UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON,
  D.C. 20549

FORM 10-K

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF 
THE SECURITIES EXCHANGE ACT OF 1934

FOR THE
  FISCAL YEAR ENDED SEPTEMBER 30, 2004

OR

o TRANSITION
  REPORT PURSUANT TO SECTION 13 OR 15(d) OF 
THE SECURITIES EXCHANGE ACT OF 1934

FOR THE
  TRANSITION PERIOD FROM _________ TO ____________

COMMISSION FILE NO.: 001-11639

LUCENT TECHNOLOGIES INC.(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

|DELAWARE                                                                   |  | 22-3408857                                
|-------------------------------------------------------------------------- |  | ------------------------------------------
|(STATE OR OTHER JURISDICTION
      OF
      INCORPORATION OR ORGANIZATION) |  | (I.R.S. EMPLOYER
      IDENTIFICATION NO.)
|                                                                           |  |                                           
|600 MOUNTAIN AVENUE,
      MURRAY HILL, NEW JERSEY                         |  | 07974                                     
|(ADDRESS OF PRINCIPAL
      EXECUTIVE OFFICES)                             |  | (ZIP CODE)                                

REGISTRANTS TELEPHONE NUMBER, INCLUDING AREA CODE: 908-582-8500

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
See attached Schedule A.

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrants knowledge, in the definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

At November 30, 2004, the aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant was approximately $17,250,000,000.

At November 30, 2004, 4,420,635,714 shares of the registrants common stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

|(1) |  | Portions of the registrants annual report to shareowners for the fiscal year ended September 30, 2004 (Part II).
|--- |  | -----------------------------------------------------------------------------------------------------------------

|(2) |  | Portions of the registrants definitive proxy statement for its 2005 annual meeting of shareowners (Part II and III).
|--- |  | ---------------------------------------------------------------------------------------------------------------------

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SCHEDULE A

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

|Title
      Of Each Class                                                                                                                                                                                          | Name
      Of Each ExchangeOn Which Registered                                                                                                  | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------- | 
|Common Stock (par
      value $.01 per share)
      7.25% Notes due July 15, 2006 
      5.50% Notes due November 15, 2008 
      6.50% Debentures due January 15, 2028 
      6.45% Debentures due March 15, 2029 | New York Stock Exchange
      New York Stock Exchange
      New York Stock Exchange
      New York Stock Exchange
      New York Stock Exchange | 

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TABLE OF CONTENTS

|Item           |  | Description                                                                      | Page |   
|-------------- |  | -------------------------------------------------------------------------------- | ---- | --
|               |  |                                                                                  |     
|PART
      I   |  |                                                                                  |     
|Item
      1.  |  | Business                                                                         |      | 3 
|Item
      2.  |  | Properties                                                                       |      | 21
|Item
      3.  |  | Legal
      Proceedings                                                          |      | 22
|Item
      4.  |  | Submission
      of Matters to a Vote of Security Holders                        |      | 23
|               | 
|PART
      II  | 
|Item
      5.  |  | Market
      for Registrants Common Equity and Related Stockholder Matters      |      | 24
|Item
      6.  |  | Selected
      Financial Data                                                    |      | 24
|Item
      7.  |  | Managements
      Discussion and Analysis of Financial Condition and Results of |     
|               |  | Operations                                                                       |      | 24
|Item
      7A. |  | Quantitative
      and Qualitative Disclosures About Market Risk                 |      | 24
|Item
      8.  |  | Financial
      Statements and Supplementary Data                                |      | 25
|Item
      9.  |  | Changes
      in and Disagreements with Accountants on Accounting and Financial  |      |   
|               |  | Disclosure                                                                       |      | 25
|Item
      9A. |  | Controls
      and Procedures                                                    |      | 25
|Item
      9B. |  | Other
      Information                                                          |      | 25
|               | 
|PART
      III | 
|Item
      10. |  | Directors
      and Executive Officers of the Registrant                         |      | 26
|Item
      11. |  | Executive
      Compensation                                                     |      | 26
|Item
      12. |  | Security
      Ownership of Certain Beneficial Owners and Management and Related |      | 26
|               |  | Stockholder
      Matters                                                        |     
|Item
      13. |  | Certain
      Relationships and Related Transactions                             |      | 27
|Item
      14. |  | Principal
      Accounting Fees and Services                                     |      | 27
|               | 
|PART
      IV  | 
|Item
      15. |  | Exhibits
      and Financial Statement Schedule                                  |      | 28

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This report contains trademarks, service marks and registered marks of us and our subsidiaries, and other companies, as indicated.

2

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PART I

Item 1. Business

Company Overview

Lucent
  Technologies Inc. (referred to in this report as the Company, we,
  us, our or Lucent) designs and delivers
  the systems, services and software that drive next-generation communications
  networks. Backed by Bell Labs research and development, we rely on our strengths
  in mobility, optical, software, data and voice networking technologies, as well
  as services, to create new revenue-generating opportunities for our customers,
  while enabling them to quickly deploy and better manage their networks. Our
  customer base includes communications service providers, governments and enterprises
  worldwide.

We were
  incorporated in Delaware in November 1995. We were formed from the systems and
  technology units that were formerly a part of AT&T Corp. (AT&T),
  including the research and development capabilities of Bell Laboratories (Bell
  Labs), and were spun off by AT&T on September 30, 1996. Our principal
  executive offices are located at 600 Mountain Avenue, Murray Hill, New Jersey
  07974 (telephone number 908-582-8500). Our fiscal year begins October 1 and
  ends September 30. Through a link on the Investor Relations section of our Website,
  www.lucent.com, we make available, free of charge, our annual report
  on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and
  amendments to those reports as soon as reasonably practicable after such material
  is electronically filed with or furnished to the SEC. These reports and other
  information are also available, free of charge, at www.sec.gov. Alternatively,
  the public may read and copy any materials we file with the SEC at the SECs
  Public Reference Room at 450 Fifth Street, NW, Washington, D.C. 20549. Information
  on the operation of the Public Reference Room may be obtained by calling the
  SEC at 1-800-SEC-0330.

Market Environment

After several
  years of decline in service provider spending, we believe the global telecommunications
  networking industry has stabilized and is starting to grow in certain areas.
  However, many service providers and telecommunications vendors are just now
  emerging from an industry restructuring of unprecedented scale, and some challenges
  remain.

Our service
  provider customers operate in a fast-changing environment driven by new technology,
  competition and regulatory change. End users are demanding fast, personalized,
  easy-to-use communications and are relying on new applications in both their
  professional and personal lives. These applications and services are enabled
  by technologies such as mobile high-speed data, broadband access, next-generation
  optical networking, Voice over Internet Protocol (VoIP) and multimedia
  converged services. Our strategy and portfolio are focused on identifying and
  capitalizing on these growth opportunities, and we believe that demand for these
  new applications and services will drive profitable growth for both the service
  providers and Lucent.

We believe
  the level of our customers success will depend on their ability to meet
  end-user demand and generate new revenue, while simultaneously managing capital
  expenditures and reducing operating expenses. To do that, we believe service
  providers need to introduce new converged lifestyle-driven services
  to enhance value for end-users and stimulate growth for their businesses. Therefore,
  we believe that choosing an architecture that seamlessly enables next-generation
  networks and having a strong portfolio of products and services that enable
  convergence will be key factors in our customers success. Lucent is committed
  to establishing a leadership role in supplying this next-generation architecture
  to our customers.

In many
  regions, government mandated regulatory changes continue to influence the telecommunications
  industry. These changes in telecommunications law were designed to liberalize
  closed markets, encourage competition, create new services and stimulate demand.
  Historically, this changing legislative landscape has created uncertainty, particularly
  in the United States. Depending on the situation, it has caused acceleration,
  postponement or cancellation of major network investments and upgrades by certain
  customers. Recent rulings by the FCC in the United States and other government
  regulatory bodies in foreign countries appear to provide a favorable environment
  for a new breed of high-speed access (broadband) as well as VoIP services.

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These factors
  have resulted in telecommunications operators managing their businesses based
  on more moderate revenue forecasts and a generally lower economic outlook. Service
  providers continue to focus on cutting operational costs, reducing debt, expanding
  new services and improving the security and reliability of their networks as
  they look to capitalize on a changing regulatory environment.

We estimate
  that the worldwide service provider capital spending will increase on a percentage
  basis in the mid-single digits in aggregate during 2004, with most of the growth
  coming from outside the U.S. market. In the United States, we estimate capital
  spending will be essentially flat during 2004. These estimates indicate that
  the capital spending declines of the past few years have leveled off and are
  beginning to increase slightly. We believe that worldwide service provider capital
  spending will continue to grow at the same rate in 2005 as compared with 2004.
  While it is widely acknowledged that opportunities are more limited and smaller
  than in the past, a large market opportunity remains for leading telecommunications
  equipment vendors to help customers address their business needs.

Our Strategy

We view
  our company as uniquely positioned in the marketplace. We have a comprehensive
  portfolio that addresses the wireline, wireless, and services markets, a clear
  vision of next-generation networking and a strategy to successfully deliver
  this vision to our customers.

Convergence
  is about creating networks that deliver communications services that are simple,
  seamless, secure, personal and portable, for people at work, home or anywhere
  in between. We refer to these services as blended lifestyle-driven
  services that greatly enhance the end-user experience in terms of ease of use,
  personalization and access to a broad variety of applications regardless of
  the type of network used. This next generation of convergence solutions will
  deliver Internet Protocol (IP)-based multimedia services to consumers and enterprises
  across any access technology such as DSL, cable modem or wireless network. As
  Lucent continues to address the demand for convergence, we have adopted an architecture
  standard, promoted by the 3G Partnership Program (3GPP) called the IP Multi-Media
  Subsystem (IMS), that enables standardization relative to how the core network
  interacts with applications, various network layers, and back-office systems.
  IMS provides the ability to deliver value added services over next-generation
  networks and provides for uniformity in the network by employing the same framework
  for any kind of access (wireless, wireline) and any kind of traffic (VoIP, data,
  multimedia, etc.). Therefore, IMS provides service providers a framework to
  cost effectively offer new services to their customers  based upon how
  the end-user chooses to access the network.

Our new
  IMS-based core network architecture is common across both wireline and wireless
  network applications. It supports open interfaces to the network (which means
  customers can use network infrastructure systems from multiple vendors) and
  open interfaces to applications (which enables service providers to engage third-parties
  to develop applications for the introduction of new subscriber communications,
  information services and entertainment services). Our Accelerate portfolio
  of solutions, based on the IMS architecture, is designed to help service providers
  deliver a new generation of multimedia communications services over wireless
  and wireline networks and migrate their voice networks to IP in order to realize
  the capital and operating expense savings provided by IP transport.

We have
  three business segments organized around the product and services we sell: Integrated
  Network Solutions (INS), Mobility Solutions (Mobility)
  and Lucent Worldwide Services (Services). Through these three reportable segments, we are focused on:

- Continuing
      to leverage our leadership position in spread spectrum CDMA wireless technologies,
      as well as continuing to grow next-generation wireless offerings such as
      high-speed wireless applications and UMTS technologies.
- Investing
      in next-generation wireline technologies for optical networking products
      and VoIP technologies.
- Investing
      in key areas of convergence, as wireline and wireless networks continue
      to merge.
- Continuing
      to grow the services business in the key areas of Maintenance, Professional
      and Managed services.
- Growing
      our government business.

4

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- Strengthening
      our presence in the worlds fastest growing emerging markets, including
      China, India, Brazil, and Russia. Revenues from customers located in China
      represented 10% and 11% of consolidated revenues during fiscal 2004 and
      2003, respectively.

While we
  have increased our focus with regard to the government sector and some emerging
  markets, we remain focused on addressing the needs of the leading telecommunications
  service providers throughout the world. We believe spending remains highly concentrated,
  with the 50 largest service providers still responsible for approximately 75%
  of spending on equipment and services, and 20 countries still accounting for
  more than 90% of all capital spending by service providers.

We strive
  to be our customers partner of choice for providing telecommunications
  network products and services. We believe that we have the following strengths
  that differentiate us from our competitors:

- An
      architectural vision that best positions us to address the needs and complexities
      of next-generation convergence.
- Deep
      experience in building and supporting large service providers wireline,
      wireless and service-intensive networks.
- A
      product portfolio that enables service providers to realize value in their
      networks, drive new revenues, reduce costs and improve security and reliability.
- Bell
      Labs, one of the largest in-house research and development programs focused
      on service providers.
- An
      extensive services capability that enables us to design, build, integrate
      and manage networks.
- Network
      management and software tools to help our customers simplify operations
      and deliver services faster.

Our Organization

We have
  three business segments organized around the products and services we sell. 
  INS provides a broad range of software and wireline equipment related to voice
  networking (primarily consisting of switching products, which we sometimes refer
  to as convergence solutions, and voice messaging products), data and network
  management (primarily consisting of access and related data networking equipment
  and operating support software) and optical networking. Voice networking, data
  and network management and optical networking products are an integral part
  of our customers networks and the foundation for Lucents IMS-based
  solutions, which deliver multimedia communications services to end-users. Mobility
  provides software and wireless equipment to support radio access and core networks.
  Services is a worldwide services organization that provides deployment, maintenance,
  professional and managed services in support of both our product
  offerings as well as multivendor networks. Financial information about each
  of these segments is set forth in Note 11 to our consolidated financial statements
  and our Managements Discussion and Analysis of Financial Condition and
  Results of Operations contained in this report.

