 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Aug. 2, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-33622 | |
Entity Registrant Name | VMWARE, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 94-3292913 | |
Entity Address, Address Line One | 3401 Hillview Avenue | |
Entity Address, City or Town | Palo Alto, | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94304 | |
City Area Code | 650 | |
Local Phone Number | 427-5000 | |
Title of 12(b) Security | Class A common stock | |
Trading Symbol | VMW | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001124610 | |
Current Fiscal Year End Date | --01-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 108,632,211 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 300,000,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Aug. 02, 2019 | Aug. 03, 2018 | Aug. 02, 2019 | Aug. 03, 2018 | ||
Revenue: | |||||
Revenue | $ 2,439 | $ 2,174 | $ 4,705 | $ 4,183 | |
Operating expenses: | |||||
Research and development | [1] | 554 | 481 | 1,087 | 934 |
Sales and marketing | [1] | 797 | 696 | 1,575 | 1,403 |
General and administrative | [1] | 200 | 182 | 387 | 351 |
Realignment and loss on disposition | [1] | 0 | 1 | 0 | 3 |
Operating income | 523 | 509 | 938 | 891 | |
Investment income | 14 | 57 | 28 | 105 | |
Interest expense | (34) | (34) | (67) | (67) | |
Other income (expense), net | (502) | 240 | (359) | 1,018 | |
Income before income tax | 1 | 772 | 540 | 1,947 | |
Income tax provision (benefit) | (4,925) | 128 | (4,890) | 361 | |
Net income | $ 4,926 | $ 644 | $ 5,430 | $ 1,586 | |
Net income per weighted-average share, basic for Classes A and B (USD per share) | $ 12.02 | $ 1.58 | $ 13.24 | $ 3.91 | |
Net income per weighted-average share, diluted for Classes A and B (USD per share) | $ 11.83 | $ 1.56 | $ 13.01 | $ 3.85 | |
Weighted-average shares, basic for Classes A and B (shares) | 409,761 | 407,112 | 410,088 | 406,040 | |
Weighted-average shares, diluted for Classes A and B (shares) | 416,288 | 413,286 | 417,488 | 412,389 | |
Cost of license revenue | |||||
Operating expenses: | |||||
Stock-based compensation | $ 0 | $ 0 | $ 1 | $ 0 | |
Cost of services revenue | |||||
Operating expenses: | |||||
Stock-based compensation | 17 | 12 | 33 | 24 | |
Research and development | |||||
Operating expenses: | |||||
Stock-based compensation | 101 | 90 | 196 | 174 | |
Sales and marketing | |||||
Operating expenses: | |||||
Stock-based compensation | 60 | 49 | 115 | 95 | |
General and administrative | |||||
Operating expenses: | |||||
Stock-based compensation | 30 | 26 | 57 | 46 | |
License | |||||
Revenue: | |||||
Revenue | [2] | 1,011 | 900 | 1,879 | 1,674 |
Operating expenses: | |||||
Cost of revenue | [1] | 50 | 45 | 101 | 90 |
License | Dell | |||||
Revenue: | |||||
Revenue | 378 | 308 | 673 | 475 | |
Services | |||||
Revenue: | |||||
Revenue | [2] | 1,428 | 1,274 | 2,826 | 2,509 |
Operating expenses: | |||||
Cost of revenue | [1] | 315 | 260 | 617 | 511 |
Services | Dell | |||||
Revenue: | |||||
Revenue | $ 356 | $ 228 | $ 686 | $ 433 | |
[1] | Includes stock-based compensation as follows: Cost of services revenue August 2, 2019: $17 million, August 3, 2018: $12 million; Research and development August 2, 2019: $101 million, August 3, 2018: $90 million; Sales and marketing August 2, 2019: $60 million, August 3, 2018: $49 million; General and administrative August 2, 2019: $30 million, August 3, 2018: $26 million | ||||
[2] | Includes related party revenue as follows (refer to Note C): License August 2, 2019: $378 million, August 3, 2018: $308 million; Services August 2, 2019: $356 million, August 3, 2018: $228 million. |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHESIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 02, 2019 | Aug. 03, 2018 | Aug. 02, 2019 | Aug. 03, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 4,926 | $ 644 | $ 5,430 | $ 1,586 |
Changes in market value of available-for-sale securities: | ||||
Unrealized gains (losses), net of tax provision (benefit) | 0 | 6 | (1) | (9) |
Changes in market value of effective foreign currency forward contracts: | ||||
Unrealized gains (losses), net of tax provision (benefit) | 3 | 1 | 7 | (12) |
Reclassification of (gains) losses realized during the period, net of tax (provision) benefit of $— for all periods | (2) | (3) | (1) | 1 |
Net change in market value of effective foreign currency forward contracts | 1 | (2) | 6 | (11) |
Total other comprehensive income (loss) | 1 | 4 | 5 | (20) |
Total comprehensive income, net of taxes | $ 4,927 | $ 648 | $ 5,435 | $ 1,566 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHESIVE INCOME (Parentheticals) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 02, 2019 | Aug. 03, 2018 | Aug. 02, 2019 | Aug. 03, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Tax provision (benefit) on unrealized gains (losses) on available-for-sale securities | $ 0 | $ 2 | $ 0 | $ (3) |
Tax provision (benefit) on unrealized gains (losses) on effective foreign currency forward contracts | 0 | 0 | 0 | 0 |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Tax | $ 0 | $ 0 | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Aug. 02, 2019 | Feb. 01, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 2,948 | $ 2,830 |
Short-term investments | 0 | 19 |
Accounts receivable, net of allowance for doubtful accounts of $3 and $2 | 1,515 | 1,576 |
Due from related parties, net | 754 | 937 |
Other current assets | 412 | 289 |
Total current assets | 5,629 | 5,651 |
Property and equipment, net | 1,225 | 1,133 |
Other assets | 2,290 | 1,853 |
Deferred tax assets | 5,128 | 103 |
Intangible assets, net | 447 | 541 |
Goodwill | 5,653 | 5,381 |
Total assets | 20,372 | 14,662 |
Current liabilities: | ||
Accounts payable | 151 | 135 |
Accrued expenses and other | 1,544 | 1,593 |
Unearned revenue | 4,163 | 3,968 |
Total current liabilities | 5,858 | 5,696 |
Note payable to Dell | 270 | 270 |
Long-term debt | 3,976 | 3,972 |
Unearned revenue | 3,370 | 3,010 |
Income tax payable | 833 | 889 |
Operating lease liabilities | 588 | |
Other liabilities | 278 | 274 |
Total liabilities | 15,173 | 14,111 |
Contingencies (refer to Note J) | ||
Stockholders’ equity: | ||
Additional paid-in capital | 0 | 531 |
Accumulated other comprehensive income | 7 | 2 |
Retained earnings | 5,188 | 14 |
Total stockholders’ equity | 5,199 | 551 |
Total liabilities and stockholders’ equity | 20,372 | 14,662 |
Class A Common Stock | ||
Stockholders’ equity: | ||
Common stock | 1 | 1 |
Class B Convertible Common Stock | ||
Stockholders’ equity: | ||
Common stock | $ 3 | $ 3 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Millions | Aug. 02, 2019 | Feb. 01, 2019 |
Allowance for doubtful accounts | $ 3 | $ 2 |
Class A Common Stock | ||
Common stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 2,500,000,000 | 2,500,000,000 |
Common stock, shares issued (shares) | 109,494,000 | 110,715,000 |
Common stock, shares outstanding (shares) | 109,494,000 | 110,715,000 |
Class B Convertible Common Stock | ||
Common stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (shares) | 300,000,000 | 300,000,000 |
Common stock, shares outstanding (shares) | 300,000,000 | 300,000,000 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Aug. 02, 2019 | Aug. 03, 2018 | |
Operating activities: | ||
Net income | $ 5,430 | $ 1,586 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 352 | 307 |
Stock-based compensation | 402 | 339 |
Deferred income taxes, net | (5,032) | 225 |
Unrealized (gain) loss on equity securities, net | 386 | (1,006) |
(Gain) loss on disposition of assets, revaluation and impairment, net | (3) | (7) |
Other | 3 | 3 |
Changes in assets and liabilities, net of acquisitions: | ||
Accounts receivable | 64 | 172 |
Other current assets and other assets | (381) | (173) |
Due to/from related parties, net | 177 | 44 |
Accounts payable | 14 | 95 |
Accrued expenses and other liabilities | 23 | 37 |
Income taxes payable | (11) | 69 |
Unearned revenue | 548 | 191 |
Net cash provided by operating activities | 1,972 | 1,882 |
Investing activities: | ||
Additions to property and equipment | (158) | (121) |
Purchases of available-for-sale securities | 0 | (778) |
Sales of available-for-sale securities | 0 | 161 |
Maturities of available-for-sale securities | 0 | 1,102 |
Purchases of strategic investments | (8) | (3) |
Proceeds from disposition of assets | 20 | 32 |
Business combinations, net of cash acquired, and purchases of intangible assets | (384) | (26) |
Net cash paid on disposition of a business | (5) | (6) |
Net cash provided by (used in) investing activities | (535) | 361 |
Financing activities: | ||
Proceeds from issuance of common stock | 106 | 99 |
Repurchase of common stock | (1,037) | 0 |
Shares repurchased for tax withholdings on vesting of restricted stock | (351) | (191) |
Principal payments on finance lease obligations | (1) | |
Net cash used in financing activities | (1,283) | (92) |
Net increase in cash, cash equivalents and restricted cash | 154 | 2,151 |
Cash, cash equivalents and restricted cash at beginning of the period | 2,894 | 6,003 |
Cash, cash equivalents and restricted cash at end of the period | 3,048 | 8,154 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 64 | 64 |
Cash paid for taxes, net | 188 | 74 |
Non-cash items: | ||
Changes in capital additions, accrued but not paid | $ (5) | $ 9 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Total | Class A Common Stock | Class B Convertible Common Stock | Common StockClass A Common Stock | Common StockClass B Convertible Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Balance at Feb. 02, 2018 | $ 8,624 | $ 1 | $ 3 | $ 844 | $ 7,791 | $ (15) | ||
Balance (shares) at Feb. 02, 2018 | 104,000,000 | 300,000,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Proceeds from issuance of common stock (shares) | 1,000,000 | |||||||
Proceeds from issuance of common stock | 99 | 99 | ||||||
Repurchase and retirement of common stock (shares) | 0 | |||||||
Issuance of restricted stock (shares) | 4,000,000 | |||||||
Issuance of restricted stock | 0 | |||||||
Shares withheld for tax withholdings on vesting of restricted stock (shares) | (1,000,000) | |||||||
Shares withheld for tax withholdings on vesting of restricted stock | (203) | (203) | ||||||
Stock-based compensation | 339 | 339 | ||||||
Credit (amount due) from tax sharing arrangement | (3) | (3) | ||||||
Total other comprehensive income (loss) | (20) | (20) | ||||||
Net income | 1,586 | 1,586 | ||||||
Balance at Aug. 03, 2018 | 10,392 | $ 1 | $ 3 | 1,076 | 9,362 | (50) | ||
Balance (shares) at Aug. 03, 2018 | 108,000,000 | 300,000,000 | ||||||
Balance at May. 04, 2018 | 9,660 | $ 1 | $ 3 | 992 | 8,718 | (54) | ||
Balance (shares) at May. 04, 2018 | 104,000,000 | 300,000,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Proceeds from issuance of common stock (shares) | 1,000,000 | |||||||
Proceeds from issuance of common stock | 8 | 8 | ||||||
Issuance of restricted stock (shares) | 3,000,000 | |||||||
Issuance of restricted stock | 0 | |||||||
Shares withheld for tax withholdings on vesting of restricted stock | (98) | (98) | ||||||
Stock-based compensation | 177 | 177 | ||||||
Credit (amount due) from tax sharing arrangement | (3) | (3) | ||||||
Total other comprehensive income (loss) | 4 | 4 | ||||||
Net income | 644 | 644 | ||||||
Balance at Aug. 03, 2018 | 10,392 | $ 1 | $ 3 | 1,076 | 9,362 | (50) | ||
Balance (shares) at Aug. 03, 2018 | 108,000,000 | 300,000,000 | ||||||
Balance at Feb. 01, 2019 | 551 | $ 1 | $ 3 | 531 | 14 | 2 | ||
Balance (shares) at Feb. 01, 2019 | 110,715,000 | 300,000,000 | 111,000,000 | 300,000,000 | ||||
Balance at May. 03, 2019 | 561 | $ 1 | $ 3 | 30 | 521 | 6 | ||
Balance (shares) at May. 03, 2019 | 110,000,000 | 300,000,000 | ||||||
Balance at Feb. 01, 2019 | 551 | $ 1 | $ 3 | 531 | 14 | 2 | ||
Balance (shares) at Feb. 01, 2019 | 110,715,000 | 300,000,000 | 111,000,000 | 300,000,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Proceeds from issuance of common stock (shares) | 1,000,000 | |||||||
Proceeds from issuance of common stock | 106 | 106 | ||||||
Issuance of stock-based awards in acquisition | 2 | 2 | ||||||
Repurchase and retirement of common stock (shares) | (5,695,000) | (6,000,000) | ||||||
Repurchase and retirement of common stock | (1,037) | $ (1,037) | (778) | (259) | ||||
Issuance of restricted stock (shares) | 5,000,000 | |||||||
Issuance of restricted stock | 0 | |||||||
Shares withheld for tax withholdings on vesting of restricted stock (shares) | (2,000,000) | |||||||
Shares withheld for tax withholdings on vesting of restricted stock | (348) | (348) | ||||||
Stock-based compensation | 402 | 402 | ||||||
Credit (amount due) from tax sharing arrangement | 85 | 85 | ||||||
Total other comprehensive income (loss) | 5 | 5 | ||||||
Net income | 5,430 | 5,430 | ||||||
Balance at Aug. 02, 2019 | 5,199 | $ 1 | $ 3 | 0 | 5,188 | 7 | ||
Balance (shares) at Aug. 02, 2019 | 109,494,000 | 300,000,000 | 109,000,000 | 300,000,000 | ||||
Balance at May. 03, 2019 | 561 | $ 1 | $ 3 | 30 | 521 | 6 | ||
Balance (shares) at May. 03, 2019 | 110,000,000 | 300,000,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Proceeds from issuance of common stock | 3 | 3 | ||||||
Issuance of stock-based awards in acquisition | 2 | 2 | ||||||
Repurchase and retirement of common stock (shares) | (2,431,000) | (2,000,000) | ||||||
Repurchase and retirement of common stock | (446) | $ (446) | (187) | (259) | ||||
Issuance of restricted stock (shares) | 2,000,000 | |||||||
Issuance of restricted stock | 0 | |||||||
Shares withheld for tax withholdings on vesting of restricted stock (shares) | (1,000,000) | |||||||
Shares withheld for tax withholdings on vesting of restricted stock | (141) | (141) | ||||||
Stock-based compensation | 208 | 208 | ||||||
Credit (amount due) from tax sharing arrangement | 85 | 85 | ||||||
Total other comprehensive income (loss) | 1 | 1 | ||||||
Net income | 4,926 | 4,926 | ||||||
Balance at Aug. 02, 2019 | $ 5,199 | $ 1 | $ 3 | $ 0 | $ 5,188 | $ 7 | ||
Balance (shares) at Aug. 02, 2019 | 109,494,000 | 300,000,000 | 109,000,000 | 300,000,000 |
Overview and Basis of Presentat
Overview and Basis of Presentation | 6 Months Ended |
Aug. 02, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Overview and Basis of Presentation | Overview and Basis of Presentation Company and Background VMware, Inc. (“VMware” or the “Company”) originally pioneered the development and application of virtualization technologies with x86 server-based computing, separating application software from the underlying hardware. Information technology (“IT”) driven innovation continues to disrupt markets and industries. Technologies emerge faster than organizations can absorb, creating increasingly complex environments. IT is working at an accelerated pace to harness new technologies, platforms and cloud models, ultimately guiding their business through a digital transformation. To take on these challenges, VMware is working with customers in the areas of hybrid cloud, multi-cloud, modern applications, networking and security, and digital workspaces. VMware’s software provides a flexible digital foundation to help enable customers in their digital transformations. Accounting Principles The financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Unaudited Interim Financial Information The accompanying unaudited condensed 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 condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments and accruals, for a fair statement of VMware’s condensed consolidated results of operations, financial position and cash flows for the periods presented. Results of operations are not necessarily indicative of the results that may be expected for the full fiscal year 2020. Certain information and footnote disclosures typically included in annual consolidated financial statements have been condensed or omitted. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in VMware’s Form 10-K filed on March 29, 2019. Effective September 7, 2016, Dell Technologies Inc. (“Dell”) (formerly Denali Holding Inc.) acquired EMC Corporation (“EMC”), VMware’s parent company, including EMC’s majority control of VMware (the “Dell Acquisition”). As of August 2, 2019 , Dell controlled 80.8% of VMware’s outstanding common stock and 97.5% of the combined voting power of VMware’s outstanding common stock, including 31 million shares of VMware’s Class A common stock and all of VMware’s Class B common stock. As VMware is a majority-owned and controlled subsidiary of Dell, its results of operations and financial position are consolidated with Dell’s financial statements. Transactions prior to the effective date of the Dell Acquisition represent transactions only with EMC and its consolidated subsidiaries. Management believes the assumptions underlying the condensed consolidated financial statements are reasonable. However, the amounts recorded for VMware’s related party transactions with Dell and its consolidated subsidiaries may not be considered arm’s length with an unrelated third party. Therefore, the condensed consolidated financial statements included herein may not necessarily reflect the results of operations, financial position and cash flows 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 results of operations, financial position and cash flows will be in the future, if and when VMware contracts at arm’s length with unrelated third parties for products and services the Company receives from and provides to Dell. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of VMware and subsidiaries in which VMware has a controlling financial interest. All intercompany transactions and account balances between VMware and its subsidiaries have been eliminated in consolidation. Transactions with Dell and its consolidated subsidiaries are generally settled in cash and are classified on the condensed consolidated statements of cash flows based upon the nature of the underlying transaction. Intra-Group Transfer of Intellectual Property During the second quarter of fiscal 2020, the Company completed an intra-group transfer of certain of its intellectual property rights (the “IP”) to its Irish subsidiary, where its international business is headquartered (the “IP Transfer”). The transaction will change the Company’s mix of international income from a lower non-U.S. tax jurisdiction to Ireland, which is subject to a statutory tax rate of 12.5% . However, the Company does not expect its effective income tax rate to increase significantly in fiscal 2020, as it expects the income earned in Ireland will largely be offset by certain tax deductions. A discrete tax benefit of $4.9 billion was recognized as a deferred tax asset during the second quarter of fiscal 2020. This deferred tax asset was recognized as a result of the book and tax basis difference on the IP transferred to Ireland. The tax amortization related to the IP transferred will be recognized in future periods and any amortization that is unused in a particular year can be carried forward indefinitely under Irish tax laws. The deferred tax asset and the tax benefit were measured based on the Irish tax rate expected to apply in the years the asset will be recovered. The Company expects to realize the deferred tax asset resulting from the IP Transfer and will assess the realizability of the deferred tax asset periodically. The impact of the transaction to net cash provided by or used in operating, investing and financing activities on the condensed consolidated statements of cash flows during the six months ended August 2, 2019 was not material. Use of Accounting Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenue 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, trade receivable valuation, marketing development funds, expected period of benefit for deferred commissions, useful lives assigned to fixed assets and intangible assets, valuation of goodwill and definite-lived intangibles, income taxes, stock-based compensation and contingencies. Actual results could differ from those estimates. Significant Accounting Policies During February 2016, the Financial Accounting Standards Board issued ASU 2016-02, Leases (“Topic 842”). The updated standard requires the recognition of a liability for lease obligations and corresponding right-of-use (“ROU”) assets on the balance sheet, and disclosures of certain information regarding leasing arrangements. VMware adopted this standard effective February 2, 2019 and applied it retrospectively at the beginning of the period of adoption through a cumulative-effect adjustment to retained earnings. The Company elected to apply practical expedients upon transition to this standard, which allowed the Company to use the beginning of the period of adoption as the date of initial application, and to not reassess lease classification, treatment of initial direct costs, or whether an existing or expired contract contains a lease. Prior period amounts were not recast under this standard. Upon adoption, VMware recognized ROU assets of $666 million , a liability for lease obligations of $629 million , and an immaterial cumulative-effect adjustment to retained earnings, net of taxes, as of February 2, 2019. The updated standard did not have a material impact on the condensed consolidated statements of income or net cash provided by or used in operating, investing and financing activities on the condensed consolidated statements of cash flows. Significant accounting policies applicable to leases reflect the adoption of Topic 842. There were no other changes to VMware’s significant accounting policies described in the Form 10-K filed on March 29, 2019 that have had a material impact on the Company’s condensed consolidated financial statements and related notes. Leases VMware determines if an arrangement contains a lease at inception by evaluating whether the arrangement conveys the right to use an identified asset and whether the Company obtains substantially all economic benefits from and has the ability to direct the use of the asset. ROU assets resulting from operating leases are included in other assets, and operating lease liabilities are included in accrued expenses and other and operating lease liabilities on the condensed consolidated balance sheets. ROU assets resulting from finance leases are included in property and equipment, net, and finance lease liabilities are included in accrued expenses and other and other liabilities on the condensed consolidated balance sheets. The current portion of finance lease liabilities included in accrued expenses and other was not material as of August 2, 2019. Lease assets and liabilities are measured at the present value of the future minimum lease payments over the lease term at commencement date using the incremental borrowing rate. The incremental borrowing rate is generally determined using factors such as the Treasury yields, the Company’s credit rating and interest rates of similar debt instruments with comparable credit ratings, among others. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that VMware will exercise that option. Lease expense resulting from the minimum lease payments is amortized on a straight-line basis over the remaining lease term. VMware elected the practical expedient to exclude leasing arrangements with a duration of less than 12 months. The Company’s lease agreements generally do not contain any material residual value guarantees or material restrictive covenants. Certain lease agreements may contain lease and non-lease components, such a common-area maintenance costs. The Company elected to account for these components as a single lease component in determining the lease liability. Variable lease payments, which are primarily comprised of common-area maintenance, utilities and real estate taxes that are passed on from the lessor in proportion to the space leased by the Company, are recognized in operating expenses in the period in which the obligation for those payments was incurred. The Company subleases certain leased office space to third parties when it determines there is excess leased capacity. Sublease income was not material for all periods presented. |
Revenue, Unearned Revenue and R
Revenue, Unearned Revenue and Remaining Performance Obligations | 6 Months Ended |
Aug. 02, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, Unearned Revenue and Remaining Performance Obligations | Revenue, Unearned Revenue and Remaining Performance Obligations Revenue Contract Assets A contract asset is recognized when a conditional right to consideration exists and transfer of control has occurred. Contract assets include fixed fee professional services where transfer of services has occurred in advance of the Company’s right to invoice. Contract assets are classified as accounts receivables upon invoicing. Contract assets are included in other current assets on the condensed consolidated balance sheets. Contract assets were $29 million and $24 million as of August 2, 2019 and February 1, 2019 , respectively. Contract asset balances will fluctuate based upon the timing of transfer of services, billings and customers’ acceptance of contractual milestones. Contract Liabilities Contract liabilities consist of unearned revenue, which is generally recorded when VMware has the right to invoice or payments have been received for undelivered products or services. Customer Deposits Customer deposits include prepayments from customers related to amounts received for contracts that include certain cancellation rights. Purchased credits eligible for redemption of VMware’s hosted services (“cloud credits”) are included in customer deposits until the cloud credit is consumed or is contractually committed to a specific hosted service. Cloud credits are redeemable by the customer for the gross value of the hosted offering. Upon contractual commitment for a hosted service, the net value of the cloud credits that are expected to be recognized as revenue when the obligation is fulfilled will be classified as unearned revenue. As of August 2, 2019 , customer deposits related to customer prepayments and cloud credits of $218 million were included in accrued expenses and other, and $100 million were included in other liabilities on the condensed consolidated balance sheets. As of February 1, 2019 , customer deposits related to customer prepayments of $238 million were included in accrued expenses and other, and $60 million were included in other liabilities on the condensed consolidated balance sheets. Deferred Commissions Deferred commissions are classified as current or non-current based on the duration of the expected period of benefit. Deferred commissions, including the employer portion of payroll taxes, included in other current assets as of August 2, 2019 and February 1, 2019 were not significant. Deferred commissions included in other assets were $783 million and $756 million as of August 2, 2019 and February 1, 2019 , respectively. Amortization expense for deferred commissions was included in sales and marketing on the condensed consolidated statements of income and was $76 million and $151 million during the three and six months ended August 2, 2019 , respectively, and $61 million and $128 million during the three and six months ended August 3, 2018 , respectively. Unearned Revenue Unearned revenue as of the periods presented consisted of the following (table in millions): August 2, February 1, 2019 2019 Unearned license revenue $ 338 $ 255 Unearned software maintenance revenue 6,357 5,972 Unearned professional services revenue 838 751 Total unearned revenue $ 7,533 $ 6,978 Unearned license revenue is primarily related to the allocated portion of VMware’s software-as-a-service (“SaaS”) offerings and is generally recognized over time as customers consume the services or ratably over the term of the subscription, commencing upon provisioning of the service. Unearned software maintenance revenue is attributable to VMware’s maintenance contracts and is generally recognized over time on a ratable basis over the contract duration. The weighted-average remaining contractual term as of August 2, 2019 was approximately two years . In addition, unearned software maintenance revenue also includes the allocated portion of VMware’s SaaS offerings. Unearned professional services revenue results primarily from prepaid professional services and is generally recognized as the services are performed. The following tables summarize unearned revenue activity during the periods presented (table in millions): Three Months Ended May 3, August 2, 2019 2019 Balance, beginning of the period $ 6,978 $ 7,119 Current period billings 1,506 1,827 Revenue recognized from amounts previously classified as unearned revenue (1) (1,365 ) (1,420 ) Other — 7 Balance, end of the period $ 7,119 $ 7,533 Three Months Ended May 4, August 3, 2018 2018 Balance, beginning of the period $ 5,839 $ 5,756 Current period billings 1,210 1,507 Revenue recognized from amounts previously classified as unearned revenue (1) (1,215 ) (1,233 ) Other (78 ) — Balance, end of the period $ 5,756 $ 6,030 (1) Revenue recognized from amounts previously classified as unearned revenue did not include revenue for performance obligations that were fully satisfied upon delivery, such as on-premises license. Remaining Performance Obligations Remaining performance obligations represent the aggregate amount of the transaction price in contracts allocated to performance obligations not delivered, or partially undelivered, as of the end of the reporting period. Remaining performance obligations include unearned revenue, multi-year contracts with future installment payments and certain unfulfilled orders against accepted customer contracts at the end of any given period. As of August 2, 2019 , the aggregate transaction price allocated to remaining performance obligations was $8.0 billion , of which approximately 54% is expected to be recognized as revenue over the next 12 months and the remainder thereafter. As of February 1, 2019 , the aggregate transaction price allocated to remaining performance obligations was $7.7 billion , of which approximately 56% was expected to be recognized as revenue during fiscal year 2020, and the remainder thereafter. |
Related Parties
Related Parties | 6 Months Ended |
Aug. 02, 2019 | |
Related Party Transactions [Abstract] | |
Related Parties | Related Parties The information provided below includes a summary of the transactions entered into with Dell and Dell’s consolidated subsidiaries, including EMC (collectively, “Dell”). Transactions with Dell VMware and Dell engaged in the following ongoing related party transactions, which resulted in revenue and receipts, and unearned revenue for VMware: • Pursuant to original equipment manufacturer and reseller arrangements, Dell integrates or bundles VMware’s products and services with Dell’s products and sells them to end users. Dell also acts as a distributor, purchasing VMware’s standalone products and services for resale to end-user customers through VMware-authorized resellers. Revenue under these arrangements is presented net of related marketing development funds and rebates paid to Dell. In addition, VMware provides professional services to end users based upon contractual agreements with Dell. • Dell purchases products and services from VMware for its internal use. • Pursuant to an ongoing distribution agreement, VMware acts as the selling agent for certain products and services of Pivotal Software, Inc. (“Pivotal”), a subsidiary of Dell, in exchange for an agency fee. Under this agreement, cash is collected from the end user by VMware and remitted to Pivotal, net of the contractual agency fee. • From time to time, VMware and Dell enter into agreements to collaborate on technology projects, and Dell pays VMware for services or reimburses VMware for costs incurred by VMware, in connection with such projects. Dell purchases VMware products and services directly from VMware, as well as through VMware’s channel partners. Information about VMware’s revenue and receipts, and unearned revenue from such arrangements, for the periods presented consisted of the following (table in millions): Revenue and Receipts Unearned Revenue Three Months Ended Six Months Ended As of August 2, August 3, August 2, August 3, August 2, February 1, 2019 2018 2019 2018 2019 2019 Reseller revenue $ 729 $ 531 $ 1,347 $ 892 $ 2,771 $ 2,375 Internal-use revenue 5 5 11 12 18 13 Agency fee revenue — — 1 4 — — Collaborative technology project receipts 2 1 4 1 n/a n/a Customer deposits resulting from transactions with Dell were $123 million and $85 million as of August 2, 2019 and February 1, 2019 , respectively. VMware and Dell engaged in the following ongoing related party transactions, which resulted in costs to VMware: • VMware purchases and leases products and purchases services from Dell. • From time to time, VMware and Dell enter into agreements to collaborate on technology projects, and VMware pays Dell for services provided to VMware by Dell related to such projects. • In certain geographic regions where VMware does not have an established legal entity, VMware contracts with Dell subsidiaries for support services and support from Dell personnel who are managed by VMware. The costs incurred by Dell on VMware’s behalf related to these employees are charged to VMware with a mark-up intended to approximate costs that would have been incurred had VMware contracted for such services with an unrelated third party. These costs are included as expenses on VMware’s condensed consolidated statements of income and primarily include salaries, benefits, travel and occupancy expenses. Dell also incurs certain administrative costs on VMware’s behalf in the United States (“U.S.”) that are recorded as expenses on VMware’s condensed consolidated statements of income. • In certain geographic regions, Dell files a consolidated indirect tax return, which includes value added taxes and other indirect taxes collected by VMware from its customers. VMware remits the indirect taxes to Dell and Dell remits the tax payment to the foreign governments on VMware’s behalf. • From time to time, VMware invoices end users on behalf of Dell for certain services rendered by Dell. Cash related to these services is collected from the end user by VMware and remitted to Dell. Information about VMware’s payments from such arrangements during the periods presented consisted of the following (table in millions): Three Months Ended Six Months Ended August 2, August 3, August 2, August 3, 2019 2018 2019 2018 Purchases and leases of products and purchases of services (1) $ 55 $ 42 $ 135 $ 91 Dell subsidiary support and administrative costs 20 26 46 54 (1) Amount includes indirect taxes that were remitted to Dell during the periods presented. VMware also purchases Dell products through Dell’s channel partners. Purchases of Dell products through Dell’s channel partners were not significant during the periods presented . From time to time, VMware and Dell also enter into joint marketing, sales, branding and product development arrangements, for which both parties may incur costs. Dell Financial Services (“DFS”) DFS provided financing to certain of VMware’s end users at the end users’ discretion. Upon acceptance of the financing arrangement by both VMware’s end user and DFS, amounts classified as trade accounts receivable are reclassified to due from related parties, net on the condensed consolidated balance sheets. Revenue recognized on transactions financed through DFS was recorded net of financing fees of $12 million and $25 million during the three and six months ended August 2, 2019 , respectively, and $9 million and $25 million during the three and six months ended August 3, 2018 , respectively. Tax Sharing Agreement with Dell The following table summarizes the payments made to Dell pursuant to a tax sharing agreement during the periods presented (table in millions): Three Months Ended Six Months Ended August 2, August 3, August 2, August 3, 2019 2018 2019 2018 Payments from VMware to Dell, net $ 52 $ — $ 89 $ 3 Payments from VMware to Dell under the tax sharing agreement relate to VMware’s portion of federal income taxes on Dell’s consolidated tax return as well as state tax payments for combined states. The timing of the tax payments due to and from related parties is governed by the tax sharing agreement. VMware’s portion of the mandatory one-time transition tax on accumulated earnings of foreign subsidiaries (the “Transition Tax”) is governed by a letter agreement between Dell, EMC and VMware executed during the first quarter of fiscal 2020 (the “Letter Agreement”). The amounts