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NOKIA : Nokia Corporation Q4 and full year 2012 Interim Report



        NOKIA : Nokia Corporation Q4 and full year 2012 Interim Report

Nokia Corporation
Interim report
January 24, 2013 at 13.00 (CET+1)

This is a summary of the fourth quarter and full year 2012 interim report
published today. The complete fourth quarter and full year 2012 interim report
with tables is available at
http://www.results.nokia.com/results/Nokia_results2012Q4e.pdf. Investors
should not rely on summaries of our interim reports only, but should review
the complete interim reports with tables.

FINANCIAL AND OPERATING HIGHLIGHTS

Fourth quarter 2012 highlights:
Nokia Group non-IFRS EPS in Q4 2012 was EUR 0.06; reported EPS was EUR 0.05.
- Nokia Group achieves underlying operating profitability, with Q4 non-IFRS
operating margin of 7.9%.
- Nokia Group strengthened its net cash position by approximately EUR 800
million sequentially, of which approximately EUR 650 million was generated by
Nokia Siemens Networks.
- Devices & Services Q4 non-IFRS operating margin improved quarter-on-quarter
to 1.3%, due to an increase in gross margin as well as a decrease in operating
expenses.
- Nokia Siemens Networks non-IFRS operating margin improved quarter-on-quarter
and year-on-year to a 14.4% in Q4, the highest level of underlying operating
profitability since its formation in April 2007, primarily due to an increase
in gross margin.

Full year 2012 highlights:
Nokia Group full year 2012 non-IFRS EPS was EUR -0.17; reported EPS was EUR
-0.84.
- Nokia Group achieves underlying operating profitability, with full year 2012
non-IFRS operating margin of 0.4%.
- Nokia Group ends 2012 with a strong balance sheet and solid cash position.
Gross cash was EUR 9.9 billion and net cash was EUR 4.4 billion, after
incurring cash outflows related to restructuring of approximately EUR 1.5
billion and dividend payment of approximately EUR 750 million.
- To ensure strategic flexibility, the Nokia Board of Directors will propose
that no dividend payment will be made for 2012 (EUR 0.20 per share for 2011).
Nokia's Q4 financial performance combined with this dividend proposal further
solidifies the company's strong liquidity position.

Commenting on the results, Stephen Elop, Nokia CEO, said:
"We are very encouraged that our team's execution against our business
strategy has started to translate into financial results. Most notably we are
pleased that Nokia Group reached underlying operating profitability in the
fourth quarter and for the full year 2012.

While the first half of 2012 was difficult for Nokia Group, in Q4 2012 we
strengthened our financial position, improved our underlying operating margin
in Devices & Services, introduced the HERE brand to expand our mapping and
location experiences, and drove record profitability in Nokia Siemens
Networks.

We remain focused on moving through our transition, which includes continuing
to improve our product competitiveness, accelerate the way we operate and
manage our costs effectively. All of these efforts are aimed at improving our
financial performance and delivering more value to our shareholders."

SUMMARY FINANCIAL INFORMATION

                      Reported and Non-IFRS            Reported and Non-IFRS
                 fourth quarter 2012 results1,2      full year 2012 results1,2
EUR million                      YoY            QoQ                        YoY
              Q4/2012 Q4/2011 Change Q3/2012 Change      2012     2011 Chan-ge
Nokia Group
Net sales       8 041  10 005   -20%   7 239    11%    30 176   38 659    -22%
Operating
profit            439    -954           -576           -2 303   -1 073
Operating
profit
(non-IFRS)        635     478    33%      78   714%       126    1 825    -93%
EPS, EUR
diluted          0.05   -0.29          -0.26            -0.84    -0.31
EPS, EUR
diluted
(non-IFRS)3      0.06    0.06     0%   -0.07            -0.17     0.29
Net cash from
operating
activities        563     634   -11%    -429             -354    1 137
Net cash and
other liquid
assets4         4 360   5 581   -22%   3 564    22%      4360    5 581    -22%
Devices &
Services5
Net sales       3 854   5 997   -36%   3 563     8%    15 686   23 943    -34%
Smart Devices
net sales       1 225   2 747   -55%     976    26%     5 446   10 820    -50%
Mobile Phones
net sales       2 468   3 040   -19%   2 366     4%     9 436   11 930    -21%
Mobile device
volume
(million
units)           86.3   113.5   -24%    82.9     4%     335.6    417.1    -20%
Smart Devices
volume
(million
units)            6.6    19.6   -66%     6.3     5%      35.1     77.3    -55%
Mobile Phones
volume
(million
units)           79.6    93.9   -15%    76.6     4%     300.5    339.8    -12%
Mobile device
ASP6               45      53   -15%      43     5%        47       57    -18%
Smart Devices
ASP6              186     140    33%     155    20%       155      140     11%
Mobile Phones
ASP6               31      32    -3%      31     0%        31       35    -11%
Operating
profit            276     203    36%    -683           -1 100      884
Operating
profit
(non-IFRS)         52     292   -82%    -263             -703    1 683
Operating
margin %         7.2%    3.4%         -19.2%            -7.0%     3.7%
Operating
margin %
(non-IFRS)       1.3%    4.9%          -7.4%            -4.5%     7.0%
Location &
Commerce5
Net sales         278     306    -9%     265     5%     1 103    1 091      1%
Operating
profit            -56  -1 205            -56             -301   -1 526
Operating
profit
(non-IFRS)         40      29    38%      37     8%       154       48    221%
Operating
margin %       -20.1% -393.8%         -21.1%           -27.3%  -139.9%
Operating
margin %
(non-IFRS)      14.4%    9.5%          14.0%            13.9%     4.4%
Nokia Siemens
Networks5
Net sales       3 988   3 815     5%   3 501    14%    13 779   14 041     -2%
Operating
profit            251      67   275%     182    38%      -799     -300
Operating
profit
(non-IFRS)        575     176   227%     323    78%       778      225    246%
Operating
margin %         6.3%    1.8%           5.2%            -5.8%    -2.1%
Operating
margin %
(non-IFRS)      14.4%    4.6%           9.2%             5.6%     1.6%

Note 1 relating to non-IFRS (also referred to as "underlying") results: In
addition to information on our reported IFRS results, we provide certain
information on a non-IFRS, or underlying business performance, basis.
 Non-IFRS results exclude special items for all periods. In addition, non-IFRS
results exclude intangible asset amortization, other purchase price accounting
related items and inventory value adjustments arising from (i) the formation
of Nokia Siemens Networks and (ii) all business acquisitions completed after
June 30, 2008.  Nokia believes that our non-IFRS results provide meaningful
supplemental information to both management and investors regarding Nokia's
underlying business performance by excluding the above-described items that
may not be indicative of Nokia's business operating results. These non-IFRS
financial measures should not be viewed in isolation or as substitutes to the
equivalent IFRS measure(s), but should be used in conjunction with the most
directly comparable IFRS measure(s) in the reported results. See note 2 below
for information about the exclusions from our non-IFRS results. More
information, including a reconciliation of our Q4 2012 and Q4 2011 non-IFRS
results to our reported results, can be found in our complete Q4 2012 interim
report with tables on pages 18 and 20-24. A reconciliation of our full year
2012 and full year 2011 non-IFRS results to our reported results can be found
in the same report on pages 40-45.  A reconciliation of our Q3 2012 non-IFRS
results to our reported results can be found in our complete Q3 interim report
with tables on pages 19 and 22-26 published on October 18, 2012.
 
Note 2 relating to non-IFRS exclusions:

Q4 2012 - EUR 196 million (net) consisting of:
- EUR 255 million restructuring charge and other associated item in Nokia
Siemens Networks, including EUR 34 million of net charges related to country
and contract exits based on new strategy that focuses on key markets and
product segments,  as well  as an impairment of assets of EUR 2 million.
- EUR 9 million restructuring charge in Location & Commerce
- EUR 2 million restructuring related impairments in Devices & Services
- EUR 75 million net benefit from releases of restructuring provisions in
Devices & Services
- EUR 21 million positive item from a cartel claim settlements in Devices &
Services
- EUR 52 million net gain on sale of Vertu business in Devices & Services
- EUR 79 million net gain on sale of real estate in Devices & Services
- EUR 67 million of intangible asset amortization and other purchase price
accounting related items arising from the formation of Nokia Siemens Networks
and the acquisition of Motorola Solutions' networks assets
- EUR 87 million of intangible asset amortization and other purchase price
accounting related items arising from the acquisition of NAVTEQ
- EUR 1 million of intangible assets amortization and other purchase price
related items arising from the acquisition of Novarra, MetaCarta and Motally
in Devices & Services

Q3 2012 - EUR 654 million (net) consisting of:
- EUR 74 million restructuring charge and other associated items in Nokia
Siemens Networks, including EUR 3 million of net charges related to country
and contract exits based on new strategy that focuses on key markets and
product segments.
- EUR 2 million restructuring charge in Location & Commerce
- EUR 454 million restructuring charge and other associated items in Devices &
Services
- EUR 67 million of intangible asset amortization and other purchase price
accounting related items arising from the formation of Nokia Siemens Networks
and the acquisition of Motorola Solutions' networks assets
- EUR 91 million of intangible asset amortization and other purchase price
accounting related items arising from the acquisition of NAVTEQ
- EUR 1 million of intangible assets amortization and other purchase price
related items arising from the acquisition of Novarra, MetaCarta and Motally
in Devices & Services
- EUR 35 million positive item from a cartel claim settlement in Devices &
Services

Q3 2012 taxes - EUR 157 million non-cash deferred tax expense related to
corporate reorganizations arising from Location & Commerce business
integration.

Q4 2011 - EUR 1 432 million (net) consisting of:
- EUR 1 090 million partial impairment of goodwill in Location & Commerce
- EUR 25 million restructuring charge in Location & Commerce
- EUR 119 million of intangible asset amortization and other purchase price
accounting related items arising from the acquisition of NAVTEQ
- EUR 100 million restructuring charge and EUR 36 million associated
impairments in Devices & Services
- EUR 2 million of intangible assets amortization and other purchase price
related items arising from the acquisition of Novarra, MetaCarta and Motally
in Devices & Services
- EUR 86 million of intangible asset amortization and other purchase price
accounting related items arising from the formation of Nokia Siemens Networks
and the acquisition of Motorola Solutions' networks assets
- EUR 23 million restructuring charge and other associated items in Nokia
Siemens Networks
- EUR 49 million benefit from a cartel claim settlement
 
Note 3 relating to non-IFRS Nokia EPS:
Nokia taxes were unfavorably impacted by Devices & Services taxes as no tax
benefits are recognized for certain Devices & Services deferred tax items. If
Nokia's earlier estimated long-term tax rate of 26% had been applied, non-IFRS
Nokia EPS would have been approximately 0.5 Euro cent higher in Q4 2012. Going
forward on a non-IFRS basis, until a pattern of tax profitability is
reestablished, Nokia expects to record quarterly tax expense of approximately
EUR 50 million related to its Devices & Services business and approximately
EUR 50 million related to its Nokia Siemens Networks business. Nokia expects
to continue to record taxes related to its Location & Commerce business at a
26% rate.
 
Note 4 relating to Nokia net cash and other liquid assets: Calculated as total
cash and other liquid assets less interest-bearing liabilities. For selected
information on Nokia Group interest-bearing liabilities, please see the table
on page 53 of the complete Q4 2012 interim report with tables
 
Note 5 relating to operational and reporting structure: We adopted our current
operational structure during 2011 and have three businesses: Devices &
Services, Location & Commerce and Nokia Siemens Networks and four operating
and reportable segments: Smart Devices and Mobile Phones within Devices &
Services, Location & Commerce and Nokia Siemens Networks. Smart Devices
focuses on smartphones and Mobile Phones focuses on mass market mobile
devices, including Asha full touch smartphones. Devices & Services also
contains Devices & Services Other which includes net sales of our luxury phone
business Vertu through October 12, 2012, spare parts and related cost of sales
and operating expenses, as well as intellectual property related income and
common research and development expenses. In October 2012, we completed the
divestment of Vertu to EQT VI, a European private equity firm.  Location &
Commerce focuses on the development of location-based services and local
commerce. On November 13, 2012, Nokia introduced HERE, the new brand for its
location and mapping service. For financial reporting purposes, the Location &
Commerce business will be renamed as the HERE business, starting with the
first quarter 2013. Nokia Siemens Networks is one of the leading global
providers of telecommunications infrastructure hardware, software and
services. Nokia Siemens Networks completed the acquisition of Motorola
Solutions' networks assets on April 30, 2011. Accordingly, the results of
Nokia Siemens Networks for 2012 are not directly comparable to 2011.
 
Note 6 relating to average selling prices (ASP): Mobile device ASP represents
total Devices & Services net sales (Smart Devices net sales, Mobile Phones net
sales, and Devices & Services Other net sales) divided by total Devices &
Services volumes. Devices & Services Other net sales includes net sales of
Nokia's luxury phone business Vertu through October 12, 2012, spare parts, as
well as intellectual property income. Smart Devices ASP represents Smart
Devices net sales divided by Smart Devices volumes. Mobile Phones ASP
represents Mobile Phones net sales divided by Mobile Phones volumes.

NOKIA OUTLOOK

- Nokia expects its Devices & Services non-IFRS operating margin in the first
quarter 2013 to be approximately negative 2 percent, plus or minus four
percentage points. This outlook is based on Nokia's expectations regarding a
number of factors, including:
- competitive industry dynamics continuing to negatively affect the Mobile
Phones and Smart Devices business units;
- the first quarter being a seasonally weak quarter;
- consumer demand, particularly for our Lumia and Asha smartphones;
- continued ramp up for our new Lumia smartphones;
- expected cost reductions under Devices & Services' restructuring program;
and
- the macroeconomic environment.

