Nokia 2011 Annual Report Download - page 274

Warranty Restructuring
IPR
infringements
Project
losses Tax Other Total
EURm EURm EURm EURm EURm EURm EURm
At January 1, 2010 .......... 971 184 390 197 274 702 2718
Translation differences ....... 40 — — — — — 40
Additional provisions ......... 888 228 106 239 40 238 1739
Changes in estimates ........ (43) (44) (15) (52) (13) (87) (254)
Charged to profit and loss
account .................. 845 184 91 187 27 151 1485
Utilized during year .......... (928) (173) (32) (177) (5) (338) (1 653)
At December 31, 2010 ....... 928 195 449 207 296 515 2590
2011 2010
EURm EURm
Analysis of total provisions at December 31:
Non-current ........................................................... 1175 837
Current .............................................................. 1452 1753
Outflows for the warranty provision are generally expected to occur within the next 18 months. Timing
of outflows related to tax provisions is inherently uncertain.
The restructuring provision is mainly related to restructuring activities in Devices & Services and Nokia
Siemens Networks businesses. The majority of outflows related to the restructuring is expected to
occur during 2012.
In April 2011, Nokia announced plans to reduce its global workforce by about 4 000 employees by the
end of 2012, as well as plans to consolidate the company’s research and product development sites so
that each site has a clear role and mission. In September 2011, Nokia announced plans to take further
actions to align its workforce and operations, which includes reductions in Sales and Marketing and
Corporate functions in line with Nokia’s earlier announcement in April 2011. The measures also include
the closure of Nokia’s manufacturing facility in Cluj, Romania, which – together with adjustments to
supply chain operations – has affected approximately 2 200 employees. As a result, Devices &
Services recognized a restructuring provision of EUR 456 million in total.
In 2010, Devices & Services recognized restructuring provisions of EUR 85 million mainly related to
changes in Symbian Smartphones and Services organizations as well as certain corporate functions
that were expected to result in a reduction of up to 1 800 employees globally.
In September 2011, Nokia announced a plan to concentrate the development efforts of the Location &
Commerce business in Berlin, Germany and Boston and Chicago in the U.S., and other supporting
sites and plans to close its operations in Bonn, Germany and Malvern, U.S. As a result, Location &
Commerce recognized a restructuring provision of EUR 25 million.
Restructuring and other associated expenses incurred in Nokia Siemens Networks in 2011 totaled
EUR 145 million (EUR 316 million in 2010) including mainly personnel related expenses as well as
expenses arising from the elimination of overlapping functions, and the realignment of product portfolio
and related replacement of discontinued products in customer sites. These expenses included
EUR 40 million (EUR 173 million in 2010) impacting gross profit, EUR 28 million (EUR 19 million in
2010) research and development expenses, EUR 22 million reversal of provision (EUR 21 million in
2010) in selling and marketing expenses, EUR 36 million (EUR 76 million in 2010) administrative
expenses and EUR 19 million (EUR 27 million in 2010) other operating expenses.
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