Reliant FORM 10-K manual Nortel Non

Supplemental Consolidating Statements of Operations for the year ended December 31, 2002:

			Nortel		Nortel				Non-
			Networks	Networks			Guarantor		Guarantor
(millions of U.S. dollars)	Corporation				Limited	Subsidiaries		Subsidiaries		Eliminations			Total
Revenues	$	–	$	3,026	$	8,557	$	2,737	$	(3,312)	$	11,008
Cost of revenues			–		2,720		5,433		2,262		(3,312)		7,103
Gross profit			–		306		3,124		475		–		3,905
Selling, general and administrative expense		4			593		1,647		309		–		2,553
Research and development expense			–		870		937		276		–		2,083
Amortization of acquired technology and other			–		–		20		137		–		157
Deferred stock option compensation			–		–		–		110		–		110
Special charges
Goodwill impairment			–		–		203		392		–		595
Other special charges			–		346		834		320		–		1,500
(Gain) loss on sale of businesses and assets			–		16		(8)		(29)		–		(21)
Operating earnings (loss)		(4)			(1,519)		(509)		(1,040)		–		(3,072)
Other income (expense) — net		682			(80)		134		(216)		(525)		(5)
Interest expense
Long-term debt		(84)			(105)		–		(31)		–		(220)
Other			–		–		(53)		1		–		(52)
Earnings (loss) from continuing operations before income taxes,
minority interests and equity in net loss of associated companies		594			(1,704)		(428)		(1,286)		(525)		(3,349)
Income tax benefit (expense)		(2)			330		(49)		189		–		468
		592			(1,374)		(477)		(1,097)		(525)		(2,881)
Minority interests — net of tax			–		–		–		31		(26)		5
Equity in net earnings (loss) of associated companies — net of tax		(3,485)			(789)		(773)		(10)		5,040		(17)
Net earnings (loss) from continuing operations		(2,893)			(2,163)		(1,250)		(1,076)		4,489		(2,893)
Net earnings (loss) from discontinued operations — net of tax		(101)			(101)		(66)		–		167		(101)
Net earnings (loss)	$	(2,994)		$	(2,264)	$	(1,316)	$	(1,076)	$	4,656	$	(2,994)

F-86