LUCENT TECHNOLOGIES
                    Fourth Fiscal Quarter Income Statement
          (Unaudited; Millions of Dollars, except per share amounts)
                                    For Three Months Ended
                         9/30/99      9/30/99(a)  9/30/98(b)   Change(c)
    Revenues              10,575       10,575       8,574       23.3%
    Costs                  5,778        5,706       4,443       28.4%
    Gross Margin           4,797        4,869       4,131       17.9%
      Selling, General
        and Administrative 2,423        2,251       1,972       14.1%
    Research and
      Development          1,145        1,131       1,050        7.7%
    Total Operating
      Expenses             3,568        3,382       3,022       11.9%
    Operating Income       1,229        1,487       1,109       34.1%
    Other Income
      (Expense), net         366           92         (43)        NM
    Interest expense         114          114          71       60.6%
    Income before
      income taxes         1,481        1,465         995       47.2%
    Income tax expense       533          493         348       41.7%
    Net Income               948          972         647       50.2%
    Earnings per
      share - Basic         0.31         0.32        0.21       52.4%
    Earnings per
      share - Diluted       0.30         0.31        0.21       47.6%
    Effective tax rate (%)  36.0         33.7        35.0       (1.3) pts.
    (a) Excludes one-time, pre-tax costs of $258 million ($191 million,
        after-tax) associated with asset  impairments, integration-related
        charges and merger expenses in connection with Ascend Communications
        and Nexabit Networks business combinations.  These costs principally
        include the write-off of Livingston goodwill and existing technology,
        certain product and system integration and direct merger expenses
        related to Nexabit.  In addition, excludes a $274 million pre-tax
        ($167 million, after-tax) gain on the sale of an investment in Juniper
        Networks.
    (b) Excludes one-time, pre-tax charges of $431 million ($427 million,
        after-tax) for in-process research and development related to the
        Company's acquisitions of SDX, MassMedia, LANNET, JNA and Stratus.
    (c) Change is between the three-month period ending 9/30/99 and the
        corresponding 1998 period, excluding one-time items.
    NM - not meaningful