Welcome to the EMC fourth quarter earnings conference call. Parties will be in a listen only mode until the question and answer session of today’s conference. At that time you can press star one to ask a question. This conference is being recorded. If you have any objections you may disconnect. I’d like to introduce your speaker, Mr. Tony Takazawa.

Thank you Julie, good morning to everyone. Welcome to EMC’s call to discuss our financial results for the fourth quarter and the full year of 2007. Today we are joined by Joe Tucci, EMC Chairman, President and CEO, David Goulden, EMC Executive Vice President and CFO. David will provide a few comments about the results that we released this morning and he will highlight some of EMC’s activities this quarter. Joe will then spend some time discussing his market outlook, his execution of the strategy and how EMC is positioned in the marketplace. After the prepared remarks, we will then open up the line to take your questions. I would like to point out that we will be highlighting various non GAAP numbers in today’s presentation. 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. All of these are available for download within the investor relations section of emc.com. In addition, we are providing a full eight quarters of GAAP and non GAAP information to help you reconcile EMC’s consolidated results with the EMC information infrastructure business and the results of VM Ware within EMC. Last quarter, we received very positive feedback from you regarding these schedules and I am pleased to say that we are increasing the transparency of this disclosure. [Unintelligible] the call this morning will contain forward looking statements. The information concerning factors that could cause actual results to differ can be found in EMC’s filings with the US Securities and Exchange Commission. Lastly, we will note that an archive of today’s presentation will be available following the call on emc.com. With that, it is now my pleasure to introduce David Goulden. David.

Thanks Tony, good morning and thank you for joining us today. I’m pleased to report that EMC demonstrated a very strong performance across the board in the fourth quarter and in 2007 and we’re well positioned for continued success as we enter 2008. Had solid execution and as a result we exceeded our growth, profitability and free cash flow goals for the year. For today’s call you should all have the consolidated results from our press release in front of you. I’m not going to take time to repeat those now. Instead, I’m going to start by highlighting some results that we know you’re very interested in, namely the results from our EMC information infrastructure business. This business is comprised of our information storage, content management and RSA security businesses. I will then make some comments about our consolidated results which will also include VM Ware. We’re starting with the EMC information infrastructure business results. Q4 revenues were $3.4 billion, up 15% and non GAAP earnings per share were $0.26, up 23%. Q4 operating cash flow was $895 million, up 62% and free cash flow was $688 million, up 98% from Q4 last year. For the full year, revenues were $11.9 billion, up 14% and non GAAP earnings per share was $0.79, up 20%. Full year operating cash flow was $2.5 billion, up 43% and free cash flow was $1.8 billion, up 86% from last year. We are very pleased with these cash flow results in 2007 and you’ll note that free cash flow was approximately, was a little over $100 million higher than our non GAAP net income. In Q4, the information infrastructure non GAAP operating margin was 18.3%, up sequentially and flat year on year. During Q4 we made investments in some startup businesses, such as Mozy, we…

Thank you David, I would like to add my welcome and thanks to all of you who have joined today’s conference call. I am very pleased with EMC’s execution and performance in Q4 and throughout 2007. We said coming into the year that we would make 2007 our breakout year and I believe it was in several dimensions. Let me take a quick look at the four key initiatives that underpinned our success. First and foremost was our laser focus on exceeding the goals which we set for ourselves at the beginning of the year. We achieved full year’s revenues of $13.23 billion against a goal of $12.75 billion. Excluding the onetime gain on the sale of VM Ware shares to CISCO, we achieved adjusted GAAP earnings per share of $0.72 against a goal of $0.64 and we achieved free cash flow per share of $1.02 against a goal of $0.71 for the year. Very importantly, these results were delivered very consistently, quarter upon quarter, demonstrating the robustness and power of our business model and strategy. Second, we organized ourselves into four business units, storage, content management and security which collectively executed on our information infrastructure strategy and VM Ware which executes on its virtual infrastructure strategy. We’ve made it easier for both the customers and investors to understand our strategy and distinctive value. Third, in the middle of the year, we will launch the very successful initial public offering of VM Ware. This IPO clearly met its key goals of unlocking shareholder value and putting a brighter spotlight on VM Ware and the power of its virtual infrastructure strategy. And last, we launched our One EMC initiative. A One EMC business model interlocked our storage, content management and security business units to help create rich information based solutions for…

