Attached files
| file | filename |
|---|---|
| 10-Q - 10-Q - Dell Technologies Inc. | delltechnologiesq3fy19.htm |
| EX-32.1 - EXHIBIT 32.1 - Dell Technologies Inc. | exhibit321_11-02x18.htm |
| EX-31.2 - EXHIBIT 31.2 - Dell Technologies Inc. | exhibit312_11-02x18.htm |
| EX-31.1 - EXHIBIT 31.1 - Dell Technologies Inc. | exhibit311_11-02x18.htm |
Exhibit 99.1
UNAUDITED ATTRIBUTED FINANCIAL INFORMATION
FOR CLASS V GROUP
(continued on next page)
The information presented below is intended solely to show the attribution of assets, liabilities, revenue, and expenses to the Class V Group in accordance with the Tracking Stock Policy of Dell Technologies Inc. (“Dell Technologies” or the “Company”), a copy of which is filed as Exhibit 99.2 to the Company’s Annual Report on Form 10-K for the fiscal year ended February 3, 2017. The individual income and expense line item amounts reflected in the column for VMware, Inc. (“VMware”) are for informational purposes and do not represent actual income and expenses of the Class V Group. The Class V stockholders do not have any special rights related to, direct ownership interest in, or recourse against the assets and liabilities attributed to the Class V Group. Holders of the DHI Group Common Stock and the Class V Common Stock are stockholders of the Company and subject to all risks associated with an investment in the Company and all of its businesses, assets, and liabilities. This financial information could change in the future based on allocations or reallocations of assets and liabilities to the Class V Group.
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
November 2, 2018 | November 2, 2018 | ||||||||||||||||||||||
VMware Reportable Segment | Adjustments and Eliminations (a) | VMware | VMware Reportable Segment | Adjustments and Eliminations (a) | VMware | ||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Net revenue | $ | 2,229 | $ | (29 | ) | $ | 2,200 | $ | 6,451 | $ | (68 | ) | $ | 6,383 | |||||||||
Cost of net revenue | 272 | 43 | 315 | 791 | 125 | 916 | |||||||||||||||||
Gross margin | 1,957 | (72 | ) | 1,885 | 5,660 | (193 | ) | 5,467 | |||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Selling, general, and administrative | 788 | 103 | 891 | 2,380 | 268 | 2,648 | |||||||||||||||||
Research and development | 401 | 98 | 499 | 1,163 | 270 | 1,433 | |||||||||||||||||
Total operating expenses | 1,189 | 201 | 1,390 | 3,543 | 538 | 4,081 | |||||||||||||||||
Operating income (loss) | $ | 768 | $ | (273 | ) | $ | 495 | $ | 2,117 | $ | (731 | ) | $ | 1,386 | |||||||||
Interest and other income (expense), net attributable to VMware | (150 | ) | 906 | ||||||||||||||||||||
Income before income taxes attributable to VMware | 345 | 2,292 | |||||||||||||||||||||
Income tax provision attributable to VMware | 11 | 372 | |||||||||||||||||||||
Net income attributable to VMware | $ | 334 | $ | 1,920 | |||||||||||||||||||
____________________
(a) | Adjustments and eliminations primarily consist of intercompany sales and allocated expenses, as well as expenses that are excluded from the VMware reportable segment, such as amortization of intangible assets, stock-based compensation expense, severance, and integration and acquisition-related costs. |
1
UNAUDITED ATTRIBUTED FINANCIAL INFORMATION
FOR CLASS V GROUP
(continued on next page)
Reconciliation of net income attributable to VMware to Class V Common Stock economic interest in Class V Group:
Three Months Ended | Nine Months Ended | ||||||
November 2, 2018 | November 2, 2018 | ||||||
(in millions) | |||||||
Net income attributable to VMware | $ | 334 | $ | 1,920 | |||
Less: Net income attributable to non-controlling interests | (64 | ) | (357 | ) | |||
Net income attributable to Class V Group | 270 | 1,563 | |||||
Less: DHI Group's 38.90% weighted average retained interest in Class V Group | (105 | ) | (608 | ) | |||
Class V Common Stock economic interest in Class V Group | $ | 165 | $ | 955 | |||
Reconciliation of VMware total net assets to Class V Common Stock economic interest in Class V Group:
VMware | ||||
November 2, 2018 | ||||
(in millions) | ||||
VMware balance sheet information | ||||
Total assets (1)(2) | $ | 23,962 | ||
Total liabilities (1)(2) | 13,051 | |||
VMware total net assets | $ | 10,911 | ||
Class V Group | ||||
November 2, 2018 | ||||
(in millions) | ||||
VMware total net assets | $ | 10,911 | ||
Less: Net assets attributable to non-controlling interests (3) | (2,108 | ) | ||
Net assets attributable to Class V Group | 8,803 | |||
Less: DHI Group's 38.90% retained interest in Class V Group | (3,425 | ) | ||
Class V Common Stock economic interest in Class V Group | $ | 5,378 | ||
Inter-group assets (4) | $ | — | ||
Inter-group liabilities (4) | $ | — | ||
____________________
(1) | Represents VMware's unadjusted assets and liabilities as of November 2, 2018 as consolidated into the Company’s Consolidated Statements of Financial Position. |
(2) | As determined by Dell Technologies’ board of directors, the Company has not allocated any assets or liabilities between the DHI Group and the Class V Group. |
(3) | Reflects the impact of non-controlling interests on net assets attributable to the Company, which had an ownership interest of approximately 80.7% of VMware’s outstanding shares of common stock as of November 2, 2018. |
(4) | Represents inter-group assets/liabilities between the Class V Group and the DHI Group in accordance with the Tracking Stock Policy. The Tracking Stock Policy states that any ordinary course commercial inter-group transactions are intended, to the extent practicable, to be on terms consistent with terms that would be applicable to arm's-length dealings with unrelated third parties. |
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UNAUDITED ATTRIBUTED FINANCIAL INFORMATION
FOR CLASS V GROUP
(continued on next page)
The adoption of the new revenue accounting standard during the three months ended May 4, 2018 impacted the previously reported results of the VMware reportable segment and the standalone results of VMware, Inc. Presented below is the Unaudited Attributed Financial Information for Class V Group for the three months ended and nine months ended November 3, 2017 and as of February 2, 2018 that has been recast to reflect the retrospective adoption of the new accounting standard.
