EMC 2003 Annual Report Download - page 28

criteria should be considered separately for each unit. The guidance in EITF 00-21 is effective for revenue arrangements entered into in fiscal periods
beginning after June 15, 2003. The adoption of EITF 00-21 did not have a material impact on our financial position or results of operations.
In April 2003, the FASB issued FAS No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities." This Statement
amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts
(collectively referred to as derivatives) and for hedging activities under FAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." In
general, this Statement is effective for contracts entered into or modified after June 30, 2003, and for hedging relationships designated after June 30, 2003.
The adoption of FAS No. 149 did not have a material impact on our financial position or results of operations.
In May 2003, the FASB issued FAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." This
Statement establishes standards for an issuer to classify and measure certain financial instruments with characteristics of both liabilities and equity. It requires
an issuer to classify a financial instrument that meets certain characteristics as a liability (or an asset in some circumstances). This Statement is effective for
financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after
June 15, 2003. The adoption of FAS No. 150 did not have a material impact on our financial position or results of operations.
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In December 2003, the FASB issued FAS No. 132 (revised 2003), "Employers' Disclosures about Pensions and Other Postretirement Benefits," that
improves financial statement disclosures for defined benefit plans. The change replaces existing FAS No. 132 disclosure requirements for pensions and other
postretirement benefits and revises employers' disclosures about pension plans and other postretirement benefit plans. It does not change the measurement of
recognition of those plans required by FAS No. 87, "Employers' Accounting for Pensions" or FAS No. 88, "Employers' Accounting for Settlements and
Curtailments of Defined Benefit Pension Plans and for Termination Benefits." FAS No. 132 revised retains the disclosure requirements contained in the
original FAS No. 132, but requires additional disclosures about the plan assets, obligations, cash flows, and net periodic benefit cost of defined benefit
pension plans and other defined benefit postretirement plans. FAS No. 132 revised is effective for annual and interim periods with fiscal years ending after
December 15, 2003. We have adopted the revised disclosure provisions.
In December 2003, the SEC issued Staff Accounting Bulletin ("SAB") No. 104, Revenue Recognition, which supersedes SAB No. 101, Revenue
Recognition in Financial Statements. SAB No. 104 rescinds accounting guidance in SAB No. 101 related to multiple-element arrangements as this guidance
has been superseded as a result of the issuance of EITF 00-21, "Accounting for Revenue Arrangements with Multiple Deliverables." The adoption of SAB
No. 104 did not have a material impact on our financial position or results of operations.
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FACTORS THAT MAY AFFECT FUTURE RESULTS
This Annual Report on Form 10-K contains forward-looking statements, within the meaning of the Federal securities laws, about our business and
prospects. The forward-looking statements do not include the potential impact of any mergers, acquisitions, divestitures or business combinations that may be
completed after the date hereof. Our future results may differ materially from our past results and from those projected in the forward-looking statements due
to various uncertainties and risks, including but not limited to those set forth below, one-time events and other important factors disclosed previously and from
time to time in our other filings with the SEC. We disclaim any obligation to update any forward-looking statements contained herein after the date of this
Annual Report.
Our business could be materially adversely affected as a result of general economic and market conditions.
We are subject to the effects of general global economic and market conditions. Our operating results were materially adversely affected in 2001 and
2002 as a result of unfavorable economic conditions. If economic and market conditions deteriorate, our business, results of operations or financial condition
could be materially adversely affected.
Our business could be materially adversely affected as a result of a lessening demand in the information technology market.
Our revenue and profitability depend on the overall demand for our products and services. Our operating results were materially adversely affected in
2001 and 2002 as a result of reduced IT spending. Recently, we have experienced an increase in demand for our products and services; however, delays or
reductions in IT spending, domestically or internationally, could materially adversely affect demand for our products and services which could result in
decreased revenues or earnings.
Our business could be materially adversely affected as a result of the risks associated with acquisitions and investments.
As part of our business strategy, we seek to acquire businesses that offer complementary products, services or technologies. These acquisitions, including
our acquisitions of LEGATO in October 2003, Documentum in December 2003 and VMware in January 2004, are accompanied by the risks commonly
encountered in an acquisition of a business, which may include, among other things:
the effect of the acquisition on our financial and strategic position and reputation
the failure of an acquired business to further our strategies
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