emc q2 2014 financial results (final webcast)

1 Copyright 2014 EMC Corporation. All rights reserved. Copyright 2014 EMC Corporation. All rights reserved.

EMC Q2 2014 Financial Results Tony Takazawa Vice President, Global Investor Relations July 23, 2014


Forward-Looking Statements This presentation 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) the relative and varying rates of product price and component cost declines and the volume and mixture of product and services revenues; (iv) competitive factors, including but not limited to pricing pressures and new product introductions; (v) component and product quality and availability; (vi) fluctuations in VMware, Inc.s operating results and risks associated with trading of VMware stock; (vii) the transition to new products, the uncertainty of customer acceptance of new product offerings and rapid technological and market change; (viii) risks associated with managing the growth of our business, including risks associated with acquisitions and investments and the challenges and costs of integration, restructuring and achieving anticipated synergies; (ix) the ability to attract and retain highly qualified employees; (x) insufficient, excess or obsolete inventory; (xi) fluctuating currency exchange rates; (xii) threats and other disruptions to our secure data centers or networks; (xiii) our ability to protect our proprietary technology; (xiv) war or acts of terrorism; and (xv) other one-time events and other important factors disclosed previously and from time to time in EMCs 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 presentation.

This presentation contains non-GAAP financial measures which include, but are not limited to, non-GAAP Gross Margin, non-GAAP Operating Margin, non-GAAP EPS, non-GAAP Net Income, Free Cash Flow and Non-GAAP Income Tax Rate. A reconciliation to GAAP is included within this presentation and in the Current Report on Form 8-K furnished by EMC on July 23, 2014 which can be found at www.EMC.com or www.sec.gov.


Joe Tucci Chairman and CEO, EMC Corporation


Mainframe, Mini Computer Terminals

LAN/Internet Client/Server PC

Mobile Cloud Big Data Social Mobile Devices

MILLIONS OF USERS

THOUSANDS OF APPS

HUNDREDS OF MILLIONS OF USERS

TENS OF THOUSANDS OF APPS

BILLIONS OF USERS

MILLIONS OF OF APPS

Source: IDC, 2012

The World Is Changing


Information Infrastructure

Data Center Infrastructure

Application & Data Platform

Security

Federation Companies Are Strategically Aligned Our Stack For The 3rd Platform


Customer Focused Solutions 5 Key Areas Of Future Investment For IT

Next Gen Apps

Traditional Applications

SOFTWARE-DEFINED DATA CENTER

PLATFORM AS A SERVICE

VIRTUAL WORKSPACE

SECURITY ANALYTICS

BUSINESS DATA LAKE


Converged Infrastructure

Partners

vCloud Hybrid Service

Hybrid Cloud

Proven & Tested In Joint Federation Labs



VIRTUAL WORKSPACE

BUSINESS DATA LAKE

SECURITY ANALYTICS

Next Gen Apps


Customer Focused Solutions


Information Infrastructure

Data Center Infrastructure

Application & Data Platform

Security

Federation Companies Are Free To Build Their Own Ecosystem Our Stack Gives Customers Choice


Acquisitions/Investments Market Opportunity Revenue Opportunity

Nicira/NSX Software Defined Networking $1B+

AirWatch Mobile Device and Security Management $1B+

Pivotal Big/Fast Data PaaS $1B+

ViPR/ECS Software Defined Storage Elastic Cloud Storage $1B+

XtremIO/ScaleIO Next-Gen, Scale-out Flash/Block Storage $1B+

DSSD New Rack Scale Flash Storage $1B+

Strategic Investments


David Goulden CEO, EMC Information Infrastructure CFO, EMC Corporation


EMC Federation

Note: Figures may not foot due to rounding

Q214 Growth Y/Y

Consolidated Revenue $5.88B 5%

Pivotal $0.05B 29%

VMware $1.45B 17%

Information Infrastructure $4.38B 1%


EMC Consolidated Results

Q214 Growth Y/Y

Consolidated Revenue $5.88B 5%

Non-GAAP EPS $0.43 2%

Free Cash Flow $930M 10%

Refer to the the Appendix for a complete reconciliation of GAAP to non-GAAP.

