Nortel Reports Financial Results for the Fourth Quarter and Full Year 2007
FEBRUARY 27, 2008
-
Achieved fourth quarter Operating Margin (OM)(a) of
$244 million, an increase of 339 basis points compared to 2006 and
achieved full year OM of 3.7 percent, the highest since 2000
-
Fourth quarter revenues increased 2 percent, excluding the impact of the UMTS divestiture(b). Revenues in the fourth quarter decreased by 4 percent, including UMTS compared to 2006 and increased 18 percent sequentially
-
Nortel expects 2008 revenues to grow in the low single digits and OM to increase by about 300 basis points compared to 2007
-
Outlined the next phase of Restructuring as part of the previously announced Business Transformation program
-
Non-cash
charge of $1.1 billion to increase the valuation allowance against the
Canadian Deferred Tax Asset primarily due to changes in Canadian tax
profile
-
Completed remediation of the remaining material weakness
TORONTO
- Nortel's focus on organizational effectiveness, strategic innovation
and customer value contributed to progress in both gross and operating
margin as Nortel* Networks Corporation [NYSE/TSX: NT]
today announced financial and operating results for the fourth quarter
and full year of 2007 prepared in accordance with United States
generally accepted accounting principles (GAAP) in U.S. dollars.
"Nortel
continued to make strong progress in the fourth quarter as we completed
a pivotal year in our transformation," said Nortel President and CEO
Mike Zafirovski. "In a period of significant change for our industry,
we have now reported six consecutive quarters of strong year over year
improvement in operating margin, reflected in a 353 basis points
improvement in the second half of 2006 and a 369 basis points
improvement in 2007. Although our fourth quarter operating margin was
below our target, it is the highest in 12 quarters. We also recorded a
386 basis point increase in gross margin to 43.7%, also the highest in
12 quarters. And most importantly, customers around the world are
validating our strategic direction by signing up for multi-year
engagements that leverage both our technological innovation and
world-class know-how. We ended the year with a positive book to bill of
1.01 in the fourth quarter."
Speaking to the progress made,
Zafirovski added: "We are just over two years into a major
transformation of Nortel. Significant progress has been made while
upholding the highest standards of ethics and integrity. We have
increased our profitability, improved organizational effectiveness and
enhanced our competitiveness in the market. I am particularly pleased
with the attainment of double digit productivity, which contributed to
our gross margin improvements, and by our ability to shift
significantly more R&D investments into growth and emerging new
areas while reducing the overall R&D spend. These accomplishments
provide us with the capability and foundation upon which to build a
successful business that delivers value both to customers and to
shareholders."
Nortel today outlined the next steps of its
previously announced Business Transformation plan, designed to
complement growth initiatives by increasing the Company's global
competitiveness and contributing to the Company's targets of
double-digit operating margins and the reduction of operating costs.
Under the 2008 Restructuring Plan, Nortel expects to implement a net
reduction of its global workforce by approximately 2,100 positions and
in addition move approximately 1,000 positions to higher growth and
lower cost geographies.
"Over the past year, we have driven
process improvements across the organization and today we are
announcing the difficult but necessary measures that accompany this
type of transformation. Our ultimate goal is to build a
high-performance, efficient and simple organization within a cost
structure that allows us to compete and win effectively against any
competitor in the world," said Zafirovski. "I recognize the impact this
will have on affected employees. Due to the careful planning that has
taken place, these reductions will occur through an orderly and
considered process. Similar to last year's restructuring, we will
maximize normal attrition and will work to re-deploy affected employees
to other opportunities within the Company, whenever appropriate. I am
pleased to report that in 2007 approximately 30% of the employees in
affected positions were redeployed or transferred to other roles in the
Company."
