Current Report Filing (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 26, 2016

________________________

EMC CORPORATION

(Exact name of registrant as specified in its charter)



Massachusetts	1-9853	04-2680009
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

176 South Street Hopkinton, Massachusetts (Address of principal executive offices)		01748 (Zip Code)

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):


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


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


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


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

Item 2.02. Results of Operations and Financial Condition.

On January 27, 2016, EMC Corporation (“EMC”) issued a press release announcing financial results for the quarter and full fiscal year ended December 31, 2015. 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 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On January 26, 2016, EMC announced that Zane C. Rowe will resign as EMC’s Chief Financial Officer and become the Chief Financial Officer of VMware, Inc. (“VMware”), effective March 1, 2016. A press release announcing Mr. Rowe’s resignation is attached hereto as Exhibit 99.2 and incorporated by reference herein.

On January 26, 2016, EMC entered into a letter agreement with Mr. Rowe (the “Rowe Letter Agreement”). Pursuant to the Rowe Letter Agreement, Mr. Rowe’s outstanding EMC equity awards will continue to vest in accordance with their terms while he is employed at VMware; provided that if the merger (the “Merger”) between EMC and an affiliate of Dell Inc. (“Dell”), pursuant to the Agreement and Plan of Merger, dated October 12, 2015, by and among Denali Holding Inc., Dell, Universal Acquisition Co. and EMC (the “Merger Agreement”), becomes effective (such date, the “Closing”), such equity awards will vest in full immediately prior to the Closing. In addition, EMC will not seek repayment of Mr. Rowe’s sign-on bonus while he is employed with VMware and will assume the lease obligations for Mr. Rowe’s Boston apartment. Mr. Rowe’s Change in Control Severance Agreement will terminate at the end of his active employment with EMC. However, in the event his employment with VMware is involuntarily terminated without “cause” (as such term is defined under VMware’s Change in Control Retention Plan) or is terminated by him for “good reason” (consisting of one or more of the following conditions: (1) a material diminution of his authority, duties or responsibilities as Chief Financial Officer of VMware; (2) a material diminution of his base salary or target cash incentives at VMware; or (3) he no longer reports to the Chief Executive Officer of VMware) at any time before the earlier of (i) the 24-month anniversary of the Closing, and (ii) the termination of the Merger Agreement, EMC will pay him a lump sum severance payment equal to $4,575,000. The foregoing description is qualified in all respects by reference to the Rowe Letter Agreement, which is attached hereto as Exhibit 99.3 and incorporated by reference herein.

On January 26, 2016, EMC announced that Denis G. Cashman will succeed Mr. Rowe as EMC’s new Chief Financial Officer, effective March 1, 2016. It is expected that Mr. Cashman will continue in his role as EMC’s Chief Accounting Officer. A press release announcing Mr. Cashman’s appointment is attached hereto as Exhibit 99.4 and incorporated by reference herein.

Mr. Cashman, 55, has been Chief Financial Officer, EMC Information Infrastructure since February 2014 and Chief Accounting Officer of EMC since January 2011. Prior thereto, he was EMC’s Chief Operating Officer, Finance from January 2011 until February 2014, a Senior Vice President from October 2002 until January 2011 and Corporate Controller from March 2005 until January 2011. Mr. Cashman joined EMC in May 1988.

On January 26, 2016, EMC entered into a letter agreement with Mr. Cashman (the “Cashman Letter Agreement”). Pursuant to the Cashman Letter Agreement, Mr. Cashman will be eligible to receive a one-time cash bonus in the amount of $250,000, payable upon the earlier of (i) the Closing of the Merger and (ii) December 31, 2016, subject to his continued active employment with EMC on such payment date. The remainder of Mr. Cashman’s compensation for 2016 has not yet been determined by EMC’s Leadership and Compensation Committee. The foregoing description is qualified in all respects by reference to the Cashman Letter Agreement, which is attached hereto as Exhibit 99.5 and incorporated by reference herein.