that VMware pays to Dell for its portion of federal income taxes on Dell’s consolidated tax return differ from the amounts VMware would owe on a separate tax return basis and the difference is recognized as a component of additional paid-in capital, generally in the period in which the consolidated tax return is filed. The difference between the amount of tax calculated on a separate tax return basis and the amount of tax calculated pursuant to the tax sharing agreement recorded in additional paid-in capital during the three and six months ended August 2, 2019 was $85 million , primarily due to a reduction in Transition Tax liability based on the terms of the Letter Agreement and certain tax attribute determination made by Dell. The amount recognized in additional paid-in capital during the three and six months ended August 3, 2018 was not significant. Due To/From Related Parties, Net Amounts due to and from related parties, net as of the periods presented consisted of the following (table in millions): August 2, February 1, 2019 2019 Due from related parties, current $ 934 $ 1,079 Due to related parties, current (1) 180 142 Due from related parties, net, current (2) $ 754 $ 937 Income tax related asset, net, current $ 26 $ — Income tax due to related parties, non-current 492 646 (1) Includes an immaterial amount related to the Company’s current operating lease liabilities due to related parties as of August 2, 2019 . (2) The Company also recognized an immaterial amount related to non-current operating lease liabilities due to related parties. This amount has been included in operating lease liabilities on the condensed consolidated balance sheets as of August 2, 2019 . Amounts included in due from related parties, net, excluding DFS and tax obligations, includes the current portion of amounts due to and due from related parties. Amounts included in due from related parties, net are generally settled in cash within 60 days of each quarter-end. Notes Payable to Dell On January 21, 2014, VMware entered into a note exchange agreement with its parent company providing for the issuance of three promissory notes in the aggregate principal amount of $1.5 billion , which consisted of outstanding principal due on the following dates: $680 million due May 1, 2018 , $550 million due May 1, 2020 and $270 million due December 1, 2022 . On August 21, 2017, VMware repaid two of the notes payable to Dell in the aggregate principal amount of $1.2 billion , representing repayment of the note due May 1, 2018 at par value and repayment of the note due May 1, 2020 at a discount. The remaining note payable of $270 million due December 1, 2022 may be prepaid without penalty or premium. Interest is payable quarterly in arrears at the annual rate of 1.75% . During the three and six months ended August 2, 2019 and August 3, 2018 , interest expense on the notes payable to Dell was not significant. Pivotal Prior to Pivotal’s initial public offering on April 20, 2018, VMware’s previously held preferred shares were converted to shares of non-trading Class B common stock, resulting in VMware having a financial interest of 17% and a voting interest of 24% in Pivotal as of February 1, 2019 . As of August 2, 2019 , VMware had a financial interest of 16% and a voting interest of 24% in Pivotal. Refer to Note H for information regarding VMware’s investment in Pivotal. |
Business Combinations, Definite
Business Combinations, Definite-Lived Intangible Assets, Net and Goodwill | 6 Months Ended |
Aug. 02, 2019 | |
Business Combinations, Goodwill and Intangible Assets Disclosure [Abstract] | |
Business Combinations, Definite-Lived Intangible Assets, Net and Goodwill | Business Combinations, Definite-Lived Intangible Assets, Net and Goodwill Business Combinations Acquisition of Avi Networks, Inc. During the second quarter of fiscal 2020, VMware completed the acquisition of Avi Networks, Inc. (“Avi Networks”), a provider of multi-cloud application delivery services. VMware acquired Avi Networks to provide customers with application delivery controller capabilities that include server load balancing for various applications and analytics. Together, VMware and Avi Networks expect to deliver a software defined networking stack built for the multi-cloud environment. The total purchase price was $326 million , net of cash acquired of $9 million . The purchase price primarily included $94 million of identifiable intangible assets and $228 million of goodwill that is no t expected to be deductible for tax purposes. The identifiable intangible assets primarily consisted of completed technology of $79 million and customer relationships of $15 million , with estimated useful lives of one year to eight years . Merger consideration totaling $27 million is held in escrow and is payable to certain employees of Avi Networks subject to specified future employment conditions and is being recognized as expense over the requisite service period of approximately three years on a straight-line basis. The fair value of assumed unvested equity awards attributed to post-combination services was $32 million and will be expensed over the remaining requisite service periods of approximately three years on a straight-line basis. The estimated fair value of the stock options assumed by the Company was determined using the Black-Scholes option pricing model. The initial allocation of the purchase price was based on preliminary valuations and assumptions and is subject to change within the measurement period. VMware expects to finalize the allocation of the purchase price as soon as practicable and no later than one year from the acquisition date. The pro forma financial information assuming the acquisition had occurred as of the beginning of the fiscal year prior to the fiscal year of acquisition, as well as the revenue and earnings generated during the current fiscal year, was not material for disclosure purposes. Acquisition of AetherPal, Inc. During the first quarter of fiscal 2020, VMware completed the acquisition of AetherPal Inc. (“AetherPal”), a provider of remote support solutions, to enhance VMware’s Workspace ONE offering. The total purchase price was $45 million , which primarily included $12 million of identifiable intangible assets and $33 million of goodwill that is no t expected to be deductible for tax purposes. The identifiable intangible assets primarily consisted of completed technology and customer relationships, with estimated useful lives of three years to five years . The pro forma financial information assuming the acquisition had occurred as of the beginning of the fiscal year prior to the fiscal year of acquisition, as well as the revenue and earnings generated during the current fiscal year, was not material for disclosure purposes. Definite-Lived Intangible Assets, Net As of the periods presented, definite-lived intangible assets consisted of the following (amounts in tables in millions): August 2, 2019 Weighted-Average Useful Lives Gross Carrying Amount Accumulated Amortization Net Book Value Purchased technology 6.2 $ 865 $ (565 ) $ 300 Customer relationships and customer lists 7.5 211 (106 ) 105 Trademarks and tradenames 7.9 87 (46 ) 41 Other 1.3 5 (4 ) 1 Total definite-lived intangible assets $ 1,168 $ (721 ) $ 447 February 1, 2019 Weighted-Average Useful Lives Gross Carrying Amount Accumulated Amortization Net Book Value Purchased technology 6.3 $ 781 $ (503 ) $ 278 Leasehold interest 34.9 149 (33 ) 116 Customer relationships and customer lists 7.5 193 (96 ) 97 Trademarks and tradenames 7.9 86 (40 ) 46 Other 3.9 7 (3 ) 4 Total definite-lived intangible assets $ 1,216 $ (675 ) $ 541 Upon adoption of Topic 842 on February 2, 2019, leasehold interest of $116 million related to favorable terms of certain ground lease agreements was derecognized and adjusted to the carrying amount of the operating lease ROU assets and classified as other assets on the condensed consolidated balance sheets. Prior to adoption, these assets were classified as intangible assets, net on the condensed consolidated balance sheets. Amortization expense on definite-lived intangible assets was $45 million and $89 million during the three and six months ended August 2, 2019 , respectively, and $39 million and $78 million during the three and six months ended August 3, 2018 , respectively. Based on intangible assets recorded as of August 2, 2019 and assuming no subsequent additions, dispositions or impairment of underlying assets, the remaining estimated annual amortization expense over the next five fiscal years and thereafter is expected to be as follows (table in millions): Remainder of 2020 $ 75 2021 112 2022 97 2023 72 2024 54 Thereafter 37 Total $ 447 Goodwill The following table summarizes the changes in the carrying amount of goodwill during the six months ended August 2, 2019 (table in millions): Balance, February 1, 2019 $ 5,381 Increase in goodwill related to business combinations 272 Balance, August 2, 2019 $ 5,653 |
Net Income Per Share
Net Income Per Share | 6 Months Ended |
Aug. 02, 2019 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share Basic net income per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income by the weighted-average number of common shares outstanding and potentially dilutive securities outstanding during the period, as calculated using the treasury stock method. Potentially dilutive securities primarily include unvested restricted stock units (“RSUs”), including performance stock unit (“PSU”) awards, and stock options, including purchase options under VMware’s employee stock purchase plan. Securities are excluded from the computation of diluted net income per share if their effect would be anti-dilutive. VMware uses the two-class method to calculate net income per share as both classes share the same rights in dividends; therefore, basic and diluted earnings per share are the same for both classes. The following table sets forth the computations of basic and diluted net income per share during the periods presented (table in millions, except per share amounts and shares in thousands): Three Months Ended Six Months Ended August 2, August 3, August 2, August 3, 2019 2018 2019 2018 Net income $ 4,926 $ 644 $ 5,430 $ 1,586 Weighted-average shares, basic for Classes A and B 409,761 407,112 410,088 406,040 Effect of other dilutive securities 6,527 6,174 7,400 6,349 Weighted-average shares, diluted for Classes A and B 416,288 413,286 417,488 412,389 Net income per weighted-average share, basic for Classes A and B $ 12.02 $ 1.58 $ 13.24 $ 3.91 Net income per weighted-average share, diluted for Classes A and B $ 11.83 $ 1.56 $ 13.01 $ 3.85 The following table sets forth the weighted-average common share equivalents of Class A common stock that were excluded from the diluted net income per share calculations during the periods presented because their effect would have been anti-dilutive (shares in thousands): Three Months Ended Six Months Ended August 2, August 3, August 2, August 3, 2019 2018 2019 2018 Anti-dilutive securities: Restricted stock units 458 606 251 1,046 Total 458 606 251 1,046 |
Cash and Cash Equivalents
Cash and Cash Equivalents | 6 Months Ended |
Aug. 02, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents as of the periods presented consisted of the following (tables in millions): August 2, 2019 Cost or Amortized Cost Unrealized Gains Unrealized Losses Aggregate Fair Value Cash $ 551 $ — $ — $ 551 Cash equivalents: Money-market funds $ 2,369 $ — $ — $ 2,369 Demand deposits and time deposits 28 — — 28 Total cash equivalents $ 2,397 $ — $ — $ 2,397 February 1, 2019 Cost or Amortized Cost Unrealized Gains Unrealized Losses Aggregate Fair Value Cash $ 461 $ — $ — $ 461 Cash equivalents: Money-market funds $ 2,316 $ — $ — $ 2,316 Demand deposits and time deposits 53 — — 53 Total cash equivalents $ 2,369 $ — $ — $ 2,369 Restricted Cash The following table provides a reconciliation of the Company’s cash and cash equivalents, current portion and non-current portion of restricted cash reported within the condensed consolidated balance sheets that sum to the total cash, cash equivalents and restricted cash as of August 2, 2019 and February 1, 2019 (table in millions): August 2, February 1, 2019 2019 Cash and cash equivalents $ 2,948 $ 2,830 Restricted cash within other current assets 67 35 Restricted cash within other assets 33 29 Total cash, cash equivalents and restricted cash $ 3,048 $ 2,894 Amounts included in restricted cash primarily relate to certain employee-related benefits, as well as amounts related to installment payments to certain employees as part of acquisitions, subject to the achievement of specified future employment conditions. |
Debt
Debt | 6 Months Ended |
Aug. 02, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt Long-term Debt On August 21, 2017, VMware issued three series of unsecured senior notes (“Senior Notes”) pursuant to a public debt offering. The proceeds from the issuance were $4.0 billion , net of debt discount of $9 million and debt issuance costs of $30 million . The carrying value of the Senior Notes as of the periods presented were as follows (amounts in millions): August 2, February 1, Effective Interest Rate 2019 2019 Long-term debt: 2.30% Senior Note Due August 21, 2020 $ 1,250 $ 1,250 2.56% 2.95% Senior Note Due August 21, 2022 1,500 1,500 3.17% 3.90% Senior Note Due August 21, 2027 1,250 1,250 4.05% Total principal amount 4,000 4,000 Less: unamortized discount (6 ) (7 ) Less: unamortized debt issuance costs (18 ) (21 ) Net carrying amount $ 3,976 $ 3,972 Interest is payable semiannually in arrears, on February 21 and August 21 of each year. During the three and six months ended August 2, 2019 and August 3, 2018 , interest expense was $32 million and $65 million , respectively. Interest expense, which included amortization of discount and issuance costs, was recognized on the condensed consolidated statements of income. The discount and issuance costs are amortized over the term of the Senior Notes on a straight-line basis, which approximates the effective interest method. The Senior Notes are redeemable in whole at any time or in part from time to time at VMware’s option, subject to a make-whole premium. In addition, upon the occurrence of certain change-of-control triggering events and certain downgrades of the ratings on the Senior Notes, VMware may be required to repurchase the notes at a repurchase price equal to 101% of the aggregate principal plus any accrued and unpaid interest on the date of purchase. The Senior Notes rank equally in right of payment with VMware’s other unsecured and unsubordinated indebtedness. The Senior Notes also include restrictive covenants that, in certain circumstances, limit VMware’s ability to create certain liens, to enter into certain sale and leaseback transactions and to consolidate, merge, sell or otherwise dispose of all or substantially all of VMware’s assets. Refer to Note C for information regarding the note payable to Dell. Revolving Credit Facility On September 12, 2017, VMware entered into an unsecured credit agreement establishing a revolving credit facility (“Credit Facility”) with a syndicate of lenders that provides the Company with a borrowing capacity of up to $1.0 billion , which may be used for general corporate purposes. Commitments under the Credit Facility are available for a period of five years , which may be extended, subject to the satisfaction of certain conditions, by up to two one -year periods. A s of August 2, 2019 and February 1, 2019 , there were no outstanding borrowings under the Credit Facility. The credit agreement contains certain representations, warranties and covenants. Commitment fees, interest rates and other terms of borrowing under the Credit Facility may vary based on VMware’s external credit ratings. The amount paid in connection with the ongoing commitment fee, which is payable quarterly in arrears, was no t significant duri ng the three and six months ended August 2, 2019 and August 3, 2018 . |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Aug. 02, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis Certain financial assets and liabilities are measured at fair value on a recurring basis. VMware determines fair value using the following hierarchy: • Level 1 - Quoted prices in active markets for identical assets or liabilities; • Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are noted as being active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. As of August 2, 2019 and February 1, 2019 , VMware’s Level 2 investment securities were generally priced using non-binding market consensus prices that were corroborated by observable market data, quoted market prices for similar instruments, or pricing models such as discounted cash flow techniques. VMware did not have any significant assets or liabilities that were classified as Level 3 of the fair value hierarchy for the periods presented , and there have been no transfers between fair value measurement levels during the periods presented . The following tables set forth the fair value hierarchy of VMware’s cash equivalents and short-term investments that were required to be measured at fair value as of the periods presented (tables in millions): August 2, 2019 Level 1 Level 2 Total Cash equivalents: Money-market funds $ 2,369 $ — $ 2,369 Demand deposits and time deposits — 28 28 Total cash equivalents $ 2,369 $ 28 $ 2,397 February 1, 2019 Level 1 Level 2 Total Cash equivalents: Money-market funds $ 2,316 $ — $ 2,316 Demand deposits and time deposits — 53 53 Total cash equivalents $ 2,316 $ 53 $ 2,369 Short-term investments: Marketable equity securities $ 19 $ — $ 19 Total short-term investments $ 19 $ — $ 19 The note payable to Dell and the Senior Notes were not adjusted to fair value. The fair value of the note payable to Dell was approximately $263 million and $252 million as of August 2, 2019 and February 1, 2019 , respectively. The fair value of the Senior Notes was approximately $4.0 billion and $3.9 billion as of August 2, 2019 and February 1, 2019 , respectively. Fair value for both the note payable to Dell and the Senior Notes was estimated primarily based on observable market interest rates (Level 2 inputs). VMware offers a deferred compensation plan for eligible employees, which allows participants to defer payment for part or all