All dollar amounts expressed numerically in this MD&A are in millions.
Certain tables may not add up due to rounding.

INTRODUCTION
We manage our business in two broad categories: EMC Information Infrastructure and VMware Virtual Infrastructure.
EMC Information Infrastructure
Our EMC Information Infrastructure business consists of three segments:
Information Storage, Information Intelligence and RSA Information Security. The objective for our EMC Information Infrastructure business is to simultaneously increase our market share, invest in the business and grow our earnings per share at a rate faster than the rate at which we grow our revenue. During 2012, we continued to innovate and invest in expanding our total addressable market through internal research and development ("R&D") and acquisitions. Our continued investment in new technologies and solutions is reflected in our roadmap for 2013, with numerous innovations, refreshes and brand-new products. We have developed a product portfolio with customers' current and future needs in mind which will continue to evolve as the largest transformation in Information Technology ("IT") history is creating enormous opportunities in Cloud Computing, Big Data and Trust.
Cloud Computing leverages an on-demand, self-managed, virtualized infrastructure to deliver IT as a Service in a more efficient, flexible and cost-effective manner. While the fundamental transition to Cloud Computing architectures is gaining traction, customers are increasingly recognizing that their ability to compete is tied to the efficiency, flexibility and agility of their IT operations and that transitioning to a cloud-based architecture will be a key component to their success. We believe our offerings are well-suited to capitalize on this trend as it unfolds over the next several years. Big Data, which is a primary contributor to the pace of overall data growth, refers to the large repositories of corporate and external data, including unstructured information created by new applications (e.g. medical, entertainment, energy and geophysical), social media and other web repositories. It is triggering new approaches for our customers to derive business insight and create new opportunities to expand revenues. The successful transition to a model that leverages Cloud Computing and Big Data is dependent upon both the right infrastructure and the ability to build Trust into that infrastructure. The ability for customers to have and offer Trusted IT is a valuable competitive advantage. We believe we are well-positioned in this market to continue assisting our customers in storing, managing and unlocking the value contained within their information and to enable them to leverage our data-centric approach to security to take full advantage of Cloud Computing and Big Data. Our go to market model, where we continue to leverage our direct sales force and services organization, as well as our channel and services partners and service providers, positions us well to help customers transition to Cloud Computing and benefit from Big Data. We offer three alternatives to help our customers transition to cloud architectures and leverage Big Data: our best of breed infrastructure components, proven infrastructure through VSPEX and converged infrastructure with Vblock from VCE Company LLC, our joint venture with Cisco, and other investors VMware and Intel. Our service provider program is another important part of our strategy to get our customers to the public cloud. Additionally, in December 2012, we announced the Pivotal Initiative ("Pivotal") with VMware, to which both companies plan to commit technology, people and programs from both companies. Pivotal will focus on Big Data Analytics and Cloud Application Platforms in 2013.
VMware Virtual Infrastructure
VMware's financial focus is on long-term revenue growth to generate free cash flows to fund its expansion of industry segment share and evolve its virtualization-based products for data centers, end-user devices and Cloud Computing through a combination of internal development and acquisitions. VMware expects to grow its business by building long-term relationships with its customers through the adoption of enterprise license agreements ("ELAs"). Additionally, VMware has made, and expects to continue to consider strategic business acquisitions in the future.
In January 2013, VMware announced a realignment of their strategy to refocus their resources and investments in support of three growth priorities that focus on their core opportunities as a provider of virtualization technologies that simplify IT infrastructure: the software-defined data center, the hybrid cloud and end-user computing. The software-defined data center ("SDDC") is where increasingly infrastructure is virtualized and delivered as a service, and the control of this data center is entirely

automated by software. To further this vision, in the third quarter of 2012, VMware released the VMware vCloud Suite, which is the first integrated solution designed to meet the requirements of the SDDC by pooling industry-standard hardware and running compute, networking, storage and management functions in the data center as software-defined services. For the SDDC, VMware plans to continue to invest in the development and delivery of innovations in networking, security, storage and management as they continue to roll out and enhance the features of their vCloud Suite. For the hybrid cloud, VMware plans to focus on expanding their capabilities to deliver enterprise-class cloud services that are complementary to private clouds in order to enhance their customer's flexibility to run applications on and off premise, as they choose on a compatible, high-quality, secure and resilient hybrid cloud platform. For end-user computing, they plan to enhance their offerings to enable a virtual workspace for both existing PC environments and emerging mobile devices in a secure enterprise environment.
On a consolidated basis, our vision, strategy and roadmap allowed us to leverage our strengths through 2012 and position us to capitalize on the evolving trends of Cloud Computing and Big Data and Trust in 2013. As a result, we believe we will grow faster than the markets we serve in 2013 while simultaneously investing in the business and growing earnings per share at a rate faster than the rate at which we will grow our revenue.

