Nokia 2003 Annual Report Download - page 149

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Notes to the Consolidated Financial Statements (Continued)
29. Commitments and contingencies (Continued)
The Group is party to routine litigation incidental to the normal conduct of business. In the
opinion of management the outcome of and liabilities in excess of what has been provided for
related to these proceedings, in the aggregate, are not likely to be material to the financial
condition or results of operations.
As of December 31, 2003, the Group had purchase commitments of EUR 1,051 million (EUR 949
million in 2002) relating to inventory purchase obligations, primarily for purchases in 2004.
30. Leasing contracts
The Group leases office, manufacturing and warehouse space under various non-cancellable
operating leases. Certain contracts contain renewal options for various periods of time.
The future costs for non-cancellable leasing contracts are as follows:
Operating
leases
Leasing payments, EURm
2004 ................................................................ 176
2005 ................................................................ 147
2006 ................................................................ 117
2007 ................................................................ 102
2008 ................................................................ 87
Thereafter ............................................................ 124
Total ................................................................ 753
Rental expense amounted to EUR 285 million in 2003 (EUR 384 million in 2002 and EUR 393
million in 2001).
31. Related party transactions
Nokia Pension Foundation is a separate legal entity that manages and holds in trust the assets for
the Group’s Finnish employee benefit plans; these assets include 0.03% of Nokia’s shares. In 2002
Nokia Pension Foundation was the counterparty to equity swap agreements with the Group. The
equity swaps were entered into to hedge part of the company’s liability relating to future social
security cost on stock options. During 2003, all outstanding transactions were terminated and no
new ones were entered into. During 2002 new transactions were entered into and old ones
terminated based on the hedging need. The transactions and terminations were executed on
standard commercial terms and conditions. The notional amount of the equity swaps outstanding
at December 31, 2002 was EUR 12 million and the fair value EUR 0 million.
At December 31, 2003 the Group had no contribution payment liability to Nokia Pension
Foundation (EUR 14 million in 2002 included in accrued expenses).
At December 31, 2003 the Group had borrowings amounting to EUR 64 million (EUR 66 million in
2002) from Nokia Unterst ¨
utzungskasse GmbH, the Group’s German pension fund, which is a
separate legal entity.
F-40