<p> MEMORANDUM – DELL 12/01/05 by Stefan Eisner</p><p>Our Position</p><p>We bought 500 shares at $41.75 on December 10, 1999. The current price is $ 30.151, therefore resulting in a total loss is -$ 5,799.50 for a -27.78 % total return.</p><p>The Company </p><p>. Revenues last four quarters: $54,182m . Net Income last four quarters: $3,565m . Direct Business Model with custom-built products . Low Cost leader with standards-based technologies</p><p>Segmentation </p><p>S o f t w a r e & Segment - Revenues (million $) P e r i p he r al s , 15 % 30,000 27,652 E nhanc e d FY03 FY04 last 4Q S ervic es 9% 25,000 21,888 S to rage 3% 19,394 20,000 D e s kto p P C s S ervers 10% 37% 15,000 12,312</p><p>M o bility, 26% 10,000 7,896 8,495 6,715 6,912 6,322 5,653 4,346 3,445 5,000</p><p>- US Business US Consumer Europe Asia Pacific - Japan Valuation</p><p>Scenario bad normal good Desktop decrease flat slow growth Mobility "pricewar" normal growth rates still higher growth rates Other slow down normal level high level cost of revenue increase constant decrease S,G & Adm slightly increase average 05 and 06 decreasing DCF-Price 23.39 31.40 35.98 +10% 25.73 34.55 39.57 -10% 21.06 28.26 32.38 P/E based on EPS06 14.41 19.35 22.16</p><p>Recommendation: SELL</p><p>There is a high level of uncertainty about Dells future. Diversification of the product portfolio and further expansion outside the US must be successful to maintain a growth company, whereas the upside potential is limited and the DCF- value is only slightly above the share price. 2</p>