Good morning and welcome to the EMC Third Quarter 2013 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 objection, you may disconnect at this time. I’d 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 third quarter of 2013. Today, we’re joined by EMC Chairman and CEO, Joe Tucci and David Goulden, EMC President and COO. David will begin with a few comments on our results and provide a bit more detail and color around the factors contributing to our results. 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 our results this quarter. After the prepared remarks, we’ll then open up the lines to take your questions. We are providing you with our updated projected financial model for 2013. This model is 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 model. This model is available as background in today’s slides available for download in the IR sections of emc.com. Please note that we’ll 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. 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 David Goulden. David?

Thanks, Tony. Good morning everyone and thank you for joining us today. By now you all have seen our financial results for the quarter. Q3 was very much a tale of two cities. On the positive side, we achieved almost all our strategic and operational goals in the quarter and there is a lot to like. But on the less positive side there were two big challenges we couldn’t overcome, which had a direct impact upon our financial results for the quarter. Third quarter 2013 revenues were a little over $5.5 billion and earnings per share was $0.40. This revenue was below our expectations for the period by approximately $250 million, principally driven by two major factors both of which impacted storage product revenue. The first was a very late timing of orders in the quarter. The second was U.S Federal Government’s spending. I will walk you through each of them. For the past several quarters we’ve seen cautioning customer spending, leading to increased scrutiny and extended close cycles and this continued in Q3. The result was another very backend loaded quarter. Specifically more storage products than we expected came in on the very last day of the quarter, which as you know was a Monday making fulfillments to these orders in Q3 extremely difficult. As a result storage product orders we received that we didn’t ship in the quarter were $100 million higher than we expected. Now turning to the second factor. Many storage product orders from the U.S Federal Government that were expected to close in the last weeks of the quarter did not, due to less than expected year end budget money and unexpected reprioritization of these year end budgets ahead of the federal government shutdown. This accounted for approximately $120 million of revenue shortfall against our…

Thank you, David. My welcome and thanks to everyone joining us for today's call. I have very mixed feelings and emotions about our Q3 results. To be clear and for the record, I am disappointed that we missed our Q3 revenue and EPS expectations and I assure you that the EMC management team shares my disappointment. On the other hand, I feel extremely good about our strategic position, about our products and service offerings and with the way our customers and new prospective customers are giving us permission to play in our target markets, in cloud, big data and trust. We are focused on building a platform for new cloud, big and fast data applications, delivering on the promise of the software defined data center for a new cloud era. Dividing our customers' portfolio of information storage and protection solutions with unparallel depth and breadth and we are focused on ensuring we deliver trusted IT. We feel good that we continue to grow faster than most of our larger IT peers. As David said, excluding federal, demand in bookings growth accelerated across the major parts of our business. In particular, our newer high growth businesses did extremely well. In Pivotal our developers pass CloudFoundry is attracting an impressive and growing community of partners and Pivotal's big data analytic solution shows strong momentum and growth. Growth also accelerated in VMware and within RSA security, our security analytics and our Archer GRC suite grew over 35% year-on-year. And our VCE joint venture year-on-year growth exceeded 50% an acceleration over Q2. And our Emerging Storage offerings; Isilon, Atmos, VPLEX and Flash grew over 65%. Going forward we will also include our software defined storage offering ViPR and our new all-Flash array XtremIO in this category starting now in Q4. By the way Q3…

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

Yes, sir. (Operator Instructions). Our first question today comes from Kulbinder Garcha with Credit Suisse. Your line is open.

Thanks. I just want to clarify a couple of points. David, first of all on the revenue sequentially in the fourth quarter if I take VMware out of it, you're guiding for 25% sequential growth which is I think the strongest sequential growth you would have seen in a decade ex the VMware business. And just to be clear, is that just all because of the orders that have been pushed out in Q3, Q4 and you're not really assuming anything much in the end environment with your customers to actually improve? That's one question. The second question I have is kind of linked to it. The gross margin relative weakness versus expectation this year has meant the information storage segment of your business isn't expanding gross margins anymore. Has that story about your ability to both increase share and expand gross margins there largely played out now and you can't do both – how can you convince this in being more structural, whether it's cloud related otherwise isn't pressurizing that business maybe more than you would have thought six or nine months ago? Many thanks.

