-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Jzez4jZRNuyKdnypKJWG+ca5pvRugDHQ6ADR0Yto2GVFy5P+lBwEZvAhe2lFkCO0 PgAxvZ7YejPxn88GZb2COA== 0000790070-97-000014.txt : 19970515 0000790070-97-000014.hdr.sgml : 19970515 ACCESSION NUMBER: 0000790070-97-000014 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970514 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMC CORP CENTRAL INDEX KEY: 0000790070 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER STORAGE DEVICES [3572] IRS NUMBER: 042680009 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09853 FILM NUMBER: 97603998 BUSINESS ADDRESS: STREET 1: 171 SOUTH STREET CITY: HOPKINTON STATE: MA ZIP: 01748-9103 BUSINESS PHONE: 5084351000 MAIL ADDRESS: STREET 1: 171 SOUTH STREET CITY: HOPKINTON STATE: MA ZIP: 01748-9103 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Quarter Ended: March 31, 1997 Commission File Number 1-9853 EMC CORPORATION - --------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Massachusetts 04-2680009 - ----------------------------- ------------------------------ (State or other jurisdiction of (I.R.S. Employer Identification organization or incorporation) Number) 171 South Street Hopkinton, Massachusetts 01748-9103 - ------------------------------------------------------------ (Address of principal executive offices, including zip code) (508) 435-1000 - ------------------------------------------------------------------- - (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO ________ Indicate the number of shares outstanding of each of the issuer's classes of Common Stock, as of the latest practicable date. Common Stock, par value $.01 per share 246,138,878 ------------------------------------- ------------ Class Outstanding as of March 31, 1997 -2- EMC CORPORATION Page No. Part I - Financial Information Consolidated Balance Sheets March 31, 1997 and December 31, 1996 3 Consolidated Statements of Income for the Three Months Ended March 31, 1997 and March 30, 1996 4 Consolidated Statements of Cash Flows for the Three Months Ended March 31, 1997 and March 30, 1996 5 Notes to Interim Consolidated Financial Statements 6-8 Management's Discussion and Analysis of Financial Condition and Results of Operations 9-13 Part II - Other Information 14-15 Signatures 16 Exhibit Index 17 -3- EMC CORPORATION CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts)
March 31, December 31, 1997 1996 ASSETS Current assets: Cash and cash equivalents $700,526 $496,377 Short-term investments 515,069 230,981 Trade and notes receivable less allowance for doubtful accounts of $7,517 and $7,368 in 1997 and 1996, respectively 644,269 627,409 Inventories 442,328 336,581 Deferred income taxes 36,819 43,421 Other assets 24,241 19,367 Total current assets 2,363,252 1,754,136 Long-term investments 123,954 113,500 Notes receivable, net 21,517 20,013 Property, plant and equipment, net 294,459 276,387 Deferred income taxes 16,620 16,664 Intangible and other assets, net 129,007 112,846 Total assets $2,948,809$2,293,546 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable and current portion of long-term obligations $6,863 $7,058 Accounts payable 215,410 172,871 Accrued expenses 103,741 122,562 Income taxes payable 122,464 104,899 Deferred revenue 7,885 10,112 Total current liabilities 456,363 417,502 Deferred revenue 1,608 2,019 Deferred income taxes 40,185 46,002 Long-term obligations: 3 1/4% convertible subordinated notes due 2002 517,500 --- 4 1/4% convertible subordinated notes due 2001 --- 142,720 Notes payable and other noncurrent liabilities 41,019 48,514 Total liabilities 1,056,675 656,757 Commitments and contingencies Stockholders' equity: Series Preferred Stock, par value $.01; authorized 25,000,000 --- --- shares, none outstanding Common Stock, par value $.01; authorized 500,000,000 shares; issued 246,138,878 and 238,239,672 shares, in 1997 and 1996, respectively 2,461 2,382 Additional paid-in capital 608,377 463,687 Deferred compensation (6,229) (7,027) Retained earnings 1,283,696 1,172,828 Cumulative translation adjustment 3,829 4,919 Total stockholders' equity 1,892,134 1,636,789 Total liabilities and stockholders' equity $2,948,809$2,293,546 The accompanying notes are an integral part of the consolidated financial statements.
