Dell Reports Fourth Quarter, Full Fiscal Year Financial Results

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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

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