On November 30, 2006, historical Alcatel and Lucent Technologies Inc. (“Lucent”) completed a business combination pursuant to which Lucent became a wholly owned subsidiary of Alcatel and was renamed Alcatel-Lucent USA Inc.

As a result of the purchase accounting treatment of the Lucent business combination required by IFRS, our results for 2015, 2014, 2013, 2012 and 2011 included several negative, non-cash impacts of purchase accounting entries.

In 2015, we changed our accounting treatment for the recognition of certain deferred tax assets. In accordance with IAS 8 “Accounting policies, changes in accounting estimates and errors”, we have retroactively applied this accounting change and restated prior years (see Note 4 to our consolidated financial statements included elsewhere in this annual report).

The table below shows the high and low noon buying rates expressed in U.S. dollars per euro for the previous six months.

On April 25, 2016, the noon buying rate was €1.00 = U.S.$1.1264.

below are not the only ones we face. We do not discuss risks that would generally be equally applicable to companies in other industries, due to the general state of the economy or the markets, or other factors. Additional risks not known to us or that we now consider immaterial may also impair our business operations.

The telecommunications industry fluctuates and is affected by many factors, including the economic environment, decisions by service providers and other customers that buy our products and services regarding their deployment of technology and their timing of purchases and roll-out, as well as demand and spending for communications services by businesses and consumers.

Spending trends in the global telecommunications industry were mixed in 2015. During the year, the continued growth in smartphone penetration, mobile data and all-IP network transformation led to improved spending in certain technologies, as evidenced by increased revenues in businesses such as IP Routing and IP Transport. From a regional perspective, investments in ultra-broadband access technologies, such as LTE, led to robust investments in the U.S. notably in the second half of the year, while spending in China continued to be focused on 4G LTE deployments, accelerating from 2014 levels. On the other hand, the telecommunications equipment market in Europe continued to show signs of easing. Actual market conditions could be very different from what we expect and are planning for due to the uncertainty that exists about the recovery in the global economy. Moreover, market conditions could vary geographically and across different technologies, and are subject to substantial fluctuations. Conditions in the specific industry segments in which we participate may be weaker than in other segments. In that case, the results of our operations may be adversely affected.

If capital investment by service providers and other customers that buy our products and services is weaker than we anticipate, our revenues and profitability may be adversely affected. The

deteriorate. If we cannot generate sufficient cash flow from operations to meet cash requirements in excess of our current expectations, we might be required to obtain supplemental funds through additional operating improvements or through further recourse to external sources, such as capital market proceeds, asset sales or financing from third parties or Nokia Corporation, beyond those funds already obtained. We cannot provide any assurance that such funding will be available on terms satisfactory to us. In addition, Nokia has stated its intention to cause us to reduce materially our discounting of accounts receivable, which has been a source of liquidity for us in the past. If we were to incur higher levels of debt, this would require a larger portion of our operating cash flow to be used to pay principal and interest on our indebtedness. The increased use of cash to pay indebtedness could leave us with insufficient funds to finance our operating activities, such as Research and Development expenses and capital expenditures, which could have a material adverse effect on our business.

Also, as part of the integration of the Alcatel Lucent Group into the Nokia Group, we redeemed a substantial portion of our long term debt, financed in part by our cash resources and in part by the Nokia Corporation Revolving Liquidity Support Facility. This resulted in a reduction of our immediately available cash on our balance sheet, making us more dependent on the Nokia facility, the availability of which is a function of Nokia’s own financial health.

Our ability to have access to the capital markets and our financing costs is, in part, dependent on Standard & Poor’s, Moody’s or similar agencies’ ratings with respect to our debt and corporate credit and their outlook with respect to our business. Our current short-term and long-term credit ratings, as well as any possible future lowering of our ratings, may result in higher financing costs and reduced access to the capital markets. We cannot provide any assurance that our credit ratings will continue to be sufficient to give us access to the capital markets on acceptable terms, or that such credit ratings will not be reduced by Standard & Poor’s, Moody’s or similar rating agencies.

Credit and commercial risks and exposures could increase if the financial condition of our customers declines.

A substantial portion of our sales are to customers in the telecommunications industry. Some of these customers require their suppliers to provide extended payment terms, direct loans or other forms of financial support as a condition to obtaining commercial contracts. We have provided and in the future we expect that we will provide or commit to provide financing where appropriate for our business. Our ability to arrange or provide financing for our customers will depend on a number of factors, including our credit rating, our level of available credit, and our ability to sell off commitments on acceptable terms. More generally, we expect to routinely enter into long-term contracts involving significant amounts to be paid by our customers over time. Pursuant to these contracts, we may deliver products and services representing an important portion of the contract price before receiving any significant payment from the customer. As a result of the financing that may be provided to customers and our commercial risk exposure under long-term contracts, our business could be adversely affected if the financial condition of our customers erodes. In the past, certain of our customers

as described in Chapter 6 “Operating and Financial Review and Prospects”, under the heading “Critical Accounting Policies”, were to occur, additional impairment charges may be incurred in the future that could be significant and that could have an adverse effect on our results of operations or financial condition.

We operate in a highly competitive industry with many participants. Our failure to compete effectively would harm our business.

We operate in a highly competitive environment in each of our businesses, competing on the basis of product offerings, technical capabilities, quality, service and pricing. Competition for new service provider and enterprise customers as well as for new infrastructure deployments is particularly intense and increasingly focused on price. We offer customers and prospective customers many benefits in addition to competitive pricing, including strong support and integrated services for quality, technologically-advanced products; however, in some situations, we may not be able to compete effectively if purchasing decisions are based solely on the lowest price.

