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Item 1. Financial Statements

2024-06-11 compared with 2023-12-08 · 308 added, 514 removed, 927 unchanged (47% of the section changed)

ITEM 1 — FINANCIAL STATEMENTS (UNAUDITED)

Condensed Consolidated Statements of Financial Position as of November 3, 2023 and February 3, 2023

Condensed Consolidated Statements of Income for the three and nine months ended November 3 , 2023 and October 28 , 2022

Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended November 3 , 2023 and October 28 , 2022

Condensed Consolidated Statements of Cash Flows for the nine months ended November 3 , 2023 and October 28 , 2022

Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the three and nine months ended November 3 , 2023 and October 28 , 2022

Condensed Consolidated Statements of Financial Position as of May 3, 202 4 and February 2, 2024

Condensed Consolidated Statements of Income for the three months ended May 3, 2024 and May 5, 2023

Condensed Consolidated Statements of Comprehensive Income for the three months ended May 3, 2024 and May 5, 2023

Condensed Consolidated Statements of Cash Flows for the three months ended May 3, 2024 and May 5, 2023

Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the three months ended May 3, 2 024 and May 5, 2023

Notes to the Condensed Consolidated Financial Statements

20 unchanged sentences

(in millions;

November 3, 2023 February 3, 2023

May 3, 2024 February 2, 2024

Current assets:

1 unchanged sentence

Accounts receivable, net of allowance of $ 66 and $ 71

Due from related party, net 386 378

Short-term financing receivables, net of allowance of $ 86 and $ 79 (Note 4)

7 unchanged sentences

Intangible assets, net 5,538 5,701

Due from related party, net 239 440

Other non-current assets 6,914 7,116

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Accounts payable 20,586 19,389

Due to related party 1,246 2,067

Accrued and other 6,016 6,805

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(in millions, except per share amounts;

Three Months Ended Nine Months Ended

November 3, 2023 October 28, 2022 November 3, 2023 October 28, 2022

Three Months Ended

May 3, 2024 May 5, 2023

Products $ 16,127 $ 15,036

13 unchanged sentences

Income before income taxes 547 705

Income tax expense 176 213 562 486

Income tax expense (benefit) ( 408 ) 127

Net income 955 578

1 unchanged sentence

Net income attributable to Dell Technologies Inc.

$ 1,006 $ 245 $ 2,051 $ 1,828

Earnings per share attributable to Dell Technologies Inc.

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(in millions;

Three Months Ended Nine Months Ended

November 3, 2023 October 28, 2022 November 3, 2023 October 28, 2022

Three Months Ended

May 3, 2024 May 5, 2023

Net income $ 955 $ 578

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Pension and other postretirement plans:

Recognition of actuarial net gains (losses) from pension and other postretirement plans 2 ( 2 ) 3 11

Reclassification adjustments for net losses from pension and other postretirement plans — 1 — 1

Net change in actuarial net gains (losses) from pension and other postretirement plans 2 ( 1 ) 3 12

Total other comprehensive income (loss), net of tax expense (benefit) of $ 6 and $ 6 , respectively, and $ 18 and $ 14 , respectively

( 66 ) ( 215 ) 178 ( 490 )

Recognition of actuarial net gains from pension and other postretirement plans 2 1

Reclassification adjustments for net gains from pension and other postretirement plans ( 1 ) —

Net change in actuarial net gains from pension and other postretirement plans 1 1

Total other comprehensive income (loss), net of tax expense of $ 7 and $ 5 , respectively

Comprehensive income, net of tax 950 711

Net loss attributable to non-controlling interests ( 5 ) ( 5 )

Other comprehensive loss attributable to non-controlling interests — — — ( 1 )

Comprehensive income attributable to Dell Technologies Inc.

$ 940 $ 30 $ 2,229 $ 1,339

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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(in millions;

Nine Months Ended

November 3, 2023 October 28, 2022

Three Months Ended

May 3, 2024 May 5, 2023

Cash flows from operating activities:

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Other, net 224 308

Changes in assets and liabilities, net of effects from acquisitions and dispositions:

Changes in assets and liabilities:

Accounts receivable 683 3,000

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Capital expenditures and capitalized software development costs ( 596 ) ( 701 )

Acquisition of businesses and assets, net ( 127 ) —

Change in cash from investing activities ( 456 ) ( 684 )

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Cash, cash equivalents, and restricted cash at beginning of the period 7,507 8,894

Cash, cash equivalents, and restricted cash at the end of the period $ 8,448 $ 5,224

Cash, cash equivalents, and restricted cash at end of the period $ 5,962 $ 7,927

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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continued on next page;

Common Stock and Capital in Excess of Par Value Treasury Stock

Three Months Ended November 3, 2023 Issued Shares Amount Shares Amount Accumulated Deficit Accumulated Other Comprehensive Income/(Loss) Dell Technologies

Stockholders’ Equity (Deficit) Non-Controlling Interests Total Stockholders’ Equity (Deficit)

Balances as of August 4, 2023 817 $ 8,554 93 $ ( 4,320 ) $ ( 6,249 ) $ ( 757 ) $ ( 2,772 ) $ 95 $ ( 2,677 )

Net income — — — — 1,006 — 1,006 ( 2 ) 1,004

Dividends and dividend equivalents declared

($ 0.37 per common share)

— — — — ( 276 ) — ( 276 ) — ( 276 )

Foreign currency translation adjustments — — — — — ( 155 ) ( 155 ) — ( 155 )

Cash flow hedges, net change — — — — — 87 87 — 87

Pension and other post-retirement — — — — — 2 2 — 2

Issuance of common stock, net of shares repurchased for employee tax withholding 2 ( 36 ) — — — — ( 36 ) — ( 36 )

Stock-based compensation expense — 217 — — — — 217 10 227

Treasury stock repurchases — — 11 ( 744 ) — — ( 744 ) — ( 744 )

Impact from equity transactions of non-controlling interests — 7 — — — — 7 ( 9 ) ( 2 )

Balances as of November 3, 2023 819 $ 8,742 104 $ ( 5,064 ) $ ( 5,519 ) $ ( 823 ) $ ( 2,664 ) $ 94 $ ( 2,570 )

Common Stock and Capital in Excess of Par Value Treasury Stock

Nine Months Ended November 3, 2023 Issued Shares Amount Shares Amount Accumulated Deficit Accumulated Other Comprehensive Income/(Loss) Dell Technologies

Common Stock and Capital in Excess of

Par Value Treasury Stock

Issued Shares Amount Shares Amount Accumulated Deficit Accumulated Other Comprehensive Income/(Loss) Dell Technologies

Stockholders’ Equity (Deficit) Non-Controlling Interests Total Stockholders’ Equity (Deficit)

Balances as of February 3, 2023 798 $ 8,424 82 $ ( 3,813 ) $ ( 6,732 ) $ ( 1,001 ) $ ( 3,122 ) $ 97 $ ( 3,025 )

Net income — — — — 2,051 — 2,051 ( 14 ) 2,037

Net income (loss) — — — — 583 — 583 ( 5 ) 578

Dividends and dividend equivalents declared ($ 0.37 per common share)

7 unchanged sentences

Impact from equity transactions of non-controlling interests — ( 4 ) — — — — ( 4 ) — ( 4 )

Balances as of November 3, 2023 819 $ 8,742 104 $ ( 5,064 ) $ ( 5,519 ) $ ( 823 ) $ ( 2,664 ) $ 94 $ ( 2,570 )

Balances as of May 5, 2023 817 $ 8,339 88 $ ( 4,064 ) $ ( 6,430 ) $ ( 868 ) $ ( 3,023 ) $ 99 $ ( 2,924 )

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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in millions, except per share amounts;

Common Stock and Capital in Excess of Par Value Treasury Stock

Three Months Ended October 28, 2022 Issued Shares Amount Shares Amount Accumulated Deficit Accumulated Other Comprehensive Income/(Loss) Dell Technologies

Stockholders’ Equity (Deficit) Non-Controlling Interests Total Stockholders’ Equity (Deficit)

Balances as of July 29, 2022 796 $ 8,005 62 $ ( 3,054 ) $ ( 7,106 ) $ ( 705 ) $ ( 2,860 ) $ 105 $ ( 2,755 )

Net income — — — — 245 — 245 ( 4 ) 241

Dividends and dividend equivalents declared ($ 0.33 per common share)

— — — — ( 241 ) — ( 241 ) — ( 241 )

Foreign currency translation adjustments — — — — — ( 196 ) ( 196 ) — ( 196 )

Cash flow hedges, net change — — — — — ( 18 ) ( 18 ) — ( 18 )

Pension and other post-retirement — — — — — ( 1 ) ( 1 ) — ( 1 )

Issuance of common stock, net of shares repurchased for employee tax withholding 1 ( 22 ) — — — — ( 22 ) — ( 22 )

Stock-based compensation expense — 226 — — — — 226 9 235

Treasury stock repurchases — — 17 ( 609 ) — — ( 609 ) — ( 609 )

Impact from equity transactions of non-controlling interests — 7 — — — — 7 ( 9 ) ( 2 )

Balances as of October 28, 2022 797 $ 8,216 79 $ ( 3,663 ) $ ( 7,102 ) $ ( 920 ) $ ( 3,469 ) $ 101 $ ( 3,368 )

Common Stock and Capital in Excess of Par Value Treasury Stock

Nine Months Ended October 28, 2022 Issued Shares Amount Shares Amount Accumulated Deficit Accumulated Other Comprehensive Income/(Loss) Dell Technologies

Common Stock and Capital in Excess of

Par Value Treasury Stock

Issued Shares Amount Shares Amount Accumulated Deficit Accumulated Other Comprehensive Income/(Loss) Dell Technologies

Stockholders’ Equity (Deficit) Non-Controlling Interests Total Stockholders’ Equity (Deficit)

Balances as of January 28, 2022 777 $ 7,898 20 $ ( 964 ) $ ( 8,188 ) $ ( 431 ) $ ( 1,685 ) $ 105 $ ( 1,580 )

Net income — — — — 1,828 — 1,828 ( 12 ) 1,816

Balances as of February 2, 2024 821 $ 8,926 116 $ ( 5,900 ) $ ( 4,630 ) $ ( 800 ) $ ( 2,404 ) $ 95 $ ( 2,309 )

Net income (loss) — — — — 960 — 960 ( 5 ) 955

Dividends and dividend equivalents declared ($ 0.445 per common share)

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Impact from equity transactions of non-controlling interests — ( 7 ) — — — — ( 7 ) 1 ( 6 )

Balances as of October 28, 2022 797 $ 8,216 79 $ ( 3,663 ) $ ( 7,102 ) $ ( 920 ) $ ( 3,469 ) $ 101 $ ( 3,368 )

Balances as of May 3, 2024 833 $ 8,606 123 $ ( 6,622 ) $ ( 4,001 ) $ ( 805 ) $ ( 2,822 ) $ 99 $ ( 2,723 )

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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Dell Technologies is a leading global end-to-end technology provider that designs, develops, manufactures, markets, sells, and supports a wide range of comprehensive and integrated solutions, products, and services.

Dell Technologies offerings include servers and networking, storage, cloud solutions, desktops, notebooks, services, software, and third-party software and peripherals.

Dell Technologies offerings include servers and networking, storage, cloud solutions, desktops, notebooks, services, software, branded peripherals, and third-party software and peripherals.

References in these Notes to the Condensed Consolidated Financial Statements to the “Company” or “Dell Technologies” mean Dell Technologies Inc.

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These Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

In the opinion of management, the accompanying Condensed Consolidated Financial Statements reflect all adjustments of a normal recurring nature considered necessary to fairly state the financial position of the Company as of November 3, 2023 and February 3, 2023, the results of its operations, corresponding comprehensive income, and changes in stockholders’ equity for the three and nine months ended November 3, 2023 and October 28, 2022, and its cash flows for the nine months ended November 3, 2023 and October 28, 2022.

In the opinion of management, the accompanying Condensed Consolidated Financial Statements reflect all adjustments of a normal recurring nature considered necessary to fairly state the financial position of the Company as of May 3, 2024 and February 2, 2024 and the results of its operations, corresponding comprehensive income, changes in stockholders’ equity, and cash flows for the three months ended May 3, 2024 and May 5, 2023.

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and the accompanying Notes.

Actual results could differ materially from those estimates.

The results of the Company’s operations, corresponding comprehensive income, and changes in stockholders’ equity for the three and nine months ended November 3, 2023 and October 28, 2022, and its cash flows for the nine months ended November 3, 2023 and October 28, 2022 are not necessarily indicative of the results to be expected for the full fiscal year or for any other fiscal period.

The results of its operations, corresponding comprehensive income, changes in stockholders’ equity, and cash flows for the three months ended May 3, 2024 and May 5, 2023 are not necessarily indicative of the results to be expected for the full fiscal year or for any other fiscal period.

The Company’s fiscal year is the 52- or 53-week period ending on the Friday nearest January 31.

The fiscal year ended February 3, 2023 (“Fiscal 2023”) was a 53-week period while the fiscal year ending February 2, 2024 (“Fiscal 2024”) will be a 52-week period.