Mr. Cashman is party to an Indemnification Agreement with EMC providing for the indemnification of, and the advancement of expenses to, Mr. Cashman to the fullest extent permitted by law in connection with the defense or disposition of any threatened, pending or completed action, suit or other proceeding in which he is involved by reason of his being an officer of EMC, subject to the terms and conditions provided in the Indemnification Agreement. The foregoing description is qualified in all respects by reference to the form of Indemnification Agreement filed as Exhibit 10.14 to EMC’s Annual Report on Form 10-K filed February 25, 2014.

Mr. Cashman is also party to a Change in Control Severance Agreement (the “CIC Agreement”) which generally provides severance benefits if there is both (i) a change in control (or potential change in control) of EMC and (ii) his employment is terminated by EMC (or any successor) without “cause” or if he terminates his employment for “good reason” within specified time periods. Pursuant to the Cashman Letter Agreement, for purposes of clause (A) of the definition of “good reason” under Section 16.16 of the CIC Agreement, the existence of good reason based upon Mr. Cashman’s Chief Financial Officer role or position following the Closing shall be determined based on a comparison to his role, position, duties and responsibilities, in effect as Chief Financial Officer, EMC Information Infrastructure, and not by reference to those in effect as EMC’s Chief Financial Officer. The foregoing description is qualified in all respects by reference to the form of Change in Control Severance Agreement filed as Exhibit 10.8 to EMC’s Annual Report on Form 10-K filed February 24, 2012 and to the Cashman Letter Agreement, as applicable.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits


99.1	Press release from EMC Corporation dated January 27, 2016


99.2	Press release from EMC Corporation dated January 26, 2016


99.3	Letter Agreement with Zane Rowe


99.4	Press release from EMC Corporation dated January 26, 2016


99.5	Letter Agreement with Denis G. Cashman

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/ Zane C. Rowe
	Zane C. Rowe
	Executive Vice President and Chief Financial Officer

Date: January 27, 2016

EXHIBIT INDEX



Exhibit No.	Description
99.1	Press release from EMC Corporation dated January 27, 2016
99.2	Press release from EMC Corporation dated January 26, 2016
99.3	Letter Agreement with Zane Rowe
99.4	Press release from EMC Corporation dated January 26, 2016
99.5	Letter Agreement with Denis G. Cashman

Exhibit 99.1


Press Contact:	Katryn McGaughey

508-293-7717

katryn.mcgaughey@emc.com

EMC Reports Fourth-Quarter and Full-Year 2015 Results




Highlights:
l	Full-year GAAP and non-GAAP revenue each up 1% year over year (up 5% on a constant currency basis); Full-year GAAP and non-GAAP EPS of $1.01 and $1.82, respectively
l	Q4 revenue was flat year over year (up 3% on a constant currency basis); Q4 GAAP and non-GAAP EPS of $0.39 and $0.65, respectively

HOPKINTON, Mass. - January 27, 2016 - EMC Corporation (NYSE:EMC) today reported fourth-quarter and full-year 2015 financial results.

Fourth-quarter consolidated revenue was $7 billion, flat year over year (up 3% on a constant currency basis²). GAAP net income attributable to EMC was $771 million in the fourth quarter, and GAAP earnings per weighted average diluted share was $0.39 in the fourth quarter. Non-GAAP¹ net income attributable to EMC was $1.3 billion in the fourth quarter, and non-GAAP¹ earnings per weighted average diluted share in the fourth quarter was $0.65.

Full-year 2015 GAAP and non-GAAP³ revenue was $24.7 billion and $24.8 billion, respectively, up 1% year over year (up 5% on a constant currency basis²). GAAP net income attributable to EMC for 2015 was $2 billion, and GAAP earnings per weighted average diluted share was $1.01. Non-GAAP³ net income attributable to EMC for 2015 was $3.6 billion, and non-GAAP³ earnings per weighted average diluted share for 2015 was $1.82.

