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Though Dell has finished an internal investigation into its accounting practices, there are still plenty of questions about the company, which not long ago could do no wrong in the minds of investors and customers.
What we know now is that Dell's finance department was apparently willing to fudge numbers to ensure it would hit or surpass its quarterly earnings forecasts. The unit seems to have done that with the knowledge of, or sometimes at the request of, senior executives. And the guilty parties did it because Dell's accountin...
The department used "inappropriate accounting decisions and entries that appear to have been largely motivated to achieve desired accounting results," Carty said during the call with investors, apparently reading from a document filed with the Securities and Exchange Commission explaining the results of the company's i...
The SEC's separate investigation is still under way.
Dell felt so pressured to meet Wall Street expectations that its finance department bent accounting rules to make up for shortfalls in certain quarters and underreported earnings results in others, each time ensuring that Dell seemed to hit earnings targets that financial analysts were expecting. Carty didn't go into d...
So who knew about the financial shenanigans, and when? Carty said executives knew and even encouraged it, but he won't say exactly who those executives were, and is so far refusing to single anyone out for responsibility. "I'm not going to talk about any individual by name," Carty said. "We've taken what we believe to ...
More importantly, how did this happen at a company widely considered to be conservative and, above all, trustworthy? Dell's explanation is that not only did it not maintain a culture that emphasized strict adherence to GAAP rules, it didn't have enough employees with the proper accounting training or experience to know...
In addition, Dell says inadequate resources in its accounting department are partly to blame, and--in a remarkable acknowledgment for a company that pioneered selling computers on the Internet--that much of its accounting is done manually, with very few electronic trails.
Carty acknowledged that Dell is "underinvested in IT resource in the financial area." He also told investors "financial systems can't be blamed for irregularities, but they can occasionally be blamed for errors."
Dell's accounting department used "inappropriate accounting decisions and entries that appear to have been largely motivated to achieve desired accounting results."
It's not uncommon, of course, for companies to be motivated by short-term results. It's just surprising that Dell has become such an egregious example of that short-term thinking.
"I think every company that's public feels the pressure of being a public company and (hitting) quarterly numbers. I think that's why you see companies issuing quarterly guidance," said Brent Bracelin, a financial analyst with Pacific Crest Securities. "It certainly isn't a comforting feeling that they were manipulatin...
Overall, the financial impact to Dell's bottom line is limited. Between fiscal years 2003 and 2006, Dell's net income was more than $12 billion. The audit committee now says that the actual net income Dell earned during that period is $50 million to $150 million less. Earnings per share for that time frame will likely ...
But how, exactly, does something like this happen? A look at the Dell quarters in question (notably, a period when the company was being praised for strong profits while rival Hewlett-Packard was struggling to meet Wall Street expectations) may provide some answers.
In the first quarter of fiscal year 2003, Dell announced profits of $457 million, or 17 cents per share, on revenue of $8.1 billion for the quarter. Analysts had been expecting a profit of 16 cents per share and revenue of $7.86 billion, according to First Call.
According to the corrected information Dell released Thursday, the net income for that quarter should have been 10 percent lower, around $410 million. Against 2.67 billion outstanding shares that quarter, that would have been 15 cents a share, missing expectations.
In Dell's second quarter of fiscal 2004, the PC maker reported net income of $621 million, or 24 cents a share. Analysts had been expecting 24 cents a share. With the restatement, Dell should have earned $561 million, or 21 cents a share.
The fourth quarter of Dell's fiscal 2005 was an anomaly, as the company took a one-time charge of $280 million for repatriating foreign earnings after the passage of the American Jobs Creation Act. GAAP net income for that quarter was $667 million, or 26 cents a share. Without the charge, it was $947 million, or 37 cen...
After the restatement, Dell actually earned $620 million in GAAP net income, or $900 million without the charge, which would have been 35 cents a share.
The main problem was in the way Dell was keeping track of its reserve and accrued liability accounts, which is money set aside, for example, when the company sells a warranty on one of its computers. It's up to Dell to estimate how much will be necessary to set aside should someone call in a repair on their computer. T...
The problem with reserve accounts is that they're quite easily manipulated because there's no absolute rule on how much money to set aside, said Tracy Coenen, founder of forensic accountant firm Sequence.
