Shareholders' Equity

6 Months Ended

Jun. 30, 2016

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, 2016			June 30, 2015			June 30, 2016			June 30, 2015
Numerator:
Net income attributable to EMC Corporation	$	581		$	487		$	849		$	739
Incremental dilution from VMware	(1		)	(1		)	(1		)	(2		)
Net income – dilution attributable to EMC Corporation	$	580		$	486		$	848		$	737
Denominator:
Weighted average shares, basic	1,955			1,927			1,952			1,950
Weighted common stock equivalents	18			20			17			21
Weighted average shares, diluted	1,973			1,947			1,969			1,971

Restricted stock awards, restricted stock units and options to acquire shares of our common stock in the amount of 1 million for the six months ended June 30, 2016 and 1 million for both the three and six months ended June 30, 2015, were excluded from the calculation of diluted earnings per share because they were anti-dilutive. 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 December 2014. For the six months ended June 30, 2016, we did not repurchase any shares of our common stock. Of the 250 million shares authorized for repurchase, we have repurchased 27 million shares to-date at a total cost of $715 million, leaving a remaining balance of 223 million shares authorized for future repurchases. 

During April 2016, VMware’s Board of Directors authorized the repurchase of up to an aggregate of $1.2 billion of VMware’s Class A common stock through the end of 2016, which includes the amount remaining from VMware’s previous stock repurchase authorization announced on January 27, 2015, which was $835 million as of June 30, 2016. All shares repurchased under VMware’s stock repurchase programs are retired. For the six months ended June 30, 2016, VMware did not repurchase any shares of its Class A common stock as it was subject to a number of legal and regulatory constraints resulting from the Merger Agreement, which impacted the timing and ability to execute repurchases of VMware’s shares.

Cash Dividend on Common Stock

EMC pays a quarterly dividend of $0.115 per share of common stock to EMC shareholders, subject to the approval of our Board of Directors. Our Board of Directors declared the following dividends during 2016 and 2015:

Declaration Date	Dividend Per Share		Record Date	Total Amount (in millions)		Payment Date
2016:
February 11, 2016	$	0.115	April 1, 2016	$	229	April 22, 2016
May 12, 2016	$	0.115	July 1, 2016	$	231	July 22, 2016
2015:
February 27, 2015	$	0.115	April 1, 2015	$	229	April 23, 2015
May 20, 2015	$	0.115	July 1, 2015	$	226	July 23, 2015
July 30, 2015	$	0.115	October 1, 2015	$	229	October 23, 2015
December 17, 2015	$	0.115	January 4, 2016	$	230	January 22, 2016

Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss), which is presented net of tax, for the six months ended June 30, 2016 and 2015 consist of the following (tables 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 2015(a)	$	(356	)	$	(10	)	$	(89	)	$	(125	)	$	1		$	(579	)
Other comprehensive income (loss) before reclassifications	(21		)	32			—			—			(6		)	5
Net losses (gains) reclassified from accumulated other comprehensive income	—			4			9			—			—			13
Net current period other comprehensive income (loss)	(21		)	36			9			—			(6		)	18
Balance as of June 30, 2016(b)	$	(377	)	$	26		$	(80	)	$	(125	)	$	(5	)	$	(561	)

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(a) Net of taxes (benefits) of $(5) million for unrealized net gains on investments, $(56) million for unrealized net losses on derivatives and $(71) million for actuarial net loss on pension plans.

(b) Net of taxes (benefits) of $15 million for unrealized net gains on investments, $(51) million for unrealized net losses on derivatives and $(71) million for actuarial net loss on pension plans.

	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 2014(a)	$	(187	)	$	49		$	(99	)	$	(126	)	$	(3	)	$	(366	)
Other comprehensive income (loss) before reclassifications	(86		)	20			9			—			(3		)	(60		)
Net losses (gains) reclassified from accumulated other comprehensive income	—			(21		)	(11		)	—			—			(32		)
Net current period other comprehensive income (loss)	(86		)	(1		)	(2		)	—			(3		)	(92		)
Balance as of June 30, 2015(b)	$	(273	)	$	48		$	(101	)	$	(126	)	$	(6	)	$	(458	)

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(a) Net of taxes (benefits) of $31 million for unrealized net gains on investments, $(64) million for unrealized net losses on derivatives and $(70) million for actuarial net loss on pension plans.

(b) Net of taxes (benefits) of $31 million for unrealized net gains on investments, $(61) million for unrealized net losses on derivatives and $(70) 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, 2016 and 2015 are as follows (tables in millions):

	For the Three Months Ended
Accumulated Other Comprehensive Income Components	June 30, 2016			June 30, 2015			Impacted Line Item on Consolidated Income Statements
Net (loss) gain on investments:	$	(4	)	$	20		Investment income
	2			(7		)	Provision for income tax
Net of tax	$	(2	)	$	13
Net (loss) gain on derivatives:
Foreign exchange contracts	$	(2	)	$	1		Product sales revenue
Foreign exchange contracts	—			3			Cost of product sales
Interest rate swap	(5		)	(6		)	Other interest expense
Total net (loss) gain on derivatives before tax	(7		)	(2		)
	2			2			Provision for income tax
Net of tax	$	(5	)	$	—

	For the Six Months Ended
Accumulated Other Comprehensive Income Components	June 30, 2016			June 30, 2015			Impacted Line Item on Consolidated Income Statements
Net (loss) gain on investments:	$	(6	)	$	34		Investment income
	2			(13		)	Provision for income tax
Net of tax	$	(4	)	$	21
Net (loss) gain on derivatives:
Foreign exchange contracts	$	(2	)	$	21		Product sales revenue
Foreign exchange contracts	—			(1		)	Cost of product sales
Interest rate swap	(11		)	(11		)	Other interest expense
Total net (loss) gain on derivatives before tax	(13		)	9
	4			2			Provision for income tax
Net of tax	$	(9	)	$	11