Highlights - Third-quarter consolidated revenue up 8% sequentially;
Ahead of prior company outlook of 4% to 5% sequential growth -
Third-quarter GAAP net income up 45% sequentially; Non-GAAP net
income up 34% sequentially - Third-quarter GAAP diluted EPS up 40%
sequentially; Non-GAAP diluted EPS up 28% sequentially - Strong
sequential increase in gross and operating margins - Year-to-date
operating cash flow - $2.3 billion; Year-to-date free cash flow -
$1.8 billion HOPKINTON, Mass., Oct. 22 /PRNewswire-FirstCall/ --
EMC Corporation (NYSE: EMC), the world leader in information
infrastructure solutions, today reported third-quarter 2009
consolidated revenue that exceeded company expectations for the
quarter. The company achieved third-quarter revenue of $3.52
billion, an increase of 8% compared with the second quarter of
2009. The results exceeded previous company outlook of 4% to 5%
sequential revenue growth. Third-quarter GAAP net income
attributable to EMC reached $298.2 million, an increase of 45%
sequentially and GAAP diluted earnings per share were $0.14, an
increase of 40% sequentially. Third-quarter 2009 non-GAAP(1) net
income attributable to EMC increased 34% sequentially, reaching
$480.3 million or $0.23 per diluted share, an increase of 28%
sequentially. Third-quarter consolidated revenue of $3.52 billion
declined 5% compared with the year-ago period. Third-quarter 2009
GAAP net income attributable to EMC compares with $393.4 million or
$0.19 per diluted share for the third quarter of 2008 and
third-quarter 2009 non-GAAP net income attributable to EMC compares
with $510 million or $0.24 per diluted share achieved in the third
quarter of 2008.(2) In the third quarter, EMC generated operating
cash flow of $888 million and free cash flow of $745 million and
ended the quarter with cash and investments of $8.4 billion. Year
to date, EMC has generated operating cash flow of $2.3 billion and
free cash flow of $1.8 billion. Joe Tucci, EMC Chairman and Chief
Executive Officer, said, "I am very pleased with EMC's solid
financial performance in a challenging economic climate. While
remaining closer than ever to customers, we made additional
progress optimizing our cost structure, expanded our product
portfolio, strengthened our partner ecosystem and positioned EMC to
capitalize on four of the higher-growth, multi-billion-dollar
market opportunities around fully virtualized data centers, cloud
computing, virtualized desktops and clients, and next-generation
backup and recovery. I am extremely proud of the EMC and VMware
people around the world who achieved these results." Commenting
further, Tucci said, "Customers are signaling more comfort spending
their IT budgets, which gives EMC confidence in our ability to
perform well and achieve our full-year 2009 targets. We are
strategically aligned with the major technology shifts and well
positioned to play a pivotal role in the IT industry for the next
decade." David Goulden, EMC Executive Vice President and Chief
Financial Officer, said, "EMC achieved solid sequential revenue and
profit growth while continuing to generate strong free cash flow.
Combined with a continued disciplined focus on cost control, this
helped EMC deliver improved gross and operating margins,
highlighting the resilience of our financial model and our crisp
execution. We remain committed to driving growth and operating
leverage through our business, while continuing to invest in
strategic growth opportunities to further extend EMC's market
leadership." Third-Quarter Business Highlights EMC's Information
Infrastructure business for the third quarter - comprising product
and services revenue from Information Storage, RSA Security, and
Content Management and Archiving - reached $3.03 billion, an
increase of 8% sequentially. The Information Infrastructure
business was driven by strong sequential growth of the
market-leading EMC Symmetrix high-end storage systems including
strong adoption of the new EMC Symmetrix V-Max line, EMC
next-generation backup and recovery solutions and EMC Celerra
unified storage systems. Further third-quarter highlights included
customer demand for EMC's RSA information security solutions,
consumer and small business-focused Iomega products, content
management and archiving solutions, and EMC's broad consulting and
professional services portfolio. VMware (NYSE:VMW), which is
majority-owned by EMC, contributed third-quarter revenue of $489
million. EMC consolidated third-quarter revenue from the United
States reached $1.90 billion, up 13% sequentially, and represented
54% of total third-quarter revenue. Revenue from EMC's operations
outside of the United States reached $1.62 billion, up 3%
sequentially, and represented 46% of total third-quarter revenue.
Business Outlook The following statements are based on current
expectations. These statements are forward-looking, and actual
results may differ materially. These statements do not give effect
to the potential impact of mergers, acquisitions, divestitures or
business combinations that may be announced or closed after the
date hereof. These statements supersede all prior statements
regarding business outlook and certain items impacting 2009 set
forth in prior EMC news releases. All dollar amounts and
percentages set forth below should be considered to be
approximations. -- Consolidated EMC revenues are expected to be
$4.0 billion for the fourth quarter of 2009 and $13.9 billion for
2009. -- Consolidated GAAP diluted earnings per share are expected
to be $0.21 for the fourth quarter of 2009 and $0.55 for 2009. --
Consolidated non-GAAP diluted earnings per share, excluding the
impact of restructuring charges, stock-based compensation expense
and intangible asset amortization, are expected to be $0.30 for the
fourth quarter of 2009. -- Consolidated non-GAAP diluted earnings
per share, excluding the impact of restructuring and
acquisition-related charges, stock-based compensation expense,
intangible asset amortization and gains recognized from holdings in
Data Domain and SpringSource common stock, are expected to be $0.87
for 2009. -- Consolidated restructuring charges, stock-based
compensation expense and intangible asset amortization are expected
to be $0.01, $0.06 and $0.02 per diluted share, respectively, for
the fourth quarter of 2009. -- Consolidated restructuring and
acquisition-related charges, stock-based compensation expense and
intangible asset amortization are expected to be $0.04, $0.21 and
$0.08 per diluted share, respectively, for 2009. Offsetting these
charges is a $0.01 per diluted share gain recognized from holdings
in Data Domain and SpringSource common stock. -- The consolidated
GAAP income tax rate is expected to be 13% for 2009. Excluding the
impact of restructuring and acquisition-related charges,
stock-based compensation expense, intangible asset amortization and
gains recognized from holdings in Data Domain and SpringSource
common stock, which collectively impact the tax rate by 6%, the
consolidated non-GAAP income tax rate is expected to be 19% for
2009. -- The weighted average outstanding diluted shares are
expected to be 2.12 billion for the fourth quarter of 2009. -- In
2010, cost reduction actions are expected to generate savings of
$500 million compared with 2008. Supporting Resources -- EMC will
host its 2009 third-quarter earnings conference call today at 8:30
a.m. ET, which will be available on EMC's web site at
http://www.emc.com/about/investor-relations/index.htm -- Additional
information regarding EMC's financials, as well as a webcast of the
conference call, will be available at 8:30 a.m. ET at
http://www.emc.com/about/investor-relations/index.htm -- Visit
http://ir.vmware.com/ for more information about VMware's
third-quarter financial results. (1) Items excluded from the
non-GAAP results are gains on Data Domain and SpringSource common
stock, restructuring and acquisition-related charges, stock-based
compensation expense and intangible asset amortization for the
third quarter of 2009 and restructuring charge, special income tax
benefit, stock-based compensation expense and intangible asset
amortization for the third quarter of 2008. See attached schedules
for reconciliation of GAAP to non-GAAP. (2) The results for 2008
have been adjusted to give effect to the adoption of authoritative
guidance relating to non-controlling interests and the accounting
for convertible debt instruments. EMC, Celerra, Symmetrix and V-Max
are registered trademarks of EMC Corporation. RSA is a registered
trademark of RSA Security Inc. VMware is a registered trademark of
VMware, Inc. Iomega is a registered trademark of Iomega
Corporation. Data Domain is a registered trademark of Data Domain,
Inc. SpringSource is a registered trademark of SpringSource, Inc.
