Exhibit 99.1
Contact: Lesley Ogrodnick
508-293-6961
lesley.ogrodnick@emc.com
EMC REPORTS RECORD FIRST-QUARTER RESULTS
First-Quarter Highlights
| • | Record first-quarter consolidated revenue up 18% year over year |
| • | All-time record consolidated quarterly revenue for Asia Pacific and Japan region |
| • | Record first-quarter GAAP net income up 28% year over year |
| • | Strong year-over-year percentage increase in gross and operating margins |
HOPKINTON, Mass. – April 20, 2011 – EMC Corporation (NYSE:EMC) today reported record financial results for the first quarter of 2011. Continued healthy customer demand for EMC’s information infrastructure and virtual infrastructure products and services, and strong performance within the company’s Europe/Middle East/Africa and Asia Pacific/Japan regions, contributed to EMC achieving record first-quarter consolidated revenue, record first-quarter net income, and strong year-over-year percentage increase in operating and gross margins.
First-quarter consolidated revenue was $4.6 billion, an increase of 18% compared with the year-ago quarter. First-quarter GAAP net income attributable to EMC increased 28% year over year to $477.1 million. First-quarter GAAP diluted earnings per share were $0.21, up 24% year over year. Non-GAAP1 net income attributable to EMC for the first quarter was $700.4 million, an increase of 27% compared with the year-ago quarter. First-quarter non-GAAP1 earnings per diluted share were $0.31, an increase of 19% year over year.
During the first quarter, EMC expanded gross and operating margins substantially on a year-over-year basis. The company achieved operating cash flow of $1.1 billion and free cash flow2 of $857.3 million, and ended the first quarter with $9.5 billion in cash and investments.
Joe Tucci, EMC Chairman and Chief Executive Officer, said, “EMC is off to a strong start in 2011 with significant opportunity and long-term growth potential ahead. With market-leading virtualization and information infrastructure products and services, and a strong partner ecosystem, we are positioned squarely at the intersection of two of the most sweeping trends in IT – cloud computing and Big Data. These assets, along with a robust innovation pipeline, uniquely align EMC to help customers accelerate their journey to cloud computing and unlock the full value of their information.”
David Goulden, EMC Executive Vice President and Chief Financial Officer, said, “For the fifth consecutive quarter EMC achieved our financial ‘triple play’ – gaining market share, investing aggressively to take advantage of the rapidly emerging opportunities offered by cloud computing and Big Data, and improving profitability. Financial strength and flexibility, combined with an intense focus on customers, enable us to continually identify and successfully execute on opportunities that increase our value proposition to customers and reward shareholders. Given the strong growth we saw in the quarter and the opportunity we see throughout 2011, we are now even more confident that we can meet and potentially exceed our 2011 consolidated revenue, non-GAAP EPS and free cash flow goals while continuing to achieve our ‘triple play’ over the long term.”
First-Quarter Highlights
First-quarter highlights included strong customer demand for the company’s market-leading high-end EMC Symmetrix storage product portfolio, which increased revenue 25% compared with the year-ago quarter, and EMC’s portfolio of mid-tier storage products3, which grew revenue 20% year over year. Revenue from VMware (NYSE: VMW), which is majority-owned by EMC, increased 33% and revenue from EMC’s RSA information security business grew 8% year over year. Additional first-quarter highlights included consistently strong revenue growth for EMC’s backup and recovery solutions, led by EMC Data Domain products. The new Isilon Storage Division exceeded revenue expectations in its first quarter within EMC, while the Data Computing Division continued to perform well with highly differentiated Greenplum offerings in the Big Data warehousing and analytics space.
Also during the quarter, VCE – the Virtual Computing Environment Company formed by Cisco and EMC with investments from VMware and Intel – experienced increasing customer traction and an expanding pipeline for its Vblock converged architecture.
EMC’s consolidated first-quarter revenue from the United States reached $2.4 billion, an increase of 12% year over year, representing 51% of consolidated first-quarter revenue. Revenue from EMC’s business operations outside of the United States reached $2.2 billion, an increase of 26% year over year, representing 49% of consolidated first-quarter revenue. Within this, consolidated revenue in EMC’s Europe/Middle East/Africa region increased 21% and consolidated revenue in EMC’s Asia Pacific/Japan region reached an all-time record amount, growing 43% 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 regarding 2011 financial results.
All dollar amounts and percentages set forth below should be considered to be approximations.
