Alcatel Lucent Annual Report on Form 20-F 2012
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Information incorporated by reference to the Listing Prospectus dated October 23, 2015 The audited financial statements of Alcatel Lucent, including the auditor’s report, for the financial year ended December 31, 2012…..……………………………………………………………......181–294 2012 ANNUAL REPORT ON FORM 20-F SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F ‘ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2012 OR ‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ‘ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 1-11130 (Exact name of Registrant as specified in its charter) N/A (Translation of Registrant’s name into English) Republic of France (Jurisdiction of incorporation or organization) 3 avenue Octave Gréard 75007 Paris, France (Address of principal executive offices) Frank MACCARY Telephone Number 33 (1) 40 76 10 10 Facsimile Number 33 (1) 40 76 14 05 3 avenue Octave Gréard 75007 Paris, France (Name, Telephone, E-mail and/or Facsimile Number and Address of Company Contact Person) Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered American Depositary Shares, each representing one ordinary share, New York Stock Exchange nominal value €2 per share* * Listed, not for trading or quotation purposes, but only in connection with the registration of the American Depositary Shares pursuant to the requirements of the Securities and Exchange Commission. Securities registered or to be registered pursuant to Section 12(g) of the Act: None Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report. 2,326,563,826 ordinary shares, nominal value €2 per share Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ‘ No È If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ‘ No È Note — checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those sections. 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 È No ‘ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer È Accelerated filer ‘ Non-accelerated filer ‘ Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing: U.S. GAAP ‘ International Financial Reporting Standards as issued by the International Accounting Standards Board È Other ‘ If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow: Item 17 ‘ Item 18 ‘ If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ‘ No È TABLE OF CONTENTS 1 SELECTED FINANCIAL DATA .......... 1 6.3 Results of operations by business segment for the year ended December 31, 2012 compared 1.1 Condensed consolidated income statement and to the year ended December 31, 2011 ........ 55 statementoffinancialpositiondata.......... 2 6.4 Consolidated results of operations for the year 1.2 Exchangerateinformation ................ 3 ended December 31, 2011 compared to the year ended December 31, 2010 .......... 57 6.5 Results of operations by business segment for 2 ACTIVITYOVERVIEW ............... 5 the year ended December 31, 2011 compared to the year ended December 31, 2010 ........ 60 2.1 NetworksSegment...................... 5 6.6 Liquidityandcapitalresources.............. 63 2.2 Software, services and solutions (S3)Segment.......................... 6 6.7 Contractual obligations and off-balance sheet contingentcommitments.................. 67 2.3 EnterpriseSegment ..................... 7 6.8 Outlook ............................... 71 6.9 Qualitative and quantitative disclosures about marketrisks............................ 71 3 RISKFACTORS.................... 9 6.10 Legalmatters........................... 73 3.1 Risksrelatingtothebusiness .............. 9 6.11 Researchanddevelopment–expenditures .... 75 3.2 Legalrisks............................. 15 3.3 RisksrelatingtoownershipofourADSs ...... 16 7 CORPORATEGOVERNANCE........... 77 7.1 Chairman’scorporategovernancereport...... 77 7.2 Compensationandlong-termincentives ...... 111 4 INFORMATIONABOUTTHEGROUP..... 17 7.3 Regulatedagreements.................... 136 4.1 General............................... 17 7.4 Alcatel-LucentCodeofConduct ............. 138 4.2 Historyanddevelopment ................. 18 7.5 Major differences between our corporate governance practices and NYSE requirements 4.3 Structure of the main consolidated companies ..................................... 139 as of December 31, 2012 ................. 23 4.4 Realestateandequipment................ 24 8 ENVIRONMENTAL MATTERS; HUMAN 4.5 Materialcontracts....................... 26 RESOURCES ...................... 141 8.1 Environment ........................... 141 8.2 Humanresources ....................... 142 5 DESCRIPTION OF THE GROUP’S ACTIVITIES....................... 29 9 INFORMATION CONCERNING OUR 5.1 Businessorganization.................... 29 COMPANYANDOURCAPITAL ......... 145 5.2 NetworksSegment...................... 30 9.1 Legalinformation........................ 145 5.3 Software, solutions and services (S3) 9.2 Specificprovisionsoftheby-lawsandoflaw ... 145 Segment.............................. 35 9.3 Sharecapitalanddilutedcapital............. 150 5.4 EnterpriseSegment ..................... 36 9.4 Authorizationsrelatedtothecapital.......... 151 5.5 Marketing, sales and distribution of our products . 37 9.5 Useofauthorizations..................... 151 5.6 Competition ........................... 38 9.6 Changes in our capital over the last five 5.7 Technology,researchanddevelopment ...... 38 years ................................. 152 5.8 Intellectualproperty ..................... 39 9.7 Purchase of Alcatel Lucent shares by the company .............................. 152 5.9 Sources and availability of materials ......... 39 9.8 Outstanding instruments giving right to shares . 154 5.10 Seasonality............................ 40 9.9 American depositary shares, taxation and 5.11 Ouractivitiesincertaincountries ........... 40 certainothermatters..................... 155 9.10 Documentsondisplay..................... 162 6 OPERATING AND FINANCIAL REVIEW 10 STOCK EXCHANGE AND ANDPROSPECTS .................. 41 SHAREHOLDING................... 163 6.1 Overview of 2012 ....................... 50 10.1 Listing ................................ 163 6.2 Consolidated results of operations for the year 10.2 Tradingoverthelastfiveyears ............. 163 ended December 31, 2012 compared to the year ended December 31, 2011 ............ 52 10.3 Shareholderprofile....................... 164 10.4 Breakdownofcapitalandvotingrights........ 165 11.4 Statutoryauditors’fees ................... 175 10.5 Employees and management’s shareholding . 167 11.5 Auditcommitteefinancialexpert ............ 176 10.6 Otherinformationonthesharecapital........ 169 11.6 Codeofethics .......................... 176 10.7 Trendofdividendpershareoverfiveyears .... 170 11.7 Financialstatements ..................... 176 10.8 GeneralShareholders’Meeting.............. 170 11.8 Exhibits ............................... 177 11.9 Cross-reference table between Form 20-F and thisdocument .......................... 177 11 CONTROLS AND PROCEDURES, STATUTORY AUDITORS’ FEES AND OTHERMATTERS .................. 173 SIGNATURE ...................... 180 11.1 Controlsandprocedures .................. 173 11.2 Report of independent registered public 12 CONSOLIDATED FINANCIAL accountingfirms......................... 174 STATEMENTS OF ALCATEL-LUCENT AND 11.3 Statutoryauditors ....................... 175 ITS SUBSIDIARIES ................. 181 SELECTED FINANCIAL DATA 1 SELECTED FINANCIAL DATA Our consolidated financial statements have been prepared in On November 30, 2006, historical Alcatel and Lucent accordance with International Financial Reporting Standards Technologies Inc., since renamed Alcatel-Lucent USA Inc. (“IFRS”) as adopted by the European Union. IFRS, as adopted (“Lucent”), completed a business combination pursuant to by the European Union, differs in certain respects from the which Lucent became a wholly owned subsidiary of Alcatel. International Financial Reporting Standards issued by the International Accounting Standards Board. However, our As a result