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DELL COMPUTER CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PART III
PART IV
DELL COMPUTER CORPORATION VALUATION AND QUALIFYING ACCOUNTS
SIGNATURES
EX-10.4 - Deferred Compensation Plan
EX-21 - Subsidiaries of the Registrant
EX-23 - Consent of PricewaterhouseCoopers LLP
Statements in this Report that relate to future results and events are based on the Company's current expectations. Actual results
in future periods may differ materially from those currently expected or desired because of a number of risks and uncertainties.
For a discussion of factors affecting the Company's business and prospects, see "Item 1 — Business — Factors Affecting the
Company's Business and Prospects."
PART I
ITEM 1 — BUSINESS
General
Dell Computer Corporation (the "Company") is the world's largest direct computer systems company and a premier provider of
products and services for customers to build their information-technology and Internet infrastructures. The Company's revenue for
fiscal year 2001 was $31.9 billion. In April 2001, the Company took the lead as the world's number one computer system company,
based on global market share estimates. The Company was founded in 1984 by Michael Dell on a simple concept: by selling personal
computer systems directly to customers, the Company could best understand their needs, and efficiently provide the most effective
computing solutions to meet those needs. With its direct relationships, the Company strives to make it easier for customers to choose,
purchase and support their computing environments. Today, the Company is enhancing and broadening the fundamental competitive
advantages of its direct model by increasingly applying the efficiencies of the Internet to its entire business. Approximately half of the
Company's sales are Web-enabled, approximately half of the Company's technical support activities occur online and approximately
three-quarters of the Company's order-status transactions occur online.
The Dell line of high-performance computer systems includes PowerEdge servers, PowerApp server appliances, PowerVault storage
products, Dell Precision workstations, Latitude and Inspiron notebook computers, and OptiPlex and Dimension desktop computers.
The Company arranges for system installation and management, guides customers through technology transitions and provides an
extensive range of other services. The Company designs and customizes products and services to the requirements of its customers,
and sells an extensive selection of peripheral hardware, including handheld products, and computing software. The Company sells its
products and services to large corporate, government, healthcare and education customers, small-to-medium businesses and
individuals.
The Company is a Delaware corporation that was incorporated in October 1987, succeeding to the business of a predecessor Texas
corporation that was originally incorporated in May 1984. Based in Austin, Texas, the Company conducts operations worldwide
through wholly owned subsidiaries. See "Item 1 — Business — Geographic Areas of Operations." Unless otherwise specified,
references herein to the Company are references to the Company and its consolidated subsidiaries. The Company operates principally
in one industry segment.
The Company's common stock, par value $.01 per share, is listed on The Nasdaq National Market under the symbol DELL. See
"Item 5 — Market for Registrant's Common Equity and Related Stockholder Matters — Market Information."
Business Strategy
The Company's business strategy is based on its direct business model. The Company's business model seeks to deliver a superior
customer experience through direct, comprehensive customer relationships, cooperative research and development with technology
partners, computer systems custom-built to customer specifications and service and support programs tailored to customer needs.
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Table of Contents
The Company believes that the direct model provides it with several distinct competitive advantages. The direct model eliminates the
need to support an extensive network of wholesale and retail dealers, thereby avoiding dealer mark-ups; avoids the higher inventory
costs associated with the wholesale/ retail channel and the competition for retail shelf space; and reduces the high risk of obsolescence
associated with products in a rapidly changing technological market. In addition, the direct model allows the Company to maintain,
monitor and update a customer database that can be used to shape future product offerings and post-sale service and support programs.