of their compensation. The net impact to the condensed consolidated statements of income is not significant since changes in the fair value of the assets substantially offset changes in the fair value of the liabilities. As such, assets and liabilities associated with this plan have not been included in the above tables. Assets associated with this plan were the same as the liabilities at approximately $93 million and $77 million as of August 2, 2019 and February 1, 2019 , respectively, and are included in other assets and other liabilities on the condensed consolidated balance sheets. Equity Securities Carried at Fair Value As of February 1, 2019, VMware held a publicly traded equity security, which was measured at its fair value of $19 million using quoted prices for identical assets in an active market (Level 1). During the first quarter of fiscal 2020 , VMware sold its investment in this equity security. The realized gain recognized on the condensed consolidated statements of income during the six months ended August 2, 2019 was not significant. The fair value of VMware’s investment in Pivotal was $427 million and $833 million as of August 2, 2019 and February 1, 2019 , respectively, and was determined using the quoted market price of Pivotal’s Class A common stock as of each reporting period, adjusted for the impact of superior voting rights (Level 2). During the three and six months ended August 2, 2019 , VMware recognized unrealized losses of $538 million and $406 million , respectively, to adjust its investment in Pivotal to its fair value. During the three and six months ended August 3, 2018 , VMware recognized unrealized gains of $231 million and $1.0 billion , respectively, to adjust its investment in Pivotal to its fair value, including an unrealized gain of $668 million recognized as a result of Pivotal’s initial public offering. Discrete tax benefits of $133 million and $100 million for the three and six months ended August 2, 2019 , respectively, and discrete tax expenses of $57 million and $236 million , net of the reversal of the previously recorded valuation allowance for the three and six months ended August 3, 2018 , respectively, was recognized related to the book and tax basis difference on the investment in Pivotal. Subsequent to August 2, 2019 and following the announcement of VMware’s proposed acquisition of Pivotal, Pivotal’s stock price has increased significantly. If Pivotal’s stock price remains unchanged from its current value, VMware will recognize a substantial unrealized gain on its investment in Pivotal as of the next measurement date. Financial information of Pivotal is made publicly available. The following tables include summarized financial information for the first quarter of fiscal 2020 obtained from Pivotal’s most recent Form 10-Q filed with the SEC on June 6, 2019 (tables in millions): Three Months Ended May 3, 2019 Results of Operations Data: Revenue $ 186 Gross profit 125 Loss from operations (35 ) Net loss (32 ) Net loss attributable to Pivotal (32 ) May 3, 2019 Balance Sheet Data: Current assets $ 1,056 Total assets 1,966 Current liabilities 460 Total liabilities 654 Non-controlling interest 1 Equity Securities Without a Readily Determinable Fair Value VMware’s equity securities also include investments in privately held companies, which do not have a readily determinable fair value. As of August 2, 2019 and February 1, 2019 , investments in privately held companies, which consisted primarily of equity securities, had a carrying value of $127 million and $95 million , respectively, and were included in other assets on the condensed consolidated balance sheets. During the three and six months ended August 2, 2019 , the Company recognized an unrealized gain of $23 million |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 6 Months Ended |
Aug. 02, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities | Derivatives and Hedging Activities VMware conducts business on a global basis in multiple foreign currencies, subjecting the Company to foreign currency risk. To mitigate a portion of this risk, VMware utilizes hedging contracts as described below, which potentially expose the Company to credit risk to the extent that the counterparties may be unable to meet the terms of the agreements. VMware manages counterparty risk by seeking counterparties of high credit quality, by monitoring credit ratings and credit spreads of, and other relevant public information about its counterparties. VMware does not, and does not intend to, use derivative instruments for trading or speculative purposes. Cash Flow Hedges To mitigate its exposure to foreign currency fluctuations resulting from certain operating expenses denominated in certain foreign currencies, VMware enters into forward contracts that are designated as cash flow hedging instruments as the accounting criteria for such designation are met. Therefore, the effective portion of gains or losses resulting from changes in the fair value of these instruments is initially reported in accumulated other comprehensive income on the condensed consolidated balance sheets and is subsequently reclassified to the related operating expense line item on the condensed consolidated statements of income in the same period that the underlying expenses are incurred. During the three and six months ended August 2, 2019 and August 3, 2018 , the effective portion of gains or losses reclassified to the condensed consolidated statements of income was not significant. During the three and six months ended August 3, 2018 , interest charges or “forward points” on VMware’s forward contracts were excluded from the assessment of hedge effectiveness and were recorded in other income (expense), net on the condensed consolidated statements of income as incurred. Beginning February 2, 2019, the excluded component was recorded to the related operating expense line item on the condensed consolidated statements of income in the same period that the underlying expenses are incurred. These forward contracts have contractual maturities of twelve months or less, and as of August 2, 2019 and February 1, 2019 , outstanding forward contracts had a total notional value of $200 million and $367 million , respectively. The notional value represents the gross amount of foreign currency that will be bought or sold upon maturity of the forward contract. During the three and six months ended August 2, 2019 and August 3, 2018 , all cash flow hedges were considered effective. Forward Contracts Not Designated as Hedges VMware has established a program that utilizes forward contracts to offset the foreign currency risk associated with net outstanding monetary asset and liability positions. 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 on the condensed consolidated statements of income. These forward contracts have a contractual maturity of one month , and as of August 2, 2019 and February 1, 2019 , outstanding forward contracts had a total notional value of $889 million and $1.2 billion , respectively. The notional value represents the gross amount of foreign currency that will be bought or sold upon maturity of the forward contract. During the three and six months ended August 2, 2019 , VMware recognized gains of $26 million and $53 million , respectively, related to the settlement of forward contracts. The gains recognized during the three and six months ended August 3, 2018 were $29 million and $59 million , respectively. Gains and losses are recorded in other income (expense), net on the condensed consolidated statements of income. The combined gains and losses related to the settlement of forward contracts and the underlying foreign currency denominated assets and liabilities during the three and six months ended August 2, 2019 resulted in net gains of $12 million and $18 million , respectively. The combined gains and losses related to the settlement of forward contracts and the underlying foreign currency denominated assets and liabilities were not significant during the three and six months ended August 3, 2018 . Net gains and losses are recorded in other income (expense), net on the condensed consolidated statements of income. |
Contingencies
Contingencies | 6 Months Ended |
Aug. 02, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies Litigation On August 10, 2015, the Company received a subpoena from the California Attorney General’s office (“California AG”), following the Company’s settlement with the Department of Justice and the General Services Administration during June 2015. In this matter, the California AG is investigating the accuracy of the Company’s sales practices with departments and agencies within the State of California. The Company held an initial meeting with the California AG’s representatives on November 5, 2015, and thereafter provided certain requested documents to the California AG. The Company did not receive any further communications from the California AG until the fall of 2017. Since then, the California AG and the Company have exchanged communications regarding the legal bases for the allegations, and the Company has provided additional information requested by the California AG. The Company is unable at this time to reasonably assess whether or to what extent it may be found liable and believes a loss is not considered probable and is not estimable. While VMware believes that it has valid defenses against each of the above legal matters, given the unpredictable nature of legal proceedings, an unfavorable resolution of one or more legal proceedings, claims, or investigations could have a material adverse effect on VMware’s condensed consolidated financial statements. VMware accrues for a liability when a determination has been made that a loss is both probable and the amount of the loss can be reasonably estimated. If only a range can be estimated and no amount within the range is a better estimate than any other amount, an accrual is recorded for the minimum amount in the range. Significant judgment is required in both the determination that the occurrence of a loss is probable and is reasonably estimable. In making such judgments, VMware considers the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular matter. Legal costs are generally recognized as expense when incurred. VMware is also subject to other legal, administrative and regulatory proceedings, claims, demands and investigations in the ordinary course of business or in connection with business mergers and acquisitions, including claims with respect to commercial, contracting and sales practices, product liability, intellectual property, employment, corporate and securities law, class action, whistleblower and other matters. From time to time, VMware also receives inquiries from and has discussions with government entities and stockholders on various matters. As of August 2, 2019 , amounts accrued relating to these other matters arising as part of the ordinary course of business were considered not material. VMware does not believe that any liability from any reasonably foreseeable disposition of such claims and litigation, individually or in the aggregate, would have a material adverse effect on its condensed consolidated financial statements. |
Leases
Leases | 6 Months Ended |
Aug. 02, 2019 | |
Leases [Abstract] | |
Leases | Leases VMware has operating and finance leases primarily related to office facilities and equipment, which have remaining lease terms of one month to 27 years . During the three and six months ended August 2, 2019 , lease expense recorded in the condensed consolidated statements of income was $40 million and $79 million , respectively. The components of lease expense during the period presented were as follows (table in millions): Three Months Ended Six Months Ended August 2, August 2, 2019 2019 Operating lease expense $ 33 $ 65 Finance lease expense: Amortization of ROU assets $ 1 $ 1 Total finance lease expense $ 1 $ 1 Short-term lease expense $ — $ 1 Variable lease expense $ 6 $ 12 Total lease expense $ 40 $ 79 From time to time, VMware enters into lease arrangements with Dell. Lease expense incurred for arrangements with Dell was not significant during the three and six months ended August 2, 2019 . Supplemental cash flow information related to operating and finance leases during the period presented was as follows (table in millions): Six Months Ended August 2, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 68 Financing cash flows from finance leases 1 ROU assets obtained in exchange for lease liabilities: Operating leases $ 107 Finance leases 63 Supplemental balance sheet information related to operating and finance leases as of the period presented was as follows (table in millions): August 2, 2019 Operating Leases Finance Leases ROU assets, non-current (1) $ 715 $ 62 Lease liabilities, current (2) $ 85 $ 3 Lease liabilities, non-current (3) 588 59 Total lease liabilities $ 673 $ 62 (1) ROU assets for operating leases are included in other assets and ROU assets for finance leases are included in property and equipment, net on the condensed consolidated balance sheets. (2) Current lease liabilities are included primarily in accrued expenses and other on the condensed consolidated balance sheets. An immaterial amount is presented in due from related parties, net on the condensed consolidated balance sheets. (3) Operating lease liabilities are presented as operating lease liabilities on the condensed consolidated balance sheets. Finance lease liabilities are included in other liabilities on the condensed consolidated balance sheets. Lease term and discount rate related to operating and finance leases as of the period presented were as follows: August 2, 2019 Weighted-average remaining lease term (in years) Operating leases 15.5 Finance leases 9.7 Weighted-average discount rate Operating leases 3.6 % Finance leases 3.1 % The following represents VMware’s future minimum lease payments under non-cancellable operating and finance leases as of August 2, 2019 (table in millions): Operating Leases Finance Leases Remainder of 2020 $ 52 $ 2 2021 99 6 2022 88 7 2023 76 8 2024 56 7 Thereafter 556 43 Total future minimum lease payments 927 73 Less: Imputed interest (254 ) (11 ) Total lease liabilities (1) $ 673 $ 62 (1) Total lease liabilities as of August 2, 2019 exclude legally binding lease payments for leases signed but not yet commenced of $336 million . Future lease payments under non-cancellable operating leases as of February 1, 2019 were as follows (table in millions): 2020 $ 109 2021 79 2022 64 2023 54 2024 41 Thereafter 523 Total (1) $ 870 (1) Total future lease payments as of February 1, 2019 exclude legally binding minimum lease payments for leases signed but not yet commenced of $164 million . |
Leases | Leases VMware has operating and finance leases primarily related to office facilities and equipment, which have remaining lease terms of one month to 27 years . During the three and six months ended August 2, 2019 , lease expense recorded in the condensed consolidated statements of income was $40 million and $79 million , respectively. The components of lease expense during the period presented were as follows (table in millions): Three Months Ended Six Months Ended August 2, August 2, 2019 2019 Operating lease expense $ 33 $ 65 Finance lease expense: Amortization of ROU assets $ 1 $ 1 Total finance lease expense $ 1 $ 1 Short-term lease expense $ — $ 1 Variable lease expense $ 6 $ 12 Total lease expense $ 40 $ 79 From time to time, VMware enters into lease arrangements with Dell. Lease expense incurred for arrangements with Dell was not significant during the three and six months ended August 2, 2019 . Supplemental cash flow information related to operating and finance leases during the period presented was as follows (table in millions): Six Months Ended August 2, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 68 Financing cash flows from finance leases 1 ROU assets obtained in exchange for lease liabilities: Operating leases $ 107 Finance leases 63 Supplemental balance sheet information related to operating and finance leases as of the period presented was as follows (table in millions): August 2, 2019 Operating Leases Finance Leases ROU assets, non-current (1) $ 715 $ 62 Lease liabilities, current (2) $ 85 $ 3 Lease liabilities, non-current (3) 588 59 Total lease liabilities $ 673 $ 62 (1) ROU assets for operating leases are included in other assets and ROU assets for finance leases are included in property and equipment, net on the condensed consolidated balance sheets. (2) Current lease liabilities are included primarily in accrued expenses and other on the condensed consolidated balance sheets. An immaterial amount is presented in due from related parties, net on the condensed consolidated balance sheets. (3) Operating lease liabilities are presented as operating lease liabilities on the condensed consolidated balance sheets. Finance lease liabilities are included in other liabilities on the condensed consolidated balance sheets. Lease term and discount rate related to operating and finance leases as of the period presented were as follows: August 2, 2019 Weighted-average remaining lease term (in years) Operating leases 15.5 Finance leases 9.7 Weighted-average discount rate Operating leases 3.6 % Finance leases 3.1 % The following represents VMware’s future minimum lease payments under non-cancellable operating and finance leases as of August 2, 2019 (table in millions): Operating Leases Finance Leases Remainder of 2020 $ 52 $ 2 2021 99 6 2022 88 7 2023 76 8 2024 56 7 Thereafter 556 43 Total future minimum lease payments 927 73 Less: Imputed interest (254 ) (11 ) Total lease liabilities (1) $ 673 $ 62 (1) Total lease liabilities as of August 2, 2019 exclude legally binding lease payments for leases signed but not yet commenced of $336 million . Future lease payments under non-cancellable operating leases as of February 1, 2019 were as follows (table in millions): 2020 $ 109 2021 79 2022 64 2023 54 2024 41 Thereafter 523 Total (1) $ 870 (1) Total future lease payments as of February 1, 2019 exclude legally binding minimum lease payments for leases signed but not yet commenced of $164 million . |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Aug. 02, 2019 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity On June 25, 2019, VMware amended its 2007 Equity and Incentive Plan and 2007 Employee Stock Purchase Plan to increase the number of shares available for issuance by 13 million and 9 million shares of Class A common stock, respectively. VMware Stock Repurchases VMware purchases stock from time to time in open market transactions, subject to market conditions. The timing of any repurchases and the actual number of shares repurchased will depend on a variety of factors, including VMware’s stock price, cash requirements for operations and business combinations, corporate, legal and regulatory requirements and other market and economic conditions. VMware is not obligated to purchase any shares under its stock repurchase programs. Purchases can be discontinued at any time VMware believes additional purchases are not warranted. From time to time, VMware also purchases stock in private transactions, such as those with Dell. All shares repurchased under VMware’s stock repurchase programs are retired. During August 2017, VMware’s board of directors authorized the repurchase of up to $1.0 billion of Class A common stock through August 31, 2018. On July 1, 2018, VMware’s board of directors extended authorization of the existing stock repurchase program through August 31, 2019. On May 29, 2019, VMware’s board of directors authorized the repurchase of up to an additional $1.5 billion of Class A common stock through the end of fiscal year 2021. The $1.5 billion authorization is in addition to VMware’s ongoing $1.0 billion stock repurchase program authorized in August 2017. In aggregate, $1.3 billion remained available for repurchase as of August 2, 2019 . The following table summarizes stock repurchase activity during the three and six months ended August 2, 2019 (aggregate purchase price in millions, shares in thousands): Three Months Ended Six Months Ended August 2, August 2, 2019 2019 Aggregate purchase price (1) $ 446 $ 1,037 Class A common shares repurchased 2,431 5,695 Weighted-average price per share $ 183.53 $ 182.06 (1) The aggregate purchase price of repurchased shares is classified as a reduction to additional paid-in capital until the balance is reduced to zero and the excess is recorded as a reduction to retained earnings. There were no repurchases of VMware Class A common stock during the three and six months ended August 3, 2018 . VMware Restricted Stock VMware’s restricted stock primarily consists of RSU awards, which have been granted to employees. The value of an RSU grant is based on VMware’s stock price on the date of grant. The shares underlying the RSU awards are not issued until the RSUs vest. Upon vesting, each RSU converts into one share of VMware’s Class A common stock. VMware’s restricted stock also includes PSU awards, which have been granted to certain VMware executives and employees. The PSU awards include performance conditions and, in certain cases, a time-based or market-based vesting component. Upon vesting, PSU awards convert into VMware’s Class A common stock at various ratios ranging from 0.1 to 2.0 shares per PSU, depending upon the degree of achievement of the performance or market-based target designated by each award. If minimum performance thresholds are not achieved, then no shares are issued. The following table summarizes restricted stock activity since February 1, 2019 (units in thousands): Number of Units Weighted-Average Grant Date Fair Value (per unit) Outstanding, February 1, 2019 18,215 $ 90.06 Granted 5,013 165.41 Vested (5,078 ) 80.50 Forfeited (930 ) 90.13 Outstanding, August 2, 2019 17,220 114.81 The aggregate vesting date fair value of VMware’s restricted stock that vested during the six months ended August 2, 2019 was $931 million . As of August 2, 2019 , restricted stock representing 17.2 million shares of VMware’s Class A common stock were outstanding, with an aggregate intrinsic value of $2.8 billion based on VMware’s closing stock price as of August 2, 2019 . Net Excess Tax Benefits Net excess tax benefits recognized in connection with stock-based awards are included in income tax provision on the condensed consolidated statements of income. Net excess tax benefits recognized during the three and six months ended August 2, 2019 were $35 million and $108 million , respectively, and were $27 million and $53 million during the three and six months ended August 3, 2018 , respectively. Accumulated Other Comprehensive Income (Loss) The changes in components of accumulated other comprehensive income (loss) during the periods presented were as follows (tables in millions): Unrealized Gain (Loss) on Unrealized Gain (Loss) on Total Balance, February 1, 2019 $ 1 $ 1 $ 2 Unrealized gains (losses), net of tax provision (benefit) of $—, $— and $— (1 ) 7 6 Amounts reclassified from accumulated other comprehensive income (loss) to the condensed consolidated statements of income, net of tax (provision) benefit of $—, $— and $— — (1 ) (1 ) Other comprehensive income (loss), net (1 ) 6 5 Balance, August 2, 2019 $ — $ 7 $ 7 Unrealized Gain (Loss) on Unrealized Gain (Loss) on Total Balance, February 2, 2018 $ (15 ) $ — $ (15 ) Adjustments related to adoption of ASU 2016-01 and 2018-02 (15 ) — (15 ) Unrealized gains (losses), net of tax provision (benefit) of $2, $— and $2 (9 ) (12 ) (21 ) Amounts reclassified from accumulated other comprehensive income (loss) to the condensed consolidated statements of income, net of tax (provision) benefit of $—, $— and $— — 1 1 Other comprehensive income (loss), net (9 ) (11 ) (20 ) Balance, August 3, 2018 $ (39 ) $ (11 ) $ (50 ) Unrealized gains and losses on VMware’s available-for-sale securities are reclassified to investment income on the condensed consolidated statements of income in the period that such gains and losses are realized. The effective portion of gains or losses resulting from changes in the fair value of forward contracts designated as cash flow hedging instruments is reclassified to its related operating expense line item on the condensed consolidated statements of income in the same period that the underlying expenses are incurred. The amounts recorded to their related operating expense functional line items on the condensed consolidated statements of income were not significant to the individual functional line items during the periods presented . |
Segment Information
Segment Information | 6 Months Ended |
Aug. 02, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information VMware operates in one reportable operating segment, thus all required financial segment information is included in the condensed consolidated financial statements. Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assessing performance. VMware’s chief operating decision maker allocates resources and assesses performance based upon discrete financial information at the consolidated level. Revenue by type during the periods presented was as follows (table in millions): Three Months Ended Six Months Ended August 2, August 3, August 2, August 3, 2019 2018 2019 2018 Revenue: License $ 1,011 $ 900 $ 1,879 $ 1,674 Services: Software maintenance 1,235 1,109 2,440 2,186 Professional services 193 165 386 323 Total services 1,428 1,274 2,826 2,509 Total revenue (1) $ 2,439 $ 2,174 $ 4,705 $ 4,183 (1) Includes revenue derived from VMware’s hybrid cloud subscription and SaaS offerings, which was $305 million and $589 million during the three and six months ended August 2, 2019 , respectively, and $217 million and $427 million during the three and six months ended August 3, 2018 , respectively. Revenue from Hybrid Cloud Computing offerings consisted primarily of VMware Cloud Provider Program revenue. Revenue by geographic area during the periods presented was as follows (table in millions): Three Months Ended Six Months Ended August 2, August 3, August 2, August 3, 2019 2018 2019 2018 United States $ 1,171 $ 1,062 $ 2,223 $ 2,000 International 1,268 1,112 2,482 2,183 Total $ 2,439 $ 2,174 $ 4,705 $ 4,183 Revenue by geographic area is based on the ship-to addresses of VMware’s customers. No individual country other than the U.S. accounted for 10% or more of revenue during the three and six months ended August 2, 2019 and August 3, 2018 . Long-lived assets by geographic area, which primarily include property and equipment, net, as of the periods presented were as follows (table in millions): August 2, February 1, 2019 2019 United States $ 840 $ 831 International 185 106 Total $ 1,025 $ 937 No individual country other than the U.S. accounted for 10% or more of these assets as of August 2, 2019 and February 1, 2019 . |
Subsequent Event
Subsequent Event | 6 Months Ended |
Aug. 02, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Events Subsequent to the fiscal quarter ended August 2, 2019, VMware entered into the following transactions: Definitive Agreement to Acquire Pivotal VMware entered into a definitive agreement to acquire Pivotal at a blended price per share of $11.71 , comprised of $15.00 per share in cash to the stockholders of Pivotal’s Class A common shares, and VMware’s Class B common shares exchanged for Pivotal’s Class B common shares held by Dell, at an exchange ratio of 0.0550 VMware shares for each Pivotal share. In aggregate, this transaction will result in an expected net cash payout of $0.8 billion for VMware and issuance of approximately 7.2 million shares of VMware’s Class B common stock to Dell. The impact of equity issued to Dell would increase its ownership stake in VMware by approximately 0.3 percentage points to 81.1% based on the shares outstanding as of the announcement of the acquisition. Pivotal provides a leading cloud-native platform that makes software development and IT operations a strategic advantage for their customers. The acquisition has been approved by the boards of directors of both VMware and Pivotal (each acting upon the unanimous recommendation of a special committee of the board of directors of each company, consisting solely of independent and disinterested directors, authorized to, among other things, negotiate, evaluate and approve or disapprove potential transactions with one another), and is expected to close during the second half of fiscal 2020, subject to approval of the merger agreement by Pivotal stockholders (including at least a majority of the outstanding shares of Pivotal’s Class A common stock not owned by VMware or any of its affiliates, including Dell), regulatory approvals and other customary closing conditions. The purchase of Pivotal will be accounted for as a transaction by entities under common control. Assets and liabilities transferred will be recorded at their historical carrying amounts on the date of the transfer, with no goodwill being recognized. This transaction will require retrospective combination of the entities for all periods presented, as if the combination had been in effect since the inception of common control. Definitive Agreement to Acquire Carbon Black, Inc. VMware entered into a definitive agreement to acquire Carbon Black, Inc. (“Carbon Black”) through a cash tender offer of $26.00 per share, resulting in an expected net cash payout of $1.9 billion by VMware. Carbon Black develops cloud-native endpoint security software. The acquisition has been approved by the boards of directors of both VMware and Carbon Black, and is expected to close during the second half of fiscal 2020, subject to completion of the tender offer, regulatory approvals and other customary closing conditions. Commitment for Senior Unsecured Term Loan Facility VMware received a commitment from a financial institution for a senior unsecured 364-day term loan facility that would provide the Company with a borrowing capacity of up to $2.0 billion (the “Commitment”), which, if funded, may be used for general corporate purposes. The initial funding of the Commitment is subject to various customary conditions, including execution and delivery of definitive loan agreement and related documentation. Amendment of Tax Sharing Agreement with Dell VMware and Dell entered into a support agreement in connection with VMware’s entry into an agreement to acquire Pivotal, which provides that, subject to VMware’s ability to consummate the Pivotal acquisition and prior to its close, VMware and Dell will execute an amended tax sharing agreement that will, subject to certain exceptions, generally limit VMware’s maximum annual tax liability to Dell to the amount VMware would owe on a separate tax return basis. |
Overview and Basis of Present_2
Overview and Basis of Presentation (Policies) | 6 Months Ended |
Aug. 02, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Accounting Principals and Unaudited Interim Financial Information | Accounting Principles The financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Unaudited Interim Financial Information The accompanying unaudited condensed 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 condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments and accruals, for a fair statement of VMware’s condensed consolidated results of operations, financial position and cash flows for the periods presented. Results of operations are not necessarily indicative of the results that may be expected for the full fiscal year 2020. Certain information and footnote disclosures typically included in annual consolidated financial statements have been condensed or omitted. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in VMware’s Form 10-K filed on March 29, 2019. Effective September 7, 2016, Dell Technologies Inc. (“Dell”) (formerly Denali Holding Inc.) acquired EMC Corporation (“EMC”), VMware’s parent company, including EMC’s majority control of VMware (the “Dell Acquisition”). As of August 2, 2019 , Dell controlled 80.8% of VMware’s outstanding common stock and 97.5% of the combined voting power of VMware’s outstanding common stock, including 31 million shares of VMware’s Class A common stock and all of VMware’s Class B common stock. As VMware is a majority-owned and controlled subsidiary of Dell, its results of operations and financial position are consolidated with Dell’s financial statements. Transactions prior to the effective date of the Dell Acquisition represent transactions only with EMC and its consolidated subsidiaries. Management believes the assumptions underlying the condensed consolidated financial statements are reasonable. However, the amounts recorded for VMware’s related party transactions with Dell and its consolidated subsidiaries may not be considered arm’s length with an unrelated third party. Therefore, the condensed consolidated financial statements included herein may not necessarily reflect the results of operations, financial position and cash flows 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 results of operations, financial position and cash flows will be in the future, if and when VMware contracts at arm’s length with unrelated third parties for products and services the Company receives from and provides to Dell. |
Principles of Consolidation | Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of VMware and subsidiaries in which VMware has a controlling financial interest. All intercompany transactions and account balances between VMware and its subsidiaries have been eliminated in consolidation. Transactions with Dell and its consolidated subsidiaries are generally settled in cash and are classified on the condensed consolidated statements of cash flows based upon the nature of the underlying transaction. |
Use of Accounting Estimates | Use of Accounting Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenue 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, trade receivable valuation, marketing development funds, expected period of benefit for deferred commissions, useful lives assigned to fixed assets and intangible assets, valuation of goodwill and definite-lived intangibles, income taxes, stock-based compensation and contingencies. Actual results could differ from those estimates. |
Significant Accounting Policies | Significant Accounting Policies During February 2016, the Financial Accounting Standards Board issued ASU 2016-02, Leases (“Topic 842”). The updated standard requires the recognition of a liability for lease obligations and corresponding right-of-use (“ROU”) assets on the balance sheet, and disclosures of certain information regarding leasing arrangements. VMware adopted this standard effective February 2, 2019 and applied it retrospectively at the beginning of the period of adoption through a cumulative-effect adjustment to retained earnings. The Company elected to apply practical expedients upon transition to this standard, which allowed the Company to use the beginning of the period of adoption as the date of initial application, and to not reassess lease classification, treatment of initial direct costs, or whether an existing or expired contract contains a lease. Prior period amounts were not recast under this standard. Upon adoption, VMware recognized ROU assets of $666 million , a liability for lease obligations of $629 million , and an immaterial cumulative-effect adjustment to retained earnings, net of taxes, as of February 2, 2019. The updated standard did not have a material impact on the condensed consolidated statements of income or net cash provided by or used in operating, investing and financing activities on the condensed consolidated statements of cash flows. Significant accounting policies applicable to leases reflect the adoption of Topic 842. There were no other changes to VMware’s significant accounting policies described in the Form 10-K filed on March 29, 2019 that have had a material impact on the Company’s condensed consolidated financial statements and related notes. |