Note: Free 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 six months ended June 30, 2014 and 2013.


EMC Consolidated Results

Q214 Growth Y/Y

North America $3.20B 3%

EMEA $1.67B 12%

APJ $0.80B -4%

Latin America $0.21B 14%

Consolidated $5.88B 5%

BRIC + 13 5%



Consolidated Non-GAAP EPS Results Y/Y


$0.42 $0.43

+$0.05

+$0.02

-$0.06

Q2'13 Gross Profit Operating Expense

Non-Operating Expense

Tax Rate Minority Interest

Incremental Dilution

Sharecount Q2'14


Free Cash Flow, Cash Use & Cash Balance Q214 FCF $930M

Cash Use

EMC ex. VMware Domestic

$3.7B

EMC ex. VMware International

$4.3B

VMware Domestic

$2.0B

VMware International

$4.7B

Q214

EMC Repurchase EMC Shares** $603M

EMC Repurchase VMW Shares -

VMware Purchase VMware Shares $238M

Acquisitions, Net of Cash Acquired $625M


Note: Free 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 six months ended June 30, 2014 and 2013.

*Note: Figures may not foot due to rounding

EMC Consolidated $14.6B

Cash & Investments Balance *

**Note: Total amount: $595M, Paid in cash: $603M


EMC Federation Wins Customer Value Proposition Federation Products and Services

European Telecom Federation solution combines virtualized infrastructure with tools for real-time intelligence Vblock, Backup/Recovery, Pivotal Spring and HAWQ

Global Agricultural Federation supports strategy to start private and evolve to public and hybrid clouds Vblock, VCAC, vCloud

Suite, Pivotal, Pivotal CF

US Security Firm Chose Federation for resilient converged infrastructure, cross-functional coordination and roadmap to cloud VNX, VPLEX, RecoverPoint,

VMware

Global Industrial Federation offers best-of-breed Big Data PaaS via multi-cloud- capable, globally deployable model Vblock, Backup/Recovery,

RSA, Pivotal Global Business Consulting Firm

Partner used Federation to build client a truly scalable and flexible IT infrastructure with a multi-sourcing strategy Vblock and VCAC

Global Pharmaceutical

Federations hybrid cloud toolset delivers application and workload mobility at a cost comparable to public cloud Vblock, vCHS, Pivotal

US Retail Consultant

Federations scalable technology makes the most of Big Data assets for new market intelligence service

Pivotal Greenplum DB, Pivotal HD, Isilon

US SaaS Company Federation provides health information exchange means to build and scale its next-gen SaaS solution

VNX, Data Domain, RecoverPoint, vCHS, Pivotal opportunity







VMware












The EMC Federation Strategically Aligned, Focused And Free To Execute On Their Mission

AD

VAN

CED

SEC

URIT

Y

INFORMATION INFRASTRUCTURE

BIG DATA: Big-data Analytics, Cloud Foundry

SDDC, Hybrid-Cloud, End-User Computing


EMC Information Infrastructure

EMC Information Infrastructure $4.38B 1%

High-End $1.03B -14%

Unified & Backup/Recovery $1.57B 6%

Emerging Storage $0.47B 52%

Storage Other & PS $0.90B -6%

RSA $0.24B 6%

IIG $0.16B 4%

Q214 Growth Y/Y



Converged Infrastructure

Partners

vCloud Hybrid Service

Hybrid Cloud

Proven & Tested In Joint Federation Labs



VIRTUAL WORKSPACE

BUSINESS DATA LAKE

SECURITY ANALYTICS

Next Gen Apps


Customer Focused Solutions


EMC 2014 Non-GAAP Business Outlook


Note: All dollar amounts and percentages presented on this slide should be considered to be approximations.

2014

Revenue $24.6B

Operating Income (% of Revenue) 24.0-24.5%

Income Tax Rate 23.5%

Weighted Average Shares, Diluted 2.05B

EPS $1.91


Q&A

emc q2 2014 financial results (final webcast)

Documents

emc corporation

emc q2

nongaap eps

nongaap net income

nongaap gross margin

nongaap financial measures

forwardlooking statements

nongaap income tax rate