SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                                    FORM 10-Q



              [X] Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934
                   For the Fiscal Quarter Ended April 30, 2000

                                       or

              [ ] Transition Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934
                         For the transition period from
                                                   to

                         Commission File Number: 0-13351


                                  NOVELL, INC.
             (Exact name of registrant as specified in its charter)

      Delaware                                              87-0393339
(State or other jurisdiction of                          (I.R.S. Employer
 incorporation or organization)                         Identification No.)


                             1800 South Novell Place
                                Provo, Utah 84606
              (Address of principal executive offices and zip code)

                                 (801) 861-7000
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days.

                                    YES X NO

As of May 31,  2000 there were  324,783,746  shares of the  Registrant's  Common
Stock outstanding.


<PAGE>


17




PART I.  FINANCIAL INFORMATION, ITEM 1.  FINANCIAL STATEMENTS


                                  NOVELL, INC.
                      CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<S>                                                                             <C>                   <C>

                                                                                      Apr. 30,              Oct. 31,
DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA                                    2000                  1999
-------------------------------------------------------------------------------------------------------------------
                                                                                  (Unaudited)
ASSETS
CURRENT ASSETS
   Cash and short-term investments                                                $   646,709          $    895,404
   Receivables, less allowances ($53,039 - April; $36,318 - October)                  239,202               284,510
   Inventories                                                                          3,591                 3,753
   Prepaid expenses                                                                    38,752                47,738
   Deferred and refundable income taxes                                                31,353                60,266
   OTHER CURRENT ASSETS                                                                37,182                43,945
-------------------------------------------------------------------------------------------------------------------

Total current assets                                                                  996,789             1,335,616

Property, plant and equipment, net                                                    341,912               347,012
Long-term investments                                                                 371,319               229,114
OTHER ASSETS                                                                           62,520                30,577
-------------------------------------------------------------------------------------------------------------------

Total assets                                                                       $1,772,540           $ 1,942,319
===================================================================================================================


LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
   Accounts payable                                                              $     73,933         $      85,037
   Accrued compensation                                                                59,097                62,778
   Accrued marketing liabilities                                                       11,369                11,449
   Other accrued liabilities                                                           48,742                50,133
   Income taxes payable                                                                 5,039                57,085
   DEFERRED REVENUE                                                                   168,201               173,150
-------------------------------------------------------------------------------------------------------------------

Total current liabilities                                                             366,381               439,632

Minority interests                                                                     12,008                10,446

SHAREHOLDERS' EQUITY
   Common stock, par value $.10 per share
   Authorized - 600,000,000 shares
   Issued -     324,546,665 shares-April
                326,593,911 shares-October                                             32,455                32,659
   Retained earnings                                                                1,355,986             1,432,624
   Accumulated other comprehensive income                                              15,331                35,189
   OTHER                                                                               (9,621)               (8,231)
-------------------------------------------------------------------------------------------------------------------

TOTAL SHAREHOLDERS' EQUITY                                                          1,394,151             1,492,241
-------------------------------------------------------------------------------------------------------------------

Total liabilities and shareholders' equity                                         $1,772,540           $ 1,942,319
===================================================================================================================
</TABLE>

See notes to consolidated unaudited condensed financial statements.


<PAGE>


                                  NOVELL, INC.
              CONSOLIDATED UNAUDITED CONDENSED STATEMENTS OF INCOME

<TABLE>
<S>                                                  <C>               <C>              <C>               <C>

                                                        FISCAL QUARTER ENDED                SIX MONTHS ENDED
Dollars in thousands,                                  Apr. 30,          Apr. 30,         Apr. 30,          Apr. 30,
EXCEPT PER SHARE DATA                                     2000              1999             2000             1999
------------------------------------------------------------------------------------------------------------------

Net sales                                            $ 302,349         $ 315,652        $ 618,392         $ 601,458
COST OF SALES                                           84,384            79,367          163,598           147,134
-------------------------------------------------------------------------------------------------------------------

Gross profit                                           217,965           236,285          454,794           454,324

OPERATING EXPENSES
   Sales and marketing                                 125,933           106,455          240,063           211,841
   Product development                                  61,360            59,682          120,037           115,286
   GENERAL AND ADMINISTRATIVE                           22,433            20,656           39,925            41,410
-------------------------------------------------------------------------------------------------------------------

TOTAL OPERATING EXPENSES                               209,726           186,793          400,025           368,537
-------------------------------------------------------------------------------------------------------------------

Income from operations                                   8,239            49,492           54,769            85,787

OTHER INCOME (EXPENSE)
   Investment income                                    37,020            10,653           54,578            20,416
   OTHER, NET                                           (2,175)           (6,358)          (3,992)          (12,280)
-------------------------------------------------------------------------------------------------------------------

OTHER INCOME, NET                                       34,845             4,295           50,586             8,136
-------------------------------------------------------------------------------------------------------------------

Income before taxes                                     43,084            53,787          105,355            93,923
INCOME TAXES                                            12,064            15,061           29,500            26,299
-------------------------------------------------------------------------------------------------------------------

Net income                                           $  31,020         $  38,726         $ 75,855         $  67,624
===================================================================================================================

Weighted average shares outstanding
   Basic                                               326,788           335,276          326,847           336,359
   Diluted                                             341,546           351,116          341,825           351,319
===================================================================================================================

Net income per share
   Basic                                          $      0.09        $      0.12     $       0.23        $     0.20
   Diluted                                        $      0.09        $      0.11     $       0.22        $     0.19
===================================================================================================================
</TABLE>

See notes to consolidated unaudited condensed financial statements.

