Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Jun. 28, 2013 | Feb. 13, 2014 | Feb. 13, 2014 | |
Class A Common Stock | Class B Convertible Common Stock | |||
Document Information [Line Items] | ' | ' | ' | ' |
Entity Registrant Name | 'VMWARE, INC. | ' | ' | ' |
Entity Central Index Key | '0001124610 | ' | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' | ' |
Document Type | '10-K | ' | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' | ' |
Amendment Flag | 'false | ' | ' | ' |
Entity Common Stock, Shares Outstanding | ' | ' | 130,781,422 | 300,000,000 |
Entity Well-known Seasoned Issuer | 'Yes | ' | ' | ' |
Entity Voluntary Filers | 'No | ' | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' | ' |
Entity Public Float | ' | $5,373,015,482 | ' | ' |
Consolidated_Statements_Of_Inc
Consolidated Statements Of Income (USD $) | 12 Months Ended | |||||
In Millions, except Share data in Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Revenues: | ' | ' | ' | |||
License | $2,270 | $2,087 | $1,841 | |||
Services | 2,937 | 2,518 | 1,926 | |||
Total revenues | 5,207 | 4,605 | 3,767 | |||
Operating expenses: | ' | ' | ' | |||
Cost of license revenues | 210 | [1] | 237 | [1] | 207 | [1] |
Cost of services revenues | 520 | [1] | 484 | [1] | 415 | [1] |
Research and development | 1,082 | [1] | 999 | [1] | 775 | [1] |
Sales and marketing | 1,815 | [1] | 1,645 | [1] | 1,334 | [1] |
General and administrative | 419 | [1] | 368 | [1] | 301 | [1] |
Realignment charges | 68 | [1] | 0 | [1] | 0 | [1] |
Operating income | 1,093 | 872 | 735 | |||
Investment income | 30 | 27 | 16 | |||
Interest expense with EMC | -4 | -5 | -4 | |||
Other income (expense), net | 28 | -1 | 47 | |||
Income before income taxes | 1,147 | 893 | 794 | |||
Income tax provision | 133 | 147 | 70 | |||
Net income | $1,014 | $746 | $724 | |||
Net income per weighted-average share, basic for Class A and Class B | $2.36 | $1.75 | $1.72 | |||
Net income per weighted-average share, diluted for Class A and Class B | $2.34 | $1.72 | $1.68 | |||
Weighted-average shares, basic for Class A and Class B | 429,093 | 426,658 | 421,188 | |||
Weighted-average shares, diluted for Class A and Class B | 433,415 | 433,974 | 431,750 | |||
[1] | Includes stock-based compensation as follows: Cost of license revenues $2 $2 $2, Cost of services revenues $29 $28 $23, Research and development $227 $210 $174, Sales and marketing $144 $150 $96, General and administrative $56 $48 $40, Realignment charges $6 $0 $0. |
Consolidated_Statements_Of_Inc1
Consolidated Statements Of Income (Parentheticals) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Stock-based Compensation | $464 | $438 | $335 |
Cost of license revenues | ' | ' | ' |
Stock-based Compensation | 2 | 2 | 2 |
Cost of services revenues | ' | ' | ' |
Stock-based Compensation | 29 | 28 | 23 |
Research and development | ' | ' | ' |
Stock-based Compensation | 227 | 210 | 174 |
Sales and marketing | ' | ' | ' |
Stock-based Compensation | 144 | 150 | 96 |
General and administrative | ' | ' | ' |
Stock-based Compensation | 56 | 48 | 40 |
Realignment charges | ' | ' | ' |
Stock-based Compensation | $6 | $0 | $0 |
Consolidated_Statements_Of_Com
Consolidated Statements Of Comprehensive Income (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Statement of Comprehensive Income [Abstract] | ' | ' | ' |
Net income | $1,014 | $746 | $724 |
Changes in market value of available-for-sale securities: | ' | ' | ' |
Unrealized gains, net of taxes of $0, $3, and $1 | 0 | 5 | 2 |
Reclassification of (gains) realized during the period, net of taxes of $(1), $0, and $(12) | -2 | 0 | -20 |
Total other comprehensive income (loss) | -2 | 5 | -18 |
Total comprehensive income, net of taxes | $1,012 | $751 | $706 |
Consolidated_Statements_Of_Com1
Consolidated Statements Of Comprehensive Income (Parentheticals) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Statement of Comprehensive Income [Abstract] | ' | ' | ' |
Tax effect on unrealized gains (losses) on available-for-sale securities | $0 | $3 | $1 |
Tax effect on reclassification of (gains) losses on available-for-sale securities realized during the period | ($1) | $0 | ($12) |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
ASSETS | ' | ' |
Cash and cash equivalents | $2,305 | $1,609 |
Short-term investments | 3,870 | 3,022 |
Accounts receivable, net of allowance for doubtful accounts of $2 and $4 | 1,220 | 1,151 |
Due from related parties, net | 0 | 68 |
Deferred tax assets | 190 | 179 |
Other current assets | 96 | 91 |
Total current assets | 7,681 | 6,120 |
Property and equipment, net | 845 | 665 |
Other assets, net | 107 | 128 |
Deferred tax assets | 60 | 103 |
Intangible assets, net | 607 | 732 |
Goodwill | 3,027 | 2,848 |
Total assets | 12,327 | 10,596 |
LIABILITIES AND STOCKHOLDERSb EQUITY | ' | ' |
Accounts payable | 109 | 90 |
Accrued expenses and other | 608 | 644 |
Due to related parties, net | 18 | 0 |
Unearned revenues | 2,558 | 2,196 |
Total current liabilities | 3,293 | 2,930 |
Note payable to EMC | 450 | 450 |
Unearned revenues | 1,534 | 1,265 |
Other liabilities | 234 | 211 |
Total liabilities | 5,511 | 4,856 |
Commitments and contingencies (see Note M) | ' | ' |
Stockholdersb equity: | ' | ' |
Additional paid-in capital | 3,496 | 3,432 |
Accumulated other comprehensive income | 4 | 6 |
Retained earnings | 3,312 | 2,298 |
Total stockholdersb equity | 6,816 | 5,740 |
Total liabilities and stockholdersb equity | 12,327 | 10,596 |
Class A Common Stock | ' | ' |
Stockholdersb equity: | ' | ' |
Common stock | 1 | 1 |
Class B Convertible Common Stock | ' | ' |
Stockholdersb equity: | ' | ' |
Common stock | $3 | $3 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parentheticals) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, except Share data, unless otherwise specified | ||
Allowance for doubtful accounts | $2 | $4 |
Class A Common Stock | ' | ' |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized (shares) | 2,500,000,000 | 2,500,000,000 |
Common stock, shares issued (shares) | 130,349,000 | 128,688,000 |
Common stock, shares outstanding (shares) | 130,349,000 | 128,688,000 |
Class B Convertible Common Stock | ' | ' |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized (shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (shares) | 300,000,000 | 300,000,000 |
Common stock, shares outstanding (shares) | 300,000,000 | 300,000,000 |
Consolidated_Statements_Of_Cas
Consolidated Statements Of Cash Flows (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Operating activities: | ' | ' | ' |
Net income | $1,014 | $746 | $724 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | ' |
Depreciation and amortization | 337 | 355 | 316 |
Stock-based compensation | 454 | 426 | 335 |
Excess tax benefits from stock-based compensation | -70 | -138 | -224 |
Deferred income taxes, net | 56 | -74 | -20 |
Non-cash realignment charges | 15 | 0 | 0 |
Gain on sale of Terremark investment | 0 | 0 | -56 |
Gain on disposition of certain lines of business and other, net | -31 | 0 | 0 |
Other | 7 | 2 | 21 |
Changes in assets and liabilities, net of acquisitions: | ' | ' | ' |
Accounts receivable | -71 | -268 | -263 |
Other assets | -59 | -112 | -76 |
Due to/from related parties, net | 60 | 6 | -18 |
Accounts payable | 30 | 24 | -16 |
Accrued expenses | 1 | 22 | 115 |
Income taxes receivable from EMC | 17 | 19 | 269 |
Income taxes payable | 19 | 138 | 79 |
Unearned revenues | 756 | 751 | 840 |
Net cash provided by operating activities | 2,535 | 1,897 | 2,026 |
Investing activities: | ' | ' | ' |
Additions to property and equipment | -345 | -234 | -230 |
Purchase of leasehold interest (see Note H) | 0 | 0 | -151 |
Capitalized software development costs | 0 | 0 | -74 |
Purchases of available-for-sale securities | -3,181 | -3,189 | -2,668 |
Sales of available-for-sale securities | 1,599 | 1,880 | 816 |
Maturities of available-for-sale securities | 717 | 902 | 974 |
Proceeds from disposition of certain lines of business | 37 | 0 | 0 |
Sale of strategic investments | 0 | 0 | 79 |
Business acquisitions, net of cash acquired | -289 | -1,344 | -304 |
Transfer of net assets under common control | 0 | 0 | -22 |
Other investing | -10 | -50 | -31 |
Net cash used in investing activities | -1,472 | -2,035 | -1,611 |
Financing activities: | ' | ' | ' |
Proceeds from issuance of common stock | 197 | 253 | 338 |
Repurchase of common stock | -508 | -467 | -526 |
Excess tax benefits from stock-based compensation | 70 | 138 | 224 |
Shares repurchased for tax withholdings on vesting of restricted stock | -126 | -133 | -124 |
Net cash used in financing activities | -367 | -209 | -88 |
Net increase (decrease) in cash and cash equivalents | 696 | -347 | 327 |
Cash and cash equivalents at beginning of the period | 1,609 | 1,956 | 1,629 |
Cash and cash equivalents at end of the period | 2,305 | 1,609 | 1,956 |
Supplemental disclosures of cash flow information: | ' | ' | ' |
Cash paid for interest | 6 | 7 | 6 |
Cash paid (refunded) for taxes, net | 35 | 56 | -269 |
Non-cash items: | ' | ' | ' |
Changes in capital additions, accrued but not paid | ($16) | $37 | $12 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Total | Class A Common Stock | Class B Convertible Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income |
In Millions, except Share data, unless otherwise specified | ||||||
Balance at Dec. 31, 2010 | $3,807 | $1 | $3 | $2,956 | $828 | $19 |
Balance (shares) at Dec. 31, 2010 | ' | 117,000,000 | 300,000,000 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' |
Proceeds from issuance of common stock | 338 | ' | ' | 338 | ' | ' |
Proceeds from issuance of common stock (shares) | ' | 11,000,000 | ' | ' | ' | ' |
Repurchase and retirement of common stock | -526 | ' | ' | -526 | ' | ' |
Repurchase and retirement of common stock (shares) | ' | -6,000,000 | ' | ' | ' | ' |
Issuance of restricted stock, net of cancellations | 0 | ' | ' | 0 | ' | ' |
Issuance of restricted stock, net of cancellations (shares) | ' | 4,000,000 | ' | ' | ' | ' |
Shares repurchased and retired or withheld for tax withholdings on vesting of restricted stock | -122 | ' | ' | -122 | ' | ' |
Shares repurchased and retired or withheld for tax withholdings on vesting of restricted stock (shares) | ' | -1,000,000 | ' | ' | ' | ' |
Stock-based compensation | 344 | ' | ' | 344 | ' | ' |
Excess tax benefits from stock-based compensation | 223 | ' | ' | 223 | ' | ' |
Credit (amount due) from tax sharing arrangement | 8 | ' | ' | 8 | ' | ' |
Total other comprehensive income (loss) | -18 | ' | ' | ' | ' | -18 |
Capital distribution to/Reduction in capital from EMC, net | -8 | ' | ' | -8 | ' | ' |
Net income | 724 | ' | ' | ' | 724 | ' |
Balance at Dec. 31, 2011 | 4,770 | 1 | 3 | 3,213 | 1,552 | 1 |
Balance (shares) at Dec. 31, 2011 | ' | 125,000,000 | 300,000,000 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' |
Proceeds from issuance of common stock | 253 | ' | ' | 253 | ' | ' |
Proceeds from issuance of common stock (shares) | ' | 7,000,000 | ' | ' | ' | ' |
Issuance of stock options in acquisition | 17 | ' | ' | 17 | ' | ' |
Repurchase and retirement of common stock | -467 | ' | ' | -467 | ' | ' |
Repurchase and retirement of common stock (shares) | ' | -5,000,000 | ' | ' | ' | ' |
Issuance of restricted stock, net of cancellations | 0 | ' | ' | 0 | ' | ' |
Issuance of restricted stock, net of cancellations (shares) | ' | 4,000,000 | ' | ' | ' | ' |
Shares repurchased and retired or withheld for tax withholdings on vesting of restricted stock | -136 | ' | ' | -136 | ' | ' |
Shares repurchased and retired or withheld for tax withholdings on vesting of restricted stock (shares) | ' | -2,000,000 | ' | ' | ' | ' |
Stock-based compensation | 420 | ' | ' | 420 | ' | ' |
Excess tax benefits from stock-based compensation | 136 | ' | ' | 136 | ' | ' |
Credit (amount due) from tax sharing arrangement | -4 | ' | ' | -4 | ' | ' |
Total other comprehensive income (loss) | 5 | ' | ' | ' | ' | 5 |
Net income | 746 | ' | ' | ' | 746 | ' |
Balance at Dec. 31, 2012 | 5,740 | 1 | 3 | 3,432 | 2,298 | 6 |
Balance (shares) at Dec. 31, 2012 | ' | 129,000,000 | 300,000,000 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' |
Proceeds from issuance of common stock | 197 | ' | ' | 197 | ' | ' |
Proceeds from issuance of common stock (shares) | ' | 6,000,000 | ' | ' | ' | ' |
Repurchase and retirement of common stock | -508 | ' | ' | -508 | ' | ' |
Repurchase and retirement of common stock (shares) | ' | -7,000,000 | ' | ' | ' | ' |
Issuance of restricted stock, net of cancellations | 0 | ' | ' | 0 | ' | ' |
Issuance of restricted stock, net of cancellations (shares) | ' | 4,000,000 | ' | ' | ' | ' |
Shares repurchased and retired or withheld for tax withholdings on vesting of restricted stock | -126 | ' | ' | -126 | ' | ' |
Shares repurchased and retired or withheld for tax withholdings on vesting of restricted stock (shares) | ' | -2,000,000 | ' | ' | ' | ' |
Stock-based compensation | 436 | ' | ' | 436 | ' | ' |
Excess tax benefits from stock-based compensation | 48 | ' | ' | 48 | ' | ' |
Credit (amount due) from tax sharing arrangement | -3 | ' | ' | -3 | ' | ' |
Total other comprehensive income (loss) | -2 | ' | ' | ' | ' | -2 |
Capital distribution to/Reduction in capital from EMC, net | -22 | ' | ' | -22 | ' | ' |
Contribution to Pivotal | 17 | ' | ' | 17 | ' | ' |
Reclassification of liability-classified awards to equity stock-based compensation | 25 | ' | ' | 25 | ' | ' |
Net income | 1,014 | ' | ' | ' | 1,014 | ' |
Balance at Dec. 31, 2013 | $6,816 | $1 | $3 | $3,496 | $3,312 | $4 |
Balance (shares) at Dec. 31, 2013 | ' | 130,000,000 | 300,000,000 | ' | ' | ' |
Overview_and_Basis_of_Presenta
Overview and Basis of Presentation | 12 Months Ended | ||
Dec. 31, 2013 | |||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||
Overview And Basis Of Presentation | ' | ||
Overview and Basis of Presentation | |||
Company and Background | |||
VMware, Inc. (“VMware” or the “Company”) is the leader in virtualization infrastructure solutions utilized by organizations to help them transform the way they build, deliver and consume information technology (“IT”) resources. VMware’s virtualization infrastructure solutions, which include a suite of products designed to deliver a software-defined data center, run on industry-standard desktop computers and servers and support a wide range of operating system and application environments, as well as networking and storage infrastructures. | |||
Basis of Presentation | |||
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for annual financial reporting. | |||
VMware was incorporated as a Delaware corporation in 1998, was acquired by EMC Corporation (“EMC”) in 2004 and conducted its initial public offering of VMware’s Class A common stock in August 2007. As of December 31, 2013, EMC held approximately 79.7% of VMware’s outstanding common stock and 97.2% of the combined voting power of VMware’s outstanding common stock, including 43 million shares of VMware’s Class A common stock and all of VMware’s Class B common stock. VMware is a majority-owned and controlled subsidiary of EMC, and its results of operations and financial position are consolidated with EMC’s financial statements. | |||
Management believes the assumptions underlying the consolidated financial statements are reasonable. However, the amounts recorded for VMware’s intercompany transactions with EMC and Pivotal Software, Inc. (“Pivotal”, previously known as “GoPivotal, Inc.”) may not be considered arm’s length with an unrelated third party. Therefore, the financial statements included herein may not necessarily reflect the financial position, results of operations and cash flows had VMware engaged in such transactions with an unrelated third party during all periods presented. Accordingly, VMware’s historical financial information is not necessarily indicative of what the Company’s financial position, results of operations and cash flows will be in the future if and when VMware contracts at arm’s length with unrelated third parties for the services the Company receives from and provides to EMC and Pivotal. | |||
Principles of Consolidation | |||
The consolidated financial statements include the accounts of VMware and its subsidiaries after elimination of intercompany transactions and account balances between VMware and its subsidiaries. All intercompany transactions with EMC and Pivotal in the consolidated statements of cash flows will be settled in cash, and changes in the current intercompany balances are presented as a component of cash flows from operating activities. | |||
Reclassification | |||
Certain prior period financial statements have been reclassified to conform to current period presentation. Deferred rent of $30 million was reclassified from accrued expenses and other to other liabilities in the consolidated balance sheet as of December 31, 2012 to conform to current-year presentation. | |||
Use of Accounting Estimates | |||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenues and expenses during the reporting periods, and the disclosure of contingent liabilities at the date of the financial statements. Estimates are used for, but not limited to trade receivable valuation, marketing rebates, useful lives assigned to fixed assets and intangible assets, valuation of goodwill and definite-lived intangibles, income taxes, stock-based compensation and contingencies. Actual results could differ from those estimates. | |||
Revenue Recognition | |||
VMware derives revenues primarily from licensing software under perpetual license, related software maintenance and from training, technical support and consulting services. VMware recognizes revenues when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collectibility is probable. | |||
License Revenues | |||
VMware licenses most of its software through its channel of distributors, resellers, system vendors, systems integrators and through its direct sales force. VMware recognizes revenues from the sale of its software licenses upon shipment provided all other revenue recognition criteria have been met. When perpetual software license arrangement is offered with new products that become available on a when and if available basis, revenue associated with these arrangements are recognized ratably over the subscription period. | |||
For software sold by system vendors that is bundled with their hardware, unless the Company has a separate license agreement which governs the transaction, revenue is recognized in arrears upon the receipt of royalty reports. | |||
VMware’s return policy only allows product returns for a refund in very limited circumstances. VMware estimates future product returns at the time of sale based on historical return rates. Returns have not been material to date. | |||
Rebates | |||
Rebates are offered to certain channel partners. When rebates are based on a set percentage of actual sales, rebates are recognized as a reduction of revenues as the underlying revenue is recognized. When rebates are earned upon achievement of a cumulative level of sales, rebates are recognized as a reduction of revenues proportionally for each sale that is required to achieve the target. | |||
Marketing development funds are also offered to certain channel partners. The obligation for marketing development funds is based upon the maximum potential liability and is also recognized as a reduction of revenues concurrent with the recognition of the underlying revenue. The difference between the maximum potential liability recognized and the actual amount paid out has not been material to date. | |||
Services Revenues | |||
Services revenues generally consist of software maintenance, training, technical support, and consulting services. Software maintenance and technical support offerings entitle customers to receive major and minor product upgrades on a when and if available basis and technical support. Revenues relating to software maintenance and technical support offerings are generally recognized ratably over the contract period, which typically ranges from one to five years. | |||
Professional services include design, implementation and training. Professional services are not considered essential to the functionality of VMware’s products as these services do not alter the product capabilities and may be performed by customers or other vendors. Revenues for professional services engagements performed for a fixed fee, for which VMware is able to make reasonably dependable estimates of progress toward completion, are recognized on a proportional performance basis. Revenue for professional services engagements billed on a time and materials basis are recognized as the hours are incurred. Revenues on all other professional services engagements are recognized upon completion. | |||
Multiple-Element Arrangements | |||
VMware enters into software-related multiple element revenue arrangements in which a customer may purchase a combination of software, maintenance and technical support, training, and consulting services. If a product or service included in a software-related multiple element arrangements has not been delivered, and is not considered essential to the functionality of the delivered products or services, fair value of each undelivered product and/or service using vendor-specific objective evidence (“VSOE”) must be determined. VSOE is used to allocate a portion of the price to the undelivered products and/or services and the residual method is used to allocate the remaining portion to the delivered products and services. Absent VSOE, revenue is deferred until the earlier of the point at which VSOE of fair value exists for any undelivered products or services, or until all elements of the arrangement have been delivered. However, if the only undelivered element is software maintenance and technical support, the entire arrangement fee is recognized ratably over the performance period. Changes in assumptions or judgments or changes to the elements in a software arrangement could cause a material increase or decrease in the amount of revenue that VMware reports in a particular period. | |||
VSOE of fair value for an undelivered element is based on historical stand-alone sales to third parties. In determining VSOE of fair value, VMware requires that the selling prices for a product or service fall within a reasonable pricing range. VMware established VSOE for its software maintenance and technical support services, consulting services and training. | |||
In the event VMware publicly announce specific features or functionalities, entitlements or the release number of an upgrade that has not been made available, and customers will receive that upgrade as part of a current software maintenance contract, a specified upgrade is deemed created. As a result of the specified upgrade, revenues are deferred on purchases made after the announcement date until delivery of the upgrade for those purchases that include the current version of the product subject to the announcement. | |||
Multiple element arrangements may be bundled with a commitment to deliver a product that has not yet been made available. Revenue specific to these arrangements is deferred until all product obligations have been fulfilled. In addition, revenue specific to arrangements that include subscription software products and professional services are deferred until the professional service obligations have been fulfilled. | |||
For multiple-element arrangements that contain software and non-software elements such as VMware's software as a service subscription offerings, VMware allocates revenue to software or software-related elements as a group and any non-software elements separately based on the selling price hierarchy. The relative selling price for each deliverable is determined using VSOE of selling price, if it exists, or third-party evidence (“TPE”) of selling price. If neither VSOE nor TPE of selling price exist for a deliverable, VMware's best estimate of selling price (“BESP”) is used for that deliverable. Once value is allocated to software or software-related elements as a group, revenue is then recognized when the relevant revenue recognition criteria are met. | |||
The objective of BESP is to determine the price at which VMware would transact a sale if the product or service were sold on a stand-alone basis. VMware determines BESP by considering its overall pricing objectives and market conditions. At this time, VMware uses BESP to determine the relative selling price of its license elements and software as a service elements based upon rates charged in both multi-element and stand-alone arrangements. | |||
Unearned revenues substantially consist of payments received in advance of revenue recognition for products and services described above. See Note J for further information. | |||
Foreign Currency Translation | |||
The U.S. Dollar is the functional currency of VMware’s foreign subsidiaries. Gains and losses from foreign currency transactions are included in other income (expense), net and were not material on a net basis in any period presented. | |||
Cash and Cash Equivalents, Short-Term Investments, and Restricted Cash | |||
VMware invests primarily in money market funds, highly liquid debt instruments of the U.S. government and its agencies, U.S. municipal obligations, and U.S. and foreign corporate debt securities. All highly liquid investments with maturities of 90 days or less from date of purchase are classified as cash equivalents and all highly liquid investments with maturities of greater than 90 days from date of purchase as short-term investments. Short-term investments are classified as available-for-sale. VMware may sell these securities at any time for use in current operations or for other purposes, such as consideration for acquisitions and strategic investments. Consequently, VMware may or may not hold securities with stated maturities greater than twelve months until maturity. | |||
VMware carries its fixed income investments, as well as its equity investments in public companies that have readily determinable fair values, at fair value and unrealized gains and losses on these investments, net of taxes, are included in accumulated other comprehensive income, a component of stockholders’ equity. Realized gains or losses are included in the consolidated statements of income. Gains and losses on the sale of fixed income securities issued by the same issuer and of the same type are determined using the first-in first-out (“FIFO”) method. When a determination has been made that an other-than-temporary decline in fair value has occurred, the amount of the decline that is related to a credit loss is realized and is included in the consolidated statements of income. | |||
Cash balances that are restricted pursuant to the terms of various agreements are classified as restricted cash and included in other current and other long-term assets in the accompanying consolidated balance sheets. The amount of restricted cash was not material in any period presented. | |||
As of December 31, 2013, VMware's total cash, cash equivalents and short-term investments were $6,175 million, of which $4,146 million was held outside the U.S. | |||
Allowance for Doubtful Accounts | |||
VMware maintains an allowance for doubtful accounts for estimated losses on uncollectible accounts receivable. The allowance for doubtful accounts considers such factors as creditworthiness of VMware’s customers, historical experience, the age of the receivable and current market and economic conditions. | |||
Property and Equipment, Net | |||
Property and equipment, net are recorded at cost. Depreciation commences upon placing the asset in service and is recognized on a straight-line basis over the estimated useful lives of the assets, as follows: | |||
Buildings | Term of underlying land lease | ||
Land improvements | 15 years | ||
Furniture and fixtures | 5 years | ||
Equipment and software | 2 years up to 5 years | ||
Leasehold improvements | Lease term, not to exceed 20 years | ||
Upon retirement or disposition, the asset cost and related accumulated depreciation are removed with any gain or loss recognized in the consolidated statements of income. Repair and maintenance costs that do not extend the economic life of the underlying assets are expensed as incurred. | |||
Internal-Use Software Development Costs | |||
Costs associated with internal-use software systems during the application development stage are capitalized. Capitalization of costs begins when the preliminary project stage is completed, management has committed to funding the project, and it is probable that the project will be completed and the software will be used to perform the function intended. Capitalization ceases at the point in which the project is substantially complete and is ready for its intended purpose. The capitalized amounts are included in property and equipment, net on the consolidated balance sheets. | |||
Research and Development and Capitalized Software Development Costs | |||
Development costs of software to be sold, leased, or otherwise marketed are subject to capitalization beginning when the product has established technological feasibility has been established and ending when the product is available for general release. | |||
Following the release of vSphere 5 and the comprehensive suite of cloud infrastructure technologies during the third quarter of 2011, management determined that VMware’s go-to-market strategy had changed from single solutions to product suite solutions. As a result of this change in strategy, the related increased importance of interoperability between VMware’s products, the length of time between achieving technological feasibility and general release to customers significantly decreased. During the years ended December 31, 2013 and 2012, software development costs incurred for products during the time period between reaching technological feasibility and general release were not material. Accordingly, software development costs incurred during the years ended December 31, 2013 and 2012 were expensed as incurred. | |||
As of December 31, 2013, all previously capitalized software development costs had been fully amortized. Unamortized software development costs as of December 31, 2012 were $34 million and were included in other assets, net on the consolidated balance sheets. | |||
For the year ended December 31, 2011, VMware capitalized $86 million (including $12 million of stock-based compensation) of costs incurred for the development of software products. Amortization expense from capitalized amounts was $34 million, $71 million and $85 million for the years ended December 31, 2013, 2012 and 2011, respectively. Amortization expense is included in cost of license revenues on the consolidated statements of income. | |||
Business Combinations | |||
For business combinations, VMware recognizes the identifiable assets acquired, the liabilities assumed, and any non-controlling interests in an acquiree, which are measured based on the acquisition date fair value. Goodwill is measured as the excess of consideration transferred over the net amounts of the identifiable tangible and intangible assets acquired and the liabilities assumed at the acquisition date. | |||
VMware uses significant estimates and assumptions, including fair value estimates, to determine the fair value of assets acquired and liabilities assumed and the related useful lives of the acquired assets, when applicable, as of the business combination date. When those estimates are provisional, VMware refines them as necessary during the measurement period. The measurement period is the period after the acquisition date, not to exceed one year, in which VMware may gather new information about facts and circumstances that existed as of the acquisition date to adjust the provisional amounts recognized. Measurement period adjustments are applied retrospectively, if material. All other adjustments are recorded to the consolidated statements of income. | |||
