Dell Delivers Record Results in Fiscal-Year 2011 Fourth Quarter

Dell Delivers Record Results in Fiscal-Year 2011 Fourth Quarter and Full Year

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
	January 28,			October 29,			January 29,
	2011			2010			2010			Sequential		Yr. to Yr.

GAAP gross margin	$	3,291		$	3,003		$	2,469		10	%	33	%

Non-GAAP adjustments:
Amortization of intangibles		69			71			71
Severance and facility actions		6			4			55
Acquisition-related		2			-			1
Non-GAAP gross margin	$	3,368		$	3,078		$	2,596		9	%	30	%


GAAP operating expenses	$	2,146		$	1,979		$	1,959		8	%	10	%

Non-GAAP adjustments:
Amortization of intangibles		(16	)		(18	)		(15	)
Severance and facility actions		(11	)		(27	)		(31	)
Acquisition-related		(37	)		(23	)		(115	)
Non-GAAP operating expenses	$	2,082		$	1,911		$	1,798		9	%	16	%


GAAP operating income	$	1,145		$	1,024		$	510		12	%	124	%

Non-GAAP adjustments:
Amortization of intangibles		85			89			86
Severance and facility actions		17			31			86
Acquisition-related		39			23			116
Non-GAAP operating income	$	1,286		$	1,167		$	798		10	%	61	%


GAAP net income	$	927		$	822		$	334		13	%	177	%

Non-GAAP adjustments:
Amortization of intangibles		85			89			86
Severance and facility actions		17			31			86
Acquisition-related		39			23			116
Other ⁽¹⁾		-			(72	)		-
Aggregate adjustment for income taxes		(50	)		(18	)		(78	)
Non-GAAP net Income	$	1,018		$	875		$	544		16	%	87	%


GAAP earnings per share - diluted	$	0.48		$	0.42		$	0.17		14	%	182	%
Non-GAAP adjustments per share - diluted		0.05			0.03			0.11
Non-GAAP earnings per share - diluted	$	0.53		$	0.45		$	0.28		18	%	89	%


GAAP Diluted WAS		1,938			1,949			1,971


Percentage of Total Net Revenue:

GAAP gross margin		21.0	%		19.5	%		16.6	%
Non-GAAP adjustment		0.5	%		0.5	%		0.8	%
Non-GAAP gross margin		21.5	%		20.0	%		17.4	%

GAAP operating expenses		13.7	%		12.8	%		13.2	%
Non-GAAP adjustment		(0.4	%)		(0.4	%)		(1.1	%)
Non-GAAP operating expenses		13.3	%		12.4	%		12.1	%

GAAP operating income		7.3	%		6.7	%		3.4	%
Non-GAAP adjustment		0.9	%		0.9	%		2.0	%
Non-GAAP operating income		8.2	%		7.6	%		5.4	%

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

⁽¹⁾ Other for the three months ended October 29, 2010 consists of Dell's receipt of a $72 million merger termination fee which on a GAAP basis is recorded in Interest and Other, Net.

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