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Nokia publishes proxy materials for its Extraordinary General Meeting 2013 and notifies a new date for its Q3 2013 results announcement

ESPOO, Finland, Sept. 19, 2013 (GLOBE NEWSWIRE) --

Nokia publishes proxy materials for its Extraordinary General Meeting 2013 and notifies a new date for its Q3 2013 results announcement Nokia Corporation Stock Exchange Release September 19, 2013 at 16.05 (CET+1) Espoo, Finland - As outlined in the notice to the Nokia Extraordinary General Meeting 2013 (EGM) published earlier today, Nokia is making available proxy materials with more detailed information on the proposed transaction, announced on September 3, 2013, in which Nokia has agreed to sell substantially all of its Devices & Services business to Microsoft (the "Sale of the D&S Business"). Additionally, Nokia today announces a new publication date for its third quarter 2013 results announcement. New publication date for Nokia's Q3 2013 results announcement Nokia informs that it plans to publish its third quarter 2013 and January - September 2013 interim report on October 29, 2013. The postponement from the previously announced date is driven by Nokia's acquisition of Siemens AG's entire stake in NSN and the announcement of the Sale of the D&S Business, both of which have taken place during the third quarter of 2013. Proxy materials for the EGM The proxy materials relating to the Sale of the D&S Business are available at www.nokia.com/gm. Additionally, the material is attached to the Nokia stock exchange release in pdf format and will be furnished to the U.S. Securities and Exchange Commission. The proxy materials contain detailed information on the proposal to be voted on, and we strongly encourage our shareholders to read the materials in their entirety. The proxy materials include, for instance, a letter from Risto Siilasmaa, Chairman and interim CEO of Nokia as well as Nokia Group unaudited pro forma financial information for certain periods. These sections are also included below in this release. Nokia Board recommendation Nokia's Board of Directors recommends that Nokia shareholders vote to confirm and approve the Sale of the D&S Business at the Extraordinary General Meeting. September 18, 2013 Shareholders of Nokia Corporation Re: Notice of Extraordinary General Meeting of Shareholders Dear Shareholder: Shareholder: You are cordially invited to attend an Extraordinary General Meeting of shareholders of Nokia Corporation to be held on November 19, 2013, at 2:00 p.m. (Helsinki time) at Barona Areena, Urheilupuistontie 3, Espoo, Finland. The attached notice of the Extraordinary General Meeting and proxy materials provide information regarding the proposed resolution to be considered and voted on at the Extraordinary General Meeting. We hope that you can attend either by voting in advance, issuing a proxy to a representative or at the Extraordinary General Meeting in person. The purpose of the Extraordinary General Meeting is for you and our other shareholders to consider and vote on a proposal to confirm and approve the transactions contemplated by the Stock and Asset Purchase Agreement, dated as of September 2, 2013 (the "Purchase Agreement"), by and between Nokia Corporation and Microsoft International Holdings B.V. ("Microsoft International"), a wholly owned subsidiary of Microsoft Corporation ("Microsoft"). Under the Purchase Agreement, Nokia will sell substantially all of its Devices & Services business (the "D&S Business"), including assets and liabilities to the extent primarily related thereto, to Microsoft International (the transactions contemplated by the Purchase Agreement, the "Sale of the D&S Business") for an aggregate purchase price of EUR 3.79 billion in cash, subject to certain adjustments. Nokia has also entered into a mutual licensing agreement (the "Patent License Agreement") with Microsoft that will become effective upon consummation of the Sale of the D&S Business and a payment to Nokia of EUR 1.55 billion, and, as consideration for Microsoft's unilateral right to extend the term of the Patent License Agreement to perpetuity, an additional payment of EUR 100 million to Nokia. Under the Patent License Agreement, Nokia will grant Microsoft a 10-year license to certain of Nokia's patents and Microsoft will grant Nokia reciprocal rights to certain of Microsoft's patents for use in Nokia's HERE business. Upon consummation of the Sale of the D&S Business, Microsoft will also become a strategic licensee of the HERE location platform and will pay Nokia separately for the services provided under this license. Microsoft is expected to become one of the top three customers of HERE. Nokia will retain the Nokia brand and all of its patents and patent applications worldwide, provided that certain registered design rights that are specific to the D&S Business will be included in the assets transferred to Microsoft. The Sale of the D&S Business and the licensing arrangements described above are expected to be significantly accretive to Nokia's earnings as each of Nokia's continuing businesses, NSN, HERE and Advanced Technologies are global leaders in enabling mobility in their respective areas. The Sale of the D&S Business and the licensing arrangements described above