##### 



SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
 FORM 11-K (Mark One) x
    
    Annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2003
 o
    
    Transition report pursuant to Section 15(d) of
the Securities Exchange Act of 1934
For the transition period  to
  Commission file number  1-7260  A.
    
    Full title of the plan and the address of the plan, if different from that
of the issuer named below: Nortel Networks
Long-Term Investment Plan
(formerly the Northern Telecom Inc.
Long-Term Investment Plan)
Northern Telecom Plaza
220 Athens Way, Suite 300
Nashville, Tennessee 37228  B.
    
    Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office: Nortel Networks Corporation
8200 Dixie Road, Suite 100
Brampton, Ontario, Canada, L6T 5P6




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##### 



REQUIRED INFORMATION Financial Statements and Exhibits  a)
    
    Financial Statements  Index to Financial StatementsLong-Term Investment Plan Report of Independent Registered Public Accounting Firm
    
    
    1Financial Statements as of and for the Years Ended December 31, 2003 and 2002:Statements of Net Assets Available for Benefits
    
    
    2Statements of Changes in Net Assets Available for Benefits
    
    
    3Notes to Financial Statements
    
    
    4-9Supplemental Schedules as of and for the Year Ended December 31, 2003:Schedule of Assets (Held at End of Year)
    
    
    10Schedule of Reportable Transactions
    
    
    11
  b)
    
    Exhibits 23.1
    
    Consent of Deloitte & Touche LLP
   Supplemental schedules other than those listed above have been omitted due to
the absence of the conditions under which they are required. 2




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##### 



Signature Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the Nortel Networks Long-Term
Investment Plan) have duly caused this annual report to be signed by the
undersigned thereunto duly authorized.  NORTEL NETWORKS LONG-TERM 
INVESTMENT PLANBy:
    /s/   Mary M. CrossMary M. CrossPresident, Nortel Networks Inc. Date:   June 28, 2004 3




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##### 



Nortel Networks Long-TermInvestment Plan Financial Statements as of and for the
Years Ended December 31, 2003 and 2002, Supplemental
Schedules as of and for the Year Ended December 31, 2003 
and Report of Independent Registered Public Accounting Firm




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##### 



NORTEL NETWORKS LONG-TERM INVESTMENT PLAN TABLE OF CONTENTS PageREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    
    1FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED
DECEMBER 31, 2003 AND 2002:Statements of Net Assets Available for Benefits
    
    2Statements of Changes in Net Assets Available for Benefits
    
    3Notes to Financial Statements
    
    4-9SUPPLEMENTAL SCHEDULES AS OF AND FOR THE YEAR ENDED
DECEMBER 31, 2003:Schedule of Assets (Held at End of Year)
    
    10Schedule of Reportable Transactions
    
    11
 Supplemental schedules other than those listed above have been omitted because
of the absence of the conditions under which they are required.




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##### 



(DELOITTE & TOUCHE LOGO)
    
    Deloitte & Touche LLP
Suite 2400
424 Church St.
Nashville, TN 37219-2396
USA
Tel: +1 615 259 1800
www.deloitte.com REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To
    
    Nortel Networks Inc. and Participants of theNortel Networks Long-Term Investment PlanNashville, Tennessee
 We have audited the accompanying statements of net assets available for
benefits of the Nortel Networks Long-Term Investment Plan (the Plan) as of
December 31, 2003 and 2002, and the related statements of changes in net assets
available for benefits for the years then ended. These financial statements are
the responsibility of the Plans management. Our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
2003 and 2002, and the changes in net assets available for benefits for the
years then ended in conformity with accounting principles generally accepted in
the United States of America. Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in the
Table of Contents are presented for the purpose of additional analysis and are
not a required part of the basic financial statements, but are supplementary
information required by the Department of Labors Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These schedules are the responsibility of the Plans management. Such
schedules have been subjected to the auditing procedures applied in our audit
of the basic 2003 financial statements and, in our opinion, are fairly stated
in all material respects when considered in relation to the basic financial
statements taken as a whole. /s/ Deloitte & Touche LLP June 25, 2004   Member
ofDeloitte
Touche Tohmatsu




