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Proc-Type: 2001,MIC-CLEAR
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For The
Quarter Ended: September 30, 2005 |
Commission File Number 1-9853 |
Massachusetts |
04-2680009 |
|||||
---|---|---|---|---|---|---|
(State or other
jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) |
Yes
[X] |
No
[ ] |
Yes
[X] |
No
[ ] |
Yes
[ ] |
No
[X] |
Page No. |
||||||
---|---|---|---|---|---|---|
PART I
FINANCIAL INFORMATION |
||||||
Item 1.
Financial Statements (unaudited) |
||||||
Consolidated
Balance Sheets at September 30, 2005 and December 31, 2004 |
3 |
|||||
Consolidated
Income Statements for the Three and Nine Months Ended September 30, 2005 and 2004 |
4 |
|||||
Consolidated
Statements of Cash Flows for the Nine Months Ended September 30, 2005 and 2004 |
5 |
|||||
Consolidated
Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2005 and 2004 |
6 |
|||||
Notes to
Consolidated Financial Statements |
7 |
|||||
Item 2.
Managements Discussion and Analysis of Financial Condition and Results of Operations |
21 |
|||||
Item 3.
Quantitative and Qualitative Disclosures About Market Risk |
38 |
|||||
Item 4.
Controls and Procedures |
38 |
|||||
PART II
OTHER INFORMATION |
||||||
Item 1.
Legal Proceedings |
39 |
|||||
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds |
39 |
|||||
Item 6.
Exhibits |
39 |
|||||
SIGNATURES |
40 |
|||||
EXHIBIT
INDEX |
41 |
Item 1. |
Financial Statements |
September 30, 2005 |
December 31, 2004 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
ASSETS |
||||||||||
Current
assets: |
||||||||||
Cash and cash
equivalents |
$ | 1,468,261 | $ | 1,476,803 | ||||||
Short-term
investments |
2,996,492 | 1,236,726 | ||||||||
Accounts and
notes receivable, less allowance for doubtful accounts of $37,011 and $39,901 |
1,166,175 | 1,162,387 | ||||||||
Inventories |
756,245 | 514,065 | ||||||||
Deferred
income taxes |
295,986 | 289,810 | ||||||||
Other current
assets |
174,701 | 151,135 | ||||||||
Total current
assets |
6,857,860 | 4,830,926 | ||||||||
Long-term
investments |
3,155,644 | 4,727,237 | ||||||||
Property,
plant and equipment, net |
1,679,572 | 1,571,810 | ||||||||
Intangible
assets, net |
484,993 | 499,478 | ||||||||
Other assets,
net |
560,327 | 509,041 | ||||||||
Goodwill,
net |
3,607,111 | 3,284,414 | ||||||||
Total
assets |
$ | 16,345,507 | $ | 15,422,906 | ||||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||||
Current
liabilities: |
||||||||||
Notes payable
and current portion of long-term obligations |
$ | 198 | $ | 183 | ||||||
Accounts
payable |
517,523 | 522,587 | ||||||||
Accrued
expenses |
1,113,316 | 1,090,666 | ||||||||
Income taxes
payable |
438,394 | 404,772 | ||||||||
Deferred
revenue |
1,020,966 | 930,492 | ||||||||
Total current
liabilities |
3,090,397 | 2,948,700 | ||||||||
Deferred
revenue |
683,162 | 570,995 | ||||||||
Long-term
convertible debt |
127,335 | 128,456 | ||||||||
Deferred
income taxes |
192,129 | 141,600 | ||||||||
Other
liabilities |
104,429 | 109,868 | ||||||||
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 and outstanding 2,390,692 and 2,404,969 shares |
23,907 | 24,050 | ||||||||
Additional
paid-in capital |
5,976,723 | 6,221,099 | ||||||||
Deferred
compensation |
(209,242 | ) | (124,286 | ) | ||||||
Retained
earnings |
6,422,216 | 5,437,346 | ||||||||
Accumulated
other comprehensive loss, net |
(65,549 | ) | (34,922 | ) | ||||||
Total
stockholders equity |
12,148,055 | 11,523,287 | ||||||||
Total
liabilities and stockholders equity |
$ | 16,345,507 | $ | 15,422,906 |
For the Three Months Ended |
For the Nine Months Ended |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30, 2005 |
September 30, 2004 |
September 30, 2005 |
September 30, 2004 |
||||||||||||||||
Revenues: |
|||||||||||||||||||
Product
sales |
$ | 1,687,277 | $ | 1,486,918 | $ | 4,996,110 | $ | 4,321,293 | |||||||||||
Services |
678,465 | 541,961 | 1,957,578 | 1,550,399 | |||||||||||||||
2,365,742 | 2,028,879 | 6,953,688 | 5,871,692 | ||||||||||||||||
Costs and
expenses: |
|||||||||||||||||||
Cost of
product sales |
813,760 | 746,131 | 2,425,379 | 2,190,976 | |||||||||||||||
Cost of
services |
274,365 | 239,547 | 819,829 | 701,921 | |||||||||||||||