are also expected to significantly strengthen Nokia's financial position and provide a solid basis for future investment in the continuing businesses. During the first half of 2013, we estimate that the non-IFRS result of the business proposed to be sold, "substantially all of Devices & Services business" would have been a loss of EUR 395 million and net sales of that business would have been EUR 5.3 billion. For the same period of time (on a pro forma basis) the non-IFRS result of Nokia's continuing businesses would have been a profit of EUR 436 million and the net sales of Nokia's continuing businesses would have been EUR 6.3 billion. On a pro forma basis Nokia had EUR 12.8 billion of gross cash and EUR 7.5 billion of net cash at the end of the first half of 2013. More information about the Sale of the D&S Business and the Purchase Agreement is contained in the accompanying proxy materials, which we strongly encourage you to read in their entirety. These proxy materials are also available on Nokia's website at www.nokia.com/gm. After a thorough assessment of how to maximize shareholder value, including considering a variety of strategic alternatives, Nokia's Board of Directors decided to approve Nokia's entry into the Purchase Agreement and the Sale of the D&S Business contemplated thereby and determined that Nokia's entry into the Purchase Agreement and the Sale of the D&S Business are in the best interests of Nokia and our shareholders. The Board of Directors recommends that Nokia shareholders vote to confirm and approve the Sale of the D&S Business at the Extraordinary General Meeting. The Purchase Agreement requires that shareholders representing a majority of the votes cast at the Extraordinary General Meeting confirm and approve the Sale of the D&S Business. The consummation of the Sale of the D&S Business is also subject to the satisfaction of certain other conditions to consummation of the Sale of the D&S Business as set forth in the Purchase Agreement and described in the accompanying proxy materials. Regardless of the number of Nokia shares or American Depositary Shares you own, your vote is very important. The accompanying notice to convene the Extraordinary General Meeting and proxy materials provide you with detailed information about the Sale of the D&S Business and the Extraordinary General Meeting. On behalf of Nokia Corporation, we would like to thank all of our shareholders for their ongoing support as we prepare for this important event in Nokia's history. Sincerely, /s/ Risto Siilasmaa Risto Siilasmaa Chairman of the Board and interim CEO NOKIA GROUP UNAUDITED PRO FORMA FINANCIAL INFORMATION Basis of compilation of the unaudited pro forma financial information The following unaudited pro forma financial information ("pro forma", "pro forma information") is presented to illustrate the financial impact of the following transactions (collectively, the "Transactions"): - Nokia's acquisition of Siemens AG's ("Siemens") 50% stake in Nokia Solutions and Networks, also referred to as NSN (formerly Nokia Siemens Networks), for EUR 1.7 billion, completed on August 7, 2013 (the "NSN Acquisition"); - The sale of substantially all of Nokia's Devices & Services business (the "D&S Business") to Microsoft International Holdings B.V. ("Microsoft International"), a wholly owned subsidiary of Microsoft Corporation ("Microsoft") for EUR 3.79 billion (the transactions contemplated by the Stock and Asset Purchase Agreement, dated as of September 2, 2013 (the "Purchase Agreement"), by and between Nokia and Microsoft International (the "Sale of the D&S Business"); - Nokia's granting Microsoft a 10-year license to certain of Nokia's patents and Microsoft granting Nokia reciprocal right to use Microsoft's patents in HERE services upon consummation of the Sale of the D&S Business for a license payment of EUR 1.55 billion in cash to Nokia and, as consideration for the unilateral right to extend the term of the Patent License Agreement to perpetuity, an additional EUR 100 million payment to Nokia (the "Patent License Agreement"); - Microsoft's payment to Nokia for services provided in connection with Microsoft becoming a strategic licensee of Nokia's HERE location platform; and - The sale of EUR 1.5 billion in senior unsecured convertible bonds to Microsoft (the "Convertible Bonds") pursuant to a bond purchase agreement, dated as of September 2, 2013, by and between Nokia and Microsoft International (the "Bond Purchase Agreement"). The Convertible Bonds will be issued in three equal tranches of EUR 500 million each, bearing interest of 1.125%, 2.500% and 3.625% and maturing in 2018, 2019 and 2020, respectively. The pro forma financial information also illustrates the financial impact of certain other items described below, including the divestment of our luxury phone business Vertu, which was completed in October 2012. This unaudited pro forma information is presented for illustrative purposes only. Because of its nature, the unaudited pro forma information illustrates what the hypothetical impact would have been if the Transactions and certain other items described below had been consummated at an earlier point in time and therefore, does not represent the actual results of operations or financial position of Nokia and its