Segment Information

9 Months Ended

Sep. 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 nine months ended September 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:
September 30, 2012
Revenues:
Product revenues	$	2,438,665		$	49,881		$	106,020		$	2,594,566		$	489,875		$	—		$	3,084,441
Services revenues	1,324,110			108,117			120,918			1,553,145			640,590			—			2,193,735
Total consolidated revenues	3,762,775			157,998			226,938			4,147,711			1,130,465			—			5,278,176
Cost of sales	1,625,910			50,471			81,330			1,757,711			135,588			97,338			1,990,637
Gross profit	$	2,136,865		$	107,527		$	145,608		2,390,000			994,877			(97,338		)	3,287,539
Gross profit percentage	56.8		%	68.1		%	64.2		%	57.6		%	88.0		%	—			62.3		%
Research and development										367,792			196,888			88,218			652,898
Selling, general and administrative										1,102,888			435,454			170,452			1,708,794
Restructuring and acquisition-related charges										—			—			27,064			27,064
Total costs and expenses										1,470,680			632,342			285,734			2,388,756
Operating income										919,320			362,535			(383,072		)	898,783
Other income (expense), net										(49,863		)	8,498			(13,320		)	(54,685		)
Income before provision for income taxes										869,457			371,033			(396,392		)	844,098
Income tax provision										210,517			82,920			(108,003		)	185,434
Net income										658,940			288,113			(288,389		)	658,664
Net income attributable to the non-controlling interest in VMware, Inc.										—			(57,912		)	25,586			(32,326		)
Net income attributable to EMC Corporation										$	658,940		$	230,201		$	(262,803	)	$	626,338

	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:
September 30, 2011
Revenues:
Product revenues	$	2,465,339		$	50,439		$	115,685		$	2,631,463		$	442,904		$	—		$	3,074,367
Services revenues	1,197,581			111,157			99,215			1,407,953			497,881			—			1,905,834
Total consolidated revenues	3,662,920			161,596			214,900			4,039,416			940,785			—			4,980,201
Cost of sales	1,583,727			59,436			69,664			1,712,827			130,683			70,426			1,913,936
Gross profit	$	2,079,193		$	102,160		$	145,236		2,326,589			810,102			(70,426		)	3,066,265
Gross profit percentage	56.8		%	63.2		%	67.6		%	57.6		%	86.1		%	—			61.6		%
Research and development										316,380			148,576			83,065			548,021
Selling, general and administrative										1,099,329			368,187			145,398			1,612,914
Restructuring and acquisition-related charges										—			—			20,302			20,302
Total costs and expenses										1,415,709			516,763			248,765			2,181,237
Operating income										910,880			293,339			(319,191		)	885,028
Other income (expense), net										(43,223		)	197			(28,802		)	(71,828		)
Income before provision for income taxes										867,657			293,536			(347,993		)	813,200
Income tax provision										237,936			22,949			(89,799		)	171,086
Net income										629,721			270,587			(258,194		)	642,114
Net income attributable to the non-controlling interest in VMware, Inc.										—			(54,622		)	18,157			(36,465		)
Net income attributable to EMC Corporation										$	629,721		$	215,965		$	(240,037	)	$	605,649

	EMC Information Infrastructure
	Information Storage			Information Intelligence Group			RSA Information Security			EMC Information Infrastructure			VMware Virtual Infrastructure within EMC			Corp Reconciling Items			Consolidated
Nine Months Ended:
September 30, 2012
Revenues:
Product revenues	$	7,406,314		$	131,440		$	305,967		$	7,843,721		$	1,488,314		$	—		$	9,332,035
Services revenues	3,862,593			324,884			348,258			4,535,735			1,816,177			—			6,351,912
Total consolidated revenues	11,268,907			456,324			654,225			12,379,456			3,304,491			—			15,683,947
Cost of sales	4,893,097			156,839			196,104			5,246,040			400,327			289,431			5,935,798
Gross profit	$	6,375,810		$	299,485		$	458,121		7,133,416			2,904,164			(289,431		)	9,748,149
Gross profit percentage	56.6		%	65.6		%	70.0		%	57.6		%	87.9		%	—			62.2		%
Research and development										1,077,907			574,282			244,467			1,896,656
Selling, general and administrative										3,325,212			1,273,696			476,733			5,075,641
Restructuring and acquisition-related charges										—			—			80,560			80,560
Total costs and expenses										4,403,119			1,847,978			801,760			7,052,857
Operating income										2,730,297			1,056,186			(1,091,191		)	2,695,292
Other income (expense), net										(107,276		)	20,337			(43,692		)	(130,631		)
Income before provision for income taxes										2,623,021			1,076,523			(1,134,883		)	2,564,661
Income tax provision										706,003			194,699			(310,102		)	590,600
Net income										1,917,018			881,824			(824,781		)	1,974,061
Net income attributable to the non-controlling interest in VMware, Inc.										—			(179,699		)	68,332			(111,367		)
Net income attributable to EMC Corporation										$	1,917,018		$	702,125		$	(756,449	)	$	1,862,694

	EMC Information Infrastructure
	Information Storage			Information Intelligence Group			RSA Information Security			EMC Information Infrastructure			VMware Virtual Infrastructure within EMC			Corp Reconciling Items			Consolidated
Nine Months Ended:
September 30, 2011
Revenues:
Product revenues	$	7,282,052		$	135,797		$	305,138		$	7,722,987		$	1,326,623		$	—		$	9,049,610
Services revenues	3,388,839			336,846			280,150			4,005,835			1,377,712			—			5,383,547
Total consolidated revenues	10,670,891			472,643			585,288			11,728,822			2,704,335			—			14,433,157
Cost of sales	4,733,529			176,361			277,817			5,187,707			390,438			209,409			5,787,554
Gross profit	$	5,937,362		$	296,282		$	307,471		6,541,115			2,313,897			(209,409		)	8,645,603
Gross profit percentage	55.6		%	62.7		%	52.5		%	55.8		%	85.6		%	—			59.9		%
Research and development										932,581			412,575			243,864			1,589,020
Selling, general and administrative										3,179,639			1,057,615			447,280			4,684,534
Restructuring and acquisition-related charges										—			—			68,411			68,411
Total costs and expenses										4,112,220			1,470,190			759,555			6,341,965
Operating income										2,428,895			843,707			(968,964		)	2,303,638
Other income (expense), net										(76,169		)	4,466			(30,184		)	(101,887		)
Income before provision for income taxes										2,352,726			848,173			(999,148		)	2,201,751
Income tax provision										620,453			103,711			(258,708		)	465,456
Net income										1,732,273			744,462			(740,440		)	1,736,295
Net income attributable to the non-controlling interest in VMware, Inc.										—			(151,612		)	44,608			(107,004		)
Net income attributable to EMC Corporation										$	1,732,273		$	592,850		$	(695,832	)	$	1,629,291

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 Nine Months Ended
	September 30, 2012		September 30, 2011		September 30, 2012		September 30, 2011
United States	$	2,885,968	$	2,674,626	$	8,376,276	$	7,552,800
Europe, Middle East and Africa	1,351,753		1,355,474		4,216,384		4,149,828
Asia Pacific and Japan	733,157		695,443		2,192,411		1,944,808
Latin America, Mexico and Canada	307,298		254,658		898,876		785,721
Total	$	5,278,176	$	4,980,201	$	15,683,947	$	14,433,157

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

Long-lived assets, excluding financial instruments, deferred tax assets, goodwill and intangible assets, in the United States were $3,851.6 million at September 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 $626.8 million at September 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 September 30, 2012 or December 31, 2011.