AS FILED WITH THE SEC ON MAY 6, 2004
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2004
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________to _____________
Commission file number 001-11639
LUCENT TECHNOLOGIES INC.
| A Delaware Corporation |
I.R.S. Employer No. 22-3408857 |
600 Mountain Avenue, Murray Hill, New Jersey 07974
Telephone Number: 908-582-8500
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x No o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes x No o
At April 30, 2004, 4,285,610,063 common shares were outstanding.
| 2 |
Form 10-Q - Part I |
INDEX
| Part I – Financial Information: |
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| Item 1. |
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Financial Statements |
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Consolidated Statements of Operations for the Three and Six Months Ended March 31, 2004 and 2003 |
3 |
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Consolidated Balance Sheets as of March 31, 2004 and September 30, 2003 |
4 |
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Consolidated Statement of Changes in Shareowners’ Deficit for the Six Months Ended March 31, 2004 |
5 |
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Consolidated Statements of Cash Flows for the Six Months Ended March 31, 2004 and 2003 |
6 |
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7 | |
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| Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
20 |
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| Item 3. |
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35 | |
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| Item 4. |
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36 | |
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| Part II – Other Information: |
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| Item 1. |
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37 | |
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| Item 2. |
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37 | |
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| Item 4. |
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37 | |
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| Item 5. |
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38 | |
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| Item 6. |
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38 | |
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| 3 |
Form 10-Q - Part I |
PART 1 - Financial Information
Item 1. Financial Statements
LUCENT TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)
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Three months ended |
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Six months ended |
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2004 |
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2003 |
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2004 |
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2003 |
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Revenues: |
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Products |
|
$ |
1,715 |
|
$ |
1,972 |
|
$ |
3,508 |
|
$ |
3,560 |
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Services |
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|
479 |
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|
431 |
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|
945 |
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|
918 |
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Total revenues |
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2,194 |
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|
2,403 |
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|
4,453 |
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4,478 |
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Costs: |
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Products |
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|
882 |
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1,263 |
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1,863 |
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2,471 |
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Services |
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|
374 |
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|
378 |
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|
733 |
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|
791 |
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Total costs |
|
|
1,256 |
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|
1,641 |
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|
2,596 |
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|
3,262 |
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Gross margin |
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|
938 |
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|
762 |
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1,857 |
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1,216 |
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Operating expenses: |
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Selling, general and administrative |
|
|
315 |
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|
491 |
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|
642 |
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|
887 |
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Research and development |
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|
325 |
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|
382 |
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|
617 |
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|
771 |
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Business restructuring |
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(17 |
) |
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(131 |
) |
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12 |
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(150 |
) |
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Total operating expenses |
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|
623 |
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|
742 |
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|
1,271 |
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|
1,508 |
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Operating income (loss) |
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|
315 |
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20 |
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|
586 |
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(292 |
) |
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Other expense, net |
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|
172 |
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|
489 |
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|
93 |
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|
467 |
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Interest expense |
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|
97 |
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|
79 |
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|
210 |
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|
173 |
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Income (loss) before income taxes |
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|
46 |
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(548 |
) |
|
283 |
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(932 |
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Benefit from income taxes |
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|
22 |
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|
197 |
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|
123 |
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|
317 |
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Net income (loss) |
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68 |
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(351 |
) |
|
406 |
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(615 |
) |
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Conversion / redemption cost – 8.00% preferred stock |
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|
— |
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(166 |
) |
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(1 |
) |
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(266 |
) |
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Preferred stock dividends and accretion |
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— |
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(36 |
) |
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12 |
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(61 |
) |
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Net income (loss) applicable to common shareowners |
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$ |
68 |
|
$ |
(553 |
) |
$ |
417 |
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$ |
(942 |
) |
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Net income (loss) applicable to common shareowners: |
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Basic |
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$ |
0.02 |
|
$ |
(0.14 |
) |
$ |
0.10 |
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$ |
(0.25 |
) |
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Diluted |
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$ |
0.02 |
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$ |
(0.14 |
) |
$ |
0.09 |
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$ |
(0.25 |
) |
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Weighted average number of common shares outstanding: |
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Basic |
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4,255 |
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3,945 |
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4,218 |
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|
3,763 |
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Diluted |
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|
4,346 |
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3,945 |
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4,784 |
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|
3,763 |
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See Notes to Unaudited Consolidated Financial Statements.
| 4 |
Form 10-Q - Part I |
LUCENT TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in Millions, Except Per Share Amounts)
(Unaudited)
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March 31, |
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September 30, |
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| ASSETS |
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| Cash and cash equivalents |
|
$ |
3,329 |
|
$ |
3,821 |
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| Marketable securities |
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|
821 |
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|
686 |
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| Receivables, less allowance of $140 and $246, respectively |
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|
1,587 |
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|
1,511 |
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| Inventories |
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|
789 |
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|
632 |
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| Other current assets |
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|
933 |
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|
1,183 |
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| Total current assets |
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7,459 |
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7,833 |
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| Marketable securities |
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|
439 |
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|
— |
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| Property, plant and equipment, net |
|
|
1,479 |
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1,593 |
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| Prepaid pension costs |
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|
5,013 |
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|
4,659 |
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| Goodwill and other acquired intangibles, net |
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|
185 |
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|
188 |
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| Other assets |
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|
1,206 |
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|
1,492 |
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| Total assets |
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$ |
15,781 |
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$ |
15,765 |
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| LIABILITIES |
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| Accounts payable |
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$ |
989 |
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$ |
1,072 |
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| Payroll and benefit-related liabilities |
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|
953 |
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|
1,080 |
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| Debt maturing within one year |
|
|
907 |
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|
389 |
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| Other current liabilities |
|
|
2,903 |
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|
2,479 |
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| Total current liabilities |
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5,752 |
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|
5,020 |
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| Postretirement and postemployment benefit liabilities |
|
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4,707 |
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|
4,669 |
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| Pension liabilities |
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|
2,270 |
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|
2,494 |
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| Long-term debt |
|
|
4,214 |
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|
4,439 |
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| Liability to subsidiary trust issuing preferred securities |
|
|
1,152 |
|
|
1,152 |
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| Other liabilities |
|
|
1,206 |
|
|
1,362 |
|
| Total liabilities |
|
|
19,301 |
|
|
19,136 |
|
|
|
|
|
|
|
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| Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
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| 8.00% redeemable convertible preferred stock |
|
|
— |
|
|
868 |
|
|
|
|
|
|
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| SHAREOWNERS’ DEFICIT |
|
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| Preferred stock - par value $1.00 per share; authorized shares: 250; issued and outstanding shares: none |
|
|
— |
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— |
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| Common stock - par value $.01 per share; authorized shares: 10,000; 4,278 issued and 4,277 outstanding shares as of March 31, 2004 and 4,170 issued and 4,169 outstanding shares as of September 30, 2003 |
|
|
43 |
|
|
42 |
|
| Additional paid-in capital |
|
|
22,610 |
|
|
22,252 |
|
| Accumulated deficit |
|
|
(22,389 |
) |
|
(22,795 |
) |
| Accumulated other comprehensive loss |
|
|
(3,784 |
) |
|
(3,738 |
) |
| Total shareowners’ deficit |
|
|
(3,520 |
) |
|
(4,239 |
) |