Principles of Consolidation — These Condensed Consolidated Financial Statements include the accounts of Dell Technologies Inc.

and its wholly-owned subsidiaries, and the accounts of SecureWorks Corp.

Both the fiscal year ended February 2, 2024 (“Fiscal 2024”) and the fiscal year ending January 31, 2025 (“Fiscal 2025”) are 52-week periods.

Principles of Consolidation — These Condensed Consolidated Financial Statements include the accounts of Dell Technologies Inc., its wholly-owned subsidiaries, and the accounts of SecureWorks Corp.

(“Secureworks”), which is majority-owned by Dell Technologies.

All intercompany transactions have been eliminated.

Secureworks — As of November 3, 2023 and February 3, 2023, the Company held approximately 81.1 % and 82.6 % , respectively, of the outstanding equity interest in Secureworks.

Secureworks — As of May 3, 2024 and February 2, 2024, the Company held approximately 79.2 % and 81.0 %, respectively, of the outstanding equity interest in SecureWorks Corp.

(“Secureworks”).

The portion of the results of operations of Secureworks allocable to its other owners is shown as net loss attributable to non-controlling interests in the Condensed Consolidated Statements of Income, as an adjustment to net income attributable to Dell Technologies stockholders.

The non-controlling interests’ share of equity in Secureworks is reflected as non-controlling interests in the Condensed Consolidated Statements of Financial Position and wa s $ 94 million and $ 97 million as of November 3, 2023 and February 3, 2023, respectively.

The non-controlling interests’ share of equity in Secureworks is reflected as non-controlling interests in the Condensed Consolidated Statements of Financial Position and wa s $ 99 million and $ 95 million as of May 3, 2024 and February 2, 2024, respectively.

Variable Interest Entities — The Company consolidates Variable Interest Entities ("VIEs") where it has been determined that the Company is the primary beneficiary of the applicable entities’ operations.

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See Note 4 of the Notes to the Condensed Consolidated Financial Statements for more information regarding consolidated VIEs.

Other Events — On October 4, 2023, the Company established a new consumer revolving financing program with Comenity Capital Bank, a subsidiary of Bread Financial Holdings, Inc.

(“Bread”), under which transactions are originated, owned, serviced, and collected by Bread.

Under the agreement, the Company also sold its U.S.

consumer revolving customer receivables portfolio for total cash consideration of approximately $ 390 million resulting in an immaterial gain recognized within the Condensed Consolidated Statements of Income.

The Company has no continuing involvement with these receivables, which are serviced by Bread.

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Other Events — On July 12, 2023, the Company entered into a definitive agreement with Comenity Capital Bank, a subsidiary of Bread Financial Holdings, Inc.

(“Bread”), to establish a new consumer revolving financing program, operated as the “Dell Pay Credit” program, under which transactions are originated, owned, serviced, and collected by Bread.

Under the agreement, the Company also agreed to sell its U.S.

consumer revolving customer receivables portfolio.

On October 4, 2023, the parties closed the sale for total cash consideration of approximately $ 390 million and the Company recognized an immaterial gain within the Condensed Consolidated Statements of Income.

Upon completion of the sale, the Company derecognized transferred receivables, net of $ 380 million from the Condensed Consolidated Statements of Financial Position.

The Company has no continuing involvement with these receivables, which are serviced by Bread.

See Note 4 of the Notes to the Condensed Consolidated Financial Statements for more information.

Recently Issued Accounting Pronouncements

Segment Reporting — In November 2023, the Financial Accounting Standards Board (“FASB”) issued guidance to improve disclosures about a public entity’s reportable segments by requiring disclosure of additional information about a reportable segment’s expenses on an annual and interim basis.

Public entities must adopt the new guidance for fiscal years beginning after December 15, 2023, with early adoption permitted.

Upon adoption, the guidance is required to be applied retrospectively to all prior periods presented in the financial statements.

Adoption of this new guidance will result in increased disclosures in the Notes to the Consolidated Financial Statements.

Income Taxes — In December 2023, the FASB issued guidance which requires companies to provide disaggregated income tax disclosures within the income tax rate reconciliation and income taxes paid.

Public entities must adopt the new guidance for fiscal years beginning after December 15, 2024, with early adoption permitted.

Upon adoption, the guidance can be applied prospectively or retrospectively.

Adoption of this new guidance will result in increased disclosures in the Notes to the Consolidated Financial Statements.

DELL TECHNOLOGIES INC.

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The following table presents the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of the dates indicated:

November 3, 2023 February 3, 2023

May 3, 2024 February 2, 2024

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

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The Company reviews security pricing and assesses money market fund liquidity on a quarterly basis.

As of November 3, 2023, the Company’s portfolio had no material exposure to money market funds with a fluctuating net asset value.

As of May 3, 2024, the Company’s portfolio had no material exposure to money market funds with a fluctuating net asset value.

Marketable Equity and Other Securities — The Company’s investments in equity and other securities that are measured at fair value on a recurring basis consist of strategic investments in publicly-traded companies.

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Deferred Compensation Plans — The Company offers deferred compensation plans for eligible employees, which allow participants to defer a portion of their compensation.

Assets were the same as liabilities associated with the plans at approximately $ 194 million and $ 179 million as of November 3, 2023 and February 3, 2023, respectively, and are included in other assets and other liabilities on the Condensed Consolidated Statements of Financial Position.

Assets were the same as liabilities associated with the plans at approximately $ 227 million and $ 214 million as of May 3, 2024 and February 2, 2024, respectively, and are included in other assets and other liabilities on the Condensed Consolidated Statements of Financial Position.

The net impact to the Condensed Consolidated Statements of Income is not material since changes in the fair value of the assets substantially offset changes in the fair value of the liabilities.

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See Note 8 of the Notes to the Condensed Consolidated Financial Statements for additional information about goodwill and intangible assets.

As of November 3, 2023 and February 3, 2023, the Company held strategic investments in non-marketable equity and other securities of $ 1.2 billion and $ 1.3 billion, respectively.

As of both May 3, 2024 and February 2, 2024, the Company held strategic investments in non-marketable equity and other securities of $ 1.3 billion.

As these investments represent early-stage companies without readily determinable fair values, they are not included in the recurring fair value table above.

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Carrying Value and Estimated Fair Value of Outstanding Debt — The following table presents the carrying value and estimated fair value of the Company’s outstanding debt as described in Note 6 of the Notes to the Condensed Consolidated Financial Statements, including the current portion, as of the dates indicated:

November 3, 2023 February 3, 2023

May 3, 2024 February 2, 2024

Carrying Value Fair Value Carrying Value Fair Value

1 unchanged sentence

Senior Notes $ 15.5 $ 15.5 $ 15.5 $ 15.8

Legacy Notes and Debentures $ 0.9 $ 0.9 $ 0.9 $ 1.0

Legacy Notes $ 0.9 $ 1.0 $ 0.9 $ 1.0

DFS Debt $ 9.0 $ 8.6 $ 9.5 $ 9.1

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The Company has strategic investments in equity and other securities as well as investments in fixed income debt securities.

All equity and other securities as well as long-term fixed income debt securities are recorded as long-term investments in the Condensed Consolidated Statements of Financial Position.

Short-term fixed income debt securities are recorded as other current assets in the Condensed Consolidated Statements of Financial Position.

As of both November 3, 2023 and February 3, 2023, total investments were $ 1.6 billion.

All equity and other securities as well as long-term fixed income debt securities are recorded as long-term investments while short-term fixed income debt securities are recorded as other current assets in the Condensed Consolidated Statements of Financial Position.

Total investments were $ 1.5 billion as of May 3, 2024 and $ 1.6 billion as of February 2, 2024.

Equity and Other Securities

6 unchanged sentences

Carrying Value of Equity and Other Securities

The following table presents the cost, cumulative unrealized gains, cumulative unrealized losses, and carrying value of the Company's strategic investments in marketable and non-marketable equity securities as of the dates indicated:

November 3, 2023 February 3, 2023

May 3, 2024 February 2, 2024

Cost Unrealized Gain Unrealized Loss Carrying Value Cost Unrealized Gain Unrealized Loss Carrying Value

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The following table presents unrealized gains and losses on marketable and non-marketable equity and other securities for the periods indicated:

Three Months Ended Nine Months Ended

November 3, 2023 October 28, 2022 November 3, 2023 October 28, 2022

Three Months Ended

May 3, 2024 May 5, 2023

(in millions)

Marketable securities:

Unrealized gain $ — $ 50 $ 1 $ 57

Unrealized loss $ ( 5 ) $ ( 23 )

Net unrealized gain (loss) — 40 ( 22 ) 28

Net unrealized loss ( 5 ) ( 23 )

Non-marketable securities:

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Net unrealized gain (loss) (a) (b) ( 30 ) 4

Net unrealized gain (loss) on equity and other securities $ 3 $ 27 $ ( 56 ) $ ( 233 )

Net unrealized loss on equity and other securities $ ( 35 ) $ ( 19 )

____________________

(a) For the three months ended November 3, 2023, net gains on non-marketable securities are due to upward adjustments for observable price changes offset by losses primarily attributable to impairments.

(b) For the nine months ended November 3, 2023 and the three and nine months ended October 28, 2022, net unrealized losses on non-marketable securities were primarily attributable to impairments.

For the three and nine months ended October 28, 2022, the impairments on equity and other securities were generally in line with extended public equity market declines.

(a) For the three months ended May 3, 2024, net unrealized losses on non-marketable securities were primarily attributable to downward adjustments for observable price changes.

(b) For the three months ended May 5, 2023, net unrealized gains on non-marketable securities were primarily attributable to upward adjustments for observable price changes.

Fixed Income Debt Securities

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The Company intends to hold the investments to maturity.

As of November 3, 2023, the Company held $ 267 million in fixed income debt securities which will mature within one year and $ 43 million in fixed income debt securities which will mature within five years.

As of May 3, 2024, the Company held $ 198 million in fixed income debt securities which will mature within one year and $ 1 million in fixed income debt securities which will mature within five years.

The following table summarizes the Company’s debt securities as of the dates indicated:

November 3, 2023 February 3, 2023

May 3, 2024 February 2, 2024

Cost Unrealized Gain Unrealized Loss Carrying Value Cost Unrealized Gain Unrealized Loss Carrying Value

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Alternative payment structures consist of various flexible consumption models, including utility, subscription, and as-a-Service models.

Financing options are offered to our customers primarily through Dell Financial Services and its affiliates (“DFS”).

Financing options are offered to the Company’s customers primarily through Dell Financial Services and its affiliates (“DFS”).

The Company also arranges financing for some of its customers in various countries where DFS does not currently operate as a captive enterprise.

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In some cases, DFS also offers financing for the purchase of third-party technology products that complement the Dell Technologies portfolio of products and services.

New financing originations were $ 1.8 billion and $ 2.3 billion for the three months ended November 3, 2023 and October 28, 2022, respectively, and $ 6.0 billion and $ 6.7 billion for the nine months ended November 3, 2023 and October 28, 2022, respectively.

New financing originations were $ 1.9 billion and $ 1.8 billion for the three months ended May 3, 2024 and May 5, 2023, respectively.

The Company’s lease and loan arrangements with customers are aggregated primarily into the following categories:

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The carrying value of these loans approximates fair value.

Revolving loans — Revolving loans offered under a private label credit financing program, referred to as Dell Business Credit (“DBC”), provide qualified customers with a revolving credit line for the purchase of products and services offered by Dell Technologies.

The DBC product is primarily offered to small and medium-sized commercial customers.

Revolving loans — Revolving loans provide qualified customers with a revolving credit line for the purchase of products and services offered by Dell Technologies.

The Company primarily offers revolving loans to small and medium-sized commercial customers.

Revolving loans in the United States bear interest at a variable annual percentage rate that is tied to the prime rate.

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Due to the short-term nature of the revolving loan portfolio, the carrying value of the portfolio approximates fair value.

Prior to the sale of the U.S.

consumer revolving customer receivables portfolio described in Note 1 of the Notes to the Condensed Consolidated Financial Statements, the Company also offered private label credit financing under the Dell Preferred Account (“DPA”) program.

The DPA product was primarily offered to individual consumer customers.

Flexible consumption models, as defined above, further enable the Company to offer its customers the option to pay over time to provide them with financial flexibility to meet their changing technological requirements.

Flexible consumption models, as defined above, further enable the Company to offer its customers the option to pay over time to provide them with financial and operational flexibility.

Such models may result in identification of embedded lease arrangements that lead to the recognition of operating or sales-type leases.

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The following table presents the components of the Company’s financing receivables segregated by portfolio segment as of the dates indicated:

November 3, 2023 February 3, 2023

May 3, 2024 February 2, 2024

Revolving Fixed-term Total Revolving Fixed-term Total

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Financing receivables, net:

Customer receivables, gross (a) (b) $ 172 $ 10,144 $ 10,316 $ 685 $ 10,293 $ 10,978

Customer receivables, gross (a) $ 163 $ 10,470 $ 10,633 $ 173 $ 10,360 $ 10,533

Allowances for losses ( 8 ) ( 187 ) ( 195 ) ( 9 ) ( 161 ) ( 170 )

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(a) Customer receivables, gross include amounts due from customers under revolving loans, fixed-term loans, fixed-term leases, and accrued interest.

