NOTE 16—SUPPLEMENTAL CONSOLIDATED FINANCIAL INFORMATION
Supplemental Consolidated Statements of Financial Position Information
The following table provides information on amounts included in accounts receivable, net, inventories, net, property, plant, and equipment, net, accrued and other liabilities, and other non-current liabilities, as well as prepaid expenses as of January 29, 2016 and January 30, 2015.
| Successor | ||||||||
| January 29, 2016 |
January 30, 2015 |
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| (in millions) | ||||||||
| Accounts receivable, net: |
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| Gross accounts receivable |
$ | 5,592 | $ | 6,126 | ||||
| Allowance for doubtful accounts |
(57 | ) | (60 | ) | ||||
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| Total accounts receivable, net |
$ | 5,535 | $ | 6,066 | ||||
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| Inventories, net: |
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| Production materials |
$ | 657 | $ | 511 | ||||
| Work-in-process |
189 | 296 | ||||||
| Finished goods |
797 | 856 | ||||||
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| Total inventories, net |
$ | 1,643 | $ | 1,663 | ||||
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| Prepaid expenses (a) |
$ | 560 | $ | 489 | ||||
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| Property, plant, and equipment, net: |
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| Computer equipment |
$ | 1,484 | $ | 1,425 | ||||
| Land and buildings |
1,496 | 1,609 | ||||||
| Machinery and other equipment |
306 | 322 | ||||||
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| Total property, plant, and equipment |
3,286 | 3,356 | ||||||
| Accumulated depreciation and amortization |
(1,016 | ) | (726 | ) | ||||
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| Total property, plant, and equipment, net |
$ | 2,270 | $ | 2,630 | ||||
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| (a) | Prepaid expenses are included in other current assets in the Consolidated Statements of Financial Position. |
- F-60 -
DENALI HOLDING INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
During the fiscal years ended January 29, 2016 and January 30, 2015, the Company recognized $682 million and $678 million, respectively, in depreciation expense. During the successor period ended January 31, 2014 and the predecessor period ended October 28, 2013, the Company recognized $178 million and $396 million, respectively, in depreciation expense.
| Successor | ||||||||
| January 29, 2016 |
January 30, 2015 |
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| (in millions) | ||||||||
| Accrued and other current liabilities: |
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| Compensation |
$ | 1,203 | $ | 1,492 | ||||
| Warranty liability |
381 | 453 | ||||||
| Income and other taxes |
1,210 | 1,238 | ||||||
| Other |
1,762 | 1,857 | ||||||
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| Total accrued and other current liabilities |
$ | 4,556 | $ | 5,040 | ||||
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| Other non-current liabilities: |
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| Warranty liability |
$ | 193 | $ | 226 | ||||
| Unrecognized tax benefits, net |
2,271 | 2,260 | ||||||
| Deferred tax liabilities |
1,038 | 1,956 | ||||||
| Other |
113 | 142 | ||||||
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| Total other non-current liabilities |
$ | 3,615 | $ | 4,584 | ||||
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Supplemental Consolidated Statements of Income (Loss)
The table below provides details of interest and other, net for the fiscal years ended January 29, 2016 and January 30, 2015, the successor period ended January 31, 2014, and the predecessor period ended October 28, 2013:
| Successor | Predecessor | |||||||||||||||||
| Fiscal Year Ended January 29, 2016 |
Fiscal Year Ended January 30, 2015 |
October 29, 2013 through January 31, 2014 |
February 2, 2013 through October 28, 2013 |
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| (in millions) | ||||||||||||||||||
| Interest and other, net: |
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| Investment income, primarily interest |
$ | 39 | $ | 47 | $ | 9 | $ | 53 | ||||||||||
| Gain (loss) on investments, net |
(2 | ) | (29 | ) | 1 | 1 | ||||||||||||
| Interest expense |
(680 | ) | (807 | ) | (235 | ) | (178 | ) | ||||||||||
| Foreign exchange |
(122 | ) | (96 | ) | 27 | (68 | ) | |||||||||||
| Other |
(27 | ) | (39 | ) | (6 | ) | (6 | ) | ||||||||||
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| Total interest and other, net |
$ | (792 | ) | $ | (924 | ) | $ | (204 | ) | $ | (198 | ) | ||||||
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- F-61 -
DENALI HOLDING INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
Valuation and Qualifying Accounts
| Successor | Predecessor | |||||||||||||||||
| Fiscal Year Ended January 29, 2016 |
Fiscal Year Ended January 30, 2015 |
October 29, 2013 through January 31, 2014 |
February 2, 2013 through October 28, 2013 |
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| Trade Receivables—Allowance for doubtful accounts |
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| Balance at beginning of period (a) |
$ | 60 | $ | 17 | $ | — | $ | 72 | ||||||||||
| Impact of purchase accounting (b) |
— | 34 | 11 | — | ||||||||||||||
| Charged to income |
67 | 69 | 36 | 63 | ||||||||||||||
| Charged to allowance |
70 | 60 | 30 | 74 | ||||||||||||||
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| Balance at end of period |
$ | 57 | $ | 60 | $ | 17 | $ | 61 | ||||||||||
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| Trade Receivables—Allowance for customer returns |
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| Balance at beginning of period (a) |
$ | 132 | $ | 108 | $ | — | $ | 112 | ||||||||||
| Impact of purchase accounting (b) |
— | 56 | 42 | — | ||||||||||||||
| Charged to income |
411 | 454 | 88 | 299 | ||||||||||||||
| Charged to allowance |
418 | 486 | 22 | 313 | ||||||||||||||
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| Balance at end of period |
$ | 125 | $ | 132 | $ | 108 | $ | 98 | ||||||||||
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| Customer Financing Receivables—Allowance for financing receivable losses |
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| Balance at beginning of period (a) |
$ | 194 | $ | 215 | $ | — | $ | 192 | ||||||||||
| Impact of purchase accounting (c) |
— | — | 204 | — | ||||||||||||||
| Charged to income |
104 | 147 | 50 | 95 | ||||||||||||||
| Charged to allowance (d) |
122 | 168 | 39 | 119 | ||||||||||||||
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| Balance at end of period |
$ | 176 | $ | 194 | $ | 215 | $ | 168 | ||||||||||
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| Tax Valuation Allowance |
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| Balance at beginning of period |
$ | 432 | $ | 399 | $ | — | $ | 163 | ||||||||||
| Charged to income tax provision |
384 | 33 | — | 237 | ||||||||||||||
| Allowance acquired |
— | — | 399 | (1 | ) | |||||||||||||
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| Balance at end of period |
$ | 816 | $ | 432 | $ | 399 | $ | 399 | ||||||||||
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| (a) | Due to purchase accounting for the going-private transaction, trade receivables and customer financing receivables were recognized at fair value as of the transaction date. Accordingly, the allowance for these receivables was adjusted to zero on day one of the successor period. |
| (b) | The impact of purchase accounting includes purchase accounting adjustments recorded under the acquisition method of accounting, related to the going-private transaction. |
| (c) | In connection with the going-private transaction, the Company recorded a provision for losses of $204 million on customer receivables to recognize an estimate of incurred losses on principal balances. |
| (d) | Charge-offs to the allowance for financing receivable losses for customer financing receivables includes principal and interest. |
- F-62 -
DENALI HOLDING INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
