EMC (EMC) Operating Income

: $3,075 Mil (TTM As of Jun. 2016)

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EMC's Operating Income for the three months ended in Jun. 2016 was $882 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Jun. 2016 was $3,075 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. EMC's Operating Income for the three months ended in Jun. 2016 was $882 Mil. EMC's Revenue for the three months ended in Jun. 2016 was $6,017 Mil. Therefore, EMC's Operating Margin % for the quarter that ended in Jun. 2016 was 14.66%.

EMC's 5-Year average Growth Rate for Operating Margin % was 0.00% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. EMC's annualized ROC % for the quarter that ended in Jun. 2016 was 6.86%. EMC's annualized ROC (Joel Greenblatt) % for the quarter that ended in Jun. 2016 was 94.97%.

EMC Operating Income Historical Data

The historical data trend for EMC's Operating Income can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

EMC Annual Data

Trend

Dec06

Dec07

Dec08

Dec09

Dec10

Dec11

Dec12

Dec13

Dec14

Dec15

Operating Income

3,442.00

3,964.00

4,150.00

4,037.00

2,841.00

EMC Quarterly Data
	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14	Mar15	Jun15	Sep15	Dec15	Mar16	Jun16
Operating Income																680.00	690.00	1,093.00	410.00	882.00

EMC Operating Income Calculation

Operating Income, is the profit a company earned through operations. All expenses, including cash expenses such as cost of goods sold (COGS), research & development, wages, and non-cash expenses, such as depreciation, depletion and amortization, have been deducted from the sales.

Operating Income for the trailing twelve months (TTM) ended in Jun. 2016 adds up the quarterly data reported by the company within the most recent 12 months, which was $3,075 Mil.

EMC (NYSE:EMC) Operating Income Explanation

1. Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.

EMC's annualized ROC % for the quarter that ended in Jun. 2016 is calculated as:

	ROC % (Q: Jun. 2016 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2016 )	+	Invested Capital (Q: Jun. 2016 ))	/ count )
=	3528 * ( 1 - 26.06% )	/	( (38590	+	37489)	/ 2 )
=	2608.6032	/	38039.5
=	6.86 %

where

	Invested Capital		(Q: Mar. 2016 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	45703	-	3799	-	( 9801	-	max(0, 11286	-	14600	+	9801	))
=	38590

	Invested Capital		(Q: Jun. 2016 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	46745	-	4109	-	( 11761	-	max(0, 11403	-	16550	+	11761	))
=	37489

Note: The Operating Income data used here is four times the quarterly (Jun. 2016) data.

2. Joel Greenblatt's definition of Return on Capital:

EMC's annualized ROC (Joel Greenblatt) % for the quarter that ended in Jun. 2016 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Jun. 2016 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Mar. 2016		Q: Jun. 2016
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	3576	/	( ( (3806 + max(-5562, 0))	+	(3725 + max(-5814, 0)) )	/	2 )
=	3576	/	( ( 3806	+	3725 )	/	2 )
=	3576	/	3765.5
=	94.97 %

where Working Capital is:

	Working Capital		(Q: Mar. 2016 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(2941	+	1233	+	625)	-	(3799	+	6477	+	85)
=	-5562

	Working Capital		(Q: Jun. 2016 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(2896	+	1243	+	650)	-	(4109	+	6421	+	73)
=	-5814

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Jun. 2016) EBIT data.

3. Operating Income is also linked to Operating Margin %:

EMC's Operating Margin % for the quarter that ended in Jun. 2016 is calculated as:

Operating Margin %	=	Operating Income (Q: Jun. 2016 )	/	Revenue (Q: Jun. 2016 )
	=	882	/	6017
	=	14.66 %

4. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Operating Income growth rate using Operating Income per share data.

Be Aware

Compared with a company's EBITDA margin, Operating Margin can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).

If a company is facing competition, its Operating Margin may decline. Often the Operating Margin declines well before the company's revenue or even profit decline. Therefore, Operating Margin is a very important indicator of whether the company is facing problems.

