DELL TECHNOLOGIES INC. |
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Condensed Consolidated Statements of Income (Loss) and Related Financial Highlights |
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(in millions, except per share amounts and percentages; unaudited) | |||||||||||||||||||||||
Three Months Ended |
% Growth |
Nine Months Ended |
% Growth |
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October 28, | October 30, | Rates | October 28, | October 30, | Rates | ||||||||||||||||||
2016 | 2015 | Yr. to Yr. | 2016 | 2015 | Yr. to Yr. | ||||||||||||||||||
Net revenue: | |||||||||||||||||||||||
Products | $ | 12,366 | $ | 10,638 | 16 | % | $ | 33,510 | $ | 32,100 | 4 | % | |||||||||||
Services | 3,881 | 2,036 | 91 | % | 8,058 | 6,132 | 31 | % | |||||||||||||||
Total net revenue | 16,247 | 12,674 | 28 | % | 41,568 | 38,232 | 9 | % | |||||||||||||||
Cost of net revenue: | |||||||||||||||||||||||
Products | 10,562 | 9,328 | 13 | % | 28,856 | 28,355 | 2 | % | |||||||||||||||
Services | 1,786 | 1,214 | 47 | % | 4,284 | 3,744 | 14 | % | |||||||||||||||
Total cost of net revenue | 12,348 | 10,542 | 17 | % | 33,140 | 32,099 | 3 | % | |||||||||||||||
Gross margin | 3,899 | 2,132 | 83 | % | 8,428 | 6,133 | 37 | % | |||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Selling, general, and administrative | 4,556 | 1,943 | 134 | % | 8,647 | 5,849 | 48 | % | |||||||||||||||
Research and development | 855 | 267 | 220 | % | 1,365 | 772 | 77 | % | |||||||||||||||
Total operating expenses | 5,411 | 2,210 | 145 | % | 10,012 | 6,621 | 51 | % | |||||||||||||||
Operating loss | (1,512 | ) | (78 | ) | (1,584 | ) | (488 | ) | |||||||||||||||
Interest and other, net | (794 | ) | (203 | ) | (1,362 | ) | (600 | ) | |||||||||||||||
Loss from continuing operations before income taxes | (2,306 | ) | (281 | ) | (2,946 | ) | (1,088 | ) | |||||||||||||||
Income tax benefit | (669 | ) | (17 | ) | (623 | ) | (88 | ) | |||||||||||||||
Net loss from continuing operations | (1,637 | ) | (264 | ) | (2,323 | ) | (1,000 | ) | |||||||||||||||
Income (loss) from discontinued operations, net of income taxes | (438 | ) | 84 | 875 | 51 | ||||||||||||||||||
Net loss | (2,075 | ) | (180 | ) | (1,448 | ) | (949 | ) | |||||||||||||||
Less: Net loss attributable to non-controlling interests | (11 | ) | - | (12 | ) | - | |||||||||||||||||
Net loss attributable to Dell Technologies Inc. | $ | (2,064 | ) | $ | (180 | ) | $ | (1,436 | ) | $ | (949 | ) | |||||||||||
Earnings (loss) per share attributable to Dell Technologies Inc. - basic: | |||||||||||||||||||||||
Continuing operations - Class V Common Stock - basic | $ | 0.79 | $ | - | $ | 0.79 | $ | - | |||||||||||||||
Continuing operations - DHI Group - basic | $ | (3.62 | ) | $ | (0.65 | ) | $ | (5.70 | ) | $ | (2.47 | ) | |||||||||||
Discontinued operations - DHI Group - basic | $ | (0.88 | ) | $ | 0.21 | $ | 2.01 | $ | 0.13 | ||||||||||||||
Earnings (loss) per share attributable to Dell Technologies Inc. - diluted: | |||||||||||||||||||||||
Continuing operations - Class V Common Stock - diluted | $ | 0.78 | $ | - | $ | 0.78 | $ | - | |||||||||||||||
Continuing operations - DHI Group - diluted | $ | (3.63 | ) | $ | (0.65 | ) | $ | (5.70 | ) | $ | (2.47 | ) | |||||||||||