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
November 3, 2017 | November 3, 2017 | ||||||||||||||||||||||
VMware Reportable Segment | Adjustments and Eliminations (a) | VMware | VMware Reportable Segment | Adjustments and Eliminations (a) | VMware | ||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Net revenue | $ | 1,933 | $ | 5 | $ | 1,938 | $ | 5,735 | $ | (99 | ) | $ | 5,636 | ||||||||||
Cost of net revenue | 246 | 32 | 278 | 730 | 107 | 837 | |||||||||||||||||
Gross margin | 1,687 | (27 | ) | 1,660 | 5,005 | (206 | ) | 4,799 | |||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Selling, general, and administrative | 702 | 99 | 801 | 2,006 | 399 | 2,405 | |||||||||||||||||
Research and development | 351 | 98 | 449 | 1,026 | 272 | 1,298 | |||||||||||||||||
Total operating expenses | 1,053 | 197 | 1,250 | 3,032 | 671 | 3,703 | |||||||||||||||||
Operating income (loss) | $ | 634 | $ | (224 | ) | $ | 410 | $ | 1,973 | $ | (877 | ) | $ | 1,096 | |||||||||
Interest and other income (expense), net attributable to VMware | 3 | 92 | |||||||||||||||||||||
Income before income taxes attributable to VMware | 413 | 1,188 | |||||||||||||||||||||
Income tax provision attributable to VMware | 18 | 143 | |||||||||||||||||||||
Net income attributable to VMware | $ | 395 | $ | 1,045 | |||||||||||||||||||
____________________
(a) | Adjustments and eliminations primarily consist of intercompany sales and allocated expenses, as well as expenses that are excluded from the VMware reportable segment, such as amortization of intangible assets, stock-based compensation expense, severance, and integration and acquisition-related costs. |
3
UNAUDITED ATTRIBUTED FINANCIAL INFORMATION
FOR CLASS V GROUP
(continued)
Reconciliation of net income attributable to VMware to Class V Common Stock economic interest in Class V Group:
Three Months Ended | Nine Months Ended | ||||||
November 3, 2017 | November 3, 2017 | ||||||
(in millions) | |||||||
Net income attributable to VMware | $ | 395 | $ | 1,045 | |||
Less: Net income attributable to non-controlling interests | (73 | ) | (191 | ) | |||
Net income attributable to Class V Group | 322 | 854 | |||||
Less: DHI Group's 38.55% weighted average retained interest in Class V Group | (124 | ) | (328 | ) | |||
Class V Common Stock economic interest in Class V Group | $ | 198 | $ | 526 | |||
Reconciliation of VMware total net assets to Class V Common Stock economic interest in Class V Group:
VMware | ||||
February 2, 2018 | ||||
(in millions) | ||||
VMware balance sheet information | ||||
Total assets (1)(2) | $ | 21,206 | ||
Total liabilities (1)(2) | 12,582 | |||
VMware total net assets | $ | 8,624 | ||
Class V Group | ||||
February 2, 2018 | ||||
(in millions) | ||||
VMware total net assets | $ | 8,624 | ||
Less: Net assets attributable to non-controlling interests (3) | (1,561 | ) | ||
Net assets attributable to Class V Group | 7,063 | |||
Less: DHI Group's 38.90% retained interest in Class V Group | (2,748 | ) | ||
Class V Common Stock economic interest in Class V Group | $ | 4,315 | ||
Inter-group assets (4) | $ | — | ||
Inter-group liabilities (4) | $ | — | ||
____________________
(1) | Represents VMware's unadjusted assets and liabilities as of February 2, 2018 as consolidated into the Company’s Consolidated Statements of Financial Position. |
(2) | As determined by Dell Technologies’ board of directors, the Company has not allocated any assets or liabilities between the DHI Group and the Class V Group. |
(3) | Reflects the impact of non-controlling interests on net assets attributable to the Company, which had an ownership interest of approximately 81.9% of VMware’s outstanding shares of common stock as of February 2, 2018. |
(4) | Represents inter-group assets/liabilities between the Class V Group and the DHI Group in accordance with the Tracking Stock Policy. The Tracking Stock Policy states that any ordinary course commercial inter-group transactions are intended, to the extent practicable, to be on terms consistent with terms that would be applicable to arm’s-length dealings with unrelated third parties. |
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