Leases | Leases VMware determines if an arrangement contains a lease at inception by evaluating whether the arrangement conveys the right to use an identified asset and whether the Company obtains substantially all economic benefits from and has the ability to direct the use of the asset. ROU assets resulting from operating leases are included in other assets, and operating lease liabilities are included in accrued expenses and other and operating lease liabilities on the condensed consolidated balance sheets. ROU assets resulting from finance leases are included in property and equipment, net, and finance lease liabilities are included in accrued expenses and other and other liabilities on the condensed consolidated balance sheets. The current portion of finance lease liabilities included in accrued expenses and other was not material as of August 2, 2019. Lease assets and liabilities are measured at the present value of the future minimum lease payments over the lease term at commencement date using the incremental borrowing rate. The incremental borrowing rate is generally determined using factors such as the Treasury yields, the Company’s credit rating and interest rates of similar debt instruments with comparable credit ratings, among others. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that VMware will exercise that option. Lease expense resulting from the minimum lease payments is amortized on a straight-line basis over the remaining lease term. VMware elected the practical expedient to exclude leasing arrangements with a duration of less than 12 months. The Company’s lease agreements generally do not contain any material residual value guarantees or material restrictive covenants. Certain lease agreements may contain lease and non-lease components, such a common-area maintenance costs. The Company elected to account for these components as a single lease component in determining the lease liability. Variable lease payments, which are primarily comprised of common-area maintenance, utilities and real estate taxes that are passed on from the lessor in proportion to the space leased by the Company, are recognized in operating expenses in the period in which the obligation for those payments was incurred. The Company subleases certain leased office space to third parties when it determines there is excess leased capacity. Sublease income was not material for all periods presented. |
Revenue, Unearned Revenue and_2
Revenue, Unearned Revenue and Remaining Performance Obligations (Tables) | 6 Months Ended |
Aug. 02, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Unearned Revenue | The following tables summarize unearned revenue activity during the periods presented (table in millions): Three Months Ended May 3, August 2, 2019 2019 Balance, beginning of the period $ 6,978 $ 7,119 Current period billings 1,506 1,827 Revenue recognized from amounts previously classified as unearned revenue (1) (1,365 ) (1,420 ) Other — 7 Balance, end of the period $ 7,119 $ 7,533 Three Months Ended May 4, August 3, 2018 2018 Balance, beginning of the period $ 5,839 $ 5,756 Current period billings 1,210 1,507 Revenue recognized from amounts previously classified as unearned revenue (1) (1,215 ) (1,233 ) Other (78 ) — Balance, end of the period $ 5,756 $ 6,030 (1) Revenue recognized from amounts previously classified as unearned revenue did not include revenue for performance obligations that were fully satisfied upon delivery, such as on-premises license. Unearned revenue as of the periods presented consisted of the following (table in millions): August 2, February 1, 2019 2019 Unearned license revenue $ 338 $ 255 Unearned software maintenance revenue 6,357 5,972 Unearned professional services revenue 838 751 Total unearned revenue $ 7,533 $ 6,978 |
Related Parties (Tables)
Related Parties (Tables) | 6 Months Ended |
Aug. 02, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Information about VMware’s payments from such arrangements during the periods presented consisted of the following (table in millions): Three Months Ended Six Months Ended August 2, August 3, August 2, August 3, 2019 2018 2019 2018 Purchases and leases of products and purchases of services (1) $ 55 $ 42 $ 135 $ 91 Dell subsidiary support and administrative costs 20 26 46 54 (1) Amount includes indirect taxes that were remitted to Dell during the periods presented. Three Months Ended Six Months Ended August 2, August 3, August 2, August 3, 2019 2018 2019 2018 Payments from VMware to Dell, net $ 52 $ — $ 89 $ 3 Amounts due to and from related parties, net as of the periods presented consisted of the following (table in millions): August 2, February 1, 2019 2019 Due from related parties, current $ 934 $ 1,079 Due to related parties, current (1) 180 142 Due from related parties, net, current (2) $ 754 $ 937 Income tax related asset, net, current $ 26 $ — Income tax due to related parties, non-current 492 646 (1) Includes an immaterial amount related to the Company’s current operating lease liabilities due to related parties as of August 2, 2019 . (2) The Company also recognized an immaterial amount related to non-current operating lease liabilities due to related parties. This amount has been included in operating lease liabilities on the condensed consolidated balance sheets as of August 2, 2019 . for the periods presented consisted of the following (table in millions): Revenue and Receipts Unearned Revenue Three Months Ended Six Months Ended As of August 2, August 3, August 2, August 3, August 2, February 1, 2019 2018 2019 2018 2019 2019 Reseller revenue $ 729 $ 531 $ 1,347 $ 892 $ 2,771 $ 2,375 Internal-use revenue 5 5 11 12 18 13 Agency fee revenue — — 1 4 — — Collaborative technology project receipts 2 1 4 1 n/a n/a |
Business Combinations, Defini_2
Business Combinations, Definite-Lived Intangible Assets, Net and Goodwill (Tables) | 6 Months Ended |
Aug. 02, 2019 | |
Business Combinations, Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | As of the periods presented, definite-lived intangible assets consisted of the following (amounts in tables in millions): August 2, 2019 Weighted-Average Useful Lives Gross Carrying Amount Accumulated Amortization Net Book Value Purchased technology 6.2 $ 865 $ (565 ) $ 300 Customer relationships and customer lists 7.5 211 (106 ) 105 Trademarks and tradenames 7.9 87 (46 ) 41 Other 1.3 5 (4 ) 1 Total definite-lived intangible assets $ 1,168 $ (721 ) $ 447 February 1, 2019 Weighted-Average Useful Lives Gross Carrying Amount Accumulated Amortization Net Book Value Purchased technology 6.3 $ 781 $ (503 ) $ 278 Leasehold interest 34.9 149 (33 ) 116 Customer relationships and customer lists 7.5 193 (96 ) 97 Trademarks and tradenames 7.9 86 (40 ) 46 Other 3.9 7 (3 ) 4 Total definite-lived intangible assets $ 1,216 $ (675 ) $ 541 |
Schedule of Future Amortization Expense | Based on intangible assets recorded as of August 2, 2019 and assuming no subsequent additions, dispositions or impairment of underlying assets, the remaining estimated annual amortization expense over the next five fiscal years and thereafter is expected to be as follows (table in millions): Remainder of 2020 $ 75 2021 112 2022 97 2023 72 2024 54 Thereafter 37 Total $ 447 |
Schedule of Goodwill | The following table summarizes the changes in the carrying amount of goodwill during the six months ended August 2, 2019 (table in millions): Balance, February 1, 2019 $ 5,381 Increase in goodwill related to business combinations 272 Balance, August 2, 2019 $ 5,653 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 6 Months Ended |
Aug. 02, 2019 | |
Earnings Per Share [Abstract] | |
Computations of Basic and Diluted Net Income per Share | The following table sets forth the computations of basic and diluted net income per share during the periods presented (table in millions, except per share amounts and shares in thousands): Three Months Ended Six Months Ended August 2, August 3, August 2, August 3, 2019 2018 2019 2018 Net income $ 4,926 $ 644 $ 5,430 $ 1,586 Weighted-average shares, basic for Classes A and B 409,761 407,112 410,088 406,040 Effect of other dilutive securities 6,527 6,174 7,400 6,349 Weighted-average shares, diluted for Classes A and B 416,288 413,286 417,488 412,389 Net income per weighted-average share, basic for Classes A and B $ 12.02 $ 1.58 $ 13.24 $ 3.91 Net income per weighted-average share, diluted for Classes A and B $ 11.83 $ 1.56 $ 13.01 $ 3.85 |
Antidilutive Securities Excluded from Computation of Net Income per Share | The following table sets forth the weighted-average common share equivalents of Class A common stock that were excluded from the diluted net income per share calculations during the periods presented because their effect would have been anti-dilutive (shares in thousands): Three Months Ended Six Months Ended August 2, August 3, August 2, August 3, 2019 2018 2019 2018 Anti-dilutive securities: Restricted stock units 458 606 251 1,046 Total 458 606 251 1,046 |
Cash and Cash Equivalents (Tabl
Cash and Cash Equivalents (Tables) | 6 Months Ended |
Aug. 02, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Cash, Cash Equivalents and Investments | Cash and cash equivalents as of the periods presented consisted of the following (tables in millions): August 2, 2019 Cost or Amortized Cost Unrealized Gains Unrealized Losses Aggregate Fair Value Cash $ 551 $ — $ — $ 551 Cash equivalents: Money-market funds $ 2,369 $ — $ — $ 2,369 Demand deposits and time deposits 28 — — 28 Total cash equivalents $ 2,397 $ — $ — $ 2,397 February 1, 2019 Cost or Amortized Cost Unrealized Gains Unrealized Losses Aggregate Fair Value Cash $ 461 $ — $ — $ 461 Cash equivalents: Money-market funds $ 2,316 $ — $ — $ 2,316 Demand deposits and time deposits 53 — — 53 Total cash equivalents $ 2,369 $ — $ — $ 2,369 |
Cash and Cash Equivalents, Restricted Cash | The following table provides a reconciliation of the Company’s cash and cash equivalents, current portion and non-current portion of restricted cash reported within the condensed consolidated balance sheets that sum to the total cash, cash equivalents and restricted cash as of August 2, 2019 and February 1, 2019 (table in millions): August 2, February 1, 2019 2019 Cash and cash equivalents $ 2,948 $ 2,830 Restricted cash within other current assets 67 35 Restricted cash within other assets 33 29 Total cash, cash equivalents and restricted cash $ 3,048 $ 2,894 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Aug. 02, 2019 | |
Debt Disclosure [Abstract] | |
Carrying Value of Senior Notes | The carrying value of the Senior Notes as of the periods presented were as follows (amounts in millions): August 2, February 1, Effective Interest Rate 2019 2019 Long-term debt: 2.30% Senior Note Due August 21, 2020 $ 1,250 $ 1,250 2.56% 2.95% Senior Note Due August 21, 2022 1,500 1,500 3.17% 3.90% Senior Note Due August 21, 2027 1,250 1,250 4.05% Total principal amount 4,000 4,000 Less: unamortized discount (6 ) (7 ) Less: unamortized debt issuance costs (18 ) (21 ) Net carrying amount $ 3,976 $ 3,972 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Aug. 02, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Hierarchy | The following tables set forth the fair value hierarchy of VMware’s cash equivalents and short-term investments that were required to be measured at fair value as of the periods presented (tables in millions): August 2, 2019 Level 1 Level 2 Total Cash equivalents: Money-market funds $ 2,369 $ — $ 2,369 Demand deposits and time deposits — 28 28 Total cash equivalents $ 2,369 $ 28 $ 2,397 February 1, 2019 Level 1 Level 2 Total Cash equivalents: Money-market funds $ 2,316 $ — $ 2,316 Demand deposits and time deposits — 53 53 Total cash equivalents $ 2,316 $ 53 $ 2,369 Short-term investments: Marketable equity securities $ 19 $ — $ 19 Total short-term investments $ 19 $ — $ 19 |
Pivotal Financial Information | The following tables include summarized financial information for the first quarter of fiscal 2020 obtained from Pivotal’s most recent Form 10-Q filed with the SEC on June 6, 2019 (tables in millions): Three Months Ended May 3, 2019 Results of Operations Data: Revenue $ 186 Gross profit 125 Loss from operations (35 ) Net loss (32 ) Net loss attributable to Pivotal (32 ) May 3, 2019 Balance Sheet Data: Current assets $ 1,056 Total assets 1,966 Current liabilities 460 Total liabilities 654 Non-controlling interest 1 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Aug. 02, 2019 | |
Leases [Abstract] | |
Lease Cost, Cash Flow, Term and Discount Rate | Lease term and discount rate related to operating and finance leases as of the period presented were as follows: August 2, 2019 Weighted-average remaining lease term (in years) Operating leases 15.5 Finance leases 9.7 Weighted-average discount rate Operating leases 3.6 % Finance leases 3.1 % The components of lease expense during the period presented were as follows (table in millions): Three Months Ended Six Months Ended August 2, August 2, 2019 2019 Operating lease expense $ 33 $ 65 Finance lease expense: Amortization of ROU assets $ 1 $ 1 Total finance lease expense $ 1 $ 1 Short-term lease expense $ — $ 1 Variable lease expense $ 6 $ 12 Total lease expense $ 40 $ 79 Supplemental cash flow information related to operating and finance leases during the period presented was as follows (table in millions): Six Months Ended August 2, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 68 Financing cash flows from finance leases 1 ROU assets obtained in exchange for lease liabilities: Operating leases $ 107 Finance leases 63 |
Lease Assets and Liabilities | Supplemental balance sheet information related to operating and finance leases as of the period presented was as follows (table in millions): August 2, 2019 Operating Leases Finance Leases ROU assets, non-current (1) $ 715 $ 62 Lease liabilities, current (2) $ 85 $ 3 Lease liabilities, non-current (3) 588 59 Total lease liabilities $ 673 $ 62 (1) ROU assets for operating leases are included in other assets and ROU assets for finance leases are included in property and equipment, net on the condensed consolidated balance sheets. (2) Current lease liabilities are included primarily in accrued expenses and other on the condensed consolidated balance sheets. An immaterial amount is presented in due from related parties, net on the condensed consolidated balance sheets. (3) Operating lease liabilities are presented as operating lease liabilities on the condensed consolidated balance sheets. Finance lease liabilities are included in other liabilities on the condensed consolidated balance sheets. |
Operating Lease Liability Maturity | The following represents VMware’s future minimum lease payments under non-cancellable operating and finance leases as of August 2, 2019 (table in millions): Operating Leases Finance Leases Remainder of 2020 $ 52 $ 2 2021 99 6 2022 88 7 2023 76 8 2024 56 7 Thereafter 556 43 Total future minimum lease payments 927 73 Less: Imputed interest (254 ) (11 ) Total lease liabilities (1) $ 673 $ 62 (1) Total lease liabilities as of August 2, 2019 exclude legally binding lease payments for leases signed but not yet commenced of $336 million . |
Finance Lease Liability Maturity | The following represents VMware’s future minimum lease payments under non-cancellable operating and finance leases as of August 2, 2019 (table in millions): Operating Leases Finance Leases Remainder of 2020 $ 52 $ 2 2021 99 6 2022 88 7 2023 76 8 2024 56 7 Thereafter 556 43 Total future minimum lease payments 927 73 Less: Imputed interest (254 ) (11 ) Total lease liabilities (1) $ 673 $ 62 (1) Total lease liabilities as of August 2, 2019 exclude legally binding lease payments for leases signed but not yet commenced of $336 million . |
Future Minimum Lease Payments | Future lease payments under non-cancellable operating leases as of February 1, 2019 were as follows (table in millions): 2020 $ 109 2021 79 2022 64 2023 54 2024 41 Thereafter 523 Total (1) $ 870 (1) Total future lease payments as of February 1, 2019 exclude legally binding minimum lease payments for leases signed but not yet commenced of $164 million . |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Aug. 02, 2019 | |
Stockholders' Equity Note [Abstract] | |
Stock Repurchase Program | The following table summarizes stock repurchase activity during the three and six months ended August 2, 2019 (aggregate purchase price in millions, shares in thousands): Three Months Ended Six Months Ended August 2, August 2, 2019 2019 Aggregate purchase price (1) $ 446 $ 1,037 Class A common shares repurchased 2,431 5,695 Weighted-average price per share $ 183.53 $ 182.06 (1) |
Summary of Restricted Stock Activity | The following table summarizes restricted stock activity since February 1, 2019 (units in thousands): Number of Units Weighted-Average Grant Date Fair Value (per unit) Outstanding, February 1, 2019 18,215 $ 90.06 Granted 5,013 165.41 Vested (5,078 ) 80.50 Forfeited (930 ) 90.13 Outstanding, August 2, 2019 17,220 114.81 |
Schedule of Accumulated Other Comprehensive Income (Loss) | The changes in components of accumulated other comprehensive income (loss) during the periods presented were as follows (tables in millions): Unrealized Gain (Loss) on Unrealized Gain (Loss) on Total Balance, February 1, 2019 $ 1 $ 1 $ 2 Unrealized gains (losses), net of tax provision (benefit) of $—, $— and $— (1 ) 7 6 Amounts reclassified from accumulated other comprehensive income (loss) to the condensed consolidated statements of income, net of tax (provision) benefit of $—, $— and $— — (1 ) (1 ) Other comprehensive income (loss), net (1 ) 6 5 Balance, August 2, 2019 $ — $ 7 $ 7 Unrealized Gain (Loss) on Unrealized Gain (Loss) on Total Balance, February 2, 2018 $ (15 ) $ — $ (15 ) Adjustments related to adoption of ASU 2016-01 and 2018-02 (15 ) — (15 ) Unrealized gains (losses), net of tax provision (benefit) of $2, $— and $2 (9 ) (12 ) (21 ) Amounts reclassified from accumulated other comprehensive income (loss) to the condensed consolidated statements of income, net of tax (provision) benefit of $—, $— and $— — 1 1 Other comprehensive income (loss), net (9 ) (11 ) (20 ) Balance, August 3, 2018 $ (39 ) $ (11 ) $ (50 ) |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Aug. 02, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Type | Revenue by type during the periods presented was as follows (table in millions): Three Months Ended Six Months Ended August 2, August 3, August 2, August 3, 2019 2018 2019 2018 Revenue: License $ 1,011 $ 900 $ 1,879 $ 1,674 Services: Software maintenance 1,235 1,109 2,440 2,186 Professional services 193 165 386 323 Total services 1,428 1,274 2,826 2,509 Total revenue (1) $ 2,439 $ 2,174 $ 4,705 $ 4,183 (1) Includes revenue derived from VMware’s hybrid cloud subscription and SaaS offerings, which was $305 million and $589 million during the three and six months ended August 2, 2019 , respectively, and $217 million and $427 million during the three and six months ended August 3, 2018 , respectively. Revenue from Hybrid Cloud Computing offerings consisted primarily of VMware Cloud Provider Program revenue. |
