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 April 23, 2014 |
EMC CORPORATION | |
By: | /s/ David I. Goulden |
David I. Goulden | |
Chief Executive Officer, EMC Information Infrastructure |
Exhibit No. | Description |
99.1 | Press release from EMC Corporation dated April 23, 2014 |
Contact: | Dave Farmer |
Highlights: | |
l | EMC exceeds Q1 revenue outlook by more than $80 million |
l | EMC meets Q1 GAAP EPS outlook and exceeds Q1 non-GAAP EPS outlook1 by $0.01 |
l | EMC increases quarterly dividend by 15% |
l | EMC consolidated Q1 revenue growth of 2% year over year |
l | Emerging Storage business Q1 revenue up 81% year over year |
l | Pivotal Q1 revenue up 41% year over year |
l | VMware Q1 revenue increases 16% year over year |
• | Consolidated revenues are expected to be $24.575 billion for 2014. |
• | Consolidated GAAP operating income is expected to range from 16.5% - 17.0% of revenues for 2014 and consolidated non-GAAP6 operating income is expected to range from 24.0% - 24.5% of revenues for 2014. |
• | Consolidated GAAP earnings per weighted average diluted share are expected to be $1.29 for 2014 and consolidated non-GAAP6 earnings per weighted average diluted share are expected to be $1.90 for 2014. |
• | The consolidated GAAP income tax rate is expected to be 23.0% and the consolidated non-GAAP6 income tax rate is expected to be 23.5% for 2014. This assumes that the U.S. research and development tax credit is extended during 2014. |
• | Consolidated net cash provided by operating activities is expected to be $7.2 billion for 2014 and free cash flow3 is expected to be $5.8 billion for 2014. |
• | The weighted average outstanding diluted shares are expected to be 2.06 billion for 2014. |
• | EMC expects to repurchase an aggregate of $2.0 billion of the company’s common stock in 2014. |
• | EMC will host its first-quarter 2014 earnings conference call today at 8:30 a.m. ET, which will be available via EMC’s web site at http://www.emc.com/ir |
• | 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/ir |
• | Visit http://ir.vmware.com for more information about VMware’s first-quarter 2014 financial results |
• | Visit EMC Pulse, EMC’s product and technology news blog, and EMC Reflections |
• | Connect with EMC via Twitter, Facebook, YouTube, and LinkedIn |
Three Months Ended | ||||||||
March 31, | March 31, | |||||||
2014 | 2013 | |||||||
Revenues: | ||||||||
Product sales | $ | 3,008 | $ | 3,112 | ||||
Services | 2,471 | 2,275 | ||||||
5,479 | 5,387 | |||||||
Cost and expenses: | ||||||||
Cost of product sales | 1,296 | 1,356 | ||||||
Cost of services | 836 | 733 | ||||||
Research and development | 731 | 676 | ||||||
Selling, general and administrative | 1,852 | 1,713 | ||||||
Restructuring and acquisition-related charges | 119 | 148 | ||||||
Operating income | 645 | 761 | ||||||
Non-operating income (expense): | ||||||||
Investment income | 36 | 33 | ||||||
Interest expense | (34 | ) | (21 | ) | ||||
Other income (expense), net | (76 | ) | (82 | ) | ||||
Total non-operating income (expense) | (74 | ) | (70 | ) | ||||
Income before provision for income taxes | 571 | 691 | ||||||
Income tax provision | 139 | 76 | ||||||
Net income | 432 | 615 | ||||||
Less: Net income attributable to the non-controlling interests in VMware, Inc. | (40 | ) | (35 | ) | ||||
Net income attributable to EMC Corporation | $ | 392 | $ | 580 | ||||
Net income per weighted average share, basic attributable to EMC Corporation common shareholders | $ | 0.19 | $ | 0.28 | ||||
Net income per weighted average share, diluted attributable to EMC Corporation common shareholders | $ | 0.19 | $ | 0.26 | ||||
Weighted average shares, basic | 2,029 | 2,102 | ||||||
Weighted average shares, diluted | 2,076 | 2,189 | ||||||
Cash dividends declared per common share | $ | 0.10 | — |
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 6,291 | $ | 7,891 | ||||
Short-term investments | 1,964 | 2,773 | ||||||
Accounts and notes receivable, less allowance for doubtful accounts of $62 and $62 | 2,981 | 3,861 | ||||||
Inventories | 1,421 | 1,334 | ||||||
Deferred income taxes | 941 | 912 | ||||||
Other current assets | 597 | 507 | ||||||