Our segments
  are supported by a number of central organizations, including Supply Chain Networks
  (SCN), Bell Labs, Global Sales Organization (GSO) and
  corporate centers. SCN manages the materials and activities necessary to produce
  and deliver products and services to our customers. Bell Labs provides basic
  and applied research and development support for our business. GSO is our primary
  interface to our customers around the world. The organization is responsible
  for managing the relationships with our customers and selling solutions to help
  them quickly deploy next-generation communication networks that create new revenue-generating
  opportunities and enable them to better manage their networks. Our corporate
  centers provide centrally managed but locally deployed corporate support groups
  that include cash management, legal, accounting, tax, public relations, insurance,
  advertising, human resources and data services.

Integrated Network Solutions

INS revenues
  were approximately $3.0 billion during fiscal 2004, of which 50% were from customers
  in the United States. Revenues are primarily from large, established service
  providers. We sell most of our products through our Global Sales Organization,
  with individual teams that support all significant customers, and, to a much
  lesser extent, through third-party distributors. As of September 30, 2004, INS
  had approximately 5,300 employees, primarily engaged in product development,
  marketing and general management activities.

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INSs
  primary focus is on addressing opportunities with our service provider customers,
  many of whom are transitioning from legacy to next-generation architectures,
  in order to deliver multimedia communications services. For example, customers
  are exploring ways to migrate their networks from circuit to packet switching
  to support voice and voice/data services over IP, from SONET/SDH optical voice
  networks to data-enabled Multiservice Provisioning Platforms, from asynchronous
  transfer mode (ATM) and Internet Protocol (IP) transport
  to Multi-Protocol Label Switched (MPLS) networks, from narrowband
  access to broadband access to support voice/data/video services, and from multiple
  network operations support systems to integrated network operating systems.
  We believe the key priorities for service providers during these transitions
  include generation of new revenues, management of capital expenses and reduction
  of operating expenses as they build standards-compliant networks.

During 2004, we realigned
  our portfolio of network infrastructure products for wireline and wireless networks
  to comply with the IMS architecture.

INS develops and offers products in the following areas:

Voice Networking Products

Primarily
  used for voice communications, circuit switches transmit, or switch,
  communications from one location to another within the network over dedicated
  paths through the network. Circuit switching has been used in telephone networks
  for decades. In a traditional circuit-switched telephone call, the telephone
  network creates dedicated connections so that the person placing the call can
  communicate with the person receiving the call.

Circuit-switched
  architectures are evolving to incorporate packet switching; a technology developed
  for data communications. IP switching is a specific type of packet switching
  in which information is divided into small segments called packets in IP networks,
  which are then sent independently, through the network from the originating
  end of the transmission to the destination. As the packets arrive at the destination,
  they are reassembled into the original information.

Packet
  switching allows information streams to more efficiently share network resources,
  because a path is not dedicated to each information stream, as in circuit switching.
  However, packet switching can have lower transmission quality than circuit switching
  because packets may get delayed or lost in transit. New protocols, or procedures,
  between packet switches allow the network to maintain the quality of transmission
  of information by tagging each information packet with a description of the
  type and importance of its content. MPLS is such a protocol for regulating the
  transmission of data through a packet network. MPLS allows multiple types of
  traffic (data, voice and video) to cross a packet-switched network with improved
  quality.

We are
  actively engaged with our traditional voice networking customers to help them
  evolve their 5ESS® circuit-switched platforms to increase capacity, lower
  the cost of operations, accelerate new feature introductions, and lay the groundwork
  for the introduction of packet-based IP transport and IMS-based services. For
  example, our iMerge IP Centrex solution adds interfaces on the 5ESS® circuit
  switch to connect packet-based end-user devices for voice traffic. This allows
  service providers to serve new types of terminals and offer new services with
  a small additional investment, while significantly reducing operating expenses.
  The Lucent Multimedia Portal gives service providers and end-users one-click
  access to all advanced phone and voice/data services and is being deployed
  to our customers residential and business customers.

Our softswitch
  software complies with the IMS architecture and enables our customers to support
  multimedia communications in an IP environment. We believe our development of
  a new software switching base has distinct competitive advantages over the alternative
  of porting decades-old circuit switching code that was designed to support voice
  in a circuit-switched environment. Code built for the circuit-switched environment
  cannot support the establishment and management of multimedia communications
  IP sessions that are required to deliver services such as voice, data and video.
  Purpose-built softswitches that support one kind of network access inevitably
  increase service provider expenses and are unable to support the variety of
  new access devices and network services that will be required in the marketplace
  (e.g., seamless handoff of a communications session from a third generation
  (3G) network to a WiFi/WiMax network on business premises or at
  a residence).

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Many of
  the systems used in traditional voice networking can be reused as components
  of Accelerate Next-Generation Networking solutions.
  For example, 5E-XC access frames can be put under software control, saving service
  providers from buying new network gateways.

We introduced
  a new internationalized version of the 5E-XC software that contains support
  for Personal Handyphone Systems (PHS) used in China and Japan. PHS
  is an extension of a wireline network that uses a wireless telephone similar
  to a cordless phone and provides mobility and extended-range voice and data
  services. Our revenues generated from the sale of these systems increased in
  China during fiscal 2004. However, the acceleration of 3G developments in China
  and Japan may cause our revenues from these systems to decline in the future.

We also
  developed a card that supports session initiation protocol, or SIP  an
  industry-wide protocol that simplifies the development and delivery of IP services
  and an optical interface unit that reduces equipment space by 75% and power
  consumption by 70% in a central office. It also provides a ten-fold increase
  in the number of trunks per cabinet or rack that the switch supports.

In August
  2004, we completed the acquisition of Telica, a private manufacturer of VoIP
  solutions for network service providers. The acquisition of Telica supports
  our IMS-based architecture and brings to Lucent what we believe is the most
  dense high-capacity media gateway in the industry. Telica also provides important
  capabilities in network controllers and signaling gateways. In addition, the
  Telica architecture enables a service provider to assemble each component into
  a single, cost-effective compact switch for smaller markets or to
  distribute and scale the components in independent frames to support very large
  networks. Each compact switch installation can grow seamlessly to support demand
  and subscriber usage increases.

Our messaging
  software technology enables users to store, retrieve, forward and otherwise
  manage incoming and outgoing voice, fax, email and video messages. In 2004 we
  introduced the AnyPath Content Delivery System to bring the AnyPath portfolio
  into the mobile data space. We expect to introduce the AnyPath video mail portfolio
  in early 2005 to meet growing market demands for end-user applications.

Data and Network Management Products

Data and
  network management products provide a means of connecting the end user to the
  rest of the network. Voice traffic has traditionally been, and continues to
  be, connected to circuit switches through circuit-switched access products.
  This allows one voice call per pair of copper wires. More recent access technologies,
  such as DSL, allow faster transmission of data, multiple voice connections and
  even video streams over one pair of copper wires. INS has three families of
  access products, two fully specialized at providing DSL service with high speeds
  at low cost and the other aimed at providing a flexible mix between traditional
  voice access and DSL access. Other access technologies allow packet-and circuit-switched
  networks to communicate with each other. An example is our Universal Gateway
  line of products, which allow end users to dial over a circuit-switched connection
  (traditional phone call) and then interface with a packet-switched network,
  such as the Internet.

Our Network
  Operations Software solutions manage network performance, reliability and provisioning
  for wireline and wireless service providers, as well as their customers. 
  Our software allows providers to ensure end-customer service quality, to control
  operating expenses, to optimize network utilization, and to enable multimedia
  converged services to scale to support large numbers of customers. In 2004 we
  delivered significant enhancements to our software and launched new service
  quality management products to support IP-based multivendor mobile, optical
  and data networks.

We are
  committed to helping our customers migrate to MPLS networks in a packet-switched
  network core. MPLS is a protocol or procedure for regulating the transmission
  of data  such as frame relay, ATM and IP  through a network so that
  service providers can deliver data traffic at specific, negotiated Quality of
  Service (QoS) levels.

We introduced
  our new CBX 3500 Multiservice Edge Switch in June 2004. This switch is designed
  for seamless insertion into operating networks to minimize operating expenses
  during network expansion. A full suite of higher-capacity cards for the CBX
  3500 are expected to provide additional capabilities to support high-bandwidth
  IP, ATM and frame relay edge services.

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We introduced
  an IP module, developed by Juniper Networks, for our large embedded base of
  CBX 500 Multiservice Edge Switches. This module enables service providers to
  add IP/MPLS capability to the CBX 500, an alternative to adding a separate router
  to their networks, while maintaining the same Navis network management system
  they are using to support existing subscriber data services.

We are
  also partnering with Microsoft to jointly pursue the IP TV market segment by
  combining our Stinger DSLAM and ADSL2+ modems with Microsoft video servers,
  set-top boxes and software. We believe the Stinger family is ideally suited
  for IP video broadcast and pay-per-view deployments because of its multicast
  capabilities and because it limits the amount of optical bandwidth that carriers
  must provide between the central office and the remote, thereby reducing expenses.

Optical Networking Products

Optical
  networking products include laser-based transmission systems that transport
  information between and among switches and other network components by the release
  of light particles. These systems include core backbone high-capacity systems,
  the central portion of network equipment, as well as lower-capacity metropolitan
  systems (local networks).

Core optical
  networking systems expand and speed optical signals over fiber cable for the
  core, or central portion, of a service providers network and
  allow the service provider to increase the amount of traffic transmitted over
  its fiber optic network. The core network equipment is responsible for moving
  voice, data and video traffic from origin to destination and connecting radio
  base stations to the public voice and data networks.

Metro optical
  networking systems, another group of optical networking products, are designed
  to aggregate and increase the use of fiber optic systems for both voice and
  data traffic for local carriers or networks located in metropolitan areas. This
  family of optical networking products gives service providers fast, efficient
  information transport over fiber optic lines.

Our Metropolis
  metropolitan area networking optical systems provide a simple, differentiated
  way for our customers to data-enable the installed base of SONET/SDH systems.
  In 2004, we added Ethernet, Gigabit Ethernet and Storage Area Network interfaces
  to our metropolitan area optical networking systems. These interfaces give our
  customers the ability to generate new revenues by supporting Ethernet data transport
  over SONET/SDH networks that formerly were used to carry only voice traffic.

Mobility Solutions

Revenues
  during fiscal 2004 were approximately $4.0 billion. A significant portion of
  Mobilitys revenues was derived from a few large service providers in the
  U.S. Verizon Wireless and Sprint accounted for 61% and 52% of total Mobility
  revenues during fiscal 2004 and 2003, respectively. As of September 30, 2004,
  Mobility had approximately 4,500 full-time employees engaged mainly in product
  development, general management and marketing activities.

Mobility
  is focused on providing CDMA and UMTS spread-spectrum solutions, which includes
  WCDMA, to wireless service providers. These are commonly referred to as 3G networks.
  We are also working on creating relationships with other equipment vendors to
  help us offer best-in-class, end-to-end solutions and products. CDMA is a globally
  deployed wireless technology, predominantly used in North America and Asia Pacific.
  WCDMA is a variant of CDMA that uses a wider frequency band and is predominantly
  used in Europe. GSM is a globally deployed wireless technology, predominantly
  used in Europe and Asia Pacific.

Mobility
  also continually evaluates opportunities to leverage its strengths in new technologies.
  The most important products in Mobilitys CDMA and UMTS portfolios are
  developed internally, including radio access products, circuit and packet core
  backbone networks, and network management, application and service delivery
  systems. Mobility also taps into INSs strengths in voice networking, data
  and network management and optical networking, and leverages the expertise of
  Services.

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We believe
  our strength and track record in spread-spectrum technologies has uniquely positioned
  Mobility for the global migration of our customers and potential customers to
  3G wireless networks. Mobilitys emphasis is on providing the equipment
  and services that our customers need to evolve from their current second-generation
  (2G and 2.5G) technology to the 3G spread-spectrum technologies
  of CDMA2000 and UMTS. CDMA2000 is the 3G standard for CDMA technology. Both
  2G and 3G wireless technologies are digital. The main differences between the
  technologies are capacity and data transmission speed. To be considered 3G,
  a network must deliver improved system capacity and spectrum efficiency over
  a 2G network and support data services at specified transmission rates in mobile
  and fixed environments.

The International
  Telecommunications Union, an international standards body that operates as part
  of the United Nations, has been instrumental in promulgating a vision of 3G
  that embraces a wide variety of spread-spectrum technologies, including those
  we have helped develop. We continue to be the global leader in CDMA spread-spectrum
  networks, with more than 120,000 base stations providing commercial service
  around the world. Approximately 70,000 of those base stations provide 3G services
  for our customers today. We have built 33 3G networks in 17 countries, equal
  to 29% of the 114 3G commercial networks deployed. We are also conducting ongoing
  UMTS customer trials with Cingular, China Netcom and Chinas Ministry of
  Information Industry.

We have already brought
  to market spread-spectrum CDMA2000 networks in North America, South America,
  China, India, Asia, Eastern Europe and Russia, and we expect continued progress
  with our UMTS offerings.

