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)) |
EMC CORPORATION | |
By: | /s/ Zane C. Rowe |
Zane C. Rowe | |
Executive Vice President and Chief Financial Officer |
Exhibit No. | Description |
99.1 | Press release from EMC Corporation dated October 21, 2015 |
Press Contact: | Katryn McGaughey |
Third-Quarter 2015 Summary: | |
l | Revenue up 1% year over year and up 5% year over year on a constant currency basis |
l | GAAP and non-GAAP EPS of $0.25 and $0.43, respectively |
l | EMC Emerging Storage, Pivotal and VMware revenues up 27%, 16% and 10% year over year, respectively; up 32%, 18% and 14% year over year on a constant currency basis, respectively |
• | EMC Information Infrastructure: Third-quarter revenue was down 3% year over year and up 2% year over year on a constant currency basis1. Information Storage revenue was down 2% year over year and up 3% on a constant currency basis1, a result of a higher than expected number of unshipped orders of approximately $100 million. Emerging Storage4 revenue was up 27% year over year and up 32% on a constant currency basis1. Within Emerging Storage in the quarter, XtremIO had another quarter of strong triple-digit revenue growth and is on track for more than $1 billion in bookings in 2015. |
• | Pivotal: Third-quarter revenue was up 16% year over year and up 18% on a constant currency basis1. Pivotal continues its transition to a subscription business model, with annual recurring revenue5 at the end of the third quarter of $75 million, up 26% quarter over quarter. |
• | VMware: Third-quarter revenue was up 10% year over year and up 14% on a constant currency basis1. VMware continues to be a central player in the transformation of IT and its influence continues to grow with key technologies in the software-defined datacenter, end-user computing and hybrid cloud. VMware continues to be integral to EMC’s success as demonstrated by the companies’ aligned strategies, technology integration and financial results, with VMware representing 27% of EMC consolidated third-quarter revenue and 44% of EMC consolidated third-quarter non-GAAP2 operating income. |
• | To access today’s webcast at 8:30 a.m. ET, visit the EMC Investor Relations website |
• | A replay of today’s webcast will be available here |
• | EMC financial results are available on the U.S. Securities and Exchange Commission website |
• | For more information about Dell and EMC combining visit http://www.emc.com/futureready |
• | Visit the VMware Investor Relations website for more detail on its third-quarter results |
• | Connect with EMC on Twitter (@EMCCorp and @EMC_News), LinkedIn, Facebook and SocialSphere |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | September 30, | September 30, | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Revenues: | ||||||||||||||||
Product sales | $ | 3,269 | $ | 3,400 | $ | 9,399 | $ | 9,728 | ||||||||
Services | 2,810 | 2,632 | 8,290 | 7,663 | ||||||||||||
6,079 | 6,032 | 17,689 | 17,391 | |||||||||||||
Cost and expenses: | ||||||||||||||||
Cost of product sales | 1,379 | 1,400 | 4,141 | 4,068 | ||||||||||||
Cost of services | 995 | 889 | 2,917 | 2,579 | ||||||||||||
Research and development | 802 | 767 | 2,372 | 2,239 | ||||||||||||
Selling, general and administrative | 2,145 | 1,990 | 6,285 | 5,852 | ||||||||||||
Restructuring and acquisition-related charges | 68 | 39 | 226 | 187 | ||||||||||||
Operating income | 690 | 947 | 1,748 | 2,466 | ||||||||||||
