Stay on Top of Recent M&A's with Breaking News Stories

Mergers & Acquisitions on Ulitzer

Subscribe to Mergers & Acquisitions on Ulitzer: eMailAlertsEmail Alerts newslettersWeekly Newsletters
Get Mergers & Acquisitions on Ulitzer: homepageHomepage mobileMobile rssRSS facebookFacebook twitterTwitter linkedinLinkedIn


                               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)%



 

 

 

 

SOURCE EMC Corporation

More Stories By Yeshim Deniz

News Desk compiles and publishes breaking news stories, press releases and latest news articles as they happen.