All other trademarks used are the property of their respective
owners. Forward-Looking Statements This release contains
"forward-looking statements" as defined under the Federal
Securities Laws. Actual results could differ materially from those
projected in the forward-looking statements as a result of certain
risk factors, including but not limited to: (i) adverse changes in
general economic or market conditions; (ii) delays or reductions in
information technology spending; (iii) our ability to protect our
proprietary technology; (iv) risks associated with managing the
growth of our business, including risks associated with
acquisitions and investments and the challenges and costs of
integration, restructuring and achieving anticipated synergies; (v)
fluctuations in VMware, Inc.'s operating results and risks
associated with trading of VMware stock; (vi) competitive factors,
including but not limited to pricing pressures and new product
introductions; (vii) the relative and varying rates of product
price and component cost declines and the volume and mixture of
product and services revenues; (viii) component and product quality
and availability; (ix) the transition to new products, the
uncertainty of customer acceptance of new product offerings and
rapid technological and market change; (x) insufficient, excess or
obsolete inventory; (xi) war or acts of terrorism; (xii) the
ability to attract and retain highly qualified employees; (xiii)
fluctuating currency exchange rates; (xiv) litigation that we may
be involved in; and (xv) other one-time events and other important
factors disclosed previously and from time to time in EMC's filings
with the U.S. Securities and Exchange Commission. EMC disclaims any
obligation to update any such forward-looking statements after the
date of this release. Use of Non-GAAP Financial Measures This
release contains non-GAAP financial measures. These non-GAAP
financial measures, which are used as measures of EMC's performance
or liquidity, should be considered in addition to, not as a
substitute for, measures of EMC's financial performance or
liquidity prepared in accordance with GAAP. EMC's non-GAAP
financial measures may be defined differently from time to time and
may be defined differently than similar terms used by other
companies, and accordingly, care should be exercised in
understanding how EMC defines its non-GAAP financial measures in
this release. Where specified in the accompanying schedules for
various periods entitled "Reconciliation of GAAP to Non-GAAP,"
certain items noted on each such specific schedule (including,
where noted, amounts relating to gains on Data Domain and
SpringSource common stock, restructuring and acquisition-related
charges, stock-based compensation expense, intangible asset
amortization, special income tax benefit and restructuring charge)
are excluded from the non-GAAP financial measures. EMC's management
uses the non-GAAP financial measures in the accompanying schedules
to gain an understanding of EMC's comparative operating performance
(when comparing such results with previous periods or forecasts)
and future prospects and excludes the above-listed items from its
internal financial statements for purposes of its internal budgets
and each reporting segment's financial goals. These non-GAAP
financial measures are used by EMC's management in their financial
and operating decision-making because management believes they
reflect EMC's ongoing business in a manner that allows meaningful
period-to-period comparisons. EMC's management believes that these
non-GAAP financial measures provide useful information to investors
and others (a) in understanding and evaluating EMC's current
operating performance and future prospects in the same manner as
management does, if they so choose, and (b) in comparing in a
consistent manner the Company's current financial results with the
Company's past financial results. This release also includes
disclosures regarding free cash flow which is a non-GAAP financial
measure. Free cash flow is defined as net cash provided by
operating activities less additions to property, plant and
equipment and capitalized software development costs. EMC uses free
cash flow, among other measures, to evaluate the ability of its
operations to generate cash that is available for purposes other
than capital expenditures and capitalized software development
costs. Management believes that information regarding free cash
flow provides investors with an important perspective on the cash
available to make strategic acquisitions and investments,
repurchase shares, service debt and fund ongoing operations. As
free cash flow is not a measure of liquidity calculated in
accordance with GAAP, free cash flow should be considered in
addition to, but not as a substitute for, the analysis provided in
the statement of cash flows. All of the foregoing non-GAAP
financial measures have limitations. Specifically, the non-GAAP
financial measures that exclude the items noted above do not
include all items of income and expense that affect EMC's
operations. Further, these non-GAAP financial measures are not
prepared in accordance with GAAP, may not be comparable to non-GAAP
financial measures used by other companies and do not reflect any
benefit that such items may confer on EMC. Management compensates
for these limitations by also considering EMC's financial results
as determined in accordance with GAAP. EMC CORPORATION Consolidated
Income Statements (in thousands, except per share amounts)
Unaudited Three Months Ended Nine Months Ended ------------------
----------------- September 30, September 30, September 30,
September 30, 2009 2008 2009 2008 ---- ---- ---- ---- (As Adjusted)
(As Adjusted) Revenues: Product sales $2,200,581 $2,492,941
$6,174,971 $7,295,022 Services 1,317,049 1,222,651 3,750,773
3,564,503 --------- --------- --------- --------- 3,517,630
3,715,592 9,925,744 10,859,525 Cost and expenses: Cost of product
sales 1,107,400 1,156,063 3,177,935 3,350,199 Cost of services
470,013 500,809 1,380,559 1,512,641 Research and development
422,092 410,793 1,203,266 1,286,809 Selling, general and
administrative 1,177,775 1,172,579 3,253,752 3,390,468 In-process
research and development - - - 79,204 Restructuring and
acquisition- related charges 34,781 4,398 83,587 4,041 ------ -----
------ ----- Operating income 305,569 470,950 826,645 1,236,163
Investment income 38,106 56,717 109,293 192,587 Interest expense
(46,227) (44,501) (135,928) (131,614) Other income (expense), net
28,022 (13,313) 17,281 (20,887) ------ ------- ------ -------
Income before tax 325,470 469,853 817,291 1,276,249 Income tax
provision 20,602 63,309 96,462 244,060 ------ ------ ------ -------
Net income 304,868 406,544 720,829 1,032,189 Less: Net income
attributable to the non- controlling interests in VMware, Inc.