Non-operating income (expense): | ||||||||||||||||
Investment income | 25 | 29 | 76 | 100 | ||||||||||||
Interest expense | (41 | ) | (40 | ) | (121 | ) | (108 | ) | ||||||||
Other income (expense), net | 22 | (103 | ) | 56 | (245 | ) | ||||||||||
Total non-operating income (expense) | 6 | (114 | ) | 11 | (253 | ) | ||||||||||
Income before provision for income taxes | 696 | 833 | 1,759 | 2,213 | ||||||||||||
Income tax provision | 168 | 206 | 420 | 532 | ||||||||||||
Net income | 528 | 627 | 1,339 | 1,681 | ||||||||||||
Less: Net income attributable to the non-controlling interests in VMware, Inc. | (48 | ) | (40 | ) | (120 | ) | (113 | ) | ||||||||
Net income attributable to EMC Corporation | $ | 480 | $ | 587 | $ | 1,219 | $ | 1,568 | ||||||||
Net income per weighted average share, basic attributable to EMC Corporation common shareholders | $ | 0.25 | $ | 0.29 | $ | 0.63 | $ | 0.77 | ||||||||
Net income per weighted average share, diluted attributable to EMC Corporation common shareholders | $ | 0.25 | $ | 0.28 | $ | 0.62 | $ | 0.76 | ||||||||
Weighted average shares, basic | 1,934 | 2,032 | 1,945 | 2,033 | ||||||||||||
Weighted average shares, diluted | 1,948 | 2,057 | 1,963 | 2,065 | ||||||||||||
Cash dividends declared per common share | $ | 0.12 | $ | 0.12 | $ | 0.34 | $ | 0.33 |
September 30, 2015 | December 31, 2014 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 5,324 | $ | 6,343 | ||||
Short-term investments | 2,318 | 1,978 | ||||||
Accounts and notes receivable, less allowance for doubtful accounts of $87 and $72 | 3,134 | 4,413 | ||||||
Inventories | 1,224 | 1,276 | ||||||
Deferred income taxes | 1,088 | 1,070 | ||||||
Other current assets | 649 | 653 | ||||||
Total current assets | 13,737 | 15,733 | ||||||
Long-term investments | 6,642 | 6,334 | ||||||
Property, plant and equipment, net | 3,791 | 3,766 | ||||||
Intangible assets, net | 2,239 | 2,125 | ||||||
Goodwill | 17,083 | 16,134 | ||||||
Other assets, net | 1,853 | 1,767 | ||||||
Total assets | $ | 45,345 | $ | 45,859 | ||||
LIABILITIES & SHAREHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,115 | $ | 1,696 | ||||
Accrued expenses | 2,831 | 3,141 | ||||||
Income taxes payable | 208 | 852 | ||||||
Short-term debt | 1,970 | — | ||||||
Deferred revenue | 6,187 | 6,021 | ||||||
Total current liabilities | 12,311 | 11,710 | ||||||
Income taxes payable | 380 | 306 | ||||||
Deferred revenue | 4,436 | 4,144 | ||||||
Deferred income taxes | 317 | 274 | ||||||
Long-term debt | 5,474 | 5,469 | ||||||
Other liabilities | 472 | 431 | ||||||
Total liabilities | 23,390 | 22,334 | ||||||
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 1,939 and 1,985 shares | 19 | 20 | ||||||
Additional paid-in capital | — | — | ||||||
Retained earnings | 20,958 | 22,242 | ||||||
Accumulated other comprehensive loss, net | (533 | ) | (366 | ) | ||||
Total EMC Corporation's shareholders' equity | 20,444 | 21,896 | ||||||
Non-controlling interests | 1,511 | 1,629 | ||||||
Total shareholders' equity | 21,955 | 23,525 | ||||||
Total liabilities and shareholders' equity | $ | 45,345 | $ | 45,859 |
Nine Months Ended | |||||||||||
September 30, | September 30, | ||||||||||
2015 | 2014 | ||||||||||
Cash flows from operating activities: | |||||||||||
Cash received from customers | $ | 19,375 | $ | 19,005 | |||||||
Cash paid to suppliers and employees | (14,894 | ) | (13,868 | ) | |||||||
Dividends and interest received | 98 | 119 | |||||||||
