DISCONTINUED OPERATIONS (Tables)

9 Months Ended

Oct. 28, 2016

Discontinued Operations and Disposal Groups [Abstract]

Discontinued operations

The following table presents key financial results of Dell Services included in “Income (loss) from discontinued operations, net of income taxes” for the three and nine months ended October 28, 2016 and October 30, 2015:

	Three Months Ended						Nine Months Ended
	October 28, 2016			October 30, 2015			October 28, 2016			October 30, 2015
	(in millions)
Net revenue	$	658		$	675		$	1,968		$	2,011
Cost of net revenue	523			521			1,555			1,611
Operating expenses	116			88			322			289
Income from discontinued operations before income taxes	19			66			91			111
Income tax provision (benefit) (a)	(37		)	(11		)	(955		)	35
Income from discontinued operations, net of income taxes	$	56		$	77		$	1,046		$	76

____________________

(a) The tax benefits of $37 million and $955 million for the three and nine months ended October 28, 2016, respectively, were primarily due to the Company's determination that it could no longer assert permanent reinvestment in the outside basis of the entities that will be divested when the Company entered into a definitive agreement to divest the business. The Company has recorded a deferred tax asset of approximately $1 billion for the outside basis differences for the entities held for sale, and has determined the asset is realizable.

The significant cash flow items from Dell Services for the nine months ended October 28, 2016 and October 30, 2015 were as follows:

	Nine Months Ended
	October 28, 2016			October 30, 2015
	(in millions)
Depreciation and amortization (a)	$	32		$	161
Capital expenditures	$	(82	)	$	(65	)

____________________

(a) Amounts represent depreciation and amortization recognized up until March 27, 2016, the date on which Dell Services met the criteria for discontinued operations reporting. Depreciation and amortization ceased upon determination that the held for sale criteria were met.

The following table presents the major classes of assets and liabilities as of October 28, 2016 and January 29, 2016 related to DSG which were classified as held for sale:

	October 28, 2016		January 29, 2016
	(in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	82	$	254
Accounts receivable, net	200		244
Inventories, net	19		24
Other current assets	3		11
Total current assets	304		533
Property, plant, and equipment, net	116		106
Goodwill	1,391		1,391
Intangible assets, net	557		613
Other non-current assets	9		8
Total assets	$	2,377	$	2,651
LIABILITIES
Current liabilities:
Accounts payable	14		15
Accrued and other	140		160
Short-term deferred revenue	621		625
Total current liabilities	775		800
Long-term deferred revenue	338		333
Other non-current liabilities	80		82
Total liabilities	$	1,193	$	1,215

The following table presents the major classes of assets and liabilities as of October 28, 2016 and January 29, 2016 related to Dell Services which were classified as held for sale:

	October 28, 2016		January 29, 2016
	(in millions)
ASSETS
Current assets:
Accounts receivable, net	$	456	$	404
Other current assets	67		73
Total current assets	523		477
Property, plant, and equipment, net	566		515
Goodwill	252		252
Intangible assets, net	376		388
Other non-current assets	53		50
Total assets	$	1,770	$	1,682
LIABILITIES
Current liabilities:
Accounts payable	$	28	$	38
Accrued and other	159		180
Short-term deferred revenue	83		82
Total current liabilities	270		300
Long-term deferred revenue	42		53
Other non-current liabilities	40		31
Total liabilities	$	352	$	384

The following table presents the major classes of assets and liabilities as of October 28, 2016 related to ECD which were classified as held for sale:

	October 28, 2016
	(in millions)
ASSETS
Current assets:
Other current assets	6
Total current assets	6
Property, plant, and equipment	15
Goodwill	661
Intangible assets	1,070
Total assets	$	1,752
LIABILITIES
Current liabilities:
Accrued and other	8
Short-term deferred revenue	114
Total current liabilities	122
Long-term deferred revenue	10
Total liabilities	$	132

The significant cash flow items from DSG for the nine months ended October 28, 2016 and October 30, 2015 were as follows:

	Nine Months Ended
	October 28, 2016			October 30, 2015
	(in millions)
Depreciation and amortization (a)	$	66		$	125
Capital expenditures	$	(20	)	$	(20	)

____________________

(a) Amounts represent depreciation and amortization recognized up until June 19, 2016, the date on which DSG met the criteria for discontinued operations reporting. Depreciation and amortization ceased upon determination that the held for sale criteria were met.

The following table presents key financial results of ECD included in “Income (loss) from discontinued operations, net of income taxes” for the period from September 7, 2016 through October 28, 2016:

	September 7, 2016 through October 28, 2016
	(in millions)
Net revenue	$	74
Cost of net revenue	28
Operating expenses	66
Loss from discontinued operations before income taxes	(20		)
Income tax benefit	(4		)
Loss from discontinued operations, net of income taxes	$	(16	)

The following table presents key financial results of DSG included in “Income (loss) from discontinued operations, net of income taxes” for the three and nine months ended October 28, 2016 and October 30, 2015:

	Three Months Ended						Nine Months Ended
	October 28, 2016			October 30, 2015			October 28, 2016			October 30, 2015
	(in millions)
Net revenue	$	326		$	318		$	968		$	961
Cost of net revenue	74			97			249			282
Operating expenses	233			234			721			695
Interest and other, net	(8		)	(2		)	(1		)	(8		)
Income (loss) from discontinued operations before income taxes	11			(15		)	(3		)	(24		)
Income tax provision (benefit) (a)	489			(22		)	152			1
Income (loss) from discontinued operations, net of income taxes	$	(478	)	$	7		$	(155	)	$	(25	)

____________________

(a) The tax expenses of $489 million and $152 million for the three and nine months ended October 28, 2016, respectively, were primarily due to the Company's determination that it could no longer assert permanent reinvestment in the outside basis of the DSG entities held for sale when the Company entered into a definitive agreement to divest the business. The additional tax recorded in the three months ended October 28, 2016 primarily resulted from structuring transactions in preparation for the disposition of these entities.