Nokia 2008 Annual Report Download - page 210

29. Commitments and contingencies
2008 2007
EURm EURm
Collateral for our own commitments
Property under mortgages ................................................ 18 18
Assets pledged ......................................................... 11 29
Contingent liabilities on behalf of Group companies
Other guarantees . . ..................................................... 2 896 2 563
Contingent liabilities on behalf of other companies
Financial guarantees on behalf of third parties ............................... 2130
Other guarantees . . ..................................................... 11
Financing commitments
Customer finance commitments
(1)
.......................................... 197 270
Venture fund commitments
(2)
............................................. 467 251
(1)
See also note 35 b).
(2)
See also note 35 a).
The amounts above represent the maximum principal amount of commitments and contingencies.
Property under mortgages given as collateral for our own commitments include mortgages given to
the Finnish National Board of Customs as a general indemnity of EUR 18 million in 2008 (EUR
18 million in 2007).
Assets pledged for the Group’s own commitments include availableforsale investments of
EUR 10 million in 2008 (EUR 10 million in 2007).
Other guarantees include guarantees of EUR 2 682 million in 2008 (EUR 2 429 million in
2007) provided to certain Nokia Siemens Networks’ customers in the form of bank guarantees,
standby letters of credit and other similar instruments. These instruments entitle the customer to
claim payment as compensation for nonperformance by Nokia of its obligations under network
infrastructure supply agreements. Depending on the nature of the instrument, compensation is
payable either immediately upon request, or subject to independent verification of nonperformance
by Nokia.
Guarantees for loans and other financial commitments on behalf of other companies were
EUR 2 million in 2008 (EUR 130 million in 2007). The amount of 2007 represents guarantees relating
to payment by certain Nokia Siemens Networks’ customers and other third parties under specified
loan facilities between such a customer and other third parties and their creditors. Nokia’s obligations
under such guarantees are released upon the earlier of expiration of the guarantee or early payment
by the customer.
Financing commitments of EUR 197 million in 2008 (EUR 270 million in 2007) are available under loan
facilities negotiated mainly with Nokia Siemens Networks’ customers. Availability of the amounts is
dependent upon the borrower’s continuing compliance with stated financial and operational
covenants and compliance with other administrative terms of the facility. The loan facilities are
primarily available to fund capital expenditure relating to purchases of network infrastructure
equipment and services.
Venture fund commitments of EUR 467 million in 2008 (EUR 251 million in 2007) are financing
commitments to a number of funds making technology related investments. As a limited partner in
these funds Nokia is committed to capital contributions and also entitled to cash distributions
according to respective partnership agreements.
F66
Notes to the Consolidated Financial Statements (Continued)