Reliant FORM 10-K manual Segment contribution margin, Segment Management EBT, Total

of the volume of our business.

Segment contribution margin

		For the years ended December 31,						2003 vs 2002			2002 vs 2001
		2003		2002		2001	$	Change	% Change	$	Change	% Change
Wireless Networks	$	1,573	$	1,104	$	515	$	469	42	$	589	114
Enterprise Networks		560		316		263		244	77		53	20
Wireline Networks		612		736		611		(124)	(17)		125	20
Optical Networks		(2)		(778)		(1,524)		776	100		746	49
Other		(341)		(26)		(1,688)		(315)	(1,212)		1,662	98
Total	$	2,402	$	1,352	$	(1,823)	$	1,050	78	$	3,175	174

As a result of the gross margin and SG&A expense changes discussed above, our total segment contribution margin improved by $1,050 in 2003 compared to 2002 and by $3,175 in 2002 compared to 2001. See “Segment information” in note 6 of the accompanying consolidated financial statements.

Segment Management EBT

		For the years ended December 31,						2003 vs 2002			2002 vs 2001
		2003		2002		2001	$	Change	% Change	$	Change	% Change
Wireless Networks	$	695	$	256	$	(456)	$	439	171	$	712	156
Enterprise Networks		279		29		(141)		250	862		170	121
Wireline Networks		171		178		(205)		(7)	(4)		383	187
Optical Networks		(260)		(1,274)		(2,504)		1,014	80		1,230	49
Other		(306)		(209)		(2,634)		(97)	(46)		2,425	92
Total	$	579	$	(1,020)	$	(5,940)	$	1,599	157	$	4,920	83

The changes in segment Management EBT are a result of the gross margin, SG&A expense and R&D expense changes discussed above. See “Segment information” in note 6 of the accompanying consolidated financial statements for a reconciliation of segment Management EBT to net earnings (loss) from continuing operations.

Amortization of intangibles

The amortization of acquired technology was $101 and $157 in 2003 and 2002, respectively, and primarily reflected the charge related to the acquisition of Alteon WebSystems, Inc, or Alteon. The remaining net carrying value of acquired technology was fully amortized in the third quarter of 2003.

On January 1, 2002, we adopted the provisions of SFAS No. 142, “Goodwill and Other Intangible Assets”, or SFAS 142. As a result, amortization of goodwill, including goodwill recorded in past business combinations, and amortization of intangibles with an indefinite life ceased upon adoption of SFAS 142.

The amortization of goodwill for 2001 primarily reflected the charges related to the acquisitions of Bay Networks, Inc., Alteon, Xros, Inc., Qtera Corporation, Clarify Inc. and the acquisition of JDS’s Switzerland-based subsidiary and its related assets in Poughkeepsie, New York (also known as the 980 NPLC business).

The net carrying value of goodwill was $2,305 on December 31, 2003 and $2,199 on December 31, 2002.

Deferred stock option compensation

For acquisitions completed subsequent to July 1, 2000, we were required to allocate a portion of the purchase price to deferred compensation related to unvested stock options held by employees of the acquired companies. This deferred compensation was amortized to net earnings (loss) based on the graded vesting schedule of the stock option awards.

Deferred stock option compensation was $16 in 2003 compared to $110 in 2002 and $248 in 2001. The declines were

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