DELL TECHNOLOGIES INC.

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

(in millions, except percentages; unaudited)

Three Months Ended

Six Months Ended

August 2, 2019

August 3, 2018

Change

August 2, 2019

August 3, 2018

Change

Net revenue:

Products

$

18,110

$

18,149

—%

$

34,864

$

34,820

—%

Services

5,260

4,793

10%

10,414

9,478

10%

Total net revenue

23,370

22,942

2%

45,278

44,298

2%

Cost of net revenue:

Products

13,889

14,943

(7)%

26,968

28,549

(6)%

Services

2,155

1,876

15%

4,187

3,748

12%

Total cost of net revenue

16,044

16,819

(5)%

31,155

32,297

(4)%

Gross margin

7,326

6,123

20%

14,123

12,001

18%

Operating expenses:

Selling, general, and administrative

5,578

4,961

12%

10,649

9,905

8%

Research and development

1,229

1,175

5%

2,405

2,262

6%

Total operating expenses

6,807

6,136

11%

13,054

12,167

7%

Operating income (loss)

519

(13)

NM

1,069

(166)

744%

Interest and other, net

(455)

(38)%

(1,323)

(925)

(43)%

Loss before income taxes

(111)

(468)

76%

(254)

(1,091)

77%

Income tax benefit

(4,616)

(7)

NM

(5,088)

(92)

NM

Net income (loss)

4,505

(461)

NM

4,834

(999)

584%

Less: Net income attributable to non-controlling interests

816

38

NM

852

136

526%

Net income (loss) attributable to Dell Technologies Inc.

$

3,689

$

(499)

839%

$

3,982

$

(1,135)

451%

Percentage of Total Net Revenue:

Gross margin

31

%

27

%

31

%

27

%

Selling, general, and administrative

24

%

22

%

24

%

22

%

Research and development

5

%

5

%

5

%

5

%

Operating expenses

29

%

27

%

29

%

28

%

Operating income (loss)

2

%

—

%

2

%

—

%

Loss before income taxes

—

%

(2)

%

(1)

%

(3)

%

Net income (loss)

19

%

(2)

%

11

%

(2)

%

Income tax rate

4158.6

%

1.5

%

2003.1

%

8.4

%