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##### 



NORTEL NETWORKS LONG-TERM INVESTMENT PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 2003 AND 2002 2003
    
    2002ASSETS:Investments, at fair value:Nortel Networks Corporation common shares
    
    $
    424,833,032
    
    
    $
    143,563,364Commingled funds
    
    
    382,250,015
    
    
    
    299,283,015Mutual funds
    
    
    536,512,261
    
    
    
    412,218,654Temporary investments
    
    
    10,689,119
    
    
    
    7,760,505Participant loans receivable
    
    
    24,884,378
    
    
    
    27,901,3991,379,168,805
    
    
    
    890,726,937Group annuity contracts, at contract value
    
    
    573,815,509
    
    
    
    598,352,409Total investments
    
    
    1,952,984,314
    
    
    
    1,489,079,346Receivables:Nortel Networks Inc. contributions
    
    
    2,530,801
    
    
    
    3,273,026Interest and dividends
    
    
    132,933
    
    
    
    2,969,582Due from broker for securities sold
    
    
    
    
    
    
    502,975Total receivables
    
    
    2,663,734
    
    
    
    6,745,583LIABILITIES:Due to broker for securities purchased
    
    
    
    
    
    
    4,277,969Accrued investment expenses
    
    
    76,670
    
    
    
    Total liabilities
    
    
    76,670
    
    
    
    4,277,969NET ASSETS AVAILABLE FOR BENEFITS
    
    $
    1,955,571,378
    
    
    $
    1,491,546,960
 See notes to financial statements. - 2 -




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##### 



NORTEL NETWORKS LONG-TERM INVESTMENT PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 2003 AND 2002 2003
    
    2002ADDITIONS TO NET ASSETS ATTRIBUTABLE TO:Net investment gain:Net appreciation in fair value of investments:Nortel Networks Corporation common shares
    
    $
    239,737,740
    
    
    $
    Commingled funds
    
    
    79,915,925
    
    
    
    Mutual funds
    
    
    105,726,099
    
    
    
    Total net appreciation in fair value of investments
    
    
    425,379,764
    
    
    
    Interest and dividends
    
    
    39,591,522
    
    
    
    48,748,638Contributions:Net asset transfers from other plans
    
    
    
    
    
    
    1,317,262Participant
    
    
    113,797,825
    
    
    
    152,126,527Nortel Networks Inc.
    
    
    48,516,926
    
    
    
    53,029,689Total additions
    
    
    627,286,037
    
    
    
    255,222,116DEDUCTIONS TO NET ASSETS ATTRIBUTABLE TO:Net investment loss:Net depreciation in fair value of investments:Nortel Networks Corporation common shares
    
    $
    
    
    
    $
    (313,528,159
    )Commingled funds
    
    
    
    
    
    
    (78,426,087
    )Mutual funds
    
    
    
    
    
    
    (79,086,346
    )Total net depreciation in fair value of investments
    
    
    
    
    
    
    (471,040,592
    )Investment expenses
    
    
    (1,162,612
    )
    
    
    (922,545
    )Total deductions
    
    
    (1,162,612
    )
    
    
    (471,963,137
    )BENEFITS PAID TO PARTICIPANTS
    
    
    (162,099,007
    )
    
    
    (302,015,582
    )NET INCREASE (DECREASE)
    
    
    464,024,418
    
    
    
    (518,756,603
    )NET ASSETS AVAILABLE FOR BENEFITS:Beginning of year
    
    
    1,491,546,960
    
    
    
    2,010,303,563End of year
    
    $
    1,955,571,378
    
    
    $
    1,491,546,960
 See notes to financial statements. - 3 -




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##### 



NORTEL NETWORKS LONG-TERM INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002   1.
    
