we believe this measure reflects our ongoing business in a manner that allows meaningful period-to-period comparisons . we are not currently focused on short-term operating margin expansion , but rather on investing at appropriate rates to support our growth and future product offerings in what may be a substantially more competitive environment . we have developed a multi-channel distribution model to expand our presence and to reach various segments of the industry . in 2010 we derived over 85 % of our sales from our channel partners , which include distributors , resellers , system vendors and systems integrators . sales to our channel partners often involve three tiers of distribution : a distributor , a reseller and an end-user customer . our sales force works collaboratively with our channel partners to introduce them to customers and new sales opportunities . as we expand geographically , we expect to continue to add additional channel partners . the remainder of our sales is primarily derived from purchases made directly by end-user customers . from late 2008 and through most of 2009 , macroeconomic conditions deteriorated globally and we observed that customers responded to the economic downturn with reductions in it spending . since the fourth quarter of 2009 and through 2010 , we have benefited , along with the it industry , from pent-up demand for it products and services . while the overall macroeconomic environment has improved since late 2009 , and while we believe that our customers continue to adopt our product platform as a strategic investment that enables substantial cost savings and improves efficiency and flexibility for their business , we continue to be cautious about the macroeconomic environment and the volatility we are observing in the world economy . we expect to continue to manage our resources prudently , while making key investments in support of our long-term growth objectives . the majority of our contracts include both perpetual software licenses and ongoing software maintenance contracts . license revenues are recognized when the elements of revenue recognition for the licensed software are complete , generally upon electronic shipment of the software . software maintenance revenues are typically recognized ratably over the term of the software maintenance period , i.e . over periods from one to five years subsequent to the initial contract , and include renewals of software maintenance sold after the initial software maintenance period expires . we also recognize revenues from professional services provided to our customers primarily as services are performed . vendor-specific objective evidence ( vsoe ) of fair value for software maintenance services is established by the rates charged in stand-alone sales of software maintenance contracts or the stated renewal rate for software maintenance included in the license agreement . our software products may also be sold with professional services . vsoe of fair value for professional services is based upon the standard rates we charge for such services when sold separately . the revenues allocated to the software license included in multiple-element contracts represent the residual amount of the contract after the fair value of the other elements has been determined . as a consequence of the timing differences in the recognition of license revenues and software maintenance revenues , variability in operating margin can result from differences in when we quote and contract for our services and when the cost is incurred . variability in operating margin can also result when we recognize our foreign denominated unearned maintenance revenues in future periods . due to our use of the u.s. dollar as our functional currency , unearned revenue remains at its historical rate when recognized into revenue while our operating expenses in future periods are based upon the foreign exchange rates at that time . our unearned revenue , both current and long-term , represents a liability on our consolidated balance sheets as the requirements of revenue recognition have not yet been met , and it consists of amounts received from customers and amounts billed but not collected for which revenue has not yet been recognized . our unearned revenues consist of unearned software maintenance revenues , unearned professional services revenues and unearned license revenues . as of december 31 , 2010 , total unearned revenues were $ 1,860.1 , an increase of 40 % from the previous year . of the total , $ 1,536.6 will be recognized ratably over terms from one to five years , and is comprised of $ 1,461.3 of software maintenance revenue and $ 75.3 of license revenue . the 45 weighted-average remaining term of arrangements where revenue will be recognized ratably is approximately 1.8 years . additionally , unearned revenues of $ 191.8 are related to software license revenue , which will be recognized upon the shipment of either existing or future products and is classified as current unearned revenue . future products include , in some cases , emerging products that are offered as part of product promotions where the purchaser of an existing product is entitled to receive a promotional product at no additional charge . we regularly offer product promotions , generally as a strategy to build awareness of our emerging products . to the extent promotional products are not yet available , the revenue for the entire order is deferred until such time as all product obligations have been fulfilled . the remaining unearned revenues of $ 131.7 relate to professional services and will be recognized when the services are delivered . we believe our overall unearned revenue balance improves predictability of future revenues and that it is a key indicator of the health and growth of our business . until the second quarter of 2009 , most of our revenue contracts with international channel partners were denominated in u.s. dollars , but a portion of our operating expenses were , and continue to be , denominated in currencies other than the u.s. dollar . story_separator_special_tag services revenues services revenues were $ 1,455.9 in 2010 , $ 994.5 in 2009 and $ 702.9 in 2008 , representing year-over-year increases of $ 461.4 or 46 % in 2010 and $ 291.6 or 41 % in 2009. the increase in services revenues during 2010 and 2009 was primarily attributable to growth in our software maintenance revenues . software maintenance revenues were $ 1,217.0 in 2010 , $ 823.8 in 2009 and $ 555.9 in 2008 , representing year-over-year increases of $ 393.3 or 48 % in 2010 and $ 267.9 or 48 % in 2009. in 2010 and 2009 , software maintenance revenues benefited from strong renewals , multi-year software maintenance contracts sold in previous periods , and additional maintenance contracts sold in conjunction with software licenses . in 2010 , customers continued to buy , on average , more than 24 months of support and maintenance with each new license purchased , which we believe illustrates our customers ' commitment to vmware as a core element of their data center architecture . in addition , in 2009 , services revenues increased year-over-year as a result of customers becoming current on their maintenance agreements in order to receive our 2009 release of vsphere 4.0 as a part of their service arrangements . 50 professional services revenues were $ 238.9 in 2010 , $ 170.7 in 2009 and $ 147.0 in 2008 , representing year-over-year increases of $ 68.2 or 40 % in 2010 and $ 23.7 or 16 % in 2009. professional services revenues increased as growth in our installed-base led to strong demand for our professional services , including consulting and customer training . as we continue to invest in our partners and expand our eco-system of third-party professionals with expertise in our solutions to independently provide professional services to our customers , we do not expect our professional services revenues to constitute an increasing component of our revenue mix . as a result of this strategy , our professional services revenue can vary based on the delivery channels used in any given period as well as the timing of engagements . operating expenses information about our operating expenses is as follows : replace_table_token_6_th replace_table_token_7_th replace_table_token_8_th 51 ( 1 ) core operating expenses is a non-gaap financial measure that excludes stock-based compensation , the net effect of the amortization and capitalization of software development costs and certain other expenses from our total operating expenses calculated in accordance with gaap . the other expenses excluded are employer payroll taxes on employee stock transactions , amortization of intangible assets and acquisition-related items . see non-gaap financial measures below for further information . operating margins increased from 10.8 % in 2009 to 15.0 % in 2010 and decreased from 16.6 % in 2008 to 10.8 % in 2009. the increase in our operating margin in 2010 compared with 2009 primarily related to the increase in our revenues , which outpaced the increase in our expenses . the decrease in our operating margin in 2009 compared with 2008 primarily related to slower revenue growth , which was negatively impacted by the global economic downturn in 2009 and late 2008 and our continued investments in our products and the company 's infrastructure . in evaluating our results , we generally focus on core operating expenses . we believe that our core operating expenses reflect our ongoing business in a manner that allows meaningful period-to-period comparisons . our core operating expenses are reconciled to the most comparable gaap measure , total operating expenses ,  in the table above . core operating expenses the following discussion of our core operating expenses and the components comprising our core operating expenses highlights the factors that our management focuses upon in evaluating our operating margin and operating expenses . the increases or decreases in operating expenses discussed in this section do not include changes relating to stock-based compensation , the net effect of the amortization and capitalization of software development costs and certain other expenses , which consist of employer payroll taxes on employee stock transactions , amortization of intangible assets and acquisition-related items set forth above . core operating expenses increased by $ 504.1 or 33 % in 2010 compared with 2009 and $ 127.8 or 9 % in 2009 compared with 2008. as quantified below , these increases were primarily due to increases in employee-related expenses , which include salaries and benefits , bonuses , commissions , and recruiting and training . the increases in employee-related expenses for both periods were largely a result of incremental headcount from strategic hiring , business growth and business acquisitions , as well as from higher commission expense as a result of increased sales volumes beginning in the fourth quarter of 2009 and continuing through 2010. in 2009 , the increase in core operating expenses was partially offset by the benefit from the austerity measures that we introduced at the end of 2008 in response to the global economic downturn . these austerity measures included reduced travel and entertainment costs , decreased contractor costs , hiring limits and suspensions of merit pay increases and matching contributions to employee 401 ( k ) retirement plan accounts . we reinstated matching contributions to 401 ( k ) retirement plan accounts in the fourth quarter of 2009 , and we reinstated a budget for merit pay increases effective in the second quarter of 2010. a portion of our core operating expenses , primarily the cost of personnel to deliver technical support on our products and professional services , marketing , and research and development , are denominated in foreign currencies , and are thus exposed to foreign exchange rate fluctuations . core operating expenses were negatively impacted by $ 4.1 in 2010 and benefited by $ 28.0 in 2009 , as compared with their respective prior years , due to the effect of fluctuations in the exchange rates between the u.s. dollar and foreign currencies . cost of license revenues core

liquidity and capital resources during the second quarter of 2010 , we began investing in fixed income securities , which drove a shift from cash and cash equivalents to short-term investments . our fixed income investment portfolio is denominated in u.s. dollars and consists of various holdings , types and maturities . our primary objective for holding fixed 56 income securities is to achieve an appropriate investment return consistent with preserving principal and managing risk . replace_table_token_10_th our operating activities in 2010 , 2009 and 2008 , respectively , generated sufficient cash to meet our operating needs . our cash flows for the years ended 2010 , 2009 and 2008 were as follows : replace_table_token_11_th in evaluating our liquidity internally , we focus on long-term , sustainable growth in free cash flows and in non-gaap cash flows from operating activities ( non-gaap operating cash flows ) . we define non-gaap operating cash flows as net cash provided by operating activities less capitalized software development costs plus the excess tax benefits from stock-based compensation . we define free cash flows , also a non-gaap financial measure , as non-gaap operating cash flows less capital expenditures . see non-gaap financial measures for additional information . our non-gaap operating cash flows and free cash flows for 2010 , 2009 and 2008 were as follows : replace_table_token_12_th free cash flows increased by $ 362.2 or 43 % to $ 1,202.0 for the year ended december 31 , 2010 , compared with $ 839.8 for the year ended december 31 , 2009 , and by $ 236.4 or 39 % to $ 839.8 for the year ended december 2009 , compared with $ 603.4 for the year ended december 31 , 2008. the increase in free cash flows in 2010 and 2009 was primarily due to increased sales and related cash collections . historically , we have invested excess cash predominantly in money market securities that are liquid and of high quality investment grade . the fair value for money market securities is determined based on quoted market prices as of the valuation date .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```liquidity and capital resources during the second quarter of 2010 , we began investing in fixed income securities , which drove a shift from cash and cash equivalents to short-term investments . our fixed income investment portfolio is denominated in u.s. dollars and consists of various holdings , types and maturities . our primary objective for holding fixed 56 income securities is to achieve an appropriate investment return consistent with preserving principal and managing risk . replace_table_token_10_th our operating activities in 2010 , 2009 and 2008 , respectively , generated sufficient cash to meet our operating needs . our cash flows for the years ended 2010 , 2009 and 2008 were as follows : replace_table_token_11_th in evaluating our liquidity internally , we focus on long-term , sustainable growth in free cash flows and in non-gaap cash flows from operating activities ( non-gaap operating cash flows ) . we define non-gaap operating cash flows as net cash provided by operating activities less capitalized software development costs plus the excess tax benefits from stock-based compensation . we define free cash flows , also a non-gaap financial measure , as non-gaap operating cash flows less capital expenditures . see non-gaap financial measures for additional information . our non-gaap operating cash flows and free cash flows for 2010 , 2009 and 2008 were as follows : replace_table_token_12_th free cash flows increased by $ 362.2 or 43 % to $ 1,202.0 for the year ended december 31 , 2010 , compared with $ 839.8 for the year ended december 31 , 2009 , and by $ 236.4 or 39 % to $ 839.8 for the year ended december 2009 , compared with $ 603.4 for the year ended december 31 , 2008. the increase in free cash flows in 2010 and 2009 was primarily due to increased sales and related cash collections . historically , we have invested excess cash predominantly in money market securities that are liquid and of high quality investment grade . the fair value for money market securities is determined based on quoted market prices as of the valuation date .
