Dell 2000 Annual Report Download

Download and view the complete annual report

Please find the complete 2000 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 64

  • 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

DELL INC (4331)
10-K
Annual report pursuant to section 13 and 15(d)
Filed on 05/02/2001
Filed Period 02/02/2001

Table of contents

  • Page 1
    DELL INC (4331) 10-K Annual report pursuant to section 13 and 15(d) Filed on 05/02/2001 Filed Period 02/02/2001

  • Page 2
    ...120 days after the end of the fiscal year to which this Report relates. TABLE OF CONTENTS PART I ITEM 2 -- PROPERTIES PART II INDEX TO CONSOLIDATED FINANCIAL STATEMENTS REPORT OF INDEPENDENT ACCOUNTANTS CONSOLIDATED STATEMENT OF FINANCIAL POSITION DELL COMPUTER CORPORATION CONSOLIDATED STATEMENT OF...

  • Page 3
    ...." 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...

  • Page 4
    ... virtual account executive for its small business customers. And, for all domestic customers, the Company provides a spare-parts ordering system, and a virtual help desk featuring natural-language search capabilities and direct access to technical support data. Comprehensive Customer Relationships...

  • Page 5
    ... - Financial Statements and Supplementary Data." During fiscal year 2001, the Company opened new manufacturing facilities in Nashville, Tennessee and Xiamen, China. The Company also opened a call center in Nashville, Tennessee and additional office and research and development space in Austin, Texas...

  • Page 6
    ... products and services to these customers by advertising on the Internet and television, in trade and general business publications and by mailing a broad range of direct marketing publications, such as promotional pieces, catalogs and customer newsletters. The Company believes these customers value...

  • Page 7
    ... parts and labor, for all computer systems for a period ranging from one to three years. The Company offers additional warranties based upon the particular product offered and customer needs. The Company also provides free, telephone-based 24-hour technical support, as well as online technical...

  • Page 8
    ... use its direct model and build-to-order manufacturing process to deliver, on a timely and cost-effective basis, those emerging technologies that are most relevant to its customers. During fiscal year 2001, the Company incurred $482 million in research, development and engineering expenses, compared...

  • Page 9
    ... Rights" for information about intellectual property risks. Infrastructure Management Information Systems The Company's management information systems enable the Company to track each unit sold from the initial sales contact, through the manufacturing process to post-sale service and support. The...

  • Page 10
    ... driver of customer demand, is largely beyond the control of the Company. Inventory management/supplies The Company's direct business model gives it the ability to operate with reduced levels of component and finished goods inventories, and the Company's financial success in recent periods...

  • Page 11
    ... utilizes equity instrument contracts to execute repurchases of its common stock under its Board-authorized stock repurchase program. Some of these instruments and contracts may involve elements of market and credit risk in excess of the amounts recognized in the Consolidated Financial Statements...

  • Page 12
    ... related product development, manufacturing, sales, marketing and customer-service activities for the Company's Home and Small Business Group. Prior to joining the Company, Mr. Bell was with Bain & Company, where he was a management consultant for six years, including two years as a consultant for...

  • Page 13
    ... related product development, manufacturing, sales, marketing and customer-service activities for the Company's Home and Small Business Group. Prior to joining the Company, Mr. Parra held various sales and general management positions with GRiD Systems Corporation, including Regional Sales Director...

  • Page 14
    ... fourth quarter of fiscal year 2001. 15 Table of Contents PART II ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Market Information The Company's common stock is traded on The Nasdaq National Market under the symbol DELL. Information regarding the market prices of...

  • Page 15
    ...also offers software, peripherals and service and support programs. The Company is managed on a geographic basis. The three geographic segments are the Americas, Europe, and Asia-Pacific and Japan. The Company markets and sells its computer products and services under the Dell brand name directly to...

  • Page 16
    ...the management team was able to fully execute its business plan. Consequently, substantially all of Europe's fiscal 2001 year-over-year growth occurred in the fourth quarter; whereas revenue growth in the Americas slowed significantly as the overall United States economy and financial markets cooled...

  • Page 17
    ... to profitably grow market share in the current business climate. The decrease in gross margin as a percentage of consolidated net revenue in fiscal year 2000 over fiscal year 1999 was primarily attributable to increased component costs, in part due to a higher than expected cost increase for memory...

  • Page 18
    ... a special charge for purchased in-process research and development) in fiscal year 2000. The Company has a share repurchase program that it uses primarily to manage the dilution resulting from shares issued under the Company's employee stock plans. As of the end of the fiscal year 2001, the Company...

