FINANCIAL SERVICES (Tables)
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6 Months Ended |
Aug. 02, 2019 |
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| Receivables [Abstract] |
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| Components of financing receivables segregated by portfolio segment |
The following table presents the components of the Company’s financing receivables segregated by portfolio segment as of the dates indicated: | | | | | | | | | | | | | | | | | | | | | | | | | | August 2, 2019 | | February 1, 2019 | | Revolving | | Fixed-term | | Total | | Revolving | | Fixed-term | | Total | | (in millions) | Financing receivables, net: | |
| | |
| | | | | | | | | Customer receivables, gross (a) | $ | 778 |
| | $ | 7,544 |
| | $ | 8,322 |
| | $ | 835 |
| | $ | 7,249 |
| | $ | 8,084 |
| Allowances for losses | (67 | ) | | (71 | ) | | (138 | ) | | (75 | ) | | (61 | ) | | (136 | ) | Customer receivables, net | 711 |
| | 7,473 |
| | 8,184 |
| | 760 |
| | 7,188 |
| | 7,948 |
| Residual interest | — |
| | 639 |
| | 639 |
| | — |
| | 674 |
| | 674 |
| Financing receivables, net | $ | 711 |
| | $ | 8,112 |
| | $ | 8,823 |
| | $ | 760 |
| | $ | 7,862 |
| | $ | 8,622 |
| Short-term | $ | 711 |
| | $ | 3,762 |
| | $ | 4,473 |
| | $ | 760 |
| | $ | 3,638 |
| | $ | 4,398 |
| Long-term | $ | — |
| | $ | 4,350 |
| | $ | 4,350 |
| | $ | — |
| | $ | 4,224 |
| | $ | 4,224 |
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____________________ | | (a) | Customer receivables, gross includes amounts due from customers under revolving loans, fixed-term loans, fixed-term sales-type or direct financing leases, and accrued interest. |
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| Allowance for financing receivable losses |
The following tables present the changes in allowance for financing receivable losses for the periods indicated: | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | August 2, 2019 | | August 3, 2018 | | Revolving | | Fixed-term | | Total | | Revolving | | Fixed-term | | Total | | (in millions) | Allowance for financing receivable losses: | | | | | | | | | | | | Balances at beginning of period | $ | 70 |
| | $ | 73 |
| | $ | 143 |
| | $ | 77 |
| | $ | 62 |
| | $ | 139 |
| Charge-offs, net of recoveries | (15 | ) | | (9 | ) | | (24 | ) | | (19 | ) | | (12 | ) | | (31 | ) | Provision charged to income statement | 12 |
| | 7 |
| | 19 |
| | 17 |
| | 1 |
| | 18 |
| Balances at end of period | $ | 67 |
| | $ | 71 |
| | $ | 138 |
| | $ | 75 |
| | $ | 51 |
| | $ | 126 |
| | | | | | | | | | | | | | Six Months Ended | | August 2, 2019 | | August 3, 2018 | | Revolving | | Fixed-term | | Total | | Revolving | | Fixed-term | | Total | | (in millions) | Allowance for financing receivable losses: | | | | | | | | | | | | Balances at beginning of period | $ | 75 |
| | $ | 61 |
| | $ | 136 |
| | $ | 81 |
| | $ | 64 |
| | $ | 145 |
| Charge-offs, net of recoveries | (35 | ) | | (12 | ) | | (47 | ) | | (39 | ) | | (17 | ) | | (56 | ) | Provision charged to income statement | 27 |
| | 22 |
| | 49 |
| | 33 |
| | 4 |
| | 37 |
| Balances at end of period | $ | 67 |
| | $ | 71 |
| | $ | 138 |
| | $ | 75 |
| | $ | 51 |
| | $ | 126 |
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| Aging of customer financing receivables |
The following table presents the aging of the Company’s customer financing receivables, gross, including accrued interest, segregated by class, as of the dates indicated: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | August 2, 2019 | | February 1, 2019 | | Current | | Past Due
1 — 90 Days | | Past Due
>90 Days | | Total | | Current | | Past Due
1 — 90 Days | | Past Due
>90 Days | | Total | | (in millions) | Revolving — DPA | $ | 537 |
| | $ | 47 |
| | $ | 18 |
| | $ | 602 |
| | $ | 583 |
| | $ | 53 |
| | $ | 21 |
