EMC 2007 Annual Report Download - page 35

2005
Category
Initial
Provision
Adjustments to
the Provision Utilization Ending Balance
Workforce reductions $ 84.1 $ — $ (4.4) $ 79.8
Consolidation of excess facilities 0.4 — (0.4) —
Total $ 84.6 $ — $ (4.8) $ 79.8
The 2005 restructuring programs included two separate reductions in force, one that commenced in the first quarter of 2005 and a second that
commenced in the fourth quarter of 2005, aggregating approximately 1,060 employees. These actions impacted the Information Storage and Content
Management and Archiving segments across all major geographic regions. As of December 31, 2006, the restructuring programs had been substantially
completed.
The adjustment to the provision in 2006 was primarily attributable to a decrease in the original number of individuals identified for termination and lower
than expected severance benefits.
Prior Year Restructuring Programs
Prior to 2005, we had instituted several restructuring programs. The activity for these 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 reduction $ 1.2 $ — $ (0.3) $ 0.8
Consolidation of excess facilities 40.1 (3.1) (11.2) 25.7
Other contractual obligations 1.9 0.2 (1.2) 0.8
Total $ 43.2 $ (3.0) $ (12.8) $ 27.3
2006
Category
Beginning
Balance
Adjustments to
the Provision Utilization Ending Balance
Workforce reduction $ 7.0 $ (2.7) $ (3.2) $ 1.2
Consolidation of excess facilities 65.4 (8.5) (16.8) 40.1
Other contractual obligations 2.4 0.3 (0.7) 1.9
Total $ 74.8 $ (10.9) $ (20.8) $ 43.2
2005
Category
Beginning
Balance
Adjustments to
the Provision Utilization Ending Balance
Workforce reduction $ 19.7 $ (1.7) $ (10.9) $ 7.0
Consolidation of excess facilities 92.9 1.6 (29.2) 65.4
Other contractual obligations 2.6 (0.2) — 2.4
Total $ 115.3 $ (0.3) $ (40.1) $ 74.8
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. The prior year 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.
As we continue to refine our business model, we will reassess our cost structure and asset deployment to assess whether additional changes are
necessary. Should we determine that additional restructuring programs will benefit our business, we may incur additional charges. If customer demand for
products changes, we may be required to write down the value of assets. Additionally, changes in our business model or market conditions could cause
goodwill or other assets to be impaired.
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