FORM 8-K |
Massachusetts | 1-9853 | 04-2680009 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
176 South Street Hopkinton, Massachusetts (Address of principal executive offices) | 01748 (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
99.1 | Press release from EMC Corporation dated October 24, 2012 |
By: | /s/ David I. Goulden |
Exhibit No. | Description |
99.1 | Press release from EMC Corporation dated October 24, 2012 |
Contact: | Lesley Ogrodnick |
Third-Quarter Highlights: | |
l | Consolidated revenue up 6% year over year |
l | GAAP net income up 3% year over year; GAAP EPS up 4% |
l | Non-GAAP net income up 7% year over year; Non-GAAP EPS up 8% |
l | Operating cash flow up 12% year over year; Free cash flow up 16% |
• | Consolidated revenues are expected to be between $21.60 billion and $21.75 billion for 2012. |
• | Consolidated GAAP operating income is expected to be 17.8% of revenues for 2012 and consolidated non-GAAP operating income is expected to be 24.5% of revenues for 2012. Excluded from consolidated non-GAAP operating income are stock-based compensation expense, intangible asset amortization, restructuring and acquisition-related charges, the amortization of VMware's capitalized software from prior periods and a release of excess RSA special charge reserve, which account for 4.3%, 1.7%, 0.5%, 0.3% and (0.1%) of revenues, respectively. |
• | Total consolidated GAAP non-operating expense, which includes investment income, interest expense and other income and expense, is expected to be $211 million in 2012 and total consolidated non-GAAP non-operating expense is expected to be $200 million in 2012. Excluded from non-GAAP non-operating expense is stock-based compensation expense of $3 million, a gain on strategic investment of ($32 million) and a loss on interest rate swaps of $40 million. |
• | Consolidated GAAP net income attributable to EMC is expected to be between $2.72 billion and $2.77 billion in 2012 and consolidated non-GAAP net income attributable to EMC is expected to be between $3.70 billion and $3.75 billion in 2012. 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, a release of excess RSA special charge reserve, a gain on strategic investment and a loss on interest rate swaps which account for $646 million, $240 million, $90 million, $30 million, ($18 million), ($32 million) and $24 million, respectively. |
• | Consolidated GAAP earnings per weighted average diluted share are expected to be between $1.24 and $1.26 for 2012 and consolidated non-GAAP earnings per weighted average diluted share are expected to be between $1.68 and $1.70 for 2012. 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, a release of excess RSA special charge reserve, a gain on strategic investment and a loss on interest rate swaps, which account for $0.29, $0.11, $0.04, $0.01, ($0.01), ($0.01) and $0.01 per weighted average diluted share, respectively. |
• | The consolidated GAAP income tax rate is expected to be 21% for 2012. 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, a release of excess RSA special charge reserve, a gain on strategic investment and a loss on interest rate swaps, which collectively impact the tax rate by 1.5%, the consolidated non-GAAP income tax rate is expected to be 22.5% for 2012. This assumes that the U.S. research and development tax credit for 2012 is extended in the fourth quarter of 2012. |