consolidated subsidiaries ("Nokia Group"). The unaudited pro forma information is not intended to project the results of operations or financial position of Nokia Group as of any future date. For the purposes of this pro forma information, the D&S Business has been treated as a discontinued operation. Accordingly, the results for the D&S Business for the year ended December 31, 2012 and for the six month period ended June 30, 2013 have been presented separately from the results of continuing operations and on a separate line at the bottom of the pro forma income statements. The pro forma adjustments are based upon available information and assumptions, which are described in the accompanying notes. There can be no assurance that the assumptions used in the preparations of the unaudited pro forma financial information will prove to be correct. Hence, the final amounts at the consummation of the Sale of the D&S Business are likely to differ from the amounts presented here. The unaudited pro forma financial information has been derived from Nokia's unaudited consolidated financial information as at and for the year ended December 31, 2012 and Nokia's unaudited consolidated interim report as at and for the six month period ended June 30, 2013. Nokia adopted the revised "IAS 19 - Employee Benefits" standard ("IAS 19R") as of January 1, 2013. The historical financial information as at and for the year ended December 31, 2012 presented has been revised to comply with the new accounting principles, and due to the revision, is unaudited. For more information on the impact of the retrospective application of IAS 19R, see Nokia's published 2013 interim reports available at www.nokia.com. The unaudited pro forma financial information included in the proxy materials should be read in conjunction with our consolidated financial statements and consolidated interim financial statements available at www.nokia.com. Pro forma periods The pro forma consolidated income statements for the year ended December 31, 2012 and for the six month period ended June 30, 2013, have been compiled assuming that the Transactions and certain other items described below had been completed on January 1, 2012. The pro forma statement of financial position as at June 30, 2013 has been compiled assuming that such transactions had been completed on June 30, 2013. Nokia Group's operating results for the six months ended June 30, 2013 The following table sets forth consolidated income statements of Nokia Group for six months ended June 30, 2013 as follows: - Nokia Group's consolidated income statement as reported in Nokia's interim report dated July 18, 2013 (column titled "Reported 1-6/2013"); - Nokia Group's consolidated income statement adjusted to reflect the Transactions and certain other items as if the Transactions and such other items had been consummated as of January 1, 2012 (column titled "Pro forma Reported 1-6/2013"); and - Nokia Group's consolidated income statement, on a non-IFRS basis, further adjusted to exclude the impact of special items and purchase price adjustments (column titled "Pro forma non-IFRS 1-6/2013"). In the first half of 2013, Nokia Group's reported net sales were EUR 11,547 million. On a pro forma basis, Nokia Group's reported net sales were EUR 6,304 million and Nokia Group's non-IFRS net sales were EUR 6,305 million, reflecting the hypothetical impact of the Transactions and certain other items described in Notes 3 and 4 below. The most significant item explaining the difference between Nokia Group's reported net sales and Nokia Group's pro forma reported net sales is the hypothetical impact of the Sale of the D&S Business, as the D&S Business generated reported net sales of EUR 5,344 million in the first half 2013. In the first half of 2013, Nokia Group's reported operating loss was EUR 265 million, or negative 2.3%. On a pro forma basis, Nokia Group's reported operating profit was EUR 19 million, or positive 0.3% and Nokia Group's non-IFRS operating profit was EUR 721 million or positive 11.4%. The most significant item explaining the difference between Nokia Group's reported operating loss and Nokia Group's pro forma reported operating profit is the hypothetical impact of the Sale of the D&S Business, as the D&S Business generated reported operating losses of EUR 273 million in the first half 2013. CONSOLIDATED INCOME STATEMENTS First half 2013, EUR million (unaudited) Pro forma Pro adjustments forma Sale Other Pro adjustments of the pro forma Pro NSN D&S forma Pro forma non-IFRS forma Reported Acquisition Business adjustments Reported exclusions Non-IFRS 1-6/2013 (1) (2) (3) 1-6/2013 (4) 1-6/2013 Continuing operati ons: Net sales 11,547 -5,344 101 6,304 1 6,305 Cost of sales -7,801 4,213 -90 -3,678 -3,678 Gross profit 3,746 - -1,131 11 2,626 1 2,627 Research and develop ment expens es -1,983 579 -1,404 176 -1,228 Selling and marketi ng expens es -1,151 638 -513 73 -440 Administrative and general expens es -440 121 -319 -319 Other income and expens es -437 66 -371 452 81 Operating loss/pr ofit -265 - 273 11 19 702 721 Share of results of associate ed company ies -4 -4 -4 Financial income and expens es -163 20 -143 -143 Loss/profit before tax -432 - 293 11 -128 702 574 Tax -185 102 11 -72 -66 -138 Loss/profit from continu ing