Analysis of Reportable Segments
EMC Corp. operates in 5 segments: Information Storage; Enterprise Content Division; RSA Information Security; Pivotal; and VMware Virtual Infrastructure.
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- Income Statement
- Statement of Comprehensive Income
- Balance Sheet: Assets
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Selected Financial Data since 2005
- Current Ratio since 2005
- Debt to Equity since 2005
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Segment Profit Margin
EMC Corp., profit margin by reportable segment
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| Information Storage | |||||
| Enterprise Content Division | |||||
| RSA Information Security | |||||
| Pivotal | |||||
| VMware Virtual Infrastructure |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
- Information Storage
- The profit margin exhibited a gradual decline over the five-year period, starting at 56.46% in 2011 and decreasing to 52.25% by 2015. This downward trend indicates a consistent reduction in profitability within this segment, with the most notable drop occurring between 2014 and 2015.
- Enterprise Content Division
- This segment demonstrated overall positive growth in profit margins, increasing from 64.3% in 2011 to 67.95% in 2015. Despite a slight dip in 2013, the values show a strengthening profitability trend, suggesting successful operational or strategic improvements over the years.
- RSA Information Security
- The profit margin rose significantly from 56.76% in 2011 to a peak of 67.94% in 2012, then stabilized within the mid-to-high 60% range through 2015. This pattern indicates an initial strong improvement followed by consistent performance in profitability for the segment.
- Pivotal
- The segment experienced considerable volatility and a general decline in profit margin. Starting at 58.46% in 2011, the margin dropped sharply to 38.19% in 2013, recovered somewhat to 46.7% in 2014, then declined again to 38.95% in 2015. This suggests instability and challenges in maintaining profitability over the assessed periods.
- VMware Virtual Infrastructure
- This segment consistently demonstrated the highest profit margins, ranging between 86.07% and 89.16% across all years. The margins remained relatively stable with minor fluctuations, indicating strong and sustained profitability in this area.
Segment Profit Margin: Information Storage
EMC Corp.; Information Storage; segment profit margin calculation
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Gross profit | |||||
| Revenues | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Segment profit margin = 100 × Gross profit ÷ Revenues
= 100 × ÷ =
The data exhibits the annual performance of the "Information Storage" segment over a five-year period from 2011 to 2015. Several noteworthy trends and patterns emerge from the analysis of gross profit, revenues, and segment profit margin.
- Revenues
- Revenues increased steadily from 14,684 million US dollars in 2011 to 16,542 million US dollars in 2014. However, in 2015, revenues slightly declined to 16,301 million US dollars. This indicates a growth trend over the first four years, followed by a modest decrease in the most recent year.
- Gross Profit
- Gross profit followed a similar upward trajectory from 8,291 million US dollars in 2011, peaking at 9,180 million US dollars in 2014. In 2015, gross profit decreased to 8,518 million US dollars, mirroring the decline observed in revenues. The general increase until 2014 suggests improved operational efficiency or favorable market conditions, with the subsequent decline possibly reflecting challenges in maintaining profitability.
- Segment Profit Margin
- The segment profit margin showed a gradual decline over the period. Starting at 56.46% in 2011, it peaked slightly higher at 57.38% in 2012, then consistently decreased each year to reach 52.25% in 2015. This trend indicates that despite revenue growth, profitability relative to revenue has eroded over time, suggesting rising costs, pricing pressures, or competitive challenges affecting margins.
In summary, the segment experienced revenue and gross profit growth from 2011 to 2014, followed by a decrease in 2015. Concurrently, the segment profit margin displayed a steady decline over the entire period, indicating diminishing profitability on a relative basis. These insights highlight potential areas for management attention concerning cost control and competitive positioning to sustain profitability.
Segment Profit Margin: Enterprise Content Division
EMC Corp.; Enterprise Content Division; segment profit margin calculation
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Gross profit | |||||
| Revenues | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Segment profit margin = 100 × Gross profit ÷ Revenues
= 100 × ÷ =
- Revenue Trends
- Revenues in the Enterprise Content Division exhibited an overall declining trend over the five-year period from 2011 to 2015. Starting at $661 million in 2011, revenues decreased to $599 million by the end of 2015. The decline was somewhat gradual, with slight fluctuations observed; revenue dropped to $640 million in 2012, slightly increased to $647 million in 2013, but then decreased again in the following years to $599 million in 2015.