| • | Consolidated revenues are expected to be $19.6 billion for 2011. |
| • | Consolidated GAAP operating income is expected to be 16.5% to 17.5% of revenues for 2011 and consolidated non-GAAP operating income is expected to be 23% to 24% of revenues for 2011. Excluded from consolidated non-GAAP operating income are restructuring and acquisition-related charges, stock-based compensation expense and intangible asset amortization, which account for less than 1%, 5% and 2% of revenues, respectively. |
| • | Total consolidated GAAP non-operating expense, which includes investment income, interest expense and other expense, is expected to be $120 million in 2011 and total consolidated non-GAAP non-operating expense is expected to be $175 million in 2011. Excluded from non-GAAP non-operating expense is a non-recurring gain on strategic investments of $55 million. |
| • | Consolidated GAAP net income is expected to be $2.5 billion in 2011 and consolidated non-GAAP net income is expected to be $3.3 billion in 2011. Excluded from consolidated non-GAAP net income are restructuring and acquisition-related charges, stock-based compensation expense, intangible asset amortization and a non-recurring gain on strategic investments, which account for $70 million, $590 million, $200 million and a gain of $30 million, respectively. |
| • | Consolidated GAAP diluted earnings per share are expected to be $1.09 for 2011 and consolidated non-GAAP diluted earnings per share are expected to be $1.46 for 2011. Excluded from consolidated non-GAAP diluted earnings per share are restructuring and acquisition-related charges, stock-based compensation expense, intangible asset amortization and a non-recurring gain on strategic investments which are expected to be $0.03, $0.26, $0.09 and ($0.01) per diluted share, respectively, for 2011. |
| • | The consolidated GAAP income tax rate is expected to be 20% for 2011. Excluding the impact of restructuring and acquisition-related charges, stock-based compensation expense, intangible asset amortization and a non-recurring gain on strategic investments, which collectively impact the tax rate by 2%, the consolidated non-GAAP income tax rate is expected to be 22% for 2011. |
| • | GAAP net income attributable to the non-controlling interest in VMware is expected to be $117 million and non-GAAP net income attributable to the non-controlling interest in VMware is expected to be $175 million for 2011. Excluded from non-GAAP net income attributable to the non-controlling interest in VMware are acquisition-related charges, stock-based compensation expense, intangible asset amortization and a non-recurring gain on strategic investments which are expected to be $1 million, $57 million, $8 million and ($8 million), respectively. The incremental dilution attributable to the shares of VMware held by EMC is expected to be $15 million for 2011. |
| • | The weighted-average outstanding diluted shares are expected to be 2.26 billion for 2011. |
| • | Consolidated net cash provided by operating activities is expected to be $5.3 billion for 2011, and free cash flow is expected to be $4.0 billion in 2011. Excluded from free cash flow are $900 million of additions to property, plant and equipment and $440 million of capitalized software development costs. |
| • | EMC expects to repurchase $1.5 billion of the company’s stock in 2011. |
Supporting Resources
| • | EMC will host its first-quarter 2011 earnings conference call today at 8:30 a.m. ET, which will be available via webcast on EMC’s Investor Relations website athttp://www.emc.com/ir |
| • | Visithttp://ir.vmware.com for more information about VMware’s first-quarter financial results. |
About EMC
EMC Corporation (NYSE: EMC) is the world’s leading developer and provider of information infrastructure technology and solutions that enable organizations of all sizes to transform the way they compete and create value from their information. Information about EMC’s products and services can be found at www.EMC.com.
# # #
¹ Items excluded from the non-GAAP results for the first quarters of 2011 and 2010 are amounts relating to restructuring and acquisition-related charges, stock-based compensation expense and intangible asset amortization. See attached schedules for reconciliation of GAAP to non-GAAP.
² 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 first quarters of 2011 and 2010.
3Mid-tier platform products include hardware and software products from EMC VNX, EMC CLARiiON, EMC Celerra, EMC Centera, EMC Data Domain, EMC Isilon, EMC Avamar and EMC Atmos.
EMC, Atmos, Avamar, Celerra, Centera, CLARiiON, Data Domain, Greenplum, Isilon, RSA, Symmetrix, VNX and Vblock 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,” certain items noted on each such specific schedule (including, where noted, amounts relating to restructuring and acquisition-related charges, stock-based compensation expense and intangible asset amortization) are excluded from the non-GAAP financial measures.
EMC’s management uses the non-GAAP financial measures in the accompanying schedules to gain an understanding of EMC’s comparative operating performance (when comparing such results with previous periods or forecasts) and future prospects and excludes the above-listed items from its internal financial statements for purposes of its internal budgets and each reporting segment’s financial goals. These non-GAAP financial measures are used by EMC’s management in their financial and operating decision-making because management believes they reflect EMC’s ongoing business in a manner that allows meaningful period-to-period comparisons. EMC’s management believes that these non-GAAP financial measures provide useful information to investors and others (a) in understanding and evaluating EMC’s current operating performance and future prospects in the same manner as management does, if they so choose, and (b) in comparing in a consistent manner the Company’s current financial results with the Company’s past financial results.
This release also includes disclosures regarding free cash flow which is a non-GAAP financial measure. Free cash flow is defined as net cash provided by operating activities less additions to property, plant and equipment and capitalized software development costs. EMC uses free cash flow, among other measures, to evaluate the ability of its operations to generate cash that is available for purposes other than capital expenditures and capitalized software development costs. Management believes that information regarding free cash flow provides investors with an important perspective on the cash available to make strategic acquisitions and investments, repurchase shares, service debt and fund ongoing operations. As free cash flow is not a measure of liquidity calculated in accordance with GAAP, free cash flow should be considered in addition to, but not as a substitute for, the analysis provided in the statement of cash flows.
All of the foregoing non-GAAP financial measures have limitations. Specifically, the non-GAAP financial measures that exclude the items noted above do not include all items of income and expense that affect EMC’s operations. Further, these non-GAAP financial measures are not prepared in accordance with GAAP, may not be comparable to non-GAAP financial measures used by other companies and do not reflect any benefit that such items may confer on EMC. Management compensates for these limitations by also considering EMC’s financial results as determined in accordance with GAAP.
