Segment Information

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Segment Information

Segment Information

We manage the Company as a federation of businesses: EMC Information Infrastructure, VMware Virtual Infrastructure and Pivotal. EMC Information Infrastructure operates in three segments: Information Storage, Enterprise Content Division and RSA Information Security, while VMware Virtual Infrastructure and Pivotal each operate as single segments.

Our management measures are designed to assess performance of these reporting 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, intangible asset amortization expense, restructuring charges and acquisition and other related charges. Additionally, in certain instances, infrequently occurring gains or losses are also excluded from the measures used by management in assessing segment performance. Research and development expenses, selling, general and administrative expenses and restructuring and acquisition -related charges 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 EMC Information Infrastructure business level. EMC Information Infrastructure and Pivotal have not been allocated non-operating income (expense), net and income tax provision as these costs are managed centrally at the EMC corporate level. Accordingly, for the three segments within the EMC Information Infrastructure business, gross profit is the segment operating performance measure, while for Pivotal, operating income is the operating performance measure. The VMware Virtual Infrastructure within EMC amounts represent the revenues and expenses of VMware as reflected within EMC’s consolidated financial statements.

Our segment information for the three months ended March 31, 2015 and 2014 is as follows (tables in millions, except percentages):

	EMC Information Infrastructure
	Information Storage			Enterprise Content Division			RSA Information Security			EMC Information Infrastructure			Pivotal			EMC Information Infrastructure plus Pivotal
Three Months Ended:
March 31, 2015
Revenues:
Product revenues	$	2,179		$	27		$	100		$	2,306		$	16		$	2,322
Services revenues	1,484			111			148			1,743			38			1,781
Total consolidated revenues	3,663			138			248			4,049			54			4,103
Gross profit	$	1,850		$	90		$	165		$	2,105		$	22		$	2,127
Gross profit percentage	50.5		%	65.2		%	66.6		%	52.0		%	40.3		%	51.9		%
Research and development										424			27			451
Selling, general and administrative										1,169			49			1,218
Restructuring and acquisition-related charges										—			—			—
Total operating expenses										1,593			76			1,669
Operating income (expense)										$	512		$	(54	)	$	458

	EMC Information Infrastructure plus Pivotal			VMware Virtual Infrastructure			Corp Reconciling Items			Consolidated
Three Months Ended
March 31, 2015
Revenues:
Product revenues	$	2,322		$	583		$	—		$	2,905
Services revenues	1,781			927			—			2,708
Total consolidated revenues	4,103			1,510			—			5,613
Gross profit	$	2,127		$	1,311		$	(99	)	$	3,339
Gross profit percentage	51.9		%	86.8		%	—		%	59.5		%
Research and development	451			247			90			788
Selling, general and administrative	1,218			604			215			2,037
Restructuring and acquisition-related charges	—			—			135			135
Total operating expenses	1,669			851			440			2,960
Operating income (expense)	458			460			(539		)	379
Non-operating income (expense), net	(14		)	8			—			(6		)
Income tax provision	126			89			(133		)	82
Net income	318			379			(406		)	291
Net income attributable to the non-controlling interest in VMware, Inc.	—			(74		)	35			(39		)
Net income attributable to EMC Corporation	$	318		$	305		$	(371	)	$	252

	EMC Information Infrastructure
	Information Storage			Enterprise Content Division			RSA Information Security			EMC Information Infrastructure			Pivotal			EMC Information Infrastructure plus Pivotal
Three Months Ended:
March 31, 2014
Revenues:
Product revenues	$	2,302		$	35		$	104		$	2,441		$	11		$	2,452
Services revenues	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 operating expenses										1,479			72			1,551
Operating income (expense)										$	758		$	(53	)	$	705

	EMC Information Infrastructure plus Pivotal			VMware Virtual Infrastructure			Corp Reconciling Items			Consolidated
Three Months Ended
March 31, 2014
Revenues:
Product revenues	$	2,452		$	556		$	—		$	3,008
Services revenues	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 operating expenses	1,551			766			385			2,702
Operating income (expense)	705			418			(478		)	645
Non-operating income (expense), net	(80		)	6			—			(74		)
Income tax provision	170			83			(114		)	139
Net income	455			341			(364		)	432
Net income attributable to the non-controlling interest in VMware, Inc.	—			(68		)	28			(40		)
Net income attributable to EMC Corporation	$	455		$	273		$	(336	)	$	392

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 millions):

	For the Three Months Ended
	March 31, 2015		March 31, 2014
United States	$	3,013	$	2,835
Europe, Middle East and Africa	1,559		1,592
Asia Pacific and Japan	729		722
Latin America, Mexico and Canada	312		330
Total	$	5,613	$	5,479

No country other than the United States accounted for 10% or more of revenues during the three months ended March 31, 2015 or 2014.

Long-lived assets, excluding financial instruments, deferred tax assets, goodwill and intangible assets, in the United States were $4,383 million at March 31, 2015 and $4,380 million at December 31, 2014. Internationally, long-lived assets, excluding financial instruments, deferred tax assets, goodwill and intangible assets, were $953 million at March 31, 2015 and $1,021 million at December 31, 2014. 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 March 31, 2015 or December 31, 2014.