Exhibit 99.1
508-293-6961
lesley.ogrodnick@emc.com
EMC Reports Record Revenue and Profit for
Q4 and Full-Year 2012
|
| |
| | |
Highlights:
|
| l | Q4 revenue growth accelerates to 8% year over year
|
| l | Full-year revenue growth of 9% year over year
|
| l | Record Q4 and full-year net income and EPS
|
| l | Record full-year operating cash flow of $6.3 billion and free cash flow of $5.0 billion |
HOPKINTON, Mass. - January 29, 2013 - EMC Corporation (NYSE:EMC) today reported record financial results for both the fourth quarter and full year 2012. For the fourth quarter, the company achieved record quarterly consolidated revenue, net income and EPS on a GAAP and non-GAAP basis. Full-year 2012 results were highlighted by record revenue, net income, EPS, operating cash flow and free cash flow. The results were also highlighted by record quarterly and full-year gross margins on a GAAP and non-GAAP basis.
Fourth-quarter revenue was $6.0 billion, an increase of 8% compared with the year-ago quarter. Fourth-quarter GAAP net income attributable to EMC increased 5% year over year to $870 million. Fourth-quarter GAAP earnings per weighted average diluted share increased 3% year over year to $0.39. Non-GAAP1 net income attributable to EMC for the fourth quarter was $1.2 billion, an increase of 12% compared with the year-ago quarter. Fourth-quarter non-GAAP1 earnings per weighted average diluted share were $0.54, an increase of 10% year over year.
Full-year 2012 revenue was $21.7 billion, an increase of 9% year over year. GAAP net income attributable to EMC for 2012 increased 11% year over year to $2.7 billion, and GAAP earnings per weighted average diluted share were $1.23, up 12% year over year. Non-GAAP2 net income attributable to EMC for 2012 was $3.8 billion, an increase of 11% year over year, and non-GAAP2 earnings per weighted average diluted share were $1.70, an increase of 13% year over year. The company's fourth-quarter and full-year non-GAAP results include the tax benefit related to the U.S. research and development tax credit for 2012.3
For 2012, EMC generated operating cash flow of $6.3 billion and free cash flow4 of $5.0 billion, increases of 10% and 14% year over year, respectively. For the quarter and full-year, EMC expanded GAAP and non-GAAP gross margin and operating margin percentages on a year-over-year basis. The company ended the year with $11.4 billion in cash and investments.
Joe Tucci, EMC Chairman and Chief Executive Officer, said, “EMC achieved its first $6 billion quarter for revenue, capping off a record breaking 2012. Driving our strong results is the strength of our leading-edge products and services, our solid operational and financial model, and consistent execution against our strategy. EMC remains squarely at the center of the most disruptive and opportunity-rich shift in IT history, propelled by the benefits of cloud computing, Big Data and trusted IT. These high-priority
IT spending areas are core to our strategic focus and represent market segments where EMC has established leadership positions and competitive advantage.”
David Goulden, EMC President and Chief Operating Officer, said, “With outstanding execution by EMC employees worldwide, we once again delivered our triple play in 2012 - simultaneously taking market share, reinvesting for growth and delivering improved earnings. EMC's broad, best-of-breed portfolio of products and services, which offer customers greater efficiency, control and choice as they transform both their IT and their businesses, is a key and differentiating element of our continued financial success. We believe EMC is well positioned to expand our leadership in the market segments we serve, deliver on our triple play again in 2013, and leverage our strong balance sheet to invest heavily in leading edge technology for cloud computing, Big Data and trusted IT.”
Fourth-Quarter Highlights
In the fourth quarter, revenue from EMC's networked storage platforms portfolio5, which includes EMC's high-end and mid-tier storage platform products, grew 6% year over year. Revenue from EMC's high-end Symmetrix storage product portfolio increased 6% compared with the year-ago quarter. Revenue from EMC's mid-tier storage products6 portfolio increased 5% year over year, led by continued strong revenue growth of EMC's Isilon scale-out NAS products. The company also saw continued strong demand for its Flash-based caching and Flash-based storage solutions.
Additional fourth-quarter highlights included strong year-over-year revenue growth for EMC's Greenplum product portfolio. VMware (NYSE: VMW), the global leader in virtualization and cloud infrastructure, grew revenue 22% year over year. EMC's VSPEX reference architecture solutions continued to gain momentum with rapid adoption and increasing popularity among customers and partners who have sold more than 1,300 VSPEX solutions since their launch in April 2012. VCE, the leader in converged cloud infrastructure systems, continued to gain traction and exceed company expectations as demand for Vblock systems showed strong year-over-year growth. Finally, EMC continued to expand its Service Provider Program with fourth-quarter revenue from service provider partners growing more than 70% year over year.
EMC's consolidated fourth-quarter revenue from the United States increased 5% year over year to $3.1 billion, representing 52% of consolidated fourth-quarter revenue. Revenue from EMC's business operations outside of the United States increased 12% year over year to $2.9 billion and represented 48% of consolidated fourth-quarter revenue. Within this, revenue from EMC's Europe, Middle East and Africa region grew 11% year over year, and revenue from EMC's Asia Pacific and Japan region increased 19% year over year.
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 made by EMC regarding 2013 financial results.
All dollar amounts and percentages set forth below should be considered to be approximations.
| |
| • | Consolidated revenues are expected to be $23.5 billion for 2013. |
| |
| • | Consolidated GAAP operating income is expected to be 18% of revenues for 2013 and consolidated non-GAAP operating income is expected to be 25.5% of revenues for 2013. Excluded from consolidated non-GAAP operating income are stock-based compensation expense, intangible asset amortization, restructuring and acquisition-related charges and the amortization of VMware's capitalized software from prior periods which account for 4.7%, 1.7%, 1.0% and 0.1% of revenues, respectively. |
| |
| • | Total consolidated GAAP and non-GAAP non-operating expense, which includes investment income, interest expense and other income and expense, is expected to be $280 million in 2013. |
| |
| • | Consolidated GAAP net income attributable to EMC is expected to be $3.0 billion in 2013 and consolidated non-GAAP net income attributable to EMC is expected to be $4.1 billion in 2013. Excluded from consolidated non-GAAP net income attributable to EMC are stock-based compensation expense, intangible asset amortization, restructuring and acquisition-related charges, the amortization of VMware's capitalized software from prior periods and the benefit of the 2012 R&D tax credit which account for $730 million, $260 million, $160 million, $15 million and ($60 million), respectively. |
| |
| • | Consolidated GAAP earnings per weighted average diluted share are expected to be $1.35 for 2013 and consolidated non-GAAP earnings per weighted average diluted share are expected to be $1.85 for 2013. Excluded from consolidated non-GAAP earnings per weighted average diluted share are stock-based compensation expense, intangible asset amortization, restructuring and acquisition-related charges, the amortization of VMware's capitalized software from prior periods and the benefit of the 2012 R&D tax credit which account for $0.33, $0.12, $0.07, $0.01 and ($0.03) per weighted average diluted share, respectively. |
| |
| • | The consolidated GAAP income tax rate is expected to be 20.5% for 2013. Excluding the tax impact of stock-based compensation expense, intangible asset amortization, restructuring and acquisition-related charges, the amortization of VMware's capitalized software from prior periods, and the benefit of the 2012 R&D tax credit which collectively impact the tax rate by 3%, the consolidated non-GAAP income tax rate is expected to be 23.5% for 2013. |
| |
| • | GAAP net income attributable to the non-controlling interest in VMware is expected to be $160 million and non-GAAP net income attributable to the non-controlling interest in VMware is expected to be $280 million for 2013. Excluded from non-GAAP net income attributable to the non-controlling interest in VMware are stock-based compensation expense, intangible asset amortization, restructuring and acquisition-related charges, the amortization of VMware's capitalized software from prior periods, and the benefit of the 2012 R&D tax credit which account for $89 million, $19 million, $14 million, $4 million and ($6 million), respectively. The incremental dilution attributable to the shares of VMware held by EMC is expected to be $15 million for 2013. |
| |
| • | The weighted average outstanding diluted shares are expected to be 2.2 billion for 2013. |
| |
| • | EMC expects to repurchase $1 billion of the company's common stock in 2013. |
Supporting Resources
| |
| • | EMC will host its 2012 fourth-quarter earnings conference call today at 8:30 a.m. ET, which will be available via 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 fourth-quarter financial results. |
About EMC
EMC Corporation is a global leader in enabling businesses and service providers to transform their operations and deliver IT as a service. Fundamental to this transformation is cloud computing. Through innovative products and services, EMC accelerates the journey to cloud computing, helping IT departments to store, manage, protect and analyze their most valuable asset - information - in a more agile, trusted and cost-efficient way. Additional information about EMC can be found at www.EMC.com.
