Nokia 2012 Annual Report Download - page 279

(c) Liquidity Risk
Liquidity risk is defined as financial distress or extraordinarily high financing costs arising due to a
shortage of liquid funds in a situation where outstanding debt needs to be refinanced or where
business conditions unexpectedly deteriorate and require financing. Transactional liquidity risk is
defined as the risk of executing a financial transaction below fair market value, or not being able to
execute the transaction at all, within a specific period of time.
The objective of liquidity risk management is to maintain sufficient liquidity, and to ensure that it is
available fast enough without endangering its value, in order to avoid uncertainty related to financial
distress at all times.
Nokia aims to secure sufficient liquidity at all times by efficient cash management and by investing in
short-term liquid interest bearing securities. Depending on overall liquidity position Nokia aims to
pre- or refinance upcoming debt maturities before contractual maturity dates. The transactional liquidity
risk is minimized by entering into transactions where proper two-way quotes can be obtained from the
market.
Due to the dynamic nature of the underlying business, Nokia and Nokia Siemens Networks aim at
maintaining flexibility in funding by keeping committed and uncommitted credit lines available. Nokia
and Nokia Siemens Networks manage their respective credit facilities independently and facilities do
not include cross-default clauses between Nokia and Nokia Siemens Networks or any forms of
guarantees from either party. At the end of December 31, 2012, the Group’s committed revolving credit
facilities totaled EUR 2 250 million (EUR 3 500 million in 2011).
The most significant existing long-term funding programs as of December 31, 2012 were:
Issuer(s): Program: Issued
Nokia Corporation ............... Shelf registration statement on file with the
US Securities and Exchange Commission
USD 1 500 million
Nokia Corporation ............... Euro Medium-Term Note Program, totaling
EUR 5 000 million
EUR 1 750 million
The most significant existing short-term funding programs as of December 31, 2012 were:
Issuer(s): Program: Issued
Nokia Corporation ............... Local commercial paper program in Finland,
totaling EUR 750 million
—
Nokia Corporation ............... USCommercial Paper program, totaling
USD 4 000 million
—
Nokia Corporation and Nokia
Finance International B.V. ......
Euro Commercial Paper program, totaling
USD 4 000 million
—
Nokia Siemens Networks Finance
B.V. ........................
Local commercial paper program in Finland,
totaling EUR 500 million
EUR 82 million
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