```    
 Suspicious Activity Report : we believe this measure reflects our ongoing business in a manner that allows meaningful period-to-period comparisons . we are not currently focused on short-term operating margin expansion , but rather on investing at appropriate rates to support our growth and future product offerings in what may be a substantially more competitive environment . we have developed a multi-channel distribution model to expand our presence and to reach various segments of the industry . in 2010 we derived over 85 % of our sales from our channel partners , which include distributors , resellers , system vendors and systems integrators . sales to our channel partners often involve three tiers of distribution : a distributor , a reseller and an end-user customer . our sales force works collaboratively with our channel partners to introduce them to customers and new sales opportunities . as we expand geographically , we expect to continue to add additional channel partners . the remainder of our sales is primarily derived from purchases made directly by end-user customers . from late 2008 and through most of 2009 , macroeconomic conditions deteriorated globally and we observed that customers responded to the economic downturn with reductions in it spending . since the fourth quarter of 2009 and through 2010 , we have benefited , along with the it industry , from pent-up demand for it products and services . while the overall macroeconomic environment has improved since late 2009 , and while we believe that our customers continue to adopt our product platform as a strategic investment that enables substantial cost savings and improves efficiency and flexibility for their business , we continue to be cautious about the macroeconomic environment and the volatility we are observing in the world economy . we expect to continue to manage our resources prudently , while making key investments in support of our long-term growth objectives . the majority of our contracts include both perpetual software licenses and ongoing software maintenance contracts . license revenues are recognized when the elements of revenue recognition for the licensed software are complete , generally upon electronic shipment of the software . software maintenance revenues are typically recognized ratably over the term of the software maintenance period , i.e . over periods from one to five years subsequent to the initial contract , and include renewals of software maintenance sold after the initial software maintenance period expires . we also recognize revenues from professional services provided to our customers primarily as services are performed . vendor-specific objective evidence ( vsoe ) of fair value for software maintenance services is established by the rates charged in stand-alone sales of software maintenance contracts or the stated renewal rate for software maintenance included in the license agreement . our software products may also be sold with professional services . vsoe of fair value for professional services is based upon the standard rates we charge for such services when sold separately . the revenues allocated to the software license included in multiple-element contracts represent the residual amount of the contract after the fair value of the other elements has been determined . as a consequence of the timing differences in the recognition of license revenues and software maintenance revenues , variability in operating margin can result from differences in when we quote and contract for our services and when the cost is incurred . variability in operating margin can also result when we recognize our foreign denominated unearned maintenance revenues in future periods . due to our use of the u.s. dollar as our functional currency , unearned revenue remains at its historical rate when recognized into revenue while our operating expenses in future periods are based upon the foreign exchange rates at that time . our unearned revenue , both current and long-term , represents a liability on our consolidated balance sheets as the requirements of revenue recognition have not yet been met , and it consists of amounts received from customers and amounts billed but not collected for which revenue has not yet been recognized . our unearned revenues consist of unearned software maintenance revenues , unearned professional services revenues and unearned license revenues . as of december 31 , 2010 , total unearned revenues were $ 1,860.1 , an increase of 40 % from the previous year . of the total , $ 1,536.6 will be recognized ratably over terms from one to five years , and is comprised of $ 1,461.3 of software maintenance revenue and $ 75.3 of license revenue . the 45 weighted-average remaining term of arrangements where revenue will be recognized ratably is approximately 1.8 years . additionally , unearned revenues of $ 191.8 are related to software license revenue , which will be recognized upon the shipment of either existing or future products and is classified as current unearned revenue . future products include , in some cases , emerging products that are offered as part of product promotions where the purchaser of an existing product is entitled to receive a promotional product at no additional charge . we regularly offer product promotions , generally as a strategy to build awareness of our emerging products . to the extent promotional products are not yet available , the revenue for the entire order is deferred until such time as all product obligations have been fulfilled . the remaining unearned revenues of $ 131.7 relate to professional services and will be recognized when the services are delivered . we believe our overall unearned revenue balance improves predictability of future revenues and that it is a key indicator of the health and growth of our business . until the second quarter of 2009 , most of our revenue contracts with international channel partners were denominated in u.s. dollars , but a portion of our operating expenses were , and continue to be , denominated in currencies other than the u.s. dollar . story_separator_special_tag services revenues services revenues were $ 1,455.9 in 2010 , $ 994.5 in 2009 and $ 702.9 in 2008 , representing year-over-year increases of $ 461.4 or 46 % in 2010 and $ 291.6 or 41 % in 2009. the increase in services revenues during 2010 and 2009 was primarily attributable to growth in our software maintenance revenues . software maintenance revenues were $ 1,217.0 in 2010 , $ 823.8 in 2009 and $ 555.9 in 2008 , representing year-over-year increases of $ 393.3 or 48 % in 2010 and $ 267.9 or 48 % in 2009. in 2010 and 2009 , software maintenance revenues benefited from strong renewals , multi-year software maintenance contracts sold in previous periods , and additional maintenance contracts sold in conjunction with software licenses . in 2010 , customers continued to buy , on average , more than 24 months of support and maintenance with each new license purchased , which we believe illustrates our customers ' commitment to vmware as a core element of their data center architecture . in addition , in 2009 , services revenues increased year-over-year as a result of customers becoming current on their maintenance agreements in order to receive our 2009 release of vsphere 4.0 as a part of their service arrangements . 50 professional services revenues were $ 238.9 in 2010 , $ 170.7 in 2009 and $ 147.0 in 2008 , representing year-over-year increases of $ 68.2 or 40 % in 2010 and $ 23.7 or 16 % in 2009. professional services revenues increased as growth in our installed-base led to strong demand for our professional services , including consulting and customer training . as we continue to invest in our partners and expand our eco-system of third-party professionals with expertise in our solutions to independently provide professional services to our customers , we do not expect our professional services revenues to constitute an increasing component of our revenue mix . as a result of this strategy , our professional services revenue can vary based on the delivery channels used in any given period as well as the timing of engagements . operating expenses information about our operating expenses is as follows : replace_table_token_6_th replace_table_token_7_th replace_table_token_8_th 51 ( 1 ) core operating expenses is a non-gaap financial measure that excludes stock-based compensation , the net effect of the amortization and capitalization of software development costs and certain other expenses from our total operating expenses calculated in accordance with gaap . the other expenses excluded are employer payroll taxes on employee stock transactions , amortization of intangible assets and acquisition-related items . see non-gaap financial measures below for further information . operating margins increased from 10.8 % in 2009 to 15.0 % in 2010 and decreased from 16.6 % in 2008 to 10.8 % in 2009. the increase in our operating margin in 2010 compared with 2009 primarily related to the increase in our revenues , which outpaced the increase in our expenses . the decrease in our operating margin in 2009 compared with 2008 primarily related to slower revenue growth , which was negatively impacted by the global economic downturn in 2009 and late 2008 and our continued investments in our products and the company 's infrastructure . in evaluating our results , we generally focus on core operating expenses . we believe that our core operating expenses reflect our ongoing business in a manner that allows meaningful period-to-period comparisons . our core operating expenses are reconciled to the most comparable gaap measure , total operating expenses ,  in the table above . core operating expenses the following discussion of our core operating expenses and the components comprising our core operating expenses highlights the factors that our management focuses upon in evaluating our operating margin and operating expenses . the increases or decreases in operating expenses discussed in this section do not include changes relating to stock-based compensation , the net effect of the amortization and capitalization of software development costs and certain other expenses , which consist of employer payroll taxes on employee stock transactions , amortization of intangible assets and acquisition-related items set forth above . core operating expenses increased by $ 504.1 or 33 % in 2010 compared with 2009 and $ 127.8 or 9 % in 2009 compared with 2008. as quantified below , these increases were primarily due to increases in employee-related expenses , which include salaries and benefits , bonuses , commissions , and recruiting and training . the increases in employee-related expenses for both periods were largely a result of incremental headcount from strategic hiring , business growth and business acquisitions , as well as from higher commission expense as a result of increased sales volumes beginning in the fourth quarter of 2009 and continuing through 2010. in 2009 , the increase in core operating expenses was partially offset by the benefit from the austerity measures that we introduced at the end of 2008 in response to the global economic downturn . these austerity measures included reduced travel and entertainment costs , decreased contractor costs , hiring limits and suspensions of merit pay increases and matching contributions to employee 401 ( k ) retirement plan accounts . we reinstated matching contributions to 401 ( k ) retirement plan accounts in the fourth quarter of 2009 , and we reinstated a budget for merit pay increases effective in the second quarter of 2010. a portion of our core operating expenses , primarily the cost of personnel to deliver technical support on our products and professional services , marketing , and research and development , are denominated in foreign currencies , and are thus exposed to foreign exchange rate fluctuations . core operating expenses were negatively impacted by $ 4.1 in 2010 and benefited by $ 28.0 in 2009 , as compared with their respective prior years , due to the effect of fluctuations in the exchange rates between the u.s. dollar and foreign currencies . cost of license revenues core

