10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For The Quarter Ended: September 30, 2004 Commission File Number 1-9853

EMC CORPORATION

(Exact name of registrant as specified in its charter)

Massachusetts
(State or other jurisdiction of
incorporation or organization) 04-2680009
(I.R.S. Employer
Identification Number)

176 South Street

Hopkinton, Massachusetts 01748

(Address of principal executive offices, including zip code)

(508) 435-1000

(Registrant’s telephone number, including area code)

      Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES x                    NO o

      Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

YES x                    NO o

     The number of shares of common stock, par value $.01 per share, of the registrant outstanding as of September 30, 2004 was 2,396,278,626

EMC CORPORATION

		Page No.
PART I— FINANCIAL INFORMATION
	Item 1. Financial Statements (unaudited)
	Consolidated Balance Sheets at September 30, 2004 and December 31, 2003		3
	Consolidated Income Statements for the Three and Nine Months Ended September 30, 2004 and 2003		4
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2004 and 2003		5
	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2004 and 2003		6
	Notes to Interim Consolidated Financial Statements		7
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		23
	Item 3. Quantitative and Qualitative Disclosures About Market Risk		44
	Item 4. Controls and Procedures		44
PART II— OTHER INFORMATION
	Item 1. Legal Proceedings		45
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		45
	Item 6. Exhibits		45
SIGNATURES			46
EXHIBIT INDEX			47

2

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements

EMC CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

(unaudited)

					September 30,			December 31,
					2004			2003
ASSETS
Current assets:
	Cash and cash equivalents				$	1,573,670		$	1,869,426
	Short-term investments					877,044			928,248
	Accounts and notes receivable, less allowance for doubtful accounts of $40,399 and $39,482					950,216			952,421
	Inventories					547,028			514,015
	Deferred income taxes					278,417			271,746
	Other current assets					133,498			151,448
Total current assets						4,359,873			4,687,304
Long-term investments						4,584,007			4,109,911
Property, plant and equipment, net						1,564,306			1,610,182
Intangible assets, net						517,598			475,295
Other assets, net						506,600			426,472
Goodwill, net						3,261,366			2,711,677
Deferred income taxes						—			72,019
				Total assets	$	14,793,750		$	14,092,860
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Notes payable and current portion of long-term obligations				$	62		$	7,104
	Accounts payable					448,427			414,251
	Accrued expenses					1,012,365			1,009,696
	Income taxes payable					433,869			436,434
	Deferred revenue					856,631			679,044
Total current liabilities						2,751,354			2,546,529
Deferred revenue						550,396			451,296
Deferred income taxes						71,517			—
Long-term convertible debt						128,832			129,966
Other liabilities						99,688			80,348
Commitments and contingencies
Stockholders’ equity:
	Series preferred stock, par value $.01; authorized 25,000 shares; none outstanding					—			—
	Common stock, par value $.01; authorized 6,000,000 shares; issued 2,396,279 and 2,476,821 shares					23,963			24,768
	Additional paid-in capital					6,178,893			6,894,823
	Deferred compensation					(101,647	)		(94,068	)
	Retained earnings					5,116,801			4,566,157
	Accumulated other comprehensive income (loss), net					(26,047	)		2,197
	Treasury stock, at cost; 62,082 shares at December 31, 2003 (Note 11)					—			(509,156	)
		Total stockholders’ equity				11,191,963			10,884,721
			Total liabilities and stockholders’ equity		$	14,793,750		$	14,092,860

The accompanying notes are an integral part of the consolidated financial statements.

3

EMC CORPORATION

CONSOLIDATED INCOME STATEMENTS

(in thousands, except per share amounts)

(unaudited)

		For the						For the
		Three Months Ended						Nine Months Ended
		September 30,			September 30,			September 30,			September 30,
		2004			2003			2004			2003
Revenues:
	Product sales	$	1,486,918		$	1,145,659		$	4,321,293		$	3,321,700
	Services		541,961			365,188			1,550,399			1,052,598
			2,028,879			1,510,847			5,871,692			4,374,298
Costs and expenses:
	Cost of product sales		746,131			658,581			2,190,976			1,932,660
	Cost of services		239,547			177,149			701,921			524,618
	Research and development		215,708			172,858			625,411			530,060
	Selling, general and administrative		557,450			390,164			1,640,934			1,167,977
	Restructuring and other special charges		—			1,696			32,688			25,785
Operating income			270,043			110,399			679,762			193,198
Investment income			38,373			45,473			115,410			149,796
Interest expense			(1,880	)		(672	)		(5,575	)		(2,711	)
Other income (expense), net			452			(3,842	)		(7,520	)		(9,826	)
Income before taxes			306,988			151,358			782,077			330,457
Income tax provision (benefit)			88,953			(7,731	)		231,433			54,446
Net income		$	218,035		$	159,089		$	550,644		$	276,011
Net income per weighted average share, basic		$	0.09		$	0.07		$	0.23		$	0.13
Net income per weighted average share, diluted		$	0.09		$	0.07		$	0.23		$	0.12
Weighted average shares, basic			2,396,399			2,186,213			2,405,216			2,186,679
Weighted average shares, diluted			2,433,671			2,213,875			2,451,916			2,208,230

The accompanying notes are an integral part of the consolidated financial statements.

4

EMC CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

				For the
				Nine Months Ended
				September 30,			September 30,
				2004			2003
Cash flows from operating activities:
Net income				$	550,644		$	276,011
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation and amortization				450,923			389,910
	Non-cash restructuring and other special charges				17,051			5,732
	Amortization of deferred compensation				40,312			7,193
	Provision for doubtful accounts				4,854			4,444
	Deferred income taxes, net				154,017			12,783
	Tax benefit from stock options exercised				27,330			3,093
	Other				(1,746	)		8,280
	Changes in assets and liabilities, net of acquisitions:
		Accounts and notes receivable			12,991			171,597
		Inventories			(15,372	)		(64,526	)
		Other assets			(8,640	)		(70,004	)
		Accounts payable			27,197			(38,253	)
		Accrued expenses			(5,567	)		(66,741	)
		Income taxes payable			(16,234	)		190,129
		Deferred revenue			200,818			275,700
		Other liabilities			14,631			(95,403	)
			Net cash provided by operating activities		1,453,209			1,009,945
Cash flows from investing activities:
	Additions to property, plant and equipment				(259,867	)		(266,490	)
	Capitalized software development costs				(126,559	)		(84,419	)
	Purchases of short and long-term available for sale securities				(5,295,866	)		(4,591,509	)
	Sales of short and long-term available for sale securities				4,770,994			3,779,868
	Maturities of short and long-term available for sale securities				73,544			186,389
	Business acquisitions, net of cash acquired				(544,016	)		(11,573	)
	Other				(58,146	)		(28,741	)
			Net cash used in investing activities		(1,439,916	)		(1,016,475	)
Cash flows from financing activities:
	Issuance of common stock				115,324			48,771
	Repurchase of common stock				(417,554	)		(99,447	)
	Payment of long-term and short-term obligations				(7,136	)		(27,831	)
	Proceeds from long-term and short-term obligations				—			4,609
			Net cash used in financing activities		(309,366	)		(73,898	)
Effect of exchange rate changes on cash					317			599
Net decrease in cash and cash equivalents					(295,756	)		(79,829	)
Cash and cash equivalents at beginning of period					1,869,426			1,686,598
Cash and cash equivalents at end of period				$	1,573,670		$	1,606,769

The accompanying notes are an integral part of the consolidated financial statements.

5

EMC CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(unaudited)

		For the						For the
		Three Months Ended						Nine Months Ended
		September 30,			September 30,			September 30,			September 30,
		2004			2003			2004			2003
Net income		$	218,035		$	159,089		$	550,644		$	276,011
Other comprehensive income (loss), net of taxes (benefit):
	Foreign currency translation adjustments, net of taxes (benefit) of $(18), $72, $(91) and $1,781		(1,772	)		(9,961	)		(7,119	)		(8,306	)
	Changes in market value of derivatives, net of tax benefit of $0, $42, $0 and $0		(21	)		(500	)		(22	)		(376	)
	Changes in market value of investments, net of taxes (benefit) of $4,454, $(10,650), $(8,548) and $(14,921)		21,902			(17,935	)		(21,103	)		(25,443	)
Other comprehensive income (loss)			20,109			(28,396	)		(28,244	)		(34,125	)
Comprehensive income		$	238,144		$	130,693		$	522,400		$	241,886

The accompanying notes are an integral part of the consolidated financial statements.

6

EMC CORPORATION

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

1.  Basis of Presentation

Company

      EMC Corporation and its subsidiaries design, manufacture, market and support a wide range of products and services for the storage, management and protection of information. Our products and services are designed to help customers deploy an information lifecycle management strategy to align the IT infrastructure with the business based upon the changing value of information while optimizing server, network and storage resources.

General

      The accompanying interim consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. These statements include the accounts of EMC and its wholly-owned subsidiaries. All intercompany transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in our annual consolidated financial statements have been condensed or omitted. The interim consolidated financial statements, in the opinion of management, reflect all adjustments (consisting only of normal recurring accruals) necessary to fairly present the results as of and for the periods ended September 30, 2004 and 2003. Certain prior year amounts have been reclassified to conform with the current presentation.

      The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for any future period or the entire fiscal year. Accordingly, these interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2003 which are contained in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 2, 2004.

Revenue Recognition

      We derive revenue from sales of information systems, software and services. We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable and collectibility is reasonably assured. This policy is applicable to all sales, including sales to resellers and end users. The following summarizes the major terms of our contractual relationships with our customers and the manner in which we account for sales transactions.

• Systems sales

      Systems sales consist of the sale of hardware, including CLARiiON systems, Symmetrix systems, NetWin and Celerra systems, Centera systems and Connectrix systems. Revenue for hardware is generally recognized upon shipment.

• Software sales

      Software sales consist of the sale of software application programs. Our software products provide customers with information management, content management, sharing, protection and server virtualization capabilities. Revenue for software is generally recognized upon shipment or electronic delivery. License revenue from royalty payments is recognized upon receipt of royalty reports from third party original equipment manufacturers (“OEMs”).

• Services revenue

      Services revenue consists of the sale of installation services, software maintenance, hardware maintenance, training and professional services.

7

EMC CORPORATION

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

1.  Basis of Presentation (Continued)

      Installation is not considered essential to the functionality of our products as these services do not alter the product capabilities, do not require specialized skills and may be performed by the customers or other vendors. Installation services revenues are recognized upon completion of installation.

      Software and hardware maintenance revenues are recognized ratably over the contract period.

      Training revenues are recognized upon completion of the training.

      Professional services revenues, which include information infrastructure design, integration and implementation, business continuity, data migration, networking storage and project management, are recognized as earned based upon the hours incurred.

• Multiple element arrangements

      When hardware, software and services are contained in a single arrangement, we allocate revenue between the elements based on their relative fair value, provided that each element meets the criteria for treatment as a separate unit of accounting. An item is considered a separate unit of accounting if it has value to the customer on a standalone basis and there is objective and reliable evidence of the fair value of the undelivered items. Fair value is generally determined based upon the price charged when the element is sold separately. Fair value of software support services may also be measured by the renewal rate offered to the customer. In the absence of fair value for a delivered element, we allocate revenue first to the fair value of the undelivered elements and allocate the residual revenue to the delivered elements. In the absence of fair value for an undelivered element, the arrangement is accounted for as a single unit of accounting, resulting in a deferral of revenue for the delivered elements until all undelivered elements are fulfilled.

• Shipping terms

      Our sales contracts generally provide for the customer to accept title and risk of loss when the product leaves our facilities. When shipping terms or local laws do not allow for passage of title and risk of loss at shipping point, we defer recognizing revenue until title and risk of loss transfer to the customer.

• Leases

      Revenue from sales-type leases is recognized at the net present value of future lease payments. Revenue from operating leases is recognized over the lease period.

• Other

      We accrue for the estimated costs of systems’ warranty at the time of sale. We reduce revenue for estimated sales returns at the time of sale. Systems’ warranty costs are estimated based upon our historical experience and specific identification of systems’ requirements. Sales returns are estimated based upon our historical experience and specific identification of probable returns.

Accounting for Stock-Based Compensation

      Statement of Financial Accounting Standards (“FAS”) No. 123, “Accounting for Stock-Based Compensation” defines a fair value method of accounting for stock options and other equity instruments. Under the fair value method, compensation cost is measured at the grant date based on the fair value of the award and is recognized over the service period, which is usually the vesting period. As provided for in FAS No. 123, we elected to apply Accounting Principles Board (“APB”) Opinion No. 25 and related interpretations in accounting for our stock-based compensation plans. The following is a reconciliation of net

8

EMC CORPORATION

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

1.  Basis of Presentation (Continued)

income per weighted average share had we adopted FAS No. 123 (table in thousands, except per share amounts):

	For the						For the
	Three Months Ended						Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2004			2003			2004			2003
Net income	$	218,035		$	159,089		$	550,644		$	276,011
Add back: Stock compensation costs, net of taxes, on stock-based awards		9,208			1,440			27,616			4,643
Less: Stock compensation costs, net of taxes, had stock compensation expense been measured at fair value		(96,277	)		(92,945	)		(298,741	)		(283,389	)
Incremental stock compensation expense per FAS No. 123, net of taxes		(87,069	)		(91,505	)		(271,125	)		(278,746	)
Adjusted net income (loss)	$	130,966		$	67,584		$	279,519		$	(2,735	)
Net income per weighted average share, basic – as reported	$	0.09		$	0.07		$	0.23		$	0.13
Net income per weighted average share, diluted – as reported	$	0.09		$	0.07		$	0.23		$	0.12
Adjusted net income per weighted average share, basic	$	0.05		$	0.03		$	0.12		$	—
Adjusted net income per weighted average share, diluted	$	0.05		$	0.03		$	0.11		$	—

      The fair value of each option granted during 2004 and 2003 is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions:

	2004		2003
Dividend yield		None		None
Expected volatility		45.0%-55.0%		55.0%
Risk-free interest rate		2.77%-3.96%		2.39%-3.36%
Expected life (years)		5.0		5.0

New Accounting Pronouncements

      In March 2004, the Financial Accounting Standards Board (“FASB”) approved the consensus reached on the Emerging Issues Task Force Issue (“EITF”) No. 03-01, “The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments.” EITF 03-01 provides guidance on determining when an investment is considered impaired, whether that impairment is other than temporary, and the measurement of an impairment loss. EITF 03-01 also provides new disclosure requirements for other-than-temporary impairments on debt and equity investments. The adoption of EITF 03-01 is not expected to have a material impact on our financial position or results of operations.

      In May 2004, the FASB issued Staff Position No. FAS 106-2, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003.” FAS 106-2 provides guidance on the accounting for the effects of the Medicare Prescription Drug, Improvement and

9

EMC CORPORATION

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

1.  Basis of Presentation (Continued)

Modernization Act of 2003 (“MPDIMA”), including the accounting for and disclosure of any federal subsidy provided by MPDIMA. The adoption of FAS 106-2 is not expected to have a material impact on our financial position or results of operations.

      In October 2004, the FASB approved the consensus reached on EITF No. 04-08, “The Effect of Contingently Convertible Instruments on Diluted Earnings per Share.” EITF 04-08 provides guidance on when the dilutive effect of contingently convertible debt instruments should be included in diluted earnings per share. The adoption of EITF 04-08 is not expected to have a material impact on our financial position or results of operations.

2.  Business Acquisitions and Goodwill

Acquisition of VMware, Inc.

      In January 2004, we acquired all of the shares of outstanding stock of VMware, Inc., a software company specializing in virtualization technology. VMware’s technology enables multiple operating systems to run simultaneously and independently on the same Intel-based server or workstation and move live applications across systems without business disruption. We determined that the acquisition advances our goal of simplifying the information technology operations of our customers and supports our overall information lifecycle management strategy. The aggregate purchase price, net of cash received, was approximately $611.9 million, which consisted of $538.2 million of cash, $72.0 million in fair value of our stock options and $1.7 million of transaction costs, which primarily consisted of fees paid for financial advisory, legal and accounting services. The fair value of our stock options issued to employees was estimated using a Black-Scholes option-pricing model with the following weighted-average assumptions:

Dividend yield	None
Expected volatility	60.0	%
Risk-free interest rate	2.0	%
Expected life (years)	4.0

The intrinsic value allocated to the unvested options issued in the acquisition that had yet to be earned as of the acquisition date was $47.3 million and has been recorded as deferred compensation in the purchase price allocation.

      The consolidated financial statements include the results of VMware from the date of acquisition. Pro forma results of operations have not been presented because the effects of the acquisition were not material to us. The purchase price has been allocated based on estimated fair values as of the acquisition date. The purchase price allocation is preliminary and a final determination of required purchase accounting adjustments

10

EMC CORPORATION

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

2.  Business Acquisitions and Goodwill (Continued)

will be made upon the completion of our integration activities. The following represents the preliminary allocation of the purchase price (table in thousands):

Current assets			$	19,840
Property, plant & equipment				2,472
Other long-term assets				1,520
Goodwill				522,606
Intangible assets:
	Developed technology (estimated useful life of 4-5 years)			93,610
	Support and subscription contracts (estimated useful life of 9 years)			3,950
	OEM contracts (estimated useful life of 5 years)			5,570
	Tradenames and trademarks (estimated useful life of 5 years)			7,580
	Non-solicitation agreements (estimated useful life of 3 years)			40
	Acquired in-process R&D (“IPR&D”)			15,200
		Total intangible assets		125,950
Deferred compensation				47,300
Current liabilities				(81,488	)
Deferred income taxes				(22,645	)
Long-term liabilities				(3,670	)
	Total purchase price		$	611,885

      In determining the purchase price allocation, we considered, among other factors, our intention to use the acquired assets, historical demand and estimates of future demand of VMware’s products and services. The fair value of intangible assets was primarily based upon the income approach. The rate used to discount the net cash flows to their present values was based upon a weighted average cost of capital of 14%. The discount rate was determined after consideration of market rates of return on debt and equity capital, the weighted average return on invested capital and the risk associated with achieving forecast sales related to the technology and assets acquired from VMware.

      The total weighted average amortization period for the intangible assets is 4.8 years. The intangible assets are being amortized based upon the pattern in which the economic benefits of the intangible assets are being utilized. None of the goodwill is deductible for income tax purposes. The goodwill is classified within our VMware products and services segment.

      Of the $126.0 million of acquired intangible assets, $15.2 million was allocated to IPR&D and was written off at the date of acquisition because the IPR&D had no alternative uses and had not reached technological feasibility. The write-off is included in restructuring and other special charges in our income statement. Three IPR&D projects were identified relating to virtual machine software. The value assigned to IPR&D was determined utilizing the income approach by determining cash flow projections relating to the projects. The stage of completion of each in-process project was estimated to determine the discount rate to be applied to the valuation of the in-process technology. Based upon the level of completion and the risk associated with in-process technology, we deemed a discount rate of 50% as appropriate for valuing IPR&D.

      In connection with the VMware acquisition, we commenced integration activities which have resulted in recognizing a $3.8 million liability for lease obligations, of which $0.8 million was paid in the first nine months of 2004. The liability will be paid over the remaining lease periods through 2007. We are working to finalize our integration activities which may result in additional purchase price allocations or adjustments.