Based on
  the existing 3G plans from leading service providers around the world, we expect
  that the majority of future 3G mobile users will access voice and high-speed
  data services through CDMA2000 or UMTS networks. While we are certain that the
  3G wireless networks will be dominated by these spread-spectrum technologies,
  there are other potential new technologies (e.g. OFDM & WiMax) that may
  be introduced as competitive alternatives for mobile customers. Given the technical
  maturity of the spread-spectrum technologies, time to market advantages will
  benefit the technologys adoption over the next 24 months. Additionally,
  demand for enterprise mobile data services is a major driver behind CDMA2000
  and UMTS spending, and the consumer market for high-speed data services is now
  beginning to develop.

New CDMA2000
  market opportunities are separated into two categories: low teledensity countries
  (e.g. Southeastern Asia) with a need for wireless voice and basic data services
  and higher-end application and service growth markets ushering in new end-user
  solutions leveraging high speed data and IP technology. While the large CDMA2000
  build-outs are less frequent today, we continue to drive footprint growth in
  new spectrum and leverage our embedded base for growth in advanced services.

Some of
  our competitors continue to invest heavily in 3G alternatives in the United
  States, and these alternatives continue to pressure our products. We regard
  these alternative technologies as complementary to 3G. For example, we are developing
  offerings that integrate 3G wide-area cellular with Wi-Fi (wireless fidelity)
  for seamless, secure roaming service. Some of our competitors invested heavily
  in GSM and the future evolution of TDMA-based technology to 2.5G (GPRS) and
  EDGE, a technology path in which we have decided not to invest. These competitors
  have developed products to help their GSM service provider customers migrate
  to 3G through technology swap outs, rather than deploy new 3G networks. Cingular
  has chosen this path. However, they continue to plan for UMTS. We believe that
  EDGE will have a limited impact on the value of UMTS, as spread-spectrum will
  provide superior performance both technically and economically.

The industry
  forecasts for investment in 3G networks over the next three years continue to
  vary widely. Financial and market conditions have driven some service providers
  to delay their 3G deployments or abandon their plans to deploy 3G. Operators
  are under pressure to achieve a positive cash-flow position, which has increased
  competitive pricing and slowed investment.

We believe
  that the 3G infrastructure market is gaining momentum as operators continue
  to adopt our strategy of initially focusing on enterprise customers. Several
  networks based on both UMTS and CDMA2000 have launched high speed data services
  focused on the business market. All of these offerings include access to mobile
  data services via a laptop enabled by an air interface modem card that can be
  inserted into any standard laptop computer. In North America, initial interest
  in high-speed data services has contributed to the decision of several of our
  customers to accelerate the upgrade of their networks from CDMA2000 1x to CDMA2000
  1xEV/DO.

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Base station
  products provide the radio links that transmit and receive wireless subscriber
  calls and manage handoffs as customers move from cell to cell (a cell is the
  area in which calls are handled by a particular base station). Each radio base
  station covers a specific geographic area and has the capacity to handle a certain
  amount of subscriber traffic. Typically, base station equipment represents a
  significant portion of capital equipment cost for a mobile operator. Base station
  equipment also supports CDMA and UMTS technologies and addresses the form, fit
  and function of future assemblies in a modular fashion. Therefore, current investment
  is not likely to be lost as the cell evolves to include expanded capacity for
  wireless voice and/or data transmissions. Core network equipment connects base
  stations to the public voice and data networks. The primary element of the core
  network for voice traffic is the mobile switching center (MSC).
  MSCs transfer calls within the wireless network and interface to the public
  switched telephone networks. The majority of these voice and packet data core
  network products are developed by the INS segment.

The 5ESS®-2000
  switch has advanced switching, signaling and administrative capabilities to
  deliver standard MSC functionality cost effectively. It is a multipurpose, flexible
  modular platform capable of supporting both wireline and wireless telecommunications
  applications. For our existing wireless customers, we expect to continue to
  support the 5ESS®-based MSC and provide
  a smooth transition to the new softswitch-based technology. Softswitch-based
  3G MSC provides integrated voice and data services that use open application
  programming interfaces (applications for which the code is published), enabling
  providers to create new, innovative services for the mobile Internet.

Operations
  and maintenance software systems allow service providers to provision, diagnose
  and administer their wireless networks. We utilize our Navis®
  network operations platforms, as well as third-party systems, to provide these
  products. Our MiLife applications platforms allow
  a wireless service provider to easily introduce personalized mobile services.
  These platforms are used to support mobile applications and services developed
  by us and by third parties.

Lucent Worldwide Services

Services
  revenues during fiscal 2004 were approximately $1.9 billion. As of September
  30, 2004, Services had approximately 10,000 employees dedicated to professional services,
  managed services, deployment services and maintenance services. Services also
  maintains a direct sales force that supplements the sales effort from the Global
  Sales Organization.

We believe
  that service providers are faced with the need to converge their existing voice
  and data networks onto a single, packet-based network to meet the increasing
  demand from end users for fast and seamless communication. Convergence is complicated;
  it will happen across multiple layers; applications, infrastructures and back-office
  environments and will involve multiple components, not all of which we supply.
  Our customers success depends on the evolution of their business models
  and their networks.

Our planning,
  design, optimization, integration and management services are critical to simplifying
  convergence and empowering service providers to bring profitable lifestyle-changing
  services to end users, while driving increased revenues.

We believe
  our customers spend about $40 billion annually on services performed themselves
  or by third parties. Services leverages its core competencies, drawing on the
  expertise and the innovation of Bell Labs to address this opportunity.

Services
  offerings are provided in combination with Lucent products, as well as services
  that are offered stand-alone or based on other vendors products. We intend
  to increase our international presence and capabilities and have plans to penetrate
  new markets adjacent to the core service provider market, such as government,
  enterprise, and cable markets.

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We believe
  Services has one of the industrys largest concentrations of skilled technicians,
  consultants, engineers and installers to address our customers challenges
  and offers multitechnology and multivendor services solutions focused in the
  following areas:

Professional Services

These services
  help our customers identify network areas where they can capitalize on high-margin
  opportunities, apply proven tools and techniques to optimize performance and
  reduce operating expenses, and plan evolution to protect their network investment
  and increase profits. Enhanced engineering services help our customers determine
  the best configuration for maximizing traffic capacity and for achieving other
  operational efficiencies. These services also provide our customers with in
  service upgrades to help them migrate to new technologies. Enhanced technical
  services help carriers maintain a high-performing network by identifying and
  correcting network performance issues, balancing traffic loads and integrating
  new multivendor equipment and software into a live system. Services improves
  our customers network quality by troubleshooting, by reporting and resolving
  problems and by providing on-the-job training to their staff. Professional
  services revenues accounted for approximately 25% of fiscal 2004 Services revenues.

Deployment Services

These services
  help our customers bring their equipment online in an efficient manner and allow
  them to begin generating revenues more quickly. Equipment and field engineering
  services provide analysis, identification and documentation of detailed hardware
  and software specifications for new multivendor networking equipment to help
  ensure smooth deployments. Services builds and expands wireline and wireless
  networks globally and provides on-site configuration, testing and network connectivity
  of the equipment following installation. Our site location and construction
  services business provides a complete network deployment solution and includes
  site acquisition, construction management, architecture and engineering, site
  construction, inspection service and network infrastructure support. Deployment
  services revenues accounted for approximately 35% of fiscal 2004 Services revenues.

Maintenance Services

These services
  help our customers maximize the performance of their multivendor networks and
  maintain network reliability and availability to ensure quality of service.
  We have the capability to provide technical support either remotely via phone
  or modem for rapid response, diagnosis and resolution or on-site through technical
  specialists supplementing the service providers staff. Maintenance services
  revenues accounted for approximately 40% of fiscal 2004 Services revenues.

Managed Services

These services
  consist of a wide range of outsourced network operations and network transformation
  services that help our clients reduce their operating expenses while preserving
  and enhancing network reliability. Services provides a seamless transition to
  an outsourced environment utilizing state-of-the-art tools and technology plus
  highly skilled technicians to provide ongoing network management of our customers
  networks. These functions can be performed at our global network operations
  centers or at the customers network operations center. We currently provide
  network operation services to more than 25 customers around the world. Although
  these revenues do not represent a significant portion of Services revenues,
  managed services are often embedded in maintenance and professional services.

By relying
  on the global multivendor expertise and field-proven processes of Services,
  our customers can leverage their installed base of assets across multiple
  technologies and vendors, quickly implement new technologies and applications
  to expand presence in target markets, and simplify operations through customized
  support to design, build, and manage communication networks.

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Competition

The global
  telecommunications networking industry is highly competitive. Our current principal
  competitors include Alcatel, Ciena Corporation, Cisco Systems, Inc., LM Ericsson
  Telephone Company, Fujitsu Limited, Huawei Technologies, Marconi Corporation
  plc, Motorola Inc., NEC Corporation, Nokia Corporation, Nortel Networks Corporation,
  Samsung Networks Inc., Siemens AG, and UTStarcom, Inc. Some of our competitors,
  such as Alcatel and Nortel, compete across many of our product lines, while
  others compete in a smaller subset of our products.

We expect
  that the level of competition will intensify, for several reasons. First, most
  industry participants will seek to strengthen their relationships with large
  service providers, as these providers represent approximately 75% of global
  carrier spending. In addition, carrier consolidation continues, resulting in
  fewer customers. Competition is accelerating around converged network technologies
  as carriers are shifting capital to areas that will enable network migration.
  Furthermore, competitors providing low-cost products and services from Asia
  are gaining market share worldwide.

Many factors influence our ability to compete successfully in our industry, including:

- The quality, performance, reliability, price and market acceptance of our products.
- The market acceptance of our competitors products.
- The efficiency and quality of the production and implementation of our products.
- Our
      ability to develop appropriate technologies and introduce new products and
      services and value-added features on a timely basis.
- Our
      willingness and ability to provide or arrange customer financings in certain
      emerging U.S. and non-U.S. markets.
- Our customer support and our reputation.

We are
  among the top suppliers of products and services to wireline and wireless service
  providers. A number of our competitors are very large companies with substantial
  technical, engineering and financial resources, brand recognition and established
  relationships with service providers. We may from time to time face new competitors,
  including entrants from the telecommunications, computer software, data networking
  and semiconductor industries. These competitors may be able to offer lower prices,
  additional products or services or other incentives that we cannot or will not
  match or do not offer.

We have
  operations in foreign countries, including manufacturing facilities and system
  integration centers, sales personnel and customer support operations. We derived
  39% of our revenues from sales outside the United States during fiscal 2004.
  We are dependent on international suppliers for many of our parts and for the
  manufacturing of some of our products. We intend to continue to pursue opportunities
  in markets outside the United States, giving careful consideration to the nature
  of each opportunity and the choice of each market. Therefore, we will continue
  to be subject to the risks inherent in doing business in foreign countries.
  In many non-U.S. markets, long-standing relationships among our potential customers
  and our competitors, as well as protective regulations (including local content
  requirements), create barriers to our entry and can adversely affect our ability
  to capitalize on the opportunities in these markets. Also, pursuit of non-U.S.
  opportunities may require us to make significant investments for an extended
  period before we can realize returns on such investments, if any. Our ability
  to compete and our investments in some countries can be adversely affected by
  difficulties with respect to protecting intellectual property, exchange controls,
  currency fluctuations, investment policies, repatriation of cash, nationalization,
  social and political risks, taxation and other factors, depending on the country.
  We have an ongoing program to mitigate these risks that includes significant
  investments in systems infrastructure and the implementation of a commissionaire
  model where appropriate.

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Bell Labs

Our INS,
  Mobility and Services segments are supported by the technological expertise
  of Bell Labs, one of the worlds largest research and development organizations
  focused on the needs of large telecommunications service providers. Bell Labs
  provides basic and applied research and development support for our business.
  Bell Labs mission is to develop technically advanced products and services
  that will keep us at the forefront of communications, to conduct fundamental
  research in scientific fields important to communications and to create innovations
  that can be put to use in our new communications products and services. Bell
  Labs R&D activities continue to focus on the technologies we view
  as central to our business strategy: software, network design and engineering,
  network services, photonics, optical, data networking and wireless communications.

Bell Labs
  has increased its work on technologies to further the development of our IMS
  architecture. We plan to continue to invest in the R&D efforts of Bell Labs
  because we believe it gives us a competitive advantage in developing innovative
  technologies. There are more than 9,000 employees in Bell Labs, which includes
  R&D, services and technical staff. Most of these employees serve in R&D
  roles in our INS and Mobility segments. There are approximately 1,100 employees
  supporting R&D efforts within Bell Labs core research group.

Supply Chain Networks

Supply
  Chain Networks, or SCN, manages our end-to-end global supply chain, which is
  needed to produce and deliver our products and services to our worldwide customers.
  The organization designs, implements and optimizes the supply chain for our
  products, with the goal of establishing product cost, product cycle and interval,
  and quality that meet our objectives and those of our customers.

The key
  functions of SCN include planning for and managing the execution of the contractual
  commitments we made to our customers and business partners; identifying the
  sources of raw materials, sub-assemblies and finished goods that are needed
  to support our product lines; establishing and managing relationships with component
  vendors and our electronic manufacturing service providers to ensure continuity
  of supply at the required price and quality; managing the customer demand planning
  activities and translating demand plans into supply plans to meet their needs;
  managing end-to-end inventory balances to ensure optimum working capital and
  cycle turns while positioning product to meet customer needs; managing the customer
  order through delivery, including execution in our systems integration centers
  and in the distribution network required to deliver products and services to
  our customers; designing and managing the functional and system level tests
  and test tools that assure the quality and reliability of our products; and
  driving the engineering effort across the product life cycle by working closely
  with our product management and development teams to ensure lowest-cost designs
  through low-cost and standardized component selection, by optimizing sourcing
  strategies, by managing new product introductions from controlled introduction
  through volume manufacturing, and by maximizing post-development cost reduction
  opportunities.

