Dell 2006 Annual Report Download - page 38

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Table of Contents
classification from other current liabilities for the short-term portion of outstanding advances under the DFS Credit Facilities for the periods from
the third quarter of Fiscal 2004 through Fiscal 2007.
(b) The restated amounts for long-term debt reflect (1) adjustments to record changes in the fair value of the debt where the interest rate is hedged
with interest rate swap agreements for all periods restated and (2) a correction in classification from other current liabilities of the long-term
portion of outstanding advances under the DFS Credit Facilities for the periods from the third quarter of Fiscal 2004 through Fiscal 2007.
(c) The adjustments relating to fiscal years prior to Fiscal 2003 are reflected in beginning retained earnings. The cumulative impact of these
adjusting entries increased beginning retained earnings by $59 million, net of tax.
(d) The cash flows have been revised to reflect a closer approximation of the weighted-average exchange rates during the reporting periods. For
most periods, this revision reduced the previously reported effect of exchange rate changes on cash and cash equivalents with an offsetting
change in effects of exchange rate changes on monetary assets and liabilities denominated in foreign currencies and changes in operating
working capital included in cash flows from operating activities.
Fiscal 2003 Restatement Adjustments to Previously Reported Net Income
The following table presents the impact of the restatement on our previously reported net income for each quarter of Fiscal
2003:
First Second Third Fourth Fiscal
Quarter Quarter Quarter Quarter Year
May 3, August 2, November 1, January 30, January 30,
Fiscal 2003 (As Restated) 2002 2002 2002 2003 2003
(in millions)
Net income as reported $ 457 $ 501 $ 561 $ 603 $ 2,122
Revenue recognition:
Software sales 1 (1) (1) (4) (5)
Other revenue recognition(a) 12 20 15 (85) (38)
Revenue recognition 13 19 14 (89) (43)
Warranty liabilities 10 13 21 54 98
Restructuring reserves (37) (12) (17) (28) (94)
Other reserves and accruals(b) (63) (19) (30) 31 (81)
(Provision) benefit for income taxes 21 (1) 1 8 29
Net impact of adjustments (56) — (11) (24) (91)
Net income as restated $ 401 $ 501 $ 550 $ 579 $ 2,031
(a) Other revenue recognition primarily includes adjustments to the recognition of deferred warranty revenue associated with the sale of extended
warranties and enhanced service level agreements. See Note 2 of Notes to Consolidated Financial Statements included in "Part II — Item 8 —
Financial Statements and Supplementary Data" for additional details.
(b) Other reserves and accruals primarily include adjustments in the recognition of the benefit of certain vendor funding arrangements, and
adjustments to the lease accruals for certain Dell facilities. See Note 2 of Notes to Consolidated Financial Statements included in "Part II — Item
8 — Financial Statements and Supplementary Data" for additional details.
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