Good morning and welcome to the EMC fourth quarter 2012 earnings conference call. All parties are in a listen-only mode until the question-and-answer portion of the call. As a reminder, this conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to introduce your host, Mr. Tony Takazawa, Vice President, Global Investor Relations of EMC.

Thank you. Good morning. Welcome to EMC’s call to discuss our financial results for the fourth quarter and full-year 2012. Today we are joined by EMC Chairman and CEO, Joe Tucci, and David Goulden, EMC President and COO. To kick things off, David will comment on our results and how these tie with the execution of our strategy and business operations. He will also discuss our outlook for the year 2013. Joe will then spend some time discussing his view of what is happening in the economy and IT, EMC’s vision and strategy and how EMC is helping customers navigate the massive transformation happening in IT regarding cloud, big data and trusted IT. After the prepared remarks, we will then open up the lines to take your questions. Today, we are providing you with our projected financial model for 2013. This model lays out all of the key assumptions and discrete financial expectations that are the foundation of our outlook this year. We hope that you find this model helpful in understanding our assumptions in context and in ensuring that these expectations are correctly incorporated into your models. This model is available as background in today’s slides and available for download in the investor relations section of emc.com. Please note that we will be referring to non-GAAP numbers in today’s presentation unless otherwise indicated. The reconciliation of our non-GAAP comments to our GAAP results can be found in the disclosure in today’s press release, supplemental schedules and the slides that accompany our presentation. As always, the call this morning will contain forward-looking statements and information concerning factors that could cause actual results to differ can be found in EMC’s filings with the US Securities and Exchange Commission. With that, it is now my pleasure to introduce David Goulden. David?

Thanks, Tony. Good morning, everyone, and thank you for joining us today. This morning we reported accelerated growth in Q4 with revenue up a solid 8% and non-GAAP EPS up 10% from last year’s Q4. Our differentiated strategy and unique value proposition enabled us to deliver very good results in the quarter and achieved record results for full-year with revenue up 9%, to $21.7 billion, non-GAAP earnings per share up 13% to $1.70 and free cash flow up 14% to $5 billion. In addition, in 2012, we delivered once again on our triple play, gaining market share, investing in the business and delivering leverage. I want to extend my thanks and congratulations to the many thousands of EMC and VMware people around the world who produced these strong results. Our strategy was our strength throughout a challenging 2012. Our three strategic pillars of cloud, big data and trust resonate strongly with our customers and remain a top priority for IT departments. EMC’s broad, best of breed portfolio gives us rich, differentiated basic capabilities to draw from as we work with our customers to transform both their IT departments and the businesses that IT supports. And customers are responding. Compared with IT spending growth of approximately 2%, we are pleased to achieve revenue growth of 9% in 2012. The challenges of complex and expensive IT infrastructures, data growth and security are at the core of the architectural shifts to cloud, big data and trusted IT. Our approach to cloud computing offers IT departments great efficiency control and choice. Once implemented, IT infrastructure can be managed in a more agile way, allowing IT to be more responsive to business needs. Big data is triggering new approaches for deriving business insights and new opportunities to expand revenue. And as security concerns create challenges…

Thank you, David, and my thanks to everyone who has joined us for today’s call. As always, we appreciate your interest in EMC. Overall, I was pleased with our performance in Q4. In last quarter’s call, we indicated that we believed Q3 would be the low point of the year in regards to our year-on-year growth rate and, in fact, that was the case. In Q4, we accelerated our growth rate from Q3 by more than two percentage points and achieved our first $6 billion plus quarter. To add a little color about the quarter, we did see a moderate budget flush but customers continued to be cautious with their IT acquisitions, making sure they lead to acceptable ROIs, increased productivity and innovation. We also saw a quarter that was back-end loaded. We had a strong December. We saw Europe have more predictability and good growth. We experienced significant interest and adoption of private (carved) models. We realized a 17% year-over-year growth rate in our brick plus plus countries. And we had a very strong growth in Greenplum and our big data assets. From a vertical perspective, we saw high growth with service providers, good growth in financial services, telecomm and the media and entertainment industries and a lower growth in public sector and manufacturing. Additionally, and very importantly, we believe in closing out Q4 we positioned ourselves well for 2013. Looking at the full year of 2012 against our goals of $22 billion in revenue, $1.70 per share of non-GAAP EPS and $4.9 billion of free cash flow, we just slightly missed our revenue goal, we hit our EPS goal and exceeded our free cash flow goal. Given the uncertain macro environment, I truly believe we executed very well and took share across a vast majority of markets in which we compete. I want to thank the 60,000 EMC and VMWare people around the world along with our valued partners for their excellence in execution and for their dedication to our customers and their success. I am very proud of all of you. Without a doubt, what underpinned our success in Q4 and in 2012 was a crisp execution of our strategy and our business model. We are squarely focused on several of the hottest areas in IT: cloud computing, big data and trust. I would now like to turn to 2013. This year we expect global IT spending to grow around 3% with Asia Pacific, excluding Japan, Latin America, the Middle East, Africa and North America being above that average, with Western Europe and Japan being below.