We have a number of competitors, many of which currently compete with us and some of which are very large, with substantial technological and financial resources and established relationships with global service providers. Some of these competitors have very low cost structures, which allow them to be very competitive in terms of pricing. In addition, new competitors may enter the industry as a result of acquisitions or shifts in technology. These new competitors, as well as existing competitors, may include entrants from the telecommunications, computer software, computer services and data networking industries. We cannot assure you that we will be able to compete successfully with these companies. Competitors may be able to offer lower prices, additional products or services or a more attractive mix of products or services, or services or other incentives that we cannot or will not match or offer. These competitors may be in a stronger position to respond quickly to new or emerging technologies and may be able to undertake more extensive marketing campaigns, adopt more aggressive pricing policies and make more attractive offers to customers, prospective customers, employees and strategic partners.

Technology drives our products and services. If we fail to keep pace with technological advances in the industry, or if we pursue technologies that do not become commercially accepted, customers may not buy our products or use our services.

The telecommunications industry uses numerous and varied technologies and large service providers often invest in several and, sometimes, incompatible technologies. The industry also demands frequent and, at times, significant technology upgrades. Furthermore, enhancing our services revenues requires that we develop and maintain leading tools. We will not have the resources to invest in all of these existing and potential technologies. As a result, we concentrate our resources on those technologies that we believe have or will achieve substantial customer acceptance and in which we will have appropriate technical expertise. However, existing products often have short product life cycles characterized by declining prices over their lives. In addition, our choices for developing

and material families that are standard for the industry to the largest extent possible. For a number of components and finished goods families, we use multiple, predefined sources which allow us to have access to additional inventories in case of a disruptive event or to satisfy increased end customer demand. On the other hand, supply chain risks may arise with respect to components that are single-sourced or that have a long lead-time for a variety of reasons, such as non-forecasted upside demand, unusual allocation of components to competitors leading to shortages, discontinuance by the supplier, quality problems, etc, that may have an adverse impact on our ability to deliver our products. In addition, for certain specific parts, an alternative source may not be technologically feasible. In addition to the multisource strategy, we further seek to mitigate sourcing disruptions by concentrating the supplier base for new products and for volume production among a group mostly made of “preferred” suppliers who satisfy our requirements. These preferred suppliers are under quality and performance monitoring, and are subject to periodic business review and executive management meetings.

Despite the steps we have taken with respect to our manufacturing and sourcing strategies, our business continuity plans and our logistics network, we can provide no assurance that such steps will be sufficient to avoid any disruption in the various stages of our supply chain. A disruption in any of those stages may materially adversely affect our ability to deliver our products, services and solutions on time and in sufficient volume, while meeting our quality, safety or security standards.

We continued the process of outsourcing a significant portion of our finance and human resources (HR) processes and services, increasing our dependence on the reliability of external providers. Interruptions in the availability of these processes and services could have a material adverse impact on the responsiveness and quality of these processes and services that are crucial to our business operations, and on our future ability to adapt to changing business needs.

Due to the customized nature of the services outsourced in the area of finance and HR, a failure to structure an efficient relationship with the outsourcing company we have selected may lead to on-going operational problems or even to severe business disruptions. In addition, as management’s focus shifts from a direct to an indirect operational control in these areas, there is a risk that without active management and monitoring of the relationship, the services provided may be below appropriate quality standards. There is the added risk that the outsourcing company may not meet the agreed service levels, in which case, depending on the impacted service, the contractual remedies may not fully cure all of the damages we may suffer. This is particularly true for any deficiencies that would impact the reporting requirements applicable to us as a company listed on Euronext NYSE in Paris.

In order to implement this outsourcing, changes in our business practices and processes were required to capture economies of scale and operational efficiencies, and to reflect a different way of doing business. Consequently, business processes that were customized for individual business units or for the Group were

operations, as well as through the network and information systems that we manage for or sell to third parties or for whose security and reliability we may otherwise be accountable. Unauthorized access to or modification, misappropriation or loss of, such information could have a material adverse impact on our business and results of operations. As we expand our use of cloud-based providers and services, the amount of information outside of our direct control increases, resulting in increasing risk. Also, increased business activities such as divestitures, outsourcing and downsizing raises the likelihood that critical information could be compromised by external or internal factors.

Unauthorized outside parties have targeted our information systems, using sophisticated methods and tools, referred to as advanced persistent threats (“APTs”). APTs use “phishing” attacks, and download exploits as main vectors of attacks. Such attempts to access our information systems have been successful on one occasion in 2013, on two occasions in 2014, and on one occasion in 2015. We investigated the impact of these attacks. Although we have no reason to believe that sensitive information was actually compromised by these attacks, we are not in a position to be conclusive, since the investigations showed that some data were extracted. As the overall number of attacks grows around the world and since our industry has been designated as a targeted industry, we have continued to take corrective actions that we believe will substantially mitigate the risk that such attacks will materially impact our business or operations, or that of our customers. However, we cannot rule out that there may have been other cyber-attacks that have been successful and have evaded detection. Our business is also vulnerable to theft, fraud, trickery or other forms of deception, sabotage and intentional acts of vandalism by outside parties, as well as parties inside the organization.

