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Item 1. Financial Statements

2024-12-10 compared with 2024-09-10 · 305 added, 252 removed, 1066 unchanged (34% of the section changed)

ITEM 1 — FINANCIAL STATEMENTS (UNAUDITED)

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

Condensed Consolidated Statements of Financial Position as of November 1, 2024 and February 2, 2024

Condensed Consolidated Statements of Income for the three and nine months ended November 1, 2024 and November 3, 2023

Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended November 1, 2024 and November 3, 2023

Condensed Consolidated Statements of Cash Flows for the nine months ended November 1, 2024 and November 3, 2023

Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the three and nine months ended November 1, 2024 and November 3, 2023

Notes to the Condensed Consolidated Financial Statements

20 unchanged sentences

(in millions;

August 2, 2024 February 2, 2024

November 1, 2024 February 2, 2024

Current assets:

4 unchanged sentences

Other current assets 9,306 10,973

Current assets held for sale 662 —

Total current assets 38,035 35,947

12 unchanged sentences

Short-term deferred revenue 13,787 15,318

Current liabilities held for sale 211 —

Total current liabilities 49,500 48,494

19 unchanged sentences

(in millions, except per share amounts;

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

November 1, 2024 November 3, 2023 November 1, 2024 November 3, 2023

Products $ 18,290 $ 16,233 $ 53,371 $ 48,204

13 unchanged sentences

Income before income taxes 1,392 1,180 2,928 2,599

Income tax expense (benefit) 148 259 ( 260 ) 386

Income tax expense 265 176 5 562

Net income 1,127 1,004 2,923 2,037

12 unchanged sentences

(in millions;

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

November 1, 2024 November 3, 2023 November 1, 2024 November 3, 2023

Net income $ 1,127 $ 1,004 $ 2,923 $ 2,037

6 unchanged sentences

Pension and other postretirement plans:

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

Recognition of actuarial net gains from pension and other postretirement plans — 2 1 3

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

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

Net change in actuarial net gains from pension and other postretirement plans — 2 — 3

Total other comprehensive income (loss), net of tax expense of $ 3 and $ 6 , respectively, and $ 10 and $ 18 , respectively

8 unchanged sentences

(in millions;

Six Months Ended

August 2, 2024 August 4, 2023

Nine Months Ended

November 1, 2024 November 3, 2023

Cash flows from operating activities:

18 unchanged sentences

Capital expenditures and capitalized software development costs ( 1,917 ) ( 2,029 )

Acquisition of businesses and assets, net — ( 127 )

Change in cash from investing activities ( 1,537 ) ( 2,114 )

18 unchanged sentences

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

Three Months Ended November 1, 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 )

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

Net income (loss) — — — — 1,132 — 1,132 ( 5 ) 1,127

8 unchanged sentences

Impact from equity transactions of non-controlling interests — 8 — — — — 8 ( 8 ) —

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

Balances as of November 1, 2024 834 $ 8,951 132 $ ( 7,747 ) $ ( 2,669 ) $ ( 820 ) $ ( 2,285 ) $ 95 $ ( 2,190 )

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

Nine Months Ended November 1, 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)

10 unchanged sentences

Impact from equity transactions of non-controlling interests — 6 — — — — 6 ( 13 ) ( 7 )

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

Balances as of November 1, 2024 834 $ 8,951 132 $ ( 7,747 ) $ ( 2,669 ) $ ( 820 ) $ ( 2,285 ) $ 95 $ ( 2,190 )

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

3 unchanged sentences

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

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

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

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

Dividends and dividend equivalents declared

($ 0.37 per common share)

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

— — — — ( 276 ) — ( 276 ) — ( 276 )

1 unchanged sentence

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 )

2 unchanged sentences

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

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

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

Six Months Ended August 4, 2023 Issued Shares Amount Shares Amount Accumulated Deficit Accumulated Other Comprehensive Income/(Loss) Dell Technologies

Nine 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)

10 unchanged sentences

Impact from equity transactions of non-controlling interests — 7 — — — — 7 ( 14 ) ( 7 )

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

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

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

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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 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.

