http://www.mitel.com

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q

      [X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 2000

                                       OR

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

                          Commission file number 1-8139

                                MITEL CORPORATION

             (Exact name of registrant as specified in its charter)

                   CANADA                               NONE

       (State or other jurisdiction of            (I.R.S. Employer
        incorporation or organization)           Identification No.)

             350 Legget Drive
              P.O. Box 13089
          Kanata, Ontario, Canada                      K2K 2W7

           (Address of principal                    (Postal Code)
            executive offices)

       Registrant's telephone number, including area code: (613) 592-2122

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  (X)     No  ( )

The number of common shares outstanding as at August 4, 2000 was 114,458,446.


                                  Page 1 of 21
<PAGE>

                                MITEL CORPORATION

                                      INDEX

PART I.  FINANCIAL INFORMATION (Unaudited)

ITEM 1.  FINANCIAL STATEMENTS

         Consolidated Balance Sheets -
         June 30, 2000 and March 31, 2000 .................................    3

         Consolidated Statements of Retained Earnings -
         Three months ended June 30, 2000 and June 25, 1999 ...............    4

         Consolidated Statements of Income -
         Three months ended June 30, 2000 and June 25, 1999 ...............    5

         Consolidated Statements of Cash Flows -
         Three months ended June 30, 2000 and June 25, 1999 ...............    6

         Notes to the Consolidated Financial Statements ...................    7

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS ..............................   14

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
         MARKET RISK ......................................................   20

PART II. OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K .................................   21


                                       2
<PAGE>

                                Mitel Corporation
                     (incorporated under the laws of Canada)
                           CONSOLIDATED BALANCE SHEETS
                        (in millions of Canadian dollars)
                                   (Unaudited)

                                                            June 30,   March 31,
                                                              2000       2000
                                                           --------------------
ASSETS

Current assets:
  Cash and cash equivalents                                $   94.0    $  195.5
  Short-term investments                                       71.9        32.9
  Accounts receivable                                         294.6       288.2
  Inventories (note 4)                                        197.4       187.7
  Prepaid expenses and other                                   39.7        37.2
  Future income tax assets                                      9.5         9.5
                                                           --------------------
                                                              707.1       751.0

Long-term receivables (note 5)                                 22.5        21.7
Fixed assets (note 6)                                         445.0       457.4
Acquired intangible assets (note 7)                             1.2         3.0
Patents, trademarks and other (note 8)                          8.9        11.3
                                                           --------------------
                                                           $1,184.7    $1,244.4
                                                           ====================

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable and accrued liabilities (note 9)        $  190.4    $  215.4
  Income and other taxes payable                               10.8        26.2
  Future income tax liabilities                                11.7        11.7
  Deferred revenue                                             43.6        44.1
  Current portion of long-term debt                            30.5        57.9
                                                           --------------------
                                                              287.0       355.3
Long-term debt                                                211.1       217.5
Pension liability                                              17.7        13.4
Future income tax liabilities                                  24.7        27.2
                                                           --------------------
                                                              540.5       613.4
                                                           --------------------
Shareholders' equity:
  Capital stock (note 10)
     Preferred shares                                          37.0        37.0
     Common shares                                            328.2       325.6
  Contributed surplus                                           9.2         9.2
  Retained earnings                                           283.3       262.6
  Translation account (note 11)                               (13.5)       (3.4)
                                                           --------------------
                                                              644.2       631.0
                                                           --------------------
                                                           $1,184.7    $1,244.4
                                                           ====================

        (See accompanying notes to the consolidated financial statements)


                                       3
<PAGE>

                                Mitel Corporation
                  CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
                        (in millions of Canadian dollars)
                                   (Unaudited)

                                                              Three Months Ended
                                                              June 30,  June 25,
                                                                2000      1999
                                                              ------------------
Retained earnings, beginning of period (as previously
  reported)                                                    $267.4    $218.4

Change in accounting policy for income taxes (note 2)            (4.8)     --
                                                               ----------------

Retained earnings, beginning of period (as restated)            262.6     218.4

Net income (loss) for the period                                 21.5      (4.6)
                                                               ----------------
                                                                284.1     213.8

Cost of common share repurchase (note 10)                        --        (0.7)

Dividends on preferred shares (note 10)                          (0.8)     (0.8)
                                                               ----------------

Retained earnings, end of period                               $283.3    $212.3
                                                               ================

        (See accompanying notes to the consolidated financial statements)


                                       4
<PAGE>

                                Mitel Corporation
                        CONSOLIDATED STATEMENTS OF INCOME
           (in millions of Canadian dollars, except per share amounts)
                                   (Unaudited)

                                                             Three Months Ended
                                                            June 30,    June 25,
                                                              2000        1999
                                                            --------------------

Revenue                                                     $ 328.8     $ 311.2
                                                            -------------------
Cost of sales:
  Cost of sales other than amortization                       150.4       151.2
  Amortization of manufacturing assets                         17.0        17.5
                                                            -------------------
                                                              167.4       168.7
                                                            -------------------
Gross margin                                                  161.4       142.5
                                                            -------------------

Expenses:
  Selling and administrative                                   87.7        85.4
  Research and development (net) (note 13)                     39.7        38.8
  Amortization of acquired intangibles                          3.2        17.1
                                                            -------------------
                                                              130.6       141.3
                                                            -------------------
Operating income                                               30.8         1.2
Interest income                                                 3.0         1.9
Interest expense                                               (5.3)       (5.2)
Debt issue costs                                               (0.6)       --
                                                            -------------------
Income (loss) before income taxes                              27.9        (2.1)
Income tax expense                                              6.4         2.5
                                                            -------------------

Net income (loss) for the period                            $  21.5     $  (4.6)
                                                            ===================

Net income (loss) attributable to common
 shareholders after preferred share dividends               $  20.7     $  (5.4)
                                                            ===================

Net income (loss) per common share (notes 3 & 10):
      Basic and fully diluted                               $  0.18     $ (0.05)
                                                            ===================

Weighted average number of common shares
  outstanding (millions):
      Basic                                                   114.2       116.5
                                                            ===================
      Fully diluted                                           122.6       116.5
                                                            ===================

        (See accompanying notes to the consolidated financial statements)


                                       5
<PAGE>

                                Mitel Corporation
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                        (in millions of Canadian dollars)
                                   (Unaudited)