RESULTS OF OPERATIONS

Revenues
The following table presents revenue by our segments:
                                                                                     Percentage Change
                                     2012           2011           2010        2012 vs 2011      2011 vs 2010
Information Storage              $ 15,589.4     $ 14,755.2     $ 12,699.1          5.7  %            16.2  %
Information Intelligence Group        640.2          661.4          735.9         (3.2 )            (10.1 )
RSA Information Security              888.7          828.2          729.4          7.3               13.5
VMware Virtual Infrastructure       4,595.6        3,762.9        2,850.7         22.1               32.0
Total revenues                   $ 21,713.9     $ 20,007.6     $ 17,015.1          8.5  %            17.6  %

Consolidated product revenues increased 3.7% to $13,060.5 in 2012. The consolidated product revenues increase was primarily driven by the Information Storage and the VMware Virtual Infrastructure segments' product revenues. The overall growth in product revenue in 2012 was due to a continued higher demand for our portfolio of offerings to address the storage, data analysis and virtualization needs for continued information growth, particularly as customers continue to build out their own data centers to develop and support their private or public cloud infrastructures.

The Information Storage segment's product revenues increased 2.6% to $10,362.8 in 2012. Within the networked storage platforms portfolio, which includes our high-end and mid-tier platform products, product revenues increased 5.7%. Within the high-end of the Information Storage segment, product revenues increased 0.8%, primarily due to demand for our scale-out block solution, VMAX, which was refreshed in the second quarter of 2012, as customers continue to purchase VMAX for mission-critical data sets needing to scale. Within the mid-tier of the Information Storage segment, which includes VNX family, Backup and Recovery Systems, EMC Isilon and EMC Atmos, product revenues increased 9.3% in 2012 due to continued performance across each of our mid-tier product groups. Our VNX family, which includes VNX and VNXe, plays an important role in our storage platform because of its simplicity and efficiency with a rich feature set on a unified platform. Within our Backup and Recovery Systems products, deduplication solutions continue to be in demand and our purpose-built back up appliance, Data Domain and our Avamar product delivered strong growth for the year in 2012. Our scale-out file offering from EMC Isilon continues to benefit from the acquisition synergies as it delivers strong revenue growth in new markets while continuing rapid growth in its more traditional verticals. The EMC Atmos object-storage solution ended 2012 with great momentum. Finally, our EMC Greenplum analytics database combined with their Hadoop implementation drove very strong year-over-year growth.

The VMware Virtual Infrastructure segment's product revenues increased 13.3% to $2,084.6 in 2012. VMware's license revenues increased in 2012 primarily due to continued demand for its product offerings. ELAs comprised between one-quarter and one-third of their overall sales during 2012 and 2011, with the balance represented by non-ELA, or transactional business. In 2012, their overall sales growth rate declined compared to 2011, with the growth rate in transactional sales lower than the growth rate in ELAs.

The RSA Information Security segment's product revenues decreased 6.5% to $412.3 in 2012. The decrease in product revenues was primarily due to the effects of slower global employment growth, especially in Europe and Asia, which negatively impacted

our Identity and Data Protection business as well as lingering effects from the prior year remediation of tokens which disrupted the normal renewal cycles.

The Information Intelligence Group segment's product revenues decreased 4.1% to $200.8 in 2012. The year-over-year decrease in product revenues was primarily attributable to changing customer demand, particularly in the first quarter of 2012. The Information Intelligence Group segment continues to innovate, creating solutions that we believe will be easier to deploy, easier to use and more aligned with customer needs.

Consolidated product revenues increased 15.6% to $12,590.7 in 2011. The consolidated product revenues increase was primarily driven by the Information Storage and the VMware Virtual Infrastructure segments' product revenues. The Information Storage segment's product revenues increased 14.5% to $10,100.5 in 2011. The VMware Virtual Infrastructure segment's product revenues increased 31.5% to $1,840.1 in 2011. The RSA Information Security segment's product revenues increased 10.2% to $440.8 in 2011. The increase in product revenues in each of these segments in 2011 was primarily attributable to continued higher demand for our portfolio of offerings to address the storage, virtualization and security needs for continued information growth, particularly as customers continue to build out their own data centers to develop and support their private or public cloud infrastructures. The Information Intelligence Group segment's product revenues decreased 22.2% to $209.3 in 2011 primarily due to changing customer demand.