- Nokia continues to target to reduce its Devices & Services non-IFRS
operating expenses to an annualized run rate of approximately EUR 3.0 billion
by the end of 2013.
- Nokia expects Location & Commerce non-IFRS operating margin in the first
quarter 2013 to be negative due to lower recognized revenue from internal
sales, which carry higher gross margin, and to a lesser extent by a negative
mix shift within external sales.
- Nokia and Nokia Siemens Networks expect Nokia Siemens Networks non-IFRS
operating margin in the first quarter 2013 to be approximately positive 3
percent, plus or minus four percentage points.  This outlook is based on Nokia
Siemens Networks' expectations regarding a number of factors, including:
- competitive industry dynamics;
- the first quarter being a seasonally weak quarter;
- product and regional mix;
- expected continued improvement under Nokia Siemens Networks' restructuring
program; and
- the macroeconomic environment.

- Nokia Siemens Networks now targets to reduce its non-IFRS annualized
operating expenses and production overheads by more than EUR 1 billion by the
end of 2013, compared to the end of 2011. Nokia Siemens Networks previous
target was to reduce its non-IFRS annualized operating expenses and production
overheads by EUR 1 billion by the end of 2013, compared to the end of 2011.

FOURTH QUARTER 2012 FINANCIAL AND OPERATING DISCUSSION

NOKIA GROUP

See note 5 to our Summary Financial Information table above concerning our
current operational and reporting structure which we adopted during 2011. The
following discussion includes information on a non-IFRS, or underlying
business performance, basis. See notes 1 and 2 to our Summary Financial
Information table above for information about our underlying non-IFRS results
and the non-IFRS exclusions for the periods discussed below.

The following table sets forth the year-on-year and sequential growth rates in
our net sales on a reported basis and at constant currency for the periods
indicated.

FOURTH QUARTER 2012 NET SALES,
REPORTED & CONSTANT CURRENCY1
                                     YoY Change QoQ Change
Group net sales - reported              -20%       11%
Group net sales - constant currency1    -23%       12%
Devices & Services
net sales -reported                     -36%        8%
Devices & Services
net sales - constant currency1          -40%        8%
Nokia Siemens Networks
net sales -reported                      5%        14%
Nokia Siemens Networks
net sales - constant currency1           1%        16%

Note 1: Change in net sales at constant currency excludes the impact of
changes in exchange rates in comparison to the Euro, our reporting currency.

At constant currency Nokia Group's net sales would have decreased 23%
year-on-year and increased 12% sequentially.

The following table sets forth Nokia Group's reported cash flow for the
periods indicated and financial position at the end of the periods indicated,
as well as the year-on-year and sequential growth rates.

NOKIA GROUP CASH FLOW
AND FINANCIAL POSITION
                                        YoY            QoQ
EUR million          Q4/2012 Q4/2011 Change Q3/2012 Change
Net cash from
operating activities     563     634  -11%     -429
Total cash and
other liquid assets    9 909  10 902  -9%     8 779  13%
Net cash and
other liquid assets1   4 360   5 581  -22%    3 564  22%

Note 1: Total cash and other liquid assets minus interest-bearing liabilities.

Year-on-year, net cash and other liquid assets decreased by EUR 1.2 billion in
the fourth quarter 2012, primarily due to cash outflows related to
restructuring of approximately EUR 1.5 billion, the payment of the dividend of
approximately EUR 750 million, cash outflows related to net financial expenses
and taxes as well as capital expenditures. This was partially offset by
positive overall net cash from operating activities, excluding cash outflows
related to restructuring, net financial expenses and taxes, as well as cash
flows related to the receipt of quarterly platform support payments from
Microsoft (which commenced in the fourth quarter 2011).

Sequentially, net cash and other liquid assets increased by EUR 796 million in
the fourth quarter 2012, primarily due to positive Nokia Siemens Networks
operating profits, the receipt of a USD 250 million (approximately EUR 196
million) quarterly platform support payment from Microsoft and proceeds from
real estate sales and business divestments, partially offset by cash outflows
related to restructuring, taxes and net financial expenses as well as capital
expenditures.

In the fourth quarter 2012, Nokia Siemens Networks' contribution to net cash
from operating activities was approximately EUR 740 million, primarily due to
net profit adjusted for non-cash items. At the end of the fourth quarter 2012,
Nokia Siemens Networks' contribution to the Nokia gross cash was EUR 2.4
billion and contribution to Nokia's net cash was EUR 1.3 billion.

Our agreement with Microsoft includes platform support payments from Microsoft
to us as well as software royalty payments from us to Microsoft.  In the
fourth quarter 2012, we received a quarterly platform support payment of USD
250 million (approximately EUR 196 million). Under the terms of the agreement
governing the platform support payments, the amount of each quarterly platform
support payment is USD 250 million. We have a competitive software royalty
structure, which includes annual minimum software royalty commitments. Minimum
software royalty commitments are paid quarterly. Over the life of the
agreement, both the platform support payments and the minimum software royalty
commitments are expected to measure in the billions of US dollars. Over the
life of the agreement the total amount of the platform support payments is
expected to slightly exceed the total amount of the minimum software royalty
commitment payments. To date the amount of platform support payments received
by Nokia has exceeded the amount of minimum royalty commitment payments to
Microsoft. Thus for the remainder of the life of the agreement the total
amount of the minimum software royalty commitment payments are expected to
exceed the total amount of the platform support payments. In accordance with
the terms of the agreement, the platform support payments and annual minimum
software royalty commitment payments continue for a corresponding period of
time.

During fourth quarter 2012, Nokia Group performed its annual goodwill
impairment assessment. The methodology and models used for the annual
impairment assessment are consistent with our second quarter 2012 interim
analysis and our last annual assessment performed during the fourth quarter
2011.  Inputs to the valuation model, such as cash flows, discount rates and
growth rates, have been updated to reflect our most recent projections and
they materially align with the interim analysis conducted during second
quarter 2012.

At the date of our 2012 annual impairment assessment, goodwill amounting to
EUR 530 million, EUR 899 million, EUR 3 270 million and EUR 183 million was
allocated to Mobile Phones, Smart Devices, Location & Commerce and Nokia
Siemens Networks, respectively. No goodwill impairment charge was recorded
during the fourth quarter 2012 as a result of the goodwill impairment
assessment. However a change in any of the key assumptions used in measuring
the recoverable value of our Location & Commerce business could have resulted
in goodwill impairment. While we believe the estimated recoverable values are
reasonable, actual performance in the short-term and long-term could be
materially different from our forecasts, which could impact future estimates
of recoverable value of our reporting units and could result in impairment
charges.

DEVICES & SERVICES

The following table sets forth a summary of the results for our Devices &
Services business for the periods indicated, as well as the year-on-year and
sequential growth rates.

DEVICES & SERVICES
RESULTS SUMMARY
                                             YoY            QoQ
                          Q4/2012 Q4/2011 Change Q3/2012 Change
Net sales (EUR million)1    3 854   5 997   -36%   3 563     8%
Mobile device volume
(million units)              86.3   113.5   -24%    82.9     4%
Mobile device ASP (EUR)        45      53   -15%      43     5%
Non-IFRS gross margin (%)   23.9%   25.8%          18.5%
Non-IFRS operating
expenses (EUR million)        869   1 262   -31%     915    -5%
Non-IFRS operating
margin (%)                   1.3%    4.9%          -7.4%

Note 1: Includes IPR income recognized in Devices & Services Other net sales.

The year-on-year and sequential changes in our Devices & Services net sales,
volumes, average selling prices and gross margin are discussed below under our
Smart Devices and Mobile Phones business units.

Smartphone Volumes
In the fourth quarter 2012, Devices & Services total smartphone volumes were
15.9 million units, composed of:
- 9.3 million Asha full touch smartphones in Mobile Phones
- 4.4 million Lumia smartphones in Smart Devices
- 2.2 million Symbian smartphones in Smart Devices

Devices & Services Other
Both year-on-year and sequentially, Devices & Services Other net sales were
lower in the fourth quarter 2012 primarily due to the divestment of Vertu.
Following the divestment of Vertu, Devices & Services Other net sales are
comprised of IPR income and sales of spare parts. In the fourth quarter 2012,
Devices & Services Other net sales benefitted from non-recurring IPR income of
approximately EUR 50 million. Within Devices & Services Other, we estimate
that our current annual IPR income run-rate is approximately EUR 0.5 billion.

Channel Inventory
We ended the fourth quarter 2012 at the higher end of our normal 4 to 6 week
channel inventory range. On an absolute unit basis channel inventories
increased sequentially.

Net Sales and Volumes by Geographic Area
The following table sets forth the net sales for our Devices & Services
business for the periods indicated, as well as the year-on-year and sequential
growth rates, by geographic area. IPR income is allocated to the geographic
areas contained in this chart.

DEVICES & SERVICES NET SALES
BY GEOGRAPHIC AREA
                                        YoY            QoQ
EUR million          Q4/2012 Q4/2011 Change Q3/2012 Change
Europe                 1 210   1 922   -37%     985    23%
Middle East & Africa     745   1 065   -30%     682     9%
Greater China            213   1 008   -79%     278   -23%
Asia-Pacific             941   1 297   -27%     977    -4%
North America            196      53   270%      36   444%
Latin America            549     652   -16%     605    -9%
Total                  3 854   5 997   -36%   3 563     8%

The following table sets forth the mobile device volumes for our Devices &
Services business for the periods indicated, as well as the year-on-year and
sequential growth rates, by geographic area.

DEVICES & SERVICES MOBILE DEVICE
VOLUMES BY GEOGRAPHIC AREA
                                        YoY            QoQ
million units        Q4/2012 Q4/2011 Change Q3/2012 Change
Europe                  19.4    25.3   -23%    16.8    15%
Middle East & Africa    21.8    25.9   -16%    19.1    14%
Greater China            4.6    14.7   -69%     5.8   -21%
Asia-Pacific            28.7    34.7   -17%    30.1    -5%
North America            0.7     0.5    40%     0.3   133%
Latin America           11.1    12.4   -10%    10.8     3%
Total                   86.3   113.5   -24%    82.9     4%

On a year-on-year basis, the increases in North America net sales and volumes
were primarily due to our Smart Devices business unit, most notably higher net
sales and volumes of our Lumia devices. On a year-on-year basis, the decrease
in Greater China net sales was primarily due to our Smart Devices business
unit, most notably lower net sales of our Symbian devices. On a year-on-year
basis, the decrease in Greater China volumes was primarily due to our Smart
Devices business unit, most notably lower volumes of our Symbian devices as
well as lower volumes of our Mobile Phones devices.

On a sequential basis, the increases in North America net sales and volumes
were primarily due to our Smart Devices business unit, most notably higher net
sales and volumes of our Lumia devices. On a sequential basis, the decreases
in Greater China net sales and volumes were primarily due to lower net sales
and volumes our Mobile Phones devices.

At constant currency Devices & Services' net sales would have decreased 40%
year-on-year and increased 8% sequentially.

Operating Expenses
Devices & Services non-IFRS operating expenses decreased 31% year-on-year and
5% sequentially in the fourth quarter 2012. On a year-on-year basis, operating
expenses related to Mobile Phones and Smart Devices decreased 19% and 34%
respectively, in the fourth quarter 2012. On a sequential basis, operating
expenses related to Mobile Phones decreased by 12% while Smart Devices
operating expenses increased 9%, respectively, in the fourth quarter 2012. In
addition to the factors described below, the year-on-year changes were
affected by the proportionate allocation of operating expenses being affected
by the relative mix of sales and gross profit performance between Mobile
Phones and Smart Devices. This resulted in higher and lower relative
allocations to Mobile Phones and Smart Devices, respectively.

Devices & Services non-IFRS research and development expenses decreased 34%
year-on-year in the fourth quarter 2012. On a sequential basis, Devices &
Services non-IFRS research and development expenses decreased 8% in the fourth
quarter 2012. Both the year-on-year and sequential declines were primarily due
to ramping down Symbian and MeeGo, reductions in certain Mobile Phones related
activities and overall cost controls.

Devices & Services non-IFRS sales and marketing expenses decreased 28%
year-on-year in the fourth quarter 2012. On a year-on-year basis marketing
expenses declined primarily due to lower marketing expenditure on Symbian, a
lower cost base as a result of business divestments and tight cost control,
partially offset by higher marketing expenditure related to our Lumia devices.
On a sequential basis, Devices & Services non-IFRS sales and marketing
expenses increased 3% in the fourth quarter 2012. Sequentially, marketing
expenses increased primarily due to higher expenditure on Lumia and
seasonality, partially offset by business divestments, headcount reductions
and tight cost control.

Devices & Services non-IFRS administrative and general expenses decreased 30%
year-on-year in the fourth quarter 2012 and 35% sequentially. The year-on-year
and sequential decreases are primarily related to cost savings in support
functions, business divestments and shared function cost categorization.

In the fourth quarter 2012, Devices & Services non-IFRS other income and
expense had a negative year-on-year and positive sequential impact on
profitability. On a reported basis, other income and expense was positively
affected in the fourth quarter 2012 primarily as a result of net gains from
the sale of real estate of EUR 79 million, the divestment of the Vertu
business of EUR 52 million and a positive item of EUR 21 million from a cartel
claim settlement, as well as an EUR 75 million net benefit related to
restructuring provision releases as discussed in the "Cost Reduction
Activities and Planned Operational Adjustments" section below.