Outlook(c)
Nortel provided its financial outlook for the full year 2008, and expects:
- Revenue to grow in the low single digits compared to 2007
- Gross Margin to be about our business model target of 43 percent of revenue
- Operating Margin as a percentage of revenue to increase by about 300 basis points compared to 2007
2007 Financial Highlights
- Revenue
in the fourth quarter of $3.20 billion, was down 4 percent year over
year and was $10.95 billion for the full year, down 4 percent; however,
excluding the impact of the UMTS Access divestiture, revenue increased
by 2 percent in the quarter and grew by 2 percent for the full year(b). Compared to the third quarter of 2007, revenue grew by 18 percent.
- Nortel's
efforts at driving long-term profitability continued to make strong
progress, with gross margin in the fourth quarter of 43.7 percent, up
386 basis points year over year and 42.1 percent for the full year
2007, up 327 basis points.
- Operating Margin(a)
in the fourth quarter of 7.6 percent, was 339 basis points better year
over year and was 3.7 percent for the full year, up 369 basis points.
- Cash
balance, as at December 31, 2007 was $3.53 billion, with an inflow of
cash from operations in the fourth quarter of $417 million. Full-year
Cash Flow from Operations was an outflow of $403 million and excluding
the impact of the shareholder litigation settlement, an inflow of $182
million.(d)
- Due to changes
in the Company's Canadian tax profile, which include the sustained
strength of the Canadian dollar relative to the U.S. dollar, and the
recent reduction of the Canadian federal tax rate and other
expectations related to the timing of Canadian taxable income, the
Company decided to record a non-cash charge of $1,064 million in the
fourth quarter to increase the valuation allowance against the Canadian
deferred tax asset. This non-cash charge is reflected in the net loss
in the fourth quarter of $844 million, or $1.70 per common share on a
basic and diluted basis and for the full year of $957 million, or $1.98
per common share on a basic and diluted basis.
"We have
made strong consistent progress on key financial metrics in 2007 that
has positioned us well for continued improvements in 2008 and beyond,"
said Executive Vice-President and CFO Pavi Binning. "The change made to
adjust our Canadian deferred tax asset is an accounting transaction and
has no bearing on our financial fundamentals or cash position. It is
also important to note that despite the net reduction on our balance
sheet for accounting purposes, the Canadian deferred tax asset remains
available to offset the Company's future Canadian tax liability as
conditions warrant."
Business Transformation - 2008 Restructuring Plan
Under
the 2008 Restructuring Plan, Nortel expects to implement a net
reduction of its global workforce by approximately 2,100 positions and
in addition move approximately 1,000 positions to higher growth and
lower cost geographies, with about 70 percent of the net reduction
taking place in 2008. The plan also includes the sale of certain real
estate assets.
These actions are expected to result in annual
gross savings of approximately $300 million, with total charges to
earnings of approximately $275 million and cash outlays of
approximately $250 million, however the actual costs could be lower
with the redeployment of resources. Approximately 70 percent of the
charges are expected to be incurred in 2008 and the remainder in 2009.
Today's
announcement is designed to complement growth initiatives by increasing
the Company's global competitiveness and will contribute to the target
of double-digit operating margins and reduction of overall SG&A
costs.
Business Highlights
- In
Unified Communications, the Innovative Communications Alliance with
Microsoft logged over 600 wins to date and Nortel's alliance with IBM
strengthened through a joint commitment to drive a service oriented
architecture (SOA) platform to give customers the benefit of business
applications and processes operating on a software-based foundation.
- Nortel's
4G wireless technologies were highlighted with Verizon's decision to
trial LTE (Long-Term-Evolution) technology. Nortel also demonstrated
the industry's first WiMAX VoIP Call over a 2G/3G voice network,
allowing wireless service providers the efficiency and simplicity of
offering advanced voice and data capabilities without replacing
existing networks.
- More than 20 trials and contracts have
been signed for Nortel's 40G solutions, including Verizon Business who
wanted to find a simple and cost-effective way of delivering greater
capacity to its large enterprise customers across Europe.
- Nortel's
PBT technology demonstrated its competitive advantage over MPLS
solutions by delivering over 30 customer wins following the landmark BT
win early in 2007. The Metro Ethernet Networks team showed additional
progress with wins such as Swiss power company groupe-e, which chose
Nortel to help deliver high-bandwidth Ethernet connectivity to support
services such as VoIP, high-speed Internet access and data center
consolidation.
- Working with Polycom, Nortel brought to market
a world-class telepresence solution that delivers an open-architecture
(unlike many competitors) and the high-definition, real-time quality
needed by businesses who want to decrease their travel costs, increase
their productivity and significantly reduce their carbon footprint.
Revenue
Revenue
was $3.20 billion for the fourth quarter of 2007 compared to $3.32
billion for the fourth quarter of 2006 and $2.70 billion for the third
quarter of 2007. In the fourth quarter of 2007, revenue increased by 18
percent compared to the third quarter of 2007 and excluding the impact
of the UMTS Access divestiture, revenue increased by 2 percent compared
with the year-ago quarter.(b) The
fourth quarter of 2007 revenue was at the low end of our expectations
primarily due to lower than expected carrier spending in North America.
Revenue
| | Q4 2007 | YoY | YoY excl UMTS Access (b) | QoQ |
| Carrier Networks | $1,346 | (9%) | (2%) | 25% |
| Enterprise Solutions | $ 762 | (3%) | | 14% |
| Global Services | $ 605 | 12% | 32% | 12% |
| Metro Ethernet Networks | $ 429 | (4%) | | 19% |
| Other | $ 56 | (3%) | | 4% |
| Total | $3,198 | (4%) | 2% | 18% |
Carrier
Networks (CN) revenue in the fourth quarter of 2007 was $1,346 million,
a decrease of 9 percent compared with the year-ago quarter and an
increase of 25 percent sequentially. Compared to the year ago quarter,
CN revenue was impacted by the UMTS Access divestiture, partially
offset by growth in CDMA and VoIP. Excluding the impact of the UMTS
Access divestiture, CN revenue decreased by 2 percent in the fourth
quarter of 2007 compared with the year-ago quarter.(b)
Enterprise
Solutions (ES) revenue in the fourth quarter of 2007 was $762 million,
a decrease of 3 percent compared with the year-ago quarter and an
increase of 14 percent sequentially. Compared to the year ago quarter,
ES revenues were negatively impacted by lower revenues from the
LG-Nortel joint venture, primarily due to higher deferred revenue
recognized in the fourth quarter of 2006, partially offset by growth in
voice, data and applications businesses.
Global Services (GS)
revenue in the fourth quarter of 2007 was $605 million, an increase of
12 percent compared with the year-ago quarter and an increase of 12
percent sequentially. The fourth quarter showed strong growth in
network implementation services, support services and managed services
and benefited from the timing of contract completion. Excluding the
impact of the UMTS Access divestiture, GS revenue increased by 32
percent in the fourth quarter of 2007 compared with the year-ago
quarter.(b)
Metro Ethernet
Networks (MEN) revenue in the fourth quarter of 2007 was $429 million,
a decrease of 4 percent compared with the year-ago quarter and an
increase of 19 percent sequentially. The year over year decrease in
revenue was primarily due to decreases in long-haul optical revenue
resulting from revenue recognized in the fourth quarter of 2006, not
repeated to the same extent in the fourth quarter of 2007, as well as
decreases in legacy data, partially offset by increases in metro
optical.
Deferred Revenue
Deferred
revenue balances decreased by $204 million during the fourth quarter of
2007 compared to a decrease of $152 million in the fourth quarter of
2006. In 2007, deferred revenue decreased by $290 million compared to a
decrease of $188 million in 2006.
Gross margin
Gross
margin was 43.7 percent of revenue in the fourth quarter of 2007. This
compared to gross margin of 39.8 percent for the fourth quarter of 2006
and 43.0 percent for the third quarter of 2007. Compared to the fourth
quarter of 2006, gross margins benefited primarily from productivity
improvements and mix.
Operating Expenses
Operating Expenses
| | Q4 2007 | YoY | QoQ |
| SG&A | $ 678 | (2%) | 11% |
| R&D | $ 475 | (3%) | 14% |
| Total | $1,153 | (2%) | 12% |
Operating
Expenses were $1,153 million in the fourth quarter of 2007, compared to
$1,182 million for the fourth quarter of 2006 and $1,029 million for
the third quarter of 2007.
Selling, general and administrative
(SG&A) expenses were $678 million in the fourth quarter of 2007,
compared to $694 million for the fourth quarter of 2006, and $613
million for the third quarter of 2007. Compared to the fourth quarter
of 2006, SG&A was favourably impacted primarily by the UMTS Access
divestiture and lower costs related to our internal control remediation
activities, partially offset by unfavourable foreign exchange impacts.
Research
and development (R&D) expenses were $475 million in the fourth
quarter of 2007, compared to $488 million for the fourth quarter of
2006 and $416 million for the third quarter of 2007. Compared to the
fourth quarter of 2006, R&D was primarily impacted by the UMTS
Access divestiture partially offset by unfavourable foreign exchange
impacts.
Operating Margin(a)
Operating
Margin was 7.6 percent in the fourth quarter of 2007, compared to 4.2
percent for the fourth quarter of 2006 and 5.0 percent for the third
quarter of 2007. Fourth quarter of 2007 Operating Margin was the
highest in 12 quarters, reflecting the continued momentum of Nortel's
Business Transformation initiatives. Fourth quarter Operating Margin
was below our expectations due primarily to lower than expected
revenues from North American carriers and higher than expected
operating expenses due to higher sales commissions and higher R&D
costs from the write-down of equipment.
Other
Special
charges in the fourth quarter of 2007 of $38 million related to costs
associated with our 2007 and prior restructuring plans.
Other
income (expense) - net was $93 million of income for the fourth quarter
of 2007, compared to income of $23 million in the fourth quarter of
2006 and income of $156 million in the third quarter of 2007. Other
income included interest and dividend income of $45 million, foreign
exchange gains of $40 million and a gain of $15 million due to a market
value adjustment on an interest rate swap.
Minority interest
was an expense of $39 million in the fourth quarter of 2007, compared
to an expense of $58 million for the fourth quarter of 2006 and an
expense of $43 million for the third quarter of 2007. Minority interest
expense included an expense of $12 million related to the ongoing
payment of preferred shares dividends, but was primarily driven by the
profitability of the LG-Nortel joint venture.
Interest expense
was $80 million in the fourth quarter of 2007, compared to $97 million
for the fourth quarter of 2006 and $107 million for the third quarter
of 2007.
Income tax expense was $1,040 million in the fourth
quarter of 2007, compared to a benefit of $9 million for the fourth
quarter of 2006 and an expense of $50 million for the third quarter of
2007. The tax expense in the fourth quarter of 2007 included an
increase to the valuation allowance against the Canadian deferred tax
asset of $1,064 million and decreases to the valuation allowances
against the deferred tax assets in Germany, Ireland, and China of $21
million, reducing consolidated net deferred tax assets by $1,043
million to $3,323 million.
Earnings
The
Company reported a net loss in the fourth quarter of 2007 of $844
million, or $1.70 per common share on a basic and diluted basis,
compared to net loss of $80 million, or $0.19 per common share on a
basic and diluted basis, in the fourth quarter of 2006 and net income
of $27 million, or $0.05 per common share on a diluted basis, in the
third quarter of 2007.