operati ons -617 - 395 22 -200 636 436 Discontinued operati ons: Loss for the period -395 -395 67 -328 Gain on dispos al, net Loss from discount inued operati ons - -395 - -395 67 -328 Loss/profit for the period -617 - - 22 -595 703 108 Loss/profit attribute able to equity holders of the parent -499 -131 7 22 -601 703 102 ----------------------------------------------------------------------------- Loss/profit attribute able to non- control ing interest s -118 131 -7 6 6 ----------------------------------------------------------------------------- -617 - - 22 -595 703 108 Earnings per share, EUR (for loss/pro fit attributa ble to the equity holders of the parent) Basic -0.13 -0.16 0.03 From continui ng operatio ns -0.13 -0.06 0.12 From disconti nued operatio ns - -0.11 -0.09 Diluted -0.13 -0.16 0.03 From continui ng operatio ns -0.13 -0.06 0.11 From disconti nued operatio ns - -0.11 -0.09 Average number of shares (1,000 shares) Basic 3,711,827 3,711,827 3,711,827 Diluted, Continu ed operatio ns 3,711,827 3,711,827 3,998,986 Diluted, Disconti nued operatio ns - 3,711,827 3,711,827 (1) The reported income statement for the period has been adjusted for the portion of NSN's results that were previously attributed to Siemens' non- controlling interest. (2) The adjustments in this column reclassify the results of the D&S Business for the period to discontinued operations. (3) The other pro forma adjustments include: - EUR 101 million net increase in revenue related to the Patent License Agreement and the HERE location platform licensing agreement with Microsoft. Revenue for the Patent License Agreement is estimated to be recognized over 10 years and revenue for the HERE location platform licensing agreement is estimated to be recognized over four years; - An adjustment of EUR 90 million in inter-company charges between HERE and the D&S Business; and - The estimated tax impact of the adjustments in the two bullet points above. (4) Pro forma non-IFRS exclusions related to continuing operations include the following: - The reversal of EUR 249 million in amortization on acquired intangible assets (EUR 176 million recorded in Research and development expenses and EUR 73 million in Selling and marketing expenses); - The reversal of EUR 301 million in restructuring charges (recorded in Other income and expenses); - The reversal of EUR 151 million in losses related to the divestment of certain NSN businesses (recorded in Other income and expenses); and - The reversal of EUR 46 million tax benefits related to the items and adjustments noted above as well as of prior year tax benefits in the amount of EUR 20 million (recorded in Tax). Additionally, the discontinued operations non-IFRS exclusions include the following: - The reversal of restructuring charges of EUR 72 million; - The reversal of EUR 27 million for a benefit from a cartel claim settlement; and - Certain prior year tax expenses of EUR 20 million Nokia Group's operating results for the full year 2012 In the full year 2012, Nokia Group's reported net sales were EUR 30,176 million. On a pro forma basis, Nokia Group's reported net sales were EUR 15,220 million and on a pro forma basis, Nokia Group's non-IFRS net sales were EUR 15,221 million, reflecting the hypothetical impact of the Transactions, the divestment of Vertu, and certain other adjustments described in Notes 3 and 4 below. The most significant item explaining the difference between Nokia Group's reported net sales and Nokia Group's pro forma reported net sales is the hypothetical impact of the Sale of the D&S Business, as the D&S Business generated net sales of EUR 14,937 million in the full year 2012. In the full year 2012, Nokia Group's reported operating loss was EUR 2,299 million, or negative 7.6%. On a pro forma basis, Nokia Group's reported operating loss was EUR 925 million, or negative 6.1% and on a pro forma basis, Nokia Group's non-IFRS operating profit was EUR 1,033 million, or positive 6.8%. The most significant item explaining the difference between Nokia Group's reported operating loss and Nokia Group's pro forma reported operating profit is the hypothetical impact of the Sale of the D&S Business, as the D&S Business generated operating losses of EUR 1,603 million in the full year 2012 and was also a significant driver of the difference between Nokia Group's non-IFRS operating loss and Nokia Group's pro forma non-IFRS operating profit. The following table sets forth Nokia Group's consolidated income statements for the twelve months ended December 31, 2012 as follows: - Nokia Group's consolidated income statement as reported in Nokia's Form 20-F for the year ended December 31, 2012, adjusted for the adoption of "IAS 19 - Employee Benefits" (column titled "Reported 1-12/2012"); - Nokia Group's consolidated income statement adjusted to reflect the Transactions, certain other items and the divestment of Vertu, as if the Transactions, such other items and the divestment of Vertu had been consummated as of January 1, 2012 (column titled "Pro forma Reported 1-12/2012"); and - Nokia Group's consolidated income statement, on a non-IFRS basis, further adjusted to exclude the impact of special items and purchase price adjustments (column titled "Pro forma Non-IFRS 1-12/2012"). CONSOLIDATED INCOME STATEMENTS Full