Welcome. Good morning and welcome to the EMC Fourth Quarter Earnings Conference Call. All parties are in a listen-only mode until the question answer portion of the call. As a reminder, this conference is being recorded and if you have any objections you may disconnect at this time. I would now like to introduce your host, Mr. Tony Takazawa, Vice President of Global Investor Relations of EMC. Sir, you may proceed.

Thank you. Good morning. Welcome to EMC’s call to discuss our financial results for the fourth quarter of 2014. Today we are joined by EMC’s Chairman and CEO, Joe Tucci, David Goulden, EMC’s Information Infrastructure CEO and Zane Rowe, EMC’s CFO. Joe will begin our discussion with his view of what is happening in IT and EMC’s vision and strategy. Zane will then discuss the consolidated EMC results, some details regarding our performance and also provide our expectations for 2015. David will comment on the EMC Information Infrastructure business, what he has seen in the market, and the Q4 performance. After the prepared remarks, we will then open up the lines to take your questions. We are providing you with our projected financial model for 2015. This model lays out all of the key assumptions and discreet 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 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 today in our press release, supplemental schedules, and the slides that accompany our presentation. In addition, all financial comparisons will be on a year-over-year basis, unless otherwise indicated. 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 U.S. Securities and Exchange Commission. With that, it is now my pleasure to introduce Joe Tucci. Joe?

Thanks, Tony. I would like to extend the warm welcome to everyone joining us for today’s call. As always, thank you for your interest in EMC. Overall, we are pleased with our execution and results in Q4. Year-over-year, our revenue grew 5% and our non-GAAP EPS grew 15%. Within these results, revenue grew 16% at VMware, 2% at EMC II, and 18% at Pivotal. But since Pivotal has essentially moved to a subscription model, booking is a better metric of future success and in Q4 I am pleased to report that Pivotal’s bookings grew over 75%. Our Q4 results fairly exhibit a good balance of growth and opportunity across our family of companies and undoubtedly will compare quite favorably the results posted by large cap enterprise IT peers. As our strategies, products, services, solution, and execution sets us apart in the minds of our customers. Additionally, we continue to invest heavily in the quarter to where the IT pup is going. Investments that we firmly believe will pay off down the road. Looking at the year 2014, we came in within the 0.5 percentage point of hitting our revenue goal of $24.57 billion. We were exactly on plan to non-GAAP EPS at $1.90 per share. Again solid execution against these two metrics. Zane and David will give you additional information and perspective on Q4 and 2014 in a few minutes. Before I shift my remarks to the year ahead, I would like to publicly thank the 68,000 plus people of the EMC, VMware, and Pivotal along with our ecosystem of great partners around the world for their dedication, hard work, and vast expertise and for always striving to meet and exceed the expectations of our customers. Now moving to 2015, we fully expect the secular IT shifts of cloud computing,…

Thanks, Joe. Good morning everyone. Today I’ll walk through our consolidated results, capital allocation strategy, and provide our outlook for 2015. I’ll also highlight the results of the Pivotal and VMware businesses within the context of EMC and then hand the mic over to David for additional insights into the Information Infrastructure business. I am pleased to report that EMC had a solid quarter with record consolidated revenue of $7 billion up 5% year-over-year and EPS of $0.69, up 15%. For the year, we grew revenue of 5% to $24.4 billion and grew EPS 6% to $1.90. The team executed well in Q4 and over the course of 2014 enabling us to continue to outpace much of the tech industry. I want to thank and congratulate all of the team members across the EMC federation for all of their efforts throughout 2014. Our global business is impacted by the dramatic currency movements we’ve seen that began most notably in the second half of 2014. This FX headwind impacted revenue by 2 points of or about $115 million year-over-year in Q4, which was about $40 million greater than we had expected as of our last report. In Q4, North American revenues grew 6%, the US was up 7%, EMEA was also up 6%, a very good result given the currency headwinds there caused us 3 points of growth; APJ was up 2%; and Latin America was up 8%. Our BRIC plus 13 markets grew 7% year-over-year. Looking across our three major businesses, Pivotal’s revenue increased 18%, VMware’s 16%, and EMC Information Infrastructure’s 2%. The ability to cross-sell products continues to be a strength of ours and we are seeing growing success in our joint efforts to serve customers’ needs. Two key areas where we are demonstrating our collective strengths are in…

