XML 37 R25.htm IDEA: XBRL DOCUMENT v3.20.2
SEGMENT INFORMATION
 9 Months Ended
Oct. 30, 2020
Segment Reporting [Abstract]  
SEGMENT INFORMATION
NOTE 17 — SEGMENT INFORMATION

The Company has three reportable segments that are based on the following business units: Infrastructure Solutions Group (“ISG”); Client Solutions Group (“CSG”); and VMware.

On December 30, 2019, VMware, Inc. completed its acquisition of Pivotal. Due to the Company’s ownership of a controlling interest in Pivotal, the Company and VMware, Inc. accounted for the Pivotal acquisition as a transaction between entities under common control, and consequently the transaction had no net effect to the Company’s consolidated financial statements. Pivotal now operates as a wholly-owned subsidiary of VMware, Inc. and Dell Technologies reports Pivotal results within the VMware reportable segment. Previously, Pivotal results were reported within Other businesses. Prior period results have been recast to conform with the current period presentation.

ISG enables the digital transformation of the Company’s customers through its trusted multi-cloud and big data solutions, which are built upon a modern data center infrastructure. The ISG comprehensive portfolio of advanced storage solutions includes traditional storage solutions as well as next-generation storage solutions (such as all-flash arrays, scale-out file, object platforms, and software-defined solutions), while the Company’s server portfolio includes high-performance rack, blade, tower, and hyperscale servers. The ISG networking portfolio helps business customers transform and modernize their infrastructure, mobilize and enrich end-user experiences, and accelerate business applications and processes. ISG also offers attached software, peripherals, and services, including support and deployment, configuration, and extended warranty services.

CSG includes sales to commercial and consumer customers of branded hardware (such as desktops, workstations, and notebooks) and branded peripherals (such as displays and projectors), as well as services and third-party software and peripherals. CSG also offers attached software, peripherals, and services, including support and deployment, configuration, and extended warranty services.

VMware works with customers in the areas of hybrid and multi-cloud, modern applications, networking, security, and digital workspaces, helping customers manage their IT resources across private clouds and complex multi-cloud, multi-device environments. VMware enables its customers to digitally transform their operations as they ready their applications, infrastructure, and employees for constantly evolving business needs.

The reportable segments disclosed herein are based on information reviewed by the Company’s management to evaluate the business segment results. The Company’s measure of segment revenue and segment operating income for management reporting purposes excludes the impact of Other businesses, unallocated corporate transactions, the impact of purchase accounting, amortization of intangible assets, transaction-related expenses, stock-based compensation expense, and other corporate expenses, as applicable. The Company does not allocate assets to the above reportable segments for internal reporting purposes.
The following table presents a reconciliation of net revenue by the Company’s reportable segments to the Company’s consolidated net revenue as well as a reconciliation of consolidated segment operating income to the Company’s consolidated operating income for the periods indicated:
 Three Months EndedNine Months Ended
 October 30, 2020November 1, 2019October 30, 2020November 1, 2019
 (in millions)
Consolidated net revenue:   
Infrastructure Solutions Group$8,024 $8,390 $23,800 $25,213 
Client Solutions Group12,286 11,410 34,593 34,068 
VMware2,893 2,671 8,556 7,779 
Reportable segment net revenue23,203 22,471 66,949 67,060 
Other businesses (a)314 456 1,288 1,311 
Unallocated transactions (b)4 1 4 1 
Impact of purchase accounting (c)(39)(84)(129)(250)
Total consolidated net revenue$23,482 $22,844 $68,112 $68,122 
Consolidated operating income:
Infrastructure Solutions Group$882 $996 $2,587 $2,889 
Client Solutions Group1,002 739 2,309 2,514 
VMware837 709 2,504 2,055 
Reportable segment operating income2,721 2,444 7,400 7,458 
Other businesses (a)3 — 105 (48)
Unallocated transactions (b)1 (2)(1)(29)
Impact of purchase accounting (c)(49)(96)(165)(299)
Amortization of intangibles(845)(1,057)(2,547)(3,334)
Transaction-related expenses (d)(52)(76)(211)(165)
Stock-based compensation expense (e)(436)(322)(1,219)(886)
Other corporate expenses (f)(214)(55)(395)(792)
Total consolidated operating income$1,129 $836 $2,967 $1,905 
____________________
(a)Secureworks, Virtustream, and Boomi constitute “Other businesses” and do not meet the requirements for a reportable segment, either individually or collectively. The results of Other businesses are not material to the Company’s overall results. On September 1, 2020, the Company completed the sale of RSA Security. Prior to the divestiture, RSA Security’s results were included in “Other businesses.” See Note 1 of the Notes to the Condensed Consolidated Financial Statements for more information about the sale of RSA Security.
(b)Unallocated transactions includes 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)Stock-based compensation expense consists of equity awards granted based on the estimated fair value of those awards at grant date.
(f)Other corporate expenses includes impairment charges, severance, facility action, and other costs. During the nine months ended November 1, 2019, this category includes Virtustream gross impairment charges of $619 million.
The following table presents the disaggregation of net revenue by reportable segment, and by major product categories within the segments for the periods indicated:
 Three Months EndedNine Months Ended
 October 30, 2020November 1, 2019October 30, 2020November 1, 2019
 (in millions)
Net revenue:   
Infrastructure Solutions Group:
Servers and networking$4,164 $4,241 $12,118 $12,858 
Storage3,860 4,149 11,682 12,355 
Total ISG net revenue8,024 8,390 23,800 25,213 
Client Solutions Group:
Commercial8,783 8,330 25,456 25,714 
Consumer3,503 3,080 9,137 8,354 
Total CSG net revenue12,286 11,410 34,593 34,068 
VMware:
Total VMware net revenue2,893 2,671 8,556 7,779 
Total segment net revenue$23,203 $22,471 $66,949 $67,060