Nortel Networks Engages Accenture to Help Develop Plan for 'Best Practices' Finance Organization

Business Wire, Sept 10, 2004

TORONTO -- Nortel Networks (NYSE:NT)(TSX:NT) has engaged Accenture (NYSE:ACN) to help develop a plan to transform its financial organization's structure, processes and systems in line with Nortel Networks goal of developing a 'best practices' finance organization.

This is the latest in a series of initiatives Nortel Networks has undertaken in the past few years to transform various internal functions through application of new technologies and process integration. Previous areas of concentration included the human resources and supply chain functions.

Nortel Networks previously announced that it is reviewing and assessing its finance organization and financial systems, including financial processes, procedures, skill sets, training programs and organizational structure, so that it may build a state-of-the-art finance organization.

"We are determined to deliver on our commitment of providing shareholders with the highest integrity standards of accounting processes and a fully transparent financial organization," said Bill Owens, president and chief executive officer, Nortel Networks.

Under the terms of the agreement, Accenture will review elements of Nortel Networks global finance organization, including structure, systems and processes, and will help identify ways to improve and streamline business processes and systems functionality. Nortel Networks has already selected SAP as the foundation for the new system globally.

"The overall transformation of our finance organization will be an ongoing, dedicated process and an important area of investment," Owens said. "Accenture's assessment is a key step as we work to transform our finance organization."

About Accenture

Accenture is a global management consulting, technology services and outsourcing company. Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance businesses and governments. With deep industry and business process expertise, broad global resources and a proven track record, Accenture can mobilize the right people, skills, and technologies to help clients improve their performance. With approximately 100,000 people in 48 countries, the company generated net revenues of US$11.8 billion for the fiscal year ended Aug. 31, 2003. Its home page is www.accenture.com.

About Nortel Networks

As a global innovation leader, Nortel Networks enriches consumer and business communications worldwide by offering converged multimedia networks that eliminate the boundaries among voice, data and video. These networks use innovative packet, wireless, voice and optical technologies and are underpinned by high standards of security and reliability. For both carriers and enterprises, these networks help to drive increased profitability and productivity by reducing costs and enabling new business and consumer services opportunities. Nortel Networks does business in more than 150 countries. For more information, visit Nortel Networks 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 or revisions of its previously announced or filed financial results; the impact of the management changes announced on April 28, 2004 and August 19, 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 controls; 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.