<PAGE>


                                  NOVELL, INC.
            CONSOLIDATED UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<S>                                                                                <C>                     <C>
                                                                                            SIX MONTHS ENDED
                                                                                    -------------------------------
                                                                                      Apr. 30,              Apr. 30,
DOLLARS IN THOUSANDS                                                                    2000                 1999
-------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM OPERATING ACTIVITIES

   Net income                                                                     $    75,855          $     67,624

ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES
   Depreciation and amortization                                                       39,961                32,585
   Stock plans' income tax benefits                                                    56,398                25,356
   Decrease in receivables                                                             45,308                36,832
   Decrease in inventories                                                                162                   454
   Decrease in prepaid expenses                                                         8,986                 6,768
   Decrease in deferred and refundable income taxes                                    29,457                 6,858
   Decrease in other current assets                                                     6,763                 1,860
   (DECREASE) IN CURRENT LIABILITIES, NET                                             (73,251)              (17,019)
-------------------------------------------------------------------------------------------------------------------

NET CASH PROVIDED FROM OPERATING ACTIVITIES                                           189,639               161,318
-------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
   Issuance of common stock, net                                                       70,608                50,804
   REPURCHASE OF COMMON STOCK                                                        (301,011)             (146,195)
-------------------------------------------------------------------------------------------------------------------
NET CASH USED BY FINANCING ACTIVITIES                                                (230,403)              (95,391)
-------------------------------------------------------------------------------------------------------------------


CASH FLOWS FROM INVESTING ACTIVITIES
   Expenditures for property, plant and equipment                                     (28,140)              (31,677)
   Purchases of short-term investments                                               (484,530)           (1,270,979)
   Maturities of short-term investments                                               413,654               969,270
   Sales of short-term investments                                                    287,585               363,271
   Expenditures for other long-term investments                                      (150,349)              (16,098)
   Increase in restricted cash                                                        (27,217)              (69,395)
   OTHER                                                                                  444                (2,357)
   -----------------------------------------------------------------------------------------------------------------

NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES                                       11,447               (57,965)
--------------------------------------------------------------------------------------------------------------------

TOTAL INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                (29,317)                7,962

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD                                       274,269               177,083
-------------------------------------------------------------------------------------------------------------------

CASH AND CASH EQUIVALENTS - END OF PERIOD                                             244,952               185,045

SHORT-TERM INVESTMENTS - END OF PERIOD                                                401,757               789,395
-------------------------------------------------------------------------------------------------------------------

CASH AND SHORT-TERM INVESTMENTS - END OF PERIOD                                     $ 646,709             $ 974,440
===================================================================================================================

SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING AND INVESTING ACTIVITIES:
Issuance of restricted stock for acquisitions                                       $  17,366     $              --
</TABLE>

See notes to consolidated unaudited condensed financial statements.


<PAGE>


                                  NOVELL, INC.
         NOTES TO CONSOLIDATED UNAUDITED CONDENSED FINANCIAL STATEMENTS



A.   QUARTERLY FINANCIAL STATEMENTS

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial  statements and accompanying notes.
Actual results could differ from those estimates. The accompanying  consolidated
unaudited condensed  financial  statements have been prepared in accordance with
the  instructions  to Form 10-Q but do not  include all of the  information  and
footnotes  required by  generally  accepted  accounting  principles  and should,
therefore,  be read in conjunction  with the Company's fiscal 1999 Annual Report
to  Shareholders.  These  financial  statements do include all normal  recurring
adjustments that the Company believes  necessary for a fair  presentation of the
statements.  The interim operating results are not necessarily indicative of the
results for a full year. Certain  reclassifications,  none of which affected net
income,  have been made to the prior  years'  amounts in order to conform to the
current years' presentation.


B.   CASH AND SHORT-TERM INVESTMENTS

All  marketable  debt  and  equity  securities  are  included  in cash  and
short-term investments and are considered available-for-sale and carried at fair
market value,  with the  unrealized  gains and losses,  net of tax,  included in
comprehensive  income.  Fair market  values are based on quoted market prices at
the  end of the  period,  where  available;  if  quoted  market  prices  are not
available,  then  fair  market  values  are  based on  quoted  market  prices of
comparable  instruments.  Municipal  securities  and  corporate  notes and bonds
included in short-term  investments have contractual  maturities from 1-7 years.
Money market  preferreds have  contractual  maturities of less than 180 days. No
other short-term investments have contractual maturities. The cost of securities
sold is  based  on the  specific  identification  method.  Such  securities  are
anticipated to be used for current  operations  and are therefore  classified as
current assets, even though some maturities may extend beyond one year.

The following is a summary of cash and short-term investments, all of which
are considered available-for-sale.

<TABLE>
<S>                                               <C>            <C>                 <C>            <C>
                                                                           Gross            Gross              Fair
                                                       Cost at        Unrealized       Unrealized   Market Value at
 (DOLLARS IN THOUSANDS)                           APR.30, 2000             GAINS           LOSSES      APR.30, 2000
 ------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
     Cash                                           $  160,921   $             -     $         -         $  160,921
     MONEY MARKET FUND                                  84,031                 -               -             84,031
-------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS                              244,952                 -               -            244,952
-------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS
     Corporate Notes and Bonds                         100,452                 -              (48)          100,404
     Municipal securities                              179,671                 -           (3,718)          175,953
     Mutual funds                                       51,370                 -           (2,569)           48,801
     EQUITY SECURITIES                                  11,450            65,149                -            76,599
-------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS                                 342,943            65,149           (6,335)          401,757
-------------------------------------------------------------------------------------------------------------------
CASH AND SHORT-TERM INVESTMENTS                     $  587,895        $   65,149        $  (6,335)       $  646,709
-------------------------------------------------------------------------------------------------------------------
</TABLE>


<PAGE>

<TABLE>
<S>                                               <C>               <C>              <C>            <C>
                                                                           Gross            Gross              Fair
                                                       Cost at        Unrealized       Unrealized   Market Value at
(DOLLARS IN THOUSANDS)                           OCT. 31, 1999             GAINS           LOSSES     OCT. 31, 1999
-------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
     Cash                                            $ 186,689      $          -      $       -           $ 186,689
     MONEY MARKET FUND                                  87,580                 -              -              87,580
-------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS                              274,269                 -              -             274,269
-------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS
     Municipal securities                              411,938                 3           (2,393)          409,548
     Money market mutual funds                          93,894                 -              -              93,894
     Money market preferreds                            33,000                 -              -              33,000
     Mutual funds                                       15,873                 -             (102)           15,771
     EQUITY SECURITIES                                   4,949            64,619             (646)           68,922
-------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS                                 559,654            64,622           (3,141)          621,135
-------------------------------------------------------------------------------------------------------------------
CASH AND SHORT-TERM INVESTMENTS                      $ 833,923          $ 64,622         $ (3,141)        $ 895,404
-------------------------------------------------------------------------------------------------------------------
</TABLE>

During the first six months of fiscal 2000 the Company  realized  gains of $33.2
million and realized  losses of $1.6 million on the sale of securities  compared
to realized  gains of $24.7 million and realized  losses of $28.9 million in the
first six months of fiscal 1999.


