Restructuring and Acquisition-Related Charges

For the three months ended March 31, 2013 and 2012, we incurred restructuring and acquisition-related charges of $147.7 million and $25.9 million, respectively. For the three months ended March 31, 2013, EMC incurred $81.7 million of restructuring charges, primarily related to our current year restructuring programs and $1.9 million of charges in connection with acquisitions for financial advisory, legal and accounting services. For the three months ended March 31, 2013, VMware incurred $53.8 million of restructuring charges related to workforce reductions as part of its current year restructuring program, $9.0 million of impairment charges related to its business realignment and $1.3 million of charges in connection with acquisitions for financial advisory, legal and accounting services. For the three months ended March 31, 2012, we incurred $24.2 million of restructuring charges, primarily related to our 2012 restructuring programs and $1.7 million of costs in connection with acquisitions for financial advisory, legal and accounting services.

In the first quarter of 2013, EMC implemented restructuring programs to create further operational efficiencies which will result in a workforce reduction of 1,004 positions. The actions will impact positions around the globe covering our Information Storage, RSA Information Security and Information Intelligence Group segments, and is expected to result in a total charge of approximately $80.0 million, with total cash payments associated with the plan expected to be approximately $73.0 million. All of these actions are expected to be completed within a year of the start of each program.

In the first quarter of 2013, VMware implemented a plan to streamline its operations in order to focus its business on strategic areas it has determined to be most compelling. The plan includes the elimination of approximately 800 positions across all major functional groups and geographies, and is expected to result in a charge in the range of $60.0 million to $65.0 million, of which $53.8 million was recognized during the three months ended March 31, 2013. Additionally, VMware exited and is planning to exit certain lines of business and consolidate facilities, which is expected to result in a total charge, including asset impairments, in the range of $15.0 million to $25.0 million, of which $9.0 million was recognized during the three months ended March 31, 2013. All of these actions are expected to be completed by the end of 2013. The total cash expenditures associated with the plan are expected to be in the range of $60.0 million to $75.0 million. The associated cash payments are expected to be paid out primarily through the end of 2013.

During 2012, we implemented separate restructuring programs to create further operational efficiencies which resulted in a workforce reduction of 1,163 positions, of which 298 positions were identified in the three months ended March 31, 2012. The actions impacted positions around the globe covering our Information Storage, RSA Information Security and Information Intelligence Group segments. All of these actions are expected to be completed by the end of 2013.

For the three months ended March 31, 2013 and 2012, we recognized $7.1 million and $3.7 million, respectively, of lease termination costs for facilities vacated in the period in accordance with our plan as part of all of our restructuring programs and for costs associated with terminating other contractual obligations. These costs are expected to be utilized by the end of 2015.

The activity for the restructuring programs is presented below (tables in thousands):

Three Months Ended March 31, 2013:



2013 EMC Programs
Category	Balance as of December 31, 2012		2013 Charges		Utilization			Balance as of March 31, 2013
Workforce reductions	$	—	$	79,409	$	(13,515	)	$	65,894
Consolidation of excess facilities and other contractual obligations	—		—		—			—
Total	$	—	$	79,409	$	(13,515	)	$	65,894



2013 VMware Programs
Category	Balance as of December 31, 2012		2013 Charges		Utilization			Balance as of March 31, 2013
Workforce reductions	$	—	$	53,847	$	(28,062	)	$	25,785
Consolidation of excess facilities and other contractual obligations	—		—		—			—
Total	$	—	$	53,847	$	(28,062	)	$	25,785



Other EMC Programs
Category	Balance as of December 31, 2012		Adjustments to the Provision			Utilization			Balance as of March 31, 2013
Workforce reductions	$	62,962	$	(4,878	)	$	(12,233	)	$	45,851
Consolidation of excess facilities and other contractual obligations	28,427		7,130			(5,377		)	30,180
Total	$	91,389	$	2,252		$	(17,610	)	$	76,031

Three Months Ended March 31, 2012:



2012 EMC Programs
Category	Balance as of December 31, 2011		2012 Charges		Utilization			Balance as of March 31, 2012
Workforce reductions	$	—	$	23,348	$	(2,706	)	$	20,642
Consolidation of excess facilities and other contractual obligations	—		1,318		(710		)	608
Total	$	—	$	24,666	$	(3,416	)	$	21,250



Other EMC Programs
Category	Balance as of December 31, 2011		Adjustments to the Provision			Utilization			Balance as of March 31, 2012
Workforce reductions	$	49,863	$	(2,876	)	$	(15,675	)	$	31,312
Consolidation of excess facilities and other contractual obligations	30,112		2,389			(4,320		)	28,181
Total	$	79,975	$	(487	)	$	(19,995	)	$	59,493

As of March 31, 2013, VMware had reclassified $26.9 million in assets, primarily intangible assets, to assets held for sale for a line of business it plans to exit. Additionally, $27.2 million in unearned revenues was reclassified to liabilities held for sale. Assets held for sale are reported in other current assets, while liabilities held for sale are reported in accrued expenses on the consolidated balance sheet as of March 31, 2013.