(6,688) (13,133) (23,348) (27,007) ------ ------- ------- -------
Net income attributable to EMC Corporation $298,180 $393,411
$697,481 $1,005,182 ======== ======== ======== ========== Net
income per weighted average share, basic: common shareholders:
$0.15 $0.19 $0.35 $0.49 ===== ===== ===== ===== Net income per
weighted average share, diluted: common shareholders: $0.14 $0.19
$0.34 $0.48 ===== ===== ===== ===== Weighted average shares, basic
2,027,347 2,048,594 2,015,920 2,060,952 Weighted average shares,
diluted 2,065,951 2,077,474 2,038,984 2,095,116 Reconciliation of
GAAP to Non-GAAP For the Three Months Ended September 30, 2009 (in
thousands, except per share amounts) Unaudited Selling, Cost of
Research and General and Revenue Revenue Development Administrative
------- ------- ------------ -------------- ------------- EMC
Consolidated GAAP $3,517,630 $1,577,413 $422,092 $1,177,775
------------- Gain on Data Domain and SpringSource common stock - -
- - Restructuring and acquisition-related charges - (12,485) - -
--- ------- --- --- --------------- EMC Consolidated Adjusted (1)
3,517,630 1,564,928 422,092 1,177,775 ---------------- Stock-based
compensation expense - (27,106) (62,557) (99,915) Intangible asset
amortization - (34,121) (3,261) (25,903) --- ------- ------ -------
--------------- EMC Consolidated Non-GAAP (2) $3,517,630 $1,503,701
$356,274 $1,051,957 ---------------- ========== ========== ========
========== -------------------- EMC Information Infrastructure GAAP
$3,028,725 $1,481,485 $289,715 $944,637 -------------------- Gain
on Data Domain common stock - - - - Restructuring and acquisition-
related charges - (12,485) - - --- ------- --- --- --------------
EMC Information Infrastructure Adjusted (3) 3,028,725 1,469,000
289,715 944,637 --------------- Stock-based compensation expense -
(17,608) (28,307) (76,146) Intangible asset amortization - (31,228)
(3,221) (25,389) --- ------- ------ ------- -------------- EMC
Information Infrastructure Non-GAAP (4) $3,028,725 $1,420,164
$258,187 $843,102 --------------- ========== ========== ========
======== ----------- VMware standalone GAAP $489,751 $96,073
$133,509 $236,933 ----------- GAAP adjustments and eliminations
(846) (145) (1,132) (3,795) ---- ---- ------ ------ ------------
VMware within EMC GAAP (5) 488,905 95,928 132,377 233,138
------------- Gain on SpringSource common stock - - - -
Acquisition- related charges - - - - --- --- --- --- ------------
VMware within EMC Adjusted (6) 488,905 95,928 132,377 233,138
------------- Stock-based compensation expense - (9,498) (34,250)
(23,769) Intangible asset amortization - (2,893) (40) (514) ---
------ --- ---- ------------ VMware within EMC Non-GAAP (7)
$488,905 $83,537 $98,087 $208,855 ------------- ======== =======
======= ======== Restructuring and Other Acquisition- Income Income
Related Operating (Expense), Before Charges Income net Taxes
------- ------ --- ----- ------------- EMC Consolidated GAAP
$34,781 $305,569 $19,901 $325,470 ------------- Gain on Data Domain
and SpringSource common stock - - (25,822) (25,822) Restructuring
and acquisition- related charges (34,781) 47,266 - 47,266 -------
------ --- ------ --------------- EMC Consolidated Adjusted (1) -
352,835 (5,921) 346,914 ---------------- Stock-based compensation
expense - 189,578 - 189,578 Intangible asset amortization - 63,285
- 63,285 --- ------ --- ------ --------------- EMC Consolidated
Non-GAAP (2) $- $605,698 $(5,921) $599,777 ---------------- ==
======== ======= ======== -------------------- EMC Information
Infrastructure GAAP $34,008 $278,880 $14,334 $293,214
-------------------- Gain on Data Domain common stock - - (19,963)
(19,963) Restructuring and acquisition- related charges (34,008)
46,493 - 46,493 ------- ------ --- ------ -------------- EMC
Information Infrastructure Adjusted (3) - 325,373 (5,629) 319,744
--------------- Stock-based compensation expense - 122,061 -
122,061 Intangible asset amortization - 59,838 - 59,838 --- ------
--- ------ -------------- EMC Information Infrastructure Non-GAAP
(4) $- $507,272 $(5,629) $501,643 --------------- == ========
======= ======== ----------- VMware standalone GAAP $- $23,236
$8,638 $31,874 ----------- GAAP adjustments and eliminations 773
3,453 (3,071) 382 --- ----- ------ --- ------------ VMware within
EMC GAAP (5) 773 26,689 5,567 32,256 ------------- Gain on
SpringSource common stock - - (5,859) (5,859) Acquisition- related
charges (773) 773 - 773 ---- --- --- --- ------------ VMware within
EMC Adjusted (6) - 27,462 (292) 27,170 ------------- Stock-based
compensation expense - 67,517 - 67,517 Intangible asset
amortization - 3,447 - 3,447 --- ----- --- ----- ------------
VMware within EMC Non-GAAP (7) $- $98,426 $(292) $98,134
------------- == ======= ===== ======= Net Net Income Income Income
Tax Net Attributable Attributable Provision Income to VMware to EMC
--------- ------ --------- ------ ------------- EMC Consolidated
GAAP $20,602 $304,868 $(6,688) $298,180 ------------- Gain on Data
Domain and SpringSource common stock - (25,822) 1,025 (24,797)
Restructuring and acquisition- related charges 14,724 32,542 (135)
32,407 ------ ------ ---- ------ --------------- EMC Consolidated
Adjusted (1) 35,326 311,588 (5,798) 305,790 ----------------
Stock-based compensation expense 47,078 142,500 (9,181) 133,319
Intangible asset amortization 21,651 41,634 (405) 41,229 ------
------ ---- ------ --------------- EMC Consolidated Non-GAAP (2)
$104,055 $495,722 $(15,384) $480,338 ---------------- ========
======== ======== ======== -------------------- EMC Information
Infrastructure GAAP $26,897 $266,317 $- $266,317
-------------------- Gain on Data Domain common stock - (19,963) -
(19,963) Restructuring and acquisition- related charges 14,724
31,769 - 31,769 ------ ------ --- ------ -------------- EMC