Total current assets | 14,195 | 17,278 | ||||||
Long-term investments | 7,006 | 6,924 | ||||||
Property, plant and equipment, net | 3,568 | 3,478 | ||||||
Intangible assets, net | 1,941 | 1,780 | ||||||
Goodwill | 15,301 | 14,424 | ||||||
Other assets, net | 2,036 | 1,965 | ||||||
Total assets | $ | 44,047 | $ | 45,849 | ||||
LIABILITIES & SHAREHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,070 | $ | 1,434 | ||||
Accrued expenses | 2,668 | 2,783 | ||||||
Notes converted and payable | — | 1,665 | ||||||
Income taxes payable | 71 | 639 | ||||||
Deferred revenue | 5,556 | 5,278 | ||||||
Total current liabilities | 9,365 | 11,799 | ||||||
Income taxes payable | 285 | 296 | ||||||
Deferred revenue | 4,116 | 3,701 | ||||||
Deferred income taxes | 428 | 421 | ||||||
Long-term debt | 5,494 | 5,494 | ||||||
Other liabilities | 364 | 352 | ||||||
Total liabilities | 20,052 | 22,063 | ||||||
Commitments and contingencies | ||||||||
Shareholders' equity: | ||||||||
Preferred stock, par value $0.01; authorized 25 shares; none outstanding | — | — | ||||||
Common stock, par value $0.01; authorized 6,000 shares; issued and outstanding 2,047 and 2,020 shares | 20 | 20 | ||||||
Additional paid-in capital | 1,363 | 1,406 | ||||||
Retained earnings | 21,297 | 21,114 | ||||||
Accumulated other comprehensive loss, net | (228 | ) | (239 | ) | ||||
Total EMC Corporation's shareholders' equity | 22,452 | 22,301 | ||||||
Non-controlling interests | 1,543 | 1,485 | ||||||
Total shareholders' equity | 23,995 | 23,786 | ||||||
Total liabilities and shareholders' equity | $ | 44,047 | $ | 45,849 |
Three Months Ended | |||||||||||
March 31, | March 31, | ||||||||||
2014 | 2013 | ||||||||||
Cash flows from operating activities: | |||||||||||
Cash received from customers | $ | 6,965 | $ | 6,616 | |||||||
Cash paid to suppliers and employees | (4,962 | ) | (4,405 | ) | |||||||
Dividends and interest received | 55 | 39 | |||||||||
Interest paid | — | (1 | ) | ||||||||
Income taxes paid | (720 | ) | (536 | ) | |||||||
Net cash provided by operating activities | 1,338 | 1,713 | |||||||||
Cash flows from investing activities: | |||||||||||
Additions to property, plant and equipment | (275 | ) | (165 | ) | |||||||
Capitalized software development costs | (117 | ) | (106 | ) | |||||||
Purchases of short- and long-term available-for-sale securities | (2,931 | ) | (1,819 | ) | |||||||
Sales of short- and long-term available-for-sale securities | 2,362 | 1,414 | |||||||||
Maturities of short- and long-term available-for-sale securities | 1,307 | 387 | |||||||||
Business acquisitions, net of cash acquired | (1,068 | ) | (184 | ) | |||||||
Purchases of strategic and other related investments | (22 | ) | (35 | ) | |||||||
Joint venture funding | — | (95 | ) | ||||||||
Increase in restricted cash | (76 | ) | — | ||||||||
Net cash used in investing activities | (820 | ) | (603 | ) | |||||||
Cash flows from financing activities: | |||||||||||
Proceeds from the issuance of EMC's common stock | 194 | 42 | |||||||||
Proceeds from the issuance of VMware's common stock | 88 | 68 | |||||||||
EMC repurchase of EMC's common stock | (390 | ) | (323 | ) | |||||||
EMC purchase of VMware's common stock | — | (125 | ) | ||||||||
VMware repurchase of VMware's common stock | (169 | ) | (182 | ) | |||||||
Excess tax benefits from stock-based compensation | 29 | 33 | |||||||||
Payment of long- and short-term obligations | (1,665 | ) | (5 | ) | |||||||
Dividend payment | (202 | ) | — | ||||||||
Net cash used in financing activities | (2,115 | ) | (492 | ) | |||||||
Effect of exchange rate changes on cash and cash equivalents | (3 | ) | (28 | ) | |||||||
Net increase (decrease) in cash and cash equivalents | (1,600 | ) | 590 | ||||||||
Cash and cash equivalents at beginning of period | 7,891 | 4,714 | |||||||||
Cash and cash equivalents at end of period | $ | 6,291 | $ | 5,304 | |||||||
Reconciliation of net income to net cash provided by operating activities: | |||||||||||
Net income | $ | 432 | $ | 615 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 442 | 391 | |||||||||
Non-cash interest expense on debt | — | 12 | |||||||||
Non-cash restructuring and other special charges | 5 | 7 | |||||||||