"You can play games with it. It's one of those gray areas in accounting," she said.
To make sure this doesn't happen again, Dell says it is reorganizing its finance department. Accounting and financial reporting duties will be kept separate from the people responsible for planning and forecasting future quarters. The position of chief accounting officer has also been "strengthened" and will be respons...
But even news of numbers being manipulated may not hurt Dell all that much in the financial community. Some investors just seemed relieved that the company could move on from the investigation, which prevented Dell from filing any official earnings reports or giving any guidance about the state of its business for the ...
"The cumulative impact is not that meaningful, but I think that the main takeaway is that they're now ready to put this behind them," said Bracelin of Pacific Crest. "They're now in a position to fix some of the deficiencies they found, and from an analyst perspective, or an investor's perspective, people don't invest ...
Dell executives continue to cooperate with the government's probe, Carty said. But the biggest concern for Dell, which is dealing with shrinking market share, exploding laptop batteries and an increasing perception that its products are decidedly bland (despite a new effort to ), is how this will play out with customer...
"You don't want any questions," said Samir Bhavnani, an analyst with Current Analysis West. "They've been doing a bunch of things good to get back on their feet a bit and this is a pretty big speed bump. Hopefully they're able to get over it."
A new skin pack for Minecraft will be available for download starting this Friday October 19; some familiar fan favorites show their faces.
Portal, Half-Life, and Left 4 Dead skins will are just a few that will be included in the new skin pack. The full list is s Half-Life, Portal, Bit.trip, Gunstringer, Dishwasher: Dead Samurai, Left 4 Dead 2, Joe Danger, and Conker.
So, something for everyone. Check out the image and let us know what you think on Twitter.
NYC terror attack: Tourists flocking to the city for holiday fun not deterred.
The blast, in which four people, including the suspected bomber, were injured, turned the tourists’ attentions from amusement to variations of bemusement and anxiety.
NEW YORK — The men and women selling tickets for New York City bus tours looked forlorn Monday morning.
Instead of the Eighth Avenue blacktop in front of them being full of traffic and the sidewalks swirling with tourists, the only vehicles were dozens of fire engines, ambulances and police cars.
And tourists were distracted by what was happening a few blocks south: an explosion in a subway pathway below the Port Authority bus terminal in Manhattan's Midtown area.
The busiest season in the city had come to a temporary halt.
The blast, in which four people, including the suspected bomber, were injured, turned the tourists’ attentions from amusement to variations of bemusement — and anxiety.
Goettingen said he was impressed by the speed and extent of the law-enforcement response and that he continued to feel safe in the city.
The incident came at a time when New York, and the Times Square area in particular, is especially packed for the holiday season with hotels full of visitors taking in Broadway shows, visiting the huge Rockefeller Center Christmas tree and shopping in stores on Fifth Avenue and other thoroughfares.
Despite several terror-related incidents since the 9/11 attacks, tourism in the city has boomed in recent years: 60.5 million tourists flocked to the city in 2016, according to NYC & Company, the local visitors bureau. In 2010, the number was 48.8 million. In the same time span, estimated spending by tourists increased...
Monday's incident also happened less than six weeks after a motorist in a rented pickup drove down a lower Manhattan bike path, killing eight people — several of them tourists -— and wounding a dozen more before crashing into a school bus. The Islamic State claimed responsibility, and Sayfullo Saipov, a 29-year-old Uzb...
At present, the Department of Homeland Security’s National Terrorism Advisory System is at an Elevated (Yellow) level, according to its website, which means there is “a significant risk of terrorist attacks.” There are two higher levels – “Severe” and “High” – and two lower (“Guarded” and “Low”).
In New York and other places most likely to be targeted by terrorists, additional measures are taken, both by local and federal authorities. For example, the New York Police Department has its own Counterterrorism Bureau, which is “the city's primary local resource to guard against the threat of international and domes...
Not more than 10 minutes away from the site of the explosion, Bryant Park was filled with afternoon visitors stopping in at the pop-up shops, children riding the carousel and skating on the ice rink.
Sarah and Rich Conley, of Niskayuna in upstate New York, were heading to the city via train to see their daughter when they heard about the explosion. There was never a moment, they said, that they hesitated visiting.