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 1, 2024 and February 2, 2024 and the results of its operations, corresponding comprehensive income, changes in stockholders’ equity (deficit) for the three and nine months ended November 1, 2024 and November 3, 2023, and its cash flows for the nine months ended November 1, 2024 and November 3, 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, 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 results of its operations, corresponding comprehensive income, and changes in stockholders’ equity (deficit) for the three and nine months ended November 1, 2024 and November 3, 2023, and its cash flows for the nine months ended November 1, 2024 and November 3, 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 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 $ 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.

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

For each VIE, the primary beneficiary is the party that has both the power to direct the activities that most significantly impact the VIE's economic performance and the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to such VIE.

2 unchanged sentences

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

Secureworks — As of November 1, 2024 and February 2, 2024, the Company held approximately 78.7 % and 81.0 %, respectively, of the outstanding equity interest in Secureworks.

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 $ 95 million as of both November 1, 2024 and February 2, 2024.

On October 21, 2024, Secureworks announced that it has entered into a definitive agreement pursuant to which Sophos Inc., an affiliate of Thoma Bravo, L.P., a private equity and growth capital firm, will acquire Secureworks in an all-cash transaction for approximately $ 0.9 billion, subject to certain closing adjustments.

The transaction is expected to close in early 2025, subject to customary closing conditions.

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In accordance with applicable accounting guidance, the Company concluded that Secureworks’ assets and liabilities have met the criteria to be classified as held-for-sale as of November 1, 2024.

The Company reclassified the related assets and liabilities as Current assets held for sale and Current liabilities held for sale, respectively, in the accompanying Condensed Consolidated Statements of Financial Position as of November 1, 2024.

The following table presents the major classes of assets and liabilities as of November 1, 2024 related to Secureworks, which were classified as held for sale as of the date indicated:

November 1, 2024

(in millions)

Current assets:

Cash and cash equivalents $ 53

Accounts receivable, net 47

Other current assets 15

Total current assets 115

Intangible assets, net 63

Other non-current assets 57

Total assets $ 662

Current liabilities:

Accrued and other $ 58

Short-term deferred revenue 125

Total current liabilities 183

Other non-current liabilities 28

Total liabilities $ 211

The sale of Secureworks does not meet the criteria for discontinued operations reporting, and as a result its operating results and cash flows are not separately stated as a discontinued operation in the accompanying Condensed Consolidated Financial Statements.

As Secureworks does not meet the requirements for a reportable segment, its operating results are included within Other businesses.

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.

3 unchanged sentences

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)

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.

Expense Disaggregation Disclosures — In November 2024, the Financial Accounting Standards Board (“FASB”) issued guidance to improve disclosures about a public entity’s expenses by requiring disclosure of additional information about the types of expenses commonly presented in the financial statements on an annual and interim basis.

Public entities must adopt the new guidance for fiscal years beginning after December 15, 2026, with early adoption permitted.

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

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.

NOTES TO THE CONDENSED 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.

2 unchanged sentences

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

Segment Reporting — In November 2023, the 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.

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 — FAIR VALUE MEASUREMENTS

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:

August 2, 2024 February 2, 2024

November 1, 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 August 2, 2024, the Company’s portfolio had no material exposure to money market funds with a fluctuating net asset value.

As of November 1, 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 $ 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.

Assets and liabilities associated with the plans are measured at fair value using Level 1 inputs.

Assets were the same as liabilities associated with the plans at approximately $ 243 million and $ 214 million as of November 1, 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 on 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.

As such, assets and liabilities associated with these plans have not been included in the recurring fair value table above.

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 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.

Fixed income debt securities are recorded at amortized cost and approximate fair value.

The fair value of fixed income debt securities is determined based on observable market prices in a less active market or based on valuation methodologies using observable inputs.

If measured at fair value in the Condensed Consolidated Statements of Financial Position, these securities would generally be classified as Level 2 in the fair value hierarchy.

