SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For The Quarter Ended: September 30, 1996 Commission File Number 1-9853
EMC CORPORATION
----------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Massachusetts 04-2680009
- ------------------------------- -------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
organization or incorporation)
171 South Street
Hopkinton, Massachusetts 01748-9103
- -----------------------------------------------------------------------
(Address of principal executive offices, including zip code)
(508) 435-1000
- ------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
YES X NO ________
Indicate the number of shares outstanding of each of the issuer's
classes of Common Stock, as of the latest practicable date.
Common Stock, par value $.01 per share 232,682,242
- -------------------------------------- -----------------------------------
Class Outstanding as of September 30, 1996
<PAGE>
Page No.
Part I - Financial Information
Consolidated Balance Sheets
September 30, 1996 and December 30, 1995 3
Consolidated Statements of Operations
for the Three and Nine Months Ended
September 30, 1996 and 1995 4
Consolidated Statements of Cash Flows
for the Nine Months Ended
September 30, 1996 and 1995 5
Notes to Interim Consolidated Financial Statements 6 -7
Management's Discussion and Analysis of
Financial Condition and Results of Operations 8 -14
Part II - Other Information 15
Signatures 16
Exhibit Index 17
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
(amounts in thousands except share amounts)
<CAPTION>
September 30, December 30,
1996 1995
<S> <C> <C>
ASSETS
Current assets:
Cash and short-term investments $593,407 $379,628
Trade and notes receivable less allowance for
doubtful accounts of $6,866 and $7,062,
respectively 564,412 550,473
Inventories 303,290 330,160
Deferred income taxes 34,973 44,061
Other assets 25,012 14,633
Total current assets 1,521,094 1,318,955
Long-term investments 165,508 125,276
Notes receivable, net 24,330 26,497
Property, plant and equipment, net 256,210 218,901
Deferred income taxes 11,334 9,200
Intangible assets, net 56,021 20,078
Other assets, net 54,054 26,822
Total assets $2,088,551 $1,745,729
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and current portion of
long-term obligations $7,289 $915
Accounts payable 151,220 111,721
Accrued expenses 114,051 130,596
Income taxes payable 104,365 107,717
Deferred revenue 13,243 8,411
Total current liabilities 390,168 359,360
Deferred revenue 2,061 223
Deferred income taxes 18,363 -
Long-term obligations:
4 1/4% convertible subordinated notes due 2001 229,498 229,598
Notes payable and capital lease obligations 48,763 16,247
Total liabilities 688,853 605,428
Stockholders' equity:
Series Preferred Stock, par value $.01;
authorized 25,000,000 shares --- ---
Common Stock, par value $.01; authorized
500,000,000 shares; issued 233,532,608
and 232,517,845 shares, in 1996 and 1995,
respectively 2,335 2,325
Additional paid-in capital 352,841 350,989
Deferred compensation (7,824) (2,140)
Retained earnings 1,048,545 786,599
Cumulative translation adjustment 4,189 3,766
Treasury stock, at cost, 850,366 and
2,646,453 shares, in 1996 and 1995,
respectively (388) (1,238)
Total stockholders' equity 1,399,698 1,140,301
Total liabilities and stockholders' equity $2,088,551 $1,745,729
The accompanying notes are an integral part of the consolidated
financial statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands except per share amounts) (unaudited)
<CAPTION>
For the Three Months Ended For the Nine Months
Ended Sept. 30, Sept. 30, Sept. 30,
Sept. 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenues:
Net sales $536,279 $465,819 $1,578,698 $1,370,301
Service and rental 14,475 9,641 38,560 31,828
550,754 475,460 1,617,258 1,402,129
Costs and expenses:
Cost of sales and service 306,438 240,277 904,543 690,147
Research and development 41,151 41,297 116,101 125,188
Selling, general and
administrative 90,268 76,474 259,190 222,760
Operating income 112,897 117,412 337,424 364,034
Investment income 9,537 5,040 23,903 17,476
Interest expense (3,045) (3,087) (9,101) (9,661)
Other income/(expense), net 92 (29) 89 1,022
Income before taxes 119,481 119,336 352,315 372,871
Income tax provision 29,134 34,178 90,369 108,153