Significant Impact Items and Tax Impact
| | Q4 2007 | Q4 2006 | Q3 2007 |
| Net Earnings / (Loss) | ($844) | ($80) | $27 |
| Restructuring Charges | $38 | $29 | $56 |
| Litigation Settlement Mark to Market | | $234 | |
| Loss (Gain) on Sale | ($23) | ($164) | $3 |
| Currency Exchange Loss (Gain) | ($40) | $32 | ($67) |
| Income Tax - Adjustment to Deferred Tax Asset | $1,043 | | $33 |
| Other Income - Loss (Gain) from Swap | ($15) | ($1) | ($14) |
| Total Tax Impact of above items | ($5) | ($1) | ($3) |
The
net loss in the fourth quarter of 2007 of $844 million included a
reduction of the deferred tax asset of $1,043 million, special charges
of $38 million for restructurings, a gain of $23 million on the sale of
assets, a gain of $40 million due to favourable effects of changes in
foreign exchange rates and a gain due to a market value adjustment of
$15 million on an interest rate swap. The net loss in the fourth
quarter of 2006 of $80 million included a loss of $234 million from the
mark-to-market of the shareholder litigation settlement, a gain of $164
million on the sale of assets, special charges of $29 million for
restructuring, a loss of $32 million due to unfavourable effects of
changes in foreign exchange rates, and a gain due to a market value
adjustment of $1 million on an interest rate swap. The net earnings in
the third quarter of 2007 of $27 million included special charges of
$56 million for restructuring, a tax expense of $33 million primarily
related to a reduction of the gross deferred tax assets, a loss of $3
million on the sale of assets, a gain of $67 million due to favourable
effects of changes in foreign exchange rates and a gain due to a market
value adjustment of $14 million on an interest rate swap.
Cash
balance at the end of the fourth quarter of 2007 was $3.53 billion, up
from $3.13 billion at the end of the third quarter of 2007. The
increase in cash was primarily driven by cash from operating activities
of $417 million and a positive impact from foreign exchange of $16
million, partially offset by cash used in financing activities of $23
million and cash used in investing activities of $6 million.
Full Year 2007 Results
For
2007, revenues were $10.95 billion compared to $11.42 billion for 2006.
Nortel reported a net loss for 2007 of $957 million, or $1.98 per
common share on a basic and diluted basis, compared to net earnings of
$28 million, or $0.06 per common share on a diluted basis, for the year
2006.
Net loss for 2007 included a tax expense of $1,114
million primarily related to an increase to the valuation allowance
against the Canadian deferred tax asset, special charges of $210
million for restructurings, a gain of $176 million due to favourable
effects of changes in foreign exchange rates, a gain of $54 million
related to a mark to market value adjustment of the equity portion of
the class action litigation settlement, a gain of $31 million on the
sale of assets, a gain due to a market value adjustment of $29 million
on an interest rate swap, and a charge of $35 million related to the
settlement of the SEC investigation. Net earnings for the year 2006
included a shareholder litigation recovery of $219 million reflecting
mark-to-market adjustments of the share portion of the global class
action settlement, special charges of $105 million primarily related to
restructuring activities, a benefit of approximately $43 million
related to the announced changes to the North American employee benefit
plans and a benefit of $206 million related to the sale of assets.
Remediation of Revenue Related Material Weakness
Nortel
will report in its 2007 Annual Report on Form 10-K ("2007 Form 10-K")
that management implemented remedial measures and internal controls
during 2007 to address the revenue related material weakness. As at
December 31, 2007, Nortel concluded that these measures resulted in the
elimination of the material weakness. See Item 9A in the 2007 Form
10-K.
(a) Operating
Margin is a non-GAAP measure defined as Gross Profit less SG&A and
R&D expenses. Operating Margin percentage is a non-GAAP measure
defined as Operating Margin divided by Revenue. Nortel's management
believes that these measures are meaningful measurements of operating
performance and provides greater transparency to investors with respect
to Nortel's performance and supplemental information used by management
in its financial and operational decision making. These non-GAAP
measures may also facilitate comparisons to Nortel's historical
performance and competitors' operating results. These non-GAAP measures
should be considered in addition to, but not as a substitute for, the
information contained in Nortel's financial statements prepared in
accordance with GAAP. These measures may not be synonymous to similar
measurement terms used by other companies. Note that commencing in the
first quarter of 2008, the primary financial measure used by the CEO in
assessing performance is Operating Margin.