For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokia's Operating Margin had already been in decline since 2002, although its earnings per share were still rising. Investors who paid attention to Operating Margin would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).

Therefore, Operating Margin is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.

EMC Operating Income Related Terms

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EMC (EMC) Business Description

Industry

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Comparable Companies

Traded in Other Exchanges

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Address

Website

http://www.emc.com

EMC Corp is a Massachusetts corporation, incorporated in 1979. The Company together with its subsidiaries supports the businesses and service providers to transform information technology (IT) operations to an as a service model (ITaaS). The Company operates in three segments: EMC Information Infrastructure, Pivotal and VMware Virtual Infrastructure. The Company's information infrastructure provides a foundation for organizations to store, manage, protect, analyze and secure ever-increasing quantities of information, while at the same time improving business agility, lowering cost and increasing competitive advantage. VMware Virtual Infrastructure provides virtualization infrastructure solutions. Pivotal provides application and data infrastructure software, agile development services and data science consulting. The Company offers a comprehensive portfolio of enterprise storage systems and software - including high-end EMC VMAX and mid-tier EMC VNX unified storage and a portfolio of backup products that support enterprise application workloads. The Company's two additional storage families, EMC Isilon and EMC Atmos, are specifically designed to handle vast quantities of unstructured data. EMC supports a broad range of customers, including service providers, around the world - in every industry, in both public and private sectors, and of sizes ranging from the Fortune 500 to small business and individual consumers. The Company markets its products through direct sales and through multiple distribution channels. It has a direct sales presence throughout North America, Latin America, Europe, the Middle East, South Africa and the Asia Pacific region. The Company also has agreements in place with many partners, including value-added resellers and distributors, cloud service providers, systems integrators, outsourcers, Independent Software Vendors ("ISVs"), and Original Equipment Manufacturers ("OEMs"). The Company competes with many companies in the markets it serve, including companies that offer IT products and services and others that offer specific information storage, protection, security, management and intelligence, data analytics or virtualization products or services.

Executives

Laura Sen	director	ONE MERCER ROAD, P.O. BOX 9601, NATICK MA 01760-9601
John R Egan	director	176 SOUTH ST., HOPKINTON MA 01748
Donald J Carty	director	C/O DELL INC., ONE DELL WAY, ROUND ROCK TX 78682-2244
Judith A Miscik	director	300 RENAISSANCE CENTER, M/C: 482-C24-A68, DETROIT MI 48265
William D Green	director	C/O ACCENTURE, 161 N CLARK STREET, CHICAGO IL 60601
William F Scannell	officer: President,Global Sales/Cust Op	EMC CORPORATION, 176 SOUTH STREET, HOPKINTON MA 01748
Randolph L Cowen	director	176 SOUTH STREET HOPKINTON MA 01748
Howard D Elias	officer: President & COO, Glob Ent Srvs	C/O EMC CORPORATION, 176 SOUTH STREET, HOPKINTON MA 01748
Paul T Dacier	officer: EVP & General Counsel	EMC CORPORATION, 176 SOUTH STREET, HOPKINTON MA 01748
Erin Mcsweeney	officer: EVP, Human Resources	EMC CORPORATION, 176 SOUTH STREET, HOPKINTON MA 01748
Teuber William J Jr	officer: Vice Chairman	EMC CORPORATION, 176 SOUTH STREET, HOPKINTON MA 01748
James S Distasio	director	C/O EVERSOURCE ENERGY, 300 CADWELL DRIVE, BOSTON MA 01104
Paul Sagan	director	AKAMAI TECHNOLOGIES INC, 8 CAMBRIDGE CENTER, CAMBRIDGE MA 02142
Jeremy Burton	officer: President, Prod & Marketing	C/O SNOWFLAKE INC., 106 EAST BABCOCK STREET SUITE 3A, BOZEMAN MT 59715
David I Goulden	officer: CEO, EMCII	176 SOUTH STREET, HOPKINTON MA 01748