We make
  significant purchases of components and other materials from many U.S. and non-U.S.
  sources. While there have been some shortages in components and some other materials
  in technology commodities common across the industry, we have generally been
  able to obtain sufficient materials and components from sources around the world
  to meet our needs. We also develop and maintain alternative sources for essential
  materials and components. We do not have a concentration of sources of supply
  of materials, labor or services that, if suddenly eliminated, could severely
  impact our operations.

We currently
  use contract manufacturers to supply most of our product lines. Our contract
  manufacturers include Celestica, Solectron, Jabil, Sanmina and other local companies
  in various regions. SCN controls the source selection for all significant or
  strategic components. Our contract manufacturers use their leverage and global
  buying power to negotiate the best prices from vendors we approve. SCN monitors
  their performance and works closely with them to ensure process and technical
  product specifications are met.

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Backlog

Our backlog
  was $2.1 billion and $2.2 billion as of September 30, 2004 and 2003, respectively.
  Substantially all of the orders included in the September 30, 2004 backlog are
  scheduled for delivery during fiscal 2005. However, all orders are subject to
  possible rescheduling by customers. Although we believe that the orders included
  in the backlog are firm, customers may be able to cancel some orders without
  penalty, and we may elect to permit cancellation of orders without penalty where
  management believes that it is in our best interest to do so. In addition, some
  customers may become unable to finance their purchases as a result of deterioration
  in their financial position.

Seasonality

Our revenues and earnings have not demonstrated consistent seasonal characteristics.

Patents, Trademarks and Other Intellectual Property Rights

We have
  patents to protect some of our innovations and proprietary products and technology.
  We market our products and services primarily under our own names and marks.
  We consider our patents and trademarks to be valuable assets. Many of our trademarks
  are registered throughout the world. We currently own approximately 6,800 patents
  in the United States and 7,300 patents in foreign countries. The foreign patents
  are, for the most part, counterparts of our U.S. patents.

Our intellectual
  property licensing division licenses, protects and maintains our intellectual
  property and enforces our intellectual property rights. This responsibility
  includes licensing our patents and technology to third parties and negotiating
  agreements regarding our licensing of intellectual property from others. Many
  of our patents are licensed to other companies with large patent portfolios,
  and we are licensed to use patents owned by these other companies, including
  our former affiliates, Agere, AT&T, Avaya and NCR. The terms of these cross-licenses
  may vary company by company.

We rely
  on patent, trademark, trade secret and copyright laws both to protect our intellectual
  property, including our proprietary technology, and to protect us against claims
  from others. We believe that we have direct intellectual property rights or
  rights under cross-licensing arrangements covering substantially all of our
  material technologies. However, third parties may assert infringement claims
  against us or against our customers in connection with their use of our systems
  and products. When infringement claims are made against our customers or us,
  the outcomes of these claims are sometimes difficult to predict because of the
  technological complexity of our systems and products.

Forward-looking Statements

This annual
  report on Form 10-K and other documents we file with the SEC contain forward-looking
  statements that are based on current expectations, estimates, forecasts and
  projections about us, our future performance, the industries in which we operate,
  our beliefs and our managements assumptions. In addition, other written
  or oral statements that constitute forward-looking statements may be made by
  us or on our behalf. Words such as expects, anticipates,
  targets, goals, projects, intends,
  plans, believes, seeks, and estimates,
  variations of such words and similar expressions are intended to identify such
  forward-looking statements. These statements are not guarantees of future performance
  and involve certain risks, uncertainties and assumptions that are difficult
  to predict or assess. Therefore, actual outcomes and results may differ materially
  from what is expressed or forecast in such forward-looking statements. Except
  as required under the federal securities laws and the rules and regulations
  of the SEC, we do not have any intention or obligation to update publicly any
  forward-looking statements after the distribution of this Form 10-K, whether
  as a result of new information, future events, changes in assumptions or otherwise.

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Risks Related to Our Business

Our business,
  our future performance and forward-looking statements are affected by general
  industry and market conditions and growth rates, general U.S. and non-U.S. economic
  and political conditions (including the global economy), interest rate and currency
  exchange rate fluctuations and other events. The following items are representative
  of the risks, uncertainties and other conditions that can impact our business,
  our future performance and the forward-looking statements that we make in this
  report or that we may make in the future.

The
  Telecommunications Market Fluctuates and Is Impacted By Many Factors, Including
  Decisions By Service Providers Regarding Their Deployment of Technology and
  Their Timing of Purchases, as Well as Demand and Spending for Communications
  Services By Businesses and Consumers.

Beginning
  in fiscal 2001 and continuing through fiscal 2003, the global telecommunications
  market deteriorated significantly, reflecting a significant decrease in the
  competitive local exchange carrier market, failures of many other start-up telecommunications
  service providers and a significant reduction in capital spending by established
  service providers. In 2004, the market stabilized but is still subject to fluctuations.

If capital
  investment by service providers improves at a slower pace than we anticipate,
  our revenues and profitability may be adversely affected. The level of demand
  by service providers can change quickly and can vary over short periods of time,
  including from month to month. As a result of the uncertainty and variations
  in our markets, accurately forecasting revenues, results and cash flow remains
  difficult.

In addition,
  our sales volume and product mix impact our gross margin. Therefore, if our
  sales volume does not improve, or we have an unfavorable product mix, we may
  not achieve the gross margin rate we expect, resulting in lower than expected
  results of operations. These factors may fluctuate from quarter to quarter.

We Operate in a Highly Competitive Industry. Our Failure to Compete Effectively Would Harm Our Business.

The industry
  in which we operate is highly competitive, and we expect that this level of
  competition on pricing and product offerings will continue. Factors that could
  affect our ability to compete successfully in the industry include the quality,
  performance, price, reliability, mix and market acceptance of our products;
  market acceptance of our competitors products; efficiency and quality
  of the production and implementation of our products; and our customer support
  and reputation.

We have
  a number of existing competitors, some of which are very large, with substantial
  technological and financial resources, brand recognition and established relationships
  with global service providers and some of our competitors have very low cost
  structures and support from governments in their home countries. In addition,
  new competitors may enter the industry as a result of shifts in technology.
  These new competitors, as well as existing competitors, may include entrants
  from the telecommunications, computer software, computer services, data networking
  and semiconductor industries. We cannot assure you that we will be able to compete
  successfully against existing or future competitors. Competitors may be able
  to offer lower prices, additional products or services or a more attractive
  mix of products or services, or services or other incentives that we cannot
  or will not match or do not offer. These competitors may be in a stronger position to respond quickly to new or emerging technologies and may be able to
  undertake more extensive marketing campaigns, adopt more aggressive pricing
  policies and make more attractive offers to potential customers, employees and
  strategic partners. Because we have a unionized workforce at some locations
  and because many of our main competitors are not unionized to the same extent,
  or at all, our costs and expenses may be higher and our profitability may be
  lower than those of our competitors.

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If
  We Fail to Maintain a Product Portfolio That Is Attractive to Our Customers,
  Enhance Our Existing Products and Keep Pace with Technological Advances in Our
  Industry, or If We Pursue Technologies That Do Not Become Commercially Accepted,
  Customers May Not Buy Our Products, and Our Revenues, Profitability and Cash
  Flow May Be Adversely Affected.

The demand
  for our products can change quickly and in ways that we may not anticipate because
  markets for our principal products are characterized by the following conditions:
  rapid, sometimes disruptive technological developments; evolving industry and
  certification standards; frequent new product introductions and enhancements;
  changes in customer requirements and a limited ability on our part to accurately
  forecast future customer orders; evolving methods of building and operating
  telecommunications systems for our customers; and short product life cycles
  with declining prices over the lives of products.

Our operating
  results depend to a significant extent on our ability to maintain a product
  portfolio that is attractive to our customers, to enhance our existing products,
  and to continue to introduce new products successfully and on a timely basis.
  New technological innovations generally require a substantial investment before
  any assurance can be given as to their commercial viability, which depends,
  in some cases on certification by U.S. and non-U.S. standards-setting bodies.
  If we fail to make sufficient investments or if we focus on technologies that
  do not become widely adopted, other technologies could render our current and
  planned products obsolete.

A
  Small Number of Our Customers Account for a Substantial Portion of Our Revenues,
  and Our Revenues Are Concentrated on the Telecommunications Service Provider
  Market. The Loss of One or More Key Customers or Reduced Spending in our Single
  Market Could Significantly Reduce Our Revenues, Profitability and Cash Flow.

We rely
  on a few large customers to provide a substantial portion of our revenues. These
  customers include: BellSouth, China Unicom, Sprint, Verizon and Verizon Wireless.
  Verizon and Verizon Wireless together accounted for approximately 27% of our
  fiscal 2004 revenues, 22% of our fiscal 2003 revenues and 19% of our fiscal
  2002 revenues. The telecommunications industry has recently experienced a consolidation
  of both U.S. and non-U.S. companies, as evidenced by the merger of AT&T
  Wireless and Cingular. As a result of these factors, it is possible that in
  fiscal 2005 and subsequent years an even greater percentage of our revenues
  will be attributable to a limited number of large service providers than in
  years past.

Reductions
  or delays in or cancellations of orders from one or more of our significant
  customers or the loss of one or more significant customers in any period could
  have an adverse effect on our revenues, profitability and cash flow. In addition,
  our concentration of business in the telecommunications service provider market
  makes us extremely vulnerable to downturns or slowdowns in spending in that
  market.

We are
  working to expand our revenue base to include more government and enterprise
  revenue as well as to increase sales in markets outside of the U.S. However,
  we cannot provide assurance that we will succeed in expanding our revenue base
  or that we will materially reduce customer concentration.

We Are Exposed to the Credit Risk of Our Customers.

Our credit
  exposure to our customers makes us vulnerable to downturns in the economy or
  in the industry and to adverse changes in our customers businesses. Many
  of the customers to whom we provided financing or with whom we have contracts
  were negatively affected by the continued softening in the telecommunications
  market. Some have filed for bankruptcy or been declared insolvent. As a result,
  we wrote off some of our accounts receivable and many of our customer financings
  and sold others at significant discounts. We also recorded reserves or write-offs
  in our financial statements and may have to record additional reserves or write-offs
  in the future. As we continue to enter new markets and work with new customers
  who may not have established credit and strong financial resources, we will
  continue to have risk of collecting our accounts receivable from these customers.

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We
  Have Long-Term Sales Agreements with a Number of Our Large Customers. Some of
  These Agreements May Prove Unprofitable As Our Costs and Product Mix Shift Over
  the Lives of the Agreements.

We have
  entered into long-term sales agreements with a number of our large customers,
  and will probably continue to do so in the future. Some of these sales agreements
  require us to sell products and services at fixed prices over the lives of the
  agreements, and some require, or may in the future require, us to sell products
  and services that we would otherwise discontinue, thereby diverting our resources
  from developing more profitable or strategically important products. The costs
  we incur in fulfilling some of our sales agreements may vary substantially from
  our initial cost estimates. Any cost overruns that we cannot pass on to our
  customers could adversely affect our results of operations.

We Have Risks Related to Our Pension and Postretirement Benefit Plans.

We currently
  maintain U.S. pension plans under the U.S. Employee Retirement Income Security
  Act of 1974 (ERISA) that cover various categories of employees and
  retirees in the U.S. Liabilities related to 20,000 active employees and 125,000
  retired employees make up approximately 90% of the total obligations under these
  pension plans. The remaining 10% of the liabilities are attributable to approximately
  87,000 beneficiaries and former employees with deferred vested pension rights.
  A separate trust is maintained to hold assets to fund pension obligations for
  management participants and for occupational participants. The funding obligations
  for our pension plans are impacted by the performance of the financial markets,
  particularly the equity markets, and interest rates. Funding obligations are
  determined under ERISA and subsequent legislation and are measured as of January
  1 of each year based on the value of assets and liabilities on that date.

If the
  financial markets do not provide the long-term returns that are expected under
  the ERISA funding calculation, the likelihood of our being required to make
  contributions will increase. The equity markets can be, and recently have been,
  very volatile, and therefore our estimate of future contribution requirements
  can change dramatically in relatively short periods of time. Similarly, changes
  in interest rates can impact our contribution requirements. In a low-interest-rate
  environment, the likelihood of required contributions in the future increases.

With respect
  to the management pension plan, we are not required to make a contribution in
  fiscal 2005 or fiscal 2006. However, because of the volatility of the financial
  markets and fluctuations in interest rates, we could be required to make contributions
  as early as fiscal 2007. With respect to the occupational pension plan, we do
  not currently foresee a need to make contributions, but this could change if
  the equity markets decline substantially.