(b) The decrease in revolving customer financing receivables is primarily attributable to the sale of the U.S.

consumer revolving customer receivables portfolio described in Note 1 of the Notes to the Condensed Consolidated Financial Statements.

The following table presents the changes in allowance for financing receivable losses for the periods indicated:

The following table presents the changes in allowance for financing receivables losses for the periods indicated:

Three Months Ended

November 3, 2023 October 28, 2022

Revolving Fixed-term Total Revolving Fixed-term Total

(in millions)

Allowance for financing receivable losses:

Balances at beginning of period $ 9 $ 140 $ 149 $ 91 $ 92 $ 183

Charge-offs, net of recoveries ( 4 ) ( 3 ) ( 7 ) ( 12 ) ( 1 ) ( 13 )

Provision charged to income statement 4 7 11 8 8 16

Balances at end of period $ 9 $ 144 $ 153 $ 87 $ 99 $ 186

Nine Months Ended

November 3, 2023 October 28, 2022

May 3, 2024 May 5, 2023

Revolving Fixed-term Total Revolving Fixed-term Total

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Provision charged to income statement 1 32 33 13 23 36

Other (a) ( 74 ) — ( 74 ) — — —

Balances at end of period $ 8 $ 187 $ 195 $ 84 $ 135 $ 219

____________________

(a) Other represents the derecognition of the allowance for financing receivable losses related to the sale of the U.S.

consumer revolving customer receivables portfolio described in Note 1 of the Notes to the Condensed Consolidated Financial Statements.

The Company recognizes an allowance for financing receivables losses, including both the lease receivable and unguaranteed residual, in an amount equal to the expected losses net of recoveries.

The allowance for financing receivables losses on the lease receivable is determined based on various factors, including lifetime expected losses determined using macroeconomic forecast assumptions and management judgments applicable to and through the expected life of the portfolios as well as past due receivables, receivable type, and customer risk profile.

The Company continues to monitor broader economic indicators and their potential impact on future credit loss performance.

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Company recognizes an allowance for financing receivable losses, including both the lease receivable and unguaranteed residual, in an amount equal to the expected losses net of recoveries.

The allowance for financing receivable losses on the lease receivable is determined based on various factors, including lifetime expected losses determined using macroeconomic forecast assumptions and management judgments applicable to and through the expected life of the portfolios as well as past due receivables, receivable type, and customer risk profile.

The Company continues to monitor broader economic indicators and their potential impact on future credit loss performance.

The following table presents the aging of the Company’s customer financing receivables, gross, including accrued interest, segregated by class, as of the dates indicated:

November 3, 2023 February 3, 2023

May 3, 2024 February 2, 2024

Current Past Due

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(in millions)

Revolving — DPA $ 5 $ — $ — $ 5 $ 457 $ 34 $ 17 $ 508

Revolving — DBC 146 17 4 167 154 19 4 177

Revolving $ 142 $ 17 $ 4 $ 163 $ 151 $ 17 $ 5 $ 173

Fixed-term — Consumer and Commercial 9,477 891 102 10,470 9,345 889 126 10,360

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The following tables present customer receivables, gross, including accrued interest, by credit quality indicator, segregated by class, as of the dates indicated:

November 3, 2023

Fixed-term — Consumer and Commercial

Fiscal Year of Origination

2024 2023 2022 2021 2020 Years Prior Revolving — DPA Revolving — DBC Total

2025 2024 2023 2022 2021 Years Prior Revolving Total

(in millions)

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Fiscal Year of Origination

2023 2022 2021 2020 2019 Years Prior Revolving — DPA Revolving — DBC Total

2024 2023 2022 2021 2020 Years Prior Revolving Total

(in millions)

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The categories shown in the tables above segregate customer receivables based on the relative degrees of credit risk.

Credit quality indicators for DBC revolving and fixed-term accounts are generally updated on a periodic basis.

For the DBC revolving receivables and fixed-term commercial receivables shown in the table above, an internal grading system is utilized that assigns a credit level score based on a number of considerations, including liquidity, operating performance, and industry outlook.

Credit quality indicators for revolving and fixed-term accounts are generally updated on a periodic basis.

For the revolving receivables and fixed-term commercial receivables shown in the tables above, an internal grading system is utilized that assigns a credit level score based on a number of considerations, including liquidity, operating performance, and industry outlook.

The grading criteria and classifications for the fixed-term products differ from those for the revolving products as loss experience varies between these product and customer groups.

The credit quality categories cannot be compared between the different classes as loss experience varies substantially between the classes.

Prior to the sale of the U.S.

consumer revolving customer receivables revolving portfolio described in Note 1 of the Notes to the Condensed Consolidated Financial Statements, the Company made credit decisions based on proprietary scorecards, which included the customer’s credit history, payment history, credit usage, and other credit agency-related elements.

The higher quality category included prime accounts generally comparable to U.S.

customer FICO scores of 720 or above.

The mid category represented mid-tier accounts that are comparable to U.S.

customer FICO scores from 660 to 719.

The lower category represented accounts that are comparable to U.S.

customer FICO scores below 660.

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table presents net revenue, cost of net revenue, and gross margin recognized at the commencement date of sales-type leases for the periods indicated:

Three Months Ended Nine Months Ended

November 3, 2023 October 28, 2022 November 3, 2023 October 28, 2022

The following table presents amounts included in the Condensed Consolidated Statements of Income related to sales-type lease activity for the periods indicated:

Three Months Ended

May 3, 2024 May 5, 2023

(in millions)

Net revenue — products

$ 227 $ 207 $ 766 $ 646

Cost of net revenue — products

176 164 564 532

Gross margin — products

$ 51 $ 43 $ 202 $ 114

The following table presents the future maturity of the Company’s fixed-term customer leases and associated financing payments, and reconciles the undiscounted cash flows to the customer receivables, gross recognized on the Condensed Consolidated Statement of Financial Position as of the date indicated:

November 3, 2023

(in millions)

Fiscal 2024 (remaining three months) $ 809

Fiscal 2025 (remaining nine months) $ 2,109

Fiscal 2026 2,416

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The following table presents the components of the Company’s operating lease portfolio included in property, plant, and equipment, net as of the dates indicated:

November 3, 2023 February 3, 2023

May 3, 2024 February 2, 2024

(in millions)

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The following table presents operating lease income related to lease payments and depreciation expense for the Company’s operating lease portfolio for the periods indicated:

Three Months Ended Nine Months Ended

November 3, 2023 October 28, 2022 November 3, 2023 October 28, 2022

Three Months Ended

May 3, 2024 May 5, 2023

(in millions)

2 unchanged sentences

The following table presents the future payments to be received by the Company in operating lease contracts as of the date indicated:

November 3, 2023

(in millions)

Fiscal 2024 (remaining three months) $ 330

Fiscal 2025 (remaining nine months) $ 852

Fiscal 2026 819

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The following table presents DFS debt as of the dates indicated and excludes the allocated portion of the Company’s other borrowings, which represents the additional amount considered to fund the DFS business:

November 3, 2023 February 3, 2023

May 3, 2024 February 2, 2024

DFS debt (in millions)

Asset-based financing and securitization facilities $ 2,443 $ 3,987

Asset-based financing facility $ 2,331 $ 2,730

Fixed-term securitization offerings 3,305 3,157

Total DFS U.S.

debt 6,189 6,742

debt, principal amount 5,662 5,915

DFS international debt:

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Dell Bank senior unsecured eurobonds 1,609 1,631

Total DFS international debt 3,431 3,548

Total DFS debt $ 9,620 $ 10,290

Total DFS international debt, principal amount 3,376 3,577

Total DFS debt, principal amount $ 9,038 $ 9,492

Total short-term DFS debt $ 5,038 $ 5,863

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Asset-Based Financing and Securitization Facilities — The Company maintains separate asset-based financing facilities in the United States, which are revolving facilities for fixed-term leases and loans.

Asset-Based Financing Facility — During the three months ended May 3, 2024, the Company consolidated its two separate asset-based financing facilities into a single asset-based financing facility in the United States, which is a revolving facility for fixed-term leases and loans.

This debt is collateralized solely by the U.S.

loan and lease payments and associated equipment in the facilities.

loan and lease payments and associated equipment in the facility.

The asset-based financing facility consists of two tranches, with effective dates through July 7, 2025 and July 7, 2026.

As of May 3, 2024, the total debt capacity related to the asset-based financing facility was $ 5.0 billion.

The debt has a variable interest rate, and the duration of the debt is based on the terms of the underlying loan and lease payment streams.

As of November 3, 2023, the total debt capacity related to the U.S.

asset-based financing facilities was $ 5.1 billion.

The Company enters into interest swap agreements to effectively convert a portion of this debt from a floating rate to a fixed rate.

See Note 7 of the Notes to the Condensed Consolidated Financial Statements for additional information about the Company’s interest rate swaps.

The Company’s two U.S.

asset-based financing facilities for fixed-term leases and loans are effective through July 7, 2025 and June 21, 2024, respectively.

The asset-based financing facilities contain standard structural features related to the performance of the funded receivables, which include defined credit losses, delinquencies, average credit scores, and minimum collection requirements.

The asset-based financing facility contains standard structural features related to the performance of the funded receivables, which include defined credit losses, delinquencies, average credit scores, and minimum collection requirements.

In the event one or more of these criteria are not met and the Company is unable to restructure the facility, no further funding of receivables will be permitted and the timing of the Company’s expected cash flows from over-collateralization will be delayed.

As of November 3, 2023, these criteria were met.

The Company previously maintained a U.S.

securitization facility for revolving loans effective through June 25, 2025.

In connection with the sale of the U.S.

consumer revolving customer receivables portfolio described in Note 1 of the Notes to the Condensed Consolidated Financial Statements, the Company’s U.S.

securitization facility for revolving loans was paid down and terminated during the three months ended November 3, 2023.

As of May 3, 2024, these criteria were met.

Fixed-Term Securitization Offerings — The Company periodically issues asset-backed debt securities under fixed-term securitization programs to private investors.

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fixed-term lease and loan payments and associated equipment, which are held by Special Purpose Entities (“SPEs”), as discussed below.

The interest rate on these securities is fixed and ranges from 0.53 % to 6.80 % per annum as of November 3, 2023, and the duration of these securities is based on the terms of the underlying lease and loan payment streams.

The interest rate on these securities is fixed and ranged from 2.49 % to 6.80 % per annum as of May 3, 2024, and the duration of these securities is based on the terms of the underlying lease and loan payment streams.

DFS International Debt

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The debt under this facility has a variable interest rate, and the duration of the debt is based on the terms of the underlying loan and lease payment streams.

This facility is effective through December 23, 2024 and had a total debt capacity of $ 850 million as of November 3, 2023.

This facility is effective through December 23, 2024 and had a total debt capacity of $ 858 million as of May 3, 2024.

The securitization facility contains standard structural features related to the performance of the securitized receivables, which include defined credit losses, delinquencies, average credit scores, and minimum collection requirements.

In the event one or more of these criteria are not met and the Company is unable to restructure the program, no further funding of receivables will be permitted and the timing of the Company’s expected cash flows from over-collateralization will be delayed.

As of November 3, 2023, these criteria were met.

As of May 3, 2024, these criteria were met.

Other Borrowings — In connection with the Company’s international financing operations, the Company has entered into revolving structured financing debt programs related to its fixed-term lease and loan products sold in Canada, Europe, Australia, New Zealand, and the Middle East.

The debt under these programs has a variable interest rate, and the duration of the debt is based on the terms of the underlying loan and lease payment streams.

The Canadian facility, which is collateralized solely by Canadian loan and lease payments and associated equipment, had a total debt capacity of $ 328 million as of November 3, 2023 and is effective through January 16, 2025.

The European facility, which is collateralized solely by European loan and lease payments and associated equipment, had a total debt capacity of $ 531 million as of November 3, 2023 and is effective through June 14, 2025.

The Australia and New Zealand facility, which is collateralized solely by Australia and New Zealand loan and lease payments and associated equipment, had a total debt capacity of $ 290 million as of November 3, 2023 and is effective through April 20, 2025.

The Middle East facility, which is collateralized solely by Middle East loan and lease payments and associated equipment, had a total debt capacity of $ 150 million as of November 3, 2023 and is effective through March 24, 2025.

The Canadian facility, which is collateralized solely by Canadian loan and lease payments and associated equipment, had a total debt capacity of $ 329 million as of May 3, 2024 and is effective through January 16, 2025.

The European facility, which is collateralized solely by European loan and lease payments and associated equipment, had a total debt capacity of $ 536 million as of May 3, 2024 and is effective through June 14, 2025.

The Australia and New Zealand facility, which is collateralized solely by Australia and New Zealand loan and lease payments and associated equipment, had a total debt capacity of $ 295 million as of May 3, 2024 and is effective through April 20, 2025.

The Middle East facility, which is collateralized solely by Middle East loan and lease payments and associated equipment, had a total debt capacity of $ 150 million as of May 3, 2024 and is effective through March 24, 2025.

Note Payable — On May 25, 2022, the Company entered into an unsecured credit agreement to fund receivables in Mexico.

As of May 3, 2024, the aggregate principal amount of the note payable was $ 250 million.