11

EMC CORPORATION

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

2.  Business Acquisitions and Goodwill (Continued)

Goodwill

      Changes in the carrying amount of goodwill, net, on a consolidated basis and by segment for the nine months ended September 30, 2004 consist of the following (table in thousands):

	For the Nine Months Ended September 30, 2004
					EMC Software
	Information		Information		Group			VMware
	Storage		Storage		Products and			Products and			Other
	Products		Services		Services			Services			Businesses		Total
Balance, January 1, 2004	$	551,888	$	1,615	$	2,158,174		$	—		$	—	$	2,711,677
Goodwill acquired		—		—		3,684			522,306			—		525,990
Tax deduction from exercise of stock options		—		—		(14,126	)		(592	)		—		(14,718	)
Adjustment of purchase price allocations		—		—		38,117			300			—		38,417
Balance, September 30, 2004	$	551,888	$	1,615	$	2,185,849		$	522,014		$	—	$	3,261,366

3.  Inventories

      Inventories consist of (table in thousands):

	September 30,		December 31,
	2004		2003
Purchased parts	$	40,781	$	34,010
Work-in-process		372,332		311,575
Finished goods		133,915		168,430
	$	547,028	$	514,015

4.  Property, Plant and Equipment

      Property, plant and equipment consists of (table in thousands):

	September 30,			December 31,
	2004			2003
Furniture and fixtures	$	135,271		$	140,354
Equipment		1,752,583			1,719,108
Buildings and improvements		861,494			840,487
Land		105,382			105,033
Construction in progress		143,467			156,504
		2,998,197			2,961,486
Accumulated depreciation		(1,433,891	)		(1,351,304	)
	$	1,564,306		$	1,610,182

      Construction in progress and land owned at September 30, 2004 include $93.1 million and $6.0 million, respectively, of facilities under construction that we are holding for future use.

12

EMC CORPORATION

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

5.  Accrued Expenses

      Accrued expenses consist of (table in thousands):

	September 30,		December 31,
	2004		2003
Salaries and benefits	$	393,521	$	367,067
Product warranties		147,816		118,816
Restructuring		109,959		139,135
Other		361,069		384,678
	$	1,012,365	$	1,009,696

      Systems sales include a standard product warranty. At the time of the sale, we accrue for systems’ warranty costs. Upon expiration of the initial warranty, we may sell additional maintenance contracts to our customers. Revenue from these additional maintenance contracts is deferred and recognized ratably over the service period. The initial systems’ warranty accrual is based upon our historical experience and specific identification of systems’ requirements. The following represents the activity in our warranty accrual for our standard product warranty (table in thousands):

	For the Three Months Ended						For the Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2004			2003			2004			2003
Balance, beginning of the period	$	132,801		$	118,419		$	118,816		$	104,258
Current year accrual		35,771			17,318			90,089			68,473
Amounts charged to the accrual		(20,756	)		(18,824	)		(61,089	)		(55,818	)
Balance, end of the period	$	147,816		$	116,913		$	147,816		$	116,913

      The current period accrual includes amounts accrued for systems at the time of shipment, adjustments within the period for changes in estimated costs for warranties on systems shipped in the period and changes in estimated costs for warranties on systems shipped in prior periods. It is not practicable to determine the amounts applicable to each of the components.

13

EMC CORPORATION

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

6.  Net Income Per Share

      The reconciliation of the numerators and denominators of the diluted earnings per share calculations is as follows (table in thousands, except per share amounts):

			For the Three Months Ended				For the Nine Months Ended
			September 30,		September 30,		September 30,		September 30,
			2004		2003		2004		2003
Numerator:
	Net income, as reported		$	218,035	$	159,089	$	550,644	$	276,011
		Adjustment for interest expense on convertible debt, net of taxes		643		—		1,929		—
	Net income, adjusted		$	218,678	$	159,089	$	552,573	$	276,011
Denominator:
	Basic weighted average common shares outstanding			2,396,399		2,186,213		2,405,216		2,186,679
		Weighted common stock equivalents		28,216		27,662		37,644		21,551
		Assumed conversion of convertible debt		9,056		—		9,056		—
	Diluted weighted average shares outstanding			2,433,671		2,213,875		2,451,916		2,208,230
Net income per weighted average share, diluted			$	0.09	$	0.07	$	0.23	$	0.12

      Options to acquire 158.6 million and 113.2 million shares of our common stock for the three and nine months ended September 30, 2004, respectively, and options to acquire 68.4 million and 100.7 million shares of common stock for the three and nine months ended September 30, 2003, respectively, were excluded from the calculation of diluted weighted average shares because of their antidilutive effect. The effect of our senior convertible debt, assumed in connection with our acquisition of Documentum, Inc., on the calculation of diluted net income per weighted average share for the three and nine months ended September 30, 2004 was calculated using the “if converted” method as required by FAS No. 128, “Earnings per Share.”

7.  Commitments and Contingencies

Line of Credit

      We have available for use a credit line of $50.0 million in the United States. As of September 30, 2004, we had no borrowings outstanding on the line of credit. The credit line bears interest at the bank’s base rate and requires us, upon utilization of the credit line, to meet certain financial covenants with respect to limitations on losses. In the event the covenants are not met, the lender may require us to provide collateral to secure the outstanding balance. At September 30, 2004, we were in compliance with the covenants.

Litigation

      On September 30, 2002, Hewlett-Packard Company (“HP”) filed a complaint against us in the United States Federal District Court for the Northern District of California alleging that certain of our products infringe seven HP patents. HP seeks a permanent injunction as well as unspecified monetary damages for patent infringement. We believe that HP’s claims are without merit. On July 21, 2003, we answered the complaint and filed counterclaims alleging that certain HP products infringe six EMC patents. We seek a permanent injunction as well as unspecified monetary damages for patent infringement.

      We are a party (either as plaintiff or defendant) to various other patent litigation matters, including certain matters which we assumed in connection with our acquisitions of LEGATO Systems, Inc. and VMware.

14

EMC CORPORATION

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

7.  Commitments and Contingencies (Continued)

      We are a party to other litigation which we consider routine and incidental to our business. Management does not expect the results of any of these actions to have a material adverse effect on our business, results of operations or financial condition.

8.  Segment Information

      We operate in the following segments: information storage products, information storage services, EMC Software Group products and services, VMware products and services and other businesses. Our management makes financial decisions and allocates resources based on revenues and gross profit achieved at the segment level. We do not allocate selling, general and administrative or research and development expenses to each segment, as management does not use this information to measure the performance of the operating segments.

      In July 2004, we revised our segments and established the EMC Software Group products and services segment. The EMC Software Group products and services segment includes the LEGATO products and services revenues and the Documentum products and services revenues that were historically presented in separate segments. The EMC Software Group products and services segment also includes EMC multi-platform license revenues and related software maintenance revenues that were historically included in our information storage products and information storage services segments. Prior period segment information has been restated to conform to the current presentation.

      The revenue components and gross profit attributable to these segments are set forth in the following tables (tables in thousands, except percentages):

								EMC Software
		Information			Information			Group			VMware
		Storage			Storage			Products and			Products and			Other
For the Three Months Ended		Products			Services			Services			Services			Businesses			Consolidated
September 30, 2004
Systems revenues		$	948,938		$	—		$	—		$	—		$	—		$	948,938
Software revenues			275,851			—			212,383			49,746			—			537,980
Services revenues			—			378,284			138,500			10,874			14,303			541,961
	Total revenues	$	1,224,789		$	378,284		$	350,883		$	60,620		$	14,303		$	2,028,879
Gross profit		$	517,400		$	192,872		$	277,033		$	48,722		$	7,174		$	1,043,201
Gross profit percentage			42.2	%		51.0	%		79.0	%		80.4	%		50.2	%		51.4	%
September 30, 2003
Systems revenues		$	801,075		$	—		$	—		$	—		$	—		$	801,075
Software revenues			228,994			—			115,590			—			—			344,584
Services revenues			—			313,548			27,565			—			24,075			365,188
	Total revenues	$	1,030,069		$	313,548		$	143,155		$	—		$	24,075		$	1,510,847
Gross profit		$	386,789		$	156,009		$	119,663		$	—		$	12,656		$	675,117
Gross profit percentage			37.5	%		49.8	%		83.6	%		—			52.6	%		44.7	%

15

EMC CORPORATION

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

8.  Segment Information (Continued)

								EMC Software
		Information			Information			Group			VMware
		Storage			Storage			Products and			Products and			Other
For the Nine Months Ended		Products			Services			Services			Services			Businesses			Consolidated
September 30, 2004
Systems revenues		$	2,774,124		$	—		$	—		$	—		$	—		$	2,774,124
Software revenues			790,153			—			635,287			121,729			—			1,547,169
Services revenues			—			1,081,959			391,920			25,383			51,137			1,550,399
	Total revenues	$	3,564,277		$	1,081,959		$	1,027,207		$	147,112		$	51,137		$	5,871,692
Gross profit		$	1,485,671		$	549,781		$	800,595		$	115,658		$	27,090		$	2,978,795
Gross profit percentage			41.7	%		50.8	%		77.9	%		78.6	%		53.0	%		50.7	%
September 30, 2003
Systems revenues		$	2,357,276		$	—		$	—		$	—		$	—		$	2,357,276
Software revenues			640,246			—			324,178			—			—			964,424
Services revenues			—			901,124			74,384			—			77,090			1,052,598
	Total revenues	$	2,997,522		$	901,124		$	398,562		$	—		$	77,090		$	4,374,298
Gross profit		$	1,112,650		$	435,730		$	328,082		$	—		$	40,558		$	1,917,020
Gross profit percentage			37.1	%		48.4	%		82.3	%		—			52.6	%		43.8	%

      Our revenue is attributed to geographic areas according to the location of customers. Revenues by geographic area are set forth in the following table (table in thousands):

		For the Three Months Ended				For the Nine Months Ended
		September 30,		September 30,		September 30,		September 30,
		2004		2003		2004		2003
Revenues:
United States		$	1,171,291	$	901,959	$	3,329,386	$	2,599,523
Canada			27,171		19,492		84,878		82,346
Europe, Middle East, Africa			549,836		382,226		1,657,135		1,118,371
Asia Pacific			232,229		172,763		674,737		486,667
Latin America and Mexico			48,352		34,407		125,556		87,391
	Total	$	2,028,879	$	1,510,847	$	5,871,692	$	4,374,298

      No single country other than the United States accounted for 10% or more of revenues during the three or nine months ended September 30, 2004 or September 30, 2003.

      At September 30, 2004, long-lived assets, excluding financial instruments, intangible assets and deferred tax assets, were $1,359.9 million in the United States and $204.4 million internationally. At December 31, 2003, the long-lived assets, excluding financial instruments, intangible assets and deferred tax assets, were $1,405.4 million in the United States and $204.8 million internationally. No single country other than the United States accounted for 10% or more of these assets at September 30, 2004 or December 31, 2003.

16

EMC CORPORATION

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

9.  Restructuring and Other Special Charges

2004 Charges

      During the first nine months of 2004, we recorded restructuring and other special charges of $32.7 million. These charges include restructuring activities, as well as IPR&D charges of $15.2 million associated with the VMware acquisition. See Note 2. The 2004 restructuring program consisted of employee termination benefits of $10.0 million and costs associated with vacating excess facilities of $0.7 million. The 2004 restructuring program impacted our information storage products, information storage services and EMC Software Group products and services segments. The 2004 restructuring program and other restructuring programs have been developed and executed on a corporate-wide basis, without regard to individual segments. These programs impact our cost of sales, selling, general and administrative expenses and research and development expenses. Segment information (Note 8) is reported only at the gross profit level. The remaining $6.8 million of charges was associated with prior restructuring programs. The expected cash impact of the 2004 restructuring charge is $10.7 million, of which $4.1 million was paid in the first nine months of 2004. The activity for the 2004 restructuring program for the three and nine months ended September 30, 2004 is presented below (tables in thousands):

Three Months Ended September 30, 2004

		Balance as of		Reductions						Balance as of
		June 30,		to the			Current			September 30,
Category		2004		Provision			Utilization			2004
Workforce reduction		$	10,072	$	(1,678	)	$	(2,295	)	$	6,099
Elimination of excess facilities			777		(66	)		(179	)		532
	Total	$	10,849	$	(1,744	)	$	(2,474	)	$	6,631

Nine Months Ended September 30, 2004

				Additions
				(Reductions)						Balance as of
		Initial		to the			Current			September 30,
Category		Provision		Provision			Utilization			2004
Workforce reduction		$	11,654	$	(1,678	)	$	(3,877	)	$	6,099
Elimination of excess facilities			—		711			(179	)		532
	Total	$	11,654	$	( 967	)	$	(4,056	)	$	6,631

      The $1.7 million reversal of the provision for workforce reduction for the three months and nine months ended September 30, 2004 was attributable to a decrease in the number of individuals included in the reduction in force. The $0.7 million addition to the elimination of excess facilities provision for the nine months ended September 30, 2004 relates to charges for facilities being vacated.

      The 2004 restructuring program includes a reduction in force of approximately 150 employees across our major business functions and all major geographic regions. Approximately 71% of such employees are or were based in North America, excluding Mexico, and 29% are or were based in Europe, Latin America, Mexico and the Asia Pacific region. As of September 30, 2004, approximately 120 employees have been terminated. The remaining cash expenditures relating to workforce reduction are expected to be substantially paid by the end of 2004. Amounts relating to elimination of excess facilities will be paid over the respective lease terms through 2005.

17

EMC CORPORATION

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

9.  Restructuring and Other Special Charges (Continued)

2003 Restructuring Program

      In 2003, we recognized restructuring and other special charges for employee termination benefits, write-off of a duplicative software project and consolidation of excess facilities. The activity for the 2003 restructuring program for the three and nine months ended September 30, 2004 is presented below (tables in thousands):

Three Months Ended September 30, 2004

		Balance as of		Reductions						Balance as of
		June 30,		to the			Current			September 30,
Category		2004		Provision			Utilization			2004
Workforce reduction		$	6,549	$	(447	)	$	(1,080	)	$	5,022
Elimination of excess facilities			9,346		(1,870	)		(656	)		6,820
	Total	$	15,895	$	(2,317	)	$	(1,736	)	$	11,842

Nine Months Ended September 30, 2004

				Additions
		Balance as of		(Reductions)						Balance as of
		December 31,		to the			Current			September 30,
Category		2003		Provision			Utilization			2004
Workforce reduction		$	14,696	$	(1,845	)	$	(7,829	)	$	5,022
Asset impairment			—		25			(25	)		—
Elimination of excess facilities			2,262		7,897			(3,339	)		6,820
	Total	$	16,958	$	6,077		$	(11,193	)	$	11,842

      The $0.4 million reversal of the provision for workforce reduction for the three months ended September 30, 2004 and $1.8 million reversal of the provision for workforce reduction for the nine months ended September 30, 2004 was attributable to finalizing severance packages for employees in foreign jurisdictions. The $1.9 million reduction to the provision for elimination of excess facilities for the three months ended September 30, 2004 relates to reduced costs incurred in closing a facility. The $7.9 million addition to the provision for elimination of excess facilities for the nine months ended September 30, 2004 relates to additional net charges for facilities being vacated.

      The 2003 restructuring program included a reduction in force of approximately 200 employees across our major business functions and all major geographic regions. Approximately 55% of such employees were based in North America, excluding Mexico, and approximately 45% were based in Europe, Latin America, Mexico and the Asia Pacific region.

      As of March 31, 2004, the 2003 restructuring program had been substantially completed. The expected cash impact of the charge is $25.0 million, of which $3.9 million was paid in 2003 and $9.3 million was paid in the nine months ended September 30, 2004. The remaining cash expenditures relating to workforce reductions are expected to be substantially paid by the end of 2004. Amounts related to elimination of excess facilities will be paid over the respective lease term through 2005.

18

EMC CORPORATION

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

9.  Restructuring and Other Special Charges (Continued)

Other Restructuring Programs

      During the period from 1998 through 2002, we implemented several restructuring programs. The activity for these restructuring programs for the three and nine months ended September 30, 2004 is presented below (tables in thousands):

Three Months Ended September 30, 2004

				Additions
		Balance as of		(Reductions)						Balance as of
		June 30,		to the			Current			September 30,
Category		2004		Provision			Utilization			2004
Workforce reduction		$	3,094	$	(8	)	$	(212	)	$	2,874
Elimination of excess facilities			88,167		4,048			(7,863	)		84,352
Contractual and other obligations			4,417		21			(178	)		4,260
	Total	$	95,678	$	4,061		$	(8,253	)	$	91,486

Nine Months Ended September 30, 2004

				Additions
		Balance as of		(Reductions)						Balance as of
		December 31,		to the			Current			September 30,
Category		2003		Provision			Utilization			2004
Workforce reduction		$	12,442	$	(6,814	)	$	(2,754	)	$	2,874
Elimination of excess facilities			104,034		7,517			(27,199	)		84,352
Contractual and other obligations			5,701		21			(1,462	)		4,260
	Total	$	122,177	$	724		$	(31,415	)	$	91,486

      For the three and nine months ended September 30, 2004, the elimination of excess facilities provision was increased due to additional charges on vacated facilities. For the nine months ended September 30, 2004, the workforce reduction provision was reduced due to the favorable resolution of certain executive severance obligations attributable to the acquisition of Data General Corporation. Amounts relating to elimination of excess facilities will be paid over the respective lease terms through 2015.

2003 Charges

      During the third quarter of 2003, we recorded restructuring and other special charges of $1.7 million associated with our 2002 restructuring program. Included in the charge was $0.4 million of additional workforce reduction costs primarily attributable to finalizing severance packages for employees in foreign jurisdictions. There was also $1.3 million of additional costs associated with contractual and other obligations.

      During the first nine months of 2003, we recorded restructuring and other special charges of $25.8 million. The charges consisted of $33.4 million of additional restructuring costs associated with our 2002 restructuring program, offset by a favorable resolution of liabilities incurred in connection with the acquisition of Data General totaling $7.6 million. Included in the charge was $22.5 million of additional workforce reduction costs, primarily attributable to finalizing severance packages for employees in foreign jurisdictions. There was also $9.6 million of additional costs associated with excess facilities being vacated and $1.3 million associated with contractual and other obligations.

19

EMC CORPORATION

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

10.  Retirement Plans and Retiree Medical Benefits

Defined Benefit Pension Plans

      We have a noncontributory defined benefit pension plan which was assumed as part of our acquisition of Data General in 1999, which covers substantially all former Data General employees located in the U.S. In addition, certain of the former Data General foreign subsidiaries also have retirement plans covering substantially all of their employees. All of these plans have been frozen; therefore, such employees no longer accrue pension benefits for future services.

      Benefits under these plans are generally based on either career average or final average salaries and creditable years of service as defined in the plans. The annual cost for these plans is determined using the projected unit credit actuarial cost method that includes actuarial assumptions and estimates which are subject to change. Prior service cost is amortized over the average remaining service period of employees expected to receive benefits under these plans. Funds contributed to the plans are invested primarily in common stock, bonds and cash equivalent securities.

      The components of net periodic benefit cost of the Data General U.S. pension plan are as follows (tables in thousands):

	For the Three Months Ended
	September 30,			September 30,
	2004			2003
Interest cost	$	4,617		$	4,460
Expected return on plan assets		(6,625	)		(5,479	)
Amortization of transition asset		(213	)		(213	)
Recognized actuarial loss		1,372			1,941
Curtailment, net of settlements		—			11
Net periodic benefit cost (credit)	$	(849	)	$	720

	For the Nine Months Ended
	September 30,			September 30,
	2004			2003
Interest cost	$	13,851		$	13,380
Expected return on plan assets		(19,875	)		(16,437	)
Amortization of transition asset		(641	)		(639	)
Recognized actuarial loss		4,116			5,823
Curtailment, net of settlements		—			33
Net periodic benefit cost (credit)	$	(2,549	)	$	2,160

Post-Retirement Medical and Life Insurance Plan

      Our post-retirement benefit plan, which was assumed in connection with the Data General acquisition, provides certain medical and life insurance benefits for retired former Data General employees. With the exception of certain participants who retired prior to 1986, the medical benefit plan requires monthly contributions by retired participants in an amount equal to insured equivalent costs less a fixed EMC contribution which is dependent on the participant’s length of service and Medicare eligibility. Benefits are continued to dependents of eligible retiree participants for 39 weeks after the death of the retiree. The life insurance benefit plan is noncontributory. Funds contributed to the plan are invested primarily in common stocks, mutual funds and cash equivalent securities.