Approximately
  119,000 of our current retirees are also covered by postretirement health care
  benefit plans. With respect to management retirees, we expect our fiscal 2005
  funding requirements to be approximately $200 million. Although it is difficult
  to estimate these expected future payments, our current view is that the annual
  funding requirement will remain at approximately $200 million for management
  retirees for fiscal 2006. With respect to represented retirees, we do not expect
  to have to make cash payments until fiscal 2006 because assets are currently
  held in a separate trust to fund these payments. Our tentative labor agreement
  with the CWA and IBEW caps the amount the Company will pay for retiree health
  care for formerly represented retirees that retired on or after March 1, 1990.
  This tentative agreement also requires us to fund $400 million to a new trust
  by September 30, 2012. The exact amounts and timing of annual contributions
  will be determined by the Company, but the minimum amount of each annual contribution,
  beginning in 2005, is $25 million. Under the agreement, the unions and the Company
  agreed to seek an amendment to Section 420 of the Internal Revenue Code for
  various changes including the elimination of the maintenance of cost requirements
  associated with the transfer of excess pension assets for retiree health care.
  If satisfactory legislation is not enacted into law by September 1, 2006, the
  Company will be able to exercise its discretion in determining the amount of
  retiree health care subsidy on or after December 31, 2006.

The cost
  of providing postretirement health care benefits continues to rise. We have
  taken some steps and expect to take additional action to reduce the overall
  cost of providing postretirement health care benefits and the share of these
  costs borne by us, consistent with legal requirements and our collective bargaining
  obligations. There can be no assurance that we will be successful in reducing
  these costs and these actions may lead to additional claims against us.

17

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If we are
  required to make significant contributions to fund pension plans or make larger
  cash payments for retiree health care benefits, our cash flow available for
  other uses may be significantly reduced.

We
  Conduct a Significant Proportion of Our Operations Outside the United States,
  Which Subjects Us To Social, Political and Economic Risks of Doing Business
  in Foreign Countries and May Cause Our Profitability to Decline Due to Increased
  Costs.

We have
  significant operations in foreign countries, including manufacturing facilities,
  sales personnel and customer support operations. For fiscal 2004 and 2003, we
  derived approximately 39% and 40%, respectively, of our revenues from sales
  outside the U.S., including in China, Germany, India and various countries
  in the Middle East, such as Iraq and Israel. We manufacture a portion of our
  products outside the United States. We are also dependent on international suppliers
  for some of our components and subassemblies and for assembly of some of our
  products. We are concentrating on sales and marketing, product development,
  services and supply chain resources to meet the global needs of the worlds
  largest service providers and to follow the geographic footprint of our large
  service provider customers around the world. We are, therefore, subject to the
  risks inherent in doing business in foreign countries. These risks include tariffs
  and duties, price controls, restrictions on foreign currencies and trade barriers
  imposed by foreign countries; exchange controls and fluctuations in currency
  exchange rates; difficulties in staffing and managing international operations;
  political or social unrest or economic instability; the risk of nationalization
  of private enterprises by foreign governments; adverse tax consequences, including
  imposition of withholding or other taxes on payments by subsidiaries; and the
  risks associated with terrorism and insurrections.

Difficulties
  in some foreign financial markets and economies could also inhibit demand from
  our customers in the affected countries. Any or all of these factors could have
  a material adverse impact on our global business operations. Although we attempt
  to manage our exposure to risks from fluctuations in foreign currency exchange
  rates, through our regular operating and financing activities and, when deemed
  appropriate, through derivative financial instruments, our attempts may not
  always be successful. A significant change in the value of the U.S. dollar against
  the currency of one or more countries where we sell products to local customers
  or make purchases from local suppliers may materially adversely affect our operating
  results.

We
  Rely on Third Parties to Manufacture Most of Our Products and to Provide Substantially
  All of Our Components. If These Third Parties Fail to Deliver Quality Products
  and Components at Reasonable Prices on a Timely Basis, We May Alienate Some
  of Our Customers, and Our Revenues, Profitability and Cash Flow May Decline.

We use
  contract manufacturers significantly as an alternative to manufacturing our
  products ourselves. If these contract manufacturers do not fulfill their obligations
  to us, or if we do not properly manage these arrangements, our customer relationships
  may suffer. In addition, since we rely more heavily now than previously on contract
  manufacturers, we may have fewer employees with the expertise needed to manage
  these third-party arrangements. In relying more on third parties, we run the
  risk that the reputation and competitiveness of our products and services may
  deteriorate because we have less control over quality and delivery schedules.
  We also may experience supply interruptions, cost escalations and competitive
  disadvantages if our contract manufacturers fail to develop, implement or maintain
  manufacturing methods appropriate for our products and customers.

In addition,
  our supply chain and manufacturing process relies on accurate forecasting to
  provide us with optimal product margins and profitability. However, because
  of market fluctuations, accurate forecasting is very difficult.

If We Fail to Generate Positive Operating Cash Flow, Our Ability to Satisfy Our Cash Requirements May Decline.

Prior to
  fiscal 2004, we experienced several years of significant negative cash flow
  that totaled billions of dollars. In fiscal 2004, we generated positive cash
  flow from operating activities. However, we do not have a demonstrated history
  of generating positive operating cash flow. If we do not continue to generate
  positive cash flow from operating activities, we may have difficulty meeting
  our obligations, including our debt service requirements, postretirement health
  care obligations and making the investments in research and development that
  are necessary to remain competitive.

18

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We
  Are a Party to Lawsuits, Which, If Determined Adversely to Us, Could Result
  in the Imposition of Damages Against Us and Could Harm Our Business and Financial
  Condition.

We are
  defendants in various lawsuits, covering such matters as commercial disputes,
  claims regarding product discontinuance, asbestos claims, labor, employment
  and benefit claims, and others. There can be no assurance that actions that
  have been or will be brought against us will be resolved in our favor or, if
  significant monetary judgments are rendered against us, that we will have the
  ability to pay such judgments. Any losses resulting from these claims could
  adversely affect our profitability and cash flow.

If We Fail to Protect Our Intellectual Property Rights, Our Business and Prospects May Be Harmed.

Intellectual
  property rights, such as patents, are vital to our business, and developing
  new products and technologies that are unique to us is critical to our success.
  We have numerous U.S. and foreign patents and numerous pending patents, but
  we cannot predict whether any patents, issued or pending, will provide us with
  any competitive advantage or will not be challenged by third parties. Moreover,
  our competitors may already have applied for patents that, once issued, could
  prevail over our patent rights or otherwise limit our ability to sell our products.
  Our competitors also may attempt to design around our patents or copy or otherwise
  obtain and use our proprietary technology. In addition, patent applications
  that we have currently pending may not be granted. If we do not receive the
  patents we seek or if other problems arise with our intellectual property, our
  competitiveness could be significantly impaired, which would limit our future revenues and harm our prospects.

We
  Are Subject to Intellectual Property Litigation and Infringement Claims, Which
  Could Cause Us to Incur Significant Expenses or Prevent Us from Selling Our
  Products.

From time
  to time, we receive notices from third parties of potential infringement and
  receive claims of potential infringement when we attempt to license our intellectual
  property to others. Intellectual property litigation can be costly and time-consuming
  and can divert the attention of management and key personnel from other business
  issues. The complexity of the technology involved and the uncertainty of intellectual
  property litigation increase these risks. A successful claim by a third party
  of patent or other intellectual property infringement by us could compel us
  to enter into costly royalty or license agreements or force us to pay significant
  damages and could even require us to stop selling certain products.

Many
  of Our Current and Planned Products Are Highly Complex and May Contain Defects
  or Errors That Are Detected Only After Deployment in Telecommunications Networks.
  If That Occurs, Our Reputation May Be Harmed.

Our products
  are highly complex, and there is no assurance that our extensive product development,
  manufacturing and integration testing will be adequate to detect all defects,
  errors, failures and quality issues that could impact customer satisfaction.
  As a result, we could have to replace certain components and/or provide remediation
  in response to the discovery of defects in products that are shipped. Most of
  these occurrences can be rectified without incident, as has been the case historically.
  However, the occurrence of any defects, errors, failures or quality issues could
  result in cancellation of orders, product returns, diversion of our resources,
  legal actions by our customers or our customers end users and other losses
  to us or to our customers or end users. These occurrences could also result
  in the loss of or delay in market acceptance of our products and loss of sales,
  which would harm our business and adversely affect our revenues and profitability.

Rapid
  Changes to Existing Regulations or Technical Standards or The Implementation
  of New Regulations or Technical Standards Relating to Products and Services
  Not Previously Regulated Could Be Disruptive, Time-Consuming and Costly to Us.

Many of
  our products and services are developed in reliance upon existing regulations
  and technical standards, our interpretation of unfinished technical standards
  or the lack of such regulations and standards. Changes to existing regulations
  and technical standards, or the implementation of new regulations and technical
  standards relating to products and services not previously regulated, could
  adversely affect the development of, demand for, and sale and warranty of our
  products and services, thus increasing our costs and decreasing the demand for
  our products and services.

19

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We
  Are Subject to Environmental, Health and Safety Laws, the Compliance with and
  Liabilities Pursuant to Which Could Be Costly and Could Restrict Our Operations.

Our operations
  are subject to a wide range of environmental, health and safety laws, including
  laws relating to the use, disposal, clean-up of, and human exposure to hazardous
  substances. In the United States, these laws often require parties to fund remedial
  action regardless of fault. Although we believe our reserves are adequate to
  cover our environmental liabilities, factors such as the discovery of additional
  contaminants, the extent of remediation and compliance expenses and the imposition
  of additional cleanup obligations at Superfund and other sites could cause our
  capital expenditures and other expenses relating to remediation activities to
  exceed the amount reflected in our environmental reserve and adversely affect
  our results of operations and cash flows. Compliance with existing or future
  environmental, health and safety laws could subject us to future liabilities,
  cause the suspension of production, restrict our ability to expand facilities
  or require us to acquire costly pollution control equipment or incur other significant
  expenses, including the expense of modifying manufacturing processes.

Our
  Success Depends on Our Ability to Recruit and Retain Key Personnel.

Our success
  depends in large part on our ability to recruit and retain highly skilled technical,
  managerial, sales and marketing personnel. Competition for these personnel is
  intense. In addition, our recent workforce reductions have increased our dependence
  on our remaining workforce, as we are relying on our current personnel to assume
  additional responsibilities. The loss of services of any of our key personnel
  or our failure to attract and retain qualified personnel in the future could
  make it difficult for us to meet our key objectives, such as timely product
  introductions.

Employee Relations

As of September
  30, 2004, we had approximately 31,800 employees, of whom approximately 20,000,
  or 63%, were located in the United States. Of these U.S. employees, approximately
  3,500, or 18%, were represented by unions, primarily the Communications Workers
  of America (CWA).

Executive Officers of the Registrant

The following
  information about our executive officers is included herein in accordance with
  Part III, Item 10 and is as of November 30, 2004.

|Name                            |  | Age |  | Title                                                                                                |  | Date
      Became 
      Executive Officer
|------------------------------- |  | --- |  | ---------------------------------------------------------------------------------------------------- |  | ------------------------------------------
|                                |  |     |  |                                                                                                      |  |                                           
|Patricia F.
      Russo         |  | 52  |  | Chairman and Chief
      Executive Officer                                                           |  | 01/02                                     
|James K. Brewington             |  | 61  |  | President, Developing
      Markets                                                                  |  | 10/02                                     
|William R.
      Carapezzi, Jr. |  | 47  |  | Senior Vice President,
      General Counsel and Secretary                                           |  | 06/04                                     
|Cynthia Christy-Langenfeld      |  | 38  |  | President, Mobility
      Solutions                                                                  |  | 03/04                                     
|Frank A. DAmelio               |  | 46  |  | Executive Vice President
      and Chief Financial Officer                                           |  | 05/01                                     
|Janet G. Davidson               |  | 48  |  | President, Integrated
      Network Solutions                                                        |  | 10/02                                     
|John A. Kritzmacher             |  | 44  |  | Senior Vice President
      and Controller                                                           |  | 08/01                                     
|Jose A. Mejia                   |  | 44  |  | President, Supply
      Chain Networks                                                               |  | 10/03                                     
|John A. Meyer                   |  | 48  |  | President, Lucent
      Worldwide Services                                                           |  | 10/03                                     
|William T.
      OShea         |  | 57  |  | President, Bell Labs
      and Executive Vice President, Corporate Strategy and Business Development |  | 10/99                                     
|Robert Warstler                 |  | 62  |  | President, Global
      Sales                                                                        |  | 10/03                                     

All of
  the executive officers have held high-level managerial positions with us for
  more than the past five years, except for Ms. Russo and Messrs. Mejia, Meyer
  and Warstler. Ms. Russo held executive officer positions with us from our formation
  in 1996 until August 2000. Prior to becoming our president and chief executive
  officer in

20

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January 2002, Ms. Russo was chairman of Avaya Inc. from December
  2000 to January 2002 and president and chief operating officer of Eastman Kodak
  Company from April 2001 to January 2002. Mr. Mejia was hired by Lucent in 1999.
  Prior to his employment with Lucent, Mr. Mejia was with Bay Networks, which
  he joined in 1996 as vice president of component engineering, supplier management
  and external manufacturing. He remained with Bay Networks until 1999. Prior
  to joining Lucent, Mr. Meyer was an executive with EDS, one of the worlds
  leading IT outsourcing and technology consulting firms, for nearly 20 years
  prior to joining us and was the president of its division serving Europe, the
  Middle East and Africa. Mr. Warstler was president and chief operating officer
  of Advanced Telecom Group from 1999 to 2002 and had previously held senior management
  positions with Network Equipment Technology and Hitachi Data Systems.

Officers are not elected or appointed for a fixed term of office.