The note bore interest at an annual rate of 4.24 % and matured and was paid in full on May 31, 2024.

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Note Payable — On May 25, 2022, the Company entered into an unsecured credit agreement to fund receivables in Mexico.

As of November 3, 2023, the aggregate principal amount of the note payable was $ 250 million.

The note bears interest at an annual rate of 4.24 % and will mature on May 31, 2024.

Dell Bank Senior Unsecured Eurobonds — On June 24, 2020, Dell Bank issued 500 million Euro of 1.625 % senior unsecured four year eurobonds due June 2024.

3 unchanged sentences

Variable Interest Entities

In connection with the asset-based financing facilities, securitization facilities, and fixed-term securitization offerings discussed above, the Company transfers certain U.S.

In connection with the asset-based financing facility, securitization facility, and fixed-term securitization offerings discussed above, the Company transfers certain U.S.

and European lease and loan payments and associated equipment to SPEs that meet the definition of a VIE and are consolidated, along with the associated debt described above, into the Condensed Consolidated Financial Statements, as the Company is the primary beneficiary of the VIEs.

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The following table presents the assets and liabilities held by the consolidated VIEs as of the dates indicated, which are included in the Condensed Consolidated Statements of Financial Position:

November 3, 2023 February 3, 2023

May 3, 2024 February 2, 2024

(in millions)

9 unchanged sentences

Long-term $ 2,804 $ 2,184

Lease and loan payments and associated equipment transferred via securitization through SPEs were $ 1.1 billion and $ 1.6 billion for the three months ended November 3, 2023 and October 28, 2022, respectively, and $ 3.7 billion and $ 4.5 billion for the nine months ended November 3, 2023 and October 28, 2022, respectively.

Customer Receivable Sales

Lease and loan payments and associated equipment transferred via securitization through SPEs were $ 0.8 billion and $ 1.5 billion for the three months ended May 3, 2024 and May 5, 2023, respectively.

Customer Receivables Sales

To manage certain concentrations of customer credit exposure, the Company may sell selected fixed-term customer receivables to unrelated third parties on a periodic basis, without recourse.

The amount of customer receivables sold for this purpose was $ 205 million and $ 431 million for the nine months ended November 3, 2023 and October 28, 2022, respectively.

The amount of customer receivables sold for this purpose was $ 67 million and $ 169 million for the three months ended May 3, 2024 and May 5, 2023, respectively.

The Company’s continuing involvement in these customer receivables is primarily limited to servicing arrangements.

6 unchanged sentences

The Company also leases certain global logistics warehouses, employee vehicles, and equipment.

As of November 3, 2023, the remaining terms of the Company’s leases range from one month to approximately ten years .

As of November 3, 2023 and February 3, 2023, there were no material finance leases in which the Company was a lessee.

As of May 3, 2024, the remaining terms of the Company’s leases range from one month to approximately ten years .

As of May 3, 2024 and February 2, 2024, there were no material finance leases in which the Company was a lessee.

The Company also enters into leasing transactions in which the Company is the lessor, primarily through customer financing arrangements offered through DFS.

2 unchanged sentences

The following table presents components of lease costs included in the Condensed Consolidated Statements of Income for the periods indicated:

Three Months Ended Nine Months Ended

November 3, 2023 October 28, 2022 November 3, 2023 October 28, 2022

Three Months Ended

May 3, 2024 May 5, 2023

(in millions)

2 unchanged sentences

Total lease costs $ 89 $ 103

For both the nine months ended November 3, 2023 and October 28, 2022, sublease income, finance lease costs, and short-term lease costs were immaterial.

During the three months ended May 3, 2024 and May 5, 2023, sublease income, finance lease costs, and short-term lease costs were immaterial.

The following table presents supplemental information related to operating leases included in the Condensed Consolidated Statements of Financial Position as of the dates indicated:

Classification November 3, 2023 February 3, 2023

Classification May 3, 2024 February 2, 2024

(in millions, except for term and discount rate)

8 unchanged sentences

The following table presents supplemental cash flow information related to leases for the periods indicated:

Nine Months Ended

November 3, 2023 October 28, 2022

Three Months Ended

May 3, 2024 May 5, 2023

(in millions)

2 unchanged sentences

The following table presents the future maturity of the Company’s operating lease liabilities under non-cancelable leases and reconciles the undiscounted cash flows for these leases to the lease liability recognized on the Condensed Consolidated Statements of Financial Position as of the date indicated:

November 3, 2023

(in millions)

Fiscal 2024 (remaining three months) $ 63

Fiscal 2025 (remaining nine months) $ 187

Fiscal 2026 205

7 unchanged sentences

Non-current operating lease liabilities $ 520

As of November 3, 2023, the Company’s undiscounted operating leases that had not yet commenced were immaterial.

As of May 3, 2024, the Company’s undiscounted operating leases that had not yet commenced were immaterial.

DELL TECHNOLOGIES INC.

2 unchanged sentences

The following table summarizes the Company’s outstanding debt as of the dates indicated:

November 3, 2023 February 3, 2023

May 3, 2024 February 2, 2024

(in millions)

Senior Notes $ 15,607 $ 15,607

5.45 % due June 2023

4.00 % due July 2024

5.85 % due July 2025

6.02 % due June 2026

4.90 % due October 2026

6.10 % due July 2027

5.25 % due February 2028

5.30 % due October 2029

6.20 % due July 2030

5.75 % due February 2033

8.10 % due July 2036

3.38 % due December 2041

8.35 % due July 2046

3.45 % due December 2051

Legacy Notes and Debentures:

7.10 % due April 2028

6.50 % due April 2038

5.40 % due September 2040

Legacy Notes 952 952

DFS Debt (Note 4)

6 unchanged sentences

Total long-term debt, carrying value $ 19,382 $ 19,012

During the nine months ended November 3, 2023, the net decrease in the Company’s debt balance was principally attributable to:

• the repayment of $ 1 billion principal amount of the 5.45 % Senior Notes due June 2023;

• the repayment of $ 1 billion principal amount of the 6.02 % Senior Notes due June 2026 in a tender offer, in connection with which the Company recognized an immaterial amount of debt extinguishment costs in interest and other, net in the Condensed Consolidated Statement of Income.

During the three months ended May 3, 2024, the Company issued $ 1.0 billion aggregate principal amount of 5.40 % Senior Notes due 2034.

The Company used the net proceeds of the issuance to prepay a portion of the outstanding 6.02 % Senior Notes due 2026.

Outstanding Debt

Senior Notes — The Company completed offerings of multiple series of senior notes which were issued on June 1, 2016, June 22, 2016, March 20, 2019, April 9, 2020, December 13, 2021, and January 24, 2023 in aggregate principal amounts of $ 20.0 billion, $ 3.3 billion, $ 4.5 billion, $ 2.3 billion, $ 2.3 billion, and $ 2.0 billion, respectively (the “Senior Notes”).

Interest on these borrowings is payable semiannually.

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Legacy Notes and Debentures — The Company has outstanding unsecured notes and debentures (collectively, the “Legacy Notes and Debentures”) that were issued by Dell Inc.

Senior Notes — The Company completed offerings of multiple series of senior notes which were issued on June 1, 2016, June 22, 2016, March 20, 2019, April 9, 2020, December 13, 2021, January 24, 2023 and March 18, 2024 in aggregate principal amounts of $ 20.0 billion, $ 3.3 billion, $ 4.5 billion, $ 2.3 billion, $ 2.3 billion, $ 2.0 billion and $ 1.0 billion, respectively (the “Senior Notes”).

The Senior Notes maturities range from 2024 through 2051.

Interest rates on these borrowings are fixed, ranging from 3.38 % to 8.35 %, and interest is payable semiannually.

Legacy Notes — The Company has outstanding unsecured notes and debentures (collectively, the “Legacy Notes”) that were issued by Dell Inc.

(“Dell”), a wholly-owned subsidiary of Dell Technologies Inc., prior to the acquisition of Dell by Dell Technologies Inc.

in the going-private transaction that closed in October 2013.

Interest on these borrowings is payable semiannually.

The Legacy Notes’ maturities range from 2028 through 2040.

Interest rates on these borrowings are fixed, ranging from 5.40 % to 7.10 %, and interest is payable semiannually.

DFS Debt — See Note 4 and Note 7 of the Notes to the Condensed Consolidated Financial Statements, respectively, for discussion of DFS debt and the interest rate swap agreements that hedge a portion of that debt.

2021 Revolving Credit Facility — The Company’s revolving credit facility, which was entered into on November 1, 2021 (the “2021 Revolving Credit Facility”), matures on November 1, 2027.

This facility provides the Company with revolving commitments in an aggregate principal amount of $ 6.0 billion for general corporate purposes, including liquidity support for the Company’s commercial paper program, and includes a letter of credit sub-facility of up to $ 0.5 billion and a swing-line loan sub-facility of up to $ 0.5 billion.

Revolving Credit Facility — The Company’s revolving credit facility provides the Company with revolving commitments in an aggregate principal amount of $ 6.0 billion for general corporate purposes and includes a letter of credit sub-facility of up to $ 0.5 billion and a swing-line loan sub-facility of up to $ 0.5 billion.

The revolving credit facility also allows the Company to obtain incremental additional commitments on one or more occasions in minimum amounts of $ 10 million.

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The base rate is calculated based upon the greatest of the specified prime rate, the specified federal reserve bank rate, or SOFR plus 1 %.

The borrowers may voluntarily repay outstanding loans under the 2021 Revolving Credit Facility at any time without premium or penalty, other than customary breakage costs.

As of November 3, 2023, the Company had no outstanding borrowings under the 2021 Revolving Credit Facility.

Commercial Paper Program — During Fiscal 2023, the Company established a commercial paper program under which the Company may issue unsecured notes in a maximum aggregate face amount of $ 5.0 billion outstanding at any time, with maturities up to 397 days from the date of issuance.

The borrowers may voluntarily repay outstanding loans at any time without premium or penalty, other than customary breakage costs.

The facility matures on November 1, 2027.

As of May 3, 2024, the Company had no outstanding borrowings under the revolving credit facility.

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Commercial Paper Program — The Company maintains a commercial paper program under which the Company may issue unsecured notes in a maximum aggregate face amount of $ 5.0 billion outstanding at any time, with maturities up to 397 days from the date of issuance.

The notes are sold on customary terms in the U.S.

1 unchanged sentence

The proceeds of the notes are used for general corporate purposes.

As of November 3, 2023, the Company had no outstanding borrowings under the commercial paper program.

As of May 3, 2024, the Company had no outstanding issuances under the commercial paper program.

The Company may purchase, redeem, prepay, refinance, or otherwise retire any amount of outstanding indebtedness under the terms of such indebtedness at any time and from time to time, in open market or negotiated transactions with the holders of such indebtedness or otherwise, as considered appropriate in light of market conditions and other relevant factors.

Covenants — The credit agreement governing the 2021 Revolving Credit Facility and the indentures governing the Senior Notes and the Legacy Notes and Debentures impose various limitations, subject to exceptions, on creating certain liens and entering into sale and lease-back transactions.

The foregoing credit agreement and indentures contain customary events of default, including failure to make required payments, failure to comply with covenants, and the occurrence of certain events of bankruptcy and insolvency.

The 2021 Revolving Credit Facility is also subject to an interest coverage ratio covenant that is tested at the end of each fiscal quarter with respect to the Company’s preceding four fiscal quarters.

The Company was in compliance with this financial covenant as of November 3, 2023.

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Covenants — The credit agreement governing the revolving credit facility and the indentures governing the Senior Notes and the Legacy Notes impose various limitations, subject to exceptions, on creating certain liens and entering into sale and lease-back transactions.

The foregoing credit agreement and indentures contain customary events of default, and the revolving credit facility is subject to an interest coverage ratio covenant that is tested at the end of each fiscal quarter with respect to the Company’s preceding four fiscal quarters.

The Company was in compliance with this financial covenant as of May 3, 2024.

Aggregate Future Maturities

The following table presents the aggregate future maturities of the Company’s debt as of November 3, 2023 for the periods indicated:

Maturities by Fiscal Year

2024 (remaining three months) 2025 2026 2027 2028 Thereafter Total

The following table presents the aggregate future maturities of the Company’s debt as of May 3, 2024, excluding associated carrying value adjustments, for the periods indicated:

(in millions)

Senior Notes $ — $ 1,000 $ 1,000 $ 5,250 $ 500 $ 8,357 $ 16,107

Legacy Notes and Debentures — — — — — 952 952

DFS Debt 1,479 4,807 1,833 884 610 7 9,620

Other 13 124 29 8 6 1 181

Fiscal 2025 (remaining nine months) $ 5,248

Fiscal 2026 3,867

Fiscal 2027 5,560

Fiscal 2028 1,194

Fiscal 2029 1,327

Thereafter 8,509

Total maturities, principal amount $ 25,705

Associated carrying value adjustments ( 2 ) ( 7 ) ( 6 ) ( 33 ) ( 8 ) ( 187 ) ( 243 )

Total maturities, carrying value amount $ 1,490 $ 5,924 $ 2,856 $ 6,109 $ 1,108 $ 9,130 $ 26,617

DELL TECHNOLOGIES INC.

