Dell 2010 Annual Report Download - page 99

Table of Contents
DELL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of January 28, 2011, Dell does not have significant concentrations of cash and cash equivalent deposits with its financial institutions.
Dell markets and sells its products and services to large corporate clients, governments, health care and education accounts, as well as
small and medium-sized businesses and individuals. No single customer accounted for more than 10% of Dell's consolidated net revenue
during Fiscal 2011, Fiscal 2010, or Fiscal 2009.
Dell purchases a number of components from single or limited sources. In some cases, alternative sources of supply are not available. In
other cases, Dell may establish a working relationship with a single source or a limited number of sources if Dell believes it is
advantageous to do so based on performance, quality, support, delivery, capacity, or price considerations.
Dell also sells components to certain contract manufacturers who assemble final products for Dell. Dell does not recognize the sale of
these components in net sales and does not recognize the related profits until the final products are sold by Dell to end users. Profits from
the sale of these parts are recognized as a reduction of cost of sales at the time of sale. Dell has net settlement agreements with the
majority of these contract manufacturers that allow Dell to offset the accounts payable to the contract manufacturers from the amounts
receivable from them. The net balances that are receivables for Dell are included in other current assets or accounts payable if Dell is in a
net payable position. Non-trade receivables from four of these contract manufacturers accounted for the majority of gross non-trade
receivables of $2.7 billion and $2.5 billion as of January 28, 2011 and January 29, 2010, respectively. As of January 28, 2011, and
January 29, 2010, these four contract manufacturers were in net payable positions.
NOTE 12 — INCOME AND OTHER TAXES
The provision for income taxes consisted of the following:
Fiscal Year Ended
January 28, January 29, January 30,
2011 2010 2009
(in millions)
Current:
Federal $ 597 $ 491 $ 446
State/Local 66 36 19
Foreign 97 116 295
Current 760 643 760
Deferred:
Federal (95) (21) 44
State/Local 9 9 (29)
Foreign 41 (40) 71
Deferred (45) (52) 86
Provision for income taxes $ 715 $ 591 $ 846
Income before income taxes included approximately $2.8 billion, $1.8 billion, and $2.7 billion related to foreign operations in Fiscal
2011, Fiscal 2010, and Fiscal 2009, respectively.
Deferred tax assets and liabilities for the estimated tax impact of temporary differences between the tax and book basis of assets and
liabilities are recognized based on the enacted statutory tax rates for the year in which Dell expects the differences to reverse. A valuation
allowance is established against a deferred tax asset when it is more likely than not that the asset or any portion thereof will not be
realized. Based upon all the available evidence,
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