Lucent Technologies Inc.

Consolidated Statements of Income

For the Years Ended September 30, 2000 and 2001

In millions

9/30/01

9/30/00

Revenues

$ 21,294

$28,904

Costs

19,236

17,190

Gross profit

$ 2,058

$11,714

Operating expenses:

Selling, general and administrative

$ 7,410

$ 5,610

Research and development

3,520

3,179

Other operating and restructuring expenses

10,157

559

Total operating expenses

$ 21,087

$ 9,348

Operating income (loss)

$(19,029)

$ 2,366

Other income (expense)-net

(357)

333

Interest expense

518

342

Income (loss) from continuing operations before

income tax expense (benefit)

$(19,904)

$ 2,357

Income tax expense (benefit)

(5,734)

924

Income (loss) from continuing operations

$(14,170)

$ 1,433