Dell Inc.

- LBO Model for Private Equity Interview Case Study

($ in Millions Except Per Share Data)
Transaction Assumptions
Company Name:
"Undisturbed" Share Price:
Offer Premium:

Dell Inc.
$ 10.88
25.5%

Transaction Close Date:

Equity Purchase Price:
Transaction Enterprise Value:

Offer Price Per Share:

Funds Required:
Equity Purchase Price:
Plus: Debt Refinanced:
Less: Excess Cash:
Less: Founder Cash Contribution:
Less: Founder Rollover:
Total Funds Required (Excl. Fees):

Refinance Existing Debt?

% Debt Used for "Funds Required":
Debt Used:
Pro-Forma TTM Debt / EBITDA:

13.65
No
90%
12,650
5.2 x

Purchase Price Calculations:

Shares Owned by Founder:
Common Shares:
Diluted Shares:
Diluted Equity Value:
Less: Cash & Cash-Equivalents:
Plus: Debt
Plus: Noncontrolling Interests
Plus: Preferred Stock
Plus: Other Liabilities
Enterprise Value:

2/1/2013
24,675
21,212

EBITDA Purchase Multiple:

Baseline EBITDA Exit Multiple:
Advisory Fee %:
Financing Fee %:
Legal & Misc. Fees:

24,675
(6,220)
(750)
(3,726)
13,979

0.10%
0.60%
$
30

LIBOR Units:

10,000

Minimum Cash Balance:

Tax Rate for Repatriated Cash:
Company Effective Tax Rate:

Diluted Shares:
273.0
1,762.0
1,807.7

5.1 x
4.0 x

3,000
35.0%
21.2%

Operating Case:
Name
Options A:
Options B:
Options C:
Options D:
Options E:
RSUs:
Total

$ 24,675
(12,569)
9,085
21
$ 21,212

Number
8.0
42.0
45.0
31.0
17.0
42.0

Exercise
Price
$
7.38
15.57
25.86
34.31
40.23

Dilution
3.675
42.000
45.675

Year 5 Revenue in Selected Case:

5-Year Revenue Growth:
Year 5 EBITDA in Selected Case:
Year 5 EBITDA Margin:
5-Year EBITDA Growth:

2
1
2
3
4
$
$

Base
Conservative
Base
Upside
Street Consensus

58,625
3.0%
5,301
9.0%
27.5%

Debt Assumptions

Revolver Commitment (Undrawn):

Total Existing Debt (if assumed):

$
$
%:

Total Debt Raised:

Term Loan B:
Term Loan C:
ABL Facility:
1st Lien Fixed Rate Notes:
2nd Lien Fixed Rate Notes:
Microsoft - Subordinated Note:

32%
12%
15%
16%
10%
16%

1,100
9,085

$ Amount:
$ 12,650
4,000
1,500
1,900
2,000
1,250
2,000

Interest Rates:
Revolver:
Total Existing Debt:

L + 100
3.66%

Principal Repayment %:
Revolver:
N/A
Total Existing Debt:
(See schedule)

Term Loan B:
Term Loan C:
ABL Facility:
1st Lien Fixed Rate Notes:
2nd Lien Fixed Rate Notes:
Microsoft - Subordinated Note:

L + 250
L + 350
5.50%
6.00%
6.50%
7.50%

Term Loan B:
Term Loan C:
ABL Facility:
1st Lien Fixed Rate Notes:
2nd Lien Fixed Rate Notes:
Microsoft - Subordinated Note:

5.0%
1.0%
0.0%
0.0%
0.0%
0.0%

Sources & Uses

Sources:
Revolver:
Term Loan B:
Term Loan C:
ABL Facility:
Bridge Loan (1st Lien Fixed Rate Notes):
Bridge Loan (2nd Lien Fixed Rate Notes):
Microsoft - Subordinated Note:
Assume Existing Debt:
Company - Excess Cash:
Founder - Cash Contribution for Equity:
MD Investors - Founder Rollover Equity:
Silver Lake - Investor Equity:
Total Sources:

