Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 19, 2016 | Jun. 30, 2015 | |
Document Information [Line Items] | |||
Entity Registrant Name | VMWARE, INC. | ||
Entity Central Index Key | 1,124,610 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 6,814,162,420 | ||
Class A Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 123,592,297 | ||
Class B Convertible Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 300,000,000 |
Consolidated Statements Of Inco
Consolidated Statements Of Income - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Revenues: | ||||
License | $ 2,720 | $ 2,591 | $ 2,270 | |
Services | 3,927 | 3,444 | 2,937 | |
GSA settlement | (76) | 0 | 0 | |
Total revenues | 6,571 | 6,035 | 5,207 | |
Operating expenses: | ||||
Cost of license revenues | [1] | 186 | 192 | 210 |
Cost of services revenues | [1] | 832 | 725 | 520 |
Research and development | [1] | 1,300 | 1,239 | 1,082 |
Sales and marketing | [1] | 2,267 | 2,141 | 1,815 |
General and administrative | [1] | 766 | 695 | 419 |
Realignment charges | [1] | 23 | 16 | 68 |
Operating income | 1,197 | 1,027 | 1,093 | |
Investment income | 49 | 38 | 30 | |
Interest expense with EMC | (26) | (24) | (4) | |
Other income (expense), net | (7) | 7 | 28 | |
Income before income taxes | 1,213 | 1,048 | 1,147 | |
Income tax provision | 216 | 162 | 133 | |
Net income | $ 997 | $ 886 | $ 1,014 | |
Net income per weighted-average share, basic for Class A and Class B (USD per share) | $ 2.35 | $ 2.06 | $ 2.36 | |
Net income per weighted-average share, diluted for Class A and Class B (USD per share) | $ 2.34 | $ 2.04 | $ 2.34 | |
Weighted-average shares, basic for Class A and Class B (shares) | 424,003 | 430,355 | 429,093 | |
Weighted-average shares, diluted for Class A and Class B (shares) | 426,547 | 434,513 | 433,415 | |
Stock-based compensation | $ 504 | $ 529 | $ 464 | |
Cost of license revenues | ||||
Operating expenses: | ||||
Stock-based compensation | 2 | 2 | 2 | |
Cost of services revenues | ||||
Operating expenses: | ||||
Stock-based compensation | 44 | 42 | 29 | |
Research and development | ||||
Operating expenses: | ||||
Stock-based compensation | 226 | 244 | 227 | |
Sales and marketing | ||||
Operating expenses: | ||||
Stock-based compensation | 168 | 172 | 144 | |
General and administrative | ||||
Operating expenses: | ||||
Stock-based compensation | 64 | 69 | 56 | |
Realignment charges | ||||
Operating expenses: | ||||
Stock-based compensation | $ 0 | $ 0 | $ 6 | |
[1] | Includes stock-based compensation as follows: Cost of license revenues $2 $2 $2, Cost of services revenues $44 $42 $29, Research and development $226 $244 $227, Sales and marketing $168 $172 $144, General and administrative $64 $69 56 million, Realignment charges $0 $0 $6. |
Consolidated Statements Of Comp
Consolidated Statements Of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 997 | $ 886 | $ 1,014 |
Changes in market value of available-for-sale securities: | |||
Unrealized gains (losses), net of taxes of $(4), $0 and $0 | (7) | (1) | 0 |
Reclassification of (gains) losses realized during the period, net of taxes of $0, $(2) and $(1) for all periods | 0 | (3) | (2) |
Net change in market value of available-for-sale securities | (7) | (4) | (2) |
Changes in market value of effective foreign currency forward contracts: | |||
Unrealized gains (losses), net of taxes of $0 for all periods | 0 | (1) | 0 |
Net change in market value of effective foreign currency forward contracts | 0 | (1) | 0 |
Total other comprehensive income (loss) | (7) | (5) | (2) |
Total comprehensive income (loss), net of taxes | $ 990 | $ 881 | $ 1,012 |
Consolidated Statements Of Com4
Consolidated Statements Of Comprehensive Income (Parentheticals) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Tax effect on unrealized gains (losses) on available-for-sale securities | $ (4) | $ 0 | $ 0 |
Tax effect on reclassification of (gains) losses on available-for-sale securities realized during the period | 0 | (2) | (1) |
Tax effect on unrealized gains (losses) on effective foreign currency forward contracts | $ 0 | $ 0 | $ 0 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 2,493 | $ 2,071 |
Short-term investments | 5,016 | 5,004 |
Accounts receivable, net of allowance for doubtful accounts of $2 and $2 | 1,633 | 1,520 |
Due from related parties, net | 74 | 49 |
Other current assets | 144 | 238 |
Total current assets | 9,360 | 8,882 |
Property and equipment, net | 1,128 | 1,035 |
Other assets | 193 | 174 |
Deferred tax assets | 456 | 413 |
Intangible assets, net | 616 | 748 |
Goodwill | 3,993 | 3,964 |
Total assets | 15,746 | 15,216 |
Current liabilities: | ||
Accounts payable | 138 | 203 |
Accrued expenses and other | 746 | 811 |
Unearned revenues | 3,245 | 2,982 |
Total current liabilities | 4,129 | 3,996 |
Notes payable to EMC | 1,500 | 1,500 |
Unearned revenues | 1,831 | 1,851 |
Other liabilities | 363 | 283 |
Total liabilities | $ 7,823 | $ 7,630 |
Contingencies | ||
Stockholders’ equity: | ||
Additional paid-in capital | $ 2,728 | $ 3,380 |
Accumulated other comprehensive income (loss) | (8) | (1) |
Retained earnings | 5,195 | 4,198 |
Total VMware, Inc.’s stockholders’ equity | 7,919 | 7,581 |
Non-controlling interests | 4 | 5 |
Total stockholders’ equity | 7,923 | 7,586 |
Total liabilities and stockholders’ equity | 15,746 | 15,216 |
Class A Common Stock | ||
Stockholders’ equity: | ||
Common stock | 1 | 1 |
Class B Convertible Common Stock | ||
Stockholders’ equity: | ||
Common stock | $ 3 | $ 3 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Allowance for doubtful accounts | $ 2 | $ 2 |
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) | 121,947,000 | 129,359,000 |
Common stock, shares outstanding (shares) | 121,947,000 | 129,359,000 |
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 Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating activities: | |||
Net income | $ 997 | $ 886 | $ 1,014 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 335 | 345 | 337 |
Stock-based compensation | 504 | 529 | 454 |
Excess tax benefits from stock-based compensation | (28) | (36) | (70) |
Deferred income taxes, net | (31) | (128) | 56 |
Non-cash realignment charges | 0 | 0 | 15 |
Impairment of strategic investment | 5 | 0 | 13 |
Gain on disposition of certain lines of business and other, net | 0 | 0 | (44) |
Gain on sales of strategic investments | (3) | (6) | 0 |
Other | 2 | (1) | 7 |
Changes in assets and liabilities, net of acquisitions: | |||
Accounts receivable | (114) | (267) | (71) |
Other assets | 32 | (70) | (59) |
Due to/from related parties, net | (21) | (46) | 60 |
Accounts payable | (35) | 69 | 30 |
Accrued expenses | 1 | 135 | 1 |
Income taxes receivable from EMC | 0 | 0 | 17 |
Income taxes payable | 13 | 77 | 19 |
Unearned revenues | 242 | 693 | 756 |
Net cash provided by operating activities | 1,899 | 2,180 | 2,535 |
Investing activities: | |||
Additions to property and equipment | (333) | (352) | (345) |
Purchases of available-for-sale securities | (3,323) | (3,937) | (3,181) |
Sales of available-for-sale securities | 2,193 | 2,076 | 1,599 |
Maturities of available-for-sale securities | 1,100 | 717 | 717 |
Proceeds from disposition of certain lines of business | 0 | 0 | 37 |
Purchases of strategic investments | (14) | (52) | (8) |
Sales of strategic investments | 4 | 11 | 0 |
Business acquisitions, net of cash acquired | (38) | (1,159) | (289) |
Decrease (increase) in restricted cash | 75 | (78) | (3) |
Other investing | 0 | (11) | 1 |
Net cash used in investing activities | (336) | (2,785) | (1,472) |
Financing activities: | |||
Proceeds from issuance of common stock | 126 | 164 | 197 |
Proceeds from issuance of notes payable to EMC | 0 | 1,050 | 0 |
Reduction in capital from EMC | 0 | (24) | 0 |
Proceeds from non-controlling interests | 4 | 7 | 0 |
Repurchase of common stock | (1,125) | (700) | (508) |
Excess tax benefits from stock-based compensation | 28 | 36 | 70 |
Shares repurchased for tax withholdings on vesting of restricted stock | (174) | (162) | (126) |
Net cash provided by (used in) financing activities | (1,141) | 371 | (367) |
Net increase (decrease) in cash and cash equivalents | 422 | (234) | 696 |
Cash and cash equivalents at beginning of the period | 2,071 | 2,305 | 1,609 |
Cash and cash equivalents at end of the period | 2,493 | 2,071 | 2,305 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | 28 | 27 | 6 |
Cash paid for taxes, net | 231 | 215 | 35 |
Non-cash items: | |||
Changes in capital additions, accrued but not paid | (49) | 19 | (16) |
Changes in tax withholdings on vesting of restricted stock, accrued but not paid | (2) | 7 | 0 |
Fair value of stock-based awards assumed in acquisitions | $ 0 | $ 24 | $ 0 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands | Total | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non-controlling Interests | Class A Common Stock | Class A Common StockCommon Stock | Class B Convertible Common Stock | Class B Convertible Common StockCommon Stock |
Balance at Dec. 31, 2012 | $ 5,740,000,000 | $ 3,432,000,000 | $ 2,298,000,000 | $ 6,000,000 | $ 0 | $ 1,000,000 | $ 3,000,000 | ||
Balance (shares) at Dec. 31, 2012 | 129,000 | 300,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Proceeds from issuance of common stock | 197,000,000 | 197,000,000 | |||||||
Proceeds from issuance of common stock (shares) | 6,000 | ||||||||
Repurchase and retirement of common stock | (508,000,000) | (508,000,000) | |||||||
Repurchase and retirement of common stock (shares) | (7,000) | ||||||||
Issuance of restricted stock, net of cancellations | 0 | 0 | |||||||
Issuance of restricted stock, net of cancellations (shares) | 4,000 | ||||||||
Shares withheld for tax withholdings on vesting of restricted stock | (126,000,000) | (126,000,000) | $ (126,000,000) | ||||||
Shares withheld for tax withholdings on vesting of restricted stock (shares) | (1,900) | (2,000) | |||||||
Stock-based compensation | 436,000,000 | 436,000,000 | |||||||
Excess tax benefits from stock-based compensation | 48,000,000 | 48,000,000 | |||||||
Increase (decrease) from tax sharing arrangement | (3,000,000) | (3,000,000) | |||||||
Total other comprehensive income (loss) | (2,000,000) | (2,000,000) | |||||||
Reduction in capital from EMC | (22,000,000) | (22,000,000) | |||||||
Contribution to Pivotal | 17,000,000 | 17,000,000 | |||||||
Reclassification of liability-classified awards to equity stock-based compensation | 25,000,000 | 25,000,000 | |||||||
Net income | 1,014,000,000 | 1,014,000,000 | |||||||
Balance (shares) at Dec. 31, 2013 | 130,000 | 300,000 | |||||||
Balance at Dec. 31, 2013 | 6,816,000,000 | 3,496,000,000 | 3,312,000,000 | 4,000,000 | 0 | $ 1,000,000 | $ 3,000,000 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Proceeds from issuance of common stock | 164,000,000 | 164,000,000 | |||||||
Proceeds from issuance of common stock (shares) | 4,000 | ||||||||
Issuance of stock-based awards in acquisition | 24,000,000 | 24,000,000 | |||||||
Repurchase and retirement of common stock | (700,000,000) | (700,000,000) | |||||||
Repurchase and retirement of common stock (shares) | (8,000) | ||||||||
Issuance of restricted stock, net of cancellations | 1,000,000 | 1,000,000 | |||||||
Issuance of restricted stock, net of cancellations (shares) | 5,000 | ||||||||
Shares withheld for tax withholdings on vesting of restricted stock | (162,000,000) | (162,000,000) | $ (162,000,000) | ||||||
Shares withheld for tax withholdings on vesting of restricted stock (shares) | (1,800) | (2,000) | |||||||
Stock-based compensation | 516,000,000 | 516,000,000 | |||||||
Excess tax benefits from stock-based compensation | 32,000,000 | 32,000,000 | |||||||
Increase (decrease) from tax sharing arrangement | (12,000,000) | (12,000,000) | |||||||
Total other comprehensive income (loss) | (5,000,000) | (5,000,000) | |||||||
Activities with non-controlling interests | 5,000,000 | 5,000,000 | |||||||
Reclassification of liability-classified awards to equity stock-based compensation | 21,000,000 | 21,000,000 | |||||||
Net income | 886,000,000 | 886,000,000 | |||||||
Balance (shares) at Dec. 31, 2014 | 129,359 | 129,000 | 300,000 | 300,000 | |||||
Balance at Dec. 31, 2014 | 7,586,000,000 | 3,380,000,000 | 4,198,000,000 | (1,000,000) | 5,000,000 | $ 1,000,000 | $ 3,000,000 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Proceeds from issuance of common stock | 126,000,000 | 126,000,000 | |||||||
Proceeds from issuance of common stock (shares) | 4,000 | ||||||||
Repurchase and retirement of common stock | (1,125,000,000) | (1,125,000,000) | |||||||
Repurchase and retirement of common stock (shares) | (13,000) | ||||||||
Issuance of restricted stock, net of cancellations | 0 | 0 | |||||||
Issuance of restricted stock, net of cancellations (shares) | 5,000 | ||||||||
Shares withheld for tax withholdings on vesting of restricted stock | (173,000,000) | (173,000,000) | $ (173,000,000) | ||||||
Shares withheld for tax withholdings on vesting of restricted stock (shares) | (2,600) | (3,000) | |||||||
Stock-based compensation | 504,000,000 | 504,000,000 | |||||||
Excess tax benefits from stock-based compensation | 3,000,000 | 3,000,000 | |||||||
Increase (decrease) from tax sharing arrangement | 13,000,000 | 13,000,000 | |||||||
Total other comprehensive income (loss) | (7,000,000) | (7,000,000) | |||||||
Activities with non-controlling interests | (1,000,000) | (1,000,000) | |||||||
Reclassification of liability-classified awards to equity stock-based compensation | 0 | ||||||||
Net income | 997,000,000 | 997,000,000 | |||||||
Balance (shares) at Dec. 31, 2015 | 121,947 | 122,000 | 300,000 | 300,000 | |||||
Balance at Dec. 31, 2015 | $ 7,923,000,000 | $ 2,728,000,000 | $ 5,195,000,000 | $ (8,000,000) | $ 4,000,000 | $ 1,000,000 | $ 3,000,000 |
Overview and Basis of Presentat
Overview and Basis of Presentation | 12 Months Ended |
Dec. 31, 2015 | |
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 a leader in virtualization and cloud infrastructure solutions that enable businesses to transform the way they build, deliver and consume Information Technology (“IT”) resources in a manner that is based on their specific needs. VMware’s virtualization infrastructure solutions, which include a suite of products and services designed to deliver a software-defined data center, run on industry-standard desktop computers, servers and mobile devices 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 (“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, 2015 , EMC held 81.3% of VMware’s outstanding common stock and 97.5% 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. On October 12, 2015, Dell Inc. (“Dell”), Denali Holding Inc. (“Denali”) and EMC entered into a definitive agreement under which Denali has agreed to acquire EMC. Management believes the assumptions underlying the consolidated financial statements are reasonable. However, the amounts recorded for VMware’s intercompany transactions with EMC may not be considered arm’s length with an unrelated third party. Therefore, the financial statements included herein may not necessarily reflect the results of operations, financial position 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 results of operations, financial position 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. Principles of Consolidation The consolidated financial statements include the accounts of VMware and subsidiaries in which VMware has a controlling financial interest. Non-controlling interests are presented as a separate component within total stockholders’ equity and represent the equity and cumulative pro-rata share of the results of operations attributable to the non-controlling interests. The portion of results of operations attributable to the non-controlling interests is eliminated in other income (expense), net on the consolidated statements of income and are not presented separately as the amounts were not material for the periods presented. All intercompany transactions and account balances between VMware and its subsidiaries have been eliminated in consolidation. Transactions with EMC and its subsidiaries are generally settled in cash and are classified on the consolidated statements of cash flows based upon the nature of the underlying transaction. Reclassification VMware early-adopted Accounting Standards Update ("ASU") No. 2015-17, Balance Sheet Classification of Deferred Taxes, effective December 31, 2015 using retrospective application. As such, current deferred tax assets of $248 million were reclassified as non-current deferred tax assets on the consolidated balance sheets as of December 31, 2014 . Refer to the "New Accounting Pronouncements" section below for further discussion. Certain prior period amounts related to impairment of strategic investments have been reclassified within the operating activities section of the consolidated statements of cash flows for the year ended December 31, 2013. The reclassification had no effect on total cash flows used in or provided by operating, investing or financing activities as previously reported. 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 development funds and 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 licenses, related software maintenance and support, training, consulting services, and hosted services. Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred or service has been provided, the sales price is fixed or determinable, and collectibility is probable. License Revenues VMware licenses most of its software through 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. VMware also licenses certain customers the rights to utilize software on a pay-as-you-go consumption model. Revenue from this selling model is generally recognized based upon the customer's reported usage. When software license arrangements are offered with new products that become available on a when-and-if-available basis, revenues associated with these arrangements are recognized ratably over the subscription period. For software sold by system vendors that is bundled with their hardware, unless VMware has a separate license agreement which governs the transaction, revenues are recognized in arrears upon the receipt of royalty reports. Services Revenues VMware’s services revenues generally consist of software maintenance and support, training, consulting services, and hosted services. Software maintenance and support offerings entitle customers to receive major and minor product upgrades on a when-and-if-available basis and technical support. Revenues from software maintenance and support offerings are generally recognized ratably over the contract period. 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 from 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 assuming all other revenue recognition criteria are met. Revenues from professional services engagements invoiced on a time and materials basis are recognized as the hours are incurred. VMware’s hosted services consist of certain software offerings sold as a service without the customer’s ability to take possession of the software over the subscription term. These arrangements are offered to VMware’s customers over a specified period of time and revenues are recognized ratably over the subscription term commencing upon delivery of the service. Hosted services are also provided on a consumption basis with revenues recognized commensurate with customer’s usage of the related services. Rebate Reserves and Marketing Development Funds Rebates are offered to certain channel partners, which are recognized as a reduction to revenues or unearned revenues. Rebates based on actual partner sales are recognized as a reduction of revenues as the underlying revenues are recognized. Rebates earned based upon partner achievement of cumulative level of sales are recognized as a reduction of revenues proportionally for each sale that is required to achieve the target. VMware participates in marketing development programs with certain channel partners wherein VMware reimburses its partners for marketing related expenses incurred by them under the terms of the programs. Reimbursed costs to channel partners are recognized as a reduction of revenues concurrent with the recognition of the underlying revenues based upon the maximum potential liability. The difference between the maximum potential liability recognized and the actual amount paid out has not been material to date. Returns Reserves With limited exceptions, VMware’s return policy does not allow product returns for a refund. VMware estimates and records reserves for product returns at the time of sale based on historical return rates. Amounts are recorded as a reduction to revenues or unearned revenues. Returns reserves have not been material for all periods presented. Multiple-Element Arrangements VMware enters into multiple-element revenue arrangements in which a customer may purchase a combination of software, maintenance and support, training, consulting services, and hosted services. For multiple-element arrangements with software elements, VMware allocates and defers revenue for the undelivered elements based on fair value using vendor-specific objective evidence (“VSOE”) and applies the residual method to allocate the remaining fee to the delivered products and services. If a product or service included in a software-related multiple-element arrangement has not been delivered, and is not considered essential to the functionality of the delivered products or services, VMware must determine the fair value of each undelivered product or service using VSOE. Absent VSOE, revenue is deferred until VSOE of fair value exists for each of the undelivered products or services, or until all elements of the arrangement have been delivered. However, if the only undelivered element without VSOE is maintenance and 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 revenues that VMware reports in a particular period. VSOE of fair value for an undelivered element is generally based on historical stand-alone sales to third parties. In limited instances, for an offering that is not yet sold, VSOE is the price established by management if it is probable that the price will not change when introduced to the marketplace, including through the use of a contractual renewal rate. In determining VSOE of fair value, VMware requires that the selling prices for a product or service fall within a reasonable pricing range. VMware has established VSOE for its software maintenance and technical support services, consulting services and training. For multiple-element arrangements that contain software and non-software elements, VMware allocates revenue to software or software-related elements as a group and any non-software elements separately based on relative selling prices using the selling price hierarchy. The relative selling price for each deliverable is determined using VSOE, if it exists, or third-party evidence (“TPE”) of selling price. TPE of fair value is based on evaluation of prices charged for competitor products or services sold to similarly situated customers. As VMware’s offerings contain significant proprietary technology and provide different features and functionality, comparable prices of similar products typically cannot be obtained and relied upon. If neither VSOE nor TPE of selling price exists for a deliverable, VMware uses its best estimate of selling price (“BESP”) for that deliverable. 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 practices across different sales channels and geographies, market conditions, and historical sales. VMware uses BESP in the allocation of arrangement consideration. 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. A specified upgrade obligation is created in the event we publicly announce new specific features, functionalities or entitlements to software upgrades or license products that have not been made available. We generally do not have VSOE of fair value for specified upgrades or license products. Accordingly, revenue recognition is deferred for multiple-element arrangements that entitle a customer to specified upgrades or new license products until the product obligations have been fulfilled. Unearned revenues substantially consist of payments received in advance of revenue recognition for products and services described above. Refer to Note J for further information. Foreign Currency Remeasurement The U.S. dollar is the functional currency of VMware’s foreign subsidiaries. VMware records net gains and losses resulting from foreign exchange transactions as a component of foreign currency exchange gains and losses in other income (expense), net on the consolidated statements of income. These gains and losses are net of those recognized on foreign currency forward contracts ("forward contracts") that VMware enters into to mitigate its exposure to foreign currency fluctuations. Net losses were $11 million , $8 million and $3 million during the years ended December 31, 2015 , 2014 and 2013 , respectively. 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, 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 securities. 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. VMware carries its fixed income investments at fair value and unrealized gains and losses on these investments, net of taxes, are included in accumulated other comprehensive income (loss), a component of stockholders’ equity. Realized gains or losses are included on 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 on 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 assets and other assets, net in the accompanying consolidated balance sheets. As of December 31, 2015 and 2014 the total amount of VMware’s restricted cash was $19 million and $95 million , respectively. As of December 31, 2014 , $75 million of the restricted cash balance related to the acquisition of AirWatch LLC ("AirWatch"), which was released and paid to certain employees of AirWatch during 2015. Refer to Note B for further information. As of December 31, 2015 , VMware’s total cash, cash equivalents and short-term investments were $7,509 million , of which $5,810 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 economic conditions. Property and Equipment, Net Property and equipment, net is recorded at cost. Depreciation commences upon placing the asset in service and is recognized on a straight-line basis over the estimated useful life of the assets, as follows: Buildings Term of underlying land lease Land improvements 15 years Furniture and fixtures 7 years Equipment 3 to 6 years Software 3 years Leasehold improvements 20 years, not to exceed the term of the underlying lease Upon retirement or disposition, the asset cost and related accumulated depreciation are removed with any gain or loss recognized on 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 when 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 Research and development costs primarily consist of personnel and related overhead costs associated with the research and development of VMware’s product software and service offerings and are expensed as incurred. Development costs of software to be sold, leased, or otherwise marketed are subject to capitalization beginning when technological feasibility for the product has been established and ending when the product is available for general release. Following a change in VMware’s go-to-market strategy in late 2011, the length of time between achieving technological feasibility and general release to customers significantly decreased. During the years presented, software development costs incurred for products during the time period between reaching technological feasibility and general release were not material and accordingly were expensed as incurred. No amortization expense was recorded during the years ended December 31, 2015 and 2014, as all previously capitalized software development costs had been fully amortized as of December 31, 2013. Amortization expense from capitalized amounts was $34 million for the year ended December 31, 2013. 