• | GAAP net income attributable to the non-controlling interest in VMware is expected to be $150 million and non-GAAP net income attributable to the non-controlling interest in VMware is expected to be $250 million for 2012. 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 and the amortization of VMware's capitalized software from prior periods, which account for $75 million, $15 million, $1 million and $9 million, respectively. The incremental dilution attributable to the shares of VMware held by EMC is expected to be $15 million for 2012. |
• | Consolidated net cash provided by operating activities is expected to be $6.1 billion for 2012 and free cash flow is expected to be $4.9 billion for 2012. Excluded from free cash flow are $800 million of additions to property, plant and equipment and $400 million of capitalized software development costs. |
• | The weighted average outstanding diluted shares are expected to be 2.2 billion for 2012. |
• | EMC expects to repurchase $700 million of the company's common stock in 2012. |
• | EMC will host its 2012 third-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 third-quarter financial results. |
• | Connect with EMC via Twitter, Facebook, YouTube, LinkedIn and ECN |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | September 30, | September 30, | |||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Revenues: | ||||||||||||||||
Product sales | $ | 3,084,441 | $ | 3,074,367 | $ | 9,332,035 | $ | 9,049,610 | ||||||||
Services | 2,193,735 | 1,905,834 | 6,351,912 | 5,383,547 | ||||||||||||
5,278,176 | 4,980,201 | 15,683,947 | 14,433,157 | |||||||||||||
Cost and expenses: | ||||||||||||||||
Cost of product sales | 1,292,756 | 1,269,323 | 3,848,634 | 3,917,028 | ||||||||||||
Cost of services | 697,881 | 644,613 | 2,087,164 | 1,870,526 | ||||||||||||
Research and development | 652,898 | 548,021 | 1,896,656 | 1,589,020 | ||||||||||||
Selling, general and administrative | 1,708,794 | 1,612,914 | 5,075,641 | 4,684,534 | ||||||||||||
Restructuring and acquisition-related charges | 27,064 | 20,302 | 80,560 | 68,411 | ||||||||||||
Operating income | 898,783 | 885,028 | 2,695,292 | 2,303,638 | ||||||||||||
Non-operating income (expense): | ||||||||||||||||
Investment income | 29,850 | 32,293 | 85,280 | 106,506 | ||||||||||||
Interest expense | (21,480 | ) | (44,322 | ) | (58,207 | ) | (135,777 | ) | ||||||||
Other income (expense), net | (63,055 | ) | (59,799 | ) | (157,704 | ) | (72,616 | ) | ||||||||
Total non-operating income (expense) | (54,685 | ) | (71,828 | ) | (130,631 | ) | (101,887 | ) | ||||||||
Income before provision for income taxes | 844,098 | 813,200 | 2,564,661 | 2,201,751 | ||||||||||||
Income tax provision | 185,434 | 171,086 | 590,600 | 465,456 | ||||||||||||
Net income | 658,664 | 642,114 | 1,974,061 | 1,736,295 | ||||||||||||
Less: Net income attributable to the non-controlling interest in VMware, Inc. | (32,326 | ) | (36,465 | ) | (111,367 | ) | (107,004 | ) | ||||||||
Net income attributable to EMC Corporation | $ | 626,338 | $ | 605,649 | $ | 1,862,694 | $ | 1,629,291 | ||||||||
Net income per weighted average share, basic attributable to EMC Corporation common shareholders | $ | 0.30 | $ | 0.29 | $ | 0.89 | $ | 0.79 | ||||||||
Net income per weighted average share, diluted attributable to EMC Corporation common shareholders | $ | 0.28 | $ | 0.27 | $ | 0.84 | $ | 0.72 | ||||||||
Weighted average shares, basic | 2,104,205 | 2,054,007 | 2,089,516 | 2,060,242 | ||||||||||||
Weighted average shares, diluted | 2,210,421 | 2,207,099 | 2,206,805 | 2,244,508 |