Environmental Matters

Our current
  and historical operations are subject to a wide range of environmental protection
  laws. In the United States, these laws often require parties to fund remedial
  action regardless of fault. We have remedial and investigatory activities under
  way at numerous current and former facilities. In addition, we were named a
  successor to AT&T as a potentially responsible party at numerous Superfund
  sites pursuant to the Comprehensive Environmental Response, Compensation and
  Liability Act of 1980 (CERCLA) or comparable state statutes. Under
  our Separation and Distribution Agreement with AT&T, we are responsible
  for all liabilities primarily resulting from or relating to our assets and the
  operation of our business as conducted at any time prior to or after the separation
  from AT&T, including related businesses discontinued or disposed of prior
  to our separation from AT&T. Furthermore, under that Separation and Distribution
  Agreement, we are required to pay a portion of contingent liabilities
  in excess of certain amounts paid out by AT&T and NCR, including environmental
  liabilities. In our separation agreements with Agere and Avaya, those companies
  have agreed, subject to certain exceptions, to assume all environmental liabilities
  related to their respective businesses.

The future
  impact of environmental matters, including potential liabilities, is often difficult
  to estimate. We record an environmental reserve when it is probable that a liability
  has been incurred and the amount of the liability is reasonably estimable. This
  practice is followed whether the claims are asserted or unasserted. Management
  expects that the amounts reserved will be paid out over the periods of remediation
  for the applicable sites, which typically range from five to 30 years.

For additional
  information about our environmental matters, see Note 13 to our consolidated
  financial statements contained in this report.

Separation Agreements

In connection
  with our separation from AT&T in 1996, we, AT&T and NCR Corp. entered
  into a Separation and Distribution Agreement and related ancillary agreements,
  including an employee benefits agreement, technology-related agreements, a tax-sharing
  agreement and other tax-related agreements. We entered into similar agreements
  with Avaya and Agere in connection with our spin-off of each of these companies.

Pursuant
  to these various agreements, we and our former affiliates have separately agreed
  to assume all liabilities, including contingent liabilities, related to our
  and their respective businesses and operations. In some instances, these agreements
  also provide for the sharing of certain contingent liabilities, specifically,
  (1) any contingent liabilities that are not primarily our contingent liabilities
  or contingent liabilities associated with the businesses attributed to our former
  affiliate, (2) certain specifically identified liabilities, including liabilities
  relating to terminated, divested or discontinued businesses or operations, and
  (3) shared contingent liabilities and excess liabilities as specified in the
  agreements with AT&T and Avaya.

Item 2. Properties

As of September
  30, 2004, we operated in 184 facilities in the United States totaling 20.2 million
  square feet, of which 8.9 million was owned and 11.3 million was leased. In
  addition, we operated in 140 facilities in 46 other countries totaling 5.0 million
  square feet, of which 1.4 million was owned and 3.6 million was leased. Our
  properties include systems integration/manufacturing sites, warehouse sites,
  offices sites (administration, sales,

21

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field service), and research and development
  sites. Included above are 3.1 million square feet that have been vacated under
  our restructuring actions. Most of the properties listed above are used jointly
  by our reporting segments. We believe our facilities are suitable and adequate
  to meet our current needs.

Item 3. Legal Proceedings

We are
  subject to legal proceedings, lawsuits and other claims, including proceedings
  by government authorities. In addition, we may be subject to liabilities to
  some of our former affiliates under separation agreements with them (see Item
  1. Separation Agreements). Legal proceedings are subject to uncertainties,
  and the outcomes are difficult to predict. Consequently, we are unable to estimate
  the ultimate aggregate amount of monetary liability or financial impact with
  respect to these matters as of September 30, 2004. We have reached an agreement
  for the settlement of our securities, ERISA, derivative and related litigation,
  and the amount of this settlement is reflected in our financial results. We
  believe that the remainder of the cases will not have a material financial impact
  on us after final disposition. However, because of the uncertainties of legal
  proceedings, one or more of these proceedings could ultimately result in material
  monetary payments by us.

Refer to Note 13 to our consolidated financial statements contained in this report for additional information about legal proceedings involving us.

Litigation and Lawsuits

Litigation, lawsuits and similar claims involving the Company include the following types of matters:

- Securities cases, including cases involving federal securities laws and related ERISA claims.
- Consumer fraud and similar claims.
- Commercial disputes including breach of contract, product performance disputes and other claims.
- Intellectual property actions, usually involving patent infringement claims.
- Employment matters.
- Environmental, health and safety claims, including asbestos-related claims.

As mentioned
  above, we have reached an agreement for the settlement of our primary securities
  and related cases and are awaiting final distribution of the settlement proceeds.
  Some individual securities cases for plaintiffs that have opted out of the settlement
  are ongoing. Following is an overview of the other litigation and legal proceedings
  to which we are subject.

In the
  normal course of business, we are involved in commercial disputes with customers,
  suppliers, subcontractors and others. These matters generally involve claims
  for monetary damages for breach of contract or breach of warranty or similar
  claims. While many of these disputes are settled amicably without litigation,
  some will result in lawsuits being filed against us. The recent downturn in
  the telecommunications market and the insolvency or failure of numerous service
  providers has led to more claims and disputes that result in litigation.

We are
  defendants in various cases in which third parties have claimed we are infringing
  their patents, including certain cases where infringement claims have been made
  against our customers in connection with products we have provided to them.
  We also occasionally institute actions against third parties whom we believe
  are infringing our intellectual property rights, and these actions sometimes
  lead to counterclaims by the opposing parties.

We are
  subject to various employment-related claims regarding employee dismissals,
  benefits, compensation and other matters. As a result of our recent restructuring
  actions and plans for the future, we have reduced our workforce significantly
  and may make further reductions in the future. These workforce reductions have
  increased the number of employment-related claims, and this trend may continue.
  We have taken and may continue to take steps to reduce the cost of providing
  postretirement health care benefits. These actions may increase claims made
  against us as well, and lawsuits have been filed against us in connection with
  the elimination of the death benefit in our U.S. Management Pension Plan. In
  addition, the Equal Employment Opportunity Commission has initiated a suit against
  us regarding certain policies used by our predecessors prior to 1980.

22

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We are
  a defendant in various lawsuits involving alleged exposure to asbestos. These
  cases involve exposure to asbestos in premises owned or operated by us or by
  the predecessors of our business, such as AT&T or Western Electric, or from
  exposure to products manufactured or sold by us or our predecessors that allegedly
  contained asbestos. Historically, we have not paid any material amounts related
  to asbestos claims, and currently do not expect these cases to have a significant
  impact on us in the future. However, asbestos claims are on the rise generally
  in the United States and more cases are being asserted against owners or operators
  of premises or companies that manufactured or sold products allegedly containing
  asbestos, and we have observed a rise in the number of matters asserted against
  us. Accordingly, we cannot give assurance that asbestos-related claims will
  not have a material adverse impact on us in the future.

Government Investigations

On November
  21, 2000, we announced that we had identified an issue affecting our revenues
  in the fourth quarter of fiscal 2000. We informed the SEC and initiated a review
  by our outside counsel and independent accountants. A final judgment and consent
  decree with the SEC was entered for this matter in May 2004. Under the terms
  of the consent decree, we paid a $25 million civil penalty in the third quarter
  of fiscal 2004 but were not required to make any financial restatements. Without
  admitting or denying any wrongdoing, we consented to the settlement, which enjoins
  us from future violations of specific provisions of the federal securities laws.

In August
  2002, the U.S. Attorneys Office in New Jersey informed us that the office
  was conducting an investigation into certain of the matters related to the events
  described in the previous paragraph. The U.S. Attorneys Office has informed
  us that the Company is not a target of this investigation. We are cooperating
  fully with the U.S. Attorneys investigation.

In August
  2003, the U.S. Department of Justice and the SEC informed us that they had each
  commenced an investigation into possible violations of the Foreign Corrupt Practices
  Act. These investigations follow allegations made by National Group for Communications
  and Computers Ltd. in an action filed against us on August 8, 2003. In April
  2004, we reported to the DOJ and the SEC that a FCPA compliance audit and an
  outside counsel investigation found incidents and internal control deficiencies
  in our operations in China that potentially involve FCPA violations. We are
  cooperating with both agencies.

As disclosed in an 8-K filing on November 8, 2004, our former Chairman
  and Chief Executive Officer, Richard McGinn, the former head of our Saudi Arabia
  operations, John Heindel, and a third former employee received Wells
  notices from the staff of the SEC. These Wells notices state that the staff
  of the SEC is considering recommending that civil actions be taken against these
  three former employees for violations of the Foreign Corrupt Practices Act (FCPA).
  The allegations against these individuals include violations of the anti-bribery
  provisions of the FCPA and aiding and abetting the Companys alleged violations
  of requirements under the FCPA to keep accurate books and records and to maintain
  a proper system of internal accounting controls. The Company has not received
  a Wells notice at this time, but the investigation is continuing.

Item 4. Submission of Matters to a Vote of Security Holders

During the fourth quarter of fiscal 2004, no matters were submitted to a vote of our security holders.

23

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PART II

Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

(a) Market Price, Holders and Dividend Information

Our common
  stock is traded on the New York Stock Exchange (NYSE) under the
  symbol LU. The following table presents the high and low sales prices of our
  common stock as reported on the NYSE:

|                                       | High  | Low  
|-------------------------------------- | ----- | -----
|YEAR
      ENDED SEPTEMBER 30, 2004    |       |      
|Quarter
      ended December 31, 2003  | $3.44 | $2.08
|Quarter
      ended March 31, 2004     | 4.91  | 2.87 
|Quarter
      ended June 30, 2004      | 4.52  | 2.99 
|Quarter
      ended September 30, 2004 | 3.80  | 2.70 
|YEAR
      ENDED SEPTEMBER 30, 2003    |       |      
|Quarter
      ended December 31, 2002  | $1.99 | $0.55
|Quarter
      ended March 31, 2003     | 2.00  | 1.28 
|Quarter
      ended June 30, 2003      | 2.57  | 1.41 
|Quarter
      ended September 30, 2003 | 2.41  | 1.60 

On November 30, 2004, there were approximately 1,345,697 shareowners of record of our common stock.

We currently do not pay cash dividends on our common stock and have no plans to reinstate a dividend on our common stock.

During the three months ended September 30, 2004, we did not issue any common shares that were not registered under the Securities Act of 1933.

(b) Not applicable

(c) No repurchases of the Companys equity securities were made during the fourth quarter of fiscal 2004.

Item 6. Selected Financial Data

The information
  required by this item is included in page F-36 of our annual report to shareowners
  for the year ended September 30, 2004. This page of the annual report to shareowners
  is included in Exhibit 13 to this report.

Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations

The information
  required by this item is included in pages F-2 to F-35 of our annual report
  to shareowners for the year ended September 30, 2004. These pages of the annual
  report to shareowners are included in Exhibit 13 to this report.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

The information
  required by this item is included in pages F-33 to F-35 of our annual report
  to shareowners for the year ended September 30, 2004. These pages of the annual
  report to shareowners are included in Exhibit 13 to this report.

24

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Item 8. Financial Statements and Supplementary Data

The information
  required by this item is included in pages F-39 to F-82 of our annual report
  to shareowners for the year ended September 30, 2004. These pages of the annual
  report to shareowners are included in Exhibit 13 to this report.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

We periodically
  review the design and effectiveness of our disclosure controls and internal
  control over financial reporting worldwide, including compliance with various
  laws and regulations that apply to our operations both inside and outside the
  United States. We make modifications to improve the design and effectiveness
  of our disclosure controls and internal control structure, and may take other
  corrective action, if our reviews identify a need for such modifications or
  actions. In designing and evaluating the disclosure controls and procedures
  and internal control of financial reporting, we recognize that any controls
  and procedures, no matter how well designed and operated, can provide only reasonable
  assurance of achieving the desired control objectives.

An evaluation
  was carried out under the supervision and with the participation of our management,
  including the Chief Executive Officer (CEO) and Chief Financial
  Officer (CFO), of the effectiveness of our disclosure controls and
  procedures.  Based on that evaluation, the CEO and CFO have concluded that
  as of the end of the period covered by this report, our disclosure controls
  and procedures are effective to provide reasonable assurance that information
  required to be disclosed by us in reports that we file or submit under the Securities
  Exchange Act of 1934 is recorded, processed, summarized and timely reported
  as provided in the Securities and Exchange Commission rules and forms. No changes
  occurred during the quarter ended September 30, 2004 in our internal controls
  over financial reporting that have materially affected, or are reasonably likely
  to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

25

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PART III

Item 10. Directors and Executive Officers of the Registrant

Information
  required by this item for executive officers is set forth under the heading
  Executive Officers of the Registrant in Part I, Item 1, of this
  report. The other information required by Item 10 is included in our definitive
  proxy statement for our 2005 annual meeting of shareowners to be held on February
  16, 2005, and is incorporated herein by reference.

Item 11. Executive Compensation

The information
  required by this item is included in our definitive proxy statement for our
  2005 annual meeting of shareowners to be held on February 16, 2005, and is incorporated
  herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following
  table provides information as of September 30, 2004 with respect to shares
  of our common stock that may be issued under our existing equity compensation
  plans, including the 2001 Employee Stock Purchase Plan (the ESPP),
  the Lucent Technologies Inc. 2003 Long-Term Incentive Program (the 2003
  Plan) and the 2004 Equity Compensation Plan for Non-Employee Directors.