EMC CORPORATION
Consolidated Income Statements
(in thousands, except per share amounts)
Unaudited
| Three Months Ended | ||||||||
| March 31, | March 31, | |||||||
| 2011 | 2010 | |||||||
Revenues: | ||||||||
Product sales | $ | 2,931,259 | $ | 2,478,717 | ||||
Services | 1,676,359 | 1,411,975 | ||||||
| 4,607,618 | 3,890,692 | |||||||
Cost and expenses: | ||||||||
Cost of product sales | 1,320,488 | 1,161,922 | ||||||
Cost of services | 588,079 | 510,251 | ||||||
Research and development | 502,108 | 434,933 | ||||||
Selling, general and administrative | 1,495,931 | 1,261,284 | ||||||
Restructuring and acquisition-related charges | 26,893 | 18,502 | ||||||
Operating income | 674,119 | 503,800 | ||||||
Non-operating income (expense): | ||||||||
Investment income | 38,227 | 31,532 | ||||||
Interest expense | (44,979 | ) | (42,968 | ) | ||||
Other expense, net | (43,174 | ) | (9,021 | ) | ||||
Total non-operating expense | (49,926 | ) | (20,457 | ) | ||||
Income before provision for income taxes | 624,193 | 483,343 | ||||||
Income tax provision | 121,639 | 95,653 | ||||||
Net income | 502,554 | 387,690 | ||||||
Less: Net income attributable to the non-controlling interest in VMware, Inc. | (25,406 | ) | (14,986 | ) | ||||
Net income attributable to EMC Corporation | $ | 477,148 | $ | 372,704 | ||||
Net income per weighted average share, basic attributable to EMC Corporation common shareholders | $ | 0.23 | $ | 0.18 | ||||
Net income per weighted average share, diluted attributable to EMC Corporation common shareholders | $ | 0.21 | $ | 0.17 | ||||
Weighted average shares, basic | 2,066,136 | 2,051,030 | ||||||
Weighted average shares, diluted | 2,258,278 | 2,119,192 | ||||||
Reconciliation of GAAP to Non-GAAP
For the Three Months Ended March 31, 2011
(in thousands, except per share amounts)
Unaudited
| Revenue | Cost of Revenue | Research and Development | Selling, General and Administrative | Restructuring and Acquisition- Related Charges | Operating Income | Other (Expense) Income, net | Income Before Taxes | Income Tax Provision | Net Income | Net Income Attributable to VMware | Net Income Attributable to EMC | Net Income per Weighted Average Share, Basic | Net Income per Weighted Average Share, Diluted | |||||||||||||||||||||||||||||||||||||||||||
EMC Consolidated GAAP | $ | 4,607,618 | $ | 1,908,567 | $ | 502,108 | $ | 1,495,931 | $ | 26,893 | $ | 674,119 | $ | (49,926 | ) | $ | 624,193 | $ | 121,639 | $ | 502,554 | $ | (25,406 | ) | $ | 477,148 | $ | 0.231 | $ | 0.210 | ||||||||||||||||||||||||||
Restructuring and acquisition-related charges | — | — | — | — | (26,893 | ) | 26,893 | — | 26,893 | 7,190 | 19,703 | (35 | ) | 19,668 | $ | 0.010 | $ | 0.009 | ||||||||||||||||||||||||||||||||||||||
EMC Consolidated Adjusted (1) | 4,607,618 | 1,908,567 | 502,108 | 1,495,931 | — | 701,012 | (49,926 | ) | 651,086 | 128,829 | 522,257 | (25,441 | ) | 496,816 | $ | 0.241 | $ | 0.219 | ||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | (33,164 | ) | (76,181 | ) | (109,668 | ) | — | 219,013 | 635 | 219,648 | 54,433 | 165,215 | (14,154 | ) | 151,061 | $ | 0.073 | $ | 0.067 | ||||||||||||||||||||||||||||||||||||
Intangible asset amortization | — | (36,175 | ) | (3,714 | ) | (40,704 | ) | — | 80,593 | — | 80,593 | 26,030 | 54,563 | (2,084 | ) | 52,479 | $ | 0.025 | $ | 0.023 | ||||||||||||||||||||||||||||||||||||
EMC Consolidated Non-GAAP (2) | $ | 4,607,618 | $ | 1,839,228 | $ | 422,213 | $ | 1,345,559 | $ | — | $ | 1,000,618 | $ | (49,291 | ) | $ | 951,327 | $ | 209,292 | $ | 742,035 | $ | (41,679 | ) | $ | 700,356 | $ | 0.339 | $ | 0.309 | ||||||||||||||||||||||||||
EMC Information Infrastructure GAAP | $ | 3,764,906 | $ | 1,759,784 | $ | 335,766 | $ | 1,126,853 | $ | 26,721 | $ | 515,782 | $ | (51,450 | ) | $ | 464,332 | $ | 90,625 | $ | 373,707 | $ | — | $ | 373,707 | $ | 0.181 | $ | 0.165 | |||||||||||||||||||||||||||
Restructuring and acquisition-related charges | — | — | — | — | (26,721 | ) | 26,721 | — | 26,721 | 7,190 | 19,531 | — | 19,531 | $ | 0.009 | $ | 0.009 | |||||||||||||||||||||||||||||||||||||||
EMC Information Infrastructure Adjusted (3) | 3,764,906 | 1,759,784 | 335,766 | 1,126,853 | — | 542,503 | (51,450 | ) | 491,053 | 97,815 | 393,238 | — | 393,238 | $ | 0.190 | $ | 0.174 | |||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | (21,953 | ) | (34,297 | ) | (77,304 | ) | — | 133,554 | 635 | 134,189 | 39,076 | 95,113 | — | 95,113 | $ | 0.046 | $ | 0.042 | |||||||||||||||||||||||||||||||||||||
