-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, T0j1CbVl6+OR8ONGEyA6wMbAUuuTRM07gS1WHC/Jh2hnBJdCPmOZrgaBFG2orzjD oknQPBdWE9Jjox6nWpgIRQ== 0001157523-07-005742.txt : 20070531 0001157523-07-005742.hdr.sgml : 20070531 20070531160214 ACCESSION NUMBER: 0001157523-07-005742 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070531 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070531 DATE AS OF CHANGE: 20070531 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DELL INC CENTRAL INDEX KEY: 0000826083 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPUTERS [3571] IRS NUMBER: 742487834 STATE OF INCORPORATION: DE FISCAL YEAR END: 0129 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-17017 FILM NUMBER: 07890962 BUSINESS ADDRESS: STREET 1: ONE DELL WAY STREET 2: STED CITY: ROUND ROCK STATE: TX ZIP: 78682-2244 BUSINESS PHONE: 5127284737 MAIL ADDRESS: STREET 1: ONE DELL WAY CITY: ROUND ROCK STATE: TX ZIP: 78682 FORMER COMPANY: FORMER CONFORMED NAME: DELL COMPUTER CORP DATE OF NAME CHANGE: 19920703 8-K 1 a5415809.txt DELL INC. 8-K ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 ------- Date of Report (Date of earliest event reported): May 31, 2007 ------- Dell Inc. (Exact name of registrant as specified in its charter) Delaware 0-17017 74-2487834 (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.) One Dell Way, Round Rock, Texas 78682 (Address of principal executive offices) (zip code) Registrant's telephone number, including area code: (512) 338-4400 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ Item 2.02 Results of Operations and Financial Condition. On May 31, 2007, Dell Inc. issued a press release announcing its preliminary financial results for its fiscal quarter ended May 4, 2007. A copy of the press release is furnished as Exhibit 99.1 to this report. Item 8.01 Other Events. Dell is involved in various claims, suits, investigations and legal proceedings that arise from time to time in the ordinary course of its business. As required by Statement of Financial Accounting Standards No. 5, "Accounting for Contingencies," the company accrues a liability when management believes that it is both probable that a liability has been incurred and the company can reasonably estimate the amount of the loss. Management believes that the company appropriately accrues for all such matters. The following is a discussion of significant legal matters involving the company. Investigations and Related Litigation In August 2005, the U.S. Securities and Exchange Commission ("SEC") initiated an investigation into certain accounting and financial reporting matters at Dell. In August 2006, because of potential issues identified in the course of responding to the SEC's requests for information, the company's Audit Committee, on the recommendation of management, initiated an independent investigation. The current status of that independent investigation is described in the press release issued by Dell on May 31 and attached as Exhibit 99.1 to this report under the heading "Investigation Update" (which section of the press release is incorporated into this Item 8.01 by reference). Due to questions raised in connection with these ongoing investigations, Dell has not filed its Annual Report on Form 10-K for the fiscal year ended February 2, 2007, and its Quarterly Reports on Form 10-Q for the periods ended August 4, 2006 and November 3, 2006. The SEC 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 the company's financial reporting from 2002 to the present. Management is cooperating with the SEC, the SDNY and the Audit Committee, and the company is committed to resolving the issues raised in connection with the investigations and regaining compliance with all SEC filing requirements as soon as possible. The company and various current and former directors and officers of the company are parties to securities, ERISA, and shareholder derivative lawsuits all arising out of the same events and facts. Four putative securities class actions that were filed in the Western District of Texas, Austin Division, against the company and certain current and former officers have been consolidated, and a lead plaintiff has been appointed by the court. The lead plaintiff has asserted claims under sections 10(b), 20(a), and 20A of the Securities Exchange Act of 1934 based on alleged false and misleading disclosures or omissions regarding Dell's financial statements, governmental investigations, known battery problems, business model, and insiders' sales of company securities. This action also includes the company's independent auditor, PricewaterhouseCoopers, as a defendant. Four other putative class actions that were also filed in the Western District by purported participants in the Dell Inc. 401(k) Plan have been consolidated, and lead plaintiffs have been appointed by the court. The lead plaintiffs have asserted that a temporary decline in the price of Dell stock gives rise to claims under ERISA based on allegations that the company, certain current officers, and certain current and former