We have procedures in place for responding to known or suspected data breaches. In addition, we conduct periodic assessments of our system vulnerabilities and the effectiveness of our security protections and have undertaken and will continue to undertake information security improvement programs ourselves and in coordination with our suppliers and business partners. We are also increasing the resources allocated in this area. However, there is no guarantee that our existing procedures or the improvement programs will be sufficient to prevent future security breaches or cyber attacks. In addition, as we have outsourced a significant portion of our information technology operations and other operations, we are also subject to vulnerabilities attributable to such third parties. Information technology is rapidly evolving, the techniques used to obtain unauthorized access or sabotage systems change frequently and the parties behind cyber attacks and other industrial espionage are believed to be sophisticated and well funded, and it is not commercially or technically feasible to mitigate all known vulnerabilities in a timely manner or to eliminate all risk of cyber attacks and data breaches. Unauthorized access to or modification, misappropriation or loss of, our intellectual property and confidential information could result in litigation and potential liability to customers, suppliers and other third parties, harm our competitive position, reduce the value of our investment in research and development and

previously regulated, could adversely affect our development efforts by increasing compliance costs and causing delay. Demand for those products and services could also decline.

Our ten largest customers accounted for 53% of our revenues in 2015 (among which Verizon, AT&T and Sprint represented 15%, 14% and 5% of our revenues, respectively), and most of our revenues come from telecommunications service providers. The loss of one or more key customers, or reduced spending by these service providers, or inability to expand and diversify our customer base to non service providers could significantly reduce our revenues, profitability and cash flow.

Our ten largest customers accounted for 53% of our revenues in 2015 (among which Verizon, AT&T and Sprint represented 15%, 14% and 5% of our revenues, respectively). As service providers increase in size, it is possible that an even greater portion of our revenues will be attributable to a smaller number of large service providers going forward. Our existing customers are typically not obliged to purchase a fixed amount of products or services over any period of time from us and usually have the right to reduce, delay or even cancel previous orders, which could impact revenues from one reporting period to the next. We, therefore, have difficulty projecting future revenues from existing customers with certainty. Although historically our customers have not made sudden supplier changes, our customers could vary their purchases from period to period, even significantly. Combined with our reliance on a small number of large customers, this could have an adverse effect on our revenues, profitability and cash flow. In addition, our concentration of business in the telecommunications service provider industry makes us extremely vulnerable to a downturn or delays in spending in that industry. Although we are continuing to focus on expanding and diversifying our customer base to new emerging customer segments such as cable service providers, web-scale, large tech enterprises or vertical businesses, which are also investing in carrier-grade networks we may not succeed in achieving such expansion and diversification.

As a result of the transaction with Nokia, we may lose certain other existing contracts, or be unable to renew or gain new contracts due to customer diversity policies that limit the ability for the same network provider to exceed a certain threshold of business in a given market with such customer. Policies or practices in certain countries may also limit the possibility for foreign vendors to participate in the provision of networks business over a certain threshold.

We have long-term sales agreements with a number of our customers. Some of these agreements may prove unprofitable as our costs and product mix shift over the lives of the agreements.

We have entered into long-term sales agreements with a number of our large customers, and we expect that we will continue to enter into long-term sales agreements in the future. Some of these existing sales agreements require us to sell products and services at fixed prices over the lives of the agreements, and some require, or may in the future require us to sell products and services that we would otherwise discontinue, thereby diverting our resources from developing more profitable or strategically

Volatility in discount rates and asset values will affect the funded status of Alcatel Lucent’s pension plans.

The U.S. Internal Revenue Code provides a number of methods to use for measuring plan assets and for determining the discount rate to be applied for measuring defined benefit pension plan liabilities for regulatory funding purposes. For measuring plan assets, we can choose between the fair market value at the valuation date or a smoothed fair value of assets (based on a prior period of time not to exceed two years, with the valuation date as the last date in the prior period). For determining the discount rate, we can opt for the spot discount rate at the valuation date (effectively, the average yield curve of the daily rates for the month preceding the valuation date) or a 24-month average of the rates for each time segment (any 24-month period as long as the 24-month period ends no later than five months before the valuation date). To measure the 2014 funding valuation, we selected the two-year asset fair value smoothing method for the U.S. management pension plan and the U.S. occupational pension plans (active and inactive). Alcatel Lucent is generally required to use this same asset valuation method to measure the 2015 funding valuation. With respect to the discount rate to be applied for measuring plan liabilities, the Moving Ahead for Progress in the 21st Century Act, enacted on July 6, 2012 and thereafter modified and extended by The Highway and Transportation Funding Act, enacted on August 8, 2014, and the Bipartisan Budget Act of 2015, enacted on November 2, 2015 (collectively, “MAP-21/HATFA/BBA”), affects U.S. tax-qualified pension plan funding requirements for plans that use time segment interest rates for measuring plan liabilities for regulatory funding purposes. For such plans, MAP-21/HATFA/BBA, stabilizes such interest rates by establishing “corridors” around a 25-year average rate. MAP-21/HATFA/BBA, is applicable to the Alcatel Lucent Group’s U.S. management and active occupational pension plans, which use time segment interest rates for purposes of determining regulatory funding requirements, but not to the U.S. inactive occupational pension plan, which uses a full yield curve for such purposes. For the U.S. management and active occupational pension plans, MAP-21/HATFA/BBA, increases the interest rates used for regulatory funding purposes. A preliminary assessment of those plans under MAP-21/HATFA/BBA suggests no required funding contribution through at least 2017. Although MAP-21/HATFA/BBA, is currently not applicable to the Alcatel Lucent Group’s U.S. inactive occupational pension plan, the Group does not foresee any required funding contribution for that plan, given the level of assets compared to liabilities for regulatory funding purposes.