Information Infrastructure Adjusted (3) 41,621 278,123 - 278,123
--------------- Stock-based compensation expense 32,023 90,038 -
90,038 Intangible asset amortization 20,518 39,320 - 39,320 ------
------ --- ------ -------------- EMC Information Infrastructure
Non-GAAP (4) $94,162 $407,481 - $407,481 --------------- =======
======== === ======== ----------- VMware standalone GAAP $(6,345)
$38,219 $- $38,219 ----------- GAAP adjustments and eliminations 50
332 (6,688) (6,356) -- --- ------ ------ ------------ VMware within
EMC GAAP (5) (6,295) 38,551 (6,688) 31,863 ------------- Gain on
SpringSource common stock - (5,859) 1,025 (4,834) Acquisition-
related charges - 773 (135) 638 --- --- ---- --- ------------
VMware within EMC Adjusted (6) (6,295) 33,465 (5,798) 27,667
------------- Stock-based compensation expense 15,055 52,462
(9,181) 43,281 Intangible asset amortization 1,133 2,314 (405)
1,909 ----- ----- ---- ----- ------------ VMware within EMC
Non-GAAP (7) $9,893 $88,241 $(15,384) $72,857 ------------- ======
======= ======== ======= Net Income per Net Income per Weighted
Average Weighted Average Share, Basic Share, Diluted ------------
-------------- ---------------------- EMC Consolidated GAAP $0.147
$0.144 ---------------------- Gain on Data Domain and SpringSource
common stock $(0.012) $(0.012) Restructuring and acquisition-
related charges $0.016 $0.016 ------ ------
---------------------------- EMC Consolidated Adjusted (1) $0.151
$0.148 ----------------------------- Stock-based compensation
expense $0.066 $0.065 Intangible asset amortization $0.020 $0.020
------ ------ ---------------------------- EMC Consolidated
Non-GAAP (2) $0.237 $0.232 ----------------------------- ======
====== -------------------- EMC Information Infrastructure GAAP
$0.131 $0.129 -------------------- Gain on Data Domain common stock
$(0.010) $(0.010) Restructuring and acquisition- related charges
$0.016 $0.015 ------ ------ ----------------------------- EMC
Information Infrastructure Adjusted (3) $0.137 $0.135
------------------------------ Stock-based compensation expense
$0.044 $0.044 Intangible asset amortization $0.019 $0.019 ------
------ ----------------------------- EMC Information Infrastructure
Non-GAAP (4) $0.201 $0.197 ------------------------------ ======
====== ---------------------- VMware standalone GAAP $0.019 $0.018
---------------------- GAAP adjustments and eliminations $(0.003)
$(0.003) ------- ------- ------------------------- VMware within
EMC GAAP (5) $0.016 $0.015 -------------------------- Gain on
SpringSource common stock $(0.002) $(0.002) Acquisition-related
charges $- $- -- -- ----------------------------- VMware within EMC
Adjusted (6) $0.014 $0.013 ------------------------------
Stock-based compensation expense $0.021 $0.021 Intangible asset
amortization $0.001 $0.001 ------ ------
----------------------------- VMware within EMC Non-GAAP (7) $0.036
$0.035 ------------------------------ ====== ====== Wtd. Average
Share O/S 2,027,347 2,065,951 ========= ========= Reconciliation of
GAAP to Non-GAAP For the Three Months Ended September 30, 2009 (in
thousands, except per share amounts) Unaudited (Continued) The
following costs are included in EMC Consolidated Non-GAAP and EMC
Information Infrastructure Non-GAAP results Selling, Cost of
Research and General and Revenue Revenue Development Administrative
------- ------- ----------- -------------- Non-cash interest
expense on convertible debt (8) $- $- $- $- Transition costs (9) -
789 3,159 12,825 -- --- ----- ------ $- $789 $3,159 $12,825 == ====
====== ======= Restructuring and Other Acquisition- Income Income
Related Operating (Expense), Before Charges Income net Taxes
------- ------ --- ----- Non-cash interest expense on convertible
debt (8) $- $- $(27,483) $(27,483) Transition costs (9) - (16,773)
- (16,773) -- ------- -- ------- $- $(16,773) $(27,483) $(44,256)
== ======== ======== ======== Net Net Income Income Income Tax Net
Attributable Attributable Provision Income to VMware to EMC
--------- ------ --------- ------ Non-cash interest expense on
convertible debt (8) $(9,153) $(18,330) $- $(18,330) Transition
costs (9) (4,943) (11,830) - $(11,830) ------ ------- -- --------
$(14,096) $(30,160) $- $(30,160) ======== ======== == ======== Net
Income Net Income per Weighted per Weighted Average Share, Average
Share, Basic Diluted ----- ------- Non-cash interest expense on
convertible debt (8) $(0.009) $(0.009) Transition costs (9)
$(0.006) $(0.006) ------- ------- $(0.015) $(0.015) ======= =======
(1) Represents EMC Consolidated GAAP excluding gain on Data Domain
and SpringSource common stock and restructuring and
acquisition-related charges. (2) Represents EMC Consolidated
Adjusted excluding stock-based compensation expense and intangible
asset amortization. (3) Represents EMC Information Infrastructure
GAAP excluding gain on Data Domain common stock and restructuring
and acquisition-related charges. (4) Represents EMC Information
Infrastructure Adjusted excluding stock- based compensation expense
and intangible asset amortization. (5) Represents VMware within EMC
GAAP. (6) Represents VMware within EMC GAAP excluding gain on
SpringSource common stock and acquisition-related charges. (7)
Represents VMware within EMC excluding stock-based compensation
expense and intangible asset amortization. (8) Represents the
non-cash interest charge associated with our convertible senior
notes due 2011 and 2013 totaling $3,450 million. (9) Represents
incremental costs incurred to transform our current cost structure
to a more streamlined cost structure. Note: schedule may not add
due to rounding Reconciliation of GAAP to Non-GAAP For the Three
Months Ended September 30, 2008 (in thousands, except per share
amounts) Unaudited Selling, Cost of Research and General and
Revenue Revenue Development Administrative ------- -------