directors imprudently invested, managed, or disclosed information regarding Dell stock held in the 401(k) plan. In addition, the seven outstanding shareholder derivative lawsuits that had been filed in three separate jurisdictions (the Western District of Texas, Austin Division; the Delaware Chancery Court; and the state district court in Travis County, Texas) have been consolidated into three actions, one in each of the respective jurisdictions, and name various current and former officers and directors as defendants and Dell Inc. as a nominal defendant. The shareholder derivative lawsuits allege claims derivatively on behalf of Dell under state law, including breaches of fiduciary duties. Finally, one purported shareholder has filed an action against the company in Delaware Chancery Court under 8 Del. ss. 220, seeking inspection of certain of the company's books and records related to the internal investigation and government investigations. Dell intends to defend all of these lawsuits vigorously. 2 Other Litigation The following is a description of other significant legal matters in which Dell is involved: Copyright Levies -- Proceedings against the IT industry in Germany seek to impose levies on equipment, such as personal computers, multifunction devices, and printers that facilitate making private copies of copyrighted materials. The total levies due, if imposed, would be based on the number of products sold and the per-product amounts of the levies, which vary. Dell, other companies, and various industry associations are opposing these levies and instead are advocating compensation to rights holders through digital rights management systems. There are currently three levies cases involving other companies pending before the German Federal Supreme Court. Adverse decisions in these cases could ultimately impact Dell. The cases involve personal computers, printers, and multifunctional devices. The amount claimed with respect to personal computers is (euro) 12 per personal computer sold. The amounts claimed with respect to printers and multifunctional devices depend on speed and color and vary between (euro) 10 and (euro) 300 for printers and between (euro) 38 and (euro) 600 for multifunctional devices. The equipment manufacturers in these cases recently lost in the lower courts, and have appealed. A decision by the Federal Supreme Court is not expected to be issued before 2008. In January 2006, Zentralstelle Fur Uberspielungrechte ("ZPU"), a joint association of various German collection societies, instituted arbitration proceedings against Dell GmbH before the Arbitration Body in Munich. ZPU claims a levy of (euro) 18.4 per personal computer that Dell sold in Germany from January 1, 2002 through December 31, 2005. The Arbitration Body is expected to issue its decision by September 2007. Dell intends to defend this claim vigorously. Lucent v. Dell -- In February 2003, Lucent Technologies, Inc. filed a lawsuit against Dell Inc. in the United States District Court for Delaware, and the lawsuit was subsequently transferred to the United States District Court for the Southern District of California. The lawsuit alleges that Dell infringed 12 patents owned by Lucent and seeks monetary damages and injunctive relief. In April 2003, Microsoft Corporation filed a declaratory judgment action against Lucent in the United States District Court for the Southern District of California, asserting that Microsoft products do not infringe patents held by Lucent, including 10 of the 12 patents at issue in the lawsuit involving Dell and Microsoft. These actions were consolidated for discovery purposes with a previous suit that Lucent filed against Gateway Inc. In September 2005, the Court granted a summary judgment of invalidity with respect to one of the Lucent patents asserted against Dell. In addition, in decisions made through May 2007, the Court granted summary judgment of non-infringement with respect to five more of the Lucent patents asserted against Dell. The Court has delayed the current trial schedule and ordered invalidity briefing with regard to other patents at issue in view of the April 30, 2007, U.S. Supreme Court decision in KSR v. Teleflex. Fact and expert discovery has closed, and the three actions have been consolidated into five separate trials, in which a different group of patents will be tried by each jury. Dell is defending these claims vigorously. Separately, Dell has filed a lawsuit against Lucent in the United District Court for the Eastern District of Texas, alleging that Lucent infringes two patents owned by Dell and seeks monetary damages and injunctive relief. That litigation is pending and discovery is proceeding. Dell is involved in various other claims, suits, investigations and legal proceedings that arise from time to time in the ordinary course of its business. Although the company does not expect that the outcome in any of these other legal proceedings, individually or collectively, will have a material adverse effect on Dell's financial condition, litigation is inherently unpredictable. Therefore, the company could in the future incur judgments or enter into settlements of claims that could adversely affect our operating results or cash flows in a particular period. 