Stock-based compensation expense | 239 | 236 | |||||||||
Provision for (recovery of) doubtful accounts | 4 | (8 | ) | ||||||||
Deferred income taxes, net | (47 | ) | (62 | ) | |||||||
Excess tax benefits from stock-based compensation | (29 | ) | (33 | ) | |||||||
Other, net | 17 | 6 | |||||||||
Changes in assets and liabilities, net of acquisitions: | |||||||||||
Accounts and notes receivable | 910 | 654 |
Inventories | (139 | ) | (46 | ) | |||||||
Other assets | (13 | ) | 53 | ||||||||
Accounts payable | (369 | ) | (110 | ) | |||||||
Accrued expenses | (236 | ) | (194 | ) | |||||||
Income taxes payable | (535 | ) | (393 | ) | |||||||
Deferred revenue | 650 | 582 | |||||||||
Other liabilities | 7 | 3 | |||||||||
Net cash provided by operating activities | $ | 1,338 | $ | 1,713 |
Three Months Ended | |||||||||||||||
Diluted | Diluted | ||||||||||||||
March 31, | Earnings | March 31, | Earnings | ||||||||||||
2014 | Per Share | 2013 | Per Share | ||||||||||||
Net Income Attributable to EMC GAAP | $ | 392 | $ | 0.188 | $ | 580 | $ | 0.264 | |||||||
Stock-based compensation expense | 168 | 0.081 | 156 | 0.072 | |||||||||||
Intangible asset amortization | 62 | 0.030 | 62 | 0.028 | |||||||||||
Restructuring charges | 84 | 0.041 | 101 | 0.046 | |||||||||||
Acquisition-related charges | 14 | 0.006 | 3 | 0.001 | |||||||||||
Amortization of VMware's capitalized software from prior periods | — | — | 7 | 0.003 | |||||||||||
R&D tax credit | 8 | 0.004 | (59 | ) | (0.027 | ) | |||||||||
Net Income Attributable to EMC Non-GAAP | $ | 728 | $ | 0.350 | $ | 850 | $ | 0.387 | |||||||
Weighted average shares, diluted | 2,076 | 2,189 | |||||||||||||
Incremental VMware dilution | $ | 2 | $ | 1 |
* | Net of tax and non-controlling interests in VMware, Inc., except weighted average shares, diluted. See Income Tax Provision and Net Income Attributable to VMware lines in Supplemental Information schedules. |
Three Months Ended | |||||||
March 31, | March 31, | ||||||
2014 | 2013 | ||||||
Gross Margin GAAP | $ | 3,347 | $ | 3,298 | |||
Stock-based compensation expense | 35 | 30 | |||||
Intangible asset amortization | 58 | 58 | |||||
Amortization of VMware's capitalized software from prior periods | — | 12 | |||||
Gross Margin Non-GAAP | $ | 3,440 | $ | 3,398 | |||
Revenues | $ | 5,479 | $ | 5,387 | |||
Gross Margin Percentages: | |||||||
GAAP | 61.1 | % | 61.2 | % | |||
Non-GAAP | 62.8 | % | 63.1 | % |
Three Months Ended | |||||||
March 31, | March 31, | ||||||
2014 | 2013 | ||||||
Operating Margin GAAP | $ | 645 | $ | 761 | |||
Stock-based compensation expense | 246 | 234 | |||||
Intangible asset amortization | 94 | 97 | |||||
Restructuring charges | 114 | 145 | |||||
Acquisition-related charges | 24 | 3 | |||||
Amortization of VMware's capitalized software from prior periods | — | 12 | |||||
Operating Margin Non-GAAP | $ | 1,123 | $ | 1,252 | |||
Revenues | $ | 5,479 | $ | 5,387 | |||
Operating Margin Percentages: | |||||||
GAAP | 11.8 | % | 14.1 | % | |||
Non-GAAP | 20.5 | % | 23.2 | % |
Three Months Ended March 31, 2014 | ||||||||||
Income Before | Tax Provision | Tax | ||||||||
Tax | (Benefit) | Rate | ||||||||
EMC Consolidated GAAP | $ | 571 | $ | 139 | 24.3 | % | ||||
Stock-based compensation expense | 246 | 58 | 23.3 | % | ||||||
Intangible asset amortization | 94 | 28 | 29.4 | % | ||||||
Restructuring charges | 114 | 30 | 25.8 | % | ||||||
Acquisition-related charges | 24 | 7 | 30.5 | % | ||||||
R&D tax credit | — | (9 | ) | — | % | |||||
EMC Consolidated Non-GAAP | $ | 1,049 | $ | 253 | 24.0 | % |
Three Months Ended | ||||||||
March 31, | March 31, | |||||||
2014 | 2013 | |||||||
Cash Flow from Operations | $ | 1,338 | $ | 1,713 | ||||
Capital expenditures | (275 | ) | (165 | ) | ||||
Capitalized software development costs | (117 | ) | (106 | ) | ||||
Free Cash Flow | $ | 946 | $ | 1,442 |
Twelve Months Ending December 31, | |
2014 | |
Operating Income as a % of Revenue - GAAP | 16.5% - 17.0% |
Stock-based compensation expense | 4.5% |
Intangible asset amortization | 1.6% |
Restructuring charges | 0.8% |
Acquisition-related charges | 0.6% |
Operating Income as a % of Revenue - Non-GAAP | 24.0% - 24.5% |
Twelve Months Ending December 31, | |||
2014 | |||