Pension and post-retirement health plan participants may live longer than has been assumed, which would result in an increase in our benefit obligation.

If our pension and retiree healthcare plan participants live longer than assumed, pension and retiree healthcare benefits obligations would likely increase. We cannot be certain that the longevity of the participants in its pension plans or retiree healthcare plan will not exceed that indicated by the mortality tables we currently use or that future updates to those tables will not reflect materially longer life expectancies.

healthcare and group life insurance costs for retirees who were represented by the Communications Workers of America and the International Brotherhood of Electrical Workers with transfers of excess pension assets from our U.S. inactive occupational pension plan. Excess assets are defined by Section 420 as those assets in excess of either 120% or 125% of the plan’s funding obligation (without the application of MAP-21/HATFA/BBA), depending on the type of transfer selected. Based on current actuarial assumptions and based on the present level and structure of benefits and of our benefit plans, we believe that we can continue to fund healthcare and group life insurance for retirees who were represented by the Communications Workers of America and the International Brotherhood of Electrical Workers through Section 420 transfers from its U.S. inactive occupational pension plan. However, a deterioration in the funded status of that plan could negatively affect our ability to make future Section 420 transfers. Section 420 is currently set to expire on December 31, 2025.

Healthcare cost increases and an increase in the use of services may significantly increase our retiree healthcare costs.

Our current healthcare plans cap the subsidy that we provide to those persons who retired after February 1990 and all future retirees, representing almost half of the retiree healthcare obligation, on a per capita basis. We may take steps in the future to reduce the overall cost of our current retiree healthcare plans, and the share of the cost borne by us, consistent with legal requirements and any collective bargaining obligations. However, cost increases may exceed our ability to reduce these costs. In addition, the reduction or elimination of U.S. retiree healthcare benefits by us has, in the past, led to lawsuits against us. Any initiatives that we might undertake to control these costs may lead to additional claims against us.

The activities of our IP Transport division include the installation and maintenance of undersea telecommunications cable networks, and in the course of this activity we may cause damage to existing undersea infrastructure, for which we may ultimately be held responsible.

Our subsidiary Alcatel-Lucent Submarine Networks is an industry leader in the supply of submarine optical fiber cable networks linking mainland to islands, island to island or several points along a coast, with activities also expanding to the supply of broadband infrastructure to oil and gas platforms and other offshore installations. Although thorough surveys, permit processes and safety procedures are implemented during the planning and deployment phases of all of these activities, there is a risk that previously-laid infrastructure, such as electric cables or oil pipelines, may go undetected despite such precautions, and be damaged during the process of installing the telecommunications cable, potentially causing business interruption to third parties operating in the same area and/or accidental pollution. While we have in place contractual limitations and maintain insurance coverage to limit its exposure, we cannot provide any assurance that these protections will be sufficient to cover such exposure fully.

If we fail to protect our intellectual property rights, our business and prospects may be harmed.

Intellectual property rights, such as patents, are vital to our business and developing new products and technologies that are unique is critical to our success. We have numerous French, U.S. and foreign patents and numerous pending patents. However, we cannot predict whether any patents, issued or pending, will provide us with any competitive advantage or whether such patents will be challenged by third parties. Moreover, our competitors may already have applied for patents that, once issued, could prevail over our patent rights or otherwise limit our ability to sell our products. Our competitors also may attempt to design around our patents or copy or otherwise obtain and use our proprietary technology. In addition, patent applications currently pending may not be granted. If we do not receive the patents that we seek or if other problems arise with our intellectual property, our competitiveness could be significantly impaired, which would limit our future revenues and harm our prospects.

We are subject to intellectual property litigation and infringement claims, which could cause us to incur significant expenses or prevent us from selling certain products.

From time to time, we receive notices or claims from third parties of potential infringement in connection with products or software. We also may receive such notices or claims when we attempt to license our intellectual property to others. Intellectual property litigation can be costly and time consuming and can divert the attention of management and key personnel from other business issues. The complexity of the technology involved and the uncertainty of intellectual property litigation increase these risks. A successful claim by a third party of patent or other intellectual property infringement by us could compel us to enter into costly royalty or license agreements or force us to pay significant damages and could even require us to stop selling certain products. Further, if one of our important patents or other intellectual property rights is invalidated, we may suffer losses of licensing revenues and be prevented from attempting to block others, including competitors, from using the related technology.

We are involved in significant joint ventures and are exposed to problems inherent to companies under joint management.

We are involved in significant joint venture companies. The related joint venture agreements may require unanimous consent or the affirmative vote of a qualified majority of the shareholders to take certain actions, thereby possibly slowing down the decision-making process. Our largest joint venture, Alcatel-Lucent Shanghai Bell Co., Ltd, has this type of requirement. We own 50% plus one share of Alcatel-Lucent Shanghai Bell Co., Ltd, the remainder being owned by the Chinese government.

Despite holding this high percentage of our capital, Nokia did not achieve the level of ownership necessary, under French law, to be able to implement a squeeze-out of the remaining shareholders of our Company, and approximately 9 % of our capital is still publicly-held. (This percentage will decrease upon the consummation of the sale of ordinary Alcatel Lucent shares, mentioned below in Section 3.3 “Risks relating to the ownership of our ADSs and our ordinary shares,” by the Depositary (defined in Section 3.3 below) to Nokia).