(b) Fourth
quarter and full year of 2006 included revenue of $110 million and $484
million respectively in CN and $81 million and $176 million
respectively in Global Services that related to the UMTS Access
business that was sold on December 31, 2006. Consolidated revenue
growth and CN and GS revenue growth for the fourth quarter of 2007
excluding UMTS revenue are non-GAAP measures. Nortel's management
believes that this supplemental information is meaningful, given the
sale of the UMTS Access business, by providing greater transparency to
investors with respect to Nortel's performance and by facilitating
comparisons to Nortel's historical performance. These non-GAAP measures
should be considered in addition to, but not as a substitute for, the
information contained in Nortel's financial statements prepared in
accordance with GAAP.
(c) The
Company's financial outlook contains forward-looking information and as
such, is based on certain assumptions, and is subject to important risk
factors and uncertainties (which are summarized in italics at the end
of this press release) that could cause actual results or events to
differ materially from this outlook.
(d) Cash
flow from operations of $182 million, which excludes the $585 million
outflow related to the litigation settlement, is a non-GAAP measure.
Nortel's management believes that this supplemental information is
meaningful, given the impact on cash flow from operations of the global
class action litigation settlement, by providing greater transparency
to investors with respect to Nortel's performance and by facilitating
comparisons to Nortel's historical performance. This non-GAAP measure
should be considered in addition to, but not as a substitute for, the
information contained in our financial statements prepared in
accordance with GAAP.
About Nortel
Nortel
is a recognized leader in delivering communications capabilities that
make the promise of Business Made Simple a reality for our customers.
Our next-generation technologies, for both service provider and
enterprise networks, support multimedia and business-critical
applications. Nortel's technologies are designed to help eliminate
today's barriers to efficiency, speed and performance by simplifying
networks and connecting people to the information they need, when they
need it. Nortel does business in more than 150 countries around the
world. For more information, visit Nortel on the Web at www.nortel.com. For the latest Nortel news, visit www.nortel.com/news.
Certain
statements in this press release may contain words such as "could",
"expects", "may", "anticipates", "believes", "intends", "estimates",
"targets", "envisions", "seeks" and other similar language and are
considered forward-looking statements or information under applicable
securities legislation. These statements are based on Nortel's current
expectations, estimates, forecasts and projections about the operating
environment, economies and markets in which Nortel operates. These
statements are subject to important assumptions, risks and
uncertainties, which are difficult to predict and the actual outcome
may be materially different. Nortel has made various assumptions in the
preparation of its financial outlook in this press release, including
the following company specific assumptions: no further negative impact
to Nortel's results of operations, financial condition and liquidity
arising from Nortel's restatements of its financial results; increase
in sales to Nortel's enterprise customers and wireless service provider
customers in the Asia Pacific region as a result of Nortel's joint
venture with LG Electronics Inc.; improvement in Nortel's product costs
due to favorable supplier pricing, offset by higher costs associated
with customer deployments in emerging markets; cost reductions
resulting from the 2008 and 2007 restructuring plans; increased
employee costs relative to expected cost of living adjustments and
employee bonuses; and the effective execution of Nortel's strategy,
including the execution of Nortel's supply chain strategy and the
implementation of its Business Transformation initiatives in 2008.
Nortel has also made certain macroeconomic and general industry
assumptions in the preparation of its financial guidance including:
global service provider capital expenditures in 2008 reflecting low to
mid single digit growth as compared to mid to high single digit growth
in 2007; global growth rate to remain stable with investments in next
generation products and services to exceed declines in purchases of
legacy equipment; and a moderate impact as a result of expected
industry consolidation among service providers in various geographic
regions, particularly in North America and EMEA. The above assumptions,
although considered reasonable by Nortel at the date of this press
release, may prove to be inaccurate and consequently Nortel's actual
results could differ materially from its expectations set out in this
press release.
