What changed in this filing

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Item 1. Financial Statements

2024-09-10 compared with 2024-06-11 · 291 added, 208 removed, 1027 unchanged (33% of the section changed)

ITEM 1 — FINANCIAL STATEMENTS (UNAUDITED)

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

Condensed Consolidated Statements of Financial Position as of August 2 , 2024 and February 2, 2024

Condensed Consolidated Statements of Income for the three and six months ended August 2 , 2024 and August 4 , 2023

Condensed Consolidated Statements of Comprehensive Income for the three and six months ended August 2 , 2024 and August 4 , 2023

Condensed Consolidated Statements of Cash Flows for the si x months ended August 2 , 2024 and Augus t 4 , 2023

Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the three and si x months ended August 2 , 2024 and August 4 , 2023

Notes to the Condensed Consolidated Financial Statements

20 unchanged sentences

(in millions;

May 3, 2024 February 2, 2024

August 2, 2024 February 2, 2024

Current assets:

39 unchanged sentences

(in millions, except per share amounts;

Three Months Ended

May 3, 2024 May 5, 2023

Three Months Ended Six Months Ended

August 2, 2024 August 4, 2023 August 2, 2024 August 4, 2023

Products $ 18,954 $ 16,935 $ 35,081 $ 31,971

17 unchanged sentences

Net income attributable to Dell Technologies Inc.

$ 846 $ 462 $ 1,806 $ 1,045

Earnings per share attributable to Dell Technologies Inc.

8 unchanged sentences

(in millions;

Three Months Ended

May 3, 2024 May 5, 2023

Three Months Ended Six Months Ended

August 2, 2024 August 4, 2023 August 2, 2024 August 4, 2023

Net income $ 841 $ 455 $ 1,796 $ 1,033

2 unchanged sentences

Cash flow hedges:

Change in unrealized gains 87 10

Change in unrealized gains (losses) ( 20 ) 49 67 59

Reclassification adjustment for net (gains) losses included in net income ( 18 ) 68 ( 37 ) 159

1 unchanged sentence

Pension and other postretirement plans:

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

Recognition of actuarial net gains (losses) from pension and other postretirement plans ( 1 ) — 1 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

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

Total other comprehensive income (loss), net of tax expense of $ 0 and $ 7 , respectively, and $ 7 and $ 12 , respectively

( 59 ) 111 ( 64 ) 244

Comprehensive income, net of tax 782 566 1,732 1,277

1 unchanged sentence

Comprehensive income attributable to Dell Technologies Inc.

$ 787 $ 573 $ 1,742 $ 1,289

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

2 unchanged sentences

(in millions;

Three Months Ended

May 3, 2024 May 5, 2023

Six Months Ended

August 2, 2024 August 4, 2023

Cash flows from operating activities:

37 unchanged sentences

continued on next page;

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

Common Stock and Capital in Excess of Par Value Treasury Stock

Three Months Ended August 2, 2024 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 May 3, 2024 833 $ 8,606 123 $ ( 6,622 ) $ ( 4,001 ) $ ( 805 ) $ ( 2,822 ) $ 99 $ ( 2,723 )

Net income (loss) — — — — 846 — 846 ( 5 ) 841

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

— — — — ( 323 ) — ( 323 ) — ( 323 )

Foreign currency translation adjustments — — — — — ( 20 ) ( 20 ) — ( 20 )

Cash flow hedges, net change — — — — — ( 38 ) ( 38 ) — ( 38 )

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

Issuance of common stock, net of shares repurchased for employee tax withholding — ( 11 ) — — — — ( 11 ) — ( 11 )

Stock-based compensation expense — 182 — — — — 182 9 191

Treasury stock repurchases — — 5 ( 712 ) — — ( 712 ) — ( 712 )

Impact from equity transactions of non-controlling interests — 5 — — — — 5 ( 6 ) ( 1 )

Balances as of August 2, 2024 833 $ 8,782 128 $ ( 7,334 ) $ ( 3,478 ) $ ( 864 ) $ ( 2,894 ) $ 97 $ ( 2,797 )

Common Stock and Capital in Excess of Par Value Treasury Stock

Six Months Ended August 2, 2024 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 2, 2024 821 $ 8,926 116 $ ( 5,900 ) $ ( 4,630 ) $ ( 800 ) $ ( 2,404 ) $ 95 $ ( 2,309 )

9 unchanged sentences

Impact from equity transactions of non-controlling interests — ( 2 ) — — — — ( 2 ) ( 5 ) ( 7 )

