Lucent Technologies? help?

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      The following is an excerpt from Lucent
      Technologies’ Management’s Discussion and
      Analysis of Financial Condition and Results
      of Operations:
      Executive Summary
      We design and deliver the systems, software
      and services that drive next-generation communications
      networks. Backed by Bell Labs
      research and development, we use our
      strengths in mobility, optical, access, data and
      voice networking technologies, as well as
      services, to create new revenue-generating
      opportunities for our customers, while
      enabling them to quickly deploy and better
      manage their networks. Our customer base
      includes communications service providers,
      governments and enterprises worldwide.
      We have three segments organized
      around the products and services we sell.
      The reportable segments are Integrated Network
      Solutions (“INS”), Mobility Solutions
      (“Mobility”) and Lucent Worldwide Services
      (“Services”). INS provides a broad range
      of software and wireline equipment related
      to voice networking (primarily consisting
      of switching products, which we sometimes
      refer to as convergence solutions, and voice
      messaging products), data and network
      management (primarily consisting of access
      and related data networking equipment
      and operating support software) and optical
      networking. Mobility provides software and
      wireless equipment to support radio access
      and core networks. Services provides deployment,
      maintenance, professional and managed
      services in support of both our product
      offerings as well as multi-vendor networks.
      Beginning in fiscal 2001, the global
      telecommunications market deteriorated,
      resulting from a decrease in the competitive
      local exchange carrier market and a significant
      reduction in capital spending by established
      service providers.This trend intensified
      during fiscal 2002 and continued into fiscal
      2003. Reasons for the market deterioration
      included general economic slowdown, network
      overcapacity, customer bankruptcies,
      network build-out delays and limited availability
      of capital.
      We believe that the market for telecommunications
      equipment has stabilized
      and is starting to grow in certain areas. The
      growing demands of enterprises and consumers
      for additional services tailored to
      their needs is creating the need for a new
      convergence of networks, technologies and
      1. Using the Consolidated Balance
      Sheets for Lucent Technologies for
      September 30, 2004 and 2003, prepare
      a common-size balance sheet.
      2. Evaluate the asset, debt, and equity
      structure of Lucent Technologies, as
      well as trends and changes found on
      the common-size balance sheet.
      3. What concerns would investors and
      creditors have based on only this
      4. What additional financial and nonfinancial
      information would investors
      and creditors need to make investing
      and lending decisions for Lucent
      C A S E S
      Case 2.1 Lucent Technologies

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