Discontinued operations - DHI Group - diluted | $ | (0.88 | ) | $ | 0.21 | $ | 2.01 | $ | 0.13 | ||||||||||||||
Weighted-average shares outstanding: | |||||||||||||||||||||||
Basic - Class V Common Stock | 222 | - | 222 | - | |||||||||||||||||||
Diluted - Class V Common Stock | 222 | - | 222 | - | |||||||||||||||||||
Basic - DHI Group | 497 | 405 | 436 | 405 | |||||||||||||||||||
Diluted - DHI Group | 497 | 405 | 436 | 405 | |||||||||||||||||||
Percentage of Total Net Revenue: |
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Gross margin | 24.0 | % | 16.8 | % | 20.3 | % | 16.0 | % | |||||||||||||||
Selling, general, and administrative | 28.0 | % | 15.3 | % | 20.8 | % | 15.3 | % | |||||||||||||||
Research, development, and engineering | 5.3 | % | 2.1 | % | 3.3 | % | 2.0 | % | |||||||||||||||
Operating expenses | 33.3 | % | 17.4 | % | 24.1 | % | 17.3 | % | |||||||||||||||
Operating loss | (9.3 | %) | (0.6 | %) | (3.8 | %) | (1.3 | %) | |||||||||||||||
Loss from continuing operations before income taxes | (14.2 | %) | (2.2 | %) | (7.1 | %) | (2.8 | %) | |||||||||||||||
Net loss from continuing operations | (10.1 | %) | (2.1 | %) | (5.6 | %) | (2.6 | %) | |||||||||||||||
Income tax rate | 29.0 | % | 6.0 | % | 21.1 | % | 8.1 | % |
DELL TECHNOLOGIES INC. | |||||||
Condensed Consolidated Statements of Financial Position | |||||||
(in millions; unaudited) | |||||||
October 28, 2016 | January 29, 2016 | ||||||
Assets: |
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Current assets: | |||||||
Cash and cash equivalents | $ | 8,822 | $ | 6,322 | |||
Short-term investments | 1,857 | - | |||||
Accounts receivable, net | 8,830 | 4,887 | |||||
Short-term financing receivables, net | 3,049 | 2,915 | |||||
Inventories, net | 3,504 | 1,619 | |||||
Other current assets | 4,441 | 3,497 | |||||
Current assets held for sale | 5,904 | 4,333 | |||||
Total current assets | 36,407 | 23,573 | |||||
Property, plant, and equipment, net | 5,805 | 1,649 | |||||
Long-term investments | 4,285 | 114 | |||||
Long-term financing receivables, net | 2,390 | 2,177 | |||||
Goodwill | 38,840 | 8,406 | |||||
Intangible assets, net | 36,571 | 8,577 | |||||
Other non-current assets | 1,334 | 626 | |||||
Total assets | $ | 125,632 | $ | 45,122 | |||
Liabilities, Redeemable Shares, and Stockholders' Equity: |
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Current liabilities: | |||||||
Short-term debt | $ | 8,388 | $ | 2,981 | |||
Accounts payable | 14,644 | 12,881 | |||||
Accrued and other | 7,445 | 4,217 | |||||
Short-term deferred revenue | 9,215 | 3,632 | |||||
Current liabilities held for sale | 1,677 | 1,599 | |||||
Total current liabilities | 41,369 | 25,310 | |||||
Long-term debt | 47,284 | 10,650 | |||||
Long-term deferred revenue | 7,907 | 4,089 | |||||
Other non-current liabilities | 9,066 | 3,501 | |||||
Total liabilities | 105,626 | 43,550 | |||||
Redeemable shares | 187 | 106 | |||||
Total Dell Technologies Inc. stockholders’ equity | 13,880 | 1,466 | |||||
Non-controlling interests | 5,939 | - | |||||
Total stockholders' equity | 19,819 | 1,466 | |||||
Total liabilities, redeemable shares, and stockholders' equity | $ | 125,632 | $ | 45,122 |
DELL TECHNOLOGIES INC. | |||||||||||||||||
Condensed Consolidated Statements of Cash Flows | |||||||||||||||||
