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Exhibit 99.1 News Release
    
    (NORTEL LOGO)
  www.nortel.comFOR IMMEDIATE RELEASE
    
    December 8, 2004For more information:MediaTina Warren(905) 863-4702tinawarr@nortelnetworks.com
    
    Investors(888) 901-7286(905) 863-6049investor@nortelnetworks.com
  Nortel Provides Status UpdateExpects to Commence Filing of Financial Statements on January 10, 2005
Plans to Announce Limited Unaudited Results for Q3 2004 Week of December 13, 2004 TORONTO  Nortel Networks* Corporation [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. Filing of Financial Statements The Company and NNL continue to work on the restatement of their financial results for each fiscal
quarter in 2003 and for the years 2002 and 2001, including the finalization of the Companys work
on the focused revenue reviews that it previously announced, and the preparation of their financial
statements for the year 2003 and the first, second and third quarters of 2004. As previously announced, the Company was targeting a filing date within 30 to 60 days of its
November 11, 2004 status update for its and NNLs audited financial statements for the year 2003
and unaudited financial statements for the first and second quarters of 2004, and related periodic
reports. The Company expects that it and NNL will commence to file these financial statements and
related periodic reports on January 10, 2005 and follow thereafter, as soon as practicable, with
the filing of its and NNLs unaudited financial statements and related periodic reports for the
third quarter of 2004, and any required amendments to periodic reports for prior periods. Release of Limited Estimated Unaudited Results The Company plans to announce updates to its previously announced estimated unaudited results for
the first and second quarters of 2004 and limited estimated unaudited results for 2001, 2002, 2003
and the third quarter of 2004 during the week of December 13, 2004. These estimated results will be
subject to audit or review by the Companys external auditors and the other limitations outlined
below. Update on Restatement Impacts and Revenue Adjustments Restatement Impacts Based on the Companys work to date, and subject to the limitations described below, the principal
estimated impacts of the restatements and revisions identified to date to the Companys results,
including the revenue adjustment impacts described below, reflect the following:  
    
    Revenue adjustments identified to date reflect increases to
previously announced annual revenues of approximately 9 percent in
2001, 3 percent in 2002 and 5 percent in 2003 (adjusted from
approximately 8 percent in 2001, 4 percent in 2002 and 5 percent
in 2003 previously announced);




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Page 2  
    
    A reduction of approximately 28 percent in previously announced
net earnings for 2003 (adjusted from 35 percent previously
announced); the amount of the reduction in 2003 net earnings will
largely be reported in prior periods, resulting in a reduction in
previously reported net losses for such periods including 2002 and
2001;
    
    The reduction in 2003 net earnings is a result of a decrease in
the first half of 2003 net earnings that is partially offset by a
slight increase to the second half of 2003 net earnings;
    
    Approximately 18 percent of the 2003 net income reductions are
expected to impact the Companys continuing operations, with the
remaining approximately 82 percent impacting discontinued
operations (adjusted from the approximately 30 percent impact to
continuing operations and approximately 70 percent impact to
discontinued operations previously announced);
    
    As previously announced, no material impact to the Companys cash
balance as at December 31, 2003; and
    
    No material changes to the previously announced estimated revenues
for the first and second quarters of 2004. Revenue Adjustments As previously announced, the Company has identified adjustments to revenues, primarily in the
Companys Optical Networks and Enterprise Networks businesses. Based upon the work done to date,
these adjustments have resulted in a net reduction in revenue of approximately US$430 million and
US$2.8 billion in 1999 and 2000, respectively (adjusted from US$600 million and US$2.5 billion
previously announced). The Company currently does not expect a material change to the previously
announced approximate amount of permanent revenue reversal in 2000, which is largely due to
collectibility issues. The remaining revenue adjustments in 1999 and 2000 will be deferred and
recognized in subsequent years. The impact of these revenue adjustments is currently estimated to
result in a net increase in revenues of approximately US$1.5 billion, US$265 million and US$460
million in 2001, 2002 and 2003, respectively (adjusted from US$1.35 billion, US$450 million and
US$450 million previously announced). The adjustments to date would also result in additional
deferred revenue on the Companys balance sheet as of December 31, 2003. The Companys work to date with respect to the restatements and revisions and the principal
estimated impacts mentioned above, as well as the Companys and NNLs expectations as to timing of
filing their financial statements and related periodic reports, 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 impacts. As such, these principal estimated impacts continue to be preliminary and
subject to change;
    
    The ongoing work of the Nortel Audit Committee independent review;
    
    The ongoing work to be done by the Company related to the restatements and revisions, including the completion of
Nortel managements work on certain accounting matters and its discussions with the United States Securities and
Exchange Commission (SEC) on certain matters that could affect its and NNLs upcoming filings, including the SECs
open comments on past filings;
    
    The previously disclosed material weaknesses in the Companys internal control over financial reporting; and
    
