Reliant FORM 10-K manual Goodwill, Intangible assets net, Other accrued liabilities

Goodwill:

The following table outlines goodwill by reportable segment:

	Wireless		Enterprise		Wireline			Optical
	Networks		Networks		Networks		Networks			Other		Total
Balance — net as of December 31, 2001	$	21	$	1,658	$	524	$	590	$	15	$	2,808
Change:
Disposal		–		–		–		–		(15)		(15)
Impairment		–		–		–		(595)		–		(595)
Foreign exchange		–		(2)		(2)		5		–		1
Balance — net as of December 31, 2002		21		1,656		522		–		–		2,199
Change:
Additions(a)		13		31		43		9		–		96
Foreign exchange		1		5		4		–		–		10
Balance — net as of December 31, 2003	$	35	$	1,692	$	569	$	9	$	–	$	2,305

(a)See note 10 for additional information.

During the year ended December 31, 2003, Nortel Networks performed its annual goodwill impairment test and concluded that there was no impairment. During the three months ended September 30, 2002, an impairment test was performed on goodwill in accordance with SFAS 142 for all reporting units due to a significant adverse change in the business climate and taking into consideration Nortel Networks market capitalization at the end of the third quarter of 2002. All of Nortel Networks reporting units had fair values in excess of their carrying values with the exception of Optical Networks. As a result of the impairment test, Nortel Networks recorded a write down of goodwill of $595 within the Optical Networks segment during the year ended December 31, 2002.

Intangible assets — net:

		2003		2002
Acquired technology(a)	$	–	$	98
Other intangible assets(b)		45		–
Pension intangible assets(c)		41		41
Intangible assets — net	$	86	$	139

(a)As of December 31, 2003, acquired technology was fully amortized.

(b)Other intangible assets are being amortized over a ten year period ending in 2013. Amortization expense for the next five years commencing in 2004 is expected to be $9, $6, $5, $5 and $4, respectively. The amortization expense is denominated in a foreign currency and may fluctuate due to changes in foreign exchange rates.

(c)Pension intangible assets were recorded as required by SFAS No. 87, “Employers’ Accounting for Pensions”. Amounts are not amortized but are adjusted as part of the annual minimum pension liability assessment.

Other accrued liabilities:

		2003		2002
Outsourcing and selling, general and administrative related	$	302	$	486
Customer deposits		73		69
Product related		120		171
Warranty		387		408
Deferred income		761		1,108
Miscellaneous taxes		76		74
Income taxes payable		111		150
Current liabilities of discontinued operations		6		63
Interest payable		62		67
Advance billings in excess of revenues recognized to date on long-term contracts		509		394
Other		98		267
Other accrued liabilities	$	2,505	$	3,257

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