Operating Margin
The lower year-on-year Devices & Services non-IFRS operating margin in the
fourth quarter 2012 was primarily due to lower net sales and gross margin,
partially offset by lower operating expenses.

The sequentially higher Devices & Services non-IFRS operating margin in the
fourth quarter 2012 was primarily due to higher gross margin and to a lesser
extent lower operating expenses.

Cost Reduction Activities and Planned Operational Adjustments

DEVICES & SERVICES RESTRUCTURING SUMMARY
                                                Q1/2013      2013
                             Cumulative up to (approxi- (approxi-        Total
                    Q4/2012           Q4/2012      mate      mate (approximate
EUR (million) (approximate)     (approximate) estimate)  estimate    estimate)
Restructuring
related                                             Not       Not
charges                 -73             1 400  provided  provided        1 600
Restructuring
related cash
outflows                300             1 100       150       300        1 400

Nokia continues to target to reduce its Devices & Services non-IFRS operating
expenses to an annualized run rate of approximately EUR 3.0 billion by the end
of 2013.

At the end of the fourth quarter 2012, Devices & Services and Corporate Common
had approximately 33 200 employees, a reduction of approximately 16 500
compared to fourth quarter 2011, and approximately 5 000 compared to third
quarter 2012.

In connection with the implementation of our strategy announced in February
2011, we have announced and made a number of changes to our operations. In the
fourth quarter of 2012, we recognized a net benefit of EUR 73 million related
to restructuring provision releases and impairments related to our
restructuring activities in Devices & Services. By the end of the fourth
quarter 2012, we had recorded cumulative Devices & Services restructuring
charges and other associated items of approximately EUR 1.4 billion. In total,
we expect now cumulative Devices & Services restructuring charges of
approximately EUR 1.6 billion before the end of 2013. This is approximately
EUR 200 million less than what we estimated earlier.  

By the end of the fourth quarter 2012, Devices & Services had cumulative
restructuring related cash outflows of approximately EUR 1.1 billion. We
expect Devices & Services restructuring related cash outflows to be
approximately EUR 150 million in first quarter 2013 and approximately EUR 300
million in full year 2013. Of the total expected charges relating to
restructuring activities of approximately EUR 1.6 billion, we expect Devices &
Services non-cash charges to be approximately EUR 200 million. This means that
we also now expect total restructuring related cash outflows to be
approximately EUR 200 million less than what we estimated earlier.

SMART DEVICES

The following table sets forth a summary of the results for our Smart Devices
business unit for the periods indicated, as well as the year-on-year and
sequential growth rates.

SMART DEVICES
RESULTS SUMMARY
                                            YoY            QoQ
                         Q4/2012 Q4/2011 Change Q3/2012 Change
Net sales (EUR million)1   1 225   2 747   -55%     976    26%
Smart Devices volume
(million units)              6.6    19.6   -66%     6.3     5%
Smart Devices ASP (EUR)      186     140    33%     155    20%
Gross margin (%)           18.0%   19.9%          -3.5%
Operating expenses
(EUR million)2               481     732   -34%     441     9%
Contribution margin (%)2  -21.6%   -7.0%         -48.9%

Note 1: Does not include IPR income. IPR income is recognized in Devices &
Services Other net sales.
Note 2: The year-on-year decrease in operating expenses was affected by the
proportionate allocation of operating expenses being affected by the relative
mix of sales and gross profit performance between Mobile Phones and Smart
Devices, resulting in lower relative allocations to Smart Devices in the
first, second, third and fourth quarters 2012. Accordingly, fourth quarter
2012 operating expenses are not directly comparable to fourth quarter 2011
operating expenses.

Net Sales
On a year-on-year basis, the decline in our Smart Devices net sales in the
fourth quarter 2012 was due to lower volumes partially offset by higher ASPs.
On a sequential basis, the increase in our Smart Devices net sales in the
fourth quarter 2012 was due to higher ASPs and volumes.

Volume
During the fourth quarter 2012 we shipped 6.6 million Smart Devices units, of
which 4.4 million were Lumia devices. During the fourth quarter 2012 our Smart
Devices volumes were affected by supply constraints as we ramped up our
production capacity, particularly related to the Lumia 920, which have
continued into the first quarter 2013. Symbian devices accounted for 2.2
million units of our Smart Devices volumes in the fourth quarter 2012. We
expect our Symbian devices to account for a significantly smaller portion of
our overall Smart Devices volumes in the first quarter 2013 and going forward.

The year-on-year decline in our Smart Devices volumes in the fourth quarter
2012 continued to be driven by the strong momentum of competing smartphone
platforms and our portfolio transition from Symbian devices to Lumia devices.
The decline was primarily due to lower Symbian device volumes, partially
offset by higher Lumia device volumes. On a geographical basis, the decrease
in volumes was due to lower volumes in Greater China, Europe, Asia-Pacific,
Middle East and Africa and Latin America, partially offset by an increase in
volumes in North America.

On a sequential basis, the increase in our Smart Devices volumes in the fourth
quarter 2012 was primarily due to higher Lumia device volumes, partially
offset by lower Symbian device volumes. On a geographical basis, the increase
in volumes was primarily due to higher volumes in North America and Europe,
partially offset by lower volumes in all other regions.

Average Selling Price
The year-on-year increase in our Smart Devices ASP in the fourth quarter 2012
was primarily due to a positive mix shift towards sales of our Lumia devices
which carry a higher ASP than our Symbian devices, partially offset by our
pricing actions taken in previous quarters in 2012 related to certain Lumia
devices.

Sequentially, the increase in our Smart Devices ASP in the fourth quarter 2012
was primarily due to a positive mix shift towards sales of our newly launched
Lumia devices which had a higher ASP, partially offset by general price
erosion. The ASP of our Lumia devices in the fourth quarter 2012 was EUR 192,
compared to EUR 160 in the third quarter 2012. The increase in Lumia ASPs was
primarily due to a positive mix shift towards sales of our newly launched
Lumia devices which had a higher ASP.

Gross Margin
The year-on-year decline in our Smart Devices gross margin in the fourth
quarter 2012 was primarily due to greater price erosion than cost erosion,
partially offset by a positive product mix shift towards higher gross margin
Lumia devices as well as the absence of Symbian related allowances which were
recognized in the fourth quarter 2011. From an operating system perspective,
the year-on-year decline in our Smart Devices gross margin in the fourth
quarter 2012 was primarily due to a lower Symbian gross margin.

On a sequential basis, the increase in our Smart Devices gross margin in the
fourth quarter 2012 was primarily due to the absence of approximately EUR 120
million of inventory related allowances which were recognized in the third
quarter 2012 as well as a positive product mix shift towards higher gross
margin devices, and lower Symbian fixed costs per unit. From an operating
system perspective, the sequential increase in our Smart Devices gross margin
in the fourth quarter was primarily due to a higher Lumia gross margin as well
as a higher Symbian gross margin.

Increases or decreases to Smart Devices inventory related allowances may be
required in the future depending on several factors, including consumer demand
and continued ramp up particularly related to our new Lumia devices.

MOBILE PHONES

The following table sets forth a summary of the results for our Mobile Phones
business unit for the periods indicated, as well as the year-on-year and
sequential growth rates.

MOBILE PHONES
RESULTS SUMMARY
                                                        YoY            QoQ
                                     Q4/2012 Q4/2011 Change Q3/2012 Change
Net sales (EUR million)1               2 468   3 040   -19%   2 366     4%
Mobile Phones volume (million units)    79.6    93.9   -15%    76.6     4%
Mobile Phones ASP (EUR)                   31      32    -3%      31     0%
Gross margin (%)                       22.2%   27.7%          21.7%
Operating expenses (EUR million)2        346     429   -19%     393   -12%
Contribution margin (%)2                8.2%   13.5%           4.9%

Note 1: Does not include IPR income. IPR income is recognized in Devices &
Services Other net sales.
Note 2: The year-on-year decrease in operating expenses was affected by the
proportionate allocation of operating expenses being affected by the relative
mix of sales and gross profit performance between Mobile Phones and Smart
Devices, resulting in higher relative allocations to Mobile Phones in the
first, second, third and fourth quarters 2012. Accordingly, fourth quarter
2012 operating expenses are not directly comparable to fourth quarter 2011
operating expenses.

Net Sales
On a year-on-year basis, the decline in our Mobile Phones net sales in the
fourth quarter 2012 was due to lower volumes as well as lower ASPs. On a
sequential basis, the increase in our Mobile Phones net sales in the fourth
quarter 2012 was primarily due to higher volumes.

Volume
During the fourth quarter 2012 we shipped 79.6 million Mobile Phones units, of
which 9.3 million were Asha full touch smartphones.

On a year-on-year basis, the decrease in our Mobile Phones volumes in the
fourth quarter 2012 was primarily due to the decline in volumes of our lower
priced devices that we sell to our customers for below EUR 30. Overall volumes
of our higher priced devices that we sell to our customers for above EUR 30
also declined, despite the addition of Asha full touch smartphone volumes in
the fourth quarter 2012.

On a sequential basis, the increase in our Mobile Phones volumes in the fourth
quarter 2012 was primarily due to the increase in volumes of our lower priced
devices that we sell to our customers for below EUR 30. Volumes of our higher
priced devices that we sell to our customers for above EUR 30 also increased,
partially due to growth in volumes of our Asha full touch smartphones.

Average Selling Price
The year-on-year decline in our Mobile Phones ASP in the fourth quarter 2012
was primarily due to general price erosion and an increased proportion of
sales of lower priced devices, partially offset by the net positive impact
related to foreign currency fluctuations.

On a sequential basis, our Mobile Phones ASP was flat in the fourth quarter
2012 as a mix shift towards higher priced devices, including our full touch
Asha smartphones, as well as the net positive impact from foreign currency
fluctuations were offset by general price erosion.

Gross Margin
The year-on-year decline in our Mobile Phones gross margin in the fourth
quarter 2012 was primarily due to a negative product mix shift towards lower
gross margin devices, as well as the net negative impact related to foreign
currency fluctuations.

On a sequential basis, the increase in our Mobile Phones gross margin in the
fourth quarter 2012 was primarily due to greater cost erosion than price
erosion, partially offset by the net negative impact related to foreign
currency fluctuations.

LOCATION & COMMERCE

On November 13, 2012, Nokia introduced HERE, the new brand for its location
and mapping service. For financial reporting purposes, the Location & Commerce
business will be renamed as the HERE business, starting with the first quarter
2013.

The following table sets forth a summary of the results for Location &
Commerce for the periods indicated, as well as the year-on-year and sequential
growth rates.

LOCATION & COMMERCE
RESULTS SUMMARY
                                                    YoY            QoQ
                                 Q4/2012 Q4/2011 Change Q3/2012 Change
Net sales (EUR millions)             278     306    -9%     265     5%
External net sales (EUR million)     204     200     2%     179    14%
Internal net sales (EUR million)      74     106   -30%      86   -14%
Non-IFRS gross margin (%)          82.0%   77.8%          80.4%
Non-IFRS operating
expenses (EUR million)               189     206    -8%     175     8%
Non-IFRS operating
margin (%)                         14.4%    9.5%          14.0%

Net Sales
In the fourth quarter 2012, the year-on-year increase in external Location &
Commerce net sales was primarily due to higher sales of map content licenses
to vehicle customers due to higher consumer uptake of vehicle navigation
systems. In the fourth quarter 2012, the sequential increase in external
Location & Commerce net sales was primarily due to a higher consumer uptake of
vehicle navigation systems as well as seasonally higher sales to personal
navigation devices customers.

In the fourth quarter 2012, the year-on-year and sequential declines in
internal Location & Commerce net sales were due to declines in sales to our
Smart Devices business unit.

Gross Margin
On a year-on-year basis, the increase in Location & Commerce non-IFRS gross
margin in the fourth quarter 2012 was primarily due to lower deferred cost of
sales associated with internal sales and a higher gross margin within the
vehicle segment, partially offset by lower sales to personal navigation device
customers.

On a sequential basis, the increase in Location & Commerce non-IFRS gross
margin in the fourth quarter 2012 was primarily due to lower deferred cost of
sales associated with internal sales, a higher gross margin within the vehicle
segment, and seasonally higher sales to personal navigation device customers.

Operating Expenses
Location & Commerce non-IFRS research and development expenses decreased 10%
year-on-year due to cost reductions. On a sequential basis, research and
development expenses increased 5% sequentially in the fourth quarter 2012
primarily due to increased project spending relating to software development
and map creation.  

Location & Commerce non-IFRS sales and marketing expenses decreased 8%
year-on-year primarily due to cost reduction actions. On a sequential basis,
sales and marketing expenses increased 22% sequentially in the fourth quarter
due to higher marketing costs and investments to establish the new HERE brand.

Location & Commerce non-IFRS administrative and general expenses increased 6%
year-on-year and increased 12% sequentially in the fourth quarter 2012. On a
year-on-year and sequential basis, the increase was primarily due to the
higher use of services provided by shared support functions.

Location & Commerce non-IFRS other income and expense for the fourth quarter
2012 was approximately zero, compared to expense of EUR 3 million in the
fourth quarter 2011 and approximately zero in the third quarter 2012.

Operating Margin
The year-on-year increase in Location & Commerce non-IFRS operating margin in
the fourth quarter 2012 was primarily due to lower operating expenses and
higher gross margin, partially offset by lower net sales.

The approximately flat sequential Location & Commerce non-IFRS operating
margin in the fourth quarter 2012 was primarily due to higher net sales and
gross margin, almost entirely offset by higher operating expenses.

NOKIA SIEMENS NETWORKS

The following table sets forth a summary of the results for Nokia Siemens
Networks for the periods indicated, as well as the year-on-year and sequential
growth rates.