EMC generated $1.9 billion in operating cash flow and $1.5 billion in free cash flow⁴ in the fourth quarter, and ended the quarter with $14.8 billion in cash and investments. EMC returned approximately $229 million to shareholders via a quarterly dividend.

Joe Tucci, EMC Chairman and CEO, said, “The fourth quarter of 2015 follows 24 consecutive quarters of reported year-over-year top-line growth; an accomplishment very few of our peers have matched. 2015 brought geopolitical and other market-wide uncertainties, while secular technology trends continued to accelerate. EMC anticipated and focused on capturing the massive growth opportunity these trends will avail, and we are well equipped in 2016 with some of the most exciting technology advancements in our history.”

Tucci added, “Together, EMC and Dell will be better positioned in the market. We believe that the coming together of the companies is the best strategic option for all stakeholders. I’m pleased to report that progress on closing the transaction remains on track under the original terms and timeline.”

Zane Rowe, EMC CFO, said, “As we work toward closing the transaction with Dell to build one of the world’s premier IT powerhouses, we continue to focus on synergies and operating efficiencies across our business. Our previously announced $850 million cost reduction and business transformation plan is on track and the initial $50 million cost reduction target was met in Q4. We are confident that we will exceed our goal, thanks to our unified team’s effort and focus.”

David Goulden, CEO of EMC Information Infrastructure, said, “Customers are buying ‘just enough’ and ‘just in time’ for their traditional environments. They are also transforming existing IT systems toward a Hybrid Cloud or building and deploying new digital applications. In some cases they are doing it all simultaneously. Against this market backdrop, our storage business revenue grew 3% in constant currency for the full year. Looking forward, I am excited about our position in 2016 as we further expand our industry-leading Storage and Converged Infrastructure portfolio, which is built upon the architectural pillars of the modern data center - Flash, Scale-Out, Software Defined, Cloud Enabled and Trusted technologies.”

Fourth-Quarter and Full-Year 2015 Highlights

•

EMC Information Infrastructure business fourth-quarter revenue was down 4% year over year (down 1% on a constant currency basis²) and full-year 2015 revenue was down 2% year over year (up 2% on a constant currency basis²). Information Storage fourth-quarter revenue was down 4% year over year (flat on a constant currency basis²) and full-year 2015 revenue was down 1% year over year (up 3% on a constant currency basis²). EMC XtremIO ended the year with over $1 billion in revenue. VCE exited 2015 with an annualized demand⁵ run rate exceeding $3 billion. Virtustream ended the fourth quarter with the strongest quarterly bookings in its history.


•	VMware fourth-quarter and full-year GAAP revenue within EMC was up 10% and 9% year over year, respectively. Fourth-quarter and full-year non-GAAP³ revenue within EMC were both up 10% year over year (both up 13% on a constant currency basis²). VMware customers continue to invest in Software-Defined Data Centers, Hybrid Cloud solutions and End-User Computing.

•

Pivotal continues to gain momentum as it helps the world’s largest enterprises successfully expand their digital capabilities, with fourth quarter revenue up 25% year over year. Pivotal continues its transition to a subscription business model, with annual recurring revenue⁶ up 40% compared to the previous quarter with strong performance in all geographies and product areas, while continuing to expand its customer base across many industries including Automotive, Financial Services, Insurance, Retail and Telecommunications.

Global Highlights

Consolidated fourth-quarter revenue from North America was flat year over year. Fourth-quarter revenue from the Europe, Middle East and Africa region was down 1% year over year (up 7% on a constant currency basis²). Asia Pacific and Japan fourth-quarter revenue was flat year over year (up 4% on a constant currency basis²). Latin America fourth-quarter revenue was down 16% year over year (down 5% on a constant currency basis²).