C.   LONG-TERM INVESTMENTS

The Company's long-term  investments consist of investments in start-up software
and internet companies,  venture capital funds, other publicly traded securities
and restricted cash held as collateral.  These  investments in start-up software
and internet  companies  and venture  capital  funds are recorded at cost as the
company does not have controlling  interest in any of the respective  companies.
Investments in publicly  traded  securities  are stated at fair value,  based on
market  quotes.  As of April 30, 2000,  there were $18.1  million in  unrealized
gains on long-term investments.


D.   INCOME TAXES

The  Company's  estimated  effective tax rate for the first six months of fiscal
2000 was  28.0%,  the same as in the first  three  months of  fiscal  1999.  The
Company  paid cash  amounts for income  taxes of $19.6  million in the first six
months of fiscal 2000 and $4.0 million during the same period of fiscal 1999.


E.   COMMITMENTS AND CONTINGENCIES

The Company currently has a $10 million unsecured revolving bank line of credit,
with interest  payable at the prime rate. The line can be used for either letter
of credit or  working  capital  purposes.  The line is subject to the terms of a
loan agreement  containing  financial covenants and restrictions,  none of which
are expected to significantly affect the Company's operations. At April 30, 2000
borrowings,  letter of credit  acceptances or commitments of approximately  $1.4
million were outstanding under this line.

The Company also has a $10 million line of credit with  another  bank,  which is
not subject to a loan agreement.  At April 30, 2000 standby letters of credit of
approximately $0.5 million were outstanding under this line of credit.


In fiscal 1997, the Company  entered into  agreements to lease  buildings  being
constructed  on land owned by the Company in San Jose,  California and in Provo,
Utah.  The lessor has committed to fund up to $223 million for  construction  of
the buildings. The leases are for a period of seven years and can be renewed for
two additional five year periods,  by either the lender or the Company,  subject
to the approval of the other party. Rent obligations commenced during the second
quarter of fiscal 1999 for the San Jose  buildings and during the second quarter
of fiscal  2000 for the Provo  building.  Annual  rent under each  agreement  is
determined by taking the portion of the committed  amount actually  utilized and
associated   capitalized   interest  accrued  during  the  construction   period
multiplied  by the secured  interest  rate. If the Company does not purchase the
buildings,  or arrange for the sale of the  buildings,  at the end of the lease,
the Company will  guarantee the lessor no more than 85% of the residual value of
the  buildings.   The   guaranteed   residual  value  at  April  30,  2000,  was
approximately $190 million. In addition,  the agreement calls for the Company to
maintain a specific  level of  restricted  cash to serve as  collateral  for the
leases and maintain  compliance with certain financial  covenants.  The value of
restricted  cash held as collateral at April 30, 2000 was  approximately  $213.4
million, and is included in long-term investments.

In February  1998, a suit was filed  against  Novell and certain of its officers
and directors,  alleging  violation of federal  securities laws. The lawsuit was
brought as a purported  class action on behalf of  purchasers  of Novell  common
stock  from  November  1,  1996  through  April  22,  1997.  The  case is in its
preliminary stages.  Novell believes that the case is without merit, and intends
to vigorously defend against the allegations. While there can be no assurance as
to the  ultimate  disposition  of the case,  Novell  does not  believe  that the
resolution  of this  litigation  will  have a  material  adverse  effect  on its
financial position, results of operations, or cash flows.

The  Company  is a party to a number of legal  claims  arising  in the  ordinary
course of business.  The Company believes the ultimate  resolution of the claims
will not have a material  adverse effect on its financial  position,  results of
operations, or cash flows.


 F.  SEGMENT INFORMATION

The  Company  operates in one  business  segment,  directory-enabled  networking
software and services.  The Company's products are sold throughout the world. In
the  United  States,  products  are sold  through  direct,  OEM,  reseller,  and
distributor   channels.   Internationally,   products   are   marketed   through
distributors  who sell to dealers and end users.  Performance  of the Company is
evaluated by the Company's chief decision  makers,  the Chief Executive  Officer
and  Executive  Council,  based on total Company  results.  Revenue is evaluated
based  on  geographic  region  and  by  product  category.   Separate  financial
information is not available by product category in regards to asset allocation,
expense allocation, or profitability.  Novell's products can be categorized into
the following four areas, all within the  directory-enabled  networking software
and services segment.

o Directory-enabled server platforms, which includes NetWare 4 and NetWare 5
o Directory-enabled  applications  products,  which include NetWare for SAA host
  connectivity  products,  BorderManager,  NDS integration and high availability
  service products,  as well as collaboration and management  products including
  GroupWise, ManageWise, and ZENworks
o Service, education and consulting revenue, which is generated from customer
  service,   educational  products  and  courses,  and  consulting  for  network
  solutions
o Pre-directory  product revenue consisting of NetWare 3,  non-directory-enabled
  infrastructure products and UNIX royalties



<PAGE>

<TABLE>
<S>                                              <C>                  <C>            <C>              <C>

REVENUE BY PRODUCT CATEGORY                            FISCAL QUARTER ENDED               SIX MONTHS ENDED
---------------------------                      -------------------------------     ---------------------
                                                      Apr. 30,          Apr. 30,         Apr. 30,       Apr. 30,
DOLLARS IN THOUSANDS                                      2000              1999             2000           1999
----------------------------------------------------------------------------------------------------------------