Interest paid | (68 | ) | (67 | ) | |||||||
Income taxes paid | (995 | ) | (897 | ) | |||||||
Net cash provided by operating activities | 3,516 | 4,292 | |||||||||
Cash flows from investing activities: | |||||||||||
Additions to property, plant and equipment | (671 | ) | (693 | ) | |||||||
Capitalized software development costs | (411 | ) | (382 | ) | |||||||
Purchases of short- and long-term available-for-sale securities | (5,553 | ) | (7,989 | ) | |||||||
Sales of short- and long-term available-for-sale securities | 3,389 | 6,396 | |||||||||
Maturities of short- and long-term available-for-sale securities | 1,465 | 2,135 | |||||||||
Business acquisitions, net of cash acquired | (1,304 | ) | (1,771 | ) | |||||||
Purchases of strategic and other related investments | (177 | ) | (101 | ) | |||||||
Sales of strategic and other related investments | 135 | 38 | |||||||||
Joint venture funding | — | (163 | ) | ||||||||
Decrease (increase) in restricted cash | 77 | (76 | ) | ||||||||
Net cash used in investing activities | (3,050 | ) | (2,606 | ) | |||||||
Cash flows from financing activities: | |||||||||||
Proceeds from the issuance of EMC's common stock | 293 | 445 | |||||||||
Proceeds from the issuance of VMware's common stock | 123 | 158 | |||||||||
EMC repurchase of EMC's common stock | (2,063 | ) | (1,374 | ) | |||||||
VMware repurchase of VMware's common stock | (1,050 | ) | (450 | ) | |||||||
Excess tax benefits from stock-based compensation | 62 | 85 | |||||||||
Payment of long-term obligations | — | (1,665 | ) | ||||||||
Net proceeds from the issuance of short-term obligations | 1,968 | — | |||||||||
Dividend payment | (683 | ) | (644 | ) | |||||||
Contributions from non-controlling interests | 4 | 7 | |||||||||
Net cash used in financing activities | (1,346 | ) | (3,438 | ) | |||||||
Effect of exchange rate changes on cash and cash equivalents | (139 | ) | (84 | ) | |||||||
Net decrease in cash and cash equivalents | (1,019 | ) | (1,836 | ) | |||||||
Cash and cash equivalents at beginning of period | 6,343 | 7,891 | |||||||||
Cash and cash equivalents at end of period | $ | 5,324 | $ | 6,055 | |||||||
Reconciliation of net income to net cash provided by operating activities: | |||||||||||
Net income | $ | 1,339 | $ | 1,681 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 1,423 | 1,370 | |||||||||
Non-cash restructuring and other special charges | 14 | 14 | |||||||||
Stock-based compensation expense | 785 | 770 | |||||||||
Provision for doubtful accounts | 50 | 11 | |||||||||
Deferred income taxes, net | (39 | ) | (246 | ) | |||||||
Excess tax benefits from stock-based compensation | (62 | ) | (85 | ) | |||||||
Gain on previously held interests in strategic investments | — | (45 | ) | ||||||||
Impairment of strategic investment | — | 33 |
Other, net | 22 | 20 | |||||||||
Changes in assets and liabilities, net of acquisitions: | |||||||||||
Accounts and notes receivable | 1,201 | 756 | |||||||||
Inventories | (99 | ) | (252 | ) | |||||||
Other assets | (92 | ) | 169 | ||||||||
Accounts payable | (537 | ) | (304 | ) | |||||||
Accrued expenses | (434 | ) | (234 | ) | |||||||
Income taxes payable | (535 | ) | (122 | ) | |||||||
Deferred revenue | 450 | 730 | |||||||||
Other liabilities | 30 | 26 | |||||||||
Net cash provided by operating activities | $ | 3,516 | $ | 4,292 |
Three Months Ended | |||||||||||||||
Diluted | Diluted | ||||||||||||||
September 30, | Earnings | September 30, | Earnings | ||||||||||||
