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Table of Contents VMware, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Goodwill
The following table summarizes the changes in the carrying amount of goodwill during the years ended December 31, 2014 and 2013 (table
in millions):
The deferred tax adjustments relate to the finalization of the fair value estimates for certain acquisitions.
C. Realignment Charges
During the second half of 2014 , VMware eliminated approximately 180 positions across all major functional groups and geographies to
streamline its operations. As a result of these actions, $16 million of realignment charges was recognized during the year ended December 31,
2014 on the consolidated statements of income, which consisted of workforce reduction charges. As of December 31, 2014 , $8 million
remained
in accrued expenses and other on the consolidated balance sheets and is expected to be paid during 2015 .
During January 2013, VMware approved and initiated a business realignment plan to streamline its operations. The realignment plan
included the elimination of approximately 710 positions and personnel across all major functional groups and geographies. During the year
ended December 31, 2013 , $68 million of realignment charges were recorded on the consolidated statements of income, which consisted of
workforce reduction charges and asset impairments. As of December 31, 2013 , the plan had been completed.
The following table summarizes the activity for the accrued realignment charges for the years ended December 31, 2014 and 2013 (table in
millions):
Other Related Activities
In connection with VMware’s 2013 business realignment plan, VMware recognized a cumulative pre-tax gain of $44 million during
the year ended December 31, 2013 relating to the disposition of certain business activities that were no
77
December 31,
2014
2013
Balance, beginning of the year
$
3,027
$
2,848
Increase in goodwill related to business combinations
941
233
Contribution to Pivotal (see Note N) —
(
28
)
Reduction related to disposition of certain business activities —
(
4
)
Deferred tax adjustments to purchase price allocations on acquisitions
(4
)
(20
)
Other adjustments to purchase price allocations on acquisitions —
(
2
)
Balance, end of the year
$
3,964
$
3,027
For the Year Ended December 31, 2014
Balance as of
January 1, 2014
Realignment
Charges
Utilization
Balance as of
December 31, 2014
Non-Cash
Portion
of Utilization
Workforce reductions
$
—
$
18
$
(10
)
$
8
$
—
Asset impairments, exit of facilities and other
exit costs
3
(2
)
(1
)
—
—
Total
$
3
$
16
$
(11
)
$
8
$
—
For the Year Ended December 31, 2013
Balance as of
January 1, 2013
Realignment
Charges
Utilization
Balance as of
December 31, 2013
Non-Cash
Portion
of Utilization
Workforce reductions
$
—
$
54
$
(54
)
$
—
$
(
6
)
Asset impairments, exit of facilities and
other exit costs
—
14
(11
)
3
(9
)
Total
$
—
$
68
$
(65
)
$
3
$
(15
)