Net income $90,347 $85,158 $261,946 $264,718
Net income per weighted
average share, primary $0.37 $0.35 $1.07 $1.10
Net income per weighted
average share, fully
diluted $0.37 $0.35 $1.07 $1.09
Weighted average number of
common shares outstanding,
primary 248,998 248,297 248,714 243,795
Weighted average number of
common shares outstanding,
fully diluted 249,795 248,297 249,287 247,957
The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
(unaudited)
<CAPTION>
For the Nine Months Ended
September 30, September 30,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $261,946 $264,718
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 63,204 39,845
Deferred income taxes 25,575 (2,592)
Net loss on disposal of property
and equipment 954 -
Changes in assets and liabilities:
Trade and notes receivable (11,166) (165,373)
Inventories 26,861 (99,727)
Other assets (44,084) (25,833)
Accounts payable 39,474 (39,013)
Accrued expenses (18,532) 4,545
Income taxes payable (3,630) 47,366
Deferred revenue 6,655 5,729
Net cash provided by operating
activities 347,257 29,665
Cash flows from investing activities:
Additions to property and equipment (88,238) (62,859)
Purchase of patents (6,333) --
Proceeds from disposal of property
and equipment 850 449
Net (purchase)/maturity of long-term
investments (40,232) 26,083
Net cash used by investing
activities (133,953) (36,327)
Cash flows from financing activities:
Issuance of common stock 19,135 12,776
Repurchase of shares for treasury (22,207) (415)
Payment of long-term and short-term
obligations (822) (11,970)
Issuance of long-term and short-term
obligations 4,296 545
Net cash provided by financing
activities 402 936
Effect of exchange rate changes on cash 73 442
Net increase/(decrease) in cash and cash
equivalents 213,706 (5,726)
Cash and cash equivalents at beginning of
period 379,628 249,830
Cash and cash equivalents at end of period $593,407 $244,546
Non-cash activity - conversion of notes
and debentures $100 $39,536
- patents acquired by notes and other
payables $37,416 --
The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
<PAGE>
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
Company
EMC Corporation and its subsidiaries ("EMC" or the "Company") design,
manufacture, market and support a wide range of storage-related hardware,
software and service products for the mainframe, open systems and network
computer storage markets worldwide. These products are sold as storage
solutions for customers utilizing a variety of computer system platforms,
including, but not limited to, International Business Machines
Corporation ("IBM") and IBM-compatible mainframe, Unisys Corporation,
Compagnie des Machines Bull S.A., Hewlett-Packard Company, NCR
Corporation and other open systems platforms.
Change in Fiscal Year End
On September 23, 1996, EMC elected to change its fiscal year end
from a fiscal basis which would have ended on December 28, 1996
to a calendar year end basis ending on December 31, 1996.
Consequently, the Company's third quarter ended on September 30, 1996.
The Company reported this change on Form 8-K on October 4, 1996.
Accounting
The accompanying consolidated financial statements are unaudited and have
been prepared in accordance with generally accepted accounting principles.
These statements include the accounts of EMC and its subsidiaries.
Certain information and footnote disclosures normally included in the
Company's annual consolidated financial statements have been condensed or
omitted. The interim consolidated financial statements, in the opinion of
management, reflect all adjustments (consisting only of normal recurring
accruals) necessary for a fair statement of the results for the interim
periods ended September 30, 1996 and 1995.
Certain prior year amounts have been reclassified to conform with
the 1996 presentation.
The results of operations for the interim periods are not necessarily
indicative of the results of operations to be expected for the entire
fiscal year. It is suggested that these interim consolidated financial
statements be read in conjunction with the audited consolidated financial
statements for the year ended December 30, 1995, which are contained
in the Company's Annual Report on Form 10-K filed with the Securities
and Exchange Commission on March 27, 1996.
