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Exhibit 99.1 (NORTEL LOGO) News Release www.nortelnetworks.com FOR
IMMEDIATE RELEASE
    
    July 13, 2004For more information:Media:
    
    Investors:Christine Simeone
    
    (888) 901-7286(781) 782-5773
    
    (905) 863-6049christine_simeone@lpp.com
    
    investor@nortelnetworks.com
 Nortel Networks Provides Status Update TORONTO  Nortel Networks* [NYSE/TSX: NT] and its principal operating
subsidiary, Nortel Networks Limited (NNL), today provided a status update
pursuant to the alternative information guidelines of the Ontario Securities
Commission. These guidelines contemplate that the Company and NNL will normally
provide bi-weekly updates on their affairs until such time as they are current
with their filing obligations under Canadian securities laws. The Company and NNL reported that there have been no material developments in
the matters reported in their status updates of June 2, 2004 and June 29, 2004
with the exception of the matters described below. I am pleased with the progress that we have made in the process to complete
the complex restatement and our financial reporting activities, said Bill
Owens, president and chief executive officer, Nortel Networks. I am also
pleased with Nortel Networks market momentum and continue to expect our
revenues in 2004 to grow faster than the market (which we now expect will grow
in the low to mid single digits). I am increasingly focused on Nortel Networks
strategic direction and driving improvements in our cash management and
operational efficiencies to allow us to build on our leadership positions in
the marketplace. It has become clear that we will need to put into place an
improved cost structure to drive financial performance. The Company will take
the necessary steps to ensure that our operations and our investments are
focused and that we are creating and leveraging our competitive advantages. The
current year has been an extremely challenging one for Nortel Networks in light
of our various announcements. That being said, we are committed to placing
Nortel Networks in a position to succeed as we move through 2004 to 2005 and
beyond. Status of Restatements and Revisions to Financial Results The Company and NNL continue to dedicate significant resources to the process
to complete their financial statements as soon as practicable. As previously
announced, the Company and NNL continue to work on the restatement of their
financial results for each fiscal quarter in 2003 and for earlier periods
including 2002 and 2001, and the preparation of their financial statements for
the full year 2003 and the first and second quarters of 2004.




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Based on the Companys work to date, which includes significant progress in the
Companys review of the second half of 2003 and prior periods, and subject to
the important limitations described below, the principal estimated impacts to
the Companys results identified to date are as follows:  
    
    Previously announced financial results for 2003 and prior periods
will be impacted by adjustments to reflect the restatements and
subsequent events. At this time, the Company has identified a reduction
of approximately 50 percent in previously announced net earnings for
2003, arising principally from the restatement work which is partially
offset by adjustments for subsequent events occurring after the balance
sheet date of December 31, 2003. These amounts will largely be reported
in prior periods, substantially in 2002, and together with other
adjustments, will result in a reduction in previously reported net
losses in those periods. This reduction in 2003 net earnings identified
to date substantially impacts the Companys continuing operations,
rather than discontinued operations, resulting in the elimination of
substantially all of the net earnings from continuing operations for the
full year 2003;  
    
    Approximately two-thirds of the reduction in 2003 net earnings
identified to date impacts the first half of 2003, resulting in a net
loss for the first half of 2003 compared to the previously reported net
earnings for that period. The remaining approximately one-third of the
reduction identified to date impacts the second half of 2003 reducing
net earnings and earnings from continuing operations for the second half
of 2003;  
    
    No material impact to revenues for any year during the restatement
period. Adjustments identified to date are less than 2 percent on an
annual basis of previously announced annual revenues. Revenue
adjustments in 2003 and prior periods identified to date primarily
relate to timing issues (for example, revenue that should have been
deferred to a later period or recognized in an earlier period). The
Company continues its work on the adjustments to revenues for the
quarterly periods within the restatement period; and  
    
    No material impact to the Companys cash balance as at December 31,
2003. The Companys work to date with respect to the restatements and revisions and
the principal estimated impacts mentioned above are subject to a number of
important limitations, including:  
    
    these principal impacts are estimated impacts which have been
identified by the Company based on the work done to date and are not
projections of the final total impacts. As such, these principal
estimated impacts continue to be preliminary, partial and subject to
change;  
    
    the ongoing work of the Nortel Networks Audit Committee independent
review;  
    
    the ongoing work to be done by the Company related to the
restatements and revisions and the impact of accounting for certain
other matters, including foreign exchange;  
    
    the previously disclosed material weaknesses in the Companys
internal controls over financial reporting;  
    
    the review or audit of the Nortel Networks financial statements by
the Companys independent auditors; and  
    
    the final determination of the impact of adjustments arising from
subsequent events on the Companys results of operation or financial
position, as referred to above.