year 2012, EUR million (unaudited) Pro Pro forma forma Other Pro adjustments adjustments pro Pro forma NSN Sale of the forma forma non-IFRS Pro forma Reported Acquisition D&S adjustments Reported exclusions Non-IFRS 1-12/2012 (1) Business(2) (3) 1-12/2012 (4) 1-12/2012 Continuing operations: Net sales 30,176 -14,937 -19 15,220 1 15,221 Cost of sales -21,786 12,242 -276 -9,820 65 -9,755 Gross profit 8,390 -2,695 -295 5,400 66 5,466 Research and development expenses -4,782 1,779 28 -2,975 375 -2,600 Selling and marketing expenses -3,205 1,657 72 -1,476 313 -1,163 Administrative and general expenses -955 287 15 -653 -653 Other income and expenses -1,747 575 -49 -1,221 1,204 -17 Operating loss/profit -2,299 1,603 -229 -925 1,958 1,033 Share of results of associated companies -1 -1 -1 Financial income and expenses -340 -46 57 -329 -329 Loss/profit before tax -2,640 -46 1,660 -229 -1,255 1,958 703 Tax -1,145 890 18 -237 69 -168 Loss/profit from continuing operations -3,785 -46 2,550 -211 -1,492 2,027 535 Discontinued operations: Loss for the period -2,550 -1 -2,551 1,339 -1,212 Gain on disposal, net 3,003 52 3,055 -3,055 - Profit/loss from discontinued operations 453 51 504 -1,716 -1,212 ----------------------------------------------------------------------------- Loss for the period -3,785 -46 3,003 -160 -988 311 -677 ----------------------------------------------------------------------------- Loss attributable to equity holders of the parent -3,104 -776 3,033 -160 -1,007 311 -696 Loss/profit attributable to non- controlling interests -681 730 -30 19 19 ----------------------------------------------------------------------------- -3,785 -46 3,003 -160 -988 311 -677 ----------------------------------------------------------------------------- Earnings per share, EUR (for loss/profit attributable to the equity holders of the parent) Basic -0.84 -0.27 -0.19 From continuing operations -0.84 -0.41 0.14 From discontinued operations - 0.14 -0.33 Diluted -0.84 -0.27 -0.19 From continuing operations -0.84 -0.41 0.14 From discontinued operations - 0.14 -0.33 Average number of shares (1,000 shares) Basic 3,710,845 3,710,845 3,710,845 Diluted, Continuing operations 3,710,845 3,710,845 3,763,561 Diluted, Discontinued operations - 3,763,561 3,710,845 (1) The reported income statement for the period has been adjusted for the portion of NSN's results that were previously attributed to Siemens' non- controlling interest. In addition, the adjustment reflects the estimated financing charges related to the NSN Acquisition funded through an initial bank facility and a secured loan from Siemens, which will be terminated early using the cash proceeds of the sale of Convertible Bonds to Microsoft International. The estimated one-time charges and interest expenses related to an early repayment of the bank facilities and secured loan from Siemens together with estimated accrued interest on the Convertible Bonds, amounting to EUR 46 million, have been reflected as a cash interest charge in the pro forma income statement for the year ended December 31, 2012. (2) The adjustments in this column reclassify the results of the D&S Business for the period to discontinued operations. The adjustment also includes the estimated gain on the Sale of the D&S Business calculated as the difference between the carrying amount of the net assets of the D&S Business using the balances as of June 30, 2013 and the estimated net proceeds to be received. In accordance with the Purchase Agreement, the purchase price of EUR 3.79 billion for the Sale of D&S Business is subject to certain adjustments. However, these adjustments are not reflected in the pro forma financial information as their estimated impact is deemed to be zero. Additionally, as the final gain on the Sale of the D&S Business will be calculated using the carrying amount of the net assets at the consummation of the Sale of the D&S Business, such final gain will vary, possibly significantly, from the pro forma gain estimate presented here. (3) The other pro forma adjustments include: - EUR 196 million net increase in revenue related to the Patent License Agreement and the HERE location platform licensing agreement with Microsoft. Revenue for the Patent License Agreement is estimated to be recognized over 10 years and revenue from the HERE location platform licensing agreement is estimated to be recognized over four years; - The elimination of EUR 374 million in inter-company charges between HERE and the D&S Business; - Elimination of EUR 215 million in revenue and, EUR 216 million in costs related to the Vertu business as well as EUR 52 million gain related to the divestment of the Vertu; and - The estimated tax impact of the adjustments in the three bullet points above. (4) Pro forma non-IFRS exclusions related to continuing operations include the following: - The reversal of a EUR 65 million charge to country and contract exits based on NSN's new strategy that focuses on key markets and product segments (recorded in Cost of sales); - The reversal of EUR 688 million in amortization on acquired intangible assets (EUR 375 million recorded in Research and development expenses and EUR 313 million in Selling and marketing expenses); - The reversal of EUR 1,220 million of restructuring charges and associated items, EUR 