Dell Reports Third Quarter Financial Results

  Dell Reports Third Quarter Financial Results

  *Revenue of $13.7 billion
  *GAAP earnings of $0.27 per share, non-GAAP earnings of $0.39 per share
  *Cash flow from operations of $1.3 billion
  *Dell Enterprise Solutions and Services revenue grew 3 percent year over
    year to $4.8 billion

Business Wire

ROUND ROCK, Texas -- November 15, 2012

Dell announced fiscal 2013 third-quarter results today with revenue of $13.7
billion, GAAP operating income of $589 million, and GAAP earnings of $0.27 per
share. Dell’s enterprise solution strategy continued to show positive results
with server and networking revenue increasing 11 percent year over year.

“We are consistently executing our end-to-end solutions strategy for the
benefit of our customers,” said Michael Dell, Chairman and CEO. “In the
quarter, we completed the acquisition of Quest Software which – along with
other recent acquisitions like SonicWALL and Wyse – adds leading management,
security, virtualization and cloud capabilities to our expanding portfolio of
powerful solutions.”

“In a difficult global IT spending environment we saw solid proof points that
demonstrate progress in our strategy,” said Brian Gladden, Dell CFO. “A
highlight has been the strong progress of our newly introduced servers, with
our server and networking business up 11 percent. We’re also encouraged by
early interest in our new Windows 8 touch portfolio and the opportunities it
creates for our commercial and consumer businesses.”

Mr. Gladden added that strong cash flow from operations generated over the
past two years continued with $1.3 billion in the quarter and, combined with a
strong cash position this fiscal year, helped enable Dell to invest in new
capabilities and return almost $900 million year to date to shareholders
through the company’s recently adopted dividend and share repurchases.

Results

  *Revenue in the quarter was $13.7 billion, an 11 percent decrease from the
    previous year as desktop and mobility revenue contracted.
  *GAAP operating income for the quarter was $589 million, or 4.3 percent of
    revenue. Non-GAAP operating income was $886 million, or 6.5 percent of
    revenue.
  *GAAP earnings per share in the quarter was 27 cents, down 45 percent from
    the previous year; non-GAAP EPS was 39 cents, down 28 percent.
  *Cash flow from operations in the quarter was $1.3 billion. Dell ended the
    quarter with $14.2 billion in cash and investments.

Fiscal-Year 2013 Third Quarter and Year-to-Date Highlights

                  Third Quarter                 Fiscal Year To Date
(in millions)      FY13      FY12      Change   FY13      FY12      Change
Revenue            $ 13,721  $ 15,365  (11 %)   $ 42,626  $ 46,040  (7  %)
                                                                        
Operating Income   $ 589      $ 1,142    (48 %)   $ 2,314    $ 3,500    (34 %)
(GAAP)
Net Income         $ 475      $ 893      (47 %)   $ 1,842    $ 2,728    (32 %)
(GAAP)
EPS (GAAP)         $ 0.27     $ 0.49     (45 %)   $ 1.05     $ 1.46     (28 %)
                                                                        
Operating Income   $ 886      $ 1,288    (31 %)   $ 3,019    $ 3,992    (24 %)
(non-GAAP)
Net Income         $ 679      $ 983      (31 %)   $ 2,315    $ 3,039    (24 %)
(non-GAAP)
EPS (non-GAAP)     $ 0.39     $ 0.54     (28 %)   $ 1.32     $ 1.62     (19 %)

Information about Dell’s use of non-GAAP financial information is provided
under “Non-GAAP Financial Measures” below. Non-GAAP financial information
excludes costs related primarily to the amortization of purchased intangibles,
severance and facility-action costs, certain settlement costs and
acquisition-related charges. All comparisons in this press release are year
over year unless otherwise noted.

Strategic Highlights:

  *Dell Enterprise Solutions and Services revenue grew 3 percent year over
    year to $4.8 billion. The company year to date is 4 percent ahead of last
    year’s ES&S revenue at $14.2 billion, accounting for greater than 50
    percent of the company’s gross margin thus far this year. The ES&S
    business is on an annual run-rate approaching $20 billion.
  *Server and networking revenue for the quarter grew 11 percent. Dell was
    the only top-3 server provider to have positive unit growth in the
    quarter. Dell’s server growth was driven by its new, 12^th-Generation
    line, leadership in hyper-scale infrastructure solutions and an increase
    in customer adoption of cloud solutions for their IT requirements. Dell’s
    differentiated intellectual property and solutions have resulted in solid
    growth in this business.
  *Dell’s Services  business continues to execute well, with gross margin
    percentages improving sequentially for the sixth consecutive quarter, as
    the company focuses on the most profitable areas of the business. Growth
    in support, deployment and security services highlighted the quarter.

Business Units and Regions:

  *Large Enterprise revenue  was $4.2 billion  in the quarter, an 8 percent
    decline. Operating income was $325 million, or 7.8 percent of revenue.
  *Public revenue was $3.8 billion, an 11 percent decrease. Operating income
    for the quarter was $352 million, or 9.2 percent of revenue.
  *Small and Medium Business revenue was $3.3 billion, a 1 percent decline.
    Operating income was $349 million, or 10.6 percent of revenue.
  *Consumer revenue was $2.5 billion, a 23 percent decline. Operating loss
    was $65 million or minus 2.7 percent of revenue.
  *Revenue in Americas was down 9 percent; Asia-Pacific and Japan was down 11
    percent; and EMEA was down 15 percent.

