SUPPLEMENTAL CONSOLIDATED FINANCIAL INFORMATION

3 Months Ended

May 03, 2024

Condensed Financial Information Disclosure [Abstract]

SUPPLEMENTAL CONSOLIDATED FINANCIAL INFORMATION

The following table presents additional information on selected assets included in the Condensed Consolidated Statements of Financial Position as of the dates indicated:


	May 3, 2024		February 2, 2024

	(in millions)
Cash, cash equivalents, and restricted cash:
Cash and cash equivalents	$	5,830	$	7,366
Restricted cash - other current assets (a)	127		136
Restricted cash - other non-current assets (a)	5		5
Total cash, cash equivalents, and restricted cash	$	5,962	$	7,507
Inventories:
Production materials	$	3,285	$	2,321
Work-in-process	694		607
Finished goods	803		694
Total inventories	$	4,782	$	3,622


Deferred costs:
Total deferred costs, current (b)	$	5,196	$	5,548
Property, plant, and equipment, net:
Assets in a customer contract	$	4,966	$	5,022
Computer and other equipment	3,627		3,552
Land and buildings	2,817		2,877
Internal use software	2,253		2,166
Total property, plant, and equipment	13,663		13,617
Accumulated depreciation and amortization	(7,426)		(7,185)
Total property, plant, and equipment, net	$	6,237	$	6,432

____________________

(a) Restricted cash includes cash required to be held in escrow pursuant to DFS securitization arrangements.

(b) Deferred costs are included in other current assets in the Condensed Consolidated Statements of Financial Position. Amounts classified as long-term deferred costs are included in other non-current assets and are not disclosed above.

Warranty Liability

The following table presents changes in the Company’s liability for standard limited warranties for the periods indicated:


	Three Months Ended
	May 3, 2024		May 5, 2023

	(in millions)
Warranty liability:
Warranty liability at beginning of period	$	426	$	467
Costs accrued for new warranty contracts and changes in estimates for pre-existing warranties (a)	229		196
Service obligations honored	(229)		(225)
Warranty liability at end of period	$	426	$	438

____________________

(a) Changes in cost estimates related to pre-existing warranties are aggregated with accruals for new standard warranty contracts. The Company’s warranty liability process does not differentiate between estimates made for pre-existing warranties and those made for new warranty obligations.

Severance Charges

The Company incurs costs related to employee severance and records a liability for these costs when it is probable that employees will be entitled to termination benefits and the amounts can be reasonably estimated. The liability related to these actions is included in accrued and other current liabilities in the Condensed Consolidated Statements of Financial Position.

The following table presents the activity related to the Company’s severance liability for the periods indicated:


	Three Months Ended
	May 3, 2024		May 5, 2023

	(in millions)
Severance liability:
Severance liability at beginning of period	$	352	$	408
Severance charges	92		48
Cash paid and other	(250)		(294)
Severance liability at end of period	$	194	$	162

The following table presents severance charges as included in the Condensed Consolidated Statements of Income for the periods indicated:


	Three Months Ended
	May 3, 2024		May 5, 2023

	(in millions)
Severance charges:
Cost of net revenue	$	29	$	21
Selling, general, and administrative	43		26
Research and development	20		1
Total severance charges	$	92	$	48

Supply Chain Finance Program

The Company maintains a Supply Chain Finance Program (the “SCF Program”), which enables eligible suppliers, at the supplier's sole discretion, to sell receivables due from the Company to a third-party financial institution. The Company has no involvement in establishing the terms or conditions of the arrangement between its suppliers and the financial institution, no economic interest in a supplier's decision to sell a receivable, and does not provide legally secured assets or other forms of guarantees under the arrangement. The SCF Program does not impact the Company's liquidity as payments for participating supplier invoices are remitted by the Company to the financial institution on the original invoice due date, regardless of whether an individual invoice is sold by the supplier to the financial institution. As of May 3, 2024 and February 2, 2024, the Company had $1.0 billion and $1.1 billion, respectively, included within Accounts Payable on the Condensed Consolidated Statements of Financial Position representing invoices due to suppliers confirmed as valid under the SCF Program.

Interest and other, net

The following table presents information regarding interest and other, net for the periods indicated:


	Three Months Ended
	May 3, 2024		May 5, 2023

	(in millions)
Interest and other, net:
Investment income, primarily interest	$	54	$	59
Loss on investments, net	(30)		(15)
Interest expense	(343)		(405)
Foreign exchange	(38)		(32)



Other	(16)		29
Total interest and other, net	$	(373)	$	(364)