2015 | Per Share | 2014 | Per Share | ||||||||||||
Net Income Attributable to EMC - GAAP | $ | 480 | $ | 0.246 | $ | 587 | $ | 0.285 | |||||||
Stock-based compensation expense | 198 | 0.102 | 174 | 0.085 | |||||||||||
Intangible asset amortization | 67 | 0.034 | 67 | 0.032 | |||||||||||
Restructuring charges | 55 | 0.028 | 27 | 0.013 | |||||||||||
Acquisition and other related charges | 26 | 0.013 | 35 | 0.017 | |||||||||||
R&D tax credit | 11 | 0.006 | 11 | 0.005 | |||||||||||
VMware litigation and other contingencies | — | — | 2 | 0.001 | |||||||||||
Net Income Attributable to EMC - Non-GAAP | $ | 837 | $ | 0.429 | $ | 903 | $ | 0.438 | |||||||
Weighted average shares, diluted | 1,948 | 2,057 | |||||||||||||
Incremental VMware dilution | $ | 1 | $ | 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 | |||||||
September 30, | September 30, | ||||||
2015 | 2014 | ||||||
Gross Margin - GAAP | $ | 3,705 | $ | 3,743 | |||
Stock-based compensation expense | 39 | 37 | |||||
Intangible asset amortization | 62 | 62 | |||||
Gross Margin - Non-GAAP | $ | 3,806 | $ | 3,842 | |||
Revenue | $ | 6,079 | $ | 6,032 | |||
Gross Margin Percentages: | |||||||
GAAP | 60.9 | % | 62.0 | % | |||
Non-GAAP | 62.6 | % | 63.7 | % |
Three Months Ended | |||||||
September 30, | September 30, | ||||||
2015 | 2014 | ||||||
Operating Margin - GAAP | $ | 690 | $ | 947 | |||
Stock-based compensation expense | 282 | 255 | |||||
Intangible asset amortization | 100 | 102 | |||||
Restructuring charges | 66 | 37 | |||||
Acquisition and other related charges | 44 | 55 | |||||
Operating Margin - Non-GAAP | $ | 1,182 | $ | 1,396 | |||
Revenue | $ | 6,079 | $ | 6,032 | |||
Operating Margin Percentages: | |||||||
GAAP | 11.3 | % | 15.7 | % | |||
Non-GAAP | 19.4 | % | 23.1 | % |
Three Months Ended September 30, 2015 | ||||||||||
Income Before | Tax Provision | Tax | ||||||||
Tax | (Benefit) | Rate | ||||||||
EMC Consolidated - GAAP | $ | 696 | $ | 168 | 24.1 | % | ||||
Stock-based compensation expense | 282 | 65 | 23.0 | % | ||||||
Intangible asset amortization | 100 | 28 | 28.9 | % | ||||||
Restructuring charges | 66 | 11 | 17.2 | % | ||||||
Acquisition and other related charges | 44 | 14 | 30.7 | % | ||||||
R&D tax credit | — | (12 | ) | N/A | ||||||
EMC Consolidated - Non-GAAP | $ | 1,188 | $ | 274 | 23.1 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Cash Flow from Operations | $ | 1,403 | $ | 1,701 | $ | 3,516 | $ | 4,292 | |||||||
Capital expenditures | (222 | ) | (222 | ) | (671 | ) | (693 | ) | |||||||
Capitalized software development costs | (148 | ) | (137 | ) | (411 | ) | (382 | ) | |||||||
Free Cash Flow | $ | 1,033 | $ | 1,342 | $ | 2,434 | $ | 3,217 |
Emerging Storage | High End, Unified and Backup Recovery, and Emerging Storage Businesses | Information Storage | EMC Information Infrastructure | Pivotal | VMware Virtual Infrastructure | EMC Consolidated | |||||||||||||||
Revenue growth - GAAP | 27 | % | (4 | )% | (2 | )% | (3 | )% | 16 | % | 10 | % | 1 | % | |||||||
Impact of currency | 5 | 5 | 5 | 5 | 2 | 4 | 4 | ||||||||||||||
Revenue growth on a constant currency basis | 32 | % | 1 | % | 3 | % | 2 | % | 18 | % | 14 | % | 5 | % |
Europe, Middle East and Africa | Asia Pacific and Japan | Latin America | North America | |||||||||
Revenue growth - GAAP | (3 | )% | (4 | )% | 1 | % | 4 | % | ||||
Impact of currency | 10 | 7 | 13 | — | ||||||||
Revenue growth on a constant currency basis | 7 | % | 3 | % | 14 | % | 4 | % |