Thanks, Zane and good morning everyone. I’d like to start by thanking the entire EMC II team for - through a year of accomplishments in an IT market that is changing rapidly. We continue to innovate across all of our businesses and in storage we cemented a decisively in all the flash ray market segments. We leveraged our portfolio to break new and differentiated business outcomes of customers and we continued to gain share. These share gains in storage are a direct result of our investments and our ability to manage these investments in the context of our existing market-leading portfolio. EMC is the best-of-breed Information Infrastructure provider. This is true for traditional datacenter environments where the vast majority of enterprise workforce runs on SAN and not infrastructures as well as the next generation datacenter environments, where the vast majority of new workloads are going in the future running on objects and ATFS infrastructures. This is a key differentiator for EMC and customers are increasingly turning to EMC’s bridge between the traditional and next-generation datacenter environments. With these advantages, we grew our storage business 3% in Q4 and 2% for the year and grew faster than our peers during 2014. Within storage, emerging product revenue grew 40% in Q4 and 52% for the full year. At over $2.3 billion of revenue in 2014 Emerging Product now represents a significant share of our storage revenue and growing fast. We expect the Emerging Products group to continue to grow at over 30% in 2015 and exit the year as the second largest components of storage revenue as the unified and back-up recovery. We would not be seeing this level of success have we not invested as aggressively as we have done. With the acquisition of an investment in all flash rays for…

Thanks, David. Before we open up the lines for your questions, we ask you to try and limit yourselves to one question, including clarifications. This will enable us to take as many questions as possible. We thank you all for our cooperation in this matter. Joe, can we please have the first question?

Certainly, one moment. Our first question is from Amit Daryanani with RBC Capital Markets. Your line is open.

Thanks much. Good morning guys. I guess my question is really on the XIO and VMAX dynamics. XIO clearly seems to be doing very strong at the same time VMAX has slowed down quite a bit. There is a lot of concern I think that, XtremIO may be cannibalizing some of the VMAX sales. But to the extent you can just talk about, how much of that is true? How much of that are you seeing? And is XIO really bringing net new customers into the EMC family?

David, let me take that one. So, great question. We are very impressed with both platforms and we really have a kind of power and story going on here. Let me explain what I mean by that. Typically, when we got to XtremIO, we’ve actually updated our data on that as we spoke to you last time. You looked at the sales in Q4 and the sales of XtremIO are in like a third to third to third, what I mean by that is a third of them are going into existing EMC accounts where people are re-hosting workloads is either existing on a VMAX or a VNX, so impact both. The third of them are in the EMC account, but net new workloads and a third of them are into net new accounts. So essentially two-thirds of the XtremIO sales are into either new workloads on new accounts and only a third is the re-hosting workload sitting on, on existing EMC platform. So, we feel good about that particular dynamic and we also feel very good about the strength and position with VMAX also that vanilla question.

Thanks, Amit. Next question please.

And our next question is from Maynard Um with Wells Fargo. Your line is open.

Hi, thank you. If I take your constant currency revenue guidance and then remove the Emerging Storage growth of north of 40% and then the $700 million from VCE the remaining pieces look like they are growing. Can you just talk about the make-up and visibility of that, you referenced VMAX decline is moderating, but can you walk through the other segments and then just talk a little bit about what impact the mix shifts might have on your gross margin? Thanks.

Yes, Maynard, that sounds like a multi-part question, but let me address the revenue part. Yes, obviously, there are number of - and it’s a little complicated with the impact of VCE and also the impacts of FX. But let me kind of give you a couple of perspectives, because Zane told exactly how much each of them were. So, if you kind of normalize them out, and I realize that’s only a piece of theory and axle, but you normalize them out and actually the storage business will be growing faster in 2015 in constant currencies than it was in 2014 and actually you also see a gross margin improvement in 2015 versus 2014 when you normalize them out as well. So perhaps, it’s the best way to think about the moving parts since it’s more specifics we can take that in a follow-up question.