Research and
development |
254,720 | 215,708 | 742,359 | 625,411 | |||||||||||||||
Selling,
general and administrative |
641,219 | 557,450 | 1,899,619 | 1,640,934 | |||||||||||||||
Restructuring
and other special charges |
5,849 | | 6,817 | 32,688 | |||||||||||||||
Operating
income |
375,829 | 270,043 | 1,059,685 | 679,762 | |||||||||||||||
Investment
income |
47,986 | 38,373 | 134,475 | 115,410 | |||||||||||||||
Interest
expense |
(1,907 | ) | (1,880 | ) | (5,923 | ) | (5,575 | ) | |||||||||||
Other income
(expense), net |
2,439 | 452 | (934 | ) | (7,520 | ) | |||||||||||||
Income before
taxes |
424,347 | 306,988 | 1,187,303 | 782,077 | |||||||||||||||
Income tax
provision |
2,675 | 88,953 | 202,433 | 231,433 | |||||||||||||||
Net
income |
$ | 421,672 | $ | 218,035 | $ | 984,870 | $ | 550,644 | |||||||||||
Net income per
weighted average share, basic |
$ | 0.18 | $ | 0.09 | $ | 0.41 | $ | 0.23 | |||||||||||
Net income per
weighted average share, diluted |
$ | 0.17 | $ | 0.09 | $ | 0.40 | $ | 0.23 | |||||||||||
Weighted
average shares, basic |
2,383,770 | 2,396,399 | 2,390,314 | 2,405,216 | |||||||||||||||
Weighted
average shares, diluted |
2,433,079 | 2,433,671 | 2,439,576 | 2,451,916 |
For the Nine Months Ended |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
September 30, 2005 |
September 30, 2004 |
||||||||||
Cash flows from
operating activities: |
|||||||||||
Cash received
from customers |
$ | 7,149,428 | $ | 6,090,355 | |||||||
Cash paid to
suppliers and employees |
(5,646,136 | ) | (4,680,467 | ) | |||||||
Dividends and
interest received |
184,133 | 113,692 | |||||||||
Interest
paid |
(7,014 | ) | (4,730 | ) | |||||||
Income taxes
paid |
(61,162 | ) | (65,641 | ) | |||||||
Net cash
provided by operating activities |
1,619,249 | 1,453,209 | |||||||||
Cash flows from
investing activities: |
|||||||||||
Additions to
property, plant and equipment |
(418,962 | ) | (259,867 | ) | |||||||
Capitalized
software development costs |
(121,208 | ) | (126,559 | ) | |||||||
Purchases of
short and long-term available for sale securities |
(8,277,684 | ) | (6,431,165 | ) | |||||||
Sales and
maturities of short and long-term available for sale securities |
8,037,653 | 5,909,212 | |||||||||
Business
acquisitions, net of cash acquired |
(349,957 | ) | (544,016 | ) | |||||||
Other |
(8,155 | ) | (58,146 | ) | |||||||
Net cash used
in investing activities |
(1,138,313 | ) | (1,510,541 | ) | |||||||
Cash flows from
financing activities: |
|||||||||||
Issuance of
common stock |
152,724 | 115,324 | |||||||||
Purchase of
treasury stock |
(603,419 | ) | (417,554 | ) | |||||||
Payment of
short and long-term obligations |
(3,011 | ) | (7,144 | ) | |||||||
Proceeds from
short and long-term obligations |
201 | 8 | |||||||||
Net cash used
in financing activities |
(453,505 | ) | (309,366 | ) | |||||||
Effect of
exchange rate changes on cash and cash equivalents |
(35,973 | ) | 317 | ||||||||
Net decrease in
cash and cash equivalents |
(8,542 | ) | (366,381 | ) | |||||||
Cash and cash
equivalents at beginning of period |
1,476,803 | 1,752,976 | |||||||||
Cash and cash
equivalents at end of period |
$ | 1,468,261 | $ | 1,386,595 | |||||||
Reconciliation of
net income to net cash provided by operating activities: |
|||||||||||
Net
income |
$ | 984,870 | $ | 550,644 | |||||||
Adjustments to
reconcile net income to net cash provided by operating activities: |
|||||||||||
Depreciation
and amortization |
474,889 | 450,923 | |||||||||
Non-cash
restructuring and other special charges |
3,100 | 17,051 | |||||||||
Amortization
of deferred compensation |
56,704 | 40,312 | |||||||||
Provision for
doubtful accounts |
6,026 | 4,854 | |||||||||
Deferred
income taxes, net |
55,430 | 154,017 | |||||||||
Tax benefit
from stock options exercised |
36,263 | 27,330 | |||||||||
Other |
40,872 | (1,746 | ) | ||||||||
Changes in
assets and liabilities, net of acquisitions: |
|||||||||||
Accounts and
notes receivable |
10,871 | 12,991 | |||||||||
Inventories |
(220,333 | ) | (15,372 | ) | |||||||
Other
assets |
(46,414 | ) | (8,640 | ) | |||||||
Accounts
payable |
(16,054 | ) | 27,197 | ||||||||
Accrued
expenses |
11,507 | (5,567 | ) | ||||||||
