16. Commitments

Bid, performance-related and other bonds

Nortel has entered into bid, performance-related and other bonds associated with various contracts. Bid bonds generally have a term of less than twelve months, depending on the length of the bid period for the applicable contract. Other bonds primarily relate to warranty, rental, real estate and customs contracts. Performance-related and other bonds generally have a term consistent with the term of the underlying contract. The various contracts to which these bonds apply generally have terms ranging from one to five years. Any potential payments which might become due under these bonds would be related to Nortel's non-performance under the applicable contract. Historically, Nortel has not made material payments under these types of bonds, and as a result of the Creditor Protection Proceedings, does not anticipate that it will be required to make such payments during the pendency of the Creditor Protection Proceedings.

The following table sets forth the maximum potential amount of future payments under bid, performance-related and other bonds, net of the corresponding restricted cash and cash equivalents:


	2011		2010
Bid and performance-related bonds ^(a)	$	3	$	26
Other bonds ^(b)		-		-

Total bid, performance-related and other bonds	$	3	$	26

(a)	Net of restricted cash and cash equivalent amounts of $6 and $5 as of December 31, 2011 and 2010, respectively.

(b)	Net of restricted cash and cash equivalent amounts of $1 and $15 as of December 31, 2011 and 2010, respectively.

Operating leases and other commitments

As of December 31, 2011, the future minimum payments under operating leases and lease costs and related sublease recoveries under contractual agreements consisted of:


	2011
2012		2
2013		1

Total future minimum payments	$	3

Rental expense on operating leases for the years ended December 31, 2011 and 2010, net of applicable sublease income, amounted to $10 and $28, respectively.

Expenses related to outsourcing contracts for the years ended December 31, 2011 and 2010 amounted to $1 and $14, respectively, and were for services provided to Nortel primarily related to a portion of its information services function. The amount payable under Nortel's outsourcing contracts is variable to the extent that Nortel's workforce fluctuates from the baseline levels contained in the contracts.