DELL TECHNOLOGIES INC.

Condensed Consolidated Statements of Income (Loss) and Related Financial Highlights

(in millions, except percentages; unaudited)

Three Months Ended

Six Months Ended

July 31, 2020

August 2, 2019

Change

July 31, 2020

August 2, 2019

Change

Net revenue (a):

Products

$

16,737

$

17,915

(7)%

$

32,775

$

34,490

(5)%

Services

5,996

5,455

10%

11,855

10,788

10%

   Total net revenue

22,733

23,370

(3)%

44,630

45,278

(1)%

Cost of net revenue:

Products

13,330

13,889

(4)%

26,134

26,968

(3)%

Services

2,247

2,155

4%

4,487

4,187

7%

   Total cost of net revenue

15,577

16,044

(3)%

30,621

31,155

(2)%

Gross margin

7,156

7,326

(2)%

14,009

14,123

(1)%

Operating expenses:

Selling, general, and administrative

4,761

5,578

(15)%

9,647

10,649

(9)%

Research and development

1,259

1,229

2%

2,524

2,405

5%

   Total operating expenses

6,020

6,807

(12)%

12,171

13,054

(7)%

Operating income

1,136

519

119%

1,838

1,069

72%

Interest and other, net

(636)

(630)

(1)%

(1,202)

(1,323)

9%

Income (loss) before income taxes

500

(111)

550%

636

(254)

350%

Income tax benefit

(599)

(4,343)

86%

(645)

(4,815)

87%

Net income

1,099

4,232

(74)%

1,281

4,561

(72)%

Less: Net income attributable to non-controlling interests

51

816

(94)%

90

852

(89)%

Net income attributable to Dell Technologies Inc.

$

1,048

$

3,416

(69)%

$

1,191

$

3,709

(68)%

Percentage of Total Net Revenue:

Gross margin

31

%

31

%

31

%

31

%

Selling, general, and administrative

21

%

24

%

22

%

24

%

Research and development

6

%

5

%

6

%

5

%

Operating expenses

26

%

29

%

27

%

29

%

Operating income

5

%

2

%

4

%

2

%

Income (loss) before income taxes

2

%

—

%

1

%

(1)

%

Net income

5

%

18

%

3

%

10

%

Income tax rate

-119.8

%

3912.6

%

-101.4

%

1895.7

%