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EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Amortization expense on intangibles was $204.8 million, $153.0 million and $112.8 million in 2007, 2006 and 2005, respectively. As of December 31,
2007, amortization expense on intangible assets for the next five years is expected to be as follows (table in thousands):
2008 $ 257,825
2009 205,961
2010 164,411
2011 117,135
2012 75,609
Total $ 820,941
Changes in the carrying amount of goodwill, net, on a consolidated basis and by segment for the years ended December 31, 2007 and 2006 consist of the
following (tables in thousands):
Year Ended December 31, 2007
Information
Storage
Content
Management
and Archiving
RSA
Information
Security
VMware
Virtual
Infrastructure Total
Balance, beginning of the year $2,657,320 $ 1,365,016 $1,395,768 $ 599,057 $6,017,161
Goodwill acquired 316,451 3,858 146,454 71,162 537,925
Tax deduction from exercise of stock options (162) (15,485) (3,590) — (19,237)
Finalization of purchase price allocations 10,067 (11,265) (13,184) 10,039 (4,343)
Balance, end of the year $2,983,676 $ 1,342,124 $1,525,448 $ 680,258 $6,531,506
Year Ended December 31, 2006
Information
Storage
Content
Management
and Archiving
RSA
Information
Security
VMware
Virtual
Infrastructure Total
Balance, beginning of the year $2,043,193 $ 1,317,797 $ — $ 522,517 $3,883,507
Goodwill acquired 647,499 64,484 1,423,438 76,504 2,211,925
Tax deduction from exercise of stock options (2,358) (7,905) (1,018) (489) (11,770)
Finalization of purchase price allocations (31,014) (8,188) (26,652) 525 (65,329)
Reduction in income tax valuation allowance — (1,172) — — (1,172)
Balance, end of the year $2,657,320 $ 1,365,016 $1,395,768 $ 599,057 $6,017,161
We test the goodwill balances for impairment at least annually. There was no impairment in 2007, 2006 or 2005.
D. Restructuring Charges
In 2007, 2006 and 2005, we incurred restructuring charges of $31.3 million, $162.6 million, and $84.2 million, respectively.
The 2007 charge consisted primarily of $21.5 million to increase the severance expenses associated with the 2006 restructuring program and a
$13.3 million charge for employee termination benefits associated with a 2007 rebalancing program that is underway and will be completed in early 2008.
Partially offsetting these amounts were net adjustments of $3.2 million associated with prior years' restructuring programs.
The 2006 charge consisted of $129.4 million for employee termination benefits associated with a reduction in workforce, a $29.7 million charge
associated with abandoned assets for which we will no longer derive a benefit, a $5.7 million charge associated with vacating excess facilities and a
$10.9 million charge for other contract terminations. Partially offsetting these amounts were net adjustments of $13.1 million associated with prior years'
restructuring programs.
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