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: March 31, 1997 Commission File
Number 1-9853
EMC CORPORATION
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(Exact name of registrant as specified in its charter)
Massachusetts 04-2680009
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(State or other jurisdiction of (I.R.S. Employer Identification
organization or incorporation) Number)
171 South Street
Hopkinton, Massachusetts 01748-9103
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(Address of principal executive offices, including zip code)
(508) 435-1000
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-
(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 246,138,878
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Class Outstanding as of March 31, 1997
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EMC CORPORATION
Page No.
Part I - Financial Information
Consolidated Balance Sheets
March 31, 1997 and December 31, 1996 3
Consolidated Statements of Income
for the Three Months Ended
March 31, 1997 and March 30, 1996 4
Consolidated Statements of Cash
Flows for the Three Months Ended
March 31, 1997 and March 30, 1996 5
Notes to Interim Consolidated Financial Statements 6-8
Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-13
Part II - Other Information 14-15
Signatures 16
Exhibit Index 17
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EMC CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
<CAPTION>
March 31, December 31,
1997 1996
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $700,526 $496,377
Short-term investments 515,069 230,981
Trade and notes receivable less
allowance for doubtful accounts of
$7,517 and $7,368 in 1997 and 1996,
respectively 644,269 627,409
Inventories 442,328 336,581
Deferred income taxes 36,819 43,421
Other assets 24,241 19,367
Total current assets 2,363,252 1,754,136
Long-term investments 123,954 113,500
Notes receivable, net 21,517 20,013
Property, plant and equipment, net 294,459 276,387
Deferred income taxes 16,620 16,664
Intangible and other assets, net 129,007 112,846
Total assets $2,948,809$2,293,546
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and current portion of
long-term obligations $6,863 $7,058
Accounts payable 215,410 172,871
Accrued expenses 103,741 122,562
Income taxes payable 122,464 104,899
Deferred revenue 7,885 10,112
Total current liabilities 456,363 417,502
Deferred revenue 1,608 2,019
Deferred income taxes 40,185 46,002
Long-term obligations:
3 1/4% convertible subordinated notes
due 2002 517,500 ---
4 1/4% convertible subordinated notes
due 2001 --- 142,720
Notes payable and other noncurrent
liabilities 41,019 48,514
Total liabilities 1,056,675 656,757
Commitments and contingencies
Stockholders' equity:
Series Preferred Stock, par value $.01;
authorized 25,000,000 --- ---
shares, none outstanding
Common Stock, par value $.01; authorized
500,000,000 shares; issued 246,138,878
and 238,239,672 shares, in 1997
and 1996, respectively 2,461 2,382
Additional paid-in capital 608,377 463,687
Deferred compensation (6,229) (7,027)
Retained earnings 1,283,696 1,172,828
Cumulative translation adjustment 3,829 4,919
Total stockholders' equity 1,892,134 1,636,789
Total liabilities and
stockholders' equity $2,948,809$2,293,546
The accompanying notes are an integral part of the consolidated financial
statements.
