FOR IMMEDIATE RELEASE:                                                                                                               November 11, 2011

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Nortel Reports Financial Results for the Third Quarter 2011

Financial Presentation and Q3 2011 Results

TORONTO—Nortel* Networks Corporation [OTC: NRTLQ] announced its results for the third quarter of 2011. Results were prepared in accordance with United States generally accepted accounting principles (GAAP) in U.S. dollars.

Nortel’s consolidated results include the results of operations and financial position of Nortel Networks Corporation, its principal operating subsidiary Nortel Networks Limited, and their subsidiaries in the Asia, CALA, and EMEA regions other than those included in the U.S. or EMEA deconsolidated subsidiaries. As of June 1, 2010, and October 1, 2010, the EMEA Subsidiaries and U.S. Subsidiaries, respectively, were deconsolidated and accounted for under the cost method of accounting. In the context of the Creditor Protection Proceedings, Nortel continues to evaluate the method of accounting for all of its subsidiaries.

As a result of and following the divestitures of: (1) the Code Division Multiple Access/LTE Access and Enterprise Solutions businesses in the fourth quarter of 2009; (2) the Optical Networking and Carrier Ethernet, and Global System for Mobile communications/GSM for Railways businesses in the first quarter of 2010; (3) the Carrier VoIP and Application Solutions business; and Nortel’s interest in the LG-Nortel (LGN) joint venture in the second quarter of 2010; (4) the multiservice switching products and related services business in the first quarter of 2011; and (5) the assets of Guangdong-Nortel Telecommunications Equipment Co. Ltd. (GDNT) in the second quarter of 2011, only the residual contracts not transferred with the businesses are included in Nortel’s financial results.

As a result of the business sales, Nortel currently has one reportable segment, being the consolidated entity, as its chief operating decision maker reviews financial and operating results on that basis.

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Financial Summary

Nortel’s overall financial performance in the third quarter of 2011 was impacted by the sale of all of its businesses in prior quarters.

Revenues

Revenues from continuing operations were $3 million in the third quarter of 2011 compared to $85 million for the third quarter of 2010, resulting from the business divestitures and the deconsolidation of the U.S. subsidiaries.

Discontinued operations revenues in the third quarter of 2011 were nil compared to nil for the third quarter of 2010. Nortel does not expect any further revenues to be generated by the discontinued operations in future reporting periods.

Operating Expenses

Operating Expenses B/(W)

A focus on reducing costs, the business divestitures and the deconsolidation of the U.S. subsidiaries resulted in lower operating expenses compared to the year ago quarter. SG&A expense was $28 million in the third quarter of 2011, compared to $108 million for the third quarter of 2010. R&D expense was nil in the third quarter of 2011, compared to $3 million for the third quarter of 2010.

Net Earnings

The Company reported net earnings in the third quarter of 2011 of $4.1 billion compared to a net loss of $649 million in the third quarter of 2010.

The net earnings in the third quarter of 2011 included reorganization items of $4.2 billion and other operating income of $6 million comprised primarily of billings under transition services agreements, partially offset by interest expense of $82 million and other expense of $54 million.

Reorganization items of $4.2 billion were comprised of a gain on the sale of the remaining patents and patent applications of $4.5 billion, partially offset by charges incurred for employee-related expenses related to the court approval of employee claims of $182 million, distributions to non-Canadian estates no longer consolidated of $59 million, and professional fees of $18 million.

The net loss in the third quarter of 2010 included reorganization items of $529 million, interest expense of $77 million and other expense—net of $18 million, partially offset by other operating income of $94 million primarily related to billings under transition services agreements.

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Reorganization items of $529 million primarily resulted from charges of $451 million primarily related to the remeasurement of liabilities related to Nortel’s Canadian defined pension plans triggered by the cessation of all future pension accruals immediately prior to the transfer of the plans to a replacement administrator appointed by the Office of the Superintendent of Financial Services pursuant to the terms of the previously announced court-approved Settlement Agreement regarding former Canadian employees. The remeasurement utilized wind-up basis assumptions resulting in a significant increase in the liabilities. Reorganization items also included professional fees of $47 million and a loss of $25 million related to purchase price adjustments from business divestitures. Other expense of $18 million was comprised primarily of a currency exchange loss of $44 million partially offset by rental income of $21 million.

Cash

The cash balance as of September 30, 2011 was $792 million, compared to a cash balance of $790 million as of June 30, 2011. Restricted cash was $7.6 billion primarily related to the business divestiture and IP proceeds. The cash balance was essentially flat.

As previously announced, Nortel does not expect that the Company’s common shareholders or the Nortel Networks Limited preferred shareholders will receive any value from Nortel’s creditor protection proceedings and expects that the proceedings will result in the cancellation of these equity interests.