Uses:
$

4,000
1,500
1,900
2,000
1,250
2,000
9,085
6,220
750
3,726
1,460
33,891

Equity Value of Company:

Refinance Existing Debt:
Assume Existing Debt:
Advisory Fees:
Capitalized Financing Fees:
Legal & Misc. Fees:
Total Uses:

24,675
9,085
25
76
30
33,891

Ownership Percentages, Pre and Post-Deal:

Pre-Deal Ownership Percentages:
Michael Dell:
Silver Lake Partners:
Institutional Investors:
Total:

15.1%
0.0%
84.9%
100.0%

Post-Deal Ownership Percentages:

Michael Dell:
Silver Lake Partners:
Institutional Investors:
Total:

75.4%
24.6%
0.0%
100.0%

Goodwill Creation & Purchase Price Allocation

Goodwill Calculation:
Equity Purchase Price:
Less: Seller Book Value:
Plus: Write-Off of Existing Goodwill:
Total Allocable Purchase Premium:
Less: Write-Up of PP&E:
Less: Write-Up of Intangibles:
Less: Write-Down of DTL:
Plus: New Deferred Tax Liability:
Total Goodwill Created:
Financing Fees Amortization Period:

24,675
(10,680)
9,304
$ 23,299
$

(213)
(4,660)
1,032
19,459
5

Fixed Asset Write-Up:

PP&E Write-Up %:
PP&E Write-Up Amount:
Depreciation Period (Years):

10.0%
213
8

Intangible Asset Write-Up:

Purchase Price to Allocate:
% Allocated to Intangibles:
Intangibles Write-Up Amount:
Amortization Period (Years):

New Deferred Tax Liability:

23,299
20.0%
4,660
5

1,032

Margins, Expense and Working Capital Trends, and BS / CFS Assumptions

FY Ending February 1,

2010

Revenue Growth %:
COGS % Revenue:
Cases - COGS % Revenue:
Conservative Case:
Base Case:
Upside Case:
Street Consensus Case:
Selected Case:

(13.4%)
82.5%

16.2%
81.5%

0.9%
77.7%

2013

Transaction Adjustments
Debit
Credit
2013

2014

(8.3%)
78.6%

Base

OpEx % Revenue:
Cases - OpEx % Revenue:
Conservative Case:
Base Case:
Upside Case:
Street Consensus Case:
Selected Case:

Historical
2011
2012

13.4%

12.9%

15.1%

16.1%

Base

2015

Projected
2016

2017

2018

(0.3%)
78.3%

2.7%
78.0%

(0.5%)
77.7%

2.0%
77.4%

(0.9%)
77.1%

79.0%
78.3%
78.0%
78.6%
78.3%

79.5%
78.0%
77.5%
78.6%
78.0%

80.0%
77.7%
77.3%
78.6%
77.7%

80.5%
77.4%
77.0%
78.6%
77.4%

81.0%
77.1%
76.7%
78.6%
77.1%

16.5%

16.0%

16.0%

15.5%

15.5%

16.5%
16.5%
16.3%
16.7%
16.5%

16.5%
16.0%
15.9%
16.9%
16.0%

17.0%
16.0%
15.5%
17.2%
16.0%

17.0%
15.5%
15.5%
17.2%
15.5%

17.5%
15.5%
15.5%
17.4%
15.5%

Effective Tax Rate:

29.2%

21.3%

17.6%

16.5%

21.2%

21.2%

21.2%

21.2%

21.2%

AR % Revenue:
Provision for Doubtful Accounts % AR:
ST Financing Receivables % Revenue:
Inventory % COGS:
Prepaid Expenses % OpEx:

11.0%
7.3%
5.1%
2.4%
51.4%

10.6%
5.9%
5.9%
2.6%
40.4%

10.4%
3.6%
5.4%
2.9%
36.5%

11.6%
3.9%
5.6%
3.1%
43.2%

10.9%
5.2%
5.5%
2.8%
42.9%

10.9%
5.2%
5.5%
2.8%
42.9%

10.9%
5.2%
5.5%
2.8%
42.9%

10.9%
5.2%
5.5%
2.8%
42.9%

10.9%
5.2%
5.5%
2.8%
42.9%

Accounts Payable % COGS:

Accrued Expenses % OpEx:
ST Deferred Revenue % Revenue:
LT Deferred Revenue % Revenue:

26.1%
54.8%
5.7%
5.7%

22.5%
52.5%
5.1%
5.7%

24.2%
41.9%
5.7%
6.2%

25.9%
39.7%
7.7%
7.0%

24.7%
40.0%
8.0%
7.5%

24.7%
39.0%
8.0%
7.5%

24.7%
38.0%
9.0%
8.0%

24.7%
37.0%
9.0%
8.5%

24.7%
36.0%
10.0%
9.0%

Depreciation % Revenue:
Amortization of Existing Intangibles:
SBC % Revenue:
Deferred Taxes % Total Taxes:
CapEx % Revenue:

1.2%
205
0.6%
(8.8%)
0.7%

1.0%
349
0.5%
(6.3%)
0.7%

0.9%
391
0.6%
2.5%
1.1%

0.9%
613
0.6%
(91.3%)
0.9%

1.0%
770
0.6%
(5.0%)
1.2%

1.0%
682
0.6%
(5.0%)
1.2%

1.0%
613
0.6%
(5.0%)
1.2%

1.0%
515
0.6%
(5.0%)
1.2%

1.0%
370
0.6%
(5.0%)
1.2%

Income Statement
FY Ending February 1,
Revenue:
Cost of Goods Sold:
Gross Profit:
Gross Margin %:

$ 61,101

2010

Historical
2011
2012

2013

52,902 $
43,641
9,261
17.5%

61,494 $
50,098
11,396
18.5%

56,940
44,754
12,186
21.4%

62,071 $
48,260
13,811
22.3%

Transaction Adjustments
Debit
Credit
2013
$

Projected
2016

2014

2015

56,783 $
44,461
12,322
21.7%

58,313 $
45,484
12,829
22.0%

58,031 $
45,090
12,941
22.3%

2017

2018

59,179 $
45,805
13,374
22.6%

58,625
45,200
13,425
22.9%

Operating Expenses:
Depreciation of PP&E Write-Up:
New Intangibles Amortization:
Amortization of Financing Fees:
Operating Income:
Operating Margin %:

7,089
2,172
4.1%

7,963
3,433
5.6%

9,380
4,431
7.1%

9,174
3,012
5.3%

9,369

9,330

9,285

9,173

9,087

2,953
5.2%

3,499
6.0%

3,656
6.3%

4,202
7.1%

4,338
7.4%

Investment & Other Income, Net:

Pre-Tax Income:
Income Tax Provision:

(148)
2,024
591

(83)
3,350
715

(191)
4,240
748

(171)
2,841
469

(210)
2,743
581

(187)
3,312
701

(123)
3,533
748

(27)
4,175
884

87
4,426
937

1,433
3,024 $
5.7%

2,635
4,403 $
7.2%

3,492
5,367 $
8.6%

2,372
4,156
7.3%

2,162
4,297 $
7.6%

2,611
4,770 $
8.2%

2,785
4,856 $
8.4%

3,291
5,315 $
9.0%

3,489
5,301
9.0%

Net Income:
EBITDA:
EBITDA Margin %:

Balance Sheet
FY Ending February 1,
Assets:
Current Assets:
Cash & Cash-Equivalents:
Short-Term Investments:
Accounts Receivable:
Short-Term Financing Receivables:
Allowances for Losses / Doubtful Accounts:
Inventories, Net:
Prepaid Expenses & Other:
Total Current Assets:

Long-Term Assets:
Net PP&E:
Long-Term Investments:
Long-Term Financing Receivable, Net:
Other Non-Current Assets:
Goodwill:
Intangible Assets:
Capitalized Financing Fees:
Total Long-Term Assets:
Total Assets:
Liabilities & Shareholders' Equity:
Current Liabilities:
Revolver:
Accounts Payable:
Accrued Expenses & Other:
Short-Term Deferred Revenue:
Total Current Liabilities:

10,635
373
5,837
2,706
1,051
3,643
24,245

2,181
781
332
6,113
9,407

13,913
452
6,493
3,643
1,301
3,219
29,021

1,953
704
799
6,122
9,578

13,852
966
6,476
3,327
1,404
3,423
29,448

2013

2,124
3,404
1,372
490
5,838
1,857
15,085

12,569
208
6,629
3,213
1,382
3,967
27,968

33,652

38,599

44,533

47,540

11,373
3,884
3,040
18,297

11,293
4,181
3,158
18,632

11,656
3,934
3,544
19,134

11,579
3,644
4,373
19,596

4,080
3,029
2,605
9,714
$

28,011

5,997
3,518
2,686
12,201
$

30,833

9,254
3,836
3,392
16,482
$

35,616

Transaction Adjustments
Debit
Credit
2013

2,126
2,565
1,349
854
9,304
3,374
19,572

Long-Term Liabilities:
Total Existing Debt:
Long-Term Deferred Revenue:
Other Long-Term Liabilities:
Term Loan B:
Term Loan C:
ABL Facility:
1st Lien Fixed Rate Notes:
2nd Lien Fixed Rate Notes:
Microsoft - Subordinated Note:
Long-Term Deferred Tax Liability:
Total Long-Term Liabilities:
Total Liabilities:

Historical
2011
2012

2010

9,085
3,971
4,187
17,243
$

36,839

2015

15,097 $
208
6,199
3,129
(321)
1,223
4,018
29,553

17,546 $
208
6,366
3,213
(651)
1,251
4,001
31,934

2,188
2,897
1,328
812
9,304
2,604
19,133

2,252
3,230
1,307
770
9,304
1,922
18,785

48,686

50,719

2017

2018

20,673 $
208
6,335
3,198
(980)
1,240
3,982
34,656

23,888 $
208
6,461
3,261
(1,315)
1,260
3,934
37,697

27,431
208
6,400
3,231
(1,647)
1,243
3,897
40,764

2,316
3,562
1,286
728
9,304
1,309
18,505

2,382
3,894
1,265
686
9,304
794
18,325

2,448
4,226
1,244
644
9,304
424
18,290

53,161

56,022

59,053

10,963
3,748
4,543
19,253

11,215
3,639
4,665
19,519

11,118
3,528
5,223
19,869

11,294
3,394
5,326
20,014

11,145
3,271
5,862
20,279

9,085
4,259
4,158

9,085
4,373
4,123

9,085
4,642
4,085

9,085
5,030
4,041

9,085
5,276
3,994

17,502
$

Projected
2016

2014

36,755

17,581
$

37,100

17,813
$

37,682

18,157
$

38,170

18,356
$

38,634

Equity:
Shareholders' Equity:
Noncontrolling Interests:
Founder Equity:
Sponsor Common Equity:
Total Equity:

5,641

7,766

8,917

10,701

11,931

13,619

15,479

17,852

20,419

Total Liabilities & Equity:

33,652

38,599

44,533

47,540

48,686

50,719

53,161

56,022

59,053

BALANCE CHECK:

5,641
-

OK!

7,766
-

OK!

8,917
-

OK!

10,680
21

OK!

11,910
21

OK!

13,598
21

OK!

15,458
21

OK!

17,831
21

OK!

20,398
21

OK!

