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: Offer Price Per Share: Refinance Existing Debt? % Debt Used for "Funds Required": Debt Used: Pro-Forma TTM Debt / EBITDA: 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: Debt Assumptions Interest Rates: Revolver: Total Existing Debt: Principal Repayment %: Revolver: N/A Total Existing Debt: (See schedule) 273.0 1,762.0 1,807.7 $ 24,675 (12,569) 9,085 21 $ 21,212 Dell Inc. 10.88 25.5% 13.65 No 90% 12,650 5.2 x Transaction Close Date: Equity Purchase Price: Transaction Enterprise Value: Funds Required: Equity Purchase Price: Plus: Debt Refinanced: Less: Excess Cash: Less: Founder Cash Contribution: Less: Founder Rollover: Total Funds Required (Excl. Fees): Diluted Shares: 2/1/2013 24,675 21,212 EBITDA Purchase Multiple: Baseline EBITDA Exit Multiple: Advisory Fee %: Financing Fee %: Legal & Misc. Fees: 5.1 x 4.0 x 0.10% 0.60% 30

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

LIBOR Units:

10,000

Minimum Cash Balance: Tax Rate for Repatriated Cash: Company Effective Tax Rate: Dilution 3.675 42.000 45.675

3,000 35.0% 21.2%

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

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

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

L + 100 3.66%

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

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: Ownership Percentages, Pre and Post-Deal: Pre-Deal Ownership Percentages: Michael Dell: Silver Lake Partners: Institutional Investors: Total: 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: Fixed Asset Write-Up: PP&E Write-Up %: PP&E Write-Up Amount: Depreciation Period (Years): Intangible Asset Write-Up: Purchase Price to Allocate: % Allocated to Intangibles: Intangibles Write-Up Amount: Amortization Period (Years): Post-Deal Ownership Percentages: Michael Dell: Silver Lake Partners: Institutional Investors: Total: 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

15.1% 0.0% 84.9% 100.0%

75.4% 24.6% 0.0% 100.0%

24,675 (10,680) 9,304 $ 23,299 $ (213) (4,660) 1,032 19,459 5

10.0% 213 8

23,299 20.0% 4,660 5

New Deferred Tax Liability:

1,032

Margins, Expense and Working Capital Trends, and BS / CFS Assumptions Historical 2011 2012 16.2% 81.5% 11.9% 1.1% 21.3% 10.6% 2.6% 44.1% 22.5% 57.3% 5.1% 5.7% 1.6% 0.5% (6.3%) 0.7% 0.9% 77.7% 13.7% 1.4% 17.6% 10.4% 2.9% 40.2% 24.2% 46.2% 5.7% 6.2% 1.5% 0.6% 2.5% 1.1% Transaction Adjustments Debit Credit 2013 Projected 2016

FY Ending February 1, Revenue Growth %: COGS % Revenue: SG&A % Revenue: R&D % Revenue: Effective Tax Rate: AR % Revenue: Inventory % COGS: Prepaid Expenses % SG&A: Accounts Payable % COGS: Accrued Expenses % SG&A: ST Deferred Revenue % Revenue: LT Deferred Revenue % Revenue: D&A % Revenue: SBC % Revenue: Deferred Taxes % Total Taxes: CapEx % Revenue: Income Statement FY Ending February 1, Revenue: Cost of Goods Sold: Gross Profit: SG&A Expense: R&D Expense: Depreciation of PP&E Write-Up: New Intangibles Amortization: Amortization of Financing Fees: Operating Income: Investment & Other Income, Net: Pre-Tax Income: Income Tax Provision: Net Income: EBITDA: $ 61,101 $

2010 (13.4%) 82.5% 12.2% 1.2% 29.2% 11.0% 2.4% 56.3% 26.1% 60.1% 5.7% 5.7% 1.6% 0.6% (8.8%) 0.7%

2013 (8.3%) 78.6% 14.2% 1.9% 16.5% 11.6% 3.1% 49.0% 25.9% 45.0% 7.7% 7.0% 2.0% 0.6% (91.3%) 0.9%

2014

2015

2017

2018

2010 52,902 43,641 9,261 6,465 624 2,172 (148) 2,024 591 1,433 3,024 $

Historical 2011 2012 61,494 50,098 11,396 7,302 661 3,433 (83) 3,350 715 2,635 4,403 $ 62,071 48,260 13,811 8,524 856 4,431 (191) 4,240 748 3,492 5,367 $

2013 56,940 44,754 12,186 8,102 1,072 3,012 (171) 2,841 469 2,372 4,156

Transaction Adjustments Debit Credit 2013

2014

2015

Projected 2016

2017

2018

Balance Sheet FY Ending February 1, Assets: Current Assets: Cash & Cash-Equivalents: Short-Term Investments: Accounts Receivable, Net: Short-Term Financing Receivables, Net: 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: 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: Equity: Shareholders' Equity: Noncontrolling Interests: Founder Equity: Sponsor Common Equity: Total Equity: Total Liabilities & Equity: BALANCE CHECK: $ $ $ 10,635 373 5,837 2,706 1,051 3,643 24,245 $ 13,913 452 6,493 3,643 1,301 3,219 29,021 $ 13,852 966 6,476 3,327 1,404 3,423 29,448 $ 12,569 208 6,629 3,213 1,382 3,967 27,968 2010 Historical 2011 2012 2013 Transaction Adjustments Debit Credit 2013 2014 2015 Projected 2016 2017 2018

