Segment Information

6 Months Ended

Jun. 30, 2012

Segment Reporting [Abstract]

Segment Information

Segment Information

We manage our business in two broad categories: EMC Information Infrastructure and VMware Virtual Infrastructure. EMC Information Infrastructure operates in three segments: Information Storage, Information Intelligence Group and RSA Information Security, while VMware Virtual Infrastructure operates in a single segment. Our management measures are designed to assess performance of these operating segments excluding certain items. As a result, the corporate reconciling items are used to capture the items excluded from the segment operating performance measures, including stock-based compensation expense, acquisition-related intangible asset amortization expense and transition costs. Additionally, in certain instances, infrequently occurring gains or losses are also excluded from the measures used by management in assessing segment performance. The VMware Virtual Infrastructure amounts represent the revenues and expenses of VMware as reflected within EMC’s consolidated financial statements. Research and development expenses, selling, general and administrative, and other income associated with the EMC Information Infrastructure business are not allocated to the segments within the EMC Information Infrastructure business, as they are managed centrally at the corporate level. For the three segments within the EMC Information Infrastructure business, gross profit is the segment operating performance measure.

Our segment information for the three and six months ended June 30, 2012 and 2011 is as follows (tables in thousands, except percentages):

	EMC Information Infrastructure
	Information Storage			Information Intelligence Group			RSA Information Security			EMC Information Infrastructure			VMware Virtual Infrastructure within EMC			Corp Reconciling Items			Consolidated
Three Months Ended:
June 30, 2012
Revenues:
Product revenues	$	2,512,914		$	45,497		$	103,458		$	2,661,869		$	516,868		$	—		$	3,178,737
Services revenues	1,304,311			107,276			117,312			1,528,899			603,757			—			2,132,656
Total consolidated revenues	3,817,225			152,773			220,770			4,190,768			1,120,625			—			5,311,393
Cost of sales	1,638,149			50,436			41,619			1,730,204			136,554			97,242			1,964,000
Gross profit	$	2,179,076		$	102,337		$	179,151		2,460,564			984,071			(97,242		)	3,347,393
Gross profit percentage	57.1		%	67.0		%	81.1		%	58.7		%	87.8		%	—			63.0		%
Research and development										371,899			198,729			85,313			655,941
Selling, general and administrative										1,128,312			433,649			154,689			1,716,650
Restructuring and acquisition-related charges										—			—			27,603			27,603
Total costs and expenses										1,500,211			632,378			267,605			2,400,194
Operating income										960,353			351,693			(364,847		)	947,199
Other income (expense), net										(28,911		)	4,538			(19,152		)	(43,525		)
Income before provision for income taxes										931,442			356,231			(383,999		)	903,674
Income tax provision										275,033			48,810			(109,587		)	214,256
Net income										656,409			307,421			(274,412		)	689,418
Net income attributable to the non-controlling interest in VMware, Inc.										—			(63,199		)	23,295			(39,904		)
Net income attributable to EMC Corporation										$	656,409		$	244,222		$	(251,117	)	$	649,514

	EMC Information Infrastructure
	Information Storage			Information Intelligence Group			RSA Information Security			EMC Information Infrastructure			VMware Virtual Infrastructure within EMC			Corp Reconciling Items			Consolidated
Three Months Ended:
June 30, 2011
Revenues:
Product revenues	$	2,432,702		$	44,226		$	102,273		$	2,579,201		$	464,783		$	—		$	3,043,984
Services revenues	1,135,792			115,646			93,861			1,345,299			456,055			—			1,801,354
Total consolidated revenues	3,568,494			159,872			196,134			3,924,500			920,838			—			4,845,338
Cost of sales	1,575,551			59,220			128,234			1,763,005			132,465			69,581			1,965,051
Gross profit	$	1,992,943		$	100,652		$	67,900		2,161,495			788,373			(69,581		)	2,880,287
Gross profit percentage	55.8		%	63.0		%	34.6		%	55.1		%	85.6		%	—			59.4		%
Research and development										318,068			140,338			80,485			538,891
Selling, general and administrative										1,075,046			354,839			145,804			1,575,689
Restructuring and acquisition-related charges										—			—			21,216			21,216
Total costs and expenses										1,393,114			495,177			247,505			2,135,796
Operating income										768,381			293,196			(317,086		)	744,491
Other income (expense), net										(8,953		)	2,745			26,075			19,867
Income before provision for income taxes										759,428			295,941			(291,011		)	764,358
Income tax provision										210,303			31,509			(69,081		)	172,731
Net income										549,125			264,432			(221,930		)	591,627
Net income attributable to the non-controlling interest in VMware, Inc.										—			(55,311		)	10,178			(45,133		)
Net income attributable to EMC Corporation										$	549,125		$	209,121		$	(211,752	)	$	546,494

