Reliant FORM 10-K manual Expected sublease revenue on leases

Year ended December 31, 2003

For the year ended December 31, 2003, Nortel Networks S.A. recorded total special charges of

24,563.

Workforce reduction charges of

19,133 were related to severance and benefit costs associated with the approximately 193 employees

notified of termination. During 2003, the workforce reduction provision balance was drawn down by cash payments of

24,399, resulting

in an ending provision balance for workforce reduction of

4,696. The remaining provision is expected to be substantially drawn down

by the end of 2004.

Contract settlement and lease costs consisted of

€

4,382 for negotiated settlements to cancel or renegotiate contracts and net lease charges

related to leased facilities that were identified as no longer required. During 2003, the provision balance for contract settlement and lease

costs was drawn down by cash payments of

€

2,310 resulting in an ending balance of

4,498. The remaining provision, net of

€

approximately 2,953 in estimated sublease income, is expected to be substantially drawn down by the end of 2008.

Year ended December 31, 2002

For the year ended December 31, 2002, Nortel Networks S.A. recorded total special charges of

83,427.

Workforce reduction charges of

73,105 were related to severance and benefit costs associated with the approximately 718 employees

notified of termination. During 2002, the workforce reduction provision balance was drawn down by cash payments of

64,232, resulting

in an ending provision balance for workforce reduction of

9,962.

Contract settlement and lease costs consisted of

612 negotiated settlements to cancel or renegotiate contracts and net lease charges

related to leased facilities that were identified as no longer required. During 2002, the provision€balance for contract settlement and lease

costs was drawn down by cash payments of

13,208, resulting in an ending provision balance of

2,426.

Plant and equipment write downs€of approximately 9,294 related primarily to the write down to net realizable value of leasehold

improvements and manufacturing equipment.

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Other consists primarily of contract settlement costs to either cancel or renegotiate existing supply contracts..

Year ended December 31, 2001

For the year ended€

December 31, 2001, Nortel Networks S.A. recorded total special charges of

95,379 related to streamlining its

operations and activities.

Workforce reduction charges of

34,419 were related to severance and benefit costs associated with the approximately 310 employees

notified of termination. During 2001, the workforce reduction provision balance was drawn down by cash payments of

34,372, resulting

€

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€210

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in an ending provision balance for workforce reduction of

1,089.

€

Contract settlement and lease costs€

of

17,123 consisted of

2,009 of negotiated settlements to cancel or renegotiate contracts and

15,114 of net lease charges related to a number of operating leases no longer required. Lease costs represent Nortel Networks€

S.A.

future contractual obligations under its applicable operating€leases net of approximately

2,964 in expected sublease revenue on leases

that Nortel Networks S.A. cannot terminate. During 2001, the provision balance for contract settlement and lease costs was drawn down
by cash payments of 176, resulting in a provision€balance of 16,947.
Plant and equipment write downs of approximately€	21,294 related primarily to the write down to€net realizable value of leasehold

improvements and manufacturing equipment in the Châteaudun facility.

Other consisted primarily of contract settlement costs to either cancel or renegotiate existing supply contracts. Goodwill impairment charge of 20,607 related to the goodwill of Nortel Networks France.