Restructuring and Acquisition-Related Charges

For the three and nine months ended September 30, 2013, we incurred restructuring and acquisition-related charges of $40 million and $195 million, respectively. For the three and nine months ended September 30, 2012, we incurred restructuring and acquisition-related charges of $27 million and $81 million, respectively. For the three and nine months ended September 30, 2013, EMC incurred $30 million and $116 million, respectively, of restructuring charges, primarily related to our current year restructuring programs and $4 million and $8 million, respectively, of charges in connection with acquisitions for financial advisory, legal and accounting services. For the three and nine months ended September 30, 2013, VMware incurred $1 million and $54 million, respectively, of restructuring charges related to workforce reductions as part of its current year restructuring program and $1 million and $3 million, respectively, of charges in connection with acquisitions for financial advisory, legal and accounting services. In addition, VMware incurred $4 million and $14 million of impairment charges related to its business realignment for the three and nine months ended September 30, 2013, respectively. For the three and nine months ended September 30, 2012, we incurred $22 million and $71 million, respectively, of restructuring charges, primarily related to our 2012 restructuring programs and $5 million and $10 million, respectively, of costs in connection with acquisitions for financial advisory, legal and accounting services.

In the first and third quarters of 2013, EMC implemented restructuring programs to create further operational efficiencies which will result in workforce reductions of approximately 1,000 and 525 positions, respectively. The actions will impact 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 within a year of the start of each program.

In the first quarter of 2013, VMware approved and initiated a business realignment plan to streamline its operations. The plan included the elimination of approximately 725 positions across all major functional groups and geographies. Substantially all of the cash-related expenses incurred in connection with the business realignment plan have been paid as of September 30, 2013 and the remaining cash payments are expected to be fully paid out by 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, 279 and 292 positions were identified in the first, second and third 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 nine months ended September 30, 2013, we recognized $2 million and $14 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 nine months ended September 30, 2012, we recognized $7 million and $15 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 September 30, 2013:



2013 EMC Programs
Category	Balance as of June 30, 2013		2013 Charges		Utilization			Balance as of September 30, 2013
Workforce reductions	$	45	$	28	$	(21	)	$	52
Consolidation of excess facilities and other contractual obligations	2		1		(1		)	2
Total	$	47	$	29	$	(22	)	$	54



2013 VMware Programs
Category	Balance as of June 30, 2013		2013 Charges		Utilization			Balance as of September 30, 2013
Workforce reductions	$	2	$	1	$	(2	)	$	1
Consolidation of excess facilities and other contractual obligations	—		—		—			—
Total	$	2	$	1	$	(2	)	$	1



Other EMC Programs
Category	Balance as of June 30, 2013		Adjustments to the Provision		Utilization			Balance as of September 30, 2013
Workforce reductions	$	29	$	—	$	(6	)	$	23
Consolidation of excess facilities and other contractual obligations	27		1		(3		)	25
Total	$	56	$	1	$	(9	)	$	48

Nine Months Ended September 30, 2013:



2013 EMC Programs
Category	Balance as of December 31, 2012		2013 Charges		Utilization			Balance as of September 30, 2013
Workforce reductions	$	—	$	110	$	(58	)	$	52
Consolidation of excess facilities and other contractual obligations	—		4		(2		)	2
Total	$	—	$	114	$	(60	)	$	54



2013 VMware Programs
Category	Balance as of December 31, 2012		2013 Charges		Utilization			Balance as of September 30, 2013
Workforce reductions	$	—	$	54	$	(53	)	$	1
Consolidation of excess facilities and other contractual obligations	—		—		—			—
Total	$	—	$	54	$	(53	)	$	1



Other EMC Programs
Category	Balance as of December 31, 2012		Adjustments to the Provision			Utilization			Balance as of September 30, 2013
Workforce reductions	$	63	$	(8	)	$	(32	)	$	23
Consolidation of excess facilities and other contractual obligations	28		10			(13		)	25
Total	$	91	$	2		$	(45	)	$	48

Three Months Ended September 30, 2012:



2012 EMC Programs
Category	Balance as of June 30, 2012		2012 Charges		Utilization			Balance as of September 30, 2012
Workforce reductions	$	34	$	17	$	(11	)	$	40
Consolidation of excess facilities and other contractual obligations	3		8		(3		)	8
Total	$	37	$	25	$	(14	)	$	48



Other EMC Programs
Category	Balance as of June 30, 2012		Adjustments to the Provision			Utilization			Balance as of September 30, 2012
Workforce reductions	$	20	$	(1	)	$	(4	)	$	15
Consolidation of excess facilities and other contractual obligations	25		(2		)	(2		)	21
Total	$	45	$	(3	)	$	(6	)	$	36

Nine Months Ended September 30, 2012:



2012 EMC Programs
Category	Balance as of December 31, 2011		2012 Charges		Utilization			Balance as of September 30, 2012
Workforce reductions	$	—	$	63	$	(23	)	$	40
Consolidation of excess facilities and other contractual obligations	—		14		(6		)	8
Total	$	—	$	77	$	(29	)	$	48



Other EMC Programs
Category	Balance as of December 31, 2011		Adjustments to the Provision			Utilization			Balance as of September 30, 2012
Workforce reductions	$	50	$	(7	)	$	(28	)	$	15
Consolidation of excess facilities and other contractual obligations	30		1			(10		)	21
Total	$	80	$	(6	)	$	(38	)	$	36

In connection with VMware's business realignment plan, in the three months ended September 30, 2013, VMware sold certain assets relating to a previous acquisition, Zimbra, in exchange for cash and equity resulting in a pre-tax gain of $12 million. During the nine months ended September 30, 2013, VMware recognized cumulative pre-tax gains of $44 million relating to the disposition of certain lines of business that were no longer aligned with VMware's core business priorities, including Zimbra. The gains recognized in connection with these dispositions were recorded to other expense, net on the consolidated income statements for the three and nine months ended September 30, 2013.