See Note 3 of the Notes to the Condensed Consolidated Financial Statements for additional information about the Company’s fixed income debt securities.

Strategic investments in non-marketable equity and other securities and certain non-financial assets such as goodwill and intangibles are measured at fair value only if they are deemed to be impaired or when there is an adjustment from observable price changes in the current period.

If measured at fair value in the Condensed Consolidated Statements of Financial Position, these securities would generally be classified as Level 3 in the fair value hierarchy.

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:

August 2, 2024 February 2, 2024

November 1, 2024 February 2, 2024

Carrying Value Fair Value Carrying Value Fair Value

5 unchanged sentences

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 — INVESTMENTS

1 unchanged sentence

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

Total investments were $ 1.4 billion as of November 1, 2024 and $ 1.6 billion as of February 2, 2024.

Equity and Other Securities

3 unchanged sentences

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

Under the alternative, the Company measures investments without readily determinable fair values at cost, less impairment, adjusted by observable price changes.

Under the alternative, the Company measures investments without readily determinable fair values at cost, less impairment, adjusted for observable price changes.

The Company makes a separate election to use the alternative for each eligible investment and is required to reassess at each reporting period whether an investment qualifies for the alternative.

2 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:

August 2, 2024 February 2, 2024

November 1, 2024 February 2, 2024

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

4 unchanged sentences

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Gains and Losses on Equity and Other Securities

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

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

November 1, 2024 November 3, 2023 November 1, 2024 November 3, 2023

(in millions)

6 unchanged sentences

Unrealized loss — ( 3 ) ( 31 ) ( 49 )

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

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

Net unrealized gain (loss) (a) (b) 7 3 ( 24 ) ( 34 )

Net unrealized gain (loss) on equity and other securities $ 10 $ 3 $ ( 27 ) $ ( 56 )

____________________

(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.

(a) For the three months ended November 1, 2024 and November 3, 2023, net gains on non-marketable securities are primarily due to upward adjustments for observable price changes.

For the three months ended November 3, 2023, these were partially offset by losses due to impairments.

(b) For the nine months ended November 1, 2024, net unrealized losses on non-marketable securities are primarily attributable to downward adjustments for observable price changes.

For the nine months ended November 3, 2023, net unrealized losses on non-marketable securities were primarily attributable to impairments.

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.

As of November 1, 2024 and February 2, 2024, the Company held fixed income debt securities of $ 61 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.

As of November 1, 2024, the Company held $ 60 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.

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 — FINANCIAL SERVICES

5 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 $ 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.

New financing originations were $ 1.6 billion and $ 1.8 billion for the three months ended November 1, 2024 and November 3, 2023, respectively, and $ 5.9 billion and $ 6.0 billion for the nine months ended November 1, 2024 and November 3, 2023, respectively.

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

6 unchanged sentences

The carrying value of these loans approximates fair value.

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

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

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

4 unchanged sentences

The DPA product was primarily offered to individual consumer customers.

During the three months ended November 1, 2024, the Company discontinued remaining offerings under the revolving loan portfolio.

The Company will support existing customer arrangements as well as transition these customers to fixed-term offerings.

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.

1 unchanged sentence

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Financing Receivables

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

August 2, 2024 February 2, 2024

November 1, 2024 February 2, 2024

Revolving Fixed-term Total Revolving Fixed-term Total

12 unchanged sentences

Three Months Ended

August 2, 2024 August 4, 2023

November 1, 2024 November 3, 2023

Revolving Fixed-term Total Revolving Fixed-term Total

4 unchanged sentences

Provision charged to income statement 2 14 16 4 7 11

Held for sale adjustment (a)

— — — ( 74 ) — ( 74 )

Balances at end of period $ 7 $ 137 $ 144 $ 9 $ 144 $ 153

Six Months Ended

August 2, 2024 August 4, 2023

Nine Months Ended

November 1, 2024 November 3, 2023

Revolving Fixed-term Total Revolving Fixed-term Total

4 unchanged sentences

Provision charged to income statement 7 32 39 32 36 68

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

Other (a) — — — ( 74 ) — ( 74 )

Balances at end of period $ 7 $ 137 $ 144 $ 9 $ 144 $ 153

____________________

(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.

