Ericsson (NASDAQ:ERIC) will change its financial reporting to reflect
a new business segment structure and today publishes restated
information for comparative prior year interim periods.
As previously announced, Ericsson has from January 1, 2007,
reorganized its operating structure. From the first quarter report
2007, the company's financial reporting will be adapted to reflect
this new structure. Ericsson will also take this opportunity to make
other modifications to further enhance transparency with additional
disclosures.
Ericsson will report the following business segments: Networks,
Professional Services and Multimedia.
Phones, represented by the share in earnings of Sony Ericsson will be
reported as before. However, Sony Ericsson have increased its
disclosure as of the first quarter report 2007.
The changed segment reporting is in accordance with the objectives
set forth in IAS 14 Segment reporting. The business activities
previously reported in Other Operations have been merged into the new
segments to better leverage the opportunities provided by internal
business combinations.
Business segment Networks includes products for mobile and fixed
broadband access, core networks, transmission and next-generation
IP-networks. Related network rollout services are also included. In
addition, the power modules and cables operations, previously
reported under Other Operations, are now included within Networks, as
well as the acquired operations of Redback and Entrisphere.
Business segment Professional Services includes all service
operations, excluding Network rollout reported under Networks.
Services for system integration of IP and core networks previously
reported as network rollout are now reclassified as Professional
Services. Sales of managed services as a part of the total
Professional Services will be disclosed since this represents service
revenues of a recurring nature.
Business segment Multimedia includes multimedia systems, previously
reported under segment Systems, and enterprise solutions and mobile
platforms, previously included in Other Operations. The operations of
Tandberg TV and Mobeon will also be included in Multimedia once these
acquisitions are concluded.
For each of the business segments, we will report net sales and
operating margin quarterly. In addition, sales of Mobile Systems,
including relevant parts of Networks and Multimedia, will continue to
be disclosed.
Within the consolidated income statement, royalty revenues for
intellectual property rights related to products will be included as
part of net sales instead of other operating income. Accordingly, the
related costs, previously reported as part of operating expenses,
will now be reported within cost of sales.
Changes within the consolidated statement of cash flows include
additional breakdown of "Adjustments to reconcile net income to
cash", "Operating net assets" and "Investing activities". Cash flow
from operations will be disclosed as before. The subtotals "Cash flow
from operating investing activities" and "Cash flow before financial
investing activities" will no longer be reported.
The table "Customer financing risk exposure" will no longer be
separately disclosed quarterly due to the decrease in activity
compared to prior years. However, significant changes to risk and
exposure will be commented within the text of interim reports.
Ericsson reports first quarter results on April 26, 2007, at 7:30
CET.
Restated 2006 Financial Statements are attached.
Ericsson is shaping the future of Mobile and Broadband Internet
communications through its continuous technology leadership.
Providing innovative solutions in more than 140 countries, Ericsson
is helping to create the most powerful communication companies in the
world.
Read more at www.ericsson.com
FOR FURTHER INFORMATION, PLEASE CONTACT
Ericsson Media Relations
Phone: +46 8 719 6992
E-mail: press.relations@ericsson.com
Ericsson Investor Relations
Phone: + 46 8 719 4631
E-mail: investor.relations.se@ericsson.com
Restated 2006 Financial Statements are attached:
