Nortel Networks 8-K 2011
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 13, 2011
(Exact name of registrant as specified in its charter)
Registrants telephone number, including area code 905-863-7000
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Nortel Networks Corporation and Nortel Networks Limited (together, Nortel) announced they have now determined that Nortels U.S. subsidiaries and the subsidiaries they control will be deconsolidated and accounted for under the cost method of accounting, effective as of October 1 2010. This change is largely based on Nortels work toward standalone debtor estates due to the diminishing interdependency between the estates primarily resulting from the sale of substantially all of Nortels global businesses. The change in accounting is currently expected to result in a fourth quarter 2010 non-cash charge of over US$2 billion, subject to finalization of Nortels year end close process. The charge is primarily related to the recognition of intercompany liabilities between the Canadian estate and U.S. estate that previously were eliminated upon consolidation of the financial results. The estates continue to work together toward fulfilling Nortels obligations under the transition services agreements with purchasers of its sold businesses, as well as in other areas such as efforts to optimize the value of Nortels intellectual property portfolio.
As previously reported, Nortel will continue to evaluate the method of accounting for all its subsidiaries.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: January 18, 2011