<PAGE>
2. Inventory
September 30, 1996 December 30, 1995
Inventories consist of:
Purchased parts $ 22,483,000 $ 22,870,000
Work-in-process 171,748,000 150,216,000
Finished goods 109,059,000 157,074,000
$303,290,000 $330,160,000
3. Net Income Per Share
Net income per share was computed on the basis of weighted
average common and dilutive common equivalent shares outstanding.
Primary weighted average shares outstanding and earnings used in per
share computations for the three and nine months ended September 30,
1996 and 1995 reflect the dilutive effects of the 4 1/4%
convertible subordinated notes due 2001 (the "Notes") and outstanding
stock options. Fully diluted weighted average shares outstanding and
earnings used in per share computations for the nine months ended
September 30, 1995 reflect the dilutive effects of the 6 1/4% convertible
subordinated debentures (the "Debentures"), which were either converted or
redeemed on or prior to April 1, 1995, in addition to the dilutive effect
of the Notes and outstanding stock options.
4. Litigation
The Company is a party to litigation which it considers routine
and incidental to its business. Management does not expect the
results of any of these actions to have a material adverse
effect on the Company's business or financial condition.
On September 16, 1996, the Company was served with civil
investigative demands ("CIDs") by the Antitrust Division of the
United States Department of Justice in connection with the Department's
investigation into the agreement dated June 7, 1996 between IBM and
Storage Technology Corporation (the "IBM/STK Agreement"). The Justice
Department is gathering evidence to determine whether the IBM/STK
Agreement has been, is, or may be in violation of the federal Sherman
Antitrust Act.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations - Third Quarter of 1996 compared to Third Quarter of
1995
- -----------------------------------------------------------------------
Revenues
Revenues for the quarter ended September 30, 1996 were $550,754,000 compared
to $475,460,000 for the third quarter of 1995, an increase of $75,294,000 or
16%.
The increase in revenues was due primarily to the continued strong demand
for the Company's series of Integrated Cached Disk Array ("ICDA") based
products, particularly the open systems products which include the Symmetrix
3000 series of products and the Centriplex series of products.
Revenues from products sold directly and through original equipment
manufacturers ("OEM's") into the mainframe storage market, which include
Symmetrix products operating primarily in the Multiple Virtual Storage
("MVS") environment, were $305,605,000 in the third quarter of 1996,
compared to $344,467,000 in the third quarter of 1995, a decrease of
$38,862,000 or 11%.
Revenues from products sold into the open systems storage market,
which include the Symmetrix products operating in an open systems
environment and the Centriplex series of products, were $182,613,000 in
the third quarter of 1996, compared to $58,555,000 in the third quarter
of 1995, an increase of $124,058,000 or 212%.
Revenues from products sold by McDATA Corporation, a wholly-owned
subsidiary of EMC ("McDATA"), which include the ESCON Director series of
products, were $43,776,000 in the third quarter of 1996, compared to
$42,426,000 in the third quarter of 1995, an increase of
$1,350,000 or 3%. Revenues from all other products, which include the
midrange series of products, were $4,285,000 in the third quarter of 1996,
compared to $20,371,000 in the third quarter of 1995, a decrease of
$16,086,000 or 79%.
Revenues from service and rental income were $14,475,000 in the
third quarter of 1996, compared to $9,641,000 in the third quarter of
1995, an increase of $4,834,000 or 50%.
On October 31, 1995, the Company entered into a reseller agreement
with Hewlett-Packard Company ("HP") wherein HP will market and resell
the Symmetrix 3000 family of systems worldwide for connection to HP's
9000 series computers. This agreement has been expanded to enable HP
to also market and resell this family of systems for connection to
HP's 3000 series computers. The agreement currently extends to June
30, 1997.
