Related Party Transactions	9 Months Ended
Related Party Transactions	Nov. 01, 2019
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions Dell and VMware Agency Arrangements Since our formation, we have entered into agency arrangements with Dell and VMware that enable our sales team to sell our subscriptions and services leveraging the Dell and VMware enterprise relationships and end customer contracts. These transactions result in Dell or VMware invoicing customers and collecting on our behalf. In exchange, we pay an agency fee, which is based on a percentage of the invoiced contract amounts, for their services. Such percentage ranged from 1.5% to 5.0% for both the three and nine months ended November 1, 2019 and November 2, 2018, respectively. In aggregate, we paid Dell and VMware $1.8 million and $1.7 million for the three months ended November 1, 2019 and November 2, 2018, respectively, and $5.0 million and $7.5 million for the nine months ended November 1, 2019 and November 2, 2018, respectively, which was deferred and amortized to sales and marketing expense over the term of the underlying customer arrangements. Sales of our Products and Services to Dell and VMware From time to time, we have sold our software products and professional, software support and other services to Dell and VMware for their internal use. Revenue recognized for sales of our products and services to Dell was $4.8 million and $3.3 million for the three months ended November 1, 2019 and November 2, 2018, respectively, and $17.1 million and $10.1 million for the nine months ended November 1, 2019 and November 2, 2018, respectively. Revenue recognized for sales of our products and services to VMware was $0.3 million and $0.5 million for the three months ended November 1, 2019 and November 2, 2018, respectively, and $0.9 million and $1.3 million for the nine months ended November 1, 2019 and November 2, 2018, respectively. Dell and VMware Transition Services and Employee Matters Agreements We engage Dell in several ongoing related party transactions which result in costs charged to us. Dell acts as a paying agent for certain international payroll, accounts payable and other expenses. Pursuant to ongoing shared services and employee matters agreements, we are charged by Dell for certain administrative services, including certain financial services as well as support services where Pivotal does not have a legal entity, based upon estimates and allocations. Additionally, in certain geographic regions where we do not have an established legal entity, we contract with Dell subsidiaries for support services. We are charged for overhead items such as facilities and IT systems for our employees that work from Dell office locations. The costs incurred by Dell on our behalf related to these employees are charged to us with a markup. These costs are included as expenses in our consolidated statements of operations and primarily include salaries, benefits, travel and facility costs. These expenses are charged to us on the basis of direct usage when identifiable, with the remainder charged primarily on the basis of headcount or other measures. Management believes the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of services provided to or the benefit received by us during the periods presented. Charges received from Dell for the three months ended November 1, 2019 and November 2, 2018 were $11.5 million and $5.3 million, respectively, and were $27.0 million and $21.5 million for the nine months ended November 1, 2019 and November 2, 2018, respectively. Dell Tax Sharing Agreement Pursuant to a tax sharing agreement Pivotal has historically received payments from Dell for the tax benefits derived from the inclusion of our losses in certain Dell U.S. federal and state group returns. As of a result of stock issued during our IPO, Pivotal no longer qualifies for inclusion in the Dell U.S. federal consolidated tax return. This reduces the amount of benefit or expense we receive from the tax sharing agreement in prospective periods to the benefit or expense that Dell realizes from our inclusion in their unitary state returns. In April 2019, we amended our TSA with Dell with regard to the treatment of certain 2017 Tax Cut and Jobs Act implications not explicitly covered by the original terms of the TSA. The amendment provided that we would receive a one-time payment of $26.5 million from Dell for the current benefit and estimated future expense related to Pivotal’s foreign deficits included in the transition tax determination in the Dell fiscal 2018 federal tax return. Dell’s payment to Pivotal was received in August 2019. As of November 1, 2019, the net payable related to the TSA with Dell was $1.8 million. The balance is comprised primarily of a return-to-provision update of $2.6 million related to the finalization of our fiscal 2019 federal taxable income, partially offset by a provision for state receivables which are not yet final. Other Related Party Transactions Through September 6, 2018, certain of our directors were also executives of companies that are our customers. Subsequent to this date, only the director from Ford remains an executive of a company that is our customer. Revenue recognized from sales of subscriptions and services to Ford was $2.0 million and $2.5 million for the three months ended November 1, 2019 and November 2, 2018, respectively, and $5.5 million and $9.4 million for the nine months ended November 1, 2019 and November 2, 2018, respectively. We had outstanding accounts receivable balances from Ford of $11.5 million and $1.8 million as of November 1, 2019 and February 1, 2019, respectively. Revenue recognized from sales of subscriptions and services to General Electric (“GE”) was $0.9 million and $6.8 million for the three and nine months ended November 2, 2018, respectively. As GE is no longer a related party, no disclosures for fiscal 2020 have been provided. Proposed Merger with VMware On August 22, 2019, Pivotal entered into the Merger Agreement with VMware and Merger Sub. Refer to “ Note 1 --- Overview and Basis of Presentation” for details of the Merger Agreement.

Pivotal Software, Inc. 10-Q