Company Outlook:

Dell sees the challenging global macro-economic environment continuing in the
fourth quarter, which will continue to impact the company’s results. The
company expects sequential revenue growth of 2 to 5 percent. For the full
year, Dell maintains its expectation for at least $1.70 in earnings per share
on a non-GAAP basis. Going forward, the company is committed to its end-to-end
solutions strategy and creating value over the long term.

About Dell

Dell Inc. (NASDAQ: DELL) listens to customers and delivers worldwide
innovative technology, business solutions and services they trust and value.
For more information, visit www.dell.com. The third-quarter analyst call with
Michael Dell, chairman and CEO, Brian Gladden, CFO, and, Steve Felice, Chief
Commercial Officer, will be webcast live today at 4 p.m. CST and archived at
www.dell.com/investor. To monitor highlighted facts from the analyst call,
follow on the Dell Investor Relations Twitter account at:
http://twitter.com/dellshares or hashtag #DellEarnings. To communicate
directly with Dell, go to www.dell.com/dellshares.

Segment Realignment:

In the first quarter of Fiscal 2013, Dell made certain segment realignments in
order to conform to the way Dell internally manages segment performance. These
realignments affected all of Dell's operating segments, but primarily
consisted of the transfer of small office business customers from the Small
and Medium Business segment to the Consumer Segment. Dell has recast prior
period amounts to provide visibility and comparability. None of these changes
impacts Dell's previously reported consolidated net revenue, gross margin,
operating income, net income, or earnings per share.

Non-GAAP Financial Measures:

This press release includes information about non-GAAP operating income,
non-GAAP net income, and non-GAAP earnings per share (collectively with
non-GAAP gross margin and non-GAAP operating expenses, the “non-GAAP financial
measures”), which are not measurements of financial performance prepared in
accordance with U.S. generally accepted accounting principles. In the
following tables, Dell has provided a reconciliation of each historical
non-GAAP financial measure to the most directly comparable GAAP financial
measure under the heading “Reconciliation of Non-GAAP Financial Measures.”
Dell encourages investors to review the reconciliation in conjunction with
Dell’s presentation of these non-GAAP financial measures.

Special Note on Forward Looking Statements:

Statements in this press release that relate to future results and events
(including statements about Dell’s future financial and operating performance,
trends relating to macroeconomic challenges and the IT spending environment,
effects of our acquisitions, our server business, our dividends and share
repurchases, and consumer demand relating to Windows 8, as well as the
financial guidance with respect to revenue and earnings per share) are
forward-looking statements and are based on Dell's current expectations. In
some cases, you can identify these statements by such forward-looking words as
“anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,”
“confidence,” “may,” “plan,” “potential,” “should,” “will” and “would,” or
similar expressions. Actual results and events in future periods may differ
materially from those expressed or implied by these forward-looking statements
because of a number of risks, uncertainties and other factors, including:
intense competition; Dell’s reliance on third-party suppliers for product
components, including reliance on several single-sourced or limited-sourced
suppliers; Dell’s ability to achieve favorable pricing from its vendors; weak
global economic conditions and instability in financial markets; Dell’s
ability to manage effectively the change involved in implementing strategic
initiatives; successful implementation of Dell’s acquisition strategy; Dell’s
cost-efficiency measures; Dell’s ability to effectively manage periodic
product and services transitions; Dell’s ability to deliver consistent quality
products and services; Dell’s ability to generate substantial non-U.S. net
revenue; Dell’s product, customer, and geographic sales mix, and seasonal
sales trends; the performance of Dell’s sales channel partners; access to the
capital markets by Dell or its customers; weak economic conditions and
additional regulation affecting our financial services activities;
counterparty default; customer terminations of or pricing changes in services
contracts, or Dell’s failure to perform as it anticipates at the time it
enters into services contracts; loss of government contracts; Dell’s ability
to obtain licenses to intellectual property developed by others on
commercially reasonable and competitive terms; infrastructure disruptions;
cyber-attacks or other data security breaches; Dell’s ability to hedge
effectively its exposure to fluctuations in foreign currency exchange rates
and interest rates; expiration of tax holidays or favorable tax rate
structures, or unfavorable outcomes in tax audits and other compliance
matters; impairment of portfolio investments; unfavorable results of legal
proceedings; Dell’s ability to attract, retain, and motivate key personnel;
Dell’s ability to maintain strong internal controls; changing environmental
and safety laws; the effect of armed hostilities, terrorism, natural
disasters, and public health issues; and other risks and uncertainties
discussed in Dell’s filings with the Securities and Exchange Commission,
including its Annual Report on Form 10-K for its fiscal year ended February 3,
2012. In particular, Dell’s expectations with regard to sequential revenue and
earnings per share for the full fiscal year ending Feb. 1, 2013 assume, among
other matters, that there is no significant decline in economic conditions
generally or demand growth specifically, that macroeconomic challenges do not
materialize into more significant economic difficulties, no significant change
in seasonality patterns, continued strength in server, storage and network
products and continued geographic customer demand trends. Dell assumes no
obligation to update its forward-looking statements.