Diluted Earnings Per Share - GAAP | $ | 1.29 | |
Stock-based compensation expense | 0.36 | ||
Intangible asset amortization | 0.13 | ||
Restructuring charges | 0.08 | ||
Acquisition-related charges | 0.04 | ||
Diluted Earnings Per Share - Non-GAAP | $ | 1.90 |
Twelve Months Ending December 31, | ||
2014 | ||
Tax Rate - GAAP | 23.0 | % |
Impact of stock-based compensation expense, intangible asset amortization, restructuring charges and acquisition-related charges | 0.5 | % |
Tax Rate - Non-GAAP | 23.5 | % |
Twelve Months Ending December 31, | |||
2014 | |||
Cash Flow from Operations | $ | 7,230 | |
Capital expenditures | (950 | ) | |
Capitalized software development costs | (480 | ) | |
Free Cash Flow | $ | 5,800 |
Stock-Based Compensation Expense | Intangible Asset Amortization | Restructuring Charges | Acquisition-Related Costs | R&D Tax Credit | |||||||||||||||
EMC Consolidated | |||||||||||||||||||
Cost of revenues | $ | (35 | ) | $ | (58 | ) | $ | — | $ | — | $ | — | |||||||
Research and development | (92 | ) | (2 | ) | — | — | — | ||||||||||||
Selling, general and administrative | (119 | ) | (34 | ) | — | (19 | ) | — | |||||||||||
Restructuring and acquisition-related charges | — | — | (114 | ) | (5 | ) | — | ||||||||||||
Income tax provision (benefit) | 58 | 28 | 30 | 7 | (9 | ) | |||||||||||||
Net income attributable to VMware | (20 | ) | (4 | ) | — | (3 | ) | (1 | ) | ||||||||||
EMC Information Infrastructure plus Pivotal | |||||||||||||||||||
Cost of revenues | $ | (25 | ) | $ | (34 | ) | $ | — | $ | — | $ | — | |||||||
Research and development | (32 | ) | (1 | ) | — | — | — | ||||||||||||
Selling, general and administrative | (61 | ) | (31 | ) | — | — | — | ||||||||||||
Restructuring and acquisition-related charges | — | — | (114 | ) | — | — | |||||||||||||
Income tax provision (benefit) | 30 | 21 | 30 | — | (5 | ) | |||||||||||||
Net income attributable to VMware | — | — | — | — | — | ||||||||||||||
VMware within EMC | |||||||||||||||||||
Cost of revenues | $ | (10 | ) | $ | (24 | ) | $ | — | $ | — | $ | — | |||||||
Research and development | (60 | ) | (1 | ) | — | — | — | ||||||||||||
Selling, general and administrative | (58 | ) | (3 | ) | — | (19 | ) | — | |||||||||||
Restructuring and acquisition-related charges | — | — | — | (5 | ) | — | |||||||||||||
Income tax provision (benefit) | 28 | 7 | — | 7 | (4 | ) | |||||||||||||
Net income attributable to VMware | (20 | ) | (4 | ) | — | (3 | ) | (1 | ) |
Stock-Based Compensation Expense | Intangible Asset Amortization | Restructuring Charges | Acquisition-Related Charges | Amortization of VMware's Capitalized Software from Prior Periods | R&D Tax Credit | ||||||||||||||||||
EMC Consolidated | |||||||||||||||||||||||
Cost of revenues | $ | (30 | ) | $ | (58 | ) | $ | — | $ | — | $ | (12 | ) | $ | — | ||||||||
Research and development | (91 | ) | (2 | ) | — | — | — | — | |||||||||||||||
Selling, general and administrative | (113 | ) | (37 | ) | — | — | — | — | |||||||||||||||
Restructuring and acquisition-related charges | — | — | (145 | ) | (3 | ) | — | — | |||||||||||||||
Income tax provision (benefit) | 59 | 31 | 35 | — | 4 | 65 | |||||||||||||||||
Net income attributable to VMware | (19 | ) | (4 | ) | (9 | ) | — | (1 | ) | 6 | |||||||||||||
EMC Information Infrastructure plus Pivotal | |||||||||||||||||||||||
Cost of revenues | $ | (20 | ) | $ | (35 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||
Research and development | (33 | ) | (1 | ) | — | — | — | — | |||||||||||||||
Selling, general and administrative | (65 | ) | (35 | ) | — | — | — | — | |||||||||||||||
Restructuring and acquisition-related charges | — | — | (85 | ) | (2 | ) | — | — | |||||||||||||||
Income tax provision (benefit) | 29 | 24 | 17 | — | — | 33 | |||||||||||||||||
Net income attributable to VMware | — | — | — | — | — | — | |||||||||||||||||
VMware within EMC | |||||||||||||||||||||||
Cost of revenues | $ | (10 | ) | $ | (23 | ) | $ | — | $ | — | $ | (12 | ) | $ | — | ||||||||
Research and development | (58 | ) | (1 | ) | — | — | — | — | |||||||||||||||
Selling, general and administrative | (48 | ) | (2 | ) | — | — | — | — | |||||||||||||||
Restructuring and acquisition-related charges | — | — | (60 | ) | (1 | ) | — | — | |||||||||||||||