Further, actual results or
events could differ materially from those contemplated in
forward-looking statements as a result of the following (i) risks and
uncertainties relating to Nortel's business including: significant
competition, competitive pricing practice, cautious capital spending by
customers as a result of factors including current economic
uncertainties, industry consolidation, rapidly changing technologies,
evolving industry standards, frequent new product introductions and
short product life cycles, and other trends and industry
characteristics affecting the telecommunications industry; any
material, adverse affects on Nortel's performance if its expectations
regarding market demand for particular products prove to be wrong; the
sufficiency of recently announced restructuring actions; any negative
developments associated with Nortel's suppliers and contract
manufacturing agreements including our reliance on certain suppliers
for key optical networking solutions components; potential penalties,
damages or cancelled customer contracts from failure to meet delivery
and installation deadlines and any defects or errors in Nortel's
current or planned products; fluctuations in foreign currency exchange
rates; potential higher operational and financial risks associated with
Nortel's efforts to expand internationally; potential additional
valuation allowances for all or a portion of Nortel's deferred tax
assets if market conditions deteriorate or future results of operations
are less than expected; a failure to protect Nortel's intellectual
property rights, or any adverse judgments or settlements arising out of
disputes regarding intellectual property; any negative effect of a
failure to maintain integrity of Nortel's information systems; changes
in regulation of the telecommunications industry or other aspects of
the industry; any failure to successfully operate or integrate
strategic acquisitions, or failure to consummate or succeed with
strategic alliances; Nortel's potential inability to attract or retain
the personnel necessary to achieve its business objectives or to
maintain an effective risk management strategy; (ii) risks and
uncertainties relating to Nortel's liquidity, financing arrangements
and capital including: any inability of Nortel to manage cash flow
fluctuations to fund working capital requirements or achieve its
business objectives in a timely manner or obtain additional sources of
funding; high levels of debt, limitations on Nortel capitalizing on
business opportunities because of senior notes covenants, or on
obtaining additional secured debt pursuant to the provisions of
indentures governing certain of Nortel's public debt issues; Nortel's
below investment grade credit rating; any increase of restricted cash
requirements for Nortel if it is unable to secure alternative support
for obligations arising from certain normal course business activities,
or any inability of Nortel's subsidiaries to provide it with sufficient
funding; any negative effect to Nortel of the need to make larger
defined benefit plans contributions in the future or exposure to
customer credit risks or inability of customers to fulfill payment
obligations under customer financing arrangements; or any negative
impact on Nortel's ability to make future acquisitions, raise capital,
issue debt and retain employees arising from stock price volatility and
any declines in the market price of Nortel's publicly traded
securities; and (iii) risks and uncertainties relating to Nortel's
prior restatements and related matters including: any negative impact
on Nortel and NNL of such restatements; legal judgments, fines,
penalties or settlements related to the ongoing criminal investigations
of Nortel in the U.S. and Canada; the significant dilution of Nortel's
existing equity positions resulting from the approval of its class
action settlement; or any significant pending or future civil
litigation actions not encompassed by Nortel's class action settlement.
For additional information with respect to certain of these and other
factors, see Nortel's Annual Report on Form10-K and other securities
filings with the United States Securities and Exchange Commission.
Unless otherwise required by applicable securities laws, Nortel
disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
*Nortel, the Nortel logo and the Globemark are trademarks of Nortel Networks.
Nortel will host a teleconference/audio webcast to discuss Fourth Quarter 2007 Results:
Date: Wednesday, February 27, 2008
Time: 8:30 a.m. ET
To take part in the audio Webcast, please visit: www.nortel.com/q4earnings2007
To participate in the audio teleconference and Q&A, please call:
*** Please dial in at least 15 minutes prior to the start of the event ***
Replay: A replay of the audio teleconference will be available at 11:00 a.m. ET at:
- North America 1-800-408-3053 Passcode: 3252006#
- International 1-416-695-5800 Passcode: 3252006#
Audio webcast replay: www.nortel.com/q4earnings2007
Contacts for Press and Analysts:
Media
Jay Barta
(972) 685-2381
jbarta@nortel.com
Mohammed Nakhooda
(905) 863-7407
mohammna@nortel.com
Investors
(888) 901-7286
(905) 863-6049
investor@nortel.com
Additional Media & Analyst Contacts
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