# # #
1 Items excluded from the non-GAAP results for the fourth quarters of 2012 and 2011 are amounts relating to stock-based compensation expense, intangible asset amortization, restructuring and acquisition-related charges, the amortization of VMware's capitalized software from prior periods and special tax charges. The benefit of the U.S. research and development (“R&D”) tax credit for 2012 is included in the non-GAAP results for the fourth quarter 2012. See attached schedules for GAAP to non-GAAP reconciliations.
2 Items excluded from the non-GAAP results for the full years 2012 and 2011 are amounts relating to stock-based compensation expense, intangible asset amortization, restructuring and acquisition related charges, the amortization of VMware's capitalized software from prior periods, an RSA special charge (release), a loss on interest rate swaps, a gain on strategic investment and special tax charges. The benefit of the R&D tax credit for 2012 is included in the non-GAAP results for the full year 2012. See attached schedules for GAAP to non-GAAP reconciliations.
3 As a result of the fact that the American Taxpayer Relief Act of 2012 was not enacted until 2013, the U.S. R&D tax credit for 2012 cannot be recognized in EMC's 2012 GAAP results but is included in the non-GAAP results for the fourth quarter and full year 2012. See attached schedules for GAAP to non-GAAP reconciliations.
4 Free cash flow is a non-GAAP financial measure which is defined as net cash provided by operating activities, less additions to property, plant and equipment and capitalized software development costs. See attached schedules for a reconciliation of net cash provided by operating activities to free cash flow for the twelve months ended December 31, 2012.
5 EMC's networked storage platforms include EMC Symmetrix, EMC VNX, EMC CLARiiON, EMC Celerra, EMC Centera, EMC Data Domain, EMC Isilon, EMC Avamar and EMC Atmos hardware and software products.
6 EMC's mid-tier storage products include EMC VNX, EMC CLARiiON, EMC Celerra, EMC Centera, EMC Data Domain, EMC Isilon, EMC Avamar and EMC Atmos hardware and software products.
EMC, Atmos, Avamar, Celerra, Centera, CLARiiON, Data Domain, Greenplum, Isilon, RSA, Symmetrix, VMAX, VSPEX, Vblock, and VNX are either registered trademarks or trademarks of EMC Corporation in the United States and/or other countries. VMware is a registered trademark or trademark of VMware, Inc. in the United States and/or other countries. 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) the relative and varying rates of product price and component cost declines and the volume and mixture of product and services revenues; (iv) competitive factors, including but not limited to pricing pressures and new product introductions; (v) component and product quality and availability; (vi) fluctuations in VMware, Inc.'s operating results and risks associated with trading of VMware stock; (vii) the transition to new products, the uncertainty of customer
acceptance of new product offerings and rapid technological and market change; (viii) 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; (ix) the ability to attract and retain highly qualified employees; (x) insufficient, excess or obsolete inventory; (xi) fluctuating currency exchange rates; (xii) threats and other disruptions to our secure data centers or networks; (xiii) our ability to protect our proprietary technology; (xiv) war or acts of terrorism; 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, the accompanying schedules and the additional content that is available on EMC's website contain 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," (a) certain items noted on each such specific schedule (including, where noted, amounts relating to stock-based compensation expense, intangible asset amortization, restructuring and acquisition-related charges, the amortization of VMware's capitalized software from prior periods beginning in 2012, an RSA special charge, a loss on interest rate swaps, a gain on strategic investment and special tax charges) are excluded from the non-GAAP financial measures and (b) the benefit of the R&D tax credit for 2012 is included in 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 includes the benefit of the R&D tax credit in, 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 | | Twelve Months Ended |
| | | December 31, |
| | December 31, | | December 31, | | December 31, |
| | | 2012 | | 2011 | | 2012 | | 2011 |
| Revenues: | | | | | | | |
| | Product sales | $ | 3,728,488 |
| | $ | 3,541,132 |
| | $ | 13,060,523 |
| | $ | 12,590,742 |
|
| | Services | 2,301,467 |
| | 2,033,299 |
| | 8,653,379 |
| | 7,416,846 |
|
| | | 6,029,955 |
| | 5,574,431 |
| | 21,713,902 |
| | 20,007,588 |
|
| Cost and expenses: | | | | | | | |
| | Cost of product sales | 1,409,530 |
| | 1,402,733 |
| | 5,258,164 |
| | 5,319,761 |
|
| | Cost of services | 730,211 |
| | 648,359 |
| | 2,817,375 |
| | 2,518,885 |
|
| | Research and development | 662,956 |
| | 560,767 |
| | 2,559,612 |
| | 2,149,787 |
|
| | Selling, general and administrative | 1,928,646 |
| | 1,794,848 |
| | 7,004,287 |
| | 6,479,382 |
|
| | Restructuring and acquisition-related charges | 30,030 |
| | 28,923 |
| | 110,590 |
| | 97,334 |
|
| Operating income | 1,268,582 |
| | 1,138,801 |
| | 3,963,874 |
| | 3,442,439 |
|
| | | | | | | | |
| Non-operating income (expense): | | | | | | | |
| | Investment income | 29,713 |
| | 22,742 |
| | 114,993 |
| | 129,248 |
|
| | Interest expense | (20,696 | ) | | (34,689 | ) | | (78,903 | ) | | (170,466 | ) |
| | Other income (expense), net | (38,645 | ) | | (79,335 | ) | | (196,349 | ) | | (151,951 | ) |
| Total non-operating income (expense) | (29,628 | ) | | (91,282 | ) | | (160,259 | ) | | (193,169 | ) |