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 acquisition 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 and analyze the necessary 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 generally amortized over their estimated useful lives using the straight-line method. 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 and Hedging Activities Derivative instruments 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 forward contracts to hedge a portion of VMware’s net outstanding monetary asset and liability positions. These forward contracts are generally entered into on a monthly basis, with a typical contractual term of one 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 on the consolidated statements of income. Additionally, VMware enters into forward contracts which it designates as cash flow hedges to manage the volatility of cash flows that relate to operating expenses denominated in certain foreign currencies. These forward contracts are entered into annually, have maturities of twelve months or less, and are adjusted to fair value through accumulated other comprehensive income (loss), 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 on the consolidated statements of income. The Company does not, and does not intend to, use derivative financial instruments for trading or speculative purposes. Refer to Note G for further information. Advertising Advertising costs are expensed as incurred. Advertising expense was $22 million , $29 million and $27 million in the years ended December 31, 2015 , 2014 and 2013 , 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 early-adopted Accounting Standards Update No. 2015-17 (“ASU”) 2015-17, Balance Sheet Classification of Deferred Taxes, effective December 31, 2015 using retrospective application, which resulted in all deferred tax assets being presented as non-current deferred tax assets. Refer to “New Accounting Pronouncements” section below for further information. VMware does not provide for a U.S. income tax liability on undistributed earnings of VMware’s non-U.S. subsidiaries. The earnings of non-U.S. subsidiaries, which reflect full provision for non-U.S. income taxes, are currently indefinitely reinvested in foreign 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 substantially all 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 if VMware were 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. Refer to Note K for further information. Net Income 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 net income per share is 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 net income per share, VMware uses the two-class method. As both classes share the same rights in dividends, basic and diluted net income 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 and 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, 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 manages counterparty risk through adequate diversification of the investment portfolio among various financial institutions and by entering into derivative contracts with financial institutions that are of high credit quality. VMware provides credit to its customers, including distributors, original equipment manufacturers (“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 payment history and 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, 2015 and 2014 , one distributor accounted for 18% and 19% , respectively, of VMware's accounts receivable balance, and another distributor accounted for 15% and 13% , respectively, of VMware's accounts receivable balance. A third distributor accounted for 11% of VMware's accounts receivable balance as of December 31, 2015 . One distributor accounted for 15% of revenues in each of the years ended December 31, 2015 , 2014 and 2013 , and another distributor accounted for 12% , 13% and 12% of revenues in the years ended December 31, 2015 , 2014 and 2013 , respectively. A third distributor accounted for 11% of revenues in each of the years ended December 31, 2015 , 2014 and 2013 . 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 Employee Stock Purchase Plan (the “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, 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 at each reporting period and are included in accrued expenses and other on the consolidated balance sheets. 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 on the statements of income and the remaining unrecognized stock-based compensation is recorded over the remaining requisite service period. New Accounting Pronouncements During November 2015, the Financial Accounting Standards Board (“FASB”) issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes (Topic 740), which simplifies the presentation of deferred income taxes. This standard requires an entity to classify deferred tax assets and liabilities as non-current within a classified statement of financial position. ASU 2015-17 is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. This standard may be applied either prospectively to all deferred tax assets and liabilities or retrospectively to all periods presented. Early application is permitted as of the beginning of the interim or annual reporting period. VMware early-adopted ASU 2015-17 effective December 31, 2015 using retrospective application. Upon adoption of ASU 2015-17, current deferred tax assets of $248 million were reclassified as non-current deferred tax assets on the consolidated balance sheets as of December 31, 2014 . During May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The updated revenue standard establishes principles for re |
Business Combinations, Definite
Business Combinations, Definite-Lived Intangible Assets, Net and Goodwill | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Business Combinations, Joint Venture, Definite-Lived Intangible Assets, Net and Goodwill | Business Combinations, Joint Venture, Definite-Lived Intangible Assets, Net and Goodwill Business Combination Fiscal Year 2015 During the year ended December 31, 2015, VMware completed two business combinations, which were not material to VMware's consolidated financial statements, either individually or in the aggregate. On October 15, 2015, VMware acquired all of the outstanding shares of Boxer, Inc. (“Boxer”) to enhance the enterprise mobile management and security solutions. On February 2, 2015, VMware acquired all of the outstanding shares of Immidio B.V. (“Immidio”) to expand VMware’s workspace environment management solutions within the End-User Computing product group. The aggregate purchase price for these two acquisitions was $39 million of cash, net of liabilities assumed. The preliminary purchase price primarily included approximately $13 million of identifiable intangible assets and approximately $29 million of goodwill that is expected to be non-deductible for tax purposes. Fiscal Year 2014 Acquisition of AirWatch LLC On February 24, 2014, VMware acquired for cash all of the outstanding membership units of 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. VMware acquired AirWatch to expand VMware’s solutions within the enterprise mobile management and security space. The total purchase price of $1,128 million included cash of $1,104 million and the fair value of assumed unvested equity attributed to pre-combination services totaling $24 million . Merger consideration totaling $300 million , including $75 million that was held in escrow, is payable to certain employees of AirWatch subject to specified future employment conditions and is being recognized as expense over the requisite service period on a straight-line basis. Compensation expense of $145 million and $141 million was recognized during the years ended December 31, 2015 and 2014 , respectively. VMware assumed all of AirWatch’s unvested stock options and restricted stock outstanding at the completion of the acquisition with an estimated fair value of $134 million . Of the total fair value, $24 million was allocated to the purchase price and $110 million was allocated to future services and will be expensed over the remaining requisite service periods on a straight-line basis. The estimated fair value of the stock options assumed by the Company was determined using the Black-Scholes option pricing model. Pursuant to the purchase agreement, AirWatch’s outstanding stock awards were converted into shares of VMware’s common stock at the conversion ratio of 0.4 . The assumed unvested options converted into 1.4 million stock options to purchase VMware Class A common stock. The assumed unvested restricted stock converted into an immaterial number of shares of restricted VMware Class A common stock. The following table summarizes the allocation of the consideration to the fair value of the assets acquired and liabilities assumed (table in millions): Cash $ 36 Other current assets 61 Intangible assets 250 Goodwill 868 Other acquired assets 30 Total assets acquired 1,245 Unearned revenues (45 ) Other assumed liabilities (72 ) Total liabilities assumed (117 ) Fair value of assets acquired and liabilities assumed $ 1,128 The excess of the purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill. Management believes that the goodwill represents the synergies expected from combining the technologies of VMware with those of AirWatch. The estimated fair value assigned to the tangible assets, identifiable intangible assets, and assumed liabilities were based on management’s estimates and assumptions. The majority of goodwill and identifiable intangible assets is deductible for U.S. income tax purposes. The following table summarizes the components of the identifiable intangible assets acquired and their estimated useful lives by VMware in conjunction with the acquisitions of AirWatch (amounts in table in millions): Useful Lives (in years) Weighted-Average Useful Lives (in years) Fair Value Amount Purchased technology 2 – 6 5.9 $ 118 Customer relationships and customer lists 2 – 8 7.9 78 Trademarks and tradenames 8 8 40 Other 2 – 8 3.2 14 Total identifiable intangible assets $ 250 The following pro forma financial information summarizes the combined net income for VMware and AirWatch, which was significant for purposes of the unaudited pro forma financial information disclosure, as though the companies were combined at the beginning of the Company’s fiscal year 2013. The amount of revenue from AirWatch was not considered material, and as such, has not been separately presented in the unaudited pro forma financial information disclosure below. Supplemental information on an unaudited pro forma basis as if AirWatch had been acquired on January 1, 2013 is presented as follows (table in millions): For the Year Ended December 31, 2014 2013 Pro forma adjusted net income $ 849 $ 781 Pro forma adjustments primarily include compensation expense for certain key employees subject to specified future employment conditions, intangible amortization, stock-based compensation and related tax effects. Other 2014 Business Combinations During the year ended December 31, 2014, VMware completed three business combinations in addition to AirWatch, which were not material to VMware’s consolidated financial statements, either individually or in the aggregate. On August 20, 2014, VMware acquired CloudVolumes, Inc. (“CloudVolumes”), a provider of real-time application delivery technology that enables enterprises to deliver native applications to virtualized environments on-demand. Additionally, in the fourth quarter of 2014, VMware completed two other immaterial business combinations. The aggregate purchase price for these three acquisitions was $91 million , net of cash acquired. The purchase price primarily included $19 million of identifiable intangible assets and approximately $73 million of goodwill. Of the goodwill acquired, $23 million is deductible for income tax purposes. Fiscal Year 2013 During 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 Useful Lives (in years) Fair Value Amount 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 remaining IPR&D was completed and transferred to purchased technology during the year ended December 31, 2014. 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. Joint Venture During the year ended December 31, 2014, VMware established a joint venture intended to expand VMware vCloud Air services (formerly vCloud Hybrid Service) in Japan. At December 31, 2015, VMware had a controlling interest in the joint venture and approximately 51% of the ownership. Accordingly, VMware consolidated the financial results of the joint venture. The share of the earnings in the joint venture attributable to the non-controlling interests was not material during the years ended December 31, 2015 and 2014. Definite-Lived Intangible Assets, Net The following table summarizes the changes in the carrying amount of definite-lived intangible assets for the years ended December 31, 2015 and 2014 (table in millions): December 31, 2015 2014 Balance, beginning of the year $ 748 $ 607 Additions to intangible assets related to business combinations 13 278 Amortization Expense (145 ) (141 ) Other adjustments — 4 Balance, end of the year $ 616 $ 748 As of December 31, 2015 and 2014 , definite-lived intangible assets consisted of the following (amounts in tables in millions): December 31, 2015 Weighted-Average Gross Carrying Amount Accumulated Amortization Net Book Value Purchased technology 6.6 $ 648 $ (298 ) $ 350 Leasehold interest 34.9 149 (20 ) 129 Customer relationships and customer lists 8.4 148 (62 ) 86 Trademarks and tradenames 8.6 61 (16 ) 45 Other 2.9 20 (14 ) 6 Total definite-lived intangible assets $ 1,026 $ (410 ) $ 616 December 31, 2014 Weighted-Average Gross Carrying Amount Accumulated Amortization Net Book Value Purchased technology 6.5 $ 699 $ (252 ) $ 447 Leasehold interest 34.9 149 (15 ) 134 Customer relationships and customer lists 8.2 157 (53 ) 104 Trademarks and tradenames 8.6 61 (9 ) 52 Other 2.7 18 (7 ) 11 Total definite-lived intangible assets $ 1,084 $ (336 ) $ 748 During the years ended December 31, 2015 , 2014 and 2013 , amortization expense was $145 million , $141 million , and $107 million , respectively. Based on intangible assets recorded as of December 31, 2015 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): 2016 $ 129 2017 122 2018 109 2019 88 2020 38 Thereafter 130 Total $ 616 Goodwill The following table summarizes the changes in the carrying amount of goodwill during the years ended December 31, 2015 and 2014 (table in millions): December 31, 2015 2014 Balance, beginning of the year $ 3,964 $ 3,027 Increase in goodwill related to business combinations 29 941 Deferred tax adjustments to purchase price allocations on acquisitions — (4 ) Balance, end of the year $ 3,993 $ 3,964 |
Realignment Charges
Realignment Charges | 12 Months Ended |
Dec. 31, 2015 | |
Restructuring and Related Activities [Abstract] | |
Realignment Charges | Realignment Charges During the year ended 2015 , VMware eliminated approximately 380 positions across all major functional groups and geographies to streamline its operations. As a result of these actions, $23 million of severance-related realignment charges were recognized during the year ended December 31, 2015 on the consolidated statements of income. As of December 31, 2015 , $3 million remained in accrued expenses and other on the consolidated balance sheets and is expected to be paid during 2016. During the year ended 2014, VMware eliminated approximately 180 positions across all major functional groups and geographies to streamline its operations. As a result of these actions, $16 million of severance-related realignment charges were recognized during the year ended December 31, 2014 on the consolidated statements of income. During the year ended 2013, VMware approved and initiated a business realignment plan to streamline its operations. The realignment plan included the elimination of approximately 710 positions and personnel across all major functional groups and geographies. During the year ended December 31, 2013, $68 million of realignment charges were recorded on the consolidated statements of income, which consisted of workforce reduction charges and asset impairments. As of December 31, 2013, the plan had been completed. The following table summarizes the activity for the accrued realignment charges for the years ended December 31, 2015 , 2014 and 2013 (table in millions): For the Year Ended December 31, 2015 Balance as of January 1, 2015 Realignment Charges Utilization Balance as of December 31, 2015 Non-Cash Portion of Utilization Severance-related costs $ 8 $ 23 $ (28 ) $ 3 $ — For the Year Ended December 31, 2014 Balance as of January 1, 2014 Realignment Charges Utilization Balance as of December 31, 2014 Non-Cash Portion of Utilization Workforce reductions $ — $ 18 $ (10 ) $ 8 $ — Asset impairments, exit of facilities and other exit costs 3 (2 ) (1 ) — — Total $ 3 $ 16 $ (11 ) $ 8 $ — For the Year Ended December 31, 2013 Balance as of January 1, 2013 Realignment Charges Utilization Balance as of December 31, 2013 Non-Cash Portion 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 2013 business realignment plan, VMware recognized a cumulative pre-tax gain 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 gain 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. |
Net Income per Share
Net Income per Share | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Net Income per Share | Net Income 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, including performance stock units, and stock options, including 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 net income 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 during the year ended December 31, 2015 , 2014 and 2013 (net income in millions, shares in thousands): For the Year Ended December 31, 2015 2014 2013 Net income $ 997 $ 886 $ 1,014 Weighted-average shares, basic for Class A and Class B 424,003 430,355 429,093 Effect of dilutive securities 2,544 4,158 4,322 Weighted-average shares, diluted for Class A and Class B 426,547 434,513 433,415 Net income per weighted-average share, basic for Class A and Class B $ 2.35 $ 2.06 $ 2.36 Net income per weighted-average share, diluted for Class A and Class B $ 2.34 $ 2.04 $ 2.34 The following table sets forth the weighted-average common share equivalents of Class A common stock that were excluded from the diluted net income per share calculations during the year ended December 31, 2015 , 2014 and 2013, because their effect would have been anti-dilutive (shares in thousands): For the Year Ended December 31, 2015 2014 2013 Anti-dilutive securities: Employee stock options 2,219 1,440 1,023 Restricted stock units 249 16 167 Total 2,468 1,456 1,190 |
Cash, Cash Equivalents and Inve
Cash, Cash Equivalents and Investments | 12 Months Ended |
Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Cash, Cash Equivalents and Investments | Cash, Cash Equivalents and Investments Cash, cash equivalents and investments as of December 31, 2015 and 2014 consisted of the following (tables in millions): December 31, 2015 Cost or Amortized Cost Unrealized Gains Unrealized Losses Aggregate Cash $ 725 $ — $ — $ 725 Cash equivalents: Money-market funds $ 1,763 $ — $ — $ 1,763 Time deposits 5 — — 5 Total cash equivalents $ 1,768 $ — $ — $ 1,768 Short-term investments: Time deposits $ 12 $ — $ — $ 12 U.S. Government and agency obligations 753 — (3 ) 750 U.S. and foreign corporate debt securities 3,263 1 (12 ) 3,252 Foreign governments and multi-national agency obligations 35 — — 35 Municipal obligations 705 1 — 706 Asset-backed securities 20 — — 20 Mortgage-backed securities 243 — (2 ) 241 Total short-term investments $ 5,031 $ 2 $ (17 ) $ 5,016 Other assets: Marketable available-for-sale equity securities $ 15 $ 3 $ — $ 18 December 31, 2014 Cost or Amortized Cost Unrealized Gains Unrealized Losses Aggregate Fair Value Cash $ 885 $ — $ — $ 885 Cash equivalents: Money-market funds $ 1,130 $ — $ — $ 1,130 U.S. and foreign corporate debt securities 54 — — 54 Foreign governments and multi-national agency obligations 2 — — 2 Total cash equivalents $ 1,186 $ — $ — $ 1,186 Short-term investments: U.S. Government and agency obligations $ 542 $ — $ — $ 542 U.S. and foreign corporate debt securities 3,236 3 (5 ) 3,234 Foreign governments and multi-national agency obligations 23 — — 23 Municipal obligations 930 2 — 932 Asset-backed securities 53 — — 53 Mortgage-backed securities 221 — (1 ) 220 Total short-term investments $ 5,005 $ 5 $ (6 ) $ 5,004 Refer to Note F for further information regarding the fair value of VMware’s cash equivalents and investments. VMware evaluated its fixed income investments as of December 31, 2015 and 2014 to determine whether or not any security had experienced an other-than-temporary decline in fair value. As of December 31, 2015 and 2014 , VMware did not consider any of its fixed income investments to be other-than-temporarily impaired. The realized gains and losses on investments during the year ended December 31, 2015 , 2014 and 2013 were not material. Unrealized losses on cash equivalents and available-for-sale investments as of December 31, 2015 and 2014 , which have been in a net loss position for less than twelve months, were classified by asset class as follows (table in millions): December 31, 2015 December 31, 2014 Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Government and agency obligations $ 657 $ (3 ) $ 275 $ — U.S. and foreign corporate debt securities 2,564 (11 ) 1,964 (5 ) Mortgage-backed securities 171 (1 ) 107 (1 ) Total $ 3,392 $ (15 ) $ 2,346 $ (6 ) Unrealized losses on cash equivalents and available-for-sale investments, which have been in a net loss position for twelve months or greater, were not material as of December 31, 2015 and 2014 . Contractual Maturities The contractual maturities of short-term investments held at December 31, 2015 consisted of the following (table in millions): Amortized Cost Basis Aggregate Fair Value Due within one year $ 1,617 $ 1,616 Due after 1 year through 5 years 3,157 3,146 Due after 5 years through 10 years 83 82 Due after 10 years 174 172 Total short-term investments $ 5,031 $ 5,016 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis Certain financial assets and liabilities are measured at fair value on a recurring basis. VMware determines fair value using the following hierarchy: • Level 1 - Quoted prices in active markets for identical assets or liabilities • Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are noted active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities • Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities VMware’s fixed income securities are primarily classified as Level 2, with the exception of some of the U.S. Government and agency obligations which are classified as Level 1. Additionally, VMware’s Level 2 classification includes forward contracts and notes payable to EMC. At December 31, 2015 and 2014 , VMware’s Level 2 securities were generally priced using 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 did not have any material assets or liabilities that fell into Level 3 of the fair value hierarchy as of December 31, 2015 and 2014 , and there have been no transfers between fair value measurement levels during the year ended December 31, 2015 and 2014 . The following tables set forth the fair value hierarchy of VMware’s cash equivalents, available-for-sale securities, and forward contracts, that were required to be measured at fair value as of December 31, 2015 and 2014 (tables in millions): December 31, 2015 Level 1 Level 2 Total Cash equivalents: Money-market funds $ 1,763 $ — $ 1,763 Time deposits — 5 5 Total cash equivalents $ 1,763 $ 5 $ 1,768 Short-term investments: Time deposits $ — $ 12 $ 12 U.S. Government and agency obligations 543 207 750 U.S. and foreign corporate debt securities — 3,252 3,252 Foreign governments and multi-national agency obligations — 35 35 Municipal obligations — 706 706 Asset-backed securities — 20 20 Mortgage-backed securities — 241 241 Total short-term investments $ 543 $ 4,473 $ 5,016 Other assets: Marketable available-for-sale equity securities $ 18 $ — $ 18 Accrued expenses and other: Forward contracts $ — $ (1 ) $ (1 ) December 31, 2014 Level 1 Level 2 Total Cash equivalents: Money-market funds $ 1,130 $ — $ 1,130 U.S. and foreign corporate debt securities — 54 54 Foreign governments and multi-national agency obligations — 2 2 Total cash equivalents $ 1,130 $ 56 $ 1,186 Short-term investments: U.S. Government and agency obligations $ 353 $ 189 $ 542 U.S. and foreign corporate debt securities — 3,234 3,234 Foreign governments and multi-national agency obligations — 23 23 Municipal obligations — 932 932 Asset-backed securities — 53 53 Mortgage-backed securities — 220 220 Total short-term investments $ 353 $ 4,651 $ 5,004 Other current assets: Forward contracts $ — $ 1 $ 1 Accrued expenses and other: Forward contracts $ — $ (1 ) $ (1 ) VMware has elected not to record its notes payable to EMC at fair value, but has measured the notes at fair value for disclosure purposes. As of December 31, 2015 , the fair value of the notes payable to EMC was approximately $1,474 million . As of December 31, 2014 , the fair value of the notes payable to EMC approximated its carrying value due to the minimal change in the interest rate between December 31, 2014 and the date the notes were entered into. Fair value was estimated based on observable market interest rates (Level 2 inputs). VMware offers a deferred compensation plan for eligible employees that allows participants to defer payment for part or all of their compensation. The net impact to the consolidated statements of income is not material since changes in the fair value of the assets substantially offset changes in the fair value of the liabilities. As such, assets and liabilities associated with this plan have not been included in the above tables. Assets and liabilities associated with this plan were both approximately $20 million and $8 million as of December 31, 2015 and 2014 , respectively, and are included in other assets and other liabilities on the consolidated balance sheets. Assets Measured and Recorded at Fair Value on a Non-Recurring Basis VMware evaluated the strategic investments in its portfolio accounted for 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 years ended December 31, 2015 and 2013 , VMware recognized charges of approximately $5 million and $13 million , respectively, as a result of determining that certain strategic investments were considered to be other-than-temporarily impaired. There was no impairment charge during the year ended December 31, 2014. All other realized gains and losses on investments during the years ended December 31, 2015 , 2014 and 2013 were not material. Strategic investments are included in other assets, net on the consolidated balance sheets. The carrying value of VMware’s strategic investments accounted for under the cost method was $103 million and $110 million as of December 31, 2015 and 2014 , respectively. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities | Derivatives and Hedging Activities VMware conducts business on a global basis in multiple foreign currencies, subjecting the Company to foreign currency risk. To mitigate this risk, VMware utilizes hedging contracts as described below, which potentially expose the Company to credit risk to the extent that the counterparties may be unable to meet the terms of the agreement. VMware manages counterparty risk by seeking counterparties of high credit quality, by monitoring credit ratings and credit spreads of, and other relevant public information about its counterparties. VMware does not, and does not intend to, use derivative instruments for trading or speculative purposes. Cash Flow Hedges To mitigate its exposure to foreign currency fluctuations resulting from operating expenses denominated in certain foreign currencies, VMware enters into forward contracts. The Company designates these forward contracts as cash flow hedging instruments as the accounting criteria for such designation have 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 sheets and is subsequently reclassified to the related operating expense line item on the consolidated statements of income in the same period that the underlying expenses are incurred. During the years ended December 31, 2015 , 2014 and 2013 the effective portion of gains or losses reclassified to the consolidated statements of income was 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 on the consolidated statements of income as incurred. VMware enters into forward contracts annually, which have maturities of twelve months or less. As of December 31, 2015 and 2014 , VMware had forward contracts designated as cash flow hedges with a total notional value of $213 million and $240 million , respectively. The notional value represents the gross amount of foreign currency that will be bought or sold upon maturity of the forward contract. During the years ended December 31, 2015 and 2014 , all cash flow hedges were considered effective. Forward Contracts Not Designated as Hedges VMware has established a program that utilizes forward contracts to offset the foreign currency risk associated with net outstanding monetary asset and liability positions. 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 on the consolidated statements of income. VMware enters into forward contracts on a monthly basis, which typically have a contractual term of one month. As of December 31, 2015 and 2014 , VMware had outstanding forward contracts with a total notional value of $721 million and $697 million , respectively. The notional value represents the gross amount of foreign currency that will be bought or sold upon maturity of the forward contract. During the year ended December 31, 2015 and 2014 , VMware recognized a gain of $36 million and $48 million , respectively, relating to the settlement of forward contracts. During the year ended December 31, 2013, VMware recognized a loss of $4 million . Gains and losses are recorded in other income (expense), net on the consolidated statements of income. The combined gains and losses derived from the settlement of forward contracts and the underlying foreign currency denominated assets and liabilities resulted in a net loss of $14 million , $9 million and $4 million , respectively, during the years ended December 31, 2015 , 2014 and 2013 . Net gains and losses are recorded in other income (expense), net on the consolidated statements of income. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net, as of December 31, 2015 and 2014 consisted of the following (table in millions): December 31, 2015 2014 Equipment and software $ 1,180 $ 974 Buildings and improvements 792 753 Furniture and fixtures 100 92 Construction in progress 30 25 Total property and equipment 2,102 1,844 Accumulated depreciation (974 ) (809 ) Total property and equipment, net $ 1,128 1,035 Depreciation expense was $190 million , $190 million and $141 million during the years ended December 31, 2015 , 2014 and 2013 , respectively. |
