Reliant FORM 10-K manual Revenues and cost of revenues

Consolidated Statement of Operations data for the year ended December 31, 2002

	As previously
		reported	Adjustments		As restated
Revenues	$	10,569	$	439	$	11,008
Gross profit		3,771		134		3,905
Operating earnings (loss)		(3,435)		363		(3,072)
Earnings (loss) from continuing operations before income taxes, minority interests and equity in net loss of
associated companies		(3,721)		372		(3,349)
Net earnings (loss) from continuing operations		(3,286)		393		(2,893)
Net earnings (loss) from discontinued operations — net of tax		20		(121)		(101)
Net earnings (loss)		(3,266)		272		(2,994)
Basic and diluted earnings (loss) per common share
— from continuing operations	$	(0.86)	$	0.11	$	(0.75)
— from discontinued operations		0.01		(0.04)		(0.03)
Basic and diluted earnings (loss) per common share	$	(0.85)	$	0.07	$	(0.78)

Consolidated Statement of Operations data for the year ended December 31, 2001

	As previously
		reported	Adjustments		As restated
Revenues	$	17,408	$	1,492	$	18,900
Gross profit		3,394		894		4,288
Operating earnings (loss)		(26,469)		1,449		(25,020)
Earnings (loss) from continuing operations before income taxes, minority interests and equity in net loss of
associated companies		(27,176)		1,339		(25,837)
Net earnings (loss) from continuing operations		(24,174)		904		(23,270)
Net earnings (loss) from discontinued operations — net of tax		(2,996)		529		(2,467)
Net earnings (loss)		(27,155)		1,433		(25,722)
Basic and diluted earnings (loss) per common share
— from continuing operations	$	(7.58)	$	0.28	$	(7.30)
— from discontinued operations		(0.94)		0.16		(0.78)
Basic and diluted earnings (loss) per common share	$	(8.52)	$	0.44	$	(8.08)

Revenues and cost of revenues

Revenues and cost of revenues were impacted by various errors related to revenue recognition, corrections to foreign exchange accounting, intercompany related items, special charges and other adjustments, including financial statement reclassifications. The net impact to revenues of the adjustments was an increase of $439 and $1,492 for the years ended December 31, 2002 and 2001, respectively. The net impact to cost of revenues related to these revenue adjustments, and the other corrections, was an increase of $305 and $598 for the years ended December 31, 2002 and 2001, respectively. The Second Restatement adjustments to revenues and cost of revenues related primarily to the following items:

•incorrect application of SEC Staff Accounting Bulletin, or SAB, No. 104, Revenue Recognition (preceded by SAB 101), or SAB 104, or AICPA Statement of Position, or SOP, 97-2, Software Revenue Recognition, or SOP 97-2, the most significant of which related to revenue that should have been deferred until title or risk of loss had passed, or products had been delivered;

•incorrect recognition of revenue upon product delivery to a certain reseller; and

•various other adjustments, primarily related to specific contracts and transactions and errors related to non-cash incentives and concessions provided to customers.

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