Dell 2006 Annual Report Download - page 17

Table of Contents
APJ Properties
Description Principal Locations Owned (square feet) Leased (square feet)
Headquarters Singapore — 100,000
Business Centers(a)
• China — Dalian and Xiamen
• India — Bangalore, Gurgaon, Hyderabad and
Mohali
• Japan — Kawasaki
• Malaysia — Penang
• Philippines — Pasay
200,000 3.1 million
Manufacturing and
Distribution
• China — Xiamen
• Malaysia — Penang 1.0 million —
Design Centers
• China — Shanghai
• India — Bangalore
• Singapore
• Taiwan — Taipei
— 150,000
(a) Business center locations include facilities with capacity greater than 1,000 people. Operations within these centers include sales, technical
support, administrative, and support functions. Locations of smaller business centers are not listed; however, the smaller centers are included in
the square footage.
We currently have approximately 750,000 square feet of manufacturing and business center space under construction. The
manufacturing plants constructed in Hortolandia, Brazil, and Chennai, India opened in the first half of Fiscal 2008 and our
manufacturing plant in Lodz, Poland is expected to begin operations later this year. Our business centers located in Quezon
City, Philippines and Kuala Lumpur, Malaysia also opened in the first half of Fiscal 2008, while a second building in Ottawa,
Canada is expected to begin operations in Fiscal 2008. Additionally, we recently completed an expansion of a design center
in India.
In general, our Americas, EMEA, and APJ regions use properties within their geographies. However, business centers in the
Philippines and India, which house sales, customer care, technical support, and administrative support functions, are used
by each of our geographic regions.
ITEM 3 — LEGAL PROCEEDINGS
We are involved in various claims, suits, investigations, and legal proceedings that arise from time to time in the ordinary
course of our business. As required by Statement of Financial Accounting Standards No. 5, Accounting for Contingencies,
we accrue a liability when we believe that it is both probable that a liability has been incurred and we can reasonably
estimate the amount of the loss. The following is a discussion of our significant legal matters.
Investigations and Related Litigation
In August 2005, the U.S. Securities and Exchange Commission ("SEC") initiated an inquiry into certain of our accounting and
financial reporting matters and requested that we provide certain documents. The SEC expanded that inquiry in June 2006
and entered a formal order of investigation in October 2006. The SEC's requests for information were joined by a similar
request from the United States Attorney for the Southern District of New York ("SDNY"), who subpoenaed documents related
to our financial reporting from and after 2002. In August 2006, because of potential issues identified in the course of
responding to the SEC's requests for information, our Audit Committee, on the recommendation of management and in
consultation with PricewaterhouseCoopers LLP, initiated an independent investigation, which was recently completed. For
information regarding the Audit Committee's investigation, the accounting errors and irregularities identified, and the
restatement adjustments, see "Part II — Item 7 — Management's Discussion and Analysis of Financial Condition and
Results of Operations — Audit Committee Independent Investigation and Restatement" and Note 2 of Notes to Consolidated
Financial Statements included in "Part II — Item 8 — Financial Statements and Supplementary Data." For a description of
the control
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