3 Additional Risk Factors In addition to the risk factors described under Part I - "Item 1A - Risk Factors" in Dell's Annual Report on Form 10-K for the fiscal year ended February 3, 2006, the following factors could adversely affect Dell's business, its results of operations or financial condition: o Possible outcomes of the ongoing investigations into certain accounting and financial reporting matters include a determination that restatement of prior period financial statements is required, a conclusion that there is a material weakness in the company's internal controls over financial reporting, and a determination that disclosure controls and procedures are not effective. As described above under "Investigations and Related Litigation," the investigations are ongoing, and no such determinations or conclusions have been made. o Litigation and governmental investigations or proceedings arising out of or related to accounting and financial reporting matters, or any restatement of Dell's financial statements, could result in substantial costs. Because Dell has not completed its required filings with the SEC, Dell may be prevented from completing other required government regulatory filings, and could incur substantial costs to defend legal actions, or be required to pay damages. See the claims, suits, investigations and legal proceedings described above under "Investigations and Related Litigation." Dell could face additional litigation depending upon the conclusions of the investigations into certain accounting and financial reporting matters. Item 9.01 Financial Statements and Exhibits. (d) Exhibits. Exhibit 99.1 -- Press Release issued by Dell Inc., dated May 31, 2007. 4 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. DELL INC. Date: May 31, 2007 By: /s/ Thomas H. Welch, Jr. --------------------------------------- Thomas H. Welch, Jr. Vice President and Assistant Secretary 5 EXHIBIT INDEX Exhibit No. Description of Exhibit --- ---------------------- 99.1 Press Release issued by Dell Inc., dated May 31, 2007. 6 EX-99.1 2 a5415809-ex991.txt EXHIBIT 99.1 EXHIBIT 99.1 Dell Reports Preliminary Revenue of $14.6 Billion; Preliminary Earnings Per Share of $0.34 Company Transformation to Develop, Deliver Long-Term Technology Solutions for Customers Under Way ROUND ROCK, Texas--(BUSINESS WIRE)--May 31, 2007--Dell (NASDAQ:DELL) reported preliminary results for the first quarter of fiscal year 2008, with revenue of $14.6 billion, operating income of $947 million and earnings per share of $0.34. In the quarter, gross and operating income margins were positively affected by a favorable decline in component costs. In addition, a focus on more richly configured customer solutions and a better mix of products and services yielded significantly higher average selling prices and a better balance of profitability and revenue growth. In the quarter, the company incurred approximately $46 million, or $0.02 per share, in costs associated with the ongoing investigations into certain accounting and financial reporting matters. "Our strategic intent is to simplify information technology for our customers by removing cost and complexity," said Chairman and CEO Michael Dell. "No other company is as well positioned to unlock value for our customers - empowering them to implement simpler and smarter technology solutions." End-to-End Transformation Dell's first-quarter performance demonstrates early progress the company is making in its systematic effort to restore competitiveness to the core business, re-ignite growth, and build solutions critical to customer needs. As part of this transformation, over the past two quarters Dell has: -- Restructured the senior leadership team to enhance accountability, bring clarity to the company's transformation strategy and move decision-making closer to the customer. -- Improved customer satisfaction ratings through increased investment in technical support resources like Dell Support Center and DellConnect. These investments helped the company achieve a 66 percent decrease in the number of times customers are transferred before their issue or question is resolved. -- Strengthened the foundation for renewed growth in established and emerging regions through innovative products tailored to specific customer needs such as the EC280 system introduced for China, and new manufacturing and development facilities in high-growth regions like Brazil. -- Globalized the services business around a strategy of embedding supportability and serviceability into hardware, simplifying and standardizing service options and delivery, and enhancing remote monitoring and resolution capability to minimize IT infrastructure costs for customers. -- Initiated a comprehensive review of costs across all processes and organizations from product development and procurement through service and