Although all the members of our Board share the same fiduciary duty to act in the best interest of our Company, and although a Committee of Independent Directors has been created within our Board (see Section 7.1.4.5 “Committee of Independent Directors”) and a Master Services Agreement has been put in place between Nokia and our Company (see Section 4.5 “Material Contracts”, subsection “Master Services Agreement and Framework Agreement”), to safeguard the interests of the Company, and of the minority shareholders, our minority shareholders may allege that decisions taken by our management and by our Board of Directors favor Nokia to their detriment and have a negative impact on the Company and on shareholder value at the Alcatel Lucent level, and may commence legal proceedings (including class actions) against our Company and the members of our Board, seeking damages. The defense of any such actions could entail significant costs and distraction of management.

our ordinary shares, which is the same exchange ratio offered in the Nokia Offer for our ordinary shares. Thereafter, the Depositary will sell the Nokia shares received by it. Accordingly, holders of ADRs who did not exchange their ADRs by April 25, 2016 will only be entitled to their pro rata portion of the proceeds from the sale of the Nokia shares by the Depositary. If the transaction contemplated by the Nokia SPA is not consummated or if for any reason the Depositary does not effect such sale, the underlying shares could be registered with Alcatel Lucent in registered form (nominatif pur).

The deposit agreement for the ADSs expressly limits our obligations and the obligations of the Depositary, and it limits our liability and their liability. Among such limitations, the deposit agreement provides that the Depositary will not be liable for the price received in connection with the sale of securities, the timing thereof, or any error, delay in action, omission to act, default or negligence on the part of the parties retained in connection with any such sale.

Please see Section 10.2.6 “American Depositary Shares (ADSs)” for more information on the termination of the ADR program.

ownership, there may be a limited market for our ordinary shares on the Euronext Paris, and the ability for an Alcatel Lucent shareholder to sell the ordinary shares owned by it at a price and time acceptable to it may be substantially limited.

Further, there is no guarantee that our ordinary shares will continue to be listed on the Euronext Paris. Additionally, if and when Nokia meets the required conditions under French law to allow it to acquire the remaining publicly-held Alcatel Lucent ordinary shares in a squeeze-out , Nokia intends to purchase all such remaining outstanding ordinary shares under the conditions prescribed by law.

Effective as of May 19, 2014, our registered office and principal place of business is 148/150 route de la Reine 92100 Boulogne-Billancourt, France. Our telephone number is +33 (0)1 55 14 10 10 and our website address is www.alcatel-lucent.com. The contents of our website are not incorporated into this document.

The address for Barbara Larsen, our authorized representative in the United States, is Alcatel-Lucent USA Inc., 600 Mountain Avenue, Murray Hill, New Jersey 07974.

Nokia Offer: Jean C. Monty, Louis R. Hughes, Olivier Piou, Stuart E. Eizenstat, Kim Crawford Goodman and Francesco Caio resigned from their position as Directors and Risto Siilasmaa, Rajeev Suri, Timo Ihamuotila, Maria Varsellona and Samih Elhage were coopted to the Board, subject to ratification by the shareholders at the Shareholders’ Meeting to be held in 2016. Nokia has stated that it will vote in favor of such ratification. Philippe Camus was confirmed in his position of Chairman of the Board and CEO of our Company.

Termination of our ADS program. Subsequent to the Nokia Offer, our Board of Directors resolved to terminate our ADS program. We instructed JPMorgan Chase Bank N.A., as the depositary of our ADS program (the “Depositary”), to terminate our ADS program in accordance with the terms of the deposit agreement. Notice of the termination of our ADS program was provided by the Depositary to holders of our ADSs evidenced by the Alcatel Lucent ADRs on January 26, 2016. The deposit agreement terminated on February 24, 2016.

Following the termination of the deposit agreement, and except as described in the paragraph below, neither the Depositary nor any of its agents will perform any further acts under the deposit agreement or the ADRs evidencing our ADSs, except to receive and hold (or sell) distributions on our ordinary shares and deliver deposited securities being withdrawn upon the cancellation of our ADSs in the manner required under the deposit agreement.

The option for holders of ADRs representing ADSs to surrender their ADRs to the Depositary in exchange for our ordinary shares expired on April 25, 2016. According to the notice provided by the Depositary to holders of our ADRs on January 26, 2016, a cancellation fee will be charged for ADSs surrendered (U.S. $5.00 per 100 ADSs or portion thereof, plus a $20.00 cable fee). In addition, holders of our ADRs are responsible for any taxes or other governmental charges which may be owing. On March 16, 2016, the Depositary and Nokia entered into a Share Purchase Agreement (the “Nokia SPA”). Pursuant to the Nokia SPA, the Depositary will sell to Nokia all of our ordinary shares underlying remaining outstanding ADRs after April 25, 2016. The Depositary will receive 0.55 Nokia shares for each of our ordinary shares,

2015 dividend. Our Board has determined not to pay a dividend on our ordinary shares based on 2015 results (there will no longer be any ADSs outstanding at the time of our Annual Shareholders’ Meeting - see Section 10.2.6 “American Depositary Shares (ADSs)”. Our Board will present this proposal at our Shareholders’ Meeting to be held in 2016.

Termination of our revolving credit facility. On February 4, 2016, we sent a termination notice, effective February 9, 2016, on the €504 million revolving credit facility we entered into on December 17, 2013 with a syndicate of twelve international banks, which had remained undrawn.

Termination of Qualcomm license. On February 4, 2016, Qualcomm notified us that they were exercising their right to terminate one of our two license agreements (that were signed on April 1, 2015) with immediate effect upon the closing of the Nokia Offer. Pursuant to the license agreement, Qualcomm had the right to terminate the license agreement upon a change of control. The termination resulted in the acceleration of all remaining unpaid quarterly royalty payments of €278 million (U.S. $302.5 million) payable to Qualcomm within 30 days of termination. The full carrying amount of the patent rights recognized in “other intangible assets” will be impaired for €287 million in the first quarter ended March 31, 2016. With respect to our rights under the terminated license, we will now be covered by rights previously negotiated between Nokia and Qualcomm.