3 unchanged sentences

The Company’s objective is to offset gains and losses resulting from these exposures with gains and losses on the derivative contracts used to hedge the exposures, thereby reducing volatility of earnings and protecting the fair values of assets and liabilities.

The earnings effects of the derivative instruments are presented in the same income statement line items as the earnings effects of the hedged items.

The earnings effects of the derivative instruments are presented in the same line items on the Condensed Consolidated Statements of Income as the earnings effects of the hedged items.

For derivatives designated as cash flow hedges, the Company assesses hedge effectiveness both at the onset of the hedge and at regular intervals throughout the life of the instruments.

6 unchanged sentences

The majority of these contracts typically expire in twelve months or less.

During the three and nine months ended November 3, 2023 and October 28, 2022, the Company did not discontinue any cash flow hedges related to foreign exchange contracts that had a material impact on the Company’s results of operations due to the probability that the forecasted cash flows would not occur.

During the three months ended May 3, 2024 and May 5, 2023, the Company did not discontinue any cash flow hedges related to foreign exchange contracts that had a material impact on the Company’s results of operations due to the probability that the forecasted cash flows would not occur.

The Company uses forward contracts to hedge monetary assets and liabilities denominated in a foreign currency.

20 unchanged sentences

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Periodically, the Company also uses interest rate swaps to modify the market risk exposures in connection with long-term debt.

During Fiscal 2023, the Company entered into interest rate swaps designated as fair value hedges intended to hedge a portion of its interest rate exposure by converting the fixed interest rate of a certain tranche of debt to a floating interest rate based on the benchmark SOFR Overnight Index Swap rate.

The gains and losses related to changes in the fair value of such interest rate swaps perfectly offset changes in the fair value of the hedged portion of the underlying debt that were attributable to the changes in the underlying benchmark interest rate.

During the nine months ended November 3, 2023, the Company repaid the hedged debt and terminated the associated interest rate swaps.

Derivative Instruments

The following table presents the notional amounts of outstanding derivative instruments as of the dates indicated:

November 3, 2023 February 3, 2023

May 3, 2024 February 2, 2024

(in millions)

4 unchanged sentences

Interest rate contracts:

Designated as fair value hedging instruments $ — $ 1,000

Non-designated as hedging instruments $ 6,074 $ 6,551

Total $ 6,107 $ 8,214

The following table presents the effect of derivative instruments designated as cash flow hedging instruments on the Condensed Consolidated Statements of Financial Position and the Condensed Consolidated Statements of Income for the periods indicated:

Derivatives in Cash Flow Hedging Relationships Gain (Loss) Recognized in Accumulated OCI, Net of Tax, on Derivatives Location of Gain (Loss) Reclassified from Accumulated OCI into Income Gain (Loss) Reclassified from Accumulated OCI into Income

(in millions) (in millions)

For the three months ended November 3, 2023:

Total net revenue $ 83

Foreign exchange contracts $ 171 Total cost of net revenue 1

Interest rate contracts — Interest and other, net —

Total $ 171 Total $ 84

For the three months ended October 28, 2022:

Total net revenue $ 324

Foreign exchange contracts $ 306 Total cost of net revenue —

Interest rate contracts — Interest and other, net —

Total $ 306 Total $ 324

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Derivatives in Cash Flow Hedging Relationships Gain Recognized in Accumulated OCI, Net of Tax, on Derivatives Location of Gain (Loss) Reclassified from Accumulated OCI into Income Gain (Loss) Reclassified from Accumulated OCI into Income

(in millions) (in millions)

For the nine months ended November 3, 2023:

For the three months ended May 3, 2024:

Total net revenue $ 18

Foreign exchange contracts $ 87 Total cost of net revenue 1

Interest rate contracts — Interest and other, net —

Total $ 87 Total $ 19

For the nine months ended October 28, 2022:

For the three months ended May 5, 2023:

Total net revenue $ ( 88 )

Foreign exchange contracts $ 10 Total cost of net revenue ( 3 )

Interest rate contracts — Interest and other, net —

Total $ 10 Total $ ( 91 )

The following table presents the effect of derivative instruments not designated as hedging instruments on the Condensed Consolidated Statements of Income for the periods indicated:

Three Months Ended Nine Months Ended

November 3, 2023 October 28, 2022 November 3, 2023 October 28, 2022 Location of Gain (Loss) Recognized

Three Months Ended

May 3, 2024 May 5, 2023 Location of Gain (Loss) Recognized

(in millions)

6 unchanged sentences

The following tables present the fair value of those derivative instruments presented on a gross basis as of the dates indicated:

November 3, 2023

Other Current

Assets Other Non-Current Assets Other Current Liabilities Other Non-Current

Liabilities Total

Other Current Assets Other Non-Current Assets Other Current Liabilities Other Non-Current Liabilities Total Fair Value

(in millions)

2 unchanged sentences

Foreign exchange contracts in a liability position ( 7 ) — ( 1 ) — ( 8 )

Interest rate contracts in an asset position — — — — —

Interest rate contracts in a liability position — — — — —

Net asset (liability) 107 — 12 — 119

7 unchanged sentences

February 2, 2024

Other Current

Assets Other Non-Current Assets Other Current Liabilities Other Non-Current

Liabilities Total

Other Current Assets Other Non-Current Assets Other Current Liabilities Other Non-Current Liabilities Total Fair Value

(in millions)

2 unchanged sentences

Foreign exchange contracts in a liability position ( 5 ) — ( 15 ) — ( 20 )

Interest rate contracts in an asset position — — — — —

Interest rate contracts in a liability position — — — ( 6 ) ( 6 )

Net asset (liability) 39 — 4 — 43

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The following tables present the gross amounts of the Company’s derivative instruments, amounts offset due to master netting agreements with the Company’s counterparties, and the net amounts recognized in the Condensed Consolidated Statements of Financial Position as of the dates indicated:

November 3, 2023

Gross Amounts of Recognized Assets/ (Liabilities) Gross Amounts Offset in the Statement of Financial Position Net Amounts of Assets/(Liabilities) Presented in the Statement of Financial Position Gross Amounts not Offset in the Statement of Financial Position Net Amount of Assets/ (Liabilities) Recognized in the Statement of Financial Position

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The Infrastructure Solutions Group and Client Solutions Group reporting units are consistent with the reportable segments identified in Note 16 of the Notes to the Condensed Consolidated Financial Statements.

Other businesses consists of VMware Resale, Secureworks, and Virtustream, which each represent separate reporting units.

Other businesses consists of Secureworks, VMware Resale, and Virtustream, each of which represents a separate reporting unit.

The following table presents goodwill allocated to the Company’s reportable segments and changes in the carrying amount of goodwill as of the dates indicated:

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Balances as of February 2, 2024 $ 15,041 $ 4,232 $ 427 $ 19,700

Goodwill acquired (a) 82 — — 82

Impact of foreign currency translation and other ( 60 ) — — ( 60 )

Balances as of November 3, 2023 $ 14,957 $ 4,232 $ 427 $ 19,616

____________________

(a) Goodwill acquired represents goodwill recognized in connection with the Company’s acquisition of Moogsoft Inc.

during the three months ended November 3, 2023.

Balances as of May 3, 2024 $ 14,981 $ 4,232 $ 427 $ 19,640

Intangible Assets

The following table presents the Company’s intangible assets as of the dates indicated:

November 3, 2023 February 3, 2023

May 3, 2024 February 2, 2024

Gross Accumulated

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Total intangible assets $ 30,434 $ ( 24,896 ) $ 5,538 $ 30,434 $ ( 24,733 ) $ 5,701

Amortization expense related to definite-lived intangible assets was $ 205 million and $ 245 million for the three months ended November 3, 2023 and October 28, 2022, respectively, and $ 613 million and $ 732 million for the nine months ended November 3, 2023 and October 28, 2022, respectively.

There were no material impairment charges related to intangible assets during the three and nine months ended November 3, 2023 and October 28, 2022.

For both the three months ended May 3, 2024 and May 5, 2023, amortization expense related to definite-lived intangible assets was $ 0.2 billion.

There were no material impairment charges related to intangible assets during the three months ended May 3, 2024 and May 5, 2023.

DELL TECHNOLOGIES INC.

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The following table presents the estimated future annual pre-tax amortization expense of definite-lived intangible assets as of the date indicated:

November 3, 2023

(in millions)

Fiscal 2024 (remaining three months) $ 205

Fiscal 2025 (remaining nine months) $ 490

Fiscal 2026 495

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The qualitative assessment included consideration of the relevant events and circumstances affecting the reporting unit, including macroeconomic, industry and market conditions, overall financial performance, and trends in the public company market valuation, where applicable.

Management exercised significant judgment related to the above assessment, including the identification of goodwill reporting units, assignment of assets and liabilities to goodwill reporting units, assignment of goodwill to reporting units, and determination of the fair value of each goodwill reporting unit.

Management exercised significant judgment related to the above assessments, including the identification of goodwill reporting units, assignment of assets and liabilities to goodwill reporting units, assignment of goodwill to reporting units, and determination of the fair value of each goodwill reporting unit.

For the quantitative goodwill impairment test, the fair value of each goodwill reporting unit is generally estimated using a combination of public company multiples and discounted cash flow methodologies.

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The fair value of the indefinite-lived trade names is generally estimated using discounted cash flow methodologies.

These methodologies require significant judgment, including estimation of future revenue, the estimation of the long-term revenue growth rate of the Company’s business and the determination of the Company’s weighted average cost of capital and royalty rates.

These methodologies require significant judgment, including the estimation of future revenue, the estimation of the long-term revenue growth rate of the Company’s business and the determination of the Company’s weighted average cost of capital and royalty rates.

Changes in these estimates and assumptions could materially affect the fair value of the indefinite-lived intangible assets, potentially resulting in a non-cash impairment charge.

Based on the results of the annual impairment test performed during the three months ended November 3, 2023, the fair values of each of the reporting units and indefinite-lived intangibles exceeded their carrying values.

No goodwill or indefinite-lived assets impairment test was performed during the nine months ended November 3, 2023 other than the Company’s annual impairment review.

Based on the results of the annual impairment test performed during Fiscal 2024, the fair values of each of the reporting units and indefinite-lived intangibles exceeded their carrying values.

No goodwill or indefinite-lived assets impairment test was performed during the three months ended May 3, 2024.

DELL TECHNOLOGIES INC.

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The following table presents the changes in the Company’s deferred revenue for the periods indicated:

Three Months Ended Nine Months Ended

November 3, 2023 October 28, 2022 November 3, 2023 October 28, 2022

Three Months Ended

May 3, 2024 May 5, 2023

(in millions)

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Revenue recognized ( 5,464 ) ( 5,310 )

Other (a) 15 — 15 ( 165 )

Deferred revenue at end of period $ 28,150 $ 29,695

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Long-term deferred revenue $ 13,116 $ 14,168

____________________

(a) For the nine months ended October 28, 2022, Other represents the reclassification of deferred revenue to accrued and other liabilities.

Remaining Performance Obligations — Remaining performance obligations represent the aggregate amount of the transaction price allocated to performance obligations not delivered, or partially undelivered, as of the end of the reporting period.

Remaining performance obligations include deferred revenue plus unbilled amounts not yet recorded in deferred revenue.

The value of the transaction price allocated to remaining performance obligations as of November 3, 2023 was approximately $ 39 billion.

The value of the transaction price allocated to remaining performance obligations as of May 3, 2024 was approximately $ 39 billion.

The Company expects to recognize approximately 59 % of remaining performance obligations as revenue in the next twelve months , and the remainder thereafter.

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NOTE 10 — COMMITMENTS AND CONTINGENCIES

Purchase Obligations

The Company has contractual obligations to purchase goods or services, which specify significant terms (including fixed or minimum quantities to be purchased), fixed, minimum, or variable price provisions;

and the approximate timing of the transaction.

As of November 3, 2023, such purchase obligations were $ 3.8 billion for the remaining three months of Fiscal 2024;

$ 0.8 billion for Fiscal 2025;

and $ 0.6 billion for Fiscal 2026 and thereafter.

Legal Matters

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Dell and certain other directors serving on the Company’s board of directors at the time of the Class V transaction (collectively, the “director defendants”), certain stockholders of the Company, consisting of Mr.

Dell and Silver Lake Group LLC and certain of its affiliated funds (collectively, the “stockholder defendants”), and Goldman Sachs & Co.

Dell and Silver Lake Group, L.L.C.

and certain of its affiliated funds (collectively, the “stockholder defendants”), and Goldman Sachs & Co.

LLC (“Goldman Sachs”), which served as financial advisor to the Company in connection with the transaction.

The plaintiffs generally alleged that the director defendants and the stockholder defendants breached their fiduciary duties under Delaware law to the former holders of the Class V Common Stock in connection with the Class V transaction by offering a transaction value that was allegedly billions of dollars below fair value.

As previously reported, during the fourth quarter of Fiscal 2023, the plaintiffs and the defendants entered into an agreement to settle the lawsuit.

As previously reported, during the fourth quarter of the fiscal year ended February 3, 2023, the plaintiffs and the defendants entered into an agreement to settle the lawsuit.

