EARNINGS PER SHARE

3 Months Ended

May 01, 2020

NOTE 15 — EARNINGS PER SHARE

Basic earnings per share is based on the weighted-average effect of all common shares issued and outstanding and is calculated by dividing net income by the weighted-average shares outstanding during the period. Diluted earnings per share is calculated by dividing net income by the weighted-average number of common shares used in the basic earnings per share calculation plus the number of common shares that would be issued assuming exercise or conversion of all potentially dilutive instruments. The Company excludes equity instruments from the calculation of diluted earnings per share if the effect of including such instruments is antidilutive.

The Class A Common Stock, the Class B Common Stock, the Class C Common Stock, and the Class D Common Stock are collectively referred to as Dell Technologies Common Stock.

For purposes of calculating earnings per share, the Company uses the two-class method. As all classes of Dell Technologies Common Stock share the same rights in dividends, basic and diluted earnings per share are the same for each class of Dell Technologies Common Stock.

The following table presents the basic and diluted earnings per share for the periods indicated:



	Three Months Ended
	May 1, 2020		May 3, 2019
Earnings per share attributable to Dell Technologies Inc.
Dell Technologies Common Stock — Basic	$	0.19	$	0.41
Dell Technologies Common Stock — Diluted	$	0.19	$	0.38

The following table presents the computation of basic and diluted earnings per share for the periods indicated:



	Three Months Ended
	May 1, 2020			May 3, 2019
	(in millions)
Numerator: Dell Technologies Common Stock
Net income attributable to Dell Technologies — basic	$	143		$	293
Incremental dilution from VMware, Inc. attributable to Dell Technologies (a)	(2		)	(8		)
Net income attributable to Dell Technologies — diluted	$	141		$	285

Denominator: Dell Technologies Common Stock weighted-average shares outstanding
Weighted-average shares outstanding — basic	740			717
Dilutive effect of options, restricted stock units, restricted stock, and other	15			34
Weighted-average shares outstanding — diluted	755			751
Weighted-average shares outstanding — antidilutive	8			6

____________________

(a)

The incremental dilution from VMware, Inc. represents the impact of VMware, Inc.’s dilutive securities on diluted earnings per share of Dell Technologies Common Stock, and is calculated by multiplying the difference between VMware, Inc.’s basic and diluted earnings per share by the number of shares of VMware, Inc. common stock held by the Company. For the three months ended May 3, 2019, the incremental dilution from VMware, Inc. was calculated by the Company without regard to VMware Inc.’s required retrospective adjustments for the Pivotal acquisition in its stand-alone financial statements, and there was no incremental dilution from Pivotal due to its net loss position. For both periods presented, there was no incremental dilution from Secureworks due to its net loss position.