| Income before provision for income taxes | 1,238,954 |
| | 1,047,519 |
| | 3,803,615 |
| | 3,249,270 |
|
| Income tax provision | 326,998 |
| | 174,929 |
| | 917,598 |
| | 640,385 |
|
| Net income | 911,956 |
| | 872,590 |
| | 2,886,017 |
| | 2,608,885 |
|
| Less: Net income attributable to the non-controlling interest in VMware, Inc. | (42,037 | ) | | (40,544 | ) | | (153,404 | ) | | (147,548 | ) |
| Net income attributable to EMC Corporation | $ | 869,919 |
| | $ | 832,046 |
| | $ | 2,732,613 |
| | $ | 2,461,337 |
|
| | | | | | | | |
| Net income per weighted average share, basic attributable to EMC Corporation common shareholders | $ | 0.41 |
| | $ | 0.41 |
| | $ | 1.31 |
| | $ | 1.20 |
|
| | | | | | | | |
| Net income per weighted average share, diluted attributable to EMC Corporation common shareholders | $ | 0.39 |
| | $ | 0.38 |
| | $ | 1.23 |
| | $ | 1.10 |
|
| | | | | | | | |
| Weighted average shares, basic | 2,104,869 |
| | 2,041,587 |
| | 2,093,372 |
| | 2,055,536 |
|
| | | | | | | | |
| Weighted average shares, diluted | 2,201,031 |
| | 2,182,933 |
| | 2,205,639 |
| | 2,229,113 |
|
EMC CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
(unaudited)
|
| | | | | | | | |
| | | December 31, | | December 31, |
| | | 2012 | | 2011 |
| ASSETS | | | |
| Current assets: | | | |
| | Cash and cash equivalents | $ | 4,754,060 |
| | $ | 4,531,036 |
|
| | Short-term investments | 1,413,060 |
| | 1,786,987 |
|
| | Accounts and notes receivable, less allowance | | | |
| | for doubtful accounts of $68,465 and $61,804 | 3,433,389 |
| | 2,937,499 |
|
| | Inventories | 1,201,020 |
| | 1,009,968 |
|
| | Deferred income taxes | 941,775 |
| | 852,848 |
|
| | Other current assets | 465,305 |
| | 583,885 |
|
| Total current assets | 12,208,609 |
| | 11,702,223 |
|
| Long-term investments | 5,228,608 |
| | 4,525,106 |
|
| Property, plant and equipment, net | 3,144,548 |
| | 2,833,149 |
|
| Intangible assets, net | 2,035,340 |
| | 1,766,115 |
|
| Goodwill | 13,839,700 |
| | 12,154,970 |
|
| Other assets, net | 1,611,880 |
| | 1,487,704 |
|
| | Total assets | $ | 38,068,685 |
| | $ | 34,469,267 |
|
| | | | | |
| LIABILITIES & SHAREHOLDERS' EQUITY | | | |
| Current liabilities: | | | |
| | Accounts payable | $ | 1,040,664 |
| | $ | 1,101,659 |
|
| | Accrued expenses | 2,522,059 |
| | 2,354,979 |
|
| | Notes converted and payable | — |
| | 1,699,832 |
|
| | Income taxes payable | 514,302 |
| | 155,909 |
|
| | Convertible debt | 1,652,442 |
| | 1,605,142 |
|
| | Deferred revenue | 4,574,529 |
| | 3,458,689 |
|
| Total current liabilities | 10,303,996 |
| | 10,376,210 |
|
| Income taxes payable | 293,105 |
| | 238,851 |
|
| Deferred revenue | 2,976,328 |
| | 2,715,361 |
|
| Deferred income taxes | 574,846 |
| | 451,905 |
|
| Other liabilities | 338,915 |
| | 287,912 |
|
| | Total liabilities | 14,487,190 |
| | 14,070,239 |
|
| | | | | |
| Convertible debt | 57,704 |
| | 119,325 |
|
| | | | | |
| Commitments and contingencies | | | |
| Shareholders' equity: | | | |
| | Preferred stock, par value $0.01; authorized 25,000 | | | |
| | shares; none outstanding | — |
| | — |
|
| | Common stock, par value $0.01; authorized 6,000,000 | | | |
| | shares; issued and outstanding 2,106,959 and 2,048,890 shares | 21,070 |
| | 20,489 |
|
| | Additional paid-in capital | 3,691,112 |
| | 3,405,513 |
|
| | Retained earnings | 18,853,234 |
| | 16,120,621 |
|
| | Accumulated other comprehensive loss, net | (208,273 | ) | | (235,009 | ) |
| | Total EMC Corporation's shareholders' equity | 22,357,143 |
| | 19,311,614 |
|
| | Non-controlling interest in VMware, Inc. | 1,166,648 |
| | 968,089 |
|
| | Total shareholders' equity | 23,523,791 |
| | 20,279,703 |
|
| | Total liabilities and shareholders' equity | $ | 38,068,685 |
| | $ | 34,469,267 |
|
EMC CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
|
| | | | | | | | | | | |
| | | | | | Twelve Months Ended |
| | | | | | December 31, | | December 31, |
| | | | | | 2012 | | 2011 |
| Cash flows from operating activities: | | | |
| | Cash received from customers | $ | 22,584,805 |
| | $ | 21,144,690 |
|
| | Cash paid to suppliers and employees | (16,018,457 | ) | | (15,218,678 | ) |
| | Dividends and interest received | 103,174 |
| | 135,971 |
|
| | Interest paid | (32,751 | ) | | (70,071 | ) |
| | Income taxes paid | (374,352 | ) | | (323,097 | ) |
| | | | Net cash provided by operating activities | 6,262,419 |
| | 5,668,815 |
|
| | | | | | | | |
| Cash flows from investing activities: | | | |
| | Additions to property, plant and equipment | (819,159 | ) | | (801,375 | ) |
| | Capitalized software development costs | (419,079 | ) | | (442,341 | ) |
| | Purchases of short- and long-term available-for-sale securities | (6,346,580 | ) | | (7,180,169 | ) |
| | Sales of short- and long-term available-for-sale securities | 4,982,790 |
| | 5,121,454 |
|
| | Maturities of short- and long-term available-for-sale securities | 1,048,979 |
| | 1,130,321 |
|
| | Business acquisitions, net of cash acquired | (2,135,758 | ) | | (536,624 | ) |
| | Purchases of strategic and other related investments | (117,103 | ) | | (329,483 | ) |
| | Sales of strategic and other related investments, net | 70,623 |
| | 29,007 |
|
| | Joint venture funding | (227,881 | ) | | (383,211 | ) |
| | Proceeds from divestiture of business | 58,100 |
| | — |
|
| | Purchase of leasehold interest | — |
| | (151,083 | ) |
| | | | Net cash used in investing activities | (3,905,068 | ) | | (3,543,504 | ) |
| | | | | | | | |
| Cash flows from financing activities: | | | |
| | Issuance of EMC's common stock from the exercise of stock options | 560,275 |
| | 673,389 |
|
| | Issuance of VMware's common stock from the exercise of stock options | 253,159 |