Given the announcement made on October 12, 2015 regarding EMC’s entry into a definitive merger agreement, the company will not be providing outlook for its 2016 financial results.

Details will be provided during today’s 8:30 a.m. ET live webcast for investors, which is available on the EMC Investor Relations website (http://www.emc.com/ir).

Resources


•	To access today’s webcast at 8:30 a.m. ET, visit the EMC Investor Relations website


•	A replay of today’s webcast will be available via the EMC Investor Relations website


•	EMC financial results are available on the U.S. Securities and Exchange Commission website


•	For more information about Dell and EMC combining visit http://www.emc.com/futureready


•	Visit the VMware Investor Relations website for more detail on its 2015 results


•	Connect with EMC on Twitter (@EMCCorp and @EMC_News), LinkedIn, Facebook and SocialSphere

About EMC

EMC Corporation is a global leader in enabling businesses and service providers to transform their operations and deliver IT as a service. Fundamental to this transformation is cloud computing. Through innovative products and services, EMC accelerates the journey to cloud computing, helping IT departments to store, manage, protect and analyze their most valuable asset - information - in a more agile, trusted and cost-efficient way. Additional information about EMC can be found at www.EMC.com.

# # #

¹Items excluded from the non-GAAP results for the fourth quarters of 2015 and 2014 are amounts relating to stock-based compensation expense, intangible asset amortization, restructuring charges, acquisition and other related charges, the reversal of the benefit of the R&D tax credit included in the first three quarters of 2015, a gain on previously held interests in strategic investments and joint venture, special tax items and merger-related costs. See attached schedules for GAAP to non-GAAP reconciliations.

²This release refers to growth rates at constant currency or adjusting for currency so that business results can be viewed without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons of EMC's business performance. To present this information, current period results for entities reporting in currencies other than US dollars are converted into US dollars at the exchange rate applied in each month of the prior year quarter. Constant currency includes the impacts from EMC's hedging program.

³Items excluded from the non-GAAP results for the full years 2015 and 2014 are amounts relating to stock-based compensation expense, intangible asset amortization, restructuring charges, acquisition and other related charges, a gain on previously held interests in strategic investments and joint venture, an impairment of strategic investment, a fair value adjustment on assets held for sale, VMware litigation and other contingencies, VMware GSA settlement, special tax items and merger-related costs. See attached schedules for GAAP to non-GAAP reconciliations.

⁴Free cash flow is a non-GAAP financial measure which is defined as net cash provided by operating activities, less additions to property, plant and equipment and capitalized software development costs. See attached schedules for a reconciliation of net cash provided by operating activities to free cash flow for the three and twelve months ended December 31, 2015 and 2014.

⁵Demand run rate is an annualized calculation of orders received in the applicable period for the sale of VCE and related products and services.

⁶Annual Recurring Revenue (“ARR”) is an operational performance metric used to assess the health and trajectory of our Pivotal segment. We calculate ARR as the value of contracted recurring revenue of term subscriptions which includes both current subscriptions and contracted subscriptions with a future start date, adjusted by the actual churn in the period. ARR should be viewed independently of revenue and any other GAAP measure.

EMC and XtremIO are either registered trademarks or trademarks of EMC Corporation in the United States and/or other countries. All other trademarks used are the property of their respective owners.

