Restructuring and Acquisition-Related Charges

In 2014, 2013 and 2012, we incurred restructuring and acquisition-related charges of $239 million, $224 million and $110 million, respectively. In 2014, EMC incurred $210 million of restructuring charges, primarily related to our current year restructuring programs, and $6 million of charges in connection with acquisitions for financial, advisory, legal and accounting services. In 2013, EMC incurred $139 million of restructuring charges, primarily related to our 2013 restructuring programs, and $8 million of charges in connection with acquisitions for financial, advisory, legal and accounting services. In 2012, EMC incurred $101 million of restructuring charges, primarily related to our 2012 restructuring program, and $9 million of charges in connection with acquisitions for financial, advisory, legal and accounting services. In 2014, VMware incurred $18 million of restructuring charges related to workforce reductions as part of its current year restructuring program and $7 million of charges in connection with acquisitions for financial, advisory, legal and accounting services. In 2013, VMware incurred $54 million of restructuring charges related to workforce reductions as part of its 2013 restructuring program and $5 million of charges in connection with acquisitions for financial, advisory, legal and accounting services. In addition, VMware incurred a benefit of $2 million and a charge of $18 million primarily related to impairment charges related to its business realignments in 2014 and 2013, respectively. VMware had no restructuring charges in 2012.

During 2014, 2013 and 2012, EMC implemented restructuring programs to re-balance the business and streamline its operations which will result or have resulted in workforce reductions of approximately 2,100, 1,900 and 1,100 positions, respectively. The actions impact positions around the globe covering our Information Storage, RSA Information Security, Enterprise Content Division and Pivotal segments. All of these actions are expected to be completed or were completed within a year of the start of each program.

During 2014, VMware eliminated approximately 180 positions across all major functional groups and geographies to streamline its operations. 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 are expected to be completed or were completed within a year of the program.

During 2014, 2013 and 2012, we recognized $18 million, $18 million and $21 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 2016. The remaining cash portion owed for these programs in 2015 is approximately $5 million, plus an additional $2 million over the period from 2016 and beyond.

On January 28, 2015, EMC management approved a restructuring plan. The plan consists of a reduction in force which will be substantially completed by the end of the first quarter of 2015 and fully completed by the end of 2015. The total charge resulting from this plan is expected to be approximately $130 million to $150 million, with total cash payments associated with the plan expected to be in the range of $120 million to $140 million.

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

Year Ended, December 31, 2014:



2014 EMC Program
Category	Balance as of December 31, 2013		2014 Charges		Utilization			Balance as of December 31, 2014
Workforce reductions	$	—	$	212	$	(115	)	$	97
Consolidation of excess facilities and other contractual obligations	—		18		(12		)	6
Total	$	—	$	230	$	(127	)	$	103



2014 VMware Program
Category	Balance as of December 31, 2013		2014 Charges		Utilization			Balance as of December 31, 2014
Workforce reductions	$	—	$	18	$	(10	)	$	8
Consolidation of excess facilities and other contractual obligations	—		—		—			—
Total	$	—	$	18	$	(10	)	$	8



Other EMC Programs
Category	Balance as of December 31, 2013		Adjustments to the Provision			Utilization			Balance as of December 31, 2014
Workforce reductions	$	66	$	(20	)	$	(41	)	$	5
Consolidation of excess facilities and other contractual obligations	24		—			(11		)	13
Total	$	90	$	(20	)	$	(52	)	$	18

Year Ended, December 31, 2013:



EMC Programs
Category	Balance as of December 31, 2012		2013 Charges		Utilization			Balance as of December 31, 2013
Workforce reductions	$	63	$	121	$	(118	)	$	66
Consolidation of excess facilities and other contractual obligations	28		18		(22		)	24
Total	$	91	$	139	$	(140	)	$	90



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

Year Ended, December 31, 2012:



EMC Programs
Category	Balance as of December 31, 2011		2012 Charges		Utilization			Balance as of December 31, 2012
Workforce reductions	$	50	$	80	$	(67	)	$	63
Consolidation of excess facilities and other contractual obligations	30		21		(23		)	28
Total	$	80	$	101	$	(90	)	$	91

During the year ended December 31, 2013, in connection with VMware’s business realignment plan, 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. The gains recognized in connection with this disposition was recorded to other expense, net on the consolidated income statements for the year ended December 31, 2013.