September 30, | December 31, | |||||||
2012 | 2011 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 4,160,817 | $ | 4,531,036 | ||||
Short-term investments | 1,284,855 | 1,786,987 | ||||||
Accounts and notes receivable, less allowance | ||||||||
for doubtful accounts of $63,117 and $61,804 | 3,164,005 | 2,937,499 | ||||||
Inventories | 1,158,262 | 1,009,968 | ||||||
Deferred income taxes | 802,215 | 733,308 | ||||||
Other current assets | 541,263 | 583,885 | ||||||
Total current assets | 11,111,417 | 11,582,683 | ||||||
Long-term investments | 5,134,328 | 4,525,106 | ||||||
Property, plant and equipment, net | 2,983,446 | 2,833,149 | ||||||
Intangible assets, net | 2,053,360 | 1,766,115 | ||||||
Goodwill | 13,728,256 | 12,154,970 | ||||||
Other assets, net | 1,494,911 | 1,406,156 | ||||||
Total assets | $ | 36,505,718 | $ | 34,268,179 | ||||
LIABILITIES & SHAREHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,074,079 | $ | 1,101,659 | ||||
Accrued expenses | 2,317,568 | 2,354,979 | ||||||
Notes converted and payable | — | 1,699,832 | ||||||
Income taxes payable | 286,696 | 155,909 | ||||||
Convertible debt | 1,636,907 | 1,605,142 | ||||||
Deferred revenue | 4,353,490 | 3,458,689 | ||||||
Total current liabilities | 9,668,740 | 10,376,210 | ||||||
Income taxes payable | 332,289 | 238,851 | ||||||
Deferred revenue | 2,884,240 | 2,715,361 | ||||||
Deferred income taxes | 384,444 | 250,817 | ||||||
Other liabilities | 307,455 | 287,912 | ||||||
Total liabilities | 13,577,168 | 13,869,151 | ||||||
Convertible debt | 73,280 | 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 2,106,655 and 2,048,890 shares | 21,067 | 20,489 | ||||||
Additional paid-in capital | 3,854,545 | 3,405,513 | ||||||
Retained earnings | 17,983,315 | 16,120,621 | ||||||
Accumulated other comprehensive loss, net | (155,303 | ) | (235,009 | ) | ||||
Total EMC Corporation's shareholders' equity | 21,703,624 | 19,311,614 | ||||||
Non-controlling interest in VMware, Inc. | 1,151,646 | 968,089 | ||||||
Total shareholders' equity | 22,855,270 | 20,279,703 | ||||||
Total liabilities and shareholders' equity | $ | 36,505,718 | $ | 34,268,179 |
Nine Months Ended | |||||||||||
September 30, | September 30, | ||||||||||
2012 | 2011 | ||||||||||
Cash flows from operating activities: | |||||||||||
Cash received from customers | $ | 16,556,689 | $ | 15,434,151 | |||||||
Cash paid to suppliers and employees | (11,950,620 | ) | (11,577,038 | ) | |||||||
Dividends and interest received | 64,780 | 77,706 | |||||||||
Interest paid | (16,880 | ) | (54,683 | ) | |||||||
Income taxes paid | (290,888 | ) | (395,539 | ) | |||||||
Net cash provided by operating activities | 4,363,081 | 3,484,597 | |||||||||
Cash flows from investing activities: | |||||||||||
Additions to property, plant and equipment | (523,459 | ) | (601,177 | ) | |||||||
Capitalized software development costs | (315,798 | ) | (342,091 | ) | |||||||
Purchases of short- and long-term available-for-sale securities | (5,011,791 | ) | (5,589,382 | ) | |||||||
Sales of short- and long-term available-for-sale securities | 4,153,617 | 3,945,683 | |||||||||
Maturities of short- and long-term available-for-sale securities | 844,287 | 877,510 | |||||||||
Business acquisitions, net of cash acquired | (1,878,051 | ) | (536,624 | ) | |||||||
Decrease (increase) in strategic and other related investments, net | 18,648 | (268,087 | ) | ||||||||
Joint venture funding | (217,881 | ) | (191,624 | ) | |||||||