    DESCRIPTION OF PLANThe following brief description of the Nortel Networks Long-Term Investment
Plan (the Plan) is provided for general information purposes only.
Participants should refer to the Plan document for more complete
information.GeneralThe Plan, effective July 1, 1979, as amended and restated effective
August 15, 2002, and further amended as of April 1, 2003, is a defined
contribution plan for employees of Nortel Networks Inc. (NNI) and its
participating subsidiaries and affiliates (collectively, the Company) and
is subject to the provisions of the Employee Retirement Income Security Act
of 1974 (ERISA). The Company established The Nortel Networks Long-Term
Investment Plan Trust (the Trust Agreement) with The Northern Trust
Company (Northern Trust), as trustee of the funds, effective November 3,
2003. Previously, the assets of the trust were held by Deutsche Bank Trust
Company Americas as trustee under the Nortel Networks Master Savings Plan
Trust. Plan membership is available upon the employees employment
commencement date to any employee of the Company carried on its payroll
register, excluding employees governed by a collective bargaining agreement.ContributionsEffective April 1, 2003,a participant may elect to contribute
up to 50% of their eligible compensation, as defined by the Plan document,
up to a maximum of $12,000 and $11,000 for 2003 and 2002, respectively.
Participant contributions to the Plan are made by means of payroll
deductions during each regular payroll period. A participant may make
rollover contributions directly from certain other qualified plans or from
certain qualified special individual retirement accounts, which a
participant may have established as a result of prior distributions from
such qualified plans or accounts. Effective April 1, 2003, the plan allows
participants age 50 and older to make an additional catch-up contribution of up to $2,000.Participants in the Plan elect one of three benefit options with Company
contributions varying based upon the elected option. Depending on the
participants elected option, the Company contributes to the Plan 50%, 60%,
or 100% of the participants contributions that do not exceed 6% of the
participants eligible earnings.Investment OptionsParticipants may elect to have the balance of their
account and any current contributions invested in the following investment
funds: Fixed Income Investment Fund, Nortel Networks Stock Fund, Scudder
Mid-Cap Fund, Scudder LifeCycle Long Range Fund, Pacific Investment
Management Company (PIMCO) Total Return Fund, Barclays MasterWorks LifePath
Income-2040 Funds, NTGI Russell 1000 Value Equity Index Fund, NTGI S&P 500
Index Fund, Templeton Foreign Fund, Fidelity Low-Priced Stock Fund, and
PIMCO RCM Large-Cap Growth Fund. - 4 -




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##### 



The following is a description of each investment option available in the
Master Trust:  Fixed Income Investment Fund: This fund is comprised primarily of
investment contracts (Contracts) and other financial instruments. The
objective of the fund is to provide stability of principal with
potentially higher returns than money market funds over most periods.The Contracts held by this fund are with various insurance companies or
other financial institutions. The issuing companies have agreed to
provide this fund with a net fixed or floating contract interest rate
that is to be earned over a specified period and payment of principal
and interest upon participant initiated withdrawals and/or transfers of
assets. The Contracts are included in the financial statements at
contract value, which represents contributions made under the contract,
plus accumulated earnings, less withdrawals and administrative expenses.
The contract value of the Contracts approximates their fair value at
December 31, 2003 and 2002. Plan management believes no reserves are
necessary against contract value for credit risk of the contract issuer
or otherwise as of December 31, 2003 and 2002.The average yield of the Contracts held by the fund during 2003 and 2002
was 5.28% and 5.88%, respectively. The average crediting interest rate
for the contracts held by the fund at December 31, 2003 and 2002 was
4.62% and 5.70%, respectively. The crediting interest rate is based on
an agreed-upon formula with the issuer.Nortel Networks Stock Fund: This fund is primarily
comprised of Nortel Networks Corporation (NNC)
common shares with the remainder invested in the BT Pyramid
Discretionary Cash Fund or the BT Pyramid Directed Cash Fund.Scudder Mid-Cap Fund: This fund invests primarily in common stocks of
growth oriented domestic corporations and, to a lesser extent, foreign
corporations, with the remainder invested in the BT Pyramid
Discretionary Cash Fund. Investments in this fund may be in any market
sectors and companies of any size to take advantage of any investment
opportunity with attractive long-term prospects. According to the fund
prospectus, the objective of this fund is to seek capital growth over
the long-term through investment in medium sized companies that show
growth potential.Scudder LifeCycle Long Range Fund: This fund invests primarily in
common stocks, corporate and government issued intermediate to long-term
bonds, various government agency issued-backed securities, and all types
of domestic and foreign securities and money market instruments, with
the remainder invested in the BT Pyramid Discretionary Cash Fund.
According to the fund prospectus, the objective of this fund is to
provide high total return with reduced risk over the long-term by
allocating investments among stocks, bonds, and short-term investments.PIMCO Total Return Fund: This fund invests primarily in a broad range
of domestic fixed income securities, including corporate, government and
mortgage sectors of the bond market.Barclays MasterWorks LifePath Income2040 Funds: These funds invest in
a more conservative allocation of stocks, bonds, and cash as the
retirement date approaches. MasterWorks LifePath 2000 Fund is the most
conservative of these funds and MasterWorks 2040 is the most aggressive.
The funds can invest in up to 20% in foreign securities. Within the five
MasterWorks LifePath funds, investors select a fund based on the year
they plan to retire. The allocation within each fund shifts among
stocks, bonds and cash, moving more to bonds and cash as retirement
approaches. - 5 -




