Lucent Expects Monster Tax Rebate

Good news for the bottom line: The vendor is one congressional approval away from an $816 million refund

September 2, 2004

1 Min Read
Lucent Expects Monster Tax Rebate

A refund from the tax authorities always brightens one's day, even if it's only a few dollars, euros, or zlotys. So imagine the glee at the headquarters of Lucent Technologies Inc. (NYSE: LU) when they opened a letter from the usually dreaded Internal Revenue Service (IRS) to say the vendor was due an $816 million tax refund (for those wondering, $816 million = 2.974 billion zlotys).

That's the tantalizing prospect Lucent noted in a filing with the Securities and Exchange Commission (SEC) this morning.

Although the refund, which stems from its 2001 operating loss, is not a done deal, Lucent seems pretty confident. The payment, which would be recognized in Lucent's 2005 financial year, is "subject to the completion of the IRS audit of Lucent’s fiscal year 2001 federal income tax return," the vendor notes in its SEC filing, and would then need to be reviewed and approved by the Congressional Joint Committee on Taxation.

Lucent also notes that the $816 million includes the $139 million previously approved by the IRS earlier this year and noted in the company's quarterly report for its third quarter, which ended on June 30.

Should the refund be approved, it will be the latest step in the vendor's financial turnaround. Following a wretched few years of massive operational losses, Lucent has strung together four consecutive quarters of profits (see Lucent Continues Down Profit Path).

Lucent spokesman Bill Price confirms that the refund, if approved, would likely be booked in the next financial year. But he stresses that the windfall is still subject to review. "We're pleased to have got to this point, and we'll wait and see what happens," he says.

— Ray Le Maistre, International News Editor, Light Reading

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like