EMC 2007 Annual Report Download - page 104

Download and view the complete annual report

Please find page 104 of the 2007 EMC annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 185

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185

EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
retain highly qualified employees; fluctuating currency exchange rates; risks associated with litigation; and other one-time events and other important factors
disclosed previously and from time to time in our filings with the SEC.
S. Segment Information
Following the completion of VMware's initial public offering, management has organized the Company around our two primary businesses: EMC
Information Infrastructure and VMware Virtual Infrastructure. The EMC Information Infrastructure business operates in three segments: Information Storage,
Content Management and Archiving, and RSA Information Security, while VMware Virtual Infrastructure operates in a single segment. Our management
measures are designed to assess performance of these operating segments excluding certain items. As a result, the corporate reconciling items are used to
capture the items excluded from the segment operating performance measures, including stock-based compensation expense, acquisition-related intangible
asset amortization expense and the effects of capitalizing and amortizing the costs of computer software development. Additionally, in certain instances, in-
process research and development charges, restructuring charges and infrequently occurring gains or losses are also excluded from assessing segment
performance. As a result of preparing separate financial statements for VMware's initial public offering, there have been some adjustments to VMware's
standalone consolidated financial statements that have been recorded in different periods by both EMC and VMware. These differences were not considered
material to the consolidated financial statements and segment disclosures of EMC. The VMware Virtual Infrastructure amounts represent the revenues and
expenses of VMware as reflected within EMC's consolidated financial statements. Research and development expenses, selling, general and administrative
expenses and other income associated with the EMC Information Infrastructure business are not allocated to the segments within the EMC Information
Infrastructure business as they are managed centrally at the business unit level. For the three segments within the EMC Information Infrastructure business,
gross profit is the segment operating performance measure.
Prior to the initial public offering, we operated within the same segments; however, our management made financial decisions and allocated resources
based on our revenues and gross profits achieved at the segment level. As a result of the initial public offering, our VMware Virtual Infrastructure segment is
now run independently and income before taxes and minority interest is now the segment operating performance measure for this segment. We have revised
the presentation of our segments for prior periods to conform to the current presentation.
97