| | $ | 657 |
| Revolving — DBC | 153 |
| | 19 |
| | 4 |
| | 176 |
| | 155 |
| | 19 |
| | 4 |
| | 178 |
| Fixed-term — Consumer and Commercial | 6,749 |
| | 688 |
| | 107 |
| | 7,544 |
| | 6,282 |
| | 878 |
| | 89 |
| | 7,249 |
| Total customer receivables, gross | $ | 7,439 |
| | $ | 754 |
| | $ | 129 |
| | $ | 8,322 |
| | $ | 7,020 |
| | $ | 950 |
| | $ | 114 |
| | $ | 8,084 |
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| Credit quality indicators |
The following table presents customer receivables, gross, including accrued interest, by credit quality indicator segregated by class, as of the dates indicated. The categories shown in the table below segregate customer receivables based on the relative degrees of credit risk. The credit quality indicators for DPA revolving accounts are measured primarily as of each quarter-end date, while all other indicators are generally updated on a periodic basis.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | August 2, 2019 | | February 1, 2019 | | Higher | | Mid | | Lower | | Total | | Higher | | Mid | | Lower | | Total | | (in millions) | Revolving — DPA | $ | 121 |
| | $ | 178 |
| | $ | 303 |
| | $ | 602 |
| | $ | 128 |
| | $ | 192 |
| | $ | 337 |
| | $ | 657 |
| Revolving — DBC | $ | 45 |
| | $ | 54 |
| | $ | 77 |
| | $ | 176 |
| | $ | 47 |
| | $ | 54 |
| | $ | 77 |
| | $ | 178 |
| Fixed-term — Consumer and Commercial | $ | 4,377 |
| | $ | 1,892 |
| | $ | 1,275 |
| | $ | 7,544 |
| | $ | 3,980 |
| | $ | 1,984 |
| | $ | 1,285 |
| | $ | 7,249 |
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| Finance leases |
The following table presents the net revenue, cost of net revenue, and gross margin recognized at the commencement date of sales-type leases for the periods indicated: | | | | | | | | | | Three Months Ended | | Six Months Ended | | August 2, 2019 | | August 2, 2019 | | (in millions) | Net revenue — products | $ | 223 |
| | $ | 353 |
| Cost of net revenue — products | 179 |
| | 260 |
| Gross margin — products | $ | 44 |
| | $ | 93 |
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| Future maturity of fixed-term customer leases |
The following table presents the future maturity of the Company’s fixed-term customer leases and associated financing payments, and reconciles the undiscounted cash flows to the customer receivables, gross recognized on the Condensed Consolidated Statements of Financial Position as of the date indicated:
| | | | | | August 2, 2019 | Fiscal Years | (in millions) | Fiscal 2020 (remaining six months) | $ | 1,488 |
| Fiscal 2021 | 2,115 |
| Fiscal 2022 | 1,322 |
| Fiscal 2023 | 542 |
| Fiscal 2024 and beyond | 198 |
| Total undiscounted cash flows | 5,665 |
| Fixed-term loans | 2,373 |
| Revolving loans | 778 |
| Less: unearned income | (494 | ) | Total customer receivables, gross | $ | 8,322 |
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| Operating lease income |
The following table presents the components of the Company’s operating lease portfolio included in Property, plant, and equipment, net as of the date indicated: | | | | | | August 2, 2019 | | (in millions) | Equipment under operating lease, gross | $ | 455 |
| Less: accumulated depreciation | (29 | ) | Equipment under operating lease, net | $ | 426 |
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| Operating lease income maturities |
The following table presents the future payments to be received by the Company as lessor in operating lease contracts as of the date indicated: | | | | | | August 2, 2019 | Fiscal Years | (in millions) | Fiscal 2020 (remaining six months) | $ | 79 |
| Fiscal 2021 | 140 |
| Fiscal 2022 | 132 |
| Fiscal 2023 | 55 |
| Fiscal 2024 and beyond | 3 |
| Total | $ | 409 |
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| Summary of debt |
