DELL TECHNOLOGIES INC.

Condensed Consolidated Statements of Income (Loss) and Related Financial Highlights

(in millions, except percentages; unaudited)

Three Months Ended

May 1, 2020

May 3, 2019

Change

Net revenue (a):

Products

$

16,038

$

16,575

(3)

%

Services

5,859

5,333

10

%

Total net revenue

21,897

21,908

—

%

Cost of net revenue:

Products

12,804

13,079

(2)

%

Services

2,240

2,032

10

%

Total cost of net revenue

15,044

15,111

—

%

Gross margin

6,853

6,797

1

%

Operating expenses:

Selling, general, and administrative

4,886

5,071

(4)

%

Research and development

1,265

1,176

8

%

Total operating expenses

6,151

6,247

(2)

%

Operating income

702

550

28

%

Interest and other, net

(566)

(693)

18

%

Income (loss) before income taxes

136

(143)

195

%

Income tax benefit

(46)

(472)

90

%

Net income

182

329

(45)

%

Less: Net income attributable to non-controlling interests

39

36

8

%

Net income attributable to Dell Technologies Inc.

$

143

$

293

(51)

%

Percentage of Total Net Revenue:

Gross margin

31

%

31

%

Selling, general, and administrative

22

%

23

%

Research and development

6

%

5

%

Operating expenses

28

%

29

%

Operating income

3

%

3

%

Income (loss) before income taxes

1

%

(1)

%

Net income

1

%

2

%

Income tax rate

(33.8)

%

330.1

%

(a)

During the fourth quarter of Fiscal 2020, the Company reclassified revenue associated with certain service and software-as-a-service offerings from product revenue to services revenue.  There was no change to total revenue as a result of the reclassifications.  Prior period results have been recast to conform with current period presentation.