20

EMC CORPORATION

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

10.  Retirement Plans and Retiree Medical Benefits (Continued)

      The components of net periodic benefit cost of the plan are as follows (tables in thousands):

	For the Three Months Ended
	September 30,			September 30,
	2004			2003
Interest cost	$	69		$	76
Expected return on plan assets		(8	)		(6	)
Amortization of transition asset		(25	)		(25	)
Recognized actuarial gain		(11	)		(14	)
Net periodic benefit cost	$	25		$	31

	For the Nine Months Ended
	September 30,			September 30,
	2004			2003
Interest cost	$	207		$	228
Expected return on plan assets		(24	)		(18	)
Amortization of transition asset		(75	)		(75	)
Recognized actuarial gain		(33	)		(42	)
Net periodic benefit cost	$	75		$	93

11.  Stockholders’ Equity

Common Stock Repurchase Program

      In May 2001, our Board of Directors authorized the repurchase of up to 50.0 million shares of common stock. In October 2002, the Board of Directors authorized the repurchase of an additional 250.0 million shares of common stock. We repurchased 10.4 million shares at a cost of $107.9 million during the three months ended September 30, 2004 and 37.0 million shares at a cost of $417.6 million during the nine months ended September 30, 2004. As of September 30, 2004, we had reacquired a total of 99.1 million shares at a cost of $926.7 million.

      On July 1, 2004, the Massachusetts Business Corporation Act (“MBCA”) became effective and eliminated treasury shares. Under the MBCA, shares repurchased by Massachusetts corporations constitute authorized but unissued shares. As a result, all of our former treasury shares were automatically converted to unissued shares on July 1, 2004 and have been accounted for as a reduction of common stock (at par value) and additional paid-in capital. As of September 30, 2004, common stock and additional paid-in capital have been reduced by $1.0 and $925.7 million, respectively.

Employee Stock Purchase Plan

      Under EMC’s 1989 Employee Stock Purchase Plan (the “1989 Plan”), eligible employees of EMC may purchase shares of common stock, through payroll deductions, at the lower of 85% of the fair market value of our common stock at the time of grant or 85% of the fair market value at the time of exercise. In accordance with the 1989 Plan, an option to purchase shares is granted to each eligible employee of EMC who elects to participate in the 1989 Plan twice yearly, on January 1 and July 1, and is exercisable on the succeeding June 30 or December 31, respectively.

      In May 2004, our stockholders approved an amendment to the 1989 Plan to increase the number of shares available for grant under the 1989 Plan to 98.0 million shares from 73.0 million shares.

21

EMC CORPORATION

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

11.  Stockholders’ Equity (Continued)

Stock Plan

      The EMC Corporation 2003 Stock Plan (the “2003 Plan”) provides for the grant of stock options, restricted stock and restricted stock units. In May 2004, our stockholders approved an amendment to the 2003 Plan to increase the number of shares available for grant under the 2003 Plan to 100.0 million shares from 50.0 million shares and to allow awards of restricted stock and restricted stock units to be granted to non-employee Directors. No more than 20.0 million shares of common stock may be issued pursuant to awards of restricted stock or restricted stock units.

12.  Income Taxes

      For the three months ended September 30, 2004, our effective income tax rate was 29.0% and for the nine months ended September 30, 2004, our effective income tax rate was 29.6%. The effective income tax rate is based upon the estimated income (loss) for the year, the composition of the income (loss) in different countries, and adjustments, if any, for the potential tax consequences, benefits or resolutions of tax audits. For the three and nine months ended September 30, 2004, the effective tax rate varied from the statutory tax rate primarily as a result of the mix of income attributable to foreign versus domestic jurisdictions. Our aggregate income tax rate in foreign jurisdictions is lower than our income tax rate in the United States. Partially offsetting this benefit for the nine months ended September 30, 2004 were non-deductible IPR&D charges of $15.2 million incurred in connection with the VMware acquisition. We did not derive a tax benefit from these charges.

      For the three months ended September 30, 2003, the effective rate of benefit was 5.1%. For the nine months ended September 30, 2003, the effective income tax rate was 16.5%. For the three and nine months ended September 30, 2003, the effective tax rate varied from the statutory tax rate primarily as a result of the favorable resolution of a series of tax audits which aggregated $53.6 million. As a result, an income tax benefit of $7.7 million was recognized in the three months ended September 30, 2003. In addition, the mix of income attributable to foreign jurisdictions favorably impacted the rate.

22

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

      This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with our interim consolidated financial statements and notes thereto which appear elsewhere in this Quarterly Report on Form 10-Q and the MD&A contained in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 2, 2004. The following discussion contains forward-looking statements, within the meaning of the Federal securities laws, about our business and prospects, including without limitation statements regarding the following: our revenues, our operating income as a percentage of revenues, our overall gross margin percentage, our research and development (“R&D”) expenses, our selling, general and administrative (“SG&A”) expenses, our purchase of additional shares of our common stock, our ability to finance our on-going operations, our introduction of new and enhanced products and service offerings, our expansion of distribution channels, our investment income and our income tax rate. Any statements herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes,” “plans,” “intends,” “expects,” “goals” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these words. Our future results may differ materially from our past results and from those projected in the forward-looking statements due to various uncertainties and risks, including those described in “FACTORS THAT MAY AFFECT FUTURE RESULTS” beginning on page 37. We disclaim any obligation to update any forward-looking statements contained herein after the date of this Quarterly Report.

All dollar amounts in this MD&A are in millions.

INTRODUCTION

      We generate revenue through the sale, license and lease of products and services that help our customers manage their information, from the time of its creation to the archival and eventual disposal, through a strategy for aligning their IT infrastructures with the needs of their business based on information’s changing value. We refer to this strategy as information lifecycle management. Our financial objective is to achieve profitable growth. Management believes that by providing a combination of systems, software and services to meet customers’ demand for information lifecycle management, we will be able to further increase revenues. Our operating income as a percentage of revenues increased from 4.4% for the first nine months of 2003 to 11.6% for the first nine months of 2004. We believe that by increasing revenues and further controlling costs, we will be able to continue to improve operating income as a percentage of revenues. Our efforts in 2004 have been and will continue to be primarily focused on expanding our portfolio of offerings to satisfy our customers’ information lifecycle management requirements. This includes additional investments in R&D and the introduction of new and enhanced product and service offerings, with a goal of increasing our market share. To further increase revenues, we are also expanding our distribution channels.

      In July 2004, we revised our segments and established the EMC Software Group products and services segment. The EMC Software Group products and services segment includes LEGATO products and services revenues, Documentum products and services revenues and EMC multi-platform software license and related software maintenance revenues.

23

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS— (Continued)

Results of Operations— Third Quarter of 2004 Compared to Third Quarter of 2003

Revenues

      The following table presents revenues by our segments. Certain columns may not add due to rounding.

		For the Three Months Ended
		September 30,		September 30,
		2004		2003		$ Change			% Change
Information storage products		$	1,224.8	$	1,030.1	$	194.7			19	%
Information storage services			378.3		313.5		64.8			21
EMC Software Group products and services			350.9		143.2		207.7			145
VMware products and services			60.6		—		60.6			—
Other businesses			14.3		24.1		(9.8	)		41
	Total revenues	$	2,028.9	$	1,510.8	$	518.1			34	%

      Information storage products revenues include information storage systems and information storage software revenues. Information storage systems revenues were $948.9 in the third quarter of 2004, compared to $801.1 in the third quarter of 2003, representing an increase of $147.8, or 18%. The increase was due to greater demand for these products attributable to a broadened product portfolio, increased demand for IT infrastructure and new and enhanced distribution channels, partially offset by price declines. Information storage software revenues were $275.9 in the third quarter of 2004, compared to $229.0 in the third quarter of 2003, representing an increase of $46.9, or 20%. Information storage software revenues consist of platform-based software revenues. The increase in information storage software revenues was attributable to an expanded product offering and a greater demand for software to manage increasingly complex high-end and midrange networked storage environments.

      Information storage services revenues increased due to increased demand for software and hardware maintenance contracts associated with the increase in sales of information storage products. Additionally, increased demand for professional services, largely to support and implement information lifecycle management based solutions, contributed to the increase. Software and hardware maintenance accounted for 53.3% of total information storage services revenues in the third quarter of 2004 compared to 50.3% in the third quarter of 2003. Professional services accounted for 46.7% of total information storage services revenues in the third quarter of 2004 compared to 49.7% in the third quarter of 2003.

      The EMC Software Group products and services segment was established in July 2004. The EMC Software Group products and services revenues include LEGATO products and services revenues and Documentum products and services revenues that were historically presented in separate segments. The EMC Software Group products and services revenues also include EMC multi-platform software licenses and related software maintenance revenues that were historically included in our information storage products and information storage services segments. The increase in the EMC Software Group products and services revenues was attributable to the incremental revenue related to the acquisitions of Documentum, Inc. and LEGATO Systems, Inc. and greater demand for multi-platform software products.

24

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS— (Continued)

      The VMware products and services segment was established as a result of our acquisition of VMware in January 2004. VMware’s technology enables multiple operating systems to run simultaneously and independently on the same Intel-based server or workstation and move live applications across systems without any business disruption. VMware product and services revenues were $60.6 in the third quarter of 2004.

      Other businesses revenues consist of revenues from AViiON maintenance services. These revenues are expected to continue to decline in future years as we have discontinued selling AViiON servers.

      Revenues on sales into the North American markets, excluding Mexico, were $1,198.5 in the third quarter of 2004, compared to $921.5 in the third quarter of 2003, representing an increase of $277.0, or 30%. Revenues on sales into markets other than North America, excluding Mexico, increased to $830.4 in the third quarter of 2004 from $589.4 in the third quarter of 2003, representing an increase of $241.0, or 41%. Revenues on sales into markets other than North America, excluding Mexico, accounted for 41% of total revenues in the third quarter of 2004 compared to 39% in the third quarter of 2003. Revenues on sales into the European, Middle East and African markets were $549.8 in the third quarter of 2004, compared to $382.2 in the third quarter of 2003, representing an increase of $167.6, or 44%. Revenues on sales into the Asia Pacific markets were $232.2 in the third quarter of 2004, compared to $172.8 in the third quarter of 2003, representing an increase of $59.4, or 34%. Revenues on sales into the Latin American markets and Mexico were $48.4 in the third quarter of 2004, compared to $34.4 in the third quarter of 2003, representing an increase of $14.0, or 41%. The increase in revenues in these geographies in the third quarter of 2004 compared to the third quarter of 2003 was attributable to greater demand for our products and services. Also contributing to the increase were revenues generated from the acquisitions of Documentum, LEGATO and VMware, new and enhanced distribution channels, broadened product offerings and favorable foreign currency exchange rates.

      Changes in exchange rates in the third quarter of 2004 compared to the third quarter of 2003 positively impacted consolidated revenues by approximately 3.1%. The impact was most significant in the European market, primarily the United Kingdom, Germany, Italy and France.

25

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS— (Continued)

Costs and Expenses

      The following table presents our costs and expenses and net income. Certain columns may not add due to rounding.

		For the Three Months Ended
		September 30,		September 30,
		2004		2003			$ Change			% Change
Cost of revenue:
Information storage products		$	707.4	$	643.3		$	64.1			10	%
Information storage services			185.4		157.5			27.9			18
EMC Software Group products and services			73.9		23.5			50.4			214
VMware products and services			11.9		—			11.9			—
Other businesses			7.1		11.4			(4.3	)		38
	Total cost of revenue		985.7		835.7			150.0			18
Gross margins:
Information storage products			517.4		386.8			130.6			34
Information storage services			192.9		156.0			36.9			24
EMC Software Group products and services			277.0		119.7			157.3			131
VMware products and services			48.7		—			48.7			—
Other businesses			7.2		12.7			(5.5	)		43
	Total gross margins		1,043.2		675.1			368.1			55
Operating expenses:
Research and development			215.7		172.9			42.8			25
Selling, general and administrative			557.5		390.2			167.3			43
Restructuring and other special charges			—		1.7			(1.7	)		100
	Total operating expenses		773.2		564.7			208.5			37
Operating income			270.0		110.4			159.6			145
Investment income, interest expense, and other income (expense), net			36.9		41.0			(4.1	)		10
Income before income taxes			307.0		151.4			155.6			103
Income tax provision (benefit)			89.0		(7.7	)		96.7			N/A
Net income		$	218.0	$	159.1		$	58.9			37	%

•           Gross Margins

      Information storage products gross margin percentage increased to 42.2% in the third quarter of 2004 from 37.5% in the third quarter of 2003. The increase in the gross margin percentage was attributable to increased sales volume over a lower fixed cost component of cost of sales.

      The gross margin percentage for information storage services increased to 51.0% in the third quarter of 2004 compared to 49.8% in the third quarter of 2003. The increase in the gross margin percentage was primarily attributable to a greater proportion of revenues derived from the sale of software and hardware maintenance contracts compared to professional services revenues. Maintenance revenues provide a higher gross margin than professional services revenues.

26

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS— (Continued)

      The gross margin percentage for the EMC Software Group products and services segment decreased to 79.0% in the third quarter of 2004 compared to 83.6% in the third quarter of 2003. The decrease in the gross margin percentage was attributable to intangible amortization associated with the acquisitions of LEGATO and Documentum. Additionally, the decrease in the gross margin percentage was attributable to a higher proportion of software maintenance and professional services revenues and a lower proportion of software license revenues in the third quarter of 2004 compared to the third quarter of 2003. This shift in mix was attributable to the acquisitions of LEGATO and Documentum. Software license revenues have a higher gross margin than software maintenance and professional services revenues.

      The gross margin percentage for the VMware products and services segment was 80.4% in the third quarter of 2004.

      The gross margin percentage for other businesses decreased to 50.2% in the third quarter of 2004 compared to 52.6% in the third quarter of 2003. The decrease in the gross margin percentage resulted from declining revenues in this segment as the volume of maintenance contracts decreased.

      Our overall gross margin percentage was 51.4% in the third quarter of 2004 compared to 44.7% in the third quarter of 2003. We anticipate our overall gross margin percentage will exceed 50.0% for 2004. However, if sales volumes decline or competitive pricing pressures increase, gross margins may be negatively impacted.

•           Research and Development

      As a percentage of revenues, R&D expenses were 10.6% and 11.4% in the third quarters of 2004 and 2003, respectively. In addition, we spent $40.2 and $27.2 in the third quarters of 2004 and 2003, respectively, on software development, which costs were capitalized. R&D spending includes enhancements to our software and information storage systems. The increase in R&D expenses was primarily attributable to the increased salaries and related costs from the LEGATO, Documentum and VMware acquisitions. We expect the amount of R&D expenses to continue to be higher in 2004 compared to 2003, primarily due to the R&D spending of LEGATO, Documentum and VMware. As a percentage of revenues, we expect R&D expenses to be around 11% for 2004. This percentage may vary, however, depending primarily on our 2004 revenues.

•           Selling, General and Administrative

      As a percentage of revenues, SG&A expenses were 27.5% and 25.8% in the third quarters of 2004 and 2003, respectively. The increase in SG&A expenses was primarily attributable to the increased salaries and related costs from the LEGATO, Documentum and VMware acquisitions. We expect the amount of SG&A expenses to continue to be higher in 2004 compared to 2003, primarily due to the SG&A spending of LEGATO, Documentum and VMware. As a percentage of revenues, we expect SG&A expenses to be between 26% and 29% for 2004. This percentage may vary, however, depending primarily on our 2004 revenues.

•           Restructuring and Other Special Charges

      In the third quarter of 2004, we adjusted the provisions associated with prior period restructuring charges. We decreased by $1.7 the provision for workforce reductions associated with the 2004 restructuring program. The decrease was attributed to a reduced number of individuals impacted by the reduction in force. There were also adjustments associated with the 2003 restructuring program, consisting of a reduction of $1.9 of costs associated with vacated facilities attributable to reduced costs incurred in closing of a facility and a $0.4 reversal to the provision for workforce reduction attributable to finalizing severance packages for employees in foreign jurisdictions. Additionally, during the quarter, we recorded a $4.0 charge associated with prior restructuring programs, consisting of additional costs for vacated facilities. The net effect of these adjustments had no impact on our results of operations.

27

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS— (Continued)

      The 2004 restructuring program includes a reduction in force of approximately 150 employees across our major business functions and all major geographic regions. Approximately 71% of such employees are or were based in North America, excluding Mexico, and 29% are or were based in Europe, Latin America, Mexico and the Asia Pacific region. As of September 30, 2004, approximately 120 employees have been terminated. The expected cash impact of the 2004 restructuring charge is $10.7, of which $2.5 was paid in the third quarter of 2004. The remaining cash expenditures relating to workforce reduction are expected to be substantially paid by the end of 2004. Amounts relating to elimination of excess facilities will be paid over the respective lease terms through 2005.

      During the third quarter of 2003, we recorded restructuring and other special charges of $1.7 associated with our 2002 restructuring program. Included in the charge was $1.3 of additional costs associated with contractual and other obligations. There was also $0.4 of additional workforce reduction costs primarily attributable to finalizing severance packages for employees in foreign jurisdictions.

•     Investment Income

      Investment income decreased to $38.4 in the third quarter of 2004 from $45.5 in the third quarter of 2003. Investment income was earned primarily from investments in cash and cash equivalents, short and long-term investments and sales-type leases. Investment income decreased in the third quarter of 2004 compared to the third quarter of 2003 due to losses from the sale of investments, partially offset by higher yields on higher outstanding investment balances. The weighted average return on investments, excluding realized gains and losses, was 2.7% and 2.5% in the third quarters of 2004 and 2003, respectively. Realized gains (losses) were $(5.1) and $8.7 in the third quarters of 2004 and 2003, respectively. We expect our investment income to be lower in 2004 compared to 2003.

•     Other Income, net

      Other income, net was $0.5 in the third quarter of 2004, compared to other expense, net of $3.8 in the third quarter of 2003. The change was primarily due to gains on the sale of strategic investments in the third quarter of 2004.

•     Provision (Benefit) for Income Taxes

      In the third quarter of 2004, we reported pre-tax income of $307.0 resulting in a provision for income taxes of $89.0. In the third quarter of 2003, we reported pre-tax income of $151.4 and a corresponding benefit of income taxes of $7.7. The effective income tax rate was 29.0% in the third quarter of 2004 compared to an effective rate of benefit of 5.1% in the third quarter of 2003. The effective income tax rate is based upon the estimated income (loss) for the year, the composition of the income (loss) in different countries, and adjustments, if any, for the potential tax consequences, benefits or resolutions of tax audits. For the quarter ended September 30, 2004, the effective tax rate varied from the statutory rate primarily as a result of the mix of income attributable to foreign versus domestic jurisdictions. Our aggregate income tax rate in foreign jurisdictions is lower than our income tax rate in the United States. For the quarter ended September 30, 2003, the effective tax rate varied from the statutory rate primarily as a result of the overall favorable resolution of international tax matters which aggregated approximately $53.6. In addition, the mix of income attributable to foreign jurisdictions favorably impacted the rate. We expect our tax rate to be approximately 29% for 2004; however, the rate may vary depending upon the income for the year, the composition of the income (loss) in different countries, and adjustments, if any, for the potential tax consequences, benefits or resolutions of audits.

      In October 2004, the American Jobs Creation Act of 2004 (“AJCA”) was signed into law. The AJCA contains a series of provisions, several of which are pertinent to us. The AJCA creates a temporary incentive for U.S. multinational corporations to repatriate accumulated income abroad by providing an 85% dividends

28

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS— (Continued)

received deduction for certain dividends from controlled foreign corporations. It has been our practice to permanently reinvest all foreign earnings into our foreign operations and we currently still plan to continue to reinvest our foreign earnings permanently into our foreign operations. Should we determine that we plan to repatriate any of our foreign earnings, we will be required to establish an income tax expense and related tax liability on such earnings.

      The AJCA also provides U.S. corporations with an income tax deduction equal to a stipulated percentage of qualified income from domestic production activities (“qualified activities”). The deduction, which cannot exceed 50% of annual wages paid, is phased in as follows: 3% of qualified activities in 2005 and 2006; 6% in 2007 through 2009; and 9% in 2010 and thereafter. The impact of the AJCA on our tax rate for 2005 is not yet known.