Consolidated services revenues increased 16.7% to $8,653.4 in 2012. The consolidated services revenues increase was primarily driven by the Information Storage and the VMware Virtual Infrastructure segments' services revenues resulting from increased demand for maintenance-related services. In addition, we continue to provide expertise to customers on effective ways to enable Cloud Computing and to leverage their Big Data assets.

The Information Storage segment's services revenues increased 12.3% to $5,226.6 in 2012. The increase in services revenues was primarily attributable to higher demand for maintenance-related services associated with a larger installed base as well as increased maintenance renewals. In addition, there has been a growing demand for professional services as we assist with customers' transitions to cloud architectures, transforming IT infrastructures and virtualizing mission-critical applications also contributed to the increase in services revenues.

The VMware Virtual Infrastructure segment's services revenues increased 30.6% to $2,511.0 in 2012. The increase in services revenues was primarily attributable to growth in VMware's software maintenance revenues. In 2012, services revenues benefited from strong renewals, multi-year software maintenance contracts sold in previous periods and additional maintenance contracts sold in conjunction with new software license sales. Additionally, VMware experienced increased demand in their professional services driven by the growth in their license sales and installed base.

The RSA Information Security segment's services revenues increased 23.0% to $476.5 in 2012. Services revenues increased due to an increase in maintenance revenues and professional services resulting from continued demand for support from our installed base. The Information Intelligence Group segment's services revenues decreased 2.8% to $439.4 in 2012.

Consolidated services revenues increased 21.1% to $7,416.8 in 2011. The consolidated services revenues increase was primarily driven by the Information Storage and the VMware Virtual Infrastructure segments' services revenues. The Information Storage segment's services revenues increased 20.1% to $4,654.7 in 2011. The VMware Virtual Infrastructure segment's services revenues increased 32.5% to $1,922.7 in 2011. The RSA Information Security segment's services revenues increased 17.7% to $387.4 in 2011. The Information Intelligence Group segment's services revenues decreased 3.2% to $452.0 in 2011. Services revenues increased across the Information Storage, VMware Virtual Infrastructure and RSA Information Security segments due to an increase in maintenance and professional services resulting from continued demand for support from our installed base.

Consolidated revenues by geography were as follows:

                                                                                      Percentage Change
                                       2012           2011           2010       2012 vs 2011     2011 vs 2010
United States                      $ 11,510.2     $ 10,549.6     $  9,152.4            9.1 %            15.3 %
Europe, Middle East and Africa        5,908.2        5,667.6        4,942.1            4.2 %            14.7 %
Asia Pacific                          3,016.5        2,639.4        1,965.2           14.3 %            34.3 %
Latin America, Mexico and Canada      1,279.0        1,151.0          955.5           11.1 %            20.5 %

Revenues increased in 2012 compared to 2011 and in 2011 compared to 2010 in all of our markets due to greater demand for our products and services offerings. Changes in exchange rates impacted the total revenue increase by 1.1% in 2012 compared to 2011. The impact of the change in rates was most significant in the Euro zone and Latin America markets, and in particular, Brazil. Changes in exchange rates contributed 1.5% to the overall revenue increase in 2011 compared to 2010. The impact of the change in rates was most significant in the Asia Pacific markets, primarily Australia and Japan, Canada and Brazil, partially offset by the Euro and the pound sterling. Costs and Expenses
The following table presents our costs and expenses, other income and net income attributable to EMC Corporation.

