Nokia Corporation Q4 and full year 2012 Interim Report

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ESPOO, FINLAND--(Marketwire - Jan 24, 2013) -




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 reportpublished today. The complete fourth quarter and full year 2012 interimreportwith tables is available athttp://www.results.nokia.com/results/Nokia_results2012Q4e.pdf. Investorsshouldnot rely on summaries of our interim reports only, but should review thecomplete 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 EUR0.05.

- Nokia Group achieves underlying operating profitability, with Q4 non-IFRSoperating margin of 7.9%.

- Nokia Group strengthened its net cash position by approximately EUR 800million sequentially, of which approximately EUR 650 million was generatedbyNokia Siemens Networks.

- Devices & Services Q4 non-IFRS operating margin improvedquarter-on-quarter to1.3%, due to an increase in gross margin as well as a decrease in operatingexpenses.

- Nokia Siemens Networks non-IFRS operating margin improvedquarter-on-quarterand year-on-year to a 14.4% in Q4, the highest level of underlyingoperatingprofitability since its formation in April 2007, primarily due to anincrease ingross 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 year2012non-IFRS operating margin of 0.4%.

- Nokia Group ends 2012 with a strong balance sheet and solid cashposition.Gross cash was EUR 9.9 billion and net cash was EUR 4.4 billion, afterincurringcash outflows related to restructuring of approximately EUR 1.5 billion anddividend payment of approximately EUR 750 million.

- To ensure strategic flexibility, the Nokia Board of Directors willproposethat no dividend payment will be made for 2012 (EUR 0.20 per share for2011).Nokia's Q4 financial performance combined with this dividend proposalfurthersolidifies 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 businessstrategyhas started to translate into financial results. Most notably we arepleasedthat Nokia Group reached underlying operating profitability in the fourthquarter and for the full year 2012.

While the first half of 2012 was difficult for Nokia Group, in Q4 2012 westrengthened our financial position, improved our underlying operatingmargin inDevices & Services, introduced the HERE brand to expand our mapping andlocationexperiences, and drove record profitability in Nokia Siemens Networks.

We remain focused on moving through our transition, which includescontinuing toimprove our product competitiveness, accelerate the way we operate andmanageour costs effectively. All of these efforts are aimed at improving ourfinancialperformance and delivering more value to our shareholders."

SUMMARY FINANCIAL INFORMATION



+---------------+-----------------------------------++--------------------+
| |Reported and Non-IFRS ||Reported and |
| |fourth quarter 2012 results1,2 ||Non-IFRS full year |
| | ||2012 results1,2 |
| +------+-------+-----+-------+------++------+------+------+
|EUR million | Q4/ |Q4/ |YoY |Q3/ |QoQ || | |YoY |
| | 2012 |2011 |Change|2012 |Change|| 2012 | 2011|Change|

+---------------+------+-------+------+------+------++------+-------+-----+
|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: Inaddition to information on our reported IFRS results, we provide certaininformation on a non-IFRS, or underlying business performance, basis.Non-IFRSresults exclude special items for all periods. In addition, non-IFRSresultsexclude intangible asset amortization, other purchase price accountingrelateditems and inventory value adjustments arising from (i) the formation ofNokiaSiemens Networks and (ii) all business acquisitions completed after June30, 2008. Nokia believes that our non-IFRS results provide meaningfulsupplemental information to both management and investors regarding Nokia'sunderlying business performance by excluding the above-described items thatmaynot be indicative of Nokia's business operating results. These non-IFRSfinancial measures should not be viewed in isolation or as substitutes totheequivalent IFRS measure(s), but should be used in conjunction with the mostdirectly comparable IFRS measure(s) in the reported results. See note 2belowfor information about the exclusions from our non-IFRS results. Moreinformation, including a reconciliation of our Q4 2012 and Q4 2011 non-IFRSresults to our reported results, can be found in our complete Q4 2012interimreport with tables on pages 18 and 20-24. A reconciliation of our full year2012 and full year 2011 non-IFRS results to our reported results can befound inthe same report on pages 40-45. A reconciliation of our Q3 2012 non-IFRSresults to our reported results can be found in our complete Q3 interimreportwith 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 NokiaSiemens Networks, including EUR 34 million of net charges related tocountry andcontract exits based on new strategy that focuses on key markets andproductsegments, 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 inDevices & 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 priceaccounting related items arising from the formation of Nokia SiemensNetworksand the acquisition of Motorola Solutions' networks assets

- EUR 87 million of intangible asset amortization and other purchase priceaccounting related items arising from the acquisition of NAVTEQ

- EUR 1 million of intangible assets amortization and other purchase pricerelated items arising from the acquisition of Novarra, MetaCarta andMotally inDevices & Services

Q3 2012 - EUR 654 million (net) consisting of:

- EUR 74 million restructuring charge and other associated items in NokiaSiemens Networks, including EUR 3 million of net charges related to countryandcontract exits based on new strategy that focuses on key markets andproductsegments.