Results of Operations— First Nine Months of 2004 Compared to First Nine Months of 2003

Revenues

      The following table presents revenues by our segments. Certain columns may not add due to rounding.

		For the Nine Months Ended
		September 30,		September 30,
		2004		2003		$ Change			% Change
Information storage products		$	3,564.3	$	2,997.5	$	566.8			19	%
Information storage services			1,082.0		901.1		180.9			20
EMC Software Group products and services			1,027.2		398.6		628.6			158
VMware products and services			147.1		—		147.1			—
Other businesses			51.1		77.1		(26.0	)		34
	Total revenues	$	5,871.7	$	4,374.3	$	1,497.4			34	%

      Information storage products revenues include information storage systems and information storage software revenues. Information storage systems revenues were $2,774.1 in the first nine months of 2004, compared to $2,357.3 in the first nine months of 2003, representing an increase of $416.8, or 18%. The increase was due to greater demand for these products attributable to a broadened product portfolio, increased demand for IT infrastructure and new and enhanced distribution channels, partially offset by price declines. Information storage software revenues were $790.2 in the first nine months of 2004, compared to $640.2 in the first nine months of 2003, representing an increase of $150.0, or 23%. Information storage software revenues consist of platform-based software revenue. The increase in information storage software revenue was attributable to an expanded product offering and greater demand for software to manage increasingly complex high-end and midrange networked storage environments.

      Information storage services revenues increased due to increased demand for software and hardware maintenance contracts associated with the increase in sales of information storage products. Additionally, increased demand for professional services, largely to support and implement information lifecycle management based solutions, contributed to the increase. Software and hardware maintenance accounted for 51.2% of total information storage services revenues in the first nine months of 2004 compared to 50.2% in the first nine months of 2003. Professional services accounted for 48.8% of total information storage services revenues in the first nine months of 2004 compared to 49.8% in the first nine months of 2003.

29

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS— (Continued)

      The EMC Software Group products and services segment was established in July 2004. The EMC Software Group products and services revenues include LEGATO products and services revenues and Documentum products and services revenues that were historically presented in separate segments. EMC Software Group products and services revenues also include EMC multi-platform software licenses and related software maintenance revenues that were historically included in our information storage products and information storage services segments. The increase in the EMC Software Group products and services revenues was attributable to the incremental revenue related to the acquisitions of Documentum and LEGATO and greater demand for EMC multi-platform software products.

      The VMware products and services segment was established as a result of the acquisition of VMware in January 2004. VMware’s technology enables multiple operating systems to run simultaneously and independently on the same Intel-based server or workstation and move live applications across systems without any business disruption. From the date of acquisition (January 9, 2004) to September 30, 2004, VMware product and services revenues were $147.1.

      Other businesses revenues consist of revenues from AViiON maintenance services. These revenues are expected to continue to decline in future years as we have discontinued selling AViiON servers.

      Revenues on sales into the North American markets, excluding Mexico, were $3,414.3 in the first nine months of 2004, compared to $2,681.9 in the first nine months of 2003, representing an increase of $732.4, or 27%. Revenues on sales into markets other than North America, excluding Mexico, increased to $2,457.4 in the first nine months of 2004 from $1,692.4 in the first nine months of 2003, representing an increase of $765.0, or 45%. Revenues on sales into markets other than North America, excluding Mexico, accounted for 42% of total revenues in the first nine months of 2004 compared to 39% in the first nine months of 2003. Revenues on sales into the European, Middle East and African markets were $1,657.1 in the first nine months of 2004, compared to $1,118.4 in the first nine months of 2003, representing an increase of $538.7, or 48%. Revenues on sales into the Asia Pacific markets were $674.7 in the first nine months of 2004, compared to $486.7 in the first nine months of 2003, representing an increase of $188.0, or 39%. Revenues on sales into the Latin American markets and Mexico were $125.6 in the first nine months of 2004, compared to $87.4 in the first nine months of 2003, representing an increase of $38.2, or 44%. The increase in revenues in these geographies in the first nine months of 2004 compared to the first nine months of 2003 was attributable to greater demand for our products and services. Also contributing to the increase were revenues generated from the acquisitions of Documentum, LEGATO and VMware, new and enhanced distribution channels, broadened product offerings and favorable foreign currency exchange rates.

      Changes in exchange rates in the first nine months of 2004 compared to the first nine months of 2003 positively impacted consolidated revenues by approximately 4.2%. The impact was most significant in the European market, primarily the United Kingdom, Germany, Italy and France.

30

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS— (Continued)

          Costs and Expenses

      The following table presents our costs and expenses and net income. Certain columns may not add due to rounding.

		For the Nine Months Ended
		September 30,		September 30,
		2004		2003		$ Change			% Change
Cost of revenue:
Information storage products		$	2,078.6	$	1,884.9	$	193.7			10	%
Information storage services			532.2		465.4		66.8			14
EMC Software Group products and services			226.6		70.5		156.1			221
VMware products and services			31.5		—		31.5			—
Other businesses			24.0		36.5		(12.5	)		34
	Total cost of revenue		2,892.9		2,457.3		435.6			18
Gross margins:
Information storage products			1,485.7		1,112.7		373.0			34
Information storage services			549.8		435.7		114.1			26
EMC Software Group products and services			800.6		328.1		472.5			144
VMware products and services			115.7		—		115.7			—
Other businesses			27.1		40.6		(13.5	)		33
	Total gross margins		2,978.8		1,917.0		1,061.8			55
Operating expenses:
Research and development			625.4		530.1		95.3			18
Selling, general and administrative			1,640.9		1,168.0		472.9			40
Restructuring and other special charges			32.7		25.8		6.9			27
	Total operating expenses		2,299.0		1,723.8		575.2			33
Operating income			679.8		193.2		486.6			252
Investment income, interest expense, and other expense, net			102.3		137.3		(35.0	)		25
Income before income taxes			782.1		330.5		451.6			137
Income tax provision			231.4		54.4		177.0			325
Net income		$	550.6	$	276.0	$	274.6			99	%

• Gross Margins

      Information storage products gross margin percentage increased to 41.7% in the first nine months of 2004 from 37.1% in the first nine months of 2003. The increase in the gross margin percentage was attributable to increased sales volume over a lower fixed cost component of cost of sales.

      The gross margin percentage for information storage services increased to 50.8% in the first nine months of 2004 compared to 48.4% in the first nine months of 2003. The increase in the gross margin percentage was primarily attributable to a greater proportion of revenues derived from the sale of software and hardware maintenance contracts compared to professional services revenues. Maintenance revenues provide a higher gross margin than professional services revenues.

31

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS— (Continued)

      The gross margin percentage for the EMC Software Group products and services segment decreased to 77.9% in the first nine months of 2004 compared to 82.3% in the first nine months of 2003. The decrease in the gross margin percentage was attributable to intangible amortization associated with the acquisitions of LEGATO and Documentum. Additionally, the decrease in the gross margin percentage was attributable to a higher proportion of software maintenance and professional services revenues as compared to software license revenues in the first nine months of 2004 compared to the first nine months of 2003. This shift in mix was attributable to the acquisitions of LEGATO and Documentum. Software license revenues have a higher gross margin than software maintenance and professional services revenues.

      The gross margin percentage for the VMware products and services segment was 78.6% in the first nine months of 2004.

      The gross margin percentage for other businesses increased to 53.0% in the first nine months of 2004 compared to 52.6% in the first nine months of 2003. The increase in the gross margin percentage resulted from reducing costs in this segment as the volume of maintenance contracts decreased.

      Our overall gross margin percentage was 50.7% in the first nine months of 2004 compared to 43.8% in the first nine months of 2003. We anticipate our overall gross margin percentage will exceed 50.0% for 2004. However, if sales volumes decline or competitive pricing pressures increase, gross margins may be negatively impacted.

•     Research and Development

      As a percentage of revenues, R&D expenses were 10.7% and 12.1% in the first nine months of 2004 and 2003, respectively. In addition, we spent $126.6 and $84.4 in the first nine months of 2004 and 2003, respectively, on software development, which costs were capitalized. R&D spending includes enhancements to our software and information storage systems. The increase in R&D expenses was primarily attributable to the increased salaries and related costs from the LEGATO, Documentum and VMware acquisitions. We expect the amount of R&D expenses to continue to be higher in 2004 compared to 2003, primarily due to the R&D spending of LEGATO, Documentum and VMware. As a percentage of revenues, we expect R&D expenses to be around 11% for 2004. This percentage may vary, however, depending primarily on our 2004 revenues.

•     Selling, General and Administrative

      As a percentage of revenues, SG&A expenses were 27.9% and 26.7% in the first nine months of 2004 and 2003, respectively. The increase in SG&A expenses was primarily attributable to the increased salaries and related costs from the LEGATO, Documentum and VMware acquisitions. We expect the amount of SG&A expenses to continue to be higher in 2004 compared to 2003, primarily due to the SG&A spending of LEGATO, Documentum and VMware. As a percentage of revenues, we expect SG&A expenses to be between 26% and 29% for 2004. This percentage may vary, however, depending primarily on our 2004 revenues.

•     Restructuring and Other Special Charges

      During the first nine months of 2004, we recorded restructuring and other special charges of $32.7. These charges include restructuring activities, as well as IPR&D charges of $15.2 associated with the VMware acquisition. The 2004 restructuring program consisted of employee termination benefits of $10.0 and costs associated with excess facilities being vacated of $0.7. The 2004 restructuring program impacted our information storage products, information storage services and EMC Software Group products and services segments. The 2004 restructuring program and other restructuring programs have been developed and executed on a corporate-wide basis, without regard to individual segments. These programs impact our cost of sales, selling, general and administrative expenses and research and development expenses. Segment information is reported only at the gross profit level. The remaining $6.8 of charges was associated with prior restructuring programs.

32

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS— (Continued)

      The 2004 restructuring program includes a reduction in force of approximately 150 employees across our major business functions and all major geographic regions. Approximately 71% of such employees are or were based in North America, excluding Mexico, and 29% are or were based in Europe, Latin America, Mexico and the Asia Pacific region. As of September 30, 2004, approximately 120 employees have been terminated. The expected cash impact of the 2004 restructuring charge is $10.7, of which $4.1 was paid in the first nine months of 2004. The remaining cash expenditures relating to workforce reduction are expected to be substantially paid by the end of 2004. Amounts relating to elimination of excess facilities will be paid over the respective lease terms through 2005.

      During the first nine months of 2003, we recorded restructuring and other special charges of $25.8. The charges consisted of $33.4 of additional restructuring costs associated with our 2002 restructuring program, offset by a favorable resolution of liabilities incurred in connection with the acquisition of Data General totaling $7.6. Included in the charge was $22.5 of additional workforce reduction costs primarily attributable to finalizing severance packages for employees in foreign jurisdictions. There was also $9.6 of additional costs associated with excess facilities being vacated and $1.3 associated with contractual and other obligations.

•     Investment Income

      Investment income decreased to $115.4 in the first nine months of 2004, from $149.8 in the first nine months of 2003. Investment income was earned primarily from investments in cash and cash equivalents, short and long-term investments and sales-type leases. Investment income decreased in the first nine months of 2004 compared to the first nine months of 2003 because of lower yields on outstanding investment balances and losses from the sale of investments. The weighted average return on investments, excluding realized gains and losses, was 2.5% and 2.8% in the first nine months of 2004 and 2003, respectively. Realized gains (losses) were $(5.3) and $30.3 in the first nine months of 2004 and 2003, respectively. As a result of the foregoing factors, we expect our investment income to be lower in 2004 compared to 2003.

•     Other Expense, net

      Other expense, net was $7.5 in the first nine months of 2004, compared to $9.8 in the first nine months of 2003. The change is primarily due to a gain on sale of strategic investments in 2004 partially offset by increased realized foreign currency exchange losses.

•     Provision for Income Taxes

      In the first nine months of 2004, we reported pre-tax income of $782.1 resulting in a provision for income taxes of $231.4. In the first nine months of 2003, we reported pre-tax income of $330.5 resulting in a provision of income taxes of $54.4. The effective income tax rate was 29.6% and 16.5% in the first nine months of 2004 and 2003, respectively. The effective income tax rate is based upon the estimated income (loss) for the year, the composition of the income (loss) in different countries, and adjustments, if any, for the potential tax consequences, benefits or resolutions of tax audits. For the nine months ended September 30, 2004, the effective tax rate varied from the statutory rate primarily as a result of the mix of income attributable to foreign versus domestic jurisdictions. Our aggregate income tax rate in foreign jurisdictions is lower than our income tax rate in the United States. Partially offsetting this benefit were non-deductible IPR&D charges of $15.2 incurred in connection with the VMware acquisition. We did not derive a tax benefit from these charges. For the nine months ended September 30, 2003, the effective tax rate varied from the statutory rate primarily as a result of the favorable resolution of a series of tax audits which aggregated $53.6. Additionally, the mix of income attributable to foreign jurisdictions favorably impacted our tax rate. We expect our tax rate to be approximately 29% for 2004; however, the rate may vary depending upon the income for the year, the composition of the income (loss) in different countries, and adjustments, if any, for the potential tax consequences, benefits or resolutions of audits.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS— (Continued)

      In October 2004, the AJCA was signed into law. The AJCA contains a series of provisions, several of which are pertinent to us. The AJCA creates a temporary incentive for U.S. multinational corporations to repatriate accumulated income abroad by providing an 85% dividends received deduction for certain dividends from controlled foreign corporations. It has been our practice to permanently reinvest all foreign earnings into our foreign operations and we currently still plan to continue to reinvest our foreign earnings permanently into our foreign operations. Should we determine that we plan to repatriate any of our foreign earnings, we will be required to establish an income tax expense and related tax liability on such earnings.

      The AJCA also provides U.S. corporations with an income tax deduction equal to a stipulated percentage of qualified income from domestic production activities (“qualified activities”). The deduction, which cannot exceed 50% of annual wages paid, is phased in as follows: 3% of qualified activities in 2005 and 2006; 6% in 2007 through 2009; and 9% in 2010 and thereafter. The impact of the AJCA on our tax rate for 2005 is not yet known.

Financial Condition

      Cash and cash equivalents and short and long-term investments were $7,034.7 and $6,907.6 at September 30, 2004 and December 31, 2003, respectively, an increase of $127.1.

      Cash provided by operating activities in the first nine months of 2004 was $1,453.2 compared to $1,009.9 in the first nine months of 2003. The increase in the first nine months of 2004 compared to the first nine months of 2003 was primarily attributable to improved profitability. Additionally, non-cash charges, primarily depreciation and amortization, amortization of deferred compensation and deferred income taxes, net increased in the nine month period ended September 30, 2004 compared to the nine month period ended September 30, 2003. The increases were attributable to the acquisitions of LEGATO, Documentum and VMware and the utilization of tax net operating loss carryforwards. Partially offsetting these items was a reduction in cash generated from working capital in 2004 compared to 2003.

      Cash used in investing activities was $1,439.9 in the first nine months of 2004, compared to $1,016.5 in the first nine months of 2003. In 2004, we acquired all the outstanding shares of VMware for $539.9. Capital additions were $259.9 and $266.5 in the first nine months of 2004 and 2003, respectively. Net purchases and maturities of investments, consisting primarily of debt securities, were $451.3 and $625.3 in the first nine months ended 2004 and 2003, respectively.

      Cash used in financing activities was $309.4 in the first nine months of 2004, compared to $73.9 in the first nine months of 2003. During the first nine months of 2004, we repurchased 37.0 million shares of our common stock at a cost of $417.6. As of September 30, 2004, we had repurchased 99.1 million of the 300.0 million shares of our common stock authorized for repurchase by our Board of Directors. We anticipate purchasing additional shares of our common stock during the remainder of 2004. Partially offsetting this use in cash was $115.3 of cash generated in the first nine months of 2004 from the exercise of stock options. In 2003, we generated $48.8 from the exercise of stock options and used $27.8 for payments of obligations.

      We employ several strategies to enhance our liquidity and income. We derive revenues from both selling and leasing activity. We customarily sell the notes receivable resulting from our leasing activity. Generally, we do not retain any recourse on the sale of these notes. We also lend certain fixed income securities to generate investment income. During the first nine months of 2004, we entered into various agreements to loan fixed income securities generally on an overnight basis. Under these securities lending agreements, the value of the collateral is equal to 102% of the fair market value of the loaned securities. The collateral is generally cash, U.S. government-backed securities or letters of credit. At September 30, 2004, there were no outstanding securities lending transactions.

      We have available for use a credit line of $50.0 in the United States. As of September 30, 2004, we had no borrowings outstanding on the line of credit. The credit line bears interest at the bank’s base rate and

34

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS— (Continued)

requires us, upon utilization of the credit line, to meet certain financial covenants with respect to limitations on losses. In the event the covenants are not met, the lender may require us to provide collateral to secure the outstanding balance. At September 30, 2004, we were in compliance with the covenants.

      Based on our current operating and capital expenditure forecasts, we believe that the combination of funds currently available, funds generated from operations and our available lines of credit will be adequate to finance our ongoing operations for the next twelve months.

      To date, inflation has not had a material impact on our financial results.

Critical Accounting Policies

      Our consolidated financial statements are based on the selection and application of accounting principles generally accepted in the United States of America which require us to make estimates and assumptions about future events that affect the amounts reported in our financial statements and the accompanying notes. Future events and their effects cannot be determined with certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results could differ from those estimates, and any such differences may be material to our financial statements. We believe that the policies set forth below may involve a higher degree of judgment and complexity in their application than our other accounting policies and represent the critical accounting policies used in the preparation of our financial statements. If different assumptions or conditions were to prevail, the results could be materially different from our reported results. Our significant accounting policies are presented within Note A to our Consolidated Financial Statements contained in our Annual Report on Form 10-K filed with the SEC on March 2, 2004.

•           Revenue Recognition

      Revenue recognition is governed by various accounting principles, including Staff Accounting Bulletin (“SAB”), No. 104, “Revenue Recognition”; Emerging Issues Task Force, No. 00-21, “Revenue Arrangements with Multiple Deliverables”; Statement of Position (“SOP”) No. 97-2, “Software Revenue Recognition”; FAS No. 48, “Revenue Recognition When Right of Return Exists”; FAS No. 13, “Accounting for Leases”; and SOP No. 81-1, “Accounting for Performance of Construction-Type and Certain Production-Type Contracts,” among others. The application of the appropriate accounting principle to our revenue is dependent upon the specific transaction and whether the sale or lease includes systems, software and services or a combination of these items. As our business evolves, the mix of products and services sold will impact the timing of when revenue and related costs are recognized. Additionally, revenue recognition involves judgments, including assessments of expected returns and the likelihood of nonpayment. We analyze various factors, including a review of specific transactions, the credit-worthiness of our customers, our historical experience and market and economic conditions. Changes in judgments on these factors could materially impact the timing and amount of revenue and costs recognized. Should market or economic conditions deteriorate, our actual return experience could exceed our estimate.

•           Warranty Costs

      We accrue for systems warranty costs at the time of shipment. While we engage in extensive product quality programs and processes, our warranty obligation is affected by product failure rates, material usage and service delivery costs. Should actual product failure rates, material usage or service delivery costs differ from our estimates, the amount of actual warranty costs could materially differ from our estimates.

•           Asset Valuation

      Asset valuation includes assessing the recorded value of certain assets, including accounts and notes receivable, inventories, goodwill and other intangible assets. We use a variety of factors to assess valuation, depending upon the asset. Accounts and notes receivable are evaluated based upon the credit-worthiness of

35

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS— (Continued)

our customers, our historical experience, the age of the receivable and current market and economic conditions. Should current market and economic conditions deteriorate, our actual bad debt experience could exceed our estimate. The recoverability of inventories is based upon the types and levels of inventory held, forecasted demand, pricing, competition and changes in technology. Should current market and economic conditions deteriorate, our actual recovery could be less than our estimate. Other intangible assets are evaluated based upon the expected period the asset will be utilized, forecasted cash flows, changes in technology and customer demand. Changes in judgments on any of these factors could materially impact the value of the asset. Our goodwill valuation is based upon a discounted cash flow analysis performed at the reporting unit level. The analysis factors in estimated revenue and expense growth rates. The estimates are based upon our historical experience and projections of future activity, factoring in customer demand, changes in technology and a cost structure necessary to achieve the related revenues. Changes in judgments on any of these factors could materially impact the value of the asset.

