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) | |||||||||||||||||||
| (unaudited) | |||||||||||||||||||
| Three Months Ended | % Growth Rates | ||||||||||||||||||
|
August 3,
2012 |
May 4,
2012 |
July 29,
2011 |
Sequential | Yr. to Yr. | |||||||||||||||
| GAAP gross margin | $ | 3,138 | $ | 3,067 | $ | 3,525 | 2 | % | (11 | )% | |||||||||
| Non-GAAP adjustments: | |||||||||||||||||||
| Amortization of intangibles | 109 | 88 | 74 | ||||||||||||||||
| Severance and facility actions and acquisition-related costs | 23 | 12 | 26 | ||||||||||||||||
| Non-GAAP gross margin | $ | 3,270 | $ | 3,167 | $ | 3,625 | 3 | % | (10 | )% | |||||||||
| GAAP operating expenses | $ | 2,237 | $ | 2,243 | $ | 2,379 | 0 | % | (6 | )% | |||||||||
| Non-GAAP adjustments: | |||||||||||||||||||
| Amortization of intangibles | (41 | ) | (22 | ) | (21 | ) | |||||||||||||
| Severance and facility actions and acquisition-related costs | (49 | ) | (64 | ) | (61 | ) | |||||||||||||
| Non-GAAP operating expenses | $ | 2,147 | $ | 2,157 | $ | 2,297 | 0 | % | (7 | )% | |||||||||
| GAAP operating income | $ | 901 | $ | 824 | $ | 1,146 | 9 | % | (21 | )% | |||||||||
| Non-GAAP adjustments: | |||||||||||||||||||
| Amortization of intangibles | 150 | 110 | 95 | ||||||||||||||||
| Severance and facility actions and acquisition-related costs | 72 | 76 | 87 | ||||||||||||||||
| Non-GAAP operating income | $ | 1,123 | $ | 1,010 | $ | 1,328 | 11 | % | (15 | )% | |||||||||
| GAAP net income | $ | 732 | $ | 635 | $ | 890 | 15 | % | (18 | )% | |||||||||
| Non-GAAP adjustments: | |||||||||||||||||||
| Amortization of intangibles | 150 | 110 | 95 | ||||||||||||||||
| Severance and facility actions and acquisition-related costs | 72 | 76 | 87 | ||||||||||||||||
| Aggregate adjustment for income taxes | (79 | ) | (60 | ) | (66 | ) | |||||||||||||
| Non-GAAP net income | $ | 875 | $ | 761 | $ | 1,006 | 15 | % | (13 | )% | |||||||||
| GAAP earnings per share - diluted | $ | 0.42 | $ | 0.36 | $ | 0.48 | 17 | % | (13 | )% | |||||||||
| Non-GAAP adjustments per share - diluted | 0.08 | 0.07 | 0.06 | ||||||||||||||||
| Non-GAAP earnings per share - diluted | $ | 0.50 | $ | 0.43 | $ | 0.54 | 16 | % | (7 | )% | |||||||||
| Diluted WAS | 1,753 | 1,774 | 1,871 | ||||||||||||||||
|
Percentage of Total Net Revenue: |
|||||||||||||||||||
| GAAP gross margin | 21.6 | % | 21.3 | % | 22.5 | % | |||||||||||||
| Non-GAAP adjustment | 1.0 | % | 0.7 | % | 0.7 | % | |||||||||||||
| Non-GAAP gross margin | 22.6 | % | 22.0 | % | 23.2 | % | |||||||||||||
| GAAP operating expenses | 15.4 | % | 15.6 | % | 15.2 | % | |||||||||||||
| Non-GAAP adjustment | (0.6 | )% | (0.6 | )% | (0.5 | )% | |||||||||||||
| Non-GAAP operating expenses | 14.8 | % | 15.0 | % | 14.7 | % | |||||||||||||
| GAAP operating income | 6.2 | % | 5.7 | % | 7.3 | % | |||||||||||||
| Non-GAAP adjustment | 1.6 | % | 1.3 | % | 1.2 | % | |||||||||||||
| Non-GAAP operating income | 7.8 | % | 7.0 | % | 8.5 | % | |||||||||||||
| GAAP net income | 5.1 | % | 4.4 | % | 5.7 | % | |||||||||||||
| Non-GAAP adjustment | 0.9 | % | 0.9 | % | 0.7 | % | |||||||||||||
| Non-GAAP net income | 6.0 | % | 5.3 | % | 6.4 | % | |||||||||||||
Note: Percentage growth rates and ratios are calculated based on
underlying data in thousands.