                                                                                  Percentage Change
                                     2012          2011          2010       2012 vs 2011    2011 vs 2010
Cost of revenue:
Information Storage               $ 6,650.1     $ 6,428.7     $ 5,851.4           3.4  %           9.9 %
Information Intelligence Group        208.2         236.6         243.2         (12.0 )           (2.8 )
RSA Information Security              284.5         357.7         221.6         (20.5 )           61.4
VMware Virtual Infrastructure         542.9         533.3         425.3           1.8             25.4
Corporate reconciling items           389.8         282.3         242.7          38.1             16.3
Total cost of revenue               8,075.5       7,838.6       6,984.1           3.0             12.2
Gross margins:
Information Storage                 8,939.3       8,326.5       6,890.7           7.4             20.9
Information Intelligence Group        432.0         424.7         449.7           1.7             (5.5 )
RSA Information Security              604.3         470.5         507.8          28.4             (7.3 )
VMware Virtual Infrastructure       4,052.7       3,229.5       2,425.5          25.5             33.1
Corporate reconciling items          (389.8 )      (282.3 )      (242.7 )        38.1             16.3
Total gross margin                 13,638.4      12,168.9      10,031.0          12.1             21.3
Operating expenses:
Research and development(1)         2,559.6       2,149.8       1,888.0          19.1             13.9
Selling, general and
administrative(2)                   7,004.3       6,479.4       5,375.3           8.1             20.5
Restructuring and
acquisition-related charges           110.6          97.3          84.4          13.7             15.3
Total operating expenses            9,674.5       8,726.5       7,347.7          10.9             18.8
Operating income                    3,963.9       3,442.4       2,683.3          15.1             28.3
Investment income, interest
expense and other expenses, net      (160.3 )      (193.2 )       (75.3 )       (17.0 )          156.6
Income before income taxes          3,803.6       3,249.3       2,608.0          17.1             24.6
Income tax provision                  917.6         640.4         638.3          43.3              0.3
Net income                          2,886.0       2,608.9       1,969.7          10.6             32.5
Less: Net income attributable
to the non-controlling interest
in VMware, Inc.                      (153.4 )      (147.5 )       (69.7 )         4.0            111.6
Net income attributable to EMC
Corporation                       $ 2,732.6     $ 2,461.3     $ 1,900.0          11.0  %          29.5 %

(1) Amount includes corporate reconciling items of $337.9, $322.6 and $287.4 for the years ended December 31, 2012, 2011 and 2010, respectively.

(2) Amount includes corporate reconciling items of $640.4, $606.4 and $477.5 for the years ended December 31, 2012, 2011 and 2010, respectively.

Gross Margins
Our gross margin percentages were 62.8%, 60.8% and 59.0% in 2012, 2011 and 2010, respectively. The increase in the gross margin percentage in 2012 compared to 2011 was attributable to the VMware Virtual Infrastructure segment, which increased overall gross margins by 149 basis points, the RSA Information Security segment, which increased overall gross margins by 47 basis points, the Information Storage segment, which increased overall gross margins by 46 basis points and the Information Intelligence Group segment, which increased overall gross margins by 10 basis points. The increase in corporate reconciling items, consisting of stock-based compensation, acquisition-related intangible asset amortization, restructuring and acquisition-related charges and amortization of VMware's capitalized software from prior periods, decreased the consolidated gross margin percentage by 53 basis points. The increase in the gross margin percentage in 2011 compared to 2010 was attributable to the VMware Virtual Infrastructure segment, which increased overall gross margins by 140 basis points, the Information Storage segment, which increased overall gross margins by 126 basis points, partially offset by the RSA Information Security segment, which decreased overall gross margins by 53 basis points, and the Information Intelligence Group segment, which decreased overall gross margins by 4 basis points. The increase in corporate reconciling items, consisting of stock-based compensation, acquisition-related intangible asset amortization and restructuring and acquisition-related charges, decreased the consolidated gross margin percentage by 22 basis points.

