Dell 2011 Annual Report Download - page 45

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Table of Contents
backlog as of January 28, 2011, and January 29, 2010, was $13.9 billion and $12.8 billion, respectively. Deferred revenue from extended warranties was $6.4
billion and $5.9 billion as of January 28, 2011, and January 29, 2010, respectively. Estimated contracted services backlog, which is primarily related to our
outsourcing services business, was $7.5 billion and $6.9 billion, as of January 28, 2011, and January 29, 2010, respectively.
•Software and Peripherals — The 8% increase in S&P revenue for Fiscal 2011 was driven by overall customer unit shipment increases due to sales of
displays and electronics and peripherals, which experienced a combined year-over-year revenue increase of 15% for Fiscal 2011, while revenue from
imaging products decreased by 6%.
Software and related support services revenue represented 33% and 39% of services revenue, including software related, for Fiscal 2011 and Fiscal 2010,
respectively.
•Client
▪Mobility — Revenue from mobility products increased 14% during Fiscal 2011 across all operating segments due to demand improvements.
Notebook units increased 14%, while average selling prices remained flat during Fiscal 2011. During Fiscal 2011, overall Commercial mobility
revenue increased 19% year-over-year, while revenue from Consumer mobility increased 8%. The increase in Commercial mobility was driven by
increases in demand for our Latitude notebooks.
▪Desktop PCs — During Fiscal 2011, revenue from desktop PCs increased as unit demand for desktop PCs increased by 10%. The average selling
price for our desktop computers increased by 3% year-over-year due to a slight shift in product mix to higher priced units. The increase in unit
demand was driven by our Large Enterprise and SMB customers, generating increases of 25% and 23%, year-over-year, respectively, for Fiscal
2011. These increases were driven primarily by the stronger demand for our Optiplex desktop PCs and fixed work stations.
Stock-Based Compensation
We primarily use our 2002 Long-Term Incentive Plan, amended in December 2007, for stock-based incentive awards. These awards can be in the form of
stock options, stock appreciation rights, stock bonuses, restricted stock, restricted stock units, performance units, or performance shares. Stock-based
compensation expense totaled $362 million for Fiscal 2012, compared to $332 million and $312 million for Fiscal 2011 and Fiscal 2010, respectively. For
further discussion on stock-based compensation, see Note 14 of Notes to Consolidated Financial Statements included in “Part II — Item 8 — Financial
Statements and Supplementary Data.”
Interest and Other, net
The following table provides a detailed presentation of Interest and other, net for each of the past three fiscal years:
Fiscal Year Ended
February 3,
2012 January 28,
2011 January 29,
2010
(in millions)
Interest and other, net:
Investment income, primarily interest $ 81 $ 47 $ 57
Gains (losses) on investments, net 8 6 2
Interest expense (279) (199) (160)
Foreign exchange 5 4 (59)
Other (6) 59 12
Interest and other, net $ (191) $ (83) $ (148)
Fiscal 2012 compared to Fiscal 2011
Our investment income increased in Fiscal 2012 over the prior year primarily due to higher average cash and investment balances as well as a shift to longer-
duration investments, which have higher investment yields. Overall investment yield in Fiscal 2012 increased from approximately 35 basis points during
Fiscal 2011 to approximately 49 basis points.
The year-over-year increase in interest expense for Fiscal 2012 was due to higher debt levels, which increased to $9.3 billion as
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