Purchase of leasehold interest | — | (151,083 | ) | ||||||||
Net cash used in investing activities | (2,930,428 | ) | (2,856,875 | ) | |||||||
Cash flows from financing activities: | |||||||||||
Issuance of EMC's common stock from the exercise of stock options | 387,782 | 501,627 | |||||||||
Issuance of VMware's common stock from the exercise of stock options | 214,223 | 285,286 | |||||||||
EMC repurchase of EMC's common stock | (379,997 | ) | (1,899,208 | ) | |||||||
EMC purchase of VMware's common stock | (131,917 | ) | (342,201 | ) | |||||||
VMware repurchase of VMware's common stock | (307,012 | ) | (490,916 | ) | |||||||
Excess tax benefits from stock-based compensation | 212,280 | 318,717 | |||||||||
Payment of long-term and short-term obligations | (14,677 | ) | (1,263 | ) | |||||||
Proceeds from long-term and short-term obligations | 4,279 | 1,253 | |||||||||
Payment of convertible debt | (1,699,816 | ) | — | ||||||||
Interest rate contract settlement | (69,905 | ) | — | ||||||||
Net cash used in financing activities | (1,784,760 | ) | (1,626,705 | ) | |||||||
Effect of exchange rate changes on cash and cash equivalents | (18,112 | ) | 5,455 | ||||||||
Net decrease in cash and cash equivalents | (370,219 | ) | (993,528 | ) | |||||||
Cash and cash equivalents at beginning of period | 4,531,036 | 4,119,138 | |||||||||
Cash and cash equivalents at end of period | $ | 4,160,817 | $ | 3,125,610 | |||||||
Reconciliation of net income to net cash provided by operating activities: | |||||||||||
Net income | $ | 1,974,061 | $ | 1,736,295 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 1,127,881 | 1,048,151 | |||||||||
Non-cash interest expense on convertible debt | 33,871 | 76,398 | |||||||||
Non-cash restructuring and other special charges | 8,990 | (2,325 | ) | ||||||||
Stock-based compensation expense | 658,455 | 613,233 | |||||||||
Provision for doubtful accounts | 21,339 | 8,525 | |||||||||
Deferred income taxes, net | (72,657 | ) | 83,657 | ||||||||
Excess tax benefits from stock-based compensation | (212,280 | ) | (318,717 | ) |
Other, net | (19,555 | ) | (28,740 | ) | |||||||
Changes in assets and liabilities, net of acquisitions: | |||||||||||
Accounts and notes receivable | (207,395 | ) | (56,076 | ) | |||||||
Inventories | (336,748 | ) | (416,898 | ) | |||||||
Other assets | 62,820 | (157,024 | ) | ||||||||
Accounts payable | 118,950 | (75,263 | ) | ||||||||
Accrued expenses | (225,725 | ) | 51,747 | ||||||||
Income taxes payable | 372,369 | (13,740 | ) | ||||||||
Deferred revenue | 1,058,798 | 1,048,545 | |||||||||
Other liabilities | (93 | ) | (113,171 | ) | |||||||
Net cash provided by operating activities | $ | 4,363,081 | $ | 3,484,597 |
Three Months Ended | |||||||||||||||
Diluted | Diluted | ||||||||||||||
September 30, | Earnings | September 30, | Earnings | ||||||||||||
2012 | Per Share | 2011 | Per Share | ||||||||||||
Net Income Attributable to EMC GAAP | $ | 626,338 | $ | 0.283 | $ | 605,649 | $ | 0.273 | |||||||
Stock-based compensation expense | 163,977 | 0.074 | 141,280 | 0.064 | |||||||||||
Intangible asset amortization | 60,088 | 0.027 | 57,474 | 0.026 | |||||||||||
Restructuring and acquisition-related charges | 24,182 | 0.011 | 17,418 | 0.008 | |||||||||||
Amortization of VMware's capitalized software from prior periods | 6,677 | 0.003 | — | — | |||||||||||
Net Income Attributable to EMC Non-GAAP | $ | 881,262 | $ | 0.398 | $ | 821,821 | $ | 0.371 | |||||||
Weighted average shares, diluted | 2,210,421 | 2,207,099 | |||||||||||||
