Dell Technologies Reports Fiscal Year 2018 Second Quarter Financial Results

 

 

 

DELL TECHNOLOGIES INC.

Segment Information

(in millions, except percentages; unaudited)

                       
 

Three Months Ended

     

Six Months Ended

   
 

August 4, 2017

 

July 29, 2016

 

Change

 

August 4, 2017

 

July 29, 2016

 

Change

Client Solutions Group (CSG):

                     

   Net Revenue:

                     

      Commercial

$                 7,196

 

$                 6,798

 

6 %

 

$               13,546

 

$               12,943

 

5 %

      Consumer

2,655

 

2,422

 

10 %

 

5,361

 

4,848

 

11 %

         Total CSG net revenue

$                 9,851

 

$                 9,220

 

7 %

 

$               18,907

 

$               17,791

 

6 %

                       

   Operating Income:

                     

      CSG operating income

$                    566

 

$                    484

 

17 %

 

$                    940

 

$                    869

 

8 %

      % of CSG net revenue

6 %

 

5 %

     

5 %

 

5 %

   

      % of total segment operating income

36 %

 

62 %

     

34 %

 

64 %

   
                       

Infrastructure Solutions Group (ISG):

                     

   Net Revenue:

                     

      Servers and networking

$                 3,740

 

$                 3,237

 

16 %

 

$                 6,971

 

$                 6,312

 

10 %

      Storage

3,666

 

542

 

576 %

 

7,351

 

1,080

 

581 %

         Total ISG net revenue

$                 7,406

 

$                 3,779

 

96 %

 

$               14,322

 

$                 7,392

 

94 %

                       

   Operating Income:

                     

      ISG operating income

$                    430

 

$                    300

 

43 %

 

$                    753

 

$                    492

 

53 %

      % of ISG net revenue

6 %

 

8 %

     

5 %

 

7 %

   

      % of total segment operating income

28 %

 

38 %

     

27 %

 

36 %

   
                       

VMware:

                     

   Net Revenue:

                     

         Total VMware net revenue

$                 1,907

 

$                     —

 

NA

 

$                 3,643

 

$                     —

 

NA

                       

   Operating Income:

                     

      VMware operating income

$                    561

 

$                     —

 

NA

 

$                 1,047

 

$                     —

 

NA

      % of VMware net revenue

29 %

 

 NA 

     

29 %

 

 NA 

   

      % of total segment operating income

36 %

 

 NA 

     

38 %

 

 NA 

   
                       

Reconciliation to consolidated net revenue:

                     

   Reportable segment net revenue

$               19,164

 

$               12,999

     

$               36,872

 

$               25,183

   

      Other businesses (a)

472

 

118

     

934

 

228

   

      Unallocated transactions (b)

(2)

 

28

     

(1)

 

53

   

      Impact of purchase accounting (c)

(335)

 

(65)

     

(690)

 

(143)

   

         Total net revenue

$               19,299

 

$               13,080

     

$               37,115

 

$               25,321

   
                       

Reconciliation to consolidated operating income (loss):

                     

   Reportable segment operating income

$                 1,557

 

$                    784

     

$                 2,740

 

$                 1,361

   

      Other businesses (a)

1

 

(11)

     

4

 

(27)

   

      Unallocated transactions (b)

(6)

 

(17)

     

5

 

(39)

   

      Impact of purchase accounting (c)

(406)

 

(98)

     

(829)

 

(204)

   

      Amortization of intangibles

(1,740)

 

(491)

     

(3,516)

 

(982)

   

      Transaction-related expenses (d)

(138)

 

(72)

     

(329)

 

(129)

   

      Other corporate expenses(e)

(247)

 

(28)

     

(554)

 

(52)

   

         Total operating income (loss)

$                  (979)

 

$                      67

     

$               (2,479)

 

$                    (72)

   

_________________

                     

(a) Other businesses consist of RSA Information Security, SecureWorks, Pivotal, and Boomi, and do not constitute a reportable segment, either individually or collectively, as the results of the businesses are not material to the Company's overall results and the businesses do not meet the criteria for reportable segments.

(b) Unallocated transactions includes long-term incentives, certain short-term incentive compensation expenses, and other corporate items that are not allocated to Dell Technologies' reportable segments.

(c) Impact of purchase accounting includes non-cash purchase accounting adjustments that are primarily related to the EMC merger transaction.

(d) Transaction-related expenses includes acquisition, integration, and divestiture related costs.

(e) Other corporate expenses includes severance and facility action costs as well as stock-based compensation expense.


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