------------ -------------- ------------- EMC Consolidated GAAP
$3,715,592 $1,656,872 $410,793 $1,172,579 -------------
Restructuring charge - - - - Special income tax benefit - - - - ---
--- --- --- --------------- EMC Consolidated Adjusted (1) 3,715,592
1,656,872 410,793 1,172,579 ---------------- Stock-based
compensation expense - (21,052) (36,734) (60,475) Intangible asset
amortization - (40,737) (2,804) (28,428) --- ------- ------ -------
------------ EMC Consolidated Non-GAAP (2) $3,715,592 $1,595,083
$371,255 $1,083,676 ------------- ========== ========== ========
========== -------------------- EMC Information Infrastructure GAAP
$3,243,732 $1,582,588 $326,204 $963,428 --------------------
Restructuring charge - - - - Special income tax benefit - - - - ---
--- --- --- -------------- EMC Information Infrastructure Adjusted
(3) 3,243,732 1,582,588 326,204 963,428 --------------- Stock-based
compensation expense - (15,251) (21,184) (44,414) Intangible asset
amortization - (37,208) (2,804) (26,882) --- ------- ------ -------
------------------- EMC Information Infrastructure Non- GAAP (4)
$3,243,732 $1,530,129 $302,216 $892,132 --------------------
========== ========== ======== ======== ---------------- VMware
standalone GAAP $472,121 $74,454 $85,315 $211,332 ----------------
GAAP adjustments and eliminations (261) (170) (726) (2,181) ----
---- ---- ------ ---------- VMware within EMC GAAP (5) 471,860
74,284 84,589 209,151 ----------- Stock-based compensation expense
- (5,801) (15,550) (16,061) Intangible asset amortization - (3,529)
- (1,546) --- ------ --- ------ ------------- VMware within EMC
Non-GAAP (6) $471,860 $64,954 $69,039 $191,544 -----------------
======== ======= ======= ======== Other Income Restructuring
Operating Income, Before Charge Income net Taxes ------ ------ ---
----- ------------- EMC Consolidated GAAP $4,398 $470,950 $(1,097)
$469,853 ------------- Restructuring charge (4,398) 4,398 - 4,398
Special income tax benefit - - - - --- --- --- --- ---------------
EMC Consolidated Adjusted (1) - 475,348 (1,097) 474,251
---------------- Stock-based compensation expense - 118,261 -
118,261 Intangible asset amortization - 71,969 - 71,969 --- ------
--- ------ ------------ EMC Consolidated Non-GAAP (2) $- $665,578
$(1,097) $664,481 ------------- == ======== ======= ========
-------------------- EMC Information Infrastructure GAAP $4,398
$367,114 $(2,342) $364,772 -------------------- Restructuring
charge (4,398) 4,398 - 4,398 Special income tax benefit - - - - ---
--- --- --- -------------- EMC Information Infrastructure Adjusted
(3) - 371,512 (2,342) 369,170 --------------- Stock-based
compensation expense - 80,849 - 80,849 Intangible asset
amortization - 66,894 - 66,894 --- ------ --- ------
------------------- EMC Information Infrastructure Non- GAAP (4) $-
$519,255 $(2,342) $516,913 -------------------- == ======== =======
======== ---------------- VMware standalone GAAP $- $101,020 $2,510
$103,530 ---------------- GAAP adjustments and eliminations - 2,816
(1,265) 1,551 --- ----- ------ ----- ---------- VMware within EMC
GAAP (5) - 103,836 1,245 105,081 ----------- Stock-based
compensation expense - 37,412 - 37,412 Intangible asset
amortization - 5,075 - 5,075 --- ----- --- ----- -------------
VMware within EMC Non-GAAP (6) $- $146,323 $1,245 $147,568
----------------- == ======== ====== ======== Net Net Income Income
Income Tax Net Attributable Attributable Provision Income to VMware
to EMC --------- ------ --------- ------ ------------- EMC
Consolidated GAAP $63,309 $406,544 $(13,133) $393,411 -------------
Restructuring charge 2,990 1,408 - 1,408 Special income tax benefit
17,803 (17,803) - (17,803) ------ ------- --- -------
--------------- EMC Consolidated Adjusted (1) 84,102 390,149
(13,133) 377,016 ---------------- Stock-based compensation expense
27,630 90,631 (4,437) 86,194 Intangible asset amortization 24,725
47,244 (500) 46,744 ------ ------ ---- ------ ------------ EMC
Consolidated Non-GAAP (2) $136,457 $528,024 $(18,070) $509,954
------------- ======== ======== ======== ========
-------------------- EMC Information Infrastructure GAAP $42,785
$321,987 $- $321,987 -------------------- Restructuring charge
2,990 1,408 - 1,408 Special income tax benefit 17,803 (17,803) -
(17,803) ------ ------- --- ------- -------------- EMC Information
Infrastructure Adjusted (3) 63,578 305,592 - 305,592
--------------- Stock-based compensation expense 18,371 62,478 -
62,478 Intangible asset amortization 22,823 44,071 - 44,071 ------
------ --- ------ ------------------- EMC Information
Infrastructure Non- GAAP (4) $104,772 $412,141 $- $412,141
-------------------- ======== ======== == ======== ----------------
VMware standalone GAAP $20,242 $83,288 $- $83,288 ----------------
GAAP adjustments and eliminations 282 1,269 (13,133) (11,864) ---
----- ------- ------- ---------- VMware within EMC GAAP (5) 20,524
84,557 (13,133) 71,424 ----------- Stock-based compensation expense
9,259 28,153 (4,437) 23,716 Intangible asset amortization 1,902
3,173 (500) 2,673 ----- ----- ---- ----- ------------- VMware
within EMC Non-GAAP (6) $31,685 $115,883 $(18,070) $97,813
----------------- ======= ======== ======== ======= Net Income Net
Income per Weighted per Weighted Average Share, Average Share,
Basic Diluted ----- ------- ---------------------- EMC Consolidated
GAAP $0.192 $0.189 ---------------------- Restructuring charge
$0.001 $0.001 Special income tax benefit $(0.009) $(0.009) -------
------- ---------------------------- EMC Consolidated Adjusted (1)
$0.184 $0.181 ----------------------------- Stock-based
compensation expense $0.042 $0.041 Intangible asset amortization
$0.023 $0.023 ------ ------ ---------------------------- EMC
Consolidated Non-GAAP (2) $0.249 $0.245
----------------------------- ====== ====== --------------------