•           Restructuring Charges

      We recognized restructuring charges in 2004, 2003 and 2002. The restructuring charges include, among other items, estimated losses on the sale of real estate, employee termination benefit costs, subletting of facilities and termination of various contracts. The amount of the actual obligations may be different than our estimates due to various factors, including market conditions and negotiations with third parties. Should the actual amounts differ from our estimates, the amount of the restructuring charges could be materially impacted.

•           Accounting for Income Taxes

      As part of the process of preparing our financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. This process involves estimating our actual current tax exposure, including assessing the risks associated with tax audits, together with assessing temporary differences resulting from the different treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within our balance sheet. We assess the likelihood that our deferred tax assets will be recovered from future taxable income and to the extent we believe that recovery is more likely than not, do not establish a valuation allowance. In the event that actual results differ from these estimates, our provision for income taxes could be materially impacted.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS— (Continued)

FACTORS THAT MAY AFFECT FUTURE RESULTS

      This Quarterly Report on Form 10-Q contains forward-looking statements, within the meaning of the Federal securities laws, about our business and prospects. The forward-looking statements do not include the potential impact of any mergers, acquisitions, divestitures or business combinations that may be completed after the date hereof. Our future results may differ materially from our past results and from those projected in the forward-looking statements due to various uncertainties and risks, including but not limited to those set forth below, one-time events and other important factors disclosed previously and from time to time in our other filings with the SEC. We disclaim any obligation to update any forward-looking statements contained herein after the date of this Quarterly Report.

Our business could be materially adversely affected as a result of general economic and market conditions.

      We are subject to the effects of general global economic and market conditions. Our operating results were materially adversely affected in 2001 and 2002 as a result of unfavorable economic conditions. If economic and market conditions deteriorate, our business, results of operations or financial condition could be materially adversely affected.

Our business could be materially adversely affected as a result of a lessening demand in the information technology market.

      Our revenue and profitability depend on the overall demand for our products and services. Our operating results were materially adversely affected in 2001 and 2002 as a result of reduced IT spending. Recently, we have experienced an increase in demand for our products and services; however, delays or reductions in IT spending, domestically or internationally, could materially adversely affect demand for our products and services which could result in decreased revenues or earnings.

Our business could be materially adversely affected as a result of the risks associated with acquisitions and investments.

      As part of our business strategy, we seek to acquire businesses that offer complementary products, services or technologies. These acquisitions, including our acquisitions of LEGATO in October 2003, Documentum in December 2003 and VMware in January 2004, are accompanied by the risks commonly encountered in an acquisition of a business, which may include, among other things:

•  the effect of the acquisition on our financial and strategic position and reputation

•  the failure of an acquired business to further our strategies

•  the failure of the acquisition to result in expected benefits, which may include benefits relating to enhanced revenues, technology, human resources, costs savings, operating efficiencies and other synergies

•  the difficulty and cost of integrating the acquired business, including costs and delays in implementing common systems and procedures and costs and delays caused by communication difficulties or geographic distances between the two companies’ sites

•  the assumption of liabilities of the acquired business, including litigation-related liabilities

•  the potential impairment of acquired assets

•  the lack of experience in new markets, products or technologies or the initial dependence on unfamiliar supply or distribution partners

•  the diversion of our management’s attention from other business concerns

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS— (Continued)

•  the impairment of relationships with customers or suppliers of the acquired business or our customers or suppliers

•  the potential loss of key employees of the acquired company

•  the potential incompatibility of business cultures

      These factors could have a material adverse effect on our business, results of operations or financial condition. To the extent that we issue shares of our common stock or other rights to purchase our common stock in connection with any future acquisition, existing stockholders may experience dilution and our earnings per share may decrease.

      In addition to the risks commonly encountered in the acquisition of a business as described above, we may also experience risks relating to the challenges and costs of closing a transaction. Further, the risks described above may be exacerbated as a result of managing multiple acquisitions at the same time.

      We also seek to invest in businesses that offer complementary products, services or technologies. These investments are accompanied by risks similar to those encountered in an acquisition of a business.

Competitive pricing, component costs and sales volume could materially adversely affect our revenues, gross margins and earnings.

      Competitive pricing pressures exist in the information storage market. There also has been and may continue to be a willingness on the part of certain competitors to reduce prices or provide storage-related products or services, together with other IT products or services, at minimal or no additional cost in order to preserve or gain market share. We currently believe that pricing pressures are likely to continue.

      To date, we have been able to manage our component and product design costs. However, there can be no assurance that we will be able to continue to achieve reductions in component and product design costs. Moreover, certain competitors may have advantages due to vertical integration of their supply chain, which may include disk drives, microprocessors, memory components and servers.

      Our gross margins are impacted by a variety of factors, including competitive pricing, component and product design costs as well as the volume and relative mixture of product and services revenues. Increased pricing pressures, increased component costs, the relative and varying rates of increases or decreases in product price and component costs, changes in product and services revenue mixture or decreased volume could have a material adverse effect on our revenues, gross margins or earnings.

If our suppliers are not able to meet our requirements, we could have decreased revenues and earnings.

      We purchase or license many sophisticated components and products from one or a limited number of qualified suppliers, including some of our competitors. These components and products include disk drives, high density memory components, power supplies and software developed and maintained by third parties. We have experienced delivery delays from time to time because of high industry demand or the inability of some vendors to consistently meet our quality or delivery requirements. If any of our suppliers were to cancel or materially change contracts or commitments with us or fail to meet the quality or delivery requirements needed to satisfy customer orders for our products, we could lose time-sensitive customer orders, be unable to develop or sell certain products cost-effectively or on a timely basis, if at all, and have significantly decreased quarterly revenues and earnings, which would have a material adverse effect on our business, results of operations and financial condition. Additionally, we periodically transition our product line to incorporate new technologies. The importance of transitioning our customers smoothly to new technologies, along with our historically uneven pattern of quarterly sales, intensifies the risk that the failure of a supplier to meet our quality or delivery requirements will have a material adverse impact on our revenues and earnings.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS— (Continued)

We may be unable to keep pace with rapid industry, technological and market changes.

      The markets in which we compete are characterized by rapid technological change, frequent new product introductions, evolving industry standards and changing needs of customers. There can be no assurance that our existing products will be properly positioned in the market or that we will be able to introduce new or enhanced products into the market on a timely basis, or at all. We spend a considerable amount of money on research and development and introduce new products from time to time. There can be no assurance that enhancements to existing products or new products will receive customer acceptance. As competition in the IT industry increases, it may become increasingly difficult for us to maintain a technological advantage and to leverage that advantage toward increased revenues and profits.

      Risks associated with the development and introduction of new products include delays in development and changes in data storage, networking and operating system technologies which could require us to modify existing products. Risks inherent in the transition to new products include:

•  the difficulty in forecasting customer preferences or demand accurately

•  the inability to expand production capacity to meet demand for new products

•  the impact of customers’ demand for new products on the products being replaced, thereby causing a decline in sales of existing products and an excessive, obsolete supply of inventory

•  delays in initial shipments of new products.

      Further risks inherent in new product introductions include the uncertainty of price-performance relative to products of competitors, competitors’ responses to the introductions and the desire by customers to evaluate new products for extended periods of time. Our failure to introduce new or enhanced products on a timely basis, keep pace with rapid industry, technological or market changes or effectively manage the transitions to new products or new technologies could have a material adverse effect on our business, results of operations or financial condition.

The markets we serve are highly competitive and we may be unable to compete effectively.

      We compete with many companies in the markets we serve, certain of which offer a broad spectrum of IT products and services and others which offer specific information storage or management products or services. Some of these companies (whether independently or by establishing alliances) may have substantially greater financial, marketing and technological resources, larger distribution capabilities, earlier access to customers and greater opportunity to address customers’ various IT requirements than us. We compete on the basis of our products’ features, performance and price as well as our services. Our failure to compete on any of these bases could affect demand for our products or services, which could have a material adverse effect on our business, results of operations or financial condition.

      Companies may develop new technologies or products in advance of us or establish business models or technologies disruptive to us. Our business may be materially adversely affected by the announcement or introduction of new products, including hardware and software products, and services by our competitors, and the implementation of effective marketing or sales strategies by our competitors. The material adverse effect to our business could include a decrease in demand for our products and services and an increase in the length of our sales cycle due to customers taking longer to compare products and services and to complete their purchases.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS— (Continued)

We may have difficulty managing operations.

      Our future operating results will depend on our overall ability to manage operations, which includes, among other things:

•  retaining and hiring, as required, the appropriate number of qualified employees

•  enhancing, as appropriate, our infrastructure, including but not limited to, our information systems

•  accurately forecasting revenues

•  training our sales force to sell more software and services

•  successfully integrating new acquisitions

•  managing inventory levels, including minimizing excess and obsolete inventory, while maintaining sufficient inventory to meet customer demands

•  controlling expenses

•  managing our manufacturing capacity, real estate facilities and other assets

•  executing on our plans

      An unexpected decline in revenues without a corresponding and timely reduction in expenses or a failure to manage other aspects of our operations could have a material adverse effect on our business, results of operations or financial condition.

Our business could be materially adversely affected as a result of war or acts of terrorism.

      Terrorist acts or acts of war may cause damage or disruption to our employees, facilities, customers, partners, suppliers and distributors and resellers, which could have a material adverse effect on our business, results of operations or financial condition. Such conflicts may also cause damage or disruption to transportation and communication systems and to our ability to manage logistics in such an environment, including receipt of components and distribution of products.

Our business may suffer if we are unable to retain or attract key personnel.

      Our business depends to a significant extent on the continued service of senior management and other key employees, the development of additional management personnel and the hiring of new qualified employees. There can be no assurance that we will be successful in retaining existing personnel or recruiting new personnel. The loss of one or more key or other employees, our inability to attract additional qualified employees or the delay in hiring key personnel could have a material adverse effect on our business, results of operations or financial condition.

Our quarterly revenues and earnings could be materially adversely affected by uneven sales patterns and changing purchasing behaviors.

      Our quarterly sales have historically reflected an uneven pattern in which a disproportionate percentage of a quarter’s total sales occur in the last month and weeks and days of each quarter. This pattern makes prediction of revenues, earnings and working capital for each financial period especially difficult and uncertain and increases the risk of unanticipated variations in quarterly results and financial condition. We believe this uneven sales pattern is a result of many factors including:

•  the size of our product and services prices in relation to our customers’ budgets, resulting in long lead times for customers’ budgetary approval, which tends to be given late in a quarter

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS— (Continued)

•  the tendency of customers to wait until late in a quarter to commit to purchase in the hope of obtaining more favorable pricing from one or more competitors seeking their business

•  the fourth quarter influence of customers’ spending their remaining capital budget authorization prior to new budget constraints in the first six months of the following year

•  seasonal influences

      Our uneven sales pattern also makes it extremely difficult to predict near-term demand and adjust manufacturing capacity accordingly. If predicted demand is substantially greater than orders, there will be excess inventory. Alternatively, if orders substantially exceed predicted demand, the ability to assemble, test and ship orders received in the last weeks and days of each quarter may be limited, which could materially adversely affect quarterly revenues and earnings.

      In addition, our revenues in any quarter are substantially dependent on orders booked and shipped in that quarter and our backlog at any particular time is not necessarily indicative of future sales levels. This is because:

•  we assemble our products on the basis of our forecast of near-term demand and maintain inventory in advance of receipt of firm orders from customers

•  we generally ship products shortly after receipt of the order

•  customers may reschedule or cancel orders with little or no penalty

      Loss of infrastructure, due to factors such as an information systems failure, loss of public utilities or extreme weather conditions, could impact our ability to ship products in a timely manner. Delays in product shipping or an unexpected decline in revenues without a corresponding and timely slowdown in expenses, could intensify the impact of these factors on our business, results of operations and financial condition.

      In addition, unanticipated changes in our customers’ purchasing behaviors such as customers taking longer to negotiate and complete their purchases or making smaller, incremental purchases based on their current needs, also make the prediction of revenues, earnings and working capital for each financial period difficult and uncertain and increase the risk of unanticipated variations in our quarterly results and financial condition.

Risks associated with our distribution channels may materially adversely affect our financial results.

      In addition to our direct sales force, we have agreements in place with many distributors, systems integrators, resellers and original equipment manufacturers to market and sell our products and services. We may, from time to time, derive a significant percentage of our revenues from such distribution channels. Our financial results could be materially adversely affected if our contracts with channel partners were terminated, if our relationship with channel partners were to deteriorate or if the financial condition of our channel partners were to weaken. In addition, as our market opportunities change, we may have an increased reliance on channel partners, which may negatively impact our gross margins. There can be no assurance that we will be successful in maintaining or expanding these channels. If we are not successful, we may lose sales opportunities, customers and market share. Furthermore, the partial reliance on channel partners may materially reduce the visibility to our management of potential customers and demand for products and services, thereby making it more difficult to accurately forecast such demand. In addition, there can be no assurance that our channel partners will not develop, market or sell products or services in competition with us in the future.

      In addition, as we focus on new market opportunities and additional customers through our various distribution channels, including small-to-medium sized businesses, we may be required to provide different levels of service and support than we typically provided in the past. We may have difficulty managing directly

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS— (Continued)

or indirectly through our channels these different service and support requirements and may be required to incur substantial costs to provide such services which may adversely affect our business, results of operations or financial condition.

Changes in foreign conditions could impair our international operations.

      A substantial portion of our revenues is derived from sales outside the United States. In addition, a substantial portion of our products is manufactured outside of the United States. Accordingly, our future results could be materially adversely affected by a variety of factors, including changes in foreign currency exchange rates, changes in a specific country’s or region’s political or economic conditions, trade restrictions, import or export licensing requirements, the overlap of different tax structures or changes in international tax laws, changes in regulatory requirements, compliance with a variety of foreign laws and regulations and longer payment cycles in certain countries.

Undetected problems in our products could directly impair our financial results.

      If flaws in design, production, assembly or testing of our products (by us or our suppliers) were to occur, we could experience a rate of failure in our products that would result in substantial repair, replacement or service costs and potential damage to our reputation. Continued improvement in manufacturing capabilities, control of material and manufacturing quality and costs and product testing are critical factors in our future growth. There can be no assurance that our efforts to monitor, develop, modify and implement appropriate test and manufacturing processes for our products will be sufficient to permit us to avoid a rate of failure in our products that results in substantial delays in shipment, significant repair or replacement costs or potential damage to our reputation, any of which could have a material adverse effect on our business, results of operations or financial condition.

Our business could be materially adversely affected as a result of the risks associated with alliances.

      We have alliances with leading information technology companies and we plan to continue our strategy of developing key alliances in order to expand our reach into markets. There can be no assurance that we will be successful in our ongoing strategic alliances or that we will be able to find further suitable business relationships as we develop new products and strategies. Any failure to continue or expand such relationships could have a material adverse effect on our business, results of operations or financial condition.

      There can be no assurance that companies with which we have strategic alliances, certain of which have substantially greater financial, marketing or technological resources than us, will not develop or market products in competition with us in the future, discontinue their alliances with us or form alliances with our competitors.

Our business may suffer if we cannot protect our intellectual property.

      We generally rely upon patent, copyright, trademark and trade secret laws and contract rights in the United States and in other countries to establish and maintain our proprietary rights in our technology and products. However, there can be no assurance that any of our proprietary rights will not be challenged, invalidated or circumvented. In addition, the laws of certain countries do not protect our proprietary rights to the same extent as do the laws of the United States. Therefore, there can be no assurance that we will be able to adequately protect our proprietary technology against unauthorized third-party copying or use, which could adversely affect our competitive position. Further, there can be no assurance that we will be able to obtain licenses to any technology that we may require to conduct our business or that, if obtainable, such technology can be licensed at a reasonable cost.

      From time to time, we receive notices from third parties claiming infringement by our products of third-party patent or other intellectual property rights. Responding to any such claim, regardless of its merit, could

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS— (Continued)

be time-consuming, result in costly litigation, divert management’s attention and resources and cause us to incur significant expenses. In the event there is a temporary or permanent injunction entered prohibiting us from marketing or selling certain of our products or a successful claim of infringement against us requiring us to pay royalties to a third party, and we fail to develop or license a substitute technology, our business, results of operations or financial condition could be materially adversely affected.

We may become involved in litigation that may materially adversely affect us.

      In the ordinary course of business, we may become involved in litigation, administrative proceedings and governmental proceedings. Such matters can be time-consuming, divert management’s attention and resources and cause us to incur significant expenses. Furthermore, there can be no assurance that the results of any of these actions will not have a material adverse effect on our business, results of operations or financial condition.

We may have exposure to additional income tax liabilities.

      As a multinational corporation, we are subject to income taxes in both the United States and various foreign jurisdictions. Our domestic and international tax liabilities are subject to the allocation of revenues and expenses in different jurisdictions and the timing of recognizing revenues and expenses. Additionally, the amount of income taxes paid is subject to our interpretation of applicable tax laws in the jurisdictions in which we file. From time to time, we are subject to income tax audits. While we believe we have complied with all applicable income tax laws, there can be no assurance that a governing tax authority will not have a different interpretation of the law and assess us with additional taxes. Should we be assessed with additional taxes, there could be a material adverse affect on our results of operations or financial condition.

Changes in regulations could materially adversely affect us.

      Our business, results of operations or financial conditions could be materially adversely affected if laws, regulations or standards relating to us or our products are newly implemented or changed. In addition, our compliance with existing regulations, such as the Sarbanes-Oxley Act of 2002, may have a material adverse impact on us. Under Sarbanes-Oxley, we are required to evaluate and determine the effectiveness of our internal control structure and procedures for financial reporting. Compliance with this legislation may divert management’s attention and resources and cause us to incur significant expense. Should we or our independent auditors determine that we have material weaknesses in our internal controls, our results of operations or financial condition may be materially adversely affected or our stock price may decline.

Our stock price is volatile.

      Our stock price, like that of other technology companies, is subject to significant volatility because of factors such as:

•  the announcement of acquisitions, new products, services or technological innovations by us or our competitors

•  quarterly variations in our operating results

•  changes in revenue or earnings estimates by the investment community

•  speculation in the press or investment community

      In addition, our stock price is affected by general economic and market conditions and has been negatively affected by unfavorable global economic and market conditions. If such conditions deteriorate, our stock price could decline.

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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      For quantitative and qualitative disclosures about market risk affecting us, see Item 7A “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K filed with the SEC on March 2, 2004. Our exposure to market risks has not changed materially from that set forth in our Annual Report.

Item 4. CONTROLS AND PROCEDURES

      Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our principal executive officer and principal financial officer have concluded that as of such date, our disclosure controls and procedures were designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in applicable SEC rules and forms and were effective.

      Changes in Internal Control Over Financial Reporting. There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

44

PART II

OTHER INFORMATION

Item 1. Legal Proceedings

      On September 30, 2002, Hewlett-Packard Company (“HP”) filed a complaint against us in the United States Federal District Court for the Northern District of California alleging that certain of our products infringe seven HP patents. HP seeks a permanent injunction as well as unspecified monetary damages for patent infringement. We believe that HP’s claims are without merit. On July 21, 2003, we answered the complaint and filed counterclaims alleging that certain HP products infringe six EMC patents. We seek a permanent injunction as well as unspecified monetary damages for patent infringement.

      We are a party (either as plaintiff or defendant) to various other patent litigation matters, including certain matters which we assumed in connection with our acquisitions of LEGATO Systems, Inc. and VMware, Inc.