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

Balances as of August 2, 2024 833 $ 8,782 128 $ ( 7,334 ) $ ( 3,478 ) $ ( 864 ) $ ( 2,894 ) $ 97 $ ( 2,797 )

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

2 unchanged sentences

in millions, except per share amounts;

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

Common Stock and Capital in Excess of Par Value Treasury Stock

Three Months Ended August 4, 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 May 5, 2023 817 $ 8,339 88 $ ( 4,064 ) $ ( 6,430 ) $ ( 868 ) $ ( 3,023 ) $ 99 $ ( 2,924 )

Net income (loss) — — — — 462 — 462 ( 7 ) 455

Dividends and dividend equivalents declared

($ 0.37 per common share)

— — — — ( 281 ) — ( 281 ) — ( 281 )

Foreign currency translation adjustments — — — — — ( 6 ) ( 6 ) — ( 6 )

Cash flow hedges, net change — — — — — 117 117 — 117

Issuance of common stock, net of shares repurchased for employee tax withholding — ( 4 ) — — — — ( 4 ) — ( 4 )

Stock-based compensation expense — 215 — — — — 215 8 223

Treasury stock repurchases — — 5 ( 256 ) — — ( 256 ) — ( 256 )

Impact from equity transactions of non-controlling interests — 4 — — — — 4 ( 5 ) ( 1 )

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

Common Stock and Capital in Excess of Par Value Treasury Stock

Six Months Ended August 4, 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 February 3, 2023 798 $ 8,424 82 $ ( 3,813 ) $ ( 6,732 ) $ ( 1,001 ) $ ( 3,122 ) $ 97 $ ( 3,025 )

9 unchanged sentences

Impact from equity transactions of non-controlling interests — — — — — — — ( 5 ) ( 5 )

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

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

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

9 unchanged sentences

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 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.

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 August 2, 2024 and February 2, 2024 and the results of its operations, corresponding comprehensive income, changes in stockholders’ equity (deficit) for the three and six months ended August 2, 2024 and August 4, 2023, and its cash flows for the six months ended August 2, 2024 and August 4, 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 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 results of its operations, corresponding comprehensive income, and changes in stockholders’ equity (deficit) for the three and six months ended August 2, 2024 and August 4, 2023, and its cash flows for the six months ended August 2, 2024 and August 4, 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.

3 unchanged sentences

All intercompany transactions have been eliminated.

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”).

Secureworks — As of August 2, 2024 and February 2, 2024, the Company held approximately 78.9 % and 81.0 %, respectively, of the outstanding equity interest in 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 $ 99 million and $ 95 million as of May 3, 2024 and February 2, 2024, 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 $ 97 million and $ 95 million as of August 2, 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.

23 unchanged sentences

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:

May 3, 2024 February 2, 2024

August 2, 2024 February 2, 2024

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

11 unchanged sentences

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

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

As of August 2, 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.

5 unchanged sentences

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 $ 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.

Assets were the same as liabilities associated with the plans at approximately $ 232 million and $ 214 million as of August 2, 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.

3 unchanged sentences

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis — Certain assets are measured at fair value on a nonrecurring basis and therefore are not included in the recurring fair value table above.

These assets consist primarily of non-financial assets such as goodwill and intangible assets.

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

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.

See Note 3 of the Notes to the Condensed Consolidated Financial Statements for additional information about the Company’s strategic investments.

These assets consist primarily of financial assets such as the Company’s fixed income debt securities and strategic investments in non-marketable equity and other securities and non-financial assets such as goodwill and intangible assets.

See Note 3 and Note 8 of the Notes to the Condensed Consolidated Financial Statements for additional information about the Company’s investments and goodwill and intangible assets, respectively.

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:

May 3, 2024 February 2, 2024

August 2, 2024 February 2, 2024

Carrying Value Fair Value Carrying Value Fair Value

9 unchanged sentences

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.

Total investments were $ 1.4 billion as of August 2, 2024 and $ 1.6 billion as of February 2, 2024.

Equity and Other Securities

1 unchanged sentence

Investments in marketable securities are measured at fair value on a recurring basis.

Investments in non-marketable equity and other securities represent early-stage companies without readily determinable fair values.

The Company has elected to apply the measurement alternative for non-marketable securities.