| | 337,618 |
|
| | EMC repurchase of EMC's common stock | (684,559 | ) | | (1,999,968 | ) |
| | EMC purchase of VMware's common stock | (290,294 | ) | | (399,984 | ) |
| | VMware repurchase of VMware's common stock | (467,534 | ) | | (526,203 | ) |
| | Excess tax benefits from stock-based compensation | 260,747 |
| | 361,632 |
|
| | Payment of short- and long-term obligations | (15,629 | ) | | (27,089 | ) |
| | Proceeds from short- and long-term obligations | 4,604 |
| | 3,096 |
|
| | Payment of convertible debt | (1,699,816 | ) | | — |
|
| | Interest rate contract settlement | (69,905 | ) | | (140,993 | ) |
| | | | Net cash used in financing activities | (2,148,952 | ) | | (1,718,502 | ) |
| | | | | | | | |
| Effect of exchange rate changes on cash and cash equivalents | 14,625 |
| | 5,089 |
|
| | | | | | | | |
| Net increase in cash and cash equivalents | 223,024 |
| | 411,898 |
|
| Cash and cash equivalents at beginning of period | 4,531,036 |
| | 4,119,138 |
|
| Cash and cash equivalents at end of period | $ | 4,754,060 |
| | $ | 4,531,036 |
|
| | | | | | | | |
| Reconciliation of net income to net cash provided by operating activities: | | | |
| | | | | | |
| Net income | $ | 2,886,017 |
| | $ | 2,608,885 |
|
| Adjustments to reconcile net income to net cash provided by operating activities: | | | |
| | Depreciation and amortization | 1,527,748 |
| | 1,421,598 |
|
| | Non-cash interest expense on convertible debt | 46,178 |
| | 102,907 |
|
| | Non-cash restructuring and other special charges | 12,974 |
| | (1,484 | ) |
| | Stock-based compensation expense | 895,384 |
| | 822,576 |
|
| | Provision for doubtful accounts | 39,313 |
| | 20,255 |
|
|
| | | | | | | | | | | |
| | Deferred income taxes, net | (63,861 | ) | | (19,423 | ) |
| | Excess tax benefits from stock-based compensation | (260,747 | ) | | (361,632 | ) |
| | Gain on XtremIO common stock | (31,599 | ) | | — |
|
| | Other, net | 20,337 |
| | 4,573 |
|
| | Changes in assets and liabilities, net of acquisitions: | | | |
| | | Accounts and notes receivable | (535,371 | ) | | (391,672 | ) |
| | | Inventories | (458,663 | ) | | (393,156 | ) |
| | | Other assets | 174,386 |
| | (61,830 | ) |
| | | Accounts payable | 89,299 |
| | 34,871 |
|
| | | Accrued expenses | (64,238 | ) | | 5,147 |
|
| | | Income taxes payable | 607,107 |
| | 336,711 |
|
| | | Deferred revenue | 1,366,961 |
| | 1,508,520 |
|
| | | Other liabilities | 11,194 |
| | 31,969 |
|
| | | | Net cash provided by operating activities | $ | 6,262,419 |
| | $ | 5,668,815 |
|
Reconciliation of GAAP to Non-GAAP*
(in thousands, except per share amounts)
(unaudited)
|
| | | | | | | | | | | | | | | |
| | Three Months Ended |
| | | | Diluted | | | | Diluted |
| | December 31, | | Earnings | | December 31, | | Earnings |
| | 2012 | | Per Share | | 2011 | | Per Share |
| Net Income Attributable to EMC GAAP | $ | 869,919 |
| | $ | 0.394 |
| | $ | 832,046 |
| | $ | 0.380 |
|
| Stock-based compensation expense | 159,633 |
| | 0.073 |
| | 151,809 |
| | 0.070 |
|
| Intangible asset amortization | 63,947 |
| | 0.029 |
| | 56,124 |
| | 0.026 |
|
| Restructuring and acquisition-related charges | 22,699 |
| | 0.010 |
| | 25,220 |
| | 0.012 |
|
Amortization of VMware's capitalized software
from prior periods | 6,669 |
| | 0.003 |
| | — |
| | — |
|
| Special tax charges | 10,660 |
| | 0.005 |
| | — |
| | — |
|
| R&D tax credit | 60,044 |
| | 0.027 |
| | — |
| | — |
|
| Net Income Attributable to EMC Non-GAAP | $ | 1,193,571 |
| | $ | 0.541 |
| | $ | 1,065,199 |
| | $ | 0.487 |
|
| | | | | | | | |
| Weighted average shares, diluted | | | 2,201,031 |
| | | | 2,182,933 |
|
| Incremental VMware Dilution | | | $ | 2,252 |
| | | | $ | 3,154 |
|
|
| | | | | | | | | | | | | | | |
| | Twelve Months Ended |
| | | | Diluted | | | | Diluted |
| | December 31, | | Earnings | | December 31, | | Earnings |
| | 2012 | | Per Share | | 2011 | | Per Share |
| Net Income Attributable to EMC GAAP | $ | 2,732,613 |
| | $ | 1.234 |
| | $ | 2,461,337 |
| | $ | 1.098 |
|
| Stock-based compensation expense | 622,504 |
| | 0.282 |
| | 587,040 |
| | 0.263 |
|
| Intangible asset amortization | 237,626 |
| | 0.108 |
| | 223,937 |
| | 0.100 |
|
| Restructuring and acquisition-related charges | 88,279 |
| | 0.040 |
| | 80,944 |
| | 0.036 |
|
Amortization of VMware's capitalized software
from prior periods | 32,996 |
| | 0.015 |
| | — |
| | — |
|
| RSA special charge (release) | (18,097 | ) | | (0.008 | ) | | 56,222 |
| | 0.025 |
|
| Loss on interest rate swaps | 24,461 |
| | 0.011 |
| | — |
| | — |
|
| Gain on strategic investment | (31,599 | ) | | (0.014 | ) | | (28,938 | ) | | (0.013 | ) |
| Special tax charges | 10,660 |
| | 0.005 |
| | — |
| | — |
|
| R&D tax credit | 60,044 |
| | 0.027 |
| | — |
| | — |
|
| Net Income Attributable to EMC Non-GAAP | $ | 3,759,487 |
| | $ | 1.700 |
| | $ | 3,380,542 |
| | $ | 1.510 |
|
| | | | | | | | |
| Weighted average shares, diluted | | | 2,205,639 |
| | | | 2,229,113 |
|
| Incremental VMware Dilution | | | $ | 9,977 |
| | | | $ | 14,082 |
|
|
| | | | | | | |
| * Net of tax and non-controlling interest in VMware, Inc., except Weighted average shares, diluted. See Income Tax Provision and Net Income Attributable to VMware lines in Supplemental Information schedules. |
| |
| Note: Schedule may not add due to rounding. |
Reconciliation of GAAP to Non-GAAP
(in thousands)
(unaudited)
|
| | | | | | | | | | | | | | | |
| | Three Months Ended | | Twelve Months Ended |
| | December 31, | | December 31, | | December 31, | | December 31, |
| | 2012 | | 2011 | | 2012 | | 2011 |
| Gross Margin GAAP | $ | 3,890,214 |
| | $ | 3,523,339 |
| | $ | 13,638,363 |
| | $ | 12,168,942 |
|