Businesses acquired from EMC are accounted for as a business combination between entities under common control. VMware includes the results of operations of the acquired businesses under common control, if material, in the period of acquisition as if it had occurred at the beginning of the period and also retrospectively adjusts the financial statement information presented for prior years to reflect the business as if it had been acquired at the beginning of the financial period presented. VMware recognizes the net assets under common control at EMC's carrying values as of the date of the transfer and records the difference between the carrying value and the cash consideration as an equity transaction. | |||
Costs to effect an acquisition are recorded in general and administrative expenses on the consolidated statements of income as the expenses are incurred. | |||
Purchased Intangible Assets and Goodwill | |||
Goodwill is evaluated for impairment during the fourth quarter of each year or more frequently if events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. VMware elected to perform a quantitative assessment of goodwill with respect to its one reporting unit. In doing so, VMware compared the enterprise fair value to the carrying amount of the reporting unit, including goodwill. VMware concluded that to date there have been no impairments of goodwill. | |||
Purchased intangible assets with finite lives are amortized over their estimated useful lives. During the years ended December 31, 2013, 2012 and 2011, amortization expense was $103 million, $92 million and $65 million, respectively. VMware reviews intangible assets for impairment whenever events or changes in business circumstances indicate that the carrying amounts of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. | |||
Derivative Instruments | |||
Derivative instruments and hedging activities are measured at fair value and reported as current assets and current liabilities on the consolidated balance sheets, as applicable. | |||
In order to manage VMware’s exposure to foreign currency fluctuations, VMware enters into foreign currency contracts to hedge a portion of VMware’s net outstanding monetary asset and liability positions. These foreign currency forward contracts are generally traded on a monthly basis, with a typical contractual term of 1 month. These forward contracts are not designated as hedging instruments under applicable accounting guidance and therefore are adjusted to fair value through other income (expense), net in the consolidated statements of income. | |||
Starting in the fourth quarter of 2011, VMware entered into forward contracts which it designated as cash flow hedges to manage the volatility of cash flows that relate to operating expenses denominated in certain foreign currencies. The cash flow hedges are generally traded semi-annually, have maturities of 6 months or less and are adjusted to fair value through accumulated other comprehensive income, net of tax, on the consolidated balance sheets. When the underlying expense transaction occurs, the gains or losses on the forward contract are subsequently reclassified from accumulated other comprehensive income to the related operating expense line item in the consolidated statements of income. | |||
The Company does not enter into speculative foreign exchange contracts for trading purposes. See Note G to the consolidated financial statements for further information. | |||
Advertising | |||
Advertising costs are expensed as incurred. Advertising expense was $27 million, $37 million and $20 million in the years ended December 31, 2013, 2012 and 2011, respectively. | |||
Income Taxes | |||
Income taxes as presented herein are calculated on a separate tax return basis, although VMware is included in the consolidated tax return of EMC. However, certain transactions that VMware and EMC are parties to, are assessed using consolidated tax return rules. Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their reported amounts using enacted tax rates in effect for the year in which the differences are expected to reverse. Tax credits are generally recognized as reductions of income tax provisions in the year in which the credits arise. The measurement of deferred tax assets is reduced by a valuation allowance if, based upon available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. | |||
VMware does not provide for a U.S. income tax liability on undistributed earnings of VMware’s foreign subsidiaries. The earnings of non-U.S. subsidiaries, which reflect full provision for non-U.S. income taxes, are currently indefinitely reinvested in non-U.S. operations or will be remitted substantially free of additional tax. If these overseas funds are needed for its operations in the U.S., VMware would be required to accrue and pay U.S. taxes on related undistributed earnings to repatriate these funds. However, VMware’s intent is to indefinitely reinvest its non-U.S. earnings in its foreign operations and VMware’s current plans do not demonstrate a need to repatriate them to fund its U.S. operations. At this time, it is not practicable to estimate the amount of tax that may be payable were VMware to repatriate these funds. | |||
The difference between the income taxes payable or receivable that is calculated on a separate return basis and the amount actually paid to or received from EMC pursuant to VMware’s tax sharing agreement is presented as a component of additional paid-in capital. See Note L to the consolidated financial statements for further information. | |||
Earnings Per Share | |||
Basic net income per share is calculated using the weighted-average number of shares of VMware’s common stock outstanding during the period. Diluted earnings per share are calculated using the weighted-average number of common shares, including the dilutive effect of equity awards as determined under the treasury stock method. VMware has two classes of common stock, Class A and Class B common stock. For purposes of calculating earnings per share, VMware uses the two-class method. As both classes share the same rights in dividends, basic and diluted earnings per share are the same for both classes. | |||
Concentrations of Risks | |||
Financial instruments, which potentially subject VMware to concentrations of credit risk, consist principally of cash and cash equivalents, short-term investments and accounts receivable. Cash on deposit with banks may exceed the amount of insurance provided on such deposits. These deposits may be redeemed upon demand. VMware places cash, cash equivalents and short-term investments primarily in money market funds and fixed income securities and limits the amount of investment with any single issuer and any single financial institution. VMware holds a diversified portfolio of money market funds and fixed income securities, which primarily consist of various highly liquid debt instruments of the U.S. government and its agencies, U.S. municipal obligations, and U.S. and foreign corporate debt securities. VMware’s fixed income investment portfolio is denominated in U.S. dollars and consists of securities with various maturities. | |||
VMware monitors the counterparty risk for adequate diversification amongst the financial institutions holding the funds. VMware also monitors counterparty risk to financial institutions with which VMware enters into derivatives to ensure that these financial institutions are of high credit quality. | |||
VMware held $37 million of foreign government and agencies securities, of which $8 million was deemed sovereign debt, at December 31, 2013. These sovereign debt securities had an average credit rating of AAA and were predominantly from Canada. | |||
VMware provides credit to its customers, including distributors, OEMs, resellers, and end-user customers, in the normal course of business. To reduce credit risk, the Company performs periodic credit evaluations, which consider the customer’s prior payment history and demonstrated financial stability. Additionally, VMware does not recognize revenues or unearned revenues to the extent a customer’s outstanding balance exceeds its credit limit. | |||
As of December 31, 2013, three distributors accounted for 18%, 15% and 11% of VMware’s accounts receivable balance. As of December 31, 2012, three distributors accounted for 19%, 16% and 11% of VMware’s accounts receivable balance. | |||
One distributor accounted for 15% of revenues in each of the years ended December 31, 2013, 2012 and 2011, respectively, and another distributor accounted for 12%, 12% and 11% of revenues in the years ended December 31, 2013, 2012 and 2011, respectively. A third distributor accounted for 11% and 10% of revenues in the years ended December 31, 2013 and 2011, respectively. | |||
Accounting for Stock-Based Compensation | |||
The Black-Scholes option-pricing model is used to determine the fair value of VMware’s stock option awards and ESPP shares. The Black-Scholes model includes assumptions regarding dividend yields, expected volatility, expected term and risk-free interest rates. These assumptions reflect the Company’s best estimates, but these items involve uncertainties based on market and other conditions outside of the Company’s control. VMware restricted stock unit awards, including performance stock unit (“PSU”) awards, are valued based on the Company’s stock price on the date of grant. For those awards expected to vest, which only contain a service vesting feature, compensation cost is recognized on a straight-line basis over the awards’ requisite service periods. Liability-classified awards are recorded at fair value and are included in accrued expenses and other on the consolidated balance sheets with changes in fair value relating to the vested portion of the award recognized as stock-based compensation on the consolidated statements of income. | |||
PSU awards will vest if certain employee-specific or VMware-designated performance targets are achieved. If minimum performance thresholds are achieved, each PSU award will convert into VMware's Class A common stock at a defined ratio depending on the degree of achievement of the performance target designated by each individual award. If minimum performance thresholds are not achieved, then no shares will be issued. Based upon the expected levels of achievement, stock-based compensation is recognized on a straight-line basis over the PSUs' requisite service periods. The expected levels of achievement are reassessed over the requisite service periods and, to the extent that the expected levels of achievement change, stock-based compensation is adjusted in the period of change and recorded in the statement of income and the remaining unrecognized stock-based compensation is recorded over the remaining requisite service period. | |||
New Accounting Pronouncement | |||
In February 2013, the Financial Accounting Standards Board (“FASB”) amended the accounting standards requiring companies to present information about reclassification adjustments from accumulated other comprehensive income in their financial statements or footnotes. VMware adopted this accounting standard update on January 1, 2013 and presents reclassification adjustments from accumulated other comprehensive income in accordance with the requirements of the amended accounting standard in this Annual Report on Form 10-K. |
Business_Combinations_Goodwill
Business Combinations, Goodwill and Intangible Assets, Net | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Business Combinations [Abstract] | ' | |||||||||||||
Business Combinations, Goodwill and Intangible Assets, Net | ' | |||||||||||||
Business Combinations, Goodwill and Intangible Assets, Net | ||||||||||||||
Business Combinations | ||||||||||||||
Fiscal Year 2013 | ||||||||||||||
In the year ended December 31, 2013, VMware completed two business combinations. On October 10, 2013, VMware acquired Desktone, Inc. (“Desktone”), a provider of desktop-as-a-service for delivering Windows desktops and applications as a cloud service. On February 15, 2013, VMware acquired Virsto Software (“Virsto”), a provider of software that optimizes storage performance and utilization in virtual environments. | ||||||||||||||
The aggregate consideration for these two acquisitions was $289 million, net of cash acquired. The following table summarizes the allocation of the consideration to the fair value of the assets acquired and net liabilities assumed (table in millions): | ||||||||||||||
Intangible assets | $ | 62 | ||||||||||||
Goodwill | 233 | |||||||||||||
Deferred tax assets, net | 4 | |||||||||||||
Total assets acquired | 299 | |||||||||||||
Other assumed liabilities, net of other acquired assets | (10 | ) | ||||||||||||
Total net liabilities assumed | (10 | ) | ||||||||||||
Fair value of assets acquired and net liabilities assumed | $ | 289 | ||||||||||||
The excess of the consideration for Desktone and Virsto over the fair values assigned to the assets acquired and liabilities assumed represents the goodwill resulting from the acquisitions. Management believes that the goodwill represents the synergies expected from combining the technologies of VMware with those of Desktone and Virsto, including complementary products that will enhance the Company’s overall product portfolio. No goodwill was deductible for tax purposes. | ||||||||||||||
The following table summarizes the fair value of the intangible assets acquired by VMware in conjunction with the acquisitions of Desktone and Virsto (amounts in table in millions): | ||||||||||||||
Weighted-Average | Fair Value | |||||||||||||
Useful Lives | Amount | |||||||||||||
(in years) | ||||||||||||||
Purchased technology | 6 | $ | 49 | |||||||||||
Vendor contracts | 8 | 3 | ||||||||||||
In-process research and development (“IPR&D”) | 10 | |||||||||||||
Total intangible assets, net, excluding goodwill | $ | 62 | ||||||||||||
As of December 31, 2013, $9 million of the $10 million in IPR&D shown in the table above was completed and transferred to purchased technology with a weighted-average life of 5 years. | ||||||||||||||
The results of operations of Desktone and Virsto described above have been included in VMware’s consolidated financial statements from their respective date of purchase. Pro forma results of operations have not been presented as the results of the acquired businesses were not material to VMware’s consolidated results of operations in the year ended December 31, 2013 or 2012. | ||||||||||||||
Fiscal Year 2012 | ||||||||||||||
Acquisition of Nicira, Inc. | ||||||||||||||
On August 24, 2012, VMware acquired all of the outstanding capital stock of Nicira, a developer of software-defined networking solutions. This acquisition expanded VMware’s product portfolio to provide a suite of software-defined networking capabilities. | ||||||||||||||
The aggregate consideration was $1,100 million, net of cash acquired, including cash of $1,083 million and the fair value of assumed equity attributed to pre-combination services of $17 million. VMware assumed all of Nicira’s unvested stock options and restricted stock outstanding at the completion of the acquisition. The fair value of the assumed equity awards for post-combination services was $152 million and was not included in the consideration transferred. The $152 million is being recognized over the awards' remaining requisite service periods, which extend through the first half of 2016. | ||||||||||||||
In accordance with the merger agreement, the assumed unvested stock options converted into 1 million stock options to purchase VMware Class A common stock. The weighted-average acquisition-date fair value of the stock options was determined using the Black-Scholes option pricing model with the following weighted-average assumptions: i) market price of $92.21 per share, which was the closing price of VMware’s Class A common stock on the acquisition date; ii) expected term of 2.7 years; iii) risk-free interest rate of 0.3%; iv) annualized volatility of 35.7%; and v) no dividend yield. The weighted-average acquisition-date fair value per share of the assumed stock options was $88.39. The assumed restricted stock converted into 1 million shares of restricted VMware Class A common stock. The fair value of the restricted stock was based on the acquisition-date closing price of $92.21 per share for VMware’s Class A common stock. | ||||||||||||||
The following table summarizes the allocation of the consideration to the fair value of the intangible assets acquired and net liabilities assumed on August 24, 2012, and reflects adjustments made through the measurement period to finalize the purchase price allocation (table in millions): | ||||||||||||||
Intangible assets | $ | 335 | ||||||||||||
Goodwill | 893 | |||||||||||||
Total intangible assets acquired | 1,228 | |||||||||||||
Deferred tax liabilities, net | (77 | ) | ||||||||||||
Income taxes payable | (50 | ) | ||||||||||||
Other assumed liabilities, net of other acquired assets | (1 | ) | ||||||||||||
Total net liabilities assumed | (128 | ) | ||||||||||||
Fair value of intangible assets acquired and net liabilities assumed | $ | 1,100 | ||||||||||||
No goodwill was deductible for tax purposes. | ||||||||||||||
The following table summarizes the fair value of the intangible assets acquired by VMware in conjunction with the Nicira acquisition (amounts in table in millions): | ||||||||||||||
Weighted-Average | Fair Value | |||||||||||||
Useful Lives | Amount | |||||||||||||
(in years) | ||||||||||||||
Purchased technology | 7 | $ | 266 | |||||||||||
Trademarks and trade names | 10 | 20 | ||||||||||||
IPR&D | 49 | |||||||||||||
Total intangible assets acquired, net, excluding goodwill | $ | 335 | ||||||||||||
As of December 31, 2012, the $49 million of IPR&D shown in the table above was completed and transferred to purchased technology with a weighted-average life of 8 years. | ||||||||||||||
Supplemental information on an unaudited pro forma basis, as if Nicira had been acquired on January 1, 2011, is presented as follows (table in millions, except per share amounts): | ||||||||||||||
For the Year | ||||||||||||||
Ended December 31, | ||||||||||||||
2012 | 2011 | |||||||||||||
Pro forma adjusted total revenue | $ | 4,607 | $ | 3,770 | ||||||||||
Pro forma adjusted net income | 687 | 611 | ||||||||||||
Pro forma adjusted net income per weighted-average share, diluted for Class A and Class B | $ | 1.58 | $ | 1.41 | ||||||||||
Pro forma adjustments primarily include intangible amortization, stock-based compensation and related tax effects. | ||||||||||||||
Other 2012 Business Combinations | ||||||||||||||
In the year ended December 31, 2012, VMware completed five business combinations in addition to Nicira, which were not material to VMware's consolidated financial statements, either individually or in the aggregate. The aggregate consideration for these five acquisitions was $261 million, net of cash acquired. The following table summarizes the allocation of the consideration to the fair value of the intangible assets acquired and net liabilities assumed (table in millions): | ||||||||||||||
Intangible assets | $ | 88 | ||||||||||||
Goodwill | 187 | |||||||||||||
Total intangible assets acquired | 275 | |||||||||||||
Deferred tax liabilities, net | (8 | ) | ||||||||||||
Other assumed liabilities, net of other acquired assets | (6 | ) | ||||||||||||
Total net liabilities assumed | (14 | ) | ||||||||||||
Fair value of intangible assets acquired and net liabilities assumed | $ | 261 | ||||||||||||
Of the goodwill acquired, $15 million is deductible for income tax purposes. | ||||||||||||||
Fiscal Year 2011 | ||||||||||||||
In year ended December 31, 2011, VMware completed six business combinations, which were not material to VMware's consolidated financial statements, either individually or in the aggregate. The aggregate consideration for these acquisitions was $304 million, net of cash acquired, and includes cash of approximately $304 million and the fair value of equity awards assumed attributed to pre-combination services of approximately $1 million. The following table summarizes the allocation of the consideration to the fair value of the tangible and intangible assets acquired and liabilities assumed (table in millions): | ||||||||||||||
Intangible assets | $ | 105 | ||||||||||||
Goodwill | 188 | |||||||||||||
Deferred tax assets, net | 23 | |||||||||||||
Total assets acquired | 316 | |||||||||||||
Other assumed liabilities, net of acquired assets | (12 | ) | ||||||||||||
Total net liabilities assumed | (12 | ) | ||||||||||||
Fair value of assets acquired and net liabilities assumed | $ | 304 | ||||||||||||
Intangible Assets, Net | ||||||||||||||
The following table summarizes the changes in the carrying amount of intangible assets, net, excluding goodwill for the years ended December 31, 2013 and 2012 (table in millions): | ||||||||||||||
December 31, | ||||||||||||||
2013 | 2012 | |||||||||||||
Balance, beginning of the year | $ | 732 | $ | 407 | ||||||||||
Additions to intangible assets related to business combinations | 62 | 423 | ||||||||||||
Disposition of certain business activities (See Note C) | (54 | ) | — | |||||||||||
Contribution to Pivotal (see Note O) | (28 | ) | — | |||||||||||
Change in accumulated amortization | (107 | ) | (96 | ) | ||||||||||
Other adjustments | 2 | (2 | ) | |||||||||||
Balance, end of the year | $ | 607 | $ | 732 | ||||||||||
As of December 31, 2013, intangible assets, net, excluded intangible assets that were fully amortized as well as goodwill, and consisted of the following (amounts in table in millions): | ||||||||||||||
2013 | Weighted-Average | Gross Carrying | Accumulated | Net Book | ||||||||||
Useful Lives | Amount | Amortization | Value | |||||||||||
(in years) | ||||||||||||||
Purchased technology | 6.6 | $ | 580 | $ | (163 | ) | $ | 417 | ||||||
Leasehold interest | 34.9 | 145 | (11 | ) | 134 | |||||||||
Customer relationships and customer lists | 8.7 | 75 | (37 | ) | 38 | |||||||||
Trademarks and trade names | 9.1 | 24 | (7 | ) | 17 | |||||||||
IPR&D | 1 | — | 1 | |||||||||||
Total intangible assets, net, excluding goodwill | $ | 825 | $ | (218 | ) | $ | 607 | |||||||
As of December 31, 2012, intangible assets, net, excluding goodwill, consisted of the following (amounts in table in millions): | ||||||||||||||
2012 | Weighted-Average | Gross Carrying | Accumulated | Net Book | ||||||||||
Useful Lives | Amount | Amortization | Value | |||||||||||
(in years) | ||||||||||||||
Purchased technology | 6.1 | $ | 757 | $ | (274 | ) | $ | 483 | ||||||
Leasehold interest | 34.9 | 145 | (7 | ) | 138 | |||||||||
Customer relationships and customer lists | 7.3 | 146 | (63 | ) | 83 | |||||||||
Trademarks and trade names | 8 | 45 | (17 | ) | 28 | |||||||||
Other | 3 | 3 | (3 | ) | — | |||||||||
Total intangible assets, net, excluding goodwill | $ | 1,096 | $ | (364 | ) | $ | 732 | |||||||
Based on intangible assets recorded as of December 31, 2013 and assuming no subsequent additions or impairment of underlying assets, the remaining estimated annual amortization expense is expected to be as follows (table in millions): | ||||||||||||||
2014 | $ | 97 | ||||||||||||
2015 | 95 | |||||||||||||
2016 | 86 | |||||||||||||
2017 | 81 | |||||||||||||
2018 | 69 | |||||||||||||
Thereafter | 178 | |||||||||||||
Total | $ | 606 | ||||||||||||
Goodwill | ||||||||||||||
The following table summarizes the changes in the carrying amount of goodwill for the years ended December 31, 2013 and 2012 (table in millions): | ||||||||||||||
December 31, | ||||||||||||||
2013 | 2012 | |||||||||||||
Balance, beginning of the year | $ | 2,848 | $ | 1,759 | ||||||||||
Increase in goodwill related to business combination | 233 | 1,092 | ||||||||||||
Contribution to Pivotal (see Note O) | (28 | ) | — | |||||||||||
Reduction related to disposition of certain business activities | (4 | ) | — | |||||||||||
Deferred tax adjustments to purchase price allocations on acquisitions | (20 | ) | (4 | ) | ||||||||||
Other adjustments to purchase price allocations on acquisitions | (2 | ) | 1 | |||||||||||
Balance, end of the year | $ | 3,027 | $ | 2,848 | ||||||||||
The deferred tax adjustments relate to the finalization of the fair value estimates for certain acquisitions. |
Realignment_Charges
Realignment Charges | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ' | |||||||||||||||||||
Realignment Charges | ' | |||||||||||||||||||
Realignment Charges | ||||||||||||||||||||
Realignment Plan | ||||||||||||||||||||
In January 2013, VMware approved and initiated a business realignment plan to streamline its operations. As of the second quarter of 2013, the plan had been substantially completed. | ||||||||||||||||||||
The realignment plan included the elimination of approximately 710 positions and personnel across all major functional groups and geographies. The total cash and non-cash charge of $54 million for workforce reductions was recorded on the consolidated statements of income for the year ended December 31, 2013. In connection with the realignment plan, VMware also recognized other cash and non-cash costs of $14 million primarily associated with asset impairments during the year ended December 31, 2013. Substantially all of the cash-related expenses incurred in connection with the business realignment plan have been paid as of December 31, 2013. | ||||||||||||||||||||
The following table summarizes the activity for the accrued realignment charges for the year ended December 31, 2013 (table in millions): | ||||||||||||||||||||
For the Year Ended December 31, 2013 | ||||||||||||||||||||
Balance as of | Realignment | Utilization | Balance as of | Non-Cash Portion | ||||||||||||||||
1-Jan-13 | Charges | 31-Dec-13 | of Utilization | |||||||||||||||||
Workforce reductions | $ | — | $ | 54 | $ | (54 | ) | $ | — | $ | (6 | ) | ||||||||
Asset impairments, exit of facilities and other exit costs | — | 14 | (11 | ) | 3 | (9 | ) | |||||||||||||
Total | $ | — | $ | 68 | $ | (65 | ) | $ | 3 | $ | (15 | ) | ||||||||
Other Related Activities | ||||||||||||||||||||
In connection with VMware's business realignment plan, VMware recognized cumulative pre-tax gains of $44 million during the year ended December 31, 2013 relating to the disposition of certain business activities that were no longer aligned with VMware's core business priorities. The gains recognized in connection with these dispositions were recorded to other income (expense), net on the consolidated statements of income for the year ended December 31, 2013. |
Earnings_per_Share
Earnings per Share | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||
Earnings per Share | ' | |||||||||||
Earnings per Share | ||||||||||||
Basic net income per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income by the weighted-average number of common shares outstanding and potentially dilutive securities outstanding during the period, as calculated using the treasury stock method. Potentially dilutive securities primarily include unvested restricted stock units, stock options and purchase options under VMware’s employee stock purchase plan. Securities are excluded from the computations of diluted net income per share if their effect would be anti-dilutive. VMware uses the two-class method to calculate earnings per share as both classes share the same rights in dividends, therefore basic and diluted earnings per share are the same for both classes. | ||||||||||||
The following table sets forth the computations of basic and diluted net income per share for the years ended December 31, 2013, 2012 and 2011 (table in millions, except per share data): | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Net income | $ | 1,014 | $ | 746 | $ | 724 | ||||||
Weighted-average shares, basic for Class A and Class B | 429 | 427 | 421 | |||||||||
Effect of dilutive securities | 4 | 7 | 11 | |||||||||
Weighted-average shares, diluted for Class A and Class B | 433 | 434 | 432 | |||||||||
Net income per weighted-average share, basic for Class A and Class B | $ | 2.36 | $ | 1.75 | $ | 1.72 | ||||||
Net income per weighted-average share, diluted for Class A and Class B | $ | 2.34 | $ | 1.72 | $ | 1.68 | ||||||
For both the years ended December 31, 2013 and 2011, stock options to purchase 1 million shares, respectively, of VMware Class A common stock were excluded from the diluted earnings per share calculations because their effect would have been anti-dilutive. For the year ended December 31, 2012, the number of stock options to purchase shares of VMware Class A common stock that were excluded from the diluted earnings per share calculations because their effect would have been anti-dilutive was not material. | ||||||||||||
For the year ended December 31, 2013, the number of shares of restricted stock that were excluded from the diluted earnings per share calculations because their effect would have been anti-dilutive was not material. For the year ended December 31, 2012, 2 million shares of restricted stock were excluded from the diluted earnings per share calculations because their effect would have been anti-dilutive. For the year ended December 31, 2011, no shares of restricted stock were excluded from the diluted earnings per share calculation. |
Investments
Investments | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | |||||||||||||||
Investments | ' | |||||||||||||||
Investments | ||||||||||||||||
Investments as of December 31, 2013 and 2012 consisted of the following (tables in millions): | ||||||||||||||||
December 31, 2013 | ||||||||||||||||
Cost or Amortized Cost | Unrealized Gains | Unrealized Losses | Aggregate | |||||||||||||
Fair Value | ||||||||||||||||
U.S. Government and agency obligations | $ | 537 | $ | — | $ | — | $ | 537 | ||||||||
U.S. and foreign corporate debt securities | 2,351 | 6 | (3 | ) | 2,354 | |||||||||||
Foreign governments and multi-national agency obligations | 37 | — | — | 37 | ||||||||||||
Municipal obligations | 811 | 3 | — | 814 | ||||||||||||
Mortgage-backed securities | 129 | — | (1 | ) | 128 | |||||||||||
Total investments | $ | 3,865 | $ | 9 | $ | (4 | ) | $ | 3,870 | |||||||
December 31, 2012 | ||||||||||||||||
Cost or Amortized Cost | Unrealized Gains | Unrealized Losses | Aggregate | |||||||||||||
Fair Value | ||||||||||||||||
U.S. Government and agency obligations | $ | 374 | $ | 1 | $ | — | $ | 375 | ||||||||
U.S. and foreign corporate debt securities | 1,545 | 6 | (1 | ) | 1,550 | |||||||||||
Foreign governments and multi-national agency obligations | 41 | — | — | 41 | ||||||||||||
Municipal obligations | 973 | 3 | — | 976 | ||||||||||||
Asset-backed securities | 1 | — | — | 1 | ||||||||||||
Mortgage-backed securities | 79 | — | — | 79 | ||||||||||||
Total investments | $ | 3,013 | $ | 10 | $ | (1 | ) | $ | 3,022 | |||||||
VMware evaluated its fixed income investments as of December 31, 2013 and 2012 to determine whether or not any security had experienced an other-than-temporary decline in fair value. As of December 31, 2013 and 2012, VMware did not consider any of its fixed income investments to be other-than-temporarily impaired. Both the realized gains and realized losses on fixed income investments in the years ended December 31, 2013 and 2012 were not material. | ||||||||||||||||
Unrealized losses on investments as of December 31, 2013 and 2012, which have been in a net loss position for less than twelve months, were classified by investment category as follows (table in millions): | ||||||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||