Intangible asset amortization | — | (25,893 | ) | (2,917 | ) | (38,579 | ) | — | 67,389 | — | 67,389 | 23,148 | 44,241 | — | 44,241 | $ | 0.021 | $ | 0.020 | |||||||||||||||||||||||||||||||||||||
EMC Information Infrastructure Non-GAAP (4) | $ | 3,764,906 | $ | 1,711,938 | $ | 298,552 | $ | 1,010,970 | $ | — | $ | 743,446 | $ | (50,815 | ) | $ | 692,631 | $ | 160,039 | $ | 532,592 | $ | — | $ | 532,592 | $ | 0.258 | $ | 0.236 | |||||||||||||||||||||||||||
VMware standalone GAAP | $ | 843,721 | $ | 149,897 | $ | 169,163 | $ | 371,159 | $ | — | $ | 153,502 | $ | 2,612 | $ | 156,114 | $ | 30,302 | $ | 125,812 | $ | — | $ | 125,812 | $ | 0.061 | $ | 0.056 | ||||||||||||||||||||||||||||
GAAP adjustments and eliminations | (1,009 | ) | (1,114 | ) | (2,821 | ) | (2,081 | ) | 172 | 4,835 | (1,088 | ) | 3,747 | 712 | 3,035 | (25,406 | ) | (22,371 | ) | $ | (0.011 | ) | $ | (0.011 | ) | |||||||||||||||||||||||||||||||
VMware within EMC GAAP (5) | 842,712 | 148,783 | 166,342 | 369,078 | 172 | 158,337 | 1,524 | 159,861 | 31,014 | 128,847 | (25,406 | ) | 103,441 | $ | 0.050 | $ | 0.045 | |||||||||||||||||||||||||||||||||||||||
Acquisition-related charges | — | — | — | — | (172 | ) | 172 | — | 172 | — | 172 | (35 | ) | 137 | $ | — | $ | — | ||||||||||||||||||||||||||||||||||||||
VMware within EMC Adjusted (6) | 842,712 | 148,783 | 166,342 | 369,078 | — | 158,509 | 1,524 | 160,033 | 31,014 | 129,019 | (25,441 | ) | 103,578 | $ | 0.050 | $ | 0.045 | |||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | (11,211 | ) | (41,884 | ) | (32,364 | ) | — | 85,459 | — | 85,459 | 15,357 | 70,102 | (14,154 | ) | 55,948 | $ | 0.027 | $ | 0.025 | ||||||||||||||||||||||||||||||||||||
Intangible asset amortization | — | (10,282 | ) | (797 | ) | (2,125 | ) | — | 13,204 | — | 13,204 | 2,882 | 10,322 | (2,084 | ) | 8,238 | $ | 0.004 | $ | 0.004 | ||||||||||||||||||||||||||||||||||||
VMware within EMC Non-GAAP (7) | $ | 842,712 | $ | 127,290 | $ | 123,661 | $ | 334,589 | $ | — | $ | 257,172 | $ | 1,524 | $ | 258,696 | $ | 49,253 | $ | 209,443 | $ | (41,679 | ) | $ | 167,764 | $ | 0.081 | $ | 0.073 | |||||||||||||||||||||||||||
| Wtd. Average Share O/S | 2,066,136 | 2,258,278 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Incremental VMware dilution | $ | 2,764 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of GAAP to Non-GAAP
For the Three Months Ended March 31, 2011
(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:
| Revenue | Cost of Revenue | Research and Development | Selling, General and Administrative | Restructuring and Acquisition- Related Charges | Operating Income | Other (Expense) Income, net | Income Before Taxes | Income Tax Provision | Net Income | Net Income Attributable to VMware | Net Income Attributable to EMC | Net Income per Weighted Average Share, Basic | Net Income per Weighted Average Share, Diluted | |||||||||||||||||||||||||||||||||||||||||||
Non-cash interest expense on convertible debt (8) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (26,822 | ) | $ | (26,822 | ) | $ | (10,081 | ) | $ | (16,741 | ) | $ | — | $ | (16,741 | ) | $ | (0.008 | ) | $ | (0.007 | ) | |||||||||||||||||||||
Transition costs (9) | — | 63 | 419 | 5,706 | — | (6,188 | ) | — | (6,188 | ) | (2,094 | ) | (4,094 | ) | — | (4,094 | ) | $ | (0.002 | ) | $ | (0.002 | ) | |||||||||||||||||||||||||||||||||
| $ | — | $ | 63 | $ | 419 | $ | 5,706 | $ | — | $ | (6,188 | ) | $ | (26,822 | ) | $ | (33,010 | ) | $ | (12,175 | ) | $ | (20,835 | ) | $ | — | $ | (20,835 | ) | $ | (0.010 | ) | $ | (0.009 | ) | |||||||||||||||||||||
| (1) | Represents EMC Consolidated GAAP excluding 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 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 acquisition-related charges. |
| (7) | Represents VMware within EMC Adjusted 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 March 31, 2010
(in thousands, except per share amounts)
Unaudited
| Revenue | Cost of Revenue | Research and Development | Selling, General and Administrative | Restructuring and Acquisition- Related Charges | Operating Income | Other (Expense) Income, net | Income Before Taxes | Income Tax Provision | Net Income | Net Income Attributable to VMware | Net Income Attributable to EMC | Net Income per Weighted Average Share, Basic | Net Income per Weighted Average Share, Diluted | |||||||||||||||||||||||||||||||||||||||||||
EMC Consolidated GAAP | $ | 3,890,692 | $ | 1,672,173 | $ | 434,933 | $ | 1,261,284 | $ | 18,502 | $ | 503,800 | $ | (20,457 | ) | $ | 483,343 | $ | 95,653 | $ | 387,690 | $ | (14,986 | ) | $ | 372,704 | $ | 0.182 | $ | 0.175 | ||||||||||||||||||||||||||