| Stock-based compensation expense | 30,835 |
| | 31,720 |
| | 125,467 |
| | 123,677 |
|
| Intangible asset amortization | 57,061 |
| | 40,757 |
| | 199,098 |
| | 157,191 |
|
| Amortization of VMware's capitalized software from prior periods | 12,511 |
| | — |
| | 61,480 |
| | — |
|
| RSA special charge (release) | — |
| | — |
| | (23,771 | ) | | 66,300 |
|
| Gross Margin Non-GAAP | $ | 3,990,621 |
| | $ | 3,595,816 |
| | $ | 14,000,637 |
| | $ | 12,516,110 |
|
| | | | | | | | |
| Revenues | $ | 6,029,955 |
| | $ | 5,574,431 |
| | $ | 21,713,902 |
| | $ | 20,007,588 |
|
| | | | | | | | |
| Gross Margin Percentages: | | | | | | | |
| GAAP | 64.5 | % | | 63.2 | % | | 62.8 | % | | 60.8 | % |
| Non-GAAP | 66.2 | % | | 64.5 | % | | 64.5 | % | | 62.6 | % |
|
| | | | | | | | | | | | | | | |
| | Three Months Ended | | Twelve Months Ended |
| | December 31, | | December 31, | | December 31, | | December 31, |
| | 2012 | | 2011 | | 2012 | | 2011 |
| Operating Margin GAAP | $ | 1,268,582 |
| | $ | 1,138,801 |
| | $ | 3,963,874 |
| | $ | 3,442,439 |
|
| Stock-based compensation expense | 246,928 |
| | 213,945 |
| | 920,307 |
| | 836,171 |
|
| Intangible asset amortization | 98,101 |
| | 86,155 |
| | 364,664 |
| | 341,796 |
|
| Restructuring and acquisition-related charges | 30,030 |
| | 28,923 |
| | 110,590 |
| | 97,334 |
|
| Amortization of VMware's capitalized software from prior periods | 12,511 |
| | — |
| | 61,480 |
| | — |
|
| RSA special charge (release) | — |
| | — |
| | (23,771 | ) | | 66,300 |
|
| Operating Margin Non-GAAP | $ | 1,656,152 |
| | $ | 1,467,824 |
| | $ | 5,397,144 |
| | $ | 4,784,040 |
|
| | | | | | | | |
| Revenues | $ | 6,029,955 |
| | $ | 5,574,431 |
| | $ | 21,713,902 |
| | $ | 20,007,588 |
|
| | | | | | | | |
| Operating Margin Percentages: | | | | | | | |
| GAAP | 21.0 | % | | 20.4 | % | | 18.3 | % | | 17.2 | % |
| Non-GAAP | 27.5 | % | | 26.3 | % | | 24.9 | % | | 23.9 | % |
Reconciliation of GAAP to Non-GAAP
(in thousands)
(unaudited)
|
| | | | | | | | | | |
| | Twelve Months Ended December 31, 2012 |
| | Income Before | | Tax | | Tax |
| | Tax | | Provision | | Rate |
| EMC Consolidated GAAP | $ | 3,803,615 |
| | $ | 917,598 |
| | 24.1 | % |
| Stock-based compensation expense | 923,450 |
| | 230,489 |
| | 25.0 | % |
| Intangible asset amortization | 364,664 |
| | 112,675 |
| | 30.9 | % |
| Restructuring and acquisition-related charges | 110,590 |
| | 21,538 |
| | 19.5 | % |
| Amortization of VMware's capitalized software from prior periods | 61,480 |
| | 19,933 |
| | 32.4 | % |
| RSA special charge (release) | (23,771 | ) | | (5,674 | ) | | 23.9 | % |
| Loss on interest rate swaps | 39,453 |
| | 14,992 |
| | 38.0 | % |
| Gain on strategic investment | (31,599 | ) | | — |
| | 0.0% |
|
| Special tax charges | — |
| | (11,514 | ) | | — | % |
| R&D tax credit | — |
| | (66,500 | ) | | — | % |
| EMC Consolidated Non-GAAP | $ | 5,247,882 |
| | $ | 1,233,537 |
| | 23.5 | % |
|
| | | | | | | | | | | | | | | |
| | Three Months Ended | | Twelve Months Ended |
| | December 31, | | December 31, | | December 31, | | December 31, |
| | 2012 | | 2011 | | 2012 | | 2011 |
| Cash Flow from Operations | $ | 1,899,338 |
| | $ | 2,184,218 |
| | $ | 6,262,419 |
| | $ | 5,668,815 |
|
| Capital expenditures | (295,700 | ) | | (200,198 | ) | | (819,159 | ) | | (801,375 | ) |
| Capitalized software development costs | (103,281 | ) | | (100,250 | ) | | (419,079 | ) | | (442,341 | ) |
| Free Cash Flow | $ | 1,500,357 |
| | $ | 1,883,770 |
| | $ | 5,024,181 |
| | $ | 4,425,099 |
|
| | | | | | | | |
| |
| |
| | | | | | | | |
| | | | | | | |
Supplemental Information
For the Three Months Ended December 31, 2012
(in thousands)
(unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Stock-Based Compensation Expense | | Intangible Asset Amortization | | Restructuring and Acquisition-Related Charges | | Amortization of VMware's Capitalized Software from Prior Periods | | Special Tax Charges | | R&D Tax Credit |
| EMC Consolidated | | | | | | | | | | | |
| Cost of revenue | $ | (30,835 | ) | | $ | (57,061 | ) | | $ | — |
| | $ | (12,511 | ) | | $ | — |
| | $ | — |
|
| Research and development | (91,041 | ) | | (2,378 | ) | | — |
| | — |
| | — |
| | — |
|
| Selling, general and administrative | (125,052 | ) | | (38,662 | ) | | — |
| | — |
| | — |
| | — |
|
| Restructuring and acquisition-related charges | — |
| | — |
| | (30,030 | ) | | — |
| | — |
| | — |
|
| Non-operating (income) expense | 470 |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Income tax provision | 68,834 |
| | 29,054 |
| | 7,262 |
| | 4,130 |
| | (11,514 | ) | | (66,500 | ) |
| Net income attributable to VMware | (18,931 | ) | | (5,100 | ) | | (69 | ) | | (1,712 | ) | | (854 | ) | | (6,456 | ) |
| | | | | | | | | | | | |
| EMC Information Infrastructure | | | | | | | | | | | |
| Cost of revenue | $ | (20,878 | ) | | $ | (31,378 | ) | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
|
| Research and development | (28,262 | ) | | (1,124 | ) | | — |
| | — |
| | — |
| | — |
|
| Selling, general and administrative | (72,058 | ) | | (35,566 | ) | | — |
| | — |
| | — |
| | — |
|
| Restructuring and acquisition-related charges | — |
| | — |
| | (29,536 | ) | | — |
| | — |
| | — |
|
| Non-operating (income) expense | 470 |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Income tax provision | 35,771 |
| | 23,986 |
| | 7,106 |
| | — |
| | (7,334 | ) | | (34,900 | ) |
| Net income attributable to VMware | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| | | | | | | | | | | | |
| VMware within EMC | | | | | | | | | | | |
| Cost of revenue | $ | (9,957 | ) | | $ | (25,683 | ) | | $ | — |
| | $ | (12,511 | ) | | $ | — |
| | $ | — |
|
| Research and development | (62,779 | ) | | (1,254 | ) | | — |
