REDEEMABLE SHARES

6 Months Ended

Jul. 31, 2020

Temporary Equity Disclosure [Abstract]

REDEEMABLE SHARES

NOTE 16 — REDEEMABLE SHARES

Awards under the Company’s stock incentive plans include certain rights that allow the holder to exercise a put feature for the underlying Class A or Class C Common Stock after a six month holding period following the issuance of such common stock. The put feature requires the Company to purchase the stock at its fair market value. Accordingly, these awards and such common stock are subject to reclassification from equity to temporary equity, and the Company determines the award amounts to be classified as temporary equity as follows:

•For stock options to purchase Class C Common Stock subject to service requirements, the intrinsic value of the option is multiplied by the portion of the option for which services have been rendered. Upon exercise of the option, the amount in temporary equity represents the fair value of the Class C Common Stock.

•For stock appreciation rights, restricted stock units (“RSUs”), or restricted stock awards (“RSAs”), any of which stock award types are subject to service requirements, the fair value of the share is multiplied by the portion of the share for which services have been rendered.

•For share-based arrangements that are subject to the occurrence of a contingent event, those amounts are reclassified to temporary equity based on a probability assessment performed by the Company on a periodic basis. Contingent events include the achievement of performance-based metrics.

In connection with the Class V transaction described in Note 1 of the Notes to the Condensed Consolidated Financial Statements, the put feature provisions were amended to provide that the put feature applicable to transfers of Dell Technologies securities will terminate upon the earlier of two years after the expiration on June 27, 2019 of the post-transaction lock-up or consummation of any underwritten public offering of shares of Class C Common Stock.

The following table presents the amount of redeemable shares classified as temporary equity and summarizes the award type as of the dates indicated:

	July 31, 2020		January 31, 2020
	(in millions)
Redeemable shares classified as temporary equity	$	610	$	629
Issued and outstanding unrestricted common shares	2		2
Restricted stock units	1		1
Restricted stock awards	—		—
Outstanding stock options	10		15

The decrease in the value of redeemable shares during the six months ended July 31, 2020 was primarily attributable to a reduction in the number of shares eligible for put rights.