Accrued Expenses and Other
Accrued Expenses and Other | 12 Months Ended |
Dec. 31, 2015 | |
Accrued Liabilities [Abstract] | |
Accrued Expenses and Other | Accrued Expenses and Other Accrued expenses and other as of December 31, 2015 and 2014 consisted of the following (table in millions): December 31, 2015 2014 Salaries, commissions, bonuses, and benefits $ 388 $ 374 Accrued partner liabilities 146 148 Other 212 289 Total $ 746 $ 811 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, 2015 | |
Deferred Revenue Disclosure [Abstract] | |
Unearned Revenues | Unearned Revenues Unearned revenues as of December 31, 2015 and 2014 consisted of the following (table in millions): December 31, December 31, 2015 2014 Unearned license revenues $ 428 $ 488 Unearned software maintenance revenues 4,174 3,905 Unearned professional services revenues 474 440 Total unearned revenues $ 5,076 $ 4,833 Unearned license revenues are generally recognized upon delivery of existing or future products or services, or are otherwise recognized ratably over the term of the arrangement. Future products include, in some cases, emerging products that are offered as part of product promotions where the purchaser of an existing product is entitled to receive the future product at no additional charge. To the extent the future product has not been delivered and vendor-specific objective evidence (“VSOE”) of fair value cannot be established, the revenue for the entire order is deferred until such time as all product delivery obligations have been fulfilled. In the event the arrangement does not include professional services, unearned license revenues may also be recognized ratably, if the customer is granted the right to receive unspecified future products or VSOE of fair value on the software maintenance element of the arrangement does not exist. Unearned software maintenance revenues are attributable to VMware’s maintenance contracts and are generally recognized ratably over the contract period. The weighted-average remaining term at December 31, 2015 was approximately two years . Unearned professional services revenues result primarily from prepaid professional services, including training, and are generally recognized as the services are delivered. Unearned license and software maintenance revenues will fluctuate based upon a variety of factors including sales volume, the timing of both product promotion offers and delivery of the future products offered, and the amount of arrangements sold with ratable revenue recognition. Additionally, the amount of unearned revenues derived from transactions denominated in a foreign currency is impacted by fluctuations in the foreign currencies in which VMware invoices. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The domestic and international components of income before provisions for income taxes were as follows (table in millions): For the Year Ended December 31, 2015 2014 2013 Domestic $ 257 $ 174 $ 160 International 956 874 987 Total $ 1,213 $ 1,048 $ 1,147 VMware’s provision for income taxes consisted of the following (table in millions): For the Year Ended December 31, 2015 2014 2013 Federal: Current $ 142 $ 188 $ 1 Deferred (33 ) (116 ) 57 109 72 58 State: Current 9 15 2 Deferred (1 ) (12 ) 6 8 3 8 Foreign: Current 96 87 72 Deferred 3 — (5 ) 99 87 67 Total provision for income taxes $ 216 $ 162 $ 133 A reconciliation of VMware’s income tax rate to the statutory federal tax rate is as follows: For the Year Ended December 31, 2015 2014 2013 Statutory federal tax rate 35 % 35 % 35 % State taxes, net of federal benefit 1 % 1 % 1 % Tax rate differential for international jurisdictions (20 )% (21 )% (22 )% U.S. tax credits (1) (2 )% (3 )% (7 )% Permanent items and other 4 % 4 % 5 % Effective tax rate 18 % 16 % 12 % (1) Amounts presented for 2013 include the federal research tax credit for 2012 as the credit was enacted retroactively through December 31, 2013, and passed by the United States Congress during January 2013. Deferred tax assets and liabilities are recognized for future tax consequences resulting from 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 consisted of the following (table in millions): December 31, 2015 2014 Deferred tax assets: Unearned revenues $ 320 $ 296 Accruals and other 60 67 Stock-based compensation 73 90 Tax credit and net operating loss carryforwards 162 138 Other assets, net 19 9 Intangible and other non-current assets 65 — Basis difference on investment in business 20 20 Gross deferred tax assets 719 620 Valuation allowance (144 ) (106 ) Total deferred tax assets 575 514 Deferred tax liabilities: Property, plant and equipment, net (119 ) (93 ) Intangibles and other assets, net — (8 ) Total deferred tax liabilities (119 ) (101 ) Net deferred tax assets $ 456 $ 413 VMware has U.S. federal net operating loss carryforwards of $118 million from acquisitions made since 2007 . These operating loss carryforwards expire at different periods through 2033 . Portions of these carryforwards are subject to annual limitations. VMware expects to be able to fully utilize these net operating losses against future income. VMware also has state net operating loss carryforwards of $144 million , resulting from acquisitions since 2008, expiring at different periods through 2035 . VMware has California research and development (“R&D”) credit carryforwards for income tax purposes of approximately $96 million that can be carried over indefinitely. VMware also has R&D credit carryforwards for Massachusetts and Georgia of approximately $6 million and $1 million , respectively, which expire at different periods through 2030. VMware has non-U.S. net operating losses of $15 million resulting from certain foreign operations and non-U.S. acquisitions in 2012 . These net operating losses have various carryforward periods, including certain portions that can be carried over indefinitely. VMware determined that the realization of deferred tax assets relating to portions of the state net operating loss carryforwards, state R&D tax credits, capital losses, and certain non-U.S. net operating losses did not meet the more-likely-than-not threshold, and accordingly, a valuation allowance of $121 million was recorded. If, in the future, new evidence supports the realization of the deferred tax assets related to these items, the valuation allowance will be reversed and a tax benefit will be recorded accordingly. VMware believes it is more-likely-than-not that the net deferred tax assets as of December 31, 2015 and 2014, will be realized in the foreseeable future as VMware believes that it will generate sufficient taxable income in future years. VMware's ability to generate sufficient taxable income in future years in the appropriate tax jurisdictions will determine the amount of net deferred tax asset balances to be realized in future periods. During the year ended December 31, 2015 , the total change in the valuation allowance was $38 million . The increase in the valuation allowance was primarily due to the California R&D credits and capital losses generated in the current year. During the year ended December 31, 2014, the total change in the valuation allowance was $12 million . The increase was primarily due to the California R&D credits generated in 2014 offset by the capital losses utilized in 2014. U.S. income taxes have not been provided on certain undistributed earnings of non-U.S. subsidiaries of approximately $4,473 million and $3,594 million at December 31, 2015 and 2014 , 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 non-U.S. 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 annual effective 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. At this time, it is not practicable to estimate the amount of tax that may be payable if VMware were to repatriate these earnings. 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, 2015 , 2014 and 2013 (table in millions): For the Year Ended December 31, 2015 2014 2013 Payments from VMware to EMC $ 144 $ 150 $ 8 Payments from EMC to VMware — — 32 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 federal tax credits in excess of federal tax liabilities. 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, 2015 , 2014 and 2013 , 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 stockholders’ equity of $13 million , and a decrease of $12 million and $3 million , respectively. 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, 2015 2014 2013 Balance, beginning of the year $ 190 $ 167 $ 158 Tax positions related to current year: Additions 41 32 32 Tax positions related to prior years: Additions 54 1 — Reductions (14 ) (3 ) (12 ) Settlements (12 ) (1 ) (2 ) Reductions resulting from a lapse of the statute of limitations (11 ) (2 ) (8 ) Foreign currency effects (3 ) (4 ) (1 ) Balance, end of the year $ 245 $ 190 $ 167 Of the net unrecognized tax benefits, including interest and penalties, of $257 million as of December 31, 2015 , approximately $232 million would, if recognized, benefit VMware's annual effective income tax rate. The $257 million of net unrecognized tax benefits were classified as a non-current liability within other liabilities on the consolidated balance sheets. VMware recognizes interest expense and penalties related to income tax matters in the income tax provision. VMware had accrued $34 million and $22 million of interest and penalties associated with unrecognized tax benefits as of December 31, 2015 and 2014 , respectively. Income tax expense for the years ended December 31, 2015 , 2014 and 2013 included interest and penalties of $13 million , $8 million and $5 million , respectively, associated with uncertain tax positions. During the fourth quarter of 2015, we recognized additional unrecognized tax benefits relating to certain acquisitions that took place in preceding periods. These additional unrecognized tax benefits were based upon communication received from the Internal Revenue Services (the “IRS”). The amount recognized, excluding interest, was $47 million , of which $25 million was recorded to the income tax provision on the consolidated statements of income. The remaining amount will be amortized to the income tax provision over the periods matching the useful lives of the underlying intangible assets. The EMC consolidated group is routinely under audit by the IRS. All U.S. federal income tax matters have been concluded for years through 2008. The IRS is currently auditing the EMC consolidated group's federal tax returns for tax years 2009 through 2011. VMware also has income tax audits in progress in numerous state and non-U.S. tax jurisdictions. In its international jurisdictions that comprise a significant portion of its operations, the years that may be examined vary, with the earliest year being 2008. In its most significant international jurisdiction, Ireland, the open tax years begin as of 2010. Based on the timing and outcome of examinations of VMware’s subsidiaries, the result of the expiration of statutes of limitations for specific jurisdictions or the timing and result of ruling requests from taxing authorities, it is reasonably possible that within the next 12 months total unrecognized tax benefits could be potentially reduced by approximately $18 million . Audit outcomes and the timing of audit settlements are subject to significant uncertainty. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation During the second quarter of 2015, VMware reached an agreement with the Department of Justice (“DOJ”) and the General Services Administration (“GSA”) to pay $76 million to resolve allegations that VMware's government sales practices between 2006 and 2013 had violated the federal False Claims Act. The settlement was paid and recorded as a reduction of VMware's total revenues during the year ended December 31, 2015. On March 27, 2015, Phoenix Technologies (“Phoenix”) filed a complaint against VMware in the U.S. District Court for the Northern District of California asserting claims for copyright infringement and breach of contract relating to a version of Phoenix’s BIOS software that VMware licensed from Phoenix. In the lawsuit, Phoenix is seeking injunctive relief and monetary damages. Trial is currently scheduled for November 2016. VMware believes that it has meritorious defenses in connection with this lawsuit, and currently a reasonably possible loss or range of loss cannot be estimated. On March 4, 2015, Christoph Hellwig, a software developer who alleges that software code he wrote is used in a component of the Company's vSphere product, filed a lawsuit against VMware in the Hamburg Regional Court in Germany alleging copyright infringement for failing to comply with the terms of an open source General Public License v.2 (“GPL v.2”) and seeking an order requiring VMware to comply with the GPL v.2 or cease distribution of any affected code within Germany. VMware believes that it has meritorious defenses in connection with this lawsuit, and currently a reasonably possible loss or range of loss cannot be estimated. VMware believes that it has valid defenses against each of the above legal matters. However, given the unpredictable nature of legal proceedings, an unfavorable resolution of one or more legal proceedings, claims, or investigations could have a material adverse effect on VMware’s consolidated financial statements. On November 17, 2015, Francis M. Ford, a VMware Class A stockholder, filed an action in the Delaware Chancery Court against certain current and former VMware directors, among others, alleging that the directors breached their fiduciary duties in connection with the proposed acquisition by Dell of EMC, and the proposed issuance of tracking stock that is intended to track the performance of VMware. The plaintiff does not assert claims directly against VMware, but purports to bring class claims on behalf of other VMware Class A stockholders and derivative claims on behalf of VMware. While VMware does not believe that the case represents a material adverse exposure, no assurances can be given that the litigation will not have any adverse consequences for the company or the directors named in the suit. VMware accrues for a liability when a determination has been made that a loss is both probable and the amount of the loss can be reasonably estimated. If only a range can be estimated and no amount within the range is a better estimate than any other amount, an accrual is recorded for the minimum amount in the range. Significant judgment is required in both the determination that the occurrence of a loss is probable and is reasonably estimable. In making such judgments, VMware considers the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular matter. Legal costs are generally recognized as expense when incurred. VMware is also subject to other legal, administrative and regulatory proceedings, claims, demands and investigations in the ordinary course of business or in connection with business mergers and acquisitions, including claims with respect to commercial, contracting and sales practices, product liability, intellectual property, employment, corporate and securities law, class action, whistleblower and other matters. From time to time, VMware also receives inquiries from and has discussions with government entities on various matters. As of December 31, 2015 and 2014 , amounts accrued relating to these other matters arising as part of the ordinary course of business were considered immaterial. VMware does not believe that any liability from any reasonably foreseeable disposition of such claims and litigation, individually or in the aggregate, would have a material adverse effect on its consolidated financial statements. Operating Lease and Other Contractual Commitments VMware leases office facilities and equipment under various operating arrangements. Rent expense for the years ended December 31, 2015 , 2014 and 2013 was $105 million , $85 million and $67 million , respectively. VMware’s minimum future lease commitments and other contractual commitments at December 31, 2015 were as follows (table in millions): Future Lease Commitments Purchase Obligations Other Contractual Commitments (1) Total 2016 $ 90 $ 32 $ 7 $ 129 2017 72 19 3 94 2018 56 16 3 75 2019 45 3 3 51 2020 34 — 3 37 Thereafter 572 — 13 585 Total $ 869 $ 70 $ 32 $ 971 (1) Consisting of various contractual agreements, which include commitments on the lease for VMware’s Washington data center facility and asset retirement obligations. The amount of the future lease commitments after 2020 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. In addition to the amounts above, $1,500 million of notes payable to EMC was outstanding as of December 31, 2015. Refer to Note N for further information regarding notes payable to EMC. 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, 2015 | |
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. If a meeting of VMware stockholders is 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. As of December 31, 2015 and 2014 , 300.0 million shares of Class A common stock were reserved for conversion. VMware Equity Plan In June 2007, VMware adopted its 2007 Equity and Incentive Plan (the “2007 Plan”). As of December 31, 2015 , the number of authorized shares under the 2007 Plan was 121.6 million . 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 4.2 million shares, which accordingly have been added to authorized shares under the 2007 Plan reserve. Awards under the 2007 Plan may be in the form of stock-based awards, such as restricted stock units, or stock options. Generally, restricted stock grants made under the 2007 Plan have a three -year to four -year period over which they vest and vest 25% the first year and semi-annually thereafter. VMware’s Compensation and Corporate Governance Committee determines the vesting schedule for all equity awards. 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 monthly thereafter over the following three years and expire between six and seven years from the date of grant. VMware utilizes both authorized and unissued shares to satisfy all shares issued under the 2007 Plan. At December 31, 2015 , there were an aggregate of 18.4 million shares of common stock available for issuance pursuant to future grants under the 2007 Plan. VMware Stock Repurchases On January 27, 2015, VMware’s board of directors authorized the repurchase of up to one billion dollars of VMware’s Class A common stock through the end of 2017. Stock will be purchased from time to time, in the open market or through private transactions, subject to market conditions. 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, legal and regulatory requirements and other market and economic conditions. VMware is not obligated to purchase any shares under its stock repurchase programs. Purchases can be discontinued at any time VMware believes additional purchases are not warranted. All shares repurchased under VMware’s stock repurchase programs are retired. The following table summarizes stock repurchase authorizations, which were open or completed during the years ended December 31, 2015 , 2014 and 2013 (amount in table in millions): Authorization Date Amount Authorized Expiration Date Status January 27, 2015 $1,000 December 31, 2017 Open August 6, 2014 1,000 December 31, 2016 Completed in Q3'15 August 7, 2013 700 December 31, 2015 Completed in Q4'14 November 28, 2012 250 December 31, 2014 Completed in Q4'13 February 29, 2012 600 December 31, 2013 Completed in Q2'13 As of December 31, 2015 , the authorized amount remaining for repurchase was $835 million . The following table summarizes stock repurchase activity during the years ended December 31, 2015 , 2014 and 2013 (aggregate purchase price in millions, shares in thousands): For the Year Ended December 31, 2015 2014 2013 Aggregate purchase price $ 1,125 $ 700 $ 508 Class A common shares repurchased 13,495 7,642 6,636 Weighted-average price per share $ 83.36 $ 91.61 $ 76.58 The aggregate purchase price of repurchased shares includes commissions and is classified as a reduction to additional paid-in capital. 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. As of December 31, 2015 , the number of authorized shares under the ESPP was a total of 14.3 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, 2015 , 4.7 million shares of VMware Class A common stock were available for issuance under the ESPP. The following table summarizes ESPP activity during the years ended December 31, 2015 , 2014 and 2013 (cash proceeds in millions, shares in thousands): For the Year Ended December 31, 2015 2014 2013 Cash proceeds $ 98 $ 80 $ 76 Class A common shares purchased 1,495 1,099 1,154 Weighted-average price per share $ 65.54 $ 73.21 $ 65.97 As of December 31, 2015 , $48 million of ESPP withholdings were recorded as a liability in accrued expenses and other on the consolidated balance sheets for the purchase that occurred during January 2016 . 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 stock option activity since January 1, 2013 (shares in thousands): VMware Stock Options EMC Stock Options Number of Shares Weighted- Average Exercise Price (per share) Number of Shares Weighted- Average Exercise Price (per share) Outstanding, December 31, 2012 10,133 $ 34.36 2,643 $ 15.12 Options relating to employees transferred (to) from EMC — — (97 ) 11.87 Granted 1,434 71.53 — — Forfeited (416 ) 36.25 (46 ) 16.09 Expired (387 ) 105.81 (29 ) 12.99 Exercised (5,009 ) 28.12 (775 ) 15.39 Outstanding, December 31, 2013 5,755 44.12 1,696 15.53 Options relating to employees transferred (to) from EMC — — 149 15.87 Granted 2,695 50.91 — — Forfeited (220 ) 47.89 (2 ) 19.10 Expired — — (9 ) 14.14 Exercised (2,361 ) 35.58 (563 ) 14.37 Outstanding, December 31, 2014 5,869 50.54 1,271 16.08 Options relating to employees transferred (to) from EMC — — 8 20.23 Granted 21 54.23 — — Forfeited (322 ) 70.42 (1 ) 19.37 Expired — — (14 ) 14.21 Exercised (2,404 ) 29.44 (201 ) 13.96 Outstanding, December 31, 2015 3,164 64.56 1,063 16.54 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. Options outstanding that are exercisable and that have vested and are expected to vest as of December 31, 2015 were as follows: VMware Stock Options EMC Stock Options Outstanding Options (in thousands) Weighted Average Exercise Price Weighted Average Remaining Term (in years) Aggregate Intrinsic Value (1) (in millions) Outstanding Options (in thousands) Weighted Average Exercise Price Weighted Average Remaining Term (in years) Aggregate Intrinsic Value (2) (in millions) Exercisable, December 31, 2015 1,627 $ 59.31 4.49 $ 26 1,050 $ 16.44 3.19 $ 10 Vested and expected to vest, December 31, 2015 3,078 63.89 4.88 43 1,061 16.53 3.20 10 (1) The aggregate intrinsic values represent the total pre-tax intrinsic values based on VMware's closing stock price of $56.57 as of December 31, 2015 , which would have been received by the option holders had all in-the-money options been exercised as of that date. (2) These aggregate intrinsic values represent the total pre-tax intrinsic values based on EMC’s adjusted closing stock price of $25.68 as of December 31, 2015 , which would have been received by the option holders had all in-the-money options been exercised as of that date. The total fair value of VMware stock options that vested during the years ended December 31, 2015 , 2014 and 2013 was $60 million , $64 million and $60 million , respectively. The options exercised during the years ended December 31, 2015 , 2014 and 2013 had a pre-tax intrinsic value of $136 million , $147 million and $256 million , respectively. Cash proceeds from the exercise of EMC stock options paid to EMC were $3 million , $8 million and $11 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. The pre-tax intrinsic value of EMC stock options held by VMware employees that were exercised during the years ended December 31, 2015 , 2014 and 2013 were $3 million , $7 million and $8 million , respectively. VMware Restricted Stock VMware's restricted stock primarily consists of restricted stock unit (“RSU”) awards granted to employees. RSUs are valued based on VMware's stock price on the date of grant. The shares underlying the RSU awards are not issued until the RSUs vest. Upon vesting, each RSU converts into one share of VMware Class A common stock. VMware's 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, in certain cases, 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 2.0 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. As of December 31, 2015 , the number of PSUs outstanding includes certain PSUs for which performance conditions have concluded but that remain subject to certain service conditions. The following table summarizes restricted stock activity since January 1, 2013 (units in thousands): Number of Units Weighted- Average Grant Date Fair Value (per unit) Outstanding, January 1, 2013 12,170 $ 91.93 Granted 7,391 76.20 Vested (4,399 ) 83.21 Forfeited (2,306 ) 90.55 Outstanding, December 31, 2013 12,856 85.85 Granted 6,189 92.82 Vested (5,166 ) 86.27 Forfeited (1,294 ) 88.03 Outstanding, December 31, 2014 12,585 88.88 Granted 12,787 72.42 Vested (4,855 ) 90.72 Forfeited (1,824 ) 87.39 Outstanding, December 31, 2015 18,693 77.29 As of December 31, 2015 , the 18.7 million units outstanding included 18.2 million of RSUs and 0.5 million of PSUs. The above table includes RSUs issued for outstanding unvested RSUs in connection with business combinations. As of December 31, 2015 , restricted stock that is expected to vest was as follows: Number of Units (in thousands) Weighted Average Remaining Term (in years) Aggregate Intrinsic Value (1) (in millions) Expected to vest, December 31, 2015 16,206 2.47 $ 917 (1) The aggregate intrinsic values represent the total pre-tax intrinsic values based on VMware's closing stock price of $56.57 as of December 31, 2015 , which would have been received by the RSU holders had the RSUs been issued as of December 31, 2015 . The total fair value of VMware restricted stock that vested during the years ended December 31, 2015 , 2014 and 2013 was $379 million , $480 million and $340 million , respectively. As of December 31, 2015 , restricted stock representing 18.7 million shares of VMware’s Class A common stock were outstanding, with an aggregate intrinsic value of $1,057 million based on VMware’s closing price as of December 31, 2015 . VMware Shares Repurchased for Tax Withholdings During the years ended December 31, 2015 , 2014 and 2013 , VMware repurchased and retired or withheld 2.6 million , 1.8 million and 1.9 million shares, respectively, of Class A common stock, for $173 million , $162 million and $126 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 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 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, 2015 , 2014 and 2013 (table in millions): For the Year Ended December 31, 2015 2014 2013 Cost of license revenues $ 2 $ 2 $ 2 Cost of services revenues 44 42 29 Research and development 226 244 227 Sales and marketing 168 172 144 General and administrative 64 69 56 Realignment — — 6 Stock-based compensation 504 529 464 Income tax benefit (144 ) (157 ) (136 ) Total stock-based compensation, net of tax $ 360 $ 372 $ 328 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 sheets. 