- EUR 2 million restructuring charge in Location & Commerce

- EUR 454 million restructuring charge and other associated items inDevices &Services

- EUR 67 million of intangible asset amortization and other purchase priceaccounting related items arising from the formation of Nokia SiemensNetworksand the acquisition of Motorola Solutions' networks assets

- EUR 91 million of intangible asset amortization and other purchase priceaccounting related items arising from the acquisition of NAVTEQ

- EUR 1 million of intangible assets amortization and other purchase pricerelated items arising from the acquisition of Novarra, MetaCarta andMotally inDevices & 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 tocorporate reorganizations arising from Location & Commerce businessintegration.

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 priceaccounting related items arising from the acquisition of NAVTEQ

- EUR 100 million restructuring charge and EUR 36 million associatedimpairmentsin Devices & Services

- EUR 2 million of intangible assets amortization and other purchase pricerelated items arising from the acquisition of Novarra, MetaCarta andMotally inDevices & Services

- EUR 86 million of intangible asset amortization and other purchase priceaccounting related items arising from the formation of Nokia SiemensNetworksand the acquisition of Motorola Solutions' networks assets

- EUR 23 million restructuring charge and other associated items in NokiaSiemens 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 taxbenefits are recognized for certain Devices & Services deferred tax items.IfNokia's earlier estimated long-term tax rate of 26% had been applied,non-IFRSNokia EPS would have been approximately 0.5 Euro cent higher in Q4 2012.Goingforward on a non-IFRS basis, until a pattern of tax profitability isreestablished, Nokia expects to record quarterly tax expense ofapproximatelyEUR 50 million related to its Devices & Services business and approximatelyEUR50 million related to its Nokia Siemens Networks business. Nokia expects tocontinue to record taxes related to its Location & Commerce business at a26%rate.

Note 4 relating to Nokia net cash and other liquid assets: Calculated astotalcash and other liquid assets less interest-bearing liabilities. Forselectedinformation on Nokia Group interest-bearing liabilities, please see thetable onpage 53 of the complete Q4 2012 interim report with tables

Note 5 relating to operational and reporting structure: We adopted ourcurrentoperational structure during 2011 and have three businesses: Devices &Services,Location & Commerce and Nokia Siemens Networks and four operating andreportablesegments: Smart Devices and Mobile Phones within Devices & Services,Location &Commerce and Nokia Siemens Networks. Smart Devices focuses on smartphonesandMobile Phones focuses on mass market mobile devices, including Asha fulltouchsmartphones. Devices & Services also contains Devices & Services Otherwhichincludes net sales of our luxury phone business Vertu through October 12,2012,spare parts and related cost of sales and operating expenses, as well asintellectual property related income and common research and developmentexpenses. In October 2012, we completed the divestment of Vertu to EQT VI,aEuropean private equity firm. Location & Commerce focuses on thedevelopment oflocation-based services and local commerce. On November 13, 2012, Nokiaintroduced HERE, the new brand for its location and mapping service. Forfinancial reporting purposes, the Location & Commerce business will berenamedas the HERE business, starting with the first quarter 2013. Nokia SiemensNetworks is one of the leading global providers of telecommunicationsinfrastructure hardware, software and services. Nokia Siemens Networkscompletedthe acquisition of Motorola Solutions' networks assets on April 30, 2011.Accordingly, the results of Nokia Siemens Networks for 2012 are notdirectlycomparable to 2011.

Note 6 relating to average selling prices (ASP): Mobile device ASPrepresentstotal Devices & Services net sales (Smart Devices net sales, Mobile Phonesnetsales, and Devices & Services Other net sales) divided by total Devices &Services volumes. Devices & Services Other net sales includes net sales ofNokia's luxury phone business Vertu through October 12, 2012, spare parts,aswell as intellectual property income. Smart Devices ASP represents SmartDevicesnet sales divided by Smart Devices volumes. Mobile Phones ASP representsMobilePhones net sales divided by Mobile Phones volumes.