| | — |
| | — |
| | — |
|
| Selling, general and administrative | (52,994 | ) | | (3,096 | ) | | — |
| | — |
| | — |
| | — |
|
| Restructuring and acquisition-related charges | — |
| | — |
| | (494 | ) | | — |
| | — |
| | — |
|
| Non-operating (income) expense | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Income tax provision | 33,063 |
| | 5,068 |
| | 156 |
| | 4,130 |
| | (4,180 | ) | | (31,600 | ) |
| Net income attributable to VMware | (18,931 | ) | | (5,100 | ) | | (69 | ) | | (1,712 | ) | | (854 | ) | | (6,456 | ) |
Supplemental Information
For the Twelve Months Ended December 31, 2012
(in thousands)
(unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Stock-Based Compensation Expense | | Intangible Asset Amortization | | Restructuring and Acquisition-Related Charges | | Amortization of VMware's Capitalized Software from Prior Periods | | RSA Special (Charge) Release | | Loss on Interest Rate Swaps | | Gain on Strategic Investment | | Special Tax Charges | | R&D Tax Credit |
| EMC Consolidated | | | | | | | | | | | | | | | | | |
| Cost of revenue | $ | (125,467 | ) | | $ | (199,098 | ) | | $ | — |
| | $ | (61,480 | ) | | $ | 23,771 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
|
| Research and development | (324,727 | ) | | (10,043 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Selling, general and administrative | (470,113 | ) | | (155,523 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Restructuring and acquisition-related charges | — |
| | — |
| | (110,590 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Non-operating (income) expense | 3,143 |
| | — |
| | — |
| | — |
| | — |
| | 39,453 |
| | (31,599 | ) | | — |
| | — |
|
| Income tax provision | 230,489 |
| | 112,675 |
| | 21,538 |
| | 19,933 |
| | (5,674 | ) | | 14,992 |
| | — |
| | (11,514 | ) | | (66,500 | ) |
| Net income attributable to VMware | (70,457 | ) | | (14,363 | ) | | (773 | ) | | (8,551 | ) | | — |
| | — |
| | — |
| | (854 | ) | | (6,456 | ) |
| | | | | | | | | | | | | | | | | | |
| EMC Information Infrastructure | | | | | | | | | | | | | | | | | |
| Cost of revenue | $ | (84,758 | ) | | $ | (125,844 | ) | | $ | — |
| | $ | — |
| | $ | 23,771 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
|
| Research and development | (114,350 | ) | | (6,325 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Selling, general and administrative | (272,127 | ) | | (143,280 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Restructuring and acquisition-related charges | — |
| | — |
| | (106,694 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Non-operating (income) expense | 3,143 |
| | — |
| | — |
| | — |
| | — |
| | 39,453 |
| | (31,599 | ) | | — |
| | — |
|
| Income tax provision | 123,766 |
| | 93,335 |
| | 21,382 |
| | — |
| | (5,674 | ) | | 14,992 |
| | — |
| | (7,334 | ) | | (34,900 | ) |
| Net income attributable to VMware | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| | | | | | | | | | | | | | | | | | |
| VMware within EMC | | | | | | | | | | | | | | | | | |
| Cost of revenue | $ | (40,709 | ) | | $ | (73,254 | ) | | $ | — |
| | $ | (61,480 | ) | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
|
| Research and development | (210,377 | ) | | (3,718 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Selling, general and administrative | (197,986 | ) | | (12,243 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Restructuring and acquisition-related charges | — |
| | — |
| | (3,896 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Non-operating (income) expense | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Income tax provision | 106,723 |
| | 19,340 |
| | 156 |
| | 19,933 |
| | — |
| | — |
| | — |
| | (4,180 | ) | | (31,600 | ) |
| Net income attributable to VMware | (70,457 | ) | | (14,363 | ) | | (773 | ) | | (8,551 | ) | | — |
| | — |
| | — |
| | (854 | ) | | (6,456 | ) |
Supplemental Information
For the Three Months Ended December 31, 2011
(in thousands)
(unaudited)
|
| | | | | | | | | | | |
| | Stock-Based Compensation Expense | | Intangible Asset Amortization | | Restructuring and Acquisition-Related Charges |
| EMC Consolidated | | | | | |
| Cost of revenue | $ | (31,720 | ) | | $ | (40,757 | ) | | $ | — |
|
| Research and development | (71,246 | ) | | (3,914 | ) | | — |
|
| Selling, general and administrative | (110,979 | ) | | (41,484 | ) | | — |
|
| Restructuring and acquisition-related charges | — |
| | — |
| | (28,923 | ) |
| Non-operating (income) expense | (616 | ) | | — |
| | — |
|
| Income tax provision | 47,580 |
| | 27,273 |
| | 3,663 |
|
| Net income attributable to VMware | (13,940 | ) | | (2,758 | ) | | (40 | ) |
| | | | | | |
| EMC Information Infrastructure | | | | | |
| Cost of revenue | $ | (22,122 | ) | | $ | (27,014 | ) | | $ | — |
|
| Research and development | (31,603 | ) | | (3,117 | ) | | — |
|
| Selling, general and administrative | (76,191 | ) | | (38,582 | ) | | — |
|
| Restructuring and acquisition-related charges | — |
| | — |
| | (28,726 | ) |
| Non-operating (income) expense | (616 | ) | | — |
| | — |
|
| Income tax provision | 32,463 |
| | 23,465 |
| | 3,663 |
|
| Net income attributable to VMware | — |
| | — |
| | — |
|
| | | | | | |
| VMware within EMC | | | | | |
| Cost of revenue | $ | (9,598 | ) | | $ | (13,743 | ) | | $ | — |
|
| Research and development | (39,643 | ) | | (797 | ) | | — |
|
| Selling, general and administrative | (34,788 | ) | | (2,902 | ) | | — |
|
| Restructuring and acquisition-related charges | — |
| | — |
| | (197 | ) |
| Non-operating (income) expense | — |
| | — |
| | — |
|
| Income tax provision | 15,117 |
| | 3,808 |
| | — |
|
| Net income attributable to VMware | (13,940 | ) | | (2,758 | ) | | (40 | ) |
Supplemental Information