42 million related to country and contract exits, impairments of assets of EUR 2 million, a negative adjustment of EUR 4 million to purchase price allocation related to the final payment from Motorola, as well as amortization of acquired intangible assets EUR 23 million in 2012, EUR 79 million of net gain on sale of real estate (recorded in Other income and expenses); and - The reversal of EUR 159 million net tax benefits related to the above as well as certain prior year tax benefit in the amount of EUR 64 million, valuation allowance for NSN deferred tax assets of EUR 135 million and EUR 157 million non-cash deferred tax expense related to legal reorganizations arising from HERE business integration (recorded in Tax). Additionally, the discontinued operation non-IFRS exclusions include the following: - Amortization of acquired intangible assets of EUR 4 million, restructuring charges of EUR 545 million, impairments of assets of EUR 30 million, a EUR 56 million benefit from settlement of cartel claims, valuation allowance related to Devices & Services tax assets in Finland of EUR 800 million, certain prior year tax expenses of EUR 64 million and the net tax benefit on special items and PPA of EUR 48 million in 2012; and - Gain on Sale of the D&S Business of EUR 3,003 million and gain on the divestment of Vertu of EUR 52 million in 2012. Nokia Group financial position as of June 30, 2013 The following table sets forth Nokia Group's consolidated financial position as of June 30, 2013 as follows: - Nokia Group's consolidated statement of financial position as reported in Nokia's interim report dated July 18, 2013 (column titled "Nokia Group Reported 30.06.2013"); and - Nokia Group's consolidated statement of financial position adjusted to reflect the Transactions as if the Transactions had been consummated as of June 30, 2013 (column titled "Pro forma Nokia Group 30.06.2013"). CONSOLIDATED STATEMENTS OF FINANCIAL POSITION 30.06.2013, IFRS, EUR million (unaudited) Pro forma Pro forma adjustments adjustments Sale of Other Nokia Group NSN the D&S pro forma Pro forma Reported Acquisition Business adjustments Nokia Group 30.06.2013 (1) (2) (3) 30.06.2013 ASSETS Non-current assets Goodwill 4,813 -1,416 3,397 Other intangible assets 369 -30 339 Property, plant and equipment 1,336 -602 734 Investments in associated companies 58 -6 52 Available-for- sale investments 740 -7 733 Deferred tax assets 1,007 -328 170 849 Long-term loans receivable 114 -1 113 Other non- current assets 168 -120 137 185 8,605 - -2,510 307 6,402 Current assets Inventories 1,420 -496 924 Accounts receivable 3,789 -990 75 2,874 Prepaid expenses and accrued income 2,920 -1,935 63 1,048 Current portion of long-term loans receivable 47 47 Other financial assets 313 -70 243 Investments at fair value through profit and loss, liquid assets 389 389 Available-for- sale investments, liquid assets 982 -207 775 Available-for- sale investments, cash equivalents 4,590 -2,056 2,534 Bank and cash 3,492 -1,752 5,757 1,650 9,147 17,942 -1,752 3 1,788 17,981 Total assets 26,547 -1,752 -2,507 2,095 24,383 Pro forma Pro forma adjustments adjustments Other SHAREHOLDERS' NSN Sale of the pro forma Pro forma EQUITY Nokia Group Acquisition D&S Business adjustments Nokia Group AND LIABILITIES 30.06.2013 (1) (2) (3) 30.06.2013 Capital and reserves attributable to equity holders of the parent Share capital 246 246 Share issue premium 450 -42 408 Treasury shares -607 -607 Translation differences 638 48 53 739 Fair value and other reserves 119 -15 25 129 Reserve for invested non- restricted equity 3,118 3,118 Retained earnings 3,500 -830 2,848 137 5,655 7,464 -797 2,885 137 9,689 Non-controlling interests 1,164 -955 -111 98 Total equity 8,628 -1,752 2,774 137 9,787 Non-current liabilities Long-term interest-bearing liabilities 3,375 3,375 Deferred tax liabilities 380 -215 170 335 Other long-term liabilities 402 -44 358 4,157 - -259 170 4,068 Current liabilities Current portion of long-term loans 1,839 -8 1,831 Short-term borrowing 172 -1 171 Other financial liabilities 70 -30 40 Accounts payable 3,595 -1,685 75 1,985 Accrued expenses and other liabilities 5,681 -2,247 1,831 5,265 Provisions 2,405 -1,051 -118 1,236 13,762 - -5,022 1,788 10,528 Total shareholders' equity and liabilities 26,547 -1,752 -2,507 2,095 24,383 Interest-bearing liabilities 5,386 - -9 - 5,377 Shareholders' equity per share, EUR 2.01 2.61 Number of shares (1,000 shares)* 3,712,192 3,712,192 * Shares owned by Nokia Group companies are excluded. As of June 30, 2013, Nokia Group's total cash and other liquid assets was EUR 9,453 million, and net cash and other liquid assets was EUR 4,067 million. On a pro forma basis, Nokia Group's total cash and other liquid assets was EUR 12,845 million, and net cash and other liquid assets was EUR 7,468 million, reflecting the hypothetical impact of the Transactions. (1) The adjustments in this column reflect the impact of the NSN Acquisition as if it had occurred on June 30, 2013. The adjustments eliminate the recorded Siemens' non-controlling interest against the related capital accounts attributable to the equity shareholders of the parent, Nokia Group, and reflect the estimated loss that will be incurred as a result of the NSN Acquisition. Although the NSN Acquisition was financed