Thanks Maynard. Next question please.

Our next question is from Aaron Rakers with Stifel. Your line is open.

Yes, thanks for taking the question. I'm going to build on that a little bit. When you take all the emerging pieces and you strip out the $2 billion in revenue, you strip out VMware, it really looks like - by my math the core business looks to being declining anywhere from 3% to 5%. So first of all, is that math correct? And how are you thinking about the goalpost of that $2 billion with regard to that - that dilution to the EPS line? When do you think that becomes neutral to positive to the overall EPS story?

Why don’t we start with the second part of the question, right which is why put that one first in terms of, so that - so, in terms of these five areas, those six areas, down to took up where they are going to go beyond 2015 is something we’ll talk about at the forum which we mentioned we are not going to get into that today. On the normalization calculation, I mean, obviously there are number of things going on inside of the business. If you strip out everything that’s drawing, then obviously, then certain parts of business are up and certain parts of business are down. Remember what we’ve talked about VMAX, we do expect that, even though we are very excited about the technology in VMAX-3, along new enterprise apps going into different types of workloads to the more suited for alternative architectures to that part of the business will actually be down a little bit less than it was in 2014. So you got to look at the puts and takes. But I think it’s sounds a little bit unfair to strip out everything that’s growing and only look at what’s left. And then you got to look at the portfolio and how we are shifting and how does the portfolio moves with a higher percentage towards the new areas you actually see our growth rates are picking up. It’s really representative of the transformation we are doing of the business and how that transformation is now showing through in terms of accelerating revenues and improving gross and operating margins.

Let me add a little color. When our sales force goes in they don’t think about declining what’s declining, what’s growing, what they think about is, what are the customers’ needs and then we have a whole portfolio of products and as you can see, that’s our strength and as we are doing that, you can also note that our gross margins are doing well. So far, that we are substituting our low gross margin products or high gross margin products, that’s why we approach it. It truly is as David said the power of - that is the power of EMC is the fact that, VMAX has a great fit in many, many of our customers but also along with many times with XtremIO along with many times with ScaleIO and the fact that we can do that and with the margin profile we that Zane laid out is I think our strength. You should not look at it, these are declining, that’s all bad, this is all good. I mean, can we - how does this work in terms of the customer set and it’s working quite well.

Thank you.

Thanks Aaron. Next question please.

Our next question is from Alex Kurtz with Sterne Agee. Your line is open.

Yes, thanks guys for taking the question. Just - on the buyback, I think there was some expectation going into this call and in the Analyst Meeting next couple of months here that the buyback may have been bigger based on Elliot's involvement. So, could you just give us your thoughts on how you got to that number and whether or not you could upside that during the year? Thank you.

This is Zane. Thanks for the question. First off, we obviously are benefiting from a strong balance sheet and as Joe talked about a lot of good investment in the company. So, as you mentioned I think there are expectations across the board on a buyback. We feel very comfortable with the flexibility we have. I mean, part of this is about balance and it is about a philosophy that hasn’t changed with the company. So, it is a balanced approach to it. We feel like, we do have flexibility for a number of different options, should they rise through the course of the year.

Thanks Alex. Next question please.

Our next question is from Keith Bachman with Bank of Montreal. Your line is open.

Hi, many thanks. I was wondering, David, if you could flush out a little bit more on VCE and talk about the strategy now that it's consolidated within EMC and specifically, Cisco has notional investment there might you broaden out to other networking vendors. When would you anticipate that profitability would improve or is it always going to be a drag on margins? But if you could just flush out the strategy as you look at VCE that would be helpful. Thank you.