Repayment of 8.50% Senior Notes. On January 15, 2016, we repaid the €190 million remaining outstanding under our 8.50% Senior Notes, on the maturity date of these notes.

Redemption in full of Senior Notes due 2017 and 2020. On January 11, 2016, in connection with the success of the initial Nokia Offer, we announced that our wholly-owned subsidiary, Alcatel-Lucent USA Inc., exercised its option to redeem early in full the entire outstanding $700 million principal amount of its 6.750% Senior Notes due 2020, the entire outstanding $500 million principal amount of its 8.875% Senior Notes due 2020 and the entire outstanding $650 million principal amount of its 4.625% Senior Notes due 2017, in accordance with the terms of the Notes and of the respective Indentures. The redemption was completed February 10, 2016.

Nokia Revolving Liquidity Support Facility. On February 3, 2016, Nokia and Alcatel Lucent USA Inc. entered into a U.S. $2 billion Revolving Liquidity Support Facility, divided in the following three tranches: Facility A, for U.S. $686 million, with a maturity date of June 30, 2017; Facility B for U.S. $546 million, with a maturity date of December 31, 2019; and Facility C, for U.S.$768 million, with a maturity date of November 15, 2020. This Facility was available for the financing of the redemption of 2017 and 2020 Senior Notes, and is also available for the general purposes of the Alcatel Lucent Group.

Nokia Revolving Facility. On April 13, 2016, Nokia Corporation and Alcatel-Lucent Participations entered into a €1 billion Revolving Credit Facility for a two-year term. This Revolving Credit Facility is available for the general purposes of Alcatel-Lucent Participations.

remain on review for upgrade. On April 20, 2015, Moody’s had placed on review for upgrade all of Alcatel-Lucent’s ratings.

On August 5, 2015, Standard and Poor’s raised its long-term corporate credit ratings on Alcatel-Lucent and Alcatel-Lucent USA Inc. to B+ from B, as well as the debt issued by Alcatel-Lucent and Alcatel-Lucent USA. All ratings remain on CreditWatch with positive implications. On April 17, 2015, Standard & Poor’s had placed Alcatel-Lucent ratings on CreditWatch with positive implications.

Tender offer on Senior Notes due 2020. Pursuant to a tender offer launched on July 31, 2015, on September 4, 2015, Alcatel-Lucent USA Inc. repurchased an aggregate of U.S. $300 million (€268 million) nominal amount of 6.75% Senior Notes due 2020 for a total cash amount of U.S. $324 million (€289 million) excluding accrued interest. The Notes tendered in the offer were cancelled.

Amendments to the terms of the long-term compensation schemes of the Group employees and of the CEO in the context of the contemplated Nokia Offer. In the context of the contemplated combination, the Alcatel-Lucent Board of Directors, at its meetings of April 14, July 29, October 28 and December 1^st, 2015, approved several amendments to the existing long-term compensation schemes of the Group employees and the CEO including particularly (i) the acceleration of the vesting of all stock options held by Group employees, (ii) the opportunity for beneficiaries holding performance shares not vested prior to the completion of the Nokia Offer, to waive their rights under their unvested performance shares, under certain conditions, in exchange for a number of Alcatel-Lucent shares equal to the number of performance shares they would have been entitled to receive under the relevant plans and (iii) the grant of unrestricted shares for compensation of the stock options commitment taken in 2014 to the beneficiaries concerned. The benefit of these amendments was subject notably to the beneficiaries undertaking to sell the shares thus received on the market two trading days at the latest before the last day of the reopened Nokia Offer. Beneficiaries of certain plans which could not be accelerated were offered a liquidity mechanism by Nokia. For more information, see Section 8.1.8 “Mechanisms put in place with respect to long-term compensation instruments in the context of the Nokia Offer”.

Governance. At its meeting of July 29, 2015, our Board of Directors accepted the resignation of Mr. Michel Combes from his position of CEO and Director of Alcatel-Lucent, effective on September 1, 2015. Mr. Philippe Camus, then Chairman of the Board of our Company, was appointed as Chairman and Interim CEO, effective September 1, 2015, for the transition period pending the completion of the Nokia transaction. For more information, see Section 7.1.2 “Principles of organization of our Company’s management”. Mr. Philippe Guillemot, Chief Operating Officer, was put in charge of leading the operational management of the Alcatel Lucent Group. Mr. Jean Raby, Chief Finance and Legal Officer, was given the responsibility for completing the proposed transaction with Nokia. Messrs. Philippe Guillemot and Basil Alwan (President of the IP Routing & Transport business line) were designated to jointly lead the integration team. During the transition period pending

solutions and communications security activities to Thales for a cash price of €41 million.

Disposal of Alcatel Lucent Enterprise. On September 30, 2014, Alcatel Lucent completed the disposal of 85% of its Enterprise business to China Huaxin, following the binding offer received early February 2014, for a cash price of €205 million.

Disposal of LGS. On March 31, 2014, we completed the disposal of LGS Innovations LLC to a U.S.-based company owned by a Madison Dearborn Partners-led investor group that includes CoVant, for a cash price of U.S.$110 million (€81 million) after working capital adjustment. The agreement includes an earnout of up to U.S.$100 million, based on the divested company’s results of operations for the 2014 fiscal year, but for which we are not expecting to receive a significant amount.