                                                             Three Months Ended
                                                            June 30,    June 25,
                                                              2000        1999
                                                            --------------------
CASH PROVIDED BY (USED IN)

Operating activities:
  Net income (loss) for the period                           $ 21.5      $ (4.6)
  Amortization of capital and other assets                     31.1        43.4
  Investment tax credits                                       --           1.4
  Loss (gain) on sale of capital assets                         2.0        (0.1)
  Future income taxes                                          (2.5)       (3.1)
  Change in pension liability                                   0.1         0.3
  (Increase) decrease in working capital
    (note 17)                                                 (51.5)       20.2
                                                             ------------------
    Total                                                       0.7        57.5
                                                             ------------------

Investing activities:
  Change in short-term investments                            (38.7)      (48.2)
  Additions to capital and other assets                       (24.6)      (13.6)
  Proceeds from disposal of capital assets                      0.6         0.1
  Net change in non-cash balances related
    to investing activities                                    (2.3)       (9.4)
                                                             ------------------
     Total                                                    (65.0)      (71.1)
                                                             ------------------

Financing activities:
  Repayment of long-term debt                                 (27.1)       (2.7)
  Repayment of capital lease liabilities                      (12.0)       (9.9)
  Dividends on preferred shares                                (0.8)       (0.8)
  Issue of common shares (note 10)                              2.6         0.1
  Repurchase of common shares (note 10)                        --          (6.4)
                                                             ------------------
     Total                                                    (37.3)      (19.7)
                                                             ------------------

Effect of currency translation on cash                          0.1        (1.8)
                                                             ------------------
Decrease in cash and cash equivalents                        (101.5)      (35.1)

Cash and cash equivalents, beginning of period                195.5       125.3
                                                             ------------------
Cash and cash equivalents, end of period                     $ 94.0      $ 90.2
                                                             ==================

        (See accompanying notes to the consolidated financial statements)


                                       6
<PAGE>

                                MITEL CORPORATION
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
           (in millions of Canadian dollars, except per share amounts)
                                   (Unaudited)

1.    In  the  opinion  of  Management,  the  unaudited  consolidated  financial
      statements  reflect  all  adjustments,  which  consist  only of normal and
      recurring adjustments,  necessary to present fairly the financial position
      at June  30,  2000  and the  results  of  operations  and the  changes  in
      financial  position  for the three month  periods  ended June 30, 2000 and
      June 25, 1999, in accordance with accounting principles generally accepted
      in Canada. (See also Note 16).

      These  financial  statements  should  be  read  in  conjunction  with  the
      financial  statements and notes thereto  contained in the Company's Annual
      Report  on Form 10-K for the year  ended  March 31,  2000.  The  Company's
      fiscal year-end is the last Friday in March.

      Due to the cyclical nature of the business,  the results of operations for
      the periods presented are not necessarily  indicative of the results to be
      expected for the full year.

2.    Change in accounting policies

      a) Income taxes

      In the first  quarter  ended June 30,  2000,  the Company  adopted the new
      recommendations  of Section  3465 of the  Canadian  Institute of Chartered
      Accountants   ("CICA")   Handbook  "Income  Taxes"  and  has  applied  the
      provisions   retroactively  without  restatement  of  the  prior  periods'
      financial  statements.  The  cumulative  adjustment  to  opening  retained
      earnings was a reduction  of $4.8 as a result of the change in  accounting
      policy.  In addition,  current future income tax assets increased by $9.5;
      current  investment tax credits  ("ITCs")  recoverable  increased by $6.4;
      long-term ITCs recoverable increased by $3.0; current income taxes payable
      decreased by $5.4;  current  future  income tax  liabilities  increased by
      $11.7; and long-term future income tax liabilities increased by $17.4.

      The new recommendations  require the Company and its subsidiaries to adopt
      the liability  method of accounting  for income taxes.  Under this method,
      future  income  tax  assets  and  liabilities  are  determined   based  on
      differences between the tax and accounting bases of assets and liabilities
      as well as for the benefit of losses  available  to be carried  forward to
      future  years for tax  purposes  that are  likely to be  realized.  Future
      income tax assets and  liabilities  are measured  using  enacted tax rates
      expected  to apply  to  taxable  income  in the  years in which  temporary
      differences  are expected to be recovered  or settled.  Future  income tax
      assets are evaluated and if  realization  is not  considered  "more likely
      than not", then a valuation allowance is recorded.

      b) Employee future benefits

      In the first quarter ended June 30, 2000, the Company also adopted the new
      CICA recommendations for employee future benefits.  Under these new rules,
      the  costs of  retirement  benefits,  other  than  pensions,  and  certain
      post-employment  benefits  are  recognized  over the  period  in which the
      employees   render   services   in  return  for  those   benefits.   Other
      post-employment  benefits are  recognized  when the event  triggering  the
      obligation occurs. The new CICA recommendations were adopted prospectively
      with the transition  obligation amortized over the average period on which
      benefits  are  expected to be paid.  Adopting  the new rules for  employee
      future benefits resulted in no material impact on the Company's  financial
      position or results of operations.


                                       7
<PAGE>

3.    Supplementary income information

      As a supplementary  measure to assess  financial  performance,  management
      utilizes  Adjusted  Net Income and  Adjusted  Net Income per common  share
      which exclude the impact of amortization of acquired intangibles,  special
      charges  (net),  non-cash debt issue and other costs  expensed on an early
      partial  debt  repayment  and  discontinued  operations.  The Adjusted Net
      Income and Adjusted Net Income per common share are as follows:

                                                             Three Months Ended
                                                            June 30,    June 25,
                                                              2000        1999
                                                            --------------------
      Net income (loss) as reported                          $ 21.5      $ (4.6)

      Adjusted Net Income, as adjusted for:
        Amortization of acquired intangibles                    3.2        17.1
        Debt issue costs                                        0.6        --
                                                             ------------------

      Adjusted Net Income                                    $ 25.3        12.5
                                                             ==================

      Adjusted Net Income per common share - basic           $ 0.21      $ 0.10
                                                             ==================

4.    Inventories:

                                                            June 30,   March 31,
                                                              2000       1999
                                                            --------------------
      Raw materials                                          $ 55.8      $ 53.5
      Work-in-process                                          78.1        68.3
      Finished goods                                           63.5        65.9
                                                             ==================
                                                             $197.4      $187.7
                                                             ==================