<PAGE>
Revenues on sales into the markets of North America and South America
were $331,374,000 in the third quarter of 1996 compared to $299,941,000
in the third quarter of 1995, an increase of $31,433,000, or 10%.
This increase was due primarily to increased revenue levels from sales
of the Symmetrix series of products in the open systems storage market.
Revenues on sales into the markets of Europe, Africa and the Middle
East were $173,724,000 in the third quarter of 1996 compared to
$148,901,000 in the third quarter of 1995, an increase of $24,823,000,
or 17%, due primarily to increased revenue levels from sales of the
Symmetrix series of products in the open systems storage market.
Revenues on sales into the markets in the Asia Pacific region were
$45,656,000 in the third quarter of 1996 compared to $26,618,000 in the
third quarter of 1995, an increase of $19,038,000, or 72%, due to
increased revenue levels from sales of the Symmetrix series of
products, in both the mainframe and open systems storage markets.
Cost of Sales and Service
Cost of sales and service increased to 55.6% of revenues in the
third quarter of 1996, compared to 50.5% of revenues in the third
quarter of 1995. This increase is primarily attributable to the impact
of price declines in the mainframe and open systems storage
markets being greater than the impact of cost declines in raw material
components. Factors mitigating this increase were growth of software
revenues and open systems product revenues, each of which have relatively
lower costs of sales. The Company currently believes that price declines
will continue.
Research and Development
Research and development ("R&D") expenses were $41,151,000 and $41,297,000
in the third quarters of 1996 and 1995, respectively, a decrease of
$146,000, or 0.4%. R&D expenses were 7.5% and 8.7% of revenues in the
third quarters of 1996 and 1995, respectively. The dollar decrease in R&D
spending reflects the consolidation of domestic development efforts and
the capitalization of software development costs primarily related to
specific software products. The decrease was partially offset by the
cost of additional technical staff and depreciation expenses associated
with capital equipment acquired to facilitate development. The Company
expects to continue to spend substantial amounts for R&D for the balance
of 1996 and thereafter.
<PAGE>
Selling, General and Administrative
Selling, general and administrative ("SG&A") expenses were $90,268,000
and $76,474,000 in the third quarters of 1996 and 1995, respectively,
an increase of $13,794,000 or 18.0%. SG&A expenses were 16.4% and 16.1%
of revenues in the third quarters of 1996 and 1995, respectively.
The dollar increase is due primarily to costs associated with additional
worldwide sales and support personnel and their related overhead costs.
These costs are attributable to the Company's increased revenue levels
and the Company's initiatives to expand its open systems storage products,
expansion of the international direct sales force and OEM and strategic
alliance programs. SG&A expenses are expected to increase in dollar terms
for the balance of 1996 and thereafter.
Investment Income
Investment income was $9,537,000 in the third quarter of 1996
compared with $5,040,000 in the same period a year ago. Interest income
was earned from investments in cash equivalents, and short and long-term
investments. Investment income increased in 1996 primarily due to higher
cash and investment balances in the third quarter of 1996 than in the
same period in 1995.
Provision for Income Taxes
The provision for income taxes was $29,134,000 and $34,178,000 in the
third quarters of 1996 and 1995, respectively, which resulted in an
effective tax rate of 24.4% in the third quarter of 1996 and 28.6%
in the third quarter of 1995. The decrease in the effective tax rate
is mainly attributable to the realization of benefits associated with
the continued progress on the Company's various tax strategies.
The Company provides for income taxes based upon its estimate of full
year earnings on a country-by-country basis.
<PAGE>
Results of Operations - First Nine Months of 1996 compared to First
Nine Months of 1995
- ---------------------------------------------------------------------------
Revenues
Revenues for the nine months ended September 30, 1996 were $1,617,258,000
compared to $1,402,129,000 for the first nine months of 1995, an increase of
$215,129,000 or 15%.
