Segment Information

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Segment Information

Segment Information

We manage the Company as a federation of businesses: EMC Information Infrastructure, VMware Virtual Infrastructure, Pivotal and Virtustream. 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. The results of Virtustream are currently reported within our Information Storage segment.

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 items are also excluded or included 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, 2016 and 2015 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, 2016
Revenues:
Product revenues	$	1,960		$	29		$	95		$	2,084		$	27		$	2,111
Services revenues	1,487			105			133			1,725			56			1,781
Total consolidated revenues	3,447			134			228			3,809			83			3,892
Gross profit	$	1,711		$	91		$	151		$	1,953		$	34		$	1,987
Gross profit percentage	49.6		%	68.0		%	66.4		%	51.3		%	41.2		%	51.1		%
Research and development										378			34			412
Selling, general and administrative										1,084			58			1,142
Restructuring and acquisition-related charges										—			—			—
Total operating expenses										1,462			92			1,554
Operating income (expense)										$	491		$	(58	)	$	433

	EMC Information Infrastructure plus Pivotal			VMware Virtual Infrastructure			Corp Reconciling Items			Consolidated
Three Months Ended
March 31, 2016
Revenues:
Product revenues	$	2,111		$	571		$	—		$	2,682
Services revenues	1,781			1,012			—			2,793
Total consolidated revenues	3,892			1,583			—			5,475
Gross profit	$	1,987		$	1,373		$	(100	)	$	3,260
Gross profit percentage	51.1		%	86.7		%	—		%	59.5		%
Research and development	412			283			119			814
Selling, general and administrative	1,142			644			201			1,987
Restructuring and acquisition-related charges	—			—			49			49
Total operating expenses	1,554			927			369			2,850
Operating income (expense)	433			446			(469		)	410
Non-operating income (expense), net	(15		)	9			(18		)	(24		)
Income tax provision (benefit)	75			128			(114		)	89
Net income	343			327			(373		)	297
Net income attributable to the non-controlling interests	1			(68		)	38			(29		)
Net income attributable to EMC Corporation	$	344		$	259		$	(335	)	$	268

	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 (benefit)	126			89			(133		)	82
Net income	318			379			(406		)	291
Net income attributable to the non-controlling interests	—			(74		)	35			(39		)
Net income attributable to EMC Corporation	$	318		$	305		$	(371	)	$	252

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, 2016		March 31, 2015
United States	$	2,897	$	3,013
Europe, Middle East and Africa	1,537		1,559
Asia Pacific and Japan	740		729
Latin America, Mexico and Canada	301		312
Total	$	5,475	$	5,613

No country other than the United States accounted for 10% or more of revenues during the three months ended March 31, 2016 or 2015.

Long-lived assets, excluding financial instruments, deferred tax assets, goodwill and intangible assets, in the United States were $4,566 million at March 31, 2016 and $4,584 million at December 31, 2015. Internationally, long-lived assets, excluding financial instruments, deferred tax assets, goodwill and intangible assets, were $1,037 million at March 31, 2016 and $1,053 million at December 31, 2015. 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, 2016 or December 31, 2015.