Restructuring and acquisition-related charges | — | — | — | — | (18,502 | ) | 18,502 | — | 18,502 | 3,408 | 15,094 | (237 | ) | 14,857 | $ | 0.007 | $ | 0.007 | ||||||||||||||||||||||||||||||||||||||
EMC Consolidated Adjusted (1) | 3,890,692 | 1,672,173 | 434,933 | 1,261,284 | — | 522,302 | (20,457 | ) | 501,845 | 99,061 | 402,784 | (15,223 | ) | 387,561 | $ | 0.189 | $ | 0.182 | ||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | (26,798 | ) | (59,855 | ) | (79,813 | ) | — | 166,466 | 201 | 166,667 | 40,049 | 126,618 | (10,432 | ) | 116,186 | $ | 0.057 | $ | 0.055 | ||||||||||||||||||||||||||||||||||||
Intangible asset amortization | — | (32,181 | ) | (4,562 | ) | (32,741 | ) | — | 69,484 | — | 69,484 | 23,112 | 46,372 | (529 | ) | 45,843 | $ | 0.022 | $ | 0.022 | ||||||||||||||||||||||||||||||||||||
EMC Consolidated Non-GAAP (2) | $ | 3,890,692 | $ | 1,613,194 | $ | 370,516 | $ | 1,148,730 | $ | — | $ | 758,252 | $ | (20,256 | ) | $ | 737,996 | $ | 162,222 | $ | 575,774 | $ | (26,184 | ) | $ | 549,590 | $ | 0.268 | $ | 0.258 | ||||||||||||||||||||||||||
EMC Information Infrastructure GAAP | $ | 3,258,727 | $ | 1,564,373 | $ | 297,824 | $ | 979,259 | $ | 17,263 | $ | 400,008 | $ | (15,186 | ) | $ | 384,822 | $ | 76,254 | $ | 308,568 | $ | — | $ | 308,568 | $ | 0.150 | $ | 0.146 | |||||||||||||||||||||||||||
Restructuring and acquisition-related charges | — | — | — | — | (17,263 | ) | 17,263 | — | 17,263 | 3,408 | 13,855 | — | 13,855 | $ | 0.007 | $ | 0.007 | |||||||||||||||||||||||||||||||||||||||
EMC Information Infrastructure Adjusted (3) | 3,258,727 | 1,564,373 | 297,824 | 979,259 | — | 417,271 | (15,186 | ) | 402,085 | 79,662 | 322,423 | — | 322,423 | $ | 0.157 | $ | 0.152 | |||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | (17,870 | ) | (25,194 | ) | (55,381 | ) | — | 98,445 | 143 | 98,588 | 26,560 | 72,028 | — | 72,028 | $ | 0.035 | $ | 0.034 | |||||||||||||||||||||||||||||||||||||
Intangible asset amortization | — | (28,813 | ) | (4,089 | ) | (32,263 | ) | — | 65,165 | — | 65,165 | 21,560 | 43,605 | — | 43,605 | $ | 0.021 | $ | 0.021 | |||||||||||||||||||||||||||||||||||||
EMC Information Infrastructure Non-GAAP (4) | $ | 3,258,727 | $ | 1,517,690 | $ | 268,541 | $ | 891,615 | $ | — | $ | 580,881 | $ | (15,043 | ) | $ | 565,838 | $ | 127,782 | $ | 438,056 | $ | — | $ | 438,056 | $ | 0.214 | $ | 0.207 | |||||||||||||||||||||||||||
VMware standalone GAAP | $ | 633,533 | $ | 108,650 | $ | 138,112 | $ | 284,585 | $ | — | $ | 102,186 | $ | (4,547 | ) | $ | 97,639 | $ | 19,218 | $ | 78,421 | $ | — | $ | 78,421 | $ | 0.038 | $ | 0.037 | |||||||||||||||||||||||||||
GAAP adjustments and eliminations | (1,568 | ) | (850 | ) | (1,003 | ) | (2,560 | ) | 1,239 | 1,606 | (724 | ) | 882 | 181 | 701 | (14,986 | ) | (14,285 | ) | $ | (0.007 | ) | $ | (0.008 | ) | |||||||||||||||||||||||||||||||
VMware within EMC GAAP (5) | 631,965 | 107,800 | 137,109 | 282,025 | 1,239 | 103,792 | (5,271 | ) | 98,521 | 19,399 | 79,122 | (14,986 | ) | 64,136 | $ | 0.031 | $ | 0.029 | ||||||||||||||||||||||||||||||||||||||
Acquisition-related charges | — | — | — | — | (1,239 | ) | 1,239 | — | 1,239 | — | 1,239 | (237 | ) | 1,002 | $ | 0.000 | $ | 0.000 | ||||||||||||||||||||||||||||||||||||||
VMware within EMC Adjusted (6) | 631,965 | 107,800 | 137,109 | 282,025 | — | 105,031 | (5,271 | ) | 99,760 | 19,399 | 80,361 | (15,223 | ) | 65,138 | $ | 0.032 | $ | 0.030 | ||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | (8,928 | ) | (34,661 | ) | (24,432 | ) | — | 68,021 | 58 | 68,079 | 13,489 | 54,590 | (10,432 | ) | 44,158 | $ | 0.022 | $ | 0.021 | ||||||||||||||||||||||||||||||||||||
Intangible asset amortization | — | (3,368 | ) | (473 | ) | (478 | ) | — | 4,319 | — | 4,319 | 1,552 | 2,767 | (529 | ) | 2,238 | $ | 0.001 | $ | 0.001 | ||||||||||||||||||||||||||||||||||||
VMware within EMC Non-GAAP (7) | $ | 631,965 | $ | 95,504 | $ | 101,975 | $ | 257,115 | $ | — | $ | 177,371 | $ | (5,213 | ) | $ | 172,158 | $ | 34,440 | $ | 137,718 | $ | (26,184 | ) | $ | 111,534 | $ | 0.054 | $ | 0.052 | ||||||||||||||||||||||||||
| Wtd. Average Share O/S | 2,051,030 | 2,119,192 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Incremental VMware dilution | $ | 1,883 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of GAAP to Non-GAAP
For the Three Months Ended March 31, 2010
(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:
