TORONTO – Nortel Networks* [NYSE/TSX: NT] and its principal operating subsidiary, Nortel Networks Limited (“NNL”), provided a status update pursuant to the alternative information guidelines of the Ontario Securities Commission. These guidelines contemplate that the Company and NNL will normally provide bi-weekly updates on their affairs until such time as they are current with their filing obligations under Canadian securities laws.

• Previously announced financial results for 2003 and prior periods will be impacted by adjustments to reflect the restatements and subsequent events. At this time, the Company has identified a reduction of approximately 50 percent in previously announced net earnings for 2003, arising principally from the restatement work which is partially offset by adjustments for subsequent events occurring after the balance sheet date of December 31, 2003. These amounts will largely be reported in prior periods, substantially in 2002, and together with other adjustments, will result in a reduction in previously reported net losses in those periods. This reduction in 2003 net earnings identified to date substantially impacts the Company’s continuing operations, rather than discontinued operations, resulting in the elimination of substantially all of the net earnings from continuing operations for the full year 2003;
• Approximately two-thirds of the reduction in 2003 net earnings identified to date impacts the first half of 2003, resulting in a net loss for the first half of 2003 compared to the previously reported net earnings for that period. The remaining approximately one-third of the reduction identified to date impacts the second half of 2003 reducing net earnings and earnings from continuing operations for the second half of 2003;
• No material impact to revenues for any year during the restatement period. Adjustments identified to date are less than 2 percent on an annual basis of previously announced annual revenues. Revenue adjustments in 2003 and prior periods identified to date primarily relate to timing issues (for example, revenue that should have been deferred to a later period or recognized in an earlier period). The Company continues its work on the adjustments to revenues for the quarterly periods within the restatement period; and
• No material impact to the Company’s cash balance as at December 31, 2003.

• these principal impacts are estimated impacts which have been identified by the Company based on the work done to date and are not projections of the final total impacts. As such, these principal estimated impacts continue to be preliminary, partial and subject to change;
• the ongoing work of the Nortel Networks Audit Committee independent review;
• the ongoing work to be done by the Company related to the restatements and revisions and the impact of accounting for certain other matters, including foreign exchange;
• the previously disclosed material weaknesses in the Company’s internal controls over financial reporting;
• the review or audit of the Nortel Networks financial statements by the Company’s independent auditors; and
• the final determination of the impact of adjustments arising from subsequent events on the Company’s results of operation or financial position, as referred to above.