support delivery with the goal to simplify structure, eliminate redundancies and better align operating expenses with the current business environment and strategic growth opportunities. As a part of this overall effort, Dell will reduce headcount by approximately 10 percent over the next 12 months. The reductions will vary across geographic regions, customer segments, and functions, and will reflect business considerations as well as local legal requirements. "While reductions in headcount are always difficult for a company, we know these actions are critical to our ability to deliver unprecedented value to our customers now and in the future," Mr. Dell said. Higher Average Selling Prices Contribute to Better Revenue The company took deliberate actions to concentrate on solutions sales, realign pricing and drive a better mix of products and services in the quarter. While these actions slowed overall unit growth, a 14 percent year-on-year improvement in average selling prices contributed to improved gross margins, revenue growth of three percent and operating margins of 6.5 percent. Cash and marketable securities were down $200 million sequentially to $12.3 billion, driven largely by a reduction in accounts payables levels and a more linear level of business activity in the quarter. Going forward, the company believes its ability to generate cash flow on an annual basis will continue to be strong. Focus on More Richly Configured Customer Solutions Drives Growth in Enterprise In the first quarter, server revenue led the enterprise with growth of 19 percent year on year to $1.6 billion. For Q1, Dell was again No. 1 in the United States in units shipped at 33.3 percent. Storage revenues were up 13 percent year on year to $0.5 billion. Revenue from mobility products increased seven percent to $4.0 billion while desktop revenues of $4.9 billion were down six percent year on year. Enhanced services delivered $1.3 billion in revenues and software and peripherals revenue increased six percent year on year to $2.3 billion. In both products and services, Dell will introduce new standards-based technologies, while reducing the complexity and cost involved in implementing solutions and maintaining a secure and stable infrastructure. Dell is demonstrating its renewed focus through initiatives like the recently formed Dell Data Center Solutions Division, which is delivering Dell's Cloud Computing service and design model that allows customers to optimize their IT infrastructure based on their specific needs. Dell is also committed to delivering innovative solutions and design to the client space by shortening product refresh cycles and delivering robust systems with the latest technologies and leading-edge industrial design. For example, the company was one of the first to introduce flash-based, solid state drives (SSD) to its portfolio as an alternative to hard disk drives on corporate notebooks. SSDs, which have no moving parts, bring a new level of reliability, performance and noise reduction to customers seeking the best in mobility performance. Company Outlook While progress in the first quarter was encouraging, the company is focused on transformational efforts aimed at IT simplification that are designed to yield more robust and targeted customer solutions, superior customer experience, and expanded growth opportunities in the coming years. These efforts may cause short-term fluctuations in operating performance, but the company believes they will produce a more optimal and sustainable balance of growth, profitability and liquidity in the long-term, driving sustainable returns for shareholders. In the second quarter, operating margins will be under pressure sequentially as the company enters the seasonally slower quarter with elevated operating expenses and additional costs related to the ongoing investigations. In addition, results for the year could be affected by additional transformational actions, changing competitive dynamics, a more aggressive pricing environment and higher component costs in the second half of the year. Investigation Update As previously announced, the Audit Committee of the company's Board of Directors is conducting an independent investigation into certain accounting and financial reporting matters. As a part of the final phases of the investigation, the Audit Committee is in the process of reviewing each of the identified accounting errors and the proposed correcting adjustments. Upon completion of that review, the Audit Committee will evaluate the impact and nature of the errors to determine whether a restatement of any previously issued financial statements will be required. To date, the Audit Committee has not determined whether any restatements will be required, or whether any identified control deficiencies constitute material weaknesses. "We are continuing to move toward the conclusion of our investigation," said Thomas W. Luce III, chairman of the Audit Committee. "We are working closely with management and our independent auditors to assess the accounting errors