TEXT-S&P raises EMC Corp to 'A' from 'A-'

Overview
-- EMC, a global provider of information infrastructure products and
services, has enjoyed strong demand for its storage, security, virtualization,
and information management products and services and integrated acquired
operations successfully, while maintaining a modest financial risk profile.
-- We are raising our corporate credit rating on EMC to 'A' from 'A-'.
-- The outlook is stable, reflecting an expanding market position, solid
operating performance, and a highly liquid balance sheet.

Rating Action
On June 25, 2012, Standard & Poor's Ratings Services raised its long-term
ratings on EMC Corp. to 'A' from 'A-'. The outlook is stable.

The upgrade reflects our view that EMC will maintain a financial policy and
growth strategy consistent with an 'A' rating. An expanding market position,
improving operating performance, and a highly liquid balance sheet support the
rating. Ratings incorporate the expectation that debt to EBITDA will remain
below 1.5x.

Rationale
EMC's ratings reflect the company's "strong" business profile, demonstrated by
consistent profitability in the face of very competitive industry conditions,
along with a more diversified product and services portfolio following recent
acquisitions, and a "modest" financial profile.

Standard & Poor's believes EMC's business profile benefits from a leading
market position in the enterprise storage market, as well as favorable trends
that we expect to support continued strong demand for data storage and data
protection. In addition, software acquisitions--including RSA Security,
Network Intelligence, Legato Systems, Documentum, VMware, and Greenplum--have
improved EMC's business profile in areas such as content management, security,
virtualization, and data analytics. The 2009 acquisition of Santa Clara,
Calif.-based Data Domain Technologies expanded EMC's base in the growing data
deduplication segment of the data storage and disaster recovery industry, as
well as accelerating its adoption of next-generation data deduplication
technologies. The expansion of EMC's software business has broadened its
market reach and strengthened its technology approach to the storage market.
Furthermore, the increase in software within EMC's business mix has helped
preserve strong profitability, despite ongoing price declines, particularly in
EMC's traditional product mainstays of hardware systems.

The combination of acquired businesses, strategic partnerships, and strong new
product offerings generated above-market revenue growth in recent years. EMC
is well positioned for the virtualized data center and evolution toward cloud
computing. Revenues in fiscal 2011 exceeded $20 billion partly as a result of
early-stage, rapid customer adoption of virtualization software and security
solutions. Virtualization, information storage, security, and data analytic
remain key growth areas in enterprise IT spending. EBITDA margins have
remained relatively stable, in the low-20% range, reflecting restructuring
actions taken over the past three years.

Operating cash flow comfortably covers about $1 billion of capital spending,
and total operating lease-adjusted debt to EBITDA--at 0.8x--is solid,
particularly given EMC's "exceptional" liquidity profile. Furthermore, we
expect EMC to manage its debt leverage at less than 1.5x in the intermediate
term, which should enable it to achieve its growth and shareholder return
objectives.

Liquidity
EMC has exceptional liquidity, with sources of cash likely to substantially
exceed uses for the next 12 to 24 months. Cash sources include cash and
short-term investment balances of $10.9 billion as of March 31, 2012 (this
balance includes about $5.2 billion held by VMware and $1.6 billion held by
EMC in overseas entities) and solid free operating cash flow generation, which
was about $4.7 billion in 2011.

Relevant aspects of EMC's liquidity, in our view, are as follows:
-- The company's unrealized value in its 79% economic ownership of VMware
provides considerable asset protection.
-- Free cash flow exceeding $4.5 billion per year, coupled with its ample
cash balances, provides the capacity for policies oriented toward increasing
shareholder value, such as share repurchase programs and cash-based
acquisitions.
-- Standard & Poor's believes that EMC has the capacity to pay off its
$1.7 billion of debt due December 2013 with existing cash if it chooses.

Outlook
The outlook is stable. An expanding market position, solid operating
performance, and a highly liquid balance sheet support the rating. Financial
metrics are currently strong for the rating, which affords EMC financial
capacity to pursue moderate-sized acquisitions and shareholder-friendly
initiatives without affecting the rating. We expect EMC to manage debt to
EBITDA below 1.5x.

Highly competitive industry conditions, a moderately acquisitive growth
strategy, and significant share repurchases currently limit the potential for
a higher rating. In contrast, we would consider lowering the rating if EMC
makes any large, cash-based acquisitions or share repurchases that
significantly alter its business or financial profile, with debt to EBITDA
sustained at the high-1x level or if market fundamentals deteriorate.

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Ratings List

Upgraded
To From
EMC Corp.
Corporate Credit Rating A/Stable/-- A-/Stable/--
Senior Unsecured A A-

Complete ratings information is available to subscribers of RatingsDirect on
the Global Credit Portal at www.globalcreditportal.com. All ratings affected
by this rating action can be found on Standard & Poor's public Web site at
www.standardandpoors.com. Use the Ratings search box located in the left
column.