NOKIA SIEMENS NETWORKS
RESULTS SUMMARY
                                             YoY            QoQ
                          Q4/2012 Q4/2011 Change Q3/2012 Change
Net sales (EUR million)     3 988   3 815     5%   3 501    14%
Non-IFRS gross margin (%)   36.0%   29.2%          32.2%
Non-IFRS operating
expenses (EUR million)        843     943   -11%     797     6%
Non-IFRS operating
margin (%)                  14.4%    4.6%           9.2%

Net Sales
The following table sets forth Nokia Siemens Networks net sales for the
periods indicated, as well as the year-on-year and sequential growth rates, by
geographic area.

NOKIA SIEMENS NETWORKS
NET SALES BY GEOGRAPHIC AREA
                                        YoY            QoQ
EUR million          Q4/2012 Q4/2011 Change Q3/2012 Change
Europe                 1 058   1 272   -17%     918    15%
Middle East & Africa     388     394    -2%     325    19%
Greater China            416     438    -5%     313    33%
Asia-Pacific           1 176     909    29%   1 266    -7%
North America            426     293    45%     285    49%
Latin America            524     509     3%     394    33%
Total                  3 988   3 815     5%   3 501    14%

The year-on-year increase in Nokia Siemens Networks' net sales in the fourth
quarter 2012 was primarily due to higher sales of both infrastructure
equipment and services, partially offset by a decline in sales of business
areas not consistent with Nokia Siemens Networks' strategic focus. On a
regional basis, the year-on-year growth was primarily due to higher net sales
in Asia Pacific, most notably in Japan which saw strong growth in sales of
both infrastructure equipment and services, as well as in North America which
also saw strong growth in sales of both infrastructure equipment and services.
This was partially offset by lower sales in Europe, most notably in Western
Europe due to declines in sales of both infrastructure equipment and services.
In the fourth quarter 2012, Nokia Siemens Networks net sales benefited from
non-recurring IPR income of approximately EUR 30 million.

The sequential increase in Nokia Siemens Networks' net sales in the fourth
quarter 2012 was primarily due to higher sales of both services and
infrastructure equipment consistent with industry seasonality. On a regional
basis, the sequential growth was primarily due to higher net sales in North
America which saw strong growth in sales of both infrastructure equipment and
services, Latin America which saw strong growth in sales of both
infrastructure equipment and services and Greater China which saw strong
growth in sales of both services and infrastructure equipment, partially
offset by lower sales in Asia Pacific, most notably Japan which saw a decline
primarily in sales of infrastructure equipment. In the fourth quarter 2012,
Nokia Siemens Networks net sales benefited from non-recurring IPR income of
approximately EUR 30 million.

At constant currency Nokia Siemens Networks' net sales would have increased 1%
year-on-year and increased 16% sequentially.

Gross Margin
On a year-on-year basis, the increase in Nokia Siemens Networks' non-IFRS
gross margin in the fourth quarter 2012 was due to favorable product and
regional mix towards higher gross margin revenues, particularly in
infrastructure equipment and to a lesser extent services, driven mainly by
Nokia Siemens Networks priority markets including Japan, Korea and North
America, partially offset by lower infrastructure equipment gross margin in
Europe. In addition, the year-on-year increase in Nokia Siemens Networks
non-IFRS gross margin was also due to structural cost savings in its
production overheads as part of its broader cost savings targets.

On a sequential basis, the increase in Nokia Siemens Networks' non-IFRS gross
margin in the fourth quarter 2012 was due to favorable product and regional
mix towards higher gross margin revenues, in both services and infrastructure
equipment, driven mainly by Latin America, North America and Europe, partially
offset by Asia Pacific most notably in Japan. In addition, the sequential
increase in Nokia Siemens Networks non-IFRS gross margin was also due to
seasonally strong high gross margin software sales as well as structural cost
savings in its production overheads as part of its broader cost savings
targets.

Operating Expenses
Nokia Siemens Networks' non-IFRS research and development expenses decreased
10% year-on-year in the fourth quarter 2012 primarily due to improvements in
overall research and development efficiency. Sequentially, Nokia Siemens
Networks' non-IFRS research and development expenses increased 7% primarily
due to higher accrued incentive expenses consistent with Nokia Siemens
Networks' business performance in the fourth quarter 2012, partially offset by
cost control initiatives.

Year-on-year, Nokia Siemens Networks' non-IFRS sales and marketing expenses
decreased 11% in the fourth quarter 2012 primarily due to structural cost
savings, partially offset by higher accrued incentive expenses consistent with
Nokia Siemens Networks' business performance in the fourth quarter 2012. On a
sequential basis, Nokia Siemens Networks non-IFRS sales and marketing expenses
increased 3% in the fourth quarter 2012 primarily due to higher accrued
incentive expenses consistent with Nokia Siemens Networks' business
performance in the fourth quarter 2012, partially offset by structural cost
savings.

Nokia Siemens Networks' non-IFRS administrative and general expenses decreased
13% year-on-year in the fourth quarter 2012 primarily due to structural cost
savings. On a sequential basis, Nokia Siemens Networks non-IFRS administrative
and general expenses increased 5% in the fourth quarter 2012, primarily due
higher accrued incentive expenses consistent with Nokia Siemens Networks'
business performance in the fourth quarter 2012, as well as higher expense
reallocation to other function costs, which more than offset structural cost
savings.

Nokia Siemens Networks' non-IFRS other income and expense for the fourth
quarter 2012 was an expense of EUR 16 million, compared to income of EUR 5
million in the fourth quarter 2011 and expense of EUR 8 million in the third
quarter 2012.  On both a year-on-year and sequential basis, this was primarily
due to changes in the doubtful account allowances.

Operating Margin
The year-on-year increase in Nokia Siemens Networks non-IFRS operating margin
in the fourth quarter 2012 was primarily due to the higher gross margin and
higher net sales, and to a lesser extent, lower operating expenses.

The sequential increase in Nokia Siemens Networks non-IFRS operating margin in
the fourth quarter 2012 was primarily due to the higher net sales and gross
margin, partially offset by higher operating expenses.

Strategy Update and Global Restructuring Program

NOKIA SIEMENS NETWORKS RESTRUCTURING SUMMARY
                        Cumulative
                             up to   Q1/2013                    2014     Total
                Q4/2012    Q4/2012 (approxi-          2013 (approxi- (approxi-
              (approxi-  (approxi-      mate (approxi-mate      mate      mate
EUR (million)     mate)      mate) estimate)      estimate estimate) estimate)
Restructuring
related                                  Not                     Not
charges             257      1 300  provided  Not provided  provided     1 300
Restructuring
related cash
outflows            180        650       200           450       200     1 300

On November 23, 2011, Nokia Siemens Networks announced its strategy to focus
on mobile broadband and services and the launch of an extensive global
restructuring program.

At the end of the fourth quarter 2012, Nokia Siemens Networks had
approximately 58 400 employees, a reduction of approximately 15 300 compared
to fourth quarter 2011, and approximately 2 200 compared to third quarter
2012.

Nokia Siemens Networks now targets to reduce its non-IFRS annualized operating
expenses and production overheads by more than EUR 1 billion by the end of
2013, compared to the end of 2011. Nokia Siemens Networks previous target was
to reduce its non-IFRS annualized operating expenses and production overheads
by EUR 1 billion by the end of 2013, compared to the end of 2011. While these
savings are expected to come largely from organizational streamlining, the
company will also target areas such as real estate, information technology,
product and service procurement costs, overall general and administrative
expenses, and a significant reduction of suppliers in order to further lower
costs and improve quality.

By the end of the fourth quarter of 2012, Nokia Siemens Networks had recorded
cumulative restructuring charges and other associated items of approximately
EUR 1.3 billion related to this restructuring program. In total we now expect
cumulative Nokia Siemens Networks' restructuring charges of approximately EUR
1.3 billion by the end of 2013, virtually all of which have now been
recognized. This is approximately EUR 100 million more than our previous
estimate.

By the end of the fourth quarter 2012, Nokia Siemens Networks had cumulative
restructuring related cash outflows of approximately EUR 650 million related
to this restructuring program. Nokia Siemens Networks expects
restructuring-related cash outflows to be approximately EUR 200 million in the
first quarter 2013, approximately EUR 450 million for the full year 2013, and
approximately EUR 200 million for the full year 2014 related to this
restructuring program. This means that we also now expect total restructuring
related cash outflows to be approximately EUR 100 million more than what we
estimated earlier.

Nokia Siemens Networks is focused on maintaining a strong financial position
and liquidity profile.  Cash generation is a clear priority at Nokia Siemens
Networks, and the company intends to be self-funding in all aspects of its
operations.

Q4 OPERATING HIGHLIGHTS

NOKIA OPERATING HIGHLIGHTS
- Nokia completed its divestment of Vertu, the global leader in luxury mobile
phones, to EQT VI. As part of the transaction, approximately 1 000 employees
have transferred with Vertu. Nokia retains a 10% minority shareholding in
Vertu.
- Nokia entered into a new patent license agreement with Research In Motion.
The agreement results in settlement of all existing patent litigation between
the companies and withdrawal of pending actions in the US, UK and Canada
related to a recent arbitration tribunal decision.
- Nokia sold its head office building in Espoo, Finland, to Finland-based
Exilion and has leased it back from Exilion on a long-term lease. The selling
price was EUR 170 million.
- Nokia completed an offering of EUR 750 million of senior unsecured
convertible bonds due 2017 convertible into ordinary shares of Nokia
Corporation. Nokia intends to use the net proceeds of the offering to
prudently manage its capital structure, proactively address upcoming
maturities while preserving existing pools of liquidity and for general
corporate purposes.

DEVICES & SERVICES OPERATING HIGHLIGHTS
SMART DEVICES
- Nokia commenced shipments of the Nokia Lumia 920 and the Nokia Lumia 820,
the first devices in Nokia's Windows Phone 8 range. The Lumia 920 is the
flagship Windows Phone 8 smartphone, introducing the latest advances in Nokia
PureView imaging innovation. The Lumia 820 brings high end smartphone
innovation like wireless charging, super-sensitive touch displays and new
augmented reality experiences, starting with Nokia City Lens, to a midrange
price point.
- Nokia and Verizon Wireless commenced shipments of the Nokia Lumia 822, which
provides Verizon Wireless customers with the high-end smartphone features of
the Nokia Lumia 820 in a unique design package running on America's largest 4G
LTE network.
- Nokia and China Mobile announced the Lumia 920T, the first TD-SCDMA Windows
Phone in China. With optical image stabilization, world class location and
navigation services, and built-in wireless charging, the Lumia 920T is the
world's most innovative smartphone with the world's largest mobile operator.
- Nokia introduced the Nokia Lumia 620, the third and most affordable in its
range of Windows Phone 8 smartphones. Alongside the flagship Nokia Lumia 920
and mid-range Nokia Lumia 820, the Nokia Lumia 620 comes in a compact,
colorful design and brings Windows Phone 8 to a more youthful audience.

MOBILE PHONES
- Nokia introduced the Nokia Asha 205 and Nokia 206 in both single SIM and
dual SIM versions. Both devices reflect Nokia's heritage by combining stylish
design and long-lasting battery life. The Nokia Asha 205 and Nokia 206 are the
first Mobile Phones devices to include Nokia's exclusive Slam feature, which
enables consumers to share multimedia content such as photos and videos with
nearby friends almost instantly. Slam works with most Bluetooth-enabled mobile
phones without the need to pair devices, and without the recipient needing to
also have Slam.
- Nokia commenced shipments of the Nokia Asha 308 and Asha 309, models
offering a fluid 'swipe' user interface and an open environment for
third-party application development.

LOCATION & COMMERCE OPERATING HIGHLIGHTS
- Location & Commerce introduced a new brand -HERE -for our location-based
products and services and has begun adopting the HERE brand in the portfolio.
HERE is the first location cloud to deliver the world's best maps and location
experiences across multiple screens and operating systems. With the new brand,
HERE, Nokia aims to inspire a new generation of location services and devices
that make the mobile experience more personally significant for people
everywhere. For financial reporting purposes, the Location & Commerce business
will be renamed as the HERE business, starting with the first quarter 2013.
- To further extend its location services, Location & Commerce launched a maps
application for iOS under the HERE brand. Based on HTML5, it includes offline
capabilities, voice-guided walk navigation, and public transport directions.
The application is available for free download from Apple's App Store.
- Nokia announced a strategic partnership with Mozilla to bring new location
experiences to the Firefox OS. Nokia plans to debut a mobile Web version of
HERE Maps for the new Firefox OS next year. The companies are working together
to give people the best mapping experience on Firefox OS.
- Nokia acquired earthmine inc. earthmine's reality capture and processing
technologies will become integral parts of the 3D map making capabilities of
HERE.
- Nokia introduced LiveSight, a technology based on a highly accurate, 3D map
of the world.  LiveSight enables a precise and intuitive augmented reality
experience. Nokia City Lens, which was developed exclusively for Nokia Lumia
devices and uses a phone's camera viewfinder to make discovering the world as
easy as lifting up a phone, is the first application providing a
LiveSight-enabled experience.
- Oracle developed a built-in link between Oracle Fusion Middleware MapViewer
and the Nokia Location Platform (NLP). This link removes the barrier to
customized map integration and extends the benefits of global maps for
business use to Oracle users.