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EMC CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(unaudited)
<CAPTION>
For the Three Months Ended
March 31, March 30,
1997 1996
Revenues:
<S> <C> <C>
Net sales $600,900 $509,184
Service and rental 17,537 12,303
618,437 521,487
Costs and expenses:
Cost of sales and service 335,985293,164
Research and development 48,091 35,318
Selling, general and
administrative 97,624 81,763
Operating income 136,737 111,242
Investment income 11,684 6,325
Interest expense (1,402) (3,059)
Other income / (expense), net 2,097 207
Income before taxes 149,116 114,715
Income tax provision 38,248 30,170
Net income $110,868 $84,545
Net income per weighted average share,
primary $0.44 $0.35
Net income per weighted average share,
fully diluted $0.44 $0.35
Weighted average number of common
shares outstanding, primary 254,853 248,539
Weighted average number of common
shares outstanding, fully diluted 254,857 248,879
The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
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EMC CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
<CAPTION>
For the Three Months Ended
March 31, March 30,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net income $110,868 $84,545
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 26,241 16,414
Deferred income taxes, net 829 8,895
Net loss on disposal of property and
equipment 142 76
Changes in assets and liabilities:
Trade and notes receivable (18,305) 44,025
Inventories (105,716) 13,181
Other assets (13,693) (12,673)
Accounts payable 42,534 14,348
Accrued expenses (18,830) (24,953)
Income taxes payable 17,553 (1,171)
Deferred revenue (2,644) 3,450
Net cash provided by operating
activities 38,979 146,137
Cash flows from investing activities
Additions to property, plant and equipment(36,121)(29,739)
Purchase of patents --- (5,000)
Proceeds from disposal of property and
equipment 135 681
Capitalized software development costs (6,200) (6,293)
Purchase of short-term and long-term
investments, net (294,542) (2,106)
Net cash used by investing
activities (336,728) (42,457)
Cash flows from financing activities:
Issuance of common stock 4,087 6,942
Repurchase of shares for treasury --- (10,295)
Redemption of 4 1/4% notes due 2001 (65) ---
Issuance of 3 1/4% notes due 2002, net
of issuance costs 506,671 ---
Payment of long-term and short-term
obligations (7,814) (193)
Issuance of long-term and short-term
obligations 124 ---
Net cash provided (used) by
financing activities 503,003 (3,546)
Effect of exchange rate changes on cash (1,105) (1,003)
Net increase in cash and cash equivalents 205,254 100,134
Cash and cash equivalents at beginning
of period 496,377 379,628
Cash and cash equivalents at end
of period $700,526 $478,759
Non-cash activity - conversion of 4 1/4% notes to common stock,
net of issuance costs $140,682 ---
- patents acquired by notes
and other payables ---$35,000
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
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EMC CORPORATION
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 and
software products and related services for the Enterprise Storage market.
Enterprise Storage provides shared storage of information from all types of
computers, including both mainframe and open systems computers. EMC's
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 IBMcompatible mainframe, Unisys
Corporation ("Unisys"), Compagnie des Machines Bull S.A., Hewlett-Packard
Company ("HP"), NCR Corporation, Sequent Computer Systems, Inc. ("Sequent"),
Seimens Nixdorf Informationssysteme AG ("SNI") (See Note 6) and other open
systems platforms.
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
March 31, 1997 and March 30, 1996.
Certain prior year amounts have been reclassified to conform with the 1997
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 31, 1996, which are contained in the Company's
Annual Report on Form 10-K filed with the Securities and Exchange Commission
on February 27, 1997.
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EMC CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
2. Inventory
March 31, 1997 December 31, 1996
Inventories consist of: (in thousands)
Purchased parts $21,165 $16,610
Work-in-process 288,085 210,445
Finished goods 133,078 109,526
$442,328 $336,581
3. Long-Term Obligations
In March 1997, the Company sold in a private placement under
Rule 144A of the Securities Act of 1933, as amended (the "Securities
Act"), $517.5 million of 31/4% convertible subordinated notes due 2002
(the "Notes"). The Notes are generally convertible into shares of common stock
of the Company at a conversion price of $45.31 per share,subject to adjustment
in certain events. Interest is payable semiannually and the Notes are
redeemable at the option of the Company at set redemption prices (which range
from 100.65% to 101.30% of principal), plus accrued interest, commencing March
15, 2000.
4. Net Income Per Share
Net income per share was computed on the basis of weighted average common and
dilutive common equivalent shares outstanding. Primary and fully diluted
weighted average shares outstanding used in the per share computations
reflect the dilutive effects of the Notes for the quarter ended March 31,
1997, and of the 41/4% convertible subordinated notes due 2001 for the
quarter ended March 30, 1996. The dilutive effects of outstanding stock
options are reflected in all periods presented.
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings per
Share" which is effective for fiscal years ending after December 15,
1997. This Statement replaces the presentation of primary earnings
per share ("EPS") with a presentation of basic EPS, which excludes
dilutive securities. It also requires a reconciliation of the basic
EPS to diluted EPS and dual presentation on the face of the income
statement. Pro forma net income per share for the first quarter of
1997 and 1996, respectively, as computed under the new standard is as
follows:
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EMC CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1997 March 30, 1996
Net income per weighted average share, basic $0.45 $0.37
Net income per weighted average share, diluted $0.44 $0.35
5. 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.
