UNITED STATES**SECURITIES AND EXCHANGE COMMISSION****Washington, D.C. 20549
                                           

FORM 10-Q

(Mark One)
**[ X ]**QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES      EXCHANGE ACT OF 1934
 **For the quarterly period ended September 27, 2002

OR****[  ]**TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES      EXCHANGE ACT OF 1934
   **            Forthe transition period from                        to                         
Commission file Number: 0-9692

 
**TELLABS, INC.(Exact name of registrant as specified in its charter)**Delaware**36-3831568
(State of Incorporation)
(I.R.S. Employer      Identification No.) **One Tellabs Center, 1415 W. Diehl Road, Naperville,      Illinois**60563
(Address of Principal Executive Offices)
(Zip Code)
 

Registrant’s telephone number, including area code: **(630)378-8800**
 

Indicate by check mark whether the registrant (1) has filed all reportsrequired to be filed by Section 13 or 15(d) of the Securities Exchange Act of1934 during the preceding 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subject to suchfiling requirements for the past 90 days.

YES   X           NO___

 

Common Shares, $.01 Par Value - 412,001,439 shares outstanding on September27, 2002.

 

 

 

 

 
**TELLABS, INC.INDEX****PART I.**FINANCIAL INFORMATION
 
 **Item 1.**Financial Statements:
 
Condensed Consolidated Comparative Statements of Operations
 
 
 
Condensed Consolidated Comparative Balance Sheets
 
 
 
Condensed Consolidated Comparative Statements of Cash Flow
 
 
 
Notes to Condensed Consolidated Comparative Financial Statements
 
 **Item 2.**Management’s Discussion and Analysis  **Item 3.**Quantitative and Qualitative Disclosures about Market Risk  **Item 4.**Disclosure Controls and Procedures
 
 **PART II.**OTHER INFORMATION  **Item 6.**Exhibits and Reports on Form 8-K  **SIGNATURE** 
 
 **CERTIFICATIONS**PART I. FINANCIAL INFORMATION

Item 1. Financial Statements**
 

 
**TELLABS, INC.**CONDENSED CONSOLIDATED COMPARATIVE STATEMENTS OF      OPERATIONS**(Unaudited)** **Three Months Ended**Nine Months Ended
(In millions, except per-share data)**9/27/02
9/28/01**9/27/02
9/28/01**Net Sales  ** 
 
  Product**$239.3
$391.2**$842.1
$1,466.2
  Services and other**48.8
57.0**162.1
263.5
 **288.1
448.2**1,004.2
1,729.7**Cost of Sales** 
  
 
  Product**138.6
208.6**558.5
876.1
  Services and other**30.5
49.9**102.2
211.4
 **169.1
258.5**660.7
1,087.5**Gross Profit**119.0
189.7**343.5
642.2     **Operating expenses** 
  
 
Selling, general and administrative**70.1
92.1**226.2
310.9
Research and development**80.4
95.6**257.3
332.4
Purchased in-process research and development**-
-**5.4
-
Intangible asset amortization**2.4
0.7**6.4
2.1
Restructuring expenses**68.0
50.3**175.9
134.1
Goodwill amortization**-
6.8**-
17.3
 **220.9
245.5**671.2
796.8
 ** 
  
 **Operating Loss**(101.9)
(55.8)**(327.7)
(154.6)     
Loss on investments, net**(31.2)
(13.2)**(29.6)
(8.4)
Interest income**9.0
11.1**24.9
36.9
Interest expense**(0.1)
(0.1)**(0.8)
(0.4)
Other income (expense)**1.0
(1.8)**0.3
(1.2)
 **(21.3)
(4.0)**(5.2)
26.9
  
  
 **Loss Before Income Tax**(123.2)
(59.8)**(332.9)
(127.7)
Income tax benefit**(32.1)
(10.3)**(104.3)
(26.0)**Net Loss**$(91.1)
$(49.5)**$(228.6)
$(101.7)
 ** 
 ** 
  ** 
 ** 
 **Loss per Share**$(0.22)
$(0.12)**$(0.56)
$(0.25)     
Average number of common shares outstanding**411.8
409.9**411.2
409.4
The accompanying notes are an integral part of these statements.

 
**TELLABS, INC.**CONDENSED CONSOLIDATED COMPARATIVE BALANCE SHEETS ** **September 27,** 
December 28,** **2002** 
2001
(In millions, except share amounts)
(Unaudited) 
 **Assets
 
 
 **Current Assets
 
 
 
Cash and cash equivalents**$523.0
 
$ 701.9
Investments in marketable securities**484.3
 
399.7
Accounts receivable, net**185.4
 
330.9
Inventories 
 
 
   Raw materials**102.8
 
145.5
   Work in process**19.6
 
33.7
   Finished goods**78.3
 
149.9
 **200.7
 
329.1
Deferred income tax asset**102.7
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