The other thing is I always look at the product cycles and we have extremely exciting product cycles this year and a lot of refreshes. We have a huge base, so these things together give us a lot of confidence and our strategic reach I think, as I delineated, the six or seven priorities we have for the company. These are really well placed and if you look at the CIO priorities for their spending, the map extremely well, so we’re in a good space. Customers understand they need to invest and they are. They move from cautious to I think what I call a cautious optimism. David, do you want to add anything?

The other thing is I always look at the product cycles and we have extremely exciting product cycles this year and a lot of refreshes. We have a huge base, so these things together give us a lot of confidence and our strategic reach I think, as I delineated, the six or seven priorities we have for the company. These are really well placed and if you look at the CIO priorities for their spending, the map extremely well, so we’re in a good space. Customers understand they need to invest and they are. They move from cautious to I think what I call a cautious optimism. David, do you want to add anything?

The other thing is I always look at the product cycles and we have extremely exciting product cycles this year and a lot of refreshes. We have a huge base, so these things together give us a lot of confidence and our strategic reach I think, as I delineated, the six or seven priorities we have for the company. These are really well placed and if you look at the CIO priorities for their spending, the map extremely well, so we’re in a good space. Customers understand they need to invest and they are. They move from cautious to I think what I call a cautious optimism. David, do you want to add anything?

The other thing is I always look at the product cycles and we have extremely exciting product cycles this year and a lot of refreshes. We have a huge base, so these things together give us a lot of confidence and our strategic reach I think, as I delineated, the six or seven priorities we have for the company. These are really well placed and if you look at the CIO priorities for their spending, the map extremely well, so we’re in a good space. Customers understand they need to invest and they are. They move from cautious to I think what I call a cautious optimism. David, do you want to add anything?

Yes, Keith, let me just pick up on that. So yes, you’re right. We are expecting a 6% growth ex VMWare, up from 5%. This year, a couple of other factors, network storage marketplace grew faster than IT spending in ’12. We do expect it to grow faster than IT spending in ’13. As Joe said, we expect a small uptick in IT spending growth in total from 2% in ’12 up to 3% in ’13, so that’s going to help us. Last but not least, just to reiterate what Joe said about the strength of the product cycle and what that can do for us and consistent with the macro guidance, of course, expect higher growth in the second half than in the first half. But your math is exactly correct. Last but not least, I’d just point out that we do expect to get a decent continued increase in operating leverage as well for the year, ex VMWare and, of course, with VMWare in the consolidated numbers as well.

Your next question comes from the line of Amit Daryanani – RBC Capital Markets. Amit Daryanani – RBC Capital Markets: David, I think you touched on the success of Isilon and verticals outside the core areas they play and you talked about financials being a big success area. I’m curious when you look at these new verticals, is Isilon actually winning against some of the traditional competitors that they've had – I think in the past I talked about 80% displacement of NetApp-centric solutions. In the newer verticals, do you see it cannibalizing more of your traditional VNX product line?

No, I think that definitely when we look at the newer verticals where Isilon is having success is against the more traditional NAS players and the example that I referenced in my prepared remarks was against an existing NAS incumbent and I gave you all the facts and figures around that. I think what’s really exciting is that with the mavericks release that shipped on schedule right at the end of the fourth quarter, which obviously didn’t have much of an impact on Q4 numbers directly, but the potential is now there for 2013 for the aperture that we can focus on in Isilon to be that much wider. Just to recap what we did with mavericks, we certainly performed. We improved the year performance drastically, about 50% reduction in latency but then we added a lot of features around data protection, security and integration backup to VMWare and all of those together represent a quantum leap in terms of the size of the market that we can address. So yes, the new verticals will be a high part of the growth and it really is incremental market opportunity compared to where EMC’s traditional storage platforms play.

Your next question comes from the line of Aaron Rakers – Stifel Nicolaus. Aaron Rakers – Stifel Nicolaus: Question building off of Keith’s prior comments. When you look at your two big storage buckets, you look at the high-end business growing 6%, the mid-tier business growing 5%. The high end in the past had been talked about being a lower-single digit growth rate. I guess my question is when you look at your guidance for 2013 and layering in some of these product cycles, do we expect the mid-tier segment to get back to a double-digit growth rate? And also within that, where do you guys recognize the Greenplum revenue and is there some point in 2013 a time that we break that out?

So the Greenplum revenue is in our storage revenue segment but it’s not in either high end or the mid-tier. It’s in the other bucket. If you added high-end to mid-tier and subtracted it from total storage product, you’ll see that there are a few other things in there. Greenplum is one of those things. In terms of breaking it out, we’ll tell you more about all the things that are going to go into the pivotal program and initiative when we get together in March. So whether we break it out specifically or not, we’ll certainly be breaking out more of the things that are part of that new program. So relative to your question on high-end to mid-tier, first of all, you’re right that mid-tier growth in the quarter was 5%. But if you look at the year, it was 9% and, as Joe and I both mentioned, we have a great roadmap coming up.