NOKIA OUTLOOK

- Nokia expects its Devices & Services non-IFRS operating margin in thefirstquarter 2013 to be approximately negative 2 percent, plus or minus fourpercentage points. This outlook is based on Nokia's expectations regardinganumber of factors, including:

- competitive industry dynamics continuing to negatively affect the MobilePhones 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-IFRSoperatingexpenses to an annualized run rate of approximately EUR 3.0 billion by theendof 2013.

- Nokia expects Location & Commerce non-IFRS operating margin in the firstquarter 2013 to be negative due to lower recognized revenue from internalsales,which carry higher gross margin, and to a lesser extent by a negative mixshiftwithin external sales.

- Nokia and Nokia Siemens Networks expect Nokia Siemens Networks non-IFRSoperating margin in the first quarter 2013 to be approximately positive 3percent, plus or minus four percentage points. This outlook is based onNokiaSiemens 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'restructuringprogram; and

- the macroeconomic environment.

- Nokia Siemens Networks now targets to reduce its non-IFRS annualizedoperatingexpenses and production overheads by more than EUR 1 billion by the end of2013, compared to the end of 2011. Nokia Siemens Networks previous targetwas toreduce its non-IFRS annualized operating expenses and production overheadsbyEUR 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 ourcurrent operational and reporting structure which we adopted during 2011.Thefollowing discussion includes information on a non-IFRS, or underlyingbusinessperformance, basis. See notes 1 and 2 to our Summary Financial Informationtableabove for information about our underlying non-IFRS results and thenon-IFRSexclusions for the periods discussed below.

The following table sets forth the year-on-year and sequential growth ratesinour net sales on a reported basis and at constant currency for the periodsindicated.



+----------------------------------------------------------------+
| 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 ofchangesin 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 theperiodsindicated and financial position at the end of the periods indicated, aswell asthe 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-bearingliabilities.

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

Sequentially, net cash and other liquid assets increased by EUR 796 millioninthe fourth quarter 2012, primarily due to positive Nokia Siemens Networksoperating profits, the receipt of a USD 250 million (approximately EUR 196million) quarterly platform support payment from Microsoft and proceedsfromreal estate sales and business divestments, partially offset by cashoutflowsrelated to restructuring, taxes and net financial expenses as well ascapitalexpenditures.

In the fourth quarter 2012, Nokia Siemens Networks' contribution to netcashfrom operating activities was approximately EUR 740 million, primarily duetonet profit adjusted for non-cash items. At the end of the fourth quarter2012,Nokia Siemens Networks' contribution to the Nokia gross cash was EUR 2.4billionand contribution to Nokia's net cash was EUR 1.3 billion.

Our agreement with Microsoft includes platform support payments fromMicrosoftto us as well as software royalty payments from us to Microsoft. In thefourthquarter 2012, we received a quarterly platform support payment of USD 250million (approximately EUR 196 million). Under the terms of the agreementgoverning the platform support payments, the amount of each quarterlyplatformsupport payment is USD 250 million. We have a competitive software royaltystructure, which includes annual minimum software royalty commitments.Minimumsoftware royalty commitments are paid quarterly. Over the life of theagreement,both the platform support payments and the minimum software royaltycommitmentsare expected to measure in the billions of US dollars. Over the life of theagreement the total amount of the platform support payments is expected toslightly exceed the total amount of the minimum software royalty commitmentpayments. To date the amount of platform support payments received by Nokiahasexceeded the amount of minimum royalty commitment payments to Microsoft.Thusfor the remainder of the life of the agreement the total amount of theminimumsoftware royalty commitment payments are expected to exceed the totalamount ofthe platform support payments. In accordance with the terms of theagreement,the platform support payments and annual minimum software royaltycommitmentpayments continue for a corresponding period of time.

During fourth quarter 2012, Nokia Group performed its annual goodwillimpairmentassessment. The methodology and models used for the annual impairmentassessmentare consistent with our second quarter 2012 interim analysis and our lastannualassessment performed during the fourth quarter 2011. Inputs to thevaluationmodel, such as cash flows, discount rates and growth rates, have beenupdated toreflect our most recent projections and they materially align with theinterimanalysis conducted during second quarter 2012.

