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Year ended December 31, 2003
For the year ended December 31, 2003, Nortel Networks S.A. recorded total special charges of 24,563.
Workforce reduction charges of
19,133 were related to severance and benefit costs associated with the approximately 193 employees
notified of termination. During 2003, the workforce reduction provision balance was drawn down by cash payments of
24,399, resulting
in an ending provision balance for workforce reduction of
4,696. The remaining provision is expected to be substantially drawn down
by the end of 2004.
Contract settlement and lease costs consisted of
4,382 for negotiated settlements to cancel or renegotiate contracts and net lease charges
related to leased facilities that were identified as no longer required. During 2003, the provision balance for contract settlement and lease
costs was drawn down by cash payments of
2,310 resulting in an ending balance of 4,498. The remaining provision, net of
approximately
2,953 in estimated sublease income, is expected to be substantially drawn down by the end of 2008.
Year ended December 31, 2002
For the year ended December 31, 2002, Nortel Networks S.A. recorded total special charges of 83,427.
Workforce reduction charges of
73,105 were related to severance and benefit costs associated with the approximately 718 employees
notified of termination. During 2002, the workforce reduction provision balance was drawn down by cash payments of
64,232, resulting
in an ending provision balance for workforce reduction of
9,962.
Contract settlement and lease costs consisted of
612 negotiated settlements to cancel or renegotiate contracts and net lease charges
related to leased facilities that were identified as no longer required. During 2002, the provision balance for contract settlement and lease
costs was drawn down by cash payments of
13,208, resulting in an ending provision balance of 2,426.
Plant and equipment write downs of approximately
9,294 related primarily to the write down to net realizable value of leasehold
improvements and manufacturing equipment.
Other consists primarily of contract settlement costs to either cancel or renegotiate existing supply contracts..
Year ended December 31, 2001
For the year ended December 31, 2001, Nortel Networks S.A. recorded total special charges of 95,379 related to streamlining its
operations and activities.
Workforce reduction charges of
34,419 were related to severance and benefit costs associated with the approximately 310 employees
notified of termination. During 2001, the workforce reduction provision balance was drawn down by cash payments of
34,372, resulting
in an ending provision balance for workforce reduction of
1,089.
Contract settlement and lease costs of
17,123 consisted of 2,009 of negotiated settlements to cancel or renegotiate contracts and
15,114 of net lease charges related to a number of operating leases no longer required. Lease costs represent Nortel Networks S.A.
future contractual obligations under its applicable operating leases net of approximately
2,964 in expected sublease revenue on leases
that Nortel Networks S.A. cannot terminate. During 2001, the provision balance for contract settlement and lease costs was drawn down
by cash payments of
176, resulting in a provision balance of 16,947.
Plant and equipment write downs of approximately
21,294 related primarily to the write down to net realizable value of leasehold
improvements and manufacturing equipment in the Ch
â
teaudun facility.
Other consisted primarily of contract settlement costs to either cancel or renegotiate existing supply contracts.
Goodwill impairment charge of
20,607 related to the goodwill of Nortel Networks France.