6. Subsequent Events
In the second quarter of 1997, the Company announced a worldwide
reseller agreement with SNI. Under the terms of this agreement, EMC is
SNI's preferred and primary supplier of storage solutions for SNI's
customers. SNI will resell EMC's Symmetrix 3000 and 5000 series of systems
for connection to SNI's families of mainframe and open systems computers.
At the Annual Meeting held on May 7, 1997, the Company's stockholders
elected two Class I members to the Board of Directors for a three-year term,
approved an increase in the number of shares of authorized common stock of
the Company to 750,000,000 shares and approved the addition of 6,000,000
shares of common stock to the Company's 1993 Stock Option Plan.
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EMC CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS - First Quarter of 1997 compared to First Quarter of 1996
(in thousands) ---------------------------------------------------------
Revenues
The Management's Discussion and Analysis of Financial Condition and Results
of Operations should be read in conjunction with the risk factors set forth
on page 13 and in EMC's other filings at the U.S. Securities and Exchange
Commission.
Total revenues for the quarter ended March 31, 1997 were $618,437 compared
to $521,487 for the first quarter of 1996, an increase of $96,950 or 19%.
The increase in revenues was due primarily to the continued strong demand
for the Company's Symmetrix series of products, particularly the Symmetrix 3000
series of products for the open systems market. In January 1997, EMC announced
six new Symmetrix products, which represented 65% of first quarter product
revenues. These new products address the growing need for Enterprise Storage.
Revenues from products sold directly and through original equipment
manufacturers ("OEM's") and resellers into the mainframe storage market, which
include Symmetrix products operating primarily in the Multiple Virtual
Storage ("MVS") environment, were $279,966 in the first quarter of 1997,
compared to $309,155 in the first quarter of 1996, a decrease of $29,189 or 9%.
The decrease in the mainframe revenue levels reflects a market transition from
proprietary mainframe storage to products operating in an open systems
environment.
Revenues from products sold directly and through OEM's and resellers into
the open systems storage market, which include the Symmetrix products
operating in an open systems environment and other products, were $274,438 in
the first quarter of 1997, compared to $146,707 in the first quarter of
1996, an increase of $127,731 or 87%. The Company expects further growth in
the open systems revenue levels and revenue as a percentage of total revenue
in this market throughout 1997. (See, however, "Factors that May Affect
Future Results.")
Revenues from products sold by McDATA Corporation, a wholly owned
subsidiary of EMC ("McDATA"), which include the ESCON Director series of
products, were $43,532 in the first quarter of 1997, compared to $39,296
in the first quarter of 1996, an increase of $4,236 or 11%.
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EMC CORPORATION
Revenues from all other products, which include the midrange series of
products, were $2,964 in the first quarter of 1997, compared to $14,026 in the
first quarter of 1996, a decrease of $11,062 or 79%. The decrease is
primarily attributable to the declines in midrange revenues.
Software revenues were $26,532 and $11,748 in the first quarters of 1997 and
1996, respectively. Software revenues are included in the product revenues for
the respective mainframe and open systems markets.
Revenues from service and rental income were $17,537 in the first quarter
of 1997, compared to $12,303 in the first quarter of 1996, an increase of
$5,234 or 43%.
In October 1995, the Company entered into a reseller agreement with HP under
which HP markets and resells the Symmetrix 3000 series of systems worldwide for
connection to HP's 9000 series computers. This agreement was expanded to
enable HP to also market and resell this family of systems for connection
to HP's 3000 series computers. The current agreement extends through August
1997. Revenues for the first quarter of 1997 and 1996 under this agreement
were $107,517 and $46,597 , or 17% and 9% of total revenues, respectively.
In January 1997, the Company entered into a reseller agreement with Sequent
under which Sequent markets and resells the Symmetrix 3000 series of
systems worldwide for connection to Sequent's Symmetry series and NUMA-Q
series computers. The agreement currently extends through January 1999.
In March 1997, the Company announced that it had expanded its agreements with
Unisys to include a worldwide reseller agreement under which Unisys markets and
resells the Symmetrix 3000 and 5000 series of systems worldwide for
connection to Unisys mainframe and open systems computers. The agreement
currently extends through December 1998.