(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.

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

2 unchanged sentences

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:

August 2, 2024 February 2, 2024

November 1, 2024 February 2, 2024

Current Past Due

12 unchanged sentences

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Credit Quality

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

August 2, 2024

November 1, 2024

Fixed-term — Fiscal Year of Origination

15 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 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.

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.

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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 Six Months Ended

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

Three Months Ended Nine Months Ended

November 1, 2024 November 3, 2023 November 1, 2024 November 3, 2023

(in millions)

5 unchanged sentences

$ 68 $ 51 $ 263 $ 202

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

November 1, 2024

(in millions)

Fiscal 2025 (remaining six months) $ 1,569

Fiscal 2025 (remaining three months) $ 871

Fiscal 2026 3,114

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:

August 2, 2024 February 2, 2024

November 1, 2024 February 2, 2024

(in millions)

2 unchanged sentences

Equipment under operating lease, net $ 2,217 $ 2,202

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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 Six Months Ended

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

Three Months Ended Nine Months Ended

November 1, 2024 November 3, 2023 November 1, 2024 November 3, 2023

(in millions)

1 unchanged sentence

Depreciation expense $ 247 $ 234 $ 732 $ 703

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

November 1, 2024

(in millions)

Fiscal 2025 (remaining six months) $ 582

Fiscal 2025 (remaining three months) $ 347

Fiscal 2026 1,079

4 unchanged sentences

The Company maintains programs that facilitate the funding of leases, loans, and other alternative payment structures in the capital markets.

The majority of DFS debt is non-recourse to Dell Technologies and represents borrowings under securitization programs and structured financing programs for which the Company’s risk of loss is limited to transferred loan and lease payments and associated equipment.

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:

August 2, 2024 February 2, 2024

November 1, 2024 February 2, 2024

DFS debt (in millions)

12 unchanged sentences

Total long-term DFS debt $ 3,589 $ 3,629

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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.

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 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.

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

lease and loan 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, respectively.

As of November 1, 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 lease and loan payment streams.

The Company enters into interest rate swap agreements to economically 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.

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 August 2, 2024, these criteria were met.

As of November 1, 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 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.

The interest rate on these securities is fixed and ranges from 4.14 % to 6.80 % per annum as of November 1, 2024, and the duration of these securities is based on the terms of the underlying lease and loan payment streams.

DFS International Debt

Securitization Facility — The Company maintains a securitization facility in Europe for fixed-term leases and loans.

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 $ 863 million as of August 2, 2024.

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

This facility is effective through December 23, 2024 and had a total debt capacity of $ 871 million as of November 1, 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 August 2, 2024, these criteria were met.

As of November 1, 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, the Middle East, and Singapore.

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.

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

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

The Canadian facility had a total debt capacity of $ 323 million as of November 1, 2024 and is effective through January 16, 2025.

The European facility had a total debt capacity of $ 544 million as of November 1, 2024 and is effective through December 14, 2026.

The Australia and New Zealand facility had a total debt capacity of $ 296 million as of November 1, 2024 and is effective through April 20, 2025.

The Middle East facility had a total debt capacity of $ 150 million as of November 1, 2024 and is effective through March 24, 2025.

The Company also has two unsecured Singapore facilities with a total debt capacity of $ 250 million as of November 1, 2024 that 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 October 27, 2021, Dell Bank issued 500 million Euro of 0.5 % senior unsecured five year eurobonds due October 2026.

2 unchanged sentences

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

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Variable Interest Entities

2 unchanged sentences

The SPEs are bankruptcy-remote legal entities with separate assets and liabilities.

The purpose of the SPEs is to facilitate the funding of customer loan and lease payments and associated equipment in the capital markets.

The purpose of the SPEs is to facilitate the funding of customer lease and loan payments and associated equipment in the capital markets.

