Stockholders' Equity

6 Months Ended

Jun. 30, 2013

Stockholders' Equity Note [Abstract]

Shareholders' Equity

Shareholders’ Equity

The reconciliation from basic to diluted earnings per share for both the numerators and denominators is as follows (table in millions):

	For the Three Months Ended						For the Six Months Ended
	June 30, 2013			June 30, 2012			June 30, 2013			June 30, 2012
Numerator:
Net income attributable to EMC Corporation	$	701		$	650		$	1,281		$	1,236
Incremental dilution from VMware	(2		)	(3		)	(3		)	(5		)
Net income – dilution attributable to EMC Corporation	$	699		$	647		$	1,278		$	1,231
Denominator:
Weighted average shares, basic	2,092			2,096			2,097			2,082
Weighted common stock equivalents	29			42			30			44
Assumed conversion of the 2013 Notes and associated warrants	53			70			54			79
Weighted average shares, diluted	2,174			2,208			2,181			2,205

Due to the cash settlement feature of the principal amount of the 2013 Notes, we only include the impact of the premium feature in our diluted earnings per share calculation when the 2013 Notes are convertible due to maturity or when the average stock price exceeds the conversion price of the 2013 Notes.

Concurrent with the issuance of the 2011 Notes and 2013 Notes, we also entered into separate transactions in which we sold warrants to acquire, subject to customary anti-dilution adjustments, approximately 215 million shares of our common stock at an exercise price of approximately $19.55 per share of our common stock. Half of the associated warrants were exercised during the six months ended June 30, 2013. We include the impact of the remaining outstanding sold warrants in our diluted earnings per share calculation when the average stock price exceeds the exercise price.

Restricted stock awards, restricted stock units and options to acquire shares of our common stock in the amount of 4 million for both the three and six months ended June 30, 2013 and 3 million and 4 million for the three and six months ended June 30, 2012, respectively, were excluded from the calculation of diluted earnings per share because they were antidilutive. The incremental dilution from VMware represents the impact of VMware’s dilutive securities on EMC’s consolidated diluted net income per share and is calculated by multiplying the difference between VMware’s basic and diluted earnings per share by the number of VMware shares owned by EMC.

Repurchase of Common Stock

We utilize both authorized and unissued shares (including repurchased shares) for all issuances under our equity plans. Our Board of Directors authorized the repurchase of 250 million shares of our common stock in April 2008 and an additional 250 million shares of our common stock in February 2013. For the six months ended June 30, 2013, we spent $1.0 billion to repurchase 42 million shares of our common stock. Of the 500 million shares authorized for repurchase, we have repurchased 264 million shares at a total cost of $5.4 billion, leaving a remaining balance of 236 million shares authorized for future repurchases.  We plan to spend up to $3.5 billion by the end of the second quarter of 2014 and up to $6.0 billion by the end of 2015 on common stock repurchases.

Cash Dividend on Common Stock

On May 30, 2013, our Board of Directors declared a cash dividend of $0.10 per share of common stock. On July 23, 2013, EMC paid a cash dividend of $208 million to shareholders of record as of the close of business on July 1, 2013.

Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss), which is presented net of tax, consist of the following (table in millions):

	Foreign Currency Translation Adjustments			Unrealized Net Gains on Investments			Unrealized Net Losses on Derivatives			Recognition of Actuarial Net Loss from Pension and Other Postretirement Plans			Accumulated Other Comprehensive Income Attributable to the Non-controlling Interest in VMware, Inc.			Total
Balance as of December 31, 2012(a)	$	(9	)	$	64		$	(109	)	$	(153	)	$	(1	)	$	(208	)
Other comprehensive income (loss) before reclassifications	(56		)	(29		)	8			—			2			(75		)
Net losses (gains) reclassified from accumulated other comprehensive income	—			(8		)	(8		)	—			—			(16		)
Net current period other comprehensive income (loss)	(56		)	(37		)	—			—			2			(91		)
Balance at June 30, 2013(b)	$	(65	)	$	27		$	(109	)	$	(153	)	$	1		$	(299	)

(a) Net of taxes (benefits) of $37 million for unrealized net gains on investments, $(67) million for unrealized net losses on derivatives and $(87) million for actuarial net loss on pension plans.

(b) Net of taxes (benefits) of $17 million for unrealized net gains on investments, $(66) million for unrealized net losses on derivatives and $(87) million for actuarial net loss on pension plans.

The amounts reclassified out of accumulated other comprehensive income (loss) for the three and six months ended June 30, 2013 are as follows (tables in millions):

Accumulated Other Comprehensive Income Components	Amount Reclassified from Accumulated Other Comprehensive Income			Impacted Line Item on Consolidated Income Statements
For the three months ended June 30, 2013:
Net gain on investments:	$	6		Investment income
	(2		)	Provision for income tax
Net of tax	$	4
Net gain on derivatives:
Foreign exchange contracts	$	6		Product sales revenue
Foreign exchange contracts	(3		)	Cost of product sales
Total net gain on derivatives before tax	3
	—			Provision for income tax
Net of tax	$	3

Accumulated Other Comprehensive Income Components	Amount Reclassified from Accumulated Other Comprehensive Income			Impacted Line Item on Consolidated Income Statements
For the six months ended June 30, 2013:
Net gain on investments:	$	13		Investment income
	(5		)	Provision for income tax
Net of tax	$	8
Net gain on derivatives:
Foreign exchange contracts	$	16		Product sales revenue
Foreign exchange contracts	(6		)	Cost of product sales
Total net gain on derivatives before tax	10
	(2		)	Provision for income tax
Net of tax	$	8