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##### 



NTGI Russell 1000 Value Equity Index Fund: This fund invests in stocks
in the Russell 1000 Value Index. To minimize trading expenses, the
portfolio may not mirror the index exactly. According to the fund
prospectus, the objective of the fund is to match the returns of the
Russell 1000 Value Index Fund. This index tracks the performance of
companies that have lower price-to-book ratios and forecasted growth
ratios.NTGI S&P 500 Index Fund: This fund invests in stocks in the Standard
and Poors (S&P) 500 Index, generally in the same order and size as the
index. According to the fund prospectus, the objective of the fund is to
match the returns of the United States Stock Market as represented by
the S&P 500 Index, a benchmark that tracks 500 companies considered to
be representative of the United States economy.Templeton Foreign Fund: This fund invests in stocks of companies that
are located or receive a majority of operating income from outside the
United States. Selection is based on potential to produce a consistently
higher total rate of return. The fund will invest in emerging market
stocks as well. According to the fund prospectus, the objective is to
achieve long-term capital growth.Fidelity Low-Priced Stock Fund: This fund invests at least 65% in
low-priced common stocks (those priced at or below $35 per share), which
can lead to investments in small and medium sized companies. The fund
may also invest in stocks with a price above $35 per share, as well as
foreign equities, convertible securities, and other fixed income
securities. The objective of the fund is to achieve long-term capital
appreciation.PIMCO RCM Large-Cap Growth Fund: This fund normally invests at least
65% of assets in equities of large companies with market capitalizations
of at least $3 billion at the time of purchase. It may invest up to 20%
of assets in foreign equities. The fund may invest up to 10% of assets
in securities of companies organized in emerging market countries. The
objective of the fund to achieve capital appreciation.  VestingA participant is immediately vested in their participant
contributions and any rollover contributions made to the Plan. In addition,
a participant is immediately vested in the Company contributions made to the
Plan.WithdrawalsUpon proper notification to the Company, participants may
withdraw all or any part of, but not less than $100, the value of
participant and Company contributions plus earnings, subject to certain
restrictions. If the value of Company contributions being withdrawn is
invested in NNC common shares and represents fewer than 50 common shares,
the distribution will be made in cash. If the value of Company contributions
represents 50 common shares or more, the participant may request a cash or
share distribution, provided that, in the event a participant requests a
share distribution, at least 50 common shares are distributed.Payment of BenefitsA participant who retires from employment with the
Company after age 65 or who is terminated after age 59 1/2 is eligible for
distribution of their account balance in the form of a lump sum payment or
installment payments. A participant who terminates employment with the
Company for any other reason is eligible only for a lump sum distribution of
their vested account balance. As of December 31, 2003 and 2002, there was
$783,925 and $2,380,073 of payments to participants or their beneficiaries
for which applications were received prior to year end that the Plan
disbursed in fiscal years 2004 and 2003, respectively. - 6 -