EMC Information Infrastructure | |||
Growth in operating expenses GAAP | 7 | % | |
Impact of currency and VCE acquisition | (4 | ) | |
Growth on a constant currency basis | 3 | % |
Stock-Based Compensation Expense | Intangible Asset Amortization | Restructuring Charges | Acquisition and Other Related Charges | R&D Tax Credit | |||||||||||||||
EMC Consolidated | |||||||||||||||||||
Cost of revenue | $ | (39 | ) | $ | (62 | ) | $ | — | $ | — | $ | — | |||||||
Research and development | (102 | ) | (1 | ) | — | — | — | ||||||||||||
Selling, general and administrative | (141 | ) | (37 | ) | — | (42 | ) | — | |||||||||||
Restructuring and acquisition-related charges | — | — | (66 | ) | (2 | ) | — | ||||||||||||
Income tax provision (benefit) | 65 | 28 | 11 | 14 | (12 | ) | |||||||||||||
Net income attributable to VMware | (19 | ) | (5 | ) | — | (4 | ) | (1 | ) | ||||||||||
EMC Information Infrastructure plus Pivotal | |||||||||||||||||||
Cost of revenue | $ | (28 | ) | $ | (34 | ) | $ | — | $ | — | $ | — | |||||||
Research and development | (46 | ) | (1 | ) | — | — | — | ||||||||||||
Selling, general and administrative | (82 | ) | (30 | ) | — | (5 | ) | — | |||||||||||
Restructuring and acquisition-related charges | — | — | (66 | ) | (1 | ) | — | ||||||||||||
Income tax provision (benefit) | 38 | 20 | 11 | — | (7 | ) | |||||||||||||
Net income attributable to VMware | — | — | — | — | — | ||||||||||||||
VMware within EMC | |||||||||||||||||||
Cost of revenue | $ | (11 | ) | $ | (28 | ) | $ | — | $ | — | $ | — | |||||||
Research and development | (56 | ) | — | — | — | — | |||||||||||||
Selling, general and administrative | (59 | ) | (7 | ) | — | (37 | ) | — | |||||||||||
Restructuring and acquisition-related charges | — | — | — | (1 | ) | — | |||||||||||||
Income tax provision (benefit) | 27 | 8 | — | 14 | (5 | ) | |||||||||||||
Net income attributable to VMware | (19 | ) | (5 | ) | — | (4 | ) | (1 | ) |
Stock-Based Compensation Expense | Intangible Asset Amortization | Restructuring Charges | Acquisition and Other Related Charges | R&D Tax Credit | VMware Litigation and Other Contingencies | ||||||||||||||||||
EMC Consolidated | |||||||||||||||||||||||
Cost of revenue | $ | (37 | ) | $ | (62 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||
Research and development | (96 | ) | (3 | ) | — | — | — | — | |||||||||||||||
Selling, general and administrative | (122 | ) | (37 | ) | — | (53 | ) | — | — | ||||||||||||||
Restructuring and acquisition-related charges | — | — | (37 | ) | (2 | ) | — | — | |||||||||||||||
Income tax provision (benefit) | 60 | 30 | 9 | 15 | (12 | ) | (2 | ) | |||||||||||||||
Net income attributable to VMware | (21 | ) | (5 | ) | (1 | ) | (5 | ) | (1 | ) | — | ||||||||||||
EMC Information Infrastructure plus Pivotal | |||||||||||||||||||||||
Cost of revenue | $ | (25 | ) | $ | (34 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||
Research and development | (35 | ) | (1 | ) | — | — | — | — | |||||||||||||||
Selling, general and administrative | (62 | ) | (31 | ) | — | (12 | ) | — | — | ||||||||||||||
Restructuring and acquisition-related charges | — | — | (31 | ) | (2 | ) | — | — | |||||||||||||||
Income tax provision (benefit) | 31 | 21 | 7 | — | (8 | ) | — | ||||||||||||||||
Net income attributable to VMware | — | — | — | — | — | — | |||||||||||||||||
VMware within EMC | |||||||||||||||||||||||
Cost of revenue | $ | (12 | ) | $ | (28 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||