Other matters

Repayment of Senior Secured Credit Facility. On August 19, 2014, using the proceeds of the Oceane 2019 and 2020 described below, together with cash, we repaid the remaining U.S.$1,724 million outstanding of the Senior Secured Credit Facility due 2019.

Tender offer on Senior Notes 2016. On June 24, 2014, we launched a tender offer on our Alcatel-Lucent 8.50% Senior Notes due 2016. On July 4, 2014, we accepted for purchase an aggregate nominal amount of Senior Notes 2016 of €210 million for a total cash amount of €235 million. The notes tendered in the offer were cancelled. In addition, during the second quarter of 2014, a nominal amount of €19 million of the Senior Notes 2016 was bought back and cancelled for a cash amount of €22 million. Similarly, during the fourth quarter of 2014, a €3 million nominal amount of the Senior Notes 2016 was also bought back and cancelled for a cash amount of €3 million. As a result, the outstanding aggregate nominal amount for the Senior Notes 2016 is €192 million as of December 31, 2014.

Issuance of OCEANE 2019 and 2020. On June 2, 2014, we launched an offering of OCEANE (OCEANE are bonds convertible into, and/or exchangeable for, new or existing shares of Alcatel Lucent). On June 10, 2014, we issued convertible / exchangeable bonds in two tranches:

The bonds bear interest at an annual rate of 0.00% and 0.125% respectively, payable semi-annually in arrears on January 30th, and July 30th, commencing January 30, 2015. At our option, the bonds may be subject to early redemption under certain

Outsourcing agreement with Accenture. On February 28, 2014, in connection with the targeted cost savings of The Shift Plan, we entered into a 7-year service implementation agreement with Accenture regarding the business transformation of our finance function, including the outsourcing of our accounting function. This agreement supplements two similar service agreements with Accenture regarding human resources and information technology. For further details, please refer to Section 6.5 “Contractual obligations and off-balance sheet contingent commitments,” sub-section “Outsourcing transactions,” of our 2014 20-F and to Note 28 to our 2014 consolidated financial statements.

Significant shareholding. According to the notification filed with the French securities market authorities and sent to Alcatel-Lucent on April 21, 2014, the Capital Group Companies, Inc.- (USA) holds, after acquiring a significant shareholding in Alcatel Lucent, a total of 290,280,811 shares of Alcatel Lucent, representing 10.31% of our capital and 10.14% of the voting rights.

Highlights of transactions during 2013

Appointment of new CEO, CFO, and Vice-Chairman of the Board of Directors. On February 22, 2013, we announced the nomination of Mr. Michel Combes as Chief Executive Officer (CEO) effective on April 1, 2013. His nomination as Director was approved at our Annual Shareholders’ Meeting on May 7, 2013. He succeeded Mr. Ben Verwaayen, who had decided not to seek re-election as a Director at such meeting and stepped down as CEO.

On February 22, 2013, our Board of Directors approved the appointment of Mr. Jean C. Monty as Vice-Chairman of the Board, effective immediately.

On August 28, 2013, we announced the nomination of Mr. Jean Raby as Chief Financial & Legal Officer effective on September 1, 2013.

Launch of The Shift Plan. On June 19, 2013, we launched The Shift Plan which, upon implementation, is designed to transform our Company into an IP and cloud networking and ultra-broadband specialist refocused on innovation, transformation and unlocking growth to become a cash generative business from 2015. The details and objectives of The Shift Plan are described in Section 6.6 “Strategy and Outlook”, of our 2013 20-F.

As part of The Shift Plan, a new organization comprised of three reportable segments, Core Networking, Access and Other, became effective as of July 1, 2013. For further details on the breakdown about the new organization, please refer to Section 5.1 “Business Organization”, sub-section “Organization,” of our 2013 20-F and to Note 5 to our 2013 consolidated financial statements.

Completion, repricing and termination of multi-year financing commitments. On January 30, 2013, we entered into three Senior Secured Credit Facilities totaling approximately €2 billion. In connection with that transaction, our then existing unsecured

Notes due January 1, 2020, with an 8.875% coupon; U.S.$1,000 million Senior Notes due November 15, 2020 with a 6.750% coupon; and U.S.$650 million Senior Notes due July 1, 2017 with a 4.625% coupon. The proceeds of these offerings were used to (i) repay the U.S.$500 million Asset Sale Facility and the remaining outstanding amount of the €300 million Credit Facility which were two of the three Senior Secured Credit Facilities mentioned above; (ii) repay or redeem Alcatel-Lucent USA Inc.’s outstanding Series A and Series B convertible debentures and Lucent Technologies Capital Trust I convertible trust preferred securities; and (iii) prefund the maturity of €274 million principal amount of Alcatel Lucent’s 6.375% Senior Notes due in 2014. The offerings made in the United States were limited to qualified institutional buyers.

Capital decrease. Effective as of June, 2013, Alcatel-Lucent’s capital was reduced to €116,471,561.65 by reducing the nominal value of its shares from €2.00 to €0.05 per share, pursuant to the capital decrease approved at the Extraordinary Shareholders’ Meeting held on May 29, 2013.

Revolving Credit Facility. On December 17, 2013, Alcatel-Lucent closed a €504 million three-year revolving credit facility with a syndicate of 12 international banks. As of the date hereof, this facility remains undrawn.