Well, thank you, Keith. We first are very excited to have VCE as part of the family we talked about how rapidly it’s been drawing just logged about seventh quarter of 6% plus bookings growth and of course CI is a very strategic piece of infrastructure generally going forward. So I think it’s a great to asset to have. In terms of where we are going with it, there are couple of points, first of all, we are very committed to the partnership with CISCO, and very committed to VBlock. We want to change - exceptionally well. We will continue to incorporate more technologies from EMC, from VMware and also new technologies from CISCO, as well and we don’t really have any short-term plans to significantly broaden the portfolio. What we are focused on doing though is bringing a lot of our convergence infrastructure assets together. So we use to run these specs as a separate program, that’s now part of VCE. We are doing some new work that we will announce next week around new converged lower end type of converged systems at - of the VCE. So, it’s really creating a consolidation place to bring all of our converged infrastructure assets together and then leverage them more and more closely. And then finally from a margin point of view, I mean, I mentioned the fact that obviously compared to business as usual, with there is an impact of 2015, but I did want to reinforce that if you look at the aggregate effects of VCE together, it does contribute operating margins in 2015 even though compared to business usual it’s a little worse and as the business grows, we think we can continue to leverage and improve our position.

Okay. Thank you, David.

Thanks Keith. Next question please.

Our next question is from Kulbinder Garcha with Credit Suisse. Your line is open.

Thanks. My question is for David and Zane. Just in terms of maybe looking at the guidance this way, let's strip out the impact of VCE, strip out the impact of VMware and revenue growth of what predominantly information storage, it seems to be kind of 2% to 3% and the margins operating-wise seems to be going down if I take out VCE and the impact of VMware. Is that the right way of thinking about it and I'm trying to think about where in that, David, versus your comments on the confidence this year of the storage market reaccelerating, IT spending being better and gaining market share. I know currency is a headwind by a couple of points as well, but it just seems like that guidance is either conservative or there is some caution or maybe I am doing the math wrong?

So, Kulbinder, I think you missing a little bit, you are missing the impact of FX. So, you take out VCE, take out VMware and I think you also got to normalize for FX because for the EMC Information Infrastructure business, it’s about 2.5% of revenue growth impact. So you back that out and you actually find on a constant currency, we expect the EMC II business to grow faster, but in 2014 we expect the gross margin be better than they were in 2014 and we expect the operating margin to be better than they were in 2014. The FX impact is not insignificant 2.5 points of revenue basically about 70 points of gross margin, about 80 points of operating income when you look at just EMC II. So that’s the way you need to think about. So it basically does for our storage that we expect - storage market to do a little bit better in 2015. We expect that EMC’s storage business to be better in 2015. We expect to better in the storage market in 2015.

Got it. Thank you. Great.

Thanks Kulbinder. Next question please.

Our next question is from Brian White with Cantor Fitzgerald. Your line is open.

Yes, Joe, I am wondering if you could update us a little bit on the discussions with Elliot and kind of how you think about enhancing shareholder value. And I am just looking back, I mean, the stock is at the same place it was four years ago and I think people are getting a little anxious. Thank you.

We basically, we started doing considerably better in this last - I think on the back of a lot of news mostly related to currency, tech has some pretty bad days. So we are looking at tech in a bit of a trough. Basically, Elliot has been a good shareholder, and very constructive. We have had a lot of dialogues. We have tremendous potential and I think the forum on the 10th is going to be - we are not going to talk about structure, just to kind of - the address will probably everybody think it, but we are going to talk a lot about the options we have, our strategies, our products, why we can win, some of the actions we will take. And I think you will see that, we are doing a lot better than almost all the companies that were born in our era, so to speak. And we had a consistent growth. We’ve got great opportunities in our investment and I think a lot of what, people want to know is exactly when did these kind of headwinds on these investments we make can become tailwind and those are the kind of things we’ll lay out for you and why we think we can win in the market. So, again, we have a very open dialogue with Elliot as we do with a lot of shareholders. And, I think lot of attention and I think, the 10th will give you a lot of the answers you want. But we are going to just this again. We are not talking about structure, we are talking about our products and our options and how we can win.

Thank you.

Thanks Brian. Next question please.

It comes from Jayson Noland with Robert Baird & Company. Your line is open.

Great. Thank you. I wanted to follow-up on the emerging growth portfolio. There is lots of new and impressive - hyper-converged and efficiency-based technologies, companies that are taking a lot of share. David, are you happy with the portfolio as it sits right now and just basically wondering if there is an acquisition that needs to be made here or is it more of a tuck-in and build from - build internally?