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##### 



LoansParticipants may borrow a minimum of $1,000 and up to a maximum equal
to the lesser of $50,000 or 50% of the value of the vested portion of their
total account value. Loan transactions are treated as a transfer to (from)
the investment fund from (to) the Participant Loan Fund, a holding account
for participant loans receivable. Loan terms range from 1-5 years for all
loans except loans for mortgage purposes which may be repaid over a period
of up to 15 years. The loans are secured by the balance in the participants
account and bear interest at a rate commensurate with prime plus one percent
as determined by Northern Trust. Interest rates ranged from 5.00% to 13.50%
on outstanding loans at December 31, 2003. Principal and interest are paid
ratably through biweekly payroll deductions. Included in benefits paid to
participants is $4,107 and $9,841,547 in 2003 and 2002, respectively, for
outstanding loans reclassified as distributions upon termination of
participants from the Plan.  2.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of AccountingThe financial statements of the Plan are prepared under
the accrual method of accounting.Investment ValuationPlan investments in NNC common shares are valued at the
last reported sales price, as quoted on the New York Stock Exchange, on
December 31, 2003 and 2002. Plan investments in securities investment funds
are valued based upon the fair value of the commingled funds, together with
any uninvested cash, accrued income or assets, and any dividends which have
been declared but remain unpaid as of the calculation date, less all
transaction costs such as brokerage commissions. Plan investments in
participant loans receivable are valued at cost which approximates fair
value. Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis and dividends are recorded
on the ex-dividend date.Payment of BenefitsBenefit payments are recorded when paid.Administrative ExpensesAll administrative expenses may be paid by the Plan
to the extent permissible by law. However, for the years ended December 31,
2003 and 2002, the Company elected to pay all such administrative expenses
except those related to participants investment transactions and trustee
fees.Use of EstimatesThe preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires the Plans management to make estimates and assumptions that affect
the reported amounts of net assets available for benefits and changes
therein. Actual results could differ from those estimates. The Plan utilizes
various investment instruments. Investment securities, in general, are
exposed to various risks, such as interest rate, credit and overall market
volatility. Due to the level of risk associated with certain investment
securities, it is reasonably possible that changes in the values of
investment securities will affect the amounts reported in the statements of
net assets available for plan benefits.ReclassificationsCertain reclassifications have been made to the 2002
financial statements to conform to the 2003 presentation.  3.
    
    PLAN TERMINATIONAlthough it has not expressed an intent to do so, the Company has the right
under the Plan to terminate the Plan subject to the provisions of ERISA. - 7 -




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##### 



4.
    
    INTERNAL REVENUE SERVICE STATUSAs of January 14, 2004, the Internal Revenue Service has determined that the
Plan is qualified under Section 401(a) and meets the additional requirements
of Section 401(k) of the Internal Revenue Code (the Code). Therefore, no
provision for income taxes has been included in the Plans financial
statements. Company contributions and participant contributions may be
excluded from the gross income of the participants for whom such
contributions are made.  5.
    
    INVESTMENTSInvestments of the Plan that represent five percent (5%) or more of net
assets available for benefits are as follows: As of December 31, 2003NTGI S&P 500 Fund
    
    $
    242,509,668Commonwealth Life Contract
#ADA002000TR
    
    
    105,164,910Commonwealth Life Contract #ADA00262TR
    
    
    114,562,247CDC Financial Group #WR 1173-001
    
    
    176,745,758*
    
    Scudder Investment Mid-Cap Fund
    
    
    146,753,278Fidelity Low-Priced Stock Fund
    
    
    171,671,034*
    
    Nortel Networks Corp New Common Shares
    
    
    424,833,032JP Morgan Chase Benefit Responsive #ANORTH01
    
    
    126,186,532
 As of December 31, 2002SSgA S&P 500 Flagship Fund
    
    $
    194,390,121Commonwealth Life Contract #ADA00262TR
    
    
    111,597,011CDC Financial Group
    
    
    164,619,908*
    
    BT Investment Mid-Cap Fund
    
    
    116,709,467Fidelity Low-Priced Stock Fund
    
    
    106,067,483*
    
    Nortel Networks Corp New Common Shares
    
    
    143,563,364JP Morgan Chase Benefit Responsive #ANORTH01
    
    
    112,571,184
  *
    
    Indicates a party-in-interest.  6.
    
    COMMITMENTS AND CONTINGENCIESOn September 12, 2003, a consolidated complaint was filed that consolidated
three different lawsuits seeking to commence a class action lawsuit filed
during prior periods against NNC, NNI, and
various named individuals and committees regarding their purported
responsibilities as fiduciaries of the Plan. A motion for dismissal of that
lawsuit is currently under review by the presiding judge. Plaintiffs have
filed an amended complaint that expands the class period to include March 7,
2000 to the present. On May 18, 2004 and June 14, 2004, two new complaints
were filed by new parties also seeking to commence class action lawsuits
against NNC and various named - 8 -




---



##### 



individuals alleged to be fiduciaries under
the Plan. The class periods described in the new complaints are: December
23, 2003 to the present and October 24, 2000 to the present, respectively.
None of these lawsuits name the Plan as a defendant. Each of these lawsuits
allege, among other things, material misrepresentations and omissions to
induce Plan participants to use their accounts under the Plan to continue to
invest in and maintain investments in NNC common shares. The Plan is unable
to determine the impact of these matters, if any, on the Plan participants
or the Plans financial status or changes therein.  7.
    
    ASSET TRANSFERSPursuant to the terms of the Companys acquisition of two companies during
2002, the following transfers in of employees account balances were made
from the plans listed below. Date
    
    Previous Plan
    
    AmountJuly 12, 2002
    
    Sonoma Systems 401(k) Plan
    
    $
    942,020November 19, 2002
    
    Architel Systems Corporation 401(k) PS Plan
    
    
    375,242
 ****** - 9 -




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##### 



NORTEL NETWORKS LONG-TERM INVESTMENT PLAN SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2003 Description of Investment IncludingIdentity of Issue, Borrower, Lessor or
    
    Maturity Date, Rate of Interest,
    
    
    
    
    
    MarketSimilar Party
    
    Collateral, Par or Maturity Vale
    
    Cost
    
    ValueUnited States Dollar
    
    Common/Collective Trust
    
    $
    10,689,119
    
    
    $
    10,689,119*
    
    Pyramid GIC Fund
    
    Common/Collective Trust
    
    
    8,764,458
    
    
    
    8,764,458Barclays Global Investors LifePath 2000
    
    Common/Collective Trust
    
    
    4,326,773
    
    
    
    4,691,183Barclays Global Investors LifePath 2010
    
    Common/Collective Trust
    
    
    5,861,660
    
    
    
    6,354,045Barclays Global Investors LifePath 2020
    
    Common/Collective Trust
    
    
    9,497,387
    
    
    
    9,885,057Barclays Global Investors LifePath 2030
    
    Common/Collective Trust
    
    
    10,546,459
    
    
    
    10,726,202Barclays Global Investors LifePath 2040
    
    Common/Collective Trust
    
    
    14,779,408
    
    
    
    14,817,194NTGI S&P500 Index Fund
    
    Common/Collective Trust
    
    
    234,635,085
    
    
    
    242,509,668NTGI Russell 1000 Value Equity Index Fund
    
    Common/Collective Trust
    
    
    81,637,523
    
    
    
    84,502,208John Hancock Contract #14462
    
    GIC, 5.91%, 6/15/04
    
    
    15,837,808
    
    
    
    15,837,808Principal Life Insurance Contract #4-35229-2
    
    GIC, 5.77%, 8/15/04
    
    
    10,657,579
    
    
    
    10,657,579Partners Insurance Group Annuity Contrct #4-35229
    
    GIC, 5.85%, 11/15/04
    
    
    4,249,524
    
    
    
    4,249,524Protective Life Insurance Contract #1713
    
    GIC, 1.00%, 1/01/05
    
    
    14,036,302
    
    
    
    14,036,302JP Morgan Chase Benefit Responsive #ANORTH01
    
    Synthetic GIC
    
    
    126,186,532
    
    
    
    126,186,532Commonwealth Life Contract #ADA002000TR
    
    Synthetic GIC
    
    
    105,164,910
    
    
    
    105,164,910Commonwealth Life Contract #ADA00262TR
    
    Synthetic GIC
    
    
    114,562,247
    
    
    
    114,562,247CDC Investment Management Contract #WR1173-001
    
    Synthetic GIC
    
    
    176,745,758
    
    
    