Cash Flow Statement

FY Ending February 1,
Net Income:
Depreciation of Existing PP&E:
Amortization of Existing Intangibles:
Stock-Based Compensation:
FX Rate Effects:
Deferred Income Taxes:
Provision For Doubtful Accounts:
Other:
Depreciation of PP&E Write-Up:
Goodwill Impairment:
New Intangibles Amortization:
Amortization of Financing Fees:
Changes in Operating Assets & Liabilities:
Accounts Receivable:
Financing Receivables:
Inventories:
Other Assets:
Accounts Payable:
Deferred Revenue:
Accrued And Other Liabilities:
Cash Flow from Operations:

Historical
2011
2012

2010
$

Transaction Adjustments
Debit
Credit
2013

2013

1,433 $
647
205
312
59
(52)
429
102

2,635 $
621
349
332
(4)
(45)
382
26

3,492 $
545
391
362
(5)
19
234
21

2,372
531
613
347
18
(428)
258
19

2014
$

Projected
2016

2015

2017

2018

2,162 $
574
770
330
17
(29)
321
42

2,611 $
589
682
339
17
(35)
330
42

2,785 $
587
613
337
17
(37)
328
42

3,291 $
598
515
344
17
(44)
335
42

3,489
593
370
340
17
(47)
332
42
-

(660)
(1,085)
(183)
(225)
2,833
135
(44)
3,906

(707)
(709)
(248)
516
(151)
551
421
3,969

(53)
(372)
(52)
(28)
327
720
(74)
5,527

(150)
(193)
48
(334)
(74)
382
(126)
3,283

430
84
159
(51)
(616)
457
104
4,754

(167)
(84)
(28)
17
252
237
(109)
4,692

31
16
11
19
(97)
827
(110)
5,367

(125)
(63)
(20)
48
176
491
(134)
5,470

61
31
17
37
(149)
782
(123)
5,791

(1,383)
1,538
(367)
16
(3,613)
(3,809)

(1,360)
1,358
(444)
18
(430)
69
(376)
(1,165)

(4,656)
1,435
(675)
14
278
(2,562)
(6,166)

(2,615)
4,354
(513)
135
167
(4,844)
(3,316)

(2,504)
2,171
(681)
46
(108)
129
(947)

(2,504)
2,171
(700)
46
(108)
129
(965)

(2,504)
2,171
(696)
46
(108)
129
(962)

(2,504)
2,171
(710)
46
(108)
129
(976)

(2,504)
2,171
(703)
46
(108)
129
(969)

Cash Flow from Financing:

Repurchases Of Common Stock:
Cash Dividends Paid:
Issuance Of Common Stock:
Issuance (Repayment) Of Comm. Paper:
Proceeds From Debt:
Repayments Of Debt:
Other:
Changes in Noncontrolling Interests:
Cash Flow from Financing:

2
76
2,058
(122)
(2)
2,012

(800)
12
(176)
3,069
(1,630)
2
477

(2,717)
40
635
4,050
(1,435)
4
577

(724)
(278)
52
(331)
3,311
(3,248)
8
(1,210)

(1,060)
(278)
27
(1,312)

(1,060)
(278)
27
(1,312)

(1,060)
(278)
27
(1,312)

(1,060)
(278)
27
(1,312)

(1,060)
(278)
27
(1,312)

Cash Flow Avail. for Debt Repayment:

2,109

3,281

(62)

(1,243)

2,495

2,415

3,094

3,183

3,510

Cash Flow from Investing:

Purchases of Investments:
Maturities And Sales of Investments:
Maturities / (Purchases) of ST Investments:
Capital Expenditures
Proceeds From Asset Sales:
Purchase of Financing Receivables:
Collections of Financing Receivables:
Acquisition Of Businesses:
Cash Flow from Investing:

Revolver:
Total Existing Debt:
Term Loan B:
Term Loan C:
ABL Facility:
1st Lien Fixed Rate Notes:
2nd Lien Fixed Rate Notes:
Microsoft - Subordinated Note:
Total Cash Flow Used to Repay Debt:
Effect of Exchange Rates:

174

(3)

Net Change in Cash:

2,283

3,278

Beginning Cash Balance:

Ending Cash Balance:

8,352
10,635

10,635
13,913

1
(61)
13,913
13,852

(40)

33

33

33

33

33

(1,283)

2,528

2,448

3,127

3,216

3,543

13,852
12,569

12,569
15,097

15,097
17,546

17,546
20,673

20,673
23,888

23,888
27,431

Debt & Interest Schedules

FY Ending February 1,

2014

LIBOR Curve:
Interest Rate Assumptions:
Revolver:
Total Existing Debt:
Term Loan B:
Term Loan C:
ABL Facility:
1st Lien Fixed Rate Notes:
2nd Lien Fixed Rate Notes:
Microsoft - Subordinated Note:
Cash & Cash-Equivalents and All Investments:

LIBOR +
1.00%

2015

Projected
2016

2017

2018

0.30%

0.30%

0.50%

0.75%

1.00%

0.80%

0.80%

1.00%

1.25%

1.50%

(332)

(332)

(332)

(332)

(332)

123
(210)

146
(187)

210
(123)

306
(27)

420
87

701

400

300

Fixed
Interest
3.66%

2.50%
3.50%
5.50%
6.00%
6.50%
7.50%
0.50%

Interest Income / (Expense) Calculations:

Revolver:
Total Existing Debt:
Term Loan B:
Term Loan C:
ABL Facility:
1st Lien Fixed Rate Notes:
2nd Lien Fixed Rate Notes:
Microsoft - Subordinated Note:
Cash & Cash-Equivalents and All Investments:
Net Interest Income / (Expense):
Sources of Funds:
Beginning Cash Balance:
Less: Minimum Cash Balance:
Plus: Cash Flow Available for Debt Repayment:
Subtotal Before Revolver:
Revolver Borrowing Required:
Total Sources of Funds:
Payment Schedule for Existing Debt:

1,404

1,291

Uses of Funds:
Mandatory Debt Repayment:
Total Existing Debt:
Term Loan B:
Term Loan C:
ABL Facility:
Bridge Loan (1st Lien Fixed Rate Notes):
Bridge Loan (2nd Lien Fixed Rate Notes):
Microsoft - Subordinated Note:
Mandatory Repayment Total:
Optional Debt Repayment:
Revolver:
Total Existing Debt:
Term Loan B:
Term Loan C:
ABL Facility:
Bridge Loan (1st Lien Fixed Rate Notes):
Bridge Loan (2nd Lien Fixed Rate Notes):
Microsoft - Subordinated Note:
Optional Repayment Total:
Cash Generated on Balance Sheet:
Total Uses of Funds:
Investor Returns
FY Ending February 1,
EBITDA:
EBITDA Multiple:
Enterprise Value:
Investor Equity:
IRR:

2013

2014

2015

2016

2017

2018

Dell Inc. - Revenue, Operating Income, and Market Share and Market Data
($ in Millions Except Per Share Data)
Income Statement - Segment-Level Revenue Scenarios
FY Ending February 1,
Revenue by Product:
Servers and Networking:
Storage:
Services:
Software & Peripherals:
Mobility:
Desktop PCs:
Total Revenue:
Selected Case:

2010

6,032 $
2,192
5,622
9,499
16,610
12,947
52,902

Historical
2011
2012

7,609 $
2,295
7,673
10,261
18,971
14,685
61,494

8,336 $
1,943
8,322
10,222
19,104
14,144
62,071

2013

2014

9,294
1,699
8,396
9,257
15,303
12,991
56,940

49,851 $ 52,840 $ 55,573 $ 54,351

136,920
162,145
160,538
151,515
98,198
107,582
104,770
105,618

9,517 $
1,750
9,179
9,627
13,909
12,801
56,783

2015

Projected
2016

9,993 $
1,802
9,592
10,012
14,048
12,865
58,313

10,193 $
1,839
10,024
10,313
13,334
12,329
58,031

2017

10,589 $
1,875
10,425
10,622
13,401
12,267
59,179

2018

10,694
1,913
10,842
10,888
12,612
11,675
58,625

Base

Total Market Size by Product Segment:

Servers and Networking:
Mobility:
Desktop PCs:

Growth in Total Market Size by Product Segment:

Servers and Networking:
Mobility:
Desktop PCs:
Market Share by Product:
Servers and Networking:

12.1%

Market Share by Product:

Mobility:

12.1%

Base

55,981 $ 57,101 $ 58,243 $ 58,825 $ 59,414

154,545
156,091
156,871
157,655
157,655
106,674
107,207
107,207
106,671
106,138

6.0%
18.4%
9.6%

5.2%
(1.0%)
(2.6%)

(2.2%)
(5.6%)
0.8%

3.0%
2.0%
1.0%

2.0%
1.0%
0.5%

2.0%
0.5%
0.0%

1.0%
0.5%
(0.5%)

1.0%
0.0%
(0.5%)

14.4%

15.0%

17.1%

17.0%

17.5%

Base Case:
17.5%

18.0%

18.0%

16.0%
17.0%
17.5%
16.0%
17.0%

15.0%
17.5%
18.0%
15.5%
17.5%

15.0%
17.5%
18.0%
15.5%
17.5%

14.0%
18.0%
18.5%
15.0%
18.0%

14.0%
18.0%
18.5%
15.0%
18.0%

9.0%

9.0%

Base Case:
8.5%

8.5%

8.0%

7.5%
9.0%
10.0%
8.5%
9.0%

7.0%
9.0%
10.0%
8.0%
9.0%

6.5%
8.5%
10.5%
7.0%
8.5%

6.0%
8.5%
10.5%
6.0%
8.5%

5.0%
8.0%
10.5%
5.0%
8.0%

Market Share Cases - Servers and Networking:

Conservative Case:
Base Case:
Upside Case:
Street Consensus Case:
Selected Case:
Base

Market Share Cases - Mobility:

Conservative Case:
Base Case:
Upside Case:
Street Consensus Case:
Selected Case:

Transaction Adjustments
Debit
Credit
2013

11.7%

11.9%

10.1%

Market Share by Product:

Desktop PCs:

13.2%

13.7%

13.5%

12.3%

Market Share Cases - Desktop PCs:

Conservative Case:
Base Case:
Upside Case:
Street Consensus Case:
Selected Case:
Base

Services Revenue:
Services Segment Metrics:
Deferred Revenue from Warranties:
Contracted Services Backlog:
Total Services Backlog:

5,622 $

7,673 $

8,322 $

8,396

5,900 $
6,900
12,800

6,416 $
7,500
13,916

7,002 $
8,400 $
15,402 $

7,103
8,700
15,803

Services Revenue % Prior Year Backlog:

Growth Rate in Services Backlog:

9,499 $

Base Case:
11.5%

11.5%

11.0%

10.5%
12.0%
12.5%
11.5%
12.0%

10.0%
12.0%
12.5%
11.0%
12.0%

9.5%
11.5%
13.0%
10.0%
11.5%

8.5%
11.5%
13.0%
9.0%
11.5%

7.5%
11.0%
13.5%
8.0%
11.0%

9,592

Base Case:
$ 10,024 $

10,425

16,514

17,257

17,948

18,665

19,319

9,179

2,192 $

10,842

54.5%

58.1%

58.1%

58.1%

58.1%

58.1%

8.7%

10.7%

2.6%

4.5%

4.5%

Base Case:
4.0%

4.0%

3.5%

2.5%
4.5%
6.0%
3.0%
4.5%

2.5%
4.5%
7.0%
3.0%
4.5%

2.0%
4.0%
7.0%
2.5%
4.0%

2.0%
4.0%
6.5%
2.5%
4.0%

1.5%
3.5%
6.5%
2.0%
3.5%

10,261 $
8.0%

10,222 $
(0.4%)

9,257
(9.4%)

9,627 $
4.0%

2.0%
4.0%
6.5%
3.0%
4.0%
$

59.8%

Growth Rate Cases - Software & Peripherals:

