EMC Corp. (NYSE:EMC)

The analysis of the annual financial data reveals several notable trends in the company’s financial performance and position over the five-year period ending December 31, 2015.

Profitability

Net income displayed an increasing trend from 2011 to 2013, rising from $2,609 million to $3,093 million, followed by a decline in the subsequent two years, ending at $2,172 million in 2015. This pattern suggests improved profitability initially, followed by a weakening performance in the last two years.

Non-cash Expenses

Depreciation and amortization consistently increased each year, growing from $1,422 million in 2011 to $1,907 million in 2015, reflecting ongoing investment in capital assets or underlying asset base growth. Stock-based compensation also rose steadily from $823 million to $1,091 million, which may imply increasing employee compensation expenses linked to equity awards.

Non-cash restructuring and special charges spiked significantly in 2015 to $40 million from a comparatively low base in prior years, indicating possible organizational changes or cost restructuring activities during that year.

Tax and Valuation Adjustments

Deferred income taxes showed an increasing negative balance peaking in 2014 at -$396 million before improving slightly in 2015. Excess tax benefits from stock-based compensation correspondingly decreased notably over the period, consistent with the rising stock-based compensation expense.

There were occasional impairments and gains related to strategic investments, including a $33 million impairment charge in 2014 and variable gains or losses in select years, signaling periodic adjustments in investment valuations.

Working Capital Elements

Accounts receivable and inventories mostly decreased their negative adjustments over the period, though they remained significant. Accounts payable showed fluctuating changes, peaking at a $380 million increase in 2013 but turning negative by 2015. Accrued expenses and income taxes payable similarly shifted from positive to negative adjustments, reflecting changes in the company’s short-term liabilities and tax positions.

Deferred revenue decreased substantially from $1,509 million in 2011 to $596 million in 2015, which might indicate either lower advance billings or changes in revenue recognition patterns.

Cash Flow from Operations

Adjustments to reconcile net income to cash flows from operating activities increased from $3,060 million in 2011 to a peak of $3,830 million in 2013, followed by a decline. Net cash provided by operating activities grew steadily from $5,669 million in 2011 to $6,923 million in 2013 but decreased thereafter, falling to $5,386 million in 2015. This trend indicates strong operational cash generation early in the period with a tapering in later years.

Investing Activities

Capital expenditures for property, plant, and equipment climbed slightly until 2014, then decreased marginally in 2015 but remained near $900 million annually. Capitalized software development costs also rose gradually, reaching $567 million by 2015.

Purchases of available-for-sale securities were significant across all years, peaking at over $11 billion in 2013, partially offset by sales and maturities. Business acquisitions were irregular but sizable, with large outflows especially in 2012 and 2014, reflecting an active acquisition strategy during the period.

Overall, net cash used in investing activities peaked in 2013 at $5,760 million, falling sharply to approximately $2,500-$2,700 million annually in 2014 and 2015, indicating a reduction in investment or divestiture activities towards the end of the period.

Financing Activities

Net cash flows from financing activities were negative in most years except 2013. The company engaged heavily in share repurchases, especially EMC’s repurchase of its common stock, which was largest in 2013 ($3,015 million) and remained substantial thereafter.

Proceeds from the issuance of common stock showed a declining trend, consistent with decreasing stock issuance activities. Dividend payments started in 2013 and rose in subsequent years, signaling a shift toward rewarding shareholders through dividends.

Issuance and repayment of debt displayed variability, with a large net issuance in 2013 but lower activity in other years.

Liquidity

Cash and cash equivalents grew from 2011 through 2013, with a notable increase of $3,177 million in 2013, then declined sharply in 2014 before stabilizing slightly in 2015. Exchange rate changes negatively impacted cash especially in 2014 and 2015, reducing cash balances.

In summary, the company exhibited strong but fluctuating profitability and operational cash flow generation with heavy investment and acquisition activity early in the period, moderating in later years. The reduction in deferred revenue and fluctuating working capital components indicate changes in operational dynamics. Financing activities reflected return of capital to shareholders through buybacks and dividends, with intermittent debt activity. Liquidity remained adequate despite volatility, supported by operational cash flows.