- Nokia's Location & Commerce business continued to strengthen its portfolio
of location-based offerings for both Windows Phone 8 and Windows Phone 7.5:
- Location & Commerce brought its signature applications to the Nokia Lumia
range on Windows Phone 8, including true offline maps for Nokia Maps and Nokia
Drive+ (beta).
- Location & Commerce continued its support for Nokia's Lumia range on Windows
Phone 7.5 with new releases of Nokia Transport and Nokia Drive, extending the
availability of the My Commute feature in Nokia Drive from five to 26
countries.  In addition, Location & Commerce also released a beta update to
Nokia City Lens for Lumia on Windows Phone 7.5, its LiveSight-based augmented
reality application, which turns the phone's camera viewfinder into a new way
to see information about restaurants, shops, hotels and more overlaid onto the
surfaces of buildings for the most intuitive way to find hidden gems.
- After announcing in early 2012 that it is teaming with Groupon to bring
local and national deals to Nokia customers and integrating Groupon Now! deals
into Nokia Maps for the Lumia range in the third quarter, Location & Commerce
now also integrated Groupon Now! deals into its maps desktop offering on
here.com.

NOKIA SIEMENS NETWORKS OPERATING HIGHLIGHTS
- Nokia Siemens Networks continued its mobile broadband deal momentum, adding
commercial LTE deals in the fourth quarter, including: delivering a large,
multi-city, TD-LTE deployment for China Mobile; preparing O2's network in the
UK to deliver LTE services across London and the south-east of England, ahead
of an anticipated rapid launch of 4G in early 2013;  completing the first 4G
pilot with TD-LTE technology in Southern Europe for COTA, a new player in
Spanish telecoms, and Wimax Online; and helping Vodacom become the first
operator to introduce voice and SMS alongside LTE in South Africa.
- Nokia Siemens Networks provided GSM and 3G mobile broadband infrastructure
and services in Central and East Java, Sumatra, and Kalimantan for Indosat in
Indonesia; and deployed Wide Band Adaptive Multi-Rate (WB-AMR) software for
Smart Communications 3G network in Mega Manila in the Philippines, providing
high-definition (HD) voice services to subscribers.
- Nokia Siemens Networks combined three powerful WCDMA software features with
the introduction of its Liquid Radio WCDMA software suite to deliver faster
data uploads and extract the full benefit from network resources and
smartphone capabilities, helping operators improve customer satisfaction and
cut churn while increasing revenue from greater 3G availability. Nokia Siemens
Networks also launched a new package of services to ensure operators have the
most profitable blend of macro and small cells for mobile broadband, as well
as a new second-generation 3G femto access point that provides mobile coverage
in the home or small office.
- Nokia Siemens Networks' Flexi Zone was awarded the 'Best of 4G award' at 4G
World in Chicago, in the Radio Access Network (RAN) and Small Cell Technology
Product category for its RAN & small cell technology product, based on the
company's Liquid Radio architecture, recognizing mobile broadband innovative
design, small cell technology and approach. In a recent proof of concept
project based on Liquid Core architecture, Nokia Siemens Networks and a
leading global operator jointly demonstrated that core virtualization and
cloud management are viable technologies for deployment by operators.
- In Services, Nokia Siemens Networks launched an industry-first capability
center - Service Operations and Management solution - which combines insights
related to service performance with operations functions to enable operators
to manage mobile broadband services and tackle service degradation before
subscribers experience poor quality.
- Nokia Siemens Networks enhanced its award-winning Customer Experience
Management (CEM) on Demand portal by adding three new software content packs
and related services to help operators pinpoint actionable problems on
internet-based maps in seconds and rank the individual customer perception of
any problem they experience, in addition to providing trends in service use,
network performance and customer experience.
- Guangdong Mobile, China Mobile's largest subsidiary, selected Nokia Siemens
Networks' Customer Experience Management engine Serve at Once Intelligence
(SAI) customer and business analysis suite to boost subscriber loyalty and
revenue through analysis of real time customer insights. In December, Nokia
Siemens Networks provided a unified network and service management dashboard
solution as part of its CEM portfolio, including a video wall bigger than a
tennis court, for Bharti Airtel in Gurgaon, India, to give the operator a
complete network view and ensure the best possible service quality and user
experience.
- Nokia Siemens Networks continued to drive towards its strategic focus on
Mobile Broadband, announcing it had reached an agreement to sell its Optical
Networks business to Marlin Equity Partners and its Business Support Systems
business to Redknee. It also completed the divestment of the assets of the
non-core IPTV business to Belgacom and Accenture.

NOKIA IN JANUARY -DECEMBER 2012

The following discussion is of Nokia's reported results. Comparisons are given
to 2011 results, unless otherwise indicated.

See note 5 to our Summary Financial Information table above concerning our
current operational and reporting structure which we adopted during 2011.

In 2012, our net sales decreased 22% to EUR 30.2 billion (EUR 38.7 billion in
2011). Net sales of Devices & Services decreased 34% to EUR 15.7 billion (EUR
23.9 billion). Net sales of Smart Devices decreased 50% to EUR 5 446 million
(EUR 10 820 million). Net sales of Mobile Phones decreased 21% to EUR 9 436
million (EUR 11 930 million). Net sales of Location & Commerce increased 1% to
EUR 1 103 million (EUR 1 091 million). Net sales of Nokia Siemens Networks
decreased 2% to EUR 13.8 billion (EUR 14.0 billion).

In 2012, Europe accounted for 29% (31%) of our net sales, Asia-Pacific 27%
(23%), Greater China 10% (17%), Middle East & Africa 14% (14%), Latin America
13% (11%) and North America 7% (4%). The 10 markets in which we generated the
greatest net sales in 2012 were, in descending order of magnitude, China,
India, Japan, the United States, Brazil, Germany, Russia, the United Kingdom,
Indonesia and Italy together representing approximately 52% of total net sales
in 2012. In comparison, the 10 markets in which we generated the greatest net
sales in 2011 were China, India, Brazil, Russia, Germany, Japan, the United
States, the United Kingdom, Italy and Spain, together representing
approximately 52% of total net sales in 2011.

Our gross margin in 2012 was 27.8%, compared to 29.4% in 2011. Gross profit in
Devices & Services decreased to EUR 3 346 million (gross profit of EUR 6 640
million), representing a gross margin of 21.3% (27.7%). Gross profit of Smart
Devices decreased to EUR 479 million (EUR 2 561 million), representing 8.8% of
Smart Devices net sales (23.7%).  Gross profit of Mobile Phones decreased to
EUR 2 211 million (EUR 3 117 million), representing 23.4% of Mobile Phones net
sales (26.1%).  Gross profit in Location & Commerce was EUR 875 million (gross
profit of EUR 877 million), representing a gross margin of 79.3% (80.4%).
Gross profit in Nokia Siemens Networks increased to EUR 4 169 million (gross
profit EUR 3 842 million), representing a gross margin of 30.3% (27.4%).

Our 2012 operating loss was EUR 2.3 billion, compared with an operating loss
of EUR 1.1 billion in 2011. Our 2012 operating margin was -7.6% (-2.8%). Our
operating loss in 2012 included purchase price accounting items and other
special items of net negative EUR 2.4 billion (net negative EUR 2.9 billion).
Operating loss in Devices & Services was EUR 1 100 million (operating profit
of EUR 884 million), representing an operating margin of -7.0% (3.7%).
 Devices & Services operating profit in 2012 included purchase price
accounting items and other special items of net negative EUR 397 million (net
negative EUR 799 million). Contribution of Smart Devices decreased to EUR -1
560 million (EUR -411 million), representing -28.6% of Smart Devices net sales
(-3.8%).  Contribution of Mobile Phones decreased to EUR 524 million (EUR 1
481 million), representing 5.6% of Mobile Phones net sales (12.4%).  Operating
loss in Location & Commerce was EUR 301 million (operating loss of EUR 1 526
million), representing an operating margin of -27.3% (-139.9%). Location &
Commerce operating loss included purchase price accounting items and other
special items of negative EUR 455 million (net negative EUR 1.6 billion).
 Operating loss in Nokia Siemens Networks was EUR 799 million (operating loss
EUR 300 million), representing an operating margin of -5.8% (-2.1%). Nokia
Siemens Networks operating loss in 2012 included purchase price accounting
items and other special items of net negative EUR 1.6 billion (net negative
EUR 0.5 billion). Group Common Functions expense totaled EUR 103 million in
2012, compared to EUR 131 million in 2011.

Our research and development expenses were EUR 4.8 billion in 2012, compared
to EUR 5.6 billion in 2011. Research and development costs represented 15.8%
of our net sales in 2012 (14.4%). Research and development expenses included
purchase price accounting items and other special items of EUR 378 million in
2012 (EUR 412 million).

In 2012, our selling and marketing expenses were EUR 3.2 billion, compared to
EUR 3.8 billion in 2011. Selling and marketing expenses represented 10.6% of
our net sales in 2012 (9.7%). Selling and marketing expenses included purchase
price accounting items and other special items of EUR 314 million in 2012 (EUR
422 million).

Administrative and general expenses were EUR 1.0 billion in 2012, compared to
EUR 1.1 billion in 2011. Administrative and general expenses were equal to
3.2% of our net sales in 2012 (2.8%). Administrative and general expenses
included no special items in 2012 (EUR 1 million in 2011).

Financial income and expenses, net, was an expense of EUR 340 million in 2012
(EUR 102 million). The higher net expense in 2012 was primarily driven by
higher net costs related to hedging our cash balances and unfavorable
fluctuations in certain foreign currency exchange rates.

Loss before tax was EUR 2.6 billion in 2012 (loss of EUR 1.2 billion). Loss
was EUR 3.8 billion (loss of EUR 1.5 billion), based on a loss of EUR 3.1
billion (loss of EUR 1.2 billion) attributable to equity holders of the parent
and a loss of EUR 0.7 billion (loss of EUR 0.3 billion) attributable to
non-controlling interests. Earnings per share decreased to EUR -0.84 (diluted
and basic), compared to EUR -0.31 (diluted and basic).

The following chart sets out Nokia Group's cash flow for the fiscal years 2012
and 2011 and financial position at the end of each of those years, as well as
the year-on-year growth rates.

NOKIA GROUP CASH FLOW AND FINANCIAL POSITION
                                         YoY
EUR million             2012    2011  Change
Net cash from
operating activities    -354   1 137   -131%
Total cash and
other liquid assets    9 909  10 902     -9%
Net cash and
other liquid assets1   4 360   5 581    -22%

Note 1: Total cash and other liquid assets minus interest-bearing liabilities.

Year-on-year, net cash and other liquid assets decreased by EUR 1.2 billion in
2012, primarily due to cash outflows related to restructuring of approximately
EUR 1.5 billion, the payment of the dividend of approximately EUR 750 million
in 2012 and cash outflows related to net financial expenses and taxes as well
as capital expenditures. This was partially offset by positive overall net
cash from operating activities, excluding cash outflows related to
restructuring, net financial expenses and taxes, as well as cash flows related
to the receipt of quarterly platform support payments from Microsoft (which
commenced in the fourth quarter 2011).

In 2012, Nokia Siemens Networks' contribution to net cash from operating
activities was approximately EUR 1.6 billion, primarily due to net working
capital changes. At the end of 2012, Nokia Siemens Networks' contribution to
the Nokia gross cash was EUR 2.4 billion and contribution to Nokia's net cash
was EUR 1.3 billion.

The following discussion of Nokia's three businesses -Devices & Services,
Location & Commerce and Nokia Siemens Networks -includes information on a
non-IFRS, or underlying business performance, basis. Non-IFRS results exclude
special items for all periods.  In addition, non-IFRS results exclude
intangible asset amortization, other purchase price accounting related items
and inventory value adjustments arising from i) the formation of Nokia Siemens
Networks and ii) all business acquisitions completed after June 30, 2008. See
note 1 to our Summary Financial Information table above for information about
our underlying non-IFRS results.

Devices & Services

The following chart sets out a summary of the results for our Devices &
Services business and the year-on-year growth rates for the fiscal years 2012
and 2011.

DEVICES & SERVICES
RESULTS SUMMARY
                                           YoY
                            2012   2011 Change
Net sales (EUR million)1  15 686 23 943   -34%
Mobile device volume
(million units)            335.6  417.1   -20%
Mobile device ASP (EUR)       47     57   -18%
Reported gross margin (%)  21.3%  27.7%
Non-IFRS gross margin (%)  21.3%  27.7%
Reported operating
expenses (EUR million)     4 001  4 983   -20%
Non-IFRS operating
expenses (EUR million)     3 997  4 974   -20%
Reported operating
margin (%)                 -7.0%   3.7%
Non-IFRS operating
margin (%)                 -4.5%   7.0%

Note 1: Includes IPR income recognized in Devices & Services Other net sales.

Net Sales

The following chart sets out the net sales for our Devices & Services business
and year-on-year growth rates by geographic area for the fiscal years 2012 and
2011. The IPR income referred to in the paragraph above has been allocated to
the geographic areas contained in this chart.

DEVICES & SERVICES NET SALES
BY GEOGRAPHIC AREA
                                      YoY
EUR million            2012   2011 Change
Europe                4 643  7 064   -34%
Middle East & Africa  2 827  4 098   -31%
Greater China         1 610  5 063   -68%
Asia-Pacific          3 811  4 896   -22%
North America           453    354    28%
Latin America         2 342  2 468    -5%
Total                15 686 23 943   -34%

The decline in Devices & Services net sales in 2012 resulted from lower
volumes in both Smart Devices and Mobile Phones as well as a lower ASP in
Mobile Phones, partially offset by a higher ASP in Smart Devices. Devices &
Services Other net sales decreased in 2012 due to lower non-recurring IPR
income, the divestment of Vertu during the fourth quarter 2012 and lower spare
parts sales.

At a constant currency, Devices & Services net sales would have decreased 36%
compared to 2011.

