Dell 2007 Annual Report Download - page 81

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 1, February 2, February 3,
2008 2007 2006
(in millions)
Retained interest:
Retained interest at beginning of year $ 159 $ 90 $ 24
New sales 173 167 97
Distributions from conduits (132) (142) (37)
Net accretion 31 17 4
Change in fair value for the period (8) 27 2
Retained interest at end of year $ 223 $ 159 $ 90
Cash flows during the periods:
Proceeds from new securitizations $ 538 $ 607 $ 446
Other cash flows received on retained interests 132 142 36
Servicing and administration fees received 15 9 -
Repurchases of ineligible contracts (11) (7) (4)
Cash flows during the period $ 674 $ 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 2008 and the assumptions used in calculating the fair value of the retained interest in securitized assets at February 1,
2008.
Weighted Average Key Assumptions
Monthly Payment Credit Discount
Rates Losses Rates Life
(lifetime) (annualized) (months)
Time of sale valuation of retained interest 9% 8% 14% 14
Valuation of retained interests 8% 10% 16% 12
The impact of adverse changes to the key valuation assumptions to the fair value of retained interest at February 1, 2008 and February 2,
2007 is shown in the following table:
Fiscal Year Ended
February 1, February 2,
2008 2007
(in millions)
Adverse change of:
Expected prepayment speed: 10% $ (17) $ (2)
Expected prepayment speed: 20% $ (27) $ (4)
Expected credit losses: 10% $ (8) $ (7)
Expected credit losses: 20% $ (15) $ (14)
Discount rate: 10% $ (7) $ (4)
Discount rate: 20% $ (13) $ (8)
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