4 unchanged sentences

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 and other securities as of the dates indicated:

May 3, 2024 February 2, 2024

August 2, 2024 February 2, 2024

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

7 unchanged sentences

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

Three Months Ended

May 3, 2024 May 5, 2023

Three Months Ended Six Months Ended

August 2, 2024 August 4, 2023 August 2, 2024 August 4, 2023

(in millions)

Marketable securities:

Unrealized gain $ — $ 1 $ — $ 1

Unrealized loss ( 1 ) — ( 6 ) ( 23 )

Net unrealized loss ( 5 ) ( 23 )

Net unrealized gain (loss) ( 1 ) 1 ( 6 ) ( 22 )

Non-marketable securities:

1 unchanged sentence

Unrealized loss — ( 41 ) ( 31 ) ( 46 )

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

Net unrealized loss (a) (b) — ( 41 ) ( 31 ) ( 37 )

Net unrealized loss on equity and other securities $ ( 1 ) $ ( 40 ) $ ( 37 ) $ ( 59 )

____________________

(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

The Company has fixed income debt securities carried at amortized cost which are primarily held as collateral for borrowings.

The Company intends to hold the investments to maturity.

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:

May 3, 2024 February 2, 2024

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

(in millions)

(a) For the six months ended August 2, 2024, unrealized losses on non-marketable securities were attributable to downward adjustments for observable price changes.

(b) For the three and six months ended August 4, 2023, net unrealized losses on non-marketable securities were primarily attributable to impairments partially offset by upward adjustments for observable price changes.

Fixed Income Debt Securities

As of August 2, 2024 and February 2, 2024, the Company held fixed income debt securities of $ 125 million and $ 301 million, respectively, which it intends to hold to maturity.

These investments are recorded at amortized cost and approximate fair value.

As of August 2, 2024, the Company held $ 123 million in fixed income debt securities which will mature within one year and $ 2 million in fixed income debt securities which will mature within five years.

The fair value of the fixed income debt securities was determined based on observable market prices in a less active market or based on valuation methodologies using observable inputs and was categorized as Level 2 in the fair value hierarchy.

DELL TECHNOLOGIES INC.

7 unchanged sentences

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

New financing originations were $ 2.4 billion for both the three months ended August 2, 2024 and August 4, 2023, and $ 4.3 billion and $ 4.2 billion for the six months ended August 2, 2024 and August 4, 2023, respectively.

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

11 unchanged sentences

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 on October 4, 2023, described in Note 1 of the Notes to the Condensed Consolidated Financial Statements, the Company 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 and operational flexibility.

4 unchanged sentences

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

May 3, 2024 February 2, 2024

August 2, 2024 February 2, 2024

Revolving Fixed-term Total Revolving Fixed-term Total

10 unchanged sentences

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

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

The following tables present the changes in allowance for financing receivable losses for the periods indicated:

Three Months Ended

May 3, 2024 May 5, 2023

August 2, 2024 August 4, 2023

Revolving Fixed-term Total Revolving Fixed-term Total

4 unchanged sentences

Provision charged to income statement 4 ( 14 ) ( 10 ) 15 6 21

Held for sale adjustment (a)

— — — ( 74 ) — ( 74 )

Balances at end of period $ 8 $ 158 $ 166 $ 9 $ 140 $ 149

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.

Six Months Ended

August 2, 2024 August 4, 2023

Revolving Fixed-term Total Revolving Fixed-term Total

(in millions)

Allowance for financing receivable losses:

Balances at beginning of period $ 9 $ 161 $ 170 $ 88 $ 113 $ 201

Charge-offs, net of recoveries ( 6 ) ( 21 ) ( 27 ) ( 33 ) ( 2 ) ( 35 )

Provision charged to income statement 5 18 23 28 29 57

Held for sale adjustment (a) — — — ( 74 ) — ( 74 )

Balances at end of period $ 8 $ 158 $ 166 $ 9 $ 140 $ 149

____________________

(a) The held for sale adjustment represents the reclassification of the U.S.

consumer revolving customer receivables portfolio to current assets held for sale as of August 4, 2023.

See Note 1 of the Notes to the Condensed Consolidated Financial Statements for more information about the sale of the U.S.

consumer revolving customer receivables portfolio.

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:

May 3, 2024 February 2, 2024

August 2, 2024 February 2, 2024

Current Past Due

3 unchanged sentences

Revolving $ 135 $ 15 $ 4 $ 154 $ 151 $ 17 $ 5 $ 173

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

Fixed-term 10,034 815 89 10,938 9,345 889 126 10,360

Total customer receivables, gross $ 10,169 $ 830 $ 93 $ 11,092 $ 9,496 $ 906 $ 131 $ 10,533

2 unchanged sentences

As a result of these factors, fluctuations in aging from period to period do not necessarily indicate a material change in the collectibility of the portfolio.