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. As of December 31, 2015 and 2014 , there were no outstanding liability-classified awards. As such, no liability-classified awards were reclassified to additional paid-in capital during the year ended December 31, 2015 . During the years ended December 31, 2014 and 2013 , $21 million and $25 million , respectively, of liability-classified awards were reclassified to additional paid-in capital upon vesting. As of December 31, 2015 , the total unrecognized compensation cost for stock options and restricted stock was $1,117 million and will be recognized through 2019 with a weighted-average remaining period of 1.4 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, 2015 , 2014 and 2013 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 2015 2014 2013 Dividend yield None None None Expected volatility 32.0 % 36.2 % 38.5 % Risk-free interest rate 1.1 % 0.9 % 0.9 % Expected term (in years) 3.3 3.2 3.6 Weighted-average fair value at grant date $ 27.16 $ 48.47 $ 29.47 For the Year Ended December 31, VMware Employee Stock Purchase Plan 2015 2014 2013 Dividend yield None None None Expected volatility 30.1 % 32.3 % 32.9 % Risk-free interest rate 0.1 % 0.1 % 0.1 % Expected term (in years) 0.5 0.5 0.5 Weighted-average fair value at grant date $ 20.59 $ 20.71 $ 20.45 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 during the years ended December 31, 2015 , 2014 and 2013 , volatility was based on an analysis of historical stock prices and implied volatilities of VMware’s Class A common stock. The expected term is based on historical exercise patterns and post-vesting termination behavior, 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 (Loss) The changes in components of accumulated other comprehensive income (loss) during the years ended December 31, 2015 and 2014 were as follows (tables in millions): Unrealized Gain on Unrealized Loss on Total Balance, January 1, 2014 $ 4 $ — $ 4 Unrealized gain (loss), net of taxes of $0 (1 ) (1 ) (2 ) Amounts reclassified from accumulated other comprehensive income to the consolidated statement of income, net of taxes of $(2), $0 and $(2) (3 ) — (3 ) Other comprehensive income (loss), net (4 ) (1 ) (5 ) Balance, December 31, 2014 — (1 ) (1 ) Unrealized gain (loss), net of taxes of $(4), $0 and $(4) (7 ) — (7 ) Other comprehensive income (loss), net (7 ) — (7 ) Balance, December 31, 2015 $ (7 ) $ (1 ) $ (8 ) Unrealized gains on VMware’s available-for-sale securities are reclassified to investment income on the consolidated statements of income in the period that such gains 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 statements of income in the same period that the underlying expenses are incurred. The amounts recorded to their related operating expense functional line items on the consolidated statements of income during the years ended December 31, 2015 and 2014 were not material to the individual functional line items. |
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. If a meeting of VMware stockholders is 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. As of December 31, 2015 and 2014 , 300.0 million shares of Class A common stock were reserved for conversion. VMware Equity Plan In June 2007, VMware adopted its 2007 Equity and Incentive Plan (the “2007 Plan”). As of December 31, 2015 , the number of authorized shares under the 2007 Plan was 121.6 million . 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 4.2 million shares, which accordingly have been added to authorized shares under the 2007 Plan reserve. Awards under the 2007 Plan may be in the form of stock-based awards, such as restricted stock units, or stock options. Generally, restricted stock grants made under the 2007 Plan have a three -year to four -year period over which they vest and vest 25% the first year and semi-annually thereafter. VMware’s Compensation and Corporate Governance Committee determines the vesting schedule for all equity awards. 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 monthly thereafter over the following three years and expire between six and seven years from the date of grant. VMware utilizes both authorized and unissued shares to satisfy all shares issued under the 2007 Plan. At December 31, 2015 , there were an aggregate of 18.4 million shares of common stock available for issuance pursuant to future grants under the 2007 Plan. VMware Stock Repurchases On January 27, 2015, VMware’s board of directors authorized the repurchase of up to one billion dollars of VMware’s Class A common stock through the end of 2017. Stock will be purchased from time to time, in the open market or through private transactions, subject to market conditions. 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, legal and regulatory requirements and other market and economic conditions. VMware is not obligated to purchase any shares under its stock repurchase programs. Purchases can be discontinued at any time VMware believes additional purchases are not warranted. All shares repurchased under VMware’s stock repurchase programs are retired. The following table summarizes stock repurchase authorizations, which were open or completed during the years ended December 31, 2015 , 2014 and 2013 (amount in table in millions): Authorization Date Amount Authorized Expiration Date Status January 27, 2015 $1,000 December 31, 2017 Open August 6, 2014 1,000 December 31, 2016 Completed in Q3'15 August 7, 2013 700 December 31, 2015 Completed in Q4'14 November 28, 2012 250 December 31, 2014 Completed in Q4'13 February 29, 2012 600 December 31, 2013 Completed in Q2'13 As of December 31, 2015 , the authorized amount remaining for repurchase was $835 million . The following table summarizes stock repurchase activity during the years ended December 31, 2015 , 2014 and 2013 (aggregate purchase price in millions, shares in thousands): For the Year Ended December 31, 2015 2014 2013 Aggregate purchase price $ 1,125 $ 700 $ 508 Class A common shares repurchased 13,495 7,642 6,636 Weighted-average price per share $ 83.36 $ 91.61 $ 76.58 The aggregate purchase price of repurchased shares includes commissions and is classified as a reduction to additional paid-in capital. 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. As of December 31, 2015 , the number of authorized shares under the ESPP was a total of 14.3 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, 2015 , 4.7 million shares of VMware Class A common stock were available for issuance under the ESPP. The following table summarizes ESPP activity during the years ended December 31, 2015 , 2014 and 2013 (cash proceeds in millions, shares in thousands): For the Year Ended December 31, 2015 2014 2013 Cash proceeds $ 98 $ 80 $ 76 Class A common shares purchased 1,495 1,099 1,154 Weighted-average price per share $ 65.54 $ 73.21 $ 65.97 As of December 31, 2015 , $48 million of ESPP withholdings were recorded as a liability in accrued expenses and other on the consolidated balance sheets for the purchase that occurred during January 2016 . 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 stock option activity since January 1, 2013 (shares in thousands): VMware Stock Options EMC Stock Options Number of Shares Weighted- Average Exercise Price (per share) Number of Shares Weighted- Average Exercise Price (per share) Outstanding, December 31, 2012 10,133 $ 34.36 2,643 $ 15.12 Options relating to employees transferred (to) from EMC — — (97 ) 11.87 Granted 1,434 71.53 — — Forfeited (416 ) 36.25 (46 ) 16.09 Expired (387 ) 105.81 (29 ) 12.99 Exercised (5,009 ) 28.12 (775 ) 15.39 Outstanding, December 31, 2013 5,755 44.12 1,696 15.53 Options relating to employees transferred (to) from EMC — — 149 15.87 Granted 2,695 50.91 — — Forfeited (220 ) 47.89 (2 ) 19.10 Expired — — (9 ) 14.14 Exercised (2,361 ) 35.58 (563 ) 14.37 Outstanding, December 31, 2014 5,869 50.54 1,271 16.08 Options relating to employees transferred (to) from EMC — — 8 20.23 Granted 21 54.23 — — Forfeited (322 ) 70.42 (1 ) 19.37 Expired — — (14 ) 14.21 Exercised (2,404 ) 29.44 (201 ) 13.96 Outstanding, December 31, 2015 3,164 64.56 1,063 16.54 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. Options outstanding that are exercisable and that have vested and are expected to vest as of December 31, 2015 were as follows: VMware Stock Options EMC Stock Options Outstanding Options (in thousands) Weighted Average Exercise Price Weighted Average Remaining Term (in years) Aggregate Intrinsic Value (1) (in millions) Outstanding Options (in thousands) Weighted Average Exercise Price Weighted Average Remaining Term (in years) Aggregate Intrinsic Value (2) (in millions) Exercisable, December 31, 2015 1,627 $ 59.31 4.49 $ 26 1,050 $ 16.44 3.19 $ 10 Vested and expected to vest, December 31, 2015 3,078 63.89 4.88 43 1,061 16.53 3.20 10 (1) The aggregate intrinsic values represent the total pre-tax intrinsic values based on VMware's closing stock price of $56.57 as of December 31, 2015 , which would have been received by the option holders had all in-the-money options been exercised as of that date. (2) These aggregate intrinsic values represent the total pre-tax intrinsic values based on EMC’s adjusted closing stock price of $25.68 as of December 31, 2015 , which would have been received by the option holders had all in-the-money options been exercised as of that date. The total fair value of VMware stock options that vested during the years ended December 31, 2015 , 2014 and 2013 was $60 million , $64 million and $60 million , respectively. The options exercised during the years ended December 31, 2015 , 2014 and 2013 had a pre-tax intrinsic value of $136 million , $147 million and $256 million , respectively. Cash proceeds from the exercise of EMC stock options paid to EMC were $3 million , $8 million and $11 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. The pre-tax intrinsic value of EMC stock options held by VMware employees that were exercised during the years ended December 31, 2015 , 2014 and 2013 were $3 million , $7 million and $8 million , respectively. VMware Restricted Stock VMware's restricted stock primarily consists of restricted stock unit (“RSU”) awards granted to employees. RSUs are valued based on VMware's stock price on the date of grant. The shares underlying the RSU awards are not issued until the RSUs vest. Upon vesting, each RSU converts into one share of VMware Class A common stock. VMware's 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, in certain cases, 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 2.0 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. As of December 31, 2015 , the number of PSUs outstanding includes certain PSUs for which performance conditions have concluded but that remain subject to certain service conditions. The following table summarizes restricted stock activity since January 1, 2013 (units in thousands): Number of Units Weighted- Average Grant Date Fair Value (per unit) Outstanding, January 1, 2013 12,170 $ 91.93 Granted 7,391 76.20 Vested (4,399 ) 83.21 Forfeited (2,306 ) 90.55 Outstanding, December 31, 2013 12,856 85.85 Granted 6,189 92.82 Vested (5,166 ) 86.27 Forfeited (1,294 ) 88.03 Outstanding, December 31, 2014 12,585 88.88 Granted 12,787 72.42 Vested (4,855 ) 90.72 Forfeited (1,824 ) 87.39 Outstanding, December 31, 2015 18,693 77.29 As of December 31, 2015 , the 18.7 million units outstanding included 18.2 million of RSUs and 0.5 million of PSUs. The above table includes RSUs issued for outstanding unvested RSUs in connection with business combinations. As of December 31, 2015 , restricted stock that is expected to vest was as follows: Number of Units (in thousands) Weighted Average Remaining Term (in years) Aggregate Intrinsic Value (1) (in millions) Expected to vest, December 31, 2015 16,206 2.47 $ 917 (1) The aggregate intrinsic values represent the total pre-tax intrinsic values based on VMware's closing stock price of $56.57 as of December 31, 2015 , which would have been received by the RSU holders had the RSUs been issued as of December 31, 2015 . The total fair value of VMware restricted stock that vested during the years ended December 31, 2015 , 2014 and 2013 was $379 million , $480 million and $340 million , respectively. As of December 31, 2015 , restricted stock representing 18.7 million shares of VMware’s Class A common stock were outstanding, with an aggregate intrinsic value of $1,057 million based on VMware’s closing price as of December 31, 2015 . VMware Shares Repurchased for Tax Withholdings During the years ended December 31, 2015 , 2014 and 2013 , VMware repurchased and retired or withheld 2.6 million , 1.8 million and 1.9 million shares, respectively, of Class A common stock, for $173 million , $162 million and $126 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 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 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, 2015 , 2014 and 2013 (table in millions): For the Year Ended December 31, 2015 2014 2013 Cost of license revenues $ 2 $ 2 $ 2 Cost of services revenues 44 42 29 Research and development 226 244 227 Sales and marketing 168 172 144 General and administrative 64 69 56 Realignment — — 6 Stock-based compensation 504 529 464 Income tax benefit (144 ) (157 ) (136 ) Total stock-based compensation, net of tax $ 360 $ 372 $ 328 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 sheets. 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. As of December 31, 2015 and 2014 , there were no outstanding liability-classified awards. As such, no liability-classified awards were reclassified to additional paid-in capital during the year ended December 31, 2015 . During the years ended December 31, 2014 and 2013 , $21 million and $25 million , respectively, of liability-classified awards were reclassified to additional paid-in capital upon vesting. As of December 31, 2015 , the total unrecognized compensation cost for stock options and restricted stock was $1,117 million and will be recognized through 2019 with a weighted-average remaining period of 1.4 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, 2015 , 2014 and 2013 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 2015 2014 2013 Dividend yield None None None Expected volatility 32.0 % 36.2 % 38.5 % Risk-free interest rate 1.1 % 0.9 % 0.9 % Expected term (in years) 3.3 3.2 3.6 Weighted-average fair value at grant date $ 27.16 $ 48.47 $ 29.47 For the Year Ended December 31, VMware Employee Stock Purchase Plan 2015 2014 2013 Dividend yield None None None Expected volatility 30.1 % 32.3 % 32.9 % Risk-free interest rate 0.1 % 0.1 % 0.1 % Expected term (in years) 0.5 0.5 0.5 Weighted-average fair value at grant date $ 20.59 $ 20.71 $ 20.45 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 during the years ended December 31, 2015 , 2014 and 2013 , volatility was based on an analysis of historical stock prices and implied volatilities of VMware’s Class A common stock. The expected term is based on historical exercise patterns and post-vesting termination behavior, 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 (Loss) The changes in components of accumulated other comprehensive income (loss) during the years ended December 31, 2015 and 2014 were as follows (tables in millions): Unrealized Gain on Unrealized Loss on Total Balance, January 1, 2014 $ 4 $ — $ 4 Unrealized gain (loss), net of taxes of $0 (1 ) (1 ) (2 ) Amounts reclassified from accumulated other comprehensive income to the consolidated statement of income, net of taxes of $(2), $0 and $(2) (3 ) — (3 ) Other comprehensive income (loss), net (4 ) (1 ) (5 ) Balance, December 31, 2014 — (1 ) (1 ) Unrealized gain (loss), net of taxes of $(4), $0 and $(4) (7 ) — (7 ) Other comprehensive income (loss), net (7 ) — (7 ) Balance, December 31, 2015 $ (7 ) $ (1 ) $ (8 ) Unrealized gains on VMware’s available-for-sale securities are reclassified to investment income on the consolidated statements of income in the period that such gains 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 statements of income in the same period that the underlying expenses are incurred. The amounts recorded to their related operating expense functional line items on the consolidated statements of income during the years ended December 31, 2015 and 2014 were not material to the individual functional line items. |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Parties | Related Parties The information provided below includes a summary of the transactions entered into with EMC and EMC’s consolidated subsidiaries (collectively “EMC”). EMC acquired the controlling interest in VCE Company LLC (“VCE”) during the fourth quarter of 2014. Transactions with VCE from the date EMC acquired VCE have been included in the tables below. Transactions with EMC 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 provides professional services to end users based upon 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. • Pursuant to an ongoing distribution agreement, VMware acts as the selling agent for certain products and services of Pivotal Software, Inc. (“Pivotal”), a subsidiary of EMC, in exchange for an agency fee. Under this agreement, cash is collected from the end user by VMware and remitted to Pivotal, net of the contractual agency fee. • VMware provides various services to Pivotal. Support costs incurred by VMware are reimbursed to VMware and are recorded as a reduction to the costs incurred by VMware. Information about VMware’s revenues and receipts from such arrangements with EMC during the years ended December 31, 2015 , 2014 and 2013 and unearned revenues as of December 31, 2015 and 2014 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, 2015 2014 2013 2015 2014 Reseller revenues $ 301 $ 205 $ 141 $ 292 $ 290 Internal-use revenues 17 21 32 11 18 Professional services revenues 100 85 72 3 9 Collaborative technology project receipts — — 7 n/a n/a Agency fee revenues 6 5 5 — — Reimbursement for services to Pivotal 4 2 12 n/a n/a VMware and EMC engaged in the following ongoing intercompany transactions, which resulted in costs to VMware: • VMware purchases and leases products and purchases services 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 charged to VMware with a mark-up intended to approximate costs that would have been incurred had VMware contracted for such services with an unrelated third party. These costs are included as expenses on VMware’s consolidated statements of income and primarily include salaries, benefits, travel and rent expenses. EMC also incurs certain administrative costs on VMware’s behalf in the U.S. that are recorded as expenses on VMware’s consolidated statements of income. • From time to time, VMware invoices end users on behalf of EMC for certain services rendered by EMC. Cash related to these services is collected from the end user by VMware and remitted to EMC. Information about VMware’s costs from such arrangements with EMC for the years ended December 31, 2015 , 2014 and 2013 consisted of the following (table in millions): For the Year Ended December 31, 2015 2014 2013 Purchases and leases of products and purchases of services $ 63 $ 71 $ 63 Collaborative technology project costs 5 12 13 EMC subsidiary support and administrative costs 100 137 128 VMware also purchases EMC products through EMC's channel partners. Purchases of EMC products through EMC's channel partners were $36 million , $25 million and $6 million during the years ended December 31, 2015 , 2014 and 2013 , respectively. 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 statements 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 was appointed Chief Executive Officer of VMware. Prior to joining VMware, Mr. Gelsinger was the President and Chief Operating Officer of EMC Information Infrastructure Products. Mr. Gelsinger retains certain of his EMC equity awards that were held as of September 1, 2012 and he continues to vest in such awards. Stock-based compensation related to Mr. Gelsinger’s EMC awards are being recognized on VMware’s consolidated statements of income over the awards’ remaining requisite service periods. Due To/From Related Parties, Net As a result of the related party transactions with EMC described above, amounts due to and from related parties, net as of December 31, 2015 and 2014 consisted of the following (table in millions): As of December 31, 2015 2014 Due to related parties $ (68 ) $ (76 ) Due from related parties 142 125 Due (to) from related parties, net $ 74 $ 49 Income tax due (to) from related parties $ (18 ) $ (40 ) 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 related parties is governed by the tax sharing agreement with EMC. Notes Payable to EMC VMware and EMC entered into a note exchange agreement on January 21, 2014 providing for the issuance of three promissory notes in the aggregate principal amount of $1,500 million . The total debt of $1,500 million 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 prepaid 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% . During the years ended December 31, 2015 , 2014 and 2013 , $26 million , $24 million and $4 million , respectively, of interest expense was recognized. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2015 | |
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, 2015 , 2014 and 2013 were as follows (table in millions): For the Year Ended December 31, 2015 2014 2013 United States $ 3,311 $ 2,912 $ 2,485 International 3,260 3,123 2,722 Total $ 6,571 $ 6,035 $ 5,207 Revenues by geographic area are based on the ship-to addresses of VMware’s customers. No individual country other than the United States accounted for 10% or more of revenues for the years ended December 31, 2015 and 2014 . It was not practicable for VMware to determine revenues by country other than the United States for the year ended December 31, 2013 . One customer accounted for 15% of revenues during each of the years ended December 31, 2015 , 2014 and 2013 , respectively, and another customer accounted for 12% , 13% and 12% of revenues during the years ended December 31, 2015 , 2014 and 2013 , respectively. A third customer accounted for 11% of revenues during the years ended December 31, 2015 , 2014 and 2013 , respectively. Long-lived assets by geographic area, which primarily include property and equipment, net, as of December 31, 2015 and 2014 were as follows (table in millions): As of December 31, 2015 2014 United States $ 831 $ 801 International 148 117 Total $ 979 $ 918 No individual country other than the United States accounted for 10% or more of these assets as of December 31, 2015 and 2014 , respectively. VMware’s product and service solutions are organized into three main product groups: • SDDC or Software-Defined Data Center • Hybrid Cloud Computing • End-User 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 enterprise agreement arrangement or packaged together and sold as a suite. Accordingly, it is not practicable to determine revenue by each of the three product groups described above. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (unaudited) | Selected Quarterly Financial Data (unaudited) Quarterly financial data for 2015 and 2014 were as follows (tables in millions, except per share amounts): 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Revenues $ 1,511 $ 1,521 $ 1,672 $ 1,868 Net income 196 172 256 373 Net income per share, basic $ 0.46 $ 0.41 $ 0.61 $ 0.89 Net income per share, diluted $ 0.45 $ 0.40 $ 0.60 $ 0.88 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Revenues $ 1,360 $ 1,457 $ 1,515 $ 1,703 Net income 199 167 194 326 Net income per share, basic $ 0.46 $ 0.39 $ 0.45 $ 0.76 Net income per share, diluted $ 0.46 $ 0.38 $ 0.45 $ 0.75 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On January 22, 2016, VMware approved, subject to compliance with all applicable local legal obligations, a plan to streamline its operations, with plans to reinvest the associated savings in field, technical and support resources associated with growth products. The total charge resulting from this plan is estimated to be between $55 million and $65 million , consisting principally of employee-related charges to be paid in cash for the elimination of approximately 800 positions and personnel. Any such proposals in countries outside the United States will be subject to local law and consultation requirements. Actions associated with the plan are expected to be completed by June 30, 2016. Finalization of the plan will be subject to local information and consultation processes with employees or their representatives if required by law. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2015 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS (in millions) Allowance for Bad Debts Balance at Beginning of Period Allowance for Bad Debts Charged to General and Administrative Expenses Bad Debts Write-Offs Balance at End of Period Year ended December 31, 2015 allowance for doubtful accounts $ 2 $ — $ — $ 2 Year ended December 31, 2014 allowance for doubtful accounts 2 — — 2 Year ended December 31, 2013 allowance for doubtful accounts 4 (2 ) — 2 Tax Valuation Allowance Balance at Beginning of Period Tax Valuation Allowance Charged to Income Tax Provision Tax Valuation Allowance Credited to Income Tax Provision Balance at End of Period Year ended December 31, 2015 income tax valuation allowance $ 106 $ 47 $ (9 ) $ 144 Year ended December 31, 2014 income tax valuation allowance 94 21 (9 ) 106 Year ended December 31, 2013 income tax valuation allowance 64 32 (2 ) 94 |
Overview and Basis of Present27
Overview and Basis of Presentation (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