  • Page 19
    ... of Financial Position. For additional information regarding the Company's stock repurchase program, see Note 5 of Notes to Consolidated Financial Statements included in "Item 8 - Financial Statements and Supplementary Data" below. The Company utilized $482 million in cash during fiscal year 2001...

  • Page 20
    ... of the Company to manage its inventory levels to minimize excess inventory, declining inventory values and obsolescence; the product, customer and geographic sales mix of any particular period; the Company's ability to recover its investments in venture capital activities; and the Company's ability...

  • Page 21
    Schedule II - Valuation and Qualifying Accounts 51 All other schedules are omitted because they are not applicable. 25 Table of Contents REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Stockholders of Dell Computer Corporation In our opinion, the consolidated financial statements...

  • Page 22
    ... The accompanying notes are an integral part of these consolidated financial statements. 27 Table of Contents DELL COMPUTER CORPORATION CONSOLIDATED STATEMENT OF INCOME (in millions, except per share amounts) Fiscal Year Ended February 2, January 28, January 29, 2001 2000 1999 $ 31,888 $ 25,265...

  • Page 23
    ... Tax benefits of employee stock plans Special charges Gain on sale of investments Other Changes in: Operating working capital Non-current assets and liabilities Net cash provided by operating activities Cash flows from investing activities: Investments: Purchases Maturities and sales Capital...

  • Page 24
    ... FINANCIAL STATEMENTS NOTE 1 - Description of Business and Summary of Significant Accounting Policies Description of Business - Dell Computer Corporation, a Delaware corporation, and its consolidated subsidiaries (collectively referred to as the "Company") designs, develops, manufactures, markets...

  • Page 25
    ... as investments. Investments - The Company's debt securities and publicly traded equity securities are classified as available-for-sale and are reported at fair market value using the specific identification method. All other investments are recorded at cost. Unrealized gains and losses are reported...

  • Page 26
    ... costs are charged to expense as incurred. Advertising expenses for fiscal years 2001, 2000, and 1999 were $431 million, $325 million, and $199 million, respectively. Stock-Based Compensation - The Company applies the intrinsic value method in accounting for its stock option and stock purchase plans...

  • Page 27
    ... consolidated financial statements at cost, which approximates fair value because of the short-term maturity of these instruments. 34 Table of Contents Investments The following table summarizes by major security type the fair market value and cost of the Company's investments. February...

  • Page 28
    ...January 28, 2000. Financing Arrangements The Company maintains a $250 million revolving credit facility, which expires in June 2002. Commitment fees for this facility are payable quarterly and are based on specific liquidity requirements. Commitment fees paid in fiscal years 2001, 2000 and 1999 were...

  • Page 29
    ...: Fiscal Year Ended January 28, 2000 (in millions) $ 125 60 30 219 101 - 535 (303) (74) $ 158 $ February 2, 2001 Deferred tax assets: Deferred service contract income Inventory and warranty provisions Provisions for product returns and doubtful accounts Loss carryforwards Credit carryforwards...

  • Page 30
    ... Compensation Committee of the Board of Directors (subject to certain specified limits). In addition, the Dell Computer Corporation 1998 Broad-Based Stock Option Plan (the "Broad-Based Plan") provides for the award of nonqualified stock options to non-executive employees of the Company. Collectively...

  • Page 31
    ... the vesting period. Fair Value Disclosures - The weighted average fair value of stock options at date of grant was $20.98, $22.64, and $11.77 per option for options granted during fiscal years 2001, 2000, and 1999, respectively. Additionally, the weighted average fair value of the purchase rights...

  • Page 32
    ...of less than three years. Management believes that no significant concentration of credit risk for investments exists for the Company. The Company markets and sells its products and services to large corporate, government, healthcare and education customers, smallto-medium businesses and individuals...

  • Page 33
    ... Related Party Transactions During fiscal year 1998, the Company and Newcourt Credit Group Inc. ("Newcourt"), formed a joint venture, Dell Financial Services L.P. ("DFS"), to provide leasing and asset management services to the Company's customers. Subsequently, in fiscal 2000, Newcourt was acquired...

  • Page 34
    February 2, 2001 Supplemental Consolidated Statement of Income Information Research, development and engineering expenses: Research and development expenses Purchased research and development Engineering expenses Fiscal Year Ended January 28, 2000 (in millions) January 29, 1999 $ 363 - 119 482 ...