U.S. and foreign corporate debt securities | $ | 750 | $ | (3 | ) | $ | 316 | $ | (1 | ) | ||||||
Mortgage-backed securities | 91 | (1 | ) | 28 | — | |||||||||||
Total | $ | 841 | $ | (4 | ) | $ | 344 | $ | (1 | ) | ||||||
As of December 31, 2013, unrealized losses on investments in other investment categories, which have been in a net loss position for less than twelve months, were not material. Additionally, unrealized losses on investments, which have been in a net loss position for twelve months or greater, were not material as of December 31, 2013. As of December 31, 2012, VMware did not have investments in a continuous unrealized loss position for twelve months or greater. | ||||||||||||||||
Strategic Investments | ||||||||||||||||
VMware evaluated the strategic investments in its portfolio that are accounted under the cost method, to assess whether any of its strategic investments were other-than-temporarily impaired. VMware uses Level 3 inputs as part of its impairment analysis, including, pre- and post-money valuations of recent financing events and the impact of those on its fully diluted ownership percentages, as well as other available information regarding the issuer’s historical and forecasted performance. The estimated fair value of these investments is considered in VMware's impairment review if any events or changes in circumstances occur that might have a significant adverse effect on their value. During the year ended December 31, 2013, VMware recognized an other-than-temporary impairment charge of approximately $13 million in connection with one of its strategic investments. | ||||||||||||||||
During the year ended December 31, 2011, a realized gain of $56 million was recorded in other income (expense), net for the sale of VMware’s investment in Terremark Worldwide, Inc. During the years ended December 31, 2013 and 2012, VMware did not have realized gains or realized losses on strategic investments. | ||||||||||||||||
Contractual Maturities | ||||||||||||||||
The contractual maturities of investments held at December 31, 2013 consisted of the following (table in millions): | ||||||||||||||||
Amortized | Aggregate | |||||||||||||||
Cost Basis | Fair Value | |||||||||||||||
Due within one year | $ | 807 | $ | 808 | ||||||||||||
Due after 1 year through 5 years | 2,864 | 2,869 | ||||||||||||||
Due after 5 years | 194 | 193 | ||||||||||||||
Total investments | $ | 3,865 | $ | 3,870 | ||||||||||||
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||
Fair Value Measurements | ' | |||||||||||
Fair Value Measurements | ||||||||||||
Certain financial assets and liabilities are measured at fair value on a recurring basis. | ||||||||||||
VMware’s Level 1 classification of the fair value hierarchy includes money market funds and certain available-for-sale fixed income securities because these securities are valued using quoted prices in active markets for identical assets. Fixed income available-for-sale securities consist of high quality, investment-grade securities from diverse issuers. | ||||||||||||
VMware’s Level 2 classification includes the remainder of the available-for-sale fixed income securities because these securities are priced using inputs other than quoted prices that are observable either directly or indirectly. The valuation techniques used to measure the fair value of financial instruments having Level 2 inputs were derived from non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models such as discounted cash flow techniques. VMware’s procedures include controls to ensure that appropriate fair values are recorded such as comparing prices obtained from multiple independent sources. VMware is ultimately responsible for the financial statements and underlying estimates. | ||||||||||||
Additionally, VMware’s Level 2 classification includes foreign currency forward contracts as the valuation inputs for these are based upon quoted prices and quoted pricing intervals from public data sources. The fair value of these contracts was not material for any period presented. | ||||||||||||
VMware does not have any material assets or liabilities that fall into Level 3 of the fair value hierarchy as of December 31, 2013 and 2012, and there have been no transfers between fair value measurement levels during the years ended December 31, 2013 and 2012. | ||||||||||||
The following tables set forth the fair value hierarchy of VMware’s money market funds and available-for-sale securities, including those securities classified within cash and cash equivalents on the consolidated balance sheets, that were required to be measured at fair value as of December 31, 2013 and 2012 (tables in millions): | ||||||||||||
December 31, 2013 | ||||||||||||
Level 1 | Level 2 | Total | ||||||||||
Money-market funds | $ | 1,808 | $ | — | $ | 1,808 | ||||||
U.S. Government and agency obligations | 385 | 152 | 537 | |||||||||
U.S. and foreign corporate debt securities | — | 2,366 | 2,366 | |||||||||
Foreign governments and multi-national agency obligations | — | 37 | 37 | |||||||||
Municipal obligations | — | 816 | 816 | |||||||||
Asset-backed securities | — | — | — | |||||||||
Mortgage-backed securities | — | 128 | 128 | |||||||||
Total | $ | 2,193 | $ | 3,499 | $ | 5,692 | ||||||
December 31, 2012 | ||||||||||||
Level 1 | Level 2 | Total | ||||||||||
Money-market funds | $ | 1,125 | $ | — | $ | 1,125 | ||||||
U.S. Government and agency obligations | 250 | 155 | 405 | |||||||||
U.S. and foreign corporate debt securities | — | 1,567 | 1,567 | |||||||||
Foreign governments and multi-national agency obligations | — | 41 | 41 | |||||||||
Municipal obligations | — | 976 | 976 | |||||||||
Asset-backed securities | — | 1 | 1 | |||||||||
Mortgage-backed securities | — | 79 | 79 | |||||||||
Total | $ | 1,375 | $ | 2,819 | $ | 4,194 | ||||||
Derivatives_and_Hedging_Activi
Derivatives and Hedging Activity | 12 Months Ended |
Dec. 31, 2013 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' |
Derivatives and Hedging Activities | ' |
Derivatives and Hedging Activity | |
VMware conducts business in several foreign currencies and has international sales and expenses denominated in foreign currencies, subjecting the Company to foreign currency risk. To mitigate this risk, VMware enters into hedging activities as described below. The counterparties to VMware’s foreign currency forward contracts are multi-national commercial banks considered to be credit-worthy. VMware does not enter into speculative foreign exchange contracts for trading purposes. | |
Cash Flow Hedging Activities | |
To mitigate its exposure to foreign currency fluctuations resulting from operating expenses denominated in certain foreign currencies, VMware enters into foreign currency forward contracts. The Company designates these forward contracts as cash flow hedging instruments as the accounting criteria for such designation has been met. Therefore, the effective portion of gains or losses resulting from changes in the fair value of these hedges is initially reported in accumulated other comprehensive income (loss) on the consolidated balance sheet and is subsequently reclassified to the related operating expense line item in the consolidated statements of income in the same period that the underlying expenses are incurred. For the years ended December 31, 2013, 2012 and 2011, the effective portion of gains or losses reclassified to the consolidated statements of income were not material. Interest charges or “forward points” on VMware’s forward contracts are excluded from the assessment of hedge effectiveness and are recorded in other income (expense), net in the consolidated statements of income as incurred. | |
VMware generally enters into cash flow hedges semi-annually with maturities of six months or less. As of December 31, 2013 and 2012, VMware had forward contracts to purchase foreign currency designated as cash flow hedges with a total notional value of $82 million and $9 million, respectively. The fair value of these forward contracts was immaterial as of December 31, 2013 and 2012, and therefore excluded from the fair value tables above. For the years ended December 31, 2013 and 2012, all cash flow hedges were considered effective. | |
Balance Sheet Hedging Activities | |
In order to manage exposure to foreign currency fluctuations, VMware enters into foreign currency forward contracts to hedge a portion of its net outstanding monetary assets and liabilities against movements in certain foreign exchange rates. These forward contracts are not designated as hedging instruments under applicable accounting guidance, and therefore all changes in the fair value of the forward contracts are reported in other income (expense), net in the consolidated statements of income. | |
VMware’s foreign currency forward contracts are generally traded on a monthly basis with a typical contractual term of one month. As of December 31, 2013 and 2012, VMware had outstanding forward contracts with a total notional value of $498 million and $440 million, respectively. The fair value of these forward contracts was immaterial as of December 31, 2013 and 2012 and therefore excluded from the fair value tables above. | |
In the years ended December 31, 2013 and 2012, VMware recognized losses of $4 million and $10 million, respectively, on its consolidated statements of income for its foreign currency forward contracts. In the year ended December 31, 2011, VMware recognized a gain of $5 million on its consolidated statement of income for its foreign currency forward contracts. | |
The net impact of the gains and losses on VMware’s foreign currency forward contracts and the gains and losses associated with the underlying foreign-currency denominated assets and liabilities resulted in net losses of $4 million, $2 million and $1 million in the years ended December 31, 2013, 2012 and 2011, respectively. |
Property_and_Equipment_Net
Property and Equipment, Net | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||
Property and Equipment, Net | ' | |||||||
Property and Equipment, Net | ||||||||
Property and equipment, net, as of December 31, 2013 and 2012 consisted of the following (table in millions): | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Equipment and software | $ | 752 | $ | 636 | ||||
Buildings and improvements | 584 | 438 | ||||||
Furniture and fixtures | 77 | 67 | ||||||
Construction in progress | 120 | 98 | ||||||
Total property and equipment | 1,533 | 1,239 | ||||||
Accumulated depreciation | (688 | ) | (574 | ) | ||||
Total property and equipment, net | $ | 845 | $ | 665 | ||||
Depreciation expense was $141 million, $131 million and $126 million in the years ended December 31, 2013, 2012 and 2011, respectively. | ||||||||
In the year ended December 31, 2011, VMware purchased all of the right, title and interest in a ground lease covering the property and improvements located adjacent to VMware's existing Palo Alto, California campus for $225 million. Based upon the respective fair values, $74 million of the purchase price was recorded to property and equipment, net on the consolidated balance sheet representing the estimated fair value of the buildings and site improvements. The remaining $151 million of the $225 million purchase price was for the fair value of the ground lease and the right to develop additional square footage on the parcel. The long-term portion of $147 million was recorded to intangible assets, net with the remainder recorded to other current assets on the consolidated balance sheet. | ||||||||
Concurrent with the closing of the transaction, VMware entered into an amended and restated ground lease for the new property which expires in 2046. VMware will possess the title to the interest and buildings during the duration of the lease. Upon termination of the lease, title will revert to the lessor. The $74 million of buildings and site improvements began depreciating and the $151 million of intangible assets began amortizing from the date they were placed into service through 2046. VMware also entered into an amendment to the ground lease for its existing campus so that the terms of both leases will be 34 years and 11 months from the closing of the purchase agreement. Annual rent payments for the new property were initially approximately $7 million and increase by 3% annually. VMware is also responsible for paying all taxes, insurance and other expenses necessary to operate the parcel. | ||||||||
As of December 31, 2013 and 2012, construction in progress primarily represented buildings and site improvements related to VMware’s Palo Alto campus expansion that had not yet been placed into service. |
Accrued_Expenses_and_Other
Accrued Expenses and Other | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Accrued Liabilities [Abstract] | ' | |||||||
Accrued Expenses and Other | ' | |||||||
Accrued Expenses and Other | ||||||||
Accrued expenses and other as of December 31, 2013 and 2012 consisted of the following (table in millions): | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Salaries, commissions, bonuses, and benefits | $ | 303 | $ | 292 | ||||
Accrued partner liabilities | 135 | 129 | ||||||
Other | 170 | 223 | ||||||
Total | $ | 608 | $ | 644 | ||||
Accrued partner liabilities relate to rebates and marketing development fund accruals for channel partners, system vendors and systems integrators, as well as accrued royalties. |
Unearned_Revenues
Unearned Revenues | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Deferred Revenue Disclosure [Abstract] | ' | |||||||
Unearned Revenues | ' | |||||||
Unearned Revenues | ||||||||
Unearned revenues as of December 31, 2013 and 2012 consisted of the following (table in millions): | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Unearned license revenues | $ | 465 | $ | 463 | ||||
Unearned software maintenance revenues | 3,304 | 2,755 | ||||||
Unearned professional services revenues | 323 | 243 | ||||||
Total unearned revenues | $ | 4,092 | $ | 3,461 | ||||
Unearned license revenues are either recognized ratably, recognized upon delivery of existing or future products or services, or will be recognized ratably upon delivery of future products or services. Future products include, in some cases, products that are offered as part of product promotions where the purchaser of an existing product is entitled to receive a promotional product at no additional charge. VMware regularly offers product promotions to improve awareness of its emerging products. To the extent promotional products have not been delivered and VSOE of fair value is not established, revenue for the entire order is deferred until such time as all product delivery obligations have been fulfilled. Unearned license revenue may also be recognized ratably, which is generally due to a right to receive unspecified future products. | ||||||||
Unearned software maintenance revenues are attributable to VMware’s maintenance contracts and are recognized ratably, typically over terms of one to five years. Unearned professional services revenues result primarily from prepaid professional services, including training, and are recognized as the services are delivered. |
Note_Payable_to_EMC
Note Payable to EMC | 12 Months Ended |
Dec. 31, 2013 | |
Note Payable To EMC [Abstract] | ' |
Note Payable to EMC | ' |
Note Payable to EMC | |
In June 2011, VMware and EMC amended and restated a promissory note issued by VMware to EMC as a dividend in April 2007 to extend the maturity date of the note to April 16, 2015 and to modify the principal amount of the note to EMC to reflect the outstanding balance of $450 million. The interest rate resets quarterly at the 90-day LIBOR plus 55 basis points. For the years ended December 31, 2013, 2012 and 2011, $4 million, $5 million and $4 million, respectively, of interest expense were recorded related to the note payable. See Note R to the consolidated financial statements for information regarding a note exchange agreement in the aggregate principal amount of $1,500 million entered into between VMware and EMC on January 21, 2014, which exchanges VMware’s promissory note issued to EMC. |
Income_Taxes
Income Taxes | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Income Tax Disclosure [Abstract] | ' | |||||||||||
Income Taxes | ' | |||||||||||
Income Taxes | ||||||||||||
The domestic and foreign components of income before provisions for income taxes were as follows (table in millions): | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Domestic | $ | 160 | $ | 177 | $ | 112 | ||||||
International | 987 | 716 | 682 | |||||||||
Total | $ | 1,147 | $ | 893 | $ | 794 | ||||||
VMware’s provision for income taxes consisted of the following (table in millions): | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Federal: | ||||||||||||
Current | $ | 1 | $ | 161 | $ | 43 | ||||||
Deferred | 57 | (71 | ) | (24 | ) | |||||||
58 | 90 | 19 | ||||||||||
State: | ||||||||||||
Current | 2 | 13 | 1 | |||||||||
Deferred | 6 | (7 | ) | 11 | ||||||||
8 | 6 | 12 | ||||||||||
Foreign: | ||||||||||||
Current | 72 | 44 | 41 | |||||||||
Deferred | (5 | ) | 7 | (2 | ) | |||||||
67 | 51 | 39 | ||||||||||
Total provision for income taxes | $ | 133 | $ | 147 | $ | 70 | ||||||
A reconciliation of VMware’s income tax rate to the statutory federal tax rate is as follows: | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Statutory federal tax rate | 35 | % | 35 | % | 35 | % | ||||||
State taxes, net of federal benefit | 1 | % | 1 | % | 2 | % | ||||||
Tax rate differential for international jurisdictions | (22 | )% | (22 | )% | (25 | )% | ||||||
U.S. tax credits(1) | (7 | )% | — | % | (6 | )% | ||||||
Permanent items and other | 5 | % | 3 | % | 3 | % | ||||||
Effective tax rate | 12 | % | 17 | % | 9 | % | ||||||
-1 | The federal research credit was enacted retroactively through December 31, 2013, which was passed by the United States Congress during January 2013. | |||||||||||
Deferred tax assets and liabilities are recognized for future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to be reversed. Significant deferred tax assets and liabilities consist of the following (table in millions): | ||||||||||||
December 31, | ||||||||||||
2013 | 2012 | |||||||||||
Deferred tax assets: | ||||||||||||
Unearned revenue | $ | 224 | $ | 211 | ||||||||
Accruals and other | 45 | 43 | ||||||||||
Stock-based compensation | 68 | 65 | ||||||||||
Tax credit and net operating loss carryforwards | 119 | 130 | ||||||||||
Other non-current assets | 14 | — | ||||||||||
Basis difference in investment in business | 20 | — | ||||||||||
Net deferred tax assets | 490 | 449 | ||||||||||
Valuation allowance | (94 | ) | (64 | ) | ||||||||
Total deferred tax assets | 396 | 385 | ||||||||||
Deferred tax liabilities: | ||||||||||||
Property, plant and equipment, net | (70 | ) | (51 | ) | ||||||||
Intangibles and other assets, net | (76 | ) | (55 | ) | ||||||||
Total deferred tax liabilities | (146 | ) | (106 | ) | ||||||||
Total deferred tax assets, net | $ | 250 | $ | 279 | ||||||||
VMware has U.S. federal net operating loss carryforwards of $129 million from acquisitions made since 2007. These operating loss carryforwards expire at different periods through 2031. Portions of these carryforwards are subject to annual limitations. VMware expects to be able to fully use these net operating losses against future income. Also resulting from acquisitions since 2006, VMware has state net operating loss carryforwards of $223 million expiring at different periods through 2032. | ||||||||||||
A valuation allowance was recorded to reduce gross deferred tax assets to an amount VMware believes is more likely than not to be realized. VMware determined that the realization of deferred tax assets relating to certain state research and development credits and capital losses did not meet the more likely than not threshold, and accordingly, a valuation allowance was assessed. | ||||||||||||
VMware has non-U.S. credits of $2 million. U.S. income taxes have not been provided on certain undistributed earnings of non-U.S. subsidiaries of approximately $2,830 million and $2,002 million at December 31, 2013 and 2012, respectively, because such earnings are considered to be reinvested indefinitely outside of the U.S., or will be remitted substantially free of additional tax. VMware's rate of taxation in foreign jurisdictions is lower than the U.S. tax rate. VMware's international income is primarily earned by VMware's subsidiaries in Ireland, where the statutory tax rate is 12.5%. Recent developments in non-U.S. tax jurisdictions and unfavorable changes in non-U.S. tax laws and regulations could have an adverse effect on VMware’s effective tax rate if earnings are lower than anticipated in countries where the statutory tax rates are lower than the U.S. federal tax rate. All income earned abroad, except for previously taxed income for U.S. tax purposes, is considered indefinitely reinvested in VMware's foreign operations and no provision for U.S. taxes has been provided with respect to such income. | ||||||||||||
Although VMware files a consolidated federal tax return with EMC, the income tax provision is calculated primarily as though VMware were a separate taxpayer. However, certain transactions that VMware and EMC are parties to, are assessed using consolidated tax return rules. | ||||||||||||
Pursuant to the tax sharing agreement, VMware has made payments to EMC and EMC has made payments to VMware. The following table summarizes these payments made between VMware and EMC during the years ended December 31, 2013, 2012 and 2011 (table in millions): | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Payments from VMware to EMC | $ | 8 | $ | — | $ | 12 | ||||||
Payments from EMC to VMware | 32 | 19 | 314 | |||||||||
Payments between VMware and EMC under the tax sharing agreement relate to VMware's portion of federal income taxes on EMC's consolidated tax return as well as the state payments for combined states. Payments from EMC to VMware relate to periods where VMware had a stand-alone loss for U.S. federal and state income tax purposes or where VMware had federal tax credits in excess of federal tax liabilities. Payments from VMware to EMC are for estimated tax payments primarily for U.S. federal income tax purposes. The amounts that VMware either pays to or receives from EMC for its portion of federal income taxes on EMC’s consolidated tax return differ from the amounts VMware would owe on a separate return basis and the difference is presented as a component of stockholders’ equity. In the year ended December 31, 2013 and 2012, the difference between the amount of tax calculated on a separate-return basis and the amount of tax calculated per the tax sharing agreement was recorded as a decrease in stockholders’ equity totaling $3 million and $4 million, respectively. In 2011, the difference between the amount of tax calculated on a separate-return basis and the amount of tax calculated per the tax sharing agreement was recorded as an increase in stockholder’s equity of $8 million. | ||||||||||||
Unrecognized Tax Benefits | ||||||||||||
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits, excluding interest and penalties associated with unrecognized tax benefits, is as follows (table in millions): | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Balance, beginning of the year | $ | 158 | $ | 95 | $ | 109 | ||||||
Tax positions related to current year: | ||||||||||||
Additions | 32 | 12 | 19 | |||||||||
Reductions | — | (4 | ) | (2 | ) | |||||||
Tax positions related to prior years: | ||||||||||||
Additions related to acquisitions completed in 2012 | — | 60 | — | |||||||||
Additions | — | — | 3 | |||||||||
Reductions | (12 | ) | — | (9 | ) | |||||||
Settlements | (2 | ) | — | (23 | ) | |||||||
Reductions resulting from a lapse of the statute of limitations | (8 | ) | (4 | ) | (2 | ) | ||||||
Foreign currency effects | (1 | ) | (1 | ) | — | |||||||
Balance, end of the year | $ | 167 | $ | 158 | $ | 95 | ||||||
The net unrecognized tax benefits, including interest and penalties, of $169 million as of December 31, 2013 would, if recognized, benefit VMware’s effective income tax rate. The $169 million of net unrecognized tax benefits were classified as a non-current liability within other liabilities on the consolidated balance sheet. VMware recognizes interest expense and penalties related to income tax matters in the income tax provision. VMware had accrued $13 million of interest and penalties as of December 31, 2013 and $8 million of interest and penalties as of December 31, 2012 associated with unrecognized tax benefits. Income tax expense for the year ended December 31, 2013 included interest and penalties of $5 million associated with uncertain tax positions. | ||||||||||||
The U.S. federal income tax audit of the EMC consolidated group for 2009 and 2010 commenced in 2012 and is ongoing as of December 31, 2013. VMware has income tax audits in progress in numerous state, local and international jurisdictions in which it operates. The years that may be examined vary for VMware international jurisdictions, which comprise a significant portion of its operations, with the earliest year being 2008. It is reasonably possible that within the next 12 months audit resolutions could potentially reduce total unrecognized tax benefits by approximately $4 million. Audit outcomes and the timing of audit settlements are subject to significant uncertainty. |
Contingencies_and_Contingencie
Contingencies and Contingencies | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||
Contingencies and Contingencies | ' | |||
Commitments and Contingencies | ||||
Litigation | ||||
VMware is subject to legal, administrative and regulatory proceedings, claims, demands and investigations in the ordinary course of business, including claims with respect to commercial, product liability, intellectual property, employment, class action, whistleblower and other matters. In the ordinary course of business, VMware also receives inquiries from and has ongoing discussions with government entities regarding the compliance of its contracting and sales practices with laws and regulations. VMware accrues for a liability when and if a determination has been made that a loss is both probable of occurrence and the amount of the loss can be reasonably estimated. Significant judgment is required in both the determination of probability and the determination as to whether a loss is reasonably estimable. VMware considers the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular matter. As of December 31, 2013 and December 31, 2012, the amounts accrued were not material. To the extent there is a reasonable possibility that the losses could exceed the amounts already accrued, management believes that the amount of any such additional loss would also be immaterial to VMware’s consolidated financial position, results of operations and cash flows. | ||||
Operating Lease Commitments | ||||
VMware leases office facilities and equipment under various operating leases. Facility leases generally include renewal options. Rent expense for the years ended December 31, 2013, 2012 and 2011 was $67 million, $62 million and $56 million, respectively. VMware’s minimum future lease commitments at December 31, 2013 were as follows (table in millions): | ||||
2014 | $ | 58 | ||
2015 | 53 | |||
2016 | 43 | |||
2017 | 36 | |||
2018 | 32 | |||
Thereafter | 564 | |||
Total minimum lease payments | $ | 786 | ||
The amount of the future lease commitments after 2018 is primarily for the ground leases on VMware’s Palo Alto, California headquarter facilities, which expire in 2046. As several of VMware’s operating leases are payable in foreign currencies, the operating lease payments may fluctuate in response to changes in the exchange rate between the U.S. dollar and the foreign currencies in which the commitments are payable. | ||||
Outstanding Obligations | ||||
At December 31, 2013, VMware had various contractual commitments aggregating $87 million. | ||||
Guarantees and Indemnification Obligations | ||||
VMware enters into agreements in the ordinary course of business with, among others, customers, distributors, resellers, system vendors and systems integrators. Most of these agreements require VMware to indemnify the other party against third-party claims alleging that a VMware product infringes or misappropriates a patent, copyright, trademark, trade secret, and/or other intellectual property right. Certain of these agreements require VMware to indemnify the other party against certain claims relating to property damage, personal injury, or the acts or omissions of VMware, its employees, agents, or representatives. | ||||
VMware has agreements with certain vendors, financial institutions, lessors and service providers pursuant to which VMware has agreed to indemnify the other party for specified matters, such as acts and omissions of VMware, its employees, agents, or representatives. | ||||
VMware has procurement or license agreements with respect to technology that it has obtained the right to use in VMware’s products and agreements. Under some of these agreements, VMware has agreed to indemnify the supplier for certain claims that may be brought against such party with respect to VMware’s acts or omissions relating to the supplied products or technologies. | ||||
VMware has agreed to indemnify the directors and executive officers of VMware, to the extent legally permissible, against all liabilities reasonably incurred in connection with any action in which such individual may be involved by reason of such individual being or having been a director or executive officer. VMware’s by-laws and charter also provide for indemnification of directors and officers of VMware and VMware subsidiaries to the extent legally permissible, against all liabilities reasonably incurred in connection with any action in which such individual may be involved by reason of such individual being or having been a director or executive officer. VMware also indemnifies certain employees who provide service with respect to employee benefits plans, including the members of the Administrative Committee of the VMware 401(k) Plan, and employees who serve as directors or officers of VMware's subsidiaries. | ||||
In connection with certain acquisitions, VMware has agreed to indemnify the former directors and officers of the acquired company in accordance with the acquired company’s by-laws and charter in effect immediately prior to the acquisition or in accordance with indemnification or similar agreements entered into by the acquired company and such persons. VMware typically purchases a “tail” directors’ and officers’ insurance policy, which should enable VMware to recover a portion of any future indemnification obligations related to the former officers and directors of an acquired company. | ||||
It is not possible to determine the maximum potential amount under these indemnification agreements due to the Company’s limited history with prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, payments made by the Company under these agreements have not had a material effect on the Company’s consolidated results of operations, financial position, or cash flows. |
Stockholders_Equity
Stockholders' Equity | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Stockholders' Equity Note [Abstract] | ' | |||||||||||||
Stockholders' Equity | ' | |||||||||||||
Stockholders’ Equity | ||||||||||||||
VMware Class B Common Stock Conversion Rights | ||||||||||||||
