Dell Will Restate

Dell said the largest percentage changes in quarterly net income and EPS are expected to be in the first quarter of fiscal 2003 and the second quarter of fiscal 2004, each with expected reductions of between 10% and 13%.

Dell's investigation raised questions relating to numerous accounting issues, most of which involved adjustments to various reserve and accrued liability accounts. The company said it found evidence that certain adjustments appear to have been motivated by "the objective of attaining financial targets."

According to the investigation, these activities typically occurred at the close of a quarter, Dell said. "The investigation found evidence that, in that timeframe, account balances were reviewed, sometimes at the request or with the knowledge of senior executives, with the goal of seeking adjustments so that quarterly performance objectives could be met."

"The investigation found that sometimes business unit personnel did not provide complete information to corporate headquarters and, in a number of instances, purposefully incorrect or incomplete information about these activities was provided to internal or external auditors."

Dell's audit committee investigation began as a result of concerns raised by documents and information discovered in the course of responding to requests from the Securities and Exchange Commission, which has an ongoing investigation in the matter.

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