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 (“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, 2015 , EMC held 81.3% of VMware’s outstanding common stock and 97.5% 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. On October 12, 2015, Dell Inc. (“Dell”), Denali Holding Inc. (“Denali”) and EMC entered into a definitive agreement under which Denali has agreed to acquire EMC. Management believes the assumptions underlying the consolidated financial statements are reasonable. However, the amounts recorded for VMware’s intercompany transactions with EMC may not be considered arm’s length with an unrelated third party. Therefore, the financial statements included herein may not necessarily reflect the results of operations, financial position 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 results of operations, financial position 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. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of VMware and subsidiaries in which VMware has a controlling financial interest. Non-controlling interests are presented as a separate component within total stockholders’ equity and represent the equity and cumulative pro-rata share of the results of operations attributable to the non-controlling interests. The portion of results of operations attributable to the non-controlling interests is eliminated in other income (expense), net on the consolidated statements of income and are not presented separately as the amounts were not material for the periods presented. All intercompany transactions and account balances between VMware and its subsidiaries have been eliminated in consolidation. Transactions with EMC and its subsidiaries are generally settled in cash and are classified on the consolidated statements of cash flows based upon the nature of the underlying transaction. |
Reclassification | Reclassification VMware early-adopted Accounting Standards Update ("ASU") No. 2015-17, Balance Sheet Classification of Deferred Taxes, effective December 31, 2015 using retrospective application. As such, current deferred tax assets of $248 million were reclassified as non-current deferred tax assets on the consolidated balance sheets as of December 31, 2014 . Refer to the "New Accounting Pronouncements" section below for further discussion. Certain prior period amounts related to impairment of strategic investments have been reclassified within the operating activities section of the consolidated statements of cash flows for the year ended December 31, 2013. The reclassification had no effect on total cash flows used in or provided by operating, investing or financing activities as previously reported. |
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 development funds and 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 licenses, related software maintenance and support, training, consulting services, and hosted services. Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred or service has been provided, the sales price is fixed or determinable, and collectibility is probable. License Revenues VMware licenses most of its software through 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. VMware also licenses certain customers the rights to utilize software on a pay-as-you-go consumption model. Revenue from this selling model is generally recognized based upon the customer's reported usage. When software license arrangements are offered with new products that become available on a when-and-if-available basis, revenues associated with these arrangements are recognized ratably over the subscription period. For software sold by system vendors that is bundled with their hardware, unless VMware has a separate license agreement which governs the transaction, revenues are recognized in arrears upon the receipt of royalty reports. Services Revenues VMware’s services revenues generally consist of software maintenance and support, training, consulting services, and hosted services. Software maintenance and support offerings entitle customers to receive major and minor product upgrades on a when-and-if-available basis and technical support. Revenues from software maintenance and support offerings are generally recognized ratably over the contract period. 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 from 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 assuming all other revenue recognition criteria are met. Revenues from professional services engagements invoiced on a time and materials basis are recognized as the hours are incurred. VMware’s hosted services consist of certain software offerings sold as a service without the customer’s ability to take possession of the software over the subscription term. These arrangements are offered to VMware’s customers over a specified period of time and revenues are recognized ratably over the subscription term commencing upon delivery of the service. Hosted services are also provided on a consumption basis with revenues recognized commensurate with customer’s usage of the related services. Rebate Reserves and Marketing Development Funds Rebates are offered to certain channel partners, which are recognized as a reduction to revenues or unearned revenues. Rebates based on actual partner sales are recognized as a reduction of revenues as the underlying revenues are recognized. Rebates earned based upon partner achievement of cumulative level of sales are recognized as a reduction of revenues proportionally for each sale that is required to achieve the target. VMware participates in marketing development programs with certain channel partners wherein VMware reimburses its partners for marketing related expenses incurred by them under the terms of the programs. Reimbursed costs to channel partners are recognized as a reduction of revenues concurrent with the recognition of the underlying revenues based upon the maximum potential liability. The difference between the maximum potential liability recognized and the actual amount paid out has not been material to date. Returns Reserves With limited exceptions, VMware’s return policy does not allow product returns for a refund. VMware estimates and records reserves for product returns at the time of sale based on historical return rates. Amounts are recorded as a reduction to revenues or unearned revenues. Returns reserves have not been material for all periods presented. Multiple-Element Arrangements VMware enters into multiple-element revenue arrangements in which a customer may purchase a combination of software, maintenance and support, training, consulting services, and hosted services. For multiple-element arrangements with software elements, VMware allocates and defers revenue for the undelivered elements based on fair value using vendor-specific objective evidence (“VSOE”) and applies the residual method to allocate the remaining fee to the delivered products and services. If a product or service included in a software-related multiple-element arrangement has not been delivered, and is not considered essential to the functionality of the delivered products or services, VMware must determine the fair value of each undelivered product or service using VSOE. Absent VSOE, revenue is deferred until VSOE of fair value exists for each of the undelivered products or services, or until all elements of the arrangement have been delivered. However, if the only undelivered element without VSOE is maintenance and 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 revenues that VMware reports in a particular period. VSOE of fair value for an undelivered element is generally based on historical stand-alone sales to third parties. In limited instances, for an offering that is not yet sold, VSOE is the price established by management if it is probable that the price will not change when introduced to the marketplace, including through the use of a contractual renewal rate. In determining VSOE of fair value, VMware requires that the selling prices for a product or service fall within a reasonable pricing range. VMware has established VSOE for its software maintenance and technical support services, consulting services and training. For multiple-element arrangements that contain software and non-software elements, VMware allocates revenue to software or software-related elements as a group and any non-software elements separately based on relative selling prices using the selling price hierarchy. The relative selling price for each deliverable is determined using VSOE, if it exists, or third-party evidence (“TPE”) of selling price. TPE of fair value is based on evaluation of prices charged for competitor products or services sold to similarly situated customers. As VMware’s offerings contain significant proprietary technology and provide different features and functionality, comparable prices of similar products typically cannot be obtained and relied upon. If neither VSOE nor TPE of selling price exists for a deliverable, VMware uses its best estimate of selling price (“BESP”) for that deliverable. 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 practices across different sales channels and geographies, market conditions, and historical sales. VMware uses BESP in the allocation of arrangement consideration. 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. A specified upgrade obligation is created in the event we publicly announce new specific features, functionalities or entitlements to software upgrades or license products that have not been made available. We generally do not have VSOE of fair value for specified upgrades or license products. Accordingly, revenue recognition is deferred for multiple-element arrangements that entitle a customer to specified upgrades or new license products until the product obligations have been fulfilled. Unearned revenues substantially consist of payments received in advance of revenue recognition for products and services described above. Refer to Note J for further information. |
Foreign Currency Remeasurement | Foreign Currency Remeasurement The U.S. dollar is the functional currency of VMware’s foreign subsidiaries. VMware records net gains and losses resulting from foreign exchange transactions as a component of foreign currency exchange gains and losses in other income (expense), net on the consolidated statements of income. These gains and losses are net of those recognized on foreign currency forward contracts ("forward contracts") that VMware enters into to mitigate its exposure to foreign currency fluctuations. Net losses were $11 million , $8 million and $3 million during the years ended December 31, 2015 , 2014 and 2013 , respectively. |
Cash and Cash Equivalents, Short-Term Investments, and Restricted Cash | 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, 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 securities. 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. VMware carries its fixed income investments at fair value and unrealized gains and losses on these investments, net of taxes, are included in accumulated other comprehensive income (loss), a component of stockholders’ equity. Realized gains or losses are included on 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 on 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 assets and other assets, net in the accompanying consolidated balance sheets. As of December 31, 2015 and 2014 the total amount of VMware’s restricted cash was $19 million and $95 million , respectively. As of December 31, 2014 , $75 million of the restricted cash balance related to the acquisition of AirWatch LLC ("AirWatch"), which was released and paid to certain employees of AirWatch during 2015. Refer to Note B for further information. As of December 31, 2015 , VMware’s total cash, cash equivalents and short-term investments were $7,509 million , of which $5,810 million was held outside the U.S. |
Cash and Cash Equivalents, Short-Term Investments, and Restricted Cash | 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, 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 securities. 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. VMware carries its fixed income investments at fair value and unrealized gains and losses on these investments, net of taxes, are included in accumulated other comprehensive income (loss), a component of stockholders’ equity. Realized gains or losses are included on 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 on 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 assets and other assets, net in the accompanying consolidated balance sheets. As of December 31, 2015 and 2014 the total amount of VMware’s restricted cash was $19 million and $95 million , respectively. As of December 31, 2014 , $75 million of the restricted cash balance related to the acquisition of AirWatch LLC ("AirWatch"), which was released and paid to certain employees of AirWatch during 2015. Refer to Note B for further information. As of December 31, 2015 , VMware’s total cash, cash equivalents and short-term investments were $7,509 million , of which $5,810 million was held outside the U.S. |
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 economic conditions. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net is recorded at cost. Depreciation commences upon placing the asset in service and is recognized on a straight-line basis over the estimated useful life of the assets, as follows: Buildings Term of underlying land lease Land improvements 15 years Furniture and fixtures 7 years Equipment 3 to 6 years Software 3 years Leasehold improvements 20 years, not to exceed the term of the underlying lease Upon retirement or disposition, the asset cost and related accumulated depreciation are removed with any gain or loss recognized on 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 when 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 | Research and Development and Capitalized Software Development Costs Research and development costs primarily consist of personnel and related overhead costs associated with the research and development of VMware’s product software and service offerings and are expensed as incurred. Development costs of software to be sold, leased, or otherwise marketed are subject to capitalization beginning when technological feasibility for the product has been established and ending when the product is available for general release. Following a change in VMware’s go-to-market strategy in late 2011, the length of time between achieving technological feasibility and general release to customers significantly decreased. During the years presented, software development costs incurred for products during the time period between reaching technological feasibility and general release were not material and accordingly were expensed as incurred. No amortization expense was recorded during the years ended December 31, 2015 and 2014, as all previously capitalized software development costs had been fully amortized as of December 31, 2013. Amortization expense from capitalized amounts was $34 million for the year ended December 31, 2013. 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 acquisition 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 and analyze the necessary 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 generally amortized over their estimated useful lives using the straight-line method. 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 and Hedging Activities | Derivative Instruments and Hedging Activities Derivative instruments 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 forward contracts to hedge a portion of VMware’s net outstanding monetary asset and liability positions. These forward contracts are generally entered into on a monthly basis, with a typical contractual term of one 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 on the consolidated statements of income. Additionally, VMware enters into forward contracts which it designates as cash flow hedges to manage the volatility of cash flows that relate to operating expenses denominated in certain foreign currencies. These forward contracts are entered into annually, have maturities of twelve months or less, and are adjusted to fair value through accumulated other comprehensive income (loss), 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 on the consolidated statements of income. The Company does not, and does not intend to, use derivative financial instruments for trading or speculative purposes. Refer to Note G 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 early-adopted Accounting Standards Update No. 2015-17 (“ASU”) 2015-17, Balance Sheet Classification of Deferred Taxes, effective December 31, 2015 using retrospective application, which resulted in all deferred tax assets being presented as non-current deferred tax assets. Refer to “New Accounting Pronouncements” section below for further information. VMware does not provide for a U.S. income tax liability on undistributed earnings of VMware’s non-U.S. subsidiaries. The earnings of non-U.S. subsidiaries, which reflect full provision for non-U.S. income taxes, are currently indefinitely reinvested in foreign 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 substantially all 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 if VMware were 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. Refer to Note K for further information. |
Net Income Per Share | Net Income 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 net income per share is 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 net income per share, VMware uses the two-class method. As both classes share the same rights in dividends, basic and diluted net income per share are the same for both classes. |
Concentrations 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 and 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, 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 manages counterparty risk through adequate diversification of the investment portfolio among various financial institutions and by entering into derivative contracts with financial institutions that are of high credit quality. VMware provides credit to its customers, including distributors, original equipment manufacturers (“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 payment history and 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 Employee Stock Purchase Plan (the “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, 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 at each reporting period and are included in accrued expenses and other on the consolidated balance sheets. 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 on the statements of income and the remaining unrecognized stock-based compensation is recorded over the remaining requisite service period. |
New Accounting Pronouncement | New Accounting Pronouncements During November 2015, the Financial Accounting Standards Board (“FASB”) issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes (Topic 740), which simplifies the presentation of deferred income taxes. This standard requires an entity to classify deferred tax assets and liabilities as non-current within a classified statement of financial position. ASU 2015-17 is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. This standard may be applied either prospectively to all deferred tax assets and liabilities or retrospectively to all periods presented. Early application is permitted as of the beginning of the interim or annual reporting period. VMware early-adopted ASU 2015-17 effective December 31, 2015 using retrospective application. Upon adoption of ASU 2015-17, current deferred tax assets of $248 million were reclassified as non-current deferred tax assets on the consolidated balance sheets as of December 31, 2014 . During May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The updated revenue standard establishes principles for recognizing revenue and develops a common revenue standard for all industries. Upon adoption, entities will be required to recognize the amount of revenue that they expect to be entitled to for the transfer of promised goods or services to their customers. The updated standard is effective for the Company in the first quarter of 2018 and permits the use of either the retrospective or cumulative effect transition method. Early adoption is permitted, but not earlier than the first quarter of 2017. The Company has not selected a transition method and is currently evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. |
Overview and Basis of Present28
Overview and Basis of Presentation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Property, Plant and Equipment | Depreciation commences upon placing the asset in service and is recognized on a straight-line basis over the estimated useful life of the assets, as follows: Buildings Term of underlying land lease Land improvements 15 years Furniture and fixtures 7 years Equipment 3 to 6 years Software 3 years Leasehold improvements 20 years, not to exceed the term of the underlying lease Property and equipment, net, as of December 31, 2015 and 2014 consisted of the following (table in millions): December 31, 2015 2014 Equipment and software $ 1,180 $ 974 Buildings and improvements 792 753 Furniture and fixtures 100 92 Construction in progress 30 25 Total property and equipment 2,102 1,844 Accumulated depreciation (974 ) (809 ) Total property and equipment, net $ 1,128 1,035 |
Business Combinations, Defini29
Business Combinations, Definite-Lived Intangible Assets, Net and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
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 liabilities assumed (table in millions): Cash $ 36 Other current assets 61 Intangible assets 250 Goodwill 868 Other acquired assets 30 Total assets acquired 1,245 Unearned revenues (45 ) Other assumed liabilities (72 ) Total liabilities assumed (117 ) Fair value of assets acquired and liabilities assumed $ 1,128 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 | The following table summarizes the components of the identifiable intangible assets acquired and their estimated useful lives by VMware in conjunction with the acquisitions of AirWatch (amounts in table in millions): Useful Lives (in years) Weighted-Average Useful Lives (in years) Fair Value Amount Purchased technology 2 – 6 5.9 $ 118 Customer relationships and customer lists 2 – 8 7.9 78 Trademarks and tradenames 8 8 40 Other 2 – 8 3.2 14 Total identifiable intangible assets $ 250 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 Useful Lives (in years) Fair Value Amount Purchased technology 6 $ 49 Vendor contracts 8 3 In-process research and development (“IPR&D”) 10 Total intangible assets, net, excluding goodwill $ 62 |
Pro Forma Information | Supplemental information on an unaudited pro forma basis as if AirWatch had been acquired on January 1, 2013 is presented as follows (table in millions): For the Year Ended December 31, 2014 2013 Pro forma adjusted net income $ 849 $ 781 |
Schedule of Finite-Lived Intangible Assets | The following table summarizes the changes in the carrying amount of definite-lived intangible assets for the years ended December 31, 2015 and 2014 (table in millions): December 31, 2015 2014 Balance, beginning of the year $ 748 $ 607 Additions to intangible assets related to business combinations 13 278 Amortization Expense (145 ) (141 ) Other adjustments — 4 Balance, end of the year $ 616 $ 748 As of December 31, 2015 and 2014 , definite-lived intangible assets consisted of the following (amounts in tables in millions): December 31, 2015 Weighted-Average Gross Carrying Amount Accumulated Amortization Net Book Value Purchased technology 6.6 $ 648 $ (298 ) $ 350 Leasehold interest 34.9 149 (20 ) 129 Customer relationships and customer lists 8.4 148 (62 ) 86 Trademarks and tradenames 8.6 61 (16 ) 45 Other 2.9 20 (14 ) 6 Total definite-lived intangible assets $ 1,026 $ (410 ) $ 616 December 31, 2014 Weighted-Average Gross Carrying Amount Accumulated Amortization Net Book Value Purchased technology 6.5 $ 699 $ (252 ) $ 447 Leasehold interest 34.9 149 (15 ) 134 Customer relationships and customer lists 8.2 157 (53 ) 104 Trademarks and tradenames 8.6 61 (9 ) 52 Other 2.7 18 (7 ) 11 Total definite-lived intangible assets $ 1,084 $ (336 ) $ 748 |
Schedule of Future Amortization Expense | Based on intangible assets recorded as of December 31, 2015 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): 2016 $ 129 2017 122 2018 109 2019 88 2020 38 Thereafter 130 Total $ 616 |
Schedule of Goodwill | The following table summarizes the changes in the carrying amount of goodwill during the years ended December 31, 2015 and 2014 (table in millions): December 31, 2015 2014 Balance, beginning of the year $ 3,964 $ 3,027 Increase in goodwill related to business combinations 29 941 Deferred tax adjustments to purchase price allocations on acquisitions — (4 ) Balance, end of the year $ 3,993 $ 3,964 |
Realignment Charges (Tables)
Realignment Charges (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | The following table summarizes the activity for the accrued realignment charges for the years ended December 31, 2015 , 2014 and 2013 (table in millions): For the Year Ended December 31, 2015 Balance as of January 1, 2015 Realignment Charges Utilization Balance as of December 31, 2015 Non-Cash Portion of Utilization Severance-related costs $ 8 $ 23 $ (28 ) $ 3 $ — For the Year Ended December 31, 2014 Balance as of January 1, 2014 Realignment Charges Utilization Balance as of December 31, 2014 Non-Cash Portion of Utilization Workforce reductions $ — $ 18 $ (10 ) $ 8 $ — Asset impairments, exit of facilities and other exit costs 3 (2 ) (1 ) — — Total $ 3 $ 16 $ (11 ) $ 8 $ — For the Year Ended December 31, 2013 Balance as of January 1, 2013 Realignment Charges Utilization Balance as of December 31, 2013 Non-Cash Portion 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 ) |
Net Income per Share (Tables)
Net Income per Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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 during the year ended December 31, 2015 , 2014 and 2013 (net income in millions, shares in thousands): For the Year Ended December 31, 2015 2014 2013 Net income $ 997 $ 886 $ 1,014 Weighted-average shares, basic for Class A and Class B 424,003 430,355 429,093 Effect of dilutive securities 2,544 4,158 4,322 Weighted-average shares, diluted for Class A and Class B 426,547 434,513 433,415 Net income per weighted-average share, basic for Class A and Class B $ 2.35 $ 2.06 $ 2.36 Net income per weighted-average share, diluted for Class A and Class B $ 2.34 $ 2.04 $ 2.34 |
Antidilutive Securities Excluded from Computation of Net Income per Share | The following table sets forth the weighted-average common share equivalents of Class A common stock that were excluded from the diluted net income per share calculations during the year ended December 31, 2015 , 2014 and 2013, because their effect would have been anti-dilutive (shares in thousands): For the Year Ended December 31, 2015 2014 2013 Anti-dilutive securities: Employee stock options 2,219 1,440 1,023 Restricted stock units 249 16 167 Total 2,468 1,456 1,190 |
Cash, Cash Equivalents and In32
Cash, Cash Equivalents and Investments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Investing in Fixed Income Securities | Cash, cash equivalents and investments as of December 31, 2015 and 2014 consisted of the following (tables in millions): December 31, 2015 Cost or Amortized Cost Unrealized Gains Unrealized Losses Aggregate Cash $ 725 $ — $ — $ 725 Cash equivalents: Money-market funds $ 1,763 $ — $ — $ 1,763 Time deposits 5 — — 5 Total cash equivalents $ 1,768 $ — $ — $ 1,768 Short-term investments: Time deposits $ 12 $ — $ — $ 12 U.S. Government and agency obligations 753 — (3 ) 750 U.S. and foreign corporate debt securities 3,263 1 (12 ) 3,252 Foreign governments and multi-national agency obligations 35 — — 35 Municipal obligations 705 1 — 706 Asset-backed securities 20 — — 20 Mortgage-backed securities 243 — (2 ) 241 Total short-term investments $ 5,031 $ 2 $ (17 ) $ 5,016 Other assets: Marketable available-for-sale equity securities $ 15 $ 3 $ — $ 18 December 31, 2014 Cost or Amortized Cost Unrealized Gains Unrealized Losses Aggregate Fair Value Cash $ 885 $ — $ — $ 885 Cash equivalents: Money-market funds $ 1,130 $ — $ — $ 1,130 U.S. and foreign corporate debt securities 54 — — 54 Foreign governments and multi-national agency obligations 2 — — 2 Total cash equivalents $ 1,186 $ — $ — $ 1,186 Short-term investments: U.S. Government and agency obligations $ 542 $ — $ — $ 542 U.S. and foreign corporate debt securities 3,236 3 (5 ) 3,234 Foreign governments and multi-national agency obligations 23 — — 23 Municipal obligations 930 2 — 932 Asset-backed securities 53 — — 53 Mortgage-backed securities 221 — (1 ) 220 Total short-term investments $ 5,005 $ 5 $ (6 ) $ 5,004 |