Thanks Joe. Before we open up the line to questions, as usual, we ask you to try and limit yourselves to one question and that includes clarification. That will enable us to take as many questions as possible. We thank you all for your cooperation in this matter. Julie, can we open up the lines for questions please?

Thank you, at this time if you would like to ask a question, please press star then one on your touchtone phone. Please un-mute your phone and record your name clearly when prompted. Again, press star one if you have a question. Our first question comes from Brent Bracelin, Pacific Crest, your line is open. Brent Bracelin – Pacific Crest: Thank you, Joe, really wanted to ask first question around, Dell obviously, you had a very strong quarter but the Dell contribution did decline sequentially for the first time during what is seasonally a strong quarter and was flat year over year. Why did you see the Dell contribution trend down and how should we think about that Dell contribution in 2008?

Brent, the real guts of the partnership we have with Dell, which we’ve extended and is a very important partnership through 2011 is based on the Clariion product family. And as you can see that was still approximately one-third of our revenue. We did consciously and Dell consciously, there are some other products that Dell used to sell where their margin profiles were lower and as they change their business model they would say less emphasis on products like Symmetrix, so in the core areas that we’re partnering on, we’re still very pleased and it’s still a very strategic relationship for us.

Our next question is from Keith Bachman, Bank of Montreal, your line is open. Keith Bachman – Bank of Montreal: Hi guys, thank you, Joe I was just hoping you could talk a little bit about the cadence of orders relative to the macro backdrop and how you see the pipeline against traditional seasonal trends in the March quarter. Thanks.

Keith, let me do it this way, I mean obviously we are stating in several different ways that this market is more uncertain. We’re being very clear that we think there absolutely is going to be IT spending growth in 2008, however it will be a couple points less we believe right now than it was in 2007. Today we haven’t seen much negativity happen in the market but obviously I think it’s prudent upon us to be cautious and it was some caution in our guidance and as we gave the guidance we’re factoring all the strength that we have in the underlying company and the relative unknown in the market and doing the best we can to give you a [unintelligible] but you know today we have not seen much on a downside to tell you the truth but again as we go forward I think being cautious is the order of the day.

We have a question from Paul Mansky, Citigroup, your line is open. Paul Mansky – Citigroup: Hey Joe, thanks for taking my question, I guess, within the context of your market share gain statements, relative to some of your larger competitors, and I know we could potentially put Dell in that category down at the lower end of the market, but I’m more specifically thinking HP, IBM, Sun, some of the legacy guys, they collectively retrenched around the bubble, they kind of took a step back from the storage market, but we very much see them looking to regain some of their IP content here recently [viak] was issuing internal development. How do you see that competitive dynamic shaking out over the course of the upcoming year? Do you see some competitors dropping off, others picking back up, just any type of color you could relate for us would be appreciative.

The investments here are immense, we’ve got tremendous benefit from what we call our One EMC initiative and ask you can see I think we did what we should do. Number one is we delivered upside throughout the year and number two we invested a lot of that upside back into the business and I believe the game and storage business is going to be, you know it’s a very high investment area and one where, I mean customers don’t want to buy separate systems for [din] provisioning or de-duplication or spin down or a lot of these other techniques that are very important. So what we’re doing is we’re taking all those and building them into our core products, every one of those capabilities. And the good news is everyone is either here now or will be here shortly and available for 2008. So mostly what’s happening is you’re seeing one offs being bought and we’re developing some special products too [light] for the web 2.0, I just alluded to and for lifeline for the consumer. But most of what we’re doing for our core market is building all those capabilities in. So I still like the shape we’re in. Obviously it’s a big market, it’s got growth rates above the IT industry average and you’re going to get some competition and we’ve always had competition but you know we have the size, we’re going for $15 billion this year, we have the 11,000 service people, we’ve got 9,000 people in our selling and customer facing organization on that side. So we’ve got a strong position and we’re going to continue to strengthen it. We’ve got the balance sheet to do that both organically and through acquisitions and that’s where we’re going to play it. So yeah it’s more competition but it’s the same competitors we’ve always had.