The table
  does not include information with respect to shares subject to outstanding options
  granted under equity compensation plans under which the right to grant options
  has expired prior to September 30, 2004 and equity compensation plans assumed
  by the Company in connection with mergers and acquisitions of the companies
  that originally granted those options. Footnotes (4) and (5) to the
  table set forth the total number of shares of our common stock issuable upon
  the exercise of options under the expired plans and assumed options, respectively,
  as of September 30, 2004, and the weighted average exercise price of those
  options. No additional options may be granted under those expired and assumed
  plans.

|                                                |  |  | A                                                                                                |            | B                                                                  |   | C                                                                                                                                                                          |    
|----------------------------------------------- |  |  | ------------------------------------------------------------------------------------------------ | ---------- | ------------------------------------------------------------------ | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---
|                                                |  |  | Number of 
      securities to be 
      issued upon 
      exercise of 
    outstanding options |            | Weighted average 
      exercise price of 
    outstanding options |   | Number of securities 
      remaining available for 
      future issuance under equity 
      compensation plans 
      (excluding securities 
    reflected in column A) |    
|                                                |  |  |                                                                                                  |            |                                                                    |   |                                                                                                                                                                            |    
|Plan
      category:                            |  |  |                                                                                                  |            |                                                                    |   |                                                                                                                                                                            |    
|Equity
      compensation plans approved by     |  |  |                                                                                                  |            |                                                                    |   |                                                                                                                                                                            |    
|shareowners
      (1)                           |  |  |                                                                                                  | 16,087,307 | (2)                                                                | $ | 3.14                                                                                                                                                                       | (2)
|Equity
      compensation plans not approved by |  | 
|shareowners
      (1)                           |  |  |                                                                                                  |           |                                                                    |   |                                                                                                                                                                           |    
|                                                |  |  |                                                                                                  |            |                                                                    |   |                                                                                                                                                                            |    
|                                                |  |  |                                                                                                  | 16,087,307 |                                                                    | $ | 3.14                                                                                                                                                                       |    
|                                                |  |  |                                                                                                  |            |                                                                    |   |                                                                                                                                                                            |    

|(1) |  | Consists of the 2003 Plan and the ESPP.
|--- |  | ---------------------------------------

|(2) |  | Excludes purchase rights accruing under the ESPP, which has a shareowner
        approved reserve of 250,000,000 shares. Under the ESPP, each eligible
        employee may purchase up to 4,000 shares of our common stock at semi-annual
        intervals at a purchase price per share equal to 85% of the lower of the
        fair market value of our common stock on either the first or last trading
        day of a purchase period.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) |  | Includes shares available for future issuance under the ESPP. As of September 30,
        2004, an aggregate of 210,404,805 shares of our common stock were available
        for issuance under the ESPP.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) |  | The table does not include information for equity compensation plans that
        have expired. The Founders Grant Stock Option Plan expired on December 31,
        1996. As of September 30, 2004, a total of 20,406,154 shares of our
        common stock were issuable upon the exercise of outstanding options granted
        under the expired plan. The 1998 Global Stock Option Plan expired on April 1,
        2000. As of September 30, 2004, a
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

26

---

| |  | total of 7,826,641 shares of our
        common stock were issuable upon the exercise of outstanding options granted
        under the expired plan. The 1996 Long Term Incentive Program expired on
        February 28, 2004. As of September 30, 2004, a total of 81,995,177 shares
        of our common stock were issuable upon the exercise of outstanding options
        granted under the expired plan. The 1997 Long-Term Incentive Plan (the
        1997 Plan), expired on December 31, 2003. As of September
        30, 2004, a total of 262,972,217 shares of our common stock were issuable
        upon the exercise of outstanding options granted under the expired plan.
        The 1999 Stock Compensation Plan for Non-Employee Directors (Non-Employee
        Directors Plan), expired on February 1, 2004. As of September 30,
        2004, a total of 363,072 shares of our common stock were issuable upon
        the exercise of outstanding options granted under the expired plan. The
        weighted average exercise price of those outstanding options granted under
        these five plans is $11.16 per share. No additional options may be
        granted under these expired plans.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) |  | The table does not include information for equity compensation plans assumed
        by Lucent in connection with our separation from AT&T and subsequent
        mergers and acquisitions of the companies which originally established
        those plans. As of September 30, 2004, a total of 13,770,027 shares
        of our common stock were issuable upon exercise of outstanding options
        granted under those assumed plans. The weighted average exercise price
        of those outstanding options is $11.29 per share. No additional options
        may be granted under those assumed plans.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The other
  information required by Item 12 is included in our definitive proxy statement
  for our 2005 annual meeting of shareowners to be held on February 16, 2005,
  and is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions

The information
  required by this item is included in our definitive proxy statement for our
  2005 annual meeting of shareowners to be held on February 16, 2005, and is incorporated
  herein by reference.

Item 14. Principal Accounting Fees and Services

The information
  required by this item is included in our definitive proxy statement for our
  2005 annual meeting of shareowners to be held on February 16, 2005, and is incorporated
  herein by reference.

27

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PART IV

Item 15. Exhibits and Financial Statement Schedule

(a) The following documents are filed as part of this report:

|                                                                                |  |  |  | Pages
|------------------------------------------------------------------------------- |  |  |  | -----
|(1)
      Consolidated Financial Statements:                                    |  |  |  |      
|(i)
      Consolidated Statements of Operations                                 |  |  |  | *    
|(ii)
      Consolidated Balance Sheets                                          |  |  |  | *    
|(iii)
      Consolidated Statements of Changes in Shareowners (Deficit) Equity |  |  |  | *    
|(iv)
      Consolidated Statements of Cash Flows                                |  |  |  | *    
|(v)
      Notes to Consolidated Financial Statements                            |  |  |  | *    
|(2) Five-Year
      Summary of Selected Financial Data                          |  |  |  | *    

|* |  | Incorporated
by reference to the appropriate portions in pages F-36 through F-82 of our annual  report
to shareowners for the fiscal year ended September 30, 2004 (see Part  II and Exhibit 13).
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Separate
  financial statements of subsidiaries not consolidated and 50 percent or less
  owned persons are omitted since no such entity constitutes a significant
  subsidiary pursuant to the provisions of Regulation S-X, Article 3-09.

(3) Exhibits:

See Exhibit
  Index on page 30 for a description of the documents that are filed as exhibits
  to this report on Form 10-K or incorporated by reference herein. Any document
  incorporated by reference is identified by a parenthetical referencing the SEC
  filing that included the document.

We will
  furnish, without charge, to a security holder upon request a copy of our definitive
  proxy statement for our 2005 annual meeting of shareowners, portions of which
  are incorporated herein by reference. We will furnish any other exhibit at cost.

28

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SIGNATURES

Pursuant
  to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
  1934, the registrant has duly caused this report to be signed on its behalf
  by the undersigned, hereunto duly authorized.

LUCENT TECHNOLOGIES INC.

| | By: | /s/
      JOHN A. KRITZMACHER                                                                             
| | --- | ----------------------------------------------------------------------------------------------------------
| |     | John
      A. Kritzmacher 
      Senior Vice President and Controller
      (Principal Accounting Officer)

Pursuant
  to the requirements of the Securities Exchange Act of 1934, this report has
  been signed below by the following persons on behalf of the registrant and in
  the capacities and on the date indicated.

|/s/
      PATRICIA F. RUSSO      
|---------------------------------
|PRINCIPAL
      EXECUTIVE OFFICER
|                                 
|                                 

|/s/
      FRANK A. DAMELIO      
|---------------------------------
|PRINCIPAL
      FINANCIAL OFFICER
|                                 
|                                 

|/s/
      JOHN A. KRITZMACHER     
|----------------------------------
|PRINCIPAL
      ACCOUNTING OFFICER
|                                  
|                                  

DIRECTORS

|Robert
      E. Denham 
      Daniel S. Goldin 
      Edward E. Hagenlocker
      Carla A. Hills 
      Karl J. Krapek 
      Richard C. Levin 
      Patricia F. Russo 
      Henry B. Schacht 
      Franklin A. Thomas 
      Ronald A. Williams 
      John A. Young |                               | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------------------- | 
|By:                                                                                                                                                                                                                                                                      | /s/
      JOHN A. KRITZMACHER
|                                                                                                                                                                                                                                                                         | Attorney-in-Fact             

29

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EXHIBIT INDEX

The following documents are filed as exhibits to this report on Form 10-K or incorporated by reference herein. Any document incorporated by reference is identified by a parenthetical reference to the SEC filing that included such document.

|ExhibitNumber |  | Description
|------------- |  | -----------

|3(i) 1 |  | Certificate of Incorporation of the registrant, as amended, effective
        February 16, 2000, (Exhibit 3.1 to Registration Statement on Form S-4,
        No. 333-31400).
|------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3(i) 2 |  | Certificate of Amendment of Restated Certificate of Incorporation of the
        registrant dated February 26, 2004 (Exhibit 3(i) to Quarterly Report on
        Form 10-Q for the quarter ended March 31, 2004).
|------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3(ii) |  | By-Laws of the registrant, as amended through February 18, 2004 (Exhibit
        3(ii) to Quarterly Report on Form 10-Q for the quarter ended March 31,
        2004).
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(ii) 1 |  | Form of the registrants Common Stock Certificate (Exhibit 4(iv)
        to Quarterly Report on Form 10-Q for the quarter ended December 31, 2001).
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------

|4(ii) 2 |  | Indenture, dated as of April 1, 1996, between Lucent Technologies Inc.
        and The Bank of New York, as trustee (Exhibit 4A to Registration Statement
        on Form S-3, No. 333-01223).
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(ii) 3 |  | First Supplemental Indenture, dated as of April 17, 2000, to Indenture
        dated April 1, 1996, (Exhibit 4 to the Current Report on Form 8-K filed
        May 5, 2000).
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(ii) 4 |  | Amended and Restated Trust Agreement, dated as of March 19, 2002, among
        the registrant, as depositor, The Bank of New York, as property trustee,
        The Bank of New York (Delaware), as Delaware trustee, and the individuals
        named therein, as administrative trustees, relating to Lucent Technologies
        Capital Trust I. (Exhibit 4(v)1 to Quarterly Report on Form 10-Q for
        the quarter ended March 31, 2002).
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(ii) 5 |  | Form of certificate for preferred securities of Lucent Technologies Capital
        Trust I, designated as 7.75% Cumulative Convertible Trust Preferred Securities
        (liquidation preference $1,000 per preferred security) (Exhibit 4(v)2
        to Quarterly Report on Form 10-Q for the quarter ended March 31, 2002).
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(ii) 6 |  | Indenture, dated as of March 19, 2002, between the registrant and The
        Bank of New York, as indenture trustee (Exhibit 4(v) 3 to Quarterly Report
        on Form 10-Q for the quarter ended March 31, 2002).
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(ii) 7 |  | Form of the registrants 7.75% convertible subordinated debentures
        due 2017 (Exhibit 4(v) 4 to Quarterly Report on Form 10-Q for the quarter
        ended March 31, 2002).
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(ii) 8 |  | Guarantee Agreement, dated as of March 19, 2002, between the registrant,
        as guarantor, and The Bank of New York, as guarantee trustee (Exhibit
        4(v) 5 to Quarterly Report on Form 10-Q for the quarter ended March 31,
        2002).
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

30

---

|4(ii) 9 |  | Indenture, dated as of June 4, 2003, between Lucent Technologies Inc.
        and The Bank of New York, as trustee (Exhibit 4.1 to Current Report on
        Form 8-K filed June 25, 2003).
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(ii) 10 |  | First Supplemental Indenture, dated as of June 4, 2003, between Lucent
        Technologies Inc. and The Bank of New York, as trustee (Exhibit 4.2 to
        the Current Report on Form 8-K filed June 25, 2003).
|-------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(ii)11 |  | Indenture dated as of November 24, 2003, between Lucent Technologies Inc.
        and the Bank of New York as trustee (Exhibit 4(ii)11 to Annual Report
        on Form 10-K for the year ended September 30, 2003).
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(ii)12 |  | Form of registrants 8% convertible subordinated debenture due 2031
        (Exhibit A to the Indenture attached as Exhibit 4(ii)11).
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------

|4(iii) |  | Other instruments in addition to exhibits under 4(ii) that define the
        rights of holders of long-term debt of the registrant and all of its consolidated
        subsidiaries are not filed herewith pursuant to Regulation S-K, Item 601(b)(4)(iii)(A).
        Pursuant to this regulation, the registrant agrees to furnish a copy of
        any such instrument to the SEC upon request.
|------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(i) 1 |  | Separation and Distribution Agreement, by and among Lucent Technologies
        Inc., AT&T Corp. and NCR Corporation, dated as of February 1, 1996,
        and amended and restated as of March 29, 1996, (Exhibit 10.1 to Registration
        Statement on Form S-1 No. 333-00703).
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(i) 2 |  | Tax Sharing Agreement, by and among Lucent Technologies Inc., AT&T
        Corp. and NCR Corporation, dated as of February 1, 1996, and amended and
        restated as of March 29, 1996, (Exhibit 10.6 to Registration Statement
        on Form S-1 No. 333-00703).
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(i) 3 |  | Employee Benefits Agreement, by and between AT&T Corp. and Lucent
        Technologies Inc., dated as of February 1, 1996, and amended and restated
        as of March 29, 1996, (Exhibit 10.2 to Registration Statement on Form
        S-1 No. 333-00703).
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(i) 4 |  | Rights Agreement, between Lucent Technologies Inc. and The Bank of New
        York (successor to First Chicago Trust Company of New York), as rights
        agent, dated as of April 4, 1996, (Exhibit 4.2 to Registration Statement
        on Form S-1 No. 333-00703).
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(i) 5 |  | Amendment to Rights Agreement, between Lucent Technologies Inc. and The
        Bank of New York (successor to First Chicago Trust Company of New York),
        dated as of February 18, 1998.
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(i) 6 |  | Letter Agreement, dated as of October 16, 2002, among Lucent Technologies
        Inc. and certain of its subsidiaries, and JPMorgan Chase Bank, as collateral
        agent (Exhibit 99.1 to the Current Report on Form 8-K filed on October
        23, 2002).
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(i) 7 |  | Letter of Credit Issuance and Reimbursement Agreement, dated as of May
        28, 2003, among Lucent Technologies Inc., several banks and other parties
        thereto and JPMorgan Chase Bank, as administrative agent (Exhibit 99.1
        to the Current Report on Form 8-K filed May 28, 2003).
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(i) 8 |  | External Sharing Debt Agreement, dated as of May 28, 2003, among Lucent
        Technologies Inc., several banks and other parties thereto and JPMorgan
        Chase
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