Research and development | (61 | ) | (2 | ) | — | — | — | — | |||||||||||||||
Selling, general and administrative | (60 | ) | (6 | ) | — | (41 | ) | — | — | ||||||||||||||
Restructuring and acquisition-related charges | — | — | (6 | ) | — | — | — | ||||||||||||||||
Income tax provision (benefit) | 29 | 9 | 2 | 15 | (4 | ) | (2 | ) | |||||||||||||||
Net income attributable to VMware | (21 | ) | (5 | ) | (1 | ) | (5 | ) | (1 | ) | — |
VMware Standalone GAAP | GAAP Adjustments and Eliminations | VMware within EMC GAAP | |||||||||
Revenue | $ | 1,672 | $ | (8 | ) | $ | 1,664 | ||||
Cost of revenue | 258 | (6 | ) | 252 | |||||||
Gross margin | 1,414 | (2 | ) | 1,412 | |||||||
Research and development | 331 | (1 | ) | 330 | |||||||
Selling, general and administrative | 757 | (3 | ) | 754 | |||||||
Restructuring and acquisition-related charges | — | 1 | 1 | ||||||||
Operating income | 326 | 1 | 327 | ||||||||
Non-operating income (expense) | (1 | ) | 5 | 4 | |||||||
Income before taxes | 325 | 6 | 331 | ||||||||
Income tax provision (benefit) | 69 | (24 | ) | 45 | |||||||
Net income | $ | 256 | 30 | 286 | |||||||
Net income attributable to VMware | (48 | ) | (48 | ) | |||||||
Net income attributable to EMC | $ | (18 | ) | $ | 238 |
VMware Standalone GAAP | GAAP Adjustments and Eliminations | VMware within EMC GAAP | |||||||||
Revenue | $ | 1,515 | $ | (7 | ) | $ | 1,508 | ||||
Cost of revenue | 242 | 2 | 244 | ||||||||
Gross margin | 1,273 | (9 | ) | 1,264 | |||||||
Research and development | 327 | (1 | ) | 326 | |||||||
Selling, general and administrative | 698 | (5 | ) | 693 | |||||||
Restructuring and acquisition-related charges | 6 | — | 6 | ||||||||
Operating income | 242 | (3 | ) | 239 | |||||||
Non-operating income (expense) | 2 | 4 | 6 | ||||||||
Income before taxes | 244 | 1 | 245 | ||||||||
Income tax provision (benefit) | 50 | — | 50 | ||||||||
Net income | $ | 194 | 1 | 195 | |||||||
Net income attributable to VMware | (40 | ) | (40 | ) | |||||||
Net income attributable to EMC | $ | (39 | ) | $ | 155 |
EMC Information Infrastructure | |||||||||||||||||||||||
Information Storage | Enterprise Content Division | RSA Information Security | EMC Information Infrastructure | Pivotal | EMC Information Infrastructure plus Pivotal | ||||||||||||||||||
Revenues | |||||||||||||||||||||||
Product revenues | $ | 2,424 | $ | 37 | $ | 106 | $ | 2,567 | $ | 22 | $ | 2,589 | |||||||||||
Services revenues | 1,537 | 107 | 137 | 1,781 | 45 | 1,826 | |||||||||||||||||
Total consolidated revenues | 3,961 | 144 | 243 | 4,348 | 67 | 4,415 | |||||||||||||||||
Gross profit | $ | 2,071 | $ | 97 | $ | 163 | 2,331 | 24 | 2,355 | ||||||||||||||
Gross profit percentage | 52.3 | % | 67.3 | % | 66.9 | % | 53.6 | % | 36.2 | % | 53.3 | % | |||||||||||
Research and development | 397 | 28 | 425 | ||||||||||||||||||||
Selling, general and administrative | 1,220 | 54 | 1,274 | ||||||||||||||||||||
Restructuring and acquisition-related charges | — | — | — | ||||||||||||||||||||
Total operating expenses | 1,617 | 82 | 1,699 | ||||||||||||||||||||
Operating income (expense) | $ | 714 | $ | (58 | ) | 656 | |||||||||||||||||
Operating margin percentage | 16.4 | % | (85.4 | )% | 14.9 | % |
EMC Information Infrastructure plus Pivotal | VMware Virtual Infrastructure | Corporate Reconciling Items | Consolidated | ||||||||||||
Revenues | |||||||||||||||
Product revenues | $ | 2,589 | $ | 680 | $ | — | $ | 3,269 | |||||||
