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EMC To Acquire VMware For $635 Million: Page 2 of 2

Upon completion of the acquisition, EMC expects to take a charge of approximately $15 million to $20 million in the first quarter of 2004 for the value of VMware's in-process research and development costs and other integration expenses.

The transaction is expected to decrease EMC's earnings per share in the first quarter of 2004 by 1 cent per share. It is not expected to impact the full year's earnings, but is projected to increase the company EPS by 1 cent a share in fiscal year 2005.

EMC plans to operate VMware as an EMC subsidiary, headquartered in Palo Alto and led by Diane Greene, VMware's current president and chief executive.