Directory-enabled server platforms                   $ 115,361        $ 168,826         $ 269,681      $ 314,644
Directory-enabled applications                          79,214            72,590          158,954        145,353
Service, education and consulting                       55,956            44,574          106,380         81,433
Pre-directory product revenue                          51,818            29,662            83,377         60,028
                                                  ------------      ------------      -----------     ----------
  Total net sales                                   $ 302,349         $ 315,652         $ 618,392      $ 601,458
                                                    ==========        ==========        =========      =========
</TABLE>

Sales  outside the U.S.  are  comprised of sales to  international  customers in
Europe, the Middle East,  Canada,  South America,  and Asia Pacific.  Other than
sales in Ireland,  international  sales were not  material  individually  in any
other  international  location.  Intercompany sales between geographic areas are
accounted for at prices representative of unaffiliated party transactions. "U.S.
operations"  include shipments to customers in the U.S.,  licensing to OEMs, and
exports of finished  goods  directly to  international  customers,  primarily in
Canada, South America, and Asia.

For the first six months of fiscal 2000 and fiscal 1999,  sales to international
customers were approximately $276 million and $277 million, respectively. In the
first six months of fiscal 2000 and fiscal 1999, 66% and 72%,  respectively,  of
international sales were to European countries. No one foreign country accounted
for 10% or more of total sales in either period.

There were no customers accounting for more than 10% of total revenue during the
first six months of fiscal 2000. One  multi-national  distributor  accounted for
12% of total revenue during the first six months of fiscal 1999.


G.   NET INCOME PER SHARE
<TABLE>
<S>                                                <C>                <C>            <C>               <C>
                                                         FISCAL QUARTER ENDED                 SIX MONTHS ENDED
                                                      --------------------------         ---------------------
                                                       Apr. 30,          Apr. 30,         Apr. 30,         Apr. 30,
AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA               2000              1999             2000              1999
-------------------------------------------------------------------------------------------------------------------
Basic net income per share computation
     NET INCOME                                     $   31,020        $   38,726       $   75,855        $   67,624
-------------------------------------------------------------------------------------------------------------------
     WEIGHTED AVERAGE SHARES OUTSTANDING               326,788           335,276          326,847           336,359
-------------------------------------------------------------------------------------------------------------------
         Basic net income per share                 $     0.09        $     0.12       $     0.23        $     0.20
===================================================================================================================

Diluted net income per share computation
     NET INCOME                                     $   31,020         $  38,726       $   75,855         $  67,624
-------------------------------------------------------------------------------------------------------------------
Weighted average shares outstanding                    326,788           335,276          326,847           336,359
Incremental shares attributable to exercise of
     OUTSTANDING OPTIONS (TREASURY STOCK METHOD)        14,758            15,840           14,978            14,960
-------------------------------------------------------------------------------------------------------------------
     TOTAL                                             341,546           351,116          341,825           351,319
-------------------------------------------------------------------------------------------------------------------
         Diluted net income per share               $     0.09         $    0.11       $     0.22         $    0.19
===================================================================================================================
</TABLE>




<PAGE>


H.   COMPREHENSIVE INCOME

The components of comprehensive  income (loss),  net of tax, for the quarter and
first six months ended April 30, 2000 and 1999 were as follows:

<TABLE>
<S>                                                 <C>               <C>             <C>              <C>
                                                        FISCAL QUARTER ENDED                SIX MONTHS ENDED
                                                     ----------------------------       ---------------------------
                                                      Apr. 30,          Apr. 30,         Apr. 30,          Apr. 30,
DOLLARS IN THOUSANDS                                      2000              1999             2000              1999
-------------------------------------------------------------------------------------------------------------------
Net income                                           $  31,020         $  38,726       $   75,855       $   67,624
Change in net unrealized gain on investments           (94,427)           (6,459)         (19,781)          20,873
CHANGE IN CUMULATIVE TRANSLATION ADJUSTMENT                473                35              (77)             (89)
-------------------------------------------------------------------------------------------------------------------
Comprehensive income (loss)                          $ (62,934)        $  32,302       $   55,997       $   88,408
==================================================================================================================
</TABLE>

The components of accumulated other comprehensive income, net of related tax, at
April 30, 2000 and 1999, are as follows:
<TABLE>
<S>                                                                     <C>             <C>
                                                                        Apr. 30,         Oct. 31,
DOLLARS IN THOUSANDS                                                        2000             1999
-------------------------------------------------------------------------------------------------
Unrealized gain on investment                                           $ 17,981        $  37,762
CUMULATIVE TRANSLATION ADJUSTMENT                                         (2,650)          (2,573)
--------------------------------------------------------------------------------------------------
Accumulated other comprehensive income                                  $ 15,331        $  35,189
=================================================================================================
</TABLE>

<PAGE>




I.   RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial Accounting  Standards No. 133, "Accounting for Derivative  Instruments
and  Hedging  Activities,"  (SFAS  133).  SFAS 133  established  accounting  and
reporting  standards for derivative  instruments,  including certain  derivative
instruments  embedded in other  contracts and for hedging  activities.  SFAS 133
requires all companies to recognize  derivatives as either assets or liabilities
in the  statement of financial  position and measure those  instruments  at fair
value.  This  statement  is  effective  for all fiscal  quarters of fiscal years
beginning  after July 1, 2000. The Company is currently  assessing the potential
impact SFAS 133 will have on the statement of financial position of the Company.

In December  1999, the  Securities  and Exchange  Commission  (SEC) issued Staff
Accounting  Bulletin  No. 101 ("SAB  101"),  "Revenue  Recognition  in Financial
Statements." SAB 101 summarizes certain of the SEC's views in applying generally
accepted accounting  principles to revenue recognition in financial  statements.
The  Company is  required  to adopt SAB 101 no later  than the first  quarter of
fiscal  2001.  Novell  is  currently  evaluating  the  impact  of SAB 101 on the
Company's results of operations and financial position.



