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SUPPLEMENTAL CONSOLIDATED FINANCIAL INFORMATION | 6 Months Ended
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Aug. 02, 2024
Condensed Financial Information Disclosure [Abstract] |
SUPPLEMENTAL CONSOLIDATED FINANCIAL INFORMATION | 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:
| August 2, 2024 |  | February 2, 2024
| (in millions)
Cash, cash equivalents, and restricted cash: |  |  |
Cash and cash equivalents | $ | 4,550 |  |  | $ | 7,366 |
Restricted cash - other current assets (a) | 118 |  |  | 136 |
Restricted cash - other non-current assets (a) | 3 |  |  | 5 |
Total cash, cash equivalents, and restricted cash | $ | 4,671 |  |  | $ | 7,507 |
Inventories: |  |  |
Production materials | $ | 4,290 |  |  | $ | 2,321 |
Work-in-process | 730 |  |  | 607 |
Finished goods | 933 |  |  | 694 |
Total inventories | $ | 5,953 |  |  | $ | 3,622 |
Prepaid expenses: |  |  |
Total prepaid expenses (b) | $ | 762 |  |  | $ | 589 |
Deferred costs: |  |  |
Total deferred costs, current (b) | $ | 5,057 |  |  | $ | 5,548 |
Property, plant, and equipment, net: |  |  |
Assets in a customer contract | $ | 5,123 |  |  | $ | 5,022 |
Computer and other equipment | 3,714 |  |  | 3,552 |
Land and buildings | 2,813 |  |  | 2,877 |
Internal use software | 2,360 |  |  | 2,166 |
Total property, plant, and equipment | 14,010 |  |  | 13,617 |
Accumulated depreciation and amortization | (7,710) |  |  | (7,185) |
Total property, plant, and equipment, net | $ | 6,300 |  |  | $ | 6,432 |
____________________ (a) Restricted cash includes cash required to be held in escrow pursuant to DFS securitization arrangements. (b) Deferred costs and prepaid expenses are included in other current assets in the Condensed Consolidated Statements of Financial Position. Amounts classified as long-term deferred costs and long-term prepaid expenses 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 |  | Six Months Ended
| August 2, 2024 |  | August 4, 2023 |  | August 2, 2024 |  | August 4, 2023 |  |
| (in millions)
Warranty liability: |  |  |  |  |  |  |  |  |
Warranty liability at beginning of period | $ | 426 |  |  | $ | 438 |  |  | $ | 426 |  |  | $ | 467 |  |  |
Costs accrued for new warranty contracts and changes in estimates for pre-existing warranties (a) | 216 |  |  | 202 |  |  | 445 |  |  | 398 |  |  |
Service obligations honored | (203) |  |  | (201) |  |  | (432) |  |  | (426) |  |  |
Warranty liability at end of period | $ | 439 |  |  | $ | 439 |  |  | $ | 439 |  |  | $ | 439 |  |  |
____________________ (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 within 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 |  | Six Months Ended
| August 2, 2024 |  | August 4, 2023 |  | August 2, 2024 |  | August 4, 2023 |  |
| (in millions)
Severance liability: |  |  |  |  |  |  |  |  |
Severance liability at beginning of period | $ | 194 |  |  | $ | 162 |  |  | $ | 352 |  |  | $ | 408 |  |  |
Severance charges | 328 |  |  | 364 |  |  | 420 |  |  | 412 |  |  |
Cash paid and other | (130) |  |  | (69) |  |  | (380) |  |  | (363) |  |  |
Severance liability at end of period | $ | 392 |  |  | $ | 457 |  |  | $ | 392 |  |  | $ | 457 |  |  |
The following table presents severance charges as included in the Condensed Consolidated Statements of Income for the periods indicated:
| Three Months Ended |  | Six Months Ended
| August 2, 2024 |  | August 4, 2023 |  | August 2, 2024 |  | August 4, 2023 |  |
| (in millions)
Severance charges: |  |  |  |  |  |  |  |  |
Cost of net revenue | $ | 56 |  |  | $ | 27 |  |  | $ | 85 |  |  | $ | 48 |  |  |
Selling, general, and administrative | 227 |  |  | 324 |  |  | 270 |  |  | 350 |  |  |
Research and development | 45 |  |  | 13 |  |  | 65 |  |  | 14 |  |  |
Total severance charges | $ | 328 |  |  | $ | 364 |  |  | $ | 420 |  |  | $ | 412 |  |  |
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 August 2, 2024 and February 2, 2024, the Company had $1.2 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 as included in the Condensed Consolidated Statements of Income for the periods indicated:
| Three Months Ended |  | Six Months Ended
| August 2, 2024 |  | August 4, 2023 |  | August 2, 2024 |  | August 4, 2023 |  |
| (in millions)
Interest and other, net: |  |  |  |  |  |  |  |  |
Investment income, primarily interest | $ | 38 |  |  | $ | 66 |  |  | $ | 92 |  |  | $ | 125 |  |  |
Gain (loss) on investments, net | 5 |  |  | (29) |  |  | (25) |  |  | (44) |  |  |
Interest expense | (387) |  |  | (352) |  |  | (730) |  |  | (757) |  |  |
Foreign exchange | (13) |  |  | (65) |  |  | (51) |  |  | (97) |  |  |
Other | 4 |  |  | (71) |  |  | (12) |  |  | (42) |  |  |
Total interest and other, net | $ | (353) |  |  | $ | (451) |  |  | $ | (726) |  |  | $ | (815) |  |  |

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