8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): January 23, 2007

EMC CORPORATION

(Exact Name of Registrant as Specified in Charter)

Massachusetts	1-9853	No. 04-2680009
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

176 South Street, Hopkinton, MA	01748
(Address of Principal Executive Offices)	(Zip code)

Registrant’s telephone number, including area code: (508) 435-1000

N/A

(Former Name or Former Address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On January 23, 2007, EMC Corporation (“EMC”) issued a press release announcing financial results for the quarter and full fiscal year ended December 31, 2006. The press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.

The information in this Item 2.02 and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

99.1 Press release of EMC Corporation dated January 23, 2007

2

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 hereunto duly authorized.

EMC CORPORATION
By:	/s/ David I. Goulden
	David I. Goulden
	Executive Vice President and
	Chief Financial Officer

Date: January 23, 2007

3

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release of EMC Corporation dated January 23, 2007

EX-99.1

Exhibit 99.1

Contact:	Greg Eden
	508-293-7195
FOR IMMEDIATE RELEASE	eden_greg@emc.com

EMC REPORTS RECORD FOURTH QUARTER

AND FULL YEAR RESULTS

EMC Exceeds Quarterly Revenue and Profit Expectations

HOPKINTON, Mass. – January 23, 2007 – EMC Corporation (NYSE:EMC), the world leader in information infrastructure solutions, today reported all-time record revenue and strong profit growth for the fourth quarter and full fiscal year 2006. EMC’s 14th consecutive quarter of double-digit year-over-year revenue growth was highlighted by better-than-expected revenue and profit performance.

Total consolidated revenue for the fourth quarter was a record $3.215 billion, 19% higher than the $2.710 billion for the fourth quarter of 2005 and $55 million more than the fourth-quarter revenue forecast provided by EMC in October 2006.

GAAP net income for the fourth quarter of 2006 was $389 million or $0.18 per diluted share, which includes a $0.06 per share restructuring charge, a $0.05 per share tax benefit related to prior years and a $0.02 per share tax benefit related to the first three quarters of 2006. Excluding these items, net income for the fourth quarter of 2006 was $0.17 per share, $0.02 higher than the fourth quarter forecast provided by EMC in October 2006. GAAP reported fourth-quarter net income for 2005 was $148 million or $0.06 per diluted share.

Total consolidated revenue for EMC’s full 2006 fiscal year was a record $11.155 billion, 15% higher than the $9.664 billion reported for the full 2005 fiscal year.

GAAP net income for 2006 was $1.22 billion or $0.54 per diluted share. Excluding special items discussed below diluted earnings per share for 2006 also was $0.54. GAAP reported net income for 2005 was $1.13 billion or $0.47 per diluted share. Adjusting for special items in both years, and had stock options been expensed in 2005, diluted earnings per share would have increased 35% to $0.54 in 2006 from the $0.40 diluted earnings per share in 2005.

Joe Tucci, EMC Chairman, President and Chief Executive Officer, said, “EMC had another record quarter and a solid finish to 2006. We have now delivered strong, double-digit revenue growth for four straight years and we are well positioned to do it again in 2007.”

“EMC has clearly joined the short list of the world’s elite information technology suppliers that organizations around the world choose to partner with to drive their business,” Tucci continued. “We have focused our entire company on information infrastructure, enabling our customers to put their information to work and better leverage its value. We begin 2007 with the technology

portfolio, the strategy and, most importantly, the trust of our customers to help them solve their most pressing issues and gain an even greater share of our $60 billion market opportunity.”

During the fourth quarter, EMC achieved double-digit revenue growth across its systems, software and services offerings, and across all four of its major geographies. EMC systems revenue grew 12%; software license and maintenance revenue increased 27%; and professional services, systems maintenance and other services revenue increased 20% compared with the fourth quarter of 2005. Quarterly revenue from North America was up 18%; revenues from Europe, Middle East and Africa grew 22%; revenue from Latin America increased 14%; and revenue from the Asia Pacific and Japan region returned to double-digit growth, increasing 13% compared with the fourth quarter of 2005.

EMC completed the fourth quarter with $5.6 billion in cash and investments. In 2006 the company spent approximately $3.8 billion to purchase 302 million EMC shares and to redeem $125 million in convertible debt.

David Goulden, EMC Executive Vice President and Chief Financial Officer, said, “Looking across our business, we are pleased with how well we performed in the quarter. We achieved solid top- and bottom-line growth, gained market share across each of our four business units, and delivered double-digit revenue growth across all four of our major geographies. We are poised for continued momentum in 2007 as we address our customers’ most critical IT priorities.”