Schedule of Revenue by Geographic Area | Revenue by geographic area during the periods presented was as follows (table in millions): Three Months Ended Six Months Ended August 2, August 3, August 2, August 3, 2019 2018 2019 2018 United States $ 1,171 $ 1,062 $ 2,223 $ 2,000 International 1,268 1,112 2,482 2,183 Total $ 2,439 $ 2,174 $ 4,705 $ 4,183 |
Schedule of Long-Lived Assets by Geographic Area | Long-lived assets by geographic area, which primarily include property and equipment, net, as of the periods presented were as follows (table in millions): August 2, February 1, 2019 2019 United States $ 840 $ 831 International 185 106 Total $ 1,025 $ 937 |
Overview and Basis of Present_3
Overview and Basis of Presentation (Basis of Presentation) (Details) shares in Millions, $ in Billions | 3 Months Ended |
Aug. 02, 2019USD ($)shares | |
Overview and Basis of Presentation [Line Items] | |
Discrete tax benefit | $ | $ 4.9 |
VMware | Dell | |
Overview and Basis of Presentation [Line Items] | |
Outstanding ownership percentage of VMware controlled by Dell | 80.80% |
Combined voting power of outstanding stock | 97.50% |
VMware | Dell | Class A Common Stock | |
Overview and Basis of Presentation [Line Items] | |
VMware's outstanding common stock controlled by Dell (shares) | shares | 31 |
Ireland | International | |
Overview and Basis of Presentation [Line Items] | |
Foreign statutory income tax rate, Ireland | 12.50% |
Overview and Basis of Present_4
Overview and Basis of Presentation (New Accounting Pronouncements) (Details) - USD ($) $ in Millions | Aug. 02, 2019 | Feb. 02, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Right-of-use asset | $ 715 | |
Liability for lease obligations | $ 673 | |
Accounting Standards Update 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Right-of-use asset | $ 666 | |
Liability for lease obligations | $ 629 |
Revenue, Unearned Revenue and_3
Revenue, Unearned Revenue and Remaining Performance Obligations (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||||
Aug. 02, 2019 | May 03, 2019 | Aug. 03, 2018 | May 04, 2018 | Aug. 02, 2019 | Aug. 03, 2018 | Feb. 01, 2019 | |
Disaggregation of Revenue [Line Items] | |||||||
Contract assets | $ 29 | $ 29 | $ 24 | ||||
Accrued expenses and other | 1,544 | 1,544 | 1,593 | ||||
Other liabilities | 278 | 278 | 274 | ||||
Deferred commissions | 783 | 783 | 756 | ||||
Amortization of deferred commissions | 76 | $ 61 | $ 151 | $ 128 | |||
Remaining weighted average contractual duration | 2 years | ||||||
Revenue recognized | 1,420 | $ 1,365 | $ 1,233 | $ 1,215 | |||
Customer Deposits | |||||||
Disaggregation of Revenue [Line Items] | |||||||
Accrued expenses and other | 218 | $ 218 | 238 | ||||
Other liabilities | $ 100 | $ 100 | $ 60 |
Revenue, Unearned Revenue and_4
Revenue, Unearned Revenue and Remaining Performance Obligations (Summary of Unearned Revenue) (Details) - USD ($) $ in Millions | Aug. 02, 2019 | May 03, 2019 | Feb. 01, 2019 | Aug. 03, 2018 | May 04, 2018 | Feb. 02, 2018 |
Disaggregation of Revenue [Line Items] | ||||||
Unearned Revenue | $ 7,533 | $ 7,119 | $ 6,978 | $ 6,030 | $ 5,756 | $ 5,839 |
Unearned license revenue | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Unearned Revenue | 338 | 255 | ||||
Unearned software maintenance revenue | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Unearned Revenue | 6,357 | 5,972 | ||||
Unearned professional services revenue | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Unearned Revenue | $ 838 | $ 751 |
Revenue, Unearned Revenue and_5
Revenue, Unearned Revenue and Remaining Performance Obligations (Summary of Unearned Revenue Activity) (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Aug. 02, 2019 | May 03, 2019 | Aug. 03, 2018 | May 04, 2018 | |
Change in Contract with Customer, Liability | ||||
Balance, beginning of the period | $ 7,119 | $ 6,978 | $ 5,756 | $ 5,839 |
Current period billings | 1,827 | 1,506 | 1,507 | 1,210 |
Revenue recognized from amounts previously classified as unearned revenue | (1,420) | (1,365) | (1,233) | (1,215) |
Other | 7 | 0 | 0 | (78) |
Balance, end of the period | $ 7,533 | $ 7,119 | $ 6,030 | $ 5,756 |
Revenue, Unearned Revenue and_6
Revenue, Unearned Revenue and Remaining Performance Obligations (Remaining Performance Obligations) (Details) - USD ($) $ in Billions | Aug. 02, 2019 | Feb. 01, 2019 |
Revenue from Contract with Customer [Abstract] | ||
Remaining performance obligation | $ 8 | $ 7.7 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-02-02 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation percentage | 56.00% | |
Remaining performance obligation period | 12 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-05-04 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation percentage | 54.00% | |
Remaining performance obligation period | 12 months |
Related Parties (Schedule of Re
Related Parties (Schedule of Related Party Transactions) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||||
Aug. 02, 2019 | Aug. 03, 2018 | Aug. 02, 2019 | Aug. 03, 2018 | May 03, 2019 | Feb. 01, 2019 | May 04, 2018 | Feb. 02, 2018 | |
Related Party Transaction [Line Items] | ||||||||
Unearned Revenue | $ 7,533 | $ 6,030 | $ 7,533 | $ 6,030 | $ 7,119 | $ 6,978 | $ 5,756 | $ 5,839 |
Dell | ||||||||
Related Party Transaction [Line Items] | ||||||||
Customer deposits | 123 | 123 | 85 | |||||
Dell | Reseller revenue | ||||||||
Related Party Transaction [Line Items] | ||||||||
Revenue and Receipts | 729 | 531 | 1,347 | 892 | ||||
Unearned Revenue | 2,771 | 2,771 | 2,375 | |||||
Dell | Internal-use revenue | ||||||||
Related Party Transaction [Line Items] | ||||||||
Revenue and Receipts | 5 | 5 | 11 | 12 | ||||
Unearned Revenue | 18 | 18 | 13 | |||||
Dell | Agency fee revenue | ||||||||
Related Party Transaction [Line Items] | ||||||||
Revenue and Receipts | 0 | 0 | 1 | 4 | ||||
Unearned Revenue | 0 | 0 | $ 0 | |||||
Dell | Collaborative technology project receipts | ||||||||
Related Party Transaction [Line Items] | ||||||||
Revenue and Receipts | 2 | 1 | 4 | 1 | ||||
Dell | Purchases and leases of products and purchases of services | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related party costs | 55 | 42 | 135 | 91 | ||||
Dell | Dell subsidiary support and administrative costs | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related party costs | $ 20 | $ 26 | $ 46 | $ 54 |
Related Parties (Dell Financial
Related Parties (Dell Financial Services) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 02, 2019 | Aug. 03, 2018 | Aug. 02, 2019 | Aug. 03, 2018 | |
Dell | Financial Services | ||||
Related Party Transaction [Line Items] | ||||
Financing Fees | $ 12 | $ 9 | $ 25 | $ 25 |
Related Parties (Tax Sharing Ag
Related Parties (Tax Sharing Agreement With Dell) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 02, 2019 | Aug. 03, 2018 | Aug. 02, 2019 | Aug. 03, 2018 | |
Related Party Transaction [Line Items] | ||||
Payments from VMware to Dell | $ 188 | $ 74 | ||
Credit (amount due) from tax sharing arrangement | $ 85 | $ (3) | 85 | (3) |
Dell | Tax sharing agreement | ||||
Related Party Transaction [Line Items] | ||||
Payments from VMware to Dell | 52 | 0 | 89 | 3 |
Additional Paid-in Capital | ||||
Related Party Transaction [Line Items] | ||||
Credit (amount due) from tax sharing arrangement | $ 85 | $ (3) | $ 85 | $ (3) |
Related Parties (Due To_From Re
Related Parties (Due To/From Related Parties, Net) (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Aug. 02, 2019 | Feb. 01, 2019 | |
Related Party Transaction [Line Items] | ||
Due from related parties, net cash settlement period | 60 days | |
Dell | ||
Related Party Transaction [Line Items] | ||
Due from related parties, current | $ 934 | $ 1,079 |
Due to related parties, current | 180 | 142 |
Due from related parties, net, current | 754 | 937 |
Income tax related asset, net, current | 26 | 0 |
Income tax due to related parties, non-current | $ 492 | $ 646 |
Related Parties (Note Payable t
Related Parties (Note Payable to Dell) (Details) - Notes payable - Dell - USD ($) | Aug. 21, 2017 | Jan. 21, 2014 |
Dell Notes Due May 2018, May 2020, and December 2022 | ||
Related Party Transaction [Line Items] | ||
Principal amount | $ 1,500,000,000 | |
Dell Notes Due May 2018 And May 2020 | ||
Related Party Transaction [Line Items] | ||
Repayments of related party debt | $ 1,200,000,000 | |
Note, May 2018 | ||
Related Party Transaction [Line Items] | ||
Principal amount | 680,000,000 | |
Note, May 2020 | ||
Related Party Transaction [Line Items] | ||
Principal amount | 550,000,000 | |
Note, December 2022 | ||
Related Party Transaction [Line Items] | ||
Principal amount | $ 270,000,000 | |
Interest rate | 1.75% |
Related Parties (Pivotal) (Deta
Related Parties (Pivotal) (Details) - Pivotal - Subsidiary of Common Parent | Aug. 02, 2019 | Feb. 01, 2019 |
Related Party Transaction [Line Items] | ||
Ownership percentage | 16.00% | 17.00% |
Voting interest | 24.00% | 24.00% |
Business Combinations, Defini_3
Business Combinations, Definite-Lived Intangible Assets, Net and Goodwill (Business Combination) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Aug. 02, 2019 | Aug. 02, 2019 | Feb. 01, 2019 | |
Business Acquisition [Line Items] | |||
Goodwill | $ 5,653,000,000 | $ 5,653,000,000 | $ 5,381,000,000 |
Avi Networks | |||
Business Acquisition [Line Items] | |||
Cash acquired from acquisition | 9,000,000 | ||
Intangible assets | 94,000,000 | 94,000,000 | |
Goodwill | 228,000,000 | 228,000,000 | |
Goodwill expected to be tax deductible | 0 | 0 | |
Consideration held in escrow | 27,000,000 | $ 27,000,000 | |
Award requisite service period (in years) | 3 years | ||
Total purchase price | 326,000,000 | ||
AetherPal | |||
Business Acquisition [Line Items] | |||
Intangible assets | 12,000,000 | $ 12,000,000 | |
Goodwill | 33,000,000 | 33,000,000 | |
Goodwill expected to be tax deductible | 0 | 0 | |
Total purchase price | 45,000,000 | ||
Completed Technology | Avi Networks | |||
Business Acquisition [Line Items] | |||
Intangible assets | 79,000,000 | 79,000,000 | |
Customer Relationships | Avi Networks | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 15,000,000 | $ 15,000,000 | |
Minimum | Completed Technology and Customer Relationships | Avi Networks | |||
Business Acquisition [Line Items] | |||
Useful lives (in years) | 1 year | ||
Minimum | Completed Technology and Customer Relationships | AetherPal | |||
Business Acquisition [Line Items] | |||
Useful lives (in years) | 3 years | ||
Maximum | Completed Technology and Customer Relationships | Avi Networks | |||
Business Acquisition [Line Items] | |||
Useful lives (in years) | 8 years | ||
Maximum | Completed Technology and Customer Relationships | AetherPal | |||
Business Acquisition [Line Items] | |||
Useful lives (in years) | 5 years | ||
Equity Attributable to Post-Combination Services | Avi Networks | |||
Business Acquisition [Line Items] | |||
Fair value of assumed unvested equity awards | $ 32,000,000 | $ 32,000,000 | |
Weighted-average remaining recognition period | 3 years |
Business Combinations, Defini_4
Business Combinations, Definite-Lived Intangible Assets, Net and Goodwill (Intangible Assets Detail) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Aug. 02, 2019 | Aug. 03, 2018 | Aug. 02, 2019 | Aug. 03, 2018 | Feb. 01, 2019 | Feb. 02, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||||||
Gross Carrying Amount | $ 1,168 | $ 1,168 | $ 1,216 | |||
Accumulated Amortization | (721) | (721) | (675) | |||
Net Book Value | 447 | 447 | 541 | |||
Other assets | 2,290 | 2,290 | 1,853 | |||
Amortization expense | 45 | $ 39 | 89 | $ 78 | ||
Purchased technology | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Gross Carrying Amount | 865 | 865 | 781 | |||
Accumulated Amortization | (565) | (565) | (503) | |||
Net Book Value | 300 | 300 | 278 | |||
Leasehold interest | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Gross Carrying Amount | 149 | |||||
Accumulated Amortization | (33) | |||||
Net Book Value | 116 | |||||
Leasehold interest | Accounting Standards Update 2016-02 | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Net Book Value | $ (116) | |||||
Other assets | $ 116 | |||||
Customer relationships and customer lists | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Gross Carrying Amount | 211 | 211 | 193 | |||
Accumulated Amortization | (106) | (106) | (96) | |||
Net Book Value | 105 | 105 | 97 | |||
Trademarks and tradenames | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Gross Carrying Amount | 87 | 87 | 86 | |||
Accumulated Amortization | (46) | (46) | (40) | |||
Net Book Value | 41 | 41 | 46 | |||
Other | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Gross Carrying Amount | 5 | 5 | 7 | |||
Accumulated Amortization | (4) | (4) | (3) | |||
Net Book Value | $ 1 | $ 1 | $ 4 | |||
Weighted Average | Purchased technology | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted-Average Useful Lives (in years) | 6 years 2 months 12 days | 6 years 3 months 18 days | ||||
Weighted Average | Leasehold interest | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted-Average Useful Lives (in years) | 34 years 10 months 24 days | |||||
Weighted Average | Customer relationships and customer lists | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted-Average Useful Lives (in years) | 7 years 6 months | 7 years 6 months | ||||
Weighted Average | Trademarks and tradenames | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted-Average Useful Lives (in years) | 7 years 10 months 24 days | 7 years 10 months 24 days | ||||
Weighted Average | Other | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted-Average Useful Lives (in years) | 1 year 3 months 18 days | 3 years 10 months 24 days |
Business Combinations, Defini_5
Business Combinations, Definite-Lived Intangible Assets, Net and Goodwill (Amortization of Intangible Assets) (Details) - USD ($) $ in Millions | Aug. 02, 2019 | Feb. 01, 2019 |
Business Combinations, Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2020 | $ 75 | |
2021 | 112 | |
2022 | 97 | |
2023 | 72 | |
2024 | 54 | |
Thereafter | 37 | |
Net Book Value | $ 447 | $ 541 |
Business Combinations, Defini_6
Business Combinations, Definite-Lived Intangible Assets, Net and Goodwill (Changes in Carrying Amount of Goodwill) (Details) $ in Millions | 6 Months Ended |
Aug. 02, 2019USD ($) | |
Goodwill [Roll Forward] | |
Balance, beginning of the year | $ 5,381 |
Increase in goodwill related to business combinations | 272 |
Balance, end of the year | $ 5,653 |
Net Income Per Share (Computati
Net Income Per Share (Computations of Basic and Diluted Net Income Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 02, 2019 | Aug. 03, 2018 | Aug. 02, 2019 | Aug. 03, 2018 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 4,926 | $ 644 | $ 5,430 | $ 1,586 |
Weighted-average shares, basic for Classes A and B (shares) | 409,761 | 407,112 | 410,088 | 406,040 |
Effect of dilutive securities (shares) | 6,527 | 6,174 | 7,400 | 6,349 |
Weighted-average shares, diluted for Classes A and B (shares) | 416,288 | 413,286 | 417,488 | 412,389 |
Net income per weighted-average share, basic for Classes A and B (USD per share) | $ 12.02 | $ 1.58 | $ 13.24 | $ 3.91 |
Net income per weighted-average share, diluted for Classes A and B (USD per share) | $ 11.83 | $ 1.56 | $ 13.01 | $ 3.85 |
Net Income Per Share (Anti-Dilu
Net Income Per Share (Anti-Dilutive Shares Excluded From Net Income) (Details) - Class A Common Stock - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 02, 2019 | Aug. 03, 2018 | Aug. 02, 2019 | Aug. 03, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities, amount (shares) | 458 | 606 | 251 | 1,046 |
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities, amount (shares) | 458 | 606 | 251 | 1,046 |
Cash and Cash Equivalents (Cash
Cash and Cash Equivalents (Cash and Cash Equivalents) (Details) - USD ($) $ in Millions | Aug. 02, 2019 | Feb. 01, 2019 |
Cash equivalents: | ||
Cost or Amortized Cost | $ 2,948 | $ 2,830 |
Cash | ||
Cash equivalents: | ||
Cost or Amortized Cost | 551 | 461 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Aggregate Fair Value | 551 | 461 |
Total cash equivalents | ||
Cash equivalents: | ||
Cost or Amortized Cost | 2,397 | 2,369 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Aggregate Fair Value | 2,397 | 2,369 |
Money-market funds | ||
Cash equivalents: | ||
Cost or Amortized Cost | 2,369 | 2,316 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Aggregate Fair Value | 2,369 | 2,316 |
Demand deposits and time deposits | ||
Cash equivalents: | ||
Cost or Amortized Cost | 28 | 53 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Aggregate Fair Value | $ 28 | $ 53 |
Cash and Cash Equivalents (Rest
Cash and Cash Equivalents (Restricted Cash) (Details) - USD ($) $ in Millions | Aug. 02, 2019 | Feb. 01, 2019 | Aug. 03, 2018 | Feb. 02, 2018 |
Investments, Debt and Equity Securities [Abstract] | ||||
Cash and cash equivalents | $ 2,948 | $ 2,830 | ||
Restricted cash within other current assets | 67 | 35 | ||
Restricted cash within other assets | 33 | 29 | ||
Total cash, cash equivalents and restricted cash | $ 3,048 | $ 2,894 | $ 8,154 | $ 6,003 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) | Sep. 12, 2017USD ($)extension | Aug. 21, 2017USD ($) | Aug. 02, 2019USD ($) | Aug. 03, 2018USD ($) | Aug. 02, 2019USD ($) | Aug. 03, 2018USD ($) | Feb. 01, 2019USD ($) |
Debt Instrument [Line Items] | |||||||
Interest expense | $ 34,000,000 | $ 34,000,000 | $ 67,000,000 | $ 67,000,000 | |||
Long-term debt | 3,976,000,000 | 3,976,000,000 | $ 3,972,000,000 | ||||
Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Proceeds from debt issuance | $ 4,000,000,000 | ||||||
Debt discount | (9,000,000) | (6,000,000) | (6,000,000) | (7,000,000) | |||
Debt issuance costs | $ (30,000,000) | ||||||
Interest expense | 32,000,000 | $ 32,000,000 | $ 65,000,000 | $ 65,000,000 | |||
Repurchase price as percent of principal | 101.00% | ||||||
Long-term debt | 3,976,000,000 | $ 3,976,000,000 | 3,972,000,000 | ||||
Line of Credit | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Credit facility maximum borrowing capacity | $ 1,000,000,000 | ||||||
Line of credit term | 5 years | ||||||
