Nortel Networks Corp - Company Report

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Company Reports are concise reports that provide a review of the company's activities, corporate strategy and recent developments.
Published: February 2007
Pages: 74

Nortel Networks Corp is a global supplier of communication equipment serving both service provider and enterprise customers. Nortel’s next-generation technologies span access and core networks, support multimedia, and business-critical applications, and help eliminate current barriers to efficiency, speed, and performance by simplifying networks and connecting people with information. The company’s networking solutions consist of hardware, software, and services. Nortel’s business activities include the design, development, assembly, marketing, sale, licensing, installation, servicing, and support of these networking solutions.

Nortel Networks was originally known as the Northern Electric Company and was established in 1914. In 1999, the company changed its name to Northern Networks Corporation and in May 2000, renamed itself Nortel Networks Limited. On May 1, 2000, the company participated in a Canadian court-approved plan of arrangement with Nortel Networks Limited and BCE Inc, the largest shareholder of Nortel Networks Limited prior to the plan of arrangement. In connection with the plan of arrangement on May 1, 2000:

• the company changed its name to Nortel Networks Corporation;
• the holders of the outstanding publicly-traded common shares of Nortel Networks Limited became common shareholders of the company;
• common shares of the company were distributed to the common shareholders of BCE; and,
• Nortel Networks Limited became the principal operating subsidiary of the company.

The company also assumed Nortel Networks Limited’s financial reporting history as of May 1, 2000, the date of the plan of arrangement, for financial reporting purposes. Effective May 1, 2000, in conjunction with the plan of arrangement, BCE’s ownership interest in Nortel Networks was reduced from approximately 36% to a nominal amount. As a result, BCE and entities owned by BCE were no longer considered related parties immediately after the plan of arrangement.

The common shares of Nortel Networks Corporation are publicly traded on the New York Stock Exchange (NYSE) and Toronto Stock Exchange (TSX). Although based in Canada, it operates mostly in the US and reports its financial figures in US dollars.