Consolidated statements of income, financial position and cash flows and other
financial data follow.

Dell is a trademark of Dell Inc. Dell disclaims any proprietary interest in
the marks and names of others.



DELL INC.
Condensed Consolidated Statement of Income and Related Financial Highlights
(in millions, except per share data and percentages; percentage growth rates and
ratios are calculated based on underlying data in thousands)
(unaudited)
                                                                    
                      Three Months Ended                     % Growth Rates
                      November     August 3,    October
                      2,                        28,
                      2012 ^(1)    2012 ^(1)    2011         Sequential  Yr. to
                                                                          Yr.
Net revenue
Products              $ 10,706     $ 11,403     $ 12,312     (6    )%     (13 )%
Services, including    3,015      3,080      3,053     (2    )%     (1  )%
software related
Total net revenue      13,721     14,483     15,365    (5    )%     (11 )%
Cost of net revenue
Products                8,904        9,280        9,797      (4    )%     (9  )%
Services, including    1,945      2,065      2,099     (6    )%     (7  )%
software related
Total cost of net      10,849     11,345     11,896    (4    )%     (9  )%
revenue
Gross margin            2,872        3,138        3,469      (8    )%     (17 )%
Operating expenses
Selling, general,       2,013        1,976        2,107      2     %      (4  )%
and administrative
Research,
development, and       270        261        220       3     %      23  %
engineering
Total operating        2,283      2,237      2,327     2     %      (2  )%
expenses
Operating income        589          901          1,142      (35   )%     (48 )%
Interest and other,    (38    )    (63    )    (70    )   41    %      46  %
net
Income before           551          838          1,072      (34   )%     (49 )%
income taxes
Income tax             76         106        179       (28   )%     (57 )%
provision
Net income            $ 475       $ 732       $ 893       (35   )%     (47 )%
Earnings per share:
Basic                 $ 0.27      $ 0.42      $ 0.49      (36   )%     (45 )%
Diluted               $ 0.27      $ 0.42      $ 0.49      (36   )%     (45 )%
Cash dividends
declared per common   $ 0.08       $ —          $ —
share
Weighted average
shares outstanding:
Basic                   1,735        1,747        1,813      (1    )%     (4  )%
Diluted                 1,742        1,753        1,828      (1    )%     (5  )%
                                                                          
Percentage of Total
Net Revenue:
Gross margin            20.9   %     21.6   %     22.6   %
Selling, general,       14.7   %     13.6   %     13.8   %
and administrative
Research,
development, and        1.9    %     1.8    %     1.4    %
engineering
Operating expenses      16.6   %     15.4   %     15.2   %
Operating income        4.3    %     6.2    %     7.4    %
Income before           4.0    %     5.8    %     7.0    %
income taxes
Net income              3.5    %     5.1    %     5.8    %
Income tax rate         13.8   %     12.7   %     16.7   %
                                                                          
Net Revenue by
Product Category:
Servers and           $ 2,322      $ 2,332      $ 2,089      —     %      11  %
Networking ^ (1)
Storage                 386          435          460        (11   )%     (16 )%
Services                2,107        2,106        2,123      —     %      (1  )%
Software and            2,258        2,338        2,528      (3    )%     (11 )%
Peripherals
Mobility                3,523        3,870        4,750      (9    )%     (26 )%
Desktop PCs            3,125      3,402      3,415     (8    )%     (8  )%
Consolidated net      $ 13,721    $ 14,483    $ 15,365    (5    )%     (11 )%
revenue
                                                                          
Percent of Total
Net Revenue:
Servers and             17     %     16     %     14     %
Networking ^ (1)
Storage                 3      %     3      %     3      %
Services                15     %     15     %     14     %
Software and            16     %     16     %     16     %
Peripherals
Mobility                26     %     27     %     31     %
Desktop PCs             23     %     23     %     22     %
                                                                          
Net Revenue by
Global Segment: ^
(2)
Large Enterprise      $ 4,156      $ 4,536      $ 4,540      (8    )%     (8  )%
Public                  3,824        4,065        4,287      (6    )%     (11 )%
Small and Medium        3,282        3,258        3,326      1     %      (1  )%
Business
Consumer               2,459      2,624      3,212     (6    )%     (23 )%
Consolidated net      $ 13,721    $ 14,483    $ 15,365    (5    )%     (11 )%
revenue
                                                                          
Percentage of Total
Net Revenue: ^ (2)
Large Enterprise        30     %     31     %     29     %
Public                  28     %     28     %     28     %
Small and Medium        24     %     23     %     22     %
Business
Consumer                18     %     18     %     21     %
                                                                          
Consolidated
Operating Income: ^
(2)
Large Enterprise      $ 325        $ 433        $ 446
Public                  352          379          454
Small and Medium        349          382          367
Business
Consumer               (65    )    14         99     
Segment operating       961          1,208        1,366
income
Broad based
long-term               (75    )     (85    )     (78    )
incentives
Amortization of         (165   )     (150   )     (100   )
intangible assets
Severance and
facility actions
and                    (132   )    (72    )    (46    )
acquisition-related
costs
Consolidated          $ 589       $ 901       $ 1,142  
operating income

^(1) Includes the results of Dell's Fiscal 2013 acquisitions from their
respective acquisition dates. Servers and Networking includes our Fiscal 2013
Software acquisitions (Quest Software, SonicWALL, and AppAssure).