31

---

| |  | Bank, as administrative agent (Exhibit 99.2 to the Current Report
        on Form 8-K filed May 28, 2003).
| |  | ----------------------------------------------------------------------------------------------------------

|10(i) 9 |  | Amended and Restated Guarantee and Collateral Agreement, dated as of May
        28, 2003, made by Lucent Technologies Inc. and certain of its subsidiaries
        in favor of JPMorgan Chase Bank, as collateral agent (Exhibit 99.3 to
        the Current Report on Form 8-K filed May 28, 2003).
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(i) 10 |  | Amended and Restated Collateral Sharing Agreement, dated as of May 28,
        2003, made by Lucent Technologies Inc. and certain of its subsidiaries
        in favor of JPMorgan Chase Bank, as collateral agent (Exhibit 99.4 to
        the Current Report on Form 8-K filed May 28, 2003).
|-------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(i) 11 |  | First Amendment, dated as of June 6, 2003, to (i) Letter of Credit Issuance
        and Reimbursement Agreement, dated as of May 28, 2003, among Lucent Technologies
        Inc., several banks and other parties thereto and JPMorgan Chase Bank,
        as administrative agent, (ii) External Sharing Debt Agreement, dated as
        of May 28, 2003, among Lucent Technologies Inc., several banks and other
        parties thereto and JPMorgan Chase Bank, as administrative agent, (iii)
        Amended and Restated Guarantee and Collateral Agreement, dated as of May
        28, 2003, made by Lucent Technologies Inc. and certain of its subsidiaries
        in favor of JPMorgan Chase Bank, as collateral agent, and (iv) Amended
        and Restated Collateral Sharing Agreement, dated as of May 28, 2003, made
        by Lucent Technologies Inc. and certain of its subsidiaries in favor of
        JPMorgan Chase Bank, as collateral agent (Exhibit 99.1 to the Current
        Report on Form 8-K filed July 16, 2003).
|-------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(i) 12 |  | Second Amendment, dated as of July 7, 2003, to (i) Letter of Credit Issuance
        and Reimbursement Agreement, dated as of May 28, 2003, among Lucent Technologies
        Inc., several banks and other parties thereto and JPMorgan Chase Bank,
        as administrative agent, and (ii) External Sharing Debt Agreement, dated
        as of May 28, 2003, among Lucent Technologies Inc., several banks and
        other parties thereto and JPMorgan Chase Bank, as administrative agent
        (Exhibit 99.2 to the Current Report on Form 8-K filed July 16, 2003).
|-------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(i) 13 |  | Third Amendment, dated as of December 22, 2003, to (i) Letter of Credit
        Issuance and Reimbursement Agreement, dated as of May 28, 2003, among
        Lucent Technologies Inc., several banks and other parties thereto and
        JPMorgan Chase Bank, as administrative agent, and (ii) External Sharing
        Debt Agreement, dated as of May 28, 2003, among Lucent Technologies Inc.,
        several banks and other parties thereto and JPMorgan Chase Bank, as administrative
        agent (Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter
        ended December 31, 2003).
|-------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(i) 14 |  | Fourth Amendment, dated as of February 4, 2004, to (i) Letter of Credit
        Issuance and Reimbursement Agreement, dated as of May 28, 2003, among
        Lucent Technologies Inc., several banks and other parties thereto and
        JPMorgan Chase Bank, as administrative agent, and (ii) External Sharing
        Debt Agreement, dated as of May 28, 2003, among Lucent Technologies Inc.,
        several banks and other parties thereto and JPMorgan Chase Bank, as administrative
        agent (Exhibit 10.2 to the Quarterly Report on Form 10-Q for the quarter
        ended December 31, 2003).
|-------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(i) 15 |  | Fifth Amendment, dated as of March 26, 2004, to (i) Letter of Credit Issuance
        and Reimbursement Agreement, dated as of May 28, 2003, among Lucent Technologies
        Inc., several banks and other parties thereto and JPMorgan Chase Bank,
        as administrative agent, and (ii) External Sharing Debt Agreement, dated
        as of May 28, 2003, among Lucent Technologies Inc., several banks and
        other
|-------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

32

---

| |  | parties thereto and JPMorgan Chase Bank, as administrative agent
        (Exhibit (10)(i)(1) to the Quarterly Report on Form 10-Q for the quarter
        ended March 31, 2004).
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(i) 16 |  | Amended and Restated Letter of Credit Issuance and Reimbursement Agreement,
        dated as of October 1, 2004, among Lucent Technologies Inc., several
        banks and other parties thereto and JPMorgan Chase Bank, as administrative
        agent (Exhibit 99.1 to the Current Report on Form 8-K filed on October
        7, 2004).
|-------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(i) 17 |  | Amended and Restated External Sharing Debt Agreement, dated as of October 1,
        2004, among Lucent Technologies Inc., several banks and other parties
        thereto and JPMorgan Chase Bank, as administrative agent (Exhibit 99.2
        to the Current Report on Form 8-K filed on October 7, 2004).
|-------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(i) 18 |  | Amended and Restated Guarantee and Collateral Agreement, dated as of October 1,
        2004, made by Lucent Technologies Inc. and certain of its subsidiaries
        in favor of JPMorgan Chase Bank, as collateral agent (Exhibit 99.3 to
        the Current Report on Form 8-K filed on October 7, 2004).
|-------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(i) 19 |  | Amended and Restated Collateral Sharing Agreement, dated as of October 1,
        2004, made by Lucent Technologies Inc. and certain of its subsidiaries
        in favor of JPMorgan Chase Bank, as collateral agent (Exhibit 99.4 to
        the Current Report on Form 8-K filed on October 7, 2004).
|-------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(ii)(B) 1 |  | Brand License Agreement, by and between Lucent Technologies Inc. and AT&T,
        dated as of February 1, 1996, (Exhibit 10.5 to Registration Statement
        on Form S-1 No. 333-00703).
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(ii)(B) 2 |  | Patent License Agreement, among AT&T Corp., NCR Corporation and Lucent
        Technologies Inc., effective as of March 29, 1996, (Exhibit 10.7 to Registration
        Statement on Form S-1 No. 333-00703).
|----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(ii)(B) 3 |  | Amended and Restated Technology License Agreement, among AT&T Corp.,
        NCR Corporation and Lucent Technologies Inc., effective as of March 29,
        1996, (Exhibit 10.8 to Registration Statement on Form S-1 No. 333-00703).
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(iii)(A) 1 |  | Lucent Technologies Inc. Short Term Incentive Program.*
|------------ |  | -------------------------------------------------------

|10(iii)(A) 2 |  | Lucent Technologies Inc. 2003 Long Term Incentive Plan (Exhibit 10.2 to
        Current Report on Form 8-K filed April 11, 2003).*
|------------ |  | ----------------------------------------------------------------------------------------------------------------------------------

|10(iii)(A) 3 |  | First Amendment to the Lucent Technologies Inc. 2003 Long Term Incentive Plan.*
|------------ |  | -------------------------------------------------------------------------------

|10(iii)(A) 4 |  | Form of Lucent Technologies Inc. 2003 Long Term Incentive Program (Plan)
        Performance Award Agreement (Exhibit (10)(iii)(A) 22 to the Annual Report
        on Form 10-K for the year ended September 30, 2003).*
|------------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(iii)(A) 5 |  | Lucent Technologies Inc. 2004 Equity Compensation Plan for Non-Employee
        Directors (Exhibit (10)(iii)(1) to the Quarterly Report on Form 10-Q
        for the quarter ended March 31, 2004.*
|------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(iii)(A) 6 |  | First Amendment to the Lucent Technologies Inc. 2004 Equity Compensation Plan for Non-Employee Directors.*
|------------ |  | ----------------------------------------------------------------------------------------------------------

33

---

|10(iii)(A) 7 |  | Lucent Technologies Inc. Deferred Compensation Plan.*
|------------ |  | -----------------------------------------------------

|10(iii)(A) 8 |  | Lucent Technologies Inc. Supplemental Pension Plan.*
|------------ |  | ----------------------------------------------------

|10(iii)(A) 9 |  | Employment Agreement, dated January 6, 2002, between Patricia F. Russo
        and Lucent Technologies Inc. (Exhibit (10)(iii)(A)(1) to Quarterly Report
        on Form 10-Q for the quarter ended December 31, 2001).*
|------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(iii)(A) 10 |  | Officer Severance
      Policy for James K. Brewington, dated January 23, 2001 (Exhibit 10)(iii)(A)(13)
      to the Annual Report on Form 10-K for the year ended September 30, 2003).*
|------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(iii)(A) 11 |  | Officer Severance Policy for Janet G. Davidson, dated January 23, 2001
        (Exhibit 10)(iii)(A)(14) to the Annual Report on Form 10-K for the year
        ended September 30, 2003).*
|------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(iii)(A) 12 |  | Officer Severance
      Policy for William T. OShea, dated February 14, 2001 (Exhibit (10)(iii)(A)
      16 to the Annual Report on Form 10-K for the year ended September 30, 2001).*
|------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(iii)(A) 13 |  | Henry Schacht letter to William T. OShea, dated December 3, 2001
        (Exhibit (10)(iii)(A) 20 to the Annual Report on Form 10-K for the year
        ended September 30, 2001).*
|------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(iii)(A) 14 |  | Henry Schacht letter to Frank A. DAmelio, dated March 13, 2001
        (Exhibit (10)(iii)(A) 18 to the Annual Report on Form 10-K for the year
        ended September 30, 2002).*
|------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(iii)(A) 15 |  | Henry Schacht letter to James K. Brewington, dated March 13, 2001 (Exhibit
        10)(iii)(A)(18) to the Annual Report on Form 10-K for the year ended September
        30, 2003).*
|------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(iii)(A) 16 |  | Henry Schacht letter to Janet G. Davidson, dated March 13, 2001(Exhibit
        10)(iii)(A)(19) to the Annual Report on Form 10-K for the year ended September
        30, 2003).*
|------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(iii)(A) 17 |  | Pam Kimmet letter to Frank A. DAmelio, dated September 12, 2001,
        (Exhibit (10)(iii)(A) 19 to the Annual Report on Form 10-K for the year
        ended September 30, 2001).*
|------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10(iii)(A) 18 |  | Lucent Technologies Executive Officer Severance Policy.*
|------------- |  | --------------------------------------------------------

|12 |  | Computation of Deficiency of Earnings to Cover Combined Fixed Charges
        and Preferred Stock Dividend Requirements and Ratio of Earnings to Combined
        Fixed Charges and Preferred Stock Dividend Requirements.
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|13 |  | Selected portions (pages F-1 to F-82) of Lucent Technologies Inc.s
        Annual Report to Shareowners for the year ended September 30, 2004.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------

|14 |  | Lucent Technologies Code of Ethics for Chief Executive Officer and Senior
        Financial Officers (Exhibit 14 to the Annual Report on Form 10-K for
        the year ended September 30, 2003).
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|21 |  | List of subsidiaries of Lucent Technologies Inc.
|-- |  | ------------------------------------------------

34

---

|23 |  | Consent of PricewaterhouseCoopers LLP.
|-- |  | --------------------------------------

|24 |  | Powers of Attorney executed by directors who signed this report.
|-- |  | ----------------------------------------------------------------

|31.1 |  | Certification of Patricia F. Russo required by Rule 13a-14(a) (17 C.F.R. 240.13a-14(a)).
|---- |  | ----------------------------------------------------------------------------------------

|31.2 |  | Certification of Frank A. DAmelio required by Rule 13a-14(a) (17 C.F.R. 240.13a-14(a)).
|---- |  | ----------------------------------------------------------------------------------------

|32 |  | Certification of Patricia F. Russo and Frank A. DAmelio pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

|99.1 |  | Description of capital stock (Exhibit 99(i) to Quarterly Report on Form 10-Q for the quarter ended December 31, 2001).
|---- |  | ----------------------------------------------------------------------------------------------------------------------

* Management contract or compensatory plan or arrangement.

35

---