In April 1997, the Company announced a reseller agreement with SNI under which
SNI markets and resells the Symmetrix 3000 and 5000 series of systems
worldwide for connection to SNI's families of mainframe and open systems
computers. The agreement currently extends through September 2002.
Revenues on sales into the North American markets were $361,646 in the first
quarter of 1997 compared to $307,617 in the first quarter of 1996, an increase
of $54,029, or 18%. 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 all markets outside North America were $256,791 or 42% of
total revenues in the first quarter of 1997 compared to $213,870 or 41% of
total revenues for the first quarter of 1996.
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EMC CORPORATION
The Company expects further increases in international sales as a percentage of
total revenues throughout 1997. (See, however, "Factors that May Affect Future
Results.") Revenues on sales into the markets of Europe, Africa and the Middle
East were $196,215 in the first quarter of 1997 compared to $163,225 in the
first quarter of 1996, an increase of $32,990, or 20%, 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 the Asia Pacific region were $58,925
in the first quarter of 1997 compared to $48,117 in the first quarter of 1996,
an increase of $10,808, or 22%, due to increased revenue levels from sales of
the Symmetrix series of products, primarily in the mainframe storage market.
Revenues on sales into the markets of South America were $1,651 in the first
quarter of 1997 compared to $2,528 in the first quarter of 1996, a decrease of
$877 or 35%.
Gross Margins
Gross margins increased to 45.7% of revenues in the first quarter of 1997,
compared to 43.8% of revenues in the first quarter of 1996. This increase is
primarily attributable to the following: the impact of cost declines in raw
material components being greater than the impact of price declines in the
mainframe and open systems storage markets, higher software revenues and
revenues attributable to the new Symmetrix products. The Company currently
believes that price declines will continue in the mainframe and open systems
environments.
Research and Development
Research and development ("R&D") expenses were $48,091 and $35,318 in the first
quarters of 1997 and 1996, respectively, an increase of $12,773, or 36%. R&D
expenses were 7.8% and 6.8% of revenues in the first quarters of 1997 and 1996,
respectively. The increase was partially due to the cost of additional
technical staff, particularly to support development of products for the
Enterprise Storage market, and is also attributable to expenses associated with
computer equipment acquired to facilitate this development. The Company expects
to continue to spend substantial amounts for R&D for the balance of 1997 and
thereafter.
Selling, General and Administrative
Selling, general and administrative ("SG&A") expenses were $97,624 and $81,763
in the first quarters of 1997 and 1996, respectively, an increase of
$15,861 or 19%. SG&A expenses were 15.8% and 15.7% of revenues in the
first quarters of 1997 and 1996, 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
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EMC CORPORATION
expand sales of its Enterprise Storage products. The Company has expanded
its international direct sales force, as well as its OEM, reseller, alliance
and partnership programs with applications, systems and database vendors. SG&A
expenses are expected to increase in dollar terms for the balance of 1997 and
thereafter.
Investment Income and Interest Expense
Investment income was $11,684 in the first quarter of 1997 compared with $6,325
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 1997 primarily due to higher cash and investment balances which
were derived from operations and the Notes that were issued in March of 1997.
Interest expense decreased by $1,657 to $1,402 in the first quarter of 1997
from $3,059 in the first quarter of 1996. The decrease was attributable to
the conversion of the 41/4% convertible subordinated notes due 2001 into equity
on January 2, 1997 offset by the issuance of the Notes in March of 1997.
Provision for Income Taxes
The provision for income taxes was $38,248 and $30,170 in the first quarters
of 1997 and 1996, respectively, which resulted in an effective tax rate of
25.6% in the first quarter of 1997 and 26.3% in the first quarter of 1996.
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 cash equivalents and short and long-term investments were
$1,339,549 and $840,858 at March 31, 1997 and December 31, 1996,
respectively, an increase of $498,691.
Cash provided by operating activities for the first three months of 1997 was
$38,979, generated primarily from net income offset primarily by an increase
in inventory related to the transition to six new Symmetrix products
worldwide. Cash used by investing activities was $336,728,
principally for the purchase of short and long-term investments and additions
to property, plant and equipment. Cash provided by financing activities was
$503,003, principally from the issuance of the Notes in March of 1997.