^(2) Segment Results for Fiscal 2012 have been recast to conform to segment
realignments that were completed during the first quarter of Fiscal 2013. See
Supplemental Segment Information at the end of these financial tables for more
information.

                                                                 
                                                                      
DELL INC.
Condensed Consolidated Statement of Income and Related Financial Highlights
(continued)
(in millions, except per share data and percentages; percentage growth rates
and ratios are calculated based on underlying data in thousands)
(unaudited)
                                                                      
                                 Nine Months Ended                    % Growth
                                                                      Rates
                                 November 2,         October 28,
                                 2012^(1)            2011             Yr. to
                                                                      Yr.
Net revenue
Products                         $   33,532          $  36,981        (9   )%
Services, including software        9,094            9,059        —    %
related
Total net revenue                   42,626           46,040       (7   )%
Cost of net revenue
Products                             27,514             29,168        (6   )%
Services, including software        6,035            6,446        (6   )%
related
Total cost of net revenue           33,549           35,614       (6   )%
Gross margin                         9,077              10,426        (13  )%
Operating expenses
Selling, general, and                5,998              6,306         (5   )%
administrative
Research, development, and          765              620          23   %
engineering
Total operating expenses            6,763            6,926        (2   )%
Operating income                     2,314              3,500         (34  )%
Interest and other, net             (133     )        (167    )     20   %
Income before income taxes           2,181              3,333         (35  )%
Income tax provision                339              605          (44  )%
Net income                       $   1,842          $  2,728        (32  )%
Earnings per share:
Basic                            $   1.05           $  1.47         (29  )%
Diluted                          $   1.05           $  1.46         (28  )%
Cash dividends declared per      $   0.08            $  —
common share
Weighted average shares
outstanding:
Basic                                1,747              1,860         (6   )%
Diluted                              1,757              1,874         (6   )%
                                                                      
Percentage of Total Net
Revenue:
Gross margin                         21.3     %         22.6    %
Selling, general, and                14.1     %         13.7    %
administrative
Research, development, and           1.8      %         1.3     %
engineering
Operating expenses                   15.9     %         15.0    %
Operating income                     5.4      %         7.6     %
Income before income taxes           5.1      %         7.2     %
Net income                           4.3      %         5.9     %
Income tax rate                      15.5     %         18.2    %
                                                                      
Net Revenue by Product
Category:
Servers and Networking ^ (1)     $   6,671           $  6,116         9    %
Storage                              1,265              1,443         (12  )%
Services                             6,284              6,143         2    %
Software and Peripherals             6,982              7,664         (9   )%
Mobility                             11,629             14,227        (18  )%
Desktop PCs                         9,795            10,447       (6   )%
Consolidated net revenue         $   42,626         $  46,040       (7   )%
                                                                      
Percent of Total Net
Revenue:
Servers and Networking ^ (1)         16       %         13      %
Storage                              3        %         3       %
Services                             15       %         13      %
Software and Peripherals             16       %         17      %
Mobility                             27       %         31      %
Desktop PCs                          23       %         23      %
                                                                      
Net Revenue by Global
Segment: ^ (2)
Large Enterprise                 $   13,128          $  13,804        (5   )%
Public                               11,355             12,237        (7   )%
Small and Medium Business            10,017             9,987         —    %
Consumer                            8,126            10,012       (19  )%
Consolidated net revenue         $   42,626         $  46,040       (7   )%
                                                                      
Percentage of Total Net
Revenue:  ^(2)
Large Enterprise                     31       %         30      %
Public                               27       %         26      %
Small and Medium Business            23       %         22      %
Consumer                             19       %         22      %
                                                                      
Consolidated Operating
Income:  ^(2)
Large Enterprise                 $   1,160           $  1,422
Public                               1,002              1,272
Small and Medium Business            1,120              1,182
Consumer                            (19      )        372     
Segment operating income             3,263              4,248
Broad based long-term                (244     )         (256    )
incentives
Amortization of intangible           (425     )         (287    )
assets
Severance and facility
actions and                         (280     )        (205    )
acquisition-related costs
Consolidated operating           $   2,314          $  3,500   
income

^(1) Includes the results of Dell's Fiscal 2013 acquisitions from their
respective acquisition dates. Servers and Networking includes our Fiscal 2013
Software acquisitions (Quest Software, SonicWALL, and AppAssure).

^(2) Segment Results for Fiscal 2012 have been recast to conform to segment
realignments that were completed during the first quarter of Fiscal 2013. See
Supplemental Segment Information at the end of these financial tables for more
information.

                                                               
                                                                   
DELL INC.
Condensed Consolidated Statement of Financial Position and Related Financial
Highlights
(in millions, except for ratios; ratios are calculated based on underlying
data in thousands)
(unaudited)
                                                                   
                                   November 2,        August 3,    October 28,
                                   2012               2012         2011
Assets:
Current assets:
Cash and cash equivalents          $   10,991         $ 11,519     $  13,293
Short-term investments                 281              372           545
Accounts receivable, net               6,187            6,829         6,690
Short-term financing                   3,151            3,174         3,326
receivables, net
Inventories, net                       1,364            1,615         1,397
Other current assets                  3,688          3,741       3,005  
Total current assets                   25,662           27,250        28,256
Property, plant, and                   2,156            2,058         2,123
equipment, net
Long-term investments                  2,908            2,738         2,183
Long-term financing                    1,354            1,344         1,279
receivables, net
Goodwill                               9,191            7,558         5,943
Purchased intangible assets,           3,511            2,609         1,957
net
Other non-current assets              664            540         302    
Total assets                       $   45,446        $ 44,097    $  42,043 
                                                                   
Liabilities and Stockholders'
Equity:
Current liabilities:
Short-term debt                    $   3,724          $ 2,609      $  1,831
Accounts payable                       10,556           11,193        11,107
Accrued and other                      3,504            3,227         3,816
Short-term deferred services          4,027          3,683       3,465  
revenue
Total current liabilities              21,811           20,712        20,219
Long-term debt                         5,310            5,832         6,430
Long-term deferred services            3,943            3,893         3,744
revenue
Other non-current liabilities         4,184          3,914       2,987  
Total liabilities                     35,248         34,351      33,380 
Total Dell stockholders'               10,177           9,746         8,663
equity
Noncontrolling interest               21             —           —      
Total stockholders' equity            10,198         9,746       8,663  
Total liabilities and equity       $   45,446        $ 44,097    $  42,043 
                                                                   
Ratios:
Days of sales outstanding ^            45               46            42
(1)
Days supply in inventory               11               13            11
Days in accounts payable              (88      )      (89    )     (84    )
Cash conversion cycle                 (32      )      (30    )     (31    )
                                                                   
Average total revenue/unit         $   1,410          $ 1,390      $  1,390
(approximate)

^(1) Days of sales outstanding ("DSO") is based on the ending net trade
receivables and most recent quarterly revenue for each period. DSO includes
the effect of product costs related to customer shipments not yet recognized
as revenue that are classified as other current assets. At November2, 2012,
August3, 2012, and October28, 2011, DSO and days of customer shipments not
yet recognized were 41 and 4 days, 42 and 4 days, and 39 and 3 days,
respectively.

                                                              
                                                                   
DELL INC.
Condensed Consolidated Statements of Cash Flows
(in millions, unaudited)
                                                                   
                         Three Months Ended          Nine Months Ended
                         November 2,   October 28,   November 2,   October 28,
                         2012          2011          2012          2011
Cash flows from
operating activities:
Net income               $  475        $  893        $  1,842      $  2,728
Adjustments to
reconcile net income
to net cash provided
by operating
activities:
Depreciation and            294           241           823           687
amortization
Stock-based                 84            80            276           261
compensation
Effects of exchange
rate changes on
monetary assets and         —             (10    )      15            (19    )
liabilities
denominated in foreign
currencies
Deferred income taxes       (59    )      (35    )      (107   )      (91    )
Provision for doubtful
accounts — including        64            50            185           167
financing receivables
Other                       10            46            22            46
Changes in assets and
liabilities, net of
effects from
acquisitions:
Accounts receivable         766           (95    )      294           (190   )
Financing receivables       (62    )      (83    )      (51    )      (162   )
Inventories                 257           (15    )      67            (46    )
Other assets                (138   )      16            (334   )      223
Accounts payable            (664   )      (492   )      (1,104 )      (231   )
Deferred services           63            137           204           540
revenue
Accrued and other          253         118         (290   )     (223   )
liabilities
Change in cash from        1,343       851         1,842       3,690  
operating activities
Cash flows from
investing activities:
Investments:
Purchases                   (641   )      (1,638 )      (1,831 )      (2,419 )
Maturities and sales        716           424           3,156         856
Capital expenditures        (121   )      (214   )      (383   )      (510   )
Proceeds from sale of
facilities, land, and       47            —             81            12
other assets
Collections on
purchased financing         34            69            136           204
receivables
Acquisition of
business, net of cash      (2,297 )     (663   )     (4,708 )     (2,564 )
received
Change in cash from        (2,262 )     (2,022 )     (3,549 )     (4,421 )
investing activities
Cash flows from
financing activities:
Repurchase of common        —             (600   )      (724   )      (2,180 )
stock
Cash dividends paid         (139   )      —             (139   )      —
Issuance of common
stock under employee        5             5             49            34
plans
Issuance (repayment)
of commercial paper         (430   )      —             (292   )      —
(maturity 90 days or
less), net
Proceeds from debt          1,639         884           2,790         3,317
Repayments of debt          (718   )      (362   )      (2,822 )      (1,055 )
Other                      —           1           8           3      
Change in cash from        357         (72    )     (1,130 )     119    
financing activities
Effect of exchange
rate changes on cash       34          (87    )     (24    )     (8     )
and cash equivalents
Change in cash and          (528   )      (1,330 )      (2,861 )      (620   )
cash equivalents
Cash and cash
equivalents at             11,519      14,623      13,852      13,913 
beginning of the
period
Cash and cash
equivalents at end of    $  10,991    $  13,293    $  10,991    $  13,293 
the period
                                                                             
                                                                             

                   SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES

The following tables include information about non-GAAP gross margin, non-GAAP
operating expenses, non-GAAP operating income, non-GAAP net income, and
non-GAAP earnings per share (collectively, the “non-GAAP financial measures”),
which are not measurements of financial performance prepared in accordance
with U.S. generally accepted accounting principles. Dell has provided a
reconciliation of the historical non-GAAP financial measures to the most
directly comparable GAAP measures in the below tables. A detailed discussion
of Dell's reasons for including the non-GAAP financial measures and the
limitations associated with those measures is presented in "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Results of Operations - Non-GAAP Financial Measures" in Dell's annual report
on Form 10-K for the financial year ended February3, 2012. Dell encourages
investors to review the historical reconciliation and the non-GAAP discussion
in conjunction with the presentation of non-GAAP financial measures.

                                                                    
                                                                          
DELL INC.
Reconciliation of Non-GAAP Financial Measures
(in millions, except per share data and percentages; percentage growth rates and
ratios are calculated based on underlying data in thousands)
(unaudited)
                                                                          
                      Three Months Ended                     % Growth Rates
                      November     August 3,    October
                      2,                        28,
                      2012 ^(1)    2012 ^(1)    2011         Sequential  Yr. to
                                                                          Yr.
GAAP gross margin     $ 2,872      $ 3,138      $ 3,469      (8    )%     (17 )%
Non-GAAP
adjustments:
Amortization of         120          109          77
intangibles
Severance and
facility actions
and                    21         23         —     
acquisition-related
costs
Non-GAAP gross        $ 3,013     $ 3,270     $ 3,546     (8    )%     (15 )%
margin
                                                                          
GAAP operating        $ 2,283      $ 2,237      $ 2,327      2     %      (2  )%
expenses
Non-GAAP
adjustments:
Amortization of         (45   )      (41   )      (23   )
intangibles
Severance and
facility actions
and                    (111  )     (49   )     (46   )
acquisition-related
costs
Non-GAAP operating    $ 2,127     $ 2,147     $ 2,258     (1    )%     (6  )%
expenses
                                                                          
GAAP operating        $ 589        $ 901        $ 1,142      (35   )%     (48 )%
income
Non-GAAP
adjustments:
Amortization of         165          150          100
intangibles
Severance and
facility actions
and                    132        72         46    
acquisition-related
costs
Non-GAAP operating    $ 886       $ 1,123     $ 1,288     (21   )%     (31 )%
income
                                                                          
GAAP net income       $ 475        $ 732        $ 893        (35   )%     (47 )%
Non-GAAP
adjustments:
Amortization of         165          150          100
intangibles
Severance and
facility actions
and                     132          72           46
acquisition-related
costs
Aggregate
adjustment for         (93   )     (79   )     (56   )
income taxes
Non-GAAP net income   $ 679       $ 875       $ 983       (22   )%     (31 )%
                                                                          
GAAP earnings per     $ 0.27       $ 0.42       $ 0.49       (36   )%     (45 )%
share - diluted
Non-GAAP
adjustments per        0.12       0.08       0.05  
share - diluted
Non-GAAP earnings     $ 0.39      $ 0.50      $ 0.54      (22   )%     (28 )%
per share - diluted
                                                                          
Diluted WAS             1,742        1,753        1,828
                                                                          
Percentage of Total
Net Revenue:
GAAP gross margin       20.9  %      21.6  %      22.6  %
Non-GAAP adjustment    1.1   %     1.0   %     0.5   %
Non-GAAP gross         22.0  %     22.6  %     23.1  %
margin
                                                                          
GAAP operating          16.6  %      15.4  %      15.2  %
expenses
Non-GAAP adjustment    (1.1  )%    (0.6  )%    (0.5  )%
Non-GAAP operating     15.5  %     14.8  %     14.7  %
expenses
                                                                          
GAAP operating          4.3   %      6.2   %      7.4   %
income
Non-GAAP adjustment    2.2   %     1.6   %     1.0   %
Non-GAAP operating     6.5   %     7.8   %     8.4   %
income
                                                                          
GAAP net income         3.5   %      5.1   %      5.8   %
Non-GAAP adjustment    1.4   %     0.9   %     0.6   %
Non-GAAP net income    4.9   %     6.0   %     6.4   %

^(1) Includes the results of Dell's Fiscal 2013 acquisitions from their
respective acquisition dates.