The increase in revenues was due primarily to the continued strong demand
for the Company's series of Integrated Cached Disk Array ("ICDA") based
products, particularly the open systems products which include the Symmetrix
3000 series of products and the Centriplex series of products.
Revenues from products sold directly and through OEM's into the mainframe
storage market, which include Symmetrix products operating primarily in
the MVS environment, were $924,254,000 in the first nine months of 1996,
compared to $1,086,787,000 in the first nine months of 1995, a decrease of
$162,533,000 or 15%.
Revenues from products sold into the open systems storage market, which
include the Symmetrix products operating in an open systems environment
and the Centriplex series of products, were $498,902,000 in the first
nine months of 1996, compared to $99,126,000 in the first nine months
of 1995, an increase of $399,776,000 or 403%.
Revenues from products sold by McDATA, which include the ESCON Director
series of products, were $129,052,000 in the first nine months of 1996,
compared to $112,658,000 in the first nine months of 1995, an increase
of $16,394,000 or 15%.
Revenues from all other products, which include the midrange series of
products, were $26,490,000 in the first nine months of 1996, compared
to $71,730,000 in the first nine months of 1995, a decrease of $45,240,000
or 63%.
Revenues from service and rental income were $38,560,000 in the first
nine months of 1996, compared to $31,828,000 in the first nine months
of 1995, an increase of $6,732,000 or 21%.
On October 31, 1995, the Company entered into a reseller agreement with
Hewlett-Packard Company ("HP") wherein HP will market and resell the
Symmetrix 3000 family of systems worldwide for connection to HP's 9000
series computers. This agreement has been expanded to enable HP to
also market and resell this family of systems for connection to HP's
3000 series computers. The agreement currently extends to June 30, 1997.
<PAGE>
Revenues on sales into the markets of North America and South America
increased by $120,254,000, or 14%, to $972,392,000 in the first nine
months of 1996 from $852,138,000 in the first nine months of 1995.
This increase was due primarily to increased revenue levels from sales
of the Symmetrix series of products in the open systems storage market.
Revenues on sales into the markets of Europe, Africa and the Middle
East increased by $54,617,000, or 12%, to $502,983,000 in the first
nine months of 1996 from $448,366,000 in the first nine months of 1995,
due primarily to increased revenue levels from sales of the Symmetrix
series of products in the open systems storage market.
Revenues on sales into the markets in the Asia Pacific region increased
by $40,258,000, or 40%, to $141,883,000 in the first nine months of
1996 from $101,625,000 in the first nine months of 1995, due to increased
revenue levels from sales of the Symmetrix series of products, in both
the mainframe and open systems storage markets.
Cost of Sales and Service
Cost of sales and service increased to 55.9% of revenues in the first
nine months of 1996, compared to 49.2% of revenues in the first nine
months of 1995. This increase is primarily attributable to the impact
of price declines in the mainframe and open systems storage markets
being greater than the impact of cost declines in raw material
components. Factors mitigating this increase were the growth of
software revenues and open systems product revenues, each of which have
relatively lower costs of sales. The Company currently believes that
price declines will continue.
In May 1996, the Company opened its International Customer Support
Center, based in Ireland, to provide primary response for all technical
support issues related to EMC storage systems installed outside of
North America.
Research and Development
Research and development ("R&D") expenses were $116,101,000 and
$125,188,000 in the first nine months of 1996 and 1995, respectively, a
decrease of $9,087,000, or 7.3%. R&D expenses were 7.2% and 8.9% of
revenues in the first nine months of 1996 and 1995, respectively. The
dollar decrease in R&D spending reflects the consolidation of domestic
development efforts and the capitalization of software development
costs primarily related to specific software products. The decrease
was partially offset by the cost of additional technical staff and
depreciation expenses associated with capital equipment acquired to
facilitate development. The Company expects to continue to spend
substantial amounts for R&D for the balance of 1996 and thereafter.
