6. Reorganization Items — net

Reorganization items represent the net direct and incremental charges related to the Creditor Protection Proceedings such as revenues, expenses including professional fees directly related to the Creditor Protection Proceedings, realized gains and losses, and provisions for losses resulting from the reorganization and restructuring of the business. Reorganization items for the years ended December 31, 2011 and 2010 consisted of the following:


	2011			2010
Professional fees ^(a)	$	(70	)	$	(155	)
Interest income ^(b)		14			13
Lease repudiation^(c)		-			(3	)
Employee incentive plans ^(d)		(20	)		(43	)
Employee severance related claims ^(e)		(79	)		-
Pension, post-retirement and post-employment plans ^(f)		(95	)		(401	)
NNUK pension guarantee ^(g)		-			(634	)
Gain on divestitures - net ^(h)		65			843
Gain on IP sale ^(h)		4,475			-
Loss on liquidation of subsidiaries ⁽ ⁱ ⁾		(1	)		(74	)
EMEA deconsolidation adjustment ^(j)		-			(763	)
U.S. deconsolidation adjustment ^(k)		-			(2,013	)
U.S. debt guarantee ^(l)		-			(150	)
Gain (loss) on impairment or sale of stranded assets ^(m)		1			(140	)
Settlements ⁽ⁿ⁾		(18	)		(2	)
Lease guarantees ^(o)		-			(125	)
Reimbursements from escrow to non-Canadian debtors ^(p)		(59	)		-
Other - net ^(q)		(26	)		(47	)

Total reorganization items - net	$	4,187		$	(3,694	)

(a)	Includes financial, legal, real estate and valuation services directly associated with the Creditor Protection Proceedings.

(b)	Reflects interest earned due to the preservation of cash as a result of the Creditor Protection Proceedings.

(c)	Nortel has rejected a number of leases, resulting in the recognition of non-cash gains and losses.

(d)	Relates to retention and incentive plans for certain key eligible employees deemed essential during the Creditor Protection Proceedings.

(e)	Relates to the estimated allowed claim for employee severance obligations. See notes 8 and 9.

(f)

Includes amounts related to the Settlement Agreement, the termination of the Nortel Networks Supplementary Executive Retirement Plan ("SERP") defined benefit plan, a partial settlement of the Retirement Allowance Plan ("RAP") and adjustments made to estimated allowed claims related to post-employment and post-retirement plans. See note 11.

(g)	Relates to the NNUK pension guarantee. See note 14.

(h)	Relates to the gains on various divestitures (includes direct and incremental costs). See note 2.

(i)	Relates to deconsolidation of certain subsidiaries in connection with liquidation activities during the Creditor Protection Proceedings.

(j)	Relates to the charge due to the deconsolidation of the EMEA Subsidiaries and the application of the cost method of accounting. See note 1.

(k)	Relates to a charge due to the deconsolidation of the U.S. Subsidiaries and the application of the cost method of accounting. See note 1.

(l)	Relates to the U.S. debt guarantee. See note 14.

(m)	Relates to impairment or sale of certain long-lived assets.

(n)	Includes net payments pursuant to settlement agreements since the Petition Date, and in some instances the extinguishment of net pre-petition liabilities.

(o)	Relates to the estimated fair value under ASC 460 of NNL's guarantees of lease obligations related to real estate leases entered into by certain EMEA Subsidiaries and U.S. Subsidiaries. See notes 1 and 14.

(p)	Relates to certain distributions and payments from escrow made to non-Canadian debtors in the course of Creditor Protection Proceedings. See note 2.

(q)	Includes other miscellaneous items directly related to the Creditor Protection Proceedings.

Nortel received $4,511 relating to reorganization items in the year ended December 31, 2011, attributable to $4,601 received from various divestitures and $13 for interest income, partially offset by $69 paid for professional fees, $11 paid for settlement of claims, and $23 paid for employee incentive plans.

Nortel received $741 relating to reorganization items in the year ended December 31, 2010, attributable to $903 received for various divestitures and $10 for interest income, partially offset by $155 paid for professional fees, and $17 paid for employee incentive plans.

See the consolidated statement of cash flows for the non-cash portion of the reorganization items.