Fixed-term consumer and commercial customer receivables are placed on non-accrual status if principal or interest is past due and considered delinquent, or if there is concern about the collectibility of a specific customer receivable.

Fixed-term customer receivables are placed on non-accrual status if principal or interest is past due and considered delinquent, or if there is concern about the collectibility of a specific customer receivable.

The receivables identified as doubtful for collectibility may be classified as current for aging purposes.

4 unchanged sentences

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

Fixed-term — Consumer and Commercial

Fiscal Year of Origination

August 2, 2024

Fixed-term — Fiscal Year of Origination

2025 2024 2023 2022 2021 Years Prior Revolving Total

5 unchanged sentences

February 2, 2024

Fixed-term — Consumer and Commercial

Fiscal Year of Origination

Fixed-term — Fiscal Year of Origination

2024 2023 2022 2021 2020 Years Prior Revolving Total

6 unchanged sentences

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.

For the revolving receivables and fixed-term 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.

3 unchanged sentences

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

Three Months Ended Six Months Ended

August 2, 2024 August 4, 2023 August 2, 2024 August 4, 2023

(in millions)

Net revenue — products

$ 622 $ 292 $ 1,350 $ 539

Cost of net revenue — products

537 192 1,155 388

Gross margin — products

$ 85 $ 100 $ 195 $ 151

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 Statements of Financial Position as of the date indicated:

August 2, 2024

(in millions)

Fiscal 2025 (remaining nine months) $ 2,109

Fiscal 2025 (remaining six months) $ 1,569

Fiscal 2026 2,841

10 unchanged sentences

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:

May 3, 2024 February 2, 2024

August 2, 2024 February 2, 2024

(in millions)

5 unchanged sentences

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

May 3, 2024 May 5, 2023

Three Months Ended Six Months Ended

August 2, 2024 August 4, 2023 August 2, 2024 August 4, 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:

August 2, 2024

(in millions)

Fiscal 2025 (remaining nine months) $ 852

Fiscal 2025 (remaining six months) $ 582

Fiscal 2026 897

6 unchanged sentences

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:

May 3, 2024 February 2, 2024

August 2, 2024 February 2, 2024

DFS debt (in millions)

14 unchanged sentences

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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.

Asset-Based Financing Facility — The Company maintains an 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.

1 unchanged sentence

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.

As of August 2, 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.

3 unchanged sentences

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 May 3, 2024, these criteria were met.

As of August 2, 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.

1 unchanged sentence

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 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.

The interest rate on these securities is fixed and ranges from 2.49 % to 6.80 % per annum as of August 2, 2024, and the duration of these securities is based on the terms of the underlying lease and loan payment streams.

DFS International Debt

1 unchanged sentence

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 $ 858 million as of May 3, 2024.

This facility is effective through December 23, 2024 and had a total debt capacity of $ 863 million as of August 2, 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 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 $ 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.

As of August 2, 2024, these criteria were met.

The debt under these programs has a variable interest rate.

The duration of the debt in Canada, Europe, Australia, New Zealand, and the Middle East is based on the terms of the underlying loan and lease payment streams.

These facilities are collateralized solely by the loan and lease payments and associated equipment in their respective region or country.

The Canadian facility had a total debt capacity of $ 324 million as of August 2, 2024 and is effective through January 16, 2025.

The European facility had a total debt capacity of $ 540 million as of August 2, 2024 and is effective through December 14, 2026.

The Australia and New Zealand facility had a total debt capacity of $ 293 million as of August 2, 2024 and is effective through April 20, 2025.

The Middle East facility had a total debt capacity of $ 150 million as of August 2, 2024 and is effective through March 24, 2025.

On July 3, 2024, the Company entered into two unsecured revolving credit agreements to fund receivables in Singapore.

The Singapore facilities have a total debt capacity of $ 247 million as of August 2, 2024 and are effective through July 3, 2026 and July 3, 2027, respectively.

Note Payable — On May 25, 2022, the Company entered into an unsecured credit agreement which had an aggregate principal amount of $ 250 million to fund receivables in Mexico.

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

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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.

On October 27, 2021, Dell Bank issued 500 million Euro of 0.5 % senior unsecured five year eurobonds due October 2026.

Dell Bank Senior Unsecured Eurobonds — On October 27, 2021, Dell Bank issued 500 million Euro of 0.5 % senior unsecured five year eurobonds due October 2026.

On October 18, 2022, Dell Bank issued 500 million Euro of 4.5 % senior unsecured five year eurobonds due October 2027.

On June 13, 2024, Dell Bank issued 500 million Euro of 3.6 % senior unsecured five year eurobonds due June 2029.

The issuances of the senior unsecured eurobonds support the expansion of the financing operations in Europe.

9 unchanged sentences

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:

May 3, 2024 February 2, 2024

August 2, 2024 February 2, 2024

(in millions)

9 unchanged sentences

Long-term $ 1,670 $ 2,184

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.

Lease and loan payments and associated equipment transferred via securitization through SPEs were $ 1.2 billion and $ 1.1 billion for the three months ended August 2, 2024 and August 4, 2023, respectively, and $ 2.0 billion and $ 2.6 billion for the six months ended August 2, 2024 and August 4, 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 $ 67 million and $ 169 million for the three months ended May 3, 2024 and May 5, 2023, respectively.

The amount of customer receivables sold for this purpose was $ 69 million and $ 187 million for the six months ended August 2, 2024 and August 4, 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 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.

As of August 2, 2024, the remaining terms of the Company’s leases range from one month to approximately twelve years .

As of August 2, 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

May 3, 2024 May 5, 2023

Three Months Ended Six Months Ended

August 2, 2024 August 4, 2023 August 2, 2024 August 4, 2023

(in millions)

2 unchanged sentences

Total lease costs $ 90 $ 82 $ 179 $ 185

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

During the six months ended August 2, 2024 and August 4, 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 May 3, 2024 February 2, 2024

Classification August 2, 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:

Three Months Ended

May 3, 2024 May 5, 2023

Six Months Ended

August 2, 2024 August 4, 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:

August 2, 2024

(in millions)

Fiscal 2025 (remaining nine months) $ 187

Fiscal 2025 (remaining six months) $ 126

Fiscal 2026 233

7 unchanged sentences

Non-current operating lease liabilities $ 581

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

As of August 2, 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:

May 3, 2024 February 2, 2024

August 2, 2024 February 2, 2024

(in millions)

2 unchanged sentences

DFS Debt (Note 4)

Other 108 171

Total debt, principal amount 24,744 26,222

4 unchanged sentences

Total long-term debt, carrying value $ 17,811 $ 19,012

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.

The Company completed the following transactions during the six months ended August 2, 2024:

• the issuance of $ 1 billion principal amount of 5.40 % Senior Notes due April 2034, the proceeds of which were utilized to prepay a portion of the outstanding 6.02 % Senior Notes due June 2026;

• the repayment of $ 1 billion principal amount of the 4.00 % Senior Notes due July 2024.

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, 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 2025 through 2051.

13 unchanged sentences

The facility matures on November 1, 2027.

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

As of August 2, 2024, the Company had no outstanding borrowings under the revolving credit facility.

DELL TECHNOLOGIES INC.

4 unchanged sentences

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

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

As of August 2, 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.

1 unchanged sentence

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.

The Company was in compliance with this financial covenant as of August 2, 2024.

Aggregate Future Maturities

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:

The following table presents the aggregate future maturities of the Company’s debt as of August 2, 2024, excluding associated carrying value adjustments, for the periods indicated:

August 2, 2024

(in millions)

Fiscal 2025 (remaining nine months) $ 5,248

Fiscal 2025 (remaining six months) $ 2,796

Fiscal 2026 4,567

18 unchanged sentences

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

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.

During the three and six months ended August 2, 2024 and August 4, 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.

9 unchanged sentences

The interest rate swaps economically convert the fixed rate on financing receivables to a three-month Euribor floating rate in order to match the floating rate nature of the banks’ funding pool.

The Company also uses interest rate swaps to manage the cash flows related to interest payments on Eurobonds.

The Company also uses interest rate swaps to manage the cash flows related to interest payments on senior unsecured eurobonds.

The interest rate swaps economically convert the fixed rate on the Company’s bonds to a floating rate to match the underlying lease repayments profile.

These contracts are not designated for hedge accounting and most expire within five years or less.

See Note 4 of the Notes to the Condensed Consolidated Financial Statements for more information about the Dell Bank senior unsecured eurobonds.

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Company utilizes cross-currency amortizing swaps to hedge the currency and interest rate risk exposure associated with the European securitization program.

1 unchanged sentence

Dollar foreign exchange forward contract in which the Company pays a fixed or floating British Pound or U.S.

Dollar amount and receives a fixed or floating amount in Euros linked to the one-month Euribor.

Dollar amount and receives a fixed or floating amount in Euros linked to the one-month Euribor rate.

The notional value of the swaps amortizes in line with the expected cash flows and run-off of the securitized assets.

The swaps are not designated for hedge accounting and expire within five years or less.

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Derivative Instruments

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

May 3, 2024 February 2, 2024

August 2, 2024 February 2, 2024

(in millions)

6 unchanged sentences

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 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

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 May 3, 2024:

For the three months ended August 2, 2024:

Total net revenue $ 14

1 unchanged sentence

Total $ ( 20 ) Total $ 18

For the three months ended May 5, 2023:

For the three months ended August 4, 2023:

Total net revenue $ ( 63 )

1 unchanged sentence

Total $ 49 Total $ ( 68 )

For the six months ended August 2, 2024:

Total net revenue $ 32

Foreign exchange contracts $ 67 Total cost of net revenue 5

Total $ 67 Total $ 37

For the six months ended August 4, 2023:

Total net revenue $ ( 151 )

Foreign exchange contracts $ 59 Total cost of net revenue ( 8 )

Total $ 59 Total $ ( 159 )

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

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

Three Months Ended Six Months Ended

August 2, 2024 August 4, 2023 August 2, 2024 August 4, 2023 Location of Gain (Loss) Recognized

(in millions)

2 unchanged sentences

Total $ 2 $ ( 16 ) $ ( 56 ) $ 20

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Company presents its derivative instruments on a net basis in the Condensed Consolidated Statements of Financial Position due to the right of offset by its counterparties under master netting arrangements.

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

August 2, 2024

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

28 unchanged sentences

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:

August 2, 2024

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

23 unchanged sentences

Impact of foreign currency translation and other ( 46 ) — — ( 46 )

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

Balances as of August 2, 2024 $ 14,995 $ 4,232 $ 427 $ 19,654

Intangible Assets

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

May 3, 2024 February 2, 2024

August 2, 2024 February 2, 2024

Gross Accumulated

8 unchanged sentences

Total intangible assets $ 30,434 $ ( 25,060 ) $ 5,374 $ 30,434 $ ( 24,733 ) $ 5,701

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.

Amortization expense related to definite-lived intangible assets was $ 164 million and $ 209 million for the three months ended August 2, 2024 and August 4, 2023, respectively, and $ 327 million and $ 408 million for the six months ended August 2, 2024 and August 4, 2023, respectively.

There were no material impairment charges related to intangible assets during the three or six months ended August 2, 2024 and August 4, 2023.

DELL TECHNOLOGIES INC.

1 unchanged sentence

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

August 2, 2024

(in millions)

Fiscal 2025 (remaining nine months) $ 490

Fiscal 2025 (remaining six months) $ 327

Fiscal 2026 495

18 unchanged sentences

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.

No goodwill or indefinite-lived assets impairment test was performed during the six months ended August 2, 2024.

DELL TECHNOLOGIES INC.

5 unchanged sentences

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

Three Months Ended

May 3, 2024 May 5, 2023

Three Months Ended Six Months Ended

August 2, 2024 August 4, 2023 August 2, 2024 August 4, 2023

(in millions)

8 unchanged sentences

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 May 3, 2024 was approximately $ 39 billion.

The value of the transaction price allocated to remaining performance obligations as of August 2, 2024 was approximately $ 38 billion.

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

5 unchanged sentences

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 August 2, 2024, such purchase obligations were $ 5.7 billion for Fiscal 2025;

$ 0.5 billion for Fiscal 2026;

and $ 1.0 billion for Fiscal 2027 and thereafter.

Legal Matters

11 unchanged sentences

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.

LLC, 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.

7 unchanged sentences

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

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.

The court conducted a trial on December 7, 2023 and, on February 7, 2024, issued a decision in favor of R2 and imposed an injunction prohibiting the sale and use of such 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.

On February 8, 2024, the Company filed an appeal.

In April and May 2024, R2 filed lawsuits in Paris, France and Milan, Italy, against affiliates of Intel Corporation (“Intel”) and of the Company, raising similar allegations.

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

On August 30, 2024, Intel and R2 publicly announced an agreement to dismiss all litigation between the two companies that would include dismissal of all litigation against all subsidiaries of Dell Technologies named in the foregoing actions.

