Nortel Reports

TORONTO -- Nortel Networks Corporation(b) (NYSE:NT)(TSE:NT.) today reportedresults for the third quarter and first nine months of 2001 preparedin accordance with US generally accepted accounting principles. Revenues from continuing operations were US$3.69 billion for thethird quarter of 2001 compared to US$6.73 billion in the same periodin 2000. Pro forma net loss from continuing operations(a) for thethird quarter of 2001, excluding incremental provisions and othercharges, was US$854 million or US$0.27 per common share. Including theincremental provisions and other charges, pro forma net loss fromcontinuing operations(a) for the third quarter of 2001 was US$2.18billion, or US$0.68 per common share, compared to pro forma netearnings of US$597 million, or US$0.19 per common share on a dilutedbasis, for the same period in 2000. "Revenues for the quarter reflected the challenges presented asthe telecom industry adjusted to new levels of spending," said JohnRoth, president and chief executive officer Nortel Networks. "Ourbottom line results reflected the impact of actions we have taken toadjust to the new business levels. During the third quarter of 2001,Nortel Networks continued to aggressively implement its work plan toreduce its cost structure and streamline operations. The Company is inthe final stages of implementing a cost structure to drive break evenat a quarterly revenue level well below US$4 billion. The structure isexpected to be in place in the first quarter of 2002."Nortel Networks Corp.