All right, Kulbinder, thank you. I think that qualifies as two questions, I'll take both of them. So the first one, Q4, yes, you're right to point out that obviously from a reported point of view that's going to be a fairly increased sequential growth rate. There are two factors to come into account. First of all we are giving you our best estimates of Q4 and as you know from our full year guidance, because we will benefit from the $100 million of backlog coming out from Q3, we've essentially taking a little bit off top of the Q – the prior Q4 guidance reflecting a slightly weaker economy that we're seeing. The important thing is the factor that impacted us in Q3 do not impact us in Q4. Specifically in Q4, the federal government business is a very low percentage of our total bookings unlike Q3 and also the backlog factor is less, in fact it's almost a non-issue in Q4 because we carry larger backlog out of Q4 just because of the nature, the size of Q4. We don't optimize our factories to try and ship all the Q4 backlog. So if you normalize Q3 for the facts that did impact this in Q3, the backlog and if you normalize for what would be a more normal federal performance, the seasonal progression from Q3 to Q4 is much more in line with seasonal norms. And of course we still expect these from budget cycle in Q4 with IT spending seasonally ahead of Q3 and that we also mentioned that we’re expecting to see a continued strong storage product booking to support that number. We talked about the fact that we’ve seen our storage product bookings growth rate accelerate in Q3 an d in Q4 on top of…

Thank you.

Thanks, Kulbinder. Next question please.

Our next question comes from Brian Marshall with ISI Group. Your line is open.

Great. Thanks, guys. Obviously there is nothing you could do about the weakness in the Fed and I didn’t actually realize 70% of your business was transactional in nature there. So that’s an interesting statistic, thanks. But with respect to the inventory situation, if you look at it, 1.4 billion up both sequential and year-over-year, can you talk about how that jives with the fact that you did have a lot of orders coming in at the end? I’d anticipate you guys could probably pre-build a lot of those orders and prep for a pretty big backend loaded quarter and orders coming in at the last day. So can you talk about how you can pre-build and if that was the case and you shipped a couple of hundred million in the last day of the quarter, why inventories went up as well? Thank you.

Yes, Brian, let me take that as well. Yes, obviously we were able to ship a large number of the orders we got on the last day. But as we explained, not all of them and we had planned our inventories for essentially $100 million less backlog and we planned to have the inventory for the federal orders that didn’t come in. So those directly impact our inventory. We also of course were playing around some product transitions both on the VNX and on the Data Domain sides where we’re covering our position a little bit on product transition. We didn’t have any issues with product shortages, which is good because we were able to plan around those transitions. So the manufacturing inventory and the situation kind of tied directly to how we saw the quarter and play out. And then the final piece is the overall inventory picture as we’ve a little bit of a build up in engineering or R&D inventory and support some of the new products that are in the pipeline.

Thank you.

Brian -- Evan, can we go the next question please. Yes, sir. Next we have Shebly Seyrafi with FBN. Your line is open.

Yes, so a clarification and a question. On the clarification, what was the VNX and Data Domain growth rates during the quarter? And the question I have is on the high end you declined 8% year-to-year following the growth at rates of 10% to 5% the prior two quarters. What do you think is going on the high end? Is it just the secular shift away from the high end to the mid range or this was just -- was it impacted mostly by the federal and what do you think the high end growth rate should be secularly going forward?

Yes Shelby, let me take that one as well. The biggest impact compared to our expectations in the high end this quarter was the reduction or the lack of federal orders, and that had a direct impact upon the high end growth rate a little bit of the backlog or the orders that we didn’t ship was is in the high end, but the biggest factor was the federal which is why it was below our expectations for the quarter. Now you can see that obviously the high end is very much a function or very much impacted by product cycles to your early point we had a very strong first half and the high end as we were still in the first year of the product cycle, Q3 was the first year we had a kind of lapping or an annualization of the new VMAX, so we expected some softness in the second half relative to the first half. We still think that the opportunity is there for the high-end to grow in the range that we talked about at the form, which is then -- at the 1% to 3% range and nothing we’ve seen recently would change our viewpoint on that. And then relative to the first part of your question you asked about the growth rates of VNX and DD. And the growth rate in VNX picked up during the quarter with the transition into the new part. The growth in DD remained strong and both of those were impacted by the additional or as we couldn’t shift. So the prior question we can do much more pre-building of the Symmetrix orders than we can pre-building of mid tier orders, they tend to come in with less define configurations mainly through the channel partners. So the majority of the build up of the un-shift inventory, the majority of the $100 million impacted the [indiscernible] mid tier bucket and absent that we would have been very pleased with the growth rate.

Thank you, Shebly. Next question please.

Next in queue we have Ittai Kidron with Oppenheimer. Your line is open.

Hello, thanks. Last night VMware gave little some color about 2014 outlook. I know it's a little bit early and you tend to do that mostly in your January conference call, but Joe is there any chance you can give us some of your initial thoughts about how, what's the framework we should think about from a macro standpoint towards spending some of the opportunities in risks that you see in that timeframe?

I hate to tell you what everybody knows. But obviously the Federal Government we take the can down the road to January and early February. And I think a lot is going to depend and I could tell you I’m traveling around the world, as a matter of fact as I finish this call I am heading on the plane to go to China. As I head around the world, I can tell you that all eyes are on the U.S. So if you can answer that question for me I’ll give you my best guess.

All right. Very good.

Thanks Ittai. Next question please.

Our next question comes from Brian Alexander with Raymond James. Your line is open. Brian Alexander - Raymond James & Associates, Inc.: Yeah, a question on the bookings acceleration that you saw in the quarter David, up high single digits I think you said. If you can talk about how the bookings linearity compares to what you normally see in the third quarter and whether the acceleration is more a function of easy comparisons from last year which Q3 was weak, but whether you’re really calling for more of an inflection point in storage demand and if the latter what change that’s driving the acceleration?

Yeah, sure Brian. Obviously number of parts to that question. Now relative to the acceleration as I mentioned, the good news whilst that’s again, we had to take federal out of our picture because that was the kind of one area where we did not meet our expectations from a bookings point of view. But if we exclude Federal and you look at the storage product bookings we saw the highest growth rate we saw during the quarter in both The Americas, in EMEA and in APJ; so we felt strong about that. Obviously a little bit of that was again say a compare, but to see that pick up in all three field as we saw as a very encouraging sign. Relative to the calendarization, it was a backend loaded quarter as we mentioned similar in total in terms of the calendarization to what we saw in Q1, Q2 of this year obviously with it being a Monday as opposed to a Sunday close. In the prior couple of quarters we’ve planned to kind of get more of the orders in the final week and less on the last Monday, obviously the numbers of all as we got on the last Monday were more than expected were probably -- were less than we would have gotten on if you like a Thursday or Friday of the prior quarters. So those are the factors. In terms of the overall pick up I think what we’re seeing a lot is the strength of our portfolio. Obviously we are doing well. We think relative to the market in all the sectors that we play in. We talked about what was impacting the high end. We feel good about our transition in mid-tier. Then you’ve also got to look in kind of the really exceptional growth we’re getting in that new emerging storage bucket, 66% is I think higher than anybody else out there. Also bare in mind that’s now fairly a large chunk of revenue close to $400 million in the quarter, it's growing at 66%. And the fact we have that break to portfolio is enabling us to go to customers and talk to them about all the different workloads in their business and say we have a portfolio that can actually handle all off of including your second platform apps and your third platform apps. And that story really resonates well with enterprises, it resonates well with service providers and it also resonates well with the cloud scale companies.

Thanks Brian. Next question please.

Next in queue we have Aaron Rakers with Stifel Nicolaus. Your line is open.

Yeah, thanks for taking the question. Going back to the backend loaded linearity in the quarter and for that matter the last three quarters. Can you talk a little bit about the initiatives that you’re putting in place or more recently have put in place to try and diminish that backend loaded quarters which has clearly been an impact on the margin trajectory particularly in the storage business?

Yes. So Aaron there are always things that we can do to improve that linearity and we are all over it and specifically I and my team are working this very aggressively. We are going to be facing midweek quarters for a few quarters going forward now less of an issue obviously for Q4 because what I mentioned in terms is not a backlog that we carry but will be, something we're going to look at going into 2014. And the way we're going to address that is a number of different areas one of which is really spending a lot more time with our customers to explain the neutral benefit of getting orders in just a few days before the end of quarter as opposed on the very last day, but we'll continue to work the opportunity.

Thanks, Aaron. Next question please.

Next in queue we have Maynard Um with Wells Fargo. Your line is open.

Hi. Sort of in line with that, how should we think about working capital in light of the economy and the product launches because if you've had very backend loaded quarters, specifically what can you do on the working capital side in this environment? Should we actually think about a new normal in the various metrics of the cash convergence because of the environment we're in? Thanks.

Yes. Maynard, obviously there are a number of things going to working capital, the famous one is our cash convergence cycle and our collections we're really very strong this quarter. We collected over $6 billion and you can see that reflected in our DSOs down to 49 days. So that's the biggest thing we can do for cash convergence cycle. There will continue to be some pressure on inventories as we manage through the quarter and we manage through the transitions. As I've said, we're looking at those opportunities as well. We continue to optimize in terms of how we're building out the factory processes, we continue to optimize our engineering, labs in terms of shared surge [ph] and things like that. So we have continued programs that will be driving very aggressively into business to optimize the working capital cycle. But again I'll come back to my first point collection is the biggest factor.

I'm just wondering if you changed any of your target metrics or metrics within DSOs or turns or things like that, just given the environment and how we can think about that?

Specifically we still are targeting DSOs around that 50-day level, obviously some quarters are a little bit higher, some quarters are a little bit lower. We're still targeting inventory turns in the 6 to 7 range and again we have a lot of promos [ph] in place to make sure we can achieve those. There are still things we can do to optimize in the factories despite the backend loaded quarter and there are some things we can still do to optimize the amount of inventory we keep in our development labs.

Great, thank you.

Thanks. Next question please.

Next in queue we have Keith Bachman with BMO Capital Markets. Your line is open.

Hi. Thank you. David, for you please, ending the year based on your 2013 outlook with upper income about 25% which is up about 10 basis points year-over-year, a little bit more than 10 basis points. Can you provide some perspective on how we should be thinking about that number in particular as we're looking at 2014? And then just a clarification, could you also just tell us how much federal government was for set of revenues and for the September quarter? It just seems like a pretty material shortfall, just wondering what it was in the September quarter. Thank you.

Sure, Keith. Let me handle both of those. So relative to your second question and obviously the impact of the federal government was most prevalent in storage for our bookings. So when you put it in that context because obviously we do all our things with the federal government including VMware and there are some services lines in there as well, but for the whole year if I look at the federal government it represents less than 5% of storage for our bookings. But as Joe said, Q3 represents a multiple of any other quarter during the year. So obviously it represents a fair amount over the 5% in a Q3 and a fair amount below the 5% in any other quarter, which is kind of where you get the impact you saw in Q3. Relative to your question on the income statement, you're right. We're now projecting to have operating margin improvement in 2013 of about 10 basis points. Obviously that's directly impacted by the less storage program when we were calling a quarter going out as I mentioned has a high incremental gross margin which is why you see the margin profile coming down from 25.5 points to 25 points. Within that margin picture for the year, we expect gross margins to be relatively flat again impacted by the fact that we are – don't have that 220 plus issue of storage for our revenue. We expect to pick up most of our leverage this year from operating margin line. Going forward next year we think there is opportunity for improvements in both lines.

Thanks, Keith. Next question please.

Next in queue we have Alex Kurtz with Sterne Agee. Your line is open. Alex Kurtz - Sterne Agee & Leach: Yes. Thanks guys for taking the question. David, just thinking about Q4 again and the increase in the sequential growth rate; Q4 from what I can understand is always a very backend loaded quarter, so I was just wondering how you discounted that into your guidance here knowing what just happened in Q3 and maybe how you think about that across different geos [ph], maybe it's going to be less pronounced in the U.S. for whatever reason and you feel more confident about hitting that sequential growth rate, but just any more color on the backend loaded nature and sort of how you base that into your guidance?

Yes. Sure, Alex. Again when we look at Q4 and fundamentally we haven't changed it very much at all from what we're calling last time, there has been a very minor change but fundamentally let's say there's no material change. And then to put that into context of what happened in Q3, let me just remind you the fact that the impact just in Q3 are not a factor in Q4 and let me just explain why. So we just explained on the last question, thank you, Keith, for the question that the U.S. federal government is actually a very small part of our Q4 expectations. As Joe said, we're not factoring any kind of budget flush out at the end of the year or any significant revival into our Q4 expectations from what didn't happen in Q3 but there's always some potential. Right now nobody knows what's going on down in Washington relative to federal government spend. The other factor that impacted us in Q3 relative to our expectations was the backlog coming out of Q3. As I mentioned, that's not a factor in Q4 either because we carry higher backlogs going out of Q4. So even if Q4 became more backend loaded and we expected from an order point of view that wouldn't impact us. So basically the things that impacted us in Q3 are not impacting us in Q4 and the reason why we feel confident about our Q4 guidance is when we look at the opportunity out there, we kind of look at what the sales teams are forecasting, the amount of pipeline we're looking at, we look at the venue box cycle, fundamentally we're saying we're broadly on track for Q4 as we expected and the fact that they hurt us in Q3 aren't a material factor. We have, as I mentioned in my comments, brought the Q4 guidance down by a little bit excluding the backlog and it's really related to the macro. If you look at the June, July quarter for example, consensus economic forecast for U.S. GDP growth 1.9%. Now there are about 1.6% and that's having a bit of an impact upon IT spending forecast. And because of that we've taken a little bit of our expectations out of the Q4 budget flush. But having said that we're still expecting a strong budget cycle in Q4, we're expecting IT spending to be seasonally ahead of Q3. So hopefully that gives you a feel, Alex, and those are the factors that go into it. Alex Kurtz - Sterne Agee & Leach: That helps. Thanks, David.

Thanks, Alex. We have time for one more question and then we'll have some concluding comments from Joe.

Our final question today comes from Lou Miscioscia with CLSA. Your line is open.

Okay. Joe, you mentioned you're actually getting on a plane, I guess, tomorrow and heading over to China. Maybe if you could comment on how you all are doing out there, some other companies it seems like might have been impacted for a number of reasons and I believe your China business is actually smaller. Has it grown well and then if you could also comment on the possible, I guess, pullback from the government on U.S. IT companies because of security issues, that would be helpful?

Yes. We don't break out China separately but we are growing nicely in China. And as David said in our [indiscernible] which is basically our emerging markets group the companies that we track and this is a little bit more than 13 companies, we just started that kind of [indiscernible], we grew 19% year-on-year in Q3. So we're doing quite nicely and China is doing well for us. You asked a comment about the security aspects faced in China and there's nothing really to add there you don't know. I mean obviously there's concerns both ways and I think rational people are having discussions and we got to – it's an opportunity for us with our security business and it's not something I want to specifically comment on.

Thanks, Lou.

Thank you, Joe.

With that, I want to again thank everybody for being with us today. We really do appreciate it. I want to emphasize that we are definitely disappointed that our revenue and non-GAAP EPS didn't meet our expectations. That said, as you can detect from our comments, we’re very excited about our future. As evidenced by the fact that excluding federal, our bookings rate in Q3 accelerated across EMC, Pivotal, VMware and gave us we believe proof that our strategic focus on cloud, Big Data, and trusted IT is right on. I’m blessed to be surrounded by a terrific leadership team. We have more than 61,000 talented, dedicated professionals around the globe that are charged up and deeply believe in our vision and mission. And most importantly, customers are rooting for us. You can feel that when you speak to customers and when I -- as I travel and they’re giving us a broader, more strategic seat at their IT table. So again thank you for being with us today and we look forward to continuing our dialogues with you on an ongoing basis and we’ll be with you. Thank you.

This does conclude today’s conference. You may disconnect at this time. Thank you.