5.    Long-term receivables

                                                            June 30,   March 31,
                                                              2000       1999
                                                            --------------------
      Investment tax credits recoverable                     $  7.8      $  7.8
      Promissory note, bearing interest at 8%,
        payable annually,  due in June 2004
        and against which a first deed on real
        property was pledged as security                        6.7         6.1
      Other long-term receivables                               8.0         7.8
                                                             ------------------
                                                             $ 22.5      $ 21.7
                                                             ==================

6.    Fixed assets:

                                                            June 30,   March 31,
                                                              2000       1999
                                                            --------------------
      Cost                                                   $832.4      $826.9
      Accumulated amortization                               (387.4)     (369.5)
                                                             ==================
                                                             $445.0      $457.4
                                                             ==================


                                       8
<PAGE>

7.    Acquired intangible assets

                                                            June 30,   March 31,
                                                              2000       1999
                                                            --------------------
      Cost:
        In-process technology                                $ --        $  5.2
        Developed technology                                   --          23.7
        Customer base and work force                            1.3        11.6
        Goodwill                                               --           6.3
                                                             ------------------
                                                                1.3        46.8
                                                             ------------------
      Less accumulated amortization:
        In-process technology                                  --           4.7
        Developed technology                                   --          22.4
        Customer base and work force                            0.1        10.9
        Goodwill                                               --           5.8
                                                             ------------------
                                                                0.1        43.8
                                                             ------------------
                                                             $  1.2      $  3.0
                                                             ==================

      Fully  amortized  acquired  intangibles  of $46.8  were  removed  from the
      accounts of the Company at June 30, 2000.

8.    Patents, trademarks and other

                                                            June 30,   March 31,
                                                              2000       1999
                                                            --------------------
      Cost:
        Patents, trademarks and other                        $ 15.3      $ 16.3
        Deferred debt issue costs                               7.6         8.5
                                                             ------------------
                                                               22.9        24.8
                                                             ------------------
      Less accumulated amortization:
        Patents and trademarks                                 10.1         9.7
        Deferred debt issue costs                               3.9         3.8
                                                             ------------------
                                                               14.0        13.5
                                                             ------------------
                                                             $  8.9      $ 11.3
                                                             ==================

9.    Accounts payable and accrued liabilities

                                                            June 30,   March 31,
                                                              2000       1999
                                                            --------------------
      Trade payables                                         $ 53.6      $ 68.5
      Employee-related payables                                34.1        34.9
      Other accrued liabilities                               102.7       112.0
                                                             ------------------
                                                             $190.4      $215.4
                                                             ==================

10.   Capital stock:

      a)

                                                          June 30,     March 31,
                                                            2000         1999
                                                        ------------------------
      Shares outstanding:
        Preferred shares - R&D Series                     1,607,900    1,607,900
        Common shares                                   114,333,671  113,997,734

      There were nil preferred shares  repurchased during the three months ended
      June 30, 2000.


                                       9
<PAGE>

      On June 5, 2000,  the Company  announced  its  intention  to continue  its
      normal  course  issuer bid program for up to  5,706,196  common  shares (5
      percent of  114,123,921  common shares issued and  outstanding  at May 30,
      2000) between June 9, 2000 and June 8, 2001. All  repurchased  shares will
      be  cancelled.  In the  quarter  ended  June  30,  2000,  no  shares  were
      repurchased under the normal course issuer bid.

      b)    A summary of the Company's stock option activity is as follows:

                                                         Three Months Ended
                                                     June 30,          June 25,
                                                      2000               1999
                                                  ------------------------------
      Outstanding options:
      Balance, beginning of period                 9,017,262          5,918,988
      Granted                                        284,500          2,454,100
      Exercised                                     (335,937)           (12,225)
      Forfeited                                     (168,788)          (336,600)
                                                  -----------------------------
      Balance, end of period                       8,797,037          8,024,263
                                                  =============================

      Available  for grant at June 30,  2000 were  6,575,536  (March 31,  2000 -
      6,691,248) common shares. The exercise prices on stock options outstanding
      range from $1.10 to $38.23 per share with  exercise  periods  extending to
      January 2008.

      c)    The net income per common share figures were calculated based on net
            income after the  deduction of preferred  share  dividends and using
            the weighted monthly average number of shares outstanding during the
            respective  periods.  The calculation of fully diluted  earnings per
            share  assumes  that,  if  a  dilutive   effect  is  produced,   all
            outstanding options had been exercised at the later of the beginning
            of the fiscal  year and the  option  issue  date,  and  includes  an
            allowance  for  imputed   earnings  net  of  tax  derived  from  the
            investment of funds that would have been received.

11.   The following table summarizes changes in the translation account:

                                                             Three Months Ended
                                                            June 30,    June 25,
                                                              2000        1999
                                                            --------------------
      Balance, beginning of period                           $ (3.4)     $ 28.2
      Increase:
        Movements in exchange rates -
           United Kingdom Pound Sterling                      (17.2)      (17.0)
           United States Dollar                                 5.7        (8.8)
           Swedish Krona                                        1.5        (1.2)
           Other currencies                                    (0.1)       (0.5)
                                                             ------------------
      Balance, end of period                                 $(13.5)     $  0.7
                                                             ==================

12.   The Company has not declared or paid any  dividends on its common  shares.
      During the first quarter, a $0.50 per share dividend was declared and paid
      on the preferred shares.

13.   Research and Development

      The research and  development  expenses were net of $3.4 in R&D government
      assistance, including ITCs, for the three month period ended June 30, 2000
      (three months ended June 25, 1999 - $1.2).


                                       10
<PAGE>

14.   Acquisition

      On July 28, 2000, the Company  acquired  privately-held  Vertex  Networks,
      Incorporated  ("Vertex"), a California-based fabless semiconductor company
      providing  silicon  solutions for the  enterprise  switching and Wide Area
      Network access markets.  Mitel acquired Vertex in a share  transaction for
      11 million newly issued common shares valued at  approximately  $300.  The
      fair value of the  consideration  was  determined by the fair value of the
      Company's  common  shares  near the  effective  date of  acquisition.  The
      acquisition will be accounted for by application of the purchase method of
      accounting.

