2023 Q1 Form 10-K Financial Statement

#000157199623000007 Filed on March 30, 2023

View on sec.gov

Income Statement

Concept 2023 Q1 2023
Revenue $25.04B $102.3B
YoY Change -10.55% 1.09%
Cost Of Revenue $19.28B $79.62B
YoY Change -19.67% 0.39%
Gross Profit $5.756B $22.69B
YoY Change 2.46% 3.63%
Gross Profit Margin 22.99% 22.18%
Selling, General & Admin $3.772B $14.14B
YoY Change -3.54%
% of Gross Profit 65.53% 62.31%
Research & Development $795.0M $2.779B
YoY Change 7.84%
% of Gross Profit 13.81% 12.25%
Depreciation & Amortization $854.0M $3.156B
YoY Change 2.89% -30.65%
% of Gross Profit 14.84% 13.91%
Operating Expenses $4.567B $16.92B
YoY Change -291.65% -1.84%
Operating Profit $1.189B $5.771B
YoY Change -85.14% 23.87%
Interest Expense -$266.0M -$2.546B
YoY Change -412.94% -265.11%
% of Operating Profit -22.37% -44.12%
Other Income/Expense, Net $14.00M -$2.546B
YoY Change -100.93% -301.42%
Pretax Income $923.0M $3.225B
YoY Change -207.08% -45.55%
Income Tax $317.0M $803.0M
% Of Pretax Income 34.34% 24.9%
Net Earnings $614.0M $2.442B
YoY Change 30600.0% -56.1%
Net Earnings / Revenue 2.45% 2.39%
Basic Earnings Per Share
Diluted Earnings Per Share $0.84 $3.24
COMMON SHARES
Basic Shares Outstanding 734.0M shares
Diluted Shares Outstanding 753.0M shares

Balance Sheet

Concept 2023 Q1 2023
SHORT-TERM ASSETS
Cash & Short-Term Investments $8.607B $8.607B
YoY Change -9.18% -9.18%
Cash & Equivalents $8.607B $8.607B
Short-Term Investments
Other Short-Term Assets $11.21B $11.21B
YoY Change -2.79% -3.88%
Inventory $4.776B $4.776B
Prepaid Expenses $641.0M
Receivables $12.48B $12.48B
Other Receivables $5.281B $5.281B
Total Short-Term Assets $42.35B $42.35B
YoY Change -5.96% -5.96%
LONG-TERM ASSETS
Property, Plant & Equipment $6.209B $6.209B
YoY Change 14.66% -1.22%
Goodwill $19.68B
YoY Change -0.48%
Intangibles $6.468B
YoY Change -13.31%
Long-Term Investments $1.518B $1.518B
YoY Change -17.46% -17.46%
Other Assets $7.751B $7.751B
YoY Change 10.97% 13.58%
Total Long-Term Assets $47.26B $47.26B
YoY Change -0.93% -0.93%
TOTAL ASSETS
Total Short-Term Assets $42.35B $42.35B
Total Long-Term Assets $47.26B $47.26B
Total Assets $89.61B $89.61B
YoY Change -3.37% -3.37%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $18.60B $18.60B
YoY Change -31.48% -31.48%
Accrued Expenses $8.874B $8.874B
YoY Change 17.1% 17.1%
Deferred Revenue $15.54B
YoY Change 8.98%
Short-Term Debt $0.00 $0.00
YoY Change
Long-Term Debt Due $6.573B $6.573B
YoY Change 12.88% 12.88%
Total Short-Term Liabilities $51.65B $51.65B
YoY Change -8.12% -8.12%
LONG-TERM LIABILITIES
Long-Term Debt $23.02B $23.02B
YoY Change 8.92% 8.92%
Other Long-Term Liabilities $17.97B $17.97B
YoY Change 391.84% 5.91%
Total Long-Term Liabilities $40.98B $40.98B
YoY Change 65.36% 7.58%
TOTAL LIABILITIES
Total Short-Term Liabilities $51.65B $51.65B
Total Long-Term Liabilities $40.98B $40.98B
Total Liabilities $92.73B $92.73B
YoY Change -1.68% -1.79%
SHAREHOLDERS EQUITY
Retained Earnings -$6.732B
YoY Change -17.78%
Common Stock
YoY Change
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity -$3.122B -$3.122B
YoY Change
Total Liabilities & Shareholders Equity $89.61B $89.61B
YoY Change -3.37% -3.37%

Cashflow Statement

Concept 2023 Q1 2023
OPERATING ACTIVITIES
Net Income $614.0M $2.442B
YoY Change 30600.0% -56.1%
Depreciation, Depletion And Amortization $854.0M $3.156B
YoY Change 2.89% -30.65%
Cash From Operating Activities $2.714B $3.565B
YoY Change -12.25% -65.41%
INVESTING ACTIVITIES
Capital Expenditures $759.0M $3.003B
YoY Change -202.57% 7.4%
Acquisitions $70.00M
YoY Change -101.77%
Other Investing Activities -$37.00M -$21.00M
YoY Change 428.57% -66.13%
Cash From Investing Activities -$796.0M -$3.024B
YoY Change 6.56% -331.55%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net -$183.0M -$3.276B
YoY Change -594.12%
Debt Paid & Issued, Net $9.825B
YoY Change -63.23%
Cash From Financing Activities 1.513B -1.625B
YoY Change -109.71% -90.22%
NET CHANGE
Cash From Operating Activities 2.714B 3.565B
Cash From Investing Activities -796.0M -3.024B
Cash From Financing Activities 1.513B -1.625B
Net Change In Cash 3.431B -1.084B
YoY Change -125.92% -78.75%
FREE CASH FLOW
Cash From Operating Activities $2.714B $3.565B
Capital Expenditures $759.0M $3.003B
Free Cash Flow $1.955B $562.0M
YoY Change -49.0% -92.52%