Fourth-Quarter Highlights

EMC’s Information Storage business, which comprises storage systems, information management, information protection and resource management software, and related customer and professional services, increased revenue 9% compared with the year-ago quarter to $2.67 billion on continued demand for the new EMC CLARiiON CX3 UltraScale and EMC Symmetrix DMX-3 networked storage systems. EMC Rainfinity File Virtualization software revenue more than doubled as more and more organizations turned to file virtualization to improve the management and utilization of files and global file systems. EMC Smarts and EMC Networker software continued to gain share on solid, double-digit license revenue growth, reflecting strong customer adoption of EMC’s broad portfolio of resource management and backup and recovery software.

The EMC Content Management and Archiving business grew 43% compared with the year-ago quarter to a record $203 million. EMC continues to expand its lead in enterprise content management, as more organizations turn to EMC Documentum software to effectively manage their increasing volumes of unstructured information.

Information security revenues for the fourth quarter — the first full quarter of operations for RSA, the Security Division of EMC — grew 26% to $114 million compared with the results reported by the division’s constituent companies (RSA Security and Network Intelligence) in the year-ago period. The division’s strong performance reflected continued traction for RSA’s consumer identity protection solutions as a result of federal guidelines for stronger authentication practices in online banking and concerns over credit card fraud and identity theft. It also demonstrates the early post-acquisition progress that has been made in integrating the division’s operations and customers’ enthusiastic response to EMC’s information-centric approach to securing business information.

VMware, an EMC subsidiary, had its 31st consecutive record quarter and grew total revenues 101% year-over-year to $232 million. VMware has delivered accelerating year-over-year growth for the past five quarters. VMware’s exceptional performance was fueled by rapid customer adoption of VMware Infrastructure 3, which began shipping in June 2006. VMware’s fourth-quarter momentum and expanding customer base were driven in part by the release of 64-bit support for VMware Infrastructure 3, VMware Lab Manager – an automation suite designed to improve software development processes, and a new virtual appliance marketplace and certification program now delivering more than 380 virtual appliances.

2006 Highlights

EMC had double-digit revenue growth across its systems, software and services offerings in 2006 as organizations turned to EMC’s portfolio to better store, protect, optimize and leverage their expanding volumes of information in increasingly complex IT environments.

Systems revenue grew 15% during the year to $5.14 billion, helped by the introduction of new models and enhancements to EMC’s entire line of networked storage platforms. Software license and maintenance revenue grew 20% to a record $4.27 billion. Professional services, systems maintenance and other services revenue grew 10% in 2006, as more customers engaged EMC Global Services professionals to help plan, build, manage and support their information infrastructures.

EMC’s Information Storage business annual revenue increased 9% in 2006 to $9.6 billion, driven in large part by EMC Symmetrix systems, which had their strongest growth in six years. Annual revenue for EMC’s Content Management and Archiving business grew 42% compared to 2005. Had EMC owned RSA and Network Intelligence for all of 2005 and 2006, 2006 annual revenues for the RSA security division would have been up 26% year over year. VMware revenue also achieved accelerated revenue growth throughout the year, increasing revenues 83% to $709 million for 2006.

Business Outlook

The following statements are based on current expectations. These statements are forward looking, and actual results may differ materially. These statements do not give effect to the potential impact of mergers, acquisitions, divestitures or business combinations that may be announced after the date hereof. These statements supersede all prior statements regarding business outlook set forth in prior EMC news releases.

o Consolidated revenue for 2007 is expected to be at least $12.7 billion, representing 14% growth over 2006.

o GAAP diluted earnings per share for 2007 are expected to be at least $0.64, representing 19% growth over 2006 diluted earnings per share of $0.54.

o The tax rate for 2007 is expected to be in the mid-20s.

o Stock option expense is expected to be approximately $0.09 per diluted share and the cost associated with acquisition amortization is expected to be approximately $0.07 per diluted share.

Special Items

The net impact of special items on full-year 2006 EPS was $0.00 per diluted share maintaining diluted earnings per share at $0.54 on both a GAAP and adjusted basis. These items included a:

o $129 million after-tax net restructuring charge.

o $35 million in-process research and development charge relating to various acquisitions.

o $144 million in tax benefits, primarily from the favorable resolution of income tax audits.

The net impact of special items on full-year 2005 EPS was $0.07 per diluted share, decreasing GAAP diluted earnings per share from $0.47 to $0.40. These items included a:

o $14 million in-process research and development charge relating to various acquisitions.

o $180 million charge for income taxes related to the repatriation of approximately $3 billion of accumulated income earned abroad.

o $70 million after-tax net restructuring charge.

o $106 million in tax benefits from an income tax settlement.

o $320 million of after-tax stock option expense had EMC expensed options in 2005.

About EMC

EMC Corporation (NYSE: EMC) is the world’s leading developer and provider of information infrastructure technology and solutions that enable organizations of all sizes to transform the way they compete and create value from their information. Information about EMC’s products and services can be found at www.EMC.com.

EMC, Symmetrix, CLARiiON, Rainfinity, Documentum and Smarts are registered trademarks, and Global File Virtualization, Networker, RecoverPoint, and UltraScale are trademarks of EMC and its subsidiaries. VMware is a registered trademark of VMware Inc. RSA is a registered trademark of RSA. All other trademarks used are the property of their respective owners.

This release contains “forward-looking statements” as defined under the Federal Securities Laws. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including but not limited to: (i) adverse changes in general economic or market conditions; (ii) delays or reductions in information technology spending; (iii) risks associated with acquisitions and investments, including the challenges and costs of integration, restructuring and achieving anticipated synergies; (iv) competitive factors, including but not limited to pricing pressures and new product introductions; (v) the relative and varying rates of product price and component cost declines and the volume and mixture of product and services revenues; (vi) component and product quality and availability; (vii) the transition to new products, the uncertainty of customer acceptance of new product offerings and rapid technological and market change; (viii) insufficient, excess or obsolete inventory; (ix) war or acts of terrorism; (x) the ability to attract and retain highly qualified employees; (xi) fluctuating currency exchange rates; and (xii) other one-time events and other important factors disclosed previously and from time to time in EMC’s filings with the U.S. Securities and Exchange Commission. EMC disclaims any obligation to update any such forward-looking statements after the date of this release.

This release contains non-GAAP financial measures. These non-GAAP financial measures, which are used as measures of EMC’s performance, should be considered in addition to, not as a substitute for, measures of EMC’s financial performance prepared in accordance with GAAP. The reconciliation for the diluted earnings per share for the fourth quarter of 2006 and the fourth quarter of 2005 and diluted earnings per share for 2006 and 2005 are in the tables entitled “Selected Non-GAAP Data” for the quarters and years ended December 31, 2006 and 2005 attached to this release. EMC’s non-GAAP financial measures may be defined differently than similar terms used by other companies, and accordingly, care should be exercised in understanding how EMC defines its non-GAAP financial measures.

As specified, certain non-GAAP financial measures in the accompanying schedule entitled “Selected Non-GAAP Data For the Three Months Ended December 31, 2006” are adjusted for restructuring charges and the tax impact of such restructuring charges and certain tax benefits. Where specified, in the accompanying schedule entitled “Selected Non-GAAP Data For the Year Ended December 31, 2006,” in-process research and development charges, restructuring charges, the related tax impact and certain tax benefits are excluded from the non-GAAP financial measures in such schedule. In addition, stock option expense was included, and in-process research and development charges, restructuring charges, the related tax impact and certain tax charges are excluded from the non-GAAP financial measures in the accompanying schedule entitled “Selected Non-GAAP Data For the Three Months Ended December 31, 2005” where specified. Stock option expense was included, and in-process research and development charges, restructuring charges, the related tax impact and certain tax charges are excluded from the non-GAAP financial measures in the accompanying schedule entitled “Selected Non-GAAP Data For the Year Ended December 31, 2005” where specified. Stock option expense, restricted stock expense, intangible amortization, restructuring charges, the related tax impact and certain tax benefits are excluded from the non-GAAP financial measures in the accompanying schedule entitled “Selected Non-GAAP Data For the Three Months Ended December 31, 2006” where specified. Finally, stock option expense, restricted stock expense, intangible amortization, in-process research and development, restructuring charges, the related tax impact and certain tax benefits are excluded from the non-GAAP financial measures in the accompanying schedule entitled “Selected Non-GAAP Data For the Year Ended December 31, 2006” where specified.

EMC’s management uses non-GAAP financial measures to gain an understanding of EMC’s comparative operating performance (when comparing such results with previous periods or forecasts) and future prospects and excludes the above listed expenses from its internal financial statements for purposes of its internal budgets and each reporting segment’s financial goals. Non-GAAP financial measures are used by EMC’s management in their financial and operating decision-making because management believes they reflect EMC’s ongoing business in a manner that allows meaningful period-to-period comparisons. EMC’s management believes that these non-GAAP financial measures provide useful information to investors and others (a) in understanding and evaluating EMC’s current operating performance and future prospects in the same manner as management does, if they so choose, and (b) in comparing in a consistent manner the Company’s current financial results with the Company’s past financial results. These non-GAAP financial measures have limitations, however, because they do not include all items of income and expense that affect EMC’s operations. Specifically, these non-GAAP financial measures are not prepared in accordance with GAAP, may not be comparable to non-GAAP financial measures used by other companies and with respect to the non-GAAP financial measures that exclude stock-based compensation, intangible amortization, in-process research and development, restructuring charges, the related tax impact of each and certain tax charges and benefits, do not reflect any benefit that such items may confer on EMC. Management compensates for these limitations by also considering EMC’s financial results as determined in accordance with GAAP.

