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TableofContents
BusinessRealignmentPlan
OnJanuary22,2016,weapproved,subjecttocompliancewithallapplicablelocallegalobligations,aplantostreamlineouroperations,withplanstoreinvest
theassociatedsavingsinfield,technicalandsupportresourcesassociatedwithgrowthproducts.Thetotalchargeresultingfromthisplanisestimatedtobe
between$55millionand$65million,consistingprincipallyofemployee-relatedchargestobepaidincashfortheeliminationofapproximately800positionsand
personnel.AnysuchproposalsincountriesoutsidetheUnitedStateswillbesubjecttolocallawandconsultationrequirements.Actionsassociatedwiththeplan
areexpectedtobecompletedbyJune30,2016.Finalizationoftheplanwillbesubjecttolocalinformationandconsultationprocesseswithemployeesortheir
representativesifrequiredbylaw.
DellandEMCMerger
Weareamajority-ownedandcontrolledsubsidiaryofEMCCorporation(“EMC”).AsofDecember31,2015,EMCheld81.3%ofouroutstandingcommon
stockand97.5%ofthecombinedvotingpowerofouroutstandingcommonstock,including43millionsharesofourClassAcommonstockandallofourClassB
commonstock.
OnOctober12,2015,DellInc.(“Dell”),DenaliHoldingInc.(“Denali”)andEMCenteredintoadefinitivemergeragreementunderwhichDenalihasagreed
toacquireEMC.Underthetermsoftheagreement,wewillcontinuetooperateasapubliclytradedcompany.Uponclosingofthetransaction,aportionofthe
mergerconsiderationthatEMCshareholderswillreceivewillincludesharesofClassVcommonstockthatwillberegisteredwiththeSecuritiesandExchange
CommissionandissuedbyDenali.Pursuanttothetermsoftheagreement,itisexpectedthatapproximately0.111sharesofClassVcommonstockwillbeissued
byDenaliforeachEMCshare.DenalihasalsodisclosedthattheClassVcommonstockwillbeapubliclytradedtrackingstockthat,uponissuance,isintendedto
tracktheperformanceofanapproximately53%economicinterestinourbusiness.Theclosingofthetransactionscontemplatedbythemergeragreementissubject
toapprovaloftheEMCshareholdersaswellasvariousregulatoryapprovals.
Results of Operations
Approximately70%ofoursalesaredenominatedintheU.S.dollar,however,wealsoinvoiceandcollectintheeuro,theBritishpound,theJapaneseyen,the
AustraliandollarandtheChineserenminbiintheirrespectiveregions.Asaresult,ourfinancialstatements,includingourrevenues,operatingexpenses,unearned
revenues,andtheresultingcashflowsderivedfromtheU.S.dollarequivalentofforeigncurrencytransactionsareimpactedbyforeignexchangefluctuations.
Foreigncurrencyfluctuationshavehadanegativeimpactonthegrowthrateofourrevenuesduring2015,theamountofunearnedrevenuesrecognizedderived
fromsalesdenominatedinforeigncurrencies,andtheU.S.dollarequivalentofforeigncurrencycashcollections.Wehavealsobenefitedfromoperatingexpenses
incurredandpaidincurrenciesotherthantheU.S.dollar.
Revenues
OurrevenuesduringtheyearsendedDecember31,2015,2014and2013wereasfollows(dollarsinmillions):
2015 vs. 2014
2014 vs. 2013
For the Year Ended December 31,
$ Change
% Change
$ Change
% Change
2015
2014
2013
Actual
Actual
Constant
Currency
Actual
Actual
Revenues:
License $ 2,720
$ 2,591
$ 2,270
$ 130
5%
9%
$ 321
14%
Services:
Software
maintenance 3,405
3,022
2,563
384
13
459
18
Professional
services 522
422
374
98
23
49
13
Totalservices 3,927
3,444
2,937
482
14
508
17
GSAsettlement (76)
—
—
(76)
n/a
—
n/a
Totalrevenues $ 6,571
$ 6,035
$ 5,207
$ 536
9
12
$ 829
16
Revenues:
UnitedStates $ 3,311
$ 2,912
$ 2,485
$ 399
14%
$ 427
17%
International 3,260
3,123
2,722
137
4
401
15
Totalrevenues $ 6,571
$ 6,035
$ 5,207
$ 536
9
12
$ 829
16
34