    176,745,758CDC Investment Management Contract #BR173-05
    
    Synthetic GIC
    
    
    6,374,849
    
    
    
    6,374,849Templeton Foreign Fund
    
    Mutual Fund
    
    
    57,862,392
    
    
    
    64,935,897*
    
    Scudder LifeCycle Fund
    
    Mutual Fund
    
    
    87,930,151
    
    
    
    77,095,649*
    
    Scudder MidCap Fund
    
    Mutual Fund
    
    
    176,375,911
    
    
    
    146,753,278Fidelity Low-Priced Stock Fund
    
    Mutual Fund
    
    
    144,714,925
    
    
    
    171,671,034Pimco Total Return Fund
    
    Mutual Fund
    
    
    48,902,167
    
    
    
    48,948,449Pimco Large-Cap Growth Fund
    
    Mutual Fund
    
    
    24,902,635
    
    
    
    27,107,954*
    
    Nortel Networks Corp New Common Shares
    
    Common Stock
    
    
    1,078,867,972
    
    
    
    424,833,032*
    
    Participant Loans
    
    Participant Loans with interest
rates ranging from 5.00% to 13.50% and maturity dates ranging from
1/9/2004 and 12/7/2018
    
    
    **
    
    
    
    24,884,378Total Investments
    
    
    
    
    
    
    
    $
    1,952,984,314
   *
    
    Indicates a party-in-interest**
    
    Cost information is not required for participant-directed investments and, therefore, is not included. - 10 -




---



##### 



NORTEL NETWORKS LONG-TERM INVESTMENT PLAN SCHEDULE OF REPORTABLE TRANSACTIONS
DECEMBER 31, 2003 Expense
    
    
    
    
    
    Current Value
    
    NetPurchase
    
    Selling
    
    Lease
    
    Incurred with
    
    Cost of
    
    of Asset on
    
    Gain orIdentity of Party Involved
    
    Description of Asset
    
    Price
    
    Price
    
    Rental
    
    Transaction
    
    Asset
    
    Transaction Date
    
    (Loss)Series of Transactions:*
    
    The Northern Trust Company
    
    SSGA S&P Index Flagship
    
    $
    
    
    
    $
    234,056,212
    
    
    $
    
    
    
    $
    
    
    
    $
    234,056,212
    
    
    $
    234,056,212
    
    
    $
    Cash Fund (1 sale; 1 purchase)
    
    
    234,056,212
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    234,056,212
    
    
    
    234,056,212
    
    
    
    *
    
    The Northern Trust Company
    
    SSGA Russell 1000 Value Index
    
    
    
    
    
    
    80,476,547
    
    
    
    
    
    
    
    
    
    
    
    80,476,547
    
    
    
    80,476,547
    
    
    
    Cash Fund (1 sale; 1 purchase)
    
    
    80,476,547
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    80,476,547
    
    
    
    80,476,547
    
    
    
    *
    
    The Northern Trust Company
    
    Col Tv Short Term Investment Fund
    
    
    
    
    
    
    93,498,989
    
    
    
    
    
    
    
    
    
    
    
    93,498,989
    
    
    
    93,498,989
    
    
    
    (71 sales; 81 purchases)
    
    
    105,890,761
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    105,890,761
    
    
    
    105,890,761
    
    
    
    *
    
    The Northern Trust Company
    
    Daily S&P500 Equity Index
    
    
    
    
    
    
    589,011
    
    
    
    
    
    
    
    
    
    
    
    581,708
    
    
    
    589,011
    
    
    
    7,303(5 sales; 6 purchases)
    
    
    235,216,793
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    235,216,793
    
    
    
    235,216,793
    
    
    
    *
    
    The Northern Trust Company
    
    ST S&P500 Flagship Series A
    
    
    
    
    
    
    239,312,142
    
    
    
    
    
    
    
    
    
    
    
    273,325,167
    
    
    
    239,312,142
    
    
    
    (34,013,025
    )(26 sales; 10 purchases)
    
    
    3,307,334
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,307,334
    
    
    
    3,307,334
    
    
    
    
 - 11 -