Each share of Class B common stock is convertible while held by EMC or its successor-in-interest at the option of EMC or its successor-in-interest into one share of Class A common stock. If VMware’s Class B common stock is distributed to security holders of EMC in a transaction (including any distribution in exchange for shares of EMC’s or its successor-in-interest’s common stock or other securities) intended to qualify as a distribution under Section 355 of the Internal Revenue Code, or any corresponding provision of any successor statute, shares of VMware’s Class B common stock will no longer be convertible into shares of Class A common stock. Prior to any such distribution, all shares of Class B common stock will automatically be converted into shares of Class A common stock upon the transfer of such shares of Class B common stock by EMC other than to any of EMC’s successors or any of its subsidiaries (excluding VMware). If such a distribution has not occurred, each share of Class B common stock will also automatically convert at such time as the number of shares of common stock owned by EMC or its successor-in-interest falls below 20% of the outstanding shares of VMware’s common stock. Following any such distribution, VMware may submit to its stockholders a proposal to convert all outstanding shares of Class B common stock into shares of Class A common stock, provided that VMware has received a favorable private letter ruling from the Internal Revenue Service satisfactory to EMC to the effect that the conversion will not affect the intended tax treatment of the distribution. In a meeting of VMware stockholders called for this purpose, the holders of VMware Class A common stock and VMware Class B common stock will be entitled to one vote per share and, subject to applicable law, will vote together as a single class, and neither class of common stock will be entitled to a separate class vote. All conversions will be effected on a share-for-share basis. | ||||||||||||||
VMware Equity Plan | ||||||||||||||
In June 2007, VMware adopted its 2007 Equity and Incentive Plan (the “2007 Plan”). In May 2009, VMware amended its 2007 Plan to increase the number of shares available for issuance by 20 million shares for total shares available for issuance of 100 million. In May 2013, VMware further amended the 2007 Plan to increase the number of shares available for issuance by 13 million shares. The number of shares underlying outstanding equity awards that VMware assumes in the course of business acquisitions are also added to the 2007 Plan reserve on an as-converted basis. VMware has assumed 2 million shares, which accordingly have been added to the 2007 Plan reserve. | ||||||||||||||
Awards under the 2007 Plan may be in the form of stock options or other stock-based awards, including awards of restricted stock units. The exercise price for a stock option awarded under the 2007 Plan shall not be less than 100% of the fair market value of VMware Class A common stock on the date of grant. Most options granted under the 2007 Plan vest 25% after the first year and then monthly thereafter over the following three years and expire between six and seven years from the date of grant. Most restricted stock grants made under the 2007 Plan have a three-year to four-year period over which they vest. VMware’s Compensation and Corporate Governance Committee determines the vesting schedule for all equity awards. VMware utilizes both authorized and unissued shares to satisfy all shares issued under the 2007 Plan. At December 31, 2013, there were an aggregate of 11 million shares of common stock available for issuance pursuant to future grants under the 2007 Plan. | ||||||||||||||
VMware Stock Repurchases | ||||||||||||||
The following table summarizes stock repurchase authorizations in the years ended December 31, 2013, 2012 and 2011 (amounts in table in millions): | ||||||||||||||
Authorization Date | Amount Authorized | Expiration Date | Status | |||||||||||
Aug-13 | $700 | End of 2015 | Open | |||||||||||
Nov-12 | 250 | End of 2014 | Completed in Q4'13 | |||||||||||
Feb-12 | 600 | End of 2013 | Completed in Q2'13 | |||||||||||
Feb-11 | 550 | End of 2012 | Completed in Q2'12 | |||||||||||
Mar-10 | 400 | End of 2011 | Completed in Q1'11 | |||||||||||
From time to time, future stock repurchases may be made pursuant to the August 2013 authorizations in open market transactions or privately negotiated transactions as permitted by securities laws and other legal requirements. VMware is not obligated to purchase any shares under its stock repurchase programs. The timing of any repurchases and the actual number of shares repurchased will depend on a variety of factors, including VMware’s stock price, cash requirements for operations and business combinations, corporate and regulatory requirements and other market and economic conditions. Purchases can be discontinued at any time that VMware feels additional purchases are not warranted. All shares repurchased under VMware’s stock repurchase programs are retired. | ||||||||||||||
The following table summarizes stock repurchase activity in the years ended December 31, 2013, 2012 and 2011 (table in millions, except per share amounts): | ||||||||||||||
For the Year Ended December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Aggregate purchase price | $ | 508 | $ | 467 | $ | 526 | ||||||||
Class A common shares repurchased | 7 | 5 | 6 | |||||||||||
Weighted-average price per share | $ | 76.58 | $ | 91.1 | $ | 88.37 | ||||||||
The amount of repurchased shares includes commissions and was classified as a reduction to additional paid-in capital. As of December 31, 2013, the cumulative authorized amount remaining for repurchase was $660 million. | ||||||||||||||
VMware Employee Stock Purchase Plan | ||||||||||||||
In June 2007, VMware adopted its 2007 Employee Stock Purchase Plan (the “ESPP”), which is intended to be qualified under Section 423 of the Internal Revenue Code. In May 2013, VMware amended its ESPP to increase the number of shares available for issuance by 8 million shares. Under the ESPP, eligible VMware employees are granted options to purchase shares at the lower of 85% of the fair market value of the stock at the time of grant or 85% of the fair market value at the time of exercise. Options to purchase shares are generally granted twice yearly on February 1 and August 1 and exercisable on the succeeding July 31 and January 31, respectively, of each year. As of December 31, 2013, 7 million shares of VMware Class A common stock were available for issuance under the ESPP. | ||||||||||||||
The following table summarizes ESPP activity in the years ended December 31, 2013, 2012 and 2011 (table in millions, except per share amounts): | ||||||||||||||
For the Year Ended December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Cash proceeds | $ | 76 | $ | 69 | $ | 57 | ||||||||
Class A common shares purchased | 1 | 1 | 1 | |||||||||||
Weighted-average price per share | $ | 65.97 | $ | 77.34 | $ | 69.81 | ||||||||
As of December 31, 2013, $36 million of ESPP withholdings were recorded as a liability on the consolidated balance sheet for the next purchase that occurred during January 2014. | ||||||||||||||
VMware and EMC Stock Options | ||||||||||||||
Prior to the adoption of VMware’s 2007 Plan in June 2007, eligible VMware employees participated in EMC’s equity plans. In August 2007, VMware and EMC completed an exchange offer enabling eligible VMware employees to exchange their options to acquire EMC common stock for options to acquire VMware Class A common stock. VMware employees who did not elect to exchange their EMC options for options to purchase VMware Class A common stock continue to have their existing grants governed under EMC’s stock plans. Additionally, if an employee transferred from EMC to VMware had outstanding EMC options at the date of transfer, the employee typically retains their EMC award which also continues to be governed under the EMC stock plan. Similarly, if an employee transferred from VMware to EMC had outstanding VMware options at the date of transfer, the employee typically retains their VMware award which continues to be governed under the VMware stock plan. | ||||||||||||||
The following table summarizes option activity since January 1, 2011 for VMware and EMC stock options (shares in millions): | ||||||||||||||
VMware Stock Options | EMC Stock Options | |||||||||||||
Number of | Weighted- | Number of | Weighted- | |||||||||||
Shares | Average | Shares | Average | |||||||||||
Exercise Price | Exercise Price | |||||||||||||
(per share) | (per share) | |||||||||||||
Outstanding, January 1, 2011 | 27 | $ | 33.54 | 3 | $ | 13.93 | ||||||||
Options relating to employees transferred to/from EMC, net | — | — | 2 | 13.53 | ||||||||||
Forfeited | (1 | ) | 40.98 | — | — | |||||||||
Exercised | (10 | ) | 28.64 | (1 | ) | 13.58 | ||||||||
Outstanding, December 31, 2011 | 16 | 35.27 | 4 | 13.16 | ||||||||||
Granted | 1 | 4.67 | — | — | ||||||||||
Forfeited | (1 | ) | 42.07 | — | — | |||||||||
Exercised | (6 | ) | 30.44 | (1 | ) | 12.35 | ||||||||
Outstanding, December 31, 2012 | 10 | 34.36 | 3 | 15.12 | ||||||||||
Granted | 1 | 71.53 | — | — | ||||||||||
Exercised | (5 | ) | 28.12 | (1 | ) | 15.39 | ||||||||
Outstanding, December 31, 2013 | 6 | 44.12 | 2 | 15.53 | ||||||||||
Exercisable, December 31, 2013 | 4 | 36.45 | 1 | 15.12 | ||||||||||
Vested and expected to vest, December 31, 2013 | 6 | 42.84 | 2 | 15.51 | ||||||||||
The above table includes stock options granted in conjunction with unvested stock options assumed in business combinations. As a result, the weighted-average exercise price per share may vary from the VMware stock price at time of grant. | ||||||||||||||
As of December 31, 2013, for the VMware stock options, the weighted-average remaining contractual term was 1.8 years and the aggregate intrinsic value was $209 million for the 4 million exercisable shares. For the 6 million options vested and expected to vest at December 31, 2013, the weighted-average remaining contractual term was 3.2 years and the aggregate intrinsic value was $261 million. These aggregate intrinsic values represent the total pre-tax intrinsic values based on VMware’s closing stock price of $89.71 as of December 31, 2013, which would have been received by the option holders had all in-the-money options been exercised as of that date. | ||||||||||||||
As of December 31, 2013, for the EMC stock options, the weighted-average remaining contractual term was 4.3 years and the aggregate intrinsic value was $15 million for the 1 million exercisable shares. For the 2 million shares vested and expected to vest at December 31, 2013, the weighted-average remaining contractual term was 4.5 years and the aggregate intrinsic value was $16 million. These aggregate intrinsic values represent the total pre-tax intrinsic values based on EMC’s adjusted closing stock price of $25.05 as of December 31, 2013, which would have been received by the option holders had all in-the-money options been exercised as of that date. | ||||||||||||||
The options exercised in the years ended December 31, 2013, 2012 and 2011 had a pre-tax intrinsic value of $256 million, $443 million and $648 million, respectively. | ||||||||||||||
Cash proceeds from the exercise of EMC stock options paid to EMC were $11 million, $9 million and $12 million for the years ended December 31, 2013, 2012 and 2011, respectively. The pre-tax intrinsic value of EMC stock options held by VMware employees that were exercised during the years ended December 31, 2013, 2012 and 2011 were $8 million, $11 million and $12 million, respectively. | ||||||||||||||
VMware Restricted Stock | ||||||||||||||
VMware restricted stock primarily consists of restricted stock unit (“RSU”) awards granted to employees. RSUs are valued based on the VMware stock price on the date of grant, and shares underlying RSU awards are not issued until the restricted stock units vest. Upon vesting, each RSU converts into one share of VMware Class A common stock. | ||||||||||||||
VMware restricted stock also includes performance stock unit (“PSU”) awards, which have been granted to certain of VMware's executives and employees. The PSU awards include performance conditions, and certain awards also include a time-based vesting component. Upon vesting, each PSU award will convert into VMware’s Class A common stock at various ratios ranging from 0.5 to 3.0 shares per PSU, depending upon the degree of achievement of the performance target designated by each individual award. If minimum performance thresholds are not achieved, then no shares will be issued. | ||||||||||||||
The following table summarizes restricted stock activity since January 1, 2011 (units in millions): | ||||||||||||||
Number of Units | Weighted- | |||||||||||||
Average Grant | ||||||||||||||
Date Fair | ||||||||||||||
Value | ||||||||||||||
(per unit) | ||||||||||||||
Outstanding, January 1, 2011 | 10 | $ | 54.17 | |||||||||||
Granted | 5 | 91.51 | ||||||||||||
Vested | (4 | ) | 48.47 | |||||||||||
Forfeited | (1 | ) | 64.7 | |||||||||||
Outstanding, December 31, 2011 | 10 | 72.74 | ||||||||||||
Granted | 8 | 101.73 | ||||||||||||
Vested | (4 | ) | 69.01 | |||||||||||
Forfeited | (2 | ) | 81.53 | |||||||||||
Outstanding, December 31, 2012 | 12 | 91.93 | ||||||||||||
Granted | 7 | 76.2 | ||||||||||||
Vested | (4 | ) | 83.21 | |||||||||||
Forfeited | (2 | ) | 90.55 | |||||||||||
Outstanding, December 31, 2013 | 13 | 85.85 | ||||||||||||
As of December 31, 2013, the 13 million of units outstanding included 12 million of RSUs and 1 million of PSUs. | ||||||||||||||
The total fair value of VMware restricted stock, including restricted stock and restricted stock units, that vested in the years ended December 31, 2013, 2012 and 2011 was $340 million, $347 million and $356 million, respectively. As of December 31, 2013, restricted stock representing 13 million shares of VMware’s Class A common stock were outstanding, with an aggregate intrinsic value of $1,153 million based on VMware’s closing price as of December 31, 2013. | ||||||||||||||
VMware Shares Repurchased for Tax Withholdings | ||||||||||||||
In the years ended December 31, 2013, 2012 and 2011 VMware repurchased and retired or withheld 2 million, 2 million and 1 million shares, respectively, of Class A common stock, for $126 million, $136 million and $122 million, respectively, to cover tax withholding obligations. These amounts may differ from the amounts of cash remitted for tax withholding obligations on the consolidated statements of cash flows due to the timing of payments. Pursuant to the respective award agreements, these shares were repurchased or withheld in conjunction with the net share settlement upon the vesting of restricted stock and restricted stock units during the period. The value of the repurchased or withheld shares, including restricted stock units, was classified as a reduction to additional paid-in capital. | ||||||||||||||
Stock-Based Compensation | ||||||||||||||
The following table summarizes the components of total stock-based compensation included in VMware’s consolidated statements of income for the years ended December 31, 2013, 2012 and 2011 (table in millions): | ||||||||||||||
For the Year Ended December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Cost of license revenues | $ | 2 | $ | 2 | $ | 2 | ||||||||
Cost of services revenues | 29 | 28 | 23 | |||||||||||
Research and development | 227 | 210 | 174 | |||||||||||
Sales and marketing | 144 | 150 | 96 | |||||||||||
General and administrative | 56 | 48 | 40 | |||||||||||
Realignment | 6 | — | — | |||||||||||
Stock-based compensation | 464 | 438 | 335 | |||||||||||
Income tax benefit | (136 | ) | (132 | ) | (98 | ) | ||||||||
Total stock-based compensation, net of tax | $ | 328 | $ | 306 | $ | 237 | ||||||||
For the years ended December 31, 2013 and 2012, no costs were capitalized for the development of software products. For the year ended 2011, VMware capitalized $12 million of stock-based compensation associated with capitalized software development. | ||||||||||||||
From time to time, VMware issues equity awards that have a guaranteed amount of value and are classified as liability awards on VMware’s consolidated balance sheet. As of December 31, 2013, liability-classified awards with an aggregate guaranteed value of $22 million were outstanding. Upon vesting, these grants will be settled in shares based upon the stock price or a trailing average stock price on a date determined by the terms of each individual award. During the year ended December 31, 2013, $25 million of liability-classified awards were reclassified to additional paid-in capital upon vesting. | ||||||||||||||
As of December 31, 2013, the total unrecognized compensation cost for stock options and restricted stock was $823 million. This non-cash expense will be recognized through 2017 with a weighted-average remaining period of 1.5 years. Stock-based compensation related to both VMware and EMC equity awards held by VMware employees is recognized on VMware's consolidated statements of income over the awards' requisite service periods. | ||||||||||||||
Fair Value of VMware Options | ||||||||||||||
The fair value of each option to acquire VMware Class A common stock granted during the years ended December 31, 2013, 2012 and 2011 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 | 2013 | 2012 | 2011 | |||||||||||
Dividend yield | None | None | None | |||||||||||
Expected volatility | 38.5 | % | 35.8 | % | 37.7 | % | ||||||||
Risk-free interest rate | 0.9 | % | 0.3 | % | 1 | % | ||||||||
Expected term (in years) | 3.6 | 2.7 | 3 | |||||||||||
Weighted-average fair value at grant date | $ | 29.47 | $ | 80.45 | $ | 88.4 | ||||||||
For the Year Ended December 31, | ||||||||||||||
VMware Employee Stock Purchase Plan | 2013 | 2012 | 2011 | |||||||||||
Dividend yield | None | None | None | |||||||||||
Expected volatility | 32.9 | % | 37.8 | % | 34.9 | % | ||||||||
Risk-free interest rate | 0.1 | % | 0.1 | % | 0.2 | % | ||||||||
Expected term (in years) | 0.5 | 0.5 | 0.5 | |||||||||||
Weighted-average fair value at grant date | $ | 20.45 | $ | 23.36 | $ | 23.69 | ||||||||
The weighted-average grant date fair value of VMware stock options can fluctuate from period to period primarily due to higher valued options assumed through business combinations with exercise prices lower than the fair market value of VMware's stock on the date of grant. | ||||||||||||||
For equity awards granted in the years ended December 31, 2013, 2012 and 2011, volatility was based on an analysis of historical stock prices and implied volatilities of VMware’s Class A common stock or those of publicly-traded companies with similar characteristics, as applicable. The expected term was calculated based upon an analysis of the expected term of similar grants of comparable publicly-traded companies, VMware's Class A common stock, the term of the purchase period for grants made under the ESPP, or the weighted-average remaining term for options assumed in acquisitions. VMware’s expected dividend yield input was zero as it has not historically paid, nor expects in the future to pay, cash dividends on its common stock. The risk-free interest rate was based on a U.S. Treasury instrument whose term is consistent with the expected term of the stock options. | ||||||||||||||
Accumulated Other Comprehensive Income | ||||||||||||||
The changes in components of accumulated other comprehensive income in the year ended December 31, 2013 were as follows (table in millions): | ||||||||||||||
Unrealized Gains on | Total | |||||||||||||
Available-for-Sale Securities | ||||||||||||||
Balance, January 1, 2013 | $ | 6 | $ | 6 | ||||||||||
Amounts reclassified from accumulated other comprehensive income to the consolidated statement of income, net of taxes of $(1) | (2 | ) | (2 | ) | ||||||||||
Other comprehensive loss, net | (2 | ) | (2 | ) | ||||||||||
Balance, December 31, 2013 | $ | 4 | $ | 4 | ||||||||||
Gains (losses) on VMware’s available-for-sale securities are reclassified to investment income on the consolidated statement of income in the same period that they are realized. | ||||||||||||||
The effective portion of gains (losses) resulting from changes in the fair value of forward contracts designated as cash flow hedging instruments are reclassified to its related operating expense line item on the consolidated statement of income in the same period that the underlying expenses are incurred. The amounts recorded to their related operating expense line items on the consolidated statements of income in the year ended December 31, 2013 were not material. |
Related_Parties
Related Parties | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Related Party Transactions [Abstract] | ' | |||||||||||||||||||
Related Parties | ' | |||||||||||||||||||
Related Parties | ||||||||||||||||||||
EMC Reseller Arrangement, Other Services and Note Payable | ||||||||||||||||||||
VMware and EMC engaged in the following ongoing intercompany transactions, which resulted in revenues and receipts and unearned revenues for VMware: | ||||||||||||||||||||
• | Pursuant to an ongoing reseller arrangement with EMC, EMC bundles VMware's products and services with EMC's products and sells them to end-users. | |||||||||||||||||||
• | EMC purchases products and services from VMware for internal use. | |||||||||||||||||||
• | VMware recognizes revenues for professional services based upon such contractual agreements with EMC. | |||||||||||||||||||
• | From time to time, VMware and EMC enter into agreements to collaborate on technology projects, and EMC pays VMware for services that VMware provides to EMC in connection with such projects. | |||||||||||||||||||
Information about VMware's revenues and receipts and unearned revenues from such arrangements with EMC for the years ended December 31, 2013, 2012 and 2011 consisted of the following (table in millions): | ||||||||||||||||||||
Revenues and Receipts from EMC | Unearned Revenues from EMC | |||||||||||||||||||
For the Year Ended December 31, | As of December 31, | |||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | ||||||||||||||||
Reseller revenues | $ | 141 | $ | 141 | $ | 72 | $ | 188 | $ | 149 | ||||||||||
Professional services revenues | 72 | 82 | 66 | 12 | 3 | |||||||||||||||
Internal-use revenues | 32 | 9 | 3 | 20 | 28 | |||||||||||||||
Collaborative technology project receipts | 7 | 7 | 2 | n/a | n/a | |||||||||||||||
VMware and EMC engaged in the following ongoing intercompany transactions, which resulted in costs to VMware: | ||||||||||||||||||||
• | VMware and EMC have ongoing arrangements pursuant to which VMware purchases products and services for internal use from EMC. | |||||||||||||||||||
• | From time to time, VMware and EMC enter into agreements to collaborate on technology projects, and VMware pays EMC for services provided to VMware by EMC related to such projects. | |||||||||||||||||||
• | In certain geographic regions where VMware does not have an established legal entity, VMware contracts with EMC subsidiaries for support services and EMC personnel who are managed by VMware. The costs incurred by EMC on VMware's behalf related to these employees are passed on to VMware and VMware is charged a mark-up intended to approximate costs that would have been charged had VMware contracted for such services with an unrelated third party. These costs are included as expenses in VMware's consolidated statements of income and primarily include salaries, benefits, travel and rent. EMC also incurs certain administrative costs on VMware's behalf in the U.S. that are recorded as expenses in VMware's consolidated statements of income. | |||||||||||||||||||
• | VMware incurs interest expense on its note payable with EMC. See Note K and R to the consolidated financial statements for further information. | |||||||||||||||||||
Information about VMware's costs from such arrangements with EMC for the years ended December 31, 2013, 2012 and 2011 consisted of the following (table in millions): | ||||||||||||||||||||
For the Year Ended December 31, | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Purchases of products and services | $ | 56 | $ | 42 | $ | 24 | ||||||||||||||
Collaborative technology project costs | 13 | n/a | n/a | |||||||||||||||||
EMC subsidiary support and administrative costs | 128 | 106 | 83 | |||||||||||||||||
Interest expense on note payable | 4 | 5 | 4 | |||||||||||||||||
In the fourth quarter of 2013, VMware and EMC modified an existing technology licensing arrangement. Pursuant to the modified arrangement, VMware received certain rights to developed technology for a lump-sum payment of $26 million, which was included in amounts due to related parties, net on the consolidated balance sheets as of December 31, 2013. The license of technology was accounted for as a transaction by entities under common control. Accordingly, an intangible asset of $2 million was recognized and was derived by allocating the value ascribed to the licensed technology based upon the relative fair market values of the technology to each party. The difference between the asset recorded and the consideration due was primarily recognized as a reduction in capital from EMC on the statement of stockholders' equity. In addition to the license of the technology, VMware will pay EMC for support and for development collaboration. These amounts are included in collaborative technology project costs in the table above. | ||||||||||||||||||||
Certain Stock-Based Compensation | ||||||||||||||||||||
Effective September 1, 2012, Pat Gelsinger succeeded Paul Maritz as Chief Executive Officer of VMware. Prior to joining VMware, Pat Gelsinger was the President and Chief Operating Officer of EMC Information Infrastructure Products. Paul Maritz remains a board member of VMware and currently serves as Chief Executive Officer of Pivotal, a majority-owned subsidiary of EMC in which VMware has an ownership interest. Both Paul Maritz and Pat Gelsinger retain and continue to vest in certain of their respective equity awards that they held as of September 1, 2012. Stock-based compensation related to Pat Gelsinger’s EMC awards will be recognized on VMware’s consolidated statements of income over the awards’ remaining requisite service periods. Effective September 1, 2012, stock-based compensation related to Paul Maritz’s VMware awards will not be recognized by VMware. | ||||||||||||||||||||
Mozy | ||||||||||||||||||||
In 2011, VMware acquired certain assets relating to EMC’s Mozy cloud-based data storage and data center services, including certain data center assets and a license to certain intellectual property. EMC retained ownership of the Mozy business and its remaining assets and continued to be responsible to Mozy customers for Mozy products and services and to recognize revenue from such products and services. VMware entered into an operational support agreement with EMC through the end of 2012, pursuant to which VMware took over responsibility to operate the Mozy service on behalf of EMC. Pursuant to the support agreement, costs incurred by VMware to support EMC’s Mozy services, plus a mark-up intended to approximate third-party costs and a management fee, were reimbursed to VMware by EMC. In the fourth quarter of 2012, the operational support agreement between VMware and EMC was amended such that VMware would no longer operate the Mozy service on behalf of EMC. Under the amendment, VMware transferred substantially all employees that support Mozy services to EMC and EMC purchased certain assets from VMware in relation to transferred employees. The termination of service and related transfer of employees and sale of assets was substantially completed during the first quarter of 2013. Amounts reimbursed by EMC to VMware to operate Mozy were immaterial in the year ended December 31, 2013, and $65 million and $39 million in the years ended December 31, 2012 and 2011, respectively. These amounts were recorded as a reduction to the costs VMware incurred. | ||||||||||||||||||||
Joint Contribution of Assets with EMC to Pivotal | ||||||||||||||||||||
During 2013, VMware transferred certain assets and liabilities to Pivotal. VMware contributed certain assets, including intellectual property, to Pivotal, and Pivotal assumed substantially all liabilities, related to certain of its Cloud Application Platform products and services, including VMware’s Cloud Foundry, VMware vFabric (including Spring and GemFire) and Cetas organizations, except for certain tangible assets related to Cloud Foundry. During the year ended December 31, 2013, VMware transferred approximately 415 VMware employees to Pivotal. | ||||||||||||||||||||
VMware received preferred equity interests in Pivotal equal to approximately 31% of Pivotal’s outstanding shares in exchange for its contributions. Additionally, VMware and Pivotal entered into an agreement pursuant to which VMware will act as the selling agent for the products and services it contributed to Pivotal in exchange for a customary agency fee. In the year ended December 31, 2013, VMware recognized revenues of $5 million from its contractual arrangement with Pivotal. VMware also agreed to provide various transition services to Pivotal. Pursuant to the support agreement, costs incurred by VMware to support Pivotal services are reimbursed to VMware by Pivotal. During the year ended December 31, 2013, VMware provided transition services of $12 million that are reimbursable by Pivotal and which were recorded as a reduction to the costs VMware incurred. Additionally, VMware purchased products and services for internal use from Pivotal for $7 million in the year ended December 31, 2013. | ||||||||||||||||||||
The book value of all contributed assets and the liabilities assumed by Pivotal, with the exception of intangible assets and goodwill, was based on the book values of those assets and liabilities specific to those particular products and services. For intangible assets and goodwill, the book value contributed was based on the relative fair value of the contributed assets applicable to Pivotal. | ||||||||||||||||||||
The following table summarizes the assets VMware contributed to Pivotal and the liabilities Pivotal assumed from VMware (table in millions): | ||||||||||||||||||||
Accounts receivable | $ | 4 | ||||||||||||||||||
Property and equipment, net | 1 | |||||||||||||||||||
Intangible assets | 28 | |||||||||||||||||||
Goodwill | 28 | |||||||||||||||||||
Total assets | 61 | |||||||||||||||||||
Accounts payable, accrued liabilities and other, net | (7 | ) | ||||||||||||||||||
Unearned revenues | (71 | ) | ||||||||||||||||||
Total liabilities | (78 | ) | ||||||||||||||||||
Total liabilities, net assumed by Pivotal | $ | (17 | ) | |||||||||||||||||
Of the $71 million in unearned revenues assumed by Pivotal on April 1, 2013, $32 million related to unearned license revenues and $39 million related to unearned services revenues. | ||||||||||||||||||||
VMware's ownership interest in Pivotal is 28% as of December 31, 2013 as a result of investments made by a third-party strategic investor. As Pivotal assumed a net liability from VMware, the investment carried by VMware has a cost basis of zero. Thus the net liability assumed by Pivotal of $17 million as of December 31, 2013 was classified to additional paid-in capital on VMware’s consolidated balance sheet. | ||||||||||||||||||||
Due To/From Related Parties, Net | ||||||||||||||||||||
As a result of the related-party transactions with EMC and Pivotal described above, amounts due to and from related parties, net as of December 31, 2013 and 2012 consisted of the following (table in millions): | ||||||||||||||||||||
As of December 31, | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Due to EMC | $ | (92 | ) | $ | (44 | ) | ||||||||||||||
Due from EMC | 93 | 112 | ||||||||||||||||||
Due to Pivotal | (22 | ) | n/a | |||||||||||||||||