15.   Information on business segments

      The Company's reportable business segments include the Mitel Semiconductor
      ("Semiconductor")  group and the Mitel Communications  Systems ("Systems")
      group.  Reportable  segments  are  business  units  that  offer  different
      products  and  services  and  are  managed  separately  because  of  their
      different manufacturing and distribution processes.

      The  Company  evaluates  the  performance  of each  business  segment  and
      allocates resources based on operating income from continuing  operations,
      which excludes any intersegment sales of products and services. Mitel does
      not allocate amortization of intangibles, special charges, interest income
      or  interest  expense  and income  taxes to its  reportable  segments.  In
      addition,  total  assets  are  not  allocated  to each  segment;  however,
      depreciation  of capital  assets is allocated to the segments based on the
      asset usage.  The accounting  policies of the reportable  segments are the
      same as those described in the summary of significant accounting policies.

<TABLE>
<CAPTION>
                                                                          Unallocated
Three Months Ended June 30, 2000             Semiconductor    Systems        Costs          Total
                                             -------------    -------     -----------       -----
<S>                                            <C>           <C>            <C>            <C>
Total external sales revenue                   $  183.8      $  145.0       $   --         $  328.8
Amortization of buildings and equipment            18.8           5.1           --             23.9
Amortization of acquired intangibles               --            --              3.2            3.2
Segment's operating income                         44.5         (10.5)          (3.2)          30.8

<CAPTION>
                                                                          Unallocated
Three Months Ended June 25, 1999             Semiconductor    Systems        Costs          Total
                                             -------------    -------     -----------       -----
<S>                                            <C>           <C>            <C>            <C>
Total external sales revenue                   $  125.2      $  186.0       $   --         $  311.2
Amortization of buildings and equipment            20.1           4.5           --             24.6
Amortization of acquired intangibles               --            --             17.1           17.1
Segment's operating income                          5.1          13.2          (17.1)           1.2
</TABLE>


                                       11
<PAGE>

16.   United States accounting principles

      The  consolidated  financial  statements  have been prepared in accordance
      with accounting  principles  generally accepted in Canada (Canadian GAAP),
      which, in the case of the Company,  conform in all material  respects with
      those in the United States (U.S.  GAAP) and with the  requirements  of the
      Securities and Exchange  Commission  (SEC),  except as fully  described in
      Note 23 to the consolidated financial statements as at March 31, 2000.

      The following  table  reconciles  the net income (loss) as reported on the
      consolidated statements of income to the net income (loss) that would have
      been  reported had the  financial  statements  been prepared in accordance
      with U.S. GAAP and the requirements of the SEC:

                                                             Three Months Ended
                                                            June 30,    June 25,
                                                              2000        1999
                                                            --------------------
      Net income (loss) for the period in
        accordance with Canadian GAAP                        $ 21.5      $ (4.6)

      Acquirer's redundancy provisions                          0.5        --
      Amortization of acquired in-process technology            0.5         1.8
      Effect of deferral accounting related to
        foreign exchange contracts                              7.6         0.9
      Translation of foreign currency denominated debt         (3.5)        5.2
                                                             ------------------

      U.S. GAAP and SEC requirements:
      Net income for the period                                26.6         3.3
      Less: dividends on cumulative preferred shares           (0.8)       (0.8)
                                                             ------------------
      Net income attributable to common shareholders         $ 25.8      $  2.5
                                                             ==================

      Net income per common share:
         Basic                                               $ 0.23      $ 0.02
                                                             ==================
         Diluted                                             $ 0.22      $ 0.02
                                                             ==================

      Weighted average shares for basic EPS
        (millions)                                            114.2       116.5
      Weighted average shares on conversion
        of stock options (millions)                             5.1         0.9
                                                             ------------------
      Adjusted weighted average shares and
        share equivalents (millions)                          119.3       117.4
                                                             ==================

      The following options were excluded in the computation of diluted earnings
      per share because the options'  exercise price exceeded the average market
      price  of  the  common  shares  and,   therefore,   the  effect  would  be
      antidilutive:

      i)    Options  outstanding  for the three  months  ended June 30,  2000 to
            purchase  158,500  shares of  common  stock at an  average  price of
            $35.27 per share.

      ii)   Options  outstanding  for the three  months  ended June 25,  1999 to
            purchase  3,654,500  shares of common  stock at an average  price of
            $16.18 per share.


                                       12
<PAGE>

      The components of comprehensive income were as follows:

                                                             Three Months Ended
                                                            June 30,    June 25,
                                                              2000        1999
                                                            --------------------
       Net income for the period                             $ 26.6      $  3.3
       Other comprehensive income (loss) -
         Foreign currency adjustment                          (10.1)      (27.5)
                                                             ------------------

      Comprehensive income (loss) for the period             $ 16.5      $(24.2)
                                                             ==================

      Balance  sheet items,  which vary,  in  conformity  with U.S. GAAP and SEC
      requirements:

                                                            June 30,   March 31,
                                                              2000       1999
                                                            --------------------
      Fixed assets                                          $ 433.9     $ 445.6
      Acquired intangible assets                            $   1.2     $   2.5
      Accounts payable and accrued liabilities              $ 187.4     $ 217.0
      Shareholders' equity:
        Redeemable preferred shares                         $  34.2     $  34.2
        Common shares                                       $ 765.7     $ 763.1
        Contributed surplus                                 $  --       $  --
        Accumulated other comprehensive income (loss)       $ (13.5)    $  (3.4)
        Deficit                                             $(150.2)    $(176.0)

      The Financial Accounting Standards Board has issued Statement of Financial
      Accounting  Standards No. 133,  Accounting for Derivative  Instruments and
      Hedging  Activities ("SFAS 133") which will be effective for the Company's
      March 31, 2002 year end.  The Company has not  determined  the impact,  if
      any, of this pronouncement on its consolidated financial statements.

      In  December  1999,  the SEC issued  Staff  Accounting  Bulletin  No. 101,
      "Revenue Recognition in Financial  Statements" ("SAB 101"), which provides
      guidance on the  recognition,  presentation  and  disclosure of revenue in
      financial  statements  filed  with the SEC.  SAB 101  outlines  the  basic
      criteria  that  must be met in order to  recognize  revenue  and  provides
      guidance for disclosures related to revenue recognition policies. Although
      the  Company is still in the process of  assessing  the impact of adopting
      SAB 101 on its financial position and results of operations in Fiscal 2001
      and  thereafter,  management  does not expect the  effect,  if any,  to be
      material.