(in millions; unaudited) | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
October 28,
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October 30,
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October 28,
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October 30,
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Cash flows from operating activities: | |||||||||||||||||
Net loss | $ | (2,075 | ) | $ | (180 | ) | $ | (1,448 | ) | $ | (949 | ) | |||||
Adjustments to reconcile net loss to net cash provided by operating activities: |
1,806 | 639 | 2,994 | 2,140 | |||||||||||||
Change in cash from operating activities | (269 | ) | 459 | 1,546 | 1,191 | ||||||||||||
Cash flows from investing activities: | |||||||||||||||||
Investments: | |||||||||||||||||
Purchases | (503 | ) | - | (511 | ) | (26 | ) | ||||||||||
Maturities and sales | 543 | - | 561 | 1 | |||||||||||||
Capital expenditures | (182 | ) | (110 | ) | (417 | ) | (340 | ) | |||||||||
Proceeds from sale of facilities, land, and other assets | 5 | 3 | 24 | 88 | |||||||||||||
Capitalized software development costs | (85 | ) | - | (85 | ) | - | |||||||||||
Collections on purchased financing receivables | 6 | 22 | 31 | 71 | |||||||||||||
Acquisition of businesses, net of cash acquired | (37,614 | ) | - | (37,614 | ) | - | |||||||||||
Divestitures of businesses, net of cash transferred | - | - | - | 8 | |||||||||||||
Other | (8 | ) | - | (48 | ) | - | |||||||||||
Change in cash from investing activities | (37,838 | ) | (85 | ) | (38,059 | ) | (198 | ) | |||||||||
Cash flows from financing activities: | |||||||||||||||||
Payment of dissenting shares obligation | - | - | (446 | ) | - | ||||||||||||
Proceeds from the issuance of DHI Group common stock | 4,404 | - | 4,404 | - | |||||||||||||
Proceeds from the issuance of common stock of subsidiaries | 1 | - | 1 | - | |||||||||||||
Repurchases of DHI Group common stock | (8 | ) | - | (10 | ) | ||||||||||||
Repurchases of Class V Group common stock | (132 | ) | - | (132 | ) | - | |||||||||||
Repurchases of common stock of subsidiaries | (611 | ) | - | (611 | ) | - | |||||||||||
Contributions from non-controlling interests, net | - | - | 100 | - | |||||||||||||
Issuance of common stock under employee plans | - | - | - | 2 | |||||||||||||
Payments for debt issuance costs | (834 | ) | (3 | ) | (849 | ) | (10 | ) | |||||||||
Proceeds from debt | 43,838 | 1,815 | 45,986 | 4,893 | |||||||||||||
Repayments of debt | (7,000 | ) | (2,459 | ) | (9,638 | ) | (5,208 | ) | |||||||||
Other | 1 | (1 | ) | 5 | 2 | ||||||||||||
Change in cash from financing activities | 39,659 | (648 | ) | 38,810 | (321 | ) | |||||||||||
Effect of exchange rate changes on cash and cash equivalents | (21 | ) | (38 | ) | 31 | (88 | ) | ||||||||||
Change in cash and cash equivalents | 1,531 | (312 | ) | 2,328 | 584 | ||||||||||||
Cash and cash equivalents at beginning of the period | 7,373 | 6,294 | 6,576 | 5,398 | |||||||||||||
Cash and cash equivalents at end of the period | $ | 8,904 | $ | 5,982 | $ | 8,904 | $ | 5,982 | |||||||||
Less: Cash included in assets held for sale | 82 | 328 | 82 | 328 | |||||||||||||
Cash and cash equivalents from continuing operations | $ | 8,822 | $ | 5,654 | $ | 8,822 | $ | 5,654 | |||||||||
SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES