EMC 2011 Annual Report Download - page 82

Table of Contents
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
profile organizations. At December 31, 2011, we had a remaining reserve of $46.6 million included in accrued liabilities on the consolidated balance sheet.
We considered whether additional losses might result from the pending remediation efforts beyond our existing accrual and concluded that no additional
material losses related to the remediation efforts are reasonably possible. We expect that the remediation efforts will be substantially completed by the end of
the second quarter of 2012.
Guarantees and Indemnification Obligations
EMC's subsidiaries have entered into arrangements with financial institutions for such institutions to provide guarantees for rent, taxes, insurance,
leases, performance bonds, bid bonds and customs duties aggregating $115 million as of December 31, 2011. The guarantees vary in length of time. In
connection with these arrangements, we have agreed to guarantee substantially all of the guarantees provided by these financial institutions. EMC and certain
of its subsidiaries have also entered into arrangements with financial institutions in order to facilitate the management of currency risk. EMC has agreed to
guarantee the obligations of its subsidiaries under these arrangements.
We enter into agreements in the ordinary course of business with, among others, customers, resellers, joint ventures, OEMs, systems integrators and
distributors. Most of these agreements require us to indemnify the other party against third-party claims alleging that an EMC product infringes a patent and/
or copyright. Certain agreements in which we grant limited licenses to specific EMC-trademarks require us to indemnify the other party against third-party
claims alleging that the use of the licensed trademark infringes a third-party trademark. Certain of these agreements require us to indemnify the other party
against certain claims relating to the loss or processing of data, to real or tangible personal property damage, personal injury or the acts or omissions of EMC,
its employees, agents or representatives. In addition, from time to time, we have made certain guarantees regarding the performance of our systems to our
customers. We have also made certain guarantees for obligations of affiliated third parties.
We have agreements with certain vendors, financial institutions, lessors and service providers pursuant to which we have agreed to indemnify the other
party for specified matters, such as acts and omissions of EMC, its employees, agents or representatives.
We have procurement or license agreements with respect to technology that is used in our products and agreements in which we obtain rights to a
product from an OEM. Under some of these agreements, we have agreed to indemnify the supplier for certain claims that may be brought against such party
with respect to our acts or omissions relating to the supplied products or technologies.
We have agreed to indemnify the directors, executive officers and certain other officers of EMC and our subsidiaries, to the extent legally permissible,
against all liabilities reasonably incurred in connection with any action in which such individual may be involved by reason of such individual being or having
been a director or officer.
In connection with certain acquisitions, we have agreed to indemnify the current and former directors, officers and employees of the acquired company
in accordance with the acquired company's by-laws and charter in effect immediately prior to the acquisition or in accordance with indemnification or similar
agreements entered into by the acquired company and such persons. In a substantial majority of instances, we have maintained the acquired company's
directors' and officers' insurance, which should enable us to recover a portion of any future amounts paid. These indemnities vary in length of time.
Based upon our historical experience and information known as of December 31, 2011, we believe our liability on the above guarantees and
indemnities at December 31, 2011 is not material.
Litigation
We are involved in a variety of claims, demands, suits, investigations and proceedings that arise from time to time relating to matters incidental to the
ordinary course of our business, including actions with respect to contracts, intellectual property, product liability, employment, benefits and securities
matters. As required by authoritative guidance, we have estimated the amount of probable losses that may result from all currently pending matters, and such
amounts are reflected in our consolidated financial statements. These recorded amounts are not material to our consolidated financial position or results of
operations and no additional material losses related to these pending matters are reasonably possible. While it is not possible to predict the outcome of these
matters with certainty, we do not expect the results of any of these actions to have a material adverse effect on our business, results of operations or financial
condition. Because litigation is inherently unpredictable, however, the actual amounts of loss may prove to be larger or smaller than the amounts reflected in
our consolidated financial statements, and we could incur judgments or enter into settlements of claims that could adversely affect our operating results or
cash flows in a particular period.
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