| Revenue | Cost of Revenue | Research and Development | Selling, General and Administrative | Restructuring and Acquisition-Related Charges | Operating Income | Other (Expense) Income, net | Income Before Taxes | Income Tax Provision | Net Income | Net Income Attributable to VMware | Net Income Attributable to EMC | Net Income per Weighted Average Share, Basic | Net Income per Weighted Average Share, Diluted | |||||||||||||||||||||||||||||||||||||||||||
Non-cash interest expense on convertible debt (8) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (25,921 | ) | $ | (25,921 | ) | $ | (8,839 | ) | $ | (17,082 | ) | $ | — | $ | (17,082 | ) | $ | (0.008 | ) | $ | (0.008 | ) | |||||||||||||||||||||
Transition costs (9) | — | 588 | 1,665 | 12,458 | — | (14,711 | ) | — | (14,711 | ) | (4,179 | ) | (10,532 | ) | — | (10,532 | ) | $ | (0.005 | ) | $ | (0.005 | ) | |||||||||||||||||||||||||||||||||
| $ | — | $ | 588 | $ | 1,665 | $ | 12,458 | $ | — | $ | (14,711 | ) | $ | (25,921 | ) | $ | (40,632 | ) | $ | (13,018 | ) | $ | (27,614 | ) | $ | — | $ | (27,614 | ) | $ | (0.013 | ) | $ | (0.013 | ) | |||||||||||||||||||||
| (1) | Represents EMC Consolidated GAAP excluding 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 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 acquisition-related charges. |
| (7) | Represents VMware within EMC Adjusted 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
EMC CORPORATION
Consolidated Balance Sheets
(in thousands, except per share amounts)
Unaudited
| March 31, | December 31, | |||||||
| 2011 | 2010 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 4,102,332 | $ | 4,119,138 | ||||
Short-term investments | 1,491,454 | 1,256,175 | ||||||
Accounts and notes receivable, less allowance for doubtful accounts of $62,305 and $57,385 | 2,379,175 | 2,569,523 | ||||||
Inventories | 921,004 | 856,405 | ||||||
Deferred income taxes | 631,809 | 609,832 | ||||||
Other current assets | 646,684 | 372,249 | ||||||
Total current assets | 10,172,458 | 9,783,322 | ||||||
Long-term investments | 3,876,569 | 4,115,918 | ||||||
Property, plant and equipment, net | 2,565,263 | 2,528,432 | ||||||
Intangible assets, net | 1,556,718 | 1,624,267 | ||||||
Goodwill | 11,790,048 | 11,772,650 | ||||||
Other assets, net | 1,226,376 | 1,008,695 | ||||||
Total assets | $ | 31,187,432 | $ | 30,833,284 | ||||
LIABILITIES & SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 913,773 | $ | 1,062,600 | ||||
Accrued expenses | 2,044,953 | 2,090,035 | ||||||
Income taxes payable | — | 199,735 | ||||||
Convertible debt | 3,244,134 | 3,214,771 | ||||||
Deferred revenue | 3,155,651 | 2,810,873 | ||||||
Total current liabilities | 9,358,511 | 9,378,014 | ||||||
Income taxes payable | 266,880 | 265,549 | ||||||
Deferred revenue | 2,065,026 | 1,853,263 | ||||||
Deferred income taxes | 710,474 | 717,004 | ||||||
Other liabilities | 248,081 | 217,449 | ||||||
Total liabilities | 12,648,972 | 12,431,279 | ||||||
Convertible debt | 205,866 | 235,229 | ||||||
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 2,057,568 and 2,069,246 shares | 20,576 | 20,692 | ||||||
Additional paid-in capital | 3,426,722 | 3,816,681 | ||||||
Retained earnings | 14,136,432 | 13,659,284 | ||||||
Accumulated other comprehensive loss, net | (56,903 | ) | (92,617 | ) | ||||
Total EMC Corporation’s shareholders’ equity | 17,526,827 | 17,404,040 | ||||||
Non-controlling interest in VMware, Inc. | 805,767 | 762,736 | ||||||
Total shareholders’ equity | 18,332,594 | 18,166,776 | ||||||
Total liabilities and shareholders’ equity | $ | 31,187,432 | $ | 30,833,284 | ||||
EMC CORPORATION
Consolidated Statements of Cash Flows
(in thousands)
Unaudited
| Three Months Ended | ||||||||
| March 31, 2011 | March 31, 2010 | |||||||
Cash flows from operating activities: | ||||||||
Cash received from customers | $ | 5,392,175 | $ | 4,615,013 | ||||
Cash paid to suppliers and employees | (4,009,553 | ) | (3,213,917 | ) | ||||
Dividends and interest received | 33,927 | 26,634 | ||||||
Interest paid | (4,749 | ) | (4,670 | ) | ||||
Income taxes paid | (277,023 | ) | (105,714 | ) | ||||
Net cash provided by operating activities | 1,134,777 | 1,317,346 | ||||||
Cash flows from investing activities: | ||||||||
Additions to property, plant and equipment | (165,525 | ) | (114,048 | ) | ||||
Capitalized software development costs | (111,993 | ) | (93,161 | ) | ||||
Purchases of short- and long-term available-for-sale securities | (1,601,241 | ) | (1,475,229 | ) | ||||
Sales of short- and long-term available-for-sale securities | 1,341,335 | 628,504 | ||||||
Maturities of short- and long-term available-for-sale securities | 261,228 | 40,346 | ||||||
Business acquisitions, net of cash acquired | (14,950 | ) | (288,246 | ) | ||||
Increase in strategic and other related investments | (198,049 | ) | (5,240 | ) | ||||
Other | (45,000 | ) | (16,648 | ) | ||||
Net cash used in investing activities | (534,195 | ) | (1,323,722 | ) | ||||
Cash flows from financing activities: | ||||||||
Issuance of EMC’s common stock from the exercise of stock options | 224,347 | 130,338 | ||||||
Issuance of VMware’s common stock from the exercise of stock options | 90,171 | 109,775 | ||||||
EMC repurchase of EMC’s common stock | (868,065 | ) | (176,260 | ) | ||||
EMC purchase of VMware’s common stock | (38,000 | ) | (99,500 | ) | ||||
VMware repurchase of VMware’s common stock | (147,729 | ) | (31,348 | ) | ||||
Excess tax benefits from stock-based compensation | 109,008 | 35,248 | ||||||
Payment of long-term and short-term obligations | (11 | ) | (2,327 | ) | ||||
Proceeds from long-term and short-term obligations | 294 | 1,116 | ||||||
Net cash used in financing activities | (629,985 | ) | (32,958 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | 12,597 | (6,539 | ) | |||||
Net decrease in cash and cash equivalents | (16,806 | ) | (45,873 | ) | ||||
Cash and cash equivalents at beginning of period | 4,119,138 | 6,302,499 | ||||||
Cash and cash equivalents at end of period | $ | 4,102,332 | $ | 6,256,626 | ||||
Reconciliation of net income to net cash provided by operating activities: | ||||||||
Net income | $ | 502,554 | $ | 387,690 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 339,272 | 281,580 | ||||||
Non-cash interest expense on convertible debt | 26,291 | 25,921 | ||||||
Non-cash restructuring and other special charges | 382 | 162 | ||||||
Stock-based compensation expense | 212,265 | 158,805 | ||||||
Provision for doubtful accounts | 6,415 | 7,226 | ||||||
Deferred income taxes, net | (10,834 | ) | (28,766 | ) | ||||
Excess tax benefits from stock-based compensation | (109,008 | ) | (35,248 | ) | ||||
Other | (8,316 | ) | (820 | ) | ||||
Changes in assets and liabilities, net of acquisitions: | ||||||||
Accounts and notes receivable | 223,464 | 380,790 | ||||||
Inventories | (102,729 | ) | 2,198 | |||||
Other assets | (127,747 | ) | (24,760 | ) | ||||
Accounts payable | (136,802 | ) | (102,803 | ) | ||||
Accrued expenses | (121,190 | ) | (83,164 | ) | ||||
Income taxes payable | (144,550 | ) | 18,705 | |||||
Deferred revenue | 554,678 | 336,305 | ||||||
Other liabilities | 30,632 | (6,475 | ) | |||||
Net cash provided by operating activities | $ | 1,134,777 | $ | 1,317,346 | ||||
EMC Corporation
Reconciliation of Cash Flow from Operations to Free Cash Flow
(in thousands)
Unaudited
| Three Months Ended | ||||||||
| March 31, 2011 | March 31, 2010 | |||||||
Cash flow from Operations | $ | 1,134,777 | $ | 1,317,346 | ||||
Capital Expenditures | (165,525 | ) | (114,048 | ) | ||||
Capitalized Software | (111,993 | ) | (93,161 | ) | ||||
Free Cash Flow | $ | 857,259 | $ | 1,110,137 | ||||
EMC Corporation
For the three months ended March 31, 2011
Reconciliation of Consolidated GAAP to Consolidated Non-GAAP Tax Rate
(in thousands)
Unaudited
| Income Before Tax | Tax Provision | Tax Rate | ||||||||||
EMC GAAP | $ | 624,193 | $ | 121,639 | 19.5 | % | ||||||
Stock-based compensation expense | 219,648 | 54,433 | 24.8 | % | ||||||||
Intangible asset amortization | 80,593 | 26,030 | 32.3 | % | ||||||||
Restructuring and acquisition-related charges | 26,893 | 7,190 | 26.7 | % | ||||||||
EMC Non-GAAP | $ | 951,327 | $ | 209,292 | 22.0 | % | ||||||
EMC Corporation
Supplemental
Revenue Analysis
(in thousands)
Unaudited
Supplemental Revenue Data
| Q1 2009 | Q2 2009 | Q3 2009 | Q4 2009 | FY 2009 | Q1 2010 | Q2 2010 | Q3 2010 | Q4 2010 | FY 2010 | Q1 2011 | ||||||||||||||||||||||||||||||||||
Storage: | ||||||||||||||||||||||||||||||||||||||||||||
Product Revenue | $ | 1,572,408 | $ | 1,632,309 | $ | 1,818,230 | $ | 2,175,104 | $ | 7,198,051 | $ | 2,017,314 | $ | 2,076,855 | $ | 2,172,875 | $ | 2,557,243 | $ | 8,824,287 | $ | 2,381,891 | ||||||||||||||||||||||
Services Revenue | 790,932 | 842,558 | 880,807 | 947,061 | 3,461,358 | 901,781 | 922,067 | 966,414 | 1,084,564 | 3,874,826 | 1,048,406 | |||||||||||||||||||||||||||||||||
Total Storage Revenue | $ | 2,363,340 | $ | 2,474,867 | $ | 2,699,037 | $ | 3,122,165 | $ | 10,659,409 | $ | 2,919,095 | $ | 2,998,922 | $ | 3,139,289 | $ | 3,641,807 | $ | 12,699,113 | $ | 3,430,297 | ||||||||||||||||||||||
Information Intelligence Group: | ||||||||||||||||||||||||||||||||||||||||||||