Pursuant to that agreement, the Italian lawsuit was dismissed on September 2, 2024, the German lawsuit was dismissed on September 4, 2024, and the French lawsuit was dismissed on September 6, 2024.

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.

1 unchanged sentence

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 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.

As of August 2, 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.

6 unchanged sentences

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.

on November 1, 2021 (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”).

1 unchanged sentence

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.

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

DELL TECHNOLOGIES INC.

1 unchanged sentence

NOTE 11 — INCOME AND OTHER TAXES

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.

For the three months ended August 2, 2024, the Company’s effective income tax rate was 15.0 % on pre-tax income of $ 1.0 billion compared to 36.3 % on pre-tax income of $ 0.7 billion for the three months ended August 4, 2023.

For the six months ended August 2, 2024, the Company’s effective income tax rate was ( 16.9 )% on pre-tax income of $ 1.5 billion compared to 27.2 % on pre-tax income of $ 1.4 billion for the six months ended August 4, 2023.The changes in the Company’s effective income tax rate were primarily driven by discrete tax items.

For the six months ended August 2, 2024, the Company recorded 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.

5 unchanged sentences

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 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.

As of August 2, 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 federal income tax 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.

12 unchanged sentences

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

Unrecognized tax benefits were $ 1.0 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.

Unrecognized tax benefits were $ 1.0 billion and $ 1.3 billion as of August 2, 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.

16 unchanged sentences

Total change for the period ( 94 ) 30 — ( 64 )

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

Balances as of August 2, 2024 $ ( 849 ) $ — $ ( 15 ) $ ( 864 )

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.

2 unchanged sentences

Three Months Ended

May 3, 2024 May 5, 2023

August 2, 2024 August 4, 2023

Cash Flow Hedges Pensions Total Cash Flow Hedges Pensions Total

5 unchanged sentences

Total reclassifications, net of tax $ 18 $ — $ 18 $ ( 68 ) $ — $ ( 68 )

Six Months Ended

August 2, 2024 August 4, 2023

Cash Flow Hedges Pensions Total Cash Flow Hedges Pensions Total

(in millions)

Total reclassifications, net of tax:

Net revenue $ 32 $ — $ 32 $ ( 151 ) $ — $ ( 151 )

Cost of net revenue 5 — 5 ( 8 ) — ( 8 )

Operating expenses — 1 1 — — —

Total reclassifications, net of tax $ 37 $ 1 $ 38 $ ( 159 ) $ — $ ( 159 )

DELL TECHNOLOGIES INC.

4 unchanged sentences

(in millions)

Common stock as of May 3, 2024

Common stock as of August 2, 2024

Class A 600 328 328

11 unchanged sentences

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

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

As of August 2, 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.

6 unchanged sentences

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 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.

During the six months ended August 2, 2024, the Company issued 45 million shares of Class C Common Stock to stockholders upon the conversion of 25 million shares of Class A Common Stock and 20 million shares of Class B Common Stock in accordance with the Company’s certificate of incorporation.

During the fiscal year ended February 2, 2024, the Company issued 34 million shares of Class C Common Stock to stockholders upon the conversion of 25 million shares of Class A Common Stock and 9 million shares of Class B Common Stock in accordance with the Company’s certificate of incorporation.

DELL TECHNOLOGIES INC.

5 unchanged sentences

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

August 2, 2024 June 11, 2024 July 23, 2024 August 2, 2024 $ 0.445 $ 314

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

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.

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

During the three and six months ended August 2, 2024 and August 4, 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

2 unchanged sentences

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.

During the six months ended August 2, 2024, the Company repurchased approximately 12 million shares of Class C Common Stock for a total purchase price of approximately $ 1.4 billion.

During the six months ended August 4, 2023, the Company repurchased approximately 11 million shares of Class C Common Stock for a total purchase price of approximately $ 0.5 billion.

As of August 2, 2024, the Company had approximately $ 3.0 billion in authorized amount remaining under the stock repurchase

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.

6 unchanged sentences

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

Three Months Ended

May 3, 2024 May 5, 2023

Three Months Ended Six Months Ended

August 2, 2024 August 4, 2023 August 2, 2024 August 4, 2023

Earnings per share attributable to Dell Technologies Inc.