17.   Net change in  non-cash  working  capital  balances  related to  operating
      activities:

                                                             Three Months Ended
                                                            June 30,    June 25,
                                                              2000        1999
                                                            --------------------
      Accounts receivable                                    $ (9.1)     $ 37.2
      Inventories                                             (14.9)        1.0
      Accounts payable and accrued liabilities                (27.2)      (14.0)
      Deferred revenue                                          0.2        (3.7)
      Other                                                    (0.5)       (0.3)
                                                             ------------------
                                                             $(51.5)     $ 20.2
                                                             ==================

18.   Comparative figures

      Certain of the 2000 comparative  figures have been reclassified to conform
      to the presentation adopted in 2001.


                                       13
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS
        (in millions of Canadian dollars, except per share amounts)

Headquartered  near the  capital  city of  Ottawa in  Canada,  Mitel is a global
provider of semiconductors and  communications  systems for converging voice and
data networks in a rapidly evolving Internet  economy.  Mitel employs some 6,000
people worldwide.

The  following  discussion  and analysis  explains  trends in Mitel's  financial
condition  and results of  operations  for the first quarter ended June 30, 2000
compared  with the same  period in the  previous  year,  and is intended to help
shareholders and other readers understand the dynamics of the Company's business
and the key factors underlying its financial results.  This discussion should be
read in conjunction with the consolidated financial statements and notes thereto
included   elsewhere  in  this  Form  10-Q,  and  with  the  Company's   audited
consolidated  financial  statements  and notes thereto for the fiscal year ended
March 31, 2000.

RECENT SIGNIFICANT EVENTS

Acquisition of Vertex Networks, Incorporated

On June 6, 2000, the Company entered into an agreement to acquire 100 percent of
the common stock of privately-held Vertex Networks, Incorporated ("Vertex"), for
total  consideration  of 11 million  common  shares newly issued by Mitel with a
fair value of  approximately  $300. The acquisition will be accounted for by the
purchase method. Accordingly,  Vertex's results from operations will be included
in  the  consolidated  accounts  of the  Company  from  the  effective  date  of
acquisition which occurred on July 28, 2000.

Vertex is a fabless  semiconductor  company providing  high-performance  network
packet  processing,  switching and routing silicon  solutions for the enterprise
and wide  area  network  ("WAN")  access  markets.  Vertex  provides  integrated
circuits for Layer 3 Internet  Protocol  ("IP") routing  switches and developing
chipsets,  reference  designs,  and software for  intelligent  packet  switching
applications.  Vertex's products encompass Quality of Service ("QoS")-enabled IP
switching for enterprise communications, WAN traffic concentration, and fiber to
the home  ("FTTH")  markets.  Vertex,  which was  founded  in 1995,  is based in
Irvine,  California,  United  States,  and  has  design  centers  in  San  Jose,
California,  and Taiwan. Vertex employed  approximately 75 people as at June 30,
2000.

Management  believes  the  acquisition  of Vertex  will allow Mitel to enter the
packet processing and switch fabric market to offer system-wide,  IP-based,  QoS
for  convergent  networks.  QoS is a term  that  qualifies  certain  performance
attributes  of voice  transmission  over IP  networks,  and  usually  refers  to
measures of delay,  latency and jitter.  Mitel's  focus will be to deliver  wire
speed  non-blocking  scalability  for the edge of WANs,  providing  the  maximum
packet-switching  throughput  required by systems designers and their customers.
Management  believes the approach will introduce Local Area Network ("LAN") cost
structures  into WAN  applications to provide a more  competitive  solution that
accommodates diverse switching technologies in use at the edge of the network.

Common Share Repurchase Program

On June 5, 2000, the Company announced its Board of Directors had authorized the
continuation  of its normal  course  issuer  bid  program  to  repurchase  up to
5,706,196 common shares, representing 5% of 114,123,921 common shares issued and
outstanding  at May 18, 2000.  The purchases  will take place on the open market
through the stock  exchanges of New York and Toronto over a twelve-month  period


                                       14
<PAGE>

beginning on June 9, 2000 and ending on June 8, 2001, or on such earlier date as
the Company may  complete its  purchases  pursuant to the notice of intention to
make a normal  course  issuer bid filed with The  Toronto  Stock  Exchange.  The
Company,  which  intends  to cancel the  repurchased  shares,  believes  that at
present no director,  senior  officer or insider of the Company  intends to sell
any common shares under this program.

RESULTS OF OPERATIONS

Mitel operates through two reportable  business  segments - Mitel  Semiconductor
("Semiconductor") and Mitel Communications Systems ("Systems").  Mitel sells its
products  through both direct and  indirect  channels of  distribution.  Factors
affecting the choice of distribution,  among others,  include end-customer type,
the level of  product  complexity  and  integration  requirements,  the stage of
product  introduction,  geographic presence and location of markets,  and volume
levels.

Semiconductor   provides   specialty    microelectronic    solutions   for   the
communications  and  medical   marketplaces.   In  the  communications   market,
Semiconductor  specializes  in  broadband  connectivity  solutions  over  wired,
wireless and optical media.  Mitel's  medical  applications-specific  integrated
circuits  ("ASICs")  provide  solutions for applications  such as pacemakers and
hearing aids and portable instruments.

Systems  provides  enterprises  with  voice  and  data  communications  systems;
complete  private  networks  including  remote  teleworking  solutions;  unified
messaging and call-center  applications;  computer telephony integration ("CTI")
systems and applications;  and it also supplies competitive carriers with public
network access products.

Consolidated Summary

Revenue, based on the geographic location of Mitel's customers,  was distributed
as follows:

<TABLE>
<CAPTION>
                                   Three Months                 Three Months
                                       Ended                      Ended
(millions of Canadian dollars)    June 30, 2000   % of Total   June 25, 1999   % of Total
                                  -------------   ----------   -------------   ----------

<S>                                   <C>             <C>          <C>             <C>
United States                         $144.2          44%          $138.7          45%
Europe                                 112.6          34            105.8          34
Asia/Pacific                            52.2          16             34.2          11
Other Regions                            5.8           2             16.0           5
Canada                                  14.0           4             16.5           5
                                      ------         ---           ------         ---
Total                                 $328.8         100%          $311.2         100%
                                      ======         ===           ======         ===
</TABLE>

For the three  months ended June 30,  2000,  the net movement in exchange  rates
from  Fiscal  2000  unfavorably  impacted  total  revenue  by 2  percent  ($6.4)
primarily as a result of changes in the UK pound sterling exchange rate.