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BASIS OF PRESENTATION<div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">References in these Notes to the Consolidated Financial Statements to the “Company” or “Dell Technologies” mean Dell Technologies Inc. individually and together with its consolidated subsidiaries. </span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Basis of Presentation — </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">These Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). </span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Company’s fiscal year is the 52- or 53-week period ending on the Friday nearest January 31. The fiscal year ended February 3, 2023 was a 53-week period. The fiscal years ended January 28, 2022 and January 29, 2021 were 52-week periods.</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Spin-Off of VMware, Inc.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> — On November 1, 2021, the Company completed its spin-off of VMware, Inc. (NYSE: VMW) (individually and together with its consolidated subsidiaries, “VMware”) by means of a special stock dividend (the “VMware Spin-off”). The VMware Spin-off was effectuated pursuant to a Separation and Distribution Agreement, dated as of April 14, 2021, between Dell Technologies and VMware (the “Separation and Distribution Agreement”).</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Pursuant to the Commercial Framework Agreement (the “CFA”) between Dell Technologies and VMware, Dell Technologies continues to act as a distributor of VMware’s standalone products and services and purchase such products and services for resale to customers. Dell Technologies also continues to integrate VMware’s products and services with Dell Technologies’ offerings and sell them to customers. The results of such operations are presented as continuing operations within the Company’s Consolidated Statements of Income for all periods presented.</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">In accordance with applicable accounting guidance, the results of VMware, excluding Dell Technologies' resale of VMware offerings, are presented as discontinued operations in the Consolidated Statements of Income and, as such, have been excluded from both continuing operations and segment results for all periods presented prior to the completion of the VMware Spin-off. The Consolidated Statements of Cash Flows are presented on a consolidated basis for both continuing operations and discontinued operations. See Note 3 of the Notes to the Consolidated Financial Statements for additional information on the VMware Spin-off.</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Boomi Divestiture </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">— On October 1, 2021, Dell Technologies completed the sale of Boomi, Inc. (“Boomi”) and certain related assets. At the completion of the sale, the Company received total cash consideration of approximately $4.0 billion, resulting in a pre-tax gain on sale of $4.0 billion recognized in interest and other, net on the Consolidated Statements of Income. The Company ultimately recorded a $3.0 billion gain, net of $1.0 billion in tax expense. Prior to the divestiture, Boomi’s operating results were included within other businesses and the divestiture did not qualify for presentation as a discontinued operation. </span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">RSA Security Divestiture</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> — On September 1, 2020, Dell Technologies completed the sale of RSA Security LLC (“RSA Security”) for total cash consideration of approximately $2.1 billion, resulting in a pre-tax gain on sale of $338 million. The Company ultimately recorded a $21 million loss, net of $359 million in tax expense due to the relatively low tax basis for the assets sold, particularly goodwill. Prior to the divestiture, RSA Security’s operating results were included within other businesses and the divestiture did not qualify for presentation as a discontinued operation.</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Secureworks</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> — As of February 3, 2023 and January 28, 2022, the Company held approximately 82.6% and 83.9%, respectively, of the outstanding equity interest in Secureworks, excluding restricted stock awards (“RSAs”), and approximately 82.6% and 83.1%, respectively, of the equity interest, including RSAs. The portion of the results of operations of Secureworks allocable to its other owners is shown as net income (loss) attributable to the non-controlling interests in the 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 a component of the non-controlling interests in the Consolidated Statements of Financial Position and was $97 million and $105 million as of February 3, 2023 and January 28, 2022, respectively.</span></div>Other Events — During the fiscal year ended February 3, 2023, Dell Technologies recognized $171 million in costs associated with exiting the Company’s business in Russia, primarily related to asset impairments and other exit related costs.
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<span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Derivative Instruments</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> — The Company’s derivative financial instruments consist primarily of foreign currency forward and purchased option contracts and interest rate swaps. The fair value of the portfolio is determined using valuation models based on market observable inputs, including interest rate curves, forward and spot prices for currencies, and implied volatilities. Credit risk is also factored into the fair value calculation of the Company’s derivative financial instrument portfolio. See Note 9 of the Notes to the Consolidated Financial Statements for a description of the Company’s derivative financial instrument activities.</span><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">As part of its risk management strategy, the Company uses derivative instruments, primarily foreign currency forward and option contracts and interest rate swaps, to hedge certain foreign currency and interest rate exposures, respectively.</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Company’s objective is to offset gains and losses resulting from these exposures with gains and losses on the derivative contracts used to hedge the exposures, thereby reducing volatility of earnings and protecting the fair values of assets and liabilities. The earnings effects of the derivative instruments are presented in the same income statement line items as the earnings effects of the hedged items. For derivatives designated as cash flow hedges, the Company assesses hedge effectiveness both at the onset of the hedge and at regular intervals throughout the life of the instruments. For derivatives designated as fair value hedges, the Company assesses hedge effectiveness on qualifying instruments using the shortcut method whereby the hedges are considered perfectly effective at the onset of the hedge and over the life of the hedging relationship.</span></div>
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