Due from Pivotal | 3 | n/a | ||||||||||||||||||
Due from (to) related parties, net | $ | (18 | ) | $ | 68 | |||||||||||||||
Income tax payable due to EMC | $ | (22 | ) | $ | (32 | ) | ||||||||||||||
Balances due to or from related parties, which are unrelated to tax obligations, are generally settled in cash within 60 days of each quarter-end. The timing of the tax payments due to and from EMC is governed by the tax sharing agreement with EMC. See Note L to the consolidated financial statements for further information. |
Segment_Information
Segment Information | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||
Segment Information | ' | |||||||||||
Segment Information | ||||||||||||
VMware operates in one reportable operating segment, thus all required financial segment information can be found in the consolidated financial statements. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assessing performance. VMware’s chief operating decision maker allocates resources and assesses performance based upon discrete financial information at the consolidated level. | ||||||||||||
Revenues by geographic area for the years ended December 31, 2013, 2012 and 2011 were as follows (table in millions): | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
United States | $ | 2,485 | $ | 2,229 | $ | 1,824 | ||||||
International | 2,722 | 2,376 | 1,943 | |||||||||
Total | $ | 5,207 | $ | 4,605 | $ | 3,767 | ||||||
It is not practicable for VMware to determine revenues by country other than the United States for the years ended December 31, 2013, 2012 and 2011. | ||||||||||||
One customer accounted for 15% of revenues in each of the years ended December 31, 2013, 2012 and 2011, respectively, and another customer accounted for 12%, 12% and 11% of revenues in the years ended December 31, 2013, 2012 and 2011, respectively. A third customer accounted for 11% and 10% of revenues in the years ended December 31, 2013 and 2011, respectively. | ||||||||||||
Long-lived assets by geographic area, which primarily include property and equipment, net, as of December 31, 2013 and 2012 were as follows (table in millions): | ||||||||||||
December 31, | ||||||||||||
2013 | 2012 | |||||||||||
United States | $ | 741 | $ | 563 | ||||||||
International | 58 | 51 | ||||||||||
Total | $ | 799 | $ | 614 | ||||||||
No individual country other than the United States accounted for 10% or more of these assets as of December 31, 2013 and 2012, respectively. | ||||||||||||
VMware's product and service solutions are organized into three main product groups: | ||||||||||||
• | SDDC | |||||||||||
• | End-User Computing | |||||||||||
• | Hybrid Cloud Computing | |||||||||||
VMware develops and markets product and service offerings within each of these three product groups. Additionally, synergies are leveraged across these three product areas. VMWare's products and service solutions from each of its product groups may also be bundled as part of an ELA arrangement. Accordingly, it is not practicable to determine revenue by each of the three product groups described above, however, the majority of revenues during fiscal 2013, 2012, and 2011 were derived from the SDDC product group. |
Selected_Quarterly_Financial_D
Selected Quarterly Financial Data (unaudited) | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | |||||||||||||||
Selected Quarterly Financial Data (unaudited) | ' | |||||||||||||||
Selected Quarterly Financial Data (unaudited) | ||||||||||||||||
Quarterly financial data for 2013 and 2012 were as follows (tables in millions, except per share amounts): | ||||||||||||||||
2013 | Q1 2013 | Q2 2013 | Q3 2013 | Q4 2013 | ||||||||||||
Revenues | $ | 1,191 | $ | 1,243 | $ | 1,289 | $ | 1,483 | ||||||||
Net income | 174 | 244 | 261 | 335 | ||||||||||||
Net income per share, basic | $ | 0.41 | $ | 0.57 | $ | 0.61 | $ | 0.78 | ||||||||
Net income per share, diluted | $ | 0.4 | $ | 0.57 | $ | 0.6 | $ | 0.77 | ||||||||
2012 | Q1 2012 | Q2 2012 | Q3 2012 | Q4 2012 | ||||||||||||
Revenues | $ | 1,055 | $ | 1,123 | $ | 1,134 | $ | 1,293 | ||||||||
Net income | 191 | 192 | 157 | 206 | ||||||||||||
Net income per share, basic | $ | 0.45 | $ | 0.45 | $ | 0.37 | $ | 0.48 | ||||||||
Net income per share, diluted | $ | 0.44 | $ | 0.44 | $ | 0.36 | $ | 0.47 | ||||||||
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Subsequent Events | |
On February 24, 2014, VMware acquired A.W.S. Holding, LLC (“AirWatch Holding”), the sole member and equity holder of AirWatch LLC (“AirWatch”). AirWatch is a leader in enterprise mobile management and security solutions. This acquisition expands VMware's portfolio of mobile solutions. | |
The estimated consideration includes approximately $1,181 million in cash and approximately $364 million of installment payments and assumed unvested equity. The acquisition was funded through a combination of balance sheet cash and proceeds from $1,050 million of additional debt provided by EMC. | |
EMC Promissory Notes | |
On January 21, 2014, in connection with VMware's acquisition of AirWatch, VMware and EMC entered into a note exchange agreement providing for the issuance of three promissory notes in the aggregate principal amount of $1,500 million. This amount includes, $450 million that was exchanged for the $450 million promissory note issued to EMC in April 2007, as amended and restated in June 2011. | |
The three notes issued may be repaid without penalty or premium, and outstanding principal is due on the following dates: $680 million due May 1, 2018, $550 million due May 1, 2020 and $270 million due December 1, 2022. The notes bear interest, payable quarterly in arrears, at the annual rate of 1.75%. |
Schedule_II_Valuation_and_Qual
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Valuation and Qualifying Accounts [Abstract] | ' | ||||||||||||||||||||
Valuation and Qualifying Accounts | ' | ||||||||||||||||||||
VMWARE, INC. | |||||||||||||||||||||
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS | |||||||||||||||||||||
(in millions) | |||||||||||||||||||||
Allowance for Bad Debts | Balance at | Allowance for Bad | Charged to | Bad Debts | Balance at | ||||||||||||||||
Beginning | Debts Charged to | Other Accounts | Write-Offs | End of | |||||||||||||||||
of Period | General | Period | |||||||||||||||||||
and Administrative | |||||||||||||||||||||
Expenses | |||||||||||||||||||||
Year ended December 31, 2013 allowance for doubtful accounts | $ | 4 | $ | (2 | ) | $ | — | $ | — | $ | 2 | ||||||||||
Year ended December 31, 2012 allowance for doubtful accounts | 4 | 1 | — | (1 | ) | 4 | |||||||||||||||
Year ended December 31, 2011 allowance for doubtful accounts | 5 | (1 | ) | — | — | 4 | |||||||||||||||
Tax Valuation Allowance | Balance at | Tax Valuation | Charged to | Tax | Balance | ||||||||||||||||
Beginning | Allowance | Other Accounts | Valuation | at End of | |||||||||||||||||
of Period | Charged to Income | Allowance | Period | ||||||||||||||||||
Tax Provision | Credited to | ||||||||||||||||||||
Income Tax | |||||||||||||||||||||
Provision | |||||||||||||||||||||
Year ended December 31, 2013 | $ | 64 | $ | 32 | $ | — | $ | (2 | ) | $ | 94 | ||||||||||
income tax valuation allowance | |||||||||||||||||||||
Year ended December 31, 2012 | 57 | 7 | — | — | 64 | ||||||||||||||||
income tax valuation allowance | |||||||||||||||||||||
Year ended December 31, 2011 | 36 | 23 | — | (2 | ) | 57 | |||||||||||||||
income tax valuation allowance |
Overview_and_Basis_of_Presenta1
Overview and Basis of Presentation (Policies) | 12 Months Ended | ||
Dec. 31, 2013 | |||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||
Basis of Presentation | ' | ||
Basis of Presentation | |||
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for annual financial reporting. | |||
VMware was incorporated as a Delaware corporation in 1998, was acquired by EMC Corporation (“EMC”) in 2004 and conducted its initial public offering of VMware’s Class A common stock in August 2007. As of December 31, 2013, EMC held approximately 79.7% of VMware’s outstanding common stock and 97.2% of the combined voting power of VMware’s outstanding common stock, including 43 million shares of VMware’s Class A common stock and all of VMware’s Class B common stock. VMware is a majority-owned and controlled subsidiary of EMC, and its results of operations and financial position are consolidated with EMC’s financial statements. | |||
Management believes the assumptions underlying the consolidated financial statements are reasonable. However, the amounts recorded for VMware’s intercompany transactions with EMC and Pivotal Software, Inc. (“Pivotal”, previously known as “GoPivotal, Inc.”) may not be considered arm’s length with an unrelated third party. Therefore, the financial statements included herein may not necessarily reflect the financial position, results of operations and cash flows had VMware engaged in such transactions with an unrelated third party during all periods presented. Accordingly, VMware’s historical financial information is not necessarily indicative of what the Company’s financial position, results of operations and cash flows will be in the future if and when VMware contracts at arm’s length with unrelated third parties for the services the Company receives from and provides to EMC and Pivotal. | |||
Principles of Consolidation | ' | ||
Principles of Consolidation | |||
The consolidated financial statements include the accounts of VMware and its subsidiaries after elimination of intercompany transactions and account balances between VMware and its subsidiaries. All intercompany transactions with EMC and Pivotal in the consolidated statements of cash flows will be settled in cash, and changes in the current intercompany balances are presented as a component of cash flows from operating activities. | |||
Use of Accounting Estimates | ' | ||
Use of Accounting Estimates | |||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenues and expenses during the reporting periods, and the disclosure of contingent liabilities at the date of the financial statements. Estimates are used for, but not limited to trade receivable valuation, marketing rebates, useful lives assigned to fixed assets and intangible assets, valuation of goodwill and definite-lived intangibles, income taxes, stock-based compensation and contingencies. Actual results could differ from those estimates. | |||
Revenue Recognition | ' | ||
Revenue Recognition | |||
VMware derives revenues primarily from licensing software under perpetual license, related software maintenance and from training, technical support and consulting services. VMware recognizes revenues when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collectibility is probable. | |||
License Revenues | |||
VMware licenses most of its software through its channel of distributors, resellers, system vendors, systems integrators and through its direct sales force. VMware recognizes revenues from the sale of its software licenses upon shipment provided all other revenue recognition criteria have been met. When perpetual software license arrangement is offered with new products that become available on a when and if available basis, revenue associated with these arrangements are recognized ratably over the subscription period. | |||
For software sold by system vendors that is bundled with their hardware, unless the Company has a separate license agreement which governs the transaction, revenue is recognized in arrears upon the receipt of royalty reports. | |||
VMware’s return policy only allows product returns for a refund in very limited circumstances. VMware estimates future product returns at the time of sale based on historical return rates. Returns have not been material to date. | |||
Rebates | |||
Rebates are offered to certain channel partners. When rebates are based on a set percentage of actual sales, rebates are recognized as a reduction of revenues as the underlying revenue is recognized. When rebates are earned upon achievement of a cumulative level of sales, rebates are recognized as a reduction of revenues proportionally for each sale that is required to achieve the target. | |||
Marketing development funds are also offered to certain channel partners. The obligation for marketing development funds is based upon the maximum potential liability and is also recognized as a reduction of revenues concurrent with the recognition of the underlying revenue. The difference between the maximum potential liability recognized and the actual amount paid out has not been material to date. | |||
Services Revenues | |||
Services revenues generally consist of software maintenance, training, technical support, and consulting services. Software maintenance and technical support offerings entitle customers to receive major and minor product upgrades on a when and if available basis and technical support. Revenues relating to software maintenance and technical support offerings are generally recognized ratably over the contract period, which typically ranges from one to five years. | |||
Professional services include design, implementation and training. Professional services are not considered essential to the functionality of VMware’s products as these services do not alter the product capabilities and may be performed by customers or other vendors. Revenues for professional services engagements performed for a fixed fee, for which VMware is able to make reasonably dependable estimates of progress toward completion, are recognized on a proportional performance basis. Revenue for professional services engagements billed on a time and materials basis are recognized as the hours are incurred. Revenues on all other professional services engagements are recognized upon completion. | |||
Multiple-Element Arrangements | |||
VMware enters into software-related multiple element revenue arrangements in which a customer may purchase a combination of software, maintenance and technical support, training, and consulting services. If a product or service included in a software-related multiple element arrangements has not been delivered, and is not considered essential to the functionality of the delivered products or services, fair value of each undelivered product and/or service using vendor-specific objective evidence (“VSOE”) must be determined. VSOE is used to allocate a portion of the price to the undelivered products and/or services and the residual method is used to allocate the remaining portion to the delivered products and services. Absent VSOE, revenue is deferred until the earlier of the point at which VSOE of fair value exists for any undelivered products or services, or until all elements of the arrangement have been delivered. However, if the only undelivered element is software maintenance and technical support, the entire arrangement fee is recognized ratably over the performance period. Changes in assumptions or judgments or changes to the elements in a software arrangement could cause a material increase or decrease in the amount of revenue that VMware reports in a particular period. | |||
VSOE of fair value for an undelivered element is based on historical stand-alone sales to third parties. In determining VSOE of fair value, VMware requires that the selling prices for a product or service fall within a reasonable pricing range. VMware established VSOE for its software maintenance and technical support services, consulting services and training. | |||
In the event VMware publicly announce specific features or functionalities, entitlements or the release number of an upgrade that has not been made available, and customers will receive that upgrade as part of a current software maintenance contract, a specified upgrade is deemed created. As a result of the specified upgrade, revenues are deferred on purchases made after the announcement date until delivery of the upgrade for those purchases that include the current version of the product subject to the announcement. | |||
Multiple element arrangements may be bundled with a commitment to deliver a product that has not yet been made available. Revenue specific to these arrangements is deferred until all product obligations have been fulfilled. In addition, revenue specific to arrangements that include subscription software products and professional services are deferred until the professional service obligations have been fulfilled. | |||
For multiple-element arrangements that contain software and non-software elements such as VMware's software as a service subscription offerings, VMware allocates revenue to software or software-related elements as a group and any non-software elements separately based on the selling price hierarchy. The relative selling price for each deliverable is determined using VSOE of selling price, if it exists, or third-party evidence (“TPE”) of selling price. If neither VSOE nor TPE of selling price exist for a deliverable, VMware's best estimate of selling price (“BESP”) is used for that deliverable. Once value is allocated to software or software-related elements as a group, revenue is then recognized when the relevant revenue recognition criteria are met. | |||
The objective of BESP is to determine the price at which VMware would transact a sale if the product or service were sold on a stand-alone basis. VMware determines BESP by considering its overall pricing objectives and market conditions. At this time, VMware uses BESP to determine the relative selling price of its license elements and software as a service elements based upon rates charged in both multi-element and stand-alone arrangements. | |||
Unearned revenues substantially consist of payments received in advance of revenue recognition for products and services described above. See Note J for further information. | |||
Foreign Currency Translation | ' | ||
Foreign Currency Translation | |||
The U.S. Dollar is the functional currency of VMware’s foreign subsidiaries. Gains and losses from foreign currency transactions are included in other income (expense), net and were not material on a net basis in any period presented. | |||
Cash and Cash Equivalents and Short-Term Investments | ' | ||
Cash and Cash Equivalents, Short-Term Investments, and Restricted Cash | |||
VMware invests primarily in money market funds, highly liquid debt instruments of the U.S. government and its agencies, U.S. municipal obligations, and U.S. and foreign corporate debt securities. All highly liquid investments with maturities of 90 days or less from date of purchase are classified as cash equivalents and all highly liquid investments with maturities of greater than 90 days from date of purchase as short-term investments. Short-term investments are classified as available-for-sale. VMware may sell these securities at any time for use in current operations or for other purposes, such as consideration for acquisitions and strategic investments. Consequently, VMware may or may not hold securities with stated maturities greater than twelve months until maturity. | |||
VMware carries its fixed income investments, as well as its equity investments in public companies that have readily determinable fair values, at fair value and unrealized gains and losses on these investments, net of taxes, are included in accumulated other comprehensive income, a component of stockholders’ equity. Realized gains or losses are included in the consolidated statements of income. Gains and losses on the sale of fixed income securities issued by the same issuer and of the same type are determined using the first-in first-out (“FIFO”) method. When a determination has been made that an other-than-temporary decline in fair value has occurred, the amount of the decline that is related to a credit loss is realized and is included in the consolidated statements of income. | |||
Cash balances that are restricted pursuant to the terms of various agreements are classified as restricted cash and included in other current and other long-term assets in the accompanying consolidated balance sheets. The amount of restricted cash was not material in any period presented. | |||
Allowance for Doubtful Accounts | ' | ||
Allowance for Doubtful Accounts | |||
VMware maintains an allowance for doubtful accounts for estimated losses on uncollectible accounts receivable. The allowance for doubtful accounts considers such factors as creditworthiness of VMware’s customers, historical experience, the age of the receivable and current market and economic conditions. | |||
Property and Equipment, Net | ' | ||
Property and Equipment, Net | |||
Property and equipment, net are recorded at cost. Depreciation commences upon placing the asset in service and is recognized on a straight-line basis over the estimated useful lives of the assets, as follows: | |||
Buildings | Term of underlying land lease | ||
Land improvements | 15 years | ||
Furniture and fixtures | 5 years | ||
Equipment and software | 2 years up to 5 years | ||
Leasehold improvements | Lease term, not to exceed 20 years | ||
Upon retirement or disposition, the asset cost and related accumulated depreciation are removed with any gain or loss recognized in the consolidated statements of income. Repair and maintenance costs that do not extend the economic life of the underlying assets are expensed as incurred. | |||
Internal-Use Software Development Costs | ' | ||
Internal-Use Software Development Costs | |||
Costs associated with internal-use software systems during the application development stage are capitalized. Capitalization of costs begins when the preliminary project stage is completed, management has committed to funding the project, and it is probable that the project will be completed and the software will be used to perform the function intended. Capitalization ceases at the point in which the project is substantially complete and is ready for its intended purpose. The capitalized amounts are included in property and equipment, net on the consolidated balance sheets. | |||
Research and Development and Capitalized Software Costs | ' | ||
Research and Development and Capitalized Software Development Costs | |||
Development costs of software to be sold, leased, or otherwise marketed are subject to capitalization beginning when the product has established technological feasibility has been established and ending when the product is available for general release. | |||
Following the release of vSphere 5 and the comprehensive suite of cloud infrastructure technologies during the third quarter of 2011, management determined that VMware’s go-to-market strategy had changed from single solutions to product suite solutions. As a result of this change in strategy, the related increased importance of interoperability between VMware’s products, the length of time between achieving technological feasibility and general release to customers significantly decreased. During the years ended December 31, 2013 and 2012, software development costs incurred for products during the time period between reaching technological feasibility and general release were not material. Accordingly, software development costs incurred during the years ended December 31, 2013 and 2012 were expensed as incurred. | |||
As of December 31, 2013, all previously capitalized software development costs had been fully amortized. Unamortized software development costs as of December 31, 2012 were $34 million and were included in other assets, net on the consolidated balance sheets. | |||
For the year ended December 31, 2011, VMware capitalized $86 million (including $12 million of stock-based compensation) of costs incurred for the development of software products. Amortization expense from capitalized amounts was $34 million, $71 million and $85 million for the years ended December 31, 2013, 2012 and 2011, respectively. Amortization expense is included in cost of license revenues on the consolidated statements of income. | |||
Business Combinations | ' | ||
Business Combinations | |||
For business combinations, VMware recognizes the identifiable assets acquired, the liabilities assumed, and any non-controlling interests in an acquiree, which are measured based on the acquisition date fair value. Goodwill is measured as the excess of consideration transferred over the net amounts of the identifiable tangible and intangible assets acquired and the liabilities assumed at the acquisition date. | |||
VMware uses significant estimates and assumptions, including fair value estimates, to determine the fair value of assets acquired and liabilities assumed and the related useful lives of the acquired assets, when applicable, as of the business combination date. When those estimates are provisional, VMware refines them as necessary during the measurement period. The measurement period is the period after the acquisition date, not to exceed one year, in which VMware may gather new information about facts and circumstances that existed as of the acquisition date to adjust the provisional amounts recognized. Measurement period adjustments are applied retrospectively, if material. All other adjustments are recorded to the consolidated statements of income. | |||
Businesses acquired from EMC are accounted for as a business combination between entities under common control. VMware includes the results of operations of the acquired businesses under common control, if material, in the period of acquisition as if it had occurred at the beginning of the period and also retrospectively adjusts the financial statement information presented for prior years to reflect the business as if it had been acquired at the beginning of the financial period presented. VMware recognizes the net assets under common control at EMC's carrying values as of the date of the transfer and records the difference between the carrying value and the cash consideration as an equity transaction. | |||
Costs to effect an acquisition are recorded in general and administrative expenses on the consolidated statements of income as the expenses are incurred. | |||
Purchased Intangible Assets and Goodwill | ' | ||
Purchased Intangible Assets and Goodwill | |||
Goodwill is evaluated for impairment during the fourth quarter of each year or more frequently if events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. VMware elected to perform a quantitative assessment of goodwill with respect to its one reporting unit. In doing so, VMware compared the enterprise fair value to the carrying amount of the reporting unit, including goodwill. VMware concluded that to date there have been no impairments of goodwill. | |||
Purchased intangible assets with finite lives are amortized over their estimated useful lives. During the years ended December 31, 2013, 2012 and 2011, amortization expense was $103 million, $92 million and $65 million, respectively. VMware reviews intangible assets for impairment whenever events or changes in business circumstances indicate that the carrying amounts of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. | |||
Derivative Instruments | ' | ||
Derivative Instruments | |||
Derivative instruments and hedging activities are measured at fair value and reported as current assets and current liabilities on the consolidated balance sheets, as applicable. | |||
In order to manage VMware’s exposure to foreign currency fluctuations, VMware enters into foreign currency contracts to hedge a portion of VMware’s net outstanding monetary asset and liability positions. These foreign currency forward contracts are generally traded on a monthly basis, with a typical contractual term of 1 month. These forward contracts are not designated as hedging instruments under applicable accounting guidance and therefore are adjusted to fair value through other income (expense), net in the consolidated statements of income. | |||
Starting in the fourth quarter of 2011, VMware entered into forward contracts which it designated as cash flow hedges to manage the volatility of cash flows that relate to operating expenses denominated in certain foreign currencies. The cash flow hedges are generally traded semi-annually, have maturities of 6 months or less and are adjusted to fair value through accumulated other comprehensive income, net of tax, on the consolidated balance sheets. When the underlying expense transaction occurs, the gains or losses on the forward contract are subsequently reclassified from accumulated other comprehensive income to the related operating expense line item in the consolidated statements of income. | |||
The Company does not enter into speculative foreign exchange contracts for trading purposes. See Note G to the consolidated financial statements for further information. | |||
Advertising | ' | ||
Advertising | |||
Advertising costs are expensed as incurred. | |||
Income Taxes | ' | ||
Income Taxes | |||
Income taxes as presented herein are calculated on a separate tax return basis, although VMware is included in the consolidated tax return of EMC. However, certain transactions that VMware and EMC are parties to, are assessed using consolidated tax return rules. Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their reported amounts using enacted tax rates in effect for the year in which the differences are expected to reverse. Tax credits are generally recognized as reductions of income tax provisions in the year in which the credits arise. The measurement of deferred tax assets is reduced by a valuation allowance if, based upon available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. | |||
VMware does not provide for a U.S. income tax liability on undistributed earnings of VMware’s foreign subsidiaries. The earnings of non-U.S. subsidiaries, which reflect full provision for non-U.S. income taxes, are currently indefinitely reinvested in non-U.S. operations or will be remitted substantially free of additional tax. If these overseas funds are needed for its operations in the U.S., VMware would be required to accrue and pay U.S. taxes on related undistributed earnings to repatriate these funds. However, VMware’s intent is to indefinitely reinvest its non-U.S. earnings in its foreign operations and VMware’s current plans do not demonstrate a need to repatriate them to fund its U.S. operations. At this time, it is not practicable to estimate the amount of tax that may be payable were VMware to repatriate these funds. | |||
The difference between the income taxes payable or receivable that is calculated on a separate return basis and the amount actually paid to or received from EMC pursuant to VMware’s tax sharing agreement is presented as a component of additional paid-in capital. See Note L to the consolidated financial statements for further information. | |||
Earnings Per Share | ' | ||
Earnings Per Share | |||
Basic net income per share is calculated using the weighted-average number of shares of VMware’s common stock outstanding during the period. Diluted earnings per share are calculated using the weighted-average number of common shares, including the dilutive effect of equity awards as determined under the treasury stock method. VMware has two classes of common stock, Class A and Class B common stock. For purposes of calculating earnings per share, VMware uses the two-class method. As both classes share the same rights in dividends, basic and diluted earnings per share are the same for both classes. | |||
Concentration of Risks | ' | ||
Concentrations of Risks | |||