EMC CORPORATION

Consolidated Income Statements

(in thousands, except per share amounts)

Unaudited

	Three Months Ended						Twelve Months Ended
	December 31, 2006			December 31, 2005			December 31, 2006			December 31, 2005
Revenues:
Product sales	$	2,360,262		$	2,012,916		$	8,078,042		$	7,009,026
Services		854,312			697,351			3,077,048			2,654,929
		3,214,574			2,710,267			11,155,090			9,663,955
Cost and expenses:
Cost of product sales		1,111,861			937,638			3,906,771			3,363,017
Cost of services		364,588			288,290			1,335,120			1,108,119
Research and development		358,973			262,470			1,254,193			1,004,829
Selling, general and administrative		913,948			706,358			3,253,274			2,605,977
In-process research and development		—			14,270			35,410			17,370
Restructuring charges		166,923			80,504			162,564			84,221
Operating income		298,281			420,737			1,207,758			1,480,422
Investment income		50,273			55,959			224,949			190,434
Interest expense		(25,685	)		(2,065	)		(34,123	)		(7,988	)
Other expense, net		(10,814	)		(9,691	)		(8,566	)		(10,625	)
Income before taxes		312,055			464,940			1,390,018			1,652,243
Income tax (benefit) provision		(76,714	)		316,645			162,664			519,078
Income before cumulative effect of a change in accounting principle		388,769			148,295			1,227,354			1,133,165
Cumulative effect of a change in accounting principle, net of tax benefit of $808		—			—			(3,372	)		—
Net income	$	388,769		$	148,295		$	1,223,982		$	1,133,165
Net income per weighted average share, basic:
Income before cumulative effect of a change in accounting principle	$	0.18		$	0.06		$	0.55		$	0.48
Cumulative effect of a change in accounting principle		—			—			—			—
Net income	$	0.18		$	0.06		$	0.54		$	0.48
Net income per weighted average share, diluted:
Income before cumulative effect of a change in accounting principle	$	0.18		$	0.06		$	0.54		$	0.47
Cumulative effect of a change in accounting principle		—			—			—			—
Net income	$	0.18		$	0.06		$	0.54		$	0.47
Weighted average shares, basic		2,124,625			2,361,223			2,248,431			2,382,977
Weighted average shares, diluted		2,164,518			2,411,855			2,286,304			2,432,582
As a % of total revenue:
Gross margin		54.1	%		54.8	%		53.0	%		53.7	%
Selling, general and administrative		28.4	%		26.1	%		29.2	%		27.0	%
Research and development		11.2	%		9.7	%		11.2	%		10.4	%
Operating income		9.3	%		15.5	%		10.8	%		15.3	%
Net income		12.1	%		5.5	%		11.0	%		11.7	%

EMC CORPORATION

Selected Non-GAAP Data

For the Three Months Ended December 31, 2006

(in thousands, except per share amounts)

Unaudited

	Costs and Expenses
	Cost of Revenue		Research and Development			Selling, General and Administrative			Restructuring Charges			Operating Income
GAAP	$	1,476,449	$	358,973		$	913,948		$	166,923		$	298,281
Adjustments to reconcile to Non-GAAP:
Restructuring Charges (1)		—		—			—			(166,923	)		166,923
Non-GAAP	$	1,476,449	$	358,973		$	913,948		$	—		$	465,204
	Income Before Tax		Income Tax Provision (Benefit)			Net Income			Net Income per Weighted Average Share, Basic			Net Income per Weighted Average Share, Diluted
GAAP	$	312,055	$	(76,714	)	$	388,769		$	0.18	*	$	0.18	*
Adjustments to reconcile to Non-GAAP:
Restructuring Charges (1)		166,923		37,833			129,090			0.06			0.06
Tax Benefits (2)		—		111,590			(111,590	)		(0.05	)		(0.05	)
Non-GAAP	$	478,978	$	72,709		$	406,269		$	0.19	*	$	0.19	*

(1) Represents Q4 06 restructuring charge net of adjustment to prior years’ restructuring programs and the associated tax benefit.

(2) Represents income tax benefits consisting primarily of favorable audit resolutions.

* Includes a $0.02 income tax benefit relating to the first three quarters of 2006.

EMC CORPORATION

Selected Non-GAAP Data

For the Year Ended December 31, 2006

(in thousands, except per share amounts)

Unaudited

	Costs and Expenses
	Cost of Revenue		Research and Development		Selling, General and Administrative			In-process Research and Development			Restructuring Charges			Operating Income
GAAP	$	5,241,891	$	1,254,193	$	3,253,274		$	35,410		$	162,564		$	1,207,758
Adjustments to reconcile to Non-GAAP:
In-process Research and Development (1)		—		—		—			(35,410	)		—			35,410
Restructuring Charges (2)		—		—		—			—			(162,564	)		162,564
Non-GAAP	$	5,241,891	$	1,254,193	$	3,253,274		$	—		$	—		$	1,405,732
	Income Before Tax		Income Tax Provision		Net Income			Net Income per Weighted Average Share, Basic			Net Income per Weighted Average Share, Diluted
GAAP	$	1,390,018	$	162,664	$	1,223,982		$	0.54		$	0.54
Adjustments to reconcile to Non-GAAP:
In-process Research and Development (1)		35,410		—		35,410			0.02			0.02
Restructuring Charges (2)		162,564		34,033		128,531			0.06			0.06
Tax Benefits (3)		—		144,376		(144,376	)		(0.06	)		(0.06	)
Non-GAAP	$	1,587,992	$	341,073	$	1,243,547		$	0.55	#	$	0.54	#

(1) Represents in-process research and development charges related to business combinations.