"We see armed people, and it makes you think ... but we do feel better that there's people looking out for everyone," Sarah Conley said.
Rich Conley said the extra police presence made him feel secure. "New York City does seem to have this sense of preparedness, I mean they're ready for just about any situation," he said.
Betsy Bright, who was visiting from Nashville, was also unperturbed as she visited a few major tourist areas Monday.
"We went to see the Rockettes and after that we went to Grand Central Station, and now we're here at Bryant Park, and it's been a lovely day with no issues," Bright said. "I feel absolutely safe here with all the police officers."
When asked if the increased police presence and law enforcement with large guns made her feel anxious or uneasy, Bright said: "Those don't bother us either because we're from the South."
Members of the Critical Response Command were on the scene near the Port Authority Bus Terminal on Monday. Their presence, plus that of hundreds of personnel from other law-enforcement agencies, brought solace to visitor Mark O’Connell of Laredo, Texas.
“Wow, New York sure knows how to respond to something like this,” he said, adding that he was impressed by the professionalism of the personnel he had seen.
Meek Mill speaks on the matter.
Meek Mill wants to change the probation system.
Meek says Bobby has it wrong.
Bobby is leaving these matters to Meek and the like.
LONDON (Reuters) - The British government is renationalizing the rail route between London and Edinburgh, taking back the line from a private company after it over-estimated profits, in a step likely to reignite a debate over public ownership of the UK’s railways.
The government said on Wednesday it was scrapping the contract with London-listed Stagecoach STG.L five years early and would operate the line, which carries 22 million people annually, for 2-3 years before setting up a new public-private partnership.
It is the third time since 2007 that the 393-mile flagship route between the English and Scottish capitals has been returned to government hands after contracts failed, giving ammunition to the opposition Labour party which opposes privatization.
The Labour party has pledged to nationalize industries like rail and water, policies which have been popular in the polls, and which helped Labour deny the pro-privatization Conservatives a majority government at last year’s election.
Transport Minister Chris Grayling tried to appeal to both parties on Wednesday with a promise that after a spell under government control, he would set up a new “partnership between the public and private sectors” to run the line.
The franchising model, also part of the reason for delays on a contract in the London area, has come under fire recently with a cross-party parliamentary committee calling it “broken” in April.
Rail union Unite called for all rail lines to be nationalized.
“It would be best for the economy, the treasury and the hard-pressed rail traveler paying through the nose for their tickets, if ministers blew the whistle on rail privatization,” Unite rail industry officer Hugh Roberts said.
Rail services in Britain were privatized in the 1990s with routes grouped into franchises and operators contracted to run services for a set number of years, promising payments to the government at the same time as making profits for themselves.
Grayling had said late last year that the East Coast franchise run since 2015 by Stagecoach, which owns 90 percent alongside Virgin, would need to end early after lower than forecast passenger numbers led to losses of about 200 million pounds for Stagecoach.
“What’s gone wrong is that the parent company offered to pay government more money than it can actually afford, so it’s run out of cash, the business has run out of money,” Grayling told Sky News.
Grayling said that the scrapping of the contract did not mean that government had lost out, because East Coast had already delivered 1 billion pounds to the public purse, and continued to generate returns, plus passenger satisfaction was high.
The contract will end on June 24, Grayling said, adding that passengers would not be impacted by the ownership change.
Explaining the contract’s difficulties in February, Stagecoach said that some of its forecasts for growth on the line were based on enhancements expected to be carried out by state-backed rail infrastructure company Network Rail, but those actions had been either delayed or abandoned.
It said on Wednesday it hoped to continue to play a role in Britain’s rail network in the future, and continues to be involved in running other UK rail franchises including the West Coast line between London and Manchester.
The company’s shares traded up 1.8 percent after the news.
Grayling said he would review Stagecoach and Virgin’s right to operate rail services in Britain once the current East Coast contract was terminated.
The biggest mystery is why the retail and mobile giant has kept quiet for so long.
Amazon remains the only US internet giant in the Fortune 500 that has not yet released a report detailing how many demands for data it receives from the US government.
Although people are starting to notice, the retail and cloud giant has no public plans to address these concerns.