Financial instruments, which potentially subject VMware to concentrations of credit risk, consist principally of cash and cash equivalents, short-term investments and accounts receivable. Cash on deposit with banks may exceed the amount of insurance provided on such deposits. These deposits may be redeemed upon demand. VMware places cash, cash equivalents and short-term investments primarily in money market funds and fixed income securities and limits the amount of investment with any single issuer and any single financial institution. VMware holds a diversified portfolio of money market funds and fixed income securities, which primarily consist of various highly liquid debt instruments of the U.S. government and its agencies, U.S. municipal obligations, and U.S. and foreign corporate debt securities. VMware’s fixed income investment portfolio is denominated in U.S. dollars and consists of securities with various maturities. | |||
VMware monitors the counterparty risk for adequate diversification amongst the financial institutions holding the funds. VMware also monitors counterparty risk to financial institutions with which VMware enters into derivatives to ensure that these financial institutions are of high credit quality. | |||
VMware held $37 million of foreign government and agencies securities, of which $8 million was deemed sovereign debt, at December 31, 2013. These sovereign debt securities had an average credit rating of AAA and were predominantly from Canada. | |||
VMware provides credit to its customers, including distributors, OEMs, resellers, and end-user customers, in the normal course of business. To reduce credit risk, the Company performs periodic credit evaluations, which consider the customer’s prior payment history and demonstrated financial stability. Additionally, VMware does not recognize revenues or unearned revenues to the extent a customer’s outstanding balance exceeds its credit limit. | |||
Accounting for Stock-Based Compensation | ' | ||
Accounting for Stock-Based Compensation | |||
The Black-Scholes option-pricing model is used to determine the fair value of VMware’s stock option awards and ESPP shares. The Black-Scholes model includes assumptions regarding dividend yields, expected volatility, expected term and risk-free interest rates. These assumptions reflect the Company’s best estimates, but these items involve uncertainties based on market and other conditions outside of the Company’s control. VMware restricted stock unit awards, including performance stock unit (“PSU”) awards, are valued based on the Company’s stock price on the date of grant. For those awards expected to vest, which only contain a service vesting feature, compensation cost is recognized on a straight-line basis over the awards’ requisite service periods. Liability-classified awards are recorded at fair value and are included in accrued expenses and other on the consolidated balance sheets with changes in fair value relating to the vested portion of the award recognized as stock-based compensation on the consolidated statements of income. | |||
PSU awards will vest if certain employee-specific or VMware-designated performance targets are achieved. If minimum performance thresholds are achieved, each PSU award will convert into VMware's Class A common stock at a defined ratio depending on the degree of achievement of the performance target designated by each individual award. If minimum performance thresholds are not achieved, then no shares will be issued. Based upon the expected levels of achievement, stock-based compensation is recognized on a straight-line basis over the PSUs' requisite service periods. The expected levels of achievement are reassessed over the requisite service periods and, to the extent that the expected levels of achievement change, stock-based compensation is adjusted in the period of change and recorded in the statement of income and the remaining unrecognized stock-based compensation is recorded over the remaining requisite service period. | |||
New Accounting Pronouncement | ' | ||
New Accounting Pronouncement | |||
In February 2013, the Financial Accounting Standards Board (“FASB”) amended the accounting standards requiring companies to present information about reclassification adjustments from accumulated other comprehensive income in their financial statements or footnotes. VMware adopted this accounting standard update on January 1, 2013 and presents reclassification adjustments from accumulated other comprehensive income in accordance with the requirements of the amended accounting standard in this Annual Report on Form 10-K. |
Business_Combinations_Goodwill1
Business Combinations, Goodwill and Intangible Assets, Net (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Business Acquisition [Line Items] | ' | |||||||||||||
Schedule of Intangible Assets | ' | |||||||||||||
The following table summarizes the changes in the carrying amount of intangible assets, net, excluding goodwill for the years ended December 31, 2013 and 2012 (table in millions): | ||||||||||||||
December 31, | ||||||||||||||
2013 | 2012 | |||||||||||||
Balance, beginning of the year | $ | 732 | $ | 407 | ||||||||||
Additions to intangible assets related to business combinations | 62 | 423 | ||||||||||||
Disposition of certain business activities (See Note C) | (54 | ) | — | |||||||||||
Contribution to Pivotal (see Note O) | (28 | ) | — | |||||||||||
Change in accumulated amortization | (107 | ) | (96 | ) | ||||||||||
Other adjustments | 2 | (2 | ) | |||||||||||
Balance, end of the year | $ | 607 | $ | 732 | ||||||||||
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | ' | |||||||||||||
As of December 31, 2013, intangible assets, net, excluded intangible assets that were fully amortized as well as goodwill, and consisted of the following (amounts in table in millions): | ||||||||||||||
2013 | Weighted-Average | Gross Carrying | Accumulated | Net Book | ||||||||||
Useful Lives | Amount | Amortization | Value | |||||||||||
(in years) | ||||||||||||||
Purchased technology | 6.6 | $ | 580 | $ | (163 | ) | $ | 417 | ||||||
Leasehold interest | 34.9 | 145 | (11 | ) | 134 | |||||||||
Customer relationships and customer lists | 8.7 | 75 | (37 | ) | 38 | |||||||||
Trademarks and trade names | 9.1 | 24 | (7 | ) | 17 | |||||||||
IPR&D | 1 | — | 1 | |||||||||||
Total intangible assets, net, excluding goodwill | $ | 825 | $ | (218 | ) | $ | 607 | |||||||
As of December 31, 2012, intangible assets, net, excluding goodwill, consisted of the following (amounts in table in millions): | ||||||||||||||
2012 | Weighted-Average | Gross Carrying | Accumulated | Net Book | ||||||||||
Useful Lives | Amount | Amortization | Value | |||||||||||
(in years) | ||||||||||||||
Purchased technology | 6.1 | $ | 757 | $ | (274 | ) | $ | 483 | ||||||
Leasehold interest | 34.9 | 145 | (7 | ) | 138 | |||||||||
Customer relationships and customer lists | 7.3 | 146 | (63 | ) | 83 | |||||||||
Trademarks and trade names | 8 | 45 | (17 | ) | 28 | |||||||||
Other | 3 | 3 | (3 | ) | — | |||||||||
Total intangible assets, net, excluding goodwill | $ | 1,096 | $ | (364 | ) | $ | 732 | |||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | ' | |||||||||||||
Based on intangible assets recorded as of December 31, 2013 and assuming no subsequent additions or impairment of underlying assets, the remaining estimated annual amortization expense is expected to be as follows (table in millions): | ||||||||||||||
2014 | $ | 97 | ||||||||||||
2015 | 95 | |||||||||||||
2016 | 86 | |||||||||||||
2017 | 81 | |||||||||||||
2018 | 69 | |||||||||||||
Thereafter | 178 | |||||||||||||
Total | $ | 606 | ||||||||||||
Schedule Of Goodwill | ' | |||||||||||||
The following table summarizes the changes in the carrying amount of goodwill for the years ended December 31, 2013 and 2012 (table in millions): | ||||||||||||||
December 31, | ||||||||||||||
2013 | 2012 | |||||||||||||
Balance, beginning of the year | $ | 2,848 | $ | 1,759 | ||||||||||
Increase in goodwill related to business combination | 233 | 1,092 | ||||||||||||
Contribution to Pivotal (see Note O) | (28 | ) | — | |||||||||||
Reduction related to disposition of certain business activities | (4 | ) | — | |||||||||||
Deferred tax adjustments to purchase price allocations on acquisitions | (20 | ) | (4 | ) | ||||||||||
Other adjustments to purchase price allocations on acquisitions | (2 | ) | 1 | |||||||||||
Balance, end of the year | $ | 3,027 | $ | 2,848 | ||||||||||
Desktone, Inc. and Virsto Software | ' | |||||||||||||
Business Acquisition [Line Items] | ' | |||||||||||||
Schedule of Recognized Assets Acquired and Liabilities Assumed | ' | |||||||||||||
The following table summarizes the allocation of the consideration to the fair value of the assets acquired and net liabilities assumed (table in millions): | ||||||||||||||
Intangible assets | $ | 62 | ||||||||||||
Goodwill | 233 | |||||||||||||
Deferred tax assets, net | 4 | |||||||||||||
Total assets acquired | 299 | |||||||||||||
Other assumed liabilities, net of other acquired assets | (10 | ) | ||||||||||||
Total net liabilities assumed | (10 | ) | ||||||||||||
Fair value of assets acquired and net liabilities assumed | $ | 289 | ||||||||||||
Schedule Of Finite-Lived And Indefinite-Lived Intangible Assets Acquired As Part Of Business Combination | ' | |||||||||||||
The following table summarizes the fair value of the intangible assets acquired by VMware in conjunction with the acquisitions of Desktone and Virsto (amounts in table in millions): | ||||||||||||||
Weighted-Average | Fair Value | |||||||||||||
Useful Lives | Amount | |||||||||||||
(in years) | ||||||||||||||
Purchased technology | 6 | $ | 49 | |||||||||||
Vendor contracts | 8 | 3 | ||||||||||||
In-process research and development (“IPR&D”) | 10 | |||||||||||||
Total intangible assets, net, excluding goodwill | $ | 62 | ||||||||||||
Nicira | ' | |||||||||||||
Business Acquisition [Line Items] | ' | |||||||||||||
Schedule of Recognized Assets Acquired and Liabilities Assumed | ' | |||||||||||||
The following table summarizes the allocation of the consideration to the fair value of the intangible assets acquired and net liabilities assumed on August 24, 2012, and reflects adjustments made through the measurement period to finalize the purchase price allocation (table in millions): | ||||||||||||||
Intangible assets | $ | 335 | ||||||||||||
Goodwill | 893 | |||||||||||||
Total intangible assets acquired | 1,228 | |||||||||||||
Deferred tax liabilities, net | (77 | ) | ||||||||||||
Income taxes payable | (50 | ) | ||||||||||||
Other assumed liabilities, net of other acquired assets | (1 | ) | ||||||||||||
Total net liabilities assumed | (128 | ) | ||||||||||||
Fair value of intangible assets acquired and net liabilities assumed | $ | 1,100 | ||||||||||||
Schedule Of Finite-Lived And Indefinite-Lived Intangible Assets Acquired As Part Of Business Combination | ' | |||||||||||||
The following table summarizes the fair value of the intangible assets acquired by VMware in conjunction with the Nicira acquisition (amounts in table in millions): | ||||||||||||||
Weighted-Average | Fair Value | |||||||||||||
Useful Lives | Amount | |||||||||||||
(in years) | ||||||||||||||
Purchased technology | 7 | $ | 266 | |||||||||||
Trademarks and trade names | 10 | 20 | ||||||||||||
IPR&D | 49 | |||||||||||||
Total intangible assets acquired, net, excluding goodwill | $ | 335 | ||||||||||||
Business Acquisition, Pro Forma Information | ' | |||||||||||||
Supplemental information on an unaudited pro forma basis, as if Nicira had been acquired on January 1, 2011, is presented as follows (table in millions, except per share amounts): | ||||||||||||||
For the Year | ||||||||||||||
Ended December 31, | ||||||||||||||
2012 | 2011 | |||||||||||||
Pro forma adjusted total revenue | $ | 4,607 | $ | 3,770 | ||||||||||
Pro forma adjusted net income | 687 | 611 | ||||||||||||
Pro forma adjusted net income per weighted-average share, diluted for Class A and Class B | $ | 1.58 | $ | 1.41 | ||||||||||
Series of Individually Immaterial Business Acquisitions | ' | |||||||||||||
Business Acquisition [Line Items] | ' | |||||||||||||
Schedule of Recognized Assets Acquired and Liabilities Assumed | ' | |||||||||||||
The following table summarizes the allocation of the consideration to the fair value of the intangible assets acquired and net liabilities assumed (table in millions): | ||||||||||||||
Intangible assets | $ | 88 | ||||||||||||
Goodwill | 187 | |||||||||||||
Total intangible assets acquired | 275 | |||||||||||||
Deferred tax liabilities, net | (8 | ) | ||||||||||||
Other assumed liabilities, net of other acquired assets | (6 | ) | ||||||||||||
Total net liabilities assumed | (14 | ) | ||||||||||||
Fair value of intangible assets acquired and net liabilities assumed | $ | 261 | ||||||||||||
The following table summarizes the allocation of the consideration to the fair value of the tangible and intangible assets acquired and liabilities assumed (table in millions): | ||||||||||||||
Intangible assets | $ | 105 | ||||||||||||
Goodwill | 188 | |||||||||||||
Deferred tax assets, net | 23 | |||||||||||||
Total assets acquired | 316 | |||||||||||||
Other assumed liabilities, net of acquired assets | (12 | ) | ||||||||||||
Total net liabilities assumed | (12 | ) | ||||||||||||
Fair value of assets acquired and net liabilities assumed | $ | 304 | ||||||||||||
Realignment_Charges_Tables
Realignment Charges (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ' | |||||||||||||||||||
Schedule of Realignment Accrual | ' | |||||||||||||||||||
The following table summarizes the activity for the accrued realignment charges for the year ended December 31, 2013 (table in millions): | ||||||||||||||||||||
For the Year Ended December 31, 2013 | ||||||||||||||||||||
Balance as of | Realignment | Utilization | Balance as of | Non-Cash Portion | ||||||||||||||||
1-Jan-13 | Charges | 31-Dec-13 | of Utilization | |||||||||||||||||
Workforce reductions | $ | — | $ | 54 | $ | (54 | ) | $ | — | $ | (6 | ) | ||||||||
Asset impairments, exit of facilities and other exit costs | — | 14 | (11 | ) | 3 | (9 | ) | |||||||||||||
Total | $ | — | $ | 68 | $ | (65 | ) | $ | 3 | $ | (15 | ) | ||||||||
Earnings_per_Share_Tables
Earnings per Share (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||
Computations of Basic and Diluted Net Income per Share | ' | |||||||||||
The following table sets forth the computations of basic and diluted net income per share for the years ended December 31, 2013, 2012 and 2011 (table in millions, except per share data): | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Net income | $ | 1,014 | $ | 746 | $ | 724 | ||||||
Weighted-average shares, basic for Class A and Class B | 429 | 427 | 421 | |||||||||
Effect of dilutive securities | 4 | 7 | 11 | |||||||||
Weighted-average shares, diluted for Class A and Class B | 433 | 434 | 432 | |||||||||
Net income per weighted-average share, basic for Class A and Class B | $ | 2.36 | $ | 1.75 | $ | 1.72 | ||||||
Net income per weighted-average share, diluted for Class A and Class B | $ | 2.34 | $ | 1.72 | $ | 1.68 | ||||||
Investments_Tables
Investments (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | |||||||||||||||
Investing in Fixed Income Securities | ' | |||||||||||||||
Investments as of December 31, 2013 and 2012 consisted of the following (tables in millions): | ||||||||||||||||
December 31, 2013 | ||||||||||||||||
Cost or Amortized Cost | Unrealized Gains | Unrealized Losses | Aggregate | |||||||||||||
Fair Value | ||||||||||||||||
U.S. Government and agency obligations | $ | 537 | $ | — | $ | — | $ | 537 | ||||||||
U.S. and foreign corporate debt securities | 2,351 | 6 | (3 | ) | 2,354 | |||||||||||
Foreign governments and multi-national agency obligations | 37 | — | — | 37 | ||||||||||||
Municipal obligations | 811 | 3 | — | 814 | ||||||||||||
Mortgage-backed securities | 129 | — | (1 | ) | 128 | |||||||||||
Total investments | $ | 3,865 | $ | 9 | $ | (4 | ) | $ | 3,870 | |||||||
December 31, 2012 | ||||||||||||||||
Cost or Amortized Cost | Unrealized Gains | Unrealized Losses | Aggregate | |||||||||||||
Fair Value | ||||||||||||||||
U.S. Government and agency obligations | $ | 374 | $ | 1 | $ | — | $ | 375 | ||||||||
U.S. and foreign corporate debt securities | 1,545 | 6 | (1 | ) | 1,550 | |||||||||||
Foreign governments and multi-national agency obligations | 41 | — | — | 41 | ||||||||||||
Municipal obligations | 973 | 3 | — | 976 | ||||||||||||
Asset-backed securities | 1 | — | — | 1 | ||||||||||||
Mortgage-backed securities | 79 | — | — | 79 | ||||||||||||
Total investments | $ | 3,013 | $ | 10 | $ | (1 | ) | $ | 3,022 | |||||||
Unrealized Losses On Investments | ' | |||||||||||||||
Unrealized losses on investments as of December 31, 2013 and 2012, which have been in a net loss position for less than twelve months, were classified by investment category as follows (table in millions): | ||||||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||
U.S. and foreign corporate debt securities | $ | 750 | $ | (3 | ) | $ | 316 | $ | (1 | ) | ||||||
Mortgage-backed securities | 91 | (1 | ) | 28 | — | |||||||||||
Total | $ | 841 | $ | (4 | ) | $ | 344 | $ | (1 | ) | ||||||
Contractual Maturities Of Investments | ' | |||||||||||||||
The contractual maturities of investments held at December 31, 2013 consisted of the following (table in millions): | ||||||||||||||||
Amortized | Aggregate | |||||||||||||||
Cost Basis | Fair Value | |||||||||||||||
Due within one year | $ | 807 | $ | 808 | ||||||||||||
Due after 1 year through 5 years | 2,864 | 2,869 | ||||||||||||||
Due after 5 years | 194 | 193 | ||||||||||||||
Total investments | $ | 3,865 | $ | 3,870 | ||||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||
Fair Value Of Money Market Funds And Available-For-Sale Securities | ' | |||||||||||
The following tables set forth the fair value hierarchy of VMware’s money market funds and available-for-sale securities, including those securities classified within cash and cash equivalents on the consolidated balance sheets, that were required to be measured at fair value as of December 31, 2013 and 2012 (tables in millions): | ||||||||||||
December 31, 2013 | ||||||||||||
Level 1 | Level 2 | Total | ||||||||||
Money-market funds | $ | 1,808 | $ | — | $ | 1,808 | ||||||
U.S. Government and agency obligations | 385 | 152 | 537 | |||||||||
U.S. and foreign corporate debt securities | — | 2,366 | 2,366 | |||||||||
Foreign governments and multi-national agency obligations | — | 37 | 37 | |||||||||
Municipal obligations | — | 816 | 816 | |||||||||
Asset-backed securities | — | — | — | |||||||||
Mortgage-backed securities | — | 128 | 128 | |||||||||
Total | $ | 2,193 | $ | 3,499 | $ | 5,692 | ||||||
December 31, 2012 | ||||||||||||
Level 1 | Level 2 | Total | ||||||||||
Money-market funds | $ | 1,125 | $ | — | $ | 1,125 | ||||||
U.S. Government and agency obligations | 250 | 155 | 405 | |||||||||
U.S. and foreign corporate debt securities | — | 1,567 | 1,567 | |||||||||
Foreign governments and multi-national agency obligations | — | 41 | 41 | |||||||||
Municipal obligations | — | 976 | 976 | |||||||||
Asset-backed securities | — | 1 | 1 | |||||||||
Mortgage-backed securities | — | 79 | 79 | |||||||||
Total | $ | 1,375 | $ | 2,819 | $ | 4,194 | ||||||
Property_and_Equipment_Net_Tab
Property and Equipment, Net (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||
Components of Property and Equipment | ' | |||||||
Property and equipment, net, as of December 31, 2013 and 2012 consisted of the following (table in millions): | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Equipment and software | $ | 752 | $ | 636 | ||||
Buildings and improvements | 584 | 438 | ||||||
Furniture and fixtures | 77 | 67 | ||||||
Construction in progress | 120 | 98 | ||||||
Total property and equipment | 1,533 | 1,239 | ||||||
Accumulated depreciation | (688 | ) | (574 | ) | ||||
Total property and equipment, net | $ | 845 | $ | 665 | ||||
Accrued_Expenses_and_Other_Tab
Accrued Expenses and Other (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Accrued Liabilities [Abstract] | ' | |||||||
Components Of Accrued Expenses | ' | |||||||
Accrued expenses and other as of December 31, 2013 and 2012 consisted of the following (table in millions): | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Salaries, commissions, bonuses, and benefits | $ | 303 | $ | 292 | ||||
Accrued partner liabilities | 135 | 129 | ||||||
Other | 170 | 223 | ||||||
Total | $ | 608 | $ | 644 | ||||
Unearned_Revenues_Tables
Unearned Revenues (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Deferred Revenue Disclosure [Abstract] | ' | |||||||
Unearned Revenues, by Arrangement | ' | |||||||
Unearned revenues as of December 31, 2013 and 2012 consisted of the following (table in millions): | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Unearned license revenues | $ | 465 | $ | 463 | ||||
Unearned software maintenance revenues | 3,304 | 2,755 | ||||||
Unearned professional services revenues | 323 | 243 | ||||||
Total unearned revenues | $ | 4,092 | $ | 3,461 | ||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Income Tax Disclosure [Abstract] | ' | |||||||||||
Schedule of Income before Income Tax | ' | |||||||||||
The domestic and foreign components of income before provisions for income taxes were as follows (table in millions): | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Domestic | $ | 160 | $ | 177 | $ | 112 | ||||||
International | 987 | 716 | 682 | |||||||||
Total | $ | 1,147 | $ | 893 | $ | 794 | ||||||
Schedule of Components of Income Tax Expense (Benefit) | ' | |||||||||||
VMware’s provision for income taxes consisted of the following (table in millions): | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Federal: | ||||||||||||
Current | $ | 1 | $ | 161 | $ | 43 | ||||||
Deferred | 57 | (71 | ) | (24 | ) | |||||||
58 | 90 | 19 | ||||||||||
State: | ||||||||||||
Current | 2 | 13 | 1 | |||||||||
Deferred | 6 | (7 | ) | 11 | ||||||||
8 | 6 | 12 | ||||||||||
Foreign: | ||||||||||||
Current | 72 | 44 | 41 | |||||||||
Deferred | (5 | ) | 7 | (2 | ) | |||||||
67 | 51 | 39 | ||||||||||
Total provision for income taxes | $ | 133 | $ | 147 | $ | 70 | ||||||
Schedule of Effective Income Tax Rate Reconciliation | ' | |||||||||||
A reconciliation of VMware’s income tax rate to the statutory federal tax rate is as follows: | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Statutory federal tax rate | 35 | % | 35 | % | 35 | % | ||||||
State taxes, net of federal benefit | 1 | % | 1 | % | 2 | % | ||||||
Tax rate differential for international jurisdictions | (22 | )% | (22 | )% | (25 | )% | ||||||
U.S. tax credits(1) | (7 | )% | — | % | (6 | )% | ||||||
Permanent items and other | 5 | % | 3 | % | 3 | % | ||||||
Effective tax rate | 12 | % | 17 | % | 9 | % | ||||||
-1 | The federal research credit was enacted retroactively through December 31, 2013, which was passed by the United States Congress during January 2013. | |||||||||||
Schedule of Deferred Tax Assets and Liabilities | ' | |||||||||||
Significant deferred tax assets and liabilities consist of the following (table in millions): | ||||||||||||
December 31, | ||||||||||||
2013 | 2012 | |||||||||||
Deferred tax assets: | ||||||||||||
Unearned revenue | $ | 224 | $ | 211 | ||||||||
Accruals and other | 45 | 43 | ||||||||||
Stock-based compensation | 68 | 65 | ||||||||||
Tax credit and net operating loss carryforwards | 119 | 130 | ||||||||||
Other non-current assets | 14 | — | ||||||||||
Basis difference in investment in business | 20 | — | ||||||||||
Net deferred tax assets | 490 | 449 | ||||||||||
Valuation allowance | (94 | ) | (64 | ) | ||||||||
Total deferred tax assets | 396 | 385 | ||||||||||
Deferred tax liabilities: | ||||||||||||
Property, plant and equipment, net | (70 | ) | (51 | ) | ||||||||
Intangibles and other assets, net | (76 | ) | (55 | ) | ||||||||
Total deferred tax liabilities | (146 | ) | (106 | ) | ||||||||
Total deferred tax assets, net | $ | 250 | $ | 279 | ||||||||
Schedule of Payments to the Income Tax Sharing Agreement | ' | |||||||||||
The following table summarizes these payments made between VMware and EMC during the years ended December 31, 2013, 2012 and 2011 (table in millions): | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Payments from VMware to EMC | $ | 8 | $ | — | $ | 12 | ||||||
Payments from EMC to VMware | 32 | 19 | 314 | |||||||||
Summary of Unrecognized Tax Benefits | ' | |||||||||||
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits, excluding interest and penalties associated with unrecognized tax benefits, is as follows (table in millions): | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Balance, beginning of the year | $ | 158 | $ | 95 | $ | 109 | ||||||
Tax positions related to current year: | ||||||||||||
Additions | 32 | 12 | 19 | |||||||||
Reductions | — | (4 | ) | (2 | ) | |||||||
Tax positions related to prior years: | ||||||||||||
Additions related to acquisitions completed in 2012 | — | 60 | — | |||||||||
Additions | — | — | 3 | |||||||||
Reductions | (12 | ) | — | (9 | ) | |||||||
Settlements | (2 | ) | — | (23 | ) | |||||||
Reductions resulting from a lapse of the statute of limitations | (8 | ) | (4 | ) | (2 | ) | ||||||
Foreign currency effects | (1 | ) | (1 | ) | — | |||||||
Balance, end of the year | $ | 167 | $ | 158 | $ | 95 | ||||||
Contingencies_and_Contingencie1
Contingencies and Contingencies (Tables) | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||
Minimum Future Lease Commitments | ' | |||
VMware’s minimum future lease commitments at December 31, 2013 were as follows (table in millions): | ||||
2014 | $ | 58 | ||
2015 | 53 | |||
2016 | 43 | |||
2017 | 36 | |||
2018 | 32 | |||
Thereafter | 564 | |||
Total minimum lease payments | $ | 786 | ||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Stockholders' Equity Note [Abstract] | ' | |||||||||||||
Stock Repurchase Programs | ' | |||||||||||||
The following table summarizes stock repurchase authorizations in the years ended December 31, 2013, 2012 and 2011 (amounts in table in millions): | ||||||||||||||
Authorization Date | Amount Authorized | Expiration Date | Status | |||||||||||
Aug-13 | $700 | End of 2015 | Open | |||||||||||
Nov-12 | 250 | End of 2014 | Completed in Q4'13 | |||||||||||
Feb-12 | 600 | End of 2013 | Completed in Q2'13 | |||||||||||
Feb-11 | 550 | End of 2012 | Completed in Q2'12 | |||||||||||
Mar-10 | 400 | End of 2011 | Completed in Q1'11 | |||||||||||
The following table summarizes stock repurchase activity in the years ended December 31, 2013, 2012 and 2011 (table in millions, except per share amounts): | ||||||||||||||
For the Year Ended December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Aggregate purchase price | $ | 508 | $ | 467 | $ | 526 | ||||||||
Class A common shares repurchased | 7 | 5 | 6 | |||||||||||
Weighted-average price per share | $ | 76.58 | $ | 91.1 | $ | 88.37 | ||||||||
Employee Stock Purchase Plan, Activity | ' | |||||||||||||
The following table summarizes ESPP activity in the years ended December 31, 2013, 2012 and 2011 (table in millions, except per share amounts): | ||||||||||||||
For the Year Ended December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Cash proceeds | $ | 76 | $ | 69 | $ | 57 | ||||||||
Class A common shares purchased | 1 | 1 | 1 | |||||||||||
Weighted-average price per share | $ | 65.97 | $ | 77.34 | $ | 69.81 | ||||||||
Stock Options, Activity | ' | |||||||||||||
The following table summarizes option activity since January 1, 2011 for VMware and EMC stock options (shares in millions): | ||||||||||||||
VMware Stock Options | EMC Stock Options | |||||||||||||
Number of | Weighted- | Number of | Weighted- | |||||||||||
Shares | Average | Shares | Average | |||||||||||
Exercise Price | Exercise Price | |||||||||||||
(per share) | (per share) | |||||||||||||
Outstanding, January 1, 2011 | 27 | $ | 33.54 | 3 | $ | 13.93 | ||||||||
Options relating to employees transferred to/from EMC, net | — | — | 2 | 13.53 | ||||||||||
Forfeited | (1 | ) | 40.98 | — | — | |||||||||
Exercised | (10 | ) | 28.64 | (1 | ) | 13.58 | ||||||||
Outstanding, December 31, 2011 | 16 | 35.27 | 4 | 13.16 | ||||||||||
Granted | 1 | 4.67 | — | — | ||||||||||
Forfeited | (1 | ) | 42.07 | — | — | |||||||||
Exercised | (6 | ) | 30.44 | (1 | ) | 12.35 | ||||||||
Outstanding, December 31, 2012 | 10 | 34.36 | 3 | 15.12 | ||||||||||
Granted | 1 | 71.53 | — | — | ||||||||||
Exercised | (5 | ) | 28.12 | (1 | ) | 15.39 | ||||||||
Outstanding, December 31, 2013 | 6 | 44.12 | 2 | 15.53 | ||||||||||
Exercisable, December 31, 2013 | 4 | 36.45 | 1 | 15.12 | ||||||||||
Vested and expected to vest, December 31, 2013 | 6 | 42.84 | 2 | 15.51 | ||||||||||
Summary Of Restricted Stock Activity | ' | |||||||||||||
The following table summarizes restricted stock activity since January 1, 2011 (units in millions): | ||||||||||||||
Number of Units | Weighted- | |||||||||||||
Average Grant | ||||||||||||||
Date Fair | ||||||||||||||
Value | ||||||||||||||
(per unit) | ||||||||||||||
Outstanding, January 1, 2011 | 10 | $ | 54.17 | |||||||||||
Granted | 5 | 91.51 | ||||||||||||
Vested | (4 | ) | 48.47 | |||||||||||
Forfeited | (1 | ) | 64.7 | |||||||||||
Outstanding, December 31, 2011 | 10 | 72.74 | ||||||||||||
Granted | 8 | 101.73 | ||||||||||||
Vested | (4 | ) | 69.01 | |||||||||||
Forfeited | (2 | ) | 81.53 | |||||||||||
Outstanding, December 31, 2012 | 12 | 91.93 | ||||||||||||
Granted | 7 | 76.2 | ||||||||||||
Vested | (4 | ) | 83.21 | |||||||||||
Forfeited | (2 | ) | 90.55 | |||||||||||
Outstanding, December 31, 2013 | 13 | 85.85 | ||||||||||||
Allocation of Recognized Period Costs | ' | |||||||||||||
The following table summarizes the components of total stock-based compensation included in VMware’s consolidated statements of income for the years ended December 31, 2013, 2012 and 2011 (table in millions): | ||||||||||||||
For the Year Ended December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Cost of license revenues | $ | 2 | $ | 2 | $ | 2 | ||||||||
Cost of services revenues | 29 | 28 | 23 | |||||||||||
Research and development | 227 | 210 | 174 | |||||||||||
Sales and marketing | 144 | 150 | 96 | |||||||||||
General and administrative | 56 | 48 | 40 | |||||||||||
Realignment | 6 | — | — | |||||||||||
Stock-based compensation | 464 | 438 | 335 | |||||||||||
Income tax benefit | (136 | ) | (132 | ) | (98 | ) | ||||||||
Total stock-based compensation, net of tax | $ | 328 | $ | 306 | $ | 237 | ||||||||
Stock Options, Valuation Assumptions | ' | |||||||||||||
The fair value of each option to acquire VMware Class A common stock granted during the years ended December 31, 2013, 2012 and 2011 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 | 2013 | 2012 | 2011 | |||||||||||
Dividend yield | None | None | None | |||||||||||
Expected volatility | 38.5 | % | 35.8 | % | 37.7 | % | ||||||||
Risk-free interest rate | 0.9 | % | 0.3 | % | 1 | % | ||||||||
Expected term (in years) | 3.6 | 2.7 | 3 | |||||||||||
Weighted-average fair value at grant date | $ | 29.47 | $ | 80.45 | $ | 88.4 | ||||||||
Employee Stock Purchase Plan, Valuation Assumptions | ' | |||||||||||||
For the Year Ended December 31, | ||||||||||||||
VMware Employee Stock Purchase Plan | 2013 | 2012 | 2011 | |||||||||||
Dividend yield | None | None | None | |||||||||||
Expected volatility | 32.9 | % | 37.8 | % | 34.9 | % | ||||||||
Risk-free interest rate | 0.1 | % | 0.1 | % | 0.2 | % | ||||||||
Expected term (in years) | 0.5 | 0.5 | 0.5 | |||||||||||
Weighted-average fair value at grant date | $ | 20.45 | $ | 23.36 | $ | 23.69 | ||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | ' | |||||||||||||
The changes in components of accumulated other comprehensive income in the year ended December 31, 2013 were as follows (table in millions): | ||||||||||||||
Unrealized Gains on | Total | |||||||||||||
Available-for-Sale Securities | ||||||||||||||
Balance, January 1, 2013 | $ | 6 | $ | 6 | ||||||||||
Amounts reclassified from accumulated other comprehensive income to the consolidated statement of income, net of taxes of $(1) | (2 | ) | (2 | ) | ||||||||||
