EMC Capital Allocation Conference Call

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Gerald Gibbs
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1 EMC Capital Allocation Conference Call Tony Takazawa Vice President, Global Investor Relations May 30,

2 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 EMC s 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, Gross Margin, Operating Margin, Free Cash Flow and EBITDA. The definition of these measures, and a reconciliation to GAAP can be found within this presentation and at or This presentation does not constitute an offer to sell or a solicitation of an offer to buy securities of EMC Corporation or any of its affiliates. Any offer to sell or solicitation of an offer to buy securities of EMC will be made pursuant to a registration statement (including a prospectus) or offering memorandum, which will contain additional and potentially differing information about EMC, the terms and conditions of an investment in its securities and also will contain tax information, risk factors and other disclosures that are important to any investment decision regarding EMC. 2

3 CEO Commentary Joe Tucci Chairman and CEO 3

4 CFO Commentary David Goulden President, COO and CFO 4

5 Capital Allocation Framework (EMC excluding VMware Free Cash Flow) Plan to Return to Shareholders ~50% of EMC excluding VMware FCF (~$4B for 2013*) via Share Buybacks and Quarterly Dividends over the long term 20-25% of EMC excluding VMware FCF allocated to Dividend Initiate $0.10 Quarterly Dividend To Shareholders of Record on July 1, 2013 Plan for Aggregate $6 Billion Share Buyback Expand Buyback from $1.0 Billion in 2013 to $3.5 Billion through June 30, 2014 including $500 Million spent on buybacks year to date Note: Refer to the schedules in the appendix for a complete reconciliation of GAAP to non-gaap including Free Cash Flow on this slide. *EMC s expectations for EMC excluding VMware Free Cash Flow for

6 Q&A 6

7 Appendix 7

8 Financial Facts 2012 Year End: Held $11.4B in cash and investments $6.8B held by EMC ex-vmware $4.0B held by EMC ex-vmware domestically 2013 Expectations: $5.5B of consolidated Free Cash Flow ~$4.0B of Free Cash Flow ex-vmware* ~$2.0B of Free Cash Flow ex-vmware domestically Cash Requirements (EMC ex-vmware): ~$2.0 - ~$2.5B to run the business ~$1.0 - ~$1.5B to run the business domestically $1.7B to settle the principal on the convertible debt due December 2013, payable in January 2014 $6.0B to buy back EMC shares $3.5B of which are expected to be repurchased by the end of Q2 2014, inclusive of the $0.5B repurchased YTD Payment of a quarterly dividend starting at $0.10/quarter in July 13 Financial Position: Long-term commitment to maintain a conservative balance sheet with a strong investmentgrade profile (Debt/EBITDA <1.5x) Note: Refer to the furnished slide for a complete reconciliation of GAAP to non-gaap including Free Cash Flow on this slide. *EMC s expectations for EMC excluding VMware Free Cash Flow for 2013, Does not represent guidance or a projection of VMware s financial results and is provided solely for illustrative purposes. 8

9 Reconciliation of GAAP to Non-GAAP Free Cash Flow 2013 (expected) EMC Consolidated VMware within EMC EMC Information Infrastructure Cash flow from operations $6,825 $1,875* $4,950 Capital expenditures (900) (350)** (550) Capitalized software development costs (400) - (400) Free cash flow $5,525 $1,525 $4,000 International free cash flow ~(2,000) Domestic free cash flow ~$2,000 Note: Dollars in millions. Numbers may not foot due to rounding. * Does not represent guidance or a projection of VMware s financial results and is provided solely for illustrative purposes. ** VMware s CapEx based on the midpoint of VMware s previously provided guidance; VMware previously stated that it expects 2013 capital expenditures on a cash basis to range between $330 million and $370 million. 9

EMC Q Financial Results

EMC Q Financial Results EMC Q4 2013 Financial Results Tony Takazawa Vice President, Global Investor Relations January 29, 2014 1 Forward-Looking Statements This presentation contains forward-looking statements as defined under