EX-99.1 12 exhibit991_020218.htm EXHIBIT 99.1 Exhibit


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.
 
Fiscal Year Ended
 
September 7, 2016 through
 
February 2, 2018
 
February 3, 2017
 
VMware Reportable Segment
 
Adjustments and Eliminations (a)
 
VMware
 
VMware Reportable Segment
 
Adjustments and Eliminations (a)
 
VMware
 
(in millions)
Net revenue
$
7,925

 
$
(3
)
 
$
7,922

 
$
3,225

 
$
(26
)
 
$
3,199

Cost of net revenue
991

 
150

 
1,141

 
399

 
54

 
453

Gross margin
6,934

 
(153
)
 
6,781

 
2,826

 
(80
)
 
2,746

Operating expenses:

 

 

 

 

 

Selling, general, and administrative
3,020

 
317

 
3,337

 
1,198

 
152

 
1,350

Research and development
1,394

 
361

 
1,755

 
515

 
144

 
659

Total operating expenses
4,414

 
678

 
5,092

 
1,713

 
296

 
2,009

Operating income (loss)
$
2,520

 
$
(831
)
 
1,689

 
$
1,113

 
$
(376
)
 
737

Interest and other income (expense), net attributable to VMware
 
 
 
 
112

 
 
 
 
 
7

Income before income taxes attributable to VMware
 
 
 
 
1,801

 
 
 
 
 
744

Income tax provision attributable to VMware
 
 
 
 
1,231

 
 
 
 
 
150

Net income attributable to VMware
 
 
 
 
$
570

 
 
 
 
 
$
594

____________________
(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.



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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:
 
 
Fiscal Year Ended
 
September 7, 2016 through
 
 
February 2, 2018
 
February 3, 2017
 
 
(in millions)
Net income attributable to VMware
$
570

 
$
594

Less: Net income attributable to non-controlling interests
(105
)
 
(102
)
Net income attributable to Class V Group
465

 
492

Less: DHI Group's 38.48% and 36.43%, respectively, weighted average retained interest in Class V Group
(179
)
 
(179
)
Class V Common Stock economic interest in Class V Group
$
286

 
$
313



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)
 
 
 
 
$
20,622

Total liabilities (1)(2)
 
 
 
 
12,846

VMware total net assets
 
 
 
 
$
7,776

 
 
 
 
 
 
 
 
 
 
 
Class V Group
 
 
 
 
 
February 2, 2018
 
 
 
 
 
(in millions)
VMware total net assets
 
 
 
 
$
7,776

Less: Net assets attributable to non-controlling interests (3)
 
 
 
(1,408
)
Net assets attributable to Class V Group
 
 
 
 
6,368

Less: DHI Group's 38.90% retained interest in Class V Group
 
(2,477
)
Class V Common Stock economic interest in Class V Group
 
$
3,891

 
 
 
 
 
 
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 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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