and control deficiencies that have been identified, and have met and will be meeting further, with the SEC to provide updates on the status of the investigation. Although this process has taken us longer than we would have liked, it is important to commit the time and resources required to ensure a thorough and comprehensive review and resolution of all identified issues and the implementation of appropriate remedial measures." Management continues to be committed to resolving the issues raised in connection with the investigation, and regaining compliance with all SEC filing requirements and all NASDAQ listing requirements, as soon as possible. Additional information about the investigations, as well as information about related private litigation, can be found in the Current Report on Form 8-K filed with the SEC concurrent with the issuance of this press release. Preliminary Results Subject to Change Due to the questions raised in connection with the Audit Committee investigation, the company has not filed the Form 10-Q for the second quarter of fiscal 2007 (ended August 4, 2006), the Form 10-Q for the third quarter of fiscal 2007 (ended November 3, 2006), or the Form 10-K for fiscal 2007 (ended February 2, 2007). As a result, all financial results described in this press release, as well as the previously announced financial results for the second, third and fourth quarters of fiscal 2007, should be considered preliminary, and are subject to change to reflect any necessary corrections or adjustments, or changes in accounting estimates, that are identified prior to the time the company is in a position to complete these filings. In addition, the preliminary results for the second, third and fourth quarters of fiscal 2007 and the first quarter of fiscal 2008 could be affected by any restatements of prior period financial statements that are required as a result of any conclusions reached by the investigations. As stated above, no determination has been made as to whether restatements of prior period financial statements will be required. The company is not currently able to predict the extent or significance of any such changes, and those changes could materially affect the preliminary results reported herein, as well as the previously announced results for the second, third and fourth quarters of fiscal 2007. The company is working diligently to file the quarterly reports for the second and third quarters of fiscal 2007, as well as the annual report for fiscal 2007, as soon as possible. NASDAQ Listing Update On May 4, 2007, the company submitted information regarding the status and certain preliminary results of the Audit Committee investigation to the NASDAQ Listing and Hearing Review Council, and requested the Council to extend the company's conditional listing while it works to regain compliance with NASDAQ's listing requirements. Annual Meeting Update Due to the delay in filing the annual report on Form 10-K for fiscal 2007, the company has decided to reschedule its annual meeting for stockholders, which was originally scheduled for July 20. Details for the meeting will be announced publicly as soon as they are available and will be distributed to stockholders in the notice of meeting included in the proxy materials. About Dell Dell Inc. (NASDAQ:DELL) listens to customers and delivers innovative technology and services they trust and value. Uniquely enabled by its direct business model, Dell is a leading global systems and services company and No. 34 on the Fortune 500. For more information, visit www.dell.com, or to communicate directly with Dell via a variety of online channels, go to www.dell.com/conversations. To get Dell news direct, visit www.dell.com/RSS. Special Note Statements in this press release that relate to future results and events (including statements about Dell's preliminary and expected future financial and operating performance) are forward-looking statements based on Dell's current expectations. Actual results may differ materially from those estimated in these forward-looking statements because of a number of risks and uncertainties, including: general economic, business and industry conditions; the level and intensity of competition in the technology industry and the pricing pressures that have resulted; the outcome of the ongoing investigations into certain accounting and financial reporting matters that could result in management's determination that restatements of the company's prior period financial statements are required, or management's conclusion that there is a material weakness in the company's internal controls over financial reporting and that disclosure controls and procedures are not effective; Dell's failure to meet NASDAQ requirements for continued listing as a result of its delinquent periodic report filings; litigation and governmental investigations or proceedings arising out of or related to accounting and financial reporting matters, or any restatement of Dell's financial statements; local economic and labor conditions, political