We have a question from Shebly Seyrafi, Caris, your line is open. Shebly Seyrafi – Caris: Yes, thank you very much, so I noticed that in your seasonally strong calendar Q4 where you were up 16% sequentially in revenue, that your gross margin was basically flat on a percentage basis sequentially and that’s abnormal and usually you’re up close to 1% point sequentially, I’m wondering what happened and what you expect to achieve with your gross margin longer term as VM Ware and other software increases as a percentage of the mix, do you have any kind of targets over the next year or two? Thanks.

Yeah, Shebly let me take this one. We’re not going to give you gross margin targets, I think you can see that we’ve factored some offering leverage into the guidance which we gave you for 2008, particularly for the EMC infrastructure business. But to answer the first part of your question, let me just kind of give you a flavor for what’s happening in gross margins and I think your comment was really to do with the gross margins for the EMC infrastructure business. What we saw happening sequentially, first of all we pointed out to you the investments that we made in the SG&A line, normally you’d expect leverage in the SG&A line in Q4 as well and we’ve invested out back into the business in the areas which I spoke about. On gross margins what is happening is a couple of phenomenas inside EMC infrastructure. The first is that product margins are improving and product margin improved sequentially and they improved year on year. And what you’re seeing that as our professional services becomes a bigger piece of our services margin that has a slight headwind effect on services margins. So the increase in product margins was slightly offset by reduction in services margins both sequentially and year on year.

We have a question from David Bailey, Goldman Sachs, your line is open. David Bailey – Goldman Sachs: Yes, thank you very much and good morning. Could you just give us a little more detail about where you expect to gain share, particularly in what areas and how much acquisitions will contribute to the 9% top line growth in your core business?

I guess you got two separate questions I think. You know most of the growth we had this year, we did a number of small acquisitions, none of which had any significant revenue profile to it in 2007 so the vast majority of what we did in 2007 was organic, so not sure how to answer that going forward. I mean what we put forward is the organic we do expect obviously to be a few tuck in acquisitions in there that won’t again like we did last year. In the first part, the areas of growth are pretty much the ones that we talked about. I mean on the new side, the SMB market is, we don’t have much share there at all, so everything we do there is going to be upside growth. The web 2.0 market we don’t have much share there at all, anything we do there will be all upside. In the BRIC countries, we talked about, we had good growth significantly above the EMC average but we know we can and will do better and that’s going to provide upside in the BRIC plus 13 countries. In the storage and software as a service, that’s kind of a startup business for us, that’ll come on and add growth then of course our traditional markets where customers are worried about business continuity and customers are worried about and want to save money by consolidation. I mean those are all strong markets for us and we’ve been nothing short of killing it in the commercial marketplace. So I think that kind of hits upon the broad areas you mentioned.

We have a question from Bill Shope, J.P. Morgan, your line is open. Bill Shope – J.P. Morgan: Okay thanks, Joe in the past you’ve talked about the differing expectations for the high end storage systems business versus the mid range and lower end storage systems business. Obviously this quarter we saw some convergence, you know clearly I’m assuming is temporary from the product cycle but can you give us an update on how you think about that dynamic, the relative growth differential between those two?