	EMC Information Infrastructure
	Information Storage			Information Intelligence Group			RSA Information Security			EMC Information Infrastructure			VMware Virtual Infrastructure within EMC			Corp Reconciling Items			Consolidated
Six Months Ended:
June 30, 2012
Revenues:
Product revenues	$	4,967,649		$	81,559		$	199,947		$	5,249,155		$	998,439		$	—		$	6,247,594
Services revenues	2,538,483			216,767			227,340			2,982,590			1,175,587			—			4,158,177
Total consolidated revenues	7,506,132			298,326			427,287			8,231,745			2,174,026			—			10,405,771
Cost of sales	3,267,187			106,368			114,774			3,488,329			264,739			192,093			3,945,161
Gross profit	$	4,238,945		$	191,958		$	312,513		4,743,416			1,909,287			(192,093		)	6,460,610
Gross profit percentage	56.5		%	64.3		%	73.1		%	57.6		%	87.8		%	—			62.1		%
Research and development										710,115			377,394			156,249			1,243,758
Selling, general and administrative										2,222,324			838,242			306,281			3,366,847
Restructuring and acquisition-related charges										—			—			53,496			53,496
Total costs and expenses										2,932,439			1,215,636			516,026			4,664,101
Operating income										1,810,977			693,651			(708,119		)	1,796,509
Other income (expense), net										(57,413		)	11,839			(30,372		)	(75,946		)
Income before provision for income taxes										1,753,564			705,490			(738,491		)	1,720,563
Income tax provision										495,486			111,779			(202,099		)	405,166
Net income										1,258,078			593,711			(536,392		)	1,315,397
Net income attributable to the non-controlling interest in VMware, Inc.										—			(121,787		)	42,746			(79,041		)
Net income attributable to EMC Corporation										$	1,258,078		$	471,924		$	(493,646	)	$	1,236,356

	EMC Information Infrastructure
	Information Storage			Information Intelligence Group			RSA Information Security			EMC Information Infrastructure			VMware Virtual Infrastructure within EMC			Corp Reconciling Items			Consolidated
Six Months Ended:
June 30, 2011
Revenues:
Product revenues	$	4,816,713		$	85,358		$	189,453		$	5,091,524		$	883,719		$	—		$	5,975,243
Services revenues	2,191,258			225,689			180,935			2,597,882			879,831			—			3,477,713
Total consolidated revenues	7,007,971			311,047			370,388			7,689,406			1,763,550			—			9,452,956
Cost of sales	3,149,802			116,925			208,153			3,474,880			259,755			138,983			3,873,618
Gross profit	$	3,858,169		$	194,122		$	162,235		4,214,526			1,503,795			(138,983		)	5,579,338
Gross profit percentage	55.1		%	62.4		%	43.8		%	54.8		%	85.3		%	—			59.0		%
Research and development										616,201			263,999			160,799			1,040,999
Selling, general and administrative										2,080,310			689,428			301,882			3,071,620
Restructuring and acquisition-related charges										—			—			48,109			48,109
Total costs and expenses										2,696,511			953,427			510,790			4,160,728
Operating income										1,518,015			550,368			(649,773		)	1,418,610
Other income (expense), net										(32,946		)	4,269			(1,382		)	(30,059		)
Income before provision for income taxes										1,485,069			554,637			(651,155		)	1,388,551
Income tax provision										382,517			80,762			(168,909		)	294,370
Net income										1,102,552			473,875			(482,246		)	1,094,181
Net income attributable to the non-controlling interest in VMware, Inc.										—			(96,990		)	26,451			(70,539		)
Net income attributable to EMC Corporation										$	1,102,552		$	376,885		$	(455,795	)	$	1,023,642

Our revenues are attributed to the geographic areas according to the location of the customers. Revenues by geographic area are included in the following table (table in thousands):

	For the Three Months Ended				For the Six Months Ended
	June 30, 2012		June 30, 2011		June 30, 2012		June 30, 2011
United States	$	2,856,914	$	2,507,142	$	5,490,308	$	4,878,174
Europe, Middle East and Africa	1,400,339		1,407,571		2,864,631		2,794,354
Asia Pacific and Japan	747,561		654,301		1,459,254		1,249,365
Latin America, Mexico and Canada	306,579		276,324		591,578		531,063
Total	$	5,311,393	$	4,845,338	$	10,405,771	$	9,452,956

No country other than the United States accounted for 10% or more of revenues during the three and six months ended June 30, 2012 or 2011.

Long-lived assets, excluding financial instruments, deferred tax assets, goodwill and intangible assets, in the United States were $3,730.8 million at June 30, 2012 and $3,622.8 million at December 31, 2011. Internationally, long-lived assets, excluding financial instruments, deferred tax assets, goodwill and intangible assets, were $627.8 million at June 30, 2012 and $616.5 million at December 31, 2011. No country other than the United States accounted for 10% or more of total long-lived assets, excluding financial instruments and deferred tax assets, at June 30, 2012 or December 31, 2011.