Restructuring and Acquisition-Related Charges

For the three and nine months ended September 30, 2014, we incurred restructuring and acquisition-related charges of $39 million and $187 million, respectively. 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, 2014, EMC incurred $31 million and $175 million, respectively, of restructuring charges, primarily related to our current year restructuring programs, and during the three and nine months ended September 30, 2014, EMC incurred $2 million and $3 million, respectively, of charges in connection with acquisitions for financial, advisory, legal and accounting services. For the three and nine months ended September 30, 2014, VMware recognized $6 million and $4 million, respectively, of restructuring charges, primarily related to its current year restructuring program. For the nine months ended September 30, 2014, VMware incurred $5 million of charges in connection with acquisitions for financial, advisory, legal and accounting services. 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 2013 restructuring programs. For the three and nine months ended September 30, 2013, VMware incurred $1 million and $54 million, respectively, of restructuring charges, primarily related to its 2013 restructuring program. For the three and nine months ended September 30, 2013, EMC incurred $4 million and $8 million, respectively, and VMware incurred $1 million and $3 million, respectively, of costs for financial, advisory, legal and accounting services in connection with acquisitions. Additionally, during the three and nine months ended September 30, 2013, VMware incurred $4 million and $14 million, respectively, of impairment charges related to its business realignment.

EMC implemented restructuring programs to create further operational efficiencies which will result in workforce reductions of approximately 1,326 positions in the first quarter, 210 positions in the second quarter and 241 positions in the third quarter of 2014. The actions will impact positions around the globe covering our Information Storage, RSA Information Security, Information Intelligence Group and Pivotal segments. All of these actions are expected to be completed within a year of the start of the program.

During the three months ended September 30, 2014, VMware initiated a business realignment plan to streamline its operations which will result in the elimination of approximately 90 positions across all major functional groups and geographies. All of these actions are expected to be completed within a year of the start of the program.

During 2013, EMC implemented a restructuring program to create further operational efficiencies which resulted in a workforce reduction of 1,917 positions, of which 1,525 positions were identified in the first and third quarters of 2013. The actions impacted positions around the globe covering our Information Storage, RSA Information Security and Information Intelligence Group segments. All of these actions were completed within a year of the start of the program.

During 2013, VMware approved and initiated a business realignment plan to streamline its operations. The plan included the elimination of approximately 710 positions across all major functional groups and geographies. All of these actions were completed within a year of the start of the program.

For the three and nine months ended September 30, 2014, we recognized $2 million and $10 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, 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. These costs are expected to be utilized by the end of 2016.

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

Three Months Ended September 30, 2014:



2014 EMC Programs
Category	Balance as of June 30, 2014		2014 Charges		Utilization			Balance as of September 30, 2014
Workforce reductions	$	98	$	30	$	(33	)	$	95
Consolidation of excess facilities and other contractual obligations	3		2		(2		)	3
Total	$	101	$	32	$	(35	)	$	98



Other EMC Programs
Category	Balance as of June 30, 2014		Adjustments to the Provision			Utilization			Balance as of September 30, 2014
Workforce reductions	$	17	$	(1	)	$	(6	)	$	10
Consolidation of excess facilities and other contractual obligations	18		—			(1		)	17
Total	$	35	$	(1	)	$	(7	)	$	27

Nine Months Ended September 30, 2014:



2014 EMC Programs
Category	Balance as of December 31, 2013		2014 Charges		Utilization			Balance as of September 30, 2014
Workforce reductions	$	—	$	179	$	(84	)	$	95
Consolidation of excess facilities and other contractual obligations	—		7		(4		)	3
Total	$	—	$	186	$	(88	)	$	98



Other EMC Programs
Category	Balance as of December 31, 2013		Adjustments to the Provision			Utilization			Balance as of September 30, 2014
Workforce reductions	$	66	$	(14	)	$	(42	)	$	10
Consolidation of excess facilities and other contractual obligations	24		3			(10		)	17
Total	$	90	$	(11	)	$	(52	)	$	27

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		2013 Charges		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		2013 Charges			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