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Stockholders' Equity

9 Months Ended

Sep. 30, 2011

12. Stockholders' Equity

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

	For the Three Months Ended				For the Nine Months Ended
	September 30,		September 30,		September 30,		September 30,
	2011		2010		2011		2010
Numerator:
Net income attributable to EMC Corporation	$	605,649	$	472,516	$	1,629,291	$	1,271,436
Incremental dilution from VMware		(3,233)		(2,365)		(11,178)		(6,302)
Net income – dilution attributable to EMC Corporation	$	602,416	$	470,151	$	1,618,113	$	1,265,134

Denominator:
Weighted average shares, basic		2,054,007		2,055,876		2,060,242		2,053,026
Weighted common stock equivalents		46,629		48,764		55,418		48,639
Assumed conversion of the Notes and associated warrants		106,463		42,113		128,848		31,283
Weighted average shares, diluted		2,207,099		2,146,753		2,244,508		2,132,948

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

Concurrent with the issuance of the 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. We also include the impact of the sold warrants in our diluted earnings per share calculation when the average stock price exceeds the exercise price.

Restricted stock units and options to acquire shares of our common stock in the amount of 17.6 million and 15.4 million for the three and nine months ended September 30, 2011, respectively, and 57.1 million and 64.5 million for the three and nine months ended September 30, 2010, 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.

Repurchases of Common Stock

We utilize both authorized and unissued shares (including repurchased shares) for all issuances under our equity plans. In 2008, our Board of Directors authorized the repurchase of 250.0 million shares of our common stock. Of the 250.0 million shares authorized for repurchase, we have repurchased 191.2 million shares at a total cost of $3.6 billion, leaving a remaining balance of 58.8 million shares authorized for future repurchases. For the nine months ended September 30, 2011, we spent $1,899.2 million to repurchase 77.2 million shares of our common stock. We plan to spend up to $2.0 billion in 2011 on common stock repurchases.

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss, which is presented net of tax, consists of the following (table in thousands):

		September 30,		December 31,
		2011		2010
Foreign currency translation adjustments	$	(12,300)	$	(6,983)
Unrealized losses on temporarily impaired investments, net of tax benefits of $(16,732) and
$(7,278)		(30,037)		(12,533)
Unrealized gains on investments, net of taxes of $16,605 and $32,684		26,883		53,823
Unrealized losses on derivatives, net of tax benefits of $(55,355) and $(3,403)		(87,637)		(5,934)
Recognition of actuarial net loss from pension and other postretirement plans, net of tax
benefits of $(70,388) and $(70,388)		(117,058)		(117,058)
		(220,149)		(88,685)
Less: accumulated other comprehensive income attributable to the
non-controlling interest in VMware, Inc.		(153)		(3,932)
	$	(220,302)	$	(92,617)

- Definition

Disclosures related to accounts comprising shareholders' equity, including other comprehensive income. Includes: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables; effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

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