Income tax provision (benefit) | 30 | 7 | 18 | — | 4 | 32 | |||||||||||||||||
Net income attributable to VMware | (19 | ) | (4 | ) | (9 | ) | — | (1 | ) | 6 |
VMware Standalone GAAP | GAAP Adjustments and Eliminations | VMware within EMC GAAP | |||||||||
Revenues | $ | 1,360 | $ | (8 | ) | $ | 1,352 | ||||
Cost of Revenues | 201 | 1 | 202 | ||||||||
Gross margin | 1,159 | (9 | ) | 1,150 | |||||||
Research and development | 293 | (3 | ) | 290 | |||||||
Selling, general and administrative | 625 | (8 | ) | 617 | |||||||
Restructuring and acquisition-related charges | — | 5 | 5 | ||||||||
Operating income | 241 | (3 | ) | 238 | |||||||
Non-operating income (expense) | 4 | 2 | 6 | ||||||||
Income before taxes | 245 | (1 | ) | 244 | |||||||
Income tax provision (benefit) | 46 | (1 | ) | 45 | |||||||
Net income | $ | 199 | — | 199 | |||||||
Net income attributable to VMware | (40 | ) | (40 | ) | |||||||
Net income attributable to EMC | $ | (40 | ) | $ | 159 |
VMware Standalone GAAP | GAAP Adjustments and Eliminations | VMware within EMC GAAP | |||||||||
Revenues | $ | 1,191 | $ | (25 | ) | $ | 1,166 | ||||
Cost of revenues | 182 | (13 | ) | 169 | |||||||
Gross margin | 1,009 | (12 | ) | 997 | |||||||
Research and development | 271 | (21 | ) | 250 | |||||||
Selling, general and administrative | 515 | (16 | ) | 499 | |||||||
Restructuring and acquisition-related charges | 63 | (2 | ) | 61 | |||||||
Operating income | 160 | 27 | 187 | ||||||||
Non-operating income (expense) | 4 | — | 4 | ||||||||
Income before taxes | 164 | 27 | 191 | ||||||||
Income tax provision (benefit) | (9 | ) | 2 | (7 | ) | ||||||
Net income | $ | 173 | 25 | 198 | |||||||
Net income attributable to VMware | (35 | ) | (35 | ) | |||||||
Net income attributable to EMC | $ | (10 | ) | $ | 163 |
EMC Information Infrastructure | |||||||||||||||||||||||
Information Storage | Information Intelligence Group | RSA Information Security | EMC Information Infrastructure | Pivotal | EMC Information Infrastructure plus Pivotal | ||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Product sales | $ | 2,302 | $ | 35 | $ | 104 | $ | 2,441 | $ | 11 | $ | 2,452 | |||||||||||
Services | 1,378 | 119 | 140 | 1,637 | 38 | 1,675 | |||||||||||||||||
Total consolidated revenues | 3,680 | 154 | 244 | 4,078 | 49 | 4,127 | |||||||||||||||||
Gross profit | $ | 1,976 | $ | 99 | $ | 162 | 2,237 | 19 | 2,256 | ||||||||||||||
Gross profit percentage | 53.7 | % | 64.7 | % | 66.2 | % | 54.9 | % | 38.1 | % | 54.7 | % | |||||||||||
Research and development | 377 | 31 | 408 | ||||||||||||||||||||
Selling, general and administrative | 1,102 | 41 | 1,143 | ||||||||||||||||||||
Restructuring and acquisition-related charges | — | — | — | ||||||||||||||||||||
Total costs and expenses | 1,479 | 72 | 1,551 | ||||||||||||||||||||
Operating income (expense) | $ | 758 | $ | (53 | ) | $ | 705 | ||||||||||||||||
Operating margin percentage | 18.6 | % | (108.5 | )% | 17.1 | % |
EMC Information Infrastructure plus Pivotal | VMware Virtual Infrastructure within EMC | Corp Reconciling Items | Consolidated | ||||||||||||
Revenues: | |||||||||||||||
Product sales | $ | 2,452 | $ | 556 | $ | — | $ | 3,008 | |||||||
Services | 1,675 | 796 | — | 2,471 | |||||||||||
Total consolidated revenues | 4,127 | 1,352 | — | 5,479 | |||||||||||
Gross profit | $ | 2,256 | $ | 1,184 | $ | (93 | ) | $ | 3,347 | ||||||
Gross profit percentage | 54.7 | % | 87.6 | % | — | 61.1 | % | ||||||||
Research and development | 408 | 229 | 94 | 731 | |||||||||||
Selling, general and administrative | 1,143 | 537 | 172 | 1,852 | |||||||||||
Restructuring and acquisition-related charges | — | — | 119 | 119 | |||||||||||
Total costs and expenses | 1,551 | 766 | 385 | 2,702 | |||||||||||
Operating income (expense) | 705 | 418 | (478 | ) | 645 | ||||||||||
Operating margin percentage | 17.1 | % | 31.0 | % | — | 11.8 | % | ||||||||
Non-operating income (expense) | (80 | ) | 6 | — | (74 | ) | |||||||||
Income tax provision | 170 | 83 | (114 | ) | 139 | ||||||||||
Net income | 455 | 341 | (364 | ) | 432 | ||||||||||
Net income attributable to the non-controlling interests in VMware, Inc. | — | (68 | ) | 28 | (40 | ) | |||||||||