- Gross Profit Analysis
- Gross profit mirrored the general downward trend of revenues, starting at $425 million in 2011 and decreasing to $407 million by 2015. The changes in gross profit were less volatile than revenues, but still showed a consistent decline year over year except for a small increase in 2012. This indicates a slight contraction in the division’s capacity to generate gross profit over the period despite minor yearly variances.
- Segment Profit Margin Evaluation
- The segment profit margin demonstrated a generally positive trend contrary to revenues and gross profit. It improved from 64.3% in 2011 to 67.95% in 2015. There was a noticeable increase in 2012 to 67.5%, followed by minor fluctuations but maintaining a level above 64%, ending at the highest margin over the five years. This suggests an improvement in operational efficiency or cost management within the segment during the period, offsetting some of the negative impact from declining revenues and gross profits.
- Overall Financial Insights
- Despite the declining revenues and gross profits over the observed years, the segment managed to enhance its profitability margin, indicating effective cost control or productivity improvements. The combination of declining top-line and gross profit with rising profit margins points to a strategic focus on improving operational efficiency. This could be reflective of shifts in business focus, pricing strategies, or cost structure optimization.
Segment Profit Margin: RSA Information Security
EMC Corp.; RSA Information Security; segment profit margin calculation
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Gross profit | |||||
| Revenues | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Segment profit margin = 100 × Gross profit ÷ Revenues
= 100 × ÷ =
- Revenue Trends
- Revenues exhibited a general upward trend from 2011 to 2014, increasing from US$ 828 million to US$ 1,035 million. However, in 2015, revenues declined to US$ 988 million, indicating a slight contraction after a period of growth.
- Gross Profit Patterns
- Gross profit increased consistently from US$ 470 million in 2011 to US$ 698 million in 2014, mirroring the revenue growth during this period. In 2015, gross profit decreased to US$ 660 million, aligning with the revenue decline and suggesting a possible impact on profitability.
- Segment Profit Margin Dynamics
- The segment profit margin demonstrated a generally stable and relatively high performance, fluctuating between 56.76% and 67.94%. Notably, the margin peaked in 2012 at 67.94%, then slightly declined and maintained levels above 66% thereafter, indicating consistent profitability relative to revenue despite fluctuations in absolute figures.
- Overall Insights
- The data reveal a period of growth in both revenues and gross profit from 2011 through 2014, accompanied by robust profit margins consistently above 56%, mostly exceeding 66%. The decline in both revenue and gross profit in 2015 suggests potential market or operational challenges during that year, although the segment maintained a strong profit margin, indicating effective cost control or pricing strategy.
Segment Profit Margin: Pivotal
EMC Corp.; Pivotal; segment profit margin calculation
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Gross profit | |||||
| Revenues | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Segment profit margin = 100 × Gross profit ÷ Revenues
= 100 × ÷ =
The financial data indicates notable fluctuations in several key metrics over the five-year period ending December 31, 2015.
- Revenues
- Revenues exhibited significant growth from 2011 through 2013, increasing from 130 million US dollars in 2011 to a peak of 309 million US dollars in 2013. However, this upward trend was followed by a decline to 227 million US dollars in 2014 before partially recovering to 267 million US dollars in 2015. Overall, revenue growth was strong in the early years but showed volatility toward the end of the period.
- Gross Profit
- Gross profit followed a somewhat similar pattern, rising substantially from 76 million US dollars in 2011 to 153 million US dollars in 2012, then decreasing to 118 million in 2013, continuing a slight decline to 106 million in 2014, and finally stabilizing around 104 million in 2015. While initially demonstrating strong gains, gross profit reflected a downward adjustment after 2012 and remained comparatively flat in the later years.
- Segment Profit Margin
- The segment profit margin showed a clear downward trajectory despite the fluctuations in revenue and gross profit. Beginning at a high margin of 58.46% in 2011, it gradually declined to 56.67% in 2012 and then more sharply to 38.19% in 2013. Although there was a partial rebound to 46.7% in 2014, the margin again dropped to 38.95% in 2015. This pattern suggests that profitability efficiency decreased over the period, potentially indicating increasing costs or pricing pressures affecting the segment's operating performance.