Other comprehensive loss, net | (2 | ) | (2 | ) | ||||||||||
Balance, December 31, 2013 | $ | 4 | $ | 4 | ||||||||||
Related_Parties_Tables
Related Parties (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Related Party Transactions [Abstract] | ' | |||||||||||||||||||
Schedule of Related Party Transactions | ' | |||||||||||||||||||
Information about VMware's revenues and receipts and unearned revenues from such arrangements with EMC for the years ended December 31, 2013, 2012 and 2011 consisted of the following (table in millions): | ||||||||||||||||||||
Revenues and Receipts from EMC | Unearned Revenues from EMC | |||||||||||||||||||
For the Year Ended December 31, | As of December 31, | |||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | ||||||||||||||||
Reseller revenues | $ | 141 | $ | 141 | $ | 72 | $ | 188 | $ | 149 | ||||||||||
Professional services revenues | 72 | 82 | 66 | 12 | 3 | |||||||||||||||
Internal-use revenues | 32 | 9 | 3 | 20 | 28 | |||||||||||||||
Collaborative technology project receipts | 7 | 7 | 2 | n/a | n/a | |||||||||||||||
Information about VMware's costs from such arrangements with EMC for the years ended December 31, 2013, 2012 and 2011 consisted of the following (table in millions): | ||||||||||||||||||||
For the Year Ended December 31, | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Purchases of products and services | $ | 56 | $ | 42 | $ | 24 | ||||||||||||||
Collaborative technology project costs | 13 | n/a | n/a | |||||||||||||||||
EMC subsidiary support and administrative costs | 128 | 106 | 83 | |||||||||||||||||
Interest expense on note payable | 4 | 5 | 4 | |||||||||||||||||
Schedule Of Recognized Identified Assets Contributed And Liabilities Assumed | ' | |||||||||||||||||||
The following table summarizes the assets VMware contributed to Pivotal and the liabilities Pivotal assumed from VMware (table in millions): | ||||||||||||||||||||
Accounts receivable | $ | 4 | ||||||||||||||||||
Property and equipment, net | 1 | |||||||||||||||||||
Intangible assets | 28 | |||||||||||||||||||
Goodwill | 28 | |||||||||||||||||||
Total assets | 61 | |||||||||||||||||||
Accounts payable, accrued liabilities and other, net | (7 | ) | ||||||||||||||||||
Unearned revenues | (71 | ) | ||||||||||||||||||
Total liabilities | (78 | ) | ||||||||||||||||||
Total liabilities, net assumed by Pivotal | $ | (17 | ) | |||||||||||||||||
Schedule of Due from (to) Related Party | ' | |||||||||||||||||||
As a result of the related-party transactions with EMC and Pivotal described above, amounts due to and from related parties, net as of December 31, 2013 and 2012 consisted of the following (table in millions): | ||||||||||||||||||||
As of December 31, | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Due to EMC | $ | (92 | ) | $ | (44 | ) | ||||||||||||||
Due from EMC | 93 | 112 | ||||||||||||||||||
Due to Pivotal | (22 | ) | n/a | |||||||||||||||||
Due from Pivotal | 3 | n/a | ||||||||||||||||||
Due from (to) related parties, net | $ | (18 | ) | $ | 68 | |||||||||||||||
Income tax payable due to EMC | $ | (22 | ) | $ | (32 | ) |
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||
Schedule Of Revenues By Geographic Area | ' | |||||||||||
Revenues by geographic area for the years ended December 31, 2013, 2012 and 2011 were as follows (table in millions): | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
United States | $ | 2,485 | $ | 2,229 | $ | 1,824 | ||||||
International | 2,722 | 2,376 | 1,943 | |||||||||
Total | $ | 5,207 | $ | 4,605 | $ | 3,767 | ||||||
Schedule Of Long-Lived Assets By Geographic Area | ' | |||||||||||
Long-lived assets by geographic area, which primarily include property and equipment, net, as of December 31, 2013 and 2012 were as follows (table in millions): | ||||||||||||
December 31, | ||||||||||||
2013 | 2012 | |||||||||||
United States | $ | 741 | $ | 563 | ||||||||
International | 58 | 51 | ||||||||||
Total | $ | 799 | $ | 614 | ||||||||
Selected_Quarterly_Financial_D1
Selected Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | |||||||||||||||
Schedule of Selected Quarterly Financial Data | ' | |||||||||||||||
Quarterly financial data for 2013 and 2012 were as follows (tables in millions, except per share amounts): | ||||||||||||||||
2013 | Q1 2013 | Q2 2013 | Q3 2013 | Q4 2013 | ||||||||||||
Revenues | $ | 1,191 | $ | 1,243 | $ | 1,289 | $ | 1,483 | ||||||||
Net income | 174 | 244 | 261 | 335 | ||||||||||||
Net income per share, basic | $ | 0.41 | $ | 0.57 | $ | 0.61 | $ | 0.78 | ||||||||
Net income per share, diluted | $ | 0.4 | $ | 0.57 | $ | 0.6 | $ | 0.77 | ||||||||
2012 | Q1 2012 | Q2 2012 | Q3 2012 | Q4 2012 | ||||||||||||
Revenues | $ | 1,055 | $ | 1,123 | $ | 1,134 | $ | 1,293 | ||||||||
Net income | 191 | 192 | 157 | 206 | ||||||||||||
Net income per share, basic | $ | 0.45 | $ | 0.45 | $ | 0.37 | $ | 0.48 | ||||||||
Net income per share, diluted | $ | 0.44 | $ | 0.44 | $ | 0.36 | $ | 0.47 | ||||||||
Overview_and_Basis_of_Presenta2
Overview and Basis of Presentation (Basis of Presentation) (Details) (EMC) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
Overview and Basis of Presentation [Line Items] | ' |
Shareholders' interest, outstanding ownership percentage of VMware by EMC | 79.70% |
Combined voting power of VMware's outstanding common stock | 97.20% |
Class A Common Stock | ' |
Overview and Basis of Presentation [Line Items] | ' |
VMware's outstanding common stock held by EMC (shares) | 43 |
Class B Convertible Common Stock | ' |
Overview and Basis of Presentation [Line Items] | ' |
VMware's outstanding common stock held by EMC (shares) | 300 |
Overview_and_Basis_of_Presenta3
Overview and Basis of Presentation (Reclassification) (Details) (Reclassified to other liabilities, USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2012 |
Reclassified to other liabilities | ' |
Overview and Basis of Presentation [Line Items] | ' |
Prior period reclassification adjustment | $30 |
Overview_and_Basis_of_Presenta4
Overview and Basis of Presentation (Cash and Cash Equivalents, Short-Term Investments and Restricted Cash) (Details) (Geographic concentration risk, USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
Overview and Basis of Presentation [Line Items] | ' |
Cash and cash equivalents and short term investments | $6,175 |
Outside the U.S. | ' |
Overview and Basis of Presentation [Line Items] | ' |
Cash and cash equivalents and short term investments | $4,146 |
Overview_and_Basis_of_Presenta5
Overview and Basis of Presentation (Property and Equipment, Net) (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Land improvements | ' |
Overview and Basis of Presentation [Line Items] | ' |
Property and equipment, useful life | '15 years |
Furniture and fixtures | ' |
Overview and Basis of Presentation [Line Items] | ' |
Property and equipment, useful life | '5 years |
Minimum | Equipment and software | ' |
Overview and Basis of Presentation [Line Items] | ' |
Property and equipment, useful life | '2 years |
Maximum | Equipment and software | ' |
Overview and Basis of Presentation [Line Items] | ' |
Property and equipment, useful life | '5 years |
Maximum | Leasehold improvements | ' |
Overview and Basis of Presentation [Line Items] | ' |
Property and equipment, useful life | '20 years |
Overview_and_Basis_of_Presenta6
Overview and Basis of Presentation (Research and Development and Capitalized Software Development Costs) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Overview and Basis of Presentation [Line Items] | ' | ' | ' |
Additions to capitalized computer software | ' | ' | $86 |
Additions to capitalized computer software, share based compensation | ' | ' | 12 |
Other assets, net | ' | ' | ' |
Overview and Basis of Presentation [Line Items] | ' | ' | ' |
Unamortized software development costs | 0 | 34 | ' |
Cost of license revenues | ' | ' | ' |
Overview and Basis of Presentation [Line Items] | ' | ' | ' |
Amortization expense from capitalized costs | $34 | $71 | $85 |
Overview_and_Basis_of_Presenta7
Overview and Basis of Presentation (Purchased Intangible Assets and Goodwill) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Overview and Basis of Presentation [Line Items] | ' | ' | ' |
Change in accumulated amortization | $107 | $96 | ' |
Purchased intangible assets | ' | ' | ' |
Overview and Basis of Presentation [Line Items] | ' | ' | ' |
Change in accumulated amortization | $103 | $92 | $65 |
Overview_and_Basis_of_Presenta8
Overview and Basis of Presentation (Derivative Instruments) (Details) (Foreign Exchange Forward) | 12 Months Ended |
Dec. 31, 2012 | |
Not Designated As Hedging Instrument | ' |
Overview and Basis of Presentation [Line Items] | ' |
Maturity of derivatives | '1 month |
Designated As Hedging Instrument | ' |
Overview and Basis of Presentation [Line Items] | ' |
Maximum maturity period in price risk cash flow hedge | '6 months |
Overview_and_Basis_of_Presenta9
Overview and Basis of Presentation (Advertising) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ' | ' |
Advertising expense | $27 | $37 | $20 |
Recovered_Sheet1
Overview and Basis of Presentation (Concentrations of Risks) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Overview and Basis of Presentation [Line Items] | ' | ' | ' |
Aggregate Fair Value | 3,870 | 3,022 | ' |
Foreign governments and multi-national agency obligations | ' | ' | ' |
Overview and Basis of Presentation [Line Items] | ' | ' | ' |
Aggregate Fair Value | 37 | 41 | ' |
Sovereign Debt Securities | Foreign governments and multi-national agency obligations | ' | ' | ' |
Overview and Basis of Presentation [Line Items] | ' | ' | ' |
Aggregate Fair Value | 8 | ' | ' |
Distributor One | Customer Concentration Risk | Accounts Receivable | ' | ' | ' |
Overview and Basis of Presentation [Line Items] | ' | ' | ' |
Concentration risk, percentage | 18.00% | 19.00% | ' |
Distributor One | Customer Concentration Risk | Sales | ' | ' | ' |
Overview and Basis of Presentation [Line Items] | ' | ' | ' |
Concentration risk, percentage | 15.00% | 15.00% | 15.00% |
Distributor Two | Customer Concentration Risk | Accounts Receivable | ' | ' | ' |
Overview and Basis of Presentation [Line Items] | ' | ' | ' |
Concentration risk, percentage | 15.00% | 16.00% | ' |
Distributor Two | Customer Concentration Risk | Sales | ' | ' | ' |
Overview and Basis of Presentation [Line Items] | ' | ' | ' |
Concentration risk, percentage | 12.00% | 12.00% | 11.00% |
Distributor Three | Customer Concentration Risk | Accounts Receivable | ' | ' | ' |
Overview and Basis of Presentation [Line Items] | ' | ' | ' |
Concentration risk, percentage | 11.00% | 11.00% | ' |
Distributor Three | Customer Concentration Risk | Sales | ' | ' | ' |
Overview and Basis of Presentation [Line Items] | ' | ' | ' |
Concentration risk, percentage | 11.00% | ' | 10.00% |
Business_Combinations_And_Good
(Business Combinations And Goodwill) (Details) (USD $) | 12 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | ||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Aug. 24, 2012 | Dec. 31, 2013 | Aug. 24, 2012 | Dec. 31, 2012 | Dec. 31, 2011 |
Desktone, Inc. and Virsto Software | Nicira | Series of Individually Immaterial Business Acquisitions | Series of Individually Immaterial Business Acquisitions | |||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Number of Businesses Acquired | ' | ' | ' | ' | 2 | ' | 5 | 6 |
Payments to Acquire Businesses, Net of Cash Acquired | $289 | $1,344 | $304 | ' | $289 | $1,100 | ' | ' |
Payments to acquire business | ' | ' | ' | ' | ' | 1,083 | ' | ' |
Assumed equity attributed to pre-combination services | ' | ' | ' | ' | ' | 17 | ' | ' |
Fair value of assumed equity awards | ' | ' | ' | ' | ' | 152 | ' | ' |
Unvested stock options issued (shares) | ' | ' | ' | ' | ' | 1 | ' | ' |
Share price | ' | ' | ' | $92.21 | ' | ' | ' | ' |
Expected term | ' | ' | ' | ' | ' | '2 years 7 months 57 days | ' | ' |
Risk-free interest rate | ' | ' | ' | ' | ' | 0.30% | ' | ' |
Expected volatility | ' | ' | ' | ' | ' | 35.70% | ' | ' |
Weighted-average acquisition-date fair value per share | ' | ' | ' | ' | ' | $88.39 | ' | ' |
Acquired restricted shares | ' | ' | ' | ' | ' | 1 | ' | ' |
Aggregate consideration for acquisition | ' | ' | ' | ' | 289 | 1,100 | 261 | 304 |
Fair value of equity awards assumed attributed to pre-combination services | ' | ' | ' | ' | ' | ' | ' | $1 |
Business_Combinations_Goodwill2
Business Combinations, Goodwill and Intangible Assets, Net (Purchase Price Allocation) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Aug. 24, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 |
In Millions, unless otherwise specified | Series of Individually Immaterial Business Acquisitions | Series of Individually Immaterial Business Acquisitions | Desktone, Inc. and Virsto Software | Nicira | Purchased technology | Purchased technology | Purchased technology | Purchased technology | |||
Desktone, Inc. and Virsto Software | Nicira | Nicira | Transferred to Purchased Technology | ||||||||
Desktone, Inc. and Virsto Software | |||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Intangible Assets, Amount Transferred from In Process Research and Development | ' | ' | ' | ' | ' | ' | ' | $9 | $49 | ' | ' |
Intangible Assets, Transferred from In Process Research and Development, Useful Life | ' | ' | ' | ' | ' | ' | ' | ' | ' | '8 years | '5 years |
Intangible assets | ' | ' | ' | 88 | 105 | 62 | 335 | ' | ' | ' | ' |
Goodwill | 3,027 | 2,848 | 1,759 | 187 | 188 | 233 | 893 | ' | ' | ' | ' |
Total intangible assets acquired | ' | ' | ' | 275 | ' | ' | 1,228 | ' | ' | ' | ' |
Deferred tax assets, net | ' | ' | ' | ' | 23 | 4 | ' | ' | ' | ' | ' |
Total assets acquired | ' | ' | ' | ' | 316 | 299 | ' | ' | ' | ' | ' |
Deferred tax liabilities, net | ' | ' | ' | -8 | ' | ' | -77 | ' | ' | ' | ' |
Income taxes payable | ' | ' | ' | ' | ' | ' | -50 | ' | ' | ' | ' |
Other assumed liabilities, net of other acquired assets | ' | ' | ' | -6 | -12 | -10 | -1 | ' | ' | ' | ' |
Total net liabilities assumed | ' | ' | ' | -14 | -12 | -10 | -128 | ' | ' | ' | ' |
Fair value of assets acquired and net liabilities assumed | ' | ' | ' | 261 | 304 | 289 | 1,100 | ' | ' | ' | ' |
Goodwill acquired, deductible amount for income tax purposes | ' | ' | ' | $15 | ' | ' | ' | ' | ' | ' | ' |
Business_Combinations_Goodwill3
Business Combinations, Goodwill and Intangible Assets, Net (Pro Forma) (Details) (Nicira, USD $) | 12 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 |
Nicira | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Pro forma adjusted total revenue | $4,607 | $3,770 |
Pro forma adjusted net income | $687 | $611 |
Pro forma adjusted net income per weighted-average share, diluted for Class A and Class B | $1.58 | $1.41 |
Business_Combinations_Goodwill4
Business Combinations, Goodwill and Intangible Assets, Net (Changes in Carrying Amount of Intangible Assets) (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Intangible Assets, Net [Roll Forward] | ' | ' |
Balance, beginning of the year | $732 | $407 |
Additions to intangible assets related to business combinations | 62 | 423 |
Disposition of certain business activities (See Note C) | 54 | 0 |
Contribution to Pivotal (see Note O) | -28 | 0 |
Change in accumulated amortization | -107 | -96 |
Other adjustments | 2 | -2 |
Balance, end of the year | $607 | $732 |
Business_Combinations_Goodwill5
Business Combinations, Goodwill and Intangible Assets, Net (Summary of Intangible Assets Acquired) (Details) (USD $) | 12 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | ||||||||||||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Aug. 24, 2012 | Aug. 24, 2012 | Aug. 24, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 24, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
IPR&D | Purchased technology | Purchased technology | Leasehold interest | Leasehold interest | Customer relationships and customer lists | Customer relationships and customer lists | Trademarks and trade names | Trademarks and trade names | Other | Nicira | Nicira | Nicira | Nicira | Nicira | Nicira | Desktone, Inc. and Virsto Software | Desktone, Inc. and Virsto Software | Desktone, Inc. and Virsto Software | Desktone, Inc. and Virsto Software | Transferred to Purchased Technology | ||||
IPR&D | Purchased technology | Purchased technology | Purchased technology | Trademarks and trade names | IPR&D | Purchased technology | Vendor contracts | Desktone, Inc. and Virsto Software | ||||||||||||||||
Purchased technology | ||||||||||||||||||||||||
Acquired Intangible Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Liability-classified awards were reclassified to additional paid-in capital | $25 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted-average useful lives of acquired intangible assets | ' | ' | ' | ' | '6 years 7 months 6 days | '6 years 1 month 2 days | '34 years 10 months 24 days | '34 years 10 months 24 days | '8 years 8 months 12 days | '7 years 3 months 6 days | '9 years 1 month 6 days | '8 years | '3 years | ' | ' | '7 years | ' | ' | '10 years | ' | ' | '6 years | '8 years | ' |
Finite-lived intangible assets | 62 | 423 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 266 | ' | ' | 20 | ' | ' | 49 | 3 | ' |
Indefinite-lived intangible assets acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 49 | ' | ' | ' | ' | ' | 10 | ' | ' | ' |
Total intangible assets acquired, net, excluding goodwill | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 335 | ' | ' | ' | ' | ' | 62 | ' | ' | ' | ' |
Intangible Assets, Amount Transferred from In Process Research and Development | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 49 | ' | ' | ' | ' | 9 | ' | ' |
Intangible Assets, Transferred from In Process Research and Development, Useful Life | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '8 years | ' | ' | ' | ' | ' | '5 years |
Finite-lived intangible assets, Net Carrying Amount | ' | ' | ' | ' | 580 | 757 | 145 | 145 | 75 | 146 | 24 | 45 | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Finite-lived intangible assets, Accumulated Amortization | -218 | -364 | ' | ' | -163 | -274 | -11 | -7 | -37 | -63 | -7 | -17 | -3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total | 606 | ' | ' | ' | 417 | 483 | 134 | 138 | 38 | 83 | 17 | 28 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Indefinite-lived intangible assets (excluding goodwill) | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total intangible assets, excluding goodwill, Net Carrying Amount | 825 | 1,096 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Intangible Assets, Net (Excluding Goodwill) | $607 | $732 | $407 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business_Combinations_Goodwill6
Business Combinations, Goodwill and Intangible Assets, Net (Schedule of Expected Amortization Expense) (Details) (USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
Business Combinations [Abstract] | ' |
2014 | $97 |
2015 | 95 |
2016 | 86 |
2017 | 81 |
2018 | 69 |
Thereafter | 178 |
Total | $606 |
Business_Combinations_Goodwill7
Business Combinations, Goodwill and Intangible Assets, Net (Changes In Carrying Amount Of Goodwill) (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Goodwill [Roll Forward] | ' | ' |
Balance, beginning of the year | $2,848 | $1,759 |
Increase in goodwill related to business combination | 233 | 1,092 |
Contribution to Pivotal (see Note O) | -28 | 0 |
Reduction related to disposition of certain business activities | -4 | 0 |
Deferred tax adjustments to purchase price allocations on acquisitions | -20 | -4 |
Other adjustments to purchase price allocations on acquisitions | -2 | 1 |
Balance, end of the year | $3,027 | $2,848 |
Realignment_Charges_Details
Realignment Charges (Details) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Position | ||||||
Realignment Cost and Reserve [Line Items] | ' | ' | ' | |||
Number of positions eliminated | 710 | ' | ' | |||
Realignment Charges | $68 | [1] | $0 | [1] | $0 | [1] |
Business Realignment Plan | ' | ' | ' | |||
Realignment Cost and Reserve [Line Items] | ' | ' | ' | |||
Realignment Charges | 68 | ' | ' | |||
Business Realignment Plan | Workforce reductions | ' | ' | ' | |||
Realignment Cost and Reserve [Line Items] | ' | ' | ' | |||
Realignment Charges | 54 | [1] | ' | ' | ||
Business Realignment Plan | Asset impairments, exit of facilities and other exit costs | ' | ' | ' | |||
Realignment Cost and Reserve [Line Items] | ' | ' | ' | |||
Realignment Charges | 14 | [1] | ' | ' | ||
Other Income (Expense), Net | Business Realignment Plan | ' | ' | ' | |||
Realignment Cost and Reserve [Line Items] | ' | ' | ' | |||
Pre-tax gain on disposition of certain lines of business | $44 | ' | ' | |||
[1] | Includes stock-based compensation as follows: Cost of license revenues $2 $2 $2, Cost of services revenues $29 $28 $23, Research and development $227 $210 $174, Sales and marketing $144 $150 $96, General and administrative $56 $48 $40, Realignment charges $6 $0 $0. |
Realignment_Charges_Schedule_o
Realignment Charges (Schedule of Accrued Realignment Charges) (Details) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Realignment Accrual [Roll Forward] | ' | ' | ' | |||
Realignment Charges | $68 | [1] | $0 | [1] | $0 | [1] |
Business Realignment Plan | ' | ' | ' | |||
Realignment Accrual [Roll Forward] | ' | ' | ' | |||
Balance as of January 1, 2013 | 0 | ' | ' | |||
Realignment Charges | 68 | ' | ' | |||
Utilization | -65 | ' | ' | |||
Balance as of December 31, 2013 | 3 | ' | ' | |||
Non-Cash Portion of Utilization | -15 | ' | ' | |||
Business Realignment Plan | Workforce reductions | ' | ' | ' | |||
Realignment Accrual [Roll Forward] | ' | ' | ' | |||
Balance as of January 1, 2013 | 0 | ' | ' | |||
Realignment Charges | 54 | [1] | ' | ' | ||
Utilization | -54 | ' | ' | |||
Balance as of December 31, 2013 | 0 | ' | ' | |||
Non-Cash Portion of Utilization | -6 | ' | ' | |||
Business Realignment Plan | Asset impairments, exit of facilities and other exit costs | ' | ' | ' | |||
Realignment Accrual [Roll Forward] | ' | ' | ' | |||
Balance as of January 1, 2013 | 0 | ' | ' | |||
Realignment Charges | 14 | [1] | ' | ' | ||
Utilization | -11 | ' | ' | |||
Balance as of December 31, 2013 | 3 | ' | ' | |||
Non-Cash Portion of Utilization | ($9) | ' | ' | |||
[1] | Includes stock-based compensation as follows: Cost of license revenues $2 $2 $2, Cost of services revenues $29 $28 $23, Research and development $227 $210 $174, Sales and marketing $144 $150 $96, General and administrative $56 $48 $40, Realignment charges $6 $0 $0. |
Earnings_per_Share_Computation
Earnings per Share (Computations Of Basic And Diluted Net Income Per Share) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Earnings Per Share [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | $335 | $261 | $244 | $174 | $206 | $157 | $192 | $191 | $1,014 | $746 | $724 |
Weighted-average shares, basic for Class A and Class B | ' | ' | ' | ' | ' | ' | ' | ' | 429,093,000 | 426,658,000 | 421,188,000 |
Effect of dilutive securities (shares) | ' | ' | ' | ' | ' | ' | ' | ' | 4,000,000 | 7,000,000 | 11,000,000 |
Weighted-average shares, diluted for Class A and Class B | ' | ' | ' | ' | ' | ' | ' | ' | 433,415,000 | 433,974,000 | 431,750,000 |
Net income per weighted-average share, basic for Class A and Class B | $0.78 | $0.61 | $0.57 | $0.41 | $0.48 | $0.37 | $0.45 | $0.45 | $2.36 | $1.75 | $1.72 |
Net income per weighted-average share, diluted for Class A and Class B | $0.77 | $0.60 | $0.57 | $0.40 | $0.47 | $0.36 | $0.44 | $0.44 | $2.34 | $1.72 | $1.68 |
Earnings_per_Share_Details
Earnings per Share (Details) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2011 |
Restricted Stock | Restricted Stock | Class A Common Stock | Class A Common Stock | |
Stock Options | Stock Options | |||
Anti-dilutive shares excluded from computation of earnings per share | 2 | 0 | 1 | 1 |
Investments_Investing_In_Fixed
Investments (Investing In Fixed Income Securities) (Details) (USD $) | 12 Months Ended | 12 Months Ended | ||||||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
TerreMark Worldwide, Inc. | U.S. Government and agency obligations | U.S. Government and agency obligations | U.S. and foreign corporate debt securities | U.S. and foreign corporate debt securities | Foreign governments and multi-national agency obligations | Foreign governments and multi-national agency obligations | Municipal obligations | Municipal obligations | Asset-backed securities | Mortgage-backed securities | Mortgage-backed securities | |||
Other Income (Expense), Net | ||||||||||||||
Schedule of Investments [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cost or Amortized Cost | $3,865 | $3,013 | ' | $537 | $374 | $2,351 | $1,545 | $37 | $41 | $811 | $973 | $1 | $129 | $79 |
Unrealized Gains | 9 | 10 | ' | 0 | 1 | 6 | 6 | 0 | 0 | 3 | 3 | 0 | 0 | 0 |
Unrealized Losses | -4 | -1 | ' | 0 | 0 | -3 | -1 | 0 | 0 | 0 | 0 | 0 | -1 | 0 |
Aggregate Fair Value | 3,870 | 3,022 | ' | 537 | 375 | 2,354 | 1,550 | 37 | 41 | 814 | 976 | 1 | 128 | 79 |
Charge recognized for other-than-temporarily impaired strategic investment | 13 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gain on Sale of Investments | ' | ' | $56 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Investments_Unrealized_Losses_
Investments (Unrealized Losses On Investments) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Schedule of Investments [Line Items] | ' | ' |
Fair Value | $841 | $344 |
Unrealized Losses | -4 | -1 |
U.S. and foreign corporate debt securities | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Fair Value | 750 | 316 |
Unrealized Losses | -3 | -1 |
Mortgage-backed securities | ' | ' |
Schedule of Investments [Line Items] | ' | ' |
Fair Value | 91 | 28 |
Unrealized Losses | ($1) | $0 |
Investments_Contractual_Maturi
Investments (Contractual Maturity Of Investments) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Amortized Cost Basis | ' | ' |
Due within one year | $807 | ' |
Due after 1 year through 5 years | 2,864 | ' |
Due after 5 years | 194 | ' |
Total investments | 3,865 | ' |
Aggregate Fair Value | ' | ' |
Due within one year | 808 | ' |
Due after 1 year through 5 years | 2,869 | ' |
Due after 5 years | 193 | ' |
Total investments | $3,870 | $3,022 |
Fair_Value_Measurements_Fair_V
Fair Value Measurements (Fair Value Hierarchy) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' |
Available-for-sale securities | $3,870 | $3,022 |
U.S. Government and agency obligations | ' | ' |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' |
Available-for-sale securities | 537 | 375 |
U.S. and foreign corporate debt securities | ' | ' |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' |
Available-for-sale securities | 2,354 | 1,550 |
Foreign governments and multi-national agency obligations | ' | ' |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' |
Available-for-sale securities | 37 | 41 |
Municipal obligations | ' | ' |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' |
Available-for-sale securities | 814 | 976 |
Asset-backed securities | ' | ' |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' |
Available-for-sale securities | ' | 1 |
Mortgage-backed securities | ' | ' |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' |
Available-for-sale securities | 128 | 79 |
Fair Value, Measurements, Recurring | Level 1 | ' | ' |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' |
Money-market funds | 1,808 | 1,125 |
Total | 2,193 | 1,375 |
Fair Value, Measurements, Recurring | Level 2 | ' | ' |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' |
Money-market funds | 0 | 0 |
Total | 3,499 | 2,819 |
Fair Value, Measurements, Recurring | Total | ' | ' |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' |
Money-market funds | 1,808 | 1,125 |
Total | 5,692 | 4,194 |
Fair Value, Measurements, Recurring | U.S. Government and agency obligations | Level 1 | ' | ' |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' |
Available-for-sale securities | 385 | 250 |
Fair Value, Measurements, Recurring | U.S. Government and agency obligations | Level 2 | ' | ' |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' |
Available-for-sale securities | 152 | 155 |
Fair Value, Measurements, Recurring | U.S. Government and agency obligations | Total | ' | ' |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' |
Available-for-sale securities | 537 | 405 |
Fair Value, Measurements, Recurring | U.S. and foreign corporate debt securities | Level 1 | ' | ' |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' |
Available-for-sale securities | 0 | 0 |
Fair Value, Measurements, Recurring | U.S. and foreign corporate debt securities | Level 2 | ' | ' |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' |
Available-for-sale securities | 2,366 | 1,567 |
Fair Value, Measurements, Recurring | U.S. and foreign corporate debt securities | Total | ' | ' |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' |
Available-for-sale securities | 2,366 | 1,567 |
Fair Value, Measurements, Recurring | Foreign governments and multi-national agency obligations | Level 1 | ' | ' |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' |
Available-for-sale securities | 0 | 0 |
Fair Value, Measurements, Recurring | Foreign governments and multi-national agency obligations | Level 2 | ' | ' |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' |
Available-for-sale securities | 37 | 41 |
Fair Value, Measurements, Recurring | Foreign governments and multi-national agency obligations | Total | ' | ' |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' |
Available-for-sale securities | 37 | 41 |
Fair Value, Measurements, Recurring | Municipal obligations | Level 1 | ' | ' |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' |
Available-for-sale securities | 0 | 0 |
Fair Value, Measurements, Recurring | Municipal obligations | Level 2 | ' | ' |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' |
Available-for-sale securities | 816 | 976 |
Fair Value, Measurements, Recurring | Municipal obligations | Total | ' | ' |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' |
Available-for-sale securities | 816 | 976 |
Fair Value, Measurements, Recurring | Asset-backed securities | Level 1 | ' | ' |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' |
Available-for-sale securities | 0 | 0 |
Fair Value, Measurements, Recurring | Asset-backed securities | Level 2 | ' | ' |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' |
Available-for-sale securities | 0 | 1 |
Fair Value, Measurements, Recurring | Asset-backed securities | Total | ' | ' |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' |
Available-for-sale securities | 0 | 1 |
Fair Value, Measurements, Recurring | Mortgage-backed securities | Level 1 | ' | ' |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' |
Available-for-sale securities | 0 | 0 |
Fair Value, Measurements, Recurring | Mortgage-backed securities | Level 2 | ' | ' |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' |
Available-for-sale securities | 128 | 79 |
Fair Value, Measurements, Recurring | Mortgage-backed securities | Total | ' | ' |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ' | ' |
Available-for-sale securities | $128 | $79 |
Derivatives_and_Hedging_Activi1
Derivatives and Hedging Activity (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Derivatives, Fair Value [Line Items] | ' | ' | ' |
Gain (loss) on foreign currency derivative instruments not designated as hedging instruments | ($4) | ($10) | $5 |
Derivative instruments, gain (loss) recognized in income, net | -4 | -2 | -1 |
Designated As Hedging Instrument | Foreign Exchange Forward | ' | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' | ' |