EMC Corporation Disclosure Regarding Forward Looking Statements

This communication contains forward-looking information about EMC Corporation and the proposed transaction that is intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. 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) the failure to obtain the approval of EMC shareholders in connection with the proposed transaction; (ii) the failure to consummate or delay in consummating the proposed transaction for other reasons; (iii) the risk that a condition to closing of the proposed transaction may not be satisfied or that required financing for the proposed transaction may not be available or may be delayed; (iv) the risk that a regulatory approval that may be required for the proposed transaction is delayed, is not obtained, or is obtained subject to conditions that are not anticipated; (v) risk as to the trading price of Class V Common Stock to be issued by Denali Holding Inc. in the proposed transaction relative to the trading price of shares of VMware, Inc.’s common stock; (vi) the effect of the proposed transaction on VMware’s business and operating results and impact on the trading price of shares of Class V Common Stock of Denali Holding Inc. and shares of VMware common stock; (vii) the diversion of management time on transaction-related issues; (viii) adverse changes in general economic or market conditions; (ix) delays or reductions in information technology spending; (x) the relative and varying rates of product price and component cost declines and the volume and mixture of product and services revenues; (xi) competitive factors, including but not limited to pricing pressures and new product introductions; (xii) component and product quality and availability; (xiii) fluctuations in VMware’s operating results and risks associated with trading of VMware common stock; (xiv) the transition to new products, the uncertainty of customer acceptance of new product offerings and rapid technological and market change; (xv) the ability to attract and retain highly qualified employees; (xvi) insufficient, excess or obsolete inventory; (xvii) fluctuating currency exchange rates; (xviii) threats and other disruptions to our secure data centers or networks; (xix) our ability to protect our proprietary technology; (xx) war or acts of terrorism; and (xxi) 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 (the “SEC”). Except to the extent otherwise required by federal securities law, EMC disclaims any obligation to update any such forward-looking statements after the date of this communication.

Additional Information and Where to Find It

This communication does not constitute an offer to sell or a solicitation of an offer to sell or a solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law. This communication is being made in respect of the proposed business combination transaction between EMC Corporation and Denali Holding Inc. The proposed transaction will be submitted to the shareholders of EMC for their consideration. In connection with the issuance of Class V Common Stock of Denali Holding Inc. in the proposed transaction, Denali Holding Inc. has filed with the SEC a Registration Statement on Form S-4 (File No. 333-208524) that includes a preliminary proxy statement/prospectus regarding the proposed transaction, and each of Denali Holding Inc. and EMC plans to file with the SEC other documents regarding the proposed transaction. After the registration statement has been declared effective by the SEC, a definitive proxy statement/prospectus will be mailed to each EMC shareholder entitled to vote at the special meeting in connection with the proposed transaction. INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER DOCUMENTS RELATING TO THE TRANSACTION FILED OR TO BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors may obtain copies of the preliminary proxy statement/prospectus and all other documents filed with the SEC regarding the proposed transaction, free of charge, at the SEC’s website (http://www.sec.gov). Investors may also obtain these documents, free of charge, from EMC’s website (www.EMC.com) under the link “Investor Relations” and then under the tab “Financials” then “SEC Filings”, or by directing a request to: EMC Corporation, 176 South Street, Hopkinton, Massachusetts, 01748, Attn: Investor Relations, 866-362-6973.

Participants in the Solicitation

EMC Corporation and its directors, executive officers and other members of management and employees may be deemed to be “participants” in the solicitation of proxies from EMC shareholders in connection with the proposed transaction. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of EMC shareholders in connection with the proposed transaction and a description of their direct and indirect interest, by security holdings or otherwise, is set forth in the preliminary proxy statement/prospectus filed with the SEC in connection with the proposed transaction. You can find information about EMC’s executive officers and directors in its definitive proxy statement filed with the SEC on March 20, 2015 and in its Annual Report on Form 10-K filed with the SEC on February 27, 2015. You can obtain free copies of these documents at the SEC’s website (http://www.sec.gov). You can also obtain free copies of these documents from EMC using the contact information above.

Use of Non-GAAP Financial Measures

This release, the accompanying schedules and the additional content that is available on EMC's website contain non-GAAP financial measures. These non-GAAP financial measures, which are used as measures of EMC's performance or liquidity, should be considered in addition to, not as a substitute for, measures of EMC's financial performance or liquidity prepared in accordance with GAAP. EMC's non-GAAP financial measures may be defined differently from time to time and 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 in this release.