EMC Information Infrastructure GAAP $0.157 $0.155
-------------------- Restructuring charge $0.001 $0.001 Special
income tax benefit $(0.009) $(0.009) ------- -------
----------------------------- EMC Information Infrastructure
Adjusted (3) $0.149 $0.147 ------------------------------
Stock-based compensation expense $0.030 $0.030 Intangible asset
amortization $0.022 $0.021 ------ ------
----------------------------- EMC Information Infrastructure
Non-GAAP (4) $0.201 $0.198 ------------------------------ ======
====== ---------------------- VMware standalone GAAP $0.041 $0.040
---------------------- GAAP adjustments and eliminations $(0.006)
$(0.006) ------- ------- ------------------------- VMware within
EMC GAAP (5) $0.035 $0.034 -------------------------- Stock-based
compensation expense $0.012 $0.011 Intangible asset amortization
$0.001 $0.001 ------ ------ --------------------- VMware within EMC
Non- GAAP (6) $0.048 $0.047 ---------------------- ====== ======
Wtd. Average Share O/S 2,048,594 2,077,474 ========= =========
Reconciliation of GAAP to Non-GAAP For the Three Months Ended
September 30, 2008 (in thousands, except per share amounts)
Unaudited (Continued) The following costs are included in EMC
Consolidated Non-GAAP and EMC Information Infrastructure Non-GAAP
results Selling, Cost of Research and General and Revenue Revenue
Development Administrative ------- ------- -----------
-------------- Non-cash interest expense on convertible debt (7) $-
$- $- $- Other Income Restructuring Operating Income, Before Charge
Income net Taxes ------ ------ --- ----- Non-cash interest expense
on convertible debt (7) $- $- $(26,009) $(26,009) Net Net Income
Income Income Tax Net Attributable Attributable Provision Income to
VMware to EMC --------- ------ --------- ------ Non-cash interest
expense on convertible debt (7) $(8,143) $(17,866) $- $(17,866) Net
Income Net Income per Weighted per Weighted Average Share, Average
Share, Basic Diluted ----- ------- Non-cash interest expense on
convertible debt (7) $(0.009) $(0.009) (1) Represents EMC
Consolidated GAAP excluding restructuring charge and special income
tax benefit. (2) Represents EMC Consolidated Adjusted excluding
stock-based compensation expense and intangible asset amortization.
(3) Represents EMC Information Infrastructure GAAP excluding
restructuring charge and special income tax benefit. (4) Represents
EMC Information Infrastructure Adjusted less stock-based
compensation expense and intangible asset amortization. (5)
Represents VMware within EMC GAAP. (6) Represents VMware within EMC
excluding stock-based compensation expense and intangible asset
amortization. (7) Represents the non-cash interest charge
associated with our convertible senior notes due 2011 and 2013
totaling $3,450 million. Note: schedule may not add due to rounding
EMC CORPORATION Consolidated Balance Sheets (in thousands, except
per share amounts) Unaudited September 30, December 31, 2009 2008
---- ---- (As Adjusted) ASSETS Current assets: Cash and cash
equivalents $5,518,359 $5,843,685 Short-term investments 617,535
963,292 Accounts and notes receivable, less allowance for doubtful
accounts of $50,500 and $48,080 1,864,121 2,252,640 Inventories
810,925 842,803 Deferred income taxes 486,463 477,101 Other current
assets 331,162 285,508 ------- ------- Total current assets
9,628,565 10,665,029 Long-term investments 2,291,672 2,370,493
Property, plant and equipment, net 2,218,632 2,223,007 Intangible
assets, net 1,245,447 795,616 Goodwill, net 9,222,725 7,046,799
Other assets, net 944,703 773,631 ------- ------- Total assets
$25,551,744 $23,874,575 =========== =========== LIABILITIES &
SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $819,204
$757,405 Accrued expenses 1,864,892 1,901,884 Securities lending
payable - 412,321 Income taxes payable 13,378 136,802 Deferred
revenue 2,220,602 2,010,024 --------- --------- Total current
liabilities 4,918,076 5,218,436 Income taxes payable 241,506
255,182 Deferred revenue 1,257,876 1,182,360 Deferred income taxes
582,633 389,787 Long-term convertible debt 3,072,505 2,991,943
Other liabilities 212,880 180,917 ------- ------- Total Liabilities
10,285,476 10,218,625 Commitments and contingencies EMC
Corporation's Shareholders' equity: Preferred stock, par value
$.01; authorized 25,000 shares, none outstanding - - Common stock,
par value $.01; authorized 6,000,000 shares; issued 2,039,822 and
2,012,938 shares 20,398 20,129 Additional paid-in capital 3,536,678
2,817,054 Retained earnings 11,368,693 10,671,212 Accumulated other
comprehensive loss (118,369) (179,952) -------- -------- Total EMC
Corporation's shareholders' equity 14,807,400 13,328,443
Non-controlling interest in VMware, Inc. 458,868 327,507 -------
------- Total shareholders' equity 15,266,268 13,655,950 ----------
---------- Total liabilities and shareholders' equity $25,551,744
$23,874,575 =========== =========== EMC CORPORATION Consolidated
Statements of Cash Flows (in thousands) Unaudited Nine Months Ended
----------------- September 30, September 30, 2009 2008
------------- ------------- (As Adjusted) Cash flows from operating
activities: Cash received from customers $10,600,727 $11,437,259
Cash paid to suppliers and employees (8,098,216) (8,842,798)
Dividends and interest received 95,024 192,651 Interest paid
(39,550) (55,270) Income taxes paid (232,257) (233,500) --------
-------- Net cash provided by operating activities 2,325,728
2,498,342 --------- --------- Cash flows from investing activities:
Additions to property, plant and equipment (277,589) (490,066)
Capitalized software development costs (222,432) (209,441)
Purchases of short and long-term available for sale securities
(4,224,872) (2,200,508) Sales and maturities of short and long-term
available for sale securities 4,880,173 2,766,087 Acquisitions, net