<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS



This Management's  Discussion and Analysis of Financial Condition and Results of
Operations  and other parts of this  Quarterly  Report  contain  forward-looking
statements that involve risks and uncertainties.  All forward-looking statements
are based on  information  available to the Company on the date hereof,  and the
Company assumes no obligation to update any such forward-looking statements. The
Company's  actual results may differ  materially  from the results  discussed in
such  forward-looking  statements  as a result  of a number  of  factors,  which
include, but are certainly not limited to, those set forth below in the sections
entitled "Future  Results," "Year 2000," and "Euro  Conversion."  Readers should
carefully review the risk factors  described in other documents that the Company
files from time to time with the Commission, including the Annual Report on Form
10-K and the Quarterly Reports on Form 10-Q to be filed by the Company in Fiscal
2000.


INTRODUCTION

Novell is the world's leading provider of directory-enabled networking software.
Novell solutions give businesses total control of their private networks and the
Internet,  simplifying  the  management  of user access and  identity.  Novell's
worldwide  channel,  consulting,  developer,  education,  and technical  support
programs are the most extensive in the network computing industry.


RESULTS OF OPERATIONS

NET SALES
<TABLE>
<S>                                                <C>         <C>       <C>          <C>          <C>      <C>
                                                          Q2                    Q2          YTD                 YTD
                                                        2000        CHG       1999         2000      CHG       1999
-------------------------------------------------------------------------------------------------------------------

Net sales (thousands)                              $ 302,349   (4.2)%    $ 315,652    $ 618,392   2.8%    $ 601,458
===================================================================================================================
</TABLE>

Novell's  products can be categorized  into the following four areas, all within
the directory-enabled networking software services segment.

oDirectory-enabled server platforms, which includes NetWare 4 and NetWare 5
oDirectory-enabled  applications  products,  or  Net  Services  Software,  which
  include  NetWare  for  SAA  host  connectivity  products,  BorderManager,  NDS
  integration and high availability  service products,  as well as collaboration
  and management products including GroupWise, ManageWise, and ZENworks
o Service,  education and consulting  revenue,  which is generated from customer
  service,   educational  products  and  courses,  and  consulting  for  network
  solutions
o Pre-directory  product revenue consisting of NetWare 3,  non-directory-enabled
  infrastructure products and UNIX royalties

Revenue from the  directory-enabled  server platforms  category  decreased $53.5
million or 32% in the second  quarter of 2000 compared to the second  quarter of
1999.  Year-to-date,  directory-enabled  server platform revenue decreased $45.0
million  or  14%.  These  decreases  are due  primarily  to the  decline  in the
Company's packaged software business, which saw a decline in sales of 83% during
the  quarter  and 49%  year-to-date.  The  decline in  packaged  software  sales
resulted  from  the  Company's  focus  on  building  a direct  sales  force  and
inadequate attention to its channel resellers in generating demand, training and
support for Novell  products.  Additionally,  the launch of competitor  products
shifted reseller efforts to training and promotional activities related to these
launches.  The Company  also  believes  that a portion of the decline was due to
lower  demand  related to post Y2K  purchases.  The  Company is  addressing  the
channel problem in an effort to improve sales results in future periods.

Revenue from the  directory-enabled  applications  products was $79.2 million in
the second  quarter of 2000 compared to $72.6  million in the second  quarter of
1999.  At the end of the second  quarter  2000,  year-to-date  directory-enabled
applications  product revenue was $159.0 million  compared to $145.4 million for
the same  period of 1999.  The 9% increase  in second  quarter and  year-to-date
revenue  and was driven by an increase in sales of the  Company's  Management  &
Collaboration  products,  Border Manager,  and NDS for NT and Solaris,  slightly
offset by a decrease in NetWare for SAA.

Service,  education and consulting revenues were $56.0 million and $44.6 million
in the second  quarter  of 2000 and 1999,  respectively.  Year-to-date  service,
education and consulting revenues were $106.4 million and $81.4 million, in 2000
and 1999,  respectively.  The  increase in the second  quarter and  year-to-date
revenue  was  a  result  of  increased  directory-related   consulting  revenue,
increased service revenue as a result of increased site licenses, and an overall
growth in consulting.

Pre-directory  products  revenue was $51.8 million in the second quarter of 2000
compared to $29.7 million in the second quarter of 1999.  Pre-directory products
revenue  year-to-date  2000 was $83.4 million  compared to $60.0 million for the
same  period  of 1999.  The  increase  in  revenue  in the  second  quarter  and
year-to-date  2000 was  primarily  the  result of revenue  from a $35.5  million
royalty payment from Caldera, Inc., the principal portion of which relates to an
antitrust  settlement  between Caldera,  Inc. and Microsoft,  and higher royalty
revenue   related  to  the  UNIX   royalties.   Without  the  Caldera   revenue,
pre-directory  products revenue would have decreased $13.3 million or 44% during
the second quarter of 2000 and $12.1 million or 20%  year-to-date  2000 compared
to the same periods of 1999, respectively. These decreases were due primarily to
the lower sales through channel resellers and the announced  discontinuation  of
the NetWare 3 products.

International  sales  represented  45% of total sales in the first six months of
2000  compared  to 46% in the first six months of 1999 due to the effects of the
Caldera settlement recorded in U.S revenue. Without this revenue,  international
sales  represented  47% of total  sales in the  first six  months of 2000.  This
increase is due to stronger sales growth in the Asia Pacific, Latin America, and
Canadian  regions.  During  the first six months of fiscal  2000,  international
sales  remained  flat and domestic  revenues,  excluding  Caldera,  decreased 5%
compared to the same period of 1999

GROSS PROFIT
<TABLE>
<S>                                                      <C>   <C>        <C>          <C>        <C>      <C>
                                                        Q2                      Q2          YTD                 YTD
                                                      2000      CHG           1999         2000   CHG          1999
-------------------------------------------------------------------------------------------------------------------
Gross profit (thousands)                         $ 217,965     (7.8)%    $ 236,285    $ 454,794   0.1%    $ 454,324
Percentage of net sales                              72.1%                    74.9%        73.5%              75.5%
==================================================================================================================
</TABLE>

Gross  profit as a  percentage  of sales  decreased  in the second  quarter  and
year-to-date  2000  compared to the same periods of fiscal 1999 due primarily to
the effects of decreased product sales levels, higher costs for services related
to the  Company's  consulting  business,  and  increased  training and education
costs.  These  increases  were  slightly  offset by the  effects of the  Caldera
revenue.  Year-to-date  cost of sales were also offset by lower royalty expenses
and material and variance costs.  Excluding  Caldera revenue,  gross profit as a
percentage  of sales would have been 68.4%  during the second  quarter and 71.9%
year-to-date 2000.