-4- EMC CORPORATION CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) (unaudited)
For the Three Months Ended March 31, March 30, 1997 1996 Revenues: Net sales $600,900 $509,184 Service and rental 17,537 12,303 618,437 521,487 Costs and expenses: Cost of sales and service 335,985293,164 Research and development 48,091 35,318 Selling, general and administrative 97,624 81,763 Operating income 136,737 111,242 Investment income 11,684 6,325 Interest expense (1,402) (3,059) Other income / (expense), net 2,097 207 Income before taxes 149,116 114,715 Income tax provision 38,248 30,170 Net income $110,868 $84,545 Net income per weighted average share, primary $0.44 $0.35 Net income per weighted average share, fully diluted $0.44 $0.35 Weighted average number of common shares outstanding, primary 254,853 248,539 Weighted average number of common shares outstanding, fully diluted 254,857 248,879 The accompanying notes are an integral part of the consolidated financial statements.
-5- EMC CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)
For the Three Months Ended March 31, March 30, 1997 1996 Cash flows from operating activities: Net income $110,868 $84,545 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 26,241 16,414 Deferred income taxes, net 829 8,895 Net loss on disposal of property and equipment 142 76 Changes in assets and liabilities: Trade and notes receivable (18,305) 44,025 Inventories (105,716) 13,181 Other assets (13,693) (12,673) Accounts payable 42,534 14,348 Accrued expenses (18,830) (24,953) Income taxes payable 17,553 (1,171) Deferred revenue (2,644) 3,450 Net cash provided by operating activities 38,979 146,137 Cash flows from investing activities Additions to property, plant and equipment(36,121)(29,739) Purchase of patents --- (5,000) Proceeds from disposal of property and equipment 135 681 Capitalized software development costs (6,200) (6,293) Purchase of short-term and long-term investments, net (294,542) (2,106) Net cash used by investing activities (336,728) (42,457) Cash flows from financing activities: Issuance of common stock 4,087 6,942 Repurchase of shares for treasury --- (10,295) Redemption of 4 1/4% notes due 2001 (65) --- Issuance of 3 1/4% notes due 2002, net of issuance costs 506,671 --- Payment of long-term and short-term obligations (7,814) (193) Issuance of long-term and short-term obligations 124 --- Net cash provided (used) by financing activities 503,003 (3,546) Effect of exchange rate changes on cash (1,105) (1,003) Net increase in cash and cash equivalents 205,254 100,134 Cash and cash equivalents at beginning of period 496,377 379,628 Cash and cash equivalents at end of period $700,526 $478,759 Non-cash activity - conversion of 4 1/4% notes to common stock, net of issuance costs $140,682 --- - patents acquired by notes and other payables ---$35,000 The accompanying notes are an integral part of the consolidated financial statements.