In summary, while revenues and gross profit initially showed growth followed by some instability, the segment profit margin exhibited a consistent decline, pointing to challenges in maintaining profitability levels within the segment. The data reflects a period of expansion tempered by increasing cost pressures or market challenges impacting the segment's profit margins.
Segment Profit Margin: VMware Virtual Infrastructure
EMC Corp.; VMware Virtual Infrastructure; segment profit margin calculation
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Gross profit | |||||
| Revenues | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Segment profit margin = 100 × Gross profit ÷ Revenues
= 100 × ÷ =
The financial data for the VMware Virtual Infrastructure segment between December 31, 2011, and December 31, 2015, reveals a consistent growth trend in both gross profit and revenues.
- Gross Profit
- There was a steady increase in gross profit each year, starting from US$3,189 million in 2011 and rising to US$5,780 million by 2015. This represents a significant growth over the five-year period, indicating improved profitability or expansion of business activities within the segment.
- Revenues
- Revenues followed a similar upward trajectory, increasing from US$3,705 million in 2011 to US$6,625 million in 2015. This sustained growth suggests a positive market reception and possibly an expanding customer base or increased sales volume for the segment.
- Segment Profit Margin
- The segment profit margin remained relatively stable throughout the period, fluctuating slightly but maintaining a high margin level above 86%. The percentage started at 86.07% in 2011, peaked at 89.16% in 2013, and modestly declined to 87.25% in 2015. This indicates that despite the growth in revenues and gross profit, the segment managed to maintain efficient cost control and profitability ratios without significant deterioration.
Overall, the data reflects strong and consistent financial performance within the VMware Virtual Infrastructure segment. The simultaneous increase in revenues and gross profit combined with a stable profit margin illustrates effective management and sustained growth in the segment's operational results over the reviewed period.
Revenues
EMC Corp., revenues by reportable segment
US$ in millions
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| Information Storage | |||||
| Enterprise Content Division | |||||
| RSA Information Security | |||||
| EMC Information Infrastructure | |||||
| Pivotal | |||||
| EMC Information Infrastructure plus Pivotal | |||||
| VMware Virtual Infrastructure | |||||
| Corp Reconciling Items | |||||
| Consolidated |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
- Information Storage
- The segment revenue showed a steady increase from 14,684 million USD in 2011 to 16,542 million USD in 2014, followed by a slight decline to 16,301 million USD in 2015. This indicates a generally positive trend over the four-year period with minor contraction in the final year.
- Enterprise Content Division
- Revenues in this division displayed a gradual decrease from 661 million USD in 2011 to 599 million USD in 2015. The decline appears consistent over the years, suggesting a continuous reduction in segment performance or sales within this area.
- RSA Information Security
- This segment experienced growth from 828 million USD in 2011 to 1,035 million USD in 2014, followed by a decrease to 988 million USD in 2015. Despite the dip in the last recorded year, the overall trend shows expansion and increased revenue generation during the observed period.
- EMC Information Infrastructure
- The revenue for this segment rose steadily from 16,173 million USD in 2011 to 18,217 million USD in 2014, then slightly receded to 17,888 million USD in 2015. The data suggest consistent growth over the majority of the term, with a marginal contraction at the end.
- Pivotal
- The revenue grew robustly from 130 million USD in 2011 to a peak of 309 million USD in 2013. Subsequently, there was a notable decrease to 227 million USD in 2014, followed by a modest recovery to 267 million USD in 2015. This indicates volatility with an overall upward trajectory.
- EMC Information Infrastructure plus Pivotal
- This combined category reflected steady growth from 16,303 million USD in 2011 to 18,444 million USD in 2014, followed by a slight decline to 18,155 million USD in 2015. The pattern mirrors the behavior observed in the individual segments forming this combination.
- VMware Virtual Infrastructure
- The segment demonstrated continuous and consistent growth throughout the period, increasing from 3,705 million USD in 2011 to 6,625 million USD in 2015. This upward trend represents a significant expansion and strengthening of this segment’s revenue contribution.
- Corp Reconciling Items
- Reconciling items appear only in 2015 with a negative value of 76 million USD. The presence of a reconciling adjustment might impact the consolidated figures, indicating possible accounting adjustments or internal eliminations during consolidation.