instability, unexpected regulatory changes, trade protection measures, tax laws, copyright levies and fluctuations in foreign currency exchange rates; the ability to accurately predict product, customer and geographic sales mix; the ability to timely and effectively manage periodic product transitions; reliance on third-party suppliers for product components, including dependence on several single-source supplier relationships; the ability to effectively manage operating costs; the ability to attract and retain qualified personnel; the level of demand for the products and services Dell offers; the ability to manage inventory levels to minimize excess inventory, declining inventory values and obsolescence; and the effect of armed hostilities, terrorism, natural disasters and public health issues on the economy generally, on the level of demand for Dell's products and services and on Dell's ability to manage its supply and delivery logistics in such an environment. Additional discussion of these and other factors affecting Dell's business and prospects is contained in Dell's periodic filings with the Securities and Exchange Commission. DELL INC. Condensed Consolidated Statement of Income and Related Financial Highlights - PRELIMINARY (see Note) (in millions, except per share data or as otherwise noted) (unaudited) Three Months Ended May 4, 2007 ------------------ Net revenue $14,622 Cost of revenue 11,777 ------------------ Gross margin 2,845 Total operating expenses 1,898 ------------------ Operating income 947 Investment and other income, net 82 ------------------ Income before income taxes 1,029 Income tax provision 270 ------------------ Net income $759 ================== Earnings per common share: Basic $0.34 ================== Diluted $0.34 ================== Weighted average shares outstanding: Basic 2,234 Diluted 2,254 Percentage of Total Net Revenue: - --------------------------------------------------- Gross margin 19.5% Operating expenses 13.0% Operating income 6.5% Income before income taxes 7.0% Net income 5.2% Income tax rate 26.3% Net Revenue by Geographic Region (in billions): - --------------------------------------------------- Americas $8.9 Europe 3.7 Asia Pacific - Japan 2.0 Percentage of Total Net Revenue: - --------------------------------------------------- Americas 61% Europe 26% Asia Pacific - Japan 13% Net Revenue by Product Category (in billions): - --------------------------------------------------- Desktop PCs $4.9 Mobility 4.0 Servers and Networking 1.6 Storage 0.5 Enhanced Services 1.3 Software and Peripherals 2.3 Percentage of Total Net Revenue: - --------------------------------------------------- Desktop PCs 33% Mobility 27% Servers and Networking 11% Storage 4% Enhanced Services 9% Software and Peripherals 16% Note: These preliminary results are subject to change to reflect any necessary corrections or adjustments, or changes in accounting estimates, that are identified prior to the time Dell's financial statements for the second, third and fourth quarters of fiscal 2007 and first quarter of fiscal 2008 are finalized. In addition, these preliminary results could be affected by any restatements of prior period financial statements that are required as a result of conclusions reached by the ongoing investigations concerning certain accounting and financial reporting matters being conducted by Dell's Audit Committee and the Securities and Exchange Commission. See "Investigation Update" and "Preliminary Results Subject to Change" in the accompanying press release. DELL INC. Financial Highlights -- Continued - PRELIMINARY (see Note) (unaudited) May 4, 2007 ---------- Other Information: - ----------------------------------------------------------- Regular headcount 82,800 Temporary headcount 5,300 ---------- Total (1) 88,100 Average total revenue/unit (approximate) $1,620 Cash and investments (in billions) $12.3 Commercial paper borrowings (in billions) $0.1 Note: These preliminary results are subject to change to reflect any necessary corrections or adjustments, or changes in accounting estimates, that are identified prior to the time Dell's financial statements for the second, third and fourth quarters of fiscal 2007 and first quarter of fiscal 2008 are finalized. In addition, these preliminary results could be affected by any restatements of prior period financial statements that are required as a result of conclusions reached by the ongoing investigations concerning certain accounting and financial reporting matters being conducted by Dell's Audit Committee and the Securities and Exchange Commission. See "Investigation Update" and "Preliminary Results Subject to Change" in the accompanying press release. (1) Previously only regular headcount was reported. CONTACT: Dell Inc., Round Rock Media Contacts: Bob Pearson, 512-728-3256 bob_pearson@dell.com or David Frink, 512-728-2678 david_frink@dell.com or Investor Contacts: Lynn A. Tyson, 512-723-1130 lynn_tyson@dell.com or Robert Williams, 512-728-7570 robert_williams@dell.com -----END PRIVACY-ENHANCED MESSAGE-----