Total first  quarter  revenue grew by 6 percent  compared to the same quarter of
last year.  Mitel's revenue growth was driven by strong  Semiconductor  sales in
high growth areas such as broadband networking, wireless and optical components.
The strong  semiconductor  growth,  however, was mostly offset by lower sales in
the Systems business. Adjusted Net Income (see below) for the quarter was $25.3,
or $0.21 per share,  compared to $12.5,  or $0.10 per share,  for the comparable
period in Fiscal  2000.  The increase in adjusted net income from a year ago was
mainly  attributable to the 47 percent  increase in  Semiconductor  sales and to
improved  manufacturing   efficiencies  in  the  Company's  semiconductor  fabs.
Including  amortization of intangibles  (see below) of $3.2,  Mitel recorded net
income of $21.5 in the first


                                       15
<PAGE>

quarter of Fiscal 2001,  or $0.18 per share,  as against a net loss of $4.6,  or
$0.05 per share,  in the first  quarter of Fiscal 2000.  In the first quarter of
Fiscal 2000, amortization of acquired intangibles amounted to $17.1.

Adjusted Net Income excludes the impact of amortization of acquired intangibles,
special charges (net),  non-cash debt issue and other costs expensed on an early
partial debt repayment and  discontinued  operations.  Although not a substitute
for net income or net income per common share,  management utilizes Adjusted Net
Income and Adjusted Net Income per common  share as a  supplementary  measure to
assess financial performance.

                                                             Three Months Ended
(millions of Canadian dollars,                              June 30,    June 25,
except per share amounts)                                     2000        1999
                                                            --------------------

Consolidated revenue                                         $ 328.8    $ 311.2
  Semiconductor segment revenue                              $ 183.8    $ 125.2
  Systems segment revenue                                    $ 145.0    $ 186.0

Operating income                                             $  30.8    $   1.2
  Semiconductor segment operating income                     $  44.5    $   5.1
  Systems segment operating income (loss)                    $ (10.5)   $  13.2
  Unallocated costs - amortization of acquired intangibles   $  (3.2)   $ (17.1)

Net income (loss)                                            $  21.5    $  (4.6)
Net income (loss) per common share                           $  0.18    $ (0.05)

Adjusted net income                                          $  25.3    $  12.5
Adjusted net income per common share                         $  0.21    $  0.10
Weighted average common shares outstanding                     114.2      116.5

Net income and cash flows for each  period,  as  determined  by U.S.  accounting
principles,  are detailed and discussed in note 16 to the consolidated financial
statements included elsewhere in this Form 10-Q.

Business Segment Review

Mitel Semiconductor

Semiconductor  sales  increased by 47 percent from Fiscal  2000's first  quarter
and,  sequentially,  by 5 percent  from the fourth  quarter of Fiscal  2000.  In
proportion  to  total  company  sales,  Semiconductor  revenue  increased  by  9
percentage points from the first quarter of last year to represent 56 percent of
total company sales in the first quarter of Fiscal 2001.

Much  of  the  growth  resulted  from  higher  sales  to  manufacturers  in  the
Asia/Pacific  region. Sales into this region began to improve in the latter half
of Fiscal 2000 and this trend has  continued  into the beginning of Fiscal 2001.
The industry is  experiencing  intense  demand by end  customers  for  converged
network infrastructure featuring QoS. It is this demand which in turn drives the
sales growth for Mitel's broadband networking and optical components. Management
believes that this trend will  continue  through  Fiscal 2001 with  double-digit
growth over Fiscal 2000.

Semiconductor's  operating  income  increased  from $5.1 last year to $44.5 as a
result  of  the  higher  sales  volumes  combined  with  improved  manufacturing
efficiencies  in the  division's  fabrication  facilities.  Since last  year,  a
continuing   focus  on  improving   manufacturing   yields  and  optimizing  fab
utilization  has  had a  significant  and  favorable  impact  on the  division's
operating margins.


                                       16
<PAGE>

Mitel Communications Systems

Systems revenue decreased by 22 percent from the first quarter of last year and,
sequentially,  by 27 percent  from the fourth  quarter of Fiscal  2000.  Systems
revenue  accounted  for 44% of total  company  revenue in the first  quarter and
represented  a decrease of 9  percentage  points in the sales mix from the first
quarter of last year.

The sales decrease was  principally due to  industry-wide  market softness while
end customers  delay capital  spending on systems and  applications.  Management
believes   recent   industry  and  Mitel   announcements   regarding  new  voice
communications  systems  moving  to an IP  platform  have  resulted  in  certain
customers  deferring  discretionary  capital  spending  in order to acquire  the
advanced  functionality  afforded by the new IP  platforms  that are expected to
become widely available in 2001. In addition,  management  believes that certain
customers have reduced or delayed their capital  requirements due to a lingering
overhang  from Year 2000 issue  spending.  Management  also believes that higher
interest rates in the U.S. have caused capital spending to contract  somewhat in
that  region,  the  Company's  largest  geographic  market.  Based on recent bid
activity experienced by Mitel,  management believes that sales levels will begin
to show  momentum  in the second  quarter  of Fiscal  2001.  However,  it is not
expected that the revenue in Fiscal 2001 will be sufficient to surpass the sales
levels of Fiscal 2000 which partially  benefited from the market's pre-Year 2000
issue  capital  spending.  Management  believes  the sales  growth  will be more
evident  beyond Fiscal 2001 when Voice over IP ("VoIP")  platforms are likely to
reach market acceptance and begin to ramp up.

As a result of this low sales  volume,  Systems  incurred an  operating  loss of
$10.5 as  compared  to  operating  income of $13.2 in the first  quarter of last
year. During the quarter, the division continued to make significant investments
in  research  and   development,   principally   directed  toward  networked  IP
communications systems and applications.