The following table presents DFS debt as of the dates indicated. The table excludes the allocated portion of the Company’s other borrowings, which represents the additional amount considered to fund the DFS business. | | | | | | | | | | August 2, 2019 | | February 1, 2019 | | (in millions) | DFS U.S. debt: | | | | Securitization facilities | $ | 2,287 |
| | $ | 1,914 |
| Fixed-term securitization offerings | 2,438 |
| | 2,303 |
| Other | 201 |
| | 223 |
| Total DFS U.S. debt | 4,926 |
| | 4,440 |
| DFS international debt: | | | | Securitization facility | 690 |
| | 584 |
| Other borrowings | 831 |
| | 708 |
| Note payable | 198 |
| | 197 |
| Total DFS international debt | 1,719 |
| | 1,489 |
| Total DFS debt | $ | 6,645 |
| | $ | 5,929 |
| Total short-term DFS debt | $ | 3,703 |
| | $ | 3,113 |
| Total long-term DFS debt | $ | 2,942 |
| | $ | 2,816 |
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The following table presents the Company’s outstanding debt as of the dates indicated: | | | | | | | | | | August 2, 2019 | | February 1, 2019 | | (in millions) | Secured Debt | | | | Senior Secured Credit Facilities: | | | | 4.24% Term Loan B Facility due September 2023 | $ | 4,913 |
| | $ | 4,938 |
| 4.16% Term Loan A-2 Facility due September 2021 | — |
| | 4,116 |
| 3.99% Term Loan A-4 Facility due December 2023 | 1,009 |
| | 1,650 |
| 4.25% Term Loan A-5 Facility due December 2019 | — |
| | 2,016 |
| 4.07% Term Loan A-6 Facility due March 2024 | 3,588 |
| | — |
| First Lien Notes: | | | | 3.48% due June 2019 | — |
| | 3,750 |
| 4.42% due June 2021 | 4,500 |
| | 4,500 |
| 5.45% due June 2023 | 3,750 |
| | 3,750 |
| 4.00% due July 2024 | 1,000 |
| | — |
| 6.02% due June 2026 | 4,500 |
| | 4,500 |
| 4.90% due October 2026
| 1,750 |
| | — |
| 5.30% due October 2029 | 1,750 |
| | — |
| 8.10% due July 2036 | 1,500 |
| | 1,500 |
| 8.35% due July 2046 | 2,000 |
| | 2,000 |
| Unsecured Debt | | | | Unsecured Notes and Debentures: | | | | 5.875% due June 2019 | — |
| | 600 |
| 4.625% due April 2021 | 400 |
| | 400 |
| 7.10% due April 2028 | 300 |
| | 300 |
| 6.50% due April 2038 | 388 |
| | 388 |
| 5.40% due September 2040 | 264 |
| | 264 |
| Senior Notes: | | | | 5.875% due June 2021 | 1,625 |
| | 1,625 |
| 7.125% due June 2024 | 1,625 |
| | 1,625 |
| EMC Notes: | | | | 2.650% due June 2020 | 2,000 |
| | 2,000 |
| 3.375% due June 2023 | 1,000 |
| | 1,000 |
| VMware Notes: | | | | 2.30% due August 2020 | 1,250 |
| | 1,250 |
| 2.95% due August 2022 | 1,500 |
| | 1,500 |
| 3.90% due August 2027 | 1,250 |
| | 1,250 |
| DFS Debt (Note 4) | 6,645 |
| | 5,929 |
| Other | | | | 4.51% Margin Loan Facility due April 2022 | 4,000 |
| | 3,350 |
| Other | 85 |
| | 38 |
| Total debt, principal amount | $ | 52,592 |
| | $ | 54,239 |
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| | | | | | | | | | August 2, 2019 | | February 1, 2019 | | (in millions) | Total debt, principal amount | $ | 52,592 |
| | $ | 54,239 |
| Unamortized discount, net of unamortized premium | (252 | ) | | (271 | ) | Debt issuance costs | (418 | ) | | (447 | ) | Total debt, carrying value | $ | 51,922 |
| | $ | 53,521 |
| Total short-term debt, carrying value | $ | 5,949 |
| | $ | 4,320 |
| Total long-term debt, carrying value | $ | 45,973 |
| | $ | 49,201 |
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| Financing receivables held by the consolidated VIEs |
The following table presents financing receivables and equipment under operating leases, net held by the consolidated VIEs as of the dates indicated: | | | | | | | | | | August 2, 2019 | | February 1, 2019 | | (in millions) | Assets held by consolidated VIEs, net: | |
| | |
| Short-term, net | $ | 3,072 |
| | $ | 2,940 |
| Long-term, net | 3,011 |
| | 2,508 |
| Assets held by consolidated VIEs, net | $ | 6,083 |
| | $ | 5,448 |
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