This orphan’s been adopted…

September 15, 2003

Just a few short months ago, Dell (DELL) and CIT (CIT) were both pretty adamant that Dell Fianancial Services, an off-balance sheet joint-venture designed to finance Dell equipment, didn’t belong to either company, despite new accounting rules that seemed to require one of the companies to own up. But in its 10-Q filed on Monday, Dell said that it would “adopt” DFS and place those numbers back on its balance sheet. (For more on off-balance sheet transactions, see chapter 8). In the filing, Dell said that consolidating DFS — accounting-speak for putting it back on Dell’s balance sheet — would not have a material effect on Dell. That may technically be true, but the numbers aren’t exactly spare change. During the quarter, Dell received $704 million in revenues from equipment sold to Dell customers that was financed via DFS. That’s up 67 percent from the same quarter a year ago. Dell also received $284 million from direct sales to DFS and $25 million in referral fees from DFS — more than twice as much as it received during the same quarter last year.

Leave a Reply

You must be logged in to post a comment.