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Table of Contents
DELL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
The following table summarizes the components of retained interest balances and related cash flows:
Fiscal Year Ended
February 2, February 3,
2007 2006
As
Restated
(in millions)
Retained interest:
Retained interest at beginning of year $ 90 $ 24
New sales 167 97
Distributions from conduits (142) (37)
Net accretion 17 4
Change in fair value for the period 27 2
Retained interest at end of year $ 159 $ 90
Cash flows during the periods:
Proceeds from new securitizations $ 607 $ 446
Other cash flows received on retained interests 142 36
Servicing fees received 9 —
Repurchases of ineligible contracts (7) (4)
Cash flows during the period $ 751 $ 478
The table below summarizes the key assumptions used to measure the retained interest at the date of the securitizations for
transactions completed in Fiscal 2007 and the assumptions used in calculating the fair value of the retained interest in
securitized assets at February 2, 2007.
Average Key Assumptions
Weighted-
Average Weighted- Weighted- Weighted-
Monthly Average Average Average
Payment Rates Credit Losses Discount Rates Life
(lifetime) (annualized) (months)
Time of Sale Valuation of Retained Interest 8% 9% 15% 12
Valuation of Retained Interests 7% 9% 14% 12
The impact of adverse changes to the key assumptions of the fair value of retained interest at February 2, 2007 is shown in
the following table:
February 2,
2007
(in millions)
Adverse Change of:
Expected Prepayment Speed: 10% $ (2)
Expected Prepayment Speed: 20% $ (4)
Expected Credit Losses: 10% $ (7)
Expected Credit Losses: 20% $ (14)
Discount Rate: 10% $ (4)
Discount Rate: 20% $ (8)
These sensitivity analyses are hypothetical in nature and should be used with caution. The analyses utilized 10 percent and
20 percent adverse variation in assumptions to assess the sensitivities in fair values of the retained interest. However, these
changes generally cannot be extrapolated because the relationship of the change in assumptions to the change in fair value
may not be linear. Further, the effect of a
95