The following table illustrates the effect on net income and 
earnings per share for each of the past three fiscal years as 
if Dell had applied the fair value recognition provisions of 
SFAS No. 123 to stock-based employee compensation: 
                            
    Fiscal Year Ended  
       
                   January 28,    January 30,    January 31,  
                         2005           2004           2003  
                 
    (in millions, except per share amounts)  
Net income — as reported    $ 3,043     $ 2,645     $ 2,122   

Deduct: Total stock-based employee compensation determined 
under fair value method for all awards, net of related tax 
effects                      (812 )      (829 )      (723 ) 
                    
Net income — pro forma    $ 2,231     $ 1,816     $ 1,399   
                    
Earnings per common share:                          
  Basic — as reported     $ 1.21      $ 1.03      $ 0.82   
  Basic — pro forma       $ 0.89      $ 0.71      $ 0.54   
  Diluted — as reported   $ 1.18      $ 1.01      $ 0.80   
  Diluted — pro forma     $ 0.88      $ 0.68      $ 0.51   

Under the Black-Scholes option pricing model, the weighted 
average fair value of stock options at date of grant was 
$10.72, $10.25, and $11.41 per option for options granted 
during fiscal 2005, 2004, and 2003, respectively.