GROSS MARGIN

As a percentage of total revenue, total gross margin was 49 percent in the first
three months of Fiscal 2001, 3 percentage  points higher than the  corresponding
period of Fiscal  2000.  The  improvement  was due to higher  sales  volumes  of
semiconductor  products,  a  favorable  semiconductor  sales  mix  and  positive
manufacturing  variances  resulting  from improved  semiconductor  manufacturing
utilization.  These factors combined to more than offset the negative impacts of
lower system sales.

OPERATING EXPENSES

Selling and Administrative ("S&A")

S&A  expenses in the first  quarter of Fiscal 2001 were $87.7,  or 27 percent of
sales,  compared with $85.4,  and also 27 percent of sales,  for the  comparable
period in Fiscal 2000.  Sequentially from the fourth quarter of Fiscal 2000, S&A
as a percentage of sales increased by 2 percentage  points  primarily due to the
lower  systems  sales.  In addition,  the Company made  significant  investments
during the quarter in sales  channels  development  for the new VoIP systems and
component portfolio.

Research and Development ("R&D")

R&D expenses amounted to $39.7, or 12 percent of revenue,  for the quarter ended
June 30,  2000.  This  compares  to $38.8,  or 12  percent  of  revenue,  in the
corresponding  period of Fiscal  2000.  These  amounts  were net of $3.4 (2000 -
$1.2) in R&D government assistance, including ITCs.


                                       17
<PAGE>

Mitel's  R&D   spending   is  directed   toward   investments   in   high-growth
communications market segments. The Semiconductor R&D programs primarily consist
of  developing  intellectual  property  in the areas of IC process  development,
communications ICs,  optoelectronic  components,  SLI or "System-On-A-Chip",  as
well as low power and high  voltage  semiconductors.  Systems R&D  programs  are
primarily directed at advancing call processing for enterprises on an IP centric
platform,  the development of a series of desktop  devices and network  gateways
for both TDM and IP to provide  enhanced  access to converged  networks,  and to
leveraging the power of emerging xDSL access technology.

Amortization of Acquired Intangibles

Amortization  of acquired  intangibles  decreased in the first quarter of Fiscal
2001 to $3.2 from $17.1 for the  comparable  period in Fiscal  2000.  The Fiscal
2000 amount included  amortization related to Fiscal 1998 acquisitions that were
fully written off by the end of last year.  Management  expects the amortization
of acquired  intangibles to increase  significantly during the balance of Fiscal
2001 in connection with the previously announced Vertex acquisition which closed
on July 28,  2000.  The  increase  will  not  affect  the  Adjusted  Net  Income
supplementary metric.

INTEREST INCOME AND EXPENSE

Interest  income  was $3.0 for the  quarter  ended June 30,  2000,  up from $1.9
recorded in the corresponding  quarter of Fiscal 2000 due to higher average cash
balances in the  quarter.  Interest  expense  was $5.3 for the first  quarter of
Fiscal 2001 compared to $5.2 in the corresponding period of Fiscal 2000.

INCOME TAXES

Effective  for Fiscal  2001,  new rules were  applied for  corporate  income tax
accounting  which require Mitel to apply the  "liability"  method instead of the
"deferral"  method.  Under the new standard,  tax assets and liabilities must be
measured  using  income tax rates and  applying  tax laws which are  expected to
apply to taxable  income in periods in which the tax assets or  liabilities  are
expected to be realized or settled.  The impact of this change on the Company is
described in Note 2 to the unaudited  consolidated  financial statements for the
quarter ended June 30, 2000.

Income tax expense for the three months ended June 30, 2000 was $6.4 compared to
$2.5 for the comparable period in Fiscal 2000. The effective income tax rate, as
a percentage of pre-tax income from continuing  operations and before the effect
of amortization of acquired intangibles, was 21 percent for the first quarter of
Fiscal 2001. This compares to 17 percent for the corresponding  period in Fiscal
2000.  The  higher  effective  tax rate in Fiscal  2001 was mainly due to higher
Semiconductor  income generated in Canada.  The sequential  decrease from Fiscal
2000's  effective  tax rate of 25 percent  was  principally  due to lower  first
quarter earnings in the European operations.

BACKLOG

As orders are frequently booked and shipped within the same fiscal month,  order
backlog is not necessarily  indicative of a sales outlook for the month, quarter
or year.  This is most  true for  Systems  since  manufacturing  lead  times for
semiconductor  products  are  generally  longer  because  of the  nature  of the
production  process.  At June 30, 2000,  order  backlog was $322.8,  up from the
total of $280.0 at March 31, 2000. The increase in backlog was  attributable  to
an improved book-to-bill ratio through higher semiconductor orders,  principally
in the areas of  broadband  networking.  Most of the  backlog is  scheduled  for
delivery in the next twelve months.


                                       18
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2000,  cash,  cash  equivalents and short-term  investment  balances
totaled  $165.9,  down from $228.4 at March 31, 2000.  The decrease of $62.5 was
mainly due to pre-payments on the long-term debt and to a significant  reduction
from the Fiscal 2000 year-end account payable balances.

Cash flow from  operations  before  working  capital  changes  amounted to $52.2
during the first quarter of Fiscal 2001 compared to $37.3 in Fiscal 2000.  Since
March 31, 2000,  Mitel's  working  capital,  as  reflected  in the  consolidated
statements of cash flows,  increased by $51.5. The increase was primarily due to
typically  lower  payables  in the quarter  following  a year-end  and to higher
inventory  levels normally built prior to the summer  manufacturing  maintenance
shutdown.  Mitel  also  maintains  a minimum  of  critical  inventory  to ensure
continuity of supply for its  manufacturing  requirements.  Most of the security
supply inventory is carried at Mitel's semiconductor plants.

Fixed asset and other  additions  were $23.8 during the first  quarter of Fiscal
2001 compared with $13.6 in the corresponding  period of Fiscal 2000,  excluding
additions  of $2.5 and $4.2  financed  by capital  lease for the two  respective
periods.  The additions were  primarily  related to continuing  improvements  to
Mitel's   information   technology   resources  as  well  as  for  Semiconductor
manufacturing capacity and design tools.