      We are a party to other litigation which we consider routine and incidental to our business. Management does not expect the results of any of these actions to have a material adverse effect on our business, results of operations or financial condition.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

ISSUER PURCHASES OF EQUITY SECURITIES IN THE THIRD QUARTER OF 2004

							Maximum Number
							(or Approximate
					Total Number of		Dollar Value) of
					Shares Purchased		Shares that May Yet
	Total Number		Average		as Part of Publicly		Be Purchased
	of Shares		Price Paid		Announced Plans		Under the Plans
Period	Purchased		per Share		or Programs(1)		or Programs
July 1, 2004 – July 31, 2004		3,000,000	$	10.91		3,000,000		208,300,700
August 1, 2004 – August 31, 2004		5,300,000	$	9.92		5,300,000		203,000,700
September 1, 2004 – September 30, 2004		2,106,000	$	10.72		2,106,000		200,894,700
Total		10,406,000	$	10.37		10,406,000		200,894,700

(1)  All shares were purchased in open-market transactions pursuant to a previously announced authorization by our Board of Directors in October 2002 to repurchase 250.0 million shares of our common stock. The repurchase program does not have a termination date. In addition, in May 2001, our Board authorized the repurchase of up to 50.0 million shares of our common stock, which shares were repurchased in 2001 and 2002.

Item 6. Exhibits

      (a) Exhibits

      See index to Exhibits on page 47 of this report.

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SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

EMC CORPORATION

Date: November 3, 2004

By:  /s/ WILLIAM J. TEUBER, JR.

William J. Teuber, Jr.

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

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EXHIBIT INDEX

3	.1	Restated Articles of Organization of EMC Corporation, as amended. (1)
3	.2	Amended and Restated By-laws of EMC Corporation (filed herewith).
4	.1	Form of Stock Certificate. (2)
10	.1	EMC Corporation 2003 Stock Plan, as amended. (3)
10	.2	Form of Indemnification Agreement for directors and executive officers (filed herewith).
10	.3	Form of Stock Option Agreement under the EMC Corporation 2003 Stock Plan (filed herewith).
10	.4	Form of Restricted Stock Agreement under the EMC Corporation 2003 Stock Plan (filed herewith).
31	.1	Certification of Principal Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31	.2	Certification of Principal Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32	.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32	.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

(1)	Incorporated by reference to EMC Corporation’s Quarterly Report on Form 10-Q filed August 9, 2001 (No. 1-9853).
(2)	Incorporated by reference to EMC Corporation’s Annual Report on Form 10-K filed March 31, 1988 (No. 0-14367).
(3)	Incorporated by reference to EMC Corporation’s Definitive Proxy Statement on Schedule 14A filed March 12, 2004 (No. 033-03656).

47 EX-3.2 2 b51937emexv3w2.htm AMENDED AND RESTATED BY-LAWS OF EMC CORPORATION

Exhibit 3.2

AMENDED AND RESTATED BYLAWS

of

EMC CORPORATION

(as amended 2-26-86, 3-10-86, 10-28-86,
1-26-87, 9-19-89, 10-16-92, 7-21-95, 7-22-98, 1-20-99, 1-19-00 and 7-28-04)

Section 1. ARTICLES OF ORGANIZATION

     The name and purposes of the corporation shall be as set forth in the articles of organization. These bylaws, the powers of the corporation and of its directors and shareholders, or of any class of shareholders if there shall be more than one class of stock, and all matters concerning the conduct and regulation of the business and affairs of the corporation shall be subject to such provisions in regard thereto, if any, as are set forth in the articles of organization as from time to time in effect.

Section 2. SHAREHOLDERS

     2.1. Annual Meeting. The annual meeting of shareholders of the corporation for the election of directors and the transaction of such other business as may properly come before the meeting shall be held on such date and at such time as shall be determined by the board of directors each year, which date and time may subsequently be changed at any time, including the year any such determination occurs.

     2.2.   Special Meetings. Except as provided in the articles of organization with respect to the ability of holders of preferred stock to call a special meeting in certain circumstances, special meetings of the shareholders may be called by the president at the direction of the chairman of the board or by a majority of the directors, and shall be called by the secretary, or in case of the death, absence, incapacity or refusal of the secretary, by any other officer, upon the written application of shareholders who hold eighty-five percent (85%) in interest of the capital stock of the corporation entitled to be voted at the proposed meeting. Such request shall state the purpose or purposes of the proposed meeting and may designate the place, date and hour of such meeting; provided, however, that no such request shall designate a date not a full business day or an hour not within normal business hours as the date or hour of such meeting.

As used in these bylaws, the expression “business day” means a day other than a day which, at a particular place, is a public holiday or a day other than a day on which banking institutions at such place are allowed or required, by law or otherwise, to remain closed.

     2.3.   Place of Meeting; Adjournment. Meetings of the shareholders may be held at the principal office of the corporation in the Commonwealth of Massachusetts, or at such places within or without the Commonwealth of Massachusetts as may be specified in the notices of such meetings; provided, that, when any meeting is convened, the chairman of the board or other presiding officer may adjourn the meeting for a period of time not to exceed 30 days if (a) no quorum is present for the transaction of business or (b) the chairman of the board or other presiding officer determines that adjournment is necessary or appropriate to enable the shareholders (i) to consider fully information which such officer determines has not been made sufficiently or timely available to shareholders or (ii) otherwise to exercise effectively their voting rights. The chairman of the board or other presiding officer in such event shall announce the adjournment and date, time and place of reconvening and shall cause notice thereof to be posted at the place of meeting designated in the notice which was sent to the shareholders, and if such date is more than 10 days after the original date of the meeting, the secretary shall give notice thereof in the manner provided in Section 2.4.

     2.4.   Notice of Meetings. A written notice of each meeting of shareholders, stating the place, date and hour and the purposes of the meeting, shall be given at least seven days before the meeting to each shareholder entitled to vote thereat and to each shareholder who, by law, by the articles of organization or by these bylaws, is entitled to notice, by leaving such notice with such shareholder or at such shareholder’s residence or usual place of business, by mailing it, postage prepaid, addressed to such shareholder at such shareholder’s address as it appears in the records of the corporation or by electronic transmission directed to such shareholder at an address given to the corporation by the shareholder or otherwise in such manner as the shareholder shall have specified to the corporation, including by facsimile transmission, electronic mail or posting on an electronic network. Such notice shall be given by the secretary or an assistant secretary or by an officer designated by the directors. Whenever notice of a meeting is required to be given to a shareholder under any provision of Chapter 156D of the Massachusetts General Laws or of the articles of organization or these bylaws, a written waiver thereof, executed before or after the meeting by such shareholder or such shareholder’s attorney thereunto authorized and filed with the records of the meeting, shall be deemed equivalent to such notice.

     No business may be transacted at a meeting of shareholders except that (a) specified in the notice thereof, or in a supplemental notice given also in compliance with the provisions hereof, (b) brought before the meeting by or at the direction of the board of directors or the presiding officer, or (c) properly brought before the meeting by or on behalf of any shareholder who shall have been a shareholder of record at the time of giving of notice provided for in this Section 2.4 and who shall continue to be entitled to vote thereat and who complies with the notice procedures set forth in this Section 2.4 or, with respect to the election of directors, Section 3.2 of these bylaws. In addition to any other applicable requirements, for business to be properly brought before a meeting by a shareholder (other than a shareholder proposal included in the corporation’s proxy statement pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as

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amended (the “Exchange Act”)), the shareholder must have given timely notice thereof in writing to the secretary of the corporation. In order to be timely given, a shareholder’s notice must be delivered to or mailed and received at the principal executive offices of the corporation (a) not less than 95 nor more than 125 days prior to the anniversary date of the immediately preceding annual meeting of shareholders of the corporation or (b) in the case of a special meeting or if the annual meeting is called for a date (including any change in a date determined by the board pursuant to Section 2.1) not within 30 days before or after such anniversary date, not later than the close of business on the 10th day following the day on which notice of the date of such meeting was mailed or public disclosure of the date of such meeting was made, whichever first occurs. Such shareholder’s notice to the secretary shall set forth as to each matter the shareholder proposes to bring before the meeting (a) a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting, (b) the name and record address of the shareholder proposing such business, (c) the class and number of shares of capital stock of the corporation held of record, owned beneficially and represented by proxy by such shareholder as of the record date for the meeting (if such date shall then have been made publicly available) and as of the date of such notice by the shareholder, and (d) all other information which would be required to be included in a proxy statement or other filings required to be filed with the Securities and Exchange Commission if, with respect to any such item of business, such shareholder were a participant in a solicitation subject to Regulation 14A under the Exchange Act (the “Proxy Rules”).

     Notwithstanding anything in these bylaws to the contrary, no business shall be conducted at any meeting of shareholders except in accordance with the procedures set forth in this Section 2.4; provided, however, that nothing in this Section 2.4 shall be deemed to preclude discussion by any shareholder of any business properly brought before such meeting.

     The chairman of the board or other presiding officer of the meeting may, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the foregoing procedures, and if such officer should so determine, such officer shall so declare to the meeting and that business shall be disregarded.

     2.5.   Quorum of Shareholders. At any meeting of shareholders, a quorum shall consist of a majority in interest of all stock issued and outstanding and entitled to vote at the meeting, except when a larger quorum is required by law, by the articles of organization or by these bylaws. Stock owned directly or indirectly by the corporation, if any, shall not be deemed outstanding for this purpose. Any meeting may be adjourned from time to time by a majority of the votes properly cast upon the question, whether or not a quorum is present, and the meeting may be held as adjourned without further notice.

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     2.6.   Action by Vote. When a quorum is present at any meeting of shareholders, a plurality of the votes properly cast for election to any office shall elect to such office, and a majority of the votes properly cast upon any question other than an election to an office shall decide the question, except when a larger vote is required by law, by the articles of organization or by these bylaws. No ballot shall be required for any election unless requested by a shareholder present or represented at the meeting and entitled to vote in the election.

     2.7.   Voting. Shareholders entitled to vote shall have one vote for each share of stock entitled to vote held by them of record according to the records of the corporation, unless otherwise provided by the articles of organization. The corporation shall not, directly or indirectly, vote any share of its own stock.

     2.8.   Action by Writing. Any action required or permitted to be taken at any meeting of shareholders may be taken without a meeting if all shareholders entitled to vote on the matter consent to the action in writing and the written consents are filed with the records of the meetings of shareholders. Such consents shall be treated for all purposes as a vote at a meeting.

     2.9.   Proxies. To the extent permitted by law, shareholders entitled to vote may vote either in person or by proxy (which proxy may be authorized in writing, by telephone or by electronic means). No proxy dated more than six months before the meeting named therein shall be valid. Unless otherwise specifically limited by their terms, such proxies shall entitle the holders thereof to vote at any adjournment of such meeting but shall not be valid after the final adjournment of such meeting.

Section 3. BOARD OF DIRECTORS

     3.1.   Number. The number of directors shall be fixed at any time or from time to time only by the affirmative vote of a majority of the directors then in office, but shall be not less than three, except that whenever there shall be only two shareholders the number of directors shall be not less than two and whenever there shall be only one shareholder there shall be at least one director; no decrease in the number of directors shall shorten the term of any incumbent director. No director need be a shareholder of the corporation.

     3.2.   Nominations for Director. Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors, except as provided in the articles of organization with respect to nominations by holders of preferred stock in certain circumstances. Nominations of persons for election to the board of directors at the annual meeting of shareholders may be made at such annual meeting (a) by or at the direction of the board of directors by any nominating committee or person appointed by the board or (b) by any shareholder of record at the time of giving of notice provided for in this Section 3.2 and who shall continue to be entitled to vote thereat and who

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complies with the notice procedures set forth in this Section 3.2. Nominations by shareholders shall be made only after giving timely notice in writing to the secretary of the corporation. In order to be timely given, a shareholder’s notice shall be delivered to or mailed and received at the principal executive offices of the corporation (a) not less than 95 nor more than 125 days prior to the anniversary date of the immediately preceding annual meeting of shareholders of the corporation or (b) if the annual meeting is called for a date (including any change in a date determined by the board pursuant to Section 2.1) not within 30 days before or after such anniversary date, not later than the close of business on the 10th day following the day on which notice of the date of the meeting was mailed or public disclosure of the date of the meeting was made, whichever first occurs. Such shareholder’s notice to the secretary shall set forth (a) as to each person whom the shareholder proposes to nominate for election or reelection as a director, (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class and number of shares of capital stock of the corporation, if any, which are beneficially owned by the person, (iv) any other information regarding the nominee as would be required to be included in a proxy statement or other filings required to be filed pursuant to the Proxy Rules, and (v) the consent of each nominee to serve as a director of the corporation if so elected; and (b) as to the shareholder giving the notice, (i) the name and record address of the shareholder, (ii) the class and number of shares of capital stock of the corporation which are beneficially owned by the shareholder as of the record date for the meeting (if such date shall then have been made publicly available) and as of the date of such notice, (iii) a representation that the shareholder intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice, (iv) a representation that the shareholder (and any party on whose behalf such shareholder is acting) is qualified at the time of giving such notice to have such individual serve as the nominee of such shareholder (and any party on whose behalf such shareholder is acting) if such individual is elected, accompanied by copies of any notifications or filings with, or orders or other actions by, and governmental authority which are required in order for such shareholder (and any party on whose behalf such shareholder is acting) to be so qualified, (v) a description of all arrangements or understandings between such shareholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by such shareholder, and (vi) such other information regarding such shareholder as would be required to be included in a proxy statement or other filings required to be filed pursuant to the Proxy Rules. The corporation may require any proposed nominee to furnish such other information as may reasonably be required by the corporation to determine the eligibility of such proposed nominee to serve as director. No person shall be eligible for election as a director unless nominated in accordance with the provisions set forth herein.

     The chairman of the board or other presiding officer of the meeting may, if the facts warrant, determine and declare to the meeting that a nomination was not

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made in accordance with the foregoing procedures, and if such officer should so determine, such officer shall so declare to the meeting and the defective nomination shall be disregarded.

     3.3.   Powers. Except as reserved to the shareholders by law, by the articles of organization or by these bylaws, the business of the corporation shall be managed by the directors who shall have and may exercise all the powers of the corporation. In particular, and without limiting the generality of the foregoing, the directors may at any time issue all or from time to time any part of the unissued capital stock of the corporation from time to time authorized under the articles of organization and may determine, subject to any requirements of law, the consideration for which stock is to be issued and the manner of allocating such consideration between capital and surplus.

     3.4   Resignation and Removal. Any director may resign at any time by delivering a resignation in writing to the president, the treasurer or the secretary or to a meeting of the directors. Such resignation shall be effective upon receipt unless specified to be effective at some other time. Any director or directors or the entire board of directors may be removed from office (a) only for Cause (as defined in Section 8.06(f)(2) of Chapter 156D of the Massachusetts General Laws) by the affirmative vote of a majority of the shares entitled to vote at an election of directors and (b) only after reasonable notice and an opportunity to be heard by the shareholders. No director resigning, and (except where a right to receive compensation shall be expressly provided in a duly authorized written agreement with the corporation) no director removed, shall have the right to any compensation as such director for any period following such director’s removal, or any right to damages on account of such removal, whether such director’s compensation be by the month or by the year or otherwise, unless in the case of a resignation, the directors, or in case of a removal, the shareholders, shall in their discretion provide for compensation.

     3.5   Vacancies. Vacancies and newly created directorships, whether resulting from an increase in the size of the board of directors, the death, resignation, disqualification or removal of a director or otherwise, shall be filled solely by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the board of directors. Any director elected in accordance with this Section 3.5 shall hold office for the remainder of the full term of the class of directors in which the vacancy occurred or the new directorship was created and until such director’s successor shall have been elected and qualified.

     3.6.   Committees. The directors may, by vote of a majority of the directors then in office, elect from their number an executive committee and other committees and delegate to any such committee or committees some or all of the power of the directors except those which by law, by the articles of organization or by these bylaws they are prohibited from delegating. Except as the directors may otherwise determine, any such committee may make rules for the conduct of its business, but unless otherwise provided by the directors or such rules, its business shall be conducted as nearly as may be in the same manner as is provided by these bylaws for the conduct of business by the directors.

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     3.7.   Regular Meetings. Regular meetings of the directors may be held without call or notice at such places and at such times as the directors may from time to time determine, provided that reasonable notice of the first regular meeting following any such determination shall be given to absent directors. A regular meeting of the directors may be held without call or notice immediately after and at the same place as the annual meeting of the shareholders.

     3.8.   Special Meetings. Special meetings of the directors may be held at any time and at any place designated in the call of the meeting, when called by the president or the treasurer or by two or more directors, or, if there be none, by the secretary or an assistant secretary, or by the officer or one of the directors calling the meeting. Each director shall be given at least two days’ notice of any special meetings or such shorter period as is reasonable under the circumstances.

     3.9.   Notice. A written notice of a meeting of the directors may be given to a director in person, by mail or express overnight courier addressed to such director at such director’s usual or last known business or residence address, or by delivering such notice by electronic transmission directed to such director at an address given to the corporation by the director or otherwise in such manner as the director shall have specified to the corporation, including by facsimile transmission, electronic mail or posting on an electronic network. Oral notice of a meeting may be given to a director in person or by telephone. Notice of a meeting need not be given to any director if a written waiver of notice, executed by such director before or after the meeting, is filed with the records of the meeting, or to any director who attends the meeting without protesting prior thereto or at its commencement the lack of notice to such director. Neither notice of a meeting nor a waiver of a notice need specify the purposes of the meeting.

     3.10.   Quorum. At any meeting of the directors a majority of the directors then in office shall constitute a quorum. Any meeting may be adjourned from time to time by a majority of the votes cast upon the question, whether or not a quorum is present, and the meeting may be held as adjourned without further notice.

     3.11.   Action by Vote. When a quorum is present at any meeting, a majority of the directors present may take any action, except when a larger vote is required by law, by the articles of organization or by these bylaws.

     3.12.   Action by Writing. Unless the articles of organization otherwise provide, any action required or permitted to be taken at any meeting of the directors, including without limitation, the approval of any transaction under Section 8.31(c) of Chapter 156D of the Massachusetts General Laws, may be taken without a meeting if all the directors consent to the action in writing and the written consents are filed with the records of the meetings of the directors. Such consents shall be treated for all purposes as a vote taken at a meeting.

     3.13. Presence Through Communications Equipment. Unless otherwise provided by law or by the articles of organization, members of the board of directors may

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participate in a meeting of such board by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time and participation by such means shall constitute presence in person at a meeting.

Section 4. OFFICERS AND AGENTS

     4.1.   Enumeration; Qualification. The officers to the corporation shall be a president, a treasurer, a secretary, and such other officers, if any, as the incorporators at their initial meeting, or the directors from time to time, may in their discretion elect or appoint. The corporation may also have such agents, if any, as the incorporators at their initial meeting, or the directors from time to time, may in their discretion appoint. Any officer may be but none need be a director or shareholder of the corporation. Any two or more offices may be held by the same person. Any officer may be required by the directors to give bond for the faithful performance of such officer’s duties to the corporation in such amount and with such sureties as the directors may determine.

     4.2.   Powers. Subject to law, to the articles of organization and to these bylaws, each officer shall have, in addition to the duties and powers herein set forth, such duties and powers as are commonly incident to such individual’s office and such duties and powers as the directors may from time to time designate.

     4.3.   Appointment. The president, the treasurer, the secretary and other officers, if any, may be appointed by the board of directors at any time.

     4.4.   Tenure. Except as otherwise provided by law, by the articles of organization or by these bylaws, each officer of the corporation shall hold office until such officer dies, resigns, is removed or becomes disqualified unless a shorter period shall have been specified by the terms of such officer’s appointment. Each agent shall retain authority as an agent at the pleasure of the directors.

     4.5   Resignation and Removal. Any officer may resign at any time by delivering a resignation in writing to the president, the treasurer or the secretary or to a meeting of the directors. Such resignation shall be effective upon receipt unless specified to be effective at some other time. The directors may remove (whether or not such individual remains in a different capacity within the corporation (either as an officer or employee)) any officer elected by them with or without cause by the vote of the majority of the directors then in office. An officer may be removed for cause only after reasonable notice and an opportunity to be heard before the directors. No officer resigning, and (except where a right to receive compensation shall be expressly provided in a duly authorized written agreement with the corporation) no officer removed, shall have the right to any compensation as such officer for any period following such removal, or any right to damages on account of such removal, whether such officer’s compensation be by the month or by the year or otherwise, unless the directors in their discretion provide for compensation.