Smart Devices continued to transition as Symbian volumes decreased
sequentially every quarter in 2012. Lumia device volumes grew in the first
half of 2012 by expanding geographical distribution as well as new product
launches, but were negatively affected in the third quarter 2012 by product
transitions. In the fourth quarter 2012, Smart Devices net sales grew
sequentially as Nokia started shipping new Lumia devices, although volumes
were adversely affected by supply constraints as we ramped up our production
capacity, particularly related to the Lumia 920. Smart Devices shipped a total
of 13.4 million Lumia devices in 2012.

During the first half of 2012, Mobile Phones was negatively affected by
aggressive price competition and the lack of affordable full touch devices.
Towards the end of the second quarter 2012 Mobile Phones introduced affordable
Asha full touch smartphones and sold 15.8 million units in the second half
2012.

Our overall Devices & Services net sales in 2012 benefited from the
recognition in Devices & Services Other of approximately EUR 50 million (EUR
450 million in 2011) of non-recurring IPR income. During the last two decades,
we have invested approximately EUR 50 billion in research and development and
built one of the wireless industry's strongest and broadest IPR portfolios,
with approximately 10 000 patent families.  Nokia is a world leader in the
development of handheld device and mobile communications technologies, which
is also demonstrated by our strong patent position. Within Devices & Services
Other, we estimate that our current annual IPR income run-rate is
approximately EUR 0.5 billion.

Volume
The following chart sets out the mobile device volumes for our Devices &
Services business and year-on-year growth rates by geographic area for the
fiscal years 2012 and 2011.

DEVICES & SERVICES MOBILE DEVICE
VOLUMES BY GEOGRAPHIC AREA
                                    YoY
million units         2012  2011 Change
Europe                67.3  87.8   -23%
Middle East & Africa  81.7  94.6   -14%
Greater China         27.5  65.8   -58%
Asia-Pacific         113.5 118.9    -5%
North America          2.2   3.9   -44%
Latin America         43.4  46.1    -6%
Total                335.6 417.1   -20%

On a year-on-year basis, the decline in our total Devices & Services volumes
in 2012 was due to lower volumes in both Smart Devices and Mobile Phones
discussed below.

Average Selling Price
On a year-on-year basis, the overall decrease in our Devices & Services ASP
was due to higher proportion of Mobile Phones volumes and lower Mobile Phones
ASPs, partially offset by higher Smart Devices ASPs.

Gross Margin
On a year-on-year basis, the decline in our Devices & Services non-IFRS gross
margin in 2012 was due to gross margin declines in Smart Devices and to a
lesser degree in Mobile Phones and Devices & Services Other.

Operating Expenses
Devices & Services non-IFRS operating expenses decreased 20% year-on-year in
2012. On a year-on-year basis, operating expenses related to Smart Devices
decreased 32% in 2012, where Mobile Phones remained approximately on the same
level. In addition to the factors described below, the year-on-year changes
were affected by the proportionate allocation of operating expenses being
affected by the relative mix of sales and gross profit performance between
Mobile Phones and Smart Devices. This resulted in higher and lower relative
allocations to Mobile Phones and Smart Devices, respectively.

Devices & Services non-IFRS research and development expenses decreased 24%
year-on-year in 2012 due to declines in Smart Devices and Devices & Services
Other research and development expenses. The decreases in research and
development expenses were due primarily to a focus on priority projects and
cost controls as well as business divestments.

Devices & Services non-IFRS sales and marketing expenses decreased 15%
year-on-year in 2012 primarily due to lower overall business activity,
improved efficiency in general marketing activities and business divestments.

Devices & Services non-IFRS administrative and general expenses decreased 19%
year-on-year in 2012, primarily due structural cost savings as well as
business divestments.

In 2012, Devices & Services non-IFRS other income and expense had a negative
year-on-year impact on profitability. Reported other income and expense was
significantly less negative in 2012. Restructuring charges of EUR 550 million
and related impairments of EUR 30 million, a benefit from cartel claim
settlements of EUR 56 million, a net gain from the sale of a real estate of
EUR 79 million and a net gain from the divestment of the Vertu business of EUR
52 million were recognized in Devices & Services Other in 2012. Restructuring
charges of EUR 456 million, impairment of assets of EUR 90 million, Accenture
deal consideration of EUR 251 million, impairment of shares in an associated
company of EUR 41 million and a benefit from a cartel claim settlement of EUR
49 million were recognized in Devices & Services Other in 2011.

Cost Reduction Activities and Planned Operational Adjustments
Nokia continues to target to reduce its Devices & Services non-IFRS operating
expenses to an annualized run rate of approximately EUR 3.0 billion by the end
of 2013.

On June 14, 2012, we announced targeted investments in key growth areas,
operational changes and significantly increased our cost reduction target. The
measures included the closure of Nokia's manufacturing facility in Salo,
Finland as well as the closure of Nokia's research and development facility in
Ulm, Germany. In addition, Nokia also focused its sales and marketing
activities and streamlined its IT, corporate and support functions to align
with the sharpened strategy.

As of December 31, 2012, we had recognized cumulative net charges in Devices &
Services of approximately EUR 1.4 billion related to restructuring activities,
which included restructuring charges and associated impairments. While the
total extent of the restructuring activities is still to be determined, we
currently anticipate cumulative charges in Devices & Services of approximately
EUR 1.6 billion before the end of 2013. We also expect the total cash outflows
related to our Devices & Services restructuring activities to be approximately
EUR 1.4 billion.

Smart Devices

The following chart sets out a summary of the results for our Smart Devices
business unit for the periods indicated, as well as the year-on-year growth
rates.

SMART DEVICES
RESULTS SUMMARY
                                          YoY
                           2012   2011 Change
Net sales (EUR million)1  5 446 10 820   -50%
Smart Devices volume
(million units)            35.1   77.3   -55%
Smart Devices ASP (EUR)     155    140    11%
Gross margin (%)           8.8%  23.7%
Operating expenses
(EUR million)2            2 018  2 974   -32%
Contribution margin (%)2 -28.6%  -3.8%

Note 1: Does not include IPR income. IPR income is recognized in Devices &
Services Other net sales.
Note 2: The year-on-year decrease in operating expenses was affected by the
proportionate allocation of operating expenses being affected by the relative
mix of sales and gross profit performance between Mobile Phones and Smart
Devices, resulting in lower relative allocations to Smart Devices in 2012.
Accordingly, 2012 operating expenses are not directly comparable to 2011
operating expenses.

Net Sales
The year-on-year decline in our Smart Devices net sales in 2012 was primarily
due to significantly lower volumes, partially offset by higher ASPs.

Volume
The year-on-year decrease in our Smart Device volumes in 2012 was driven by
the strong momentum of competing smartphone platforms relative to our Symbian
devices. On a geographical basis, the decrease in volumes was due to lower
volumes in Greater China, Europe, Asia Pacific, Middle East &Africa and Latin
America, partially offset by slightly higher volumes in North America.

Average Selling Price
The year-on-year increase in our Smart Devices ASP in 2012 was primarily due
to a positive mix shift towards sales of our Lumia devices which had a higher
ASP, a positive impact related to deferred revenue on services sold in
combination with our devices as well as the net positive impact related to
foreign currency fluctuations, partially offset by general price erosion and
our pricing actions.

Gross Margin
The year-on-year decline in our Smart Devices gross margin in 2012 was
primarily due to greater price erosion than cost erosion due to the
competitive environment, inventory related allowances of EUR 220 million in
the second quarter 2012 and EUR 120 million in the third quarter 2012, higher
fixed costs per unit because of lower sales volumes, and a negative product
mix shift towards lower gross margin devices.

Mobile Phones

The following chart sets out a summary of the results for our Mobile Phones
business unit and year-on-year growth rates for the fiscal years 2012 and
2011.

MOBILE PHONES
RESULTS SUMMARY
                                                     YoY
                                      2012   2011 Change
Net sales (EUR million)1             9 436 11 930   -21%
Mobile Phones volume (million units)   300    340   -12%
Mobile Phones ASP (EUR)                 31     35   -11%
Gross margin (%)                     23.4%  26.1%
Operating expenses (EUR million)2    1 661  1 640     1%
Contribution margin (%)2              5.6%  12.4%

Note 1: Does not include IPR income. IPR income is recognized in Devices &
Services Other net sales.
Note 2: The year-on-year decrease in operating expenses was affected by the
proportionate allocation of operating expenses being affected by the relative
mix of sales and gross profit performance between Mobile Phones and Smart
Devices, resulting in higher relative allocations to Mobile Phones in 2012.
Accordingly, 2012 operating expenses are not directly comparable to 2011
operating expenses.

Net Sales
On a year-on-year basis, our Mobile Phones net sales decreased in 2012 due to
lower volumes and ASPs.

Volume
The year-on-year decline in our Mobile Phones volumes in 2012 was due to the
challenging competitive environment and market environment, which negatively
affected our volumes across the Mobile Phones portfolio. In particular, low
end smartphones powered by the Android operating system proliferated at lower
price points throughout 2012. During the second half of 2012, Mobile Phones
started shipping Asha full touch smartphones, which improved the
competitiveness of our higher end Mobile Phones product portfolio. During the
second half of 2012 Mobile Phones shipped 15.8 million Asha full touch
smartphones.

Average Selling Price
The year-on-year decline in our Mobile Phones ASP in 2012 was primarily due to
a higher proportion of sales of lower priced devices and general price
erosion.

Gross Margin
The year-on-year decline in our Mobile Phones gross margin in 2012 was
primarily due to a higher proportion of sales of lower gross margin devices as
well as the net negative impact related to foreign currency fluctuations.

Location & Commerce

On November 13, 2012, Nokia introduced HERE, the new brand for its location
and mapping service. For financial reporting purposes, the Location & Commerce
business will be renamed as the HERE business, starting with the first quarter
2013.

The following chart sets out a summary of the results for Location & Commerce
and year-on-year growth rates for the fiscal years 2012 and 2011.

LOCATION & COMMERCE
RESULTS SUMMARY
                                                            YoY
                                            2012    2011 Change
Net sales (EUR millions)                   1 103   1 091     1%
         External net sales (EUR million)    729     698     4%
         Internal net sales (EUR million)    374     393    -5%
Reported gross margin (%)                  79.3%   80.4%
Non-IFRS gross margin (%)                  79.3%   80.4%
Reported operating expenses (EUR million)  1 146   1 285   -11%
Non-IFRS operating
expenses (EUR millions)                      723     827   -13%
Reported operating margin (%)             -27.3% -139.9%
Non-IFRS operating
margin (%)                                 13.9%    4.4%

Net Sales
The year-on-year increase in Location & Commerce external net sales in 2012
was primarily driven by higher sales of map content licenses to vehicle
customers, partially offset by lower sales to personal navigation devices
customers.

The year-on-year decline in Location & Commerce internal net sales was
primarily due to lower sales related to the large decline in Symbian volumes
experienced since 2010.

Gross Margin
On a year-on-year basis, the decrease in Location & Commerce non-IFRS gross
margin in 2012 was primarily due to lower personal navigation device sales
which carry a higher gross margin, partially offset by higher gross margin in
the vehicle segment.

Operating Expenses
Location & Commerce non-IFRS research and development expenses decreased 14%
primarily driven by a focus on cost controls, lower project spending and a
shift of research and development operating expenses to cost of sales as a
result of the divestiture of the media advertising business.

Location & Commerce non-IFRS sales and marketing expenses decreased 18%
primarily driven by a focus on cost controls and lower marketing spending.

Location & Commerce non-IFRS administrative and general expenses increased 13%
primarily driven by higher use of services provided by shared support
functions.

Nokia Siemens Networks

Nokia Siemens Networks completed the acquisition of Motorola Solutions'
networks assets on April 30, 2011. Accordingly, the results of Nokia Siemens
Networks for 2012 are not directly comparable to 2011.

The following chart sets out a summary of the results for Nokia Siemens
Networks and year-on-year growth rates for fiscal years 2012 and 2011.

NOKIA SIEMENS NETWORKS
RESULTS SUMMARY
                                                           YoY
                                            2012   2011 Change
Net sales (EUR million)                   13 779 14 041    -2%
Reported gross margin (%)                  30.3%  27.4%
Non-IFRS gross margin (%)                  30.7%  27.4%
Reported operating expenses (EUR million)  3 678  4 030    -9%
Non-IFRS operating
expenses (EUR million)                     3 413  3 662    -7%
Reported operating margin (%)              -5.8%  -2.1%
Non-IFRS operating
margin (%)                                  5.6%   1.6%

Net Sales
The following chart sets out Nokia Siemens Networks net sales and year-on-year
growth rates, by geographic area for fiscal years 2012 and 2011.

NOKIA SIEMENS NETWORKS
NET SALES BY GEOGRAPHIC AREA
                                      YoY
EUR millions           2012   2011 Change
Europe                3 896  4 469   -13%
Middle East & Africa  1 287  1 391    -7%
Greater China         1 278  1 465   -13%
Asia-Pacific          4 347  3 848    13%
North America         1 294   1077    20%
Latin America         1 677  1 791    -6%
Total                13 779 14 041    -2%

The year-on-year decline in Nokia Siemens Networks' net sales was primarily
due to the decline in sales of business areas not consistent with Nokia
Siemens Networks' strategic focus and lower infrastructure equipment sales,
partially offset by higher services net sales. On a full year basis, services
represented slightly more than 50% of Nokia Siemens Networks' net sales.

At constant currency, Nokia Siemens Networks' net sales would have decreased
5% year-on-year in 2012.

