Nokia 2007 Annual Report Download - page 86

service requirements at least through 2008. The ratings of our short and longterm debt from credit
rating agencies have not changed during the year. The ratings at December 31, 2007, were:
Shortterm Standard & Poor’s A1
Moody’s P1
Longterm Standard & Poor’s A
Moody’s A1
We believe that Nokia 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 Nokia has increased its investment in services and software by acquiring
companies with specific technology assets. In 2007, capital expenditures totaled EUR 715 million
compared with EUR 650 million in 2006 and EUR 607 million in 2005. The increase in 2007 resulted
from increased amount of capital expenditures in machinery and equipment to support our growing
volumes and 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 as well as office and manufacturing facilities.
We expect the amount of capital expenditures during 2008 to be approximately EUR 900 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. Customer financing
continues to be requested by some of our customers in some markets. 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. See “Item 3.D Risk Factors—
Providing customer financing or extending payment terms to customers can be a competitive
requirement and could have a material adverse effect on our results of operations and financial
condition.”
The following table sets forth our total Structured Finance, outstanding and committed, for the years
indicated.
Structured Finance
2007 2006 2005
At December 31,
(EUR millions)
Financing commitments .............................................. 270 164 13
Outstanding longterm loans (net of allowances and writeoffs) .............. 10 19 63
Current portion of outstanding longterm loans (net of allowances and
writeoffs) ....................................................... 156 — —
Outstanding financial guarantees and securities pledged .................... 130 23 —
Total.............................................................. 566 206 63
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.
Financial guarantees given on behalf of third parties of EUR 130 million were issued during 2007.
In 2006, our total structured financing, outstanding and committed, increased to EUR 206 million
85