At March 31, 1997, the Company had available for use its credit line of
$50,000. The Company may elect to borrow at any time. Based on its current
operating and capital expenditure forecasts, the Company
believes funds currently available, funds generated from operations and its
available line of credit will be adequate to finance its operations, as well as
potential acquisitions.
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EMC CORPORATION
FACTORS THAT MAY AFFECT FUTURE RESULTS
This Quarterly Report on Form 10-Q 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) 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; (ii) the transition to new
products; (iii) the historic and recurring "hockey stick" 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; (iv) the
"hockey stick" pattern of the Company's sales, making it extremely difficult to
predict near-term demand and adjust production capacity accordingly; (v)
competitive factors, including but not limited to pricing pressures, in
the computer storage market; (vi) fluctuating currency exchange rates; (vii)
the relative and varying rates of product price and component cost declines;
(viii) termination of the agreements with certain of the Company's OEM's or
resellers; (ix) other onetime 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.
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EMC CORPORATION
PART II.
OTHER INFORMATION
Item 2. Changes in Securities
On March 11, 1997, the Company sold an aggregate of $450,000,000 principal
amount of the Notes through a private offering to qualified institutional
buyers, to certain institutional accredited investors and outside the United
States to non-U.S. investors. The initial purchasers were Smith Barney Inc.,
Alex. Brown & Sons and Morgan Stanley & Co. On March 12, 1997, the initial
purchasers exercised an option to purchase an additional $67,500,000 of the
Notes to cover overallotments, which sale was completed on March 13, 1997. The
aggregate of the discounts and commissions was $10,350,000.
The Notes were sold in reliance on Rule 144A under the Securities Act to
"qualified institutional buyers," Rule 501(a)(1), (2), (3) or (7) under the
Securities Act to a limited number of other "accredited investors," and
Regulation S under the Securities Act outside the United States to certain
persons in offshore transactions.
The Notes are convertible into common stock of the Company at a conversion price
of $45.31 per share at any time after the 60th day following the date of
original issuance of the Notes and thereafter at any time at or before maturity,
unless previously redeemed, subject to adjustment in certain events.
The Company has filed a Registration Statement on Form S-3 with the Securities
and Exchange Commission under the Securities Act, which is expected to become
effective during May of 1997 and which will permit the resale, on a registered
basis, of the Notes and of the shares of common stock issuable upon conversion
of the Notes from time to time by the securityholders named or to be named
therein. The Company has also applied for the Notes and the underlying shares to
be listed on the New York Stock Exchange.
Item 6. Exhibits and Reports on Form 8-K
(a)Exhibits
3.1 Articles of Amendment to EMC Corporation's
Articles of Incorporation (filed herewith).
11.1 Computation of Primary and Fully Diluted
Net Income Per Share (filed herewith).
27 Financial Data Schedule (filed herewith).
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EMC CORPORATION
(b) Reports on Form 8-K
On March 20, 1997, the Company filed a report (Date of Report: March 13,
1997) on Form 8-K announcing that it had completed the sale of $517,500,000
principal amount of 3 1/4% Convertible Subordinated Notes due 2002.
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EMC CORPORATION
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: May 14, 1997 By: /s/ Colin G. Patteson
Colin G. Patteson
Senior Vice President,
Chief Administrative Officer
and Treasurer (Principal Financial
Officer)
By: /s/ William J. Teuber, Jr. William J. Teuber, Jr.
Vice President and Chief Financial Officer
(Principal Accounting Officer)
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EMC CORPORATION
EXHIBIT INDEX
Exhibit 3.1 Articles of Amendment to EMC Corporation's
Articles of Incorporation (filed herewith).
Exhibit 11.1 Computation of Primary and Fully Diluted
Net Income Per Share
Exhibit 27 Financial Data Schedule
<PAGE>
Exhibit 3.1
Federal Identifi ca ti on No.