                                                                 
                                                                      
DELL INC.
Reconciliation of Non-GAAP Financial Measures
(in millions, except per share data and percentages; percentage growth rates
and ratios are calculated based on underlying data in thousands)
(unaudited)
                                                                      
                                Nine Months Ended                     % Growth
                                                                      Rates
                                November 2,         October 28,
                                2012^(1)            2011              Yr. to
                                                                      Yr.
GAAP gross margin               $   9,077           $  10,426         (13  )%
Non-GAAP adjustments:
Amortization of intangibles         317                222
Severance and facility
actions and                        56               34      
acquisition-related costs
Non-GAAP gross margin           $   9,450          $  10,682        (12  )%
                                                                      
GAAP operating expenses         $   6,763           $  6,926          (2   )%
Non-GAAP adjustments:
Amortization of intangibles         (108    )          (65     )
Severance and facility
actions and                        (224    )         (171    )
acquisition-related costs
Non-GAAP operating expenses     $   6,431          $  6,690         (4   )%
                                                                      
GAAP operating income           $   2,314           $  3,500          (34  )%
Non-GAAP adjustments:
Amortization of intangibles         425                287
Severance and facility
actions and                        280              205     
acquisition-related costs
Non-GAAP operating income       $   3,019          $  3,992         (24  )%
                                                                      
GAAP net income                 $   1,842           $  2,728          (32  )%
Non-GAAP adjustments:
Amortization of intangibles         425                287
Severance and facility
actions and                         280                205
acquisition-related costs
Aggregate adjustment for           (232    )         (181    )
income taxes
Non-GAAP net income             $   2,315          $  3,039         (24  )%
                                                                      
GAAP earnings per share -       $   1.05            $  1.46           (28  )%
diluted
Non-GAAP adjustments per           0.27             0.16    
share - diluted
Non-GAAP earnings per share     $   1.32           $  1.62          (19  )%
- diluted
                                                                      
Diluted WAS                         1,757              1,874
                                                                      
Percentage of Total Net
Revenue:
GAAP gross margin                   21.3    %          22.6    %
Non-GAAP adjustment                0.9     %         0.6     %
Non-GAAP gross margin              22.2    %         23.2    %
                                                                      
GAAP operating expenses             15.9    %          15.0    %
Non-GAAP adjustment                (0.8    )%        (0.5    )%
Non-GAAP operating expenses        15.1    %         14.5    %
                                                                      
GAAP operating income               5.4     %          7.6     %
Non-GAAP adjustment                1.7     %         1.1     %
Non-GAAP operating income          7.1     %         8.7     %
                                                                      
GAAP net income                     4.3     %          5.9     %
Non-GAAP adjustment                1.1     %         0.7     %
Non-GAAP net income                5.4     %         6.6     %

^(1) Includes the results of Dell's Fiscal 2013 acquisitions from their
respective acquisition dates.

                                                                                                                                                                              
                                                                                                                                                                                               
Dell Inc.
Supplemental Segment Information
Fiscal 2011
(in millions, unaudited)
                                                                                                                                                                                               
               Three Months Ended                                                                                                                                    Fiscal Year Ended
               April 30, 2010                       July 30, 2010                        October 29, 2010                     January 28, 2011                       January 28, 2011
               As          Recast      Variance   As          Recast      Variance   As          Recast      Variance   As          Recast      Variance     As          Recast      Variance
               Reported                             Reported                             Reported                             Reported                               Reported
Net Revenue
by Global
Segment: 
^(1)
Large          $ 4,246      $ 4,341      $ 95       $ 4,549      $ 4,618      $ 69       $ 4,326      $ 4,389      $ 63       $ 4,692      $ 4,763      $ 71         $ 17,813     $ 18,111     $ 298
Enterprise
Public           3,856        3,708        (148 )     4,580        4,467        (113 )     4,442        4,340        (102 )     3,973        3,862        (111 )       16,851       16,377       (474   )
Small and
Medium           3,524        3,096        (428 )     3,535        3,083        (452 )     3,665        3,179        (486 )     3,749        3,250        (499 )       14,473       12,608       (1,865 )
Business
Consumer        3,248     3,729     481      2,870     3,366     496      2,961     3,486     525      3,278     3,817     539        12,357    14,398    2,041  
Consolidated   $ 14,874   $ 14,874   $ —       $ 15,534   $ 15,534   $ —       $ 15,394   $ 15,394   $ —       $ 15,692   $ 15,692   $ —         $ 61,494   $ 61,494   $ —      
net revenue
                                                                                                                                                                                               
Percentage
of Total Net
Revenue: 
^(1)
Large            28     %     29     %     1    %     29     %     30     %     1    %     28     %     28     %     —          30     %     30     %     —            29     %     29     %     —
Enterprise
Public           26     %     25     %     -1   %     30     %     29     %     -1   %     29     %     28     %     -1   %     25     %     25     %     —            27     %     27     %     —
Small and
Medium           24     %     21     %     -3   %     23     %     20     %     -3   %     24     %     21     %     -3   %     24     %     21     %     -3   %       24     %     21     %     -3     %
Business
Consumer         22     %     25     %     3    %     18     %     21     %     3    %     19     %     23     %     4    %     21     %     24     %     3    %       20     %     23     %     3      %
                                                                                                                                                                                               