Some of the SPEs have entered into financing arrangements with multi-seller conduits that, in turn, issue asset-backed debt securities in the capital markets.

3 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:

August 2, 2024 February 2, 2024

November 1, 2024 February 2, 2024

(in millions)

9 unchanged sentences

Long-term $ 1,838 $ 2,184

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.

Lease and loan payments and associated equipment transferred via securitization through SPEs were $ 1.0 billion and $ 1.1 billion for the three months ended November 1, 2024 and November 3, 2023, respectively, and $ 3.0 billion and $ 3.7 billion for the nine months ended November 1, 2024 and November 3, 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 $ 69 million and $ 187 million for the six months ended August 2, 2024 and August 4, 2023, respectively.

The amount of customer receivables sold for this purpose was $ 75 million and $ 205 million for the nine months ended November 1, 2024 and November 3, 2023, respectively.

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

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 — LEASES

3 unchanged sentences

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

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.

As of November 1, 2024, the remaining terms of the Company’s leases range from one month to approximately eleven years .

As of November 1, 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 Six Months Ended

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

Three Months Ended Nine Months Ended

November 1, 2024 November 3, 2023 November 1, 2024 November 3, 2023

(in millions)

2 unchanged sentences

Total lease costs $ 90 $ 98 $ 269 $ 283

During the six months ended August 2, 2024 and August 4, 2023, sublease income, finance lease costs, and short-term lease costs were immaterial.

During the nine months ended November 1, 2024 and November 3, 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 August 2, 2024 February 2, 2024

Classification November 1, 2024 February 2, 2024

(in millions, except for term and discount rate)

6 unchanged sentences

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Six Months Ended

August 2, 2024 August 4, 2023

Nine Months Ended

November 1, 2024 November 3, 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

November 1, 2024

(in millions)

Fiscal 2025 (remaining six months) $ 126

Fiscal 2025 (remaining three months) $ 65

Fiscal 2026 235

7 unchanged sentences

Non-current operating lease liabilities $ 563

As of August 2, 2024, the Company’s undiscounted operating leases that had not yet commenced were immaterial.

As of November 1, 2024, the Company’s undiscounted operating leases that had not yet commenced were immaterial.

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 — DEBT

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

August 2, 2024 February 2, 2024

November 1, 2024 February 2, 2024

(in millions)

8 unchanged sentences

Total long-term debt, carrying value $ 19,410 $ 19,012

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

The Company completed the following transactions during the nine months ended November 1, 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;

• the issuance of $ 0.7 billion principal amount of 4.35 % Senior Notes due February 2030 and $ 0.8 billion principal amount of 4.85 % Senior Notes due February 2035, the proceeds of which were utilized to redeem the 5.85 % Senior Notes due July 2025.

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 (collectively, the “Senior Notes”).

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, March 18, 2024, and October 8, 2024 in aggregate principal amounts of $ 20.0 billion, $ 3.3 billion, $ 4.5 billion, $ 2.3 billion, $ 2.3 billion, $ 2.0 billion, $ 1.0 billion, and $ 1.5 billion, respectively (collectively, the “Senior Notes”).

The Senior Notes maturities range from 2026 through 2051.

13 unchanged sentences

The facility matures on November 1, 2027.

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

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of November 1, 2024, the Company had no outstanding borrowings under the revolving credit facility.

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.

2 unchanged sentences

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

As of August 2, 2024, the Company had no outstanding issuances under the commercial paper program.

As of November 1, 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 August 2, 2024.

The Company was in compliance with this financial covenant as of November 1, 2024.

Aggregate Future Maturities

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

The following table presents the aggregate future maturities of the Company’s debt as of November 1, 2024, excluding associated carrying value adjustments, for the periods indicated:

November 1, 2024

(in millions)

Fiscal 2025 (remaining six months) $ 2,796

Fiscal 2025 (remaining three months) $ 2,023

Fiscal 2026 3,996

5 unchanged sentences

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 — DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

10 unchanged sentences

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

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.