Where specified in the accompanying schedules for various periods entitled "Reconciliation of GAAP to Non-GAAP," certain items noted on each such specific schedule (including, where noted, amounts relating to stock-based compensation expense, intangible asset amortization, restructuring charges, acquisition and other related charges, a gain on previously held interests in strategic investments and joint venture, an impairment of strategic investment, a fair value adjustment on assets held for sale, VMware litigation and other contingencies, VMware GSA settlement, the reversal of the benefit of the R&D tax credit included in the first three quarters of 2015, special tax items and merger-related costs) are excluded from the non-GAAP financial measures.

EMC’s management uses the non-GAAP financial measures in the accompanying schedules to gain an understanding of EMC's comparative operating performance (when comparing such results with previous periods or forecasts) and future prospects and includes the benefit of the R&D tax credit in, and excludes the above-listed items from, its internal financial statements for purposes of its internal budgets and each reporting segment’s financial goals. These 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.

This release also includes disclosures regarding free cash flow which is a non-GAAP financial measure. Free cash flow is defined as net cash provided by operating activities less additions to property, plant and equipment and capitalized software development costs. EMC uses free cash flow, among other measures, to evaluate the ability of its operations to generate cash that is available for purposes other than capital expenditures and capitalized software development costs. Management believes that information regarding free cash flow provides investors with an important perspective on the cash available to make strategic acquisitions and investments, repurchase shares, pay dividends, service debt and fund ongoing operations. As free cash flow is not a measure of liquidity calculated in accordance with GAAP, free cash flow should be considered in addition to, but not as a substitute for, the analysis provided in the statement of cash flows.

This release also refers to growth rates at constant currency or adjusting for currency so that business results can be viewed without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons of EMC's business performance. To present this information, current period results for entities reporting in currencies other than US dollars are converted into US dollars at the exchange rate applied in each month of the prior year quarter. Constant currency includes the impacts from EMC's hedging program.

All of the foregoing non-GAAP financial measures have limitations. Specifically, the non-GAAP financial measures that exclude the items noted above do not include all items of income and expense that affect EMC's operations. Further, 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 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 millions, except per share amounts)

(unaudited)



		Three Months Ended						Twelve Months Ended
		December 31,			December 31,			December 31,			December 31,
		2015			2014			2015			2014
Revenues:
	Product sales	$	4,114		$	4,322		$	13,514		$	14,051
	Services	2,900			2,726			11,190			10,389
		7,014			7,048			24,704			24,440
Cost and expenses:
	Cost of product sales	1,667			1,669			5,809			5,738
	Cost of services	987			874			3,904			3,453
	Research and development	795			752			3,167			2,991
	Selling, general and administrative	2,248			2,131			8,533			7,982
	Restructuring and acquisition-related charges	224			52			450			239
Operating income		1,093			1,570			2,841			4,037

Non-operating income (expense):
	Investment income	19			24			94			123
	Interest expense	(42		)	(39		)	(164		)	(147		)
	Other income (expense), net	53			(6		)	111			(251		)
Total non-operating income (expense)		30			(21		)	41			(275		)
Income before provision for income taxes		1,123			1,549			2,882			3,762
Income tax provision		290			336			710			868
Net income		833			1,213			2,172			2,894
Less: Net income attributable to the non-controlling interest in VMware, Inc.		(62		)	(66		)	(182		)	(180		)
Net income attributable to EMC Corporation		$	771		$	1,147		$	1,990		$	2,714

Net income per weighted average share, basic attributable to EMC Corporation common shareholders		$	0.40		$	0.57		$	1.02		$	1.34
Net income per weighted average share, diluted attributable to EMC Corporation common shareholders		$	0.39		$	0.56		$	1.01		$	1.32

Weighted average shares, basic		1,941			2,014			1,944			2,028
Weighted average shares, diluted		1,957			2,038			1,962			2,059