(2) Represents Q4 06 restructuring charge net of adjustment to prior years’ restructuring programs and the associated tax benefit.

(3) Represents income tax benefits consisting primarily of favorable audit resolutions.

# May not foot due to rounding.

EMC CORPORATION

Selected Non-GAAP Data

For the Three Months Ended December 31, 2005

(in thousands, except per share amounts)

Unaudited

	Costs and Expenses
	Cost of Revenue			Research and Development			Selling, General and Administrative			In-process Research and Development and Restructuring			Operating Income
GAAP	$	1,225,928		$	262,470		$	706,358		$	94,774		$	420,737
Adjustments to reconcile to Non-GAAP:
Stock Option Expense (1)		14,140			22,989			48,190			—			(85,319	)
In-process Research and Development (2)		—			—			—			(14,270	)		14,270
Restructuring Charges (3)		—			—			—			(80,504	)		80,504
Non-GAAP	$	1,240,068		$	285,459		$	754,548		$	—		$	430,192
	Income Before Tax			Income Tax Provision			Net Income			Net Income per Weighted Average Share, Basic			Net Income per Weighted Average Share, Diluted
GAAP	$	464,940		$	316,645		$	148,295		$	0.06		$	0.06
Adjustments to reconcile to Non-GAAP:
Stock Option Expense (1)		(85,319	)		(16,807	)		(68,512	)		(0.03	)		(0.03	)
In-process Research and Development (2)		14,270			—			14,270			0.01			0.01
Restructuring Charges (3)		80,504			14,737			65,767			0.03			0.03
Tax Charges (4)		—			(180,223	)		180,223			0.08			0.07
Non-GAAP	$	474,395		$	134,352		$	340,043		$	0.14	#	$	0.14

(1) Represents stock option expense had we expensed stock options in 2005.

(2) Represents in-process research and development charges related to business combinations.

(3) Represents Q4 05 restructuring charge net of adjustment to prior years’ restructuring programs and the associated tax benefit.

(4) Represents tax expense associated with the repatriation under the 2004 American Jobs Creation Act.

# May not foot due to rounding.

EMC CORPORATION

Selected Non-GAAP Data

For the Year Ended December 31, 2005

(in thousands, except per share amounts)

Unaudited

	Costs and Expenses
	Cost of Revenue			Research and Development			Selling, General and Administrative			In-process Research and Development And Restructuring			Operating Income
GAAP	$	4,471,136		$	1,004,829		$	2,605,977		$	101,591		$	1,480,422
Adjustments to reconcile to Non-GAAP:
Stock Option Expense (1)		69,733			98,051			213,008			—			(380,792	)
In-process Research and Development (2)		—			—			—			(14,270	)		14,270
Restructuring Charges (3)		—			—			—			(86,353	)		86,353
Non-GAAP	$	4,540,869		$	1,102,880		$	2,818,985		$	968		$	1,200,253
	Income Before Tax			Income Tax Provision			Net Income			Net Income per Weighted Average Share, Basic			Net Income per Weighted Average Share, Diluted
GAAP	$	1,652,243		$	519,078		$	1,133,165		$	0.48		$	0.47
Adjustments to reconcile to Non-GAAP:
Stock Option Expense (1)		(380,792	)		(61,242	)		(319,550	)		(0.13	)		(0.13	)
In-process Research and Development (2)		14,270			—			14,270			0.01			0.01
Restructuring Charges (3)		86,353			16,352			70,001			0.03			0.03
Tax Charges (4)		—			(74,541	)		74,541			0.03			0.03
Non-GAAP	$	1,372,074		$	399,647		$	972,427		$	0.41	#	$	0.40	#

(1) Represents stock option expense had we expensed stock options in 2005.

(2) Represents in-process research and development charges related to business combinations.

(3) Represents Q4 05 restructuring charge net of adjustment to prior years’ restructuring programs and the associated tax benefit.

(4) Represents tax expense associated with the repatriation under the 2004 American Jobs Creation Act net of income tax benefits consisting primarily of favorable audit resolutions.