During the three and nine months ended November 1, 2024 and November 3, 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.

14 unchanged sentences

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

6 unchanged sentences

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

August 2, 2024 February 2, 2024

November 1, 2024 February 2, 2024

(in millions)

8 unchanged sentences

(in millions) (in millions)

For the three months ended August 2, 2024:

For the three months ended November 1, 2024:

Total net revenue $ ( 57 )

1 unchanged sentence

Total $ ( 9 ) Total $ ( 54 )

For the three months ended August 4, 2023:

For the three months ended November 3, 2023:

Total net revenue $ 83

1 unchanged sentence

Total $ 171 Total $ 84

For the six months ended August 2, 2024:

For the nine months ended November 1, 2024:

Total net revenue $ ( 25 )

1 unchanged sentence

Total $ 58 Total $ ( 17 )

For the six months ended August 4, 2023:

For the nine months ended November 3, 2023:

Total net revenue $ ( 68 )

2 unchanged sentences

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 Six Months Ended

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

Three Months Ended Nine Months Ended

November 1, 2024 November 3, 2023 November 1, 2024 November 3, 2023 Location of Gain (Loss) Recognized

(in millions)

4 unchanged sentences

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

August 2, 2024

November 1, 2024

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

26 unchanged sentences

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

November 1, 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

14 unchanged sentences

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 — GOODWILL AND INTANGIBLE ASSETS

6 unchanged sentences

Impact of foreign currency translation and other ( 30 ) — — ( 30 )

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

Reclassification to assets held for sale (a) — — ( 427 ) ( 427 )

Balances as of November 1, 2024 $ 15,011 $ 4,232 $ — $ 19,243

____________________

(a) During the three months ended November 1, 2024, Secureworks goodwill was reclassified to current assets held for sale on the Condensed Consolidated Statements of Financial Position.

See Note 1 of the Notes to the Condensed Consolidated Financial Statements for additional information about the pending sale of Secureworks.

Intangible Assets

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

August 2, 2024 February 2, 2024

November 1, 2024 February 2, 2024

Gross Accumulated

8 unchanged sentences

Total intangible assets $ 30,073 $ ( 24,926 ) $ 5,147 $ 30,434 $ ( 24,733 ) $ 5,701

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.

Amortization expense related to definite-lived intangible assets was $ 163 million and $ 205 million for the three months ended November 1, 2024 and November 3, 2023, respectively, and $ 491 million and $ 613 million for the nine months ended November 1, 2024 and November 3, 2023, respectively.

There were no material impairment charges related to intangible assets during the three or nine months ended November 1, 2024 and November 3, 2023.

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

November 1, 2024

(in millions)

Fiscal 2025 (remaining six months) $ 327

Fiscal 2025 (remaining three months) $ 160

Fiscal 2026 480

10 unchanged sentences

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.

Additionally, Secureworks’ entry into a definitive agreement, pursuant to which Secureworks will be acquired in an all-cash transaction for approximately $ 0.9 billion, as discussed in Note 1 of the Notes to the Condensed Consolidated Financial Statements, provided a fair value indication that the Secureworks reporting unit exceeded its carrying value.

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.

5 unchanged sentences

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 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 six months ended August 2, 2024.

Based on the results of the annual impairment test performed during the three months ended November 1, 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 nine months ended November 1, 2024 other than the Company’s annual impairment review and the assessment of Secureworks.

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 — DEFERRED REVENUE

3 unchanged sentences

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

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

November 1, 2024 November 3, 2023 November 1, 2024 November 3, 2023

(in millions)

3 unchanged sentences

Revenue recognized ( 5,262 ) ( 5,766 ) ( 16,084 ) ( 16,484 )

Other (a) ( 136 ) 15 ( 136 ) 15

Deferred revenue at end of period $ 26,211 $ 29,053 $ 26,211 $ 29,053

1 unchanged sentence

Long-term deferred revenue $ 12,424 $ 13,847 $ 12,424 $ 13,847

____________________

(a) For the three and nine months ended November 1, 2024, Other represents the reclassification of Secureworks deferred revenue to liabilities held for sale.