<PAGE>


OPERATING EXPENSES
<TABLE>
<S>                                                <C>         <C>       <C>          <C>         <C>      <C>
                                                          Q2                   Q2         YTD                   YTD
                                                        2000      CHG        1999        2000        CHG       1999
-------------------------------------------------------------------------------------------------------------------
Sales and marketing (thousands)                    $ 125,933   18.3%    $ 106,455    $ 240,063   13.3%    $ 211,841
PERCENTAGE OF NET SALES                                 41.7%               33.7%         38.8%               35.2%
------------------------------------------------------------------------------------------------------------------
Product development (thousands)                    $  61,360    2.8%    $  59,682    $ 120,037    4.1%    $ 115,286
PERCENTAGE OF NET SALES                                 20.3%               18.9%         19.4%               19.2%
------------------------------------------------------------------------------------------------------------------
General and administrative (thousands)             $  22,433    8.6%    $  20,656    $  39,925   (3.6)%   $  41,410
PERCENTAGE OF NET SALES                                  7.4%                6.5%          6.5%                6.9%
------------------------------------------------------------------------------------------------------------------
Total operating expenses (thousands)               $ 209,726   12.3%    $ 186,793    $ 400,025    8.5%    $ 368,537
Percentage of net sales                                 69.4%               59.2%         64.7%               61.3%
==================================================================================================================
</TABLE>

Sales and marketing expenses  increased by $19.5 million,  in the second quarter
of fiscal 2000 and by $28.2 million  year-to-date in fiscal 2000 compared to the
same periods of fiscal 1999. Sales and marketing expenses fluctuate in any given
period due to timing of product  promotions,  advertising or other discretionary
expenses.  Also during  fiscal  2000,  the Company has  increased  its sales and
marketing  expenditures  where  appropriate  in an effort to focus on  improving
future sales growth.  Lower sales in the second quarter of 2000 caused sales and
marketing expenses as a percentage of sales to increase.

Product  development  expenses  increased $1.7 million in the second quarter and
$4.8 million  year-to-date in fiscal 2000 compared to the same periods of fiscal
1999. Product  development  expenses also increased as a percentage of net sales
in the second  quarter and  year-to-date  2000 due to lower sales  levels in the
second quarter of fiscal 2000 and increased headcount in the product development
organization  as the Company  continues  to invest in  developing  new  products
consistent with the Company's strategy.

General and  administrative  expenses  increased in total and as a percentage of
net sales in the second quarter of fiscal 2000 compared to the second quarter of
fiscal 1999,  due  primarily to increased  bad debt expense  offset  slightly by
lower  operating  costs.   Year-to-date  general  and  administrative   expenses
decreased  in total and as a  percentage  of sales as the Company  continued  to
focus on controlling these types of costs.

<TABLE>
<S>                                                            <C>                     <C>                  <C>
                                                                    YTD                                         YTD
                                                                   2000                CHANGE                  1999
-------------------------------------------------------------------------------------------------------------------
Employees                                                         5,373                 8.5%                  4,951
Annualized revenue per average employee (000's)                   $ 229                (9.5)%                  $253
 Annualized net income per average employee (000's)            $   28.1                (1.3)%                $28.4
==================================================================================================================
</TABLE>

Headcount  increased  from the second  quarter of 1999 to the second  quarter of
2000, primarily due to increases in the education,  consulting, worldwide sales,
and product development areas. Headcount has increased in these areas to support
the Company's growth in the new products and services.

OTHER INCOME, NET
<TABLE>
<S>                                                 <C>           <C>       <C>       <C>         <C>       <C>
                                                          Q2                    Q2         YTD                  YTD
                                                        2000        CHG       1999        2000       CHG       1999
-------------------------------------------------------------------------------------------------------------------
Other income, net (thousands)                       $ 34,845      711.3%   $ 4,295    $ 50,586    521.8%    $ 8,136
Percentage of net sales                                 11.5%                  1.4%        8.2%                1.4%
==================================================================================================================
</TABLE>

The primary component of other income, net is investment income, which was $37.0
million in the second  quarter of fiscal 2000  compared to $10.7  million in the
second quarter of fiscal 1999.  Year-to-date investment income was $54.6 million
in 2000 compared to $20.4 million in 1999.  Included in investment income during
the first half of 2000 were realized capital losses of $1.6 million and realized
capital gains of $33.2 million.  During the first half of 1999, realized capital
losses were $28.9 million and realized capital gains were $24.7 million.

In addition to  investment  income,  the  Company  recognized  a gain on foreign
currency and higher  sublease income from an increase in subleases in the second
quarter and  year-to-date  2000  compared to a loss in the same periods of 1999.
This additional income was slightly offset by higher losses on fixed asset sales
and lower dividend income.

INCOME TAXES
<TABLE>
<S>                                                <C>         <C>         <C>        <C>         <C>      <C>
                                                          Q2                    Q2          YTD                 YTD
                                                        2000        CHG       1999         2000      CHG       1999
-------------------------------------------------------------------------------------------------------------------
 Income taxes (thousands)                          $  12,064   (19.9)%    $ 15,061    $  29,500   12.2%    $ 26,299
 Percentage of net sales                                 4.0%                  4.8%         4.8%               4.4%
 Effective tax rate                                     28.0%                 28.0%        28.0%              28.0%
 =================================================================================================================
</TABLE>

 The  effective  tax rate for fiscal 2000 is  estimated  to be 28%,  the same as
fiscal 1999.