Conservative Case:
Base Case:
Upside Case:
Street Consensus Case:
Selected Case:
Base
Storage Revenue:
Growth Rate:

12.0%

59.9%

Growth Rate Cases - Services Backlog:

Conservative Case:
Base Case:
Upside Case:
Street Consensus Case:
Selected Case:
Base

Software & Peripherals Revenue:

Growth Rate:

12.0%

2,295 $
1,943 $
1,699
4.7%
(15.3%)
(12.6%)

1,750 $
3.0%

Base Case:
10,012 $ 10,313 $
4.0%
3.0%

2.0%
4.0%
6.5%
2.5%
4.0%
1,802 $
3.0%

1.5%
3.0%
6.0%
2.5%
3.0%
1,839 $
2.0%

10,622 $
3.0%

1.5%
3.0%
5.5%
2.0%
3.0%
1,875 $
2.0%

10,888
2.5%

1.0%
2.5%
5.0%
2.0%
2.5%
1,913
2.0%

Other Revenue and Expense Metrics and Key Performance Indicators

Historical
FY Ending February 1,
2010
2011
2012
Revenue by Business Unit:
Global Large Enterprise:
Global Public:
Global Small And Medium Business:
Global Consumer:
Total Revenue:

52,902

Market Share of Business Units:

Global Large Enterprise:
Global Public:
Global Small And Medium Business:
Global Consumer:

8.9%
12.0%
20.9%
31.8%

18,111 $
16,377
12,608
14,398
61,494

8.6%
12.8%
17.7%
29.3%

Other Data - Global Desktop, Notebook, and Tablet Shipments (Millions):

Enterprise Desktops:
94.7
84.4
89.9
Enterprise Notebooks:
69.9
68.3
80.8
Consumer Desktops:
48.0
47.1
49.9
Consumer Notebooks:
59.1
69.0
89.1
Consumer Netbooks:
12.9
32.7
34.4
Total, Branded PCs:
301.5
344.1
Non-Branded PCs:
23.9
20.8
27.5
Total Shipments:
322.3
371.6
Tablet Shipments:
Total Enterprise Shipments:
Total Consumer Shipments:
Total Desktop Shipments:
Total Notebook Shipments:

164.6
120
142.7
141.9

Growth Rates by Segment:

Enterprise:
Consumer:
Desktop:
Notebook:
Non-Branded PCs:
Tablets:
New Signings:
Growth Rate:
Operating Income by Business Unit:
Global Large Enterprise:
Global Public:
Global Small And Medium Business:
Global Consumer:
Total Operating Income (Excl. Overhead):
Operating Margin (Excl. Overhead):

18,786 $
16,070
13,547
13,668
62,071

2013

17,781
14,828
13,413
10,918
56,940

8.7%
13.0%
16.9%
26.5%

7.0%
12.0%
15.0%
24.0%

87.6
86.2
48.2
98.8
24.4
345.2
43.2
388.4

89.3
86.0
42.7
95.3
17.1
330.4
60.2
390.6

0.0

18.0

70.0

125.0

152.7
148.8
131.5
170.0

170.7
173.4
139.8
204.3

173.8
171.4
135.8
209.4

175.3
155.1
132.0
198.4

(7.2%)
24.0%
(7.8%)
19.8%
(13.0%)
N/A

11.8%
16.5%
6.3%
20.2%
32.2%
N/A

1.8%
(1.2%)
(2.9%)
2.5%
57.1%
288.9%

0.9%
(9.5%)
(2.8%)
(5.3%)
39.4%
78.6%

N/A
N/A

N/A
17.0%

1,900
N/A

2,100
10.5%

3,327
6.3%

1,490
1,446
1,383
180
4,499
7.3%

1,889
1,584
1,581
433
5,487
8.8%

1,553
1,238
1,505
(11)
4,285
7.5%

Transaction Adjustments
Debit
Credit
2013

2014

2015

41671
2016

2017

2018