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

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 August 2, 2024 was approximately $ 38 billion.

The value of the transaction price allocated to remaining performance obligations as of November 1, 2024 was approximately $ 37 billion.

The Company expects to recognize approximately 60 % of remaining performance obligations as revenue in the next twelve months , and the remainder thereafter.

3 unchanged sentences

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 — COMMITMENTS AND CONTINGENCIES

1 unchanged sentence

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;

As of November 1, 2024, such purchase obligations were $ 6.4 billion for the remaining three months of Fiscal 2025;

$ 0.5 billion for Fiscal 2026;

20 unchanged sentences

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

11 unchanged sentences

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 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.

As of November 1, 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.

7 unchanged sentences

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”).

(currently operating under the name “VMware LLC,” and 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.

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 August 2, 2024 and February 2, 2024.

Net income tax indemnification receivables from VMware were immaterial as of November 1, 2024 and February 2, 2024.

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11 — INCOME AND OTHER TAXES

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.

For the three months ended November 1, 2024, the Company’s effective income tax rate was 19.0 % on pre-tax income of $ 1.4 billion compared to 14.9 % on pre-tax income of $ 1.2 billion for the three months ended November 3, 2023.

For the nine months ended November 1, 2024, the Company’s effective income tax rate was 0.2 % on pre-tax income of $ 2.9 billion compared to 21.6 % on pre-tax income of $ 2.6 billion for the nine months ended November 3, 2023.

The changes in the Company’s effective income tax rate were primarily driven by discrete tax items.

For the nine months ended November 1, 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 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.

As of November 1, 2024, the Company was not aware of any matters of non-compliance related to 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.

2 unchanged sentences

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 disagrees with the IRS’s 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.

8 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 August 2, 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 November 1, 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.

The Company believes that a material loss in these matters is not probable and that it is not reasonably possible that a material loss exceeding amounts already accrued has been incurred.

The Company believes its positions in these non-income tax litigation matters are supportable and that it ultimately will prevail in the matters.

The Company believes that a material loss in these non-income tax litigation matters is not probable and that it is not reasonably possible that a material loss exceeding amounts already accrued has been incurred.

The Company believes its positions in these matters are supportable and that it ultimately will prevail in the matters.

In the normal course of business, the Company’s positions and conclusions related to its non-income taxes could be challenged and assessments may be made.

2 unchanged sentences

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 — ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

7 unchanged sentences

Total change for the period ( 95 ) 75 — ( 20 )

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

Balances as of November 1, 2024 $ ( 850 ) $ 45 $ ( 15 ) $ ( 820 )

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

August 2, 2024 August 4, 2023

November 1, 2024 November 3, 2023

Cash Flow Hedges Pensions Total Cash Flow Hedges Pensions Total

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Total reclassifications, net of tax $ ( 54 ) $ — $ ( 54 ) $ 84 $ — $ 84

Six Months Ended

August 2, 2024 August 4, 2023

Nine Months Ended

November 1, 2024 November 3, 2023

Cash Flow Hedges Pensions Total Cash Flow Hedges Pensions Total

6 unchanged sentences

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13 — CAPITALIZATION

2 unchanged sentences

(in millions)

Common stock as of August 2, 2024

Common stock as of November 1, 2024

Class A 600 302 302

11 unchanged sentences

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

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

As of November 1, 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 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 nine months ended November 1, 2024, the Company issued 71 million shares of Class C Common Stock to stockholders upon the conversion of 51 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.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

4 unchanged sentences

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

November 1, 2024 September 18, 2024 October 22, 2024 November 1, 2024 $ 0.445 $ 312

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

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.

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

During the three and nine months ended November 1, 2024 and November 3, 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 under the stock repurchase program.

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

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.

During the nine months ended November 1, 2024, the Company repurchased approximately 16 million shares of Class C Common Stock for a total purchase price of approximately $ 1.8 billion.

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.