Yeah I think, Bill we’ve been pretty consistent in saying that we think the high end storage market is a mid single digit grower, lower to mid single digit grower. Obviously that gets affected very much by product cycles. We’re at the end of a product cycle, it might slow down and you get a new product cycle as you saw here, it sped up and I think that’s going to continue. You know the one nuance is that as you scale out these systems with the now thousands of drives that you can put in them and now with the new ability to put our unique ability to put [satir] drives inside a Symmetrix and adjust quality of service. So that means as we put an archive layer or drives in a [Symmetr] we can make sure that we don’t let that kind of workload deteriorate the performance from an online transaction processing workload. So as we put those capabilities in, it actually becomes a pretty inexpensive way of adding another tier of storage. So that could give it some revival but with that caveat we still expect it to be a mid single digit grower and a business that has got great cash flow and one we have a great position in. Bill Shope – J.P. Morgan: And on the mid range?

The mid range I think is going to continue to be a double digit grower for us and as I said, we are a strong believer that certainly in the mid range and in the low end that the multi protocol systems are going to dominate. We have a tremendous success because in these systems you buy the system and then as the customers workload changes and grows they can use iSCSI SAN, they can use the fibre channel SAN technology or they can use a network attached [safer] for file and print work. And to be able to do that and have that kind of flexibility is a tremendous advantage. So between those multi protocol systems and the dual protocol systems which are fibre channel and iSCSI, our systems I think have great legs on them to continue to grow in that mid teens range.

We have a question from Kaushik Roy, Pacific Growth, your line is open. Kaushik Roy – Pacific Growth: Congratulations on a great Q4. I understand you’re not giving Q1 guidance but can you comment how much of your yearly revenue typically comes from Q1. Last year I think you mentioned it was about 23%, so do you expect similar in 2008? Historically EMC Q1 revenues have been down 5-6% sequentially so do you expect similar in Q1. And then second, within your full year revenue guidance are you including any impact of currency, if so, how much?

At the risk of getting punched by David, I’ll broadly state that I wouldn’t expect our calendarization this year to be much different than it was last year. David do you want to comment on the currency?

We really haven’t factored in currencies, it’s very difficult to predict and we don’t make explicit assumptions about what’s happening with currency in our guidance.

We have a question from Chris Whitmore, Deutsche Bank, your line is open. Chris Whitmore – Deutsche Bank: Thanks very much, wanted to come back to the gross margin issue and the overall pricing environment. Given the ramp of DMX and the mix of software, I would have expected a little bit more margin leverage on the gross margin line, was there a change in pricing during the quarter or the competitive environment? Thanks.

Chris, no we look at that as we mentioned to you before we kind of look at what’s happened to pricing in both the high end and the mid tier separately. I’d tell you the pricing declines were seasonally normal in Q4, so that was not a factor.

Next question is from Katie Huberty or Morgan Stanley. Katie Huberty – Morgan Stanley: Yes, thanks, does the plan to continue reinvesting upside into the sales and distribution initiatives that you mentioned such that SG&A as a percentage of revenues may not fall as much as some expected given the One EMC initiative?

Katie, let me take that, I mean certainly we absolutely produced leverage in the business last year in EMC information infrastructure and the One EMC program helped. But we also delivered above market growth rates and we’re entering into new markets. So what we’re doing is taking the opportunity to invest the leverage we are generating in the business back in expanding the business both in a geographic point of view into new markets and into the commercial and SMB segments. So we are taking advantage to take leverage that we have built, put it back into the business and generate above market growth and that’s been our approach as we’ve gone through the year. Katie Huberty – Morgan Stanley: And that continues in ’08?

Yeah, you should expect that to continue, we’ve talked about entry into new markets and we’ve given you guidance which would indicate that we continue to have market share gains, so yes.

Next question is from Brian Freed from Morgan, Keegan. Brian Freed – Morgan, Keegan: Hey guys, good quarter, as you look to your ’08 guidance, I mean the headline reaction is you guided lower than the street on a GAAP basis and I understand that it’s primarily related to higher non cash expenses than most of us on the street were expecting. Can you talk a little bit more about the factors and assumptions that are driven those higher non cash expenses from your part?