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About Nortel

For more information, visit Nortel on the Web at www.nortel.com. For the latest Nortel news, visit www.nortel.com/news.

About Nortel

Certain statements in this press release may contain words such as “could”, “expects”, “may”, “should”, “will”, “anticipates”, “believes”, “intends”, “estimates”, “targets”, “plans”, “envisions”, “seeks” and other similar language and are considered forward-looking statements or information under applicable securities laws. These statements are based on Nortel’s current expectations, estimates, forecasts and projections about the operating environment, economies and markets in which Nortel operates. These statements are subject to important assumptions, risks and uncertainties that are difficult to predict, and the actual outcome may be materially different. Nortel’s assumptions, although considered reasonable by Nortel at the date of this press release, may prove to be inaccurate and consequently Nortel’s actual results could differ materially from the expectations set out herein.

Actual results or events could differ materially from those contemplated in forward-looking statements as a result of the following: (i) risks and uncertainties relating to the Creditor Protection Proceedings including: (a) risks associated with Nortel’s ability to: obtain required approvals and successfully consummate remaining divestitures; ability to satisfy transition services agreement obligations in connection with divestiture of operations; successfully conclude ongoing discussions for the sale of Nortel’s remaining assets; develop, obtain required approvals for, and implement a court approved plan; allocation of the sale proceeds of our businesses among the various Nortel entities participating in these sales may take considerable time to resolve; resolve ongoing issues with creditors and other third parties whose interests may differ from Nortel’s; generate cash from operations and maintain adequate cash on hand in each of its jurisdictions to fund operations within the jurisdiction during the Creditor Protection Proceedings; obtain any further required approvals from the Canadian Monitor, the U.K. Administrators, the U.S. Principal Officer, the U.S. Creditors’ Committee, or other third parties; Nortel’s ability to sell assets to satisfy claims against Nortel; realize full or fair value for any assets or business that are divested; utilize net operating loss carryforwards and certain other tax attributes in the future; avoid the substantive consolidation of NNI’s assets and liabilities with those of one or more other U.S. Debtors; operate effectively, and in consultation with the Canadian Monitor, and the U.S. Creditors’ Committee, and the U.S. Principal Officer and work effectively with the U.K. Administrators, French Administrator, French Liquidator and Israeli Administrators in their respective administration of the EMEA businesses subject to the Creditor Protection Proceedings; continue as a going concern; actively and adequately communicate on and respond to events, media and rumors associated with the Creditor Protection Proceedings; retain and incentivize key employees; retain, or if necessary, replace suppliers on acceptable terms and avoid disruptions in Nortel’s supply chain regarding our remaining stranded contracts; obtain court orders or approvals with respect to motions filed from time to time; resolve claims made against Nortel in connection with the Creditor Protection Proceedings for amounts not exceeding Nortel’s recorded liabilities subject to compromise; prevent third parties from obtaining court orders or approvals that are contrary to Nortel’s interests; and (b) risks and uncertainties associated with: limitations on actions against any Debtor during the Creditor Protection Proceedings; the values, if any, that will be ascribed pursuant to any court approved plan to outstanding Nortel securities and, in particular, that Nortel does not expect that any value will be prescribed to the NNC common shares or the NNL preferred shares in any such plan; the delisting of NNC common shares from the NYSE; and the delisting of NNC common shares and NNL preferred shares from the TSX; and (ii) risks and uncertainties relating to Nortel’s business including fluctuations in foreign currency exchange rates; the sufficiency of workforce and cost reduction initiatives; any adverse legal judgments, fines, penalties or settlements related to any significant pending or future litigation actions; failure to maintain integrity of Nortel’s information systems; and Nortel’s potential inability to maintain an effective risk management strategy.

For additional information with respect to certain of these and other factors, see Nortel’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other securities filings with the SEC. Unless otherwise required by applicable securities laws, Nortel disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

*Nortel, the Nortel logo and the Globemark are trademarks of Nortel Networks.

Note that Nortel will not be hosting a teleconference/audio webcast to discuss third quarter 2011 results.

NORTEL NETWORKS CORPORATION

(Under Creditor Protection Proceedings as of January 14, 2009)

Condensed Consolidated Statements of Operations (unaudited)

(U.S. GAAP; Millions of U.S. dollars, except per share amounts)

NORTEL NETWORKS CORPORATION

(Under Creditor Protection Proceedings as of January 14, 2009)

Condensed Consolidated Balance Sheets (unaudited)

(U.S. GAAP; Millions of U.S. dollars, except per share amounts)

NORTEL NETWORKS CORPORATION

(Under Creditor Protection Proceedings as of January 14, 2009)

Condensed Consolidated Statements of Cash Flows

(U.S. GAAP; Millions of U.S. dollars)