NET INCOME AND NET INCOME PER SHARE
<TABLE>
<S>                                                  <C>        <C>        <C>         <C>        <C>       <C>
                                                          Q2                    Q2        YTD                   YTD
                                                        2000        CHG       1999       2000        CHG       1999
-------------------------------------------------------------------------------------------------------------------
Net income (thousands)                              $ 31,020    (19.9)%   $ 38,726    $ 75,855    12.2%   $ 67,624
Percentage of net sales                                 10.3%                 12.3%       12.3%               11.2%
Net income per share - basic                           $0.09                 $0.12       $0.23               $0.20
Net income per share - diluted                         $0.09                 $0.11       $0.22               $0.19
==================================================================================================================
</TABLE>



LIQUIDITY AND CAPITAL RESOURCES
<TABLE>
<S>                                                            <C>                    <C>                  <C>
                                                                     Q2                                          Q4
                                                                   2000                CHANGE                  1999
-------------------------------------------------------------------------------------------------------------------
Cash and short-term investments (thousands)                   $ 646,709                (27.8)%            $ 895,404
Percentage of total assets                                           37%                                         46%
===================================================================================================================
</TABLE>

Cash and  short-term  investments  decreased by $248.7 million at April 30, 2000
from $895.4  million at October 31, 1999.  During the first six months of fiscal
2000, cash and short-term  investments  decreased due to cash outflows of $301.0
million for the  repurchase  of common  stock,  $150.3  million for purchases of
long-term investments and other long term investing activities, $27.2 million to
increase collateral associated with certain long-term investments, $28.1 million
to  purchase  property,  plant  and  equipment,  and $2.7  million  from the net
purchases of short-term  investments.  These cash outflows were offset by $189.6
million  provided from operating  activities and $70.6 million from the issuance
of common stock.

The  Company's  investment  portfolio  includes  equity  securities  with  gross
unrealized  losses of $35.8 million and gross  unrealized gains of $65.1 million
as of April 30, 2000.  Included in the Company's net  unrealized  gains at April
30, 2000 was the Company's investment in Marchfirst,  Inc., which had unrealized
net  losses  of  $18.1  million.  No  other  individual  security  had  material
unrealized losses as of the end of the second quarter 2000.

The investment  portfolio is diversified among security types,  industry groups,
and individual issuers. To achieve potentially higher returns, a limited portion
of the  Company's  investment  portfolio  is invested in equity  securities  and
mutual funds, which incur market risk. The Company believes that the market risk
has been  limited by  diversification  and by use of a funds  management  timing
service  which  switches  funds out of mutual  funds and into money market funds
when preset signals occur.

The Company's  principal source of liquidity has been from operations.  At April
30, 2000, the Company's  principal unused sources of liquidity consisted of cash
and short-term  investments and available  borrowing  capacity of  approximately
$18.1 million under its credit  facilities.  The Company's  liquidity  needs are
principally for the Company's financing of accounts receivable,  capital assets,
strategic  investments,  product  development  and  flexibility in a dynamic and
competitive operating environment.

During the first six months of fiscal  2000,  the Company  continued to generate
cash from  operations.  The Company  anticipates  being able to fund its current
operations  and capital  expenditures  planned for the  foreseeable  future with
existing cash and  short-term  investments  together with  internally  generated
funds.   The  Company  believes  that  borrowings  under  the  Company's  credit
facilities or public offerings of equity or debt securities are available if the
need arises.  Investments  will continue in product  development  and in new and
existing  areas  of  technology.  Cash may  also be used to  acquire  technology
through  purchases and strategic  acquisitions.  Capital  expenditures in fiscal
2000 are anticipated to be approximately $75.0 million,  but could be reduced if
the growth of the Company is less than presently anticipated.

In July 1999,  the Board of  Directors  authorized  up to $500  million  for the
repurchase  of  additional  outstanding  shares of the  Company's  common  stock
through  October 31, 2000.  As of April 30, 2000,  19.9 million  shares had been
repurchased  under this plan at a total  cost of $500  million  completing  this
repurchase.

As the  Company  continues  to  consolidate  its Utah  operations  to its  Provo
facility,  the  properties  currently  owned and  occupied in Orem,  Utah become
unnecessary.  On May 5, 2000,  the  Company  finalized  the sale of a portion of
these buildings.  The remaining  buildings are expected to be sold over the next
two years.

FUTURE RESULTS

The  Company's  future  results  of  operations  involve  a number  of risks and
uncertainties.  Among the  factors  that could  cause  actual  results to differ
materially from historical  results are the following:  business  conditions and
the general  economy;  competitive  factors,  such as rival  operating  systems,
acceptance  of new products and price  pressures;  availability  of  third-party
compatible  products at below market  prices;  risk of nonpayment of accounts or
notes receivable; risks associated with foreign operations; risk of product line
or inventory obsolescence due to shifts in technologies or market demand; timing
of software product introductions; market fluctuations of investment securities;
and litigation.

Novell believes that it has the product offerings,  facilities,  personnel,  and
competitive and financial  resources for continued business success,  but future
revenues,  costs,  margins,  product  mix, and profits are all  influenced  by a
number of factors,  such as those discussed above, as well as risks described in
detail in the Company's fiscal 1999 report on Form 10-K.

YEAR 2000

In the past, many information  technology  products were designed with two digit
year codes that did not recognize  century and millennium  fields.  As a result,
these  hardware  and software  products  may not function or may give  incorrect
results   beginning  in  the  Year  2000.  The  Year  2000  issue  is  faced  by
substantially  every company in the computer industry,  as well as every company
that relies on  computer  systems.  To address  this issue,  such  hardware  and
software products were upgraded or replaced to correctly process dates beginning
in the Year 2000.

The Company has a general  contingency  plan to address  extreme  events such as
earthquake,  flood,  or serious  equipment  failures.  The  Company's  Year 2000
contingency planning was an extension of this effort.

