Dell Reports Fourth Quarter, Full Fiscal Year Financial Results

  Dell Reports Fourth Quarter, Full Fiscal Year Financial Results

  *Revenue of $14.3 billion in fourth quarter, $56.9 billion for the year
  *GAAP earnings of $0.30 per share in quarter, $1.35 per share for full
    year; non-GAAP earnings of $0.40 per share in quarter and $1.72 per share
    for full year
  *Cash flow from operations of $1.4 billion; $3.3 billion for fiscal year

Business Wire

ROUND ROCK, Texas -- February 19, 2013

Dell announced fiscal 2013 fourth quarter and full-year results today, with
revenue of $14.3 billion for the quarter and $56.9 billion for the year.
Revenue from enterprise solutions and services grew 6 percent in the quarter
to $5.2 billion and was $19.4 billion, or 34 percent of Dell revenue for the
fiscal year, a 4 percent gain over fiscal year 2012.

“We continued to execute our long-term strategy in Q4, and realized a 6
percent increase in our enterprise solutions and services business,” said
Brian Gladden, Dell CFO. “We also continued to generate strong cash flow from
operations of $1.4 billion in the quarter. Our strong balance sheet and cash
position enabled the company to invest almost $5 billion in new capabilities
and intellectual property this fiscal year, including great assets like Quest,
SonicWall, Wyse and AppAssure.”

Results

  *Revenue in the quarter was $14.3 billion, an 11 percent decrease from the
    previous year, and a 4 percent increase sequentially. Revenue for the 2013
    fiscal year was $56.9 billion, an 8 percent decrease. Dell’s fiscal year
    2012 had an extra week, which was incorporated into the company’s Q4
    results.
  *GAAP operating income for the quarter was $698 million, or 4.9 percent of
    revenue. Non-GAAP operating income was $954 million, or 6.7 percent of
    revenue. Gross margins for the quarter benefitted by approximately $250
    million, primarily resulting from vendor settlements. For the fiscal year,
    GAAP operating income was $3 billion and non-GAAP operating income was $4
    billion.
  *GAAP earnings per share in the quarter was 30 cents, down 30 percent from
    the previous year; non-GAAP EPS was 40 cents, down 22 percent. For the
    fiscal year, GAAP EPS was $1.35, down 28 percent year over year and
    non-GAAP EPS was $1.72, down 19 percent.
  *Cash flow from operations in the quarter was $1.4 billion, and Dell ended
    Q4 with $15.3 billion in cash and investments. Full-year cash flow from
    operations was $3.3 billion.

Fiscal-Year 2013 Fourth Quarter and Full Year Highlights

                    Fourth Quarter              Fiscal Year
(in millions)        FY13      FY12     Change   FY13      FY12      Change
Revenue              $ 14,314  $ 16,031 (11 %)   $ 56,940  $ 62,071  (8  %)
                                                                        
Operating Income     $ 698      $ 931    (25 %)   $ 3,012    $ 4,431    (32 %)
(GAAP)
Net Income (GAAP)    $ 530      $ 764    (31 %)   $ 2,372    $ 3,492    (32 %)
EPS (GAAP)           $ 0.30     $ 0.43   (30 %)   $ 1.35     $ 1.88     (28 %)
                                                                        
Operating Income     $ 954      $ 1,143  (17 %)   $ 3,973    $ 5,135    (23 %)
(non-GAAP)
Net Income           $ 702      $ 913    (23 %)   $ 3,017    $ 3,952    (24 %)
(non-GAAP)
EPS (non-GAAP)       $ 0.40     $ 0.51   (22 %)   $ 1.72     $ 2.13     (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.

Products and Solutions:

  *Dell server revenue  increased 5 percent driven by strong growth in the
    company’s hyper-scale data center solutions business and migration to the
    company’s 12^th-generation servers. The 12G-server line now represents
    almost 80 percent of Dell PowerEdge server revenue at average selling
    prices and margins that are a premium over previous-generation servers.
  *Dell networking continued to deliver strong growth, with a 42 percent
    revenue increase, including more than 100 percent growth in the company’s
    Force10 business.
  *Dell Quest software delivered revenue over the company’s stated target of
    $180-$200 million for the quarter. The company’s security software
    business also grew sequentially.
  *Dell desktop and mobility business revenue declined 20 percent and was up
    3 percent sequentially.