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     4.6.   Vacancies. If the office of any officer becomes vacant, the directors may elect or appoint a successor by vote of a majority of the directors present. Each such successor shall hold office until such individual’s successor is chosen and qualified, or in each case until the successor sooner dies, resigns, is removed (whether or not such individual remains in a different capacity within the corporation (either as an officer or an employee)) or becomes disqualified.

     4.7.   Chief Executive Officer. The chief executive officer of the corporation shall be the president or such other officer as is designated by the directors and shall, subject to the control of the directors, have general charge and supervision of the business of the corporation and, except as the directors shall otherwise determine, preside at all meetings of the shareholders and of the directors. If no such designation is made, the president shall be the chief executive officer.

     4.8.   President and Vice Presidents. The president shall have the duties and powers specified in these bylaws and shall have such other duties and powers as may be determined by the directors.

     Any vice presidents shall have such duties and powers as shall be designated from time to time by the directors.

     4.9.   Treasurer and Assistant Treasurers. Except as the directors shall otherwise determine, the treasurer shall be the chief financial and accounting officer of the corporation and shall be in charge of its funds and valuable papers, books of account and accounting records, and shall have such other duties and powers as may be designated from time to time by the directors.

     Any assistant treasurers shall have such duties and powers as shall be designated from time to time by the directors.

     4.10.   Secretary and Assistant Secretarys. The secretary shall record all proceedings of the shareholders in a book or series of books to be kept therefor, which book or books shall be kept at the principal office of the corporation or at the office of its transfer agent or of its secretary and shall be open at all reasonable times to the inspection of any shareholder. In the absence of the secretary from any meeting of shareholders, an assistant secretary, or if there be none or such assistant secretary is absent, a temporary secretary chosen at the meeting, shall record the proceedings thereof in the aforesaid book. Unless a transfer agent has been appointed, the secretary shall keep or cause to be kept the stock and transfer records of the corporation, which shall contain the names and record addresses of all shareholders and the amount of stock held by each. The secretary shall keep a true record of the proceedings of all meetings of the directors and in the secretary’s absence from any such meeting an assistant secretary, or if there be none or such assistant secretary is absent, a temporary secretary chosen at the meeting, shall record the proceedings thereof. The secretary shall also have such other duties and powers as may be designated from time to time by the directors.

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     Any assistant secretarys shall have such other duties and powers as shall be designated from time to time by the directors.

     The secretary shall also serve and may be referred to as the clerk of the corporation and each assistant secretary shall also serve and may be referred to as an assistant clerk of the corporation.

Section 5. CAPITAL STOCK

     5.1.   Number and Par Value. The total number of shares and the par value, if any, of each class of stock which the corporation is authorized to issue shall be as stated in the articles of organization.

     5.2.   Stock Certificates. Each shareholder shall be entitled to a certificate stating the number and the class and the designation of the series, if any, of the shares held by such shareholder, in such form as shall, in conformity to law, be prescribed from time to time by the directors. Such certificate shall be signed by the president or a vice president and by the treasurer or an assistant treasurer. Such signatures may be facsimiles if the certificate is signed by a transfer agent, or by a registrar, other than a director, officer or employee of the corporation. In case any officer who has signed or whose facsimile signature has been placed on such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the corporation with the same effect as if such individual were such officer at the time of its issue.

     5.3.   Loss of Certificates. In the case of the alleged loss or destruction or the mutilation of a certificate of stock, a duplicate certificate may be issued in place thereof, upon such conditions as the directors may prescribe.

Section 6. TRANSFER OF SHARES OF STOCK

     6.1.   Transfer on Books. Subject to the restrictions, if any, stated or noted on the stock certificates, shares of stock may be transferred on the books of the corporation by the surrender to the corporation or its transfer agent of the certificate therefor properly endorsed or accompanied by a written assignment and power of attorney properly executed, with necessary transfer stamps affixed, and with such proof of the authenticity of signature as the directors or the transfer agent of the corporation may reasonably require. Except as may otherwise be required by law, by the articles of organization or by these bylaws, the corporation shall be entitled to treat the record holder of stock as shown on its books as the owner of such stock for all purposes, including the payment of dividends and the right to receive notice and to vote with respect thereto, regardless of any transfer, pledge or other disposition of such stock until the shares have been transferred on the books of the corporation in accordance with the requirements of these bylaws. It shall be the duty of each shareholder to notify the corporation of such shareholder’s address.

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     6.2.   Record Date and Closing Transfer Books. The directors may fix in advance a time, which shall not be more than seventy days before the date of any meeting of shareholders or the date for the payment of any dividend or making of any distribution to shareholders or the last day on which the consent or dissent of shareholders may be effectively expressed for any purpose, as the record date for determining the shareholders having the right to notice of and to vote at such meeting and any adjournment thereof or the right to receive such dividend or distribution or the right to give such consent or dissent, and in such case only shareholders of record on such record date shall have such right, notwithstanding any transfer of stock on the books of the corporation after the record date; or without fixing such record date the directors may for any of such purposes close the transfer books for all or any part of such period. If no record date is fixed and the transfer books are not closed:

     (1) The record date for determining shareholders having the right to notice of and to vote at a meeting of shareholders shall be at the close of business on the date next preceding the date on which notice is given; and

     (2) The record date for determining shareholders for any other purpose shall be at the close of business on the day on which the board of directors acts with respect thereto.

Section 7. INDEMNIFICATION OF DIRECTORS AND OFFICERS

     The corporation shall, to the extent legally permissible, indemnify each of its directors and officers (including persons who act at its request as directors, officers or trustees of another organization or in any capacity with respect to any employee benefit plan) against all liabilities and expenses, including amounts paid in satisfaction of judgments, in compromise or as fines and penalties, and counsel fees, reasonably incurred by such director or officer in connection with the defense or disposition of any action, suit or other proceeding, whether civil or criminal, in which such director or officer may be involved or with which such director or officer may be threatened, while in office or thereafter, by reason of such individual being or having been such a director or officer, except with respect to any matter as to which such director or officer shall have been adjudicated in any proceeding not to have acted in good faith in the reasonable belief that such individual’s action was in the best interests of the corporation (any person serving another organization in one or more of the indicated capacities at the request of the corporation who shall have acted in good faith in the reasonable belief that such individual’s action was in the best interests of such other organization to be deemed as having acted in such manner with respect to the corporation) or, to the extent that such matter relates to service with respect to any employee benefit plan, in the best interests of the participants or beneficiaries of such employee benefit plan; provided, however, that as to any matter disposed of by a compromise payment by such director or officer, pursuant to a consent decree or otherwise, no indemnification either for said payment or for any other expenses shall be provided unless such compromise shall be approved as in the best interests of the corporation, after notice that it involves such indemnification: (a) by a disinterested majority of the directors then in office; or (b) by a majority of the

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disinterested directors then in office, provided that there has been obtained an opinion in writing of independent legal counsel to the effect that such director or officer appears to have acted in good faith in the reasonable belief that such individual’s action was in the best interests of the corporation; or (c) by the holders of a majority of the outstanding stock at the time entitled to vote for directors, voting as a single class, exclusive of any stock owned by any interested director or officer. Expenses, including counsel fees, reasonably incurred by any director or officer in connection with the defense or disposition of any such action, suit or other proceeding may be paid from time to time by the corporation in advance of the final disposition thereof upon receipt of an undertaking by such director or officer to repay to the corporation the amounts so paid by the corporation if it is ultimately determined that indemnification for such expenses is not authorized under this Section 7. The right of indemnification hereby provided shall not be exclusive of or affect any other rights to which any director or officer may be entitled. As used in this Section, the terms, “director” and “officer” include their respective heirs, executors and administrators, and an “interested” director or officer is one against whom in such capacity the proceedings in question or another proceeding on the same or similar grounds is then pending. Nothing contained in this Section shall affect any rights to indemnification to which corporate personnel other than directors or officers may be entitled by contract or otherwise under law.

Section 8. CORPORATE SEAL

     The seal of the corporation shall, subject to alteration by the directors, consist of a flat-faced circular die with the word “Massachusetts”, together with the name of the corporation and the year of its organization, cut or engraved thereon.

Section 9. EXECUTION OF PAPERS

     Except as the directors may generally or in particular cases authorize the execution thereof in some other manner, all deeds, leases, transfers, contracts, bonds, notes, checks, drafts and other obligations made, accepted or endorsed by the corporation shall be signed by the president or by one of the vice presidents or by the treasurer.

Section 10. FISCAL YEAR

     The fiscal year of the corporation shall end on December 31.

Section 11. AMENDMENTS

     These bylaws may be altered, amended or repealed at any annual or special meeting of the shareholders called for the purpose, of which the notice shall specify the subject matter of the proposed alteration, amendment or repeal or the sections to be affected thereby, by vote of the shareholders. These bylaws may also be altered,

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amended or repealed by vote of a majority of the directors then in office, except that the directors shall not take any action which provides for indemnification of directors nor any action to amend this Section 11, and except that the directors shall not take any action unless permitted by law.

     Any bylaw so altered, amended or repealed by the directors may be further altered or amended or reinstated by the shareholders in the above manner.

Section 12. MASSACHUSETTS CONTROL SHARE ACQUISITIONS ACT

     The provisions of Chapter 110D shall not apply to control share acquisitions of the corporation.

     If the provisions of Chapter 110D shall become applicable to control share acquisitions of the corporation through amendment of these bylaws or otherwise, the following provisions shall apply:

(a)	The corporation is authorized to redeem shares acquired in a control share acquisition to the extent and in accordance with the procedures specified in Section 6 of Chapter 110D and in this Section.
(b)	The additional procedures for redemption specified in this Section are as follows:

(i)	Fair value shall be determined by the board of directors or a committee of the board of directors of the corporation, and the amount so determined shall be included in the notice of redemption given by the corporation pursuant to Section 6 of Chapter 110D.
(ii)	The person whose shares are being redeemed (the “Holder”) may within ten days after the date of the notice of redemption advise the corporation in writing that the Holder believes that the value so determined is not fair, and in such event the corporation shall, within the 30-day period following its receipt of the Holder’s notice, permit the Holder to submit such written and oral evidence of value as the Holder may wish and the board of directors or committee considers appropriate. The board of directors or committee shall affirm or revise its determination of fair value within fifteen days after the completion of the 30-day period, and shall promptly advise the Holder in writing of its decision.
(iii)	The notice of redemption shall specify a redemption date, which shall be 30 days after the date of the notice (or the first business day after the 30-day period), and a redemption office, which shall be the principal office of the corporation or an office of a commercial bank

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	specified by the corporation in the notice. The redemption date so fixed shall not be deferred by a request of the Holder for a redetermination of fair value. The Holder shall cause the certificate or certificates representing the shares being redeemed to be delivered to the redemption office not later than the redemption date, duly endorsed or assigned for transfer, with signature guaranteed, if such an endorsement or assignment is required in the notice of redemption.
(iv)	The certificate or certificates representing the shares being redeemed having been deposited in accordance with item (iii) above, the redemption price shall be paid by the corporation on the redemption date specified in its notice of redemption or such later date as the redemption price may be determined if the Holder has duly requested a redetermination of fair value.
(v)	Notice of redemption having been given, from and after the redemption date the shares being redeemed shall no longer be deemed to be outstanding, and all rights of the holder or holders thereof as a shareholder or shareholders of the corporation shall cease, except the right to receive the redemption price. If the corporation shall default in payment of the redemption price, interest shall accrue thereon from the date of default at the base or prime rate of the corporation’s principal lending bank or if none, the base or prime rate of Fleet Bank or its successor, as in effect from time to time during the period of default.
(vi)	Notice given by the corporation by first class mail or delivered in person on the basis of a good faith determination by the corporation of the identity and address of the person who had made a control share acquisition shall be deemed to have been duly given.
(vii)	Any person who makes a control share acquisition of the corporation shall be deemed to have consented to and shall be bound by the provisions of this Section and shall indemnify and hold the corporation harmless from and against any damage, loss or expense which the corporation may suffer as a result of any non-compliance with the provisions of this Section.

     References in this Section to Chapter 110D mean Chapter 110D of the Massachusetts General Laws as in effect from time to time.

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Section 13. MASSACHUSETTS BUSINESS COMBINATION ACT

     The provisions of Chapter 110F of the Massachusetts General Laws shall not apply to “business combinations” (as defined therein) involving the corporation.

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EX-3.2

exv3w2

EX-10.2

Exhibit 10.2

INDEMNIFICATION AGREEMENT

         AGREEMENT effective as of [DATE] (the “Effective Date”), between EMC Corporation, a Massachusetts corporation (the “Company”), and [NAME] (the “Indemnitee”).

         WHEREAS, it is essential to the Company to retain and attract as directors and officers the most capable persons available; and

         WHEREAS, the Indemnitee is a director or officer of the Company; and

         WHEREAS, both the Company and the Indemnitee recognize the increased risk of litigation and other claims being asserted against directors and officers of public companies in today’s environment; and

         WHEREAS, as of the Effective Date the Company is subject to the provisions of the new Massachusetts Business Corporation Act (the “Act”); and

         WHEREAS, in recognition of the Indemnitee’s need for substantial protection against personal liability in order to enhance the Indemnitee’s continued service to the Company in an effective manner, and in part to provide the Indemnitee with specific contractual assurance that all protections permitted by the Act will be available to the Indemnitee, the Company wishes to provide in this Agreement for the indemnification of and the advancing of expenses to the Indemnitee to the fullest extent (whether partial or complete) permitted by law and as set forth in this Agreement; and

         WHEREAS, the Board of Directors of the Company wishes to provide the Indemnitee with rights to indemnification to the fullest extent permitted by the Act and as set forth in this Agreement and has approved this agreement for the purposes of the Act, including for the purpose of obligating the Company in advance of any act or omission giving rise to a proceeding to provide indemnification;

         NOW, THEREFORE, in consideration of the premises and of the Indemnitee continuing to serve the Company directly or, at its request, another enterprise, and intending to be legally bound hereby, the parties hereto agree as follows:

     1.    Basic Indemnification Arrangement.

         (a)    In accordance with the provisions of the Act, the Company shall, to the extent legally permissible, indemnify the Indemnitee against all liabilities and expenses, including amounts paid in satisfaction of judgments, in compromise or as fines and penalties, and attorneys’ fees or other costs paid or incurred by the Indemnitee in connection with the defense or disposition of any threatened, pending or completed action, suit or other proceeding, whether civil,

criminal, administrative, arbitrative or investigative and whether formal or informal, in which the Indemnitee may be involved or with which the Indemnitee was, is or is threatened to be made, while in office or thereafter, a defendant or respondent by reason of the Indemnitee being or having been a director of the Company.

         (b)    If so requested by the Indemnitee, the Company shall advance (within five business days of such request) any and all expenses, including attorneys’ fees or other costs, paid or incurred by the Indemnitee in connection with the defense or disposition of any such action, suit or other proceeding (“Expenses”), to the Indemnitee (an “Expense Advance”) upon receipt by the Company of (i) a written affirmation of the Indemnitee’s good faith belief that he has met the relevant standard of conduct described in the Act or any successor provision of Massachusetts law or that the proceeding involves conduct for which liability has been eliminated under a provision of the Company’s restated articles of organization, as amended, as authorized by the Act or any successor provision of Massachusetts law, and (ii) a written undertaking by the Indemnitee to repay the Expense Advance if it is ultimately determined that the Indemnitee is not entitled to indemnification in accordance with the provisions of the Act or any successor thereto.

     2.    Other Expenses. The Company shall be liable to and shall pay the Indemnitee for any and all expenses (including attorneys’ fees) which are incurred by the Indemnitee in connection with any action brought by the Indemnitee for (i) indemnification or advance payment of Expenses by the Company under this Agreement or any other agreement or Company By-law now or hereafter in effect relating to indemnification and/or (ii) recovery under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether the Indemnitee ultimately is determined to be entitled to such indemnification, advance expense payment or insurance recovery, as the case may be. If requested by the Indemnitee, the Company shall promptly advance (but in no event more than five business days after receiving such request) any such expenses to the Indemnitee.

     3.    Partial Indemnity, Etc. If the Indemnitee is entitled under any provision of this Agreement to indemnification or payment by the Company for some or a portion of the Expenses, judgments, fines, penalties and amounts paid in settlement of any threatened, pending or completed action, suit or proceeding but not, however, for all of the total amount thereof, the Company shall nevertheless indemnify or pay the Indemnitee for the portion thereof to which the Indemnitee is entitled.

     4.    Nonexclusivity, Etc. The rights of the Indemnitee hereunder shall be in addition to any other rights the Indemnitee may have under the Company’s By-Laws or the Act or otherwise. To the extent that a change in the Act (whether by statute or judicial decision) permits greater indemnification by agreement than would be afforded currently under the Company’s By-Laws or this Agreement, it is the intent of the parties hereto that the Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change.

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     5.    Liability Insurance. To the extent the Company maintains an insurance policy or policies providing directors’ and officers’ liability insurance, the Indemnitee shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any Company director or officer.

     6.    Amendments, Etc. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

     7.    Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights.

     8.    No Duplication of Payments. The Company shall not be liable under this Agreement to make any payment in connection with any claim made against the Indemnitee in connection with any threatened, pending or completed action, suit or proceeding to the extent the Indemnitee has otherwise actually received payment (under any insurance policy, By-law or otherwise) of the amounts otherwise indemnifiable hereunder.

     9.    Notice. All notices, requests, consents or other communications under this Agreement shall be delivered by hand or sent by registered or certified mail, return receipt requested, or by overnight prepaid courier, or by facsimile (receipt confirmed) to:

if to the Company:	EMC Corporation 176 South Street Hopkinton, MA 01748 Attention: Office of the General Counsel Facsimile: (508) 497-6915
if to the Indemnitee:	[NAME ADDRESS]

All such notices, requests, consents and other communications shall be deemed to have been duly delivered and received three (3) days following the date on which mailed, or one (1) day following the date mailed if sent by overnight courier, or on the date on which delivery by hand or by facsimile transmission.

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     10.    Binding Effect, Etc. This Agreement shall be effective as of the Effective Date and shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors, assigns, including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company, spouses, heirs, executors and personal and legal representatives. This Agreement shall continue in effect regardless of whether the Indemnitee continues to serve as an officer or director of the Company or of any other enterprise at the Company’s request.

     11.    Severability. The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable in any respect, and the validity and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired and shall remain enforceable to the fullest extent permitted by law.

     12.    Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the Commonwealth of Massachusetts applicable to contracts made and to be performed in such state without giving effect to the principles of conflicts of laws.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written.

EMC CORPORATION
By:
	Name:
	Title:
[NAME]

5

EX-10.3

Exhibit 10.3

Grant
Date Grant
Number Grant Type Grant
Price Shares Granted Days Left to Accept

[Form of]

EMC CORPORATION
2003 Stock Plan
Stock Option Agreement

1. Grant of Option

EMC Corporation, a Massachusetts corporation (the “Company”), hereby grants to you (the “Participant”) on the grant date referenced above (the “Grant Date”) an option (the “Option”) to purchase the number of shares of the Company’s common stock referenced under “Shares Granted” above (the “Shares”) at the option exercise price per Share referenced under “Grant Price” above, which is not less than the fair market value of the Shares on the Grant Date. The Option is made pursuant to and is subject to the provisions of this Stock Option Agreement and the Company’s 2003 Stock Plan, as amended from time to time (the “Plan”). The final exercise date of the Option is the expiration date which shall be the tenth (10th) anniversary of the Grant Date (the “Expiration Date”). If the Option is designated as an “ISO” under “Grant Type” above, it is intended that the Option shall be an incentive stock option to the maximum extent possible under Section 422(a) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). If the Option is designated as a “NQO” under “Grant Type” above, it is intended that the Option shall be a non-statutory stock option under Section 422(a) of the Code. Capitalized terms used but not defined in this Stock Option Agreement shall have the meanings ascribed to them in the Plan. You must accept this Stock Option Agreement, without amendment, within the acceptance period referenced under “Days Left to Accept” above.