Under the terms of the settlement, the plaintiffs agreed to the dismissal of all claims upon payment of a total of $ 1.0 billion (the “settlement amount”), which includes all costs, expenses and fees of the plaintiff class relating to the action and its resolution.

The settlement terms required that the settlement amount be paid by the Company and/or the Company’s insurers pursuant to indemnification obligations of the Company to the defendants.

The Company is subject to indemnification obligations, upon the satisfaction of specified conditions, to the director and stockholder defendants and their affiliates pursuant to provisions of the Delaware General Corporation Law, the Company’s certificate of incorporation and bylaws, and agreements with the defendants.

A special committee of the Board of Directors consisting of directors who were not defendants in the action, advised by independent counsel, informed the Board of Directors of its determination that the defendants are entitled to indemnification under the foregoing obligations.

On May 16, 2023, during the fiscal year ended February 2, 2024, the Company paid the settlement amount following approval of the settlement by the Delaware Court of Chancery.

This matter is no longer material to the Company.

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

During Fiscal 2023, the Company established a $ 1.0 billion liability on the Consolidated Statements of Financial Position and recognized $ 0.9 billion expense, net of $ 106 million in insurance proceeds, within interest and other, net within the Consolidated Statements of Income related to the settlement agreement.

The Company accounted for the expected insurance proceeds as a loss recovery and recognized a benefit within interest and other, net within the Condensed Consolidated Statements of Income and corresponding receivable on the Condensed Consolidated Statements of Financial Position.

On May 16, 2023, during the second quarter of Fiscal 2024, the Company paid the settlement amount following approval of the settlement by the Delaware Court of Chancery.

The payment is reflected within cash flows from operating activities within the Condensed Consolidated Statements of Cash Flows.

The Company does not expect to incur additional expenses with respect to the settlement.

Other Litigation — Dell does not currently anticipate that any of the other various legal proceedings it is involved in will have a material adverse effect on its business, financial condition, results of operations, or cash flows.

R2 Semiconductor Patent Litigation — In November 2022, R2 Semiconductor, Inc.

(“R2”) filed a lawsuit in the Dusseldorf Regional Court in Germany against Intel Deutschland GmbH, Dell GmbH, and certain other customers of Intel Corporation.

R2 asserted that one European patent is infringed by certain Intel processors and those of the Company’s products that incorporate those processors (the “Accused Products”).

R2 sought an injunction prohibiting the sale of the allegedly infringing products and damages for the alleged infringement.

The Dusseldorf Regional Court (the “Court”) conducted a trial on December 7, 2023, and, on February 7, 2024, issued a decision in favor of R2.

The Court’s judgment imposes an injunction prohibiting (among other acts) the sale and use of the Accused Products in Germany by Dell GmbH, and requiring Dell GmbH to issue a communication to certain customers recalling the covered products sold since March 5, 2020.

These orders will not take effect until after notice of R2’s payment of the sureties required for enforcement and will remain in place unless stayed or overturned on appeal or until the parties reach an agreement.

On February 8, 2024, the Company filed an appeal which is in process with the appellate court.

The Court has not yet assessed damages arising out of R2’s claim.

In April 2024, R2 filed another action alleging infringement of the same patent in the Judicial Court of Paris, France and seeking an injunction prohibiting the sale of the allegedly infringing products and damages for the alleged infringement.

The defendants in the French case include, among others, Intel Corporation and Dell SAS.

Additionally, Dell SAS and its co-defendants filed a nullity action against the patent in France.

In May 2024, R2 filed a third-party action in the Court of Milan, Italy, against Dell S.p.A., Intel Corporation Italia S.p.A., and other Intel customers alleging infringement of the same patent and seeking similar relief.

Intel Corporation has agreed to defend the actions and indemnify the Company and its affiliates against certain losses incurred by the Company in connection with R2’s claims.

Given the status of these lawsuits, the nature of the dispute, and the Company’s agreements with Intel Corporation, the Company is unable to make a reasonable estimate of the potential loss or range of losses that might arise from the litigations.

Other Litigation — Dell does not currently anticipate that any of the other legal proceedings it is involved in will have a material adverse effect on its business, financial condition, results of operations, or cash flows.

In accordance with the relevant accounting guidance, the Company provides disclosures of matters where it is at least reasonably possible that the Company could experience a material loss exceeding the amounts already accrued for these or other proceedings or matters.

In addition, the Company also discloses matters based on its consideration of other matters and qualitative factors, including the experience of other companies in the industry, and investor, customer, and employee relations considerations.

As of November 3, 2023, the Company does not believe there is a reasonable possibility that a material loss exceeding the amounts already accrued for these or other proceedings or matters has been incurred.

As of May 3, 2024, the Company does not believe there is a reasonable possibility that a material loss exceeding the amounts already accrued for these or other proceedings or matters has been incurred.

However, since the ultimate resolution of any such proceedings and matters is inherently unpredictable, the Company’s business, financial condition, results of operations, or cash flows could be materially affected in any particular period by unfavorable outcomes in one or more of these proceedings or matters.

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Under the Separation and Distribution Agreement entered into with VMware, Inc.

upon the completion of the spin-off of VMware, Inc.

by means of a special stock dividend (the “VMware Spin-off”) on November 1, 2021, Dell Technologies agreed to indemnify VMware, Inc., each of its subsidiaries and each of their respective directors, officers, and employees from and against all liabilities relating to, arising out of or resulting from, among other matters, the liabilities allocated to Dell Technologies as part of the separation of Dell Technologies and VMware, Inc.

upon completion of the spin-off of VMware, Inc.

by means of a special stock dividend (the “VMware Spin-off”), Dell Technologies agreed to indemnify VMware, Inc., each of its subsidiaries and each of their respective directors, officers, employees, as well as any successors and assigns of the foregoing, from and against all liabilities relating to, arising out of or resulting from, among other matters, the liabilities allocated to Dell Technologies as part of the separation of Dell Technologies and VMware, Inc.

(individually and together with its subsidiaries, “VMware”) and their respective businesses (the “Separation”).

VMware similarly agreed to indemnify Dell Technologies Inc., each of its subsidiaries and each of their respective directors, officers, and employees from and against all liabilities relating to, arising out of or resulting from, among other matters, the liabilities allocated to VMware as part of the Separation.

Dell Technologies expects VMware to fully perform under the terms of the Separation and Distribution Agreement.

For information on the cross-indemnifications related to the tax matters agreement between the Company and VMware effective upon the Separation on November 1, 2021, see Note 15 of the Notes to the Condensed Consolidated Financial Statements.

The amounts that VMware and Dell Technologies may be obligated to pay each other could vary depending on the outcome of certain unresolved tax matters, which may not be resolved for several years.

Net income tax indemnification receivables from VMware were immaterial as of May 3, 2024 and February 2, 2024.

DELL TECHNOLOGIES INC.

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NOTE 11 — INCOME AND OTHER TAXES

For the three months ended November 3, 2023, the Company’s effective income tax rate was 14.9 % on pre-tax income of $ 1.2 billion compared to 46.9 % on pre-tax income of $ 0.5 billion for the three months ended October 28, 2022.

The decline in the Company’s effective tax rate was primarily attributable to the impact of expenses recognized during the three months ended October 28, 2022 in connection with the agreement to settle the Class V transaction litigation described in Note 10 of the Notes to the Condensed Consolidated Financial Statements.

Other changes in the Company’s effective income tax rate were attributable to higher U.S.

tax on foreign operations, changes in the Company’s jurisdictional mix of income, and the impact of discrete tax items.

For the nine months ended November 3, 2023, the Company’s effective income tax rate was 21.6 % on pre-tax income of $ 2.6 billion compared to 21.1 % on pre-tax income of $ 2.3 billion for the nine months ended October 28, 2022.

The increase in the Company’s effective tax rate was attributable to higher U.S.

tax on the Company’s foreign operations, changes in the Company’s jurisdictional mix of income, and the impact of discrete tax items, largely offset by the impact of the litigation expenses discussed above.

For the three months ended May 3, 2024, the Company’s effective income tax rate was ( 74.6 )% on pre-tax income of $ 0.5 billion compared to 18.0 % on pre-tax income of $ 0.7 billion for the three months ended May 5, 2023.

The change in the Company’s effective income tax rate was primarily driven by discrete tax benefits of $ 0.4 billion related to changes in uncertain tax benefits resulting from the expiration of certain statutes of limitations and $ 0.2 billion related to stock-based compensation.

The differences between the estimated effective income tax rates and the U.S.

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A significant portion of these income tax benefits relates to a tax holiday that will be effective until January 31, 2029.

Most of the Company’s other tax holidays will expire in whole or in part during fiscal years 2030 through 2031.

Most of the Company’s other tax holidays will expire in whole or in part during fiscal years 2030 and 2031.

Many of these tax holidays and reduced tax rates may be extended when certain conditions are met or may be terminated early if certain conditions are not met or as a result of changes in tax legislation.

As of November 3, 2023, the Company was not aware of any matters of noncompliance related to these tax holidays or enacted tax legislative changes affecting these tax holidays.

In June 2023, the Company received Revenue Agent’s Reports for the examination by the Internal Revenue Service (“IRS”) of fiscal years 2015 through 2017 and fiscal years 2018 through 2019.

The Company agreed with the IRS assessments relating to fiscal years 2015 through 2017 and settled those positions in August 2023.

The impact to the financial statements for that settlement was not material.

For fiscal years 2018 through 2019, the IRS proposed adjustments primarily relating to certain transactions the Company completed as part of its business integration efforts, with which the Company disagrees and which it will contest through the IRS administrative appeals procedures.

As of May 3, 2024, the Company was not aware of any matters of non-compliance related to these tax holidays or enacted tax legislative changes affecting these tax holidays.

In June 2023, the Company received a Revenue Agent’s Report for the examination by the Internal Revenue Service (“IRS”) of fiscal years 2018 through 2019.

The IRS proposed adjustments primarily relating to certain transactions the Company completed as part of its business integration efforts.

In August 2023, the Company submitted a written protest to the IRS relating to certain assessments.

The Company received a rebuttal from the IRS to its written protest in April 2024.

The Company disagrees with the IRS proposed adjustments and will contest them through the IRS administrative appeals procedures.

The Company anticipates that the appeals process for the resolution of these matters will extend beyond the next twelve months.

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The Company believes that it has provided adequate reserves related to all matters contained in tax periods open to examination, including the IRS audits described above.

Although the Company believes it has made adequate provisions for the uncertainties surrounding these audits, should the Company experience unfavorable outcomes, such outcomes could have a material impact on its results of operations, financial position, and cash flows.

Although the Company believes it has made adequate provisions for the uncertainties with respect to these audits, should the Company experience unfavorable outcomes, such outcomes could have a material impact on its results of operations, financial position, and cash flows.

Judgment is required in evaluating the Company’s uncertain tax positions and determining the Company’s provision for income taxes.

Unrecognized tax benefits were $ 1.2 billion and $ 1.3 billion as of November 3, 2023 and February 3, 2023, respectively, and are included in other non-current liabilities in the Condensed Consolidated Statements of Financial Position.

Although the timing of resolution or closure of uncertain tax positions is not certain, the Company believes it is reasonably possible that certain tax matters in various jurisdictions could be concluded within the next twelve months.

The resolution of these matters could reduce the Company’s unrecognized tax benefits up to $ 0.4 billion including interest and penalties.

Such a reduction would have a material impact on the Company’s effective tax rate.

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Unrecognized tax benefits were $ 1.0 billion and $ 1.3 billion as of May 3, 2024 and February 2, 2024, respectively, and are included in other non-current liabilities in the Condensed Consolidated Statements of Financial Position.

The Company does not anticipate a significant change to the total amount of unrecognized tax benefits within the next twelve months.

The Company takes certain non-income tax positions in the jurisdictions in which it operates and has received certain non-income tax assessments from various jurisdictions.

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Total change for the period ( 74 ) 68 1 ( 5 )

Balances as of November 3, 2023 $ ( 877 ) $ 83 $ ( 29 ) $ ( 823 )

Balances as of May 3, 2024 $ ( 829 ) $ 38 $ ( 14 ) $ ( 805 )

Amounts related to the Company’s cash flow hedges are reclassified to net income during the same period in which the items being hedged are recognized in earnings.

See Note 7 of the Notes to the Condensed Consolidated Financial Statements for more information on the Company’s derivative instruments.

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

See Note 7 of the Notes to the Condensed Consolidated Financial Statements for more information about the Company’s derivative instruments.

The following table presents reclassifications out of accumulated other comprehensive income (loss), net of tax, to net income for the periods indicated:

Three Months Ended

November 3, 2023 October 28, 2022

Cash Flow Hedges Pensions Total Cash Flow Hedges Pensions Total

(in millions)

Total reclassifications, net of tax:

Net revenue $ 83 $ — $ 83 $ 324 $ — $ 324

Cost of net revenue 1 — 1 — — —

Operating expenses — — — — ( 1 ) ( 1 )

Total reclassifications, net of tax $ 84 $ — $ 84 $ 324 $ ( 1 ) $ 323

Nine Months Ended

November 3, 2023 October 28, 2022

May 3, 2024 May 5, 2023

Cash Flow Hedges Pensions Total Cash Flow Hedges Pensions Total

11 unchanged sentences

(in millions)

Common stock as of November 3, 2023

Common stock as of May 3, 2024

Class A 600 328 328

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The Company is authorized to issue one million shares of preferred stock, par value $ 0.01 per share.