Cash dividends declared per common share		$	0.12		$	0.12		$	0.46		$	0.45

EMC CORPORATION

CONSOLIDATED BALANCE SHEETS

(in millions, except per share amounts)

(unaudited)



		December 31,			December 31,
		2015			2014
ASSETS
Current assets:
	Cash and cash equivalents	$	6,549		$	6,343
	Short-term investments	2,726			1,978
	Accounts and notes receivable, less allowance for doubtful accounts of $90 and $72	3,977			4,413
	Inventories	1,245			1,276
	Other current assets	566			619
Total current assets		15,063			14,629
Long-term investments		5,508			6,334
Property, plant and equipment, net		3,850			3,766
Intangible assets, net		2,149			2,125
Goodwill		17,090			16,134
Deferred income taxes⁽¹⁾		1,164			952
Other assets, net		1,788			1,645
	Total assets	$	46,612		$	45,585

LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
	Accounts payable	$	1,644		$	1,696
	Accrued expenses	3,123			3,141
	Income taxes payable	609			852
	Short-term debt	1,299			—
	Deferred revenue	6,210			6,021
Total current liabilities		12,885			11,710
Income taxes payable		461			306
Deferred revenue		4,592			4,144
Long-term debt		5,475			5,469
Other liabilities		480			431
	Total liabilities	23,893			22,060
Commitments and contingencies
Shareholders' equity:
	Preferred stock, par value $0.01; authorized 25 shares; none outstanding	—			—
	Common stock, par value $0.01; authorized 6,000 shares; issued and outstanding 1,943 and 1,985 shares	19			20
	Additional paid-in capital	—			—
	Retained earnings	21,700			22,242
	Accumulated other comprehensive loss, net	(579		)	(366		)
	Total EMC Corporation's shareholders' equity	21,140			21,896
Non-controlling interests		1,579			1,629
	Total shareholders' equity	22,719			23,525
	Total liabilities and shareholders' equity	$	46,612		$	45,585

⁽¹⁾ During the fourth quarter of 2015, EMC early-adopted Accounting Standards Update No. 2015-17, Balance Sheet Classification of Deferred Taxes, using retrospective application. This standard requires that all deferred tax assets and liabilities, and any related valuation allowance, be classified as noncurrent on the balance sheets. The updated standard has been applied retrospectively to all periods presented.

EMC CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(unaudited)



			Twelve Months Ended
			December 31,			December 31,
			2015			2014
Cash flows from operating activities:
	Cash received from customers		$	25,737		$	25,360
	Cash paid to suppliers and employees		(19,312		)	(17,893		)
	Dividends and interest received		100			143
	Interest paid		(138		)	(134		)
	Income taxes paid		(1,001		)	(953		)
		Net cash provided by operating activities	5,386			6,523

Cash flows from investing activities:
	Additions to property, plant and equipment		(902		)	(979		)
	Capitalized software development costs		(567		)	(509		)
	Purchases of short- and long-term available-for-sale securities		(7,252		)	(9,982		)
	Sales of short- and long-term available-for-sale securities		5,205			8,722
	Maturities of short- and long-term available-for-sale securities		1,970			2,651
	Business acquisitions, net of cash acquired		(1,336		)	(1,973		)
	Purchases of strategic and other related investments		(182		)	(144		)
	Sales of strategic and other related investments		235			101
	Joint venture funding		—			(360		)
	Decrease (increase) in restricted cash		75			(78		)
		Net cash used in investing activities	(2,754		)	(2,551		)

Cash flows from financing activities:
	Proceeds from the issuance of EMC's common stock		322			503
	Proceeds from the issuance of VMware's common stock		126			164
	EMC repurchase of EMC's common stock		(2,063		)	(2,969		)
	VMware repurchase of VMware's common stock		(1,125		)	(700		)
	Excess tax benefits from stock-based compensation		55			102
	Payment of long-term obligations		—			(1,665		)
	Net proceeds from the issuance of short-term obligations		1,295			—
	Contributions from non-controlling interests		5			7
	Dividend payment		(907		)	(879		)
		Net cash used in financing activities	(2,292		)	(5,437		)