Income taxes
payable |
50,194 | (16,234 | ) | ||||||||
Deferred
revenue |
178,843 | 200,818 | |||||||||
Other
liabilities |
(7,519 | ) | 14,631 | ||||||||
Net cash
provided by operating activities |
$ | 1,619,249 | $ | 1,453,209 | |||||||
Non Cash
Activity: |
|||||||||||
Issuance of
stock options exchanged in business combinations |
$ | 41,381 | $ | 72,026 |
For the Three Months Ended |
For the Nine Months Ended |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30, 2005 |
September 30, 2004 |
September 30, 2005 |
September 30, 2004 |
||||||||||||||||
Net
income |
$ | 421,672 | $ | 218,035 | $ | 984,870 | $ | 550,644 | |||||||||||
Other
comprehensive income (loss), net of taxes: |
|||||||||||||||||||
Foreign
currency translation adjustments, net of taxes (benefit) of $0, $(18), $(10,716) and $(91) |
(4,943 | ) | (1,772 | ) | (19,052 | ) | (7,119 | ) | |||||||||||
Changes in
market value of derivatives, net of taxes (benefit) of $(44), $0, $234 and $0 |
(394 | ) | (21 | ) | 2,141 | (22 | ) | ||||||||||||
Changes in
market value of investments, net of taxes (benefit) of $891, $4,454, $1,286 and $(8,548) |
(9,027 | ) | 21,902 | (13,716 | ) | (21,103 | ) | ||||||||||||
Other
comprehensive income (loss) |
(14,364 | ) | 20,109 | (30,627 | ) | (28,244 | ) | ||||||||||||
Comprehensive
income |
$ | 407,308 | $ | 238,144 | $ | 954,243 | $ | 522,400 |
1. |
Basis of Presentation |
For the Three Months Ended |
For the Nine Months Ended |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30, 2005 |
September 30, 2004 |
September 30, 2005 |
September 30, 2004 |
||||||||||||||||
Net
income |
$ | 421,672 | $ | 218,035 | $ | 984,870 | $ | 550,644 | |||||||||||
Add back:
Stock compensation costs, net of taxes, on stock-based awards |
14,256 | 9,208 | 36,386 | 27,616 | |||||||||||||||
Less: Stock
compensation costs, net of taxes, had stock compensation expense been measured at fair value |
(91,157 | ) | (96,277 | ) | (282,901 | ) | (298,741 | ) | |||||||||||
Incremental
stock compensation expense per FAS No. 123, net of taxes |
(76,901 | ) | (87,069 | ) | (246,515 | ) | (271,125 | ) | |||||||||||
Adjusted net
income |
$ | 344,771 | $ | 130,966 | $ | 738,355 | $ | 279,519 | |||||||||||
Net income per
weighted average share, basic as reported |
$ | 0.18 | $ | 0.09 | $ | 0.41 | $ | 0.23 | |||||||||||
Net income per
weighted average share, diluted as reported |
$ | 0.17 | $ | 0.09 | $ | 0.40 | $ | 0.23 | |||||||||||
Adjusted net
income per weighted average share, basic |
$ | 0.14 | $ | 0.05 | $ | 0.31 | $ | 0.12 | |||||||||||
Adjusted net
income per weighted average share, diluted |
$ | 0.14 | $ | 0.05 | $ | 0.30 | $ | 0.11 |
For the Three Months Ended |
For the Nine Months Ended |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30, 2005 |
September 30, 2004 |
September 30, 2005 |
September 30, 2004 |
||||||||||||||||
Dividend |
None |
None |
None |
None |
|||||||||||||||
Expected
volatility |
40.0% |
45.0% |
40.4% |
53.2% |
|||||||||||||||
Risk-free
interest rate |
4.02% |
3.47% |
4.00% |
3.57% |
|||||||||||||||
Expected life
(in years) |
4.0 |
5.0 |
4.0 |
5.0 |
2. |
Business Acquisitions and Goodwill |
Expected life
(in years) |
4.0 | |||||
Expected
volatility |
45.0 | % | ||||
Risk-free
interest rate |
2.7 | % |
Current
assets |
$ | 21,076 | ||||
Property,
plant and equipment |
7,596 | |||||
Other
long-term assets |
533 | |||||
Goodwill |
264,408 | |||||
Intangible
assets: |
||||||
Developed
technology (estimated useful lives 47 years) |
24,870 | |||||
Customer
relationships (estimated useful lives of 48 years) |
16,170 | |||||
Tradenames and
trademarks (estimated useful lives of 27 years) |
1,660 | |||||
Non-solicitation agreements (estimated useful life of 3 years) |
1,570 | |||||
Acquired
IPR&D |
3,100 | |||||
Total
intangible assets |
47,370 | |||||
Deferred
compensation |
3,536 | |||||
Current
liabilities |
(32,308 | ) | ||||
Deferred
income taxes |
(11,374 | ) | ||||
Long-term
liabilities |
(7,354 | ) | ||||
Total purchase
price |
$ | 293,483 |
Information Storage Products |
Information Storage and Management Services |
EMC Software Group Products and Services |
VMware Products and Services |
Other Businesses |
Total |