<PAGE>
Selling, General and Administrative
Selling, general and administrative ("SG&A") expenses were $259,190,000
and $222,760,000 in the first nine months of 1996 and 1995, respectively,
an increase of $36,430,000 or 16.4%. SG&A expenses were 16.0% and 15.9%
of revenues in the first nine months of 1996 and 1995, respectively.
The dollar increase is due primarily to costs associated with additional
worldwide sales and support personnel and their related overhead costs.
These costs are attributable to the Company's increased revenue levels
and the Company's initiatives to expand its open systems storage products,
expansion of the international direct sales force and OEM and strategic
alliance programs. SG&A expenses are expected to increase in dollar
terms for the balance of 1996 and thereafter.
Investment Income and Interest Expense
Investment income was $23,903,000 in the first nine months of 1996
compared with $17,476,000 in the same period a year ago. Interest income
was earned from investments in cash equivalents, and short and long-term
investments. Investment income increased in the first nine months of 1996
primarily due to higher cash and investment balances in the first nine months
of 1996 than in the same period in 1995.
Interest expense decreased slightly in the first nine months of 1996 from
the same period in 1995, primarily due to conversion and redemption of the
Debentures in the first quarter of 1995.
Provision for Income Taxes
The provision for income taxes was $90,369,000 and $108,153,000
in the first nine months of 1996 and 1995, respectively, which
resulted in an effective tax rate of 25.6% and 29.0%, respectively.
The decrease in the effective tax rate is mainly attributable to the
realization of benefits associated with the continued progress on the
Company's various tax strategies. The Company provides for income taxes
based upon its estimate of full year earnings on a country-by-country
basis.
FINANCIAL CONDITION
Cash and short-term investments were $593,407,000 and $379,628,000
at September 30, 1996 and December 30, 1995, respectively.
Cash and short and long-term investments were $758,915,000
and $504,904,000 at September 30, 1996 and December 30, 1995,
respectively. In the first nine months of 1996, cash and short
and long-term investments increased by $254,011,000.
<PAGE>
Cash provided by operating activities for the first nine months of
1996 amounted to $347,257,000. This was primarily generated from net
income and working capital management. Cash used by investing
activities was $133,953,000, principally for additions to property,
plant and equipment, and the purchase of long-term investments. Cash
provided by financing activities was $402,000, principally due to
proceeds from stock option exercises, offset by repurchases
of treasury stock.
The Company currently expects to generate a further increase in
cash and short and long-term investments from operations over the
balance of 1996.
At September 30, 1996, the Company had available for use its
credit lines of $72,000,000. The Company may elect to borrow at
any time from these credit lines. Based on its current operating
and capital expenditure forecasts, the Company believes funds currently
available, funds generated from operations and its available lines of
credit will be adequate to finance its operations.
FACTORS THAT MAY AFFECT FUTURE RESULTS
The Company's future results of operations and certain forward
looking statements contained in this filing involve a number of risks
and uncertainties. Factors that could cause actual results to vary
materially include, but are not limited to: (i) the historic and
recurring "hockeystick" pattern of the Company's sales by which a
disproportionate percentage of a quarter's total sales occur in the
last month and weeks and days of each quarter; (ii) the "hockeystick"
pattern of the Company's sales, making it extremely difficult to predict
near-term demand and adjust production capacity accordingly; (iii)
competitive pricing pressures in the computer storage market;
(iv) fluctuating currency exchange rates; (v) the relative and
varying rates of product price and component cost declines; (vi)a
failure by any supplier of high density DRAMS, disk drives or other
components to meet EMC's requirements for an extended period of time;
other one-time events and other important factors disclosed previously
and from time to time in EMC's other filings at the U.S. Securities and
Exchange Commission.
<PAGE>
PART II.
OTHER INFORMATION
Item 1. Legal Proceedings
The Company is a party to litigation which it considers routine and
incidental to its business. Management does not expect the results
of any of these actions to have a material adverse effect on the Company's
business or financial condition.