Effect of exchange rate changes on cash and cash equivalents			(134		)	(83		)

Net increase (decrease) in cash and cash equivalents			206			(1,548		)
Cash and cash equivalents at beginning of period			6,343			7,891
Cash and cash equivalents at end of period			$	6,549		$	6,343

Reconciliation of net income to net cash provided by operating activities:
Net income			$	2,172		$	2,894
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation and amortization		1,907			1,864
	Non-cash interest expense on debt		—			1
	Non-cash restructuring and other special charges		40			19
	Stock-based compensation expense		1,091			1,031
	Provision for doubtful accounts		55			10
	Deferred income taxes, net		(235		)	(396		)
	Excess tax benefits from stock-based compensation		(55		)	(102		)
	Gain on previously held interests in strategic investments		—			(101		)



Impairment of strategic investment			—			33
Other, net			6			20
Changes in assets and liabilities, net of acquisitions:
	Accounts and notes receivable		385			(309		)
	Inventories		(196		)	(149		)
	Other assets		47			345
	Accounts payable		(75		)	167
	Accrued expenses		(333		)	(286		)
	Income taxes payable		(53		)	314
	Deferred revenue		596			1,126
	Other liabilities		34			42
		Net cash provided by operating activities	$	5,386		$	6,523

Reconciliation of GAAP to Non-GAAP*

(in millions, except per share amounts)

(unaudited)



	Three Months Ended
				Diluted						Diluted
	December 31,			Earnings			December 31,			Earnings
	2015			Per Share			2014			Per Share
Net Income Attributable to EMC - GAAP	$	771		$	0.393		$	1,147		$	0.562
Stock-based compensation expense	216			0.111			190			0.093
Intangible asset amortization	67			0.034			68			0.034
Restructuring charges	169			0.086			34			0.017
Acquisition and other related charges	21			0.010			31			0.015
R&D tax credit	(29		)	(0.015		)	(32		)	(0.016		)
Gain on previously held interests in strategic investments and joint venture	—			—			(33		)	(0.016		)
Special tax items	39			0.020			—			—
Merger-related costs	14			0.007			—			—
Net Income Attributable to EMC - Non-GAAP	$	1,268		$	0.647		$	1,405		$	0.689

Weighted average shares, diluted				1,957						2,038
Incremental VMware dilution				$	1					$	2



	Twelve Months Ended
			Diluted					Diluted
	December 31,		Earnings		December 31,			Earnings
	2015		Per Share		2014			Per Share
Net Income Attributable to EMC - GAAP	$	1,990	$	1.012	$	2,714		$	1.315
Stock-based compensation expense	767		0.391		713			0.347
Intangible asset amortization	263		0.134		263			0.128
Restructuring charges	336		0.171		168			0.082
Acquisition and other related charges	103		0.053		108			0.052
Gain on previously held interests in strategic investments and joint venture	—		—		(77		)	(0.038		)
Impairment of strategic investment	—		—		23			0.011
Fair value adjustment on assets held for sale	12		0.006		—			—
VMware litigation and other contingencies	6		0.003		7			0.003
VMware GSA settlement	42		0.021		—			—
Special tax items	39		0.020		—			—
Merger-related costs	14		0.007		—			—
Net Income Attributable to EMC - Non-GAAP	$	3,572	$	1.819	$	3,919		$	1.900

Weighted average shares, diluted			1,962					2,059
Incremental VMware dilution			$	5				$	7


*	Net of tax and non-controlling interest in VMware, Inc., except weighted average shares, diluted. See Income Tax Provision and Net Income Attributable to VMware lines in Supplemental Information schedules.

Note: Schedules may not add or recalculate due to rounding.