|||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Balance,
January 1, 2005 |
$ | 551,888 | $ | 1,615 | $ | 2,204,230 | $ | 526,681 | $ | | $ | 3,284,414 | ||||||||||||||
Goodwill
acquired |
| | 342,598 | 4,427 | | 347,025 | ||||||||||||||||||||
Tax deduction
from exercise of stock options |
| | (7,626 | ) | | | (7,626 | ) | ||||||||||||||||||
Finalization
of purchase price allocations |
| | (8,291 | ) | (8,411 | ) | | (16,702 | ) | |||||||||||||||||
Balance,
September 30, 2005 |
$ | 551,888 | $ | 1,615 | $ | 2,530,911 | $ | 522,697 | $ | | $ | 3,607,111 |
3. |
Inventories |
September 30, 2005 |
December 31, 2004 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Purchased
parts |
$ | 38,556 | $ | 46,823 | ||||||
Work-in-process |
464,035 | 349,788 | ||||||||
Finished
goods |
253,654 | 117,454 | ||||||||
$ | 756,245 | $ | 514,065 |
4. |
Property, Plant and Equipment |
September 30, 2005 |
December 31, 2004 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Furniture and
fixtures |
$ | 131,518 | $ | 136,441 | ||||||
Equipment |
2,136,833 | 1,844,738 | ||||||||
Buildings and
improvements |
882,843 | 865,184 | ||||||||
Land |
105,887 | 105,184 | ||||||||
Building
construction in progress |
127,448 | 114,646 | ||||||||
3,384,529 | 3,066,193 | |||||||||
Accumulated
depreciation |
(1,704,957 | ) | (1,494,383 | ) | ||||||
$ | 1,679,572 | $ | 1,571,810 |
5. |
Accrued Expenses |
September 30, 2005 |
December 31, 2004 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Salaries and
benefits |
$ | 394,594 | $ | 426,408 | ||||||
Product
warranties |
213,198 | 180,758 | ||||||||
Restructuring |
84,370 | 115,262 | ||||||||
Other |
421,154 | 368,238 | ||||||||
$ | 1,113,316 | $ | 1,090,666 |
For the Three Months Ended |
For the Nine Months Ended |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30, 2005 |
September 30, 2004 |
September 30, 2005 |
September 30, 2004 |
||||||||||||||||
Balance,
beginning of the period |
$ | 217,792 | $ | 132,801 | $ | 180,758 | $ | 118,816 | |||||||||||
Current year
accrual |
22,217 | 35,771 | 107,260 | 90,089 | |||||||||||||||
Amounts
charged to the accrual |
(26,811 | ) | (20,756 | ) | (74,820 | ) | (61,089 | ) | |||||||||||
Balance, end
of the period |
$ | 213,198 | $ | 147,816 | $ | 213,198 | $ | 147,816 |
6. |
Net Income Per Share |
For the Three Months Ended |
For the Nine Months Ended |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30, 2005 |
September 30, 2004 |
September 30, 2005 |
September 30, 2004 |
||||||||||||||||
Numerator: |
|||||||||||||||||||
Net income,
as reported, basic |
$ | 421,672 | $ | 218,035 | $ | 984,870 | $ | 550,644 | |||||||||||
Adjustment
for interest expense on convertible debt, net of taxes |
643 | 643 | 1,929 | 1,929 | |||||||||||||||
Net
income-diluted |
$ | 422,315 | $ | 218,678 | $ | 986,799 | $ | 552,573 | |||||||||||
Denominator: |
|||||||||||||||||||
Basic
weighted average common shares outstanding |
2,383,770 | 2,396,399 | 2,390,314 | 2,405,216 | |||||||||||||||
Weighted
common stock equivalents |
40,253 | 28,216 | 40,206 | 37,644 | |||||||||||||||
Assumed
conversion of convertible debt |
9,056 | 9,056 | 9,056 | 9,056 | |||||||||||||||
Diluted
weighted average shares outstanding |
2,433,079 | 2,433,671 | 2,439,576 | 2,451,916 |
7. |
Commitments and Contingencies |
8. |
Segment Information |
For the Three Months Ended |
Information Storage Products |
Information Storage and Management Services |
EMC Software Group Products and Services |
VMware Products and Services |
Other Businesses |
Consolidated |
||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30, 2005 |
||||||||||||||||||||||||||
Systems
revenues |
$ | 1,091,881 | $ | | $ | | $ | | $ | | $ | 1,091,881 | ||||||||||||||
Software
license revenues |
284,446 | | 239,106 | 71,844 | | 595,396 | ||||||||||||||||||||
Services
revenues |
| 471,955 | 169,860 | 29,416 | 7,234 | 678,465 | ||||||||||||||||||||
Total
revenues |
$ | 1,376,327 | $ | 471,955 | $ | 408,966 | $ | 101,260 | $ | 7,234 | $ | 2,365,742 | ||||||||||||||
Gross
profit |
$ | 606,828 | $ | 260,312 | $ | 323,949 | $ | 83,097 | $ | 3,431 | $ | 1,277,617 | ||||||||||||||
Gross profit
percentage |
44.1 | % | 55.2 | % | 79.2 | % | 82.1 | % | 47.4 | % | 54.0 | % | ||||||||||||||
