Slide 1: Dell Q2 FY07 Results
Dell Q2 FY07 Results August 17, 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 and the impact of the informal SEC investigation) are forward-looking stat
Slide 3: Q2 FY07 Overview
Q2 FY07 Overview Strong Stronggrowth growthin inAsia AsiaPacific/Japan Pacific/Japan and and Emerging Emerging Markets Markets • Generated $14.1 billion in revenue, an increase of 5%, and EPS of $0.221, which includes $0.04 for stock-based compensation • Units were up 6% and we gained >1 point of sh
Slide 4: Q2 FY07 Financial Highlights
Q2 FY07 Financial Highlights Delivered Delivered$14.1 $14.1billion billionof ofrevenue revenueand and$0.22 $0.22of ofEPS EPS Spent Spent$1.0 $1.0billion billionto torepurchase repurchase43 43million millionshares shares LIQUIDITY GROWTH • Almost $700 million cash • Units up 6% flow from operat
Slide 5: Industry Leading Returns: Free Cash Flow & EPS Trends
Industry Leading Returns Free Cash Flow & EPS Trends $2.00 FCF EPS FCF Trend EPS Trend • Cash flow from operations of almost $1.50 $700 million Per Share • Free Cash Flow of $490 million $1.00 • CFOps/share of $0.30 & FCF/share of $0.21 $0.50 • Long-term strategy to consistently grow FCF/share and E
Slide 6: Share Repurchase Program Continues to be Accretive
Share Repurchase Program Continues to be Accretive Dell Dell reduced reduced share share count count 12% 12% over over last last two two years years Share Buyback $16 2,600 WAS 2,550 • Spent $1.0B to repurchase 43M shares $14 Cumulative Share Repurchase 2,500 $12 • Decreased Q2 weighted average Sinc
Slide 7: Q2 Product Summary
Q2 Product Summary Revenue Revenue Growth Unit Growth Product $B Y/Y Q/Q Y/Y Q/Q Desktop PCs 4.9 -4% -6% -1% -6% Mobility 3.7 8% 1% 22% 1% Servers 1.4 1% 0% 3% -2% Storage 0.5 36% 12% Enhanced Services 1.4 21% 2% S&P 2.2 10% 2% TOTAL $14.1 5% -1% 6% -3% “Desktop PCs” includes desktops and desktop wo
Slide 8: Product Summary: Growth in Servers & Storage
Q2 FY07 Product Summary: Growth in Servers & Storage Total Totalenterprise enterpriseincluding includingservers, servers,storage storageand andassociated associated services, services,software softwareand andperipherals peripheralsgrew grew11% 11% Servers PowerEdge 2950 & 1950 • Revenue of $1.4B, up
Slide 9: Product Summary: Enhanced Services are Growing Rapidly
Q2 FY07 Product Summary: Enhanced Services are Growing Rapidly Deferred Services Revenue ($B) $4.0 Provides Annuity Stream of Revenue and Profits • Revenue up 21% to $1.4B $3.5 ¾ Grew 28% outside the Americas $3.0 ¾ Over $5.6B annualized run-rate 28% CAGR • New Platinum Plus $2.5 ¾ Support includes
Slide 10: Product Summary: Software & Peripherals
Q2 FY07 Product Summary: Software & Peripherals S&P S&P revenue revenue grew grew 10%, 10%, driven driven by by software software growth growth Imaging • Imaging and printing revenues up 5% - total laser revenue up 34% 3110cn 5310n • New 3rd generation laser printers including 6 color, MFP and mono
Slide 11: Product Summary: Strong Growth in Mobility
Q2 FY07 Product Summary: Strong Growth in Mobility • Revenue of $3.7B, up 8% on 22% unit growth • Increased #1 Worldwide NB share .5% to 19.0% • Continued refresh of entire notebook line with Intel Core Duo technology ¾ XPS M2010: 20” display, innovative entertainment ¾ Latitude D420: Ultra-Mobile 3
Slide 12: Product Summary: Leading Edge Technology in Desktop PCs
Q2 FY07 Product Summary: Leading Edge Technology in Desktop PCs • With continuing shift to mobility, Desktop revenue declined -4% to $4.9B, units down -1% • Increased #1 Worldwide share by .4% to 19.1% • New Precision 690 and 490 workstations up to 155% faster, with Dual-Core Intel Xeon • New Dimens
Slide 13: Q2 FY07 Regional Summary
Q2 FY07 Regional Summary Op Inc Unit Revenue Op Inc Revenue Growth Growth Growth REGION $M $M Y/Y Q/Q Y/Y Q/Q Y/Y Q/Q Americas 1 9,180 610 3% 3% -29% -18% 1% 2% EMEA 3,006 19 3% -10% -90% -90% 6% -15% APAC/Japan 1,908 95 17% -1% -23% -30% 27% -3% Stock-based compensation - -119 - - NA NA - - expense
Slide 14: Geographic Expansion
Q2 FY07 Geographic Expansion Revenue Revenue outside outside the the U.S. U.S. was was up up 11%, 11%, led led by by strong strong growth growth in in Asia Asia Pacific Pacific and and emerging emerging markets markets in in the the Americas Americas • Asia Pacific & Japan Revenue Outside of the U.S
Slide 15: Relevant Items to Gauge Our Progress
Relevant Items to Gauge Our Progress • AMD on Dimension desktops and 2-way PowerEdge servers • Excited about new processors from Intel, including Xeon 5100, Core 2 Duo and Merom • Continue to take share in strategic regions and customer segments and intend to balance revenue growth with profitabilit
Slide 16: Strategic Overview: Industry Growth & Consolidation
Strategic Overview: Industry Growth & Consolidation • Balance our revenue growth and profitability ¾ In business accounts, more closely monitoring our list and bid pricing ¾ In consumer, simplifying our pricing and promotions structure • The industry is slowing modestly ¾ Worldwide unit growth down
Slide 17: Strategic Overview: Cost Position
Strategic Overview: Cost Position • On track to drive >$3 billion of cost improvements this year • Includes lower component, structural material, transformation and warranty costs which are backend loaded into the year • Took a step forward in this effort with the addition of AMD desktop processors
Slide 18: Strategic Overview: Turnaround in Customer Experience
Strategic Overview: Turnaround in Customer Experience • Increasing investment in improving Customer Experience from $100M to $150M • Seeing signs of progress – reduction in hold times and call transfers, increase in customer satisfaction rates and higher repurchase intention results • Customers are
Slide 19: Visit www.dell.com/investor for additional information
Visit www.dell.com/investor for additional information