On September 16, 1996, the Company was served with civil investigative
demands ("CIDs") by the Antitrust Division of the United States Department
of Justice in connection with the Department's investigation into the
agreement dated June 7, 1996 between International Business Machines
Corporation and Storage Technology Corporation ("IBM/STK Agreement"). The
Justice Department is gathering evidence to determine whether the IBM/STK
Agreement has been, is, or may be in violation of the federal Sherman
Antitrust Act.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11.1 Computation of Primary and Fully Diluted Net
Income Per Share (filed herewith).
27 Financial Data Schedule (filed herewith).
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company for the
quarter ended September 30, 1996.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EMC CORPORATION
Date: November 12, 1996 By: /s/ Colin G. Patteson
Colin G. Patteson
Vice President, Chief Financial
Officer and Treasurer
(Principal Financial Officer)
By: /s/ William J. Teuber, Jr.
William J. Teuber, Jr.
Vice President and Controller
(Principal Accounting Officer)
<PAGE>
EXHIBIT INDEX
Exhibit 11.1 Computation of Primary and Fully Diluted Net Income Per Share
Exhibit 27 Financial Data Schedule
<PAGE>
<TABLE>
Exhibit 11.1 Computation of Primary and Fully Diluted Net Income Per Share
(unaudited)
(Amounts in thousands except share and per share data)
<CAPTION>
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept.30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Primary
Net income $90,347 $85,158 $261,946 $264,718
Add back interest expense
on convertible notes 2,438 2,440 7,316 7,320
Less tax effect on interest
expense on convertible notes (975) (976) (2,926) (2,928)
Net income for purposes of
calculating primary net income
per share $91,810 $86,622 $266,336 $269,110
Weighted average shares
outstanding during the
period 232,295,208 229,098,687 231,271,815 223,549,358
Common equivalent shares 16,702,332 219,198,208 17,442,159 20,245,579
Common and common equivalent
shares outstanding for
purpose of calculating
primary net income per
share 248,997,540 248,296,895 248,713,974 243,794,937
Primary net income per share
(Note 3) $0.37 $0.35 $1.07 $1.10
Fully Diluted
Net income $90,347 $85,158 $261,946 $264,718
Add back interest expense on
convertible notes and debentures 2,438 2,440 7,316 7,320
Less tax effect on interest expense
on convertible notes and
debentures (975) (976) (2,926) (2,928)
Net income for purpose of
calculating fully diluted net
income per share $91,810 $86,622 $266,336 $269,110
Common and common equivalent shares
outstanding for purpose of
calculating primary net
income per share 248,997,540 248,296,895 248,713,974 243,794,937
Incremental shares to reflect
full dilution, primarily
from convertible subordinated
debentures in 1995 797,225 0 572,536 4,161,578
Total shares for purpose of
calculating fully diluted
net income per share 249,794,765 248,296,895 249,286,510 247,956,515
Fully diluted net income
per share (Note 3) $0.37 $0.35 $1.07 $1.09
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
EMC Corporation financial statements and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 593,407
<SECURITIES> 0
<RECEIVABLES> 564,412
<ALLOWANCES> 6,866
<INVENTORY> 303,290
<CURRENT-ASSETS> 1,521,094
<PP&E> 256,210
<DEPRECIATION> 63,204
<TOTAL-ASSETS> 2,088,551
<CURRENT-LIABILITIES> 390,168
<BONDS> 229,498
<COMMON> 2,335
0
0
<OTHER-SE> 1,397,363
<TOTAL-LIABILITY-AND-EQUITY> 2,088,551
<SALES> 1,578,698
<TOTAL-REVENUES> 1,617,258
<CGS> 904,543
<TOTAL-COSTS> 1,279,834
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,101
<INCOME-PRETAX> 352,315
<INCOME-TAX> 90,369
<INCOME-CONTINUING> 261,946
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 261,946
<EPS-PRIMARY> 1.07
<EPS-DILUTED> 1.07
</TABLE>