September 30, 2004 |
||||||||||||||||||||||||||
Systems
revenues |
$ | 948,938 | $ | | $ | | $ | | $ | | $ | 948,938 | ||||||||||||||
Software
license 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 | % |
For the Nine Months Ended |
Information Storage Products |
Information Storage and Management Services |
EMC Software Group Products and Services |
VMware Products and Services |
Other Businesses |
Consolidated |
||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30, 2005 |
||||||||||||||||||||||||||
Systems
revenues |
$ | 3,186,577 | $ | | $ | | $ | | $ | | $ | 3,186,577 | ||||||||||||||
Software
license revenues |
881,758 | | 727,728 | 200,047 | | 1,809,533 | ||||||||||||||||||||
Services
revenues |
| 1,368,656 | 490,829 | 72,230 | 25,863 | 1,957,578 | ||||||||||||||||||||
Total
revenues |
$ | 4,068,335 | $ | 1,368,656 | $ | 1,218,557 | $ | 272,277 | $ | 25,863 | $ | 6,953,688 | ||||||||||||||
Gross
profit |
$ | 1,782,756 | $ | 732,861 | $ | 958,803 | $ | 221,861 | $ | 12,200 | $ | 3,708,480 | ||||||||||||||
Gross profit
percentage |
43.8 | % | 53.5 | % | 78.7 | % | 81.5 | % | 47.2 | % | 53.3 | % | ||||||||||||||
September 30, 2004 |
||||||||||||||||||||||||||
Systems
revenues |
$ | 2,774,124 | $ | | $ | | $ | | $ | | $ | 2,774,124 | ||||||||||||||
Software
license 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 | % |
For the Three Months Ended |
For the Nine Months Ended |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30, 2005 |
September 30, 2004 |
September 30, 2005 |
September 30, 2004 |
||||||||||||||||
Revenues: |
|||||||||||||||||||
United
States |
$ | 1,369,690 | $ | 1,171,291 | $ | 3,979,586 | $ | 3,329,386 | |||||||||||
Canada |
31,182 | 27,171 | 102,492 | 84,878 | |||||||||||||||
Europe,
Middle East, Africa |
638,785 | 549,836 | 1,942,933 | 1,657,135 | |||||||||||||||
Asia
Pacific |
265,204 | 232,229 | 770,753 | 674,737 | |||||||||||||||
Latin
America |
60,881 | 48,352 | 157,924 | 125,556 | |||||||||||||||
Total |
$ | 2,365,742 | $ | 2,028,879 | $ | 6,953,688 | $ | 5,871,692 |
9. |
Restructuring and Other Special Charges |
Category |
Balance as of June 30, 2005 |
Additions (Reductions) to the Provision |
Current Utilization |
Balance as of September 30, 2005 |
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Workforce
reduction |
$ | 13,987 | $ | (1,000 | ) | $ | (3,245 | ) | $ | 9,742 | ||||||||
Consolidation
of excess facilities |
69,318 | 6,849 | (5,566 | ) | 70,601 | |||||||||||||
Other
contractual obligations |
2,327 | | | 2,327 | ||||||||||||||
Total |
$ | 85,632 | $ | 5,849 | $ | (8,811 | ) | $ | 82,670 |
Category |
Balance as of December 31, 2004 |
Additions (Reductions) to the Provision |
Current Utilization |
Balance as of September 30, 2005 |
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Workforce
reduction |
$ | 19,680 | $ | (786 | ) | $ | (9,152 | ) | $ | 9,742 | ||||||||
Consolidation
of excess facilities |
92,943 | 1,623 | (23,966 | ) | 70,601 | |||||||||||||
Other
contractual obligations |
2,639 | (244 | ) | (68 | ) | 2,327 | ||||||||||||
Total |
$ | 115,262 | $ | 593 | $ | (33,186 | ) | $ | 82,670 |
10. |
Retirement Plans and Retiree Medical Benefits |
For the Three Months Ended |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
September 30, 2005 |
September 30, 2004 |
||||||||||
Interest
cost |
$ | 4,741 | $ | 4,617 | |||||||
Expected return
on plan assets |
(7,050 | ) | (6,625 | ) | |||||||
Amortization of
transition asset |
(153 | ) | (213 | ) | |||||||
Recognized
actuarial loss |
1,589 | 1,372 | |||||||||
Net periodic
benefit credit |
$ | (873 | ) | $ | (849 | ) |
For the Nine Months Ended |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
September 30, 2005 |
September 30, 2004 |
||||||||||
Interest
cost |
$ | 14,222 | $ | 13,851 | |||||||
Expected return
on plan assets |
(21,151 | ) | (19,875 | ) | |||||||
Amortization of
transition asset |
(458 | ) | (641 | ) | |||||||
Recognized
actuarial loss |
4,768 | 4,116 | |||||||||
Net periodic
benefit credit |
$ | (2,619 | ) | $ | (2,549 | ) |
For the Three Months Ended |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
September 30, 2005 |
September 30, 2004 |
