Discontinued Operations

12 Months Ended

Dec. 31, 2011

Discontinued Operations [Abstract]

Discontinued Operations

5. Discontinued Operations

ES

On December 18, 2009 Nortel completed the sale of substantially all of the assets of the ES business globally as well as the shares of NGS and DiamondWare, Ltd. to Avaya. As a result of the sale, Nortel had recognized a cumulative gain of $750.

The ES business, which included Layer 4-7 Data Portfolio, DiamondWare, Ltd. and NGS, had total revenues of nil and $11 and net loss from discontinued operations of $1 and $18 for the years ended December 31, 2011 and 2010, respectively.

Certain liabilities related to the ES business were not transferred to Avaya and continue to be classified as liabilities of discontinued operations. These liabilities are expected to be extinguished as the Creditor Protection Proceedings progress. The remaining liabilities related to the operations of the ES business are as follows:

	2011		2010
Assets
Accounts receivable - net	$	-	$	2
Other current assets		-		2
Assets of discontinued operations	$	-	$	4
Liabilities
Trade and other accounts payable	$	1	$	-
Other current liabilities		-		5
Liabilities of discontinued operations	$	1	$	5

LGN

On June 29, 2010, Nortel completed the sale of NNL's 50% plus 1 share interest in LGN to Ericsson for $242 in cash, subject to certain purchase price adjustments and taxes. As a result of the sale, Nortel recognized a gain of $53 in the year ended December 31, 2010. The LGN business had total revenues of nil and $210 and net loss from discontinued operations of nil and $42 for the years ended December 31, 2011 and 2010, respectively.

Prior to the divestiture of its interest in LGN, Nortel engaged in transactions with certain of its equity-owned investees and certain other business partners. These transactions included sales and purchases of goods and services under normal trade terms and were measured at their exchange amounts. Transactions with LG Electronics ("LGE"), Vertical Communications, Inc ("Vertical") and GNTEL Co., Ltd ("GNTEL") resulted in $16 of revenue and $61 of costs of revenues from purchases during 2010. LGE held a noncontrolling interest in LGN prior to Nortel's sale of its interest on June 29, 2010. Nortel's sales and purchases related primarily to certain inventory-related items up to June 30, 2010. Accounts payable or other balances involving LGE were nil as of December 31, 2010.

Prior to Nortel's divestiture of its interest in LGN on June 29, 2010, LGN owned a noncontrolling interest in Vertical which supported LGN's efforts to distribute Nortel's products to the North American market. Prior to divestiture of its interest in LGN Nortel held a noncontrolling interest in GNTEL through its business venture LGN. Nortel's purchases from GNTEL related primarily to installation and warranty services up to June 30, 2010. Accounts payable or other balances involving GNTEL and Vertical were nil as of December 31, 2011 and 2010.