Rudedog and thread,
I do not believe that Dell buys call options. I have gone through the 1998 10-K carefully,
and find no mention of it. You will note, however that Dell sell's put options, and these
transactions are listed in several places. The following posts were extracted from the
1998 10-K and should be read by all shareholders:
DELL COMPUTER CORPORATION
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(IN MILLIONS)
ASSETS
FEBRUARY 1, FEBRUARY 2,
1998 1997
----------- -----------
Current assets:
Cash...................................................... $ 320 $ 115
Marketable securities..................................... 1,524 1,237
Accounts receivable, net.................................. 1,486 903
Inventories............................................... 233 251
Other..................................................... 349 241
------ ------
Total current assets.............................. 3,912 2,747
Property, plant and equipment, net.......................... 342 235
Other....................................................... 14 11
------ ------
Total assets...................................... $4,268 $2,993
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.......................................... $1,643 $1,040
Accrued and other......................................... 1,054 618
------ ------
Total current liabilities......................... 2,697 1,658
Long-term debt.............................................. 17 18
Deferred revenue on warranty contracts...................... 225 219
Other....................................................... 36 13
Commitments and contingent liabilities...................... -- --
------ ------
Total liabilities................................. 2,975 1,908
------ ------
Put options................................................. -- 279
------ ------
Stockholders' equity:
Preferred stock and capital in excess of $.01 par value;
shares issued and outstanding: none.................... -- --
Common stock and capital in excess of $.01 par value;
shares issued and outstanding: 644 and 692,
respectively........................................... 747 195
Retained earnings......................................... 607 647
Other..................................................... (61) (36)
------ ------
Total stockholders' equity........................ 1,293 806
------ ------
$4,268 $2,993
====== ======
The accompanying notes are an integral part of these consolidated financial
statements.
DELL COMPUTER CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(IN MILLIONS)
FISCAL YEAR ENDED
-----------------------------------------
FEBRUARY 1, FEBRUARY 2, JANUARY 28,
1998 1997 1996
----------- ----------- -----------
Net revenue............................................. $12,327 $7,759 $5,296
Cost of revenue......................................... 9,605 6,093 4,229
------- ------ ------
Gross margin.......................................... 2,722 1,666 1,067
------- ------ ------
Operating expenses:
Selling, general and administrative................... 1,202 826 595
Research, development and engineering................. 204 126 95
------- ------ ------
Total operating expenses...................... 1,406 952 690
------- ------ ------
Operating income.............................. 1,316 714 377
Financing and other..................................... 52 33 6
------- ------ ------
Income before income taxes and extraordinary loss..... 1,368 747 383
Provision for income taxes.............................. 424 216 111
------- ------ ------
Income before extraordinary loss...................... 944 531 272
Extraordinary loss, net of taxes........................ -- (13) --
------- ------ ------
Net income............................................ 944 518 272
Preferred stock dividends............................... -- -- (12)
------- ------ ------
Net income available to common stockholders............. $ 944 $ 518 $ 260
======= ====== ======
Basic earnings per common share (in whole dollars):
Income before extraordinary loss...................... $ 1.44 $ 0.75 $ 0.36
Extraordinary loss, net of taxes...................... -- (.02) --
------- ------ ------
Earnings per common share............................. $ 1.44 $ 0.73 $ 0.36
======= ====== ======
Diluted earnings per common share (in whole dollars):
Income before extraordinary loss...................... $ 1.28 $ 0.68 $ 0.33
Extraordinary loss, net of taxes...................... -- (.02) --
------- ------ ------
Earnings per common share............................. $ 1.28 $ 0.66 $ 0.33
======= ====== ======
Weighted average shares outstanding:
Basic................................................. 658 710 716
Diluted............................................... 738 782 790
The accompanying notes are an integral part of these consolidated financial
statements.
DELL COMPUTER CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(IN MILLIONS)
FISCAL YEAR ENDED
---------------------------------------
FEBRUARY 1, FEBRUARY 2, JANUARY 28,
1998 1997 1996
----------- ----------- -----------
Cash flows from operating activities:
Net income............................................... $ 944 $ 518 $ 272
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization....................... 67 47 38
Other............................................... 24 29 22
Changes in:
Operating working capital............................. 529 659 (195)
Non-current assets and liabilities.................... 28 109 38
-------- ------- -------
Net cash provided by operating activities........ 1,592 1,362 175
-------- ------- -------
Cash flows from investing activities:
Marketable securities:
Purchases............................................. (12,305) (9,538) (4,545)
Maturities and sales.................................. 12,017 8,891 4,442
Capital expenditures..................................... (187) (114) (101)
-------- ------- -------
Net cash used in investing activities............ (475) (761) (204)
-------- ------- -------
Cash flows from financing activities:
Purchase of common stock................................. (1,023) (495) --
Repurchase of 11% Senior Notes........................... -- (95) --
Issuance of common stock under employee plans............ 88 57 48
Cash received from sale of equity options................ 38 -- --
Preferred stock dividends and other...................... (1) -- (14)
-------- ------- -------
Net cash (used in) provided by financing
activities..................................... (898) (533) 34
-------- ------- -------
Effect of exchange rate changes on cash.................... (14) (8) 7
-------- ------- -------
Net increase in cash....................................... 205 60 12
Cash at beginning of period................................ 115 55 43
-------- ------- -------
Cash at end of period...................................... $ 320 $ 115 $ 55
======== ======= =======
DELL COMPUTER CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(IN MILLIONS)
PREFERRED STOCK
AND CAPITAL IN COMMON STOCK AND
EXCESS OF PAR CAPITAL IN EXCESS
VALUE OF PAR VALUE
---------------- ------------------ RETAINED
SHARES AMOUNT SHARES AMOUNT EARNINGS OTHER TOTAL
------ ------ ------- ------- -------- ----- -------
Balances at January 29, 1995.......... 1 $ 120 635 $ 242 $ 311 $(21) $ 652
Net income.......................... -- -- -- -- 272 -- 272
Stock issuance under employee plans,
including tax benefits........... -- -- 33 74 -- (17) 57
Preferred stock conversion.......... (1) (114) 80 114 -- -- --
Other............................... -- -- -- -- (13) 5 (8)
Balances at January 28, 1996.......... -- 6 748 430 570 (33) 973
Net income.......................... -- -- -- -- 518 -- 518
Stock issuance under employee plans,
including tax benefits........... -- -- 6 65 -- (18) 47
Purchase and retirement of 62
million shares................... -- -- (62) (22) (388) -- (410)
Purchase and reissuance of 19
million shares for employee plans
and preferred stock conversion... -- (6) -- -- (55) -- (61)
Reclassification of put options..... -- -- -- (279) -- -- (279)
Other............................... -- -- -- 1 2 15 18
Balances at February 2, 1997.......... -- -- 692 195 647 (36) 806
Net income.......................... -- -- -- -- 944 -- 944
Stock issuance under employee plans,
including tax benefits........... -- 21 274 -- (11) 263
Purchase and retirement of 69
million shares................... -- (69) (39) (984) -- (1,023)
Reclassification of put options..... -- -- -- 279 -- -- 279
Other............................... -- -- -- 38 -- (14) 24
Balances at February 1, 1998.......... -- $ -- 644 $ 747 $ 607 $(61) $ 1,293
-- More to come-- |