||||||||||
Interest
cost |
$ | 60 | $ | 69 | |||||||
Expected return
on plan assets |
(7 | ) | (8 | ) | |||||||
Amortization of
transition asset |
(25 | ) | (25 | ) | |||||||
Recognized
actuarial gain |
(10 | ) | (11 | ) | |||||||
Net periodic
benefit cost |
$ | 18 | $ | 25 |
For the Nine Months Ended |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
September 30, 2005 |
September 30, 2004 |
||||||||||
Interest
cost |
$ | 180 | $ | 207 | |||||||
Expected return
on plan assets |
(22 | ) | (24 | ) | |||||||
Amortization of
transition asset |
(75 | ) | (75 | ) | |||||||
Recognized
actuarial gain |
(30 | ) | (33 | ) | |||||||
Net periodic
benefit cost |
$ | 53 | $ | 75 |
11. |
Stockholders Equity |
12. |
Income Taxes |
13. |
Subsequent Event |
This Managements 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 4, 2005. The following discussion contains forward-looking statements
and should also be read in conjunction with FACTORS THAT MAY AFFECT FUTURE RESULTS beginning on page 31. The forward-looking statements do
not include the potential impact of any mergers, acquisitions, divestitures or business combinations that may be announced after the date
hereof. |
For the Three Months Ended |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30, 2005 |
September 30, 2004 |
$ Change |
% Change |
|||||||||||||||
Information
storage products |
$ | 1,376.3 | $ | 1,224.8 | $ | 151.5 | 12 | % | ||||||||||
Information
storage and management services |
472.0 | 378.3 | 93.7 | 25 | ||||||||||||||
EMC Software
Group products and services |
409.0 | 350.9 | 58.1 | 17 | ||||||||||||||
VMware
products and services |
101.3 | 60.6 | 40.7 | 67 | ||||||||||||||
Other
businesses |
7.2 | 14.3 | (7.1 | ) | (50 | ) | ||||||||||||
Total
revenues |
$ | 2,365.7 | $ | 2,028.9 | $ | 336.8 | 17 | % |
For the Nine Months Ended |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30, 2005 |
September 30, 2004 |
$ Change |
% Change |
|||||||||||||||
Information
storage products |
$ | 4,068.3 | $ | 3,564.3 | $ | 504.0 | 14 | % | ||||||||||
Information
storage and management services |
1,368.7 | 1,082.0 | 286.7 | 26 | ||||||||||||||
EMC Software
Group products and services |
1,218.6 | 1,027.2 | 191.4 | 19 | ||||||||||||||
VMware
products and services |
272.3 | 147.1 | 125.2 | 85 | ||||||||||||||
Other
businesses |
25.9 | 51.1 | (25.2 | ) | (49 | ) | ||||||||||||
Total
revenues |
$ | 6,953.7 | $ | 5,871.7 | $ | 1,082.0 | 18 | % |
For the Three Months Ended |
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30, 2005 |
September 30, 2004 |
Percentage Change |
||||||||||||
North
America, excluding Mexico |
$ | 1,400.9 | $ | 1,198.5 | 17 | % | ||||||||
Europe,
Middle East and Africa |
638.8 | 549.8 | 16 | |||||||||||
Asia
Pacific |
265.2 | 232.2 | 14 | |||||||||||
Latin
America and Mexico |
60.8 | 48.4 | 26 |
For the Nine Months Ended |
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30, 2005 |
September 30, 2004 |
Percentage Change |
||||||||||||
North
America, excluding Mexico |
$ | 4,082.1 | $ | 3,414.3 | 20 | % | ||||||||
Europe,
Middle East and Africa |
1,942.9 | 1,657.1 | 17 | |||||||||||
Asia
Pacific |
770.8 | 674.7 | 14 | |||||||||||
Latin
America and Mexico |
157.9 | 125.6 | 26 |
For the Three Months Ended |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30, 2005 |
September 30, 2004 |
$ Change |
% Change |
|||||||||||||||
Cost of
revenue: |
||||||||||||||||||
Information
storage products |
$ | 769.5 | $ | 707.4 | $ | 62.1 | 9 | % | ||||||||||
Information
storage and management services |
211.6 | 185.4 | 26.2 | 14 | ||||||||||||||
EMC Software
Group products and services |
85.0 | 73.9 | 11.1 | 15 | ||||||||||||||
VMware
products and services |
18.2 | 11.9 | 6.3 | 53 | ||||||||||||||
Other
businesses |
3.8 | 7.1 | (3.3 | ) | (46 | ) | ||||||||||||
Total cost of
revenue |
1,088.1 | 985.7 | 102.4 | 10 | ||||||||||||||
Gross
margins: |
||||||||||||||||||
Information
storage products |
606.8 | 517.4 | 89.4 | 17 | ||||||||||||||
Information
storage and management services |
260.3 | 192.9 | 67.4 | 35 | ||||||||||||||
EMC Software
Group products and services |
324.0 | 277.0 | 47.0 | 17 | ||||||||||||||
VMware
products and services |
