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 | |||||||||||||||||
October 28, | July 29, | October 29, | ||||||||||||||||
2011 | 2011 | 2010 | Sequential | Yr. to Yr. | ||||||||||||||
|
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GAAP gross margin | $ | 3,469 | $ | 3,525 | $ | 3,003 | (2 | %) | 16 | % | ||||||||
Non-GAAP adjustments: | ||||||||||||||||||
Amortization of intangibles | 77 | 74 | 71 | |||||||||||||||
Severance and facility actions | - | - | 4 | |||||||||||||||
Acquisition-related | - | 26 | - | |||||||||||||||
Non-GAAP gross margin | $ | 3,546 | $ | 3,625 | $ | 3,078 | (2 | %) | 15 | % | ||||||||
GAAP operating expenses | $ | 2,327 | $ | 2,379 | $ | 1,979 | (2 | %) | 18 | % | ||||||||
Non-GAAP adjustments: | ||||||||||||||||||
Amortization of intangibles | (23 | ) | (21 | ) | (18 | ) | ||||||||||||
Severance and facility actions | - | - | (27 | ) | ||||||||||||||
Acquisition-related | (46 | ) | (61 | ) | (23 | ) | ||||||||||||
Non-GAAP operating expenses | $ | 2,258 | $ | 2,297 | $ | 1,911 | (2 | %) | 18 | % | ||||||||
GAAP operating income | $ | 1,142 | $ | 1,146 | $ | 1,024 | 0 | % | 12 | % | ||||||||
Non-GAAP adjustments: | ||||||||||||||||||
Amortization of intangibles | 100 | 95 | 89 | |||||||||||||||
Severance and facility actions | - | - | 31 | |||||||||||||||
Acquisition-related | 46 | 87 | 23 | |||||||||||||||
Non-GAAP operating income | $ | 1,288 | $ | 1,328 | $ | 1,167 | (3 | %) | 10 | % | ||||||||
GAAP net income | $ | 893 | $ | 890 | $ | 822 | 0 | % | 9 | % | ||||||||
Non-GAAP adjustments: | ||||||||||||||||||
Amortization of intangibles | 100 | 95 | 89 | |||||||||||||||
Severance and facility actions | - | - | 31 | |||||||||||||||
Acquisition-related | 46 | 87 | 23 | |||||||||||||||
Other (1) | - | - | (72 | ) | ||||||||||||||
Aggregate adjustment for income taxes | (56 | ) | (66 | ) | (18 | ) | ||||||||||||
Non-GAAP net income | $ | 983 | $ | 1,006 | $ | 875 | (2 | %) | 12 | % | ||||||||
GAAP earnings per share - diluted | $ | 0.49 | $ | 0.48 | $ | 0.42 | 2 | % | 17 | % | ||||||||
Non-GAAP adjustments per share - diluted | 0.05 | 0.06 | 0.03 | |||||||||||||||
Non-GAAP earnings per share - diluted | $ | 0.54 | $ | 0.54 | $ | 0.45 | 0 | % | 20 | % | ||||||||
GAAP Diluted WAS | 1,828 | 1,871 | 1,949 | |||||||||||||||
Percentage of Total Net Revenue: |
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GAAP gross margin | 22.6 | % | 22.5 | % | 19.5 | % | ||||||||||||
Non-GAAP adjustment | 0.5 | % | 0.7 | % | 0.5 | % | ||||||||||||
Non-GAAP gross margin | 23.1 | % | 23.2 | % | 20.0 | % | ||||||||||||
GAAP operating expenses | 15.2 | % | 15.2 | % | 12.8 | % | ||||||||||||
Non-GAAP adjustment | (0.5 | %) | (0.5 | %) | (0.4 | %) | ||||||||||||
Non-GAAP operating expenses | 14.7 | % | 14.7 | % | 12.4 | % | ||||||||||||
GAAP operating income | 7.4 | % | 7.3 | % | 6.7 | % | ||||||||||||
Non-GAAP adjustment | 1.0 | % | 1.2 | % | 0.9 | % | ||||||||||||
Non-GAAP operating income | 8.4 | % | 8.5 | % | 7.6 | % | ||||||||||||
GAAP net income | 5.8 | % | 5.7 | % | 5.3 | % | ||||||||||||
Non-GAAP adjustment | 0.6 | % | 0.7 | % | 0.4 | % | ||||||||||||
Non-GAAP net income | 6.4 | % | 6.4 | % | 5.7 | % | ||||||||||||
Note: Percentage growth rates and ratios are calculated based on underlying data in thousands. | ||||||||||||||||||