VMware Announces Record Date for Previously Announced One-Time Special Dividend
December 11 2018 - 4:16PM
VMware Inc. (NYSE:VMW) (“VMware”), a leading innovator in
enterprise software, today announced that December 27, 2018 has
been set as the record date (the “Record Date”) for VMware’s $11
billion, conditional one-time special dividend payable pro-rata to
all VMware stockholders (the “Special Dividend”), previously
announced on July 2, 2018. The Special Dividend is payable in
connection with the closing of the transaction originally announced
on July 2, 2018, by Dell Technologies Inc. (“Dell”) for the
exchange of Dell Class V tracking stock for Dell Class C common
stock or cash election option that was approved by Dell
stockholders earlier today (the “Exchange Transaction”). Payment of
the Special Dividend remains subject to the conditions described in
VMware’s Current Reports on Form 8-K filed with the SEC on July 2,
2018, and November 15, 2018 (the “Payment Conditions”).
The Special Dividend will be payable to all VMware stockholders
of record as of the close of business on the Record Date.
VMware will announce the per share dividend amount following the
end of trading on the New York Stock Exchange on the Record
Date.
It is currently expected that the payment date for the Special
Dividend will be December 28, 2018 (the “Payment Date”), subject to
satisfaction of the Payment Conditions. The Payment
Conditions include the condition that Dell provide a certification
to VMware that if Dell’s pro rata share of the Special Dividend is
received by Dell’s subsidiaries that are holders of record of
VMware common stock by 3:30 p.m. Eastern time on the Payment Date,
the closing of the Dell Merger will occur on such date (provided
that if payment cannot occur prior to 3:30 p.m. Eastern time, the
Payment Date will be December 31, 2018).
Shares of VMware Class A common stock will trade with due bills
following the Record Date through and including the Payment
Date. The ex-dividend date will be the first trading day
following the Payment Date.
US Federal Tax Treatment of the Special
DividendVMware currently estimates that, for federal tax
purposes, 60.39% of the Special Dividend will be treated as a
taxable dividend, with the other 39.61% of the Special Dividend
being first treated as a return on capital to stockholders to the
extent of their basis in VMware common stock, and then as capital
gain.
The tax treatment of the Special Dividend will be based on
VMware’s current and accumulated earnings and profits for VMware’s
fiscal year ending February 1, 2019. (“FY19”). The
process of determining current and accumulated earnings and profits
requires a final determination of VMware’s financial results for
FY19 and a review of certain other factors. The determination will
be based in part on factors that are outside of the control of
VMware and which cannot be ascertained at this time. VMware does
not expect the calculation of the portion that will be treated as a
taxable dividend for federal tax purposes to be finalized until
after the completion of FY19. Accordingly, the portion of the
Special Dividend estimated to be a taxable dividend provided in
this release is based upon currently available information and is
subject to change. VMware currently expects to update
information on taxation of the Special Dividend later in calendar
year 2019.
The precise tax impact of the Special Dividend to specific
stockholders depends upon the stockholder’s individual tax
situation. Stockholders are urged to consult with their personal
tax
advisors.
About VMwareVMware software powers the
world’s complex digital infrastructure. The company’s compute,
cloud, mobility, networking and security offerings provide a
dynamic and efficient digital foundation to over 500,000 customers
globally, aided by an ecosystem of 75,000 partners. Headquartered
in Palo Alto, California, this year VMware celebrates twenty years
of breakthrough innovation benefiting business and society. For
more information please visit
https://www.vmware.com/company.html.
Forward-Looking StatementsThis press release
contains forward-looking statements that are based on VMware’s
current expectations, including, among other things, statements
regarding VMware’s Special Dividend, including its record date and
payment date, the tax treatment of the Special Dividend and the
specific percentage of the Special Dividend that will be treated as
a return on capital or capital gain, the expected completion of the
Dell exchange transaction and the satisfaction of conditions to
payment of the Special Dividend. These forward-looking statements
are subject to the safe harbor provisions created by the Private
Securities Litigation Reform Act of 1995. Actual results could
differ materially from those projected in the forward-looking
statements as a result of certain risk factors, including but not
limited to: (i) VMware’s ability to pay the Special Dividend,
(ii) the satisfaction of conditions to the Special Dividend
payment, including the timely satisfaction of conditions to the
consummation of the Dell exchange transaction, including any
financing condition, (iii) adverse changes in general
economic, capital markets or other market conditions;
(iv) competitive factors, including but not limited to pricing
pressures, industry consolidation, entry of new competitors into
the virtualization software and cloud, end user and mobile
computing industries, and new product and marketing initiatives by
VMware’s competitors; (v) VMware’s relationship with Dell and
Dell’s ability to control matters requiring stockholder approval,
including the election of VMware’s board members and matters
relating to Dell’s investment in VMware; (vi) tabulation of
VMware’s financial results for FY19; and (vii) other factors
relating to the final calculation of the portion of the Special
Dividend taxable as a dividend or as a return of capital or capital
gain including calculations of the impact on VMware as a member of
a consolidated tax group with Dell. These forward-looking
statements are made as of the date of this press release, are based
on current expectations and are subject to uncertainties and
changes in condition, significance, value and effect as well as
other risks detailed in documents filed with the Securities and
Exchange Commission, including VMware’s most recent reports on Form
10-K and Form 10-Q and Current Reports on Form 8-K that we have
filed and may file from time to time, which could cause actual
results to vary from expectations. VMware assumes no obligation to,
and does not currently intend to, update any such forward-looking
statements after the date of this press release.
ContactPaul ZiotsVMware Investor
Relationspziots@vmware.com650-427-3267
Michael ThackerVMware Global
PRmthacker@vmware.com650-427-4454
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