Nokia 2012 Annual Report Download - page 264

2012 2011
EURm EURm
Analysis of total provisions at December 31:
Non-current ........................................................... 971 1 175
Current .............................................................. 1 648 1 452
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 2013.
In February 2012, Nokia announced planned changes at its factories in Komarom, Hungary, Reynosa,
Mexico and Salo, Finland to increase efficiency in smartphone manufacturing. In June 2012, Nokia
announced additional actions to align its workforce and operations. The planned actions was expected
to lead to a total reduction of up to 10 000 positions globally by the end of 2013. As part of this Nokia
planned to make significant reductions in certain R&D projects, which resulted in the closure of Ulm in
Germany and Burnaby, Canada; reduce factory operations, including the closure of the factory in Salo;
prioritize sales efforts around certain markets resulting in reducing headcount in certain other markets;
align support functions around Nokia’s focused strategy resulting in a significant reduction in the
number of employees in corporate functions. As a result, Devices & Services recognized restructuring
charges of EUR 550 million in total.
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 restructuring charges of EUR 456 million in total.
In 2012, Location & Commerce announced further plans to reduce its workforce and as a result
recognized restructuring charges of EUR 31 million in total.
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 restructuring charges of EUR 25 million.
In November 2011, Nokia Siemens Networks announced a new strategy to focus on mobile broadband
and services and the launch of an extensive global restructuring program. At the same time, Nokia
Siemens Networks announced its intention to reduce its global workforce by approximately 17 000 by
the end of 2013. Restructuring and other associated expenses incurred in Nokia Siemens Networks in
2012 totaled EUR 1 226 million (EUR 145 million in 2011) including mainly personnel related expenses
as well as expenses arising from the country and contract exits based on Nokia Siemens Networks’
strategy that focuses on key markets and product segments.
The IPR provision is based on estimated potential future settlements for asserted past IPR
infringements. Final resolution of IPR claims generally occurs over several periods.
Material liability provision relates to non-cancellable purchase commitments with suppliers. The
outflows are expected to occur over the next 12 months.
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