Unrealized Losses on Cash Equivalents and Investments | Unrealized losses on cash equivalents and available-for-sale investments as of December 31, 2015 and 2014 , which have been in a net loss position for less than twelve months, were classified by asset class as follows (table in millions): December 31, 2015 December 31, 2014 Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Government and agency obligations $ 657 $ (3 ) $ 275 $ — U.S. and foreign corporate debt securities 2,564 (11 ) 1,964 (5 ) Mortgage-backed securities 171 (1 ) 107 (1 ) Total $ 3,392 $ (15 ) $ 2,346 $ (6 ) |
Contractual Maturities of Investments | The contractual maturities of short-term investments held at December 31, 2015 consisted of the following (table in millions): Amortized Cost Basis Aggregate Fair Value Due within one year $ 1,617 $ 1,616 Due after 1 year through 5 years 3,157 3,146 Due after 5 years through 10 years 83 82 Due after 10 years 174 172 Total short-term investments $ 5,031 $ 5,016 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Of Money Market Funds, Available-For-Sale Securities, and Foreign Currency Forward Contracts | The following tables set forth the fair value hierarchy of VMware’s cash equivalents, available-for-sale securities, and forward contracts, that were required to be measured at fair value as of December 31, 2015 and 2014 (tables in millions): December 31, 2015 Level 1 Level 2 Total Cash equivalents: Money-market funds $ 1,763 $ — $ 1,763 Time deposits — 5 5 Total cash equivalents $ 1,763 $ 5 $ 1,768 Short-term investments: Time deposits $ — $ 12 $ 12 U.S. Government and agency obligations 543 207 750 U.S. and foreign corporate debt securities — 3,252 3,252 Foreign governments and multi-national agency obligations — 35 35 Municipal obligations — 706 706 Asset-backed securities — 20 20 Mortgage-backed securities — 241 241 Total short-term investments $ 543 $ 4,473 $ 5,016 Other assets: Marketable available-for-sale equity securities $ 18 $ — $ 18 Accrued expenses and other: Forward contracts $ — $ (1 ) $ (1 ) December 31, 2014 Level 1 Level 2 Total Cash equivalents: Money-market funds $ 1,130 $ — $ 1,130 U.S. and foreign corporate debt securities — 54 54 Foreign governments and multi-national agency obligations — 2 2 Total cash equivalents $ 1,130 $ 56 $ 1,186 Short-term investments: U.S. Government and agency obligations $ 353 $ 189 $ 542 U.S. and foreign corporate debt securities — 3,234 3,234 Foreign governments and multi-national agency obligations — 23 23 Municipal obligations — 932 932 Asset-backed securities — 53 53 Mortgage-backed securities — 220 220 Total short-term investments $ 353 $ 4,651 $ 5,004 Other current assets: Forward contracts $ — $ 1 $ 1 Accrued expenses and other: Forward contracts $ — $ (1 ) $ (1 ) |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Depreciation commences upon placing the asset in service and is recognized on a straight-line basis over the estimated useful life of the assets, as follows: Buildings Term of underlying land lease Land improvements 15 years Furniture and fixtures 7 years Equipment 3 to 6 years Software 3 years Leasehold improvements 20 years, not to exceed the term of the underlying lease Property and equipment, net, as of December 31, 2015 and 2014 consisted of the following (table in millions): December 31, 2015 2014 Equipment and software $ 1,180 $ 974 Buildings and improvements 792 753 Furniture and fixtures 100 92 Construction in progress 30 25 Total property and equipment 2,102 1,844 Accumulated depreciation (974 ) (809 ) Total property and equipment, net $ 1,128 1,035 |
Accrued Expenses and Other (Tab
Accrued Expenses and Other (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accrued Liabilities [Abstract] | |
Components of Accrued Expenses | Accrued expenses and other as of December 31, 2015 and 2014 consisted of the following (table in millions): December 31, 2015 2014 Salaries, commissions, bonuses, and benefits $ 388 $ 374 Accrued partner liabilities 146 148 Other 212 289 Total $ 746 $ 811 |
Unearned Revenues (Tables)
Unearned Revenues (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Deferred Revenue Disclosure [Abstract] | |
Unearned Revenues, by Arrangement | Unearned revenues as of December 31, 2015 and 2014 consisted of the following (table in millions): December 31, December 31, 2015 2014 Unearned license revenues $ 428 $ 488 Unearned software maintenance revenues 4,174 3,905 Unearned professional services revenues 474 440 Total unearned revenues $ 5,076 $ 4,833 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax | The domestic and international components of income before provisions for income taxes were as follows (table in millions): For the Year Ended December 31, 2015 2014 2013 Domestic $ 257 $ 174 $ 160 International 956 874 987 Total $ 1,213 $ 1,048 $ 1,147 |
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, 2015 2014 2013 Federal: Current $ 142 $ 188 $ 1 Deferred (33 ) (116 ) 57 109 72 58 State: Current 9 15 2 Deferred (1 ) (12 ) 6 8 3 8 Foreign: Current 96 87 72 Deferred 3 — (5 ) 99 87 67 Total provision for income taxes $ 216 $ 162 $ 133 |
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, 2015 2014 2013 Statutory federal tax rate 35 % 35 % 35 % State taxes, net of federal benefit 1 % 1 % 1 % Tax rate differential for international jurisdictions (20 )% (21 )% (22 )% U.S. tax credits (1) (2 )% (3 )% (7 )% Permanent items and other 4 % 4 % 5 % Effective tax rate 18 % 16 % 12 % (1) Amounts presented for 2013 include the federal research tax credit for 2012 as the credit was enacted retroactively through December 31, 2013, and passed by the United States Congress during January 2013. |
Schedule of Deferred Tax Assets and Liabilities | Significant deferred tax assets and liabilities consisted of the following (table in millions): December 31, 2015 2014 Deferred tax assets: Unearned revenues $ 320 $ 296 Accruals and other 60 67 Stock-based compensation 73 90 Tax credit and net operating loss carryforwards 162 138 Other assets, net 19 9 Intangible and other non-current assets 65 — Basis difference on investment in business 20 20 Gross deferred tax assets 719 620 Valuation allowance (144 ) (106 ) Total deferred tax assets 575 514 Deferred tax liabilities: Property, plant and equipment, net (119 ) (93 ) Intangibles and other assets, net — (8 ) Total deferred tax liabilities (119 ) (101 ) Net deferred tax assets $ 456 $ 413 |
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, 2015 , 2014 and 2013 (table in millions): For the Year Ended December 31, 2015 2014 2013 Payments from VMware to EMC $ 144 $ 150 $ 8 Payments from EMC to VMware — — 32 Information about VMware’s costs from such arrangements with EMC for the years ended December 31, 2015 , 2014 and 2013 consisted of the following (table in millions): For the Year Ended December 31, 2015 2014 2013 Purchases and leases of products and purchases of services $ 63 $ 71 $ 63 Collaborative technology project costs 5 12 13 EMC subsidiary support and administrative costs 100 137 128 Information about VMware’s revenues and receipts from such arrangements with EMC during the years ended December 31, 2015 , 2014 and 2013 and unearned revenues as of December 31, 2015 and 2014 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, 2015 2014 2013 2015 2014 Reseller revenues $ 301 $ 205 $ 141 $ 292 $ 290 Internal-use revenues 17 21 32 11 18 Professional services revenues 100 85 72 3 9 Collaborative technology project receipts — — 7 n/a n/a Agency fee revenues 6 5 5 — — Reimbursement for services to Pivotal 4 2 12 n/a n/a As a result of the related party transactions with EMC described above, amounts due to and from related parties, net as of December 31, 2015 and 2014 consisted of the following (table in millions): As of December 31, 2015 2014 Due to related parties $ (68 ) $ (76 ) Due from related parties 142 125 Due (to) from related parties, net $ 74 $ 49 Income tax due (to) from related parties $ (18 ) $ (40 ) |
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, 2015 2014 2013 Balance, beginning of the year $ 190 $ 167 $ 158 Tax positions related to current year: Additions 41 32 32 Tax positions related to prior years: Additions 54 1 — Reductions (14 ) (3 ) (12 ) Settlements (12 ) (1 ) (2 ) Reductions resulting from a lapse of the statute of limitations (11 ) (2 ) (8 ) Foreign currency effects (3 ) (4 ) (1 ) Balance, end of the year $ 245 $ 190 $ 167 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating Lease and Other Contractual Commitments | VMware’s minimum future lease commitments and other contractual commitments at December 31, 2015 were as follows (table in millions): Future Lease Commitments Purchase Obligations Other Contractual Commitments (1) Total 2016 $ 90 $ 32 $ 7 $ 129 2017 72 19 3 94 2018 56 16 3 75 2019 45 3 3 51 2020 34 — 3 37 Thereafter 572 — 13 585 Total $ 869 $ 70 $ 32 $ 971 (1) Consisting of various contractual agreements, which include commitments on the lease for VMware’s Washington data center facility and asset retirement obligations. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Stockholders' Equity Note [Abstract] | |
Stock Repurchase Programs | The following table summarizes stock repurchase activity during the years ended December 31, 2015 , 2014 and 2013 (aggregate purchase price in millions, shares in thousands): For the Year Ended December 31, 2015 2014 2013 Aggregate purchase price $ 1,125 $ 700 $ 508 Class A common shares repurchased 13,495 7,642 6,636 Weighted-average price per share $ 83.36 $ 91.61 $ 76.58 The following table summarizes stock repurchase authorizations, which were open or completed during the years ended December 31, 2015 , 2014 and 2013 (amount in table in millions): Authorization Date Amount Authorized Expiration Date Status January 27, 2015 $1,000 December 31, 2017 Open August 6, 2014 1,000 December 31, 2016 Completed in Q3'15 August 7, 2013 700 December 31, 2015 Completed in Q4'14 November 28, 2012 250 December 31, 2014 Completed in Q4'13 February 29, 2012 600 December 31, 2013 Completed in Q2'13 |
Employee Stock Purchase Plan, Activity | The following table summarizes ESPP activity during the years ended December 31, 2015 , 2014 and 2013 (cash proceeds in millions, shares in thousands): For the Year Ended December 31, 2015 2014 2013 Cash proceeds $ 98 $ 80 $ 76 Class A common shares purchased 1,495 1,099 1,154 Weighted-average price per share $ 65.54 $ 73.21 $ 65.97 |
Summary of Stock Option Activity | The following table summarizes stock option activity since January 1, 2013 (shares in thousands): VMware Stock Options EMC Stock Options Number of Shares Weighted- Average Exercise Price (per share) Number of Shares Weighted- Average Exercise Price (per share) Outstanding, December 31, 2012 10,133 $ 34.36 2,643 $ 15.12 Options relating to employees transferred (to) from EMC — — (97 ) 11.87 Granted 1,434 71.53 — — Forfeited (416 ) 36.25 (46 ) 16.09 Expired (387 ) 105.81 (29 ) 12.99 Exercised (5,009 ) 28.12 (775 ) 15.39 Outstanding, December 31, 2013 5,755 44.12 1,696 15.53 Options relating to employees transferred (to) from EMC — — 149 15.87 Granted 2,695 50.91 — — Forfeited (220 ) 47.89 (2 ) 19.10 Expired — — (9 ) 14.14 Exercised (2,361 ) 35.58 (563 ) 14.37 Outstanding, December 31, 2014 5,869 50.54 1,271 16.08 Options relating to employees transferred (to) from EMC — — 8 20.23 Granted 21 54.23 — — Forfeited (322 ) 70.42 (1 ) 19.37 Expired — — (14 ) 14.21 Exercised (2,404 ) 29.44 (201 ) 13.96 Outstanding, December 31, 2015 3,164 64.56 1,063 16.54 Options outstanding that are exercisable and that have vested and are expected to vest as of December 31, 2015 were as follows: VMware Stock Options EMC Stock Options Outstanding Options (in thousands) Weighted Average Exercise Price Weighted Average Remaining Term (in years) Aggregate Intrinsic Value (1) (in millions) Outstanding Options (in thousands) Weighted Average Exercise Price Weighted Average Remaining Term (in years) Aggregate Intrinsic Value (2) (in millions) Exercisable, December 31, 2015 1,627 $ 59.31 4.49 $ 26 1,050 $ 16.44 3.19 $ 10 Vested and expected to vest, December 31, 2015 3,078 63.89 4.88 43 1,061 16.53 3.20 10 (1) The aggregate intrinsic values represent the total pre-tax intrinsic values based on VMware's closing stock price of $56.57 as of December 31, 2015 , which would have been received by the option holders had all in-the-money options been exercised as of that date. (2) These aggregate intrinsic values represent the total pre-tax intrinsic values based on EMC’s adjusted closing stock price of $25.68 as of December 31, 2015 , which would have been received by the option holders had all in-the-money options been exercised as of that date. |
Summary of Restricted Stock Activity | As of December 31, 2015 , restricted stock that is expected to vest was as follows: Number of Units (in thousands) Weighted Average Remaining Term (in years) Aggregate Intrinsic Value (1) (in millions) Expected to vest, December 31, 2015 16,206 2.47 $ 917 (1) The aggregate intrinsic values represent the total pre-tax intrinsic values based on VMware's closing stock price of $56.57 as of December 31, 2015 , which would have been received by the RSU holders had the RSUs been issued as of December 31, 2015 . The following table summarizes restricted stock activity since January 1, 2013 (units in thousands): Number of Units Weighted- Average Grant Date Fair Value (per unit) Outstanding, January 1, 2013 12,170 $ 91.93 Granted 7,391 76.20 Vested (4,399 ) 83.21 Forfeited (2,306 ) 90.55 Outstanding, December 31, 2013 12,856 85.85 Granted 6,189 92.82 Vested (5,166 ) 86.27 Forfeited (1,294 ) 88.03 Outstanding, December 31, 2014 12,585 88.88 Granted 12,787 72.42 Vested (4,855 ) 90.72 Forfeited (1,824 ) 87.39 Outstanding, December 31, 2015 18,693 77.29 |
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, 2015 , 2014 and 2013 (table in millions): For the Year Ended December 31, 2015 2014 2013 Cost of license revenues $ 2 $ 2 $ 2 Cost of services revenues 44 42 29 Research and development 226 244 227 Sales and marketing 168 172 144 General and administrative 64 69 56 Realignment — — 6 Stock-based compensation 504 529 464 Income tax benefit (144 ) (157 ) (136 ) Total stock-based compensation, net of tax $ 360 $ 372 $ 328 |
Stock Options, Valuation Assumptions | The fair value of each option to acquire VMware Class A common stock granted during the years ended December 31, 2015 , 2014 and 2013 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 2015 2014 2013 Dividend yield None None None Expected volatility 32.0 % 36.2 % 38.5 % Risk-free interest rate 1.1 % 0.9 % 0.9 % Expected term (in years) 3.3 3.2 3.6 Weighted-average fair value at grant date $ 27.16 $ 48.47 $ 29.47 |
Employee Stock Purchase Plan, Valuation Assumptions | For the Year Ended December 31, VMware Employee Stock Purchase Plan 2015 2014 2013 Dividend yield None None None Expected volatility 30.1 % 32.3 % 32.9 % Risk-free interest rate 0.1 % 0.1 % 0.1 % Expected term (in years) 0.5 0.5 0.5 Weighted-average fair value at grant date $ 20.59 $ 20.71 $ 20.45 |
Schedule of Accumulated Other Comprehensive Income | The changes in components of accumulated other comprehensive income (loss) during the years ended December 31, 2015 and 2014 were as follows (tables in millions): Unrealized Gain on Unrealized Loss on Total Balance, January 1, 2014 $ 4 $ — $ 4 Unrealized gain (loss), net of taxes of $0 (1 ) (1 ) (2 ) Amounts reclassified from accumulated other comprehensive income to the consolidated statement of income, net of taxes of $(2), $0 and $(2) (3 ) — (3 ) Other comprehensive income (loss), net (4 ) (1 ) (5 ) Balance, December 31, 2014 — (1 ) (1 ) Unrealized gain (loss), net of taxes of $(4), $0 and $(4) (7 ) — (7 ) Other comprehensive income (loss), net (7 ) — (7 ) Balance, December 31, 2015 $ (7 ) $ (1 ) $ (8 ) |
Related Parties (Tables)
Related Parties (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The following table summarizes these payments made between VMware and EMC during the years ended December 31, 2015 , 2014 and 2013 (table in millions): For the Year Ended December 31, 2015 2014 2013 Payments from VMware to EMC $ 144 $ 150 $ 8 Payments from EMC to VMware — — 32 Information about VMware’s costs from such arrangements with EMC for the years ended December 31, 2015 , 2014 and 2013 consisted of the following (table in millions): For the Year Ended December 31, 2015 2014 2013 Purchases and leases of products and purchases of services $ 63 $ 71 $ 63 Collaborative technology project costs 5 12 13 EMC subsidiary support and administrative costs 100 137 128 Information about VMware’s revenues and receipts from such arrangements with EMC during the years ended December 31, 2015 , 2014 and 2013 and unearned revenues as of December 31, 2015 and 2014 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, 2015 2014 2013 2015 2014 Reseller revenues $ 301 $ 205 $ 141 $ 292 $ 290 Internal-use revenues 17 21 32 11 18 Professional services revenues 100 85 72 3 9 Collaborative technology project receipts — — 7 n/a n/a Agency fee revenues 6 5 5 — — Reimbursement for services to Pivotal 4 2 12 n/a n/a As a result of the related party transactions with EMC described above, amounts due to and from related parties, net as of December 31, 2015 and 2014 consisted of the following (table in millions): As of December 31, 2015 2014 Due to related parties $ (68 ) $ (76 ) Due from related parties 142 125 Due (to) from related parties, net $ 74 $ 49 Income tax due (to) from related parties $ (18 ) $ (40 ) |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Revenues by Geographic Area | Revenues by geographic area for the years ended December 31, 2015 , 2014 and 2013 were as follows (table in millions): For the Year Ended December 31, 2015 2014 2013 United States $ 3,311 $ 2,912 $ 2,485 International 3,260 3,123 2,722 Total $ 6,571 $ 6,035 $ 5,207 |
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, 2015 and 2014 were as follows (table in millions): As of December 31, 2015 2014 United States $ 831 $ 801 International 148 117 Total $ 979 $ 918 |
Selected Quarterly Financial 42
Selected Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Selected Quarterly Financial Data | Quarterly financial data for 2015 and 2014 were as follows (tables in millions, except per share amounts): 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Revenues $ 1,511 $ 1,521 $ 1,672 $ 1,868 Net income 196 172 256 373 Net income per share, basic $ 0.46 $ 0.41 $ 0.61 $ 0.89 Net income per share, diluted $ 0.45 $ 0.40 $ 0.60 $ 0.88 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Revenues $ 1,360 $ 1,457 $ 1,515 $ 1,703 Net income 199 167 194 326 Net income per share, basic $ 0.46 $ 0.39 $ 0.45 $ 0.76 Net income per share, diluted $ 0.46 $ 0.38 $ 0.45 $ 0.75 |
Overview and Basis of Present43
Overview and Basis of Presentation (Basis of Presentation) (Details) - EMC shares in Millions | Dec. 31, 2015shares |
Related Party Transaction [Line Items] | |
Shareholders' interest, outstanding ownership percentage of VMware by EMC | 81.30% |
Combined voting power of VMware's outstanding common stock | 97.50% |
Class A Common Stock | |
Related Party Transaction [Line Items] | |
VMware's outstanding common stock held by EMC (shares) | 43 |
Overview and Basis of Present44
Overview and Basis of Presentation (Reclassification) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Deferred tax assets | $ 456 | $ 413 |
Effect of ASU 2015-17 adoption | ||
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Deferred tax assets, current | 248 | |
Deferred tax assets | $ 248 |
Overview and Basis of Present45
Overview and Basis of Presentation (Foreign Currency Remeasurement) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Foreign Currency Transaction Gain (Loss), Realized | $ (11) | $ (8) | $ (3) |
Overview and Basis of Present46
Overview and Basis of Presentation (Cash and Cash Equivalents, Short-Term Investments and Restricted Cash) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Overview and Basis of Presentation [Line Items] | ||
Restricted Cash and Cash Equivalents | $ 19 | $ 95 |
Cash and cash equivalents and short term investments | 7,509 | |
International | ||
Overview and Basis of Presentation [Line Items] | ||
Cash and cash equivalents and short term investments | $ 5,810 | |
AirWatch Holding | ||
Overview and Basis of Presentation [Line Items] | ||
Restricted Cash and Cash Equivalents | $ 75 |
Overview and Basis of Present47
Overview and Basis of Presentation (Property and Equipment, Net) (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Land improvements | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 15 years |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 7 years |
Software and Software Development Costs | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 3 years |
Minimum | Equipment | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 3 years |
Maximum | Equipment | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 6 years |
Maximum | Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 20 years |
Overview and Basis of Present48
Overview and Basis of Presentation (Research and Development and Capitalized Software Development) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cost of license revenues | |||
Property, Plant and Equipment [Line Items] | |||
Amortization of capitalized software | $ 0 | $ 0 | $ 34,000,000 |
Overview and Basis of Present49
Overview and Basis of Presentation (Purchased Intangible Assets and Goodwill) (Details) | 12 Months Ended |
Dec. 31, 2015USD ($)segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | segment | 1 |
Goodwill, Impaired, Accumulated Impairment Loss | $ | $ 0 |
Overview and Basis of Present50
Overview and Basis of Presentation (Derivative Instruments) (Details) - Foreign Exchange Forward | 12 Months Ended |
Dec. 31, 2015 | |
Not Designated As Hedging Instrument | |
Derivative [Line Items] | |
Maximum maturity of forward contracts | 1 month |
Designated As Hedging Instrument | |
Derivative [Line Items] | |
Maximum maturity period in price risk cash flow hedge | 12 months |
Overview and Basis of Present51
Overview and Basis of Presentation (Advertising) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Advertising expense | $ 22 | $ 29 | $ 27 |
Overview and Basis of Present52
Overview and Basis of Presentation (Concentrations of Risks) (Details) - Customer Concentration Risk | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Distributor One | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 18.00% | 19.00% | |
Distributor One | Sales | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 15.00% | 15.00% | 15.00% |
Distributor Two | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 15.00% | 13.00% | |
Distributor Two | Sales | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 12.00% | 13.00% | 12.00% |
Distributor Three | Accounts Receivable | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 11.00% | ||
Distributor Three | Sales | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 11.00% | 11.00% | 11.00% |
Business Combinations, Defini53
Business Combinations, Definite-Lived Intangible Assets, Net and Goodwill (Business Combinations) (Details) | Feb. 24, 2014USD ($)shares | Dec. 31, 2014USD ($)business | Dec. 31, 2015USD ($)business | Dec. 31, 2014USD ($)business | Dec. 31, 2013USD ($)business |
Business Acquisition [Line Items] | |||||
Goodwill | $ 3,964,000,000 | $ 3,993,000,000 | $ 3,964,000,000 | $ 3,027,000,000 | |
Unrecognized compensation cost for stock options and restricted stock | $ 1,117,000,000 | ||||
All other business combinations | |||||
Business Acquisition [Line Items] | |||||
Number of businesses acquired | business | 2 | 2 | 3 | ||
Cash paid to acquire business | $ 39,000,000 | ||||
Intangible assets | $ 19,000,000 | 13,000,000 | $ 19,000,000 | ||
Goodwill | 73,000,000 | 29,000,000 | 73,000,000 | ||
Total consideration transferred | 91,000,000 | ||||
Goodwill expected to be tax deductible | $ 23,000,000 | 23,000,000 | |||
AirWatch Holding | |||||
Business Acquisition [Line Items] | |||||
Cash paid to acquire business | $ 1,104,000,000 | ||||
Intangible assets | 250,000,000 | ||||
Goodwill | 868,000,000 | ||||
Total consideration transferred | 1,128,000,000 | ||||
Equity Interests Transferred | 134,000,000 | ||||
Contingent Compensation | $ 300,000,000 | ||||
Award conversion ratio | shares | 0.4 | ||||
Shares converted for acquisition | shares | 1,400,000 | ||||
Fair value of assets acquired and liabilities assumed | $ 1,128,000,000 | ||||
Desktone, Inc. and Virsto Software | |||||
Business Acquisition [Line Items] | |||||
Number of businesses acquired | business | 2 | ||||
Intangible assets | $ 62,000,000 | ||||
Goodwill | 233,000,000 | ||||
Total consideration transferred | 289,000,000 | ||||
Goodwill expected to be tax deductible | 0 | ||||
Fair value of assets acquired and liabilities assumed | 289,000,000 | ||||
In-process research and development (“IPR&D”) | Desktone, Inc. and Virsto Software | |||||
Business Acquisition [Line Items] | |||||
Indefinite-lived assets acquired | 10,000,000 | ||||
Purchased technology | Desktone, Inc. and Virsto Software | |||||
Business Acquisition [Line Items] | |||||
Amounts transferred from IPR&D | $ 9,000,000 | ||||
Purchased technology | Transferred to Purchased Technology | Desktone, Inc. and Virsto Software | |||||
Business Acquisition [Line Items] | |||||
Useful life of IPR&D | 5 years | ||||
Amount In Escrow | AirWatch Holding | |||||
Business Acquisition [Line Items] | |||||
Contingent Compensation | 75,000,000 | ||||
Expense In Period | AirWatch Holding | |||||
Business Acquisition [Line Items] | |||||
Contingent Compensation | $ 145,000,000 | $ 141,000,000 | |||
Equity Attributed to Pre-Combination Services | AirWatch Holding | |||||
Business Acquisition [Line Items] | |||||
Equity Interests Transferred | 24,000,000 | ||||
Equity Attributed to Post-Combination Services | AirWatch Holding | |||||
Business Acquisition [Line Items] | |||||
Unrecognized compensation cost for stock options and restricted stock | $ 110,000,000 |
Business Combinations, Defini54
Business Combinations, Definite-Lived Intangible Assets, Net and Goodwill (Assets Identified and Liabilities Assumed) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Feb. 24, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 3,993 | $ 3,964 | $ 3,027 | |
AirWatch Holding | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 36 | |||
Other current assets | 61 | |||
Intangible assets | 250 | |||
Goodwill | 868 | |||
Other acquired assets | 30 | |||
Total assets acquired | 1,245 | |||
Unearned revenues | (45) | |||
Other assumed liabilities | (72) | |||
Total liabilities assumed | (117) | |||
Fair value of assets acquired and liabilities assumed | $ 1,128 | |||
Desktone, Inc. and Virsto Software | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 62 | |||
Goodwill | 233 | |||
Deferred tax assets, net | 4 | |||
Total assets acquired | 299 | |||
Other assumed liabilities | (10) | |||
Total liabilities assumed | (10) | |||
Fair value of assets acquired and liabilities assumed | $ 289 | |||
All other business combinations | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 13 | 19 | ||
Goodwill | $ 29 | $ 73 |
Business Combinations, Defini55
Business Combinations, Definite-Lived Intangible Assets, Net and Goodwill (Summary of Intangible Assets Acquired) (Details) - USD ($) $ in Millions | Feb. 24, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Additions to intangible assets related to business combinations | $ 13 | $ 278 | ||
Purchased technology | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Useful Lives (in years) | 6 years 7 months 6 days | 6 years 5 months 25 days | ||
Customer relationships and customer lists | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Useful Lives (in years) | 8 years 4 months 24 days | 8 years 2 months 13 days | ||
Trademarks and tradenames | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Useful Lives (in years) | 8 years 7 months 6 days | 8 years 7 months 15 days | ||