Incremental VMware Dilution | $ | 1,766 | $ | 3,233 |
* 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. |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Cash Flow from Operations | $ | 1,437,867 | $ | 1,286,390 | $ | 4,363,081 | $ | 3,484,597 | |||||||
Capital expenditures | (191,157 | ) | (195,019 | ) | (523,459 | ) | (601,177 | ) | |||||||
Capitalized software | (109,236 | ) | (110,530 | ) | (315,798 | ) | (342,091 | ) | |||||||
Free Cash Flow | $ | 1,137,474 | $ | 980,841 | $ | 3,523,824 | $ | 2,541,329 | |||||||
Three Months Ended | |||||||
September 30, | September 30, | ||||||
2012 | 2011 | ||||||
Gross Margin GAAP | $ | 3,287,539 | $ | 3,066,265 | |||
Stock-based compensation expense | 32,973 | 28,720 | |||||
Intangible asset amortization | 51,672 | 41,015 | |||||
Restructuring and acquisition-related charges | — | — | |||||
Amortization of VMware's capitalized software from prior periods | 12,693 | — | |||||
Gross Margin Non-GAAP | $ | 3,384,877 | $ | 3,136,000 | |||
Revenues | $ | 5,278,176 | $ | 4,980,201 | |||
Gross Margin Percentages: | |||||||
GAAP | 62.3 | % | 61.6 | % | |||
Non-GAAP | 64.1 | % | 63.0 | % |
Three Months Ended | |||||||
September 30, | September 30, | ||||||
2012 | 2011 | ||||||
Operating Margin GAAP | $ | 898,783 | $ | 885,028 | |||
Stock-based compensation expense | 249,874 | 200,217 | |||||
Intangible asset amortization | 93,441 | 88,605 | |||||
Restructuring and acquisition-related charges | 27,064 | 20,302 | |||||
Amortization of VMware's capitalized software from prior periods | 12,693 | — | |||||
Operating Margin Non-GAAP | $ | 1,281,855 | $ | 1,194,152 | |||
Revenues | $ | 5,278,176 | $ | 4,980,201 | |||
Operating Margin Percentages: | |||||||
GAAP | 17.0 | % | 17.8 | % | |||
Non-GAAP | 24.3 | % | 24.0 | % |
Three Months Ended | |||||||
September 30, | September 30, | ||||||
2012 | 2011 | ||||||
Non-operating income (expense) GAAP | $ | (54,685 | ) | $ | (71,828 | ) | |
Stock-based compensation expense | 508 | 1,320 | |||||
Intangible asset amortization | — | — | |||||
Restructuring and acquisition-related charges | — | — | |||||
Amortization of VMware's capitalized software from prior periods | — | — | |||||
Non-operating income (expense) Non-GAAP | $ | (54,177 | ) | $ | (70,508 | ) |
Three Months Ended September 30, 2012 | ||||||||||
Income Before | Tax | Tax | ||||||||
Tax | Provision | Rate | ||||||||
EMC Consolidated GAAP | $ | 844,098 | $ | 185,434 | 22.0 | % | ||||
Stock-based compensation expense | 250,382 | 66,734 | 26.7 | % | ||||||
Intangible asset amortization | 93,441 | 29,527 | 31.6 | % | ||||||
Restructuring and acquisition-related charges | 27,064 | 2,527 | 9.3 | % | ||||||
Amortization of VMware's capitalized software from prior periods | 12,693 | 4,282 | 33.7 | % | ||||||
EMC Consolidated Non-GAAP | $ | 1,227,678 | $ | 288,504 | 23.5 | % |
Stock-Based Compensation Expense | Intangible Asset Amortization | Restructuring and Acquisition-Related Charges | Amortization of VMware's Capitalized Software from Prior Periods | ||||||||||||
EMC Consolidated | |||||||||||||||
Cost of revenue | $ | (32,973 | ) | $ | (51,672 | ) | $ | — | $ | (12,693 | ) | ||||
Research and development | (85,499 | ) | (2,719 | ) | — | — | |||||||||
Selling, general and administrative | (131,402 | ) | (39,050 | ) | — | — | |||||||||
Restructuring and acquisition-related charges | — | — | (27,064 | ) | — | ||||||||||
Non-operating (income) expense | 508 | — | — | — | |||||||||||