2 unchanged sentences

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

Three Months Ended

May 3, 2024 May 5, 2023

Three Months Ended Six Months Ended

August 2, 2024 August 4, 2023 August 2, 2024 August 4, 2023

(in millions)

4 unchanged sentences

Weighted-average shares outstanding — basic

708 726 708 725

Dilutive effect of equity awards 16 12 17 12

Weighted-average shares outstanding — diluted

724 738 725 737

Weighted-average shares outstanding — antidilutive

7 unchanged sentences

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 information provided below includes a summary of related party transactions with VMware for the three and six months ended August 4, 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.

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

Related Party Transactions with VMware

5 unchanged sentences

• 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.

For the three and six months ended August 4, 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.

For the three and six months ended August 4, 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

For the three and six months ended August 4, 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 and six months ended August 4, 2023:

Three Months Ended Six Months Ended

Classification August 4, 2023 August 4, 2023

(in millions)

2 unchanged sentences

Purchase of VMware services for resale Cost of net revenue - services $ 880 $ 1,756

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.

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 following the VMware Spin-off.

Pursuant to the Tax Matters Agreement, net receipts from VMware during the six months ended August 4, 2023 were immaterial.

Other Related Parties

17 unchanged sentences

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”).

On March 25, 2024, the Company terminated the Commercial Framework Agreement with VMware, which provided the framework pursuant to which the Company and VMware continued the commercial relationship following the VMware Spin-off and under which 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.

5 unchanged sentences

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

May 3, 2024 May 5, 2023

Three Months Ended Six Months Ended

August 2, 2024 August 4, 2023 August 2, 2024 August 4, 2023

(in millions)

25 unchanged sentences

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

May 3, 2024 May 5, 2023

Three Months Ended Six Months Ended

August 2, 2024 August 4, 2023 August 2, 2024 August 4, 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:

May 3, 2024 February 2, 2024

August 2, 2024 February 2, 2024

(in millions)

8 unchanged sentences

Total inventories $ 5,953 $ 3,622

Prepaid expenses:

Total prepaid expenses (b) $ 762 $ 589

Deferred costs:

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(a) Restricted cash includes cash required to be held in escrow pursuant to DFS securitization arrangements.

(b) Deferred costs are included in other current assets in the Condensed Consolidated Statements of Financial Position.

Amounts classified as long-term deferred costs are included in other non-current assets and are not disclosed above.

(b) Deferred costs and prepaid expenses are included in other current assets in the Condensed Consolidated Statements of Financial Position.

Amounts classified as long-term deferred costs and long-term prepaid expenses are included in other non-current assets and are not disclosed above.

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Warranty Liability

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

Three Months Ended

May 3, 2024 May 5, 2023

Three Months Ended Six Months Ended

August 2, 2024 August 4, 2023 August 2, 2024 August 4, 2023

(in millions)

7 unchanged sentences

The Company’s warranty liability process does not differentiate between estimates made for pre-existing warranties and those made for new warranty obligations.

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Severance Charges

The Company incurs costs related to employee severance and records a liability for these costs when it is probable that employees will be entitled to termination benefits and the amounts can be reasonably estimated.

The liability related to these actions is included in accrued and other current liabilities in the Condensed Consolidated Statements of Financial Position.

The liability related to these actions is included in accrued and other within current liabilities in the Condensed Consolidated Statements of Financial Position.

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

Three Months Ended

May 3, 2024 May 5, 2023

Three Months Ended Six Months Ended

August 2, 2024 August 4, 2023 August 2, 2024 August 4, 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

May 3, 2024 May 5, 2023

Three Months Ended Six Months Ended

August 2, 2024 August 4, 2023 August 2, 2024 August 4, 2023

(in millions)

4 unchanged sentences

Total severance charges $ 328 $ 364 $ 420 $ 412

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Supply Chain Finance Program

2 unchanged sentences

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.

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.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of August 2, 2024 and February 2, 2024, the Company had $ 1.2 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.

Interest and other, net

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

Three Months Ended

May 3, 2024 May 5, 2023

The following table presents information regarding interest and other, net as included in the Condensed Consolidated Statements of Income for the periods indicated:

Three Months Ended Six Months Ended

August 2, 2024 August 4, 2023 August 2, 2024 August 4, 2023

(in millions)

1 unchanged sentence

Investment income, primarily interest $ 38 $ 66 $ 92 $ 125

Loss on investments, net ( 30 ) ( 15 )

Gain (loss) on investments, net 5 ( 29 ) ( 25 ) ( 44 )

Interest expense ( 387 ) ( 352 ) ( 730 ) ( 757 )

5 unchanged sentences

NOTE 18 — SUBSEQUENT EVENTS

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.

There were no known events occurring after August 2, 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