Dell Reports Fiscal Year 2014 First Quarter Financial Results

Additional Information and Where to Find It

In connection with the proposed merger transaction, the Company filed with the SEC an amended preliminary proxy statement and other documents relating to the proposed merger on May 13, 2013. When completed, a definitive proxy statement and a form of proxy will be filed with the SEC and mailed to the Company’s stockholders. Stockholders are urged to read the definitive proxy statement when it becomes available and any other documents to be filed with the SEC in connection with the proposed merger or incorporated by reference in the proxy statement because they will contain important information about the proposed merger.

Investors will be able to obtain a free copy of documents filed with the SEC at the SEC’s website at http://www.sec.gov. In addition, investors may obtain a free copy of the Company’s filings with the SEC from the Company’s website at http://content.dell.com/us/en/corp/investor-financial-reporting.aspx or by directing a request to: Dell Inc. One Dell Way, Round Rock, Texas 78682, Attn: Investor Relations, (512) 728-7800, Email Contact.

The Company and its directors, executive officers and certain other members of management and employees of the Company may be deemed “participants” in the solicitation of proxies from stockholders of the Company in favor of the proposed merger. Information regarding the persons who may, under the rules of the SEC, be considered participants in the solicitation of the stockholders of the Company in connection with the proposed merger and their direct or indirect interests, by security holdings or otherwise, which may be different from those of the Company’s stockholders generally, will be set forth in the proxy statement and the other relevant documents to be filed with the SEC. You can find information about the Company’s executive officers and directors in its Annual Report on Form 10-K for the fiscal year ended February 1, 2013 and in its definitive proxy statement filed with the SEC on Schedule 14A on May 24, 2012.

Consolidated statements of income, financial position and cash flows and other financial data follow.

Dell is a trademark of Dell Inc. Dell disclaims any proprietary interest in the marks and names of others.


DELL INC.
Condensed Consolidated Statement of Income and Related Financial Highlights
(in millions, except per share data and percentages)
(unaudited)

	Three Months Ended						% Growth Rates
	May 3,			May 4,
	2013			2012			Yr. to Yr.

Net revenue
Products	$	10,902		$	11,423		(5	%)
Services, including software related		3,172			2,999		6	%
Total net revenue		14,074			14,422		(2	%)

Cost of net revenue
Products		9,244			9,330		(1	%)
Services, including software related		2,083			2,025		3	%
Total cost of net revenue		11,327			11,355		0	%

Gross margin		2,747			3,067		(10	%)

Operating expenses
Selling, general and administrative		2,208			2,009		10	%
Research, development, and engineering		313			234		34	%
Total operating expenses		2,521			2,243		12	%

Operating income		226			824		(73	%)

Interest and other, net		(68	)		(32	)	(114	%)
Income before income taxes		158			792		(80	%)
Income tax provision		28			157		(82	%)
Net income	$	130		$	635		(79	%)

Earnings per share:
Basic	$	0.07		$	0.36		(81	%)
Diluted	$	0.07		$	0.36		(81	%)
Cash dividends declared per common share	$	0.08		$	-

Weighted average shares outstanding:
Basic		1,748			1,759		(1	%)
Diluted		1,761			1,774		(1	%)

Percentage of Total Net Revenue:
Gross margin		19.5	%		21.3	%
Selling, general and administrative		15.7	%		13.9	%
Research, development, and engineering		2.2	%		1.7	%
Operating expenses		17.9	%		15.6	%
Operating income		1.6	%		5.7	%
Income before income taxes		1.1	%		5.5	%
Net income		0.9	%		4.4	%
Income tax rate		17.6	%		19.8	%

Average total revenue/unit (approximate)	$	1,460		$	1,360

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

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