EMC 2008 Annual Report Download - page 33

Table of Contents
The total charge resulting from these actions is expected to be between $362.0 and $387.0, with $247.9 recognized in 2008, $100.0 to $125.0 to be
recognized in 2009 and 2010 and the remainder to be recognized through 2015. Total cash expenditures associated with the plan are expected to be in the
range of $310.7 to $335.7.
The 2008 charge consisted of the aforementioned fourth quarter restructuring program which aggregated $247.9, a third quarter charge of $8.6 and a net
reduction of $6.2 relating to restructuring programs from prior years. For purposes of presentation, $244.7 of the 2008 charge is presented as a restructuring
charge, $1.3 is presented as a reduction of SG&A and $6.9, related to the impairment of strategic investments, is presented within other expense, net on the
consolidated income statement.
The fourth quarter 2008 charge consisted of $195.5 for employee termination benefits associated with a reduction in workforce, a $28.0 charge for
impaired long-lived assets, a $21.8 charge associated with abandoned assets for which we will no longer derive a benefit and a $2.6 charge for contract
terminations. These actions impacted substantially all of our functional organizations within our Information Storage, Content Management and Archiving
and RSA Information Security segments and affected employees in each of our major geographical areas. As of December 31, 2008, we had eliminated
approximately 500 of the 2,400 positions. The asset impairment charge of $28.0 consists of $21.1 of capitalized technology costs for which the forecasted
cash flows from the assets are less than the assets' net book value. The impairment charge was equal to the amount by which the assets' carrying amount
exceeded its fair value, measured as the present value of their estimated discounted cash flows. The impairment charge also included a $6.9 charge for
strategic investments for which the decline in their fair market value below their book value was considered other than temporary.
The third quarter 2008 charge consisted of $5.5 for employee termination benefits associated with a reduction in force of approximately 75 employees
and $3.1 for the consolidation of excess facilities and other items within our Information Storage, Content Management and Archiving and RSA Information
Security segments. As of December 31, 2008, all of these actions had been completed.
The 2007 charge consisted primarily of a $21.5 charge to increase the severance expenses associated with the 2006 restructuring program and a $13.3
charge for employee termination benefits associated with a 2007 rebalancing program impacting approximately 450 positions. As of December 31, 2008, all
of these actions had been completed. These actions impacted our Information Storage, Content Management and Archiving and RSA Information Security
segments and affected employees in each of our major geographical areas. Partially offsetting these amounts were net adjustments of $3.2 associated with
restructuring programs prior to 2006.
The 2006 charge consisted of a $129.4 charge for employee termination benefits associated with a reduction in workforce, a $29.7 charge associated with
abandoned assets for which we will no longer derive a benefit, a $10.9 charge for contract terminations and a $5.7 charge associated with vacating excess
facilities. Partially offsetting these amounts were net adjustments of $13.1 associated with prior years' restructuring programs. The 2006 charge for employee
termination benefits covered approximately 1,350 employees worldwide. The workforce reduction's objective was to further integrate EMC and the majority
of the businesses we have acquired over the prior three years. These actions impacted substantially all of our functional organizations and affected employees
in each of our major geographical areas. As of December 31, 2008, substantially all of these actions had been completed. The asset impairment charge of
$29.7 consisted primarily of internal infrastructure projects that management decided to no longer pursue. The impairment charge was equal to the amount by
which the assets' carrying amount exceeded its fair value, measured as the present value of their estimated discounted cash flows. The 2006 charges impacted
the Information Storage and Content Management and Archiving segments.
The activity for each charge is explained in the following sections.
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