04268000 9
THE COMMONWEALTH OF MASSACHUSETTS
William Francis Galvin Secretary of the Commonwealth
One Ashburton Place, Boston, Massachusetts
021081512
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
We, Michael C. Ruettgers, President, and Paul T. Dacier, Assistant Clerk of EMC
Corporation, located at 171 South Street, Hopkinton, Massachusetts 01748,
certify that these Articles of Amendment affecting articles numbered 3 of the
Articles of Organization were duly adopted at a meeting held on May 7, 1997, by
vote of 200,768,112 shares of common of 246,134,438 shares outstanding, being at
least a majority of each type, class or series outstanding and entitled to vote
thereon.
<PAGE>
To change the number of shares and the par value (if any) of any type, class or
series of stock which the corporation is authorized to issue, fill in the
following:
The total presently authorized is:
With Par Value Stocks
Type Number of Shares Par Value
Common 500,000,000 $.01
Preferred 25,000,000 $.01
Change the total authorized to:
With Par Value Stocks
Type Number of Shares Par
Value
Common 750,000,000 $.01
Preferred 25,000,000 $.01
<PAGE>
The foregoing amendment(s) will become effective when these Articles of
Amendment are filed in accordance with General Laws, Chapter 156B, Section 6
unless these articles specify, in accordance with the vote adopting the
amendment, a later effective date not more than thirty days after such filing,
in
which event the amendment will become effective on such later date.
Later effective date:___________________________.
SIGNED UNDER THE PENALTIES OF PERJURY, this 7th day of May, 1997.
/s/ Michael C. Ruettgers, President,
/s/ Paul T. Dacier, Assistant Clerk.
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
__________________________________________________________ __
I hereby approve the within Articles of Amendment, and the filing fee in the
amount of $_________ having been paid, said article is deemed to have been filed
with me this __________ day of _____________________, 1997.
Effective date:_____________________________________________________
WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth
TO BE FILLED IN BY
CORPORATION Photocopy of
document to be sent to:
Paul T. Dacier, Esq. Vice President
and General
Counsel EMC Corporation
171 South St. Hopkinton, MA 01748
<PAGE>
EMC CORPORATION
Exhibit 11.1 Computation of Primary and Fully Diluted Net Income
Per Share (unaudited)
(Amounts in thousands except share and per share data)
<TABLE>
Three Months Ended
March 31, March 30,
1997 1996
Primary
<S> <C> <C>
Net income $110,868 $84,545
Add back interest expense
on convertible notes 888 2,440
Less tax effect on interest
expense on convertible notes (355) (976)
Net income for purposes of
calculating $111,401 $86,009
primary net income per share
Weighted average shares
outstanding during the period 245,795,997 230,488,964
Common equivalent shares 9,056,959 18,050,105
Common and common equivalent
shares
outstanding for purpose of 254,852,956 248,539,069
calculating
primary net income per share
Primary net income per share $0.44 $0.35
(Note 4)
Fully Diluted
Net income $110,868 $84,545
Add back interest expense on
convertible notes 888 2,440
Less tax effect on interest
expense (355) (976)
on convertible notes
Net income for purpose of
calculating $111,401 $86,009
fully diluted net income per
share
Common and common equivalent
shares
outstanding for purpose of 254,852,956 248,539,069
calculating
primary net income per share
Incremental shares to reflect 4,510 340,230
full dilution
Total shares for purpose of
calculating 254,857,466 248,879,299
fully diluted net income per
share
Fully diluted net income per $0.44 $0.35
share (Note 4)
</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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 700,526
<SECURITIES> 515,069
<RECEIVABLES> 644,269
<ALLOWANCES> 7,517
<INVENTORY> 442,328
<CURRENT-ASSETS> 2,363,252
<PP&E> 294,459
<DEPRECIATION> 26,241
<TOTAL-ASSETS> 2,948,809
<CURRENT-LIABILITIES> 456,363
<BONDS> 517,500
<COMMON> 2,461
0
0
<OTHER-SE> 1,889,673
<TOTAL-LIABILITY-AND-EQUITY> 2,948,809
<SALES> 600,900
<TOTAL-REVENUES> 618,437
<CGS> 335,985
<TOTAL-COSTS> 481,700
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,402
<INCOME-PRETAX> 149,116
<INCOME-TAX> 38,248
<INCOME-CONTINUING> 110,868
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 110,868
<EPS-PRIMARY> 0.44
<EPS-DILUTED> 0.44
</TABLE>