through a secured loan from Siemens and bank financing, the adjustments reflect a cash transaction as the secured loan and the bank financing is expected to be repaid with the cash proceeds from the Sale of the D&S Business. (2) The adjustments in this column reflect the impact of the Sale of the D&S Business. The pro forma adjustments eliminate all of the assets and liabilities attributable to the D&S Business, reflect the net proceeds expected to be received from Microsoft International and reflect the estimated gain that would result if the Sale of the D&S Business was consummated on June 30, 2013. These adjustments and the estimated gain are based on the reported assets and liabilities as of June 30, 2013 and the estimated net proceeds, while the actual adjustments and gain to be recognized upon consummation of the Sale of the D&S Business will be based on the assets and liabilities that exist on that date and on the final purchase price paid to Nokia. Accordingly, the final gain and related adjustments may differ significantly from the estimated adjustments presented here. (3) Other pro forma adjustments include: - EUR 1.65 billion in cash to be received in connection with the Patent License Agreement; - An increase of EUR 1.65 billion in accrued expenses and other liabilities related to deferred revenue under the Patent License Agreement; and - Tax related and other miscellaneous adjustments to reflect the conversion of certain inter-segment receivables and payables into external receivables and payables between the D&S Business and the continuing operations of Nokia Group. Presentation of pro forma non-IFRS results from continuing operations In addition to information on Nokia's reported IFRS results, Nokia provides certain information on a non-IFRS, or underlying business performance, basis. Non-IFRS results exclude all material 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 (1) the formation of Nokia Siemens Networks and (2) all business acquisitions completed after June 30, 2008. Nokia believes that its non-IFRS results provide meaningful supplemental information to both management and investors regarding Nokia and its underlying business performance by excluding the above-described items that may not be indicative of Nokia's business operating results. In this pro forma information Nokia's non-IFRS results as described above are also presented on a pro forma basis. 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. More information, including a reconciliation of our January - June 2013 and full year 2012 non-IFRS results to our reported results, can be found in our complete January - June 2013 interim report and in our complete interim report for the fourth quarter 2012. The following table sets forth information on Nokia's non-IFRS results as previously reported and on a pro forma basis for the six month period ended June 30, 2013 and for the year ended December 31, 2012. Consolidated income statements (unaudited) First half 2013, EUR million Full year 2012, EUR million Pro forma Pro forma Non-IFRS Non-IFRS Non-IFRS as Continuing Non-IFRS as Continuing published for operations published for operations 1-6/2013 1-6/2013 1-12/2012 1-12/2012 Net sales 11,548 6,305 30,177 15,221 Cost of sales -7,801 -3,678 -21,721 -9,755 Gross profit 3,747 2,627 8,456 5,466 Research and development expenses -1,805 -1,228 -4,404 -2,600 Selling and marketing expenses -1,078 -440 -2,891 -1,163 Administrative and general expenses -440 -319 -955 -653 Other income and expenses 60 81 -76 -17 Operating profit 484 721 130 1,033 Share of results of associated companies -4 -4 -1 -1 Financial income and expenses -163 -143 -340 -329 Profit/loss before tax 317 574 -211 703 Tax -231 -138 -260 -168 Profit/loss 86 436 -471 535 Profit/loss attributable to equity holders of the parent -53 430 -646 516 Profit/loss attributable to non-controlling interests 139 6 175 19 86 436 -471 535 Earnings per share, EUR (for loss/profit attributable to the equity holders of the parent) Basic -0.01 0.12 -0.17 0.14 Diluted -0.01 0.11 -0.17 0.14 Average number of shares (1,000 shares) Basic 3,711,827 3,711,827 3,710,845 3,710,845 Diluted 3,711,827 3,998,986 3,710,845 3,763,561 Evaluation of other assets and liabilities In connection with the Sale of the D&S Business, Nokia Group will be required to evaluate whether the impact of the Sale of the D&S Business on future cash flows or operating results requires changes in the carrying values of any of Nokia's remaining assets or liabilities. This evaluation will include, among other things, a review of existing goodwill balances for impairment and the potential recoverability of deferred tax assets currently subject to valuation allowance. Nokia will conduct this review during the third quarter and the results of the review are planned to be disclosed in connection with the announcement of our third quarter 2013 results, scheduled for October 29, 2013. Income Taxes Pro forma income taxes reflect tax for continuing operations and estimated tax consequences for divesting discontinued operations. After the Sale of the D&S Business, Nokia Group continues to have unrecorded material deferred tax assets including deferred tax benefits available in Finland for both the NSN and Advanced Technologies businesses. Other