# May not foot due to rounding.

EMC CORPORATION

Selected Non-GAAP Data

For the Three Months Ended December 31, 2006

(in thousands, except per share amounts)

Unaudited

	Costs and Expenses
	Cost of Revenue			Research and Development			Selling, General and Administrative			Restructuring Charges			Operating Income
GAAP	$	1,476,449		$	358,973		$	913,948		$	166,923		$	298,281
Adjustments to reconcile to Non-GAAP:
Stock Option Expense (1)		(13,704	)		(15,261	)		(33,329	)		—			62,294
Restricted Stock Expense (1)		(3,210	)		(12,656	)		(21,016	)		—			36,882
Intangible Amortization (2)		(27,757	)		(1,977	)		(13,931	)		—			43,665
Restructuring Charges (3)		—			—			—			(166,923	)		166,923
Tax Benefits (4)		—			—			—			—			—
Non-GAAP	$	1,431,778		$	329,079		$	845,672		$	—		$	608,045
	Income Before Tax			Income Tax Provision (Benefit)			Net Income			Net Income per Weighted Average Share, Basic			Net Income per Weighted Average Share, Diluted
GAAP	$	312,055		$	(76,714	)	$	388,769		$	0.18		$	0.18
Adjustments to reconcile to Non-GAAP:
Stock Option Expense (1)		62,294			13,011			49,283			0.02			0.02
Restricted Stock Expense (1)		36,882			12,769			24,113			0.01			0.01
Intangible Amortization (2)		43,665			15,654			28,011			0.01			0.01
Restructuring Charges (3)		166,923			37,833			129,090			0.06			0.06
Tax Benefits (4)		—			111,590			(111,590	)		(0.05	)		(0.05	)
Non-GAAP	$	621,819		$	114,143		$	507,676		$	0.24	#	$	0.23

(1) Represents equity compensation recognized pursuant to FAS No. 123R “Share-Based Payment”.

(2) Represents amortization associated with intangible assets acquired in connection with business combinations.

(3) Represents Q4 06 restructuring charge net of adjustment to prior years’ restructuring programs and the associated tax benefit.

(4) Represents income tax benefits consisting primarily of favorable audit resolutions.

# May not foot due to rounding.

EMC CORPORATION

Selected Non-GAAP Data

For the Year Ended December 31, 2006

(in thousands, except per share amounts)

Unaudited

	Costs and Expenses
	Cost of Revenue			Research and Development			Selling, General and Administrative			In-process Research and Development			Restructuring Charges			Operating Income
GAAP	$	5,241,891		$	1,254,193		$	3,253,274		$	35,410		$	162,564		$	1,207,758
Adjustments to reconcile to Non-GAAP:
Stock Option Expense (1)		(56,603	)		(61,582	)		(146,950	)		—			—			265,135
Restricted Stock Expense (1)		(9,685	)		(45,899	)		(77,968	)		—			—			133,552
Intangible Amortization (2)		(94,333	)		(12,600	)		(46,091	)		—			—			153,024
In-process Research and Development (3)		—			—			—			(35,410	)					35,410
Restructuring Charges (4)		—			—			—			—			(162,564	)		162,564
Non-GAAP	$	5,081,270		$	1,134,112		$	2,982,265		$	—		$	—		$	1,957,443
	Income Before Tax			Income Tax Provision			Net Income			Net Income per Weighted Average Share, Basic			Net Income per Weighted Average Share, Diluted
GAAP	$	1,390,018		$	162,664		$	1,223,982		$	0.54		$	0.54
Adjustments to reconcile to Non-GAAP:
Stock Option Expense (1)		265,135			49,844			218,663			0.10			0.10
Restricted Stock Expense (1)		133,552			39,518			94,034			0.04			0.04
Intangible Amortization (2)		153,024			53,967			99,057			0.04			0.04
In-process Research and Development (3)		35,410			—			35,410			0.02			0.02
Restructuring Charges (4)		162,564			34,033			128,531			0.06			0.06
Tax Benefits (5)		—			144,376			(144,376	)		(0.06	)		(0.06	)
Non-GAAP	$	2,139,703		$	484,402		$	1,655,301		$	0.74		$	0.72	#

(1) Represents equity compensation recognized pursuant to FAS No. 123R “Share-Based Payment”.

(2) Represents amortization associated with intangible assets acquired in connection with business combinations.

(3) Represents in-process research and development charge related to business combinations.

(4) Represents Q4 06 restructuring charge net of adjustment to prior years’ restructuring programs and the associated tax benefit.

(5) Represents income tax benefits consisting primarily of favorable audit resolutions.