As of November 1, 2024, the Company had approximately $ 2.6 billion in authorized amount remaining under the stock repurchase program.

The above repurchases of Class C Common Stock exclude U.S.

federal excise taxes and shares withheld from stock awards to settle employee tax withholding obligations related to the vesting of such awards.

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14 — EARNINGS PER SHARE

3 unchanged sentences

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

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

November 1, 2024 November 3, 2023 November 1, 2024 November 3, 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 Six Months Ended

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

Three Months Ended Nine Months Ended

November 1, 2024 November 3, 2023 November 1, 2024 November 3, 2023

(in millions)

10 unchanged sentences

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 15 — RELATED PARTY TRANSACTIONS

2 unchanged sentences

(“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 and six months ended August 4, 2023.

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

1 unchanged sentence

Related Party Transactions with VMware

The information provided below includes a summary of related party transactions with VMware for the three and nine months ended November 3, 2023.

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

4 unchanged sentences

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

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.

For the three and nine months ended November 3, 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 and six months ended August 4, 2023, revenue recognized from sales of services to VMware was immaterial.

For the three and nine months ended November 3, 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 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

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

Three Months Ended Nine Months Ended

Classification November 3, 2023 November 3, 2023

(in millions)

2 unchanged sentences

Purchase of VMware services for resale Cost of net revenue — services $ 884 $ 2,640

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.

In connection with the completion of the VMware Spin-off described in Note 10 of the Notes to the Condensed Consolidated Financial Statements, 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 nine months ended November 3, 2023 were immaterial.

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Other Related Parties

1 unchanged sentence

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16 — SEGMENT INFORMATION

13 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 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”).

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 Broadcom’s VMware 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 Company continues to integrate and embed 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.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 Six Months Ended

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

Three Months Ended Nine Months Ended

November 1, 2024 November 3, 2023 November 1, 2024 November 3, 2023

(in millions)

23 unchanged sentences

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 Six Months Ended

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

Three Months Ended Nine Months Ended

November 1, 2024 November 3, 2023 November 1, 2024 November 3, 2023

(in millions)

8 unchanged sentences

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 17 — SUPPLEMENTAL CONSOLIDATED FINANCIAL INFORMATION

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

August 2, 2024 February 2, 2024

November 1, 2024 February 2, 2024

(in millions)

1 unchanged sentence

Cash and cash equivalents $ 5,225 $ 7,366

Restricted cash - other current assets (a) 118 136

Restricted cash - other non-current assets (a) 3 5

Cash and cash equivalents — held for sale (a) 53 —

Restricted cash — other current assets (b) 122 136

Restricted cash — other non-current assets (b) 4 5

Total cash, cash equivalents, and restricted cash $ 5,404 $ 7,507

3 unchanged sentences

Total inventories $ 6,652 $ 3,622

Prepaid expenses:

Total prepaid expenses (b) $ 762 $ 589

Deferred costs:

Total deferred costs, current (b) $ 5,057 $ 5,548

Total deferred costs, current (c) $ 4,282 $ 5,548

Property, plant, and equipment, net:

7 unchanged sentences

____________________

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

(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.

(a) Held for sale represents the reclassification of Secureworks cash and cash equivalents to assets held for sale.

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

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

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

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Warranty Liability

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

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

November 1, 2024 November 3, 2023 November 1, 2024 November 3, 2023

(in millions)

11 unchanged sentences

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

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

November 1, 2024 November 3, 2023 November 1, 2024 November 3, 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 Six Months Ended

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

Three Months Ended Nine Months Ended

November 1, 2024 November 3, 2023 November 1, 2024 November 3, 2023

(in millions)

5 unchanged sentences

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 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.

As of November 1, 2024 and February 2, 2024, the Company had $ 1.4 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 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

Three Months Ended Nine Months Ended

November 1, 2024 November 3, 2023 November 1, 2024 November 3, 2023

(in millions)

7 unchanged sentences

DELL TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 18 — SUBSEQUENT EVENTS

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.

There were no known events occurring after November 1, 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