Income tax provision | 66,734 | 29,527 | 2,527 | 4,282 | |||||||||||
Net income attributable to VMware | (19,671 | ) | (3,826 | ) | (355 | ) | (1,734 | ) | |||||||
EMC Information Infrastructure | |||||||||||||||
Cost of revenue | $ | (22,429 | ) | $ | (31,953 | ) | $ | — | $ | — | |||||
Research and development | (25,305 | ) | (1,757 | ) | — | — | |||||||||
Selling, general and administrative | (67,826 | ) | (35,763 | ) | — | — | |||||||||
Restructuring and acquisition-related charges | — | — | (25,341 | ) | — | ||||||||||
Non-operating (income) expense | 508 | — | — | — | |||||||||||
Income tax provision | 27,817 | 24,115 | 2,527 | — | |||||||||||
Net income attributable to VMware | — | — | — | — | |||||||||||
VMware within EMC | |||||||||||||||
Cost of revenue | $ | (10,544 | ) | $ | (19,719 | ) | $ | — | $ | (12,693 | ) | ||||
Research and development | (60,194 | ) | (962 | ) | — | — | |||||||||
Selling, general and administrative | (63,576 | ) | (3,287 | ) | — | — | |||||||||
Restructuring and acquisition-related charges | — | — | (1,723 | ) | — | ||||||||||
Non-operating (income) expense | — | — | — | — | |||||||||||
Income tax provision | 38,917 | 5,412 | — | 4,282 | |||||||||||
Net income attributable to VMware | (19,671 | ) | (3,826 | ) | (355 | ) | (1,734 | ) |
Stock-Based Compensation Expense | Intangible Asset Amortization | Restructuring and Acquisition-Related Charges | |||||||||
EMC Consolidated | |||||||||||
Cost of revenue | $ | (28,720 | ) | $ | (41,015 | ) | $ | — | |||
Research and development | (76,059 | ) | (4,450 | ) | — | ||||||
Selling, general and administrative | (95,438 | ) | (43,140 | ) | — | ||||||
Restructuring and acquisition-related charges | — | — | (20,302 | ) | |||||||
Non-operating (income) expense | 1,320 | — | — | ||||||||
Income tax provision | 44,997 | 28,407 | 2,711 | ||||||||
Net income attributable to VMware | (15,260 | ) | (2,724 | ) | (173 | ) | |||||
EMC Information Infrastructure | |||||||||||
Cost of revenue | $ | (20,102 | ) | $ | (27,717 | ) | $ | — | |||
Research and development | (29,396 | ) | (3,653 | ) | — | ||||||
Selling, general and administrative | (60,157 | ) | (40,271 | ) | — | ||||||
Restructuring and acquisition-related charges | — | — | (19,458 | ) | |||||||
Non-operating (income) expense | 1,320 | — | — | ||||||||
Income tax provision | 28,732 | 24,704 | 2,711 | ||||||||
Net income attributable to VMware | — | — | — | ||||||||
VMware within EMC | |||||||||||
Cost of revenue | $ | (8,618 | ) | $ | (13,298 | ) | $ | — | |||
Research and development | (46,663 | ) | (797 | ) | — | ||||||
Selling, general and administrative | (35,281 | ) | (2,869 | ) | — | ||||||
Restructuring and acquisition-related charges | — | — | (844 | ) | |||||||
Non-operating (income) expense | — | — | — | ||||||||
Income tax provision | 16,265 | 3,703 | — | ||||||||
Net income attributable to VMware | (15,260 | ) | (2,724 | ) | (173 | ) |
VMware Standalone GAAP | GAAP Adjustments and Eliminations | VMware within EMC GAAP | |||||||||
Revenue | $ | 1,133,684 | $ | (3,219 | ) | $ | 1,130,465 | ||||
Cost of revenue | 179,362 | (818 | ) | 178,544 | |||||||
Gross margin | 954,322 | (2,401 | ) | 951,921 | |||||||
Research and development | 259,907 | (1,863 | ) | 258,044 | |||||||
Selling, general and administrative | 504,072 | (1,755 | ) | 502,317 | |||||||
Restructuring and acquisition-related charges | — | 1,723 | 1,723 | ||||||||
Operating income | 190,343 | (506 | ) | 189,837 | |||||||
Non-operating income | 4,804 | 3,694 | 8,498 | ||||||||