# May not foot due to rounding.

EMC CORPORATION

Consolidated Balance Sheets

(in thousands, except per share amounts)

Unaudited

	December 31, 2006			December 31, 2005
ASSETS
Current assets:
Cash and cash equivalents	$	1,828,106		$	2,322,370
Short-term investments		1,521,925			1,615,495
Accounts and notes receivable, less allowance for doubtful accounts of $39,509 and $38,126		1,692,214			1,405,564
Inventories		834,800			724,751
Deferred income taxes		418,146			326,318
Other current assets		225,396			179,478
Total current assets		6,520,587			6,573,976
Long-term investments		2,246,290			3,417,589
Property, plant and equipment, net		2,035,559			1,754,035
Deferred income taxes		104,446			—
Intangible assets, net		1,003,549			563,024
Other assets, net		638,655			598,252
Goodwill, net		6,017,161			3,883,507
Total assets	$	18,566,247		$	16,790,383
LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	680,263		$	583,756
Accrued expenses		1,592,022			1,279,857
Income taxes payable		283,148			645,694
Deferred revenue		1,325,671			1,164,551
Total current liabilities		3,881,104			3,673,858
Deferred revenue		780,124			640,598
Deferred income taxes		—			175,192
Long-term convertible debt		3,450,000			126,963
Other liabilities		129,312			108,342
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 2,122,339 and 2,384,147 shares		21,223			23,841
Additional paid-in capital		2,564,554			5,867,076
Deferred compensation		—			(332,311	)
Retained earnings		7,794,493			6,570,511
Accumulated other comprehensive loss		(54,563	)		(63,687	)
Total stockholders’ equity		10,325,707			12,065,430
Total liabilities and stockholders’ equity	$	18,566,247		$	16,790,383

EMC CORPORATION

Consolidated Statements of Cash Flows

(in thousands)

Unaudited

	Twelve Months Ended
	December 31, 2006			December 31, 2005
Cash flows from operating activities:
Cash received from customers	$	11,167,249		$	9,732,761
Cash paid to suppliers and employees		(8,666,586	)		(7,539,855	)
Dividends and interest received		258,631			249,208
Interest paid		(26,804	)		(9,132	)
Income taxes paid		(592,066	)		(216,686	)
Net cash provided by operating activities		2,140,424			2,216,296
Cash flows from investing activities:
Additions to property, plant and equipment		(718,095	)		(601,145	)
Capitalized software development costs		(192,895	)		(167,109	)
Purchases of short and long-term available for sale securities		(6,611,698	)		(12,115,524	)
Sales and maturities of short and long-term available for sale securities		7,865,264			12,983,911
Business acquisitions, net of cash acquired		(2,618,376	)		(683,663	)
Other		(20,860	)		(28,155	)
Net cash used in investing activities		(2,296,660	)		(611,685	)
Cash flows from financing activities:
Issuance of common stock		257,789			263,296
Purchase of treasury stock		(3,655,404	)		(1,003,419	)
Excess tax benefits from stock based compensation		20,025			—
Payment of long-term and short-term obligations		(2,331,587	)		(3,721	)
Proceeds from long-term and short-term obligations		5,654,004			220
Purchase of call options		(669,076	)		—
Sale of warrants		391,144			—
Debt issuance costs		(58,863	)		—
Net cash used in financing activities		(391,968	)		(743,624	)
Effect of exchange rate changes on cash		53,940			(15,420	)
Net (decrease) increase in cash and cash equivalents		(494,264	)		845,567
Cash and cash equivalents at beginning of period		2,322,370			1,476,803
Cash and cash equivalents at end of period	$	1,828,106		$	2,322,370
Reconciliation of net income to net cash provided by operating activities:
Net income	$	1,223,982		$	1,133,165
Adjustments to reconcile net income to net cash provided by operating activities:
Cumulative effect of a change in accounting principle		3,372			—
Depreciation and amortization		764,162			639,974
Non-cash restructuring and other special charges		75,889			17,370
Stock-based compensation expense		398,687			81,578
Provision for doubtful accounts		10,290			9,750
Deferred income taxes, net		(131,966	)		(3,173	)
Tax benefit from stock options exercised		—			42,593
Excess tax benefits from stock based compensation		(20,025	)		—
Other		27,271			56,594
Changes in assets and liabilities, net of acquisitions:
Accounts and notes receivable		(232,295	)		(221,507	)
Inventories		(69,567	)		(180,442	)
Other assets		(31,822	)		(65,150	)
Accounts payable		59,631			12,186
Accrued expenses		133,856			153,622
Income taxes payable		(297,936	)		263,255
Deferred revenue		234,164			280,563
Other liabilities		(7,269	)		(4,082	)
Net cash provided by operating activities	$	2,140,424		$	2,216,296
Non-cash activity:
— Issuance of stock options exchanged in business combinations	$	41,151		$	77,645

EMC Corporation

Supplemental Financial Data

Revenue Analysis

(in thousands)

