Dell 2004 Annual Report Download - page 31

Table of Contents
the growth of the company with an emphasis on enterprise products, make capital investments, and make a limited number of strategic equity
investments.
Capital Commitments
Share Repurchase Program — Dell has a share repurchase program that authorizes the company to purchase shares of common stock in
order to both distribute cash to stockholders and manage dilution resulting from shares issued under Dell's equity compensation plans.
However, Dell does not currently have a policy that requires the repurchase of common stock in conjunction with share-based payment
arrangements. As of January 28, 2005, Dell's share repurchase program authorized the purchase of up to 1.25 billion shares of common stock
at an aggregate cost not to exceed $20 billion. Subsequent to fiscal 2005, on March 3, 2005, the Board of Directors of Dell approved an
amendment to the plan to increase the number of authorized shares available for repurchase by 250 million to 1.5 billion, and the aggregate
dollar cost threshold by $10 billion to $30 billion.
Dell expects to continue to repurchase shares of common stock through a systematic program of open market purchases. As of the end of
fiscal 2005, Dell had cumulatively repurchased 1.2 billion shares for an aggregate cost of approximately $18.3 billion. During fiscal 2005, Dell
repurchased 119 million shares of common stock for an aggregate cost of $4.2 billion. Through the fourth quarter of fiscal 2003, Dell previously
utilized equity instrument contracts to facilitate its repurchase of common stock. All remaining put and call contracts were settled in full during
the fourth quarter of fiscal 2003. Dell now effects its share repurchases entirely through open market transactions. As of March 3, 2005, Dell
has spent approximately $1.3 billion in share repurchases for the first quarter of fiscal 2006.
Capital Expenditures — During fiscal 2005, Dell spent $525 million on property, plant, and equipment. Capital expenditures increased during
fiscal 2005, compared to recent fiscal years, primarily due to the company's global expansion efforts and infrastructure investments in order to
support the company's future growth. Product demand and mix, as well as ongoing efficiencies in operating and information technology
infrastructure, influence the level and prioritization of Dell's capital expenditures. Capital expenditures for fiscal 2006 are currently expected to
be up to approximately $700 million. Capital expenditures during fiscal 2006 are expected to be funded by cash flows from operating activities
and are estimated to increase compared to recent years due to Dell's continued expansion worldwide and the need for additional capacity.
Restricted Cash — Pursuant to the joint venture agreement between DFS and CIT, DFS is required to maintain certain escrow cash accounts.
Due to the consolidation of DFS, $438 million in restricted cash is included in other current assets on Dell's consolidated statement of financial
position as of January 28, 2005.
Contractual Cash Obligations
The following table summarizes Dell's contractual cash obligations as of January 28, 2005.
Payments Due by Period
Fiscal 2007- Fiscal 2009-
Total Fiscal 2006 2008 2010 Beyond
(in millions)
Long-term debt, including current portion $ 507 $ 2 $ 3 $ 204 $ 298
Operating leases 257 52 76 46 83
Advances under credit facilities 158 29 129 — —
Purchase obligations 107 56 23 28 —
DFS purchase commitment 100 — — 100 —
Total contractual cash obligations $ 1,129 $ 139 $ 231 $ 378 $ 381
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