On February  12,  1998,  Mitel  entered  into two term loans,  respectively  the
AXELs(SM)*  Series B loan and the Tranche A Term Loan, with a syndicate of banks
led by Goldman,  Sachs Credit  Partners  L.P. as the  syndication  agent and the
Canadian Imperial Bank of Commerce as the administrative agent. The principal of
the AXELs  Series B loan is payable in four  quarterly  installments  commencing
March 2003.  The  principal  of the Tranche A Term Loan was fully repaid in June
2000 as a result of a  mandatory  prepayment  required  to be made from  Mitel's
defined excess cash flow in Fiscal 2000 (see below).

The  remaining  AXELs Series B loan bears  interest at a variable  interest rate
based on the lower of a defined  base rate or the  London  Inter Bank Offer Rate
("LIBOR")  plus a premium.  Mitel  entered into an interest rate swap to fix the
effective interest rate on a portion of the term loan. The interest rate swap is
considered to be an effective  hedge of the variable  interest rates on the term
loan. Mitel is subject to certain  restrictive  covenants and commitments and is
required to maintain  certain  financial  ratios for the purpose of ensuring the
Company's ability to meet its obligations  under the credit agreement.  The term
loan is subject to  mandatory  prepayments  out of certain  insurance  proceeds,
defined excess cash flow  generated by Mitel,  and the proceeds of certain asset
sales  (other than  inventory),  equity  offerings  or debt  issuances by Mitel.
Mandatory  prepayments  range  from  50% to  100%  of the  applicable  net  cash
proceeds. Prior to February 2003, mandatory prepayments are restricted to paying
down the  amounts,  if any,  that are drawn on the  revolving  credit  facility.
Management  believes Mitel is in compliance with the obligations and restrictive
covenants under the credit agreement.

Long-term debt decreased principally due to the mandatory prepayment,  mentioned
above, in the amount of $27.1 against the syndicated term loans.  Long-term debt
also  decreased  due to scheduled  repayments  of $12.0  against  capital  lease
liabilities.

On June 5, 2000,  Mitel  announced  its intention to make a normal course issuer
bid for up to 5,706,196  common shares (5 percent of  114,123,921  common shares
issued and outstanding at May 30, 2000).  These purchases will take place on the
open  market  through  the stock  exchanges  of New York,  London,  Toronto  and
Montreal over a twelve-month  period which commenced on June 9, 2000 and ends on
June 8, 2001 or on such earlier  date as the Company may complete its  purchases
pursuant to the normal  course  issuer bid filed with the  Toronto and  Montreal
exchanges.  All  repurchased  shares will be cancelled.  As at June 30, 2000, no
shares were purchased under the normal course issuer bid.


                                       19
<PAGE>

As at June 30, 2000, Mitel's  capitalization was comprised of 27 percent debt, 4
percent  preferred  equity,  and 69 percent common  equity.  This compares to 30
percent debt, 4 percent  preferred  equity,  and 66 percent common equity at the
end of Fiscal 2000.

In addition to cash,  cash  equivalent  and  short-term  investment  balances of
$165.9 as at June 30, 2000,  Mitel has an unused  revolving  credit  facility of
approximately $108.4 (U.S.$73.3).  Management believes Mitel is in a position to
meet all foreseeable  business cash  requirements and debt service from its cash
balances on hand, existing financing facilities and cash flow from operations.

OTHER

Foreign Currency Translation

Management periodically evaluates the financial and operational  independence of
its  foreign  operations  and the  resulting  accounting  classification  of the
foreign subsidiaries as self-sustaining enterprises. Should a foreign subsidiary
cease to be classified as  self-sustaining,  then translation gains or losses on
consolidating the foreign subsidiary's  financial statements would be charged to
operating  income instead of a separate  component of shareholders'  equity.  At
June 30, 2000, the translation  account balance was in a debit position of $13.5
as compared to a debit  position of $3.4 at the end of Fiscal 2000. The increase
in the debit was due to a stronger  Canadian  dollar as measured  against  other
currencies, principally the U.K. pound sterling.

Forward Looking Statements

Certain  statements  in this  management's  discussion  and analysis  constitute
forward-looking  statements.  Such forward-looking  statements involve known and
unknown  risks,  uncertainties,  and other  factors  which may cause the  actual
results,  performance  or  achievements  of Mitel,  or industry  results,  to be
materially  different  from any future  results,  performance,  or  achievements
expressed   or  implied  by  such   forward-looking   statements.   Such  risks,
uncertainties  and assumptions  include,  among others,  the following:  general
economic and business  conditions;  demographic  changes;  import protection and
regulation;   rapid  technology  development  and  changes;  timing  of  product
introductions;  the mix of  products/services;  industry  competition,  industry
capacity  and other  industry  trends;  and the  ability of Mitel to attract and
retain key employees.

(SM)* AXEL is a registered service mark of Goldman, Sachs and Co.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS

Market  risk  represents  the risk of loss  that may  impact  Mitel's  financial
statements  due to adverse  changes in  financial  markets.  Mitel is exposed to
market risk from changes in interest rates and foreign exchange rates. To manage
these risks,  Mitel uses certain  derivative  financial  instruments,  including
interest rate swaps,  forward  contracts and other  derivative  instruments from
time to time, that have been authorized pursuant to board-approved  policies and
procedures.  Mitel does not hold or issue  financial  instruments for trading or
speculative purposes.

Mitel currently uses forward  contracts and foreign  currency  options to reduce
the exposure to foreign  exchange risk. The most  significant  foreign  exchange
exposures for Mitel relate to the U.S. dollar, U.K. pound sterling and the Euro.
As at June 30, 2000, there were no material changes in information  about market
risks as  disclosed in the  Company's  Form 10-K for the fiscal year ended March
31, 2000.


                                       20
<PAGE>

PART II - OTHER INFORMATION

ITEM 6. Reports on Form 8-K

a) Reports on Form 8-K

The Company  filed a Current  Report on Form 8-K in the three  months ended June
30, 2000. The Report was dated June 5, 2000 and related to the  continuation  of
the common stock repurchase  program and to the Company's  announcement  that it
had  entered  into an  agreement  to  acquire  privately-held  Vertex  Networks,
Incorporated.

                                    SIGNATURE

Pursuant to the  requirements  of the  Securities  and Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                           MITEL CORPORATION

August 10, 2000                            JEAN-JACQUES CARRIER
---------------                            --------------------------------
Date                                       Jean-Jacques Carrier
                                           Senior Vice President of Finance
                                             and Chief Financial Officer


                                       21