Nokia 2011 Annual Report Download - page 141

We believe that we will continue to be able to access the capital markets on terms and in amounts that
will be satisfactory to us, and that we will be able to obtain bid and performance bonds, to arrange or
provide customer financing as necessary to support our business and to engage in hedging
transactions on commercially acceptable terms.
We primarily invest in research and development, marketing and building the Nokia brand. However,
over the past few years we have increased our investment in services and software by acquiring
companies with specific technology assets and expertise. In 2011, capital expenditures totaled
EUR 597 million, compared with EUR 679 million in 2010 and EUR 531 million in 2009. The decrease
in 2011 resulted primarily from site consolidation and increased efficiency. 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. In accordance with our current estimate, we expect the amount of
capital expenditures (excluding acquisitions) during 2012 to be approximately EUR 650 million, and to
be funded from cash flow from operating activities.
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, facilitate or provide long-
term financing as a condition to obtain or bid on infrastructure projects.
In response to the tightened credit markets, requests for customer financing and extended payment
terms have increased in volume and scope since 2009. Recent turmoil in the financial markets may
result in more customer financing requests. During 2011, the amount of financing provided directly to
our customers remained at approximately the same level as in 2010. However, we do not currently
intend to significantly increase financing directly 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, typically supported by export credit or guarantee
agencies, and provide extended payment terms to a number of 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
At December 31,
2011 2010 2009
(EUR millions)
Financing commitments ........................ 86 85 99
Outstanding long-term loans (net of allowances and
write-offs) .................................. 60 64 46
Current portion of outstanding long-term loans (net of
allowances and write-offs) ..................... 54 39 14
Outstanding financial guarantees and securities
pledged .................................... — — —
Total ........................................ 200 188 159
In 2011, our total structured financing, outstanding and committed, increased to EUR 200 million from
EUR 188 million in 2010 and primarily consisted of outstanding long-term loans to network operators.
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