Services revenues | 1,826 | 984 | — | 2,810 | |||||||||||
Total consolidated revenues | 4,415 | 1,664 | — | 6,079 | |||||||||||
Gross profit | 2,355 | 1,451 | (101 | ) | 3,705 | ||||||||||
Gross profit percentage | 53.3 | % | 87.2 | % | — | % | 60.9 | % | |||||||
Research and development | 425 | 274 | 103 | 802 | |||||||||||
Selling, general and administrative | 1,274 | 651 | 220 | 2,145 | |||||||||||
Restructuring and acquisition-related charges | — | — | 68 | 68 | |||||||||||
Total operating expenses | 1,699 | 925 | 391 | 3,015 | |||||||||||
Operating income (expense) | 656 | 526 | (492 | ) | 690 | ||||||||||
Operating margin percentage | 14.9 | % | 31.6 | % | — | % | 11.3 | % | |||||||
Non-operating income (expense), net | 2 | 4 | — | 6 | |||||||||||
Income tax provision (benefit) | 185 | 89 | (106 | ) | 168 | ||||||||||
Net income | 473 | 441 | (386 | ) | 528 | ||||||||||
Net income attributable to the non-controlling interests in VMware, Inc. | — | (77 | ) | 29 | (48 | ) | |||||||||
Net income attributable to EMC Corporation | $ | 473 | $ | 364 | $ | (357 | ) | $ | 480 |
EMC Information Infrastructure | |||||||||||||||||||||||
Information Storage | Enterprise Content Division | RSA Information Security | EMC Information Infrastructure | Pivotal | EMC Information Infrastructure plus Pivotal | ||||||||||||||||||
Revenues | |||||||||||||||||||||||
Product revenues | $ | 2,595 | $ | 36 | $ | 114 | $ | 2,745 | $ | 17 | $ | 2,762 | |||||||||||
Services revenues | 1,456 | 118 | 147 | 1,721 | 41 | 1,762 | |||||||||||||||||
Total consolidated revenues | 4,051 | 154 | 261 | 4,466 | 58 | 4,524 | |||||||||||||||||
Gross profit | $ | 2,238 | $ | 100 | $ | 173 | 2,511 | 27 | 2,538 | ||||||||||||||
Gross profit percentage | 55.2 | % | 65.2 | % | 66.3 | % | 56.2 | % | 46.9 | % | 56.1 | % | |||||||||||
Research and development | 372 | 33 | 405 | ||||||||||||||||||||
Selling, general and administrative | 1,146 | 46 | 1,192 | ||||||||||||||||||||
Restructuring and acquisition-related charges | — | — | — | ||||||||||||||||||||
Total operating expenses | 1,518 | 79 | 1,597 | ||||||||||||||||||||
Operating income (expense) | $ | 993 | $ | (52 | ) | 941 | |||||||||||||||||
Operating margin percentage | 22.2 | % | (89.7 | )% | 20.8 | % |
EMC Information Infrastructure plus Pivotal | VMware Virtual Infrastructure | Corporate Reconciling Items | Consolidated | ||||||||||||
Revenues | |||||||||||||||
Product revenues | $ | 2,762 | $ | 638 | $ | — | $ | 3,400 | |||||||
Services revenues | 1,762 | 870 | — | 2,632 | |||||||||||
Total consolidated revenues | 4,524 | 1,508 | — | 6,032 | |||||||||||
Gross profit | 2,538 | 1,304 | (99 | ) | 3,743 | ||||||||||
Gross profit percentage | 56.1 | % | 86.5 | % | — | % | 62.0 | % | |||||||
Research and development | 405 | 263 | 99 | 767 | |||||||||||
Selling, general and administrative | 1,192 | 586 | 212 | 1,990 | |||||||||||
Restructuring and acquisition-related charges | — | — | 39 | 39 | |||||||||||
Total operating expenses | 1,597 | 849 | 350 | 2,796 | |||||||||||
Operating income (expense) | 941 | 455 | (449 | ) | 947 | ||||||||||
Operating margin percentage | 20.8 | % | 30.2 | % | — | % | 15.7 | % | |||||||
Non-operating income (expense), net | (120 | ) | 6 | — | (114 | ) | |||||||||
Income tax provision (benefit) | 207 | 99 | (100 | ) | 206 | ||||||||||
Net income | 614 | 362 | (349 | ) | 627 | ||||||||||
Net income attributable to the non-controlling interests in VMware, Inc. | — | (73 | ) | 33 | (40 | ) | |||||||||
