Dell Reports First Quarter Financial Results

SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES

The tables on the following pages set forth, for the periods indicated, a reconciliation of 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”) to the most comparable GAAP financial measures. These non-GAAP financial measures may not be directly comparable to similarly titled measures reported by other companies. See “Use of Non-GAAP Financial Measures” following the tables for additional information regarding Dell’s reasons for including the non-GAAP financial measures and for material limitations with respect to the usefulness of these measures.



DELL INC.
Reconciliation of Non-GAAP Financial Measures
(in millions, except per share data and percentages)
(unaudited)

			Three Months Ended									% Growth Rates
			May 4,			February 3,			April 29,
				2012			2012			2011		Sequential		Yr. to Yr.


	GAAP gross margin		$	3,067		$	3,385		$	3,432		(9	%)	(11	%)

	Non-GAAP adjustments:
		Amortization of intangibles		88			83			71
		Severance and facility actions and acquisition-related		12			15			8
	Non-GAAP gross margin		$	3,167		$	3,483		$	3,511		(9	%)	(10	%)


	GAAP operating expenses		$	2,243		$	2,454		$	2,220		(9	%)	1	%

	Non-GAAP adjustments:
		Amortization of intangibles		(22	)		(21	)		(21	)
		Severance and facility actions and acquisition-related		(64	)		(93	)		(64	)
	Non-GAAP operating expenses		$	2,157		$	2,340		$	2,135		(8	%)	1	%


	GAAP operating income		$	824		$	931		$	1,212		(11	%)	(32	%)

	Non-GAAP adjustments:
		Amortization of intangibles		110			104			92
		Severance and facility actions and acquisition-related		76			108			72
	Non-GAAP operating income		$	1,010		$	1,143		$	1,376		(12	%)	(27	%)


	GAAP net income		$	635		$	764		$	945		(17	%)	(33	%)

	Non-GAAP adjustments:
		Amortization of intangibles		110			104			92
		Severance and facility actions and acquisition-related		76			108			72
		Aggregate adjustment for income taxes		(60	)		(63	)		(59	)
	Non-GAAP net income		$	761		$	913		$	1,050		(17	%)	(28	%)


	GAAP earnings per share - diluted		$	0.36		$	0.43		$	0.49		(16	%)	(27	%)
		Non-GAAP adjustments per share - diluted		0.07			0.08			0.06
	Non-GAAP earnings per share - diluted		$	0.43		$	0.51		$	0.55		(16	%)	(22	%)


	Diluted WAS			1,774			1,796			1,923


	Percentage of Total Net Revenue:

	GAAP gross margin			21.3	%		21.1	%		22.9	%
		Non-GAAP adjustment		0.7	%		0.6	%		0.5	%
	Non-GAAP gross margin			22.0	%		21.7	%		23.4	%

	GAAP operating expenses			15.6	%		15.3	%		14.8	%
		Non-GAAP adjustment		(0.6	%)		(0.7	%)		(0.6	%)
	Non-GAAP operating expenses			15.0	%		14.6	%		14.2	%

	GAAP operating income			5.7	%		5.8	%		8.1	%
		Non-GAAP adjustment		1.3	%		1.3	%		1.1	%
	Non-GAAP operating income			7.0	%		7.1	%		9.2	%

	GAAP net income			4.4	%		4.8	%		6.3	%
		Non-GAAP adjustment		0.9	%		0.9	%		0.7	%
	Non-GAAP net income			5.3	%		5.7	%		7.0	%

Note: Percentage growth rates and ratios are calculated based on underlying data in thousands.

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