Net income attributable to EMC Corporation | $ | 455 | $ | 273 | $ | (336 | ) | $ | 392 |
EMC Information Infrastructure | |||||||||||||||||||||||
Information Storage | Information Intelligence Group | RSA Information Security | EMC Information Infrastructure | Pivotal | EMC Information Infrastructure plus Pivotal | ||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Product sales | $ | 2,472 | $ | 43 | $ | 100 | $ | 2,615 | $ | 13 | $ | 2,628 | |||||||||||
Services | 1,326 | 112 | 133 | 1,571 | 22 | 1,593 | |||||||||||||||||
Total consolidated revenues | 3,798 | 155 | 233 | 4,186 | 35 | 4,221 | |||||||||||||||||
Gross profit | $ | 2,088 | $ | 99 | $ | 152 | 2,339 | 17 | 2,356 | ||||||||||||||
Gross profit percentage | 55.0 | % | 63.6 | % | 65.4 | % | 55.9 | % | 48.3 | % | 55.8 | % | |||||||||||
Research and development | 366 | 26 | 392 | ||||||||||||||||||||
Selling, general and administrative | 1,076 | 37 | 1,113 | ||||||||||||||||||||
Restructuring and acquisition-related charges | — | — | — | ||||||||||||||||||||
Total costs and expenses | 1,442 | 63 | 1,505 | ||||||||||||||||||||
Operating income (expense) | $ | 897 | $ | (46 | ) | $ | 851 | ||||||||||||||||
Operating margin percentage | 21.4 | % | (133.4 | )% | 20.2 | % |
EMC Information Infrastructure plus Pivotal | VMware Virtual Infrastructure within EMC | Corp Reconciling Items | Consolidated | ||||||||||||
Revenues: | |||||||||||||||
Product sales | $ | 2,628 | $ | 484 | $ | — | $ | 3,112 | |||||||
Services | 1,593 | 682 | — | 2,275 | |||||||||||
Total consolidated revenues | 4,221 | 1,166 | — | 5,387 | |||||||||||
Gross profit | $ | 2,356 | $ | 1,042 | $ | (100 | ) | $ | 3,298 | ||||||
Gross profit percentage | 55.8 | % | 89.3 | % | — | 61.2 | % | ||||||||
Research and development | 392 | 191 | 93 | 676 | |||||||||||
Selling, general and administrative | 1,113 | 450 | 150 | 1,713 | |||||||||||
Restructuring and acquisition-related charges | — | — | 148 | 148 | |||||||||||
Total costs and expenses | 1,505 | 641 | 391 | 2,537 | |||||||||||
Operating income (expense) | 851 | 401 | (491 | ) | 761 | ||||||||||
Operating margin percentage | 20.2 | % | 34.4 | % | — | 14.1 | % | ||||||||
Non-operating income (expense) | (74 | ) | 4 | — | (70 | ) | |||||||||
Income tax provision | 187 | 83 | (194 | ) | 76 | ||||||||||
Net income | 590 | 322 | (297 | ) | 615 | ||||||||||
Net income attributable to the non-controlling interests in VMware, Inc. | — | (62 | ) | 27 | (35 | ) | |||||||||
Net income attributable to EMC Corporation | $ | 590 | $ | 260 | $ | (270 | ) | $ | 580 |
EMC Information Infrastructure | |||||||||||||||||||||||
Information Storage | Information Intelligence Group | RSA Information Security | EMC Information Infrastructure | Pivotal | EMC Information Infrastructure plus Pivotal | ||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Product sales | $ | 2,577 | $ | 39 | $ | 98 | $ | 2,714 | $ | 15 | $ | 2,729 | |||||||||||
Services | 1,377 | 113 | 130 | 1,620 | 27 | 1,647 | |||||||||||||||||
Total consolidated revenues | 3,954 | 152 | 228 | 4,334 | 42 | 4,376 | |||||||||||||||||
Gross profit | $ | 2,236 | $ | 96 | $ | 148 | 2,480 | 20 | 2,500 | ||||||||||||||
Gross profit percentage | 56.5 | % | 63.1 | % | 65.1 | % | 57.2 | % | 48.0 | % | 57.1 | % | |||||||||||
Research and development | 377 | 26 | 403 | ||||||||||||||||||||
Selling, general and administrative | 1,118 | 36 | 1,154 | ||||||||||||||||||||
Restructuring and acquisition-related charges | — | — | — | ||||||||||||||||||||
Total costs and expenses | 1,495 | 62 | 1,557 | ||||||||||||||||||||
Operating income (expense) | $ | 985 | $ | (42 | ) | $ | 943 | ||||||||||||||||
Operating margin percentage | 22.7 | % | (99.6 | )% | 21.6 | % |
EMC Information Infrastructure plus Pivotal | VMware Virtual Infrastructure within EMC | Corp Reconciling Items | Consolidated | ||||||||||||
Revenues: | |||||||||||||||
Product sales | $ | 2,729 | $ | 529 | $ | — | $ | 3,258 | |||||||
Services | 1,647 | 709 | — | 2,356 | |||||||||||
Total consolidated revenues | 4,376 | 1,238 | — | 5,614 | |||||||||||
Gross profit | $ | 2,500 | $ | 1,109 | $ | (100 | ) | $ | 3,509 | ||||||