Consolidated
Operating
Income: 
^(1)
Large          $ 283        $ 293        $ 10       $ 288        $ 289        $ 1        $ 400        $ 398        $ (2   )   $ 502        $ 510        $ 8          $ 1,473      $ 1,490      $ 17
Enterprise
Public           298          280          (18  )     369          363          (6   )     451          450          (1   )     366          353          (13  )       1,484        1,446        (38    )
Small and
Medium           313          301          (12  )     323          298          (25  )     391          365          (26  )     450          419          (31  )       1,477        1,383        (94    )
Business
Consumer        17        37        20       (21    )   9         30       —         29        29       69        105       36         65        180       115    
Segment
operating      $ 911      $ 911      $ —       $ 959      $ 959      $ —       $ 1,242    $ 1,242    $ —       $ 1,387    $ 1,387    $ —         $ 4,499    $ 4,499    $ —      
income

^(1) In the first quarter of Fiscal 2013, Dell made certain segment
realignments in order to conform to the way Dell now internally manages
segment performance. These realignments affected all of Dell's operating
segments, but primarily consisted of the transfer of small office business
customers from the Small and Medium Business segment to the Consumer Segment.
Dell has recast prior period amounts to provide visibility and comparability.
None of these changes impacts Dell's previously reported consolidated net
revenue, gross margin, operating income, net income, or earnings per share.

                                                                                                                                                                              
                                                                                                                                                                                               
Dell Inc.
Supplemental Segment Information
Fiscal 2012
(in millions, unaudited)
                                                                                                                                                                                               
               Three Months Ended                                                                                                                                    Fiscal Year Ended
               April 29, 2011                       July 29, 2011                        October 28, 2011                     February 3, 2012                       February 3, 2012
               As          Recast      Variance   As          Recast      Variance   As          Recast      Variance   As          Recast      Variance     As          Recast      Variance
               Reported                             Reported                             Reported                             Reported                               Reported
Net Revenue
by Global
Segment: 
^(1)
Large          $ 4,477      $ 4,587      $ 110      $ 4,584      $ 4,677      $ 93       $ 4,487      $ 4,540      $ 53       $ 4,909      $ 4,982      $ 73         $ 18,457     $ 18,786     $ 329
Enterprise
Public           3,767        3,621        (146 )     4,457        4,329        (128 )     4,375        4,287        (88  )     3,949        3,833        (116 )       16,548       16,070       (478   )
Small and
Medium           3,768        3,355        (413 )     3,709        3,306        (403 )     3,712        3,326        (386 )     3,977        3,560        (417 )       15,166       13,547       (1,619 )
Business
Consumer        3,005     3,454     449      2,908     3,346     438      2,791     3,212     421      3,196     3,656     460        11,900    13,668    1,768  
Consolidated   $ 15,017   $ 15,017   $ —       $ 15,658   $ 15,658   $ —       $ 15,365   $ 15,365   $ —       $ 16,031   $ 16,031   $ —         $ 62,071   $ 62,071   $ —      
net revenue
                                                                                                                                                                                               
Percentage
of Total Net
Revenue: 
^(1)
Large            30     %     31     %     1    %     29     %     30     %     1    %     29     %     29     %     —          30     %     31     %     1    %       30     %     30     %     —
Enterprise
Public           25     %     24     %     -1   %     28     %     28     %     —          29     %     28     %     -1   %     25     %     24     %     -1   %       27     %     26     %     -1     %
Small and
Medium           25     %     22     %     -3   %     24     %     21     %     -3   %     24     %     22     %     -2   %     25     %     22     %     -3   %       24     %     22     %     -2     %
Business
Consumer         20     %     23     %     3    %     19     %     21     %     2    %     18     %     21     %     3    %     20     %     23     %     3    %       19     %     22     %     3      %
                                                                                                                                                                                               
Consolidated
Operating
Income: 
^(1)
Large          $ 504        $ 516        $ 12       $ 448        $ 460        $ 12       $ 441        $ 446        $ 5        $ 461        $ 467        $ 6          $ 1,854      $ 1,889      $ 35
Enterprise
Public           370          352          (18  )     484          466          (18  )     463          454          (9   )     327          312          (15  )       1,644        1,584        (60    )
Small and
Medium           463          435          (28  )     404          380          (24  )     386          367          (19  )     412          399          (13  )       1,665        1,581        (84    )
Business
Consumer        136       170       34       73        103       30       76        99        23       39        61        22         324       433       109    
Segment
operating      $ 1,473    $ 1,473    $ —       $ 1,409    $ 1,409    $ —       $ 1,366    $ 1,366    $ —       $ 1,239    $ 1,239    $ —         $ 5,487    $ 5,487    $ —      
income

^(1) In the first quarter of Fiscal 2013, Dell made certain segment
realignments in order to conform to the way Dell now internally manages
segment performance. These realignments affected all of Dell's operating
segments, but primarily consisted of the transfer of small office business
customers from the Small and Medium Business segment to the Consumer Segment.
Dell has recast prior period amounts to provide visibility and comparability.
None of these changes impacts Dell's previously reported consolidated net
revenue, gross margin, operating income, net income, or earnings per share.

Contact:

Dell
Media Contacts: 512-728-4100
David Frink, 512-728-2678
david_frink@dell.com
or
Jess Blackburn, 512-728-8295
jess_blackburn@dell.com
or
Investor Relations Contacts:
Robert Williams, 512-728-7570
robert_williams@dell.com
or
David Mehok, 512-728-4225
david_mehok@dell.com