Contingencies Litigation On March 27, 2015, Phoenix Technologies (Phoenix) filed a complaint against VMware in the U.S. District Court for the Northern District of California asserting claims for copyright infringement and breach of contract relating to a version of Phoenixs BIOS software that VMware licensed from Phoenix. Following trial, the jury issued its verdict on June 12, 2017, finding that VMware did not infringe on any of the four bases asserted by Phoenix. The Court entered judgment in VMwares favor, and the parties have filed post-trial motions. The Company intends to continue vigorously defending itself against this lawsuit. On March 4, 2015, Christoph Hellwig, a software developer who alleged that software code he wrote is used in a component of the Companys vSphere product, filed a lawsuit against VMware in the Hamburg Regional Court in Germany alleging copyright infringement for failing to comply with the terms of the open source General Public License v.2 (GPL v.2). On July 8, 2016, the German court issued a written decision dismissing Mr. Hellwigs lawsuit. Mr. Hellwig has appealed the Regional Courts decision. No hearing schedule has yet been set by the appellate court. 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 VMwares 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 nego