83.1 | 48.7 | 34.4 | 71 | ||||||||||||||
Other
businesses |
3.4 | 7.2 | (3.8 | ) | (53 | ) | ||||||||||||
Total gross
margins |
1,277.6 | 1,043.2 | 234.4 | 22 | ||||||||||||||
Operating
expenses: |
||||||||||||||||||
Research and
development |
254.7 | 215.7 | 39.0 | 18 | ||||||||||||||
Selling,
general and administrative |
641.2 | 557.5 | 83.7 | 15 | ||||||||||||||
Restructuring
and other special charges |
5.8 | | (5.8 | ) | (100 | ) | ||||||||||||
Total
operating expenses |
901.7 | 773.2 | 128.5 | 17 | ||||||||||||||
Operating
income |
375.8 | 270.0 | 105.8 | 39 | ||||||||||||||
Investment
income, interest expense, and other expense, net |
48.5 | 36.9 | 11.6 | 31 | ||||||||||||||
Income before
income taxes |
424.3 | 307.0 | 117.3 | 38 | ||||||||||||||
Income tax
provision |
2.6 | 89.0 | 86.4 | 97 | ||||||||||||||
Net income
|
$ | 421.7 | $ | 218.0 | $ | 203.7 | 93 | % |
For the Nine Months Ended |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
September 30, 2005 |
September 30, 2004 |
$ Change |
% Change |
|||||||||||||||
Cost of
revenue: |
||||||||||||||||||
Information
storage products |
$ | 2,285.6 | $ | 2,078.6 | $ | 207.0 | 10 | % | ||||||||||
Information
storage and management services |
635.8 | 532.2 | 103.6 | 19 | ||||||||||||||
EMC Software
Group products and services |
259.7 | 226.6 | 33.1 | 15 | ||||||||||||||
VMware
products and services |
50.4 | 31.5 | 18.9 | 60 | ||||||||||||||
Other
businesses |
13.7 | 24.0 | (10.3 | ) | (43 | ) | ||||||||||||
Total cost of
revenue |
3,245.2 | 2,892.9 | 352.3 | 12 | ||||||||||||||
Gross
margins: |
||||||||||||||||||
Information
storage products |
1,782.8 | 1,485.7 | 297.1 | 20 | ||||||||||||||
Information
storage and management services |
732.8 | 549.8 | 183.0 | 33 | ||||||||||||||
EMC Software
Group products and services |
958.8 | 800.6 | 158.2 | 20 | ||||||||||||||
VMware
products and services |
221.9 | 115.7 | 106.2 | 92 | ||||||||||||||
Other
businesses |
12.2 | 27.1 | (14.9 | ) | (55 | ) | ||||||||||||
Total gross
margins |
3,708.5 | 2,978.8 | 729.7 | 24 | ||||||||||||||
Operating
expenses: |
||||||||||||||||||
Research and
development |
742.4 | 625.4 | 117.0 | 19 | ||||||||||||||
Selling,
general and administrative |
1,899.6 | 1,640.9 | 258.7 | 16 | ||||||||||||||
Restructuring
and other special charges |
6.8 | 32.7 | (25.9 | ) | (79 | ) | ||||||||||||
Total
operating expenses |
2,648.8 | 2,299.0 | 349.8 | 15 | ||||||||||||||
Operating
income |
1,059.7 | 679.8 | 379.9 | 56 | ||||||||||||||
Investment
income, interest expense, and other expense, net |
127.6 | 102.3 | 25.3 | 25 | ||||||||||||||
Income before
income taxes |
1,187.3 | 782.1 | 405.2 | 52 | ||||||||||||||
Income tax
provision |
202.4 | 231.4 | (29.0 | ) | 13 | |||||||||||||
Net income
|
$ | 984.8 | $ | 550.6 | $ | 434.3 | 79 | % |
Category |
Balance as of June 30, 2005 |
Additions (Reductions) to the Provision |
Current Utilization |
Balance as of September 30, 2005 |
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Workforce
reduction |
$ | 14.0 | $ | (1.0 | ) | $ | (3.2 | ) | $ | 9.8 | ||||||||
Consolidation
of excess facilities |
69.3 | 6.8 | (5.6 | ) | 70.6 | |||||||||||||
Other
contractual obligations |
2.3 | | | 2.3 | ||||||||||||||
Total |
$ | 85.6 | $ | 5.8 | $ | (8.8 | ) | $ | 82.6 |
Category |
Balance as of December 31, 2004 |
Additions (Reductions) to the Provision |
Current Utilization |
Balance as of September 30, 2005 |
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Workforce
reduction |
$ | 19.6 | $ | (0.8 | ) | $ | (9.1 | ) | $ | 9.8 | ||||||||
Consolidation
of excess facilities |
93.0 | 1.6 | (24.0 | ) | 70.6 | |||||||||||||
Other
contractual obligations |
2.6 | (0.3 | ) | | 2.3 | |||||||||||||
Total |
$ | 115.2 | $ | 0.6 | $ | (33.1 | ) | $ | 82.6 |
|
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 managements attention from other business concerns |
|
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 |
|
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 |
|
retaining and hiring, as required, the appropriate number of qualified employees |
|
managing, protecting and enhancing, as appropriate, our infrastructure, including but not limited to, our information systems and internal controls |
