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 (GAAP) $ 698 $ 931 (25 %) $
3,012 $ 4,431 (32 %) 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 (non-GAAP) $ 954 $ 1,143 (17 %) $ 3,973 $
5,135 (23 %) Net Income (non-GAAP) $ 702 $ 913 (23 %) $ 3,017 $
3,952 (24 %) 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
12th-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
1,2013(1)
November 2,2012
(1)
February 3,2012
Sequential Yr. to Yr. Net revenue Products $
11,212 $ 10,706 $ 12,925 5 % (13 )% Services, including software
related 3,102 3,015 3,106
3 % — % 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 software related
2,036 1,945 2,125 5 % (4 )%
Total cost of net revenue 11,205 10,849
12,646 3 % (11 )% Gross margin 3,109 2,872 3,385 8 %
(8 )% Operating expenses Selling, general, and administrative 2,104
2,013 2,218 5 % (5 )% Research, development, and engineering
307 270 236 14 % 30 % Total
operating expenses 2,411 2,283
2,454 6 % (2 )% Operating income 698 589 931 19 % (25 )%
Interest and other, net (38 ) (38 ) (24 ) (2
)% (59 )% Income before income taxes 660 551 907 20 % (27 )% Income
tax provision 130 76 143
70 % (9 )% 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 share $ 0.08
$ 0.08 $ — 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, and
administrative 14.7 % 14.7 % 13.8 % Research, development, and
engineering 2.1 % 1.9 % 1.5 % Operating expenses 16.8 % 16.6 % 15.3
% Operating income 4.9 % 4.3 % 5.8 % Income before income taxes 4.6
% 4.0 % 5.7 % Net income 3.7 % 3.5 % 4.8 % Income tax rate 19.7 %
13.8 % 15.8 %
Net Revenue by
Product Category:
Servers and Networking (1) $ 2,623 $ 2,322 $ 2,220 13 % 18 %
Storage 434 386 500 12 % (13 )% Services 2,112 2,107 2,179 — % (3
)% Third-party software and peripherals 2,275 2,258 2,558 1 % (11
)% Mobility 3,674 3,523 4,877 4 % (25 )% Desktop PCs 3,196
3,125 3,697 2 % (14 )%
Consolidated net revenue $ 14,314 $ 13,721 $ 16,031
4 % (11 )%
Percent of Total
Net Revenue:
Servers and Networking (1) 18 % 17 % 14 % Storage 3 % 3 % 3 %
Services 15 % 15 % 14 % Third-party software and peripherals 16 %
16 % 16 % 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 Business 3,396 3,282 3,560
3 % (5 )% Consumer 2,792 2,459
3,656 14 % (24 )% Consolidated net revenue $ 14,314 $
13,721 $ 16,031 4 % (11 )%
Percentage of
Total Net Revenue: (2)
Large Enterprise 33 % 30 % 31 % Public 24 % 28 % 24 % Small and
Medium Business 24 % 24 % 22 % Consumer 19 % 18 % 23 %
Consolidated
Operating Income: (2)
Large Enterprise $ 393 $ 325 $ 467 Public 236 352 312 Small and
Medium Business 385 349 399 Consumer 8 (65 )
61 Segment operating income 1,022 961 1,239 Broad
based long-term incentives (68 ) (75 ) (96 ) Amortization of
intangible assets (188 ) (165 ) (104 ) Severance and facility
actions and acquisition-related costs (68 ) (132 )
(108 ) Consolidated operating income $ 698 $ 589
$ 931
(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 1,2013
(1)
February 3,2012
Yr. to Yr. Net revenue Products $ 44,744 $ 49,906 (10 )%
Services, including software related 12,196
12,165 — % Total net revenue 56,940
62,071 (8 )% Cost of net revenue Products 36,683 39,689 (8
)% Services, including software related 8,071
8,571 (6 )% Total cost of net revenue 44,754
48,260 (7 )% Gross margin 12,186 13,811 (12 )%
Operating expenses Selling, general, and administrative 8,102 8,524
(5 )% Research, development, and engineering 1,072
856 25 % 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 common share $ 0.16 $ — 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 administrative
14.2 % 13.7 % Research, development, and engineering 1.9 % 1.5 %
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
peripherals 9,257 10,222 (9 )% 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 peripherals 16 % 17 % 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 and acquisition-related costs
(348 ) (313 ) 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
(1) February 3, 2012 (1)
Assets:
Current assets: Cash and cash equivalents $ 12,569 $ 10,991 $
13,852 Short-term investments 208 281 966 Accounts receivable, net
6,629 6,187 6,476 Short-term financing receivables, net 3,213 3,151
3,327 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 equipment,
net 2,126 2,156 2,124 Long-term investments 2,565 2,908 3,404
Long-term financing receivables, net 1,349 1,354 1,372 Goodwill
9,304 9,191 5,838 Purchased intangible assets, net 3,374 3,511
1,857 Other non-current assets 854 664
490 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 revenue 4,373 4,207
3,738 Total current liabilities 23,439 21,811
22,001 Long-term debt 5,242 5,310 6,387 Long-term deferred revenue
3,971 3,963 3,855 Other non-current liabilities 4,187
4,164 3,373 Total liabilities
36,839 35,248 35,616 Total Dell
stockholders' equity 10,680 10,177 8,917 Noncontrolling interest
21 21 — Total
stockholders' equity 10,701 10,198
8,917 Total liabilities and equity $ 47,540 $
45,446 $ 44,533
Ratios:
Days of sales outstanding (2) 46 45 42 Days supply in inventory 11
11 11 Days in accounts payable (93 ) (88 ) (89
) Cash conversion cycle (36 ) (32 ) (36 )
Average total revenue/unit (approximate) 1,390 $ 1,410 $
1,330
(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 February 1, 2013,
November 2, 2012, and February 3, 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 1,2013
February 3,2012
(1)
February 1,2013
February 3,2012
(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 amortization 321
249 1,144 936 Stock-based compensation 71 101 347 362 Effects of
exchange rate changes on monetary assets and liabilities
denominated in foreign currencies 3 14 18 (5 ) Deferred income
taxes (321 ) 110 (428 ) 19 Provision for doubtful accounts —
including financing receivables 73 67 258 234 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
liabilities 150 139 (126 )
(55 ) Change in cash from operating activities 1,441
1,837 3,283 5,527
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 other assets 54 2 135 14
Collections on purchased financing receivables 31 74 167 278
Acquisition of business, net of cash received (136 )
2 (4,844 ) (2,562 ) Change in cash from
investing activities 233 (1,745 )
(3,316 ) (6,166 ) Cash flows from financing activities:
Repurchase of common stock — (537 ) (724 ) (2,717 ) Cash dividends
paid (139 ) — (278 ) — Issuance of common stock under employee
plans 3 6 52 40 Issuance (repayment) of commercial paper (maturity
90 days or less), net (39 ) 635 (331 ) 635 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 financing activities (80 )
458 (1,210 ) 577 Effect of exchange
rate changes on cash and cash equivalents (16 ) 9
(40 ) 1 Change in cash and cash
equivalents 1,578 559 (1,283 ) (61 ) Cash and cash equivalents at
beginning of the period 10,991 13,293
13,852 13,913 Cash and cash equivalents
at end of the period $ 12,569 $ 13,852 $ 12,569
$ 13,852
(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 February 3, 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 1,2013
(1)
November 2,2012
(1)
February 3,2012
Sequential Yr. to Yr. GAAP gross margin $
3,109 $ 2,872 $ 3,385 8 % (8 )% Non-GAAP adjustments: Amortization
of intangibles 138 120 83 Severance and facility actions and
acquisition-related costs 11 21
15 Non-GAAP gross margin $ 3,258 $ 3,013 $
3,483 8 % (6 )% GAAP operating expenses $ 2,411 $
2,283 $ 2,454 6 % (2 )% Non-GAAP adjustments: Amortization of
intangibles (50 ) (45 ) (21 ) Severance and facility actions and
acquisition-related costs (57 ) (111 ) (93 )
Non-GAAP operating expenses $ 2,304 $ 2,127 $ 2,340
8 % (2 )% GAAP operating income $ 698 $ 589 $ 931 19
% (25 )% Non-GAAP adjustments: Amortization of intangibles 188 165
104 Severance and facility actions and acquisition-related costs
68 132 108 Non-GAAP
operating income $ 954 $ 886 $ 1,143 8 % (17
)% GAAP net income $ 530 $ 475 $ 764 12 % (31 )% Non-GAAP
adjustments: Amortization of intangibles 188 165 104 Severance and
facility actions and acquisition-related costs 68 132 108 Aggregate
adjustment for income taxes (84 ) (93 ) (63 )
Non-GAAP net income $ 702 $ 679 $ 913 3 % (23
)% GAAP earnings per share - diluted $ 0.30 $ 0.27 $ 0.43 11
% (30 )% Non-GAAP adjustments per share - diluted 0.10
0.12 0.08 Non-GAAP earnings per
share - diluted $ 0.40 $ 0.39 $ 0.51 3 % (22
)% 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 margin 22.8 %
22.0 % 21.7 % GAAP operating expenses 16.8 %
16.6 % 15.3 % Non-GAAP adjustment (0.7 )% (1.1 )%
(0.7 )% Non-GAAP operating expenses 16.1 %
15.5 % 14.6 % GAAP operating income 4.9 % 4.3 % 5.8 %
Non-GAAP adjustment 1.8 % 2.2 % 1.3 % Non-GAAP
operating income 6.7 % 6.5 % 7.1 % 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 1,2013
(1)
February 3, 2012 Yr. to Yr. GAAP gross
margin $ 12,186 $ 13,811 (12 )% Non-GAAP adjustments: Amortization
of intangibles 455 305 Severance and facility actions and
acquisition-related costs 67 49
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 and acquisition-related costs (281 ) (264 )
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 and acquisition-related costs 348
313 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 and acquisition-related costs 348 313
Aggregate adjustment for income taxes (316 ) (244 )
Non-GAAP net income $ 3,017 $ 3,952 (24 )%
GAAP earnings per share - diluted $ 1.35 $ 1.88 (28 )% Non-GAAP
adjustments per share - diluted 0.37 0.25
Non-GAAP earnings per share - diluted $ 1.72 $ 2.13
(19 )% 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
AsReported
Recast Variance
AsReported
Recast Variance
AsReported
Recast Variance
AsReported
Recast Variance
AsReported
Recast Variance
Net Revenue by
Global Segment: (1)
Large Enterprise $ 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 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 Business 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 ) 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 net revenue $ 14,874 $ 14,874 $ —
$ 15,534 $ 15,534 $ —
$
15,394
$ 15,394 $ — $ 15,692 $ 15,692 $
— $ 61,494 $ 61,494 $ —
Percentage of
Total Net Revenue: (1)
Large Enterprise 28 % 29 % 1 % 29 % 30 % 1 % 28 % 28 % — 30 % 30 %
— 29 % 29 % — Public 26 % 25 % -1 % 30 % 29 % -1 % 29 % 28 % -1 %
25 % 25 % — 27 % 27 % — Small and Medium Business 24 % 21 % -3 % 23
% 20 % -3 % 24 % 21 % -3 % 24 % 21 % -3 % 24 % 21 % -3 % Consumer
22 % 25 % 3 % 18 % 21 % 3 % 19 % 23 % 4 % 21 % 24 % 3 % 20 % 23 % 3
%
Consolidated
Operating Income: (1)
Large Enterprise $ 283 $ 293 $ 10 $ 288 $ 289 $ 1 $ 400 $ 398 $ (2
) $ 502 $ 510 $ 8 $ 1,473 $ 1,490 $ 17 Public 298 280 (18 ) 369 363
(6 ) 451 450 (1 ) 366 353 (13 ) 1,484 1,446 (38 ) Small and Medium
Business 313 301 (12 ) 323 298 (25 ) 391 365 (26 ) 450 419 (31 )
1,477 1,383 (94 ) Consumer 17 37
20 (21 ) 9 30 —
29 29 69
105 36 65 180
115 Segment operating income $ 911 $ 911
$ — $ 959 $ 959 $ — $ 1,242
$ 1,242 $ — $ 1,387 $ 1,387 $ —
$ 4,499 $ 4,499 $ —
(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
AsReported
Recast Variance
AsReported
Recast Variance
AsReported
Recast Variance
AsReported
Recast Variance
AsReported
Recast Variance
Net Revenue by
Global Segment: (1)
Large Enterprise $ 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 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 Business 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 ) 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 net revenue $ 15,017 $ 15,017 $ —
$ 15,658 $ 15,658 $ — $ 15,365 $
15,365 $ — $ 16,031 $ 16,031 $ —
$ 62,071 $ 62,071 $ —
Percentage of
Total Net Revenue: (1)
Large Enterprise 30 % 31 % 1 % 29 % 30 % 1 % 29 % 29 % — 30 % 31 %
1 % 30 % 30 % — Public 25 % 24 % -1 % 28 % 28 % — 29 % 28 % -1 % 25
% 24 % -1 % 27 % 26 % -1 % Small and Medium Business 25 % 22 % -3 %
24 % 21 % -3 % 24 % 22 % -2 % 25 % 22 % -3 % 24 % 22 % -2 %
Consumer 20 % 23 % 3 % 19 % 21 % 2 % 18 % 21 % 3 % 20 % 23 % 3 % 19
% 22 % 3 %
Consolidated
Operating Income: (1)
Large Enterprise $ 504 $ 516 $ 12 $ 448 $ 460 $ 12 $ 441 $ 446 $ 5
$ 461 $ 467 $ 6 $ 1,854 $ 1,889 $ 35 Public 370 352 (18 ) 484 466
(18 ) 463 454 (9 ) 327 312 (15 ) 1,644 1,584 (60 ) Small and Medium
Business 463 435 (28 ) 404 380 (24 ) 386 367 (19 ) 412 399 (13 )
1,665 1,581 (84 ) Consumer 136 170
34 73 103 30
76 99 23 39
61 22 324
433 109 Segment operating income $ 1,473
$ 1,473 $ — $ 1,409 $ 1,409 $ —
$ 1,366 $ 1,366 $ — $ 1,239 $
1,239 $ — $ 5,487 $ 5,487 $ —
(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.
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