Gross Margin
The increase in Nokia Siemens Networks non-IFRS gross margin in 2012 was
primarily due to the better gross margin in both infrastructure equipment and
services. Within infrastructure equipment the increase was primarily due to
favorable region and product mix consistent with Nokia Siemens Networks'
strategy to focus on mobile broadband. Within services, the increase was
primarily due to structural cost actions and efforts to align the services
business with the focused strategy.

Operating Expenses
Nokia Siemens Networks' non-IFRS research and development expenses decreased
5% year-on-year in 2012 primarily due to structural cost saving actions and
overall research and development efficiency.

Nokia Siemens Networks' non-IFRS sales and marketing expenses decreased 11%
year-on-year in 2012 primarily due to structural cost saving actions.

Nokia Siemens Networks' non-IFRS administrative and general expenses decreased
8% year-on-year in 2012 primarily due to structural cost saving actions.

Nokia Siemens Networks' non-IFRS other income decreased to an expense
year-on-year in 2012 due primarily to due to changes in the doubtful account
allowances. Reported other income and expense for 2012 was an expense of EUR 1
290 million. The year-on-year increase of the expense was mainly driven by
increased restructuring and associated charges.

Operating Margin
The higher year-on-year Nokia Siemens Networks non-IFRS operating margin in
2012 primarily reflected the higher gross margin and lower operating expenses.

Strategy Update and Global Restructuring Program
On November 23, 2011 Nokia Siemens Networks announced its strategy to focus on
mobile broadband and services and the launch of an extensive global
restructuring program.

At the end of 2012, Nokia Siemens Networks had approximately 58 400 employees,
a reduction of approximately 15 300 compared to end of 2011.

Nokia Siemens Networks now targets to reduce its non-IFRS annualized operating
expenses and production overheads by more than EUR 1 billion by the end of
2013, compared to the end of 2011. Nokia Siemens Networks previous target was
to reduce its non-IFRS annualized operating expenses and production overheads
by EUR 1 billion by the end of 2013, compared to the end of 2011. While these
savings are expected to come largely from organizational streamlining, the
company will also target areas such as real estate, information technology,
product and service procurement costs, overall general and administrative
expenses, and a significant reduction of suppliers in order to further lower
costs and improve quality.

During 2012, Nokia Siemens Networks recognized restructuring charges and other
associated items of EUR 1.3 billion related to this restructuring program,
resulting in cumulative charges of approximately EUR 1.3 billion. In total we
now expect cumulative Nokia Siemens Networks restructuring charges of
approximately EUR 1.3 billion by the end of 2013, virtually all of which have
now been recognized. By the end of 2012, Nokia Siemens Networks had cumulative
restructuring related cash outflows of approximately EUR 650 million related
to this restructuring program. Nokia Siemens Networks expects
restructuring-related cash outflows to be approximately EUR 450 million for
the full year 2013, and approximately EUR 200 million for the full year 2014
related to this restructuring program.

Nokia Siemens Networks is focused on maintaining a strong financial position
and liquidity profile.  Cash generation is a clear priority at Nokia Siemens
Networks, and the company intends to be self-funding in all aspects of its
operations.

FULL YEAR 2012 OPERATING HIGHLIGHTS

NOKIA OPERATING HIGHLIGHTS
- Nokia outlined a range of actions -planned or since completed -aimed at
sharpening its strategy, improving its operating model and returning the
company to profitable growth. The measures included:
- Reductions within certain research and development projects, resulting in
the closure of Nokia's facilities in Ulm, Germany and Burnaby, Canada;
- The transfer of device assembly from our production facilities in Komarom in
Hungary and Reynosa in Mexico to Nokia facilities in Asia, where the majority
of component suppliers are based. The Komarom and Reynosa facilities are now
focusing on smartphone product customization.
- The consolidation of certain manufacturing operations, resulting in the
closure of its manufacturing facility in Salo, Finland;
- Nokia, and De' Longhi SpA, a global leader in household appliances, agreed
terms for De' Longhi to acquire Nokia's production facility in Cluj, Romania.
- Focusing of marketing and sales activities, including prioritizing key
markets;
- Streamlining of corporate and support functions.

Since the end of 2012, Nokia has also announced a range of planned changes to
streamline its IT organization. Nokia believes these changes will increase
operational efficiency and reduce operating costs, creating an IT organization
appropriate for Nokia's current size and scope. As part of the planned
changes, Nokia plans to transfer certain activities and up to 820 employees to
HCL Technologies and TATA Consultancy Services.
- There were various changes in the Nokia Leadership Team during 2012. Changes
included:
- Marko Ahtisaari was appointed Executive Vice President of Design and member
of the Nokia Leadership Team as from February 1, 2012.
- Juha Putkiranta was appointed Executive Vice President of Operations and
member of the Nokia Leadership Team as from July 1, 2012.
- Timo Toikkanen was appointed Executive Vice President of Mobile Phones and
member of the Nokia Leadership Team as from July 1, 2012.
- Chris Weber was appointed Executive Vice President of Sales and Marketing
and member of the Nokia Leadership Team as from July 1, 2012.

Further, during 2012, the following members resigned from the Nokia Leadership
Team:
- Jerri DeVard, formerly Executive Vice President and Chief Marketing Officer,
resigned from the Nokia Leadership Team effective as from July 1, 2012.
- Colin Giles, formerly Executive Vice President of Sales, resigned from the
Nokia Leadership Team effective as from July 1, 2012.
- Mary T. McDowell, formerly Executive Vice President of Mobile Phones
resigned from the Nokia Leadership Team effective as from July 1, 2012.
- Niklas Savander, formerly Executive Vice President of Markets resigned from
the Nokia Leadership Team effective as from July 1, 2012.
- Esko Aho, formerly Executive Vice President of Corporate Relations and
Responsibility resigned from the Nokia Leadership Team.

- Nokia completed the acquisition of all technologies and intellectual
property from Scalado AB to strengthen Nokia's leading position in mobile
imaging. As part of the transaction, approximately 50 world-class imaging
specialists transferred to Nokia.
- Nokia divested Vertu, its luxury mobile phones business to EQT VI, a
European private equity firm.
- Nokia started development of a new manufacturing facility in Vietnam to
serve the feature phone market.
- Nokia was again selected as a component of the Dow Jones Sustainability
World Index (DJSI) and Dow Jones
Sustainability Europe Index in the DJSI 2012 Review.
- Nokia was included by the Carbon Disclosure Project (CDP) in the Carbon
Disclosure Leadership Index and the Carbon Performance Leadership Index,
receiving recognition both for its disclosure of climate change information
and the action it is taking to reduce its emissions.

DEVICES & SERVICES OPERATING HIGHLIGHTS
SMART DEVICES
- Nokia continued to expand the breadth and depth of its Nokia Lumia range of
Windows Phone 7-based smartphones and brought the range to new markets,
including China and the United States.
- In September 2012, Nokia launched its first products on Windows Phone 8, the
latest generation of the Windows Phone platform. Nokia started selling the
first products running Windows Phone 8 -the flagship Nokia Lumia 920 and the
mid-range Nokia Lumia 820 - in select markets including China, Germany, the
United Kingdom and the United States Nokia has also launched in markets such
as India as well as introduced the Nokia 620 in select markets, with Lumia
smartphones now available in more than 90 markets around the world. Nokia's
first Windows Phone 8 products showcase the best of Windows Phone 8, which for
the first time shares many core technologies with the wider Windows ecosystem.
Windows Phone 8 also introduced multi-core processor support, NFC (near field
communication) technology, and support for higher screen resolutions, as well
as increased language support and new capabilities in imaging and application.
- Nokia continued to support the growth of the Windows Phone ecosystem. The
number of applications in the Windows Phone Marketplace grew to more than 125
000 by the end of 2012, up from more than 50 000 at the start of the year.
- During our transition to Windows Phone through 2012, we continued to ship
devices based on Symbian. The Nokia 808 PureView, a device which showcases our
imaging capabilities and which came to market in mid-2012, was the last
Symbian device from Nokia.
- Nokia announced a range of wireless charging accessories and partnerships.
The Fatboy Recharge Pillow provides an alternative way to charge the Lumia 920
and Lumia 820 wirelessly, while HARMAN'S JBL brand introduced the JBL PowerUP,
a wireless charging docking station with high quality audio in retro styling
and the JBL PlayUp for high quality portable audio. Nokia also agreed with
Virgin Atlantic to put wireless charging stations in its London Heathrow
Clubhouse lounge and with Coffee Bean & Tea Leaf to put charging plates on
tables in some of their cafés.
- Nokia announced the launch of Nokia Music in the United States, further
expanding the number of markets in which the free music streaming service is
now available. Nokia Music is a free mobile experience exclusive to Nokia
Lumia handsets, providing consumers with a simple and delightful way to
discover and enjoy music.

MOBILE PHONES
- Mobile Phones continued to expand Nokia's Asha range of products with
technological and design innovations, including launching full touch models
such as the Asha 308 and Asha 309. These two models offer a fluid 'swipe' user
interface and an open environment for third-party application development
-characteristics which helped earn the complete Asha touch range full
smartphone classification from global market research companies and analysts
such as GfK.
- Nokia introduced the Nokia 206 in both a single and dual SIM version. The
Nokia 206 includes Nokia's exclusive Slam feature, which enables consumers to
share multimedia content like photos and videos with nearby friends almost
instantly. Slam works with most Bluetooth-enabled mobile phones without the
need to pair devices, and without the recipient needing to also have Slam.
- Nokia unveiled Nokia Life+, the latest evolution of its widely-used Nokia
Life service. Nokia Life+ is a Web application, which will provide millions of
people with valuable information on education, health and "infotainment"
topics. Nokia Life+ will be supported by the Nokia Asha 308 and Nokia Asha 309
smartphones alongside a wide range of Nokia mobile phones.
- The Nokia Xpress browser, Nokia's cloud-accelerated browser for Series 40
devices, continued to grow rapidly with support for 38 devices in 87 languages
and more than 200 countries. The Nokia Xpress browser is the first of its kind
to support web apps, and since the release of the SDK in 2011, developer
support has continued to grow.

LOCATION & COMMERCE OPERATING HIGHLIGHTS
- Nokia introduced a new brand -HERE -for our location-based products and
services and has begun adopting the HERE brand in the portfolio. HERE is the
first location cloud to deliver the world's best maps and location experiences
across multiple screens and operating systems.
- To further extend its location services, Nokia launched a maps application
for iOS under the HERE brand.
- Nokia announced a strategic partnership with Mozilla to bring new location
experiences to the Firefox OS.
- Nokia acquired earthmine inc. earthmine's reality capture and processing
technologies will become integral parts of the 3D map making capabilities of
HERE,
- Nokia introduced LiveSight, a technology based on a highly accurate, 3D map
of the world.  LiveSight provides a precise and intuitive augmented reality
experience.
- Location & Commerce continued to grow the Nokia Location Platform (NLP), an
advanced location platform which offers numerous opportunities upon which
third parties can build. During the year, among others, Amazon became an NLP
licensee for maps and geocoding and Ford's research organization selected the
NLP to leverage Nokia's high-quality global location content as well as
scalable cloud services and APIs.
- As part of its commitment to strengthen the Windows Phone ecosystem, Nokia
integrated the NLP into Windows Phone 8 OS to power location-based experiences
built for Windows Phone 8, including access to offline maps
- Location & Commerce agreed a partnership with Groupon to bring local and
national deals to Nokia customer and released a new version of Nokia Maps for
the Lumia range that integrates Groupon Now! deals into the app.
- Location & Commerce introduced My Commute, a new feature of Nokia Drive that
learns people's driving preferences and uses information about the latest
traffic conditions to help people choose between the different routes they
usually take to get to the places they travel most.
- Location & Commerce brought Nokia City Lens, an augmented reality
application, to the Nokia Lumia smartphone range and continued to update it
throughout the year.
- Location & Commerce released Nokia Transport, a mobile application for the
Lumia range providing underground, tram, suburban train and bus directions for
more than 500 cities in 46 countries in a convenient way, and further updated
the application during the year.
- Location & Commerce continued to build partnerships with a number of major
industry players, particularly in the area of automotive-grade maps content
and solutions. We are providing content to partners including Audi, BMW
Chrysler, Dacia, ESRI, Ford, Garmin, Hyundai, Kia, Mercedes, Nikon, Pioneer,
Scania, Toyota and Volkswagen.
- In indoor mapping, Location & Commerce continued to steadily increase its
coverage of venues and buildings around the world and now covers 5 100 venues
and altogether 18 000 buildings in 40 countries.

