Nortel Restates 2003 Results, Appoints Ethics Officer"

TORONTO -- Nortel Networks Corp. (NT) filed its long-awaited financial restatements for 2003 to resolve accounting errors and said it will adopt recommendations of the panel that reviewed the problems.

The Canadian telecommunications-equipment supplier also said Tuesday that 12 executives have volunteered to pay back bonuses amounting to about $8.6 million "as a matter of corporate leadership and integrity," although none was found to have been directly involved in inappropriate accounting.

In addition, Nortel has appointed Susan E. Shepard, a commissioner of the New York State Ethics Commission since May 2003, to the new position of chief ethics and compliance officer, effective Feb. 21.

The restatements show Nortel earned less for 2003, but generated more revenue than previously reported.

Nortel said Tuesday that it earned $434 million, or 10 cents a share, for 2003, on revenue of $10.19 billion. In January 2004, Nortel reported net income for 2003 of $732 million, or 17 cents a share, and revenue of $9.81 billion.

Nortel also restated results for 2002 and 2001. For 2002, the restated net loss was $2.99 billion, or 78 cents a share, on revenue of $11.01 billion. For 2001, Nortel's net loss was $25.72 billion, or $8.08 a share, on revenue of $18.9 billion.

Nortel expects to file financial statements for the first and second quarters of 2004 by the end of January, and to follow that with third-quarter statements as soon as practical.

Nortel has been trying for months to resolve its accounting problems, which stemmed from noncash accounting entries that were used to artificially raise net income.

"With the completion of our restatements we have a solid foundation on which to move forward with our business," President and Chief Executive Bill Owens said Tuesday in a prepared statement.

Nortel said the review of the problems has resulted in recommendations by the audit committee for remedial measures to prevent "the inappropriate accounting conduct" that led to the restatement. Nortel said its board has adopted the recommendations and instructed management to develop a detailed plan and timetable for implementation.

-Judy Bocklage; Dow Jones Newswires; 609-520-7811

(END) Dow Jones Newswires "

Posted to the site on 11th January 2005