- Consolidated
- Overall consolidated revenue showed a consistent upward trajectory, rising from 20,008 million USD in 2011 to 24,704 million USD in 2015. This reflects steady corporate growth, despite minor decreases in some individual segments.
- Summary
- Across the observed periods, most segments experienced growth with some fluctuations. The VMware Virtual Infrastructure segment showed the most consistent and robust increase in revenues. Enterprise Content Division was the only segment with a persistent decline. Consolidated revenues increased steadily, underpinned by strong performance in core infrastructure and virtual infrastructure segments. Minor decreases in segments such as Information Storage and EMC Information Infrastructure in 2015 indicate potential market pressures or business challenges in that year. Reconciling items in 2015 may also have impacted net consolidated revenue slightly. Overall, the data suggests a company maintaining growth momentum with varying segment performances.
Gross profit
EMC Corp., gross profit by reportable segment
US$ in millions
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | |
|---|---|---|---|---|---|
| Information Storage | |||||
| Enterprise Content Division | |||||
| RSA Information Security | |||||
| EMC Information Infrastructure | |||||
| Pivotal | |||||
| EMC Information Infrastructure plus Pivotal | |||||
| VMware Virtual Infrastructure | |||||
| Corp Reconciling Items | |||||
| Consolidated |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
The annual reportable segment gross profit data reveals several notable trends across the periods from December 31, 2011, to December 31, 2015. Overall, the consolidated gross profit demonstrates a steady upward trajectory from 12,169 million US dollars in 2011 to a peak of 15,249 million US dollars in 2014, followed by a slight decline to 14,991 million US dollars in 2015. This indicates consistent growth with a minor contraction in the final year observed.
- Information Storage
- This segment shows a steady increase in gross profit from 8,291 million US dollars in 2011 to a high of 9,180 million US dollars in 2014. However, the following year sees a decline to 8,518 million US dollars, suggesting a potential saturation or challenges affecting this segment.
- Enterprise Content Division
- The gross profit in this division remains relatively stable but exhibits a subtle downward trend, starting at 425 million US dollars in 2011 and decreasing slightly each year to 407 million US dollars by 2015. The change is not drastic but indicates a marginal shrinkage in profitability.
- RSA Information Security
- This segment experiences consistent growth from 470 million US dollars in 2011 to 698 million US dollars in 2014, with a minor decline to 660 million US dollars in 2015. The overall upward trend suggests expanding contributions to the company’s gross profit despite the slight dip.
- EMC Information Infrastructure
- Gross profit in this segment steadily rises from 9,186 million US dollars in 2011 to 10,295 million US dollars in 2014, before falling to 9,585 million US dollars in 2015. This pattern mirrors that of the Information Storage segment, suggesting possible interrelated market or operational factors.
- Pivotal
- Reported gross profit shows fluctuation over the years, starting modestly at 76 million US dollars in 2011, peaking at 153 million US dollars in 2012, and then declining to 104 million US dollars in 2015. The volatile pattern suggests varying performance or strategic shifts within this segment.
- EMC Information Infrastructure plus Pivotal
- Combining the two segments presents a growth trend from 9,262 million US dollars in 2011 to a peak in 2014 of 10,401 million US dollars, followed by a decline to 9,689 million US dollars in 2015. This composite measure highlights the overall rise and recent contraction consistent with individual segment trends.
- VMware Virtual Infrastructure
- This segment demonstrates a strong and consistent upward trend, with gross profit increasing annually from 3,189 million US dollars in 2011 to 5,780 million US dollars in 2015. This represents significant growth and an increasing share of total gross profit, emphasizing the segment's expanding importance within the company.
- Corp Reconciling Items
- The reconciling items show an increasing negative value over the period, starting at -282 million US dollars in 2011 and deepening to -478 million US dollars in 2015. This growing negative adjustment may reflect increasing internal eliminations, allocation adjustments, or consolidation effects impacting reported segment profits.
- Consolidated
- Overall consolidated gross profit increased steadily for four years from 12,169 million US dollars in 2011 to 15,249 million US dollars in 2014, but then experienced a slight dip to 14,991 million US dollars in 2015, consistent with observed decreases in several key segments.