For the Twelve Months Ended December 31, 2011
(in thousands)
(unaudited)
|
| | | | | | | | | | | | | | | | | | | |
| | Stock-Based Compensation Expense | | Intangible Asset Amortization | | Restructuring and Acquisition-Related Charges | | RSA Special (Charge) Release | | Gain on Strategic Investment |
| EMC Consolidated | | | | | | | | | |
| Cost of revenue | $ | (123,677 | ) | | $ | (157,191 | ) | | $ | — |
| | $ | (66,300 | ) | | $ | — |
|
| Research and development | (299,255 | ) | | (16,409 | ) | | — |
| | — |
| | — |
|
| Selling, general and administrative | (413,239 | ) | | (168,196 | ) | | — |
| | — |
| | — |
|
| Restructuring and acquisition-related charges | — |
| | — |
| | (97,334 | ) | | — |
| | — |
|
| Non-operating (income) expense | 3,818 |
| | — |
| | — |
| | — |
| | (56,000 | ) |
| Income tax provision | 194,594 |
| | 107,902 |
| | 15,894 |
| | 10,078 |
| | (19,600 | ) |
| Net income attributable to VMware | (58,355 | ) | | (9,957 | ) | | (496 | ) | | — |
| | 7,462 |
|
| | | | | | | | | | |
| EMC Information Infrastructure | | | | | | | | | |
| Cost of revenue | $ | (84,570 | ) | | $ | (108,208 | ) | | $ | — |
| | $ | (66,300 | ) | | $ | — |
|
| Research and development | (124,991 | ) | | (13,221 | ) | | — |
| | — |
| | — |
|
| Selling, general and administrative | (277,345 | ) | | (157,838 | ) | | — |
| | — |
| | — |
|
| Restructuring and acquisition-related charges | — |
| | — |
| | (94,911 | ) | | — |
| | — |
|
| Non-operating (income) expense | 3,818 |
| | — |
| | — |
| | — |
| | — |
|
| Income tax provision | 131,814 |
| | 94,252 |
| | 15,894 |
| | 10,078 |
| | — |
|
| Net income attributable to VMware | — |
| | — |
| | — |
| | — |
| | — |
|
| | | | | | | | | | |
| VMware within EMC | | | | | | | | | |
| Cost of revenue | $ | (39,107 | ) | | $ | (48,983 | ) | | $ | — |
| | $ | — |
| | $ | — |
|
| Research and development | (174,264 | ) | | (3,188 | ) | | — |
| | — |
| | — |
|
| Selling, general and administrative | (135,894 | ) | | (10,358 | ) | | — |
| | — |
| | — |
|
| Restructuring and acquisition-related charges | — |
| | — |
| | (2,423 | ) | | — |
| | — |
|
| Non-operating (income) expense | — |
| | — |
| | — |
| | — |
| | (56,000 | ) |
| Income tax provision | 62,780 |
| | 13,650 |
| | — |
| | — |
| | (19,600 | ) |
| Net income attributable to VMware | (58,355 | ) | | (9,957 | ) | | (496 | ) | | — |
| | 7,462 |
|
Supplemental Information
For the Three Months Ended December 31, 2012
(in thousands)
(unaudited) |
| | | | | | | | | | | |
| | VMware
Standalone
GAAP | | GAAP Adjustments and Eliminations | | VMware within EMC
GAAP |
| Revenue | $ | 1,293,155 |
| | $ | (2,045 | ) | | $ | 1,291,110 |
|
| Cost of revenue | 191,824 |
| | (1,057 | ) | | 190,767 |
|
| Gross margin | 1,101,331 |
| | (988 | ) | | 1,100,343 |
|
| Research and development | 268,323 |
| | (2,225 | ) | | 266,098 |
|
| Selling, general and administrative | 580,483 |
| | 1,281 |
| | 581,764 |
|
| Restructuring and acquisition-related charges | — |
| | 494 |
| | 494 |
|
| Operating income | 252,525 |
| | (538 | ) | | 251,987 |
|
| Non-operating income (expense) | 7,399 |
| | (156 | ) | | 7,243 |
|
| Income before taxes | 259,924 |
| | (694 | ) | | 259,230 |
|
| Income tax provision | 54,155 |
| | 4,874 |
| | 59,029 |
|
| Net income | $ | 205,769 |
| | (5,568 | ) | | 200,201 |
|
| Net income attributable to VMware | | | (42,037 | ) | | (42,037 | ) |
| Net income attributable to EMC | | | $ | (47,605 | ) | | $ | 158,164 |
|
Supplemental Information
For the Three Months Ended December 31, 2011
(in thousands)
(unaudited)
|
| | | | | | | | | | | |
| | VMware
Standalone
GAAP | | GAAP Adjustments and Eliminations | | VMware within EMC
GAAP |
| Revenue | $ | 1,060,302 |
| | $ | (1,783 | ) | | $ | 1,058,519 |
|
| Cost of revenue | 166,874 |
| | (642 | ) | | 166,232 |
|
| Gross margin | 893,428 |
| | (1,141 | ) | | 892,287 |
|
| Research and development | 216,992 |
| | (1,225 | ) | | 215,767 |
|
| Selling, general and administrative | 462,380 |
| | (1,513 | ) | | 460,867 |
|
| Restructuring and acquisition-related charges | — |
| | 197 |
| | 197 |
|
| Operating income (expense) | 214,056 |
| | 1,400 |
| | 215,456 |
|
| Non-operating income | (5,190 | ) | | 7,458 |
| | 2,268 |
|
| Income before taxes | 208,866 |
| | 8,858 |
| | 217,724 |
|
| Income tax provision | 8,438 |
| | (2,440 | ) | | 5,998 |
|
| Net income | $ | 200,428 |
| | 11,298 |
| | 211,726 |
|
| Net income attributable to VMware | | | (40,544 | ) | | (40,544 | ) |
| Net income attributable to EMC | | | $ | (29,246 | ) | | $ | 171,182 |
|
Supplemental Information
For the Twelve Months Ended December 31, 2012
(in thousands)
(unaudited)
|
| | | | | | | | | | | |
| | VMware
Standalone
GAAP | | GAAP Adjustments and Eliminations | | VMware within EMC
GAAP |
| Revenue | $ | 4,605,047 |
| | $ | (9,446 | ) | | $ | 4,595,601 |
|
| Cost of revenue | 721,323 |
| | (2,937 | ) | | 718,386 |
|
| Gross margin | 3,883,724 |
| | (6,509 | ) | | 3,877,215 |
|
| Research and development | 999,214 |
| | (8,772 | ) | | 990,442 |
|
| Selling, general and administrative | 2,012,567 |
| | (2,968 | ) | | 2,009,599 |
|
| Restructuring and acquisition-related charges | — |
| | 3,896 |
| | 3,896 |
|
| Operating income (expense) | 871,943 |
| | 1,335 |
| | 873,278 |
|
| Non-operating income | 21,171 |
| | 6,409 |
| | 27,580 |
|
| Income before taxes | 893,114 |
| | 7,744 |
| | 900,858 |
|
| Income tax provision | 147,412 |
| | 2,581 |
| | 149,993 |
|
| Net income | $ | 745,702 |
| | 5,163 |
| | 750,865 |
|
| Net income attributable to VMware | | | (153,404 | ) | | (153,404 | ) |
| Net income attributable to EMC | | | $ | (148,241 | ) | | $ | 597,461 |
|
Supplemental Information
For the Twelve Months Ended December 31, 2011
