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Stock-Based Compensation (Tables)
 12 Months Ended
Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Components of Stock-Based Compensation Expense
The following tables summarize the components of total stock-based compensation expense included in our consolidated income statements in 2014, 2013 and 2012 (in millions):
 
 
Year Ended December 31, 2014
 
 
Stock Options
 
Restricted
Stock
 
Total Stock-Based
Compensation
Cost of product sales
 
$
16

 
$
38

 
$
54

Cost of services
 
20

 
72

 
92

Research and development
 
79

 
303

 
382

Selling, general and administrative
 
78

 
415

 
493

Stock-based compensation expense before income taxes
 
193

 
828

 
1,021

Income tax benefit
 
45

 
179

 
224

Total stock-based compensation, net of tax
 
$
148

 
$
649

 
$
797

 
 
Year Ended December 31, 2013
 
 
Stock Options
 
Restricted
Stock
 
Total Stock-Based
Compensation
Cost of product sales
 
$
19

 
$
29

 
$
48

Cost of services
 
15

 
61

 
76

Research and development
 
75

 
282

 
357

Selling, general and administrative
 
82

 
372

 
454

Stock-based compensation expense before income taxes
 
191

 
744

 
935

Income tax benefit
 
56

 
170

 
226

Total stock-based compensation, net of tax
 
$
135

 
$
574

 
$
709

 
 
Year Ended December 31, 2012
 
 
Stock Options
 
Restricted
Stock
 
Total Stock-Based
Compensation
Cost of product sales
 
$
22

 
$
30

 
$
52

Cost of services
 
21

 
53

 
74

Research and development
 
88

 
236

 
324

Selling, general and administrative
 
131

 
339

 
470

Stock-based compensation expense before income taxes
 
262

 
658

 
920

Income tax benefit
 
68

 
162

 
230

Total stock-based compensation, net of tax
 
$
194

 
$
496

 
$
690
Net Change in Amounts Capitalized or Accrued
The table below presents the net change in amounts capitalized or accrued in 2014 and 2013 for the following items (in millions):
 
 
Increased (decreased)
during the year ended
December 31, 2014
 
Increased (decreased)
during the year ended
December 31, 2013
Accrued expenses (accrued warranty expenses)
 
$
—

 
$
(1
)
Other assets
 
(19
)
 
2
EMC Employee Stock Purchase - 1989 Plan  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Employee Stock Purchase Plan Activity
The following table summarizes the 1989 Plan activity in the years ended December 31, 2014, 2013 and 2012 (table in millions, except per share amounts):
 
 
For the Year Ended
 
 
December 31, 2014
 
December 31, 2013
 
December 31, 2012
Cash proceeds
 
$
186

 
$
82

 
$
154

Common shares purchased
 
8

 
4

 
7

Weighted-average price per share
 
$
22.44

 
$
20.08

 
$
21.65
EMC  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Stock Option Activity
The following table summarizes our option activity under all equity plans since January 1, 2012 (shares in millions):
 
 
Number of
Shares
 
Weighted Average
Exercise Price
(per share)
Outstanding, January 1, 2012
 
112

 
$
13.69

Options granted relating to business acquisitions
 
2

 
1.54

Granted
 
1

 
26.80

Forfeited
 
(2
)
 
13.75

Expired
 
(1
)
 
14.19

Exercised
 
(35
)
 
11.65

Outstanding, December 31, 2012
 
77

 
14.39

Options granted relating to business acquisitions
 
1

 
3.29

Granted
 
—

 
—

Forfeited
 
(1
)
 
13.36

Expired
 
—

 
—

Exercised
 
(20
)
 
13.10

Outstanding, December 31, 2013
 
57

 
14.56

Options granted relating to business acquisitions
 
8

 
0.62

Granted
 
—

 
—

Forfeited
 
(1
)
 
13.55

Expired
 
—

 
—

Exercised
 
(24
)
 
13.19

Outstanding, December 31, 2014
 
40

 
12.68

Exercisable, December 31, 2014
 
31

 
15.27

Vested and expected to vest, December 31, 2014
 
39

 
$
13.06
Restricted Stock and Restricted Stock Unit Activity
The following table summarizes our restricted stock and restricted stock unit activity since January 1, 2012 (shares in millions):
 
 
Number of
Shares
 
Weighted Average
Grant Date
Fair Value
Restricted stock and restricted stock units at January 1, 2012
 