As of November 3, 2023 and February 3, 2023, no shares of preferred stock were issued or outstanding.

As of May 3, 2024 and February 2, 2024, no shares of preferred stock were issued or outstanding.

Dell Technologies Common Stock — The Class A Common Stock, the Class B Common Stock, the Class C Common Stock, and the Class D Common Stock are collectively referred to as Dell Technologies Common Stock.

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Conversion Rights — Under the Company’s certificate of incorporation, at any time and from time to time, any holder of Class A Common Stock or Class B Common Stock has the right to convert all or any of the shares of Class A Common Stock or Class B Common Stock, as applicable, held by such holder into shares of Class C Common Stock on a one -to-one basis.

During the nine months ended November 3, 2023, the Company issued 4.7 million shares of Class C Common Stock to stockholders upon the conversion of the same number of shares of Class B Common Stock into Class C Common Stock in accordance with the Company’s certificate of incorporation.

During the nine months ended October 28, 2022, there were no conversions of shares of Class A Common Stock or Class B Common Stock into shares of Class C Common Stock.

During the three months ended May 3, 2024, the Company issued 35 million shares of Class C Common Stock to stockholders upon the conversion of 25 million shares of Class A Common Stock and 10 million shares of Class B Common Stock in accordance with the Company’s certificate of incorporation.

During the three months ended May 5, 2023, there were no conversions of shares of Class A Common Stock or Class B Common Stock into shares of Class C Common Stock.

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

On February 24, 2022, the Company announced that the Board of Directors adopted a dividend policy providing for our payment of quarterly cash dividends on the Dell Technologies common stock at a rate of $ 0.33 per share per fiscal quarter beginning in the first quarter of Fiscal 2023.

On March 2, 2023, the Company announced that the Board of Directors approved a 12 % increase in the quarterly dividend rate from $ 0.33 per share per fiscal quarter to a rate of $ 0.37 per share per fiscal quarter beginning in the first quarter of Fiscal 2024.

On February 29, 2024, the Company announced that the Board of Directors approved a 20 % increase in the quarterly dividend rate to $ 0.445 per share per fiscal quarter beginning in the first quarter of Fiscal 2025.

The Company paid the following dividends during the periods presented:

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( in millions )

May 3, 2024 February 29, 2024 April 23, 2024 May 3, 2024 $ 0.445 $ 316

May 5, 2023 March 2, 2023 April 25, 2023 May 5, 2023 $ 0.37 $ 270

August 4, 2023 June 16, 2023 July 25, 2023 August 4, 2023 $ 0.37 $ 268

November 3, 2023 September 28, 2023 October 24, 2023 November 3, 2023 $ 0.37 $ 266

April 29, 2022 February 24, 2022 April 20, 2022 April 29, 2022 $ 0.33 $ 248

July 29, 2022 June 7, 2022 July 20, 2022 July 29, 2022 $ 0.33 $ 242

October 28, 2022 September 6, 2022 October 19, 2022 October 28, 2022 $ 0.33 $ 238

During the three and nine months ended November 3, 2023, the Company also paid an immaterial amount of dividend equivalents on eligible vested equity awards which are not reflected above.

During the three months ended May 3, 2024 and May 5, 2023, the Company also paid an immaterial amount of dividend equivalents on eligible vested equity awards which are not included above.

Repurchases of Common Stock

Effective as of September 23, 2021, the Company’s Board of Directors approved a stock repurchase program under which the Company is authorized to repurchase up to $ 5 billion of shares of Class C Common Stock with no fixed expiration date.

Effective as of October 5, 2023, the Company’s Board of Directors approved the repurchase of an additional $ 5 billion of shares of the Company’s Class C Common Stock with no fixed expiration date.

Following the approval, the Company had approximately $ 5.7 billion in authorized amount remaining under the stock repurchase program.

During the nine months ended November 3, 2023, the Company repurchased approximately 22 million shares of Class C Common Stock for a total purchase price of approximately $ 1.3 billion.

During the nine months ended October 28, 2022, the Company repurchased approximately 59 million shares of Class C Common Stock for a total purchase price of approximately $ 2.7 billion.

Effective as of October 5, 2023, the Company’s Board of Directors approved the repurchase of an additional $ 5 billion of shares of the Company’s Class C Common Stock under the stock repurchase program.

Following the approval, the Company had approximately $ 5.7 billion in authorized amount remaining under the program.

During the three months ended May 3, 2024, the Company repurchased approximately 6.7 million shares of Class C Common Stock for a total purchase price of approximately $ 0.7 billion.

During the three months ended May 5, 2023, the Company repurchased 6.1 million shares of Class C Common Stock for a total purchase price of approximately $ 0.3 billion.

The above repurchases of Class C Common Stock exclude shares withheld from stock awards to settle employee tax withholding obligations related to the vesting of such awards.

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The following table presents basic and diluted earnings per share for the periods indicated:

Three Months Ended Nine Months Ended

November 3, 2023 October 28, 2022 November 3, 2023 October 28, 2022

Three Months Ended

May 3, 2024 May 5, 2023

Earnings per share attributable to Dell Technologies Inc.

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The following table presents the computation of basic and diluted earnings per share for the periods indicated:

Three Months Ended Nine Months Ended

November 3, 2023 October 28, 2022 November 3, 2023 October 28, 2022

Three Months Ended

May 3, 2024 May 5, 2023

(in millions)

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Weighted-average shares outstanding — basic

722 728 724 740

Dilutive effect of equity awards 19 13

Weighted-average shares outstanding — diluted

740 743 738 759

Weighted-average shares outstanding — antidilutive

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NOTE 15 — RELATED PARTY TRANSACTIONS

For the periods presented within this report, VMware was considered to be a related party of the Company as a result of Michael Dell’s ownership interests in both Dell Technologies and VMware as well as Mr.

Dell’s service as Chairman and Chief Executive Officer of Dell Technologies and as Chairman of the Board of VMware, Inc.

Subsequent to the close of the Company’s third quarter of Fiscal 2024, Broadcom Inc.

completed its acquisition of VMware and terminated the preexisting related party relationship.

See Note 18 of the Notes to the Condensed Consolidated Financial Statements for more information about the impact of the transaction on the Company’s relationship with VMware.

The information provided below includes a summary of transactions with VMware for the periods presented.

Transactions with related parties other than VMware during the periods presented were immaterial, individually and in aggregate.

Transactions with VMware

• Pursuant to original equipment manufacturer and reseller arrangements, Dell Technologies integrates or bundles VMware’s products and services with Dell Technologies’ products and sells them to end-users.

Dell Technologies also acts as a distributor, purchasing VMware’s standalone products and services for resale to end-user customers.

Where applicable, costs under these arrangements are presented net of rebates received by Dell Technologies.

• Dell Technologies may procure products and services from VMware for its internal use.

For the three and nine months ended November 3, 2023 and October 28, 2022, costs incurred associated with products and services purchased from VMware for internal use were immaterial.

• Dell Technologies sells and leases products and sells services to VMware.

For the three and nine months ended November 3, 2023 and October 28, 2022, revenue recognized from sales of services to VMware was immaterial.

• DFS provides financing to certain VMware end-users.

Upon acceptance of the financing arrangement by both VMware’s end-users and DFS, DFS recognizes amounts due to related parties on the Condensed Consolidated Statements of Financial Position.

Associated financing fees are recorded to product net revenue on the Condensed Consolidated Statements of Income and are reflected within sales and leases of products to VMware in the table below.

• Dell Technologies and VMware also enter into joint marketing, sales, and branding arrangements, for which both parties may incur costs.

For the three and nine months ended November 3, 2023 and October 28, 2022, consideration received from VMware for joint marketing, sales, and branding arrangements was immaterial.

• Dell Technologies and VMware entered into a transition services agreement in connection with the VMware Spin-off to provide various support services, including investment advisory services, certain support services from Dell Technologies personnel, and other transitional services.

Costs associated with this agreement were immaterial for the three and nine months ended October 28, 2022.

Activities under the agreement concluded during Fiscal 2023.

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table presents information about the impact of Dell Technologies’ related party transactions with VMware on the Condensed Consolidated Statements of Income for the periods indicated:

Three Months Ended Nine Months Ended

Classification November 3, 2023 October 28, 2022 November 3, 2023 October 28, 2022

Prior to the acquisition on November 22, 2023 of VMware LLC (previously VMware, Inc.

and individually and together with its consolidated subsidiaries, “VMware”) by Broadcom Inc.

(“Broadcom”), VMware was considered a related party of the Company.

Upon Broadcom’s acquisition of VMware, Mr.

Dell’s ownership interest in VMware and his position as Chairman of the Board of VMware terminated, and the Company determined no related party relationship exists with Broadcom or VMware effective as of November 22, 2023.

The information provided below includes a summary of related party transactions with VMware for the three months ended May 5, 2023.

The Company continues to engage in select transactions with VMware following the completion of Broadcom’s acquisition and the termination of the related party relationship.

See Note 16 of the Notes to the Consolidated Financial Statements for additional information.

Related Party Transactions with VMware

• Dell Technologies integrated or bundled select VMware products and services with Dell Technologies’ products and sold them to end-users.

Dell Technologies also acted as a distributor, purchasing VMware’s standalone products and services for resale to end-user customers.

Where applicable, costs under these arrangements were presented net of rebates received by Dell Technologies.

• DFS provided financing to certain VMware end-users, which resulted in the recognition of amounts due to related parties on the Condensed Consolidated Statements of Financial Position.

Associated financing fees were recorded to product net revenue on the Condensed Consolidated Statements of Income and were reflected within sales and leases of products to VMware in the table below.

• Dell Technologies procured products and services from VMware for its internal use.

For the three months ended May 5, 2023, costs incurred associated with products and services purchased from VMware for internal use were immaterial.

• Dell Technologies sold and leased products and sold services to VMware.

For the three months ended May 5, 2023, revenue recognized from sales of services to VMware was immaterial.

• Dell Technologies and VMware entered into joint marketing, sales, and branding arrangements, for which both parties incurred costs.

For the three months ended May 5, 2023, consideration received from VMware for joint marketing, sales, and branding arrangements was immaterial.

The following table presents information about the impact of Dell Technologies’ related party transactions with VMware on the Consolidated Statements of Income for the three months ended May 5, 2023:

Three Months Ended

Classification May 5, 2023

(in millions)

2 unchanged sentences

Purchase of VMware services for resale Cost of net revenue - services $ 876

The following table presents information about the impact of Dell Technologies’ related party transactions with VMware on the Condensed Consolidated Statements of Financial Position as of the dates indicated:

Classification November 3, 2023 February 3, 2023

(in millions)

Deferred costs related to VMware products and services for resale Other current assets $ 2,926 $ 3,000

Deferred costs related to VMware products and services for resale Other non-current assets $ 2,201 $ 2,537

November 3, 2023 February 3, 2023

(in millions)

Due from related party, net, current (a) $ 386 $ 378

Due from related party, net, non-current (b) $ 239 $ 440

Due to related party, current (c) $ 1,246 $ 2,067

Due to related party, non-current (d) $ 11 $ —

____________________

(a) Amounts due from related party, net, current consisted of amounts due from VMware, inclusive of current net tax receivables from VMware under the Tax Agreements described below.

Amounts, excluding tax, are generally settled in cash within 60 days of each quarter-end.

(b) Amounts due from related party, net, non-current consisted of the non-current portion of net receivables from VMware under the Tax Agreements.

(c) Amounts due to related party, current included amounts due to VMware, which are generally settled in cash within 60 days of each quarter-end.

(d) Amounts due to related party, non-current are included in other non-current liabilities.

Related Party Tax Matters

Tax Agreements — In connection with the VMware Spin-off and concurrently with the execution of the Separation and Distribution Agreement, effective as of April 14, 2021, Dell Technologies and VMware entered into a Tax Matters Agreement (the “Tax Matters Agreement”) and agreed to terminate the tax sharing agreement as amended on December 30, 2019 (together with the Tax Matters Agreement, the “Tax Agreements”).

The Tax Matters Agreement governs Dell Technologies’ and VMware’s respective rights and obligations, both for pre-spin-off periods and post-spin-off periods, regarding income and other taxes, and related matters, including tax liabilities and benefits, attributes, and returns.

The timing of the tax payments due to and from related parties is governed by the Tax Agreements.

VMware’s portion of the mandatory one-time transition tax on accumulated earnings of foreign subsidiaries (the “Transition Tax”) is governed by a letter agreement between VMware and Dell Technologies entered into on April 1, 2019.

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Pursuant to the Tax Agreements, net receipts from VMware during the nine months ended November 3, 2023 and net payments to VMware during the nine months ended October 28, 2022 were immaterial.

As a result of the activity under the Tax Agreements with VMware, amounts due from VMware were $ 484 million and $ 599 million as of November 3, 2023 and February 3, 2023, respectively, and primarily related to VMware’s estimated tax obligation resulting from the Transition Tax.

