Press Release

EMC Reports First Quarter Results

Hopkinton, Mass. - Thursday, April 18, 2002

Hopkinton, Mass., Thursday, April 18, 2002 - 

EMC Corporation (NYSE:EMC) today reported financial results for the first quarter of 2002. The results reflect continued progress in lowering EMC's cost structure and strong early customer adoption of EMC's AutoIS (Automated Information Storage) strategy.

Revenue for the quarter was $1.3 billion, 14% lower than the $1.5 billion reported in the fourth quarter of 2001. Net loss for the first quarter, excluding the after-tax effects of a $28 million reversal to the third-quarter 2001 restructuring charge, was $97 million or $0.04 per diluted share, compared with a fourth-quarter 2001 net loss of $70 million or $0.03 per diluted share. Consolidated net loss for the first quarter, including the after-tax benefit of the $28 million reversal, was $77 million or $0.03 per diluted share. In the year-ago first quarter, total revenue was $2.3 billion and net income was $399 million or $0.18 per diluted share.

Joe Tucci, EMC's President and CEO, said, "Our first-quarter results reflect across-the-board operational improvements that make us even more competitive during this prolonged IT spending slump. The well for new application deployment remains fairly dry, suppressing demand for major new IT projects. Customers' purchasing activity during the first quarter was heavily focused on automating the management of their information and accelerating the consolidation of existing IT infrastructures. We saw a more than four-fold increase in licenses for our new AutoIS software applications compared with the fourth quarter, representing the most rapid adoption of new software in EMC's history. Our leading storage platforms, advanced software functionality, automated management tools, and storage services expertise are helping EMC to capture the current opportunities and further drive our market leadership."

Bill Teuber, EMC's Executive Vice President and Chief Financial Officer, said, "We have reduced the company's quarterly break-even level by more than $200 million over the last nine months—exceeding our expense reduction goals a full quarter ahead of schedule. This progress contributed to an increase during the first quarter of more than $200 million in cash and investments, bringing our total cash and investments to approximately $5.3 billion. While our progress on the cost side of the equation has been excellent, we continue to invest in significantly more storage-focused R&D than any other company in the industry."

With more than 1,000 licenses sold since their October 2001 introduction, AutoIS open software applications such as ECC StorageScope and ECC Replication Manager have advanced EMC's position as the market leader in open storage management. During the first quarter EMC also delivered the WideSky Developers Suite, enabling software vendors and other developers to access and manage various elements of a networked storage environment; and announced ESN Manager support for Compaq StorageWorks, delivering on the AutoIS promise of open storage management across EMC and non-EMC storage platforms. Among the many customers who chose to implement EMC's AutoIS strategy during the first quarter were Quest Diagnostics, Eastman Chemical, Volvo Car Corporation, ReadRite, and Norway's Det Norske Veritas.

EMC had other key customer wins during the quarter at Citigroup Inc., Deutsche Bank, General Motors, United Airlines, and Intuit Inc. in the U.S.; Germany's Adolf Wurth GmbH & Co. KG, Sweden's Saab Automobile and Italy's Banca d'Italia in Europe; and DBS Bank in Singapore, Korea's Kookmin Bank, and China's Ministry of Railway in the Asia Pacific region.

Highlights of the first quarter included EMC's introduction of several new hardware, software and service offerings. In January EMC launched "Rapid Results," a new business continuity offering combining the expertise and strength of EMC Global Services with EMC's industry-leading business continuity technologies. In February EMC significantly increased the capacity, performance, connectivity and manageability of its industry-leading Celerra File Server, providing greater networked storage consolidation and NAS/SAN integration; and extended the delivery of its storage networking services through qualified partners with the introduction of EMC's Authorized Services Network. In March EMC introduced new CLARiiON software to simplify networked storage management, reduce customer costs and increase data protection.

Also during the first quarter, Gartner Dataquest reported that EMC widened its lead as the #1 provider of storage management software in 2001, capturing 30.4% of the $4.9 billion market; and EMC was named "Channel Champion" by the readers of CRN (Computer Reseller News), a leading magazine for the reseller and solution provider market, being rated #1 in every category for "Enterprise Network Attached Storage."

EMC Corporation is the world leader in information storage systems, software, networks and services, providing the information infrastructure for a connected world. Information about EMC's products and services can be found at http://www.EMC.com.
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