46

 
$
21.10

Granted
 
21

 
26.57

Vested
 
(16
)
 
18.92

Forfeited
 
(4
)
 
23.09

Outstanding, December 31, 2012
 
47

 
24.39

Granted
 
20

 
25.55

Vested
 
(15
)
 
22.61

Forfeited
 
(4
)
 
24.80

Outstanding, December 31, 2013
 
48

 
25.43

Granted
 
23

 
27.65

Vested
 
(14
)
 
24.89

Forfeited
 
(4
)
 
25.63

Restricted stock and restricted stock units at December 31, 2014
 
53

 
$
26.50
Weighted Average Assumptions Used to Estimate Fair Value of Awards
The fair value of each option granted during the year ended December 31, 2012 was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:
EMC Stock Options
 
For the Year Ended December 31, 2012
Dividend yield
 
None

Expected volatility
 
34.3
%
Risk-free interest rate
 
0.8
%
Expected term (in years)
 
5.2

Weighted-average fair value at grant date
 
$
8.56
VMware  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Employee Stock Purchase Plan Activity
The following table summarizes ESPP activity in the years ended December 31, 2014, 2013 and 2012 (table in millions, except per share amounts):
 
 
For the Year Ended
 
 
December 31, 2014
 
December 31, 2013
 
December 31, 2012
Cash proceeds
 
$
80

 
$
76

 
$
69

Class A common shares purchased
 
1

 
1

 
1

Weighted-average price per share
 
$
73.21

 
$
65.97

 
$
77.34
Stock Option Activity
The following table summarizes activity since January 1, 2012 for VMware employees in VMware stock options (shares in millions):
 
 
Number of
Shares
 
Weighted Average
Exercise Price
(per share)
Outstanding, January 1, 2012
 
16

 
$
35.27

Granted
 
1

 
4.67

Forfeited
 
(1
)
 
42.07

Exercised
 
(6
)
 
30.44

Outstanding, December 31, 2012
 
10

 
34.36

Granted
 
1

 
71.53

Exercised
 
(5
)
 
28.12

Outstanding, December 31, 2013
 
6

 
44.12

Granted
 
2

 
50.91

Exercised
 
(2
)
 
35.58

Outstanding, December 31, 2014
 
6

 
50.54

Exercisable, December 31, 2014
 
3

 
37.40

Vested and expected to vest
 
6

 
$
48.57
Restricted Stock and Restricted Stock Unit Activity
The following table summarizes restricted stock activity since January 1, 2012 (units in millions):
 
 
Number of
Units
 
Weighted Average
Grant Date
Fair Value
(per unit)
Restricted stock at January 1, 2012
 
10

 
$
72.74

Granted
 
8

 
101.73

Vested
 
(4
)
 
69.01

Forfeited
 
(2
)
 
81.53

Outstanding, December 31, 2012
 
12

 
91.93

Granted
 
7

 
76.20

Vested
 
(4
)
 
83.21

Forfeited
 
(2
)
 
90.55

Outstanding, December 31, 2013
 
13

 
85.85

Granted
 
6

 
92.82

Vested
 
(5
)
 
86.27

Forfeited
 
(1
)
 
88.03

Outstanding, December 31, 2014
 
13

 
$
88.88
Weighted Average Assumptions Used to Estimate Fair Value of Awards
The fair value of each option to acquire VMware Class A common stock granted during the years ended December 31, 2014, 2013 and 2012 was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:
 
 
For the Year Ended
December 31,
VMware Stock Options
 
2014
 
2013
 
2012
Dividend yield
 
None

 
None

 
None

Expected volatility
 
36.2
%
 
38.5
%
 
35.8
%
Risk-free interest rate
 
0.9
%
 
0.9
%
 
0.3
%
Expected term (in years)
 
3.2

 
3.6

 
2.6

Weighted-average fair value at grant date
 
$
48.47

 
$
29.47

 
$
80.45

 
 
For the Year Ended
December 31,
VMware Employee Stock Purchase Plan
 
2014
 
2013
 
2012
Dividend yield
 
None

 
None

 
None

Expected volatility
 
32.3
%
 
32.9
%
 
37.8
%
Risk-free interest rate
 
0.1
%
 
0.1
%
 
0.1
%
Expected term (in years)
 
0.5

 
0.5

 
0.5

Weighted-average fair value at grant date
 
$
20.71

 
$
20.45

 
$
23.36