Maximum maturity period in price risk cash flow hedge | ' | '6 months | ' |
Not Designated As Hedging Instrument | Foreign Exchange Forward | ' | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' | ' |
Notional amount of foreign currency cash flow hedge derivatives | 498 | 440 | ' |
Maturity of derivatives | ' | '1 month | ' |
Cash Flow Hedging | Designated As Hedging Instrument | Foreign Exchange Forward | ' | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' | ' |
Notional amount of foreign currency cash flow hedge derivatives | $82 | $9 | ' |
Property_and_Equipment_Net_Com
Property and Equipment, Net (Components Of Property And Equipment) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment | $1,533 | $1,239 |
Accumulated depreciation | -688 | -574 |
Total property and equipment, net | 845 | 665 |
Equipment and software | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment | 752 | 636 |
Buildings and improvements | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment | 584 | 438 |
Furniture and fixtures | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment | 77 | 67 |
Construction in progress | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment | $120 | $98 |
Property_and_Equipment_Net_Det
Property and Equipment, Net (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Depreciation expense | $141 | $131 | $126 |
Payments to acquire ground lease | ' | ' | 225 |
Purchase price recorded to property and equipment | 345 | 234 | 230 |
Payments to acquire intangible assets | 0 | 0 | 151 |
Ground lease, agreement term | ' | ' | '34 years 11 months |
Initial annual rental payments | ' | ' | 7 |
Percentage increase in annual rent | ' | ' | 3.00% |
Buildings and improvements | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Purchase price recorded to property and equipment | ' | ' | 74 |
Leasehold interest | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Payments to acquire intangible assets | ' | ' | 151 |
Intangible assets, net | Leasehold interest | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Payments to acquire intangible assets | ' | ' | $147 |
Accrued_Expenses_and_Other_Com
Accrued Expenses and Other (Components Of Accrued Expenses) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Accrued Liabilities [Abstract] | ' | ' |
Salaries, commissions, bonuses and benefits | $303 | $292 |
Accrued partner liabilities | 135 | 129 |
Other | 170 | 223 |
Total | $608 | $644 |
Unearned_Revenues_Summary_of_U
Unearned Revenues (Summary of Unearned Revenues) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 |
In Millions, unless otherwise specified | Unearned license revenues | Unearned license revenues | Unearned software maintenance revenues | Unearned software maintenance revenues | Professional services revenues | Professional services revenues | Minimum | Maximum | ||
Unearned software maintenance revenues | Unearned software maintenance revenues | |||||||||
Unearned Revenue Arrangement [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unearned revenues | $4,092 | $3,461 | $465 | $463 | $3,304 | $2,755 | $323 | $243 | ' | ' |
Revenue recognition term | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | '5 years |
Note_Payable_to_EMC_Details
Note Payable to EMC (Details) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Jan. 21, 2014 |
EMC | Subsequent event | Notes payable | ||||
EMC | Subsequent event | |||||
EMC | ||||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' |
Notes payable | $450 | $450 | ' | $450 | $450 | ' |
Basis Description | '90-day LIBOR | ' | ' | ' | ' | ' |
Spread over LIBOR (basis points) | 0.55% | ' | ' | ' | ' | ' |
Interest expense | 4 | 5 | 4 | ' | ' | ' |
Principal amount | ' | ' | ' | ' | ' | $1,500 |
Income_Taxes_Income_Loss_Befor
Income Taxes (Income (Loss) Before Income Taxes) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income Tax Disclosure [Abstract] | ' | ' | ' |
Domestic | $160 | $177 | $112 |
International | 987 | 716 | 682 |
Income before income taxes | $1,147 | $893 | $794 |
Income_Taxes_Tax_Expense_Benef
Income Taxes (Tax Expense (Benefit) by Jurisdiction) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Federal: | ' | ' | ' |
Current | $1 | $161 | $43 |
Deferred | 57 | -71 | -24 |
Total | 58 | 90 | 19 |
State: | ' | ' | ' |
Current | 2 | 13 | 1 |
Deferred | 6 | -7 | 11 |
Total | 8 | 6 | 12 |
Foreign: | ' | ' | ' |
Current | 72 | 44 | 41 |
Deferred | -5 | 7 | -2 |
Total | 67 | 51 | 39 |
Total provision for income taxes | $133 | $147 | $70 |
Income_Taxes_Effective_Income_
Income Taxes (Effective Income Tax Rate Reconciliation) (Details) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Income Tax Disclosure [Abstract] | ' | ' | ' |
Statutory federal tax rate | 35.00% | 35.00% | 35.00% |
State taxes, net of federal benefit | 1.00% | 1.00% | 2.00% |
Tax rate differential for international jurisdictions | -22.00% | -22.00% | -25.00% |
U.S. tax credits | -7.00% | 0.00% | -6.00% |
Permanent items and other | 5.00% | 3.00% | 3.00% |
Effective tax rate | 12.00% | 17.00% | 9.00% |
Income_Taxes_Deferred_Tax_Asse
Income Taxes (Deferred Tax Assets and Liabilities) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Deferred tax assets: | ' | ' |
Unearned revenue | $224 | $211 |
Accruals and other | 45 | 43 |
Stock-based compensation | 68 | 65 |
Tax credit and net operating loss carryforwards | 119 | 130 |
Other non-current assets | 14 | 0 |
Basis difference in investment in business | 20 | 0 |
Net deferred tax assets | 490 | 449 |
Valuation allowance | -94 | -64 |
Total deferred tax assets | 396 | 385 |
Deferred tax liabilities: | ' | ' |
Property, plant and equipment, net | -70 | -51 |
Intangibles and other assets, net | -76 | -55 |
Total deferred tax liabilities | -146 | -106 |
Total deferred tax assets, net | $250 | $279 |
Income_Taxes_Operating_Loss_Ca
Income Taxes (Operating Loss Carryforwards) (Details) (USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
U.S. Federal | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards | $129 |
State | ' |
Operating Loss Carryforwards [Line Items] | ' |
Operating loss carryforwards | $223 |
Income_Taxes_Tax_Credit_Carryf
Income Taxes (Tax Credit Carryforward) (Details) (International, USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
International | ' |
Tax Credit Carryforward [Line Items] | ' |
Tax credit carryforward | $2 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule Of Income Taxes [Line Items] | ' | ' |
Undistributed Earnings of Foreign Subsidiaries | $2,830 | $2,002 |
Unrecognized tax benefits that would impact effective tax rate, including interest and penalties | 169 | ' |
Unrecognized tax benefits, interest and penalties on income taxes accrued | 13 | 8 |
Unrecognized tax benefits, interest and penalties on income tax expense | 5 | ' |
Reduction in total unrecognized tax benefits reasonably possible within next 12 months, minimum | $4 | ' |
International | Ireland | ' | ' |
Schedule Of Income Taxes [Line Items] | ' | ' |
Foreign statutory income tax rate, Ireland | 12.50% | ' |
Income_Taxes_Tax_Sharing_Agree
Income Taxes (Tax Sharing Agreement) (Details) (EMC, Tax Sharing Agreement, USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
EMC | Tax Sharing Agreement | ' | ' | ' |
Schedule Of Income Taxes [Line Items] | ' | ' | ' |
Payments from VMware to EMC | $8 | $0 | $12 |
Payments from EMC to VMware | 32 | 19 | 314 |
(Decrease) Increase in shareholders' equity from tax sharing agreement | ($3) | ($4) | $8 |
Income_Taxes_Unrecognized_Tax_
Income Taxes (Unrecognized Tax Benefits) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Reconciliation of Gross Unrecognized Tax Benefits, Excluding Interest and Penalties Associated with Unrecognized Tax Benefits [Roll Forward] | ' | ' | ' |
Balance, beginning of the year | $158 | $95 | $109 |
Tax positions related to current year: | ' | ' | ' |
Additions | 32 | 12 | 19 |
Reductions | 0 | -4 | -2 |
Tax positions related to prior years: | ' | ' | ' |
Additions related to acquisitions completed in 2012 | 0 | 60 | 0 |
Additions | 0 | 0 | 3 |
Reductions | -12 | 0 | -9 |
Settlements | -2 | 0 | -23 |
Reductions resulting from a lapse of the statute of limitations | -8 | -4 | -2 |
Foreign currency effects | -1 | -1 | 0 |
Balance, end of the year | $167 | $158 | $95 |
Contingencies_and_Contingencie2
Contingencies and Contingencies (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Commitments and Contingencies Disclosure [Abstract] | ' | ' | ' |
Rent expense | $67 | $62 | $56 |
Contractual commitments | $87 | ' | ' |
Contingencies_and_Contingencie3
Contingencies and Contingencies (Lease Commitments) (Details) (USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
Commitments and Contingencies Disclosure [Abstract] | ' |
2014 | $58 |
2015 | 53 |
2016 | 43 |
2017 | 36 |
2018 | 32 |
Thereafter | 564 |
Total minimum lease payments | $786 |
Stockholders_Equity_Details
Stockholders' Equity (Details) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | 31-May-09 | Dec. 31, 2013 | Dec. 31, 2012 | 31-May-13 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
Class B Convertible Common Stock | Class B Convertible Common Stock | Class A Common Stock | Class A Common Stock | Class A Common Stock | VMware 2007 Equity and Incentive Plan | VMware 2007 Equity and Incentive Plan | Stock Options | Stock Options | Minimum | Minimum | Maximum | Maximum | ||
Class A Common Stock | Class A Common Stock | Stock Options | Restricted Stock | Stock Options | Restricted Stock | |||||||||
Class A Common Stock | Class A Common Stock | Class A Common Stock | Class A Common Stock | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum percentage of total outstanding common stock owned required before automatic conversion | ' | 20.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of additional shares authorized | ' | ' | ' | 20,000,000 | ' | ' | 13,300,000 | ' | ' | ' | ' | ' | ' | ' |
Number of additional shares authorized from business acquisitions | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' | ' | ' | ' | ' |
Common stock, shares authorized (shares) | ' | 1,000,000,000 | 1,000,000,000 | 100,000,000 | 2,500,000,000 | 2,500,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Options minimum exercise price as percentage of fair value on grant date | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' |
Options award annual vesting percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | ' | ' | ' | ' |
Award vesting period after first year | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | ' |
Award vesting period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '6 years | '3 years | '7 years | '4 years |
Number of shares available for grant | 11,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stockholders_Equity_Stock_Repu
Stockholders' Equity (Stock Repurchase Program) (Details) (USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Aggregate purchase price | $508 | $467 | $526 |
August 2013 Stock Repurchase Program | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Authorized repurchase amount under stock repurchase program | 700 | ' | ' |
November 2012 Stock Repurchase Program | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Authorized repurchase amount under stock repurchase program | 250 | ' | ' |
February 2012 Stock Repurchase Program | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Authorized repurchase amount under stock repurchase program | 600 | ' | ' |
February 2011 Stock Repurchase Program | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Authorized repurchase amount under stock repurchase program | 550 | ' | ' |
March 2010 Stock Repurchase Program | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Authorized repurchase amount under stock repurchase program | 400 | ' | ' |
Class A Common Stock | VMware Repurchase Program | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Aggregate purchase price | 508 | 467 | 526 |
Class A common shares repurchased (shares) | 7 | 5 | 6 |
Weighted-average price per share (US$ per share) | $76.58 | $91.10 | $88.37 |
Authorized amount remaining for repurchase | $660 | ' | ' |
Stockholders_Equity_Employee_S
Stockholders' Equity (Employee Stock Purchase Plan) (Details) (USD $) | 1 Months Ended | 12 Months Ended | ||||
In Millions, except Share data, unless otherwise specified | 31-May-09 | 31-May-13 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 |
Class A Common Stock | VMware Employee Stock Purchase Plan | Employee Stock | Employee Stock | Employee Stock | Employee Stock | |
Class A Common Stock | ||||||
Class of Stock [Line Items] | ' | ' | ' | ' | ' | ' |
Number of additional shares authorized | 20,000,000 | 8,000,000 | ' | ' | ' | ' |
Fair market value at grant purchase price, percentage | ' | ' | ' | ' | ' | 85.00% |
Fair market value at grant exercise price, percentage | ' | ' | ' | ' | ' | 85.00% |
Cash proceeds | ' | ' | $76 | $69 | $57 | ' |
Class A common shares purchased (shares) | ' | ' | 1,000,000 | 1,000,000 | 1,000,000 | ' |
Weighted-average price per share | ' | ' | $65.97 | $77.34 | $69.81 | ' |
ESPP withholdings | ' | ' | ' | ' | ' | $36 |
Stockholders_Equity_Summary_of
Stockholders' Equity (Summary of Stock Option Activity) (Details) (USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Class A Common Stock | ' | ' | ' |
Number of Shares | ' | ' | ' |
Outstanding, Beginning balance | 10 | 16 | 27 |
Granted | 1 | 1 | ' |
Options relating to employees transferred to/from EMC, net | ' | ' | 0 |
Forfeited | ' | -1 | -1 |
Exercised | -5 | -6 | -10 |
Outstanding, Ending balance | 6 | 10 | 16 |
Exercisable | 4 | ' | ' |
Vested and expected to vest | 6 | ' | ' |
Weighted-Average Exercise Price | ' | ' | ' |
Outstanding, Beginning balance (per share) | $34.36 | $35.27 | $33.54 |
Weighted-average fair value at grant date | $71.53 | $4.67 | ' |
Options relating to employees transferred to/from EMC, net (per share) | ' | ' | $0 |
Forfeited (per share) | ' | $42.07 | $40.98 |
Exercised (per share) | $28.12 | $30.44 | $28.64 |
Outstanding, Ending balance (per share) | $44.12 | $34.36 | $35.27 |
Exercisable (per share) | $36.45 | ' | ' |
Vested and Expected to Vest (per share) | $42.84 | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | ' | '1 year 9 months 18 days | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | ' | $209 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term | ' | '3 years 2 months 8 days | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | ' | 261 | ' |
Stock, Closing Price Per Share | ' | $89.71 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | 256 | 443 | 648 |
Class A Common Stock | EMC Stock Plan | ' | ' | ' |
Number of Shares | ' | ' | ' |
Outstanding, Beginning balance | 3 | 4 | 3 |
Granted | 0 | 0 | ' |
Options relating to employees transferred to/from EMC, net | ' | ' | 2 |
Forfeited | ' | 0 | 0 |
Exercised | -1 | -1 | -1 |
Outstanding, Ending balance | 2 | 3 | 4 |
Exercisable | 1 | ' | ' |
Vested and expected to vest | 2 | ' | ' |
Weighted-Average Exercise Price | ' | ' | ' |
Outstanding, Beginning balance (per share) | $15.12 | $13.16 | $13.93 |
Weighted-average fair value at grant date | $0 | $0 | ' |
Options relating to employees transferred to/from EMC, net (per share) | ' | ' | $13.53 |
Forfeited (per share) | ' | $0 | $0 |
Exercised (per share) | $15.39 | $12.35 | $13.58 |
Outstanding, Ending balance (per share) | $15.53 | $15.12 | $13.16 |
Exercisable (per share) | $15.12 | ' | ' |
Vested and Expected to Vest (per share) | $15.51 | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | ' | '4 years 3 months 4 days | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | ' | 15 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Remaining Contractual Term | ' | '4 years 6 months | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | ' | 16 | ' |
Stock, Closing Price Per Share | ' | $25.05 | ' |
Employee Service Share-based Compensation, Cash Proceeds from Exercise of Stock Options | 11 | 9 | 12 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $8 | $11 | $12 |
Stock Options | ' | ' | ' |
Weighted-Average Exercise Price | ' | ' | ' |
Weighted-average fair value at grant date | $29.47 | $80.45 | $88.40 |
Recovered_Sheet2
Stockholders' Equity (Summary Of Restricted Stock Activity) (Details) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Class A Common Stock | ' | ' | ' |
Number of Units | ' | ' | ' |
Outstanding, number of shares | 12,000,000 | 10,000,000 | 10,000,000 |
Granted, number of shares | 7,000,000 | 8,000,000 | 5,000,000 |
Vested, number of shares | -4,000,000 | -4,000,000 | -4,000,000 |
Forfeited, number of shares | -2,000,000 | -2,000,000 | -1,000,000 |
Outstanding, number of shares | 13,000,000 | 12,000,000 | 10,000,000 |
Weighted-Average Grant Date Fair Value | ' | ' | ' |
Outstanding, weighted-average grant date fair value (per share) | $91.93 | $72.74 | $54.17 |
Granted, weighted-average grant date fair value (per share) | $76.20 | $101.73 | $91.51 |
Vested, weighted-average grant date fair value (per share) | $83.21 | $69.01 | $48.47 |
Forfeited, weighted-average grant date fair value (per share) | $90.55 | $81.53 | $64.70 |
Outstanding, weighted-average grant date fair falue (per share) | $85.85 | $91.93 | $72.74 |
Aggregate intrinsic value | $1,153 | ' | ' |
Restricted Stock Units (RSUs) | Class A Common Stock | ' | ' | ' |
Number of Units | ' | ' | ' |
Outstanding, number of shares | 12,000,000 | ' | ' |
Performance Stock Units (PSUs) | Class A Common Stock | ' | ' | ' |
Number of Units | ' | ' | ' |
Outstanding, number of shares | 1,000,000 | ' | ' |
Restricted Stock | ' | ' | ' |
Weighted-Average Grant Date Fair Value | ' | ' | ' |
Fair value of restricted stock-based awards, vested | $340 | $347 | $356 |
Restricted Stock | Class A Common Stock | ' | ' | ' |
Number of Units | ' | ' | ' |
Outstanding, number of shares | 13,000,000 | ' | ' |
Minimum | Performance Stock Units (PSUs) | Class A Common Stock | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Performance stock units to Class A common stock, conversion ratio | 0.5 | ' | ' |
Maximum | Performance Stock Units (PSUs) | Class A Common Stock | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Performance stock units to Class A common stock, conversion ratio | 3 | ' | ' |
Stockholders_Equity_Shares_Rep
Stockholders' Equity (Shares Repurchased for Tax Withholdings) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Stock repurchased and retired during period, value | $508 | $467 | $526 |
Class A Common Stock | Stock Repurchase For Tax Withholding Member | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Stock repurchased and retired during period, shares | 2 | 2 | 1 |
Stock repurchased and retired during period, value | $126 | $136 | $122 |
Stockholders_Equity_ShareBased
Stockholders' Equity (Share-Based Compensation) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' |
Stock-based compensation | $464 | $438 | $335 |
Income tax benefit | -136 | -132 | -98 |
Total stock-based compensation, net of tax | 328 | 306 | 237 |
Additions to capitalized computer software, share based compensation | ' | ' | 12 |
Liability-Classified Awards | 22 | ' | ' |
Liability-classified awards were reclassified to additional paid-in capital | 25 | ' | ' |
Unrecognized compensation cost for stock options and restricted stock | 823 | ' | ' |
Weighted-Average Remaining Period for Recognition | '1 year 6 months | ' | ' |
Additional Paid-in Capital | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' |
Liability-classified awards were reclassified to additional paid-in capital | 25 | ' | ' |
Cost of license revenues | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' |
Stock-based compensation | 2 | 2 | 2 |
Cost of services revenues | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' |
Stock-based compensation | 29 | 28 | 23 |
Research and development | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' |
Stock-based compensation | 227 | 210 | 174 |
Sales and marketing | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' |
Stock-based compensation | 144 | 150 | 96 |
General and administrative | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' |
Stock-based compensation | 56 | 48 | 40 |
Realignment | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' |
Stock-based compensation | 6 | 0 | 0 |
Software and Software Development Costs | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' |
Additions to capitalized computer software, share based compensation | $0 | $0 | $12 |
Stockholders_Equity_ShareBased1
Stockholders' Equity (Share-Based Compensation Valuation Method) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Stock Options | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Expected volatility | 38.50% | 35.80% | 37.70% |
Risk-free interest rate | 0.90% | 0.30% | 1.00% |
Expected term | '3 years 7 months 2 days | '2 years 8 months 4 days | '3 years |
Weighted-average fair value at grant date | $29.47 | $80.45 | $88.40 |
Employee Stock | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Expected volatility | 32.90% | 37.80% | 34.90% |
Risk-free interest rate | 0.10% | 0.10% | 0.20% |
Expected term | '6 months | '6 months | '6 months |
Weighted-average fair value at grant date | $20.45 | $23.36 | $23.69 |
Stockholders_Equity_Accumulate
Stockholders' Equity (Accumulated Other Comprehensive Income) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Accumulated Other Comprehensive Income [Roll Forward] | ' | ' | ' |
Balance, January 1, 2013 | $6 | ' | ' |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax [Abstract] | ' | ' | ' |
Amounts reclassified from accumulated other comprehensive income to the consolidated statement of income, net of taxes of $(1) | -2 | ' | ' |
Total other comprehensive income (loss) | -2 | 5 | -18 |
Balance, December 31, 2013 | 4 | 6 | ' |
Unrealized Gains On Available-For-Sale Securities [Member] | ' | ' | ' |
Accumulated Other Comprehensive Income [Roll Forward] | ' | ' | ' |
Balance, January 1, 2013 | 6 | ' | ' |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax [Abstract] | ' | ' | ' |
Amounts reclassified from accumulated other comprehensive income to the consolidated statement of income, net of taxes of $(1) | -2 | ' | ' |
Total other comprehensive income (loss) | -2 | ' | ' |
Balance, December 31, 2013 | $4 | ' | ' |
Stockholders_Equity_Accumulate1
Stockholders' Equity (Accumulated Other Comprehensive Income (Loss)) (Parenthetical) (Details) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Accumulated Other Comprehensive Income [Line Items] | ' |
Tax effect on amounts reclassified from accumulated other comprehensive income | ($1) |
Unrealized Gains On Available-For-Sale Securities [Member] | ' |
Accumulated Other Comprehensive Income [Line Items] | ' |
Tax effect on amounts reclassified from accumulated other comprehensive income | ($1) |
Related_Parties_Details
Related Parties (Details) (USD $) | 12 Months Ended | 12 Months Ended | 12 Months Ended | 3 Months Ended | |||||||||||||||||||||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 |
EMC | EMC | Pivotal | Reseller revenues | Reseller revenues | Reseller revenues | Professional services revenues | Professional services revenues | Professional services revenues | Internal-use revenues | Internal-use revenues | Internal-use revenues | Collaborative technology project receipts | Collaborative technology project receipts | Collaborative technology project receipts | Collaborative technology project receipts | Collaborative technology project receipts | Purchases of products and services | Purchases of products and services | Purchases of products and services | Purchases of products and services | Collaborative technology project costs | EMC subsidiary support and administrative costs | EMC subsidiary support and administrative costs | EMC subsidiary support and administrative costs | Interest expense on note payable | Interest expense on note payable | Interest expense on note payable | Due to related parties, net | Purchased technology | ||
EMC | EMC | EMC | EMC | EMC | EMC | EMC | EMC | EMC | EMC | EMC | EMC | Pivotal | Pivotal | EMC | EMC | EMC | Pivotal | EMC | EMC | EMC | EMC | EMC | EMC | EMC | Collaborative technology project costs | Collaborative technology project costs | |||||
employees | EMC | EMC | |||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue from related party | ' | ' | ' | $5 | $141 | $141 | $72 | $72 | $82 | $66 | $32 | $9 | $3 | $7 | $7 | $2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unearned revenues | ' | ' | ' | ' | 188 | 149 | ' | 12 | 3 | ' | 20 | 28 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Related party costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 56 | 42 | 24 | ' | 13 | 128 | 106 | 83 | 4 | 5 | 4 | ' | ' |
Due from related party | ' | 93 | 112 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 26 | ' |
Purchases from related party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7 | ' | ' | ' | ' | ' | ' | ' | ' | 2 |
Related party transaction, amounts of transaction | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 65 | 39 | 12 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Related party transactions, employees transferred | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 415 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ownership percentage in Pivotal | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 28.00% | 31.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cost basis of investment in Pivotal | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net liability assumed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ($17) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Related party transaction, other than tax obligation due to or from related party, cash settlement period | '60 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Related_Parties_Schedule_of_As
Related Parties (Schedule of Assets Contributed and Liabilities Assumed) (Details) (Collaborative technology project receipts, Pivotal, USD $) | Dec. 31, 2013 | Mar. 31, 2013 |
In Millions, unless otherwise specified | ||
Related Party Transaction [Line Items] | ' | ' |
Accounts receivable | $4 | ' |
Property and equipment, net | 1 | ' |
Intangible assets | 28 | ' |
Goodwill | 28 | ' |
Total assets | 61 | ' |
Accounts payable, accrued liabilities and other, net | -7 | ' |
Unearned revenues | -71 | -71 |
Total liabilities | -78 | ' |
Total liabilities, net assumed by Pivotal | -17 | ' |
Unearned license revenues | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Unearned revenues | ' | -32 |
Unearned service revenues | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Unearned revenues | ' | ($39) |
Related_Parties_Due_ToFrom_Rel
Related Parties (Due To/From Related Parties) (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Related Party Transaction [Line Items] | ' | ' |
Due from (to) related parties, net | ($18) | $68 |
EMC | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Due to related party | -92 | -44 |
Due from related party | 93 | 112 |
Income tax payable due to EMC | -22 | -32 |
Pivotal | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Due to related party | -22 | ' |
Due from related party | $3 | ' |
Segment_Information_Schedule_O
Segment Information (Schedule Of Revenues By Geographic Area) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
segment | |||||||||||
Revenues From External Customers And Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of reportable segments | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' |
Revenues | $1,483 | $1,289 | $1,243 | $1,191 | $1,293 | $1,134 | $1,123 | $1,055 | $5,207 | $4,605 | $3,767 |
United States | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues From External Customers And Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | 2,485 | 2,229 | 1,824 |
International | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues From External Customers And Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | $2,722 | $2,376 | $1,943 |
Distributor One | Sales | Customer Concentration Risk | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues From External Customers And Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Concentration risk, percentage | ' | ' | ' | ' | ' | ' | ' | ' | 15.00% | 15.00% | 15.00% |
Distributor Two | Sales | Customer Concentration Risk | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues From External Customers And Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Concentration risk, percentage | ' | ' | ' | ' | ' | ' | ' | ' | 12.00% | 12.00% | 11.00% |
Distributor Three | Sales | Customer Concentration Risk | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues From External Customers And Long-Lived Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Concentration risk, percentage | ' | ' | ' | ' | ' | ' | ' | ' | 11.00% | ' | 10.00% |
Segment_Information_Schedule_O1
Segment Information (Schedule Of Long-Lived Assets By Geographic Area) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Revenues From External Customers And Long-Lived Assets [Line Items] | ' | ' |
Long-lived assets by geographic area | $799 | $614 |
United States | ' | ' |
Revenues From External Customers And Long-Lived Assets [Line Items] | ' | ' |
Long-lived assets by geographic area | 741 | 563 |
International | ' | ' |
Revenues From External Customers And Long-Lived Assets [Line Items] | ' | ' |
Long-lived assets by geographic area | $58 | $51 |
Selected_Quarterly_Financial_D2
Selected Quarterly Financial Data (unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Quarterly Financial Information Disclosure [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | $1,483 | $1,289 | $1,243 | $1,191 | $1,293 | $1,134 | $1,123 | $1,055 | $5,207 | $4,605 | $3,767 |
Net income | $335 | $261 | $244 | $174 | $206 | $157 | $192 | $191 | $1,014 | $746 | $724 |
Net income per share, basic | $0.78 | $0.61 | $0.57 | $0.41 | $0.48 | $0.37 | $0.45 | $0.45 | $2.36 | $1.75 | $1.72 |
Net income per share, diluted | $0.77 | $0.60 | $0.57 | $0.40 | $0.47 | $0.36 | $0.44 | $0.44 | $2.34 | $1.72 | $1.68 |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Feb. 24, 2014 | Jan. 21, 2014 | Jan. 21, 2014 | Jan. 21, 2014 | Jan. 21, 2014 | Feb. 24, 2014 |
In Millions, unless otherwise specified | EMC | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | ||
EMC | EMC | EMC | EMC | EMC | EMC | AirWatch Holding | ||||
Notes payable | Notes payable | Note, May 2018 | Note, May 2020 | Note, December 2022 | ||||||
Notes payable | Notes payable | Notes payable | ||||||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Payments to acquire business | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,181 |
Installment payments to acquire business | ' | ' | ' | ' | ' | ' | ' | ' | ' | 364 |
Proceeds from debt | ' | ' | ' | ' | 1,050 | ' | ' | ' | ' | ' |
Principal amount | ' | ' | ' | ' | ' | 1,500 | 680 | 550 | 270 | ' |
Note payable to EMC | $450 | $450 | $450 | $450 | ' | ' | ' | ' | ' | ' |
Interest rate | ' | ' | ' | ' | ' | 1.75% | ' | ' | ' | ' |
Schedule_II_Valuation_and_Qual1
Schedule II - Valuation and Qualifying Accounts (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Allowance for Bad Debts | ' | ' | ' |
Movement in Valuation Allowances and Reserves [Roll Forward] | ' | ' | ' |
Balance at Beginning of Period | $4 | $4 | $5 |
Charged to Expenses/Provision | -2 | 1 | -1 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions | 0 | -1 | 0 |
Balance at End of Period | 2 | 4 | 4 |
Tax Valuation Allowance | ' | ' | ' |
Movement in Valuation Allowances and Reserves [Roll Forward] | ' | ' | ' |
Balance at Beginning of Period | 64 | 57 | 36 |
Charged to Expenses/Provision | 32 | 7 | 23 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions | -2 | 0 | -2 |
Balance at End of Period | $94 | $64 | $57 |