Business Units and Regions:

  *Large Enterprise had revenue of $4.7 billion  in the quarter, a 7 percent
    decrease. Operating income for the quarter was $393 million, a 16 percent
    decrease. Server and networking revenue increased 25 percent and ES&S
    business grew 10 percent. Revenue for the full year was $17.8 billion,
    down 5 percent from the previous year.
  *Public revenue was $3.5 billion, a 9 percent decrease. Operating income
    for the quarter was $236 million, a 25 percent decrease. Servers and
    networking revenue grew 11 percent. Revenue for the full year was $14.8
    billion, down 8 percent from the previous year.
  *Small and Medium Business revenue was $3.4 billion, a 5 percent decrease.
    Operating income for the quarter was $385 million, a 4 percent decrease.
    SMB enterprise solutions and services sales increased 9 percent for the
    quarter, driven by servers and networking growth of 13 percent and
    services revenue growth of 17 percent. Revenue for the full year was $13.4
    billion, down 1 percent from the previous year.
  *Consumer revenue was $2.8 billion, a 24 percent decline for the quarter.
    Operating income was $8 million, an 87 percent decrease. Revenue for the
    full year was $10.9 billion, down 20 percent from the previous year.
  *EMEA revenue decreased 14 percent in the quarter, Americas was down 10
    percent, and Asia-Pacific and Japan declined 9 percent.

Company Outlook:

Given the company’s announcement Feb. 5 of a definitive merger agreement to
take Dell private, the company is not providing an outlook for its fiscal 2014
or Q1.

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 fourth-quarter analyst call with Brian
Gladden, CFO, and Tom Sweet, Corporate Controller, 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 trends relating to macroeconomic challenges,
effects of our server business, and government demand) 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. Factors or risks that could cause our actual results to differ
materially from the results we anticipate also include: (1)the occurrence of
any event, change or other circumstances that could give rise to the
termination of the merger agreement; (2)the inability to complete the
proposed merger due to the failure to obtain stockholder approval for the
proposed merger or the failure to satisfy other conditions to completion of
the proposed merger, including that a governmental entity may prohibit, delay
or refuse to grant approval for the consummation of the transaction; (3)the
failure to obtain the necessary financing arrangements set forth in the debt
and equity commitment letters delivered pursuant to the merger agreement;
(4)risks related to disruption of management’s attention from the Company’s
ongoing business operations due to the transaction; and (5)the effect of the
announcement of the proposed merger on the Company’s relationships with its
customers, operating results and business generally. Dell assumes no
obligation to update its forward-looking statements.

Additional Information and Where to Find It

In connection with the proposed merger transaction, the Company will file with
the SEC and furnish to the Company’s stockholders a proxy statement and other
relevant documents. These materials do not constitute a solicitation of any
vote or approval. Stockholders are urged to read the proxy statement when it
becomes available and any other documents to be filed with the SEC in
connection with the proposed merger or incorporated by reference in the proxy
statement because they will contain important information about the proposed
merger.

Investors will be able to obtain a free copy of documents filed with the SEC
at the SEC’s website at http://www.sec.gov. In addition, investors may obtain
a free copy of the Company’s filings with the SEC from the Company’s website
at http://content.dell.com/us/en/corp/investor-financial-reporting.aspx or by
directing a request to: Dell Inc. One Dell Way, Round Rock, Texas 78682, Attn:
Investor Relations, (512) 728-7800, investor_relations@dell.com.

The directors, executive officers and certain other members of management and
employees of the Company may be deemed “participants” in the solicitation of
proxies from stockholders of the Company in favor of the proposed merger.
Information regarding the persons who may, under the rules of the SEC, be
considered participants in the solicitation of the stockholders of the Company
in connection with the proposed merger will be set forth in the proxy
statement and the other relevant documents to be filed with the SEC. You can
find information about the Company’s executive officers and directors in its
Annual Report on Form 10-K for the fiscal year ended February 3, 2012 and in
its definitive proxy statement filed with the SEC on Schedule 14A on May 24,
2012.

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
                      February     November     February                  Yr. to
                      1,          2,          3,           Sequential  Yr.
                      2013^(1)     2012 ^ (1)   2012
Net revenue
Products              $ 11,212     $ 10,706     $ 12,925     5     %      (13 )%
Services, including    3,102      3,015      3,106     3     %      —   %
software related
Total net revenue      14,314     13,721     16,031    4     %      (11 )%
Cost of net revenue
Products                9,169        8,904        10,521     3     %      (13 )%
Services, including    2,036      1,945      2,125     5     %      (4  )%
software related
Total cost of net      11,205     10,849     12,646    3     %      (11 )%
revenue
Gross margin            3,109        2,872        3,385      8     %      (8  )%
Operating expenses
Selling, general,       2,104        2,013        2,218      5     %      (5  )%
and administrative
Research,
development, and       307        270        236       14    %      30  %
engineering
Total operating        2,411      2,283      2,454     6     %      (2  )%
expenses
Operating income        698          589          931        19    %      (25 )%
Interest and other,    (38    )    (38    )    (24    )   (2    )%     (59 )%
net
Income before           660          551          907        20    %      (27 )%
income taxes
Income tax             130        76         143       70    %      (9  )%
provision
Net income            $ 530       $ 475       $ 764       12    %      (31 )%
Earnings per share:
Basic                 $ 0.30      $ 0.27      $ 0.43      11    %      (30 )%
Diluted               $ 0.30      $ 0.27      $ 0.43      11    %      (30 )%
Cash dividends
declared per common   $ 0.08       $ 0.08       $ —
share
                                                                          
Weighted average
shares outstanding:
Basic                   1,738        1,735        1,778      —     %      (2  )%
Diluted                 1,748        1,742        1,796      —     %      (3  )%
                                                                          
Percentage of Total
Net Revenue:
Gross margin            21.7   %     20.9   %     21.1   %
Selling, general,       14.7   %     14.7   %     13.8   %
and administrative
Research,
development, and        2.1    %     1.9    %     1.5    %
engineering
Operating expenses      16.8   %     16.6   %     15.3   %
Operating income        4.9    %     4.3    %     5.8    %
Income before           4.6    %     4.0    %     5.7    %
income taxes
Net income              3.7    %     3.5    %     4.8    %
Income tax rate         19.7   %     13.8   %     15.8   %
                                                                          
Net Revenue by
Product Category:
Servers and           $ 2,623      $ 2,322      $ 2,220      13    %      18  %
Networking ^ (1)
Storage                 434          386          500        12    %      (13 )%
Services                2,112        2,107        2,179      —     %      (3  )%
Third-party
software and            2,275        2,258        2,558      1     %      (11 )%
peripherals
Mobility                3,674        3,523        4,877      4     %      (25 )%
Desktop PCs            3,196      3,125      3,697     2     %      (14 )%
Consolidated net      $ 14,314    $ 13,721    $ 16,031    4     %      (11 )%
revenue
                                                                          
Percent of Total
Net Revenue:
Servers and             18     %     17     %     14     %
Networking ^ (1)
Storage                 3      %     3      %     3      %
Services                15     %     15     %     14     %
Third-party
software and            16     %     16     %     16     %
peripherals
Mobility                26     %     26     %     30     %
Desktop PCs             22     %     23     %     23     %
                                                                          
Net Revenue by
Global Segment: ^
(2)
Large Enterprise      $ 4,653      $ 4,156      $ 4,982      12    %      (7  )%
Public                  3,473        3,824        3,833      (9    )%     (9  )%
Small and Medium        3,396        3,282        3,560      3     %      (5  )%
Business
Consumer               2,792      2,459      3,656     14    %      (24 )%
Consolidated net      $ 14,314    $ 13,721    $ 16,031    4     %      (11 )%
revenue
                                                                          
Percentage of Total
Net Revenue: ^ (2)
Large Enterprise        33     %     30     %     31     %
Public                  24     %     28     %     24     %
Small and Medium        24     %     24     %     22     %
Business
Consumer                19     %     18     %     23     %
                                                                          
Consolidated
Operating Income: ^
(2)
Large Enterprise      $ 393        $ 325        $ 467
Public                  236          352          312
Small and Medium        385          349          399
Business
Consumer               8          (65    )    61     
Segment operating       1,022        961          1,239
income
Broad based
long-term               (68    )     (75    )     (96    )
incentives
Amortization of         (188   )     (165   )     (104   )
intangible assets
Severance and
facility actions
and                    (68    )    (132   )    (108   )
acquisition-related
costs
Consolidated          $ 698       $ 589       $ 931    
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)

                                                             
                                    Fiscal Year Ended           % Growth Rates
                                    February 1,  February 3,   Yr. to Yr.
                                    2013 ^ (1)    2012
Net revenue
Products                            $  44,744     $  49,906     (10     )%
Services, including software          12,196      12,165    —       %
related
Total net revenue                     56,940      62,071    (8      )%
Cost of net revenue
Products                               36,683        39,689     (8      )%
Services, including software          8,071       8,571     (6      )%
related
Total cost of net revenue             44,754      48,260    (7      )%
Gross margin                           12,186        13,811     (12     )%
Operating expenses
Selling, general, and                  8,102         8,524      (5      )%
administrative
Research, development, and            1,072       856       25      %
engineering
Total operating expenses              9,174       9,380     (2      )%
Operating income                       3,012         4,431      (32     )%
Interest and other, net               (171   )     (191   )   10      %
Income before income taxes             2,841         4,240      (33     )%
Income tax provision                  469         748       (37     )%
Net income                          $  2,372     $  3,492     (32     )%
Earnings per share:
Basic                               $  1.36      $  1.90      (28     )%
Diluted                             $  1.35     $  1.88      (28     )%
Cash dividends declared per         $  0.16       $  —
common share
                                                                
Weighted average shares
outstanding:
Basic                                  1,745         1,838      (5      )%
Diluted                                1,755         1,853      (5      )%
                                                                
Percentage of Total Net Revenue:
Gross margin                           21.4   %      22.3   %
Selling, general, and                  14.2   %      13.7   %
administrative
Research, development, and             1.9    %      1.5    %
engineering
Operating expenses                     16.1   %      15.2   %
Operating income                       5.3    %      7.1    %
Income before income taxes             5.0    %      6.8    %
Net income                             4.2    %      5.6    %
Income tax rate                        16.5   %      17.6   %
                                                                
Net Revenue by Product Category:
Servers and Networking ^ (1)        $  9,294      $  8,336      11      %
Storage                                1,699         1,943      (13     )%
Services                               8,396         8,322      1       %
Third-party software and               9,257         10,222     (9      )%
peripherals
Mobility                               15,303        19,104     (20     )%
Desktop PCs                           12,991      14,144    (8      )%
Consolidated net revenue            $  56,940    $  62,071    (8      )%
                                                                
Percent of Total Net Revenue:
Servers and Networking ^ (1)           16     %      13     %
Storage                                3      %      3      %
Services                               15     %      13     %
Third-party software and               16     %      17     %
peripherals
Mobility                               27     %      31     %
Desktop PCs                            23     %      23     %
                                                                
Net Revenue by Global Segment: ^
(2)
Large Enterprise                    $  17,781     $  18,786     (5      )%
Public                                 14,828        16,070     (8      )%
Small and Medium Business              13,413        13,547     (1      )%
Consumer                              10,918      13,668    (20     )%
Consolidated net revenue            $  56,940    $  62,071    (8      )%
                                                                
Percentage of Total Net Revenue: 
^(2)
Large Enterprise                       31     %      30     %
Public                                 26     %      26     %
Small and Medium Business              24     %      22     %
Consumer                               19     %      22     %
                                                                
Consolidated Operating Income: 
^(2)
Large Enterprise                    $  1,553      $  1,889
Public                                 1,238         1,584
Small and Medium Business              1,505         1,581
Consumer                              (11    )     433    
Segment operating income               4,285         5,487
Broad based long-term incentives       (312   )      (352   )
Amortization of intangible assets      (613   )      (391   )
Severance and facility actions        (348   )     (313   )
and acquisition-related costs
Consolidated operating income       $  3,012     $  4,431  

^(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)

                       February 1, 2013  November 2, 2012  February 3, 2012
                                           ^(1)               ^ (1)
Assets:
Current assets:
Cash and cash           $   12,569         $   10,991         $   13,852
equivalents
Short-term                  208                281                966
investments
Accounts receivable,        6,629              6,187              6,476
net
Short-term financing        3,213              3,151              3,327
receivables, net
Inventories, net            1,382              1,364              1,404
Other current assets       3,967            3,688            3,423    
Total current assets        27,968             25,662             29,448
Property, plant, and        2,126              2,156              2,124
equipment, net
Long-term investments       2,565              2,908              3,404
Long-term financing         1,349              1,354              1,372
receivables, net
Goodwill                    9,304              9,191              5,838
Purchased intangible        3,374              3,511              1,857
assets, net
Other non-current          854              664              490      
assets
Total assets            $   47,540        $   45,446        $   44,533   
                                                              
Liabilities and
Stockholders' Equity:
Current liabilities:
Short-term debt         $   3,843          $   3,724          $   2,867
Accounts payable            11,579             10,556             11,656
Accrued and other           3,644              3,324              3,740
Short-term deferred        4,373            4,207            3,738    
revenue
Total current               23,439             21,811             22,001
liabilities
Long-term debt              5,242              5,310              6,387
Long-term deferred          3,971              3,963              3,855
revenue
Other non-current          4,187            4,164            3,373    
liabilities
Total liabilities          36,839           35,248           35,616   
Total Dell                  10,680             10,177             8,917
stockholders' equity
Noncontrolling             21               21               —        
interest
Total stockholders'        10,701           10,198           8,917    
equity
Total liabilities and   $   47,540        $   45,446        $   44,533   
equity
                                                              
Ratios:
Days of sales               46                 45                 42
outstanding ^ (2)
Days supply in              11                 11                 11
inventory
Days in accounts           (93      )        (88      )        (89      )
payable
Cash conversion cycle      (36      )        (32      )        (36      )
                                                              
Average total
revenue/unit                1,390          $   1,410          $   1,330
(approximate)

^(1) Certain prior year amounts have been reclassified from accrued and other
liabilities and other non-current liabilities on the Condensed Consolidated
Statements of Financial Position to short-term deferred revenue and long-term
deferred revenue, respectively, to conform to the current year presentation.

^(2) 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 February1, 2013,
November2, 2012, and February3, 2012, DSO and days of customer shipments not
yet recognized were 42 and 4 days, 41 and 4 days, and 39 and 3 days,
respectively.

                                                  
DELL INC.
Condensed Consolidated Statements of Cash Flows
(in millions, unaudited)
                                                     
                         Three Months Ended          Fiscal Year Ended
                         February 1,  February 3,   February 1,  February 3,
                         2013          2012 ^ (1)    2013          2012 ^ (1)
Cash flows from
operating activities:
Net income               $  530        $  764        $  2,372      $  3,492
Adjustments to
reconcile net income
to net cash provided
by operating
activities:
Depreciation and            321           249           1,144         936
amortization
Stock-based                 71            101           347           362
compensation
Effects of exchange
rate changes on
monetary assets and         3             14            18            (5     )
liabilities
denominated in foreign
currencies
Deferred income taxes       (321   )      110           (428   )      19
Provision for doubtful
accounts — including        73            67            258           234
financing receivables
Other                       (3     )      (25    )      19            21
Changes in assets and
liabilities, net of
effects from
acquisitions:
Accounts receivable         (444   )      137           (150   )      (53    )
Financing receivables       (142   )      (210   )      (193   )      (372   )
Inventories                 (19    )      (6     )      48            (52    )
Other assets                —             (251   )      (334   )      (28    )
Accounts payable            1,030         558           (74    )      327
Deferred revenue            192           190           382           701
Accrued and other          150         139         (126   )     (55    )
liabilities
Change in cash from        1,441       1,837       3,283       5,527  
operating activities
Cash flows from
investing activities:
Investments:
Purchases                   (784   )      (2,237 )      (2,615 )      (4,656 )
Maturities and sales        1,198         579           4,354         1,435
Capital expenditures        (130   )      (165   )      (513   )      (675   )
Proceeds from sale of
facilities, land, and       54            2             135           14
other assets
Collections on
purchased financing         31            74            167           278
receivables
Acquisition of
business, net of cash      (136   )     2           (4,844 )     (2,562 )
received
Change in cash from        233         (1,745 )     (3,316 )     (6,166 )
investing activities
Cash flows from
financing activities:
Repurchase of common        —             (537   )      (724   )      (2,717 )
stock
Cash dividends paid         (139   )      —             (278   )      —
Issuance of common
stock under employee        3             6             52            40
plans
Issuance (repayment)
of commercial paper         (39    )      635           (331   )      635
(maturity 90 days or
less), net
Proceeds from debt          521           733           3,311         4,050
Repayments of debt          (426   )      (380   )      (3,248 )      (1,435 )
Other                      —           1           8           4      
Change in cash from        (80    )     458         (1,210 )     577    
financing activities
Effect of exchange
rate changes on cash       (16    )     9           (40    )     1      
and cash equivalents
Change in cash and          1,578         559           (1,283 )      (61    )
cash equivalents
Cash and cash
equivalents at             10,991      13,293      13,852      13,913 
beginning of the
period
Cash and cash
equivalents at end of    $  12,569    $  13,852    $  12,569    $  13,852 
the period

^(1) Certain prior year amounts have been reclassified from accrued and other
liabilities and other non-current liabilities on the Condensed Consolidated
Statements of Financial Position to short-term deferred revenue and long-term
deferred revenue, respectively, to conform to the current year presentation.
Prior period amounts on the Condensed Consolidated Statements of Cash Flows
have been reclassified to conform to the current period presentation.

                   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
                      February     November     February                  Yr. to
                      1,          2,          3,           Sequential  Yr.
                      2013 ^(1)    2012 ^ (1)   2012
GAAP gross margin     $ 3,109      $ 2,872      $ 3,385      8     %      (8  )%
Non-GAAP
adjustments:
Amortization of         138          120          83
intangibles
Severance and
facility actions
and                    11         21         15    
acquisition-related
costs
Non-GAAP gross        $ 3,258     $ 3,013     $ 3,483     8     %      (6  )%
margin
                                                                          
GAAP operating        $ 2,411      $ 2,283      $ 2,454      6     %      (2  )%
expenses
Non-GAAP
adjustments:
Amortization of         (50   )      (45   )      (21   )
intangibles
Severance and
facility actions
and                    (57   )     (111  )     (93   )
acquisition-related
costs
Non-GAAP operating    $ 2,304     $ 2,127     $ 2,340     8     %      (2  )%
expenses
                                                                          
GAAP operating        $ 698        $ 589        $ 931        19    %      (25 )%
income
Non-GAAP
adjustments:
Amortization of         188          165          104
intangibles
Severance and
facility actions
and                    68         132        108   
acquisition-related
costs
Non-GAAP operating    $ 954       $ 886       $ 1,143     8     %      (17 )%
income
                                                                          
GAAP net income       $ 530        $ 475        $ 764        12    %      (31 )%
Non-GAAP
adjustments:
Amortization of         188          165          104
intangibles
Severance and
facility actions
and                     68           132          108
acquisition-related
costs
Aggregate
adjustment for         (84   )     (93   )     (63   )
income taxes
Non-GAAP net income   $ 702       $ 679       $ 913       3     %      (23 )%
                                                                          
GAAP earnings per     $ 0.30       $ 0.27       $ 0.43       11    %      (30 )%
share - diluted
Non-GAAP
adjustments per        0.10       0.12       0.08  
share - diluted
Non-GAAP earnings     $ 0.40      $ 0.39      $ 0.51      3     %      (22 )%
per share - diluted
                                                                          
Diluted WAS             1,748        1,742        1,796
                                                                          
Percentage of Total
Net Revenue:
GAAP gross margin       21.7  %      20.9  %      21.1  %
Non-GAAP adjustment    1.1   %     1.1   %     0.6   %
Non-GAAP gross         22.8  %     22.0  %     21.7  %
margin
                                                                          
GAAP operating          16.8  %      16.6  %      15.3  %
expenses
Non-GAAP adjustment    (0.7  )%    (1.1  )%    (0.7  )%
Non-GAAP operating     16.1  %     15.5  %     14.6  %
expenses
                                                                          
GAAP operating          4.9   %      4.3   %      5.8   %
income
Non-GAAP adjustment    1.8   %     2.2   %     1.3   %
Non-GAAP operating     6.7   %     6.5   %     7.1   %
income
                                                                          
GAAP net income         3.7   %      3.5   %      4.8   %
Non-GAAP adjustment    1.2   %     1.4   %     0.9   %
Non-GAAP net income    4.9   %     4.9   %     5.7   %

^(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)

                                                             
                                    Fiscal Year Ended           % Growth Rates
                                    February 1,  February 3,   Yr. to Yr.
                                    2013 ^(1)     2012
GAAP gross margin                   $ 12,186      $ 13,811      (12     )%
Non-GAAP adjustments:
Amortization of intangibles           455           305
Severance and facility actions       67          49     
and acquisition-related costs
Non-GAAP gross margin               $ 12,708     $ 14,165     (10     )%
                                                                
GAAP operating expenses             $ 9,174       $ 9,380       (2      )%
Non-GAAP adjustments:
Amortization of intangibles           (158   )      (86    )
Severance and facility actions       (281   )     (264   )
and acquisition-related costs
Non-GAAP operating expenses         $ 8,735      $ 9,030      (3      )%
                                                                
GAAP operating income               $ 3,012       $ 4,431       (32     )%
Non-GAAP adjustments:
Amortization of intangibles           613           391
Severance and facility actions       348         313    
and acquisition-related costs
Non-GAAP operating income           $ 3,973      $ 5,135      (23     )%
                                                                
GAAP net income                     $ 2,372       $ 3,492       (32     )%
Non-GAAP adjustments:
Amortization of intangibles           613           391
Severance and facility actions        348           313
and acquisition-related costs
Aggregate adjustment for income      (316   )     (244   )
taxes
Non-GAAP net income                 $ 3,017      $ 3,952      (24     )%
                                                                
GAAP earnings per share - diluted   $ 1.35        $ 1.88        (28     )%
Non-GAAP adjustments per share -     0.37        0.25   
diluted
Non-GAAP earnings per share -       $ 1.72       $ 2.13       (19     )%
diluted
                                                                
Diluted WAS                           1,755         1,853
                                                                
Percentage of Total Net Revenue:
GAAP gross margin                     21.4   %      22.3   %
Non-GAAP adjustment                  0.9    %     0.5    %
Non-GAAP gross margin                22.3   %     22.8   %
                                                                
GAAP operating expenses               16.1   %      15.2   %
Non-GAAP adjustment                  (0.8   )%    (0.7   )%
Non-GAAP operating expenses          15.3   %     14.5   %
                                                                
GAAP operating income                 5.3    %      7.1    %
Non-GAAP adjustment                  1.7    %     1.2    %
Non-GAAP operating income            7.0    %     8.3    %
                                                                
GAAP net income                       4.2    %      5.6    %
Non-GAAP adjustment                  1.1    %     0.8    %
Non-GAAP net income                  5.3    %     6.4    %

^(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
 
Press spacebar to pause and continue. Press esc to stop.