EMC 2008 Annual Report Download - page 111

Table of Contents
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
2006
Category Beginning
Balance Adjustments to the Provision Utilization Ending Balance
Workforce reduction $ 86,821 $ (5,015)$(62,587) $ 19,219
Consolidation of excess facilities 65,414 (8,350) (16,831) 40,233
Other contractual obligations 2,378 278 (740) 1,916
Total $154,613 $ (13,087)$(80,158) $ 61,368
The reductions to the provisions in 2007 and 2006 for excess facilities were a result of lower than expected costs associated with vacating leased
facilities. These restructuring programs impacted the Information Storage and Content Management and Archiving segments. The remaining liability for the
consolidation of excess facilities is expected to be paid through 2015.
Q. Related Party Transactions
In 2008, 2007 and 2006, we leased certain real estate from a company owned by a member of our Board of Directors and such Director's siblings, for
which payments aggregated approximately $4.1 million, $3.7 million and $3.8 million, respectively. Such lease was initially assumed by us as a result of our
acquisition of Data General in 1999, and renewed in 2003 for a ten-year term.
In 2008 and 2007, we paid approximately $33,000 and $10,000, respectively, for renewal of software maintenance and licenses to a third party, and
VMware amended an agreement with such third party for the licensing, implementation and maintenance of software. The approximate value of the amended
agreement with VMware is $880,000, of which approximately $480,000 was invoiced in 2008 and approximately $342,000 was invoiced in 2007. In 2008 and
2007, this entity paid us approximately $1,500 and $3,000, respectively, for software maintenance services. A member of our Board of Directors is managing
partner and general partner in a limited partnership which is a stockholder of such company.
In 2006, we purchased hardware, software and services from a company for approximately $152,000. A member of our Board of Directors is managing
partner and general partner in a limited partnership which is a stockholder of such company.
In February 2006, we acquired all of the outstanding shares of Authentica, Inc. A member of our Board of Directors is a general partner in a limited
partnership that was a stockholder of Authentica. Of the total cash paid to Authentica's stockholders of approximately $16 million, proceeds to the limited
partnership as a result of this acquisition were approximately $2.7 million. Such director did not participate in any Board or committee approval of this
acquisition, and EMC believes that the terms of the transaction were negotiated at arms' length.
In September 2006, we acquired all of the outstanding shares of Network Intelligence. A member of our Board of Directors is a managing partner and
general partner in a limited partnership that was a stockholder in Network Intelligence. Of the total cash paid to Network Intelligence's stockholders of
approximately $170 million, proceeds to the limited partnership as a result of the acquisition were approximately $24.4 million. Such director did not
participate in any Board or committee approval of this acquisition, and EMC believes that the terms of the transaction were negotiated at arms' length.
In accordance with its written policy and procedures relating to related person transactions, EMC's Audit Committee has approved each of the above
transactions occurring since the policy's adoption.
EMC is a large global organization which engages in thousands of purchase, sales and other transactions annually. We enter into purchase and sales
transactions with other publicly- and privately-held companies, universities, hospitals and not-for-profit organizations with which members of our Board of
Directors or executive officers are affiliated. We enter into these arrangements in the ordinary course of our business.
105