NOKIA SIEMENS NETWORKS OPERATING HIGHLIGHTS
- Nokia Siemens Networks added significant commercial LTE deals during 2012,
including; a major contract with SOFTBANK MOBILE Corp. in Japan to upgrade its
mobile broadband capacity across the country, supplying, deploying and
integrating its HSPA+ (3G) and FDD LTE (4G) networks; deploying  the world's
first multi-technology, multi-vendor self-organizing 3G and 4G mobile networks
for KDDI, also in Japan; and supporting T-Mobile's 4G network evolution plan
with the modernization of its GSM, HSPA+ core and radio access infrastructure
in key markets in the USA to improve existing voice and data coverage.
- Nokia Siemens Networks had a total of 77 LTE deals by the 2012 year end,
with other mobile broadband deals including with: Bharti Airtel in India;
Telkomsel in Indonesia; KT in Korea;  Singapore's StarHub; Tele2 in Estonia,
Latvia and Lithuania;  Hrvatski Telekom in Croatia; T-Mobile and Orange in
Poland; Polkomtel in Poland; Si.mobil in Slovenia; COTA and Wimax Online in
Spain; Zain KSA in Saudi Arabia; TOT in Thailand; Optus in Australia; Mobile
TeleSystems in Russia; O2 in the UK; Vodacom in South Africa; Saudi Telecom
Company;  and China Mobile.
- Nokia Siemens Networks demonstrated its commitment to staying at the
forefront of mobile broadband innovation with the opening of a mobile
broadband testing and development facility which opened in Silicon Valley in
the United States.  In other LTE technology developments, Nokia Siemens
Networks: launched its "FlexiZone" approach to mobile broadband coverage,
which will deliver faster and more flexible 4G across areas with a very high
user density more efficiently and cost effectively; and expanded its
portfolio, to enable smooth 4G rollouts using the 'Digital Dividend' in the
Asia Pacific region, Latin America and other parts of the world.
- Nokia Siemens Networks also launched a new CDMA base station, bringing the
benefits of its globally recognized Flexi Multiradio Base Station platform to
CDMA operators whilst reducing base station operating costs by up to 70%, and
with 4G upgrade capability underlining Nokia Siemens Networks' commitment to
mobile broadband technology evolution.
- Nokia Siemens Networks unveiled its 'Intelligent IP Edge', the world's most
advanced network gateway that enables operators to deliver a better mobile
broadband experience and reduce running costs using Nokia Siemens Networks'
Liquid Net approach. Nokia Siemens Networks and Juniper Networks announced the
launch of the "Integrated Packet Transport Network", addressing the need for
service providers to simplify network architecture and giving operators more
flexibility in their transport networks in a cost effective way, reflecting
Nokia Siemens Networks Liquid Net approach to transforming networks to cope
with unpredictability and increasing network demand.
- Nokia Siemens Networks extended its comprehensive small cells portfolio with
the launch of an enhanced range of picocell base stations and 3G Femto access
points, and announced a US-based trial of its Hot Zone approach for increasing
network capacity in the Chicago area.
- The launch of the Customer Experience Management (CEM) on Demand portal in
the first quarter allowed Nokia Siemens Networks to showcase a new way of
handling relationships with the world's six billion mobile users. Nokia
Siemens Networks was recognized for its advances in CEM at the Global Telecoms
Business (GTB) Innovation Awards 2012 in the wireless infrastructure category
where it won a joint award with Telkomsel for its use of Nokia Siemens
Networks' CEM on Demand portfolio. Guangdong MCC in China has signed up to
Nokia Siemens Networks' CEM software and services, enabling it to improve
customer experience by providing a unified view of its customer data and
continuous reporting of usage trends.
- During the year, Nokia Siemens Networks completed the sale of its microwave
transport business to DragonWave, the sale of its fixed line Broadband Access
business to ADTRAN and the divestment of the assets of the non-core IPTV
business to Belgacom and Accenture. It also announced it had reached an
agreement to sell its Optical Networks business to Marlin Equity Partners and
its Business Support Systems business to Redknee.

PERSONNEL

PERSONNEL END OF QUARTER
                                                           YoY            QoQ
                                        Q4/2012 Q4/2011 Change Q3/2012 Change
Devices & Services and corporate common  33 201  49 705   -33%  38 264   -13%
Location & Commerce                       6 186   6 659    -7%   6 366    -3%
Nokia Siemens Networks                   58 411  73 686   -21%  60 635    -4%
Nokia Group                              97 798 130 050   -25% 105 265    -7%

The average number of Nokia Group employees during the period from January to
December 2012 was 112 256, of which the average number of employees at
Location & Commerce and Nokia Siemens Networks was 6 441 and 64 052
respectively. At December 31, 2012, Nokia Group employed a total of 97 798
people (130 050 people at December 31, 2011), of which 6 186 were employed by
Location & Commerce (6 659 people at December 31, 2011) and 58 411 were
employed by Nokia Siemens Networks (73 686 people at December 31, 2011).

SHARES

The total number of Nokia shares at December 31, 2012, was 3 744 956 052. At
December 31, 2012, Nokia and its subsidiary companies owned 33 971 118 Nokia
shares, representing approximately 0.9% of the total number of Nokia shares
and the total voting rights.

DIVIDEND

To ensure strategic flexibility, the Nokia Board of Directors will propose
that no dividend payment will be made for 2012 (EUR 0.20 per share for 2011).
Nokia's fourth quarter 2012 financial performance combined with this dividend
proposal further solidifies the company's strong liquidity position.

The distributable funds on the balance sheet of the parent company as per
December 31, 2012 amount to EUR 5 213 million.

RISKS AND FORWARD-LOOKING STATEMENTS
It should be noted that Nokia and its business is exposed to various risks and
uncertainties and certain statements herein that are not historical facts are
forward-looking statements, including, without limitation, those regarding: A)
the expected plans and benefits of our partnership with Microsoft to bring
together complementary assets and expertise to form a global mobile ecosystem
for smartphones; B) the timing and expected benefits of our strategies,
including expected operational and financial benefits and targets as well as
changes in leadership and operational structure; C) the timing of the
deliveries of our products and services; D) our ability to innovate, develop,
execute and commercialize new technologies, products and services; E)
expectations regarding market developments and structural changes; F)
expectations and targets regarding our industry volumes, market share, prices,
net sales and margins of our products and services; G) expectations and
targets regarding our operational priorities and results of operations; H)
expectations and targets regarding collaboration and partnering arrangements;
I) the outcome of pending and threatened litigation and regulatory
proceedings; J) expectations regarding the successful completion of
 restructurings, investments, acquisitions and divestments on a timely basis
and our ability to achieve the financial and operational targets set in
connection with any such restructurings, investments, acquisitions and
divestments; and K) statements preceded by "believe," "expect," "anticipate,"
"foresee," "target," "estimate," "designed," "aim", "plans," "intends," "will"
or similar expressions. These statements are based on management's best
assumptions and beliefs in light of the information currently available to it.
Because they involve risks and uncertainties, actual results may differ
materially from the results that we currently expect. Factors, including risks
and uncertainties, that could cause these differences include, but are not
limited to:  1) our success in the smartphone market, including our ability to
introduce and bring to market quantities of attractive, competitively priced
Nokia products that operate on the  Windows Phone operating system that are
positively differentiated from our competitors' products, both outside and
within the Windows Phone ecosystem; 2) our ability to make Nokia products that
operate on the Windows Phone operating system a competitive choice for
consumers, and together with Microsoft, our success in encouraging and
supporting a competitive and profitable global ecosystem for Windows Phone
products that achieves sufficient scale, value and attractiveness to all
market participants; 3) reduced demand for, and net sales of, Nokia Lumia
products that operate on the Windows Phone 7 operating system as a result of
increasing availability of Nokia Lumia products with the new Windows Phone 8
operating system; 4) the expected continuing decline of sales of Symbian
devices and the significantly diminishing viability of the Symbian smartphone
platform; 5) our ability to produce attractive and competitive devices in our
Mobile Phones business unit including feature phones and devices with more
smartphone-like features such as full touch devices, in a timely and cost
efficient manner with differentiated hardware, software, localized services
and applications; 6) our ability to effectively and timely implement planned
changes to our operational structure, including the planned restructuring
measures, and to successfully complete the planned investments, acquisitions
and divestments in order to improve our operating model and achieve targeted
efficiencies and reductions in operating expenses as well as our ability to
accurately estimate the related restructuring charges and restructuring
related cash outflows;  7) our future sales performance, among other factors,
may require us to recognize allowances related to excess component inventory,
future purchase commitments and inventory write-offs  in our Devices &
Services business;  8) our ability to realize a return on our investment in
next generation devices, platforms and user experiences; 9) the intensity of
competition in the various markets where we do business and our ability to
maintain or improve our market position or respond successfully to changes in
the competitive environment; 10) our ability to retain, motivate, develop and
recruit appropriately skilled employees; 11) the success of our Location &
Commerce strategy, including our ability to establish a successful
location-based platform, extend our location-based  services across devices
and operating systems, provide support for our Devices & Services business and
create new sources of revenue from our location-based services and commerce
assets; 12) our actual performance in the short-term and long-term could be
materially different from our forecasts, which could impact future estimates
of recoverable value of our reporting units and may result in impairment
charges; 13) our success in collaboration and partnering arrangements with
third parties, including Microsoft; 14) our ability to increase our speed of
innovation, product development and execution to bring new innovative and
competitive mobile products and location-based or other services to the market
in a timely manner; 15) our dependence on the development of the mobile and
communications industry, including location-based and other services
industries, in numerous diverse markets, as well as on general economic
conditions globally and regionally; 16) our ability to protect numerous
patented standardized or proprietary technologies from third-party
infringement or actions to invalidate the intellectual property rights of
these technologies and our ability to maintain the existing sources of
intellectual property related income or establish new such sources; 17) our
ability to maintain and leverage our traditional strengths in the mobile
product market if we are unable to retain the loyalty of our mobile operator
and distributor customers and consumers as a result of the implementation of
our strategies or other factors; 18) the success, financial condition and
performance of our suppliers, collaboration partners and customers; 19) our
ability to manage efficiently our manufacturing and logistics, as well as to
ensure the quality, safety, security and timely delivery of our products and
services; 20) our ability to source sufficient amounts of fully functional
quality components, sub-assemblies, software and services on a timely basis
without interruption and on favorable terms, particularly as we ramp our new
Lumia smartphone devices; 21) our ability to manage our inventory and timely
adapt our supply to meet changing demands for our products, particularly as we
ramp our new Lumia smartphone devices; 22) any actual or even alleged defects
or other quality, safety and security issues in our products; 23) the impact
of a cybersecurity breach or other factors leading to any actual or alleged
loss, improper disclosure or leakage of any personal or consumer data
collected by us or our partners or subcontractors, made available to us or
stored in or through our products; 24) our ability to successfully manage the
pricing of our products and costs related to our products and operations; 25)
exchange rate fluctuations, including, in particular, fluctuations between the
euro, which is our reporting currency, and the US dollar, the Japanese yen and
the Chinese yuan, as well as certain other currencies; 26) our ability to
protect the technologies, which we or others develop or that we license, from
claims that we have infringed third parties' intellectual property rights, as
well as our unrestricted use on commercially acceptable terms of certain
technologies in our products and services; 27) the impact of economic,
political, regulatory or other developments on our sales, manufacturing
facilities and assets located in emerging market countries; 28) the impact of
changes in government policies, trade policies, laws or regulations where our
assets are located and where we do business; 29) the potential complex tax
issues and obligations we may incur to pay additional taxes in the various
jurisdictions in which we do business and our actual or anticipated
performance, among other factors, could result in allowances related to
deferred tax assets, 30) any disruption to information technology systems and
networks that our operations rely on, which may be for instance caused by our
inability to successfully and smoothly implement our plans to streamline our
IT organization including the transfer of some activities and employees to
strategic partners; 31) unfavorable outcome of litigations and regulatory
proceedings;  32) allegations of possible health risks from electromagnetic
fields generated by base stations and mobile products and lawsuits related to
them, regardless of merit; 33) Nokia Siemens Networks ability to implement its
new strategy and restructuring plan effectively and in a timely manner to
improve its overall competitiveness and profitability; 34) Nokia Siemens
Networks' success in the mobile broadband and services market and Nokia
Siemens Networks' ability to effectively and profitably adapt its business and
operations in a timely manner to the increasingly diverse service needs of its
customers; 35) Nokia Siemens Networks' ability to maintain or improve its
market position or respond successfully to changes in the competitive
environment; 36) Nokia Siemens Networks' liquidity and its ability to meet its
working capital requirements; 37) Nokia Siemens Networks' ability to timely
introduce new competitive products, services, upgrades and technologies; 38)
Nokia Siemens Networks' ability to execute successfully its strategy for the
acquired Motorola Solutions wireless network infrastructure assets; 39)
developments under large, multi-year contracts or in relation to major
customers in the networks infrastructure and related services business; 40)
the management of our customer financing exposure, particularly in the
networks infrastructure and related services business; 41) whether ongoing or
any additional governmental investigations into alleged violations of law by
some former employees of Siemens may involve and affect the carrier-related
assets and employees transferred by Siemens to Nokia Siemens Networks; and 42)
any impairment of Nokia Siemens Networks customer relationships resulting from
ongoing or any additional governmental investigations involving the Siemens
carrier-related operations transferred to Nokia Siemens Networks, as well as
the risk factors specified on pages 13-47 of Nokia's annual report on Form
20-F for the year ended December 31, 2011 under Item 3D. "Risk Factors." Other
unknown or unpredictable factors or underlying assumptions subsequently
proving to be incorrect could cause actual results to differ materially from
those in the forward-looking statements. Nokia does not undertake any
obligation to publicly update or revise forward-looking statements, whether as
a result of new information, future events or otherwise, except to the extent
legally required.

Nokia, Helsinki - January 24, 2013

Media and Investor Contacts:
Corporate Communications, tel. +358 7180 34900,
email: press.services@nokia.com
Investor Relations Europe, tel. +358 7180 34927
Investor Relations US, tel. +1 914 368 0555

Planned publication dates for interim reports in 2013
- first quarter 2013 interim report: April 18, 2013
- second quarter 2013 interim report: July 18, 2013
- third quarter 2013 interim report: October 17, 2013

Publication of "Nokia in 2012"
Nokia plans to publish its "Nokia in 2012" annual report, which includes the
review by the Board of Directors and the audited annual accounts, in week 13
of 2013.

Nokia's Annual General Meeting
Nokia's Annual General Meeting 2013 is scheduled to be held on May 7, 2013.

www.nokia.com

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Source: NOKIA via Thomson Reuters ONE
HUG#1672898
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