Nokia 2010 Annual Report Download - page 36

cost competitors, price reductions by existing competitors or otherwise, our business, sales, results of
operations, particularly profitability, and financial condition may be materially adversely affected.
In addition, Nokia Siemens Networks has expanded its enterprise mobility infrastructure as well as its
managed service, systems integration and consulting businesses through acquisitions and
collaborative arrangements, such as partnering with third parties. Nokia Siemens Networks expects to
make further investments in these areas in a focused manner. If Nokia Siemens Networks fails to
increase its competitiveness through these and other measures and if there is a deterioration of
Nokia Siemens Networks financial performance as a result, this may have a material adverse effect on
our business, results of operations and financial condition, and we may need to make further
impairment charges.
Nokia Siemens Networks’ liquidity and its ability to meet its working capital requirements
depend on access to available credit under Nokia Siemens Networks’ credit facilities and other
credit lines. If a significant number of those sources of liquidity were to be unavailable, or
cannot be refinanced when they mature, this would have a material adverse effect on our
business, results of operations and financial condition.
To provide liquidity and meet its working capital requirements, Nokia Siemens Networks is party to
certain credit facilities and has arranged for other committed and uncommitted credit lines. Nokia
Siemens Networks’ ability to draw upon those resources is dependent upon a variety of factors,
including compliance with existing covenants, the absence of any event of default and, with respect
to uncommitted credit lines, the lenders’ perception of Nokia Siemens Networks’ credit quality. The
covenants under Nokia Siemens Networks’ existing credit facilities require it, among other things, to
maintain a maximum gearing ratio. Nokia Siemens Networks’ ability to satisfy these and other
existing covenants may be affected by events beyond its control and there can be no assurance that
Nokia Siemens Networks will be able to comply with its existing covenants in the future. Any failure
to comply with the covenants under any of Nokia Siemens Networks’ existing credit facilities may
constitute a default under its other credit facilities and credit lines and may require Nokia Siemens
Networks to either obtain a waiver from its creditors, renegotiate its credit facilities, raise additional
financing from existing or new shareholders or repay or refinance borrowings in order to avoid the
consequences of a default. There can be no assurance that Nokia Siemens Networks would be able to
obtain such a waiver, to renegotiate its credit facilities, to raise additional financing from existing or
new shareholders or to repay or refinance its borrowings on terms that are acceptable to it, if at all.
In addition, any failure by Nokia Siemens Networks to comply with its existing covenants, any actual
or perceived decline in Nokia Siemens Networks’ business, results of operations or financial condition
or other factors may result in a deterioration of lenders’ perception of Nokia Siemens Networks’ credit
quality, which may negatively impact Nokia Siemens Networks’ ability to renegotiate its credit
facilities, refinance its borrowings or to draw upon its uncommitted credit lines. Although Nokia
Siemens Networks believes it has sufficient resources to fund its operations, if a significant number of
those sources of liquidity were to be unavailable, or cannot be refinanced when they mature, this
could have a material adverse effect on our business, results of operations and financial condition.
Nokia Siemens Networks may be unable to complete its planned acquisition of the majority of
the wireless infrastructure networks assets of Motorola in a timely manner, or at all, and, if
completed, to successfully integrate the acquired business or crosssell Nokia Siemens
Networks’ existing products and services to customers of the acquired business and realize
the expected synergies and benefits of the acquisition.
On July 19, 2010, Nokia Siemens Networks and Motorola jointly announced that Nokia Siemens
Networks and Motorola had entered into an agreement under which Nokia Siemens Networks will
acquire the majority of Motorola’s wireless network infrastructure assets for USD 1.2 billion in cash.
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