NOTE 20—SUBSEQUENT EVENTS
There were no known events occurring after the balance sheet date and up until the date of the issuance of these financial statements that would materially affect the information presented herein. The Company evaluated subsequent events through March 11, 2016, the date of the issuance of these financial statements.
Sale of Dell Services (Unaudited)
On March 27, 2016, Dell entered into a definitive agreement with NTT Data International L.L.C. to sell Dell Services, including the Dell Services Federal Government business (collectively, “Dell Services”), for cash consideration of approximately $3.1 billion. Dell Services includes process outsourcing, application management, and infrastructure services. The global support, deployment, and professional services businesses are not included in the pending transaction. Denali performed an assessment of Dell Services as of January 29, 2016 and determined that it did not meet held-for-sale criteria as of that date. Dell Services assets and liabilities will be classified as held-for-sale, and its historical financial results will be classified as discontinued operations beginning in the first quarter of the fiscal year ended February 3, 2017. There are no indications of potential impairment of assets.
Federal Income Taxes (Unaudited)
The Company’s U.S. federal income tax returns for fiscal years 2007 through 2009 are currently under examination by the IRS and the IRS issued an RAR related to those years during the first quarter of Fiscal 2017. Similar to the action taken in connection with the audit of the Company’s U.S. federal income tax returns for fiscal years 2004 through 2006, the IRS has proposed adjustments relating to certain tax positions taken on the return that the Company disagrees with and will contest through the IRS administrative appeals procedures. The Company believes it has valid positions supporting its tax returns and that it is adequately reserved.
- F-66 -
DENALI HOLDING INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
Private Debt Offerings (unaudited)
On June 1, 2016, two subsidiaries of the Company completed a private offering of multiple series of First Lien Notes (the “First Lien Notes”) with an aggregate principal amount of $20 billion.
The principal amount, interest rate and maturity of each series of First Lien Notes are as follows:
| • | $3,750 million 3.48% First Lien Notes due June 1, 2019 |
| • | $4,500 million 4.42% First Lien Notes due June 15, 2021 |
| • | $3,750 million 5.45% First Lien Notes due June 15, 2023 |
| • | $4,500 million 6.02% First Lien Notes due June 15, 2026 |
| • | $1,500 million 8.10% First Lien Notes due July 15, 2036 |
| • | $2,000 million 8.35% First Lien Notes due July 15, 2046 |
Under the terms of the agreements relating to the issuance of the First Lien Notes, the proceeds of the offering were deposited into escrow, with such proceeds to be released to finance the consummation of the EMC merger subject to the satisfaction of customary conditions. Upon the completion of the EMC merger, Dell International L.L.C., a wholly-owned indirect subsidiary of the Company, and EMC will assume all of the co-issuers’ obligations under the First Lien Notes, and the First Lien Notes will be guaranteed on a joint and several basis by the Company, Denali Intermediate Inc., Dell and each of Denali Intermediate Inc.’s wholly-owned domestic subsidiaries (including EMC’s wholly-owned domestic subsidiaries following the completion of the EMC merger) that guarantees obligations under the new senior secured credit facilities that will be entered into in connection with the EMC merger.
On June 6, 2016, two subsidiaries of the Company commenced a private offering of $3.25 billion aggregate principal amount of Senior Unsecured Notes (the “Senior Unsecured Notes”). Under the expected terms of agreements relating to the issuance of the Senior Unsecured Notes, the proceeds of the offering will be deposited into escrow, with such proceeds to be released to finance the consummation of the EMC merger subject to the satisfaction of customary conditions. Upon the completion of the EMC merger, Dell International L.L.C., a wholly-owned indirect subsidiary of the Company, and EMC will assume all of the co-issuers’ obligations under the Senior Unsecured Notes, and the Senior Unsecured Notes will be guaranteed on a joint and several basis by the Company, Denali Intermediate Inc., Dell and each of Denali Intermediate Inc.’s wholly-owned domestic subsidiaries (including EMC’s wholly-owned domestic subsidiaries following the completion of the EMC merger) that guarantees obligations under the new senior secured credit facilities that will be entered into in connection with the EMC merger.
- F-67 -
EXECUTION VERSION
AGREEMENT AND PLAN OF MERGER
Dated as of October 12, 2015
among
DENALI HOLDING INC.,
DELL INC.,
UNIVERSAL ACQUISITION CO.
and
