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Table of Contents
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Adjustments
2003 to the
Beginning Provision Utilization Ending
Category Balance During 2003 During 2003 Balance
Workforce reduction $ 22,121 $ 24,081 $ (39,585) $ 6,617
Consolidation of excess facilities 52,647 6,134 (21,594) 37,187
Contractual and other obligations 15,260 1,300 (11,685) 4,875
Total $ 90,028 $ 31,515 $ (72,864) $ 48,679
2002 Non-Cash
Initial Utilization Ending Portion of the
Category Provision During 2002 Balance Provision
Workforce reduction $ 44,478 $ (22,357) $ 22,121 $ –
Consolidation of excess facilities 57,988 (5,341) 52,647 5,124
Asset impairments 21,487 (21,487) – 21,487
Contractual and other obligations 16,921 (1,661) 15,260 –
Total $ 140,874 $ (50,846) $ 90,028 $ 26,611
The $24.1 million addition to the provision for workforce reduction in 2003 was primarily attributable to finalizing severance packages for employees in
foreign jurisdictions. The $6.1 million addition to the provision for the consolidation of excess facilities in 2003 represents the charges for facilities being
vacated, offset by the reversal of reserves related to the reactivation of facilities that had previously been vacated.
The asset impairment charges in 2002 resulted from consolidating the locations of and modifications made to our Internet hosting business and the write-
down of assets within one of our Data General's services business which we put up for sale. The impairment charge relating to the Internet hosting business
was equal to the amount by which the assets' carrying amount exceeded their fair value, measured as the present value of their estimated discounted cash
flows. The impairment charge relating to the assets used within our Data General's services business was determined by comparing the expected sales
proceeds to the assets' carrying value. The impaired assets were classified within the information storage and management services and other businesses
segments.
The 2002 restructuring program impacted our information storage products, information storage and management services, EMC Software Group products
and services and other businesses segments.
2001 Restructuring Program
In 2001, we implemented a restructuring program to reduce our cost structure. As a result of the program, we incurred restructuring and other special
charges of $825.1 million. The restructuring program impacted our information storage products, information storage and management services and other
businesses segments. 72