  • Page 35
    ...depreciation and amortization Identifiable assets General corporate assets Total assets $ 2,456 $ $ 82 $ $ 17,879 48 17,927 2,173 $ Europe 5,590 5 5,595 403 Fiscal Year 2000 Asia-Pacific and Japan Eliminations (in millions) $ 1,796 $ - 2 (55) $ $ 1,798 97 $ $ (55) - Consolidated $ 25,265 - 25,265...

  • Page 36
    ... worldwide service revenue. No single customer accounted for more than 10% of the Company's consolidated net revenue during fiscal years 2001, 2000, and 1999. NOTE 11 - Unaudited Quarterly Results The following tables contain selected unaudited Consolidated Statement of Income and stock sales price...

  • Page 37
    ... - Executive Officers of the Company," is incorporated by reference from the Company's definitive proxy statement, which will be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this Report relates. PART IV ITEM 14 - EXHIBITS, FINANCIAL...

  • Page 38
    ...years ended February 2, 2001 Notes to Consolidated Financial Statements 29 30 31 Financial Statement Schedules The following financial statement schedule is filed as a part of this Report under Schedule II on page 51: Schedule II - Valuation and Qualifying Accounts for the three fiscal years ended...

  • Page 39
    ... a management contract or compensatory plan or arrangement. †Filed herewith. Reports on Form 8-K None. 50 Table of Contents SCHEDULE II DELL COMPUTER CORPORATION VALUATION AND QUALIFYING ACCOUNTS Write-Offs Charged to Allowance $ $ $ 31 15 11 Fiscal Year 2001 2000 1999 Description Allowance...

  • Page 40
    ...Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. DELL COMPUTER CORPORATION By: /s/ MICHAEL S. DELL Michael S. Dell Chairman of the Board and Chief Executive Officer Date: May 2, 2001 Pursuant to the requirements of the...

  • Page 41
    ...) 10.1* - Dell Computer Corporation 1989 Stock Option Plan, as amended and restated (incorporated by reference to Exhibit 10.4 to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1993, Commission File No. 0-17017) 10.2* - Dell Computer Corporation 1993 Stock Option Plan...

  • Page 42
    ...to the Company's Report on Form 10-K for the fiscal year ended January 28, 2000, Commission File No. 0-17017) 21†- Subsidiaries of the Company 23†- Consent of PricewaterhouseCoopers LLP * Identifies Exhibit that consists of or includes a management contract or compensatory plan or arrangement...

  • Page 43
    ...Company Credits Account...3 (14) Compensation...4 (15) Compensation Deferrals...5 (16) Compensation Deferrals Account...5 (17) Directors...5 (18) Disability...5 (19) Effective Date...5 (20) Election Date...5 (21) Employee...6 (22) Employer or Participating Employer...6 (23) ERISA...6 (24) Investment...

  • Page 44
    ... of Compensation Deferrals Account...12 6.2 Vesting of Company Credits Account...12 6.3 Forfeitures...13 Article VII. In-Service Withdrawals and Loans...13 7.1 In-Service Withdrawals...13 7.2 Involuntary Distributions...14 7.3 No Loans...14 Article VIII. Plan Benefits...14 8.1 Plan Benefit...14...

  • Page 45
    ...'s Compensation Deferrals Account and Company Credits Account, if any. AFFILIATE: Each trade or business (whether or not incorporated), which together with Dell Computer Corporation would be deemed to be a "single employer" within the meaning of Code Section 414(b), (c), (m), or (o). BASE SALARY...

  • Page 46
    ... employee benefit plan (or related trust) of Dell Computer Corporation, such corporation resulting from such Business Combination, and Michael Dell) beneficially owns, directly or indirectly, 20% or more of the then outstanding shares of common stock of the corporation resulting from such Business...

  • Page 47
    ...and noncash fringe benefits; Moving expenses; Deferred compensation under any plan or program other than as specifically included in Section 1.1(i)(1)(vii); Welfare benefits; Employer contributions to or payments from this or any other deferred compensation program, whether such program is qualified...

  • Page 48
    ... is credited his Compensation Deferrals pursuant to Section 3.1, and which is credited with (or debited for) such account's allocation of net income (or net loss) as provided in Section 4.3. DIRECTORS: The Board of Directors of Dell Computer Corporation. DISABILITY: A physical or mental condition...

  • Page 49
    ...fund consisting of funds, investments and properties, if any, held pursuant to the provisions of the Trust Agreement, together with all income, profit, and increments thereto. TRUST AGREEMENT: The Dell Computer Corporation Deferred Compensation Trust, entered into between the Company and the Trustee...

  • Page 50
    ... the Election Date for Base Salary deferrals. If an Employee becomes initially eligible under the Plan following an Election Date, he may make an election to defer Base Salary for the remaining portion of the Plan Year by filing an election within the thirty (30) day period following the date of his...

  • Page 51
    ...(30)-day period following the date of his initial eligibility, and such election shall be irrevocable for such Bonus Year. Notwithstanding the preceding, an Employee who becomes initially eligible to participate in the Plan after the first day of the fourth quarter of the Company's fiscal year shall...

  • Page 52
    ... allocate earnings and losses to each Participant's Accounts according to the hypothetical investments made by a Participant pursuant to the terms of Article V. ALLOCATION OF NET INCOME OR LOSS AND CHANGES IN VALUE. (a) As of each Valuation Date, the Committee shall determine the fair market value...

  • Page 53
    ... special election procedures for Participants subject to Section 16 of such Act. A Participant's hypothetical investment selections pursuant to the immediately preceding paragraph shall be made solely for purposes of crediting earnings and/or losses to his Accounts under Section 4.3 of this Plan...

  • Page 54
    ...INVOLUNTARY DISTRIBUTIONS. Notwithstanding anything contained in the Plan to the contrary, if at any time any Participant is finally determined by the Internal Revenue Service or the U.S. Department of Labor not to qualify as a member of a select group of "management or highly compensated employees...

  • Page 55
    ... by the Internal Revenue Service or the U.S. Department of Labor which is no longer subject to administrative appeal within such agency. In addition, the Committee may, in its exclusive and sole discretion, cause the Plan to make a distribution to a Participant during a Plan Year in order to cause...

  • Page 56
    ... such Participant in a single lump sum cash payment as soon as administratively practicable after such Change of Control. Notwithstanding any provision of the Plan to the contrary, the Committee may, in its sole and absolute discretion, distribute a Participant's benefit in the form of a single lump...

  • Page 57
    ... the date such benefit became payable, such forfeited benefit shall be payable pursuant to the Plan provisions. ARTICLE IX. ADMINISTRATION OF PLAN 8.7 9.1 APPOINTMENT OF COMMITTEE. The general administration of the Plan shall be vested in the Committee, which shall be appointed by the Directors...

  • Page 58
    ... benefit under the Plan and to prescribe procedures to be followed by distributees in obtaining benefits hereunder; and To receive and review reports from the Trustee as to the financial condition of the Trust Fund, including its receipts and disbursements. (e) (f) (g) (h) (i) 9.5 CLAIMS REVIEW...

  • Page 59
    ... the Trust and enter into the Trust Agreement. Any such Trust, and any assets held by such Trust, to assist the Employers in meeting its obligations under the Plan shall be a "rabbi trust." The Employers may transfer money or other property to the Trustee, and the Trustee shall pay Plan benefits to...

  • Page 60
    ... receives a written allegation that the Company is insolvent, the Trustee shall suspend payments to the Participants and beneficiaries and hold the Trust Fund for the benefit of the Company's general creditors and shall determine within the period specified in the Trust Agreement, or, in the absence...

  • Page 61
    ...relations order" as defined in ERISA Section 206(d). WITHHOLDING. All Compensation Deferrals, Company Credits, and benefit payments provided for hereunder shall be subject to applicable withholding and other deductions as shall be required of the Company under any applicable local, state, or federal...

  • Page 62
    ...L.P. Dell Services Corporation Dell Services L.P. Dell USA Corporation Dell USA L.P. Dell Ventures Corporation Dell Ventures L.P. Dell World Trade L.P. Dellnet Limited EUROPE, MIDDLE EAST AND AFRICA Bracknell Boulevard Management Company Limited Dell Computer (FZE) Dell Computer (Italia) S.p.A. Dell...

  • Page 63
    ... OY Dell Computer AB Dell Computer Holdings (Europe) Investments C.V. ASIA-PACIFIC/JAPAN Dell Asia Pacific Sdn. Dell Computer (China) Co. Ltd. Dell Computer (Thailand) Co., Ltd. Dell Computer Asia Pte. Ltd. Dell Computer Asia, Limited Netherlands Ireland Ireland Finland Netherlands Malaysia China...

  • Page 64
    ... CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (Nos. 33-24621, 33-54577, 33-31812, 33-63273, 33-54583, 333-49014, 333-49016, 333-66415 and 333-58039) of Dell Computer Corporation of our report dated February 15, 2001...