TORONTO -- Nortel Networks Corporation (NYSE:NT)(TSX:NT) and its principal operating subsidiary, Nortel Networks Limited ("NNL"), today 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.

Third Quarter of 2004; Canadian GAAP Financial Statements

The Company and NNL expect to file their unaudited financial statements for the third quarter of 2004 prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP"), and related Quarterly Reports on Form 10-Q and corresponding Canadian filings, after the close of trading today.

Pursuant to new Canadian securities regulations and recent amendments to the Canada Business Corporations Act regulations, the Company and NNL will no longer be filing financial statements prepared in accordance with Canadian generally accepted accounting principles ("Canadian GAAP"), including for the fiscal year 2004. Consistent with the financial statement presentation in the Company's and NNL's 2004 Quarterly Reports on Form 10-Q, the Company's and NNL's audited financial statements for the fiscal year 2004 to be filed with their respective Annual Report on Form 10-K will include a reconciliation note highlighting the material differences between their financial statements prepared in accordance with U.S. GAAP as compared to Canadian GAAP. Subsequent to 2005, no further reconciliation notes will be required in the Company's or NNL's financial statements.

Annual Shareholders' Meeting

The Company's application to the Ontario Superior Court of Justice for an order extending the time for calling the Company's 2004 Annual Shareholders' Meeting (the "Meeting") to a date no later than June 30, 2005 was heard on March 3, 2005. The Court granted an order to a date no later than June 30, 2005. The extension was sought to permit compliance with a specific rule of the United States Securities and Exchange Commission which will require, in these circumstances, that the Company provide to shareholders its 2004 audited financial statements either prior to or concurrently with the mailing of the proxy materials for the Meeting. The Company plans to hold a combined 2004/2005 Annual Shareholders' Meeting as soon as reasonably possible within the extended time period granted by the Court.

Status of Civil Proceedings

On March 9, 2005, the Company and certain of its current and former officers and directors and its auditors were named as defendants in a purported class proceeding filed in the Ontario Superior Court of Justice, Commercial List, on behalf of all Canadian residents who purchased the Company's securities from April 24, 2003 to April 27, 2004. This lawsuit alleges, among other things, negligence, misrepresentations, oppressive conduct, insider trading and violations of Canadian corporation and competition laws in connection with the Company's 2003 financial results and seeks damages of CDN $3 billion, plus punitive damages in the amount of CDN $1 billion, prejudgment and postjudgment interest and costs of the action.

Nortel Networks Ltd.