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Please note that the above estimates of the principal impacts of the
restatements identified to date have not been the subject of a review or audit
engagement by Nortel Networks independent auditors, Deloitte & Touche LLP. Availability of Q1 and Q2 2004 Limited Preliminary Results/Financial Statement Filings As previously announced, the Company expects to be in a position to announce
limited preliminary unaudited results for the first and second quarters of 2004
by mid August 2004. At that time, the Company expects to report, on a
preliminary unaudited basis, a cash balance as at June 30, 2004 that is not
materially different from the announced cash balance of approximately US$3.6
billion as at March 31, 2004. Based on the Companys expectations as to the completion of its work, the work
of the independent review being undertaken by the Nortel Networks Audit
Committee and the work of the Companys independent auditors, the Company
continues to expect to file, in the third quarter of 2004, financial statements
for the year 2003 and the first and second quarters of 2004, and related
periodic reports, and follow thereafter, as soon as practicable, with any
required amendments to periodic reports for prior periods. The Companys expectation as to timing of events, including the availability of
limited preliminary unaudited results for the first and second quarters of 2004
and the filing of financial statements and related periodic reports, is subject
to change. Specifically, the completion of the Companys work and the related
audits of annual results by the Companys and NNLs independent auditors is
dependent upon the timing of the completion and results of the independent
review being undertaken by the Nortel Networks Audit Committee. Nortel Networks Limited The financial results of NNL are consolidated into the Companys results. NNLs
financial statements for the applicable periods will also be restated upon the
related restatements of the Companys financial statements. NNLs preferred
shares are publicly traded in Canada. Other Matters Status of Civil Proceedings On June 30, 2004, the United States District Court in the Southern District of
New York signed Orders which consolidated the 27 class action complaints that
have been filed against Nortel Networks, and certain former officers, in the
Southern District of New York and appointed lead counsel and lead plaintiffs in
respect of the consolidated action. As previously announced, the 27 class
action complaints variously allege that, in connection with the comprehensive
review and analysis of Nortel Networks assets and liabilities, the named
defendants made materially false and misleading statements in violation of U.S.
securities laws. On July 12, 2004, the
Company received a letter purporting to be on behalf of a
class of shareholders of Nortel Networks. The letter claims that certain
directors and officers, and certain former directors and officers, of Nortel
Networks breached fiduciary duties owed to the Company during the period from
2000 to 2003 including by (i) causing the Company to engage in unlawful conduct
or failing to prevent such conduct; (ii) causing the Company to issue false
statements; and (iii) violating law. The letter requires that the Company seek
to recover its damages arising from the alleged breaches. The letter




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demands that the Company commence a proposed action against the listed
individuals within 14 days or the class of shareholders will do so. Nortel Networks is an industry leader and innovator focused on transforming how
the world communicates and exchanges information. The Company is supplying its
service provider and enterprise customers with communications technology and
infrastructure to enable value-added IP data, voice and multimedia services
spanning Wireless Networks, Wireline Networks, Enterprise Networks, and Optical
Networks. As a global company, Nortel Networks does business in more than 150
countries. More information about Nortel Networks can be found on the Web at
www.nortelnetworks.com or www.nortelnetworks.com/media_center. Certain information included in this press release is forward-looking and is
subject to important risks and uncertainties. The results or events predicted
in these statements may differ materially from actual results or events.
Factors which could cause results or events to differ from current expectations
include, among other things: the outcome of Nortel Networks independent review
and planned restatement of its previously announced or filed financial results;
the impact of the management changes announced on April 28, 2004; the impact of
the inability to meet Nortel Networks filing obligations on support facilities
and public debt obligations; the sufficiency of Nortel Networks restructuring
activities, including the potential for higher actual costs to be incurred in
connection with restructuring actions compared to the estimated costs of such
actions; continued reductions in spending by Nortel Networks customers;
fluctuations in Nortel Networks operating results and general industry,
economic and market conditions and growth rates; the communication by Nortel
Networks auditors of the existence of material weaknesses in internal control;
Nortel Networks ability to recruit and retain qualified employees; fluctuations
in Nortel Networks cash flow, level of outstanding debt and current debt
ratings; the use of cash collateral to support Nortel Networks normal course
business activities; the dependence on Nortel Networks subsidiaries for
funding; the impact of Nortel Networks defined benefit plans and deferred tax
assets on results of operations and Nortel Networks cash flows; Nortel Networks
dependence on new product development and its ability to predict market demand
for particular products; Nortel Networks ability to integrate the operations
and technologies of acquired businesses in an effective manner; the impact of
rapid technological and market change; the impact of price and product
competition; barriers to international growth and global economic conditions,
particularly in emerging markets and including interest rate and currency
exchange rate fluctuations; the impact of rationalization in the
telecommunications industry; changes in regulation of the Internet; the impact
of the credit risks of Nortel Networks customers and the impact of customer
financing and commitments; stock market volatility generally and as a result of
acceleration of the settlement date or early settlement of Nortel Networks
purchase contracts; the impact of Nortel Networks supply and outsourcing
contracts that contain delivery and installation provisions, which, if not met,
could result in the payment of substantial penalties or liquidated damages; the
future success of Nortel Networks strategic alliances; and the adverse
resolution of litigation, investigations, intellectual property disputes and
similar matters. For additional information with respect to certain of these
and other factors, see the most recent Form 10 Q/A and Form 10-K/A filed by
Nortel Networks with the United States Securities and Exchange Commission.
Unless otherwise required by applicable securities laws, Nortel Networks
disclaims any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise. -end- *Nortel Networks, the Nortel Networks logo, the Globemark and Business Without
Boundaries are trademarks of Nortel Networks.