Nortel Networks* Corporation reported results for the first quarter of 2002 prepared in accordance with United States generally accepted accounting principles, except as noted with respect to pro forma results.
Revenues from continuing operations were US$2.91 billion for the first quarter of 2002 compared to US$5.75 billion in the same period in 2001. Pro forma net loss from continuing operations(a) for the first quarter of 2002 was US$463 million, or US$0.14 per common share, compared to pro forma net loss from continuing operations(a) of US$277 million, or US$0.09 per common share, in the first quarter of 2001. Included in the pro forma net loss from continuing operations(a) was an incremental charge of approximately US$200 million (pre-tax) for excess and obsolete inventory, primarily related to recently completed negotiations with all of Nortel Networks major suppliers. Pro forma net loss from continuing operations(a) for the first quarter of 2002 excluded US$378 million (after-tax), mainly comprised of special charges (US$329 million (after-tax)), primarily related to previously announced workforce reductions, and certain costs related to acquisitions (US$51 million (after-tax)). Nortel Networks reported a net loss in the first quarter of 2002 of US$841 million, or US$0.26 per common share.
In the first quarter of 2002, Nortel Networks restructuring efforts, and its focus on core businesses and cash management, continued to drive significant improvements in its bottom line results on a sequential basis and helped to enhance its ongoing financial flexibility. The company recorded a strong cash balance at the end of the first quarter of approximately US$3.1 billion, which decreased from approximately US$3.5 billion at the end of the fourth quarter of 2001. The decrease primarily reflected the loss from operations, the cash costs in the quarter associated with restructuring, and capital spending, which was partially offset by approximately US$500 million from tax recoveries. The cash reserves, combined with existing committed credit facilities, which are undrawn, provide the company with approximately US$6.6 billion in sources of liquidity.
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(source: Nortel Networks)