Gross profit percentage | 57.1 | % | 89.6 | % | — | 62.5 | % | ||||||||
Research and development | 403 | 207 | 85 | 695 | |||||||||||
Selling, general and administrative | 1,154 | 489 | 142 | 1,785 | |||||||||||
Restructuring and acquisition-related charges | — | — | 7 | 7 | |||||||||||
Total costs and expenses | 1,557 | 696 | 234 | 2,487 | |||||||||||
Operating income (expense) | 943 | 413 | (334 | ) | 1,022 | ||||||||||
Operating margin percentage | 21.6 | % | 33.4 | % | — | 18.2 | % | ||||||||
Non-operating income (expense) | (77 | ) | 3 | 18 | (56 | ) | |||||||||
Income tax provision | 214 | 93 | (91 | ) | 216 | ||||||||||
Net income | 652 | 323 | (225 | ) | 750 | ||||||||||
Net income attributable to the non-controlling interests in VMware, Inc. | — | (68 | ) | 19 | (49 | ) | |||||||||
Net income attributable to EMC Corporation | $ | 652 | $ | 255 | $ | (206 | ) | $ | 701 |
EMC Information Infrastructure | |||||||||||||||||||||||
Information Storage | Information Intelligence Group | RSA Information Security | EMC Information Infrastructure | Pivotal | EMC Information Infrastructure plus Pivotal | ||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Product sales | $ | 2,430 | $ | 32 | $ | 120 | $ | 2,582 | $ | 20 | $ | 2,602 | |||||||||||
Services | 1,376 | 117 | 132 | 1,625 | 27 | 1,652 | |||||||||||||||||
Total consolidated revenues | 3,806 | 149 | 252 | 4,207 | 47 | 4,254 | |||||||||||||||||
Gross profit | $ | 2,106 | $ | 94 | $ | 170 | 2,370 | 29 | 2,399 | ||||||||||||||
Gross profit percentage | 55.3 | % | 63.3 | % | 67.6 | % | 56.3 | % | 61.0 | % | 56.4 | % | |||||||||||
Research and development | 356 | 30 | 386 | ||||||||||||||||||||
Selling, general and administrative | 1,115 | 42 | 1,157 | ||||||||||||||||||||
Restructuring and acquisition-related charges | — | — | — | ||||||||||||||||||||
Total costs and expenses | 1,471 | 72 | 1,543 | ||||||||||||||||||||
Operating income (expense) | $ | 899 | $ | (43 | ) | $ | 856 | ||||||||||||||||
Operating margin percentage | 21.4 | % | (92.9 | )% | 20.1 | % |
EMC Information Infrastructure plus Pivotal | VMware Virtual Infrastructure within EMC | Corp Reconciling Items | Consolidated | ||||||||||||
Revenues: | |||||||||||||||
Product sales | $ | 2,602 | $ | 563 | $ | — | $ | 3,165 | |||||||
Services | 1,652 | 722 | — | 2,374 | |||||||||||
Total consolidated revenues | 4,254 | 1,285 | — | 5,539 | |||||||||||
Gross profit | $ | 2,399 | $ | 1,141 | $ | (98 | ) | $ | 3,442 | ||||||
Gross profit percentage | 56.4 | % | 88.8 | % | — | 62.1 | % | ||||||||
Research and development | 386 | 208 | 92 | 686 | |||||||||||
Selling, general and administrative | 1,157 | 493 | 159 | 1,809 | |||||||||||
Restructuring and acquisition-related charges | — | — | 40 | 40 | |||||||||||
Total costs and expenses | 1,543 | 701 | 291 | 2,535 | |||||||||||
Operating income (expense) | 856 | 440 | (389 | ) | 907 | ||||||||||
Operating margin percentage | 20.1 | % | 34.2 | % | — | 16.4 | % | ||||||||
Non-operating income (expense) | (106 | ) | 7 | 12 | (87 | ) | |||||||||
Income tax provision | 193 | 70 | (82 | ) | 181 | ||||||||||
Net income | 557 | 377 | (295 | ) | 639 | ||||||||||
Net income attributable to the non-controlling interests in VMware, Inc. | — | (74 | ) | 21 | (53 | ) | |||||||||
Net income attributable to EMC Corporation | $ | 557 | $ | 303 | $ | (274 | ) | $ | 586 |
EMC Information Infrastructure | |||||||||||||||||||||||
Information Storage | Information Intelligence Group | RSA Information Security | EMC Information Infrastructure | Pivotal | EMC Information Infrastructure plus Pivotal | ||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Product sales | $ | 3,260 | $ | 65 | $ | 136 | $ | 3,461 | $ | 18 | $ | 3,479 | |||||||||||
Services | 1,445 | 124 | 139 | 1,708 | 37 | 1,745 | |||||||||||||||||
Total consolidated revenues | 4,705 | 189 | 275 | 5,169 | 55 | 5,224 | |||||||||||||||||
Gross profit | $ | 2,680 | $ | 129 | $ | 185 | 2,994 | 25 | 3,019 | ||||||||||||||
Gross profit percentage | 57.0 | % | 68.2 | % | 67.2 | % | 57.9 | % | 45.7 | % | 57.8 | % | |||||||||||
Research and development | 362 | 27 | 389 | ||||||||||||||||||||
Selling, general and administrative | 1,262 | 46 | 1,308 | ||||||||||||||||||||
