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PART I
Overview
Nortel Networks Corporation is a recognized leader in delivering communications capabilities that enhance the human experience, ignite and
power global commerce, and secure and protect the world’s most critical information. We offer converged multimedia networks that use
innovative packet, wireless, voice and optical technologies and are underpinned by high standards of security and reliability. For both service
providers and enterprises, these networks help to drive increased profitability and productivity by reducing costs and enabling new business
and consumer services opportunities. We refer to the communications technology, infrastructure and related professional services that we
supply as “networking solutions”. Our business consists of the design, development, manufacture, assembly, marketing, sale, licensing,
installation, servicing and support of these networking solutions. A substantial portion of our business has a technology focus and is dedicated
to research and development. This focus forms a core strength and is a factor that we believe differentiates us from many of our competitors.
We envision a network society where people will be able to connect and interact with information and with each other instantly, simply and
reliably, accessing data, voice and multimedia communications services and sharing experiences anywhere, anytime.
Our networking solutions enable our service provider and enterprise customers to provide their own customers or employees with services to
communicate locally, regionally or globally through the use of data, voice and multimedia communications. Our service provider customers
include local and long-distance communications companies, wireless service providers and cable operators. Our networking solutions enable
our service provider customers to deploy reliable, robust networks that create opportunities to provide revenue-generating services and cost
savings. Our enterprise customers include large and small businesses, governments and institutions. Our networking solutions enable our
enterprise customers to deploy secure networks with seamless connectivity that provide opportunities for cost efficiency and increased
productivity.
During 2003 and up to September 30, 2004, we conducted our business through the following four reportable segments: Wireless Networks;
Enterprise Networks; Wireline Networks; and Optical Networks. We refer you to the descriptions of each of these segments below. Effective
October 1, 2004, we established a new organizational structure that included, among other things, combining the businesses of our four
segments into two business organizations: (i) Carrier Networks and Global Operations; and (ii) Enterprise Networks. We are reviewing the
impact of these changes to our reportable segments under applicable accounting standards. The new structure reflects the evolution of the
network transformation to converged networks. For financial information by reporting segment and product category, see “Segment
information” in note 6 of the accompanying consolidated financial statements and “Results of operations — continuing operations — Segment
revenues” in Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A.
The Company’s principal executive offices are located at 8200 Dixie Road, Suite 100, Brampton, Ontario, Canada, L6T 5P6, telephone number
(905) 863-0000. The Company was incorporated in Canada on March 7, 2000 under the name New Nortel Inc. On May 1, 2000, the Company
participated in a Canadian court-approved plan of arrangement under which, among other things, the Company exchanged its common shares
for all of the outstanding common shares of Nortel Networks Limited (previously known as Nortel Networks Corporation); Nortel Networks
Limited, or NNL, became the principal operating subsidiary of the Company; and the Company changed its name to Nortel Networks
Corporation.
Where we say “we”, “us”, “our” or “Nortel Networks”, we mean Nortel Networks Corporation or Nortel Networks Corporation and its
subsidiaries, as applicable. References to “the Company” mean Nortel Networks Corporation without its subsidiaries. Where we refer to the
“industry”, we mean the telecommunications industry.
The Company makes its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to
those reports available free of charge under “Investor Relations” on our website at
www.nortel.com
as soon as reasonably practicable after we
electronically file this material with, or furnish this material to, the United States Securities and Exchange Commission, or SEC. We have
adopted a Code of Ethics known as “Living the Values: A Guide to Ethical Business Practices at Nortel Networks”. We make our Code of
Ethics, and all amendments to and waivers of (in accordance with applicable laws) our Code of Ethics, available free of charge under
“Corporate Information” on our website at
www.nortel.com
or by writing to our corporate secretary at Nortel Networks Corporation, 8200
Dixie Road, Suite 100,
1
ITEM 1. Business