Filter
Top Products
2
0.
D
iscontinued o
p
erations
During the year ended December 31, 2003, Nortel Networks continued to wind down its access solutions operations and there was no
change to the initial disposal strategy or intent to exit the business which was approved by the Nortel Networks Board of Directors on
June 14, 2001. However, the prolonged deterioration in industry and market conditions during 2002 and 2003 delayed certain disposal
activities beyond the original planned timeframe of one year. In particular, actions involving negotiations with customers, who were also
affected by industry conditions, took longer than expected. Although disposal activities continued beyond the one-year period generally
contemplated under APB 30, Nortel Networks continues to present the access solutions operations as discontinued operations in the
consolidated financial statements. As of December 31, 2003, Nortel Networks had substantially completed the wind down of its
discontinued operations.
Pursuant to APB 30, the revenues, costs and expenses, assets and liabilities and cash flows of Nortel Networks access solutions
operations have been segregated in the consolidated statements of operations, consolidated balance sheets and consolidated statements of
cash flows, and are reported as “discontinued operations”. The following consolidated financial results for discontinued operations are
presented as of December 31 for the consolidated balance sheets and for the years ended December 31 for the consolidated statements of
operations and consolidated statements of cash flows:
Consolidated statements of o
p
erations:
Consolidated balance sheets:
(number of shares in thousands) 2003 2002 2001
Nortel Networks Corporation common shares purchased
(a)
11,532 38,824 14,648
Weighted-average price of shares purchased $ 3.10 $ 1.31 $ 8.50
(a) Compensation expense was recognized for Nortel Networks portion of the contributions. Nortel Networks contributed an amount equal to the difference between the
market price and the purchase price.
2003 2002 2001
Revenues $ 14 $ 158 $ 1,071
Net earnings (loss) from discontinued operations — net of tax
(a)
$–$–$(498)
Net gain (loss) on disposal of operations — net of tax
(b)
184 (101) (1,969)
Net earnin
g
s (loss) from discontinued o
p
erations — net of tax $ 184 $ (101) $ (2,467)
(a) Net earnings (loss) from discontinued operations was net of applicable income tax benefit of $96 for the year ended December 31, 2001.
(b) Net gain (loss) on disposal of operations was net of an applicable income tax expense (benefit) of $1, $(16) and $(367) for the years ended December 31, 2003, 2002
and 2001, respectively.
F-72
2003 2002
Deferred income taxes $ 26 $ 144
Other current assets
(a)
265
Total current assets of discontinued operations
(b)
28 209
Other long-term assets
(b)(c)
4127
Total assets of discontinued operations $ 32 $ 336
Current liabilities
(b)(d)
$6$63
Long-term liabilities
(b)
1 1
Total liabilities of discontinued operations $7$64
(a) Included accounts receivable of nil and $20, which was net of provisions of $5 and $53, as of December 31, 2003 and 2002, respectively. Included inventories of
nil, which was net of provisions of $75 and $102, as of December 31, 2003 and 2002, respectively.
(b) Current assets, other long-term assets, current liabilities and long-term liabilities of discontinued operations were included in other current assets, other assets, other
accrued liabilities and other liabilities, respectively, on the consolidated balance sheets.
(c) Included customer financing receivables of $4 and $37, which was net of provisions of $55 and $470, as of December 31, 2003 and 2002, respectively.