For segment reporting purposes, stock-based compensation, acquisition-related intangible asset amortization, restructuring and acquisition-related charges and amortization of VMware's capitalized software from prior periods are recognized as corporate expenses and are not allocated among our various operating segments. The increase of $107.5 in the corporate reconciling items in 2012 was attributable to a $61.5 increase in amortization of VMware's capitalized software from prior periods, a $41.9 increase in intangible asset amortization expense and a $1.8 increase in stock-based compensation expense. The $41.9 increase in intangible asset amortization expense is due to a larger intangible asset balance resulting from business acquisitions. The increase of $39.7 in the corporate reconciling items in 2011 was attributable to a $25.4 increase in intangible asset amortization expense and a $15.0 increase in stock-based compensation expense. The $15.0 increase in stock-based compensation expense was primarily attributable to the full-year impact of options exchanged in the acquisition of Isilon, which was acquired in the fourth quarter of 2010. The gross margin percentages for the Information Storage segment were 57.3%, 56.4% and 54.1% in 2012, 2011 and 2010, respectively. The increase in gross margin percentage in 2012 compared to 2011 was primarily attributable to improved product gross margins driven by a shift in mix towards higher margin products and higher sales volume. The increase in gross margin percentage in 2011 compared to 2010 was primarily attributable to improved product and service gross margins driven by a shift in mix towards higher margin products and services, higher sales volume and an improved cost structure.
The gross margin percentages for the VMware Virtual Infrastructure segment were 88.2%, 85.8% and 85.1% in 2012, 2011 and 2010, respectively. The increase in gross margin percentage in 2012 compared to 2011 was primarily attributable to improvements in services margins due to growth in maintenance revenue as well as improved license margins resulting from decreased software capitalized amortization expense. The increase in gross margin percentage in 2011 compared to 2010 was primarily attributable to improved license gross margins resulting from decreased software capitalization amortization expense due to VMware's go-to-market strategy and the timing of products reaching technological feasibility.
The gross margin percentages for the RSA Information Security segment were 68.0%, 56.8% and 69.6% in 2012, 2011 and 2010, respectively. The increase in the gross margin percentage in 2012 compared to 2011 and the decrease in gross margin percentage in 2011 compared to 2010 was due to an increase in product margins primarily due to the one-time impact of RSA remediation associated with working with customers to implement remediation programs which negatively impacted gross margin in 2011, as well as a release of the residual reserve, which positively impacted gross margins in 2012.
The gross margin percentages for the Information Intelligence Group segment were 67.5%, 64.2% and 64.9% in 2012, 2011 and 2010, respectively. The increase in gross margin percentage in 2012 compared to 2011 was attributable to a continued containment of fixed costs and services margin improvement. The decrease in gross margin percentage in 2011 compared to 2010 was attributable to an increase in the mix of service revenue as a percentage of total revenue, slightly offset by an increase in service gross margins. Research and Development

As a percentage of revenues, R&D expenses were 11.8%, 10.7% and 11.1% in 2012, 2011 and 2010, respectively. R&D expenses increased $409.8 in 2012 primarily due to an increase in personnel-related costs, which are expenses driven by incremental headcount from strategic hiring and business acquisitions, infrastructure costs and depreciation expense. Personnel-related costs increased by $354.5, infrastructure costs increased by $15.2 and depreciation expense increased by $11.3. Also increasing these

costs was a decrease in capitalized software development costs of $23.2. R&D expenses increased $261.8 in 2011 primarily due to an increase in personnel-related costs, including stock-based compensation, infrastructure costs, depreciation expense and travel costs, partially offset by greater levels of software capitalization. Personnel-related costs increased by $274.0, infrastructure costs increased by $20.5, depreciation expense increased by $13.0 and travel costs increased by $10.0. Capitalized software development costs, which reduce R&D expense, increased by $73.6.

Corporate reconciling items within R&D, which consist of stock-based compensation and acquisition-related intangible asset amortization, increased $15.3 and $35.2 to $337.9 and $322.6 in 2012 and 2011, respectively. Stock-based compensation expense increased $25.5 and $40.5 in 2012 and 2011, respectively. Acquisition-related intangible asset amortization decreased $6.4 and $7.1 in 2012 and 2011, respectively. The increase in stock-based compensation expense in 2012 was primarily driven by VMware's issuance of restricted stock in connection with the acquisition of Nicira in the third quarter of 2012. The increase in stock-based compensation expense in 2011 was primarily driven by EMC's issuance of stock options in connection with the acquisition of Isilon in the fourth quarter of 2010.

R&D expenses within EMC's Information Infrastructure business, as a percentage of EMC's Information Infrastructure business revenues, were 8.4%, 7.6% and 7.9% in 2012, 2011 and 2010, respectively. R&D expenses increased $206.0 in 2012 primarily due to an increase in personnel-related costs, depreciation expense, business development costs and travel costs. Personnel-related costs increased by $221.3, depreciation expense increased by $15.1, business development costs increased by $17.0 and travel costs increased by $5.6. Partially offsetting these increased costs was a increase in capitalized software development costs of $49.5. R&D expenses increased $116.5 in 2011 primarily due to increases in personnel-related costs, depreciation expense, travel costs and infrastructure costs. Personnel-related costs increased by $124.8, depreciation expense increased by $17.8, travel costs increased by $6.1 and infrastructure costs increased by $4.2. Partially offsetting these increased costs was an increase in capitalized software development costs of $60.4.

R&D expenses within the VMware Virtual Infrastructure business, as a percentage of VMware's revenues, were 16.9%, 15.6% and 16.8% in 2012, 2011 and 2010, respectively. R&D expenses increased $188.4 in 2012 largely due to an increase in personnel-related costs of $110.2 and to a decrease in VMware's capitalized . . .