Nokia 2008 Annual Report Download - page 88

increased investment in services and software related intangible assets. Principal capital expenditures
during the three years included production lines, test equipment and computer hardware used
primarily in research and development, office and manufacturing facilities as well as services and
software related intangible assets. We expect the amount of capital expenditures (excluding
acquisitions) during 2009 to be reduced to approximately EUR 700 million, and to be funded from our
cash flow from operations.
Structured Finance
Structured finance includes customer financing and other thirdparty financing. Network operators in
some markets sometimes require their suppliers, including us, to arrange or provide longterm
financing as a condition to obtaining or bidding on infrastructure projects.
The current global financial crisis and the related tightening of the credit markets may restrict the
access of our customers and suppliers to financing. We do not, however, currently intend to
significantly increase financing to our customers which may have an adverse effect on our ability to
compete successfully for their business. Rather, as a strategic market requirement, we plan to
continue to arrange and facilitate financing to our customers, and provide financing and extended
payment terms to a small number of selected customers. Extended payment terms may continue to
result in a material aggregate amount of trade credits, but the associated risk is mitigated by the fact
that the portfolio relates to a variety of customers.
The following table sets forth our total structured finance, outstanding and committed, for the years
indicated.
Structured Finance
2008 2007 2006
At December 31,
(EUR millions)
Financing commitments .............................................. 197 270 164
Outstanding longterm loans (net of allowances and writeoffs) .............. 27 10 19
Current portion of outstanding longterm loans (net of allowances and
writeoffs) ....................................................... 101 156 —
Outstanding financial guarantees and securities pledged .................... 2 130 23
Total.............................................................. 327 566 206
In 2008, our total structured financing, outstanding and committed, decreased to EUR 327 million
from EUR 566 million in 2007 and primarily consisted of committed financing to network operators.
Outstanding financial guarantees given on behalf of third parties decreased to EUR 2 million in 2008
from EUR 130 million in 2007.
In 2007, our total structured financing, outstanding and committed, increased to EUR 566 million
from EUR 206 million in 2006 and primarily consisted of committed financing to network operators.
Outstanding financial guarantees given on behalf of third parties increased from EUR 23 million in
2006 to EUR 130 million in 2007.
See Note 35 (b) to our consolidated financial statements included in Item 18 of this annual report for
further information relating to our committed and outstanding customer financing.
As a strategic market requirement, we plan to continue to provide customer financing and extended
payment terms to a small number of selected customers. We continue to make arrangements with
financial institutions and investors to sell credit risk we have incurred from the commitments and
outstanding loans we have made as well as from the financial guarantees we have given. Should the
demand for customer finance increase in the future, we intend to further mitigate our total structured
financing exposure, market conditions permitting.
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