Restructuring and acquisition-related charges | — | — | — | ||||||||||||||||||||
Total costs and expenses | 1,624 | 73 | 1,697 | ||||||||||||||||||||
Operating income (expense) | $ | 1,370 | $ | (48 | ) | $ | 1,322 | ||||||||||||||||
Operating margin percentage | 26.5 | % | (86.3 | )% | 25.3 | % |
EMC Information Infrastructure plus Pivotal | VMware Virtual Infrastructure within EMC | Corp Reconciling Items | Consolidated | ||||||||||||
Revenues: | |||||||||||||||
Product sales | $ | 3,479 | $ | 676 | $ | — | $ | 4,155 | |||||||
Services | 1,745 | 782 | — | 2,527 | |||||||||||
Total consolidated revenues | 5,224 | 1,458 | — | 6,682 | |||||||||||
Gross profit | $ | 3,019 | $ | 1,297 | $ | (92 | ) | $ | 4,224 | ||||||
Gross profit percentage | 57.8 | % | 89.1 | % | — | 63.2 | % | ||||||||
Research and development | 389 | 220 | 96 | 705 | |||||||||||
Selling, general and administrative | 1,308 | 571 | 150 | 2,029 | |||||||||||
Restructuring and acquisition-related charges | — | — | 29 | 29 | |||||||||||
Total costs and expenses | 1,697 | 791 | 275 | 2,763 | |||||||||||
Operating income (expense) | 1,322 | 506 | (367 | ) | 1,461 | ||||||||||
Operating margin percentage | 25.3 | % | 34.7 | % | — | 21.9 | % | ||||||||
Non-operating income (expense) | (80 | ) | 7 | — | (73 | ) | |||||||||
Income tax provision | 316 | 70 | (88 | ) | 298 | ||||||||||
Net income | 926 | 443 | (279 | ) | 1,090 | ||||||||||
Net income attributable to the non-controlling interests in VMware, Inc. | — | (93 | ) | 25 | (68 | ) | |||||||||
Net income attributable to EMC Corporation | $ | 926 | $ | 350 | $ | (254 | ) | $ | 1,022 |
Q1 2013 | Q2 2013 | Q3 2013 | Q4 2013 | FY 2013 | Q1 2014 | ||||||||||||||||||
Information Storage: | |||||||||||||||||||||||
Product Revenues | $ | 2,472 | $ | 2,577 | $ | 2,430 | $ | 3,260 | $ | 10,738 | $ | 2,302 | |||||||||||
Services Revenues | 1,326 | 1,377 | 1,376 | 1,445 | 5,524 | 1,378 | |||||||||||||||||
Total Information Storage Revenues | $ | 3,798 | $ | 3,954 | $ | 3,806 | $ | 4,705 | $ | 16,262 | $ | 3,680 | |||||||||||
Information Intelligence Group: | |||||||||||||||||||||||
Product Revenues | $ | 43 | $ | 39 | $ | 32 | $ | 65 | $ | 180 | $ | 35 | |||||||||||
Services Revenues | 112 | 113 | 117 | 124 | 467 | 119 | |||||||||||||||||
Total Information Intelligence Group Revenues | $ | 155 | $ | 152 | $ | 149 | $ | 189 | $ | 647 | $ | 154 | |||||||||||
RSA Information Security: | |||||||||||||||||||||||
Product Revenues | $ | 100 | $ | 98 | $ | 120 | $ | 136 | $ | 453 | $ | 104 | |||||||||||
Services Revenues | 133 | 130 | 132 | 139 | 534 | 140 | |||||||||||||||||
Total RSA Information Security Revenues | $ | 233 | $ | 228 | $ | 252 | $ | 275 | $ | 987 | $ | 244 | |||||||||||
EMC Information Infrastructure: | |||||||||||||||||||||||
Product Revenues | $ | 2,615 | $ | 2,714 | $ | 2,582 | $ | 3,461 | $ | 11,371 | $ | 2,441 | |||||||||||
Services Revenues | 1,571 | 1,620 | 1,625 | 1,708 | 6,525 | 1,637 | |||||||||||||||||
Total EMC Information Infrastructure Revenues | $ | 4,186 | $ | 4,334 | $ | 4,207 | $ | 5,169 | $ | 17,896 | $ | 4,078 | |||||||||||
Pivotal: | |||||||||||||||||||||||
Product Revenues | $ | 13 | $ | 15 | $ | 20 | $ | 18 | $ | 66 | $ | 11 | |||||||||||
Services Revenues | 22 | 27 | 27 | 37 | 113 | 38 | |||||||||||||||||
Total Pivotal Revenues | $ | 35 | $ | 42 | $ | 47 | $ | 55 | $ | 179 | $ | 49 | |||||||||||
VMware: | |||||||||||||||||||||||
Product Revenues | $ | 484 | $ | 529 | $ | 563 | $ | 676 | $ | 2,523 | $ | 556 | |||||||||||
Services Revenues | 682 | 709 | 722 | 782 | 2,894 | 796 | |||||||||||||||||
Total VMware Revenues | $ | 1,166 | $ | 1,238 | $ | 1,285 | $ | 1,458 | $ | 5,147 | $ | 1,352 | |||||||||||
Consolidated Revenues: | |||||||||||||||||||||||
Product Revenues | $ | 3,112 | $ | 3,258 | $ | 3,165 | $ | 4,155 | $ | 13,690 | $ | 3,008 | |||||||||||
Services Revenues | 2,275 | 2,356 | 2,374 | 2,527 | 9,532 | 2,471 | |||||||||||||||||
Total Consolidated Revenues | $ | 5,387 | $ | 5,614 | $ | 5,539 | $ | 6,682 | $ | 23,222 | $ | 5,479 | |||||||||||
Percentage impact to EMC revenues growth rate due to changes in exchange rates from the prior year | (0.5)% | (0.7)% | (0.8)% | (0.5)% | (0.6)% | (0.4)% |