Other | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Useful Lives (in years) | 2 years 10 months 24 days | 2 years 8 months 21 days | ||
AirWatch Holding | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Additions to intangible assets related to business combinations | $ 250 | |||
Intangible assets | $ 250 | |||
AirWatch Holding | Purchased technology | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Weighted-Average Useful Lives (in years) | 5 years 10 months 8 days | |||
Additions to intangible assets related to business combinations | $ 118 | |||
AirWatch Holding | Customer relationships and customer lists | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Weighted-Average Useful Lives (in years) | 7 years 10 months 8 days | |||
Additions to intangible assets related to business combinations | $ 78 | |||
AirWatch Holding | Trademarks and tradenames | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Useful Lives (in years) | 8 years | |||
Weighted-Average Useful Lives (in years) | 8 years | |||
Additions to intangible assets related to business combinations | $ 40 | |||
AirWatch Holding | Other | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Weighted-Average Useful Lives (in years) | 3 years 2 months 4 days | |||
Additions to intangible assets related to business combinations | $ 14 | |||
Desktone, Inc. and Virsto Software | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets | $ 62 | |||
Desktone, Inc. and Virsto Software | In-process research and development (“IPR&D”) | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Indefinite-lived assets acquired | $ 10 | |||
Desktone, Inc. and Virsto Software | Purchased technology | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Weighted-Average Useful Lives (in years) | 6 years | |||
Additions to intangible assets related to business combinations | $ 49 | |||
Amounts transferred from IPR&D | $ 9 | |||
Desktone, Inc. and Virsto Software | Vendor contracts | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Weighted-Average Useful Lives (in years) | 8 years | |||
Additions to intangible assets related to business combinations | $ 3 | |||
Minimum | AirWatch Holding | Purchased technology | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Useful Lives (in years) | 2 years | |||
Minimum | AirWatch Holding | Customer relationships and customer lists | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Useful Lives (in years) | 2 years | |||
Minimum | AirWatch Holding | Other | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Useful Lives (in years) | 2 years | |||
Maximum | AirWatch Holding | Purchased technology | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Useful Lives (in years) | 6 years | |||
Maximum | AirWatch Holding | Customer relationships and customer lists | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Useful Lives (in years) | 8 years | |||
Maximum | AirWatch Holding | Other | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Useful Lives (in years) | 8 years |
(Pro Forma) (Details)
(Pro Forma) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
AirWatch Holding | ||
Business Acquisition [Line Items] | ||
Pro forma adjusted net income | $ 849 | $ 781 |
Business Combinations, Defini57
Business Combinations, Definite-Lived Intangible Assets, Net and Goodwill (Joint Venture) (Details) | Dec. 31, 2015 |
Business Combinations [Abstract] | |
Ownership percentage | 51.00% |
Business Combinations, Defini58
Business Combinations, Definite-Lived Intangible Assets, Net and Goodwill (Roll-forward of Intangible Assets) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Finite-lived Intangible Assets [Roll Forward] | |||
Balance, beginning of the year | $ 748 | $ 607 | |
Additions to intangible assets related to business combinations | 13 | 278 | |
Amortization Expense | (145) | (141) | $ (107) |
Other adjustments | 0 | 4 | |
Balance, end of the year | $ 616 | $ 748 | $ 607 |
Business Combinations, Defini59
Business Combinations, Definite-Lived Intangible Assets, Net and Goodwill (Intangible Assets Detail) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 1,026 | $ 1,084 | |
Accumulated Amortization | (410) | (336) | |
Net Book Value | 616 | 748 | $ 607 |
Amortization Expense | $ 145 | $ 141 | $ 107 |
Purchased technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Useful Lives (in years) | 6 years 7 months 6 days | 6 years 5 months 25 days | |
Gross Carrying Amount | $ 648 | $ 699 | |
Accumulated Amortization | (298) | (252) | |
Net Book Value | $ 350 | $ 447 | |
Leasehold interest | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Useful Lives (in years) | 34 years 10 months 24 days | 34 years 10 months 24 days | |
Gross Carrying Amount | $ 149 | $ 149 | |
Accumulated Amortization | (20) | (15) | |
Net Book Value | $ 129 | $ 134 | |
Customer relationships and customer lists | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Useful Lives (in years) | 8 years 4 months 24 days | 8 years 2 months 13 days | |
Gross Carrying Amount | $ 148 | $ 157 | |
Accumulated Amortization | (62) | (53) | |
Net Book Value | $ 86 | $ 104 | |
Trademarks and tradenames | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Useful Lives (in years) | 8 years 7 months 6 days | 8 years 7 months 15 days | |
Gross Carrying Amount | $ 61 | $ 61 | |
Accumulated Amortization | (16) | (9) | |
Net Book Value | $ 45 | $ 52 | |
Other | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted-Average Useful Lives (in years) | 2 years 10 months 24 days | 2 years 8 months 21 days | |
Gross Carrying Amount | $ 20 | $ 18 | |
Accumulated Amortization | (14) | (7) | |
Net Book Value | $ 6 | $ 11 |
Business Combinations, Defini60
Business Combinations, Definite-Lived Intangible Assets, Net and Goodwill (Amortization of Intangible Assets) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Business Combinations [Abstract] | |||
2,016 | $ 129 | ||
2,017 | 122 | ||
2,018 | 109 | ||
2,019 | 88 | ||
2,020 | 38 | ||
Thereafter | 130 | ||
Net Book Value | $ 616 | $ 748 | $ 607 |
Business Combinations, Defini61
Business Combinations, Definite-Lived Intangible Assets, Net and Goodwill (Changes In Carrying Amount Of Goodwill) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill [Roll Forward] | ||
Balance, beginning of the year | $ 3,964 | $ 3,027 |
Increase in goodwill related to business combinations | 29 | 941 |
Deferred tax adjustments to purchase price allocations on acquisitions | 0 | (4) |
Balance, end of the year | $ 3,993 | $ 3,964 |
Realignment Charges (Narrative)
Realignment Charges (Narrative) (Details) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2015USD ($)Position | Dec. 31, 2014USD ($)Position | Dec. 31, 2013USD ($)Position | Dec. 31, 2012USD ($) | ||
Restructuring Cost and Reserve [Line Items] | |||||
Number of positions eliminated | Position | 380 | 180 | 710 | ||
Realignment Charges | [1] | $ 23 | $ 16 | $ 68 | |
Restructuring Reserve | 8 | 3 | $ 0 | ||
Employee Severance | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Realignment Charges | 23 | 18 | 54 | ||
Restructuring Reserve | $ 3 | $ 8 | 0 | $ 0 | |
Business Realignment Plan | Other Income (Expense), Net | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Gain (Loss) on Disposition of Business | $ 44 | ||||
[1] | Includes stock-based compensation as follows: Cost of license revenues $2 $2 $2, Cost of services revenues $44 $42 $29, Research and development $226 $244 $227, Sales and marketing $168 $172 $144, General and administrative $64 $69 56 million, Realignment charges $0 $0 $6. |
Realignment Charges (Schedule o
Realignment Charges (Schedule of Restructuring Reserve) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Restructuring Reserve [Roll Forward] | ||||
Restructuring Reserve, Beginning of Period | $ 8 | $ 3 | $ 0 | |
Realignment Charges | [1] | 23 | 16 | 68 |
Utilization | (11) | (65) | ||
Restructuring Reserve, End of Period | 8 | 3 | ||
Non-cash realignment charges | 0 | (15) | ||
Employee Severance | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring Reserve, Beginning of Period | 8 | 0 | 0 | |
Realignment Charges | 23 | 18 | 54 | |
Utilization | (28) | (10) | (54) | |
Restructuring Reserve, End of Period | 3 | 8 | 0 | |
Non-cash realignment charges | 0 | 0 | (6) | |
Asset impairments, exit of facilities and other exit costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring Reserve, Beginning of Period | $ 0 | 3 | 0 | |
Realignment Charges | (2) | 14 | ||
Utilization | (1) | (11) | ||
Restructuring Reserve, End of Period | 0 | 3 | ||
Non-cash realignment charges | $ 0 | $ (9) | ||
[1] | Includes stock-based compensation as follows: Cost of license revenues $2 $2 $2, Cost of services revenues $44 $42 $29, Research and development $226 $244 $227, Sales and marketing $168 $172 $144, General and administrative $64 $69 56 million, Realignment charges $0 $0 $6. |
Net Income per Share (Computati
Net Income per Share (Computations Of Basic And Diluted Net Income Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Earnings Per Share [Abstract] | |||||||||||
Net income | $ 373 | $ 256 | $ 172 | $ 196 | $ 326 | $ 194 | $ 167 | $ 199 | $ 997 | $ 886 | $ 1,014 |
Weighted-average shares, basic for Class A and Class B | 424,003 | 430,355 | 429,093 | ||||||||
Effect of dilutive securities | 2,544 | 4,158 | 4,322 | ||||||||
Weighted-average shares, diluted for Class A and Class B | 426,547 | 434,513 | 433,415 | ||||||||
Net income per weighted-average share, basic for Class A and Class B (USD per share) | $ 0.89 | $ 0.61 | $ 0.41 | $ 0.46 | $ 0.76 | $ 0.45 | $ 0.39 | $ 0.46 | $ 2.35 | $ 2.06 | $ 2.36 |
Net income per weighted-average share, diluted for Class A and Class B (USD per share) | $ 0.88 | $ 0.60 | $ 0.40 | $ 0.45 | $ 0.75 | $ 0.45 | $ 0.38 | $ 0.46 | $ 2.34 | $ 2.04 | $ 2.34 |
Net Income per Share (Anti-Dilu
Net Income per Share (Anti-Dilutive Shares Excluded From Net Income) (Details) - Class A Common Stock - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,468 | 1,456 | 1,190 |
Stock Options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,219 | 1,440 | 1,023 |
Restricted Stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 249 | 16 | 167 |
Cash, Cash Equivalents and In66
Cash, Cash Equivalents and Investments (Investing In Fixed Income Securities) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule of Investments [Line Items] | ||||
Cash and Cash Equivalents, cost or amortized cost | $ 2,493 | $ 2,071 | $ 2,305 | $ 1,609 |
Short-term investments, cost or amortized cost | 5,031 | 5,005 | ||
Short-term investments, unrealized gains | 2 | 5 | ||
Short-term investments, unrealized losses | (17) | (6) | ||
Short-term investments, aggregate fair value | 5,016 | 5,004 | ||
Other Assets | ||||
Schedule of Investments [Line Items] | ||||
Marketable available-for-sale equity securities, amortized cost | 15 | |||
Marketable available-for-sale equity securities, unrealized gains | 3 | |||
Marketable available-for-sale equity securities, unrealized losses | 0 | |||
Marketable available-for-sale equity securities, aggregate fair value | 18 | |||
Time deposits | ||||
Schedule of Investments [Line Items] | ||||
Short-term investments, cost or amortized cost | 12 | |||
Short-term investments, unrealized gains | 0 | |||
Short-term investments, unrealized losses | 0 | |||
Short-term investments, aggregate fair value | 12 | |||
U.S. Government and agency obligations | ||||
Schedule of Investments [Line Items] | ||||
Short-term investments, cost or amortized cost | 753 | 542 | ||
Short-term investments, unrealized gains | 0 | 0 | ||
Short-term investments, unrealized losses | (3) | 0 | ||
Short-term investments, aggregate fair value | 750 | 542 | ||
U.S. and foreign corporate debt securities | ||||
Schedule of Investments [Line Items] | ||||
Short-term investments, cost or amortized cost | 3,263 | 3,236 | ||
Short-term investments, unrealized gains | 1 | 3 | ||
Short-term investments, unrealized losses | (12) | (5) | ||
Short-term investments, aggregate fair value | 3,252 | 3,234 | ||
Foreign governments and multi-national agency obligations | ||||
Schedule of Investments [Line Items] | ||||
Short-term investments, cost or amortized cost | 35 | 23 | ||
Short-term investments, unrealized gains | 0 | 0 | ||
Short-term investments, unrealized losses | 0 | 0 | ||
Short-term investments, aggregate fair value | 35 | 23 | ||
Municipal obligations | ||||
Schedule of Investments [Line Items] | ||||
Short-term investments, cost or amortized cost | 705 | 930 | ||
Short-term investments, unrealized gains | 1 | 2 | ||
Short-term investments, unrealized losses | 0 | 0 | ||
Short-term investments, aggregate fair value | 706 | 932 | ||
Asset-backed securities | ||||
Schedule of Investments [Line Items] | ||||
Short-term investments, cost or amortized cost | 20 | 53 | ||
Short-term investments, unrealized gains | 0 | 0 | ||
Short-term investments, unrealized losses | 0 | 0 | ||
Short-term investments, aggregate fair value | 20 | 53 | ||
Mortgage-backed securities | ||||
Schedule of Investments [Line Items] | ||||
Short-term investments, cost or amortized cost | 243 | 221 | ||
Short-term investments, unrealized gains | 0 | 0 | ||
Short-term investments, unrealized losses | (2) | (1) | ||
Short-term investments, aggregate fair value | 241 | 220 | ||
Cash | ||||
Schedule of Investments [Line Items] | ||||
Cash and Cash Equivalents, cost or amortized cost | 725 | 885 | ||
Cash and cash equivalents, unrealized gains | 0 | 0 | ||
Cash and cash equivalents, unrealized losses | 0 | 0 | ||
Cash and cash equivalents, aggregate fair value | 725 | 885 | ||
Money-market funds | ||||
Schedule of Investments [Line Items] | ||||
Cash and Cash Equivalents, cost or amortized cost | 1,763 | 1,130 | ||
Cash and cash equivalents, unrealized gains | 0 | 0 | ||
Cash and cash equivalents, unrealized losses | 0 | 0 | ||
Cash and cash equivalents, aggregate fair value | 1,763 | 1,130 | ||
U.S. and foreign corporate debt securities | ||||
Schedule of Investments [Line Items] | ||||
Cash and Cash Equivalents, cost or amortized cost | 54 | |||
Cash and cash equivalents, unrealized gains | 0 | |||
Cash and cash equivalents, unrealized losses | 0 | |||
Cash and cash equivalents, aggregate fair value | 54 | |||
Foreign governments and multi-national agency obligations | ||||
Schedule of Investments [Line Items] | ||||
Cash and Cash Equivalents, cost or amortized cost | 2 | |||
Cash and cash equivalents, unrealized gains | 0 | |||
Cash and cash equivalents, unrealized losses | 0 | |||
Cash and cash equivalents, aggregate fair value | 2 | |||
Time deposits | ||||
Schedule of Investments [Line Items] | ||||
Cash and Cash Equivalents, cost or amortized cost | 5 | |||
Cash and cash equivalents, unrealized gains | 0 | |||
Cash and cash equivalents, unrealized losses | 0 | |||
Cash and cash equivalents, aggregate fair value | 5 | |||
Total cash equivalents | ||||
Schedule of Investments [Line Items] | ||||
Cash and Cash Equivalents, cost or amortized cost | 1,768 | 1,186 | ||
Cash and cash equivalents, unrealized gains | 0 | 0 | ||
Cash and cash equivalents, unrealized losses | 0 | 0 | ||
Cash and cash equivalents, aggregate fair value | $ 1,768 | $ 1,186 |
Cash, Cash Equivalents and In67
Cash, Cash Equivalents and Investments (Unrealized Losses On Cash Equivalents and Investments) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Schedule of Investments [Line Items] | ||
Fair Value | $ 3,392 | $ 2,346 |
Unrealized Losses | (15) | (6) |
U.S. Government and agency obligations | ||
Schedule of Investments [Line Items] | ||
Fair Value | 657 | 275 |
Unrealized Losses | (3) | 0 |
U.S. and foreign corporate debt securities | ||
Schedule of Investments [Line Items] | ||
Fair Value | 2,564 | 1,964 |
Unrealized Losses | (11) | (5) |
Mortgage-backed securities | ||
Schedule of Investments [Line Items] | ||
Fair Value | 171 | 107 |
Unrealized Losses | $ (1) | $ (1) |
Cash, Cash Equivalents and In68
Cash, Cash Equivalents and Investments (Contractual Maturities) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Amortized Cost Basis | ||
Due within one year | $ 1,617 | |
Due after 1 year through 5 years | 3,157 | |
Due after 5 years through 10 years | 83 | |
Due after 10 years | 174 | |
Short-term investments, cost or amortized cost | 5,031 | $ 5,005 |
Aggregate Fair Value | ||
Due within one year | 1,616 | |
Due after 1 year through 5 years | 3,146 | |
Due after 5 years through 10 years | 82 | |
Due after 10 years | 172 | |
Short-term investments, aggregate fair value | $ 5,016 | $ 5,004 |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Value Hierarchy) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments: | $ 5,016 | $ 5,004 |
Other Assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Marketable available-for-sale equity securities | 18 | |
Deferred compensation plan assets | 20 | 8 |
Notes payable to EMC | Notes payable | EMC | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument | 1,474 | |
Other Liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Deferred Compensation Plan Liabilities | 20 | 8 |
Time deposits | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments: | 12 | |
U.S. Government and agency obligations | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments: | 750 | 542 |
U.S. and foreign corporate debt securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments: | 3,252 | 3,234 |
Foreign governments and multi-national agency obligations | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments: | 35 | 23 |
Municipal obligations | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments: | 706 | 932 |
Asset-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments: | 20 | 53 |
Mortgage-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments: | 241 | 220 |
Money-market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents: | 1,763 | 1,130 |
Time deposits | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents: | 5 | |
U.S. and foreign corporate debt securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents: | 54 | |
Foreign governments and multi-national agency obligations | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents: | 2 | |
Total cash equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents: | 1,768 | 1,186 |
Fair Value, Measurements, Recurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments: | 5,016 | 5,004 |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments: | 543 | 353 |
Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments: | 4,473 | 4,651 |
Fair Value, Measurements, Recurring | Other Assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Marketable available-for-sale equity securities | 18 | |
Fair Value, Measurements, Recurring | Other Assets | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Marketable available-for-sale equity securities | 18 | |
Fair Value, Measurements, Recurring | Other Assets | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Marketable available-for-sale equity securities | 0 | |
Fair Value, Measurements, Recurring | Accrued expense and other | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Foreign currency forward contracts, liability | (1) | (1) |
Fair Value, Measurements, Recurring | Accrued expense and other | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Foreign currency forward contracts, liability | 0 | 0 |
Fair Value, Measurements, Recurring | Accrued expense and other | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Foreign currency forward contracts, liability | (1) | (1) |
Fair Value, Measurements, Recurring | Other current assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Foreign currency forward contracts, asset | 1 | |
Fair Value, Measurements, Recurring | Other current assets | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Foreign currency forward contracts, asset | 0 | |
Fair Value, Measurements, Recurring | Other current assets | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Foreign currency forward contracts, asset | 1 | |
Fair Value, Measurements, Recurring | Time deposits | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments: | 12 | |
Fair Value, Measurements, Recurring | Time deposits | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments: | 0 | |
Fair Value, Measurements, Recurring | Time deposits | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments: | 12 | |
Fair Value, Measurements, Recurring | U.S. Government and agency obligations | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments: | 750 | 542 |
Fair Value, Measurements, Recurring | U.S. Government and agency obligations | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments: | 543 | 353 |
Fair Value, Measurements, Recurring | U.S. Government and agency obligations | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments: | 207 | 189 |
Fair Value, Measurements, Recurring | U.S. and foreign corporate debt securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments: | 3,252 | 3,234 |
Fair Value, Measurements, Recurring | U.S. and foreign corporate debt securities | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments: | 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] | ||
Short-term investments: | 3,252 | 3,234 |
Fair Value, Measurements, Recurring | Foreign governments and multi-national agency obligations | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments: | 35 | 23 |
Fair Value, Measurements, Recurring | Foreign governments and multi-national agency obligations | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments: | 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] | ||
Short-term investments: | 35 | 23 |
Fair Value, Measurements, Recurring | Municipal obligations | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments: | 706 | 932 |
Fair Value, Measurements, Recurring | Municipal obligations | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments: | 0 | 0 |
Fair Value, Measurements, Recurring | Municipal obligations | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments: | 706 | 932 |
Fair Value, Measurements, Recurring | Asset-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments: | 20 | 53 |
Fair Value, Measurements, Recurring | Asset-backed securities | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments: | 0 | 0 |
Fair Value, Measurements, Recurring | Asset-backed securities | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments: | 20 | 53 |
Fair Value, Measurements, Recurring | Mortgage-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments: | 241 | 220 |
Fair Value, Measurements, Recurring | Mortgage-backed securities | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments: | 0 | 0 |
Fair Value, Measurements, Recurring | Mortgage-backed securities | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Short-term investments: | 241 | 220 |
Fair Value, Measurements, Recurring | Money-market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents: | 1,763 | 1,130 |
Fair Value, Measurements, Recurring | Money-market funds | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents: | 1,763 | 1,130 |
Fair Value, Measurements, Recurring | Money-market funds | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents: | 0 | 0 |
Fair Value, Measurements, Recurring | Time deposits | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents: | 5 | |
Fair Value, Measurements, Recurring | Time deposits | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents: | 0 | |
Fair Value, Measurements, Recurring | Time deposits | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents: | 5 | |
Fair Value, Measurements, Recurring | U.S. and foreign corporate debt securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents: | 54 | |
Fair Value, Measurements, Recurring | U.S. and foreign corporate debt securities | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents: | 0 | |
Fair Value, Measurements, Recurring | U.S. and foreign corporate debt securities | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents: | 54 | |
Fair Value, Measurements, Recurring | Foreign governments and multi-national agency obligations | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents: | 2 | |
Fair Value, Measurements, Recurring | Foreign governments and multi-national agency obligations | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents: | 0 | |
Fair Value, Measurements, Recurring | Foreign governments and multi-national agency obligations | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents: | 2 | |
Fair Value, Measurements, Recurring | Total cash equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents: | 1,768 | 1,186 |
Fair Value, Measurements, Recurring | Total cash equivalents | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents: | 1,763 | 1,130 |
Fair Value, Measurements, Recurring | Total cash equivalents | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents: | $ 5 | $ 56 |
Fair Value Measurements (Assets
Fair Value Measurements (Assets Measured and Recorded at Fair Value on a Non-Recurring Basis) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Impairment of strategic investment | $ 5 | $ 0 | $ 13 |
Other Assets | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Strategic Investments | $ 103 | $ 110 |
Derivatives and Hedging Activ71
Derivatives and Hedging Activities (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Derivatives, Fair Value [Line Items] | |||
Net loss on forward contracts and underlying foreign currency denominated assets and liabilities | $ 14 | $ 9 | $ 4 |
Foreign Exchange Forward | |||
Derivatives, Fair Value [Line Items] | |||
Gain (loss) on forward contracts not designated as hedging instruments | $ 36 | 48 | $ (4) |
Not Designated As Hedging Instrument | Foreign Exchange Forward | |||
Derivatives, Fair Value [Line Items] | |||
Maximum maturity of forward contracts | 1 month | ||
Notional amount of forward contracts | $ 721 | 697 | |
Cash Flow Hedging | Designated As Hedging Instrument | Foreign Exchange Forward | |||
Derivatives, Fair Value [Line Items] | |||
Maximum maturity of forward contracts | 12 months | ||
Notional amount of forward contracts | $ 213 | $ 240 |
Property and Equipment, Net (Co
Property and Equipment, Net (Components Of Property And Equipment) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 2,102 | $ 1,844 |
Accumulated depreciation | (974) | (809) |
Total property and equipment, net | 1,128 | 1,035 |
Equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 1,180 | 974 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 792 | 753 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 100 | 92 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 30 | $ 25 |
Property and Equipment, Net (Na
Property and Equipment, Net (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 190 | $ 190 | $ 141 |
Accrued Expenses and Other (Com
Accrued Expenses and Other (Components Of Accrued Expenses) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Accrued Liabilities [Abstract] | ||
Salaries, commissions, bonuses and benefits | $ 388 | $ 374 |
Accrued partner liabilities | 146 | 148 |
Other | 212 | 289 |
Total | $ 746 | $ 811 |
Unearned Revenues (Summary of U
Unearned Revenues (Summary of Unearned Revenues) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Unearned Revenue Arrangement [Line Items] | ||
Unearned revenues | $ 5,076 | $ 4,833 |
Unearned license revenues | ||
Unearned Revenue Arrangement [Line Items] | ||
Unearned revenues | 428 | 488 |
Unearned software maintenance revenues | ||
Unearned Revenue Arrangement [Line Items] | ||
Unearned revenues | $ 4,174 | 3,905 |
Unearned software maintenance revenues | Weighted Average | ||
Unearned Revenue Arrangement [Line Items] | ||
Revenue recognition term | 2 years | |
Unearned professional services revenues | ||
Unearned Revenue Arrangement [Line Items] | ||
Unearned revenues | $ 474 | $ 440 |
Income Taxes (Income (Loss) Bef
Income Taxes (Income (Loss) Before Income Taxes) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 257 | $ 174 | $ 160 |
International | 956 | 874 | 987 |
Income before income taxes | $ 1,213 | $ 1,048 | $ 1,147 |
Income Taxes (Tax Expense (Bene
Income Taxes (Tax Expense (Benefit) by Jurisdiction) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Federal: | |||