Net income attributable to EMC Corporation | $ | 614 | $ | 289 | $ | (316 | ) | $ | 587 |
Q1 2014 | Q2 2014 | Q3 2014 | Q4 2014 | FY 2014 | Q1 2015 | Q2 2015 | Q3 2015 | ||||||||||||||||||||||||
Information Storage: | |||||||||||||||||||||||||||||||
Product Revenues | $ | 2,302 | $ | 2,551 | $ | 2,595 | $ | 3,338 | $ | 10,785 | $ | 2,179 | $ | 2,509 | $ | 2,424 | |||||||||||||||
Services Revenues | 1,378 | 1,425 | 1,456 | 1,497 | 5,757 | 1,484 | 1,519 | 1,537 | |||||||||||||||||||||||
Total Information Storage Revenues | $ | 3,680 | $ | 3,976 | $ | 4,051 | $ | 4,835 | $ | 16,542 | $ | 3,663 | $ | 4,028 | $ | 3,961 | |||||||||||||||
Enterprise Content Division: | |||||||||||||||||||||||||||||||
Product Revenues | $ | 35 | $ | 37 | $ | 36 | $ | 56 | $ | 164 | $ | 27 | $ | 40 | $ | 37 | |||||||||||||||
Services Revenues | 119 | 121 | 118 | 118 | 476 | 111 | 115 | 107 | |||||||||||||||||||||||
Total Enterprise Content Division Revenues | $ | 154 | $ | 158 | $ | 154 | $ | 174 | $ | 640 | $ | 138 | $ | 155 | $ | 144 | |||||||||||||||
RSA Information Security: | |||||||||||||||||||||||||||||||
Product Revenues | $ | 104 | $ | 104 | $ | 114 | $ | 139 | $ | 462 | $ | 100 | $ | 97 | $ | 106 | |||||||||||||||
Services Revenues | 140 | 139 | 147 | 148 | 573 | 148 | 141 | 137 | |||||||||||||||||||||||
Total RSA Information Security Revenues | $ | 244 | $ | 243 | $ | 261 | $ | 287 | $ | 1,035 | $ | 248 | $ | 238 | $ | 243 | |||||||||||||||
EMC Information Infrastructure: | |||||||||||||||||||||||||||||||
Product Revenues | $ | 2,441 | $ | 2,692 | $ | 2,745 | $ | 3,533 | $ | 11,411 | $ | 2,306 | $ | 2,646 | $ | 2,567 | |||||||||||||||
Services Revenues | 1,637 | 1,685 | 1,721 | 1,763 | 6,806 | 1,743 | 1,775 | 1,781 | |||||||||||||||||||||||
Total EMC Information Infrastructure Revenues | $ | 4,078 | $ | 4,377 | $ | 4,466 | $ | 5,296 | $ | 18,217 | $ | 4,049 | $ | 4,421 | $ | 4,348 | |||||||||||||||
Pivotal: | |||||||||||||||||||||||||||||||
Product Revenues | $ | 11 | $ | 15 | $ | 17 | $ | 21 | $ | 65 | $ | 16 | $ | 20 | $ | 22 | |||||||||||||||
Services Revenues | 38 | 39 | 41 | 44 | 162 | 38 | 44 | 45 | |||||||||||||||||||||||
Total Pivotal Revenues | $ | 49 | $ | 54 | $ | 58 | $ | 65 | $ | 227 | $ | 54 | $ | 64 | $ | 67 | |||||||||||||||
VMware Virtual Infrastructure: | |||||||||||||||||||||||||||||||
Product Revenues | $ | 556 | $ | 612 | $ | 638 | $ | 768 | $ | 2,575 | $ | 583 | $ | 635 | $ | 680 | |||||||||||||||
Services Revenues | 796 | 837 | 870 | 919 | 3,421 | 927 | 953 | 984 | |||||||||||||||||||||||
Total VMware Virtual Infrastructure Revenues | $ | 1,352 | $ | 1,449 | $ | 1,508 | $ | 1,687 | $ | 5,996 | $ | 1,510 | $ | 1,588 | $ | 1,664 | |||||||||||||||
Corporate Reconciling Items | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (76 | ) | $ | — | ||||||||||||||
Consolidated Revenues: | |||||||||||||||||||||||||||||||
Product Revenues | $ | 3,008 | $ | 3,319 | $ | 3,400 | $ | 4,322 | $ | 14,051 | $ | 2,905 | $ | 3,225 | $ | 3,269 | |||||||||||||||
Services Revenues | 2,471 | 2,561 | 2,632 | 2,726 | 10,389 | 2,708 | 2,772 | 2,810 | |||||||||||||||||||||||
Total Consolidated Revenues | $ | 5,479 | $ | 5,880 | $ | 6,032 | $ | 7,048 | $ | 24,440 | $ | 5,613 | $ | 5,997 | $ | 6,079 | |||||||||||||||
Percentage impact to EMC revenues growth rate due to changes in exchange rates from the prior year | (0.4)% | 0.5% | (0.1)% | (1.7)% | (0.5)% | (3.1)% | (4.4)% | (4.3)% |