-6- EMC CORPORATION NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Presentation Company EMC Corporation and its subsidiaries ("EMC" or the "Company") design, manufacture, market and support a wide range of storage related hardware and software products and related services for the Enterprise Storage market. Enterprise Storage provides shared storage of information from all types of computers, including both mainframe and open systems computers. EMC's products are sold as storage solutions for customers utilizing a variety of computer system platforms, including, but not limited to, International Business Machines Corporation ("IBM") and IBMcompatible mainframe, Unisys Corporation ("Unisys"), Compagnie des Machines Bull S.A., Hewlett-Packard Company ("HP"), NCR Corporation, Sequent Computer Systems, Inc. ("Sequent"), Seimens Nixdorf Informationssysteme AG ("SNI") (See Note 6) and other open systems platforms. Accounting The accompanying consolidated financial statements are unaudited and have been prepared in accordance with generally accepted accounting principles. These statements include the accounts of EMC and its subsidiaries. Certain information and footnote disclosures normally included in the Company's annual consolidated financial statements have been condensed or omitted. The interim consolidated financial statements, in the opinion of management, reflect all adjustments (consisting only of normal recurring accruals) necessary for a fair statement of the results for the interim periods ended March 31, 1997 and March 30, 1996. Certain prior year amounts have been reclassified to conform with the 1997 presentation. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the entire fiscal year. It is suggested that these interim consolidated financial statements be read in conjunction with the audited consolidated financial statements for the year ended December 31, 1996, which are contained in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 27, 1997. -7- EMC CORPORATION NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS 2. Inventory March 31, 1997 December 31, 1996 Inventories consist of: (in thousands) Purchased parts $21,165 $16,610 Work-in-process 288,085 210,445 Finished goods 133,078 109,526 $442,328 $336,581 3. Long-Term Obligations In March 1997, the Company sold in a private placement under Rule 144A of the Securities Act of 1933, as amended (the "Securities Act"), $517.5 million of 31/4% convertible subordinated notes due 2002 (the "Notes"). The Notes are generally convertible into shares of common stock of the Company at a conversion price of $45.31 per share,subject to adjustment in certain events. Interest is payable semiannually and the Notes are redeemable at the option of the Company at set redemption prices (which range from 100.65% to 101.30% of principal), plus accrued interest, commencing March 15, 2000. 4. Net Income Per Share Net income per share was computed on the basis of weighted average common and dilutive common equivalent shares outstanding. Primary and fully diluted weighted average shares outstanding used in the per share computations reflect the dilutive effects of the Notes for the quarter ended March 31, 1997, and of the 41/4% convertible subordinated notes due 2001 for the quarter ended March 30, 1996. The dilutive effects of outstanding stock options are reflected in all periods presented. In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, "Earnings per Share" which is effective for fiscal years ending after December 15, 1997. This Statement replaces the presentation of primary earnings per share ("EPS") with a presentation of basic EPS, which excludes dilutive securities. It also requires a reconciliation of the basic EPS to diluted EPS and dual presentation on the face of the income statement. Pro forma net income per share for the first quarter of 1997 and 1996, respectively, as computed under the new standard is as follows: -8- EMC CORPORATION NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS March 31, 1997 March 30, 1996 Net income per weighted average share, basic $0.45 $0.37 Net income per weighted average share, diluted $0.44 $0.35 5. Litigation The Company is a party to litigation which it considers routine and incidental to its business. Management does not expect the results of any of these actions to have a material adverse effect on the Company's business or financial condition. 6. Subsequent Events In the second quarter of 1997, the Company announced a worldwide reseller agreement with SNI. Under the terms of this agreement, EMC is SNI's preferred and primary supplier of storage solutions for SNI's customers. SNI will resell EMC's Symmetrix 3000 and 5000 series of systems for connection to SNI's families of mainframe and open systems computers. At the Annual Meeting held on May 7, 1997, the Company's stockholders elected two Class I members to the Board of Directors for a three-year term, approved an increase in the number of shares of authorized common stock of the Company to 750,000,000 shares and approved the addition of 6,000,000 shares of common stock to the Company's 1993 Stock Option Plan. -9- EMC CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS - First Quarter of 1997 compared to First Quarter of 1996 (in thousands) --------------------------------------------------------- Revenues The Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the risk factors set forth on page 13 and in EMC's other filings at the U.S. Securities and Exchange Commission. Total revenues for the quarter ended March 31, 1997 were $618,437 compared to $521,487 for the first quarter of 1996, an increase of $96,950 or 19%. The increase in revenues was due primarily to the continued strong demand for the Company's Symmetrix series of products, particularly the Symmetrix 3000 series of products for the open systems market. In January 1997, EMC announced six new Symmetrix products, which represented 65% of first quarter product revenues. These new products address the growing need for Enterprise Storage. Revenues from products sold directly and through original equipment manufacturers ("OEM's") and resellers into the mainframe storage market, which include Symmetrix products operating primarily in the Multiple Virtual Storage ("MVS") environment, were $279,966 in the first quarter of 1997, compared to $309,155 in the first quarter of 1996, a decrease of $29,189 or 9%. The decrease in the mainframe revenue levels reflects a market transition from proprietary mainframe storage to products operating in an open systems environment. Revenues from products sold directly and through OEM's and resellers into the open systems storage market, which include the Symmetrix products operating in an open systems environment and other products, were $274,438 in the first quarter of 1997, compared to $146,707 in the first quarter of 1996, an increase of $127,731 or 87%. The Company expects further growth in the open systems revenue levels and revenue as a percentage of total revenue in this market throughout 1997. (See, however, "Factors that May Affect Future Results.") Revenues from products sold by McDATA Corporation, a wholly owned subsidiary of EMC ("McDATA"), which include the ESCON Director series of products, were $43,532 in the first quarter of 1997, compared to $39,296 in the first quarter of 1996, an increase of $4,236 or 11%. -10- EMC CORPORATION Revenues from all other products, which include the midrange series of products, were $2,964 in the first quarter of 1997, compared to $14,026 in the first quarter of 1996, a decrease of $11,062 or 79%. The decrease is primarily attributable to the declines in midrange revenues. Software revenues were $26,532 and $11,748 in the first quarters of 1997 and 1996, respectively. Software revenues are included in the product revenues for the respective mainframe and open systems markets. Revenues from service and rental income were $17,537 in the first quarter of 1997, compared to $12,303 in the first quarter of 1996, an increase of $5,234 or 43%. In October 1995, the Company entered into a reseller agreement with HP under which HP markets and resells the Symmetrix 3000 series of systems worldwide for connection to HP's 9000 series computers. This agreement was expanded to enable HP to also market and resell this family of systems for connection to HP's 3000 series computers. The current agreement extends through August 1997. Revenues for the first quarter of 1997 and 1996 under this agreement were $107,517 and $46,597 , or 17% and 9% of total revenues, respectively. In January 1997, the Company entered into a reseller agreement with Sequent under which Sequent markets and resells the Symmetrix 3000 series of systems worldwide for connection to Sequent's Symmetry series and NUMA-Q series computers. The agreement currently extends through January 1999. In March 1997, the Company announced that it had expanded its agreements with Unisys to include a worldwide reseller agreement under which Unisys markets and resells the Symmetrix 3000 and 5000 series of systems worldwide for connection to Unisys mainframe and open systems computers. The agreement currently extends through December 1998. In April 1997, the Company announced a reseller agreement with SNI under which SNI markets and resells the Symmetrix 3000 and 5000 series of systems worldwide for connection to SNI's families of mainframe and open systems computers. The agreement currently extends through September 2002. Revenues on sales into the North American markets were $361,646 in the first quarter of 1997 compared to $307,617 in the first quarter of 1996, an increase of $54,029, or 18%. This increase was due primarily to increased revenue levels from sales of the Symmetrix series of products in the open systems storage market. Revenues on sales into all markets outside North America were $256,791 or 42% of total revenues in the first quarter of 1997 compared to $213,870 or 41% of total revenues for the first quarter of 1996. -11- EMC CORPORATION The Company expects further increases in international sales as a percentage of total revenues throughout 1997. (See, however, "Factors that May Affect Future Results.") Revenues on sales into the markets of Europe, Africa and the Middle East were $196,215 in the first quarter of 1997 compared to $163,225 in the first quarter of 1996, an increase of $32,990, or 20%, due primarily to increased revenue levels from sales of the Symmetrix series of products in the open systems storage market. Revenues on sales into the markets of the Asia Pacific region were $58,925 in the first quarter of 1997 compared to $48,117 in the first quarter of 1996, an increase of $10,808, or 22%, due to increased revenue levels from sales of the Symmetrix series of products, primarily in the mainframe storage market. Revenues on sales into the markets of South America were $1,651 in the first quarter of 1997 compared to $2,528 in the first quarter of 1996, a decrease of $877 or 35%. Gross Margins Gross margins increased to 45.7% of revenues in the first quarter of 1997, compared to 43.8% of revenues in the first quarter of 1996. This increase is primarily attributable to the following: the impact of cost declines in raw material components being greater than the impact of price declines in the mainframe and open systems storage markets, higher software revenues and revenues attributable to the new Symmetrix products. The Company currently believes that price declines will continue in the mainframe and open systems environments. Research and Development Research and development ("R&D") expenses were $48,091 and $35,318 in the first quarters of 1997 and 1996, respectively, an increase of $12,773, or 36%. R&D expenses were 7.8% and 6.8% of revenues in the first quarters of 1997 and 1996, respectively. The increase was partially due to the cost of additional technical staff, particularly to support development of products for the Enterprise Storage market, and is also attributable to expenses associated with computer equipment acquired to facilitate this development. The Company expects to continue to spend substantial amounts for R&D for the balance of 1997 and thereafter. Selling, General and Administrative Selling, general and administrative ("SG&A") expenses were $97,624 and $81,763 in the first quarters of 1997 and 1996, respectively, an increase of $15,861 or 19%. SG&A expenses were 15.8% and 15.7% of revenues in the first quarters of 1997 and 1996, respectively. The dollar increase is due primarily to costs associated with additional worldwide sales and support personnel and their related overhead costs. These costs are attributable to the Company's increased revenue levels and the Company's initiatives to -12- EMC CORPORATION expand sales of its Enterprise Storage products. The Company has expanded its international direct sales force, as well as its OEM, reseller, alliance and partnership programs with applications, systems and database vendors. SG&A expenses are expected to increase in dollar terms for the balance of 1997 and thereafter. Investment Income and Interest Expense Investment income was $11,684 in the first quarter of 1997 compared with $6,325 in the same period a year ago. Interest income was earned from investments in cash equivalents, and short and long term investments. Investment income increased in 1997 primarily due to higher cash and investment balances which were derived from operations and the Notes that were issued in March of 1997. Interest expense decreased by $1,657 to $1,402 in the first quarter of 1997 from $3,059 in the first quarter of 1996. The decrease was attributable to the conversion of the 41/4% convertible subordinated notes due 2001 into equity on January 2, 1997 offset by the issuance of the Notes in March of 1997. Provision for Income Taxes The provision for income taxes was $38,248 and $30,170 in the first quarters of 1997 and 1996, respectively, which resulted in an effective tax rate of 25.6% in the first quarter of 1997 and 26.3% in the first quarter of 1996. The decrease in the effective tax rate is mainly attributable to the realization of benefits associated with the continued progress on the Company's various tax strategies. The Company provides for income taxes based upon its estimate of full year earnings on a country-by-country basis. FINANCIAL CONDITION Cash and cash equivalents and short and long-term investments were $1,339,549 and $840,858 at March 31, 1997 and December 31, 1996, respectively, an increase of $498,691. Cash provided by operating activities for the first three months of 1997 was $38,979, generated primarily from net income offset primarily by an increase in inventory related to the transition to six new Symmetrix products worldwide. Cash used by investing activities was $336,728, principally for the purchase of short and long-term investments and additions to property, plant and equipment. Cash provided by financing activities was $503,003, principally from the issuance of the Notes in March of 1997. At March 31, 1997, the Company had available for use its credit line of $50,000. The Company may elect to borrow at any time. Based on its current operating and capital expenditure forecasts, the Company believes funds currently available, funds generated from operations and its available line of credit will be adequate to finance its operations, as well as potential acquisitions. -13- EMC CORPORATION FACTORS THAT MAY AFFECT FUTURE RESULTS This Quarterly Report on Form 10-Q 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) a failure by any supplier of high density DRAMs, disk drives or other components to meet EMC's requirements for an extended period of time; (ii) the transition to new products; (iii) the historic and recurring "hockey stick" pattern of the Company's sales by which a disproportionate percentage of a quarter's total sales occur in the last month and weeks and days of each quarter; (iv) the "hockey stick" pattern of the Company's sales, making it extremely difficult to predict near-term demand and adjust production capacity accordingly; (v) competitive factors, including but not limited to pricing pressures, in the computer storage market; (vi) fluctuating currency exchange rates; (vii) the relative and varying rates of product price and component cost declines; (viii) termination of the agreements with certain of the Company's OEM's or resellers; (ix) other onetime events and other important factors disclosed previously and from time to time in EMC's other filings at the U.S. Securities and Exchange Commission. -14- EMC CORPORATION PART II. OTHER INFORMATION Item 2. Changes in Securities On March 11, 1997, the Company sold an aggregate of $450,000,000 principal amount of the Notes through a private offering to qualified institutional buyers, to certain institutional accredited investors and outside the United States to non-U.S. investors. The initial purchasers were Smith Barney Inc., Alex. Brown & Sons and Morgan Stanley & Co. On March 12, 1997, the initial purchasers exercised an option to purchase an additional $67,500,000 of the Notes to cover overallotments, which sale was completed on March 13, 1997. The aggregate of the discounts and commissions was $10,350,000. The Notes were sold in reliance on Rule 144A under the Securities Act to "qualified institutional buyers," Rule 501(a)(1), (2), (3) or (7) under the Securities Act to a limited number of other "accredited investors," and Regulation S under the Securities Act outside the United States to certain persons in offshore transactions. The Notes are convertible into common stock of the Company at a conversion price of $45.31 per share at any time after the 60th day following the date of original issuance of the Notes and thereafter at any time at or before maturity, unless previously redeemed, subject to adjustment in certain events. The Company has filed a Registration Statement on Form S-3 with the Securities and Exchange Commission under the Securities Act, which is expected to become effective during May of 1997 and which will permit the resale, on a registered basis, of the Notes and of the shares of common stock issuable upon conversion of the Notes from time to time by the securityholders named or to be named therein. The Company has also applied for the Notes and the underlying shares to be listed on the New York Stock Exchange. Item 6. Exhibits and Reports on Form 8-K (a)Exhibits 3.1 Articles of Amendment to EMC Corporation's Articles of Incorporation (filed herewith). 11.1 Computation of Primary and Fully Diluted Net Income Per Share (filed herewith). 27 Financial Data Schedule (filed herewith). -15- EMC CORPORATION (b) Reports on Form 8-K On March 20, 1997, the Company filed a report (Date of Report: March 13, 1997) on Form 8-K announcing that it had completed the sale of $517,500,000 principal amount of 3 1/4% Convertible Subordinated Notes due 2002. -16- EMC CORPORATION SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. EMC CORPORATION Date: May 14, 1997 By: /s/ Colin G. Patteson Colin G. Patteson Senior Vice President, Chief Administrative Officer and Treasurer (Principal Financial Officer) By: /s/ William J. Teuber, Jr. William J. Teuber, Jr. Vice President and Chief Financial Officer (Principal Accounting Officer) -17- EMC CORPORATION EXHIBIT INDEX Exhibit 3.1 Articles of Amendment to EMC Corporation's Articles of Incorporation (filed herewith). Exhibit 11.1 Computation of Primary and Fully Diluted Net Income Per Share Exhibit 27 Financial Data Schedule Exhibit 3.1 Federal Identifi ca ti on No. 04268000 9 THE COMMONWEALTH OF MASSACHUSETTS William Francis Galvin Secretary of the Commonwealth One Ashburton Place, Boston, Massachusetts 021081512 ARTICLES OF AMENDMENT (General Laws, Chapter 156B, Section 72) We, Michael C. Ruettgers, President, and Paul T. Dacier, Assistant Clerk of EMC Corporation, located at 171 South Street, Hopkinton, Massachusetts 01748, certify that these Articles of Amendment affecting articles numbered 3 of the Articles of Organization were duly adopted at a meeting held on May 7, 1997, by vote of 200,768,112 shares of common of 246,134,438 shares outstanding, being at least a majority of each type, class or series outstanding and entitled to vote thereon. To change the number of shares and the par value (if any) of any type, class or series of stock which the corporation is authorized to issue, fill in the following: The total presently authorized is: With Par Value Stocks Type Number of Shares Par Value Common 500,000,000 $.01 Preferred 25,000,000 $.01 Change the total authorized to: With Par Value Stocks Type Number of Shares Par Value Common 750,000,000 $.01 Preferred 25,000,000 $.01 The foregoing amendment(s) will become effective when these Articles of Amendment are filed in accordance with General Laws, Chapter 156B, Section 6 unless these articles specify, in accordance with the vote adopting the amendment, a later effective date not more than thirty days after such filing, in which event the amendment will become effective on such later date. Later effective date:___________________________. SIGNED UNDER THE PENALTIES OF PERJURY, this 7th day of May, 1997. /s/ Michael C. Ruettgers, President, /s/ Paul T. Dacier, Assistant Clerk. THE COMMONWEALTH OF MASSACHUSETTS ARTICLES OF AMENDMENT (General Laws, Chapter 156B, Section 72) __________________________________________________________ __ I hereby approve the within Articles of Amendment, and the filing fee in the amount of $_________ having been paid, said article is deemed to have been filed with me this __________ day of _____________________, 1997. Effective date:_____________________________________________________ WILLIAM FRANCIS GALVIN Secretary of the Commonwealth TO BE FILLED IN BY CORPORATION Photocopy of document to be sent to: Paul T. Dacier, Esq. Vice President and General Counsel EMC Corporation 171 South St. Hopkinton, MA 01748 EMC CORPORATION Exhibit 11.1 Computation of Primary and Fully Diluted Net Income Per Share (unaudited) (Amounts in thousands except share and per share data) Three Months Ended March 31, March 30, 1997 1996 Primary Net income $110,868 $84,545 Add back interest expense on convertible notes 888 2,440 Less tax effect on interest expense on convertible notes (355) (976) Net income for purposes of calculating $111,401 $86,009 primary net income per share Weighted average shares outstanding during the period 245,795,997 230,488,964 Common equivalent shares 9,056,959 18,050,105 Common and common equivalent shares outstanding for purpose of 254,852,956 248,539,069 calculating primary net income per share Primary net income per share $0.44 $0.35 (Note 4) Fully Diluted Net income $110,868 $84,545 Add back interest expense on convertible notes 888 2,440 Less tax effect on interest expense (355) (976) on convertible notes Net income for purpose of calculating $111,401 $86,009 fully diluted net income per share Common and common equivalent shares outstanding for purpose of 254,852,956 248,539,069 calculating primary net income per share Incremental shares to reflect 4,510 340,230 full dilution Total shares for purpose of calculating 254,857,466 248,879,299 fully diluted net income per share Fully diluted net income per $0.44 $0.35 share (Note 4)
EX-27 2
5 This schedule contains summary financial information extracted from EMC Corporation financial statements and is qualified in its entirety by reference to such financial statements. 1000 3-MOS DEC-31-1997 MAR-31-1997 700,526 515,069 644,269 7,517 442,328 2,363,252 294,459 26,241 2,948,809 456,363 517,500 2,461 0 0 1,889,673 2,948,809 600,900 618,437 335,985 481,700 0 0 1,402 149,116 38,248 110,868 0 0 0 110,868 0.44 0.44
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