|
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 |
|
the relative dollar amount of our product and services offerings in relation to many of our customers budgets, resulting in long lead times for customers budgetary approval, which tends to be given late in a quarter |
|
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 |
|
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 |
|
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 |
Item
4. |
CONTROLS AND PROCEDURES |
Item
1. |
Legal Proceedings |
Item
2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
Period |
Total Number of Shares Purchased |
Average Price Paid per Share |
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs3 |
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs |
||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
July 1, 2005
July 31, 2005 |
7,584,056 | 1 | $ | 14.07 | 7,500,000 | 163,035,900 | ||||||||||||
August 1, 2005
August 31, 2005 |
14,767,500 | $ | 13.61 | 14,767,500 | 148,268,400 | |||||||||||||
September 1, 2005
September 30, 2005 |
2,003,969 | 2 | $ | 13.01 | 2,000,000 | 146,268,400 | ||||||||||||
Total |
24,355,525 | $ | 13.70 | 24,267,500 | 146,268,400 |
1 |
Includes an aggregate of 84,056 shares acquired from employees for tax withholding purposes. |
2 |
Includes an aggregate of 3,969 shares acquired from employees for tax withholding purposes. |
3 |
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 |
EMC
CORPORATION |
||||||
Date: October
28, 2005 |
By: /s/ William J. Teuber, Jr. William J. Teuber, Jr. Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
3.1 |
Restated Articles of Organization of EMC Corporation, as amended. (1) |
3.2 |
Amended and Restated By-laws of EMC Corporation. (2) |
4.1 |
Form of Stock Certificate. (3) |
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 Corporations Quarterly Report on Form 10-Q filed August 9, 2001 (No. 1-9853). |
(2) |
Incorporated by reference to EMC Corporations Quarterly Report on Form 10-Q filed November 3, 2004 (No. 1-9853). |
(3) |
Incorporated by reference to EMC Corporations Annual Report on Form 10-K filed March 31, 1988 (No. 0-14367). |
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 Registrants 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) |
Evaluated the effectiveness of the Registrants 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 Registrants internal control over financial reporting that occurred during the Registrants most recent fiscal quarter (the Registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrants internal control over financial reporting; and |
5. |
The Registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrants auditors and the audit committee of the Registrants 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 Registrants 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 Registrants internal control over financial reporting. |
/s/ Joseph M. Tucci Joseph M. Tucci President and Chief Executive Officer |
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 Registrants 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) |
Evaluated the effectiveness of the Registrants 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 Registrants internal control over financial reporting that occurred during the Registrants most recent fiscal quarter (the Registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrants internal control over financial reporting; and |
5. |
The Registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrants auditors and the audit committee of the Registrants 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 Registrants 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 Registrants internal control over financial reporting. |
/s/ William J. Teuber, Jr. William J. Teuber, Jr. Executive Vice President and Chief Financial Officer |
(1) |
The Companys Quarterly Report on Form 10-Q for the quarter ended September 30, 2005, 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 October 28, 2005 |
(1) |
The Companys Quarterly Report on Form 10-Q for the quarter ended September 30, 2005, 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 October 28, 2005 |