Certainly Brian, let me take that, you’re absolutely right, when we looked at most of the street models and as you would expect this too we kind of looked at everybody’s model before the call and most people were probably about $0.10 light on the amount of stock based compensation and intangibles compared to what we’ve guided at. And then of course most people didn’t have the lower tax rate which would have brought you up by about $0.04, so probably if you kind of took people’s guidance and you normalized it, there’s about a $0.06 difference, so we actually probably did better in guidance than you were expecting to us on a normalized basis. Let me kind of talk to you about the pieces, why stock based compensation and intangibles are higher and I don’t think why people haven’t factored it in. I mentioned the intangibles, there’s going to be an increase this year in $0.02 on the acquisition intangibles and that’s basically due to the timing of the amortization of the RSA intangibles. Simply it’ll be a higher number in 2008 than it was in 2007, so that’s a couple cents of a difference. The other area where people I think did not have this factored in because the numbers just weren’t clear is stock based compensation. We said stock based compensation would go up by $0.05 a share this year and basically $0.03 was due to VM Ware. Of course the options we issued during the IPO and subsequently throughout the year have become a fairly large expense, non cash expense in 2008. And then on the EMC side, there’s a couple of pennies a share increase in stock based compensation principally due to two factors. One is that we were issuing options at the end of 2007 at $19.11 a share, those would be options we issued in 2006 at $9.75 a share and also in 2006 we did not have a senior management team basically, senior vice presidents and above in the grants and we did in 2007. So those are all the factors and hopefully they’ll help you normalize your models.

The next question comes from Bill Fearnley of Ftn Midwest. Bill Fearnley – Ftn Midwest: Yes, good morning, could you guys give additional color, Joe you talked a lot about going after the SMB market more and more, what’s the overall effect on SG&A, gross margin, operating margin as you go into these lower markets. Is the margin profile better or worse than the core? Thanks.

We actually think the gross margin profile is going to be better. Or I shouldn’t say it that way, we actually think the operating margin profile will be better. Probably what you’ll see is we’ll use gross margins might be a tick lower because we’re going to use more channels, sales to attack that market, more inside sales to attack that market. And on the other side the operating margin should actually be a little bit higher.

Thanks Bill, we have time for one more question and then Joe will have a few concluding comments.

The next question is from Tom Curlin of RBC. Tom Curlin – RBC: Hi, good morning, as we approach actually calendar 2009 and the more I guess beneficial tax treatment of VM Ware. How are you going to weight strategic factors versus financial and valuation factors in deciding what to do with your interest in VM Ware in terms of keeping it versus spinning it out and can you just elaborate on what degree or specifics in terms of strategic versus valuation side.

Tom, I’m not going to get in those specifics now, I mean a couple of points though. First and most importantly, both EMC and VM Ware are performing very well and that is the first and most important thing for us all because that builds long term shareholder value. As we’ve said before, VM Ware has only been a public company for two quarters and we are very pleased with the performance, our asset mix has no plans to distribute at this time. But I assure you, management and the Board is focused on doing what will create maximum shareholder value for both sets of shareholders over the longer term. I know I’m not answering your specific question but that’s all I want to comment on that now. Thank you Tom. Well let me thank everyone for your interest in calling in today for our conference. I really do appreciate it. We are clearly focused on success in 2008. I believe we have a great set of products and our strategy is resonating well with customers and very importantly we have momentum. If you walk around the halls of EMC, there’s a winning attitude. I believe we have a first rate management team and we are very fortunate to have 37,000 very talented people throughout the world committed to our success this year. So I can’t help but obviously we’re facing uncertain economic times but EMC itself couldn’t be better positioned. And again thank you for your interest today. Bye-bye.

That concludes today’s conference, you may disconnect at this time.