     The Option is exercisable prior to the Expiration Date as follows:
Note: the Option generally will become exercisable on certain specified dates determined by the Committee; for certain Options, in certain circumstances, the Option will become exercisable upon the achievement of certain goals determined by the Committee. See (a) below for examples of vesting terms. With each example, there may be multiple vesting dates, goals and portions of Shares subject to vesting.

[(a)	On or after [date], you will be entitled to purchase [                 ] of the Shares subject to the Option.] [May have multiple vesting dates and portions of Shares subject to vesting]
[(a)	If [goal] is achieved by [date], then you will be entitled to purchase [                 ] of the Shares on or after the date of the Committee’s determination that such Shares shall become exercisable.] [May have multiple goals and portions of Shares subject to vesting]
[(a)	On or after [date] (the “Cliff Vesting Date”), you will be entitled to purchase any and all Shares subject to the Option. Shares subject to the Option may become exercisable prior to the Cliff Vesting Date as follows:

• If [goal] is achieved by [date], then you will be entitled to purchase [                 ] of the Shares on or after the date of the Committee’s determination that such Shares shall become exercisable.] [May have multiple goals and portions of Shares subject to vesting]

(b) The Option may not be exercised to any extent after the Expiration Date.

2.

Exercise of Option

The Option may be exercised by delivery of a written election to exercise to the Company and payment in full of the aggregate option exercise price in accordance with the provisions of the Plan, or in such other manner as the Company may otherwise from time to time permit. Each election to exercise the Option in whole or in part shall be in writing, signed by the Participant or by his or her executor, administrator or the person(s) to whom the Option is transferred by will or applicable laws of descent and distribution (the “Legal Representative”), and received by the Company at its principal office, accompanied by this Stock Option Agreement, and payment in full of the aggregate option exercise price in accordance with the provisions of the Plan. The option exercise price may be paid by delivery of cash, certified check, bank draft or money order. In the event that the Option is exercised by such Legal Representative, the Company shall be under no obligation to deliver Shares hereunder unless and until the Company is satisfied as to the authority of the

person(s) exercising the Option. To the extent the Company is required to withhold any taxes with respect to the exercise of the Option, the Participant or the Legal Representative, as the case may be, shall remit to the Company, or its agent, a check in the amount of all such taxes.

3.	Termination of Participant’s Service Relationship
	If the Participant’s Service Relationship terminates by reason of death or Disability, then Section 6.6.1 or Section 6.6.2, respectively, of the Plan shall apply. If (a) the Participant’s Service Relationship terminates by reason of Retirement and (b) the Participant has previously given written notice of his or her decision to retire from the Company and proposed date of Retirement to each of his or her immediate manager and the Senior Vice President, Human Resources, at least six (6) months prior to such date of Retirement (or such shorter period as may be agreed upon in writing by his or her immediate manager and the Senior Vice President, Human Resources), then Section 6.6.3 of the Plan shall apply. If the Participant’s Service Relationship terminates by reason of Retirement but the Participant failed to give the appropriate notice thereof pursuant to this Section 3, or if the Participant’s Service Relationship terminates for any other reason, then Section 6.6.4 of the Plan shall apply.
4.	Notice of Disposition
	The person exercising the Option shall notify the Company when he or she makes any disposition of the Shares acquired upon exercise of the Option, whether by sale, gift or otherwise.
5.	Application of Stock Transfer Agreement
	If, at the time the Option is exercised, the Company is a party to any agreement restricting the transfer of any outstanding shares of its Common Stock, the Option may be exercised only if the Shares acquired upon such exercise are made subject to the transfer restrictions set forth in that agreement or, if more than one such agreement is then in effect, the agreement specified by the Committee.
6.	Tax Assessments
	Participant acknowledges and agrees that he or she is solely responsible for any and all taxes that may be assessed by any taxing authority in the United States or any other jurisdiction arising out of the grant or the exercise of the Option and that the Company or any Company subsidiary is not liable for any such assessments.
7.	Agreement to Provide Security
	If, at the time the Option is exercised, the Committee determines that under applicable law and regulations the Company or any Company subsidiary could be liable for the withholding of any income or social taxes with respect to any Shares acquired upon exercise or disposition of the Option, the Option may not be exercised unless the person exercising the Option gives such security as the Committee deems adequate to meet the potential liability of the Company or such Company subsidiary for the withholding of tax and agrees to augment such security from time to time in an amount reasonably determined by the Committee to preserve the adequacy of such security.
8.	Non-transferability of Option
	The Option is not transferable by the Participant except by will or the laws of descent and distribution, and is exercisable during the Participant’s lifetime only by the Participant, in accordance with the terms and provisions of the Plan.
9.	Provisions of the Plan
	This Stock Option Agreement and the Option are subject to the provisions of the Plan, a copy of which is furnished to the Participant herewith.

Acceptance, Acknowledgment and Receipt

By accepting this Stock Option Agreement, I, the Participant, hereby:

• accept and acknowledge receipt of the Option granted on the Grant Date, which has been issued to me under the terms and conditions of the Plan;

• acknowledge and confirm my consent to the collection, use and transfer, in electronic or other form, of personal information about me, including, without limitation, my name, home address and telephone number, date of birth, social security number or other identification number, and details of all my stock awards and shares held and transactions related thereto, by the Company and its subsidiaries, affiliates and agents for the purpose of implementing, administrating and managing my participation in the Company’s stock plans, and further understand and agree that my personal information may be transferred to third parties assisting in the implementation, administration and management of the Company’s stock plans, that any recipient may be located in my country or elsewhere, and that such recipient’s country may have different data privacy laws and protections than my country;

• acknowledge and confirm my consent to receive electronically this Stock Option Agreement, the Plan and the related Plan Description and any other Plan documents that the Company is required to deliver;

• acknowledge that a copy of the Plan and the related Plan Description is posted in the [     ] section of [website] and in the [     ] section of [intranet site];

• acknowledge receipt of a copy of the Plan and the related Plan Description and agree to be bound by the terms and conditions of this Stock Option Agreement and the Plan (including, but not limited to, Section 6.7 — Cancellation and Rescission of Awards), as amended from time to time;

• understand that neither the Plan nor this Stock Option Agreement gives me any right to any Service Relationship with the Company or any Company subsidiary, as the case may be, and that the Option is not part of my normal or expected compensation; and

• understand and acknowledge that the grant of the Option is expressly conditioned on my adherence to the terms of the Key Employment Agreement with the Company.

EX-10.4

Exhibit 10.4

Grant
Date Grant
Number Shares Granted

Participant:
Employee ID Number:

[Form of]

EMC CORPORATION
2003 Stock Plan
Restricted Stock Agreement

1.	Grant of Restricted Stock
	EMC Corporation, a Massachusetts corporation (the “Company”), hereby grants to you (the “Participant”), on the grant date referenced above (the “Grant Date”), a restricted stock award (the “Award”) with respect to the number of shares of the Company’s common stock referenced under “Shares Granted” above (the “Shares”). The Award is made pursuant to and is subject to the provisions of this Restricted Stock Agreement and the Company’s 2003 Stock Plan, as amended from time to time (the “Plan”). Capitalized terms used but not defined in this Restricted Stock Agreement shall have the meanings ascribed to them in the Plan. You must sign and accept this Restricted Stock Agreement, without amendment, and return it within thirty (30) days of the Grant Date to [                                         ], Stock Option Administrator – EMC Corporation – 176 South Street, Hopkinton, MA 01748. If you fail to do so, this Award shall be cancelled and terminated effective as of the Grant Date.
2.	Shares
	The Participant’s rights to the Shares are subject to the restrictions described in this Restricted Stock Agreement and the Plan, in addition to such restrictions, if any, as may be imposed by law.
3.	Transfer and Forfeiture Restrictions
	The Shares are subject to certain restrictions on transfer and forfeiture, as described below. These restrictions are referred to in this Restricted Stock Agreement as the “Transfer and Forfeiture Restrictions.” The Transfer and Forfeiture Restrictions lapse with respect to Shares as set forth in Section 4 below and the applicable provisions of the Plan. Shares no longer subject to the Transfer and Forfeiture Restrictions are referred to in this Restricted Stock Agreement as “Vested Shares” and Shares subject to the restrictions are referred to in this Restricted Stock Agreement as “Unvested Shares.”

(a)

No Unvested Shares may be sold, assigned, transferred, pledged or otherwise disposed of except as provided in this Restricted Stock Agreement and in the Plan. Any attempt to dispose of any Shares in contravention of this Restricted Stock Agreement or the Plan shall be null and void and without effect.

(b)

In the event that the Participant’s Service Relationship terminates for any reason then, except as otherwise provided in the Plan or this Restricted Stock Agreement with respect to termination by reason of death, Disability or Retirement, all Unvested Shares shall be automatically and immediately forfeited and returned to the Company. The Participant hereby (i) appoints the Company as the attorney-in-fact of the Participant to take such actions as may be necessary or appropriate to effectuate a transfer of the record ownership of any such Shares that are forfeited hereunder, (ii) agrees to deliver to the Company, as a precondition to the issuance of any certificate or certificates with respect to Shares hereunder, one or more stock powers, endorsed in blank, with respect to the Shares, and (iii) agrees to sign such other powers and take such other actions as the Company may reasonably request to accomplish the transfer or forfeiture of any Shares that are forfeited hereunder.

4.	Lapse of the Transfer and Forfeiture Restrictions
	The Transfer and Forfeiture Restrictions shall lapse in accordance with this Section 4 and the applicable provisions of the Plan as follows:

Note: the Transfer and Forfeiture Restrictions generally will lapse on certain specified dates determined by the Committee; for certain Awards, in certain circumstances, the Transfer and Forfeiture Restrictions will lapse upon the achievement of certain goals determined by the Committee. See (a) below for examples of vesting terms. With each example, there may be multiple vesting dates, goals and portions of Shares subject to vesting.

[(a)	On [date], the Transfer and Forfeiture Restrictions with respect to [                 ] of the Shares shall lapse and all such Shares shall constitute Vested Shares.] [May have multiple vesting dates and portions of Shares subject to vesting]
[(a)	If [goal] is achieved by [date], then upon the Committee’s determination in accordance with Section 4(b) below, the Transfer and Forfeiture Restrictions with respect to [                 ] of the Shares shall lapse and such Shares shall constitute Vested Shares.] [May have multiple goals and portions of Shares subject to vesting]
[(a)	On [date] (the “Cliff Vesting Date”), the Transfer and Forfeiture Restrictions with respect to any and all Shares that have not lapsed earlier pursuant to this Section 4(a)(i) shall lapse and all such Shares shall constitute Vested Shares.

(i) The Transfer and Forfeiture Restrictions with respect to the Shares shall lapse and the Shares shall become Vested Shares prior to the Cliff Vesting Date as follows:

• If [goal] is achieved by [date], then upon the Committee’s determination in accordance with Section 4(b) below, the Transfer and Forfeiture Restrictions with respect to [                 ] of the Shares shall lapse and such Shares shall constitute Vested Shares.] [May have multiple goals and portions of Shares subject to vesting]

(b)	All determinations regarding [the achievement of any goals and] the lapse of the Transfer and Forfeiture Restrictions on any Shares, shall be made by the Committee, in its sole discretion. None of the Transfer and Forfeiture Restrictions shall lapse with respect to any Shares in accordance with Section 4(a) above, unless the Committee, in its sole discretion, shall so determine.
(c)	Except as otherwise provided in the Plan or this Restricted Stock Agreement with respect to termination of the Participant’s Service Relationship by reason of death, Disability or Retirement, none of the Transfer and Forfeiture Restrictions shall lapse with respect to any Shares on any date specified above unless the Participant’s Service Relationship is then in effect.

5.	Termination of Participant’s Service Relationship by Reason of Retirement
	In the event that (a) the Participant’s Service Relationship terminates by reason of Retirement, (b) the Participant has previously given written notice of his or her decision to retire from the Company and proposed date of Retirement to each of his or her immediate manager and the Senior Vice President, Human Resources, at least six (6) months prior to such date of Retirement (or such shorter period as may be agreed upon in writing by his or her immediate manager and the Senior Vice President, Human Resources), [and (c) the date of termination occurs after [date] and/or the [goal] has been achieved]], then this Award shall be treated in the manner set forth in Section 6.6.3 of the Plan. In the event that the Participant’s Service Relationship terminates by reason of Retirement and neither the conditions set forth in (b) nor (c) are met, then this Award shall be treated in the manner set forth in Section 6.6.4 of the Plan.
	Note: the Committee may require one or more conditions set forth in (c) be met in order for this Award to be treated in the manner set forth in Section 6.6.3 of the Plan upon the Participant’s Retirement. See (c) above for examples of such conditions.
6.	Stock Certificates
	In its sole discretion, the Company may require that any certificates representing Unvested Shares be held by the Company. Any such certificates shall contain a legend substantially in the following form:

THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE) OF THE EMC CORPORATION 2003 STOCK PLAN, AS AMENDED, AND A RESTRICTED STOCK AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER AND EMC CORPORATION. COPIES OF SUCH PLAN AND AGREEMENT ARE ON FILE IN THE OFFICES OF EMC CORPORATION.

If any Unvested Shares are held in book-entry form, the Company may take such steps as it deems necessary or appropriate to record and manifest the restrictions applicable to such Shares, including the provision of stop transfer instructions to the depository.

Following the lapse of the Transfer and Forfeiture Restrictions with respect to any Shares, the Company shall either cause a certificate or certificates representing such Vested Shares, without the aforesaid legend, to be issued and delivered to the Participant or the Participant’s account to be credited with such Vested Shares.

7.	Rights as a Stockholder
	The Participant shall be entitled to (a) receive any and all dividends or other distributions paid with respect to the Shares, whether Vested or Unvested Shares, of which he or she is the record owner on the record date for such dividend or other distribution, and (b) vote any Shares, whether Vested or Unvested Shares, of which he or she is the record owner on the record date for such vote; provided, however, that any property (other than cash) distributed with respect to a Share (the “associated share”) acquired hereunder, including without limitation a distribution of the Company’s common stock by reason of a stock dividend, stock split or otherwise, or a distribution of other securities with respect to an associated share, shall be subject to the restrictions of this Restricted Stock Agreement in the same manner and for so long as the associated share remains subject to such restrictions, and shall be promptly forfeited if and when the associated share is so forfeited; and further provided, that the Committee may require that any cash distribution with respect to the Shares other than a normal cash dividend be placed in escrow or otherwise made subject to such restrictions as the Committee deems appropriate to carry out the intent of this Restricted Stock Agreement and the Plan. References in this Restricted Stock Agreement to the Shares shall include any such restricted amounts.
8.	Taxes
	The Participant acknowledges and agrees that he or she is solely responsible for any and all taxes that may be assessed by any taxing authority in the United States or any other jurisdiction arising in any way out of the Award or the Shares and that neither the Company nor any Company subsidiary is liable for any such assessments. The grant of the Award and the vesting of the Shares, and the payment of dividends with respect to the Shares, may give rise to taxable income subject to withholding. The Participant expressly acknowledges and agrees that his or her rights hereunder are subject to the Participant promptly paying to the Company in cash (or by such other means as may be acceptable to the Company in its discretion, including, if the Company so determines, by the delivery of previously acquired shares of the Company’s common stock held for at least six months or Shares acquired hereunder or by the withholding of amounts from any payment hereunder) all taxes required to be withheld in connection with such grant, vesting or payment. Notwithstanding the foregoing, if the Committee determines that under applicable law and regulations the Company or any Company subsidiary could be liable for the withholding of any income or social taxes with respect to the foregoing, the Company may withhold Shares to be delivered to the Participant unless the Participant gives such security as the Committee deems adequate to meet the potential liability of the Company or such Company subsidiary for the withholding of tax and agrees to augment such security from time to time in an amount reasonably determined by the Committee to preserve the adequacy of such security.
9.	Section 83(b) Election
	The Participant acknowledges and agrees that he or she is aware of and understands the tax consequences to him or her of the Award. Without limiting the foregoing, the Participant acknowledges and agrees that he or she has been advised to confer promptly with a professional tax advisor to consider whether the Participant should make a so-called “83(b) election” with respect to the Shares. Any such election, to be effective, must be made in accordance with applicable regulations and within thirty (30) days following the Grant Date. The Participant acknowledges and agrees that the Company has made no recommendation to the Participant with respect to the advisability of making such an election.
10.	Non-transferability of Award
	The Award is not transferable by the Participant except by will or the laws of descent and distribution.
11.	Provisions of the Plan
	This Restricted Stock Agreement and the Award are subject to the provisions of the Plan, a copy of which has been furnished to the Participant herewith.
12.	Entire Agreement

This Restricted Stock Agreement (including the documents referred to herein) constitutes the entire agreement with respect to the Award and supersedes all prior agreements and understandings, whether oral or written, between the Participant and the Company with respect to the foregoing.

Acceptance, Acknowledgment and Receipt
By accepting this Restricted Stock Agreement, I, the Participant, hereby:

• accept and acknowledge receipt of the Award granted on the Grant Date, which has been issued to me under the terms and conditions of the Plan;

• acknowledge and confirm my consent to the collection, use and transfer, in electronic or other form, of personal information about me, including, without limitation, my name, home address and telephone number, date of birth, social security number or other identification number, and details of all my stock awards and shares held and transactions related thereto, by the Company and its subsidiaries, affiliates and agents for the purpose of implementing, administrating and managing my participation in the Company’s stock plans, and further understand and agree that my personal information may be transferred to third parties assisting in the implementation, administration and management of the Company’s stock plans, that any recipient may be located in my country or elsewhere, and that such recipient’s country may have different data privacy laws and protections than my country;

• acknowledge receipt of a copy of the Plan and the related Plan Description and agree to be bound by the terms and conditions of this Restricted Stock Agreement and the Plan (including, but not limited to, Section 6.7 – Cancellation and Rescission of Awards), as amended from time to time;

• understand that neither the Plan nor this Restricted Stock Agreement gives me any right to any Service Relationship with the Company or any Company subsidiary, as the case may be, and that the Award is not part of my normal or expected compensation; and

• understand and acknowledge that the grant of the Award is expressly conditioned on my adherence to, and agreement to the terms of, the Key Employment Agreement with the Company.

EX-31.1

Exhibit 31.1

PRINCIPAL EXECUTIVE OFFICER CERTIFICATION

     I, Joseph M. Tucci, President and Chief Executive Officer of EMC Corporation (the “Registrant”), certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of the Registrant;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4.	The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	[Paragraph omitted in accordance with SEC transition instructions]
c)	Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: November 3, 2004	/s/ Joseph M. Tucci
	Joseph M. Tucci
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

PRINCIPAL FINANCIAL OFFICER CERTIFICATION

     I, William J. Teuber, Jr., Executive Vice President and Chief Financial Officer of EMC Corporation (the “Registrant”), certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of the Registrant;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4.	The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	[Paragraph omitted in accordance with SEC transition instructions]
c)	Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: November 3, 2004	/s/ William J. Teuber, Jr.
	William J. Teuber, Jr.
	Executive Vice President and
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     I, Joseph M. Tucci, President and Chief Executive Officer of EMC Corporation (the “Company”), certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)	The Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Joseph M. Tucci

Joseph M. Tucci

President and Chief Executive Officer

November 3, 2004

This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section. This certification shall not be deemed incorporated by reference in any filing under the Securities Act or Exchange Act, except to the extent that the Company specifically incorporates it by reference.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     I, William J. Teuber, Jr., Executive Vice President and Chief Financial Officer of EMC Corporation (the “Company”), certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)	The Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ William J. Teuber, Jr.

William J. Teuber, Jr.

Executive Vice President and

Chief Financial Officer

November 3, 2004

This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section. This certification shall not be deemed incorporated by reference in any filing under the Securities Act or Exchange Act, except to the extent that the Company specifically incorporates it by reference.