Andrew, there’s a couple of use cases that seems to be resonating particularly well for extreme IO. First, and obviously – let’s step back and talk about what extreme IO is. First of all, it’s a storage array and, secondly, it’s a storage array with rich data services and inbuilt dedup and the ability to do lots of snapshots. So when you think of the – and of course, very high performance. So you think of all those things together and the sweet spot are going to be data sets or work loads that really take maximum (inaudible). And a couple of areas come to mind and a couple of areas off (beta) that customers are using. First one is (VDI) where obviously there’s a lot of ability to do dedup across all the different work station images and need extreme performance, particularly when you’re booting up, potentially thousands of work stations in peak periods. Another big area is data base test and (def) where the ability to do all the snapshots and keep multiple copies are very important and efficient for those customers. So those are a couple of major use cases. In terms of the competitive environment, we’ll talk more about that. We are going to have a big flash launch in early March just before our analyst day but I think you know how all the all-flash array vendors are out there. Our customers have been using the extreme IO systems against all the popular candidates, so I won’t mention any by name. But as I said in my prepared remarks, we are very excited of the feedback from our beta customers and we generally do believe this is going to be the best all-flash array in the marketplace.

Your next question comes from the line of Ittai Kidron – Oppenheimer. Ittai Kidron – Oppenheimer: First of all, guys, can you give some color on your views on the federal government vertical through 2013? And second, David, you’ve talked about 2012 having IT spend growth 2%, EMC 9%. ’13 we’re looking at IT accelerating actually to 3% and EMC declining to 8%. So clearly VMWare is part of the equation but I’m trying to understand if you can also benchmark what storage spending is going to be in 2013 versus ’12 and is there perhaps smaller and fewer opportunities for share regains for you in ’13 versus what you had in the past?

So first of all, you’re right that in 2012 we grew 9% in total against IT spend of 2% but let’s also put that into context of VMC x VMWare or EMC II that was 5% against IT spending of 2%. And in 2013, we’re forecasting to grow at 6% versus IT spending of 3%. So and as Joe said, we strive to meet or beat our goals. We’ve talked about our product cycle. So the fact that we’re still gaining share, we do plan to grow at twice the market in 2013, x VMWare. We grew at 2.5 times x VMWare in 2012, so I wouldn’t read too much into that. We look at potential – I don’t think it’s an issue of relative growth. We think we’ll be gaining a lot of share in both years. And as we said, we aim to meet and potentially exceed our goals.

On the federal landscape, Ittai, I’m just not sure. Let me give you two sides of it. I think we all agree and federal budgets will be tight this year for sure, tighter than last year. On the other side, what we all know intuitively and the federal government knows, that to really get the productivity they need you’ve got to invest in IT and you’ve got to do in some of the newer ways and there are tremendous opportunities for the federal government to utilize cloud and get real value out of big data. So the question is how will that materialize itself in an area that’s obviously more political, more bureaucratic by definition. So eventually they’re going to have to do what I said. How much they get done in 2013, how good a year it’ll be, I think it needs to be watched but I don’t think it’ll be a terrible year. I think it’ll take probably a while for them to through the political process make sure that they use IT to gain these productivity gains that they need.

Your next question comes from the line of Brian Alexander – Raymond James. Brian Alexander – Raymond James:

Abhey Lamba – Mizuho Securities: Speaking on the discussion about flash, Joe and David, how are the products that we are going to see later this year? When should we think about their ability to contribute meaningful revenues? Can it happen this year as customers are likely going to test and pilot them initially? So should we see an impact this year? And also, David, if you can touch upon the impact on your margins. Should we see a step up based on those.

So let me put that all into context with how – doing everything we’re going to do in March. Now, the first thing we’re going to bring to market from a customer, from a GA, general availability point of view, is going to be our new line of MLC-based PCIE flash cards for the server and those will start to revenue later this quarter into early next quarter and then the Project X will have a revenue impact more in the second half of this year, so both ramping up. But again, so they’ll be growing rapidly but obviously compared to a $23.5 billion business it’s not going to have a huge impact. The bigger impact is flash and the hybrid arrays, where, as I mentioned, over 50% include flash and that’s a big piece of the growth of our VNX and VMAX marketplace, so flash is having an impact on our growth rate. All flash products will be ramping this year and, in terms of bring able to move the needle against a $23.5 billion revenue line, that will be more something for 2014.

Well, again, thank you all for joining us and it goes without saying. We are really excited about our strategies and our strategic position around cloud, big data and trust. We know they’re well placed. We know they’re being extremely well received by our customers and our partners and we really look forward to sharing in depth with you on March 13th. So again, we – I think the strongest thing that I take a lot of solace in is we just have a great team here in EMC and VMWare. We have momentum and we’re extremely excited about our prospects to grow and take share. So again, thank you for being with us today and we’ll see you real soon.

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