Restructuring and Acquisition-Related Charges

In 2015, 2014 and 2013, we incurred restructuring and acquisition-related charges of $450 million, $239 million and $224 million, respectively. In 2015, EMC incurred $420 million of restructuring charges, primarily related to our current year restructuring programs, and $4 million of charges in connection with acquisitions for financial, advisory, legal and accounting services. In 2014, EMC incurred $210 million of restructuring charges, primarily related to our 2014 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 program, and $8 million of charges in connection with acquisitions for financial, advisory, legal and accounting services.

In 2015, VMware incurred $23 million of restructuring charges related to workforce reductions as part of its current year restructuring program and $3 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.

During 2015, we initiated a cost reduction and business transformation program to better align our expenses and improve the operations of our federation of businesses. In the fourth quarter of 2015, as part of the previously announced program to reduce our existing cost base by $850 million annually, and consistent with prior restructuring actions to keep pace with changes in the industry, we approved a restructuring plan which consists of a reduction in force which will be substantially completed by the end of the first quarter of 2016 and fully completed by the end of 2016. The total charge resulting from this plan is expected to be approximately $250 million, with total cash payments associated with the plan expected to be $220 million. Charges related to this restructuring action are included in the 2015 charges. During 2015, 2014 and 2013, EMC implemented restructuring programs to create further operational efficiencies which will result or have resulted in workforce reductions of approximately 4,600, 2,100 and 1,900 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 2015 and 2014, VMware eliminated approximately 380 and 180 positions, respectively, 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 2015, 2014 and 2013, we recognized $18 million in each year, 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 2017. The remaining cash portion owed for these programs in 2016 is approximately $4 million, plus an additional $7 million over the period from 2017 and beyond.

On January 22, 2016, VMware approved, subject to compliance with all applicable local legal obligations, a plan to streamline its operations, with plans to reinvest the associated savings in field, technical and support resources associated with growth products. The total charge resulting from this plan is estimated to be between $55 million and $65 million, consisting principally of employee-related charges to be paid in cash for the elimination of approximately 800 positions and personnel which are expected to be completed by June 30, 2016.

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

Year Ended, December 31, 2015:



2015 EMC Programs
Category	Balance as of December 31, 2014		2015 Charges		Utilization			Balance as of December 31, 2015
Workforce reductions	$	—	$	409	$	(104	)	$	305
Consolidation of excess facilities and other contractual obligations	—		26		(9		)	17
Total	$	—	$	435	$	(113	)	$	322



Other EMC Programs
Category	Balance as of December 31, 2014		Adjustments to the Provision			Utilization			Balance as of December 31, 2015
Workforce reductions	$	102	$	(7	)	$	(78	)	$	17
Consolidation of excess facilities and other contractual obligations	19		(8		)	(8		)	3
Total	$	121	$	(15	)	$	(86	)	$	20



VMware Programs
Category	Balance as of December 31, 2014		2015 Charges		Utilization			Balance as of December 31, 2015
Workforce reductions	$	8	$	23	$	(28	)	$	3
Consolidation of excess facilities and other contractual obligations	—		—		—			—
Total	$	8	$	23	$	(28	)	$	3

Year Ended, December 31, 2014:



EMC Programs
Category	Balance as of December 31, 2013		2014 Charges		Utilization			Balance as of December 31, 2014
Workforce reductions	$	66	$	192	$	(156	)	$	102
Consolidation of excess facilities and other contractual obligations	24		18		(23		)	19
Total	$	90	$	210	$	(179	)	$	121



VMware Programs
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

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	)	$	—

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 income (expense), net on the consolidated income statements for the year ended December 31, 2013.