(in thousands)
(unaudited)
|
| | | | | | | | | | | |
| | VMware
Standalone
GAAP | | GAAP Adjustments and Eliminations | | VMware within EMC
GAAP |
| Revenue | $ | 3,767,096 |
| | $ | (4,242 | ) | | $ | 3,762,854 |
|
| Cost of revenue | 621,987 |
| | (568 | ) | | 621,419 |
|
| Gross margin | 3,145,109 |
| | (3,674 | ) | | 3,141,435 |
|
| Research and development | 775,051 |
| | (9,697 | ) | | 765,354 |
|
| Selling, general and administrative | 1,634,887 |
| | (7,843 | ) | | 1,627,044 |
|
| Restructuring and acquisition-related charges | — |
| | 2,423 |
| | 2,423 |
|
| Operating income (expense) | 735,171 |
| | 11,443 |
| | 746,614 |
|
| Non-operating income | 59,242 |
| | 3,492 |
| | 62,734 |
|
| Income before taxes | 794,413 |
| | 14,935 |
| | 809,348 |
|
| Income tax provision | 70,477 |
| | 1,327 |
| | 71,804 |
|
| Net income | $ | 723,936 |
| | 13,608 |
| | 737,544 |
|
| Net income attributable to VMware | | | (147,548 | ) | | (147,548 | ) |
| Net income attributable to EMC | | | $ | (133,940 | ) | | $ | 589,996 |
|
Supplemental Information
(in thousands)
(unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Q1 2011 | | Q2 2011 | | Q3 2011 | | Q4 2011 | | FY 2011 | | Q1 2012 | | Q2 2012 | | Q3 2012 | | Q4 2012 | | FY 2012 |
| Information Storage: | | | | | | | | | | | | | | | | | | | |
| Product Revenue | $ | 2,384,011 |
| | $ | 2,432,702 |
| | $ | 2,465,339 |
| | $ | 2,818,421 |
| | $ | 10,100,473 |
| | $ | 2,454,735 |
| | $ | 2,512,914 |
| | $ | 2,438,665 |
| | $ | 2,956,473 |
| | $ | 10,362,787 |
|
| Services Revenue | 1,055,466 |
| | 1,135,792 |
| | 1,197,581 |
| | 1,265,867 |
| | 4,654,706 |
| | 1,234,172 |
| | 1,304,311 |
| | 1,324,110 |
| | 1,363,995 |
| | 5,226,588 |
|
| Total Information Storage Revenue | $ | 3,439,477 |
| | $ | 3,568,494 |
| | $ | 3,662,920 |
| | $ | 4,084,288 |
| | $ | 14,755,179 |
| | $ | 3,688,907 |
| | $ | 3,817,225 |
| | $ | 3,762,775 |
| | $ | 4,320,468 |
| | $ | 15,589,375 |
|
| | | | | | | | | | | | | | | | | | | | |
| Information Intelligence Group: | | | | | | | | | | | | | | | | | | | |
| Product Revenue | $ | 41,132 |
| | $ | 44,226 |
| | $ | 50,439 |
| | $ | 73,540 |
| | $ | 209,337 |
| | $ | 36,062 |
| | $ | 45,497 |
| | $ | 49,881 |
| | $ | 69,390 |
| | $ | 200,830 |
|
| Services Revenue | 110,043 |
| | 115,646 |
| | 111,157 |
| | 115,169 |
| | 452,015 |
| | 109,491 |
| | 107,276 |
| | 108,117 |
| | 114,467 |
| | 439,351 |
|
| Total Information Intelligence Group Revenue | $ | 151,175 |
| | $ | 159,872 |
| | $ | 161,596 |
| | $ | 188,709 |
| | $ | 661,352 |
| | $ | 145,553 |
| | $ | 152,773 |
| | $ | 157,998 |
| | $ | 183,857 |
| | $ | 640,181 |
|
| | | | | | | | | | | | | | | | | | | | |
| RSA Information Security: | | | | | | | | | | | | | | | | | | | |
| Product Revenue | $ | 87,180 |
| | $ | 102,273 |
| | $ | 115,685 |
| | $ | 135,652 |
| | $ | 440,790 |
| | $ | 96,489 |
| | $ | 103,458 |
| | $ | 106,020 |
| | $ | 106,312 |
| | $ | 412,279 |
|
| Services Revenue | 87,074 |
| | 93,861 |
| | 99,215 |
| | 107,263 |
| | 387,413 |
| | 110,028 |
| | 117,312 |
| | 120,918 |
| | 128,208 |
| | 476,466 |
|
| Total RSA Information Security Revenue | $ | 174,254 |
| | $ | 196,134 |
| | $ | 214,900 |
| | $ | 242,915 |
| | $ | 828,203 |
| | $ | 206,517 |
| | $ | 220,770 |
| | $ | 226,938 |
| | $ | 234,520 |
| | $ | 888,745 |
|
| | | | | | | | | | | | | | | | | | | | |
| EMC Information Infrastructure: | | | | | | | | | | | | | | | | | | | |
| Product Revenue | $ | 2,512,323 |
| | $ | 2,579,201 |
| | $ | 2,631,463 |
| | $ | 3,027,613 |
| | $ | 10,750,600 |
| | $ | 2,587,286 |
| | $ | 2,661,869 |
| | $ | 2,594,566 |
| | $ | 3,132,175 |
| | $ | 10,975,896 |
|
| Services Revenue | 1,252,583 |
| | 1,345,299 |
| | 1,407,953 |
| | 1,488,299 |
| | 5,494,134 |
| | 1,453,691 |
| | 1,528,899 |
| | 1,553,145 |
| | 1,606,670 |
| | 6,142,405 |
|
| Total EMC Information Infrastructure Revenue | $ | 3,764,906 |
| | $ | 3,924,500 |
| | $ | 4,039,416 |
| | $ | 4,515,912 |
| | $ | 16,244,734 |
| | $ | 4,040,977 |
| | $ | 4,190,768 |
| | $ | 4,147,711 |
| | $ | 4,738,845 |
| | $ | 17,118,301 |
|
| | | | | | | | | | | | | | | | | | | | |
| VMware: | | | | | | | | | | | | | | | | | | | |
| Product Revenue | $ | 418,936 |
| | $ | 464,783 |
| | $ | 442,904 |
| | $ | 513,519 |
| | $ | 1,840,142 |
| | $ | 481,571 |
| | $ | 516,868 |
| | $ | 489,875 |
| | $ | 596,313 |
| | $ | 2,084,627 |
|
| Services Revenue | 423,776 |
| | 456,055 |
| | 497,881 |
| | 545,000 |
| | 1,922,712 |
| | 571,830 |
| | 603,757 |
| | 640,590 |
| | 694,797 |
| | 2,510,974 |
|
| Total VMware Revenue | $ | 842,712 |
| | $ | 920,838 |
| | $ | 940,785 |
| | $ | 1,058,519 |
| | $ | 3,762,854 |
| | $ | 1,053,401 |
| | $ | 1,120,625 |
| | $ | 1,130,465 |
| | $ | 1,291,110 |
| | $ | 4,595,601 |
|
| | | | | | | | | | | | | | | | | | | | |
| Consolidated Revenues: | | | | | | | | | | | | | | | | | | | |
| Product Revenue | $ | 2,931,259 |
| | $ | 3,043,984 |
| | $ | 3,074,367 |
| | $ | 3,541,132 |
| | $ | 12,590,742 |
| | $ | 3,068,857 |
| | $ | 3,178,737 |
| | $ | 3,084,441 |
| | $ | 3,728,488 |
| | $ | 13,060,523 |
|
| Services Revenue | 1,676,359 |
| | 1,801,354 |
| | 1,905,834 |
| | 2,033,299 |
| | 7,416,846 |
| | 2,025,521 |
| | 2,132,656 |
| | 2,193,735 |
| | 2,301,467 |
| | 8,653,379 |
|
| Total Consolidated Revenues | $ | 4,607,618 |
| | $ | 4,845,338 |
| | $ | 4,980,201 |
| | $ | 5,574,431 |
| | $ | 20,007,588 |
| | $ | 5,094,378 |
| | $ | 5,311,393 |
| | $ | 5,278,176 |
| | $ | 6,029,955 |
| | $ | 21,713,902 |
|
| | | | | | | | | | | | | | | | | | | | |
| Percentage impact to EMC revenue growth rate due to changes in exchange rates from the prior year | 1.1% | | 3.4% | | 1.7% | | 0.1% | | 1.5% | | (0.5)% | | (2.1)% | | (1.5)% | | (0.5)% | | (1.1)% |