of cash acquired (2,664,141) (678,218) Increase in strategic and
other related investments (152,667) (4,410) -------- ------ Net
cash used in investing activities (2,661,528) (816,556) ----------
-------- Cash flows from financing activities: Issuance of EMC's
common stock from the exercise of stock options 226,276 176,774
Issuance of VMware's common stock from the exercise of stock
options 166,523 167,417 Repayments on securities lending (412,321)
- Repurchase of EMC's common stock - (1,119,986) Excess tax
benefits from stock-based compensation 25,355 96,046 Payment of
short and long-term obligations (19,836) (5,678) Proceeds from
short and long- term obligations 1,615 2,125 ----- ----- Net cash
used in financing activities (12,388) (683,302) ------- --------
Effect of exchange rate changes on cash 22,862 (6,995) ------
------ Net (decrease) increase in cash and cash equivalents
(325,326) 991,489 Cash and cash equivalents at beginning of period
5,843,685 4,482,211 --------- --------- Cash and cash equivalents
at end of period $5,518,359 $5,473,700 ========== ==========
Reconciliation of net income to net cash provided by operating
activities: Net income $720,829 $1,032,189 Adjustments to reconcile
net income to net cash provided by operating activities:
Depreciation and amortization 791,043 785,871 Non-cash interest
expense on convertible debt 80,562 76,286 Non-cash restructuring
and in-process research and development 22,138 80,705 Stock-based
compensation expense 420,947 357,668 Increase in provision for
doubtful accounts 15,160 16,615 Deferred income taxes, net 8,101
588 Excess tax benefits from stock-based compensation (25,355)
(96,046) Gain on Data Domain and SpringSource common stock (25,822)
- Other (13,567) (4,135) Changes in assets and liabilities, net of
acquisitions: Accounts and notes receivable 455,116 270,942
Inventories (61,265) 4,039 Other assets (35,483) (68,180) Accounts
payable 66,868 14,096 Accrued expenses (175,982) (286,691) Income
taxes payable (143,896) 4,326 Deferred revenue 204,707 290,177
Other liabilities 21,627 19,892 ------ ------ Net cash provided by
operating activities $2,325,728 $2,498,342 ========== ==========
EMC Corporation Reconciliation of Cash Flow from Operations to Free
Cash Flow (in thousands) Unaudited Three Months Nine Months Ended
Ended ------------ ----------- September 30, September 30,
September 30, September 30, 2009 2008 2009 2008 ---- ---- ---- ----
EMC Consolidated Cash flow from Operations $887,649 $961,473
$2,325,728 $2,498,342 Capital Expenditures (72,077) (163,617)
(277,589) (490,066) Capitalized Software (70,658) (90,593)
(222,432) (209,441) ------- ------- -------- -------- Free Cash
Flow $744,914 $707,263 $1,825,707 $1,798,835 ======== ========
========== ========== VMware within EMC Cash flow from Operations
$196,516 $238,544 $662,810 $471,301 Capital Expenditures (18,455)
(32,042) (66,104) (118,385) Capitalized Software (8,844) (37,961)
(53,524) (53,895) ------ ------- ------- ------- Free Cash Flow
$169,217 $168,541 $543,182 $299,021 ======== ======== ========
======== EMC Information Infrastructure Cash flow from Operations
$691,133 $722,929 $1,662,918 $2,027,041 Capital Expenditures
(53,622) (131,575) (211,485) (371,681) Capitalized Software
(61,814) (52,632) (168,908) (155,546) ------- ------- --------
-------- Free Cash Flow $575,697 $538,722 $1,282,525 $1,499,814
======== ======== ========== ========== Free cash flow for the
three and nine months ended September 30, 2009 includes
intercompany tax payments of $8.0 million and $93.4 million,
respectively, from EMC Information Infrastructure to VMware within
EMC. EMC Corporation Reconciliation of GAAP to Non-GAAP (in
thousands) Unaudited Income Before Tax Tax Tax Provision Rate ---
--------- ---- EMC Consolidated GAAP $325,470 $20,602 6%
Stock-based compensation expense 189,578 47,078 25% Intangible
asset amortization 63,285 21,651 34% Restructuring and acquisition-
related charges 47,266 14,724 31% Gain on Data Domain and
SpringSource common stock (25,822) - 0% ------- --- EMC
Consolidated Non-GAAP $599,777 $104,055 17% ======== ======== EMC
Corporation Reconciliation of EMC Information Infrastructure Gross
Margin GAAP to Non-GAAP (in thousands) Unaudited Q1 '07 Q2 '07 Q3
'07 Q4 '07 ------ ------ ------ ------ EMC Information
Infrastructure Gross Margin GAAP $1,356,449 $1,452,198 $1,526,004
$1,774,212 Less: Stock-based compensation expense 13,028 12,456
12,652 10,557 Intangible asset amortization 23,792 23,970 25,003
26,011 Acquisition- related charges - - - - --- --- --- --- EMC
Information Infrastructure Gross Margin Non-GAAP $1,393,269
$1,488,624 $1,563,659 $1,810,780 ========== ========== ==========
========== Revenues $2,718,987 $2,826,575 $2,945,463 $3,418,367 %
GAAP 49.9% 51.4% 51.8% 51.9% % Non-GAAP 51.2% 52.7% 53.1% 53.0% Q1
'08 Q2 '08 Q3 '08 Q4 '08 ------ ------ ------ ------ EMC
Information Infrastructure Gross Margin GAAP $1,548,285 $1,656,440
$1,661,144 $1,783,145 Less: Stock-based compensation 12,136 12,486
15,251 16,665 Intangible asset amortization 35,888 36,974 37,208
37,253 Acquisition-related charges - - - - --- --- --- --- EMC
Information Infrastructure Gross Margin Non-GAAP $1,596,309
$1,705,900 $1,713,603 $1,837,063 ========== ========== ==========
========== Revenues $3,031,889 $3,221,299 $3,243,732 $3,502,307 %
GAAP 51.1% 51.4% 51.2% 50.9% % Non-GAAP 52.7% 53.0% 52.8% 52.5% Q1
'09 Q2 '09 Q3 '09 ------ ------ ------ EMC Information
Infrastructure Gross Margin GAAP $1,287,536 $1,369,676 $1,547,240
Less: Stock-based compensation 14,233 15,224 17,608 Intangible
asset amortization 27,853 27,778 31,228 Acquisition-related charges
- - 12,485 --- --- ------ EMC Information Infrastructure Gross
Margin Non-GAAP $1,329,622 $1,412,678 $1,608,561 ==========
========== ========== Revenues $2,680,361 $2,802,239 $3,028,725 %