    The review or audit of the Nortel financial statements by the Companys external auditors. 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 EDC Support Facility As previously announced, NNL obtained a new waiver from Export Development Canada (EDC) under the
EDC performance-related support facility (the EDC Support Facility) of certain defaults related
to the delay by the Company and NNL in filing their respective 2003 Annual Reports on Form 10-K and
Q1, Q2 and Q3 2004 Quarterly Reports on Form 10-Q (collectively, the Reports), in each case with
the SEC, the trustees under the Companys and NNLs public debt indentures and EDC. The waiver also
applies to certain additional




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Page 3 breaches under the EDC Support Facility relating to the delayed
filings and the planned restatements and revisions to the Companys and NNLs prior financial
results (the Related Breaches). The EDC Support Facility provides up to US$750 million in support, all presently on an uncommitted
basis. The US$300 million revolving small bond sub-facility of the EDC Support Facility will not
become committed support until all of the Reports are filed with the SEC unless and until NNL
obtains a permanent waiver of the Related Breaches. As of December 7, 2004, there was approximately
US$290 million of outstanding support utilized under the EDC Support Facility, approximately US$206
million of which was outstanding under the small bond sub-facility. The current waiver from EDC will expire on December 10, 2004. As the Company and NNL do not expect
to deliver the Reports by December 10, 2004, EDC will have the right on such date (absent a further
waiver in relation to the delayed filings and the Related Breaches) to terminate the EDC Support
Facility, exercise certain rights against collateral or require NNL to collateralize all existing
support. While NNL is seeking a new waiver from EDC in connection with the delay in filing the
Reports, there can be no assurance that NNL will receive a new waiver or as to the terms of any
such waiver. In addition, the Related Breaches will continue independent of whether the Reports are filed.
Accordingly, EDC will have the right (absent a further waiver of the Related Breaches), beginning
on December 10, 2004, to terminate or suspend the EDC Support Facility. While NNL is seeking a
permanent waiver from EDC in connection with the Related Breaches, there can be no assurance that
NNL will receive a permanent waiver, or any waiver or as to the terms of any such waiver. Stock Exchanges The Company continues to provide periodic updates to the New York Stock Exchange and the Toronto
Stock Exchange concerning the Companys and NNLs delay in filing with securities regulatory
authorities their 2003 Annual Reports on Form 10-K and other periodic reports. Status Updates Except as to the matters described above, the Company and NNL have reported that there have been no
other material developments in the matters reported in their status updates of June 2, 2004, June
15, 2004, June 29, 2004, July 13, 2004, July 27, 2004, August 10, 2004, August 19, 2004, September
2, 2004, September 16, 2004, September 30, 2004, October 14, 2004, October 27, 2004, November 11,
2004 and November 24, 2004; the Companys press release Nortel Networks Announces New Waiver from
Export Development Canada dated November 19, 2004; and the Companys press release Nortel
Provides Update on Annual Shareholders Meeting dated November 29, 2004. ************************ About Nortel Nortel is a recognized leader in delivering communications capabilities that enhance the human
experience, ignite and power global commerce, and secure and protect the worlds most critical
information. Serving both service provider and enterprise customers, Nortel delivers innovative
technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and
applications, and wireless broadband designed to help people solve the worlds greatest challenges.
Nortel does business in more than 150 countries. For more information, visit Nortel on the Web at
www.nortel.com. For the latest Nortel news, visit
www.nortel.com/news. 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s independent review
and planned restatement or revisions of its previously announced or filed financial results; the
resolution of the accounting issues announced on November 11, 2004, including the outcome of
discussions with the United States Securities and Exchange Commission; the impact of the management
changes announced on April 28, 2004 and August 19, 2004; the impact of the inability to meet
Nortels filing obligations on support facilities and public debt obligations; any potential
delisting or suspension of the Companys or NNLs securities; the adverse resolution of litigation,
investigations, intellectual property disputes and similar matters; the sufficiency of Nortels
restructuring activities, including the work plan announced on August 19, 2004 as updated on
September 30, 2004, including the potential for higher actual costs to be incurred in connection
with restructuring actions compared to the estimated costs of such actions; cautious or reduced
spending by Nortels customers; fluctuations in Nortels operating results and general industry,
economic and market conditions and growth rates; the communication by Nortels auditors of the
existence of material weaknesses in internal controls; Nortels ability to recruit and retain
qualified employees; fluctuations in Nortels cash flow, level of outstanding debt and current debt
ratings; the use of cash collateral to support Nortels normal course business activities; the
dependence on Nortels subsidiaries for funding; the impact of Nortels defined benefit plans and
deferred tax assets on results of operations and Nortels cash flows; Nortels dependence on new
product development and its ability to predict market demand for particular products; Nortels
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




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Page 4 impact of the credit
risks of Nortels 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s purchase contracts; the impact of Nortels 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; and the future success of Nortels strategic alliances. 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 with the SEC. Unless otherwise required by applicable
securities laws, Nortel disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information, future events or otherwise.. -end- *Nortel, the Nortel logo and the Globemark are trademarks of Nortel.