Number of line of credit term extensions | extension | 2 | ||||||
Line of credit term extension duration | 1 year | ||||||
Long-term debt | $ 0 | $ 0 | $ 0 |
Debt (Carrying Value of Senior
Debt (Carrying Value of Senior Notes) (Details) - USD ($) $ in Millions | Aug. 02, 2019 | Feb. 01, 2019 | Aug. 21, 2017 |
Debt Instrument [Line Items] | |||
Net carrying amount | $ 3,976 | $ 3,972 | |
Senior Notes | |||
Debt Instrument [Line Items] | |||
Long-term debt | 4,000 | 4,000 | |
Less: unamortized discount | (6) | (7) | $ (9) |
Less: unamortized debt issuance costs | (18) | (21) | |
Net carrying amount | 3,976 | 3,972 | |
Senior Notes | 2.30% Senior Note Due August 21, 2020 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 1,250 | 1,250 | |
Effective Interest Rate | 2.56% | ||
Interest rate | 2.30% | ||
Senior Notes | 2.95% Senior Note Due August 21, 2022 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 1,500 | 1,500 | |
Effective Interest Rate | 3.17% | ||
Interest rate | 2.95% | ||
Senior Notes | 3.90% Senior Note Due August 21, 2027 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 1,250 | $ 1,250 | |
Effective Interest Rate | 4.05% | ||
Interest rate | 3.90% |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Value Hierarchy) (Details) - USD ($) $ in Millions | Aug. 02, 2019 | Feb. 01, 2019 |
Short-term Investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments | $ 19 | |
Short-term Investments | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments | 19 | |
Short-term Investments | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments | 0 | |
Total cash equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | $ 2,397 | 2,369 |
Total cash equivalents | Cash and Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 2,397 | 2,369 |
Total cash equivalents | Cash and Cash Equivalents | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 2,369 | 2,316 |
Total cash equivalents | Cash and Cash Equivalents | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 28 | 53 |
Money-market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 2,369 | 2,316 |
Money-market funds | Cash and Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 2,369 | 2,316 |
Money-market funds | Cash and Cash Equivalents | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 2,369 | 2,316 |
Money-market funds | Cash and Cash Equivalents | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 0 | 0 |
Demand deposits and time deposits | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 28 | 53 |
Demand deposits and time deposits | Cash and Cash Equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 28 | 53 |
Demand deposits and time deposits | Cash and Cash Equivalents | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 0 | 0 |
Demand deposits and time deposits | Cash and Cash Equivalents | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | $ 28 | $ 53 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Aug. 02, 2019 | Aug. 03, 2018 | Aug. 02, 2019 | Aug. 03, 2018 | Feb. 01, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Deferred compensation plan assets | $ 93 | $ 93 | $ 77 | ||
Deferred compensation plan liabilities | 93 | 93 | 77 | ||
Securities without readily determinable fair value | 127 | 127 | 95 | ||
Unrealized gain on equity securities without a readily determinable fair value | 23 | 23 | |||
Notes payable | Dell | Level 2 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value of debt | 263 | 263 | 252 | ||
Senior Notes | Level 2 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value of debt | 4,000 | 4,000 | 3,900 | ||
Pivotal | Subsidiary of Common Parent | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Marketable equity securities | 427 | 427 | $ 833 | ||
Unrealized gain (loss) on equity security | (538) | $ 231 | (406) | $ 1,000 | |
Discrete tax expense | $ 133 | $ 57 | $ 100 | 236 | |
IPO | Pivotal | Subsidiary of Common Parent | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Unrealized gain (loss) on equity security | $ 668 |
Fair Value Measurements (Pivota
Fair Value Measurements (Pivotal Financial Information) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Aug. 02, 2019 | May 03, 2019 | Aug. 03, 2018 | Aug. 02, 2019 | Aug. 03, 2018 | Feb. 01, 2019 | |
Results of Operations Data: | ||||||
Revenue | $ 2,439 | $ 2,174 | $ 4,705 | $ 4,183 | ||
Operating income | 523 | 509 | 938 | 891 | ||
Net income | 4,926 | $ 644 | 5,430 | $ 1,586 | ||
Balance Sheet Data: | ||||||
Current assets | 5,629 | 5,629 | $ 5,651 | |||
Total assets | 20,372 | 20,372 | 14,662 | |||
Current liabilities | 5,858 | 5,858 | 5,696 | |||
Total liabilities | $ 15,173 | $ 15,173 | $ 14,111 | |||
Pivotal | ||||||
Results of Operations Data: | ||||||
Revenue | $ 186 | |||||
Gross profit | 125 | |||||
Operating income | (35) | |||||
Net income | (32) | |||||
Net loss attributable to Pivotal | (32) | |||||
Balance Sheet Data: | ||||||
Current assets | 1,056 | |||||
Total assets | 1,966 | |||||
Current liabilities | 460 | |||||
Total liabilities | 654 | |||||
Non-controlling interest | $ 1 |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Aug. 02, 2019 | Aug. 03, 2018 | Aug. 02, 2019 | Aug. 03, 2018 | Feb. 01, 2019 | |
Derivative [Line Items] | |||||
Combined gain (loss) on settlement of forward contracts and the underlying foregin currency denominated assets and liabilities | $ 12 | $ 18 | |||
Foreign Exchange Forward | |||||
Derivative [Line Items] | |||||
Gain (loss) on forward contracts not designated as hedging instruments | 26 | $ 29 | $ 53 | $ 59 | |
Foreign Exchange Forward | Not Designated As Hedging Instrument | |||||
Derivative [Line Items] | |||||
Forward contract maturity | 1 month | ||||
Notional amount | 889 | $ 889 | $ 1,200 | ||
Cash Flow Hedging | Foreign Exchange Forward | Designated As Hedging Instrument | |||||
Derivative [Line Items] | |||||
Notional amount | $ 200 | $ 200 | $ 367 | ||
Maximum | Cash Flow Hedging | Foreign Exchange Forward | Designated As Hedging Instrument | |||||
Derivative [Line Items] | |||||
Forward contract maturity | 12 months |
Leases (Narrative) (Details)
Leases (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Aug. 02, 2019 | Aug. 02, 2019 | |
Lessee, Lease, Description [Line Items] | ||
Lease expense | $ 40 | $ 79 |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Term of lease contract | 1 month | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Term of lease contract | 27 years |
Leases (Lease Cost) (Details)
Leases (Lease Cost) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Aug. 02, 2019 | Aug. 02, 2019 | |
Leases [Abstract] | ||
Operating lease expense | $ 33 | $ 65 |
Lease, Cost [Abstract] | ||
Amortization of ROU assets | 1 | 1 |
Total finance lease expense | 1 | 1 |
Short-term lease expense | 0 | 1 |
Variable lease expense | 6 | 12 |
Total lease expense | $ 40 | $ 79 |
Leases (Lease Cash Flow) (Detai
Leases (Lease Cash Flow) (Details) $ in Millions | 6 Months Ended |
Aug. 02, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | $ 68 |
Financing cash flows from finance leases | 1 |
ROU assets obtained in exchange for lease liabilities: | |
Operating leases | 107 |
Finance leases | $ 63 |
Leases (Lease Assets and Liabil
Leases (Lease Assets and Liabilities) (Details) $ in Millions | Aug. 02, 2019USD ($) |
Operating Leases | |
ROU assets, non-current | $ 715 |
Lease liabilities, current | 85 |
Lease liabilities, non-current | 588 |
Total lease liabilities | 673 |
Finance Leases | |
ROU assets, non-current | 62 |
Lease liabilities, current | 3 |
Lease liabilities, non-current | 59 |
Total lease liabilities | $ 62 |
Leases (Lease Term and Discount
Leases (Lease Term and Discount Rate) (Details) | Aug. 02, 2019 |
Weighted-average remaining lease term (in years) | |
Operating leases | 15 years 6 months |
Finance leases | 9 years 8 months 12 days |
Weighted-average discount rate | |
Operating leases | 3.60% |
Finance leases | 3.10% |
Leases (Lease Liability Maturit
Leases (Lease Liability Maturity) (Details) - USD ($) $ in Millions | Aug. 02, 2019 | Feb. 01, 2019 |
Operating Leases | ||
Remainder of 2020 | $ 52 | |
2021 | 99 | |
2022 | 88 | |
2023 | 76 | |
2024 | 56 | |
Thereafter | 556 | |
Total future minimum lease payments | 927 | |
Less: Imputed interest | (254) | |
Total lease liabilities | 673 | |
Finance Lease, Liability, Payment, Due [Abstract] | ||
Remainder of 2020 | 2 | |
2021 | 6 | |
2022 | 7 | |
2023 | 8 | |
2024 | 7 | |
Thereafter | 43 | |
Total future minimum lease payments | 73 | |
Less: Imputed interest | (11) | |
Total lease liabilities | 62 | |
Legally binding minimum lease payments for leases signed but not yet commenced | $ 336 | |
Future Lease Commitments | ||
2020 | $ 109 | |
2021 | 79 | |
2022 | 64 | |
2023 | 54 | |
2024 | 41 | |
Thereafter | 523 | |
Total | 870 | |
Legally binding minimum lease payments for leases signed but not yet commenced | $ 164 |
Stockholders' Equity (Stock Rep
Stockholders' Equity (Stock Repurchase Program) (Details) - USD ($) | Jun. 25, 2019 | Aug. 02, 2019 | Aug. 02, 2019 | Aug. 03, 2018 | May 29, 2019 | Aug. 31, 2017 |
Class of Stock [Line Items] | ||||||
Aggregate purchase price | $ 446,000,000 | $ 1,037,000,000 | ||||
May 2019 Share Repurchase Program | ||||||
Class of Stock [Line Items] | ||||||
Authorized repurchase amount under stock repurchase program | $ 1,500,000,000 | |||||
Class A Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Aggregate purchase price | $ 446,000,000 | $ 1,037,000,000 | ||||
Class A common shares repurchased (shares) | 2,431,000 | 5,695,000 | 0 | |||
Weighted-average price per share (USD per share) | $ 183.53 | $ 182.06 | ||||
Class A Common Stock | August 2017 Stock Repurchase Program | ||||||
Class of Stock [Line Items] | ||||||
Authorized repurchase amount under stock repurchase program | $ 1,000,000,000 | |||||
Remaining authorized repurchase amount | $ 1,300,000,000 | $ 1,300,000,000 | ||||
VMware 2007 Equity and Incentive Plan | ||||||
Class of Stock [Line Items] | ||||||
Increase in shares available for issuance (in shares) | 13,000,000 | |||||
VMware Employee Stock Purchase Plan | ||||||
Class of Stock [Line Items] | ||||||
Increase in shares available for issuance (in shares) | 9,000,000 |
Stockholders' Equity (Summary o
Stockholders' Equity (Summary of Restricted Stock Activity) (Details) - Class A Common Stock $ / shares in Units, $ in Millions | 6 Months Ended |
Aug. 02, 2019USD ($)$ / sharesshares | |
Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted stock unit conversion into common stock (in shares) | 1 |
Number of Units | |
Outstanding (shares) | 18,215,000 |
Granted (shares) | 5,013,000 |
Vested (shares) | (5,078,000) |
Forfeited (shares) | (930,000) |
Outstanding (shares) | 17,220,000 |
Weighted-Average Grant Date Fair Value | |
Outstanding, weighted-average grant date fair value (USD per share) | $ / shares | $ 90.06 |
Granted, weighted-average grant date fair value (USD per share) | $ / shares | 165.41 |
Vested, weighted-average grant date fair value (USD per share) | $ / shares | 80.50 |
Forfeited, weighted-average grant date fair value (USD per share) | $ / shares | 90.13 |
Outstanding, weighted-average grant date fair value (USD per share) | $ / shares | $ 114.81 |
Fair value of restricted stock-based awards, vested | $ | $ 931 |
Aggregate intrinsic value, nonvested | $ | $ 2,800 |
Minimum | Performance Stock Units (PSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award annual vesting percentage | 10.00% |
Maximum | Performance Stock Units (PSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award annual vesting percentage | 200.00% |
Stockholders' Equity (Net Exces
Stockholders' Equity (Net Excess Tax Benefits) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 02, 2019 | Aug. 03, 2018 | Aug. 02, 2019 | Aug. 03, 2018 | |
Stockholders' Equity Note [Abstract] | ||||
Net excess tax benefits | $ 35 | $ 27 | $ 108 | $ 53 |
Stockholders' Equity (Accumulat
Stockholders' Equity (Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 02, 2019 | Aug. 03, 2018 | Aug. 02, 2019 | Aug. 03, 2018 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance | $ 561 | $ 9,660 | $ 551 | $ 8,624 |
Adjustments related to adoption of ASU 2016-01 and 2018-02 | (15) | |||
Unrealized gains (losses), net of tax provision (benefit) | 6 | (21) | ||
Amounts reclassified from accumulated other comprehensive income (loss) to the condensed consolidated statements of income (loss), net of tax (provision) benefit | (1) | 1 | ||
Other comprehensive income (loss), net | 1 | 4 | 5 | (20) |
Balance | 5,199 | 10,392 | 5,199 | 10,392 |
Total | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance | 6 | (54) | 2 | (15) |
Other comprehensive income (loss), net | 1 | 4 | 5 | (20) |
Balance | 7 | (50) | 7 | (50) |
Tax provision (benefit) on other comprehensive loss before reclassifications | 0 | 2 | ||
Tax (provision) benefit on amounts reclassified from accumulated other comprehensive income | 0 | 0 | ||
Unrealized Gain (Loss) on Available-for-Sale Securities | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance | 1 | (15) | ||
Adjustments related to adoption of ASU 2016-01 and 2018-02 | (15) | |||
Unrealized gains (losses), net of tax provision (benefit) | (1) | (9) | ||
Amounts reclassified from accumulated other comprehensive income (loss) to the condensed consolidated statements of income (loss), net of tax (provision) benefit | 0 | 0 | ||
Other comprehensive income (loss), net | (1) | (9) | ||
Balance | 0 | (39) | 0 | (39) |
Tax provision (benefit) on other comprehensive loss before reclassifications | 0 | 2 | ||
Tax (provision) benefit on amounts reclassified from accumulated other comprehensive income | 0 | 0 | ||
Unrealized Gain (Loss) on Forward Contracts | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Balance | 1 | 0 | ||
Adjustments related to adoption of ASU 2016-01 and 2018-02 | 0 | |||
Unrealized gains (losses), net of tax provision (benefit) | 7 | (12) | ||
Amounts reclassified from accumulated other comprehensive income (loss) to the condensed consolidated statements of income (loss), net of tax (provision) benefit | (1) | 1 | ||
Other comprehensive income (loss), net | 6 | (11) | ||
Balance | $ 7 | $ (11) | 7 | (11) |
Tax provision (benefit) on other comprehensive loss before reclassifications | 0 | 0 | ||
Tax (provision) benefit on amounts reclassified from accumulated other comprehensive income | $ 0 | $ 0 |
Segment Information (Schedule o
Segment Information (Schedule of Revenue by Type) (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Aug. 02, 2019USD ($) | Aug. 03, 2018USD ($) | Aug. 02, 2019USD ($)segment | Aug. 03, 2018USD ($) | ||
Segment Reporting [Abstract] | |||||
Number of reportable segments | segment | 1 | ||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | $ 2,439 | $ 2,174 | $ 4,705 | $ 4,183 | |
License | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | [1] | 1,011 | 900 | 1,879 | 1,674 |
Services | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | [1] | 1,428 | 1,274 | 2,826 | 2,509 |
Software maintenance | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 1,235 | 1,109 | 2,440 | 2,186 | |
Professional services | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 193 | 165 | 386 | 323 | |
Hybrid Cloud Subscription and SaaS Offerings | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | $ 305 | $ 217 | $ 589 | $ 427 | |
[1] | Includes related party revenue as follows (refer to Note C): License August 2, 2019: $378 million, August 3, 2018: $308 million; Services August 2, 2019: $356 million, August 3, 2018: $228 million. |
Segment Information (Schedule_2
Segment Information (Schedule of Revenue by Geographic Area) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 02, 2019 | Aug. 03, 2018 | Aug. 02, 2019 | Aug. 03, 2018 | |
Revenues From External Customers And Long-Lived Assets [Line Items] | ||||
Revenue | $ 2,439 | $ 2,174 | $ 4,705 | $ 4,183 |
United States | ||||
Revenues From External Customers And Long-Lived Assets [Line Items] | ||||
Revenue | 1,171 | 1,062 | 2,223 | 2,000 |
International | ||||
Revenues From External Customers And Long-Lived Assets [Line Items] | ||||
Revenue | $ 1,268 | $ 1,112 | $ 2,482 | $ 2,183 |
Segment Information (Schedule_3
Segment Information (Schedule of Long-Lived Assets by Geographic Area) (Details) - USD ($) $ in Millions | Aug. 02, 2019 | Feb. 01, 2019 |
Revenues From External Customers And Long-Lived Assets [Line Items] | ||
Long-lived assets by geographic area | $ 1,025 | $ 937 |
United States | ||
Revenues From External Customers And Long-Lived Assets [Line Items] | ||
Long-lived assets by geographic area | 840 | 831 |
International | ||
Revenues From External Customers And Long-Lived Assets [Line Items] | ||
Long-lived assets by geographic area | $ 185 | $ 106 |
Subsequent Event (Details)
Subsequent Event (Details) $ / shares in Units, $ in Billions | 1 Months Ended | |
Sep. 09, 2019USD ($)$ / sharesshares | Aug. 02, 2019 | |
VMware | Dell | ||
Subsequent Event [Line Items] | ||
Ownership percentage | 80.80% | |
VMware | Dell | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Increase in ownership percentage | 30.00% | |
Ownership percentage | 81.10% | |
Pivotal | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Blended price per share (USD per share) | $ / shares | $ 11.71 | |
Net cash payout | $ | $ 0.8 | |
Carbon Black | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Blended price per share (USD per share) | $ / shares | $ 26 | |
Net cash payout | $ | $ 1.9 | |
Class A Common Stock | Pivotal | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Blended price per share (USD per share) | $ / shares | $ 15 | |
Class B Common Stock | Pivotal | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Exchange rate ratio | 0.0550 | |
Class B Common Stock | Pivotal | Dell | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Shares issued (in shares) | shares | 7,200,000 | |
Unsecured Debt | Term Loan | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Credit facility maximum borrowing capacity | $ | $ 2 |
Uncategorized Items - vmw-82201
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (30,000,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 3,000,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (15,000,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 3,000,000 |
AOCI Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (15,000,000) |