Jayson, I am really happy with what we are doing in our emerging area. Again, 40% growth in the quarter, 50% plus the year, $2.3 billion business, and I’ll figure and all the little guys put together in that segment. I don’t want to give away too much but there will be a hyper convergence team around our announcement next week in terms of an area where we are going to lay aggressively ourselves. So, we think, we got the key assets. We are doing more joint work VMware that brings new solutions together. So I feel really good about where we are. If I look across these segments in the emerging area, we are the market leader in all the segments we could play and we’ve done incredibly well with XtremIO. I think we are doing incredibly well with our new solutions as well.

Thank you.

Next question please.

It comes from Jim Suva with Citi. Your line is open.

Thank you and congratulations. A quick question, you mentioned the new or normal seasonality for Q1. It's been a long time since we've had kind of a normal operating environment given government sequestering and lots of things and now with the fold-in of VCE. Could you kind of update us on what normal seasonality is kind of - not only for Q1, but I guess, just normal for your full year?

This is Zane. I’ll start with that. I guess, taking from your question, line of question I probably should have an aspect on the new normal, because there are always these exogenous events that may alter that. As we talked about and David mentioned last year, the shift in the fulfillment process and making that process more efficient will have an impact on what we would call sort of new normal or a typical revenue profile through the course of the year. And what we tried to do is, just help you out and give you a sense of what impact that would have on revenue with the new normal being 22% of our full year revenue coming in, in the first quarter. And that’s a swap from the fourth quarter. So, it’s a point where you would historically see our percent of revenue mix in the first quarter and that’s a trade-off with the fourth quarter which should obviously increase the opposite amount. And then the remaining two quarters are roughly flat if you would just think of that profile through the course of the year.

Maybe just to add to that, just to help a little bit, what we said about Q1, remember, we kind of started our changing our order fulfillment process this time last year and you saw we had little bit more than 22% in Q1 last year, because it didn’t find, complete those change until Q2. So we are kind of explaining, we’ve actually got there and we talked about 22% as what we expected last year, we are short a little bit last year, but we now got locked in more that 22% level for this year

Thank you very much.

Thanks, Jim. Next question please.

Our next question comes Toni Sacconaghi with Bernstein. Your line is open.

Hi, yes, thank you. Joe, I was wondering if you could update us on your plans and leadership transitions at EMC. You talked publicly about February, plus or minus a few months in terms of being a transition. Obviously, the standstill agreement with Elliot had a date ascribed to it as well around September. So I am wondering, A. if the two are related in any way and B. if you can provide an update on how we should be thinking about a leadership transition at EMC in the near term? Thank you.

Sure, thanks Toni. I think, I’ve been inconsistent and basically because, with the Board they gave me contract that ends sometime in February. I think a lot of - there was lot of focus. I tried to say that February was a guidepost and I said it could be couple of months and couple of quarters earlier, which obviously was not and it could be a couple of months, couple of quarters, few quarters later. And then, I’ve also said that the Board has talked to me and I would look favorably upon saying on this and involve Chairman and not of an involve Chairman for a longer period than that. So basically, this is still within the guidelines, I don’t want nor as the Board agrees that we are not going to put another date with another contract. I am serving at the will of the Board, the will of the all the employees here and of course the will of our shareholders and I am really excited about our opportunities and our prospects. So it’s not directly related to Elliot, but it’s just kind of what we are going to do to make sure everything is smoother succession we can possibly have here.

Thanks, Toni. We’ll have a few concluding comments from Joe now and then we’ll end the call. Thanks.

Thanks for joining us and hopefully you have left with the feeling that we deeply believe in our opportunity that we can win in the significant IT transformation that is taking place. We have an incredibly large and valuable stable of relevant leading technologies and services to both today’s market, today’s IT world and tomorrow’s IT world. We have the people, the leadership and the expertise that trust in what we are doing, believing what we are doing and customers’ trust them to help them on their IT journey. And we look forward to sharing more with you at our strategic forum. So whether be it the web or in person, please join us and again, just thank you so much for your interest in EMC.