Word first spread last week when the ACLU's Christopher Soghoian, who's spent years publicly denouncing companies for poor privacy practices, told attendees at a Seattle town hall event that he's "hit a wall with Amazon," adding that it's "just really difficult to reach people there."
Almost every major internet company issues on a bi-annual basis a report of how many demands for data it receives from the US government (and others). In the wake of the PRISM surveillance scandal, where nine tech companies were accused of being complicit in NSA surveillance, the tech industry wanted more transparency....
So we got on the phone with Amazon to ask why it hasn't disclosed its figures yet.
After a brief exchange, spokesperson Ty Rogers did not return a request for comment. Bill Way, the company's associate general counsel for privacy, did not return an email asking for comment.
We reached out to nearly 30 people who are currently or formerly associated with the company. After two days of cold-emails, one person who declined to be named said they and others were "under confidentiality obligations" not to discuss such matters. We weren't getting anywhere.
Nicole Ozer, at the ACLU's Northern California branch, described Amazon's silence as "puzzling" in the wake of the NSA revelations.
"All the major tech companies, even the telcos, have issued transparency reports, and yet Amazon, which deals with so much sensitive customer data and a mountain of business data, hasn't released a transparency report," she said.
Indeed, Amazon remains one of the few internet-focused companies that has not (yet) been directly affected by the NSA revelations, which continues to threaten public trust in the US internet economy.
"The more consumer-facing companies were more obviously implicated by the NSA revelations, and they started to feel the pressure and the impact on their business," said Kate Westmoreland, a fellow at the Center for Internet and Society at Stanford Law School. "Where a company such as Google has experienced the pressure...
Amazon hasn't budged on its privacy stance in years. Because of its lack of clarity on how it handles data requests, Amazon has for the past four years running ranked as one of the lowest companies in the Electronic Frontier Foundation's (EFF) annual privacy reports.
"Amazon has a tremendous amount of user data, both from its direct retail businesses and from its hosting services through Amazon Web Services, but it fails to let users, and potential users, evaluate their policies and understand how law enforcement seeks to gain access to data stored with them," the privacy group wro...
A transparency report could give the company at least two more stars, putting Amazon on par with LinkedIn, security firm Lookout, Pinterest, privacy-focused cloud-firm Spideroak, and encrypted chat app maker Wickr, which all have four out of five stars.
Amazon is under no legal obligation to report its numbers, despite the fact that such reporting has now become an industry norm.
"Customers increasingly care about companies making ethical choices, and transparency reporting provides them with one more piece of the puzzle to aid them in making decisions about what services, tools, and products they use," said Jillian York, Director for International Freedom of Expression at the EFF.
So, why won't Amazon do it?
We don't know, and nobody wants to talk. It's been widely speculated before (though not necessarily naively) that the US government may have asked Amazon to hold back on reporting those figures.
Amazon struck a deal worth $600 million over ten years to provide its cloud computing prowess to the US intelligence community. The aim of the deal is to "avoid the intelligence gaps" that preceded the September 11 terrorist attacks.
But it doesn't add up. Microsoft has contracts with various governments to provide Windows and Office software. Google offers a range of open-source and cloud-based services to the government, and Apple provides iPhones and iPads to government and military users, thanks to earning various certifications.
The other big question is "now what?"
Amazon doesn't just provide retail services and cloud computing technology. With its smartphone and tablet line-up, the company is taking on even more data -- including browsing history through its Silk browser, reading habits, and other data like IP addresses. The company is slated to be moving into the enterprise and...
"I think companies certainly risk opening themselves up to more scrutiny by posting transparency figures, but they also provide customers or users with more information with which to make their decisions, which can certainly have positive result," said York.
If Amazon is getting into Microsoft and Google territory with the amount of data it has, it should be expected to be just as transparent. At very least, it should be held to the same standard by consumers.
whether he had any statement to make regarding the plan of the German Government to deport all Jews to Eastern Europe, and there to put them to death. Mr. Eden replied that the Govern- ment had, in fact, received reliable reports as to the barbarous treatment to which Jews were being subjected in occupied Europe, and t...
How far has this famous Declaration—the indictment it embodied, the threats which it announced, the dramatic approval with which it was supported by the House of Commons—either checked the German murder-plan or alleviated the lot of Jewish and other minorities in occupied Europe? The figures are not encouraging. The Po...

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