EMC 2007 Annual Report Download - page 34

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2006 Restructuring Programs
The activity for the 2006 restructuring programs for 2007 and 2006 is presented below:
2007
Category
Beginning
Balance
Adjustment to
the Provision Utilization Ending Balance
Workforce reductions $ 127.8 $ 21.5 $ (66.2) $ 83.2
Consolidation of excess facilities 5.5 (0.3) (2.7) 2.6
Contractual and other obligations 4.8 — (4.8) —
Total $ 138.2 $ 21.2 $ (73.7) $ 85.7
2006
Category
Initial
Provision Utilization Ending Balance
Non-Cash
Portion of the
Provision
Workforce reductions $ 129.4 $ (1.5) $ 127.8 $ 10.7
Asset impairment 29.7 (29.7) — 29.7
Consolidation of excess facilities 5.7 (0.2) 5.5 —
Contractual and other obligations 10.9 (6.1) 4.8 —
Total $ 175.7 $ (37.5) $ 138.2 $ 40.4
The 2006 restructuring programs included a workforce reduction and covers approximately 1,350 employees worldwide. The workforce reduction's
objective is to further integrate EMC and the majority of the businesses we have acquired over the prior three years. These actions impacted the Information
Storage and Content Management and Archiving segments across all major geographic regions.
The adjustment to the provision in 2007 includes changes for finalizing severance agreements, particularly in international locations and estimated
changes in severance amounts for employees yet to be terminated. The workforce reductions include $10.7 of non-cash stock-based compensation expense.
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.
Approximately 190 employees remain to be terminated. Substantially all actions are expected to be completed by March 31, 2008. The remaining cash
portion owed for the 2006 restructuring is $76.5. The cash expenditures relating to workforce reductions are expected to be substantially paid by the end of
2008. The cash expenditures relating to consolidation of excess facilities are expected to be paid out through 2018.
2005 Restructuring Programs
The activity for the 2005 restructuring programs for the years ended December 31, 2007, 2006 and 2005 is presented below:
2007
Category
Beginning
Balance
Adjustments to
the Provision Utilization Ending Balance
Workforce reductions $ 18.0 $ — $ (17.6) $ 0.5
Consolidation of excess facilities 0.1 (0.1) — —
Total $ 18.2 $ (0.1) $ (17.6) $ 0.5
2006
Category
Beginning
Balance
Adjustments to
the Provision Utilization Ending Balance
Workforce reductions $ 79.8 $ (2.3) $ (59.4) $ 18.0
Consolidation of excess facilities — 0.1 — 0.1
Total $ 79.8 $ (2.2) $ (59.4) $ 18.2
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