Restructuring and Acquisition-Related Charges

For the three and six months ended June 30, 2013, we incurred restructuring and acquisition-related charges of $7 million and $155 million, respectively. For the three and six months ended June 30, 2012, we incurred restructuring and acquisition-related charges of $28 million and $53 million, respectively. For the three and six months ended June 30, 2013, EMC incurred $4 million and $85 million, respectively, of restructuring charges, primarily related to our current year restructuring programs and $0 million and $3 million, respectively, of charges in connection with acquisitions for financial advisory, legal and accounting services. For the three and six months ended June 30, 2013, VMware incurred $2 million and $56 million, respectively, of restructuring charges related to workforce reductions as part of its current year restructuring program, $1 million and $10 million, respectively, of impairment charges related to its business realignment and $0 million and $1 million, respectively, of charges in connection with acquisitions for financial advisory, legal and accounting services. For the three and six months ended June 30, 2012, we incurred $24 million and $48 million, respectively, of restructuring charges, primarily related to our 2012 restructuring programs and $4 million and $5 million, respectively, of costs in connection with acquisitions for financial advisory, legal and accounting services.

In the first quarter of 2013, EMC implemented a restructuring program to create further operational efficiencies which will result in a workforce reduction of approximately 1,000 positions. The actions will impact positions around the globe covering our Information Storage, RSA Information Security and Information Intelligence Group segments. The first quarter restructuring program is expected to result in a total charge of approximately $80 million, with total cash payments associated with the plan expected to be approximately $73 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 approved a business realignment plan to streamline its operations. The plan includes the elimination of approximately 750 positions across all major functional groups and geographies, and is expected to result in a charge in the range of $55 million to $60 million, of which $2 million and $56 million was recognized during the three and six months ended June 30, 2013, respectively. Additionally, VMware exited and is planning to exit certain lines of business and consolidated and is planning to consolidate facilities, which is expected to result in a total charge, including asset impairments recorded in the prior quarters, in the range of $20 million to $25 million, of which $1 million and $10 million was recognized during the three and six months ended June 30, 2013, respectively. 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 $50 million to $60 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 and 279 positions were identified in the first and second quarters of 2012, respectively. 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 and six months ended June 30, 2013, we recognized $5 million and $12 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. For the three and six months ended June 30, 2012, we recognized $4 million and $8 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. These costs are expected to be utilized by the end of 2015.

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

Three Months Ended June 30, 2013:



2013 EMC Programs
Category	Balance as of March 31, 2013		2013 Charges		Utilization			Balance as of June 30, 2013
Workforce reductions	$	66	$	2	$	(23	)	$	45
Consolidation of excess facilities and other contractual obligations	—		3		(1		)	2
Total	$	66	$	5	$	(24	)	$	47



2013 VMware Programs
Category	Balance as of March 31, 2013		2013 Charges		Utilization			Balance as of June 30, 2013
Workforce reductions	$	26	$	2	$	(26	)	$	2
Consolidation of excess facilities and other contractual obligations	—		—		—			—
Total	$	26	$	2	$	(26	)	$	2



Other EMC Programs
Category	Balance as of March 31, 2013		Adjustments to the Provision			Utilization			Balance as of June 30, 2013
Workforce reductions	$	46	$	(3	)	$	(14	)	$	29
Consolidation of excess facilities and other contractual obligations	30		2			(5		)	27
Total	$	76	$	(1	)	$	(19	)	$	56

Six Months Ended June 30, 2013:



2013 EMC Programs
Category	Balance as of December 31, 2012		2013 Charges		Utilization			Balance as of June 30, 2013
Workforce reductions	$	—	$	81	$	(36	)	$	45
Consolidation of excess facilities and other contractual obligations	—		3		(1		)	2
Total	$	—	$	84	$	(37	)	$	47



2013 VMware Programs
Category	Balance as of December 31, 2012		2013 Charges		Utilization			Balance as of June 30, 2013
Workforce reductions	$	—	$	56	$	(54	)	$	2
Consolidation of excess facilities and other contractual obligations	—		—		—			—
Total	$	—	$	56	$	(54	)	$	2



Other EMC Programs
Category	Balance as of December 31, 2012		Adjustments to the Provision			Utilization			Balance as of June 30, 2013
Workforce reductions	$	63	$	(8	)	$	(26	)	$	29
Consolidation of excess facilities and other contractual obligations	28		9			(10		)	27
Total	$	91	$	1		$	(36	)	$	56

Three Months Ended June 30, 2012:



2012 EMC Programs
Category	Balance as of March 31, 2012		2012 Charges		Utilization			Balance as of June 30, 2012
Workforce reductions	$	20	$	23	$	(9	)	$	34
Consolidation of excess facilities and other contractual obligations	1		4		(2		)	3
Total	$	21	$	27	$	(11	)	$	37



Other EMC Programs
Category	Balance as of March 31, 2012		Adjustments to the Provision			Utilization			Balance as of June 30, 2012
Workforce reductions	$	31	$	(3	)	$	(8	)	$	20
Consolidation of excess facilities and other contractual obligations	28		—			(2		)	26
Total	$	59	$	(3	)	$	(10	)	$	46

Six Months Ended June 30, 2012:



2012 EMC Programs
Category	Balance as of December 31, 2011		2012 Charges		Utilization			Balance as of June 30, 2012
Workforce reductions	$	—	$	46	$	(12	)	$	34
Consolidation of excess facilities and other contractual obligations	—		5		(2		)	3
Total	$	—	$	51	$	(14	)	$	37



Other EMC Programs
Category	Balance as of December 31, 2011		Adjustments to the Provision			Utilization			Balance as of June 30, 2012
Workforce reductions	$	50	$	(6	)	$	(24	)	$	20
Consolidation of excess facilities and other contractual obligations	30		3			(7		)	26
Total	$	80	$	(3	)	$	(31	)	$	46

In the three months ended June 30, 2013, VMware recorded a pre-tax gain of $32 million for the disposition of certain lines of business under its business realignment plan, which were no longer in line with VMware's core business priorities. The gain was recorded to other expense, net on the consolidated statements of income for the three and six months ended June 30, 2013.

As of June 30, 2013, VMware had $19 million in assets held for sale, primarily related to intangible assets for a business it exited in the third quarter of 2013. Additionally, $21 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 June 30, 2013.