items In addition to the pro forma adjustments reflected in the pro forma information above, Nokia Group has determined during the third quarter of 2013 that certain properties of the continuing business will meet the criteria of assets held for sale. The assets held for sale reclassification is not reflected in the tables above, but it will be presented in the third quarter 2013 interim report. As part of the reclassification, Nokia Group expects to record impairment charges of approximately EUR 5 million to the third quarter 2013 income statement, after which the properties' carrying values will be approximately EUR 113 million. FORWARD-LOOKING STATEMENTS It should be noted that Nokia and its business are 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 planned sale by Nokia of substantially all of Nokia's Devices & Services business, including Smart Devices and Mobile Phones (referred to below as "Sale of the D&S Business") pursuant to the Stock and Asset Purchase Agreement, dated as of September 2, 2013, between Nokia and Microsoft International Holdings B.V.(referred to below as the "Agreement"); B) the closing of the Sale of the D&S Business; C) obtaining the confirmation and approval of our shareholders for the Sale of the D&S Business; D) receiving timely (if at all), necessary regulatory approvals for the Sale of the D&S Business; E) expectations, plans or benefits related to or caused by the Sale of the D&S Business; F) expectations, plans or benefits related to Nokia's strategies, including plans for Nokia with respect to its continuing businesses that will not be divested in connection with the Sale of the D&S Business; G) expectations, plans or benefits related to changes in leadership and operational structure; H) expectations and targets regarding our operational priorities, financial performance or position, results of operations and use of proceeds from the Sale of the D&S Business; and I) statements preceded by "believe," "expect," "anticipate," "foresee," "sees," "target," "estimate," "designed," "aim", "plans," "intends," "focus," "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) the inability to close the Sale of the D&S Business in a timely manner, or at all, for instance due to the inability or delays in obtaining the shareholder approval or necessary regulatory approvals for the Sale of the D&S Business, or the occurrence of any event, change or other circumstance that could give rise to the termination of the Agreement; 2) the potential adverse effect on the sales of our mobile devices, business relationships, operating results and business generally resulting from the announcement of the Sale of the D&S Business or from the terms that we have agreed for the Sale of the D&S Business; 3) any negative effect from the implementation of the Sale of the D&S Business, as we may forego other competitive alternatives for strategies or partnerships that would benefit our Devices & Services business and if the Sale of the D&S Business is not closed, we may have limited options to continue the Devices & Services business or enter into another transaction on terms favorable to us, or at all; 4) our ability to effectively and smoothly implement planned changes to our leadership and operational structure or maintain an efficient interim governance structure and preserve or hire key personnel; 5) any negative effect from the implementation of the Sale of the D&S Business, including our internal reorganization in connection therewith, which will require significant time, attention and resources of our senior management and others within the company potentially diverting their attention from other aspects of our business; 6) disruption and dissatisfaction among employees caused by the plans and implementation of the Sale of the D&S Business reducing focus and productivity in areas of our business; 7) the amount of the costs, fees, expenses and charges related to or triggered by the Sale of the D&S Business; 8) any impairments or charges to carrying values of assets or liabilities related to or triggered by the Sale of the D&S Business; 9) potential adverse effects on our business, properties or operations caused by us implementing the Sale of the D&S Business; 10) the initiation or outcome of any legal proceedings, regulatory proceedings or enforcement matters that may be instituted against us relating to the Sale of the D&S Business; and, as well as the risk factors specified on pages 12-47 of Nokia's annual report on Form 20-F for the year ended December 31, 2012 under Item 3D. "Risk Factors." and risks outlined in our most recent interim report. 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. About Nokia Nokia is a global leader in mobile communications whose products have become an integral part of the lives of people around the world. Every day, more than 1.3 billion people use their Nokia to capture and share experiences, access information, find their way or simply to speak to one another. Nokia's technological and design innovations have made its brand one of the most recognized in the world. For more information, visit http://www.nokia.com/about- nokia. Media and Investor Contacts: Nokia 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 www.nokia.com [HUG#1730191] Source: NOKIA