Income before taxes | 195,147 | 3,188 | 198,335 | ||||||||
Income tax provision | 38,379 | (4,070 | ) | 34,309 | |||||||
Net income | $ | 156,768 | 7,258 | 164,026 | |||||||
Net income attributable to VMware | (32,326 | ) | (32,326 | ) | |||||||
Net income attributable to EMC | $ | (25,068 | ) | $ | 131,700 |
VMware Standalone GAAP | GAAP Adjustments and Eliminations | VMware within EMC GAAP | |||||||||
Revenue | $ | 941,863 | $ | (1,078 | ) | $ | 940,785 | ||||
Cost of revenue | 152,741 | (142 | ) | 152,599 | |||||||
Gross margin | 789,122 | (936 | ) | 788,186 | |||||||
Research and development | 199,655 | (3,619 | ) | 196,036 | |||||||
Selling, general and administrative | 408,746 | (2,409 | ) | 406,337 | |||||||
Restructuring and acquisition-related charges | — | 844 | 844 | ||||||||
Operating income | 180,721 | 4,248 | 184,969 | ||||||||
Non-operating income | 2,438 | (2,241 | ) | 197 | |||||||
Income before taxes | 183,159 | 2,007 | 185,166 | ||||||||
Income tax provision | 5,621 | (2,640 | ) | 2,981 | |||||||
Net income | $ | 177,538 | 4,647 | 182,185 | |||||||
Net income attributable to VMware | (36,465 | ) | (36,465 | ) | |||||||
Net income attributable to EMC | $ | (31,818 | ) | $ | 145,720 |
Q1 2011 | Q2 2011 | Q3 2011 | Q4 2011 | FY 2011 | Q1 2012 | Q2 2012 | Q3 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 | |||||||||||||||
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 | |||||||||||||||||||||||
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 | |||||||||||||||
Information Intelligence Group: | |||||||||||||||||||||||||||||||
Product Revenue | $ | 41,132 | $ | 44,226 | $ | 50,439 | $ | 73,540 | $ | 209,337 | $ | 36,062 | $ | 45,497 | $ | 49,881 | |||||||||||||||
Services Revenue | 110,043 | 115,646 | 111,157 | 115,169 | 452,015 | 109,491 | 107,276 | 108,117 | |||||||||||||||||||||||
Total Information Intelligence Group Revenue | $ | 151,175 | $ | 159,872 | $ | 161,596 | $ | 188,709 | $ | 661,352 | $ | 145,553 | $ | 152,773 | $ | 157,998 | |||||||||||||||
RSA Information Security: | |||||||||||||||||||||||||||||||
Product Revenue | $ | 87,180 | $ | 102,273 | $ | 115,685 | $ | 135,652 | $ | 440,790 | $ | 96,489 | $ | 103,458 | $ | 106,020 | |||||||||||||||
Services Revenue | 87,074 | 93,861 | 99,215 | 107,263 | 387,413 | 110,028 | 117,312 | 120,918 | |||||||||||||||||||||||
Total RSA Information Security Revenue | $ | 174,254 | $ | 196,134 | $ | 214,900 | $ | 242,915 | $ | 828,203 | $ | 206,517 | $ | 220,770 | $ | 226,938 | |||||||||||||||
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 | |||||||||||||||
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 | |||||||||||||||||||||||
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 | |||||||||||||||
VMware: | |||||||||||||||||||||||||||||||
Product Revenue | $ | 418,936 | $ | 464,783 | $ | 442,904 | $ | 513,519 | $ | 1,840,142 | $ | 481,571 | $ | 516,868 | $ | 489,875 | |||||||||||||||
Services Revenue | 423,776 | 456,055 | 497,881 | 545,000 | 1,922,712 | 571,830 | 603,757 | 640,590 | |||||||||||||||||||||||
Total VMware Revenue | $ | 842,712 | $ | 920,838 | $ | 940,785 | $ | 1,058,519 | $ | 3,762,854 | $ | 1,053,401 | $ | 1,120,625 | $ | 1,130,465 | |||||||||||||||
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 | |||||||||||||||
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 | |||||||||||||||||||||||
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 | |||||||||||||||
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)% |