The 2017 Tax Cuts and Jobs Act included a deferral election for an eight-year installment payment method on the Transition Tax.

Dell Technologies expects VMware to pay the remainder of its Transition Tax over a period of two years .

Indemnification — Upon consummation of the VMware Spin-off, Dell Technologies recorded net income tax indemnification receivables from VMware related to certain income tax liabilities for which Dell Technologies is jointly and severally liable, but for which it is indemnified by VMware under the Tax Matters Agreement.

The amounts that VMware may be obligated to pay Dell Technologies could vary depending on the outcome of certain unresolved tax matters, which may not be resolved for several years.

The net receivable as of November 3, 2023 and February 3, 2023 was $ 95 million and $ 146 million, respectively.

In connection with the completion of the VMware Spin-off, Dell Technologies and VMware entered into a Tax Matters Agreement effective as of April 14, 2021 (the “Tax Matters Agreement”) which governs the respective rights and obligations of Dell Technologies and VMware regarding income and other taxes as well as related matters, including tax liabilities and benefits, attributes, and returns for periods both preceding and proceeding the VMware Spin-off.

Pursuant to the Tax Matters Agreement, net receipts for VMware during the three months ended May 5, 2023 were immaterial.

Other Related Parties

Transactions with other related parties during the periods presented were immaterial, individually and in aggregate.

DELL TECHNOLOGIES INC.

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Infrastructure Solutions Group (“ISG”) and Client Solutions Group (“CSG”).

ISG enables the Company’s customers’ digital transformation with solutions that address the fundamental shift to multicloud environments, machine learning, artificial intelligence (“AI”), and data analytics.

The Company’s comprehensive storage portfolio includes traditional as well as next-generation storage solutions, including all-flash arrays, scale-out file, object platforms, hyperconverged infrastructure, and software-defined storage.

The Company’s server portfolio includes high-performance rack, blade, and tower servers.

The Company’s servers are designed with the capability to run high value workloads across customers’ IT environments, including the training, fine-tuning, and operationalization of AI models.

The ISG networking portfolio helps the Company’s business customers transform and modernize their infrastructure, mobilize and enrich end-user experiences, and accelerate business applications and processes.

ISG also offers attached software, peripherals, and services, including support and deployment, configuration, and extended warranty services.

CSG includes sales to commercial and consumer customers of branded hardware (such as desktops, workstations, and notebooks) and branded peripherals (such as displays, docking stations, and other electronics), as well as third-party software and peripherals.

CSG also includes services offerings, including support and deployment, configuration, and extended warranty services.

ISG includes the Company’s storage, server, and networking offerings.

The Company’s comprehensive storage portfolio includes modern and traditional storage solutions, including all-flash arrays, scale-out file, object platforms, hyper-converged infrastructure, and software-defined storage.

The Company’s server portfolio includes high-performance general-purpose and AI-optimized servers.

The Company’s networking portfolio includes wide area network infrastructure, data center and edge networking switches, and cables and optics.

ISG also offers software, peripherals, and services, including consulting and support and deployment.

CSG includes offerings designed for commercial and consumer customers.

The Company’s CSG portfolio includes branded PCs including notebooks, desktops, and workstations, branded peripherals, and third-party software and peripherals.

CSG also includes services offerings, such as configuration, support and deployment, and extended warranties.

The reportable segments disclosed herein are based on information reviewed by the Company’s management to evaluate the business segment results.

The Company’s measure of segment revenue and segment operating income for management reporting purposes excludes operating results of other businesses, unallocated corporate transactions, the impact of purchase accounting, amortization of intangible assets, transaction-related expenses, stock-based compensation expense, and other corporate expenses, as applicable.

The Company’s measure of segment revenue and segment operating income for management reporting purposes excludes operating results of other businesses, unallocated corporate transactions, amortization of intangible assets, stock-based compensation expense, and other corporate expenses, as applicable.

The Company does not allocate assets to the above reportable segments for internal reporting purposes.

Pursuant to the Commercial Framework Agreement (the “CFA”) established between Dell Technologies and VMware in connection with the VMware Spin-off, Dell Technologies acts as a distributor of VMware’s standalone products and services and purchases such products and services for resale to end-user customers (“VMware Resale”).

Dell Technologies also integrates VMware’s products and services with Dell Technologies’ offerings and sells them to end users.

The results of standalone VMware Resale transactions are reflected in other businesses.

The results of integrated offering transactions are reflected within CSG or ISG, depending upon the nature of the underlying offering sold.

Subsequent to the close of the Company’s third quarter of Fiscal 2024, Broadcom Inc.

completed its acquisition of VMware.

See Note 18 of the Notes to the Condensed Consolidated Financial Statements for more information about the impact of the transaction on the Company’s relationship with VMware.

Following its acquisition by Broadcom on November 22, 2023, VMware announced changes to its go-to-market approach for VMware offerings that impacted the Company’s commercial relationship with VMware.

On March 25, 2024, the Company terminated the Commercial Framework Agreement (“CFA”) with VMware, which provided the framework under which the Company and VMware continued the commercial relationship following the VMware Spin-off, where Dell Technologies acted as a distributor of VMware’s stand-alone products and services and purchased such products and services for resale to end-user customers (“VMware Resale”).

Dell Technologies no longer acts as a distributor of VMware’s standalone products and services, though the Company will continue to support customers that have purchased resale offerings sold in prior periods.

The results of VMware Resale transactions are reflected in other businesses.

The Company continues to integrate certain VMware products and services with select Dell Technologies’ offerings to end-users.

The results of such offerings are reflected within CSG or ISG, depending upon the nature of the underlying offering sold.

DELL TECHNOLOGIES INC.

1 unchanged sentence

The following table presents a reconciliation of net revenue by the Company’s reportable segments to the Company’s consolidated net revenue as well as a reconciliation of segment operating income to the Company’s consolidated operating income for the periods indicated:

Three Months Ended Nine Months Ended

November 3, 2023 October 28, 2022 November 3, 2023 October 28, 2022

Three Months Ended

May 3, 2024 May 5, 2023

(in millions)

12 unchanged sentences

Unallocated transactions (b) — 2

Impact of purchase accounting (c) ( 2 ) ( 21 ) ( 10 ) ( 33 )

Amortization of intangibles ( 205 ) ( 245 ) ( 613 ) ( 732 )

Transaction-related expenses (d) ( 3 ) ( 8 ) ( 9 ) ( 16 )

Stock-based compensation expense (e) ( 227 ) ( 235 ) ( 675 ) ( 703 )

Other corporate expenses (f) ( 41 ) ( 109 ) ( 512 ) ( 401 )

Amortization of intangibles (c) ( 168 ) ( 203 )

Stock-based compensation expense (d) ( 210 ) ( 225 )

Other corporate expenses (e) ( 176 ) ( 101 )

Total consolidated operating income $ 920 $ 1,069

2 unchanged sentences

(b) Unallocated transactions includes other corporate items that are not allocated to Dell Technologies’ reportable segments.

(c) Impact of purchase accounting includes non-cash purchase accounting adjustments that are primarily related to the EMC merger transaction that was completed in September 2016.

(d) Transaction-related expenses includes acquisition, integration, and divestiture related costs.

(e) Stock-based compensation expense consists of equity awards granted based on the estimated fair value of those awards at grant date.

(f) Other corporate expenses includes severance, impairment charges, facility action, payroll taxes associated with stock-based compensation, and other costs.

(c) Amortization of intangibles includes non-cash purchase accounting adjustments that are primarily related to the EMC merger transaction.

(d) Stock-based compensation expense consists of equity awards granted based on the estimated fair value of those awards at grant date.

(e) Other corporate expenses includes severance expenses, payroll taxes associated with stock-based compensation, facility action costs, transaction-related expenses, impairment charges, incentive charges related to equity investments, and other costs.

DELL TECHNOLOGIES INC.

1 unchanged sentence

The following table presents the disaggregation of net revenue by reportable segment and by major product categories within the segments for the periods indicated:

Three Months Ended Nine Months Ended

November 3, 2023 October 28, 2022 November 3, 2023 October 28, 2022

Three Months Ended

May 3, 2024 May 5, 2023

(in millions)

11 unchanged sentences

The following table presents additional information on selected assets included in the Condensed Consolidated Statements of Financial Position as of the dates indicated:

November 3, 2023 February 3, 2023

May 3, 2024 February 2, 2024

(in millions)

11 unchanged sentences

Property, plant, and equipment, net:

Computer equipment $ 7,534 $ 6,899

Assets in a customer contract $ 4,966 $ 5,022

Computer and other equipment 3,627 3,552

Land and buildings 2,817 2,877

Machinery and other equipment 3,310 3,134

Internal use software 2,253 2,166

Total property, plant, and equipment 13,663 13,617

7 unchanged sentences

The following table presents changes in the Company’s liability for standard limited warranties for the periods indicated:

Three Months Ended Nine Months Ended

November 3, 2023 October 28, 2022 November 3, 2023 October 28, 2022

Three Months Ended

May 3, 2024 May 5, 2023

(in millions)

13 unchanged sentences

The following table presents the activity related to the Company’s severance liability for the periods indicated:

Three Months Ended Nine Months Ended

November 3, 2023 October 28, 2022 November 3, 2023 October 28, 2022

Three Months Ended

May 3, 2024 May 5, 2023

(in millions)

5 unchanged sentences

The following table presents severance charges as included in the Condensed Consolidated Statements of Income for the periods indicated:

Three Months Ended Nine Months Ended

November 3, 2023 October 28, 2022 November 3, 2023 October 28, 2022

Three Months Ended

May 3, 2024 May 5, 2023

(in millions)

5 unchanged sentences

Supply Chain Finance Program

The Company maintains a Supply Chain Finance Program (the “SCF Program”), which enables eligible suppliers of the Company, at the supplier's sole discretion, to sell receivables due from the Company to a third-party financial institution.

The Company has no involvement in establishing the terms or conditions of the arrangement between its suppliers and the financial institution and no economic interest in a supplier's decision to sell a receivable.

Suppliers may elect to sell varying amounts of their outstanding receivables as part of the SCF Program.

The Company does not provide legally secured assets or other forms of guarantees under the arrangement.

The Company maintains a Supply Chain Finance Program (the “SCF Program”), which enables eligible suppliers, at the supplier's sole discretion, to sell receivables due from the Company to a third-party financial institution.

The Company has no involvement in establishing the terms or conditions of the arrangement between its suppliers and the financial institution, no economic interest in a supplier's decision to sell a receivable, and does not provide legally secured assets or other forms of guarantees under the arrangement.

The SCF Program does not impact the Company's liquidity as payments for participating supplier invoices are remitted by the Company to the financial institution on the original invoice due date, regardless of whether an individual invoice is sold by the supplier to the financial institution.

Further, the Company negotiates payment terms with suppliers regardless of their decision to participate in the SCF Program.

Payment terms with such suppliers vary and do not exceed 120 days.

Any amounts due to the financial institution for suppliers participating in the SCF Program are recorded within Accounts Payable on the Company's Condensed Consolidated Statements of Financial Position and associated payments are included in cash flows from operating activities on the Condensed Consolidated Statements of Cash Flows.

As of both November 3, 2023 and February 3, 2023, the Company had $ 1.0 billion included within Accounts Payable representing invoices due to suppliers confirmed as valid under the SCF Program.

As of May 3, 2024 and February 2, 2024, the Company had $ 1.0 billion and $ 1.1 billion, respectively, included within Accounts Payable on the Condensed Consolidated Statements of Financial Position representing invoices due to suppliers confirmed as valid under the SCF Program.

DELL TECHNOLOGIES INC.

2 unchanged sentences

The following table presents information regarding interest and other, net for the periods indicated:

Three Months Ended Nine Months Ended

November 3, 2023 October 28, 2022 November 3, 2023 October 28, 2022

Three Months Ended

May 3, 2024 May 5, 2023

(in millions)

1 unchanged sentence

Investment income, primarily interest $ 54 $ 59

Gain (loss) on investments, net 8 44 ( 36 ) ( 197 )

Loss on investments, net ( 30 ) ( 15 )

Interest expense ( 343 ) ( 405 )

Foreign exchange ( 38 ) ( 32 )

Legal settlement, net — ( 1,000 ) — ( 1,000 )

Other ( 16 ) 29

3 unchanged sentences

NOTE 18 — SUBSEQUENT EVENTS

On November 22, 2023, subsequent to the close of the Company’s third quarter of Fiscal 2024, VMware was acquired by Broadcom Inc.

(“Broadcom”).

Upon the completion of Broadcom’s acquisition of VMware, Mr.

Dell relinquished his direct ownership interest in VMware and his position as Chairman of the Board of VMware, Inc.

Dell’s subsequent ownership interest in Broadcom does not represent control or significant influence to an extent that the transacting parties might be prevented from fully pursuing their own separate interests.

As a result, the Company determined that the acquisition terminated the preexisting related party relationship with VMware and that no related party relationship exists with either Broadcom or VMware as of the date of issuance of this report.

Other than the matter identified above, there were no known events occurring after November 3, 2023 and up until the date of issuance of this report that would materially affect the information presented herein.

There were no known events occurring after May 3, 2024, and up until the date of issuance of this report that would materially affect the information presented herein.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements