Dell 2002 Annual Report Download - page 10

Table of Contents
Dell's net revenue was attributable to international sales. Dell has recently established technical and customer support and related operations in India and
intends to continue such efforts in other regions throughout the world. 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 9 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 current worldwide economic
climate does not improve, or continues to deteriorate, customers or potential customers could reduce or delay their technology investments. As a result,
Dell's net revenue and earnings could be negatively affected.
• Armed hostilities, terrorism or public health issues could have a material adverse effect on Dell's business. Armed hostilities, terrorism or public health
issues, whether in the U.S. or abroad, could cause damage or disruption to Dell, its suppliers or customers, or could create political or economic instability,
any of which could have a material adverse effect on Dell's business. Although it is impossible to predict the consequences of any such events, such events
could result in a decrease in demand for Dell's products, could make it difficult or impossible for Dell to deliver products or for its suppliers to deliver
components and could create delay and inefficiencies in Dell's supply chain.
• 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 in
the U.S. and abroad 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 34% of Dell's net revenue in fiscal 2003. 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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