Unaudited

Revenue Components

	Q1 2005			Q2 2005			Q3 2005			Q4 2005			YTD 2005			Q1 2006			Q2 2006			Q3 2006			Q4 2006			YTD 2006
Revenues
Systems	$	1,025,971		$	1,068,725		$	1,091,881		$	1,300,290		$	4,486,867		$	1,226,928		$	1,151,600		$	1,299,321		$	1,462,777		$	5,140,626
Software:
Software License		594,532			619,605			595,396			712,626			2,522,159			621,602			681,998			736,331			897,485			2,937,416
Software Maintenance		237,894			258,622			269,145			287,587			1,053,248			303,202			315,189			345,650			371,163			1,335,204
Total Software License & Maintenance		832,426			878,227			864,541			1,000,213			3,575,407			924,804			997,187			1,081,981			1,268,648			4,272,620
Professional, Systems Maintenance and Other Services		374,609			389,359			402,087			402,830			1,568,885			396,081			423,525			431,989			481,471			1,733,066
		2,233,006			2,336,311			2,358,509			2,703,333			9,631,159			2,547,813			2,572,312			2,813,291			3,212,896			11,146,312
Other Businesses		10,125			8,504			7,233			6,934			32,796			2,874			2,211			2,015			1,678			8,778
Total Consolidated Revenues	$	2,243,131		$	2,344,815		$	2,365,742		$	2,710,267		$	9,663,955		$	2,550,687		$	2,574,523		$	2,815,306		$	3,214,574		$	11,155,090
Percentage impact to EMC revenue growth rate due to changes in exchange rates from the prior year		1.7	%		1.7	%		0.6	%		(0.5	)%		0.8	%		(2.1	)%		(1.1	)%		0.7	%		1.4	%		0.2	%

EMC Corporation

Supplemental Financial Data

Revenue Analysis

(in thousands)

Unaudited

Supplemental Revenue Data

	Q1 2005		Q2 2005		Q3 2005		Q4 2005		YTD 2005		Q1 2006		Q2 2006		Q3 2006		Q4 2006		YTD 2006
Total Storage Revenue	$	2,050,488	$	2,144,880	$	2,143,799	$	2,453,026	$	8,792,193	$	2,252,354	$	2,250,909	$	2,439,699	$	2,665,616	$	9,608,578
Total Content Management and Archiving Revenue	$	112,553	$	109,008	$	120,683	$	142,032	$	484,276	$	167,320	$	166,122	$	149,352	$	202,996	$	685,790
Total Security Revenue	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	37,755	$	113,931	$	151,686
Total VMware Revenue	$	80,090	$	90,927	$	101,260	$	115,209	$	387,486	$	131,013	$	157,492	$	188,500	$	232,031	$	709,036
Symmetrix Hardware and Software Revenue (a)	$	652,328	$	677,655	$	633,308	$	754,345	$	2,717,636	$	718,356	$	676,649	$	763,770	$	781,357	$	2,940,132
CLARiiON Hardware and Software Revenue (a)		418,641		430,960		425,375		518,729		1,793,705		472,003		446,511		501,704		611,781		2,031,999
Connectivity Revenue (b)		176,053		188,189		226,829		242,992		834,063		204,113		211,713		234,844		274,383		925,053
Platform Software License Revenue	$	284,485	$	312,827	$	284,446	$	333,442	$	1,215,200	$	272,819	$	291,059	$	313,662	$	324,690	$	1,202,230
Platform Software Maintenance Revenue		100,064		104,601		109,727		116,182		430,574		124,057		118,883		124,005		128,972		495,917
Total Platform Revenue	$	384,549	$	417,428	$	394,173	$	449,624	$	1,645,774	$	396,876	$	409,942	$	437,667	$	453,662	$	1,698,147
Multi-platform Software License Revenue:
Resource Management Software License Revenue	$	146,708	$	151,833	$	141,002	$	167,404	$	606,947	$	136,467	$	150,652	$	165,455	$	168,596	$	621,170
Backup and Archive Software License Revenue		51,742		49,877		50,467		59,881		211,967		40,797		56,218		51,875		67,102		215,992
Content Management Software License Revenue		49,302		39,160		47,637		64,400		200,499		79,675		70,234		52,779		96,769		299,457
Total Multi-platform Software License Revenue	$	247,752	$	240,870	$	239,106	$	291,685	$	1,019,413	$	256,939	$	277,104	$	270,109	$	332,467	$	1,136,619
Multi-platform Software Maintenance Revenue		125,371		134,476		137,196		149,258		546,301		149,534		162,711		166,550		170,258		649,053
Total Multi-platform Software License and Maintenance Revenue	$	373,123	$	375,346	$	376,302	$	440,943	$	1,565,714	$	406,473	$	439,815	$	436,659	$	502,725	$	1,785,672
VMware Software License Revenue	$	62,295	$	65,908	$	71,844	$	87,499	$	287,546	$	91,844	$	113,835	$	125,476	$	163,492	$	494,647
VMware Maintenance and Services Revenue		17,795		25,019		29,416		27,710		99,940		39,169		43,657		63,024		68,539		214,389
Total VMware Revenue	$	80,090	$	90,927	$	101,260	$	115,209	$	387,486	$	131,013	$	157,492	$	188,500	$	232,031	$	709,036

(a) Includes hardware, hardware upgrades and platform software.

(b) Includes Connectrix fibre channel switch/director revenues, Celerra file server revenue, exclusive of disk revenue, Rainstorage product revenues and Invista product revenues.