GAAP 48.0% 48.9% 51.1% % Non-GAAP 49.6% 50.4% 53.1% EMC Corporation
Reconciliation of EMC Information Infrastructure Operating Margin
GAAP to Non-GAAP (In thousands) Unaudited Q1 '07 Q2 '07 Q3 '07 Q4
'07 ------ ------ ------ ------ EMC Information Infrastructure
Operating Margin GAAP $308,372 $346,018 $391,816 $479,218 Less:
Restructuring and acquisition-related charges - - - 34,901
Stock-based compensation expense 71,703 71,233 68,896 61,627
Intangible asset amortization 41,958 42,308 44,280 50,510 ------
------ ------ ------ EMC Information Infrastructure Operating
Margin Non-GAAP $422,033 $459,559 $504,992 $626,256 ========
======== ======== ======== Revenues $2,718,987 $2,826,575
$2,945,463 $3,418,367 % GAAP 11.3% 12.2% 13.3% 14.0% % Non-GAAP
15.5% 16.3% 17.1% 18.3% Q1 '08 Q2 '08 Q3 '08 Q4 '08 ------ ------
------ ------ EMC Information Infrastructure Operating Margin GAAP
$263,370 $391,523 $367,114 $228,453 Less: Restructuring and
acquisition-related charges 79,204 - 4,398 240,694 Stock-based
compensation 74,460 75,424 80,849 94,824 Intangible asset
amortization 62,149 65,038 66,894 68,263 ------ ------ ------
------ EMC Information Infrastructure Operating Margin Non-GAAP
$479,183 $531,985 $519,255 $632,234 ======== ======== ========
======== Revenues $3,031,889 $3,221,299 $3,243,732 $3,502,307 %
GAAP 8.7% 12.2% 11.3% 6.5% % Non-GAAP 15.8% 16.5% 16.0% 18.1% Q1
'09 Q2 '09 Q3 '09 ------ ------ ------ EMC Information
Infrastructure Operating Margin GAAP $170,216 $220,545 $278,880
Less: Restructuring and acquisition-related charges 15,572 33,234
46,493 Stock-based compensation 60,949 67,156 122,061 Intangible
asset amortization 55,879 56,143 59,838 ------ ------ ------ EMC
Information Infrastructure Operating Margin Non-GAAP $302,616
$377,078 $507,272 ======== ======== ======== Revenues $2,680,361
$2,802,239 $3,028,725 % GAAP 6.4% 7.9% 9.2% % Non-GAAP 11.3% 13.5%
16.7% EMC Corporation Supplemental Revenue Analysis (in thousands)
Unaudited Supplemental Revenue Data Q1 2008 Q2 2008 Q3 2008 Q4 2008
YTD 2008 ------- ------- ------- ------- -------- Storage: Product
Revenue $1,903,639 $2,018,026 $2,056,498 $2,285,366 $8,263,529
Services Revenue 808,190 855,221 851,825 853,539 3,368,775
---------- ---------- ---------- ---------- ----------- Total
Storage Revenue $2,711,829 $2,873,247 $2,908,323 $3,138,905
$11,632,304 ========== ========== ========== ========== ===========
Content Management and Archiving: Product Revenue $61,128 $73,415
$62,576 $81,054 $278,173 Services Revenue 124,075 130,591 125,493
127,316 507,475 -------- -------- -------- -------- -------- Total
Content Management and Archiving Revenue $185,203 $204,006 $188,069
$208,370 $785,648 ======== ======== ======== ======== ========
Security: Product Revenue $81,683 $89,067 $88,779 $95,534 $355,063
Services Revenue 53,174 54,979 58,561 59,498 226,212 --------
-------- -------- -------- -------- Total Security Revenue $134,857
$144,046 $147,340 $155,032 $581,275 ======== ======== ========
======== ======== EMC Information Infrastructure: Product Revenue
$2,046,450 $2,180,508 $2,207,853 $2,461,954 $8,896,765 Services
Revenue 985,439 1,040,791 1,035,879 1,040,353 4,102,462 ----------
---------- ---------- ---------- ----------- Total EMC Information
Infrastructure Revenue $3,031,889 $3,221,299 $3,243,732 $3,502,307
$12,999,227 ========== ========== ========== ========== ===========
VMware: Product Revenue $293,980 $281,143 $285,088 $314,840
$1,175,051 Services Revenue 144,190 171,432 186,772 199,491 701,885
-------- -------- -------- -------- ---------- Total VMware Revenue
$438,170 $452,575 $471,860 $514,331 $1,876,936 ======== ========
======== ======== ========== Consolidated Revenues Product Revenue
$2,340,430 $2,461,651 $2,492,941 $2,776,794 $10,071,816 Services
Revenue 1,129,629 1,212,223 1,222,651 1,239,844 4,804,347
---------- ---------- ---------- ---------- ----------- Total
Consolidated Revenues $3,470,059 $3,673,874 $3,715,592 $4,016,638
$14,876,163 ========== ========== ========== ========== ===========
Percentage impact to EMC revenue growth rate due to changes in
exchange rates from the prior year 2.3% 2.7% 1.2% (2.3)% 0.8% Q1
2009 Q2 2009 Q3 2009 ----------- ----------- ----------- Storage:
Product Revenue $1,572,408 $1,632,309 $1,818,230 Services Revenue
790,932 842,558 880,807 ---------- ---------- ---------- Total
Storage Revenue $2,363,340 $2,474,867 $2,699,037 ==========
========== ========== Content Management and Archiving: Product
Revenue $58,710 $60,792 $58,209 Services Revenue 115,605 119,445
118,979 -------- -------- -------- Total Content Management and
Archiving Revenue $174,315 $180,237 $177,188 ======== ========
======== Security: Product Revenue $80,671 $84,080 $84,080 Services
Revenue 62,035 63,055 68,420 -------- -------- -------- Total
Security Revenue $142,706 $147,135 $152,500 ======== ========
======== EMC Information Infrastructure: Product Revenue $1,711,789
$1,777,181 $1,960,519 Services Revenue 968,572 1,025,058 1,068,206
---------- ---------- ---------- Total EMC Information
Infrastructure Revenue $2,680,361 $2,802,239 $3,028,725 ==========
========== ========== VMware: Product Revenue $257,331 $228,089
$240,062 Services Revenue 213,070 227,024 248,843 -------- --------
-------- Total VMware Revenue $470,401 $455,113 $488,905 ========
======== ======== Consolidated Revenues Product Revenue $1,969,120
$2,005,270 $2,200,581 Services Revenue 1,181,642 1,252,082
1,317,049 ---------- ---------- ---------- Total Consolidated
Revenues $3,150,762 $3,257,352 $3,517,630 ========== ==========
========== Percentage impact to EMC revenue growth rate due to
changes in exchange rates from the prior year (3.5)% (3.7)% (1.3)%
DATASOURCE: EMC Corporation CONTACT: Dave Farmer, +1-508-293-7206,
Web Site: http://www.emc.com/
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