The Company's  total cost relating to these  activities  was not material to the
Company's  financial  position,  results  of  operations,  or  cash  flows.  The
modifications  were made on a timely  basis.  The Company did not  experience  a
delay in,  or  increased  costs  associated  with,  the  implementation  of such
modifications,  nor  did  the  Company  experience  problems  due  to  suppliers
inadequately  preparing  for the  Year  2000  issue.  The  Company  also did not
experience an inability to deliver products or services to its customers.

The Company believes that its current products, with any applicable updates, are
prepared  for Year 2000 date  issues.  The  Company  also plans to  continue  to
provide support for these products' Year 2000 date-related  issues, as described
in the Company's support policy statements.  However,  there can be no guarantee
that one or more current  Company  products do not contain Year 2000 date issues
that may result in material costs to the Company.  Because it is in the business
of selling software products,  the Company's risk of being subjected to lawsuits
relating to Year 2000 issues with its software  products is likely to be greater
than that of companies in other industries. Because computer systems may involve
hardware, firmware and software components from different manufacturers,  it may
be difficult to determine  which component in a computer system may cause a Year
2000  issue.  As a result,  the Company may be  subjected  to Year 2000  related
lawsuits  independent  of whether its products and services are Year 2000 ready.
The  outcomes  of any such  lawsuits  and the  impact on the  Company  cannot be
determined at this time.

EURO CONVERSION

On January 1, 1999, 11 of the 15 members of the European Union established fixed
conversion rates among their existing sovereign  currencies and adopted the euro
as their common legal  currency.  At the end of a three-year  transition  period
during  which  companies  may choose to operate  either in the euro or  national
currencies the legacy  currencies will be eliminated.  In June 1998, the Company
formed a  cross-functional  team to assess the impact of the  conversion  on the
Company's operations and to address associated issues.

The Company is currently conducting transactions in the euro and expects to have
all affected  information systems fully converted by April 2001. Novell does not
expect the euro conversion to have a material effect on its competitive position
or financial results.




<PAGE>


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to financial market risks,  including changes in interest
rates, foreign currency exchange rates and marketable equity security prices. To
mitigate  these risks,  the Company  utilizes  currency  forward  contracts  and
currency options. The Company does not use derivative financial  instruments for
speculative or trading purposes,  and no derivative  financial  instruments were
outstanding at April 30, 2000.

The primary  objective of the  Company's  investment  activities  is to preserve
principal while maximizing yields without significantly increasing risk. This is
accomplished  by  investing  in  widely  diversified   short-term   investments,
consisting primarily of investment grade securities,  substantially all of which
either  mature  within  the  next  twelve  months  or  have  characteristics  of
short-term investments. A hypothetical 50 basis point increase in interest rates
would result in an approximate  $5 million  decrease  (approximately  1%) in the
fair value of the Company's available-for-sale securities.

The  Company  hedges  currency  risks  of  investments  denominated  in  foreign
currencies with currency  forward  contracts.  Gains and losses on these foreign
currency investments would generally be offset by corresponding losses and gains
on the related hedging instruments,  resulting in negligible net exposure to the
Company. A substantial  majority of the Company's  revenue,  expense and capital
purchasing activities are transacted in U.S. dollars.  However, the Company does
enter into  transactions in other currencies,  primarily  Japanese yen, Canadian
Dollar,  and certain  other Asian and European  currencies.  To protect  against
reductions in value and the volatility of future cash flows caused by changes in
foreign  exchange  rates,  the Company has  established  balance  sheet  hedging
programs.  Currency forward contracts and currency options are utilized in these
hedging  programs.  The Company's  hedging  programs  reduce,  but do not always
entirely eliminate,  the impact of foreign currency exchange rate movements.  If
the Company did not hedge against foreign  currency  exchange rate movement,  an
adverse  change of 10% in  exchange  rates  would  result in a decline in income
before taxes of approximately $9 million.

The Company is exposed to equity  price risks on equity  securities  included in
its  portfolio of  investments  entered  into for the  promotion of business and
strategic  objectives.  These investments are generally in small  capitalization
stocks in the  high-technology  industry sector.  The Company typically does not
attempt to reduce or eliminate its market  exposure on these  securities.  A 10%
adverse  change in equity  prices  would  result in an  approximate  $8  million
decrease in the fair value of the Company's available-for-sale securities.

All of the  potential  changes  noted  above are based on  sensitivity  analyses
performed on the Company's  financial position at April 30, 2000. Actual results
may differ materially.



<PAGE>


PART II. OTHER INFORMATION



Except as listed below, all information  required by items in Part II is omitted
because the items are inapplicable or the answer is negative.

ITEM 1.  LEGAL PROCEEDINGS.

The  information  required by this item is  incorporated  herein by reference to
Footnote D of the Company's financial  statements contained in Part I, Item 1 of
this Form 10-Q.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

(a)  Exhibits

Exhibit
NUMBER                         DESCRIPTION
  27*                          Financial Data Schedule

(b)  Reports on Form 8-K.

No reports on Form 8-K were filed by the  Registrant  during the  quarter  ended
April 30, 2000.



*Filed herewith.


<PAGE>


                                   SIGNATURES



Pursuant to the  requirements  of the  Securities  and Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.


                                                   NOVELL, INC.
                                                   ------------
                                                   (Registrant)



Date:  June 13, 2000                     /S/ DR. ERIC SCHMIDT
                                         --------------------
                                         Dr. Eric Schmidt
                                         Chairman of the Board and
                                         Chief Executive Officer
                                         (Principal Executive Officer)



Date: June 13, 2000                      /S/ DENNIS R. RANEY
                                         -------------------
                                         Dennis R. Raney
                                         Chief Financial Officer
                                         (Principal Financial Officer)



Date: June 13, 2000                      /S/ RON FOSTER
                                         --------------
                                         Ron Foster
                                         Vice President and Corporate Controller
                                         (Principal Accounting Officer)
<PAGE>