Dell 2002 Annual Report Download - page 53

Download and view the complete annual report

Please find page 53 of the 2002 Dell annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 91

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91

Table of Contents
value of certain venture investments. This charge was recorded in investment and other income (loss), net.
During the fourth quarter of fiscal 2001, the Company undertook a separate program to reduce its workforce and to exit certain facilities during fiscal 2002.
Total charges recorded were $105 million. The charges consisted of approximately $50 million in employee termination benefits with the remainder relating
to facilities closure costs. The employee separations, which occurred primarily in the U.S. and which were completed in fiscal 2002, affected 1,700 employees
across a majority of the Company's business functions and job classes.
During fiscal 2003, the Company made charge-related payments totaling $161 million. As of January 31, 2003, the remaining accrual relates to net lease
expenses that will be paid over the respective lease terms through fiscal 2006. A summary of the fiscal 2002 and 2001 charges, and subsequent activity
through fiscal 2003, is as follows (in millions):
Total Cumulative Non-Cash Liability at
Charge Payments Charges January 31, 2003
Employee separations $ 184 $ (184) $ — $ —
Facility consolidations 224 (130) (79) 15
Other asset impairments and exit costs 179 (27) (152) —
Total $ 587 $ (341) $ (231) $ 15
NOTE 9 — Segment Information
The Company conducts operations worldwide and is primarily managed on a geographic basis, with those geographic segments being the Americas, Europe,
and Asia Pacific-Japan regions. The Americas region, which is based in Round Rock, Texas, covers the U.S., Canada, South America, and Latin America.
The Company has two reportable segments within the Americas: Business and U.S. Consumer. The Americas Business segment includes sales to corporate,
government, healthcare and education customers. The European region, which is based in Bracknell, England, covers the European countries and also some
countries in the Middle East and Africa. The Asia Pacific-Japan region covers the Pacific Rim, including Australia and New Zealand, and is based in
Singapore.
The accounting policies of the Company's reportable segments are the same as those described in the summary of significant accounting policies. The
Company allocates resources to and evaluates the performance of its segments based on operating income. Corporate expenses are included and special
charges are excluded from the Company's measure of segment operating income for management reporting purposes. The asset totals disclosed by geography
are directly managed by those regions and include accounts receivable, inventory, certain fixed assets, and certain other assets. Assets are not allocated
specifically to the Business and U.S. Consumer segments within the Americas. Corporate assets primarily include cash and cash equivalents, investments,
deferred tax assets, and other assets.
50