Nortel Issues Encouraging Words
To Nortel Networks Shareholders:
Much has been said and written about Nortel Networks in recent weeks. I recognize that this has been of concern to our shareholders. It has also been a concern to me and all those associated with the company. That is why I want to review and update you on what has transpired since we issued a press release on February 15 revising our guidance for the first quarter and year 2001.
When issuing that release, we stated that Nortel Networks was not immune to the current economic downturn in the United States. Based on previous experience, we had anticipated a longer lead-time for the effects of a downturn to be felt by our sector and by our company. The current downturn occurred with unprecedented suddenness and severity. Our decision to revise guidance on February 15 occurred as soon as the effects of this downturn were clear to us.
We were among the first to recognize the severity of the downturn occurring in the U.S., our largest market. Since February 15, a growing number of technology companies with heavy dependence on the U.S. market have also revised their forecasts. This is clearly a broad market/economic slowdown that has affected companies in our sector with unprecedented speed.
At the same time, I want you to know that our position as an industry leader and innovator remains strong, despite the unfavorable economic and market conditions we are facing. Our fundamentals remain sound and we offer an industry-leading portfolio of end-to-end communications solutions. We have a diverse and strong base of customers throughout the world. And we have some of the most talented and committed people in the world working to provide those customers with breakthrough technologies that create value and competitive advantage for our customers around the world.
Where the class action lawsuits resulting from our February 15 announcement are concerned, our shareholders, customers and employees should also know that we will defend ourselves vigorously. Quite simply, we believe the allegations in the lawsuits against your company in Canada and the United States are without merit. I can assure you that your company is committed to maintaining the highest integrity and credibility of business practices. The way in which we conduct our business is as important as the business we conduct.
On behalf of everyone at Nortel Networks, I want to thank our shareholders, customers, suppliers and friends for their expressions of support and encouragement. We greatly value our hard-earned reputation for integrity, ethical behavior and corporate citizenship. I want to assure you that the senior executives of Nortel Networks and myself, as significant shareholders in the company, are fully committed to delivering the long-term performance and results you have come to expect of your company.
President and Chief Executive Officer