2,181 781 332 6,113 9,407 33,652 $

1,953 704 799 6,122 9,578 38,599 $

2,124 3,404 1,372 490 5,838 1,857 15,085 44,533 $

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

9,085 3,971 4,187 17,243 36,839

5,641 -

7,766 -

8,917 -

10,680 21

$ $

5,641 33,652 OK!

$ $

7,766 38,599 OK!

$ $

8,917 44,533 OK!

$ $

10,701 47,540 OK!

Cash Flow Statement FY Ending February 1, Net Income: Depreciation & Amortization: Stock-Based Compensation: FX Rate Effects: Deferred Income Taxes: Provision For Doubtful Accounts: Other: Depreciation of PP&E Write-Up: 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: Cash Flow from Investing: Purchases of Investments: Maturities And Sales of Investments: Capital Expenditures Proceeds From Asset Sales: Purchase of Financing Receivables: Collections of Financing Receivables: Acquisition Of Businesses: Cash Flow from Investing: 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: Cash Flow from Financing: Cash Flow Avail. for Debt Repayment: 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: Net Change in Cash: Beginning Cash Balance: Ending Cash Balance: $ 2010 1,433 $ 852 312 59 (52) 429 102 Historical 2011 2012 2,635 $ 970 332 (4) (45) 382 26 3,492 $ 936 362 (5) 19 234 21 2013 2,372 1,144 347 18 (428) 258 19 Transaction Adjustments Debit Credit 2013 2014 2015 Projected 2016 2017 2018

(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

(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 76 2,058 (122) (2) 2,012 2,109 174 2,283 8,352 10,635

(800) 12 (176) 3,069 (1,630) 2 477 3,281 (3) 3,278 10,635 13,913

(2,717) 40 635 4,050 (1,435) 4 577 (62) 1 (61) 13,913 13,852

(724) (278) 52 (331) 3,311 (3,248) 8 (1,210) (1,243) (40) (1,283) 13,852 12,569

Debt & Interest Schedules FY Ending February 1, 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: 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: 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: LIBOR + 1.00% 2.50% 3.50% 5.50% 6.00% 6.50% 7.50% Fixed Interest 3.66% 2014 0.30% 2015 0.30% Projected 2016 0.50% 2017 0.75% 2018 1.00%

1,404

1,291

701

400

300

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 & Operating Income and Market Data 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: Market Share of Business Units: Global Large Enterprise: Global Public: Global Small And Medium Business: Global Consumer: Operating Income by Business Unit: Global Large Enterprise: Global Public: Global Small And Medium Business: Global Consumer: Total Operating Income: Revenue by Product: Servers and Networking: Storage: Services: Software & Peripherals: Mobility: Desktop PCs: Total Revenue:

Transaction Adjustme 2013

52,902

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

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

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

8.9% 12.0% 20.9% 31.8%

8.6% 12.8% 17.7% 29.3%

8.7% 13.0% 16.9% 26.5%

7.0% 12.0% 15.0% 24.0%

3,327

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

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

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

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

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

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

Market Share by Product: Servers and Networking: Storage: Services: Software & Peripherals: Mobility: Desktop PCs: Total Market Size by Product Segment: Servers and Networking: Storage: Services: Software & Peripherals: Mobility: Desktop PCs:

12.1% N/A N/A N/A 12.1% 13.2%

14.4% N/A N/A N/A 11.7% 13.7%

15.0% N/A N/A N/A 11.9% 13.5%

17.1% N/A N/A N/A 10.1% 12.3%

49,851 $ 52,840 $ 55,573 $ 54,351 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 136,920 162,145 160,538 151,515 98,198 107,582 104,770 105,618

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: Growth Rates by Segment: Enterprise: Consumer: Desktop: Notebook: Non-Branded PCs: Tablets: 164.6 120 142.7 141.9 0.0 152.7 148.8 131.5 170.0 18.0 170.7 173.4 139.8 204.3

87.6 86.2 48.2 98.8 24.4 345.2 43.2 388.4 70.0 173.8 171.4 135.8 209.4

89.3 86.0 42.7 95.3 17.1 330.4 60.2 390.6 125.0 175.3 155.1 132.0 198.4

(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%

Services Segment Metrics: Deferred Revenue from Warranties: Contracted Services Backlog: Total Services Backlog: New Signings: Growth Rate:

5,900 $ 6,900 12,800 N/A N/A

6,400 $ 7,500 13,900 N/A 17.0%

7,000 8,500 15,500 $ 1,900 N/A

N/A N/A 16,300 2,100 10.5%

Transaction Adjustments Debit Credit 2013

2014

2015

Projected 2016

2017

2018