Dell 2003 Annual Report Download - page 10

Table of Contents
Geographic Areas of Operations
Dell conducts operations worldwide and is managed in three geographic segments: the Americas, Europe, and Asia Pacific-Japan regions. The Americas
region, which is based in Round Rock, Texas, covers the U.S., Canada, and Latin America. Within the Americas, Dell is further segmented into Business and
U.S. Consumer. The Americas Business segment includes sales to corporate, government, healthcare, and education customers while the U.S. Consumer
segment includes sales primarily to individual consumers. The European region, which is based in Bracknell, England, covers Europe, the Middle East, and
Africa. The Asia Pacific-Japan region covers the Pacific Rim, including Australia and New Zealand, and is based in Singapore. In fiscal 2004, approximately
36% of Dell's net revenue was attributable to international sales. Dell has recently established technical and customer support and related operations in India,
Panama, Slovakia, Morocco, and China and intends to continue such efforts in other regions throughout the world as its international business continues to
expand. Dell also recently established design centers in China and Taiwan. See "Item 1 — Business — Factors Affecting Dell's Business and Prospects" for
information about certain risks of international activities. For financial information about the results of Dell's operating segments for each of the last three
fiscal years, see Note 8 of Notes to Consolidated Financial Statements included in "Item 8 — Financial Statements and Supplementary Data."
Dell's corporate headquarters are located in Round Rock, Texas. Its manufacturing facilities are located in Austin, Texas; Eldorado do Sul, Brazil; Nashville,
Tennessee; Limerick, Ireland; Penang, Malaysia; and Xiamen, China. See "Item 2 — Properties."
Factors Affecting Dell's Business and Prospects
There are many factors that affect Dell's business and the results of its operations, some of which are beyond Dell's control. The following is a description of
some of the important factors that may cause the actual results of Dell's operations in future periods to differ materially from those currently expected or
desired.
• General economic, business, or industry conditions may result in a decrease in net revenue. As a global company with customers in virtually every business
and industry, Dell's net revenue could deteriorate as a result of macroeconomic trends in both the U.S. and abroad. If the economic climate deteriorates,
customers or potential customers could reduce or delay their technology investments. As a result, Dell's net revenue and earnings could be negatively
affected.
• Dell's business is extremely competitive and no assurances can be offered that Dell can maintain its competitive advantage. Dell's success is based on its
ability to profitably offer its products at a lower price than its competitors. However, Dell encounters aggressive competition from numerous companies
globally in all aspects of its business. Accordingly, Dell cannot provide any assurance that it can maintain or extend this advantage if its competitors alter
their cost structure or business model, or take other actions that affect Dell's current competitive advantage. If Dell is unable to maintain its competitive
advantage, a loss of market share, revenue, or profitability may result.
• A substantial portion of Dell's net revenue is dependent upon international sales, which are subject to risks and uncertainties. Sales outside the
U.S. accounted for approximately 36% of Dell's net revenue in fiscal 2004. Dell's future growth rates and success are dependent on continued growth and
success in international markets. The success and profitability of Dell's international operations are subject to numerous risks and uncertainties, including
local economic and labor conditions, political instability, unexpected changes in the regulatory environment, trade protection measures, tax laws (including
U.S. taxes on foreign operations), and foreign currency exchange rates, any of which could potentially adversely affect Dell's operations. Further, as Dell
generates cash flow in non-U.S. jurisdictions, Dell may experience difficulty transferring such funds to the U.S. in a tax efficient manner.
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