* Company also appoints chief ethics and compliance officer
Nortel completed its financial restatements for the 2001 – 2003 fiscal years, ending a tumultuous period for the company as it attempted to conduct business while reconstructing its credibility with customers, business partners and investors.
The completion of the restatements is accompanied by a “new tone at the top,” in which senior-level Nortel executives are now committed to “transparency and integrity” when reporting financial results, says Nortel CEO Bill Owens. To underscore that, Nortel also created the position and announced the appointment of a chief ethics and compliance officer, and said that 12 senior executives have voluntarily agreed to pay back some $8.6 million in bonuses tied to bogus profitability.
The restatements required the attention of 600 people at a cost of $100 million, Owens says. They also incurred numerous reporting delays.
Audited results for 2003 were revenue of $10.2 billion and earnings of $434 million. For 2002, restatements resulted in a loss of $3 billion on revenue of $11 billion; and a loss of $25.7 billion for the full year of 2001 on revenue of $18.9 billion.
Nortel expects to file unaudited financial statements for the first and second quarters of 2004 before the end of this month and follow with unaudited financial statements for the third quarter of 2004. Nortel already disclosed a “limited estimated unaudited” loss of 6 cents per share for the 2004 third quarter, on revenue of $2.3 billion. This was down from revenue of about $2.6 billion for the 2004 second quarter.
Nortel already stated revenue forecasts in the range of $2.8 billion to $2.9 billion for the fourth quarter and revenue between $10.1 billion to $10.2 billion for the full year 2004.
The company’s new ethics and compliance officer, effective Feb. 21, is Susan Shepard, a former commissioner for the New York State Ethics Commission. Over the past 20 years, Shepard was also Commissioner of Investigation for New York City, Chief Counsel to the New York State Commission of Investigation, and an Assistant United States Attorney for the Eastern District of New York.