Product Revenue | $ | 58,710 | $ | 60,792 | $ | 58,209 | $ | 83,125 | $ | 260,836 | $ | 63,662 | $ | 62,329 | $ | 59,078 | $ | 84,069 | $ | 269,138 | $ | 43,252 | ||||||||||||||||||||||
Services Revenue | 115,605 | 119,445 | 118,979 | 124,724 | 478,753 | 114,502 | 116,105 | 116,713 | 119,439 | 466,759 | 117,103 | |||||||||||||||||||||||||||||||||
Total Information Intelligence Group Revenue | $ | 174,315 | $ | 180,237 | $ | 177,188 | $ | 207,849 | $ | 739,589 | $ | 178,164 | $ | 178,434 | $ | 175,791 | $ | 203,508 | $ | 735,897 | $ | 160,355 | ||||||||||||||||||||||
Security: | ||||||||||||||||||||||||||||||||||||||||||||
Product Revenue | $ | 80,671 | $ | 84,080 | $ | 84,080 | $ | 91,441 | $ | 340,272 | $ | 85,814 | $ | 90,876 | $ | 102,442 | $ | 121,019 | $ | 400,151 | $ | 87,180 | ||||||||||||||||||||||
Services Revenue | 62,035 | 63,055 | 68,420 | 72,168 | 265,678 | 75,654 | 82,460 | 83,290 | 87,828 | 329,232 | 87,074 | |||||||||||||||||||||||||||||||||
Total Security Revenue | $ | 142,706 | $ | 147,135 | $ | 152,500 | $ | 163,609 | $ | 605,950 | $ | 161,468 | $ | 173,336 | $ | 185,732 | $ | 208,847 | $ | 729,383 | $ | 174,254 | ||||||||||||||||||||||
EMC Information Infrastructure: | ||||||||||||||||||||||||||||||||||||||||||||
Product Revenue | $ | 1,711,789 | $ | 1,777,181 | $ | 1,960,519 | $ | 2,349,670 | $ | 7,799,159 | $ | 2,166,790 | $ | 2,230,060 | $ | 2,334,395 | $ | 2,762,331 | $ | 9,493,576 | $ | 2,512,323 | ||||||||||||||||||||||
Services Revenue | 968,572 | 1,025,058 | 1,068,206 | 1,143,953 | 4,205,789 | 1,091,937 | 1,120,632 | 1,166,417 | 1,291,831 | 4,670,817 | 1,252,583 | |||||||||||||||||||||||||||||||||
Total EMC Information Infrastructure Revenue | $ | 2,680,361 | $ | 2,802,239 | $ | 3,028,725 | $ | 3,493,623 | $ | 12,004,948 | $ | 3,258,727 | $ | 3,350,692 | $ | 3,500,812 | $ | 4,054,162 | $ | 14,164,393 | $ | 3,764,906 | ||||||||||||||||||||||
VMware: | ||||||||||||||||||||||||||||||||||||||||||||
Product Revenue | $ | 257,331 | $ | 228,089 | $ | 240,062 | $ | 303,504 | $ | 1,028,986 | $ | 311,927 | $ | 323,256 | $ | 341,530 | $ | 422,568 | $ | 1,399,281 | $ | 418,936 | ||||||||||||||||||||||
Services Revenue | 213,070 | 227,024 | 248,843 | 303,039 | 991,976 | 320,038 | 349,549 | 369,929 | 411,936 | 1,451,452 | 423,776 | |||||||||||||||||||||||||||||||||
Total VMware Revenue | $ | 470,401 | $ | 455,113 | $ | 488,905 | $ | 606,543 | $ | 2,020,962 | $ | 631,965 | $ | 672,805 | $ | 711,459 | $ | 834,504 | $ | 2,850,733 | $ | 842,712 | ||||||||||||||||||||||
Consolidated Revenues: | ||||||||||||||||||||||||||||||||||||||||||||
Product Revenue | $ | 1,969,120 | $ | 2,005,270 | $ | 2,200,581 | $ | 2,653,174 | $ | 8,828,145 | $ | 2,478,717 | $ | 2,553,316 | $ | 2,675,925 | $ | 3,184,899 | $ | 10,892,857 | $ | 2,931,259 | ||||||||||||||||||||||
Services Revenue | 1,181,642 | 1,252,082 | 1,317,049 | 1,446,992 | 5,197,765 | 1,411,975 | 1,470,181 | 1,536,346 | 1,703,767 | 6,122,269 | 1,676,359 | |||||||||||||||||||||||||||||||||
Total Consolidated Revenues | $ | 3,150,762 | $ | 3,257,352 | $ | 3,517,630 | $ | 4,100,166 | $ | 14,025,910 | $ | 3,890,692 | $ | 4,023,497 | $ | 4,212,271 | $ | 4,888,666 | $ | 17,015,126 | $ | 4,607,618 | ||||||||||||||||||||||
Percentage impact to EMC revenue growth rate due to changes in exchange rates from the prior year | (3.5 | )% | (3.7 | )% | (1.3 | )% | 2.5 | % | (1.4 | )% | 2.4 | % | 0.0 | % | (0.6 | )% | (0.6 | )% | 0.2 | % | 1.1 | % | ||||||||||||||||||||||
EMC Corporation
Reconciliation of Gross Margin GAAP to Non-GAAP
(in thousands)
Unaudited
| Q1 2011 | Q1 2010 | |||||||
Gross Margin GAAP | $ | 2,699,051 | $ | 2,218,519 | ||||
Stock-based compensation expense | 33,164 | 26,798 | ||||||
Intangible asset amortization | 36,175 | 32,181 | ||||||
Restructuring and acquisition-related charges | — | — | ||||||
Gross Margin Non-GAAP | $ | 2,768,390 | $ | 2,277,498 | ||||
Revenues | $ | 4,607,618 | $ | 3,890,692 | ||||
% GAAP | 58.6 | % | 57.0 | % | ||||
% Non-GAAP | 60.1 | % | 58.5 | % | ||||
EMC Corporation
Reconciliation of Operating Margin GAAP to Non-GAAP
(in thousands)
Unaudited
| Q1 2011 | Q1 2010 | |||||||
Operating Margin GAAP | $ | 674,119 | $ | 503,800 | ||||
Restructuring and acquisition-related charges | 26,893 | 18,502 | ||||||
Stock-based compensation expense | 219,013 | 166,466 | ||||||
Intangible asset amortization | 80,593 | 69,484 | ||||||
Operating Margin Non-GAAP | $ | 1,000,618 | $ | 758,252 | ||||
Revenues | $ | 4,607,618 | $ | 3,890,692 | ||||
% GAAP | 14.6 | % | 12.9 | % | ||||
% Non-GAAP | 21.7 | % | 19.5 | % | ||||