Strategic partnership with Qualcomm. On September 30, 2013, we entered into a strategic partnership agreement with Qualcomm Incorporated to develop small cells for ultra-broadband wireless access. As a result, Qualcomm may purchase up to U.S.$20 million of our shares per year, in four tranches, over the period from 2013 to 2016. Each tranche is subject to a minimum lock-up period of six months. On September 30, 2013, Qualcomm Incorporated purchased approximately six million treasury shares (representing approximately 0.25% of our share capital) for U.S.$20 million.

End of joint venture with Bharti Airtel. In February 2013, we decided to discontinue our joint venture with Bharti Airtel formed in 2009 for the management of Bharti Airtel’s pan-India broadband and telephone services and to help Bharti Airtel’s transition to a next generation network across India. As a result, the former joint venture’s operations were absorbed into a new business entity set up by Bharti Airtel.

Termination of agreement with RPX. On March 7, 2013, we terminated our contract with RPX by mutual agreement, resulting in the extinguishment of all obligations of the parties, except for continuing obligations under certain non-disclosure provisions of the contract.

the breakdown by region for the Core Networking and Access segments, where our production capacity is concentrated.

We believe that these properties are in good condition and meet the needs and requirements of the Group’s current and future activity and do not present an exposure to major environmental risks that could impact the Group’s earnings.

The environmental issues that could affect how these properties are used are mentioned in Section 9.2 “Environment” of this annual report.

The sites mentioned in the tables below were selected among our portfolio of 390 sites to illustrate the diversity of the real estate we use, applying four main criteria: region, business segment, type of use (production/assembly, research/innovation or support function), and whether the property is owned or leased.

The average rate of 77% is based on the global portfolio of Alcatel-Lucent. The facilities presented are the major sites and form a representative sample of our activities.

respect to our U.S. businesses relating to the work done by Bell Labs and to the communications infrastructure in the United States. Under the NSA, in the event that we materially fail to comply with any of its terms, and the failure to comply threatens to impair the national security of the United States, the parties to the NSA have agreed that CFIUS, at the request of the USG Parties at the cabinet level and the Chairman of CFIUS, may reopen review of the business combination with Lucent and revise any recommendations or make new recommendations to the President of the United States, which could lead to new commitments for Alcatel Lucent. In addition, we agreed to establish a separate subsidiary, LGS Innovations LLC (“LGS”), to perform certain work for the U.S. government, and hold government contracts and certain sensitive assets associated with Bell Labs. The SSA, effective December 20, 2006, that

Nokia Liquidity Support Facility

On February 3, 2016, Nokia Corporation and Alcatel Lucent USA Inc. entered into a U.S.$2 billion Revolving Liquidity Support Facility (the “Facility”), which comprises:

Applicable interest rate is 2.40% per annum on drawn amounts. The commitment fee is 30% of 2.40% on available undrawn amounts.

The Facility was made available to Alcatel Lucent USA Inc. to finance the redemption of U.S.$700 million of its 6.750% Senior Notes due 2020, U.S.$500 million of its 8.875% Senior Notes due 2020, and U.S.$650 million of its 4.625% Senior Notes due 2017 (together, the “Notes”), including any related fees, costs and expenses, as well as for general purposes of the Alcatel Lucent Group. The Notes were redeemed in February, 2016 (see Section 6.4 “Liquidity and Capital Resources”).

human resources, marketing and IT services. The transactions covered by the MSA qualify as regulated transactions pursuant to Article L. 225-38 of the French Commercial Code, and consequently will be submitted to the approval of Alcatel-Lucent’s shareholders at the next Annual Shareholders’ Meeting (with shares of our Company held by Nokia excluded from quorum and majority calculations), whereas the transactions covered by the FA do not fall within the scope of that article. Our Board of Directors approved the execution of the MSA, upon the recommendation of the Committee of Independent Directors, and of the FA. The Nokia-appointed directors, that is, Messrs. Risto Siilasmaa, Rajeev Suri, Timo Ihamuotila and Samih Elhage, and Ms. Maria Varsellona, did not participate in the vote concerning the approval of the MSA. (See Section 7.1.4.5 “Committee of Independent Directors – The Committee’s work in early 2016”, and Section 7.2 “Regulated Agreements – Other commitments and related party transactions”).

Both agreements state that services are to be provided at arm’s length conditions, including fair and proportional allocation of commitments and revenues between Alcatel-Lucent and Nokia (and their respective subsidiaries), and of synergies realized by the parties, including synergies achieved through product portfolio decisions. The pricing mechanisms applicable under both agreements are in line with the Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations issued by the Organization for Economic Co-operation and Development (OECD). Both agreements also contain provisions protecting the Alcatel-Lucent Group from any significant increase in costs or fees incurred in connection with the agreements. In addition, the MSA provides for specific information rights to the members of our Company’s Committee of Independent Directors.

A Steering Committee comprised of top managers of Alcatel-Lucent and Nokia, equally represented, supervises the overall performance of these agreements. If a dispute arises under the MSA or the FA that cannot be resolved by the Steering Committee, the matter is escalated to the Nokia Board of Directors and to the Alcatel-Lucent Board of Directors, but in the case of the latter, if the dispute concerns the MSA, with the participation only of the independent directors.

The MSA and the FA were entered into for a twelve-month period, and are automatically renewable for similar periods, except that they may be terminated by either party at any time with three-months’ prior notice.

The description of the MSA and the FA set forth in this subheading is qualified in its entirety by reference to the MSA and the FA, copies of which are filed as Exhibit 4.3 and Exhibit 4.4, respectively, to this annual Report on Form 20-F, and are incorporated herein by reference.