Current | $ 142 | $ 188 | $ 1 |
Deferred | (33) | (116) | 57 |
Total | 109 | 72 | 58 |
State: | |||
Current | 9 | 15 | 2 |
Deferred | (1) | (12) | 6 |
Total | 8 | 3 | 8 |
Foreign: | |||
Current | 96 | 87 | 72 |
Deferred | 3 | 0 | (5) |
Total | 99 | 87 | 67 |
Total provision for income taxes | $ 216 | $ 162 | $ 133 |
Income Taxes (Effective Income
Income Taxes (Effective Income Tax Rate Reconciliation) (Details) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
Statutory federal tax rate | 35.00% | 35.00% | 35.00% |
State taxes, net of federal benefit | 1.00% | 1.00% | 1.00% |
Tax rate differential for international jurisdictions | (20.00%) | (21.00%) | (22.00%) |
U.S. tax credits | (2.00%) | (3.00%) | (7.00%) |
Permanent items and other | 4.00% | 4.00% | 5.00% |
Effective tax rate | 18.00% | 16.00% | 12.00% |
Income Taxes (Deferred Tax Asse
Income Taxes (Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||
Unearned revenues | $ 320 | $ 296 |
Accruals and other | 60 | 67 |
Stock-based compensation | 73 | 90 |
Tax credit and net operating loss carryforwards | 162 | 138 |
Other assets, net | 19 | 9 |
Intangible and other non-current assets | 65 | 0 |
Basis difference on investment in business | 20 | 20 |
Gross deferred tax assets | 719 | 620 |
Valuation allowance | (144) | (106) |
Total deferred tax assets | 575 | 514 |
Deferred tax liabilities: | ||
Property, plant and equipment, net | (119) | (93) |
Intangibles and other assets, net | 0 | (8) |
Total deferred tax liabilities | (119) | (101) |
Net deferred tax assets | $ 456 | $ 413 |
Income Taxes (Tax Sharing Agree
Income Taxes (Tax Sharing Agreement) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Related Party Transaction [Line Items] | |||
Payments from VMware to EMC | $ 231 | $ 215 | $ 35 |
EMC | Tax Sharing Agreement | |||
Related Party Transaction [Line Items] | |||
Payments from VMware to EMC | 144 | 150 | 8 |
Payments from EMC to VMware | $ 0 | $ 0 | $ 32 |
Income Taxes (Unrecognized Tax
Income Taxes (Unrecognized Tax Benefits) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reconciliation of Gross Unrecognized Tax Benefits, Excluding Interest and Penalties Associated with Unrecognized Tax Benefits [Roll Forward] | |||
Balance, beginning of the year | $ 190 | $ 167 | $ 158 |
Tax positions related to current year: | |||
Additions | 41 | 32 | 32 |
Tax positions related to prior years: | |||
Additions | 54 | 1 | 0 |
Reductions | (14) | (3) | (12) |
Settlements | (12) | (1) | (2) |
Reductions resulting from a lapse of the statute of limitations | (11) | (2) | (8) |
Foreign currency effects | (3) | (4) | (1) |
Balance, end of the year | $ 245 | $ 190 | $ 167 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule Of Income Taxes [Line Items] | ||||
Increase (decrease) in valuation allowance | $ 38 | $ 12 | ||
Undistributed earnings of foreign subsidiaries | $ 4,473 | 4,473 | 3,594 | |
Increase (decrease) to stockholders' equity from tax sharing agreement | 13 | (12) | $ (3) | |
Net unrecognized tax benefits, including interest and penalties | 257 | 257 | ||
Net unrecognized tax benefits that would impact effective tax rate | 232 | 232 | ||
Unrecognized tax benefits, interest and penalties on income taxes accrued | 34 | 34 | 22 | |
Unrecognized tax benefits, interest and penalties on income tax expense | 13 | 8 | 5 | |
Income tax provision | 216 | 162 | 133 | |
Reduction in total unrecognized tax benefits reasonably possible within next 12 months, minimum | 18 | 18 | ||
IRS | ||||
Schedule Of Income Taxes [Line Items] | ||||
Operating loss carryforwards | 118 | 118 | ||
Additional unrecognized tax benefits related to certain acquisitions, excluding interest | 47 | |||
Additional unrecognized tax benefits related to certain acquisitions, excluding interest, recognized in income tax provision | 25 | |||
State and Local Jurisdiction | ||||
Schedule Of Income Taxes [Line Items] | ||||
Operating loss carryforwards | 144 | $ 144 | ||
International | Ireland | ||||
Schedule Of Income Taxes [Line Items] | ||||
Foreign statutory income tax rate, Ireland | 12.50% | |||
Tax Sharing Agreement | EMC | ||||
Schedule Of Income Taxes [Line Items] | ||||
Increase (decrease) to stockholders' equity from tax sharing agreement | $ 13 | $ (12) | $ (3) | |
Research Tax Credit Carryforward | State and Local Jurisdiction | CALIFORNIA | ||||
Schedule Of Income Taxes [Line Items] | ||||
Tax carryforward | 96 | 96 | ||
Research Tax Credit Carryforward | State and Local Jurisdiction | MASSACHUSETTS | ||||
Schedule Of Income Taxes [Line Items] | ||||
Tax carryforward | 6 | 6 | ||
Research Tax Credit Carryforward | State and Local Jurisdiction | GEORGIA | ||||
Schedule Of Income Taxes [Line Items] | ||||
Tax carryforward | 1 | 1 | ||
Tax Year 2012 | International | ||||
Schedule Of Income Taxes [Line Items] | ||||
Operating loss carryforwards | 15 | 15 | ||
State Net Operating Loss Carryforwards, State R&D Tax Credits, Capital Losses, and Certain non-U.S. Net Operating Losses [Member] | ||||
Schedule Of Income Taxes [Line Items] | ||||
Valuation allowance | $ 121 | $ 121 |
Commitments and Contingencies83
Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Loss Contingencies [Line Items] | ||||
GSA settlement | $ (76) | $ 0 | $ 0 | |
General Services Administration (GSA) | ||||
Loss Contingencies [Line Items] | ||||
GSA settlement | $ 76 |
Commitments and Contingencies84
Commitments and Contingencies (Operating Lease and Other Contractual Commitments) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Jan. 21, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Rent expense | $ 105 | $ 85 | $ 67 | |
Future Lease Commitments, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||
2,016 | 90 | |||
2,017 | 72 | |||
2,018 | 56 | |||
2,019 | 45 | |||
2,020 | 34 | |||
Thereafter | 572 | |||
Total minimum lease payments | 869 | |||
Purchase Obligations, Fiscal Year Maturity [Abstract] | ||||
2,016 | 32 | |||
2,017 | 19 | |||
2,018 | 16 | |||
2,019 | 3 | |||
2,020 | 0 | |||
Thereafter | 0 | |||
Total minimum purchase obligations | 70 | |||
Other Contractual Commitments, Fiscal Year Maturity [Abstract] | ||||
2,016 | 7 | |||
2,017 | 3 | |||
2,018 | 3 | |||
2,019 | 3 | |||
2,020 | 3 | |||
Thereafter | 13 | |||
Total other commitments | 32 | |||
Contractual Commitments, Fiscal Year Maturity [Abstract] | ||||
2,016 | 129 | |||
2,017 | 94 | |||
2,018 | 75 | |||
2,019 | 51 | |||
2,020 | 37 | |||
Thereafter | 585 | |||
Contractual commitments | 971 | |||
Notes payable | EMC | ||||
Notes Payable [Line Items] | ||||
Principal amount | $ 1,500 | $ 1,500 |
Stockholders' Equity (VMware Eq
Stockholders' Equity (VMware Equity Plan) (Details) shares in Millions | 12 Months Ended |
Dec. 31, 2015voteshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Votes per share (in votes) | vote | 1 |
Class B Convertible 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% |
Class A Common Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares reserved for conversion (in shares) | 300 |
Class A Common Stock | VMware 2007 Equity and Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares authorized (in shares) | 121.6 |
Number of additional shares authorized from business acquisitions (in shares) | 4.2 |
Number of shares available for grant (in shares) | 18.4 |
Class A Common Stock | VMware 2007 Equity and Incentive Plan | Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Options award annual vesting percentage | 25.00% |
Class A Common Stock | VMware 2007 Equity and Incentive Plan | Restricted Stock | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period | 3 years |
Class A Common Stock | VMware 2007 Equity and Incentive Plan | Restricted Stock | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period | 4 years |
Class A Common Stock | VMware 2007 Equity and Incentive Plan | Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Options award annual vesting percentage | 25.00% |
Options minimum exercise price as percentage of fair value on grant date | 100.00% |
Class A Common Stock | VMware 2007 Equity and Incentive Plan | Stock Options | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 6 years |
Class A Common Stock | VMware 2007 Equity and Incentive Plan | Stock Options | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 7 years |
Monthly vesting after first year | Class A Common Stock | VMware 2007 Equity and Incentive Plan | Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period | 3 years |
Stockholders' Equity (Stock Rep
Stockholders' Equity (Stock Repurchase Program) (Details) - USD ($) $ / shares in Units, shares in Thousands | 12 Months Ended | |||||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Jan. 27, 2015 | Aug. 06, 2014 | Aug. 07, 2013 | Nov. 28, 2012 | Feb. 29, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Aggregate purchase price | $ 1,125,000,000 | $ 700,000,000 | $ 508,000,000 | |||||
Class A Common Stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Authorized amount remaining for repurchase | 835,000,000 | |||||||
Class A Common Stock | January 2015 Stock Repurchase Program | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Authorized repurchase amount under stock repurchase program | $ 1,000,000,000 | |||||||
Class A Common Stock | August 2014 Stock Repurchase Program | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Authorized repurchase amount under stock repurchase program | $ 1,000,000,000 | |||||||
Class A Common Stock | August 2013 Stock Repurchase Program | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Authorized repurchase amount under stock repurchase program | $ 700,000,000 | |||||||
Class A Common Stock | November 2012 Stock Repurchase Program | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Authorized repurchase amount under stock repurchase program | $ 250,000,000 | |||||||
Class A Common Stock | February 2012 Stock Repurchase Program | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Authorized repurchase amount under stock repurchase program | $ 600,000,000 | |||||||
Class A Common Stock | VMware Share Repurchase Programs | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Aggregate purchase price | $ 1,125,000,000 | $ 700,000,000 | $ 508,000,000 | |||||
Class A common shares repurchased (shares) | 13,495 | 7,642 | 6,636 | |||||
Weighted-average price per share | $ 83.36 | $ 91.61 | $ 76.58 |
Stockholders' Equity (Employee
Stockholders' Equity (Employee Stock Purchase Plan) (Details) - Employee Stock - VMware Employee Stock Purchase Plan - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair market value at grant purchase price, percentage | 85.00% | ||
Fair market value at grant exercise price, percentage | 85.00% | ||
Cash proceeds | $ 98 | $ 80 | $ 76 |
Weighted-average price (USD per share) | $ 65.54 | $ 73.21 | $ 65.97 |
ESPP withholdings | $ 48 | ||
Class A Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized (in shares) | 14,300 | ||
Number of shares available for grant (in shares) | 4,700 | ||
Class A common shares purchased (shares) | 1,495 | 1,099 | 1,154 |
Stockholders' Equity (Summary o
Stockholders' Equity (Summary of Stock Option Activity) (Details) - Class A Common Stock - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Weighted-Average Exercise Price | |||
Options exercisable, weighted average term (in years) | 4 years 5 months 26 days | ||
Options vested and expected to vest, weighted average term (in years) | 4 years 10 months 17 days | ||
Options, exercisable, intrinsic value | $ 26 | ||
Options aggregate intrinsic value | $ 43 | ||
Share price (in USD per share) | $ 56.57 | ||
Fair value vested in period | $ 60 | $ 64 | $ 60 |
Options, exercises in period, intrinsic value | $ 136 | $ 147 | $ 256 |
VMware 2007 Equity and Incentive Plan | |||
Number of Shares | |||
Outstanding, Beginning balance (shares) | 5,869 | 5,755 | 10,133 |
Options relating to employees transferred (to) from EMC (in shares) | 0 | 0 | 0 |
Granted (shares) | 21 | 2,695 | 1,434 |
Forfeited (shares) | (322) | (220) | (416) |
Expirations (shares) | 0 | 0 | (387) |
Exercised (shares) | (2,404) | (2,361) | (5,009) |
Outstanding, Ending balance (shares) | 3,164 | 5,869 | 5,755 |
Exercisable (shares) | 1,627 | ||
Vested and expected to vest (shares) | 3,078 | ||
Weighted-Average Exercise Price | |||
Outstanding, Beginning balance (USD per share) | $ 50.54 | $ 44.12 | $ 34.36 |
Options relating to employees transferred (to) from EMC (in USD shares) | 0 | 0 | 0 |
Granted (USD per share) | 54.23 | 50.91 | 71.53 |
Forfeited (USD per share) | 70.42 | 47.89 | 36.25 |
Expirations (USD per share) | 0 | 0 | 105.81 |
Exercised (USD per share) | 29.44 | 35.58 | 28.12 |
Outstanding, Ending balance (USD per share) | 64.56 | $ 50.54 | $ 44.12 |
Exercisable (USD per share) | 59.31 | ||
Vested and Expected to Vest (USD per share) | $ 63.89 | ||
EMC Stock Plan | |||
Number of Shares | |||
Outstanding, Beginning balance (shares) | 1,271 | 1,696 | 2,643 |
Options relating to employees transferred (to) from EMC (in shares) | 8 | 149 | 97 |
Granted (shares) | 0 | 0 | 0 |
Forfeited (shares) | (1) | (2) | (46) |
Expirations (shares) | (14) | (9) | (29) |
Exercised (shares) | (201) | (563) | (775) |
Outstanding, Ending balance (shares) | 1,063 | 1,271 | 1,696 |
Exercisable (shares) | 1,050 | ||
Vested and expected to vest (shares) | 1,061 | ||
Weighted-Average Exercise Price | |||
Outstanding, Beginning balance (USD per share) | $ 16.08 | $ 15.53 | $ 15.12 |
Options relating to employees transferred (to) from EMC (in USD shares) | 20.23 | 15.87 | 11.87 |
Granted (USD per share) | 0 | 0 | 0 |
Forfeited (USD per share) | 19.37 | 19.10 | 16.09 |
Expirations (USD per share) | 14.21 | 14.14 | 12.99 |
Exercised (USD per share) | 13.96 | 14.37 | 15.39 |
Outstanding, Ending balance (USD per share) | 16.54 | $ 16.08 | $ 15.53 |
Exercisable (USD per share) | 16.44 | ||
Vested and Expected to Vest (USD per share) | $ 16.53 | ||
Options exercisable, weighted average term (in years) | 3 years 2 months 8 days | ||
Options vested and expected to vest, weighted average term (in years) | 3 years 2 months 12 days | ||
Options, exercisable, intrinsic value | $ 10 | ||
Options aggregate intrinsic value | $ 10 | ||
Share price (in USD per share) | $ 25.68 | ||
Options, exercises in period, intrinsic value | $ 3 | $ 7 | $ 8 |
Proceeds from exercise of stock options | $ 3 | $ 8 | $ 11 |
Stockholders' Equity (Summary89
Stockholders' Equity (Summary of Restricted Stock Activity) (Details) - Class A Common Stock $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2013USD ($)$ / sharesshares | |
Weighted-Average Grant Date Fair Value | |||
Share price (in USD per share) | $ / shares | $ 56.57 | ||
Restricted Stock | |||
Number of Units | |||
Outstanding, number of shares (in shares) | 12,585 | 12,856 | 12,170 |
Granted, number of shares (in shares) | 12,787 | 6,189 | 7,391 |
Vested, number of shares (in shares) | (4,855) | (5,166) | (4,399) |
Forfeited, number of shares (in shares) | (1,824) | (1,294) | (2,306) |
Outstanding, number of shares (in shares) | 18,693 | 12,585 | 12,856 |
Weighted-Average Grant Date Fair Value | |||
Outstanding, weighted-average grant date fair value (USD per share) | $ / shares | $ 88.88 | $ 85.85 | $ 91.93 |
Granted, weighted-average grant date fair value (USD per share) | $ / shares | 72.42 | 92.82 | 76.20 |
Vested, weighted-average grant date fair value (USD per share) | $ / shares | 90.72 | 86.27 | 83.21 |
Forfeited, weighted-average grant date fair value (USD per share) | $ / shares | 87.39 | 88.03 | 90.55 |
Outstanding, weighted-average grant date fair value (USD per share) | $ / shares | $ 77.29 | $ 88.88 | $ 85.85 |
Expected to vest (shares) | 16,206 | ||
Weighted average remaining contractual term | 2 years 5 months 19 days | ||
Expected to vest, aggregate intrinsic value | $ | $ 917 | ||
Fair value of restricted stock-based awards, vested | $ | 379 | $ 480 | $ 340 |
Aggregate intrinsic value | $ | $ 1,057 | ||
Restricted Stock Units (RSUs) | |||
Number of Units | |||
Outstanding, number of shares (in shares) | 18,200 | ||
Performance Stock Units (PSUs) | |||
Number of Units | |||
Outstanding, number of shares (in shares) | 500 | ||
Minimum | Performance Stock Units (PSUs) | |||
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) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance stock units to Class A common stock, conversion ratio | 2 |
Stockholders' Equity (Shares Re
Stockholders' Equity (Shares Repurchased for Tax Withholdings) (Details) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock repurchased and retired during period, value | $ 173 | $ 162 | $ 126 |
Class A Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock repurchased and retired during period (shares) | 2.6 | 1.8 | 1.9 |
Stock repurchased and retired during period, value | $ 173 | $ 162 | $ 126 |
Stockholders' Equity (Share-Bas
Stockholders' Equity (Share-Based Compensation) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation | $ 504,000,000 | $ 529,000,000 | $ 464,000,000 |
Income tax benefit | (144,000,000) | (157,000,000) | (136,000,000) |
Total stock-based compensation, net of tax | 360,000,000 | 372,000,000 | 328,000,000 |
Liability-classified awards | 0 | 0 | |
Liability-classified awards were reclassified to additional paid-in capital | 21,000,000 | 25,000,000 | |
Unrecognized compensation cost for stock options and restricted stock | $ 1,117,000,000 | ||
Weighted-average remaining recognition period | 1 year 5 months 1 day | ||
Cost of license revenues | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation | $ 2,000,000 | 2,000,000 | 2,000,000 |
Cost of services revenues | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation | 44,000,000 | 42,000,000 | 29,000,000 |
Research and development | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation | 226,000,000 | 244,000,000 | 227,000,000 |
Sales and marketing | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation | 168,000,000 | 172,000,000 | 144,000,000 |
General and administrative | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation | 64,000,000 | 69,000,000 | 56,000,000 |
Realignment charges | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation | 0 | 0 | 6,000,000 |
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 | $ 0 | $ 21,000,000 | $ 25,000,000 |
Stockholders' Equity (Share-B92
Stockholders' Equity (Share-Based Compensation Valuation Method) (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected Dividend Rate | 0.00% | 0.00% | 0.00% |
Expected volatility | 32.00% | 36.20% | 38.50% |
Risk-free interest rate | 1.10% | 0.90% | 0.90% |
Expected term | 3 years 3 months 18 days | 3 years 2 months 23 days | 3 years 7 months 2 days |
Weighted-average fair value at grant date (USD per share) | $ 27.16 | $ 48.47 | $ 29.47 |
Employee Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected Dividend Rate | 0.00% | 0.00% | 0.00% |
Expected volatility | 30.10% | 32.30% | 32.90% |
Risk-free interest rate | 0.10% | 0.10% | 0.10% |
Expected term | 6 months | 6 months | 6 months |
Weighted-average fair value at grant date (USD per share) | $ 20.59 | $ 20.71 | $ 20.45 |
Stockholders' Equity (Accumulat
Stockholders' Equity (Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Balance | $ 7,586 | $ 6,816 | $ 5,740 |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | (7) | (2) | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | (3) | ||
Total other comprehensive income (loss) | (7) | (5) | (2) |
Balance | 7,923 | 7,586 | 6,816 |
Other Comprehensive Income (Loss) before Reclassifications, Tax [Abstract] | |||
Tax effect on unrealized gains (losses) on available-for-sale securities | (4) | 0 | 0 |
Tax effect on unrealized gains (losses) on effective foreign currency forward contracts | 0 | 0 | 0 |
Tax effect on unrealized gains (losses) | (4) | 0 | |
Reclassification from AOCI, Current Period, Tax [Abstract] | |||
Tax effect on reclassification of (gains) losses on available-for-sale securities realized during the period | 0 | (2) | (1) |
Tax effect on reclassification of (gains) losses on effective foreign currency forward contracts realized during the period | 0 | ||
Tax effect on reclassification of (gains) losses realized during the period | (2) | ||
Unrealized Gain on Available-for-Sale Securities | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Balance | 0 | 4 | |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | (7) | (1) | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | (3) | ||
Total other comprehensive income (loss) | (7) | (4) | |
Balance | (7) | 0 | 4 |
Unrealized Loss on Forward Contracts | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Balance | (1) | 0 | |
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | 0 | (1) | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0 | ||
Total other comprehensive income (loss) | 0 | (1) | |
Balance | (1) | (1) | 0 |
Accumulated Other Comprehensive Income (Loss) | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Balance | (1) | 4 | 6 |
Total other comprehensive income (loss) | (7) | (5) | (2) |
Balance | $ (8) | $ (1) | $ 4 |
Related Parties (Schedule of Re
Related Parties (Schedule of Related Party Transactions) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Related Party Transaction [Line Items] | ||||
Additions to intangible assets related to business combinations | $ 13 | $ 278 | ||
EMC | ||||
Related Party Transaction [Line Items] | ||||
Due to related parties | 68 | 76 | ||
EMC | Reseller revenues | ||||
Related Party Transaction [Line Items] | ||||
Revenue from related party | 301 | 205 | $ 141 | |
Unearned revenues | 292 | 290 | ||
EMC | Internal-use revenues | ||||
Related Party Transaction [Line Items] | ||||
Revenue from related party | 17 | 21 | 32 | |
Unearned revenues | 11 | 18 | ||
EMC | Professional services revenues | ||||
Related Party Transaction [Line Items] | ||||
Revenue from related party | 100 | 85 | 72 | |
Unearned revenues | 3 | 9 | ||
EMC | Collaborative technology project receipts | ||||
Related Party Transaction [Line Items] | ||||
Revenue from related party | 0 | 0 | 7 | |
EMC | Agency fee revenues | ||||
Related Party Transaction [Line Items] | ||||
Revenue from related party | 6 | 5 | 5 | |
Unearned revenues | 0 | 0 | ||
EMC | Reimbursement for services to Pivotal | ||||
Related Party Transaction [Line Items] | ||||
Revenue from related party | 4 | 2 | 12 | |
EMC | Purchases and leases of products and purchases of services | ||||
Related Party Transaction [Line Items] | ||||
Related party costs | 63 | 71 | 63 | |
EMC | Collaborative technology project costs | ||||
Related Party Transaction [Line Items] | ||||
Related party costs | 5 | 12 | 13 | |
EMC | EMC subsidiary support and administrative costs | ||||
Related Party Transaction [Line Items] | ||||
Related party costs | 100 | 137 | 128 | |
EMC | Purchases of products through channel | ||||
Related Party Transaction [Line Items] | ||||
Related party costs | $ 36 | $ 25 | 6 | |
Due to related party, net | EMC | Transaction to acquired developed technology rights | ||||
Related Party Transaction [Line Items] | ||||
Due to related parties | $ 26 | $ 26 | ||
Purchased technology | Purchased technology | EMC | Transaction to acquired developed technology rights | ||||
Related Party Transaction [Line Items] | ||||
Additions to intangible assets related to business combinations | $ 2 |
Related Parties (Due To_From Re
Related Parties (Due To/From Related Parties) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | ||
Related party transaction, other than tax obligation due to or from related party, cash settlement period | 60 days | |
EMC | ||
Related Party Transaction [Line Items] | ||
Due to related parties | $ (68) | $ (76) |
Due from related parties | 142 | 125 |
Due (to) from related parties, net | 74 | 49 |
Income tax due (to) from related parties | $ (18) | $ (40) |
Related Parties (Note Payable t
Related Parties (Note Payable to EMC) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Jan. 21, 2014 | |
Related Party Transaction [Line Items] | ||||
Notes payable to EMC | $ 1,500 | $ 1,500 | ||
Interest Expense, Related Party | 26 | $ 24 | $ 4 | |
EMC | ||||
Related Party Transaction [Line Items] | ||||
Notes payable to EMC | $ 450 | |||
Notes payable | EMC | ||||
Related Party Transaction [Line Items] | ||||
Principal amount | $ 1,500 | 1,500 | ||
Note, May 2018 | Notes payable | EMC | ||||
Related Party Transaction [Line Items] | ||||
Principal amount | $ 680 | |||
Interest rate | 1.75% | |||
Note, May 2020 | Notes payable | EMC | ||||
Related Party Transaction [Line Items] | ||||
Principal amount | $ 550 | |||
Interest rate | 1.75% | |||
Note, December 2022 | Notes payable | EMC | ||||
Related Party Transaction [Line Items] | ||||
Principal amount | $ 270 | |||
Interest rate | 1.75% |
Segment Information (Schedule O
Segment Information (Schedule Of Revenues By Geographic Area) (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)segment | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Revenues From External Customers And Long-Lived Assets [Line Items] | |||||||||||
Number of reportable segments | segment | 1 | ||||||||||
Revenues | $ 1,868 | $ 1,672 | $ 1,521 | $ 1,511 | $ 1,703 | $ 1,515 | $ 1,457 | $ 1,360 | $ 6,571 | $ 6,035 | $ 5,207 |
United States | |||||||||||
Revenues From External Customers And Long-Lived Assets [Line Items] | |||||||||||
Revenues | 3,311 | 2,912 | 2,485 | ||||||||
International | |||||||||||
Revenues From External Customers And Long-Lived Assets [Line Items] | |||||||||||
Revenues | $ 3,260 | $ 3,123 | $ 2,722 |
Segment Information (Concentrat
Segment Information (Concentration of Revenue) (Details) - product_group | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Concentration Risk [Line Items] | |||
Number of Product Groups | 3 | ||
Distributor One | Sales | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 15.00% | 15.00% | 15.00% |
Distributor Two | Sales | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 12.00% | 13.00% | 12.00% |
Distributor Three | Sales | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 11.00% | 11.00% | 11.00% |
Segment Information (Schedule99
Segment Information (Schedule Of Long-Lived Assets By Geographic Area) (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Revenues From External Customers And Long-Lived Assets [Line Items] | ||
Long-lived assets by geographic area | $ 979 | $ 918 |
United States | ||
Revenues From External Customers And Long-Lived Assets [Line Items] | ||
Long-lived assets by geographic area | 831 | 801 |
International | ||
Revenues From External Customers And Long-Lived Assets [Line Items] | ||
Long-lived assets by geographic area | $ 148 | $ 117 |
Selected Quarterly Financial100
Selected Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 1,868 | $ 1,672 | $ 1,521 | $ 1,511 | $ 1,703 | $ 1,515 | $ 1,457 | $ 1,360 | $ 6,571 | $ 6,035 | $ 5,207 |
Net income | $ 373 | $ 256 | $ 172 | $ 196 | $ 326 | $ 194 | $ 167 | $ 199 | $ 997 | $ 886 | $ 1,014 |
Net income per share, basic (USD per share) | $ 0.89 | $ 0.61 | $ 0.41 | $ 0.46 | $ 0.76 | $ 0.45 | $ 0.39 | $ 0.46 | $ 2.35 | $ 2.06 | $ 2.36 |
Net income per share, diluted (USD per share) | $ 0.88 | $ 0.60 | $ 0.40 | $ 0.45 | $ 0.75 | $ 0.45 | $ 0.38 | $ 0.46 | $ 2.34 | $ 2.04 | $ 2.34 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event $ in Millions | Jan. 22, 2016USD ($)employee |
Subsequent Event [Line Items] | |
Restructuring and Related Cost, Expected Number of Positions Eliminated | employee | 800 |
Minimum | |
Subsequent Event [Line Items] | |
Restructuring and Related Cost, Expected Cost | $ 55 |
Maximum | |
Subsequent Event [Line Items] | |
Restructuring and Related Cost, Expected Cost | $ 65 |
Schedule II - Valuation and 102
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Allowance for Bad Debts | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | $ 2 | $ 2 | $ 4 |
Charged to Expenses/Provision | 0 | 0 | (2) |
Deductions | 0 | 0 | 0 |
Balance at End of Period | 2 | 2 | 2 |
Tax Valuation Allowance | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 106 | 94 | 64 |
Charged to Expenses/Provision | 47 | 21 | 32 |
Deductions | (9) | (9) | (2) |
Balance at End of Period | $ 144 | $ 106 | $ 94 |