http://www.morningstar.com/earnings/48762233-dell-dell-q4-2013.aspx

DELL DELL
Q4 2013 Earnings Call Transcript

Transcript Call Date 02/19/2013

Operator: Good afternoon, and welcome to the Dell Inc. Fourth Quarter and Full Year Fiscal 2013 Earnings Conference Call. I'd like to inform all participants this call is being recorded at the request of Dell. This broadcast is the copyrighted property of Dell Inc. Any rebroadcast of this information in whole or part without the prior written permission of Dell Inc. is prohibited. As a reminder, Dell is also simulcasting this presentation with slides at www.dell.com/investor. Later, we will conduct a question-and-answer session.

I'd like to turn the call over to Rob Williams, Head of Investor Relations. Mr. Williams, you may begin.

Robert Williams - IR: Thanks Regina. In light of Michael's involvement in the pending transaction today's call will be led by Brian Gladden and he will be joined by Tom Sweet, our Corporate Controller. The web deck was posted to our website in advance of the call. I encourage you to review these materials and related materials for additional prospective.

Next, I'd also like to remind you that all statements made during this call that relate to future results and events are forward-looking statements that are based on current expectations. Actual results and events could differ materially from those projected in the forward-looking statements because of a number of risks and uncertainties which are discussed in our annual and quarterly SEC filings and in the cautionary statements in our press release and web deck. We assume no obligation to update our forward-looking statements.

Note that we will be referring to non-GAAP financial measures, including non-GAAP gross margin, operating expenses, operating income, net income and earnings per share. Historical non-GAAP measures are reconciled to the most directly comparable GAAP measures in the web deck posted in the Investor Relations section of dell.com and in our press release, and 8-K filed today. I encourage you to review these documents. Also note that unless otherwise mentioned, all growth percentages refer to year-over-year progress.

As you know, the Board of Directors of Dell acting on the recommendation of the special committee of independent directors unanimously approved the merger agreement to take the Company private subject to a number of conditions. Given the nature of this transaction, we are not going to address any questions on this matter in today's Q&A.

Now, I'd like to turn it over to Brian.

Brian T. Gladden - SVP and CFO: Thanks Rob. For the full fiscal year, our revenue was $56.9 billion, down 8%. Full year non-GAAP EPS was $1.72, down 19%. Our enterprise solutions and services business was $19.4 billion, up 4% from fiscal year 2012.

For the fourth quarter, we delivered revenue of $14.3 billion, down 11% and up 4% sequentially, which was at the high end of the 2% to 5% sequential growth outlook we provided last quarter. The ES&S business was up 6% to $5.2 billion, and now represents 36% of our revenue and well over half of our gross margin dollars.

We continue to execute on our long-term strategy. Our strong balance sheet and cash position have enabled almost $5 billion in investments in new capabilities and intellectual property in key assets such as Quest, SonicWALL, Wyse and AppAssure.

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