Slide 1: Dell Q4 FY06 Results
Dell Q4 FY06 Results February 16, 2006
Slide 2: Special Note
Special Note • Statements in this presentation and the accompanying press release and conference call that relate to future results and events (including statements about Dell’s anticipated financial and operating performance) are forward-looking statements based on Dell’s current expectations. • Ac
Slide 3: Q4 FY06 Overview
Q4 FY06 Overview Delivered Delivered balanced balanced revenue revenue and and earnings earnings growth growth while while making making progress progress on on strategic strategic initiatives initiatives • Revenues of $15.2B an increase of 13% and EPS of $0.431 , an increase of 16%2 • Revenue outsi
Slide 4: FY06 Full Year Highlights
FY06 Full Year Highlights Achieved Achieved record record results results for for unit unit shipments, shipments, revenues, revenues, operating operating income income andand EPS EPS • Revenue was up 14% to $56B with revenue outside US up 21% ¾ Non-desktops 62% of revenue, up 400 bps from last year
Slide 5: FY06 GAAP to Non-GAAP Bridge
FY06 GAAP to Non-GAAP Bridge Non-GAAP Twelve Months Ended February 3, 2006 Tax GAAP A Benefit Charges Non-GAAP Net revenue $ 55,908 $ 55,908 Cost of revenue 45,620 45,620 Other product charges 338 - ($338) - Gross margin 9,950 338 10,288 Gross margin % 17.8% 18.4% Total operating expenses 5,603 - (1
Slide 6: FY05 GAAP to Non-GAAP Bridge
FY05 GAAP to Non-GAAP Bridge Non-GAAP Three Months Ended Twelve Months Ended January 28, 2005 January 28, 2005 Tax Tax B B GAAP Charge Non-GAAP GAAP Charge Non-GAAP Income before income taxes $ 1,235 $ 1,235 $ 4,445 $ 4,445 Income tax provision 568 $ (280) 288 1,402 $ (280) 1,122 Effective tax rate
Slide 7: Q4 FY06 Financial Highlights
Q4 FY06 Financial Highlights Delivered Delivered record record $15.2 $15.2 billion billion revenue revenue and and $0.43 $0.43 EPS EPS Spent Spent $2.0B $2.0B to to repurchase repurchase 6666 million million shares shares LIQUIDITY GROWTH • $1.6 billion cash flow • Units up 15% from operations
Slide 8: Free Cash Flow Per Share
Free Cash Flow Free Cash Flow & EPS Trends $2.00 • Strong cash flows FCF EPS ¾ CFOps of $1.6B $1.50 FCF Trend EPS Trend ¾ FCF of almost $2.0B Per Share $1.00 ¾ CFOps/share of $0.67 & FCF/share of $0.83 $0.50 • Strategy is to consistently grow EPS and FCF/share $0.00 faster than Revenue FY00 FY01 FY0
Slide 9: Share Repurchase
Share Repurchase Share Buyback $14 2,650 • Spent $2.0 billion to 2,600 repurchase 66 million shares $12 WAS Cumulative Share Repurchase • Repurchased almost 205 Diluted Shares (M) 2,550 $10 million shares in FY06 Since Q1 FY05 ($B) 2,500 $8 ¾ Decreased Q4 weighted Share Repurchase 2,450 $6 average s
Slide 10: Q4 Product Summary
Q4 Product Summary Revenue Revenue Growth Unit Growth Product $B Y/Y Q/Q Y/Y Q/Q Desktop PCs 5.6 1% 10% 4% 11% Mobility 3.8 22% 7% 47% 12% Servers 1.4 10% 4% 11% 7% Storage 0.6 41% 30% Enhanced Services 1.4 26% 8% S&P 2.4 22% 9% TOTAL $15.2 13% 9% 15% 11% “Desktop PCs” PCs” includes desktops and des
Slide 11: Q4 Product Summary: Servers & Storage
Q4 Product Summary: Servers & Storage Total Totalenterprise enterpriseincluding includingservers, servers,storage, storage,services, services, software softwareand andperipherals peripheralsgrew grew21% 21% Dell/EMC Fibre Channel PowerConnect 342P CX700, CX500, CX300, AX100 PowerEdge 2850 PowerVault
Slide 12: Q4 Product Summary: Enhanced Services
Q4 Product Summary: Enhanced Services Deferred Services Revenue • Revenue up 26% to $1.4B Balance ($B) ¾ Grew 57% outside of the Americas $4.0 Professional Services, Managed Services, ¾ Over $5 billion annualized run-rate $3.5 Deployment Services, Support 40% CAGR Services, Training and ¾ Up 33% thi
Slide 13: Q4 Product Summary: Software & Peripherals
Q4 Product Summary: Software & Peripherals S&P S&Prevenue revenuegrew grew22%, 22%,driven drivenby bydisplays displaysbusiness business Digital Televisions and Monitors • Ranked top worldwide LCD vendor, almost double the next closest vendor • Introduced 30” UltraSharp LCD monitor for gamers & 37" H
Slide 14: Q4 Product Summary: Mobility
Q4 Product Summary: Mobility Mobility Dual Core Inspiron • Revenue of $3.8B, up 22% on unit growth E1705 of 47% • Increased #1 in Worldwide and U.S. Notebook share - WW up by 1.6% and grew at 1.4x the industry • In 1H FY07, notebook customers in the UK, Germany and France will have the option of sel
Slide 15: Q4 Product Summary: Desktop PCs
Q4 Product Summary: Desktop PCs Desktop PCs • Revenue of $5.6 billion, up 1% on unit growth of 4% • Launched the XPS 600 Renegade ¾ First system to support NVIDIA GeForce 7800SLI graphics cards linking 4 graphics processors XPS 200, XPS 600, & XPS 400 • #1 in Worldwide and U.S. share • Received Fros
Slide 16: Q4 Regional Summary
Q4 Regional Summary Revenue Op Inc Unit Revenue Op Inc Growth Growth Growth REGION $M $M Y/Y Q/Q Y/Y Q/Q Y/Y Q/Q Americas 7,362 776 13% 1% 14% -5% 11% 1% Business Unit U.S. Consumer 2,393 92 1% 26% -23% 15% 4% 29% Total 9,755 868 10% 6% 8% -3% 9% 8% Americas EMEA 3,683 249 18% 19% -3% 38% 25% 20% AP
Slide 17: Q4 Geographic Expansion
Q4 Geographic Expansion Revenue RevenueOutside Outsidethe theUS USwas wasupup21% 21%and andcontributed contributed 43% 43%ofoftotal totalrevenues revenues • Europe, Middle East & Africa Revenue Outside of the ¾ Units were up 25% and revenues up 18% led United States 42% by Germany and emerging count
Slide 18: Q1 FY07 Outlook
Q1 FY07 Outlook • Revenue of $14.2 - $14.6 billion; up 6-9% Y/Y • Balance revenue growth and operating margins to achieve desired growth around the globe • Investment and other income of about $55 million • Tax rate of 23.75% • Share repurchase of at least $1.2 billion • EPS between $0.39 and $0.41;
Slide 19: Growth/Share Opportunities
Growth/Share Opportunities • Taking share across our portfolio of products, customer segments and countries • Dell is committed to meeting the needs of our customers and growing faster than the industry • China is a perfect example: ¾ $2B revenue run rate and growing at a multiple of the industry re
Slide 20: Superior Customer Experience
Superior Customer Experience • A core attribute of the Dell direct model is an unparalleled customer satisfaction and experience, which our management team is committed to deliver. • Established aggressive goals and implemented programs designed to drive personal accountability across the organizati
Slide 21: 2006 Technology Trends
2006 Technology Trends • The Dell model is optimized to bring the most relevant technology to our customers and 2006 is shaping up to be particularly exciting • Enterprise is trending toward smaller, more powerful standardized systems ¾ 95% server units shipped are 1 and 2-socket and 75% of revenue
Slide 22: Visit www.dell.com/investor for additional information
Visit www.dell.com/investor for additional information