At the date of our 2012 annual impairment assessment, goodwill amounting toEUR530 million, EUR 899 million, EUR 3 270 million and EUR 183 million wasallocated to Mobile Phones, Smart Devices, Location & Commerce and NokiaSiemensNetworks, respectively. No goodwill impairment charge was recorded duringthefourth quarter 2012 as a result of the goodwill impairment assessment.However achange in any of the key assumptions used in measuring the recoverablevalue ofour Location & Commerce business could have resulted in goodwillimpairment.While we believe the estimated recoverable values are reasonable, actualperformance in the short-term and long-term could be materially differentfromour forecasts, which could impact future estimates of recoverable value ofourreporting 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-yearandsequential 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 netsales.

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

Smartphone Volumes

In the fourth quarter 2012, Devices & Services total smartphone volumeswere15.9 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 werelower in the fourth quarter 2012 primarily due to the divestment of Vertu.Following the divestment of Vertu, Devices & Services Other net sales arecomprised of IPR income and sales of spare parts. In the fourth quarter2012,Devices & Services Other net sales benefitted from non-recurring IPR incomeofapproximately EUR 50 million. Within Devices & Services Other, we estimatethatour 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 6weekchannel inventory range. On an absolute unit basis channel inventoriesincreasedsequentially.

Net Sales and Volumes by Geographic Area

The following table sets forth the net sales for our Devices & Servicesbusinessfor the periods indicated, as well as the year-on-year and sequentialgrowthrates, by geographic area. IPR income is allocated to the geographic areascontained 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-yearandsequential 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 andvolumeswere primarily due to our Smart Devices business unit, most notably highernetsales and volumes of our Lumia devices. On a year-on-year basis, thedecrease inGreater China net sales was primarily due to our Smart Devices businessunit,most notably lower net sales of our Symbian devices. On a year-on-yearbasis,the decrease in Greater China volumes was primarily due to our SmartDevicesbusiness unit, most notably lower volumes of our Symbian devices as well aslower volumes of our Mobile Phones devices.

On a sequential basis, the increases in North America net sales and volumeswereprimarily due to our Smart Devices business unit, most notably higher netsalesand volumes of our Lumia devices. On a sequential basis, the decreases inGreater China net sales and volumes were primarily due to lower net salesandvolumes 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-yearand5% sequentially in the fourth quarter 2012. On a year-on-year basis,operatingexpenses related to Mobile Phones and Smart Devices decreased 19% and 34%respectively, in the fourth quarter 2012. On a sequential basis, operatingexpenses related to Mobile Phones decreased by 12% while Smart Devicesoperatingexpenses increased 9%, respectively, in the fourth quarter 2012. Inaddition tothe factors described below, the year-on-year changes were affected by theproportionate allocation of operating expenses being affected by therelativemix of sales and gross profit performance between Mobile Phones and SmartDevices. This resulted in higher and lower relative allocations to MobilePhonesand 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 thefourthquarter 2012. Both the year-on-year and sequential declines were primarilydueto ramping down Symbian and MeeGo, reductions in certain Mobile Phonesrelatedactivities 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 marketingexpensesdeclined primarily due to lower marketing expenditure on Symbian, a lowercostbase as a result of business divestments and tight cost control, partiallyoffset by higher marketing expenditure related to our Lumia devices. On asequential basis, Devices & Services non-IFRS sales and marketing expensesincreased 3% in the fourth quarter 2012. Sequentially, marketing expensesincreased primarily due to higher expenditure on Lumia and seasonality,partially offset by business divestments, headcount reductions and tightcostcontrol.

Devices & Services non-IFRS administrative and general expenses decreased30%year-on-year in the fourth quarter 2012 and 35% sequentially. Theyear-on-yearand sequential decreases are primarily related to cost savings in supportfunctions, business divestments and shared function cost categorization.

In the fourth quarter 2012, Devices & Services non-IFRS other income andexpensehad a negative year-on-year and positive sequential impact onprofitability. Ona reported basis, other income and expense was positively affected in thefourthquarter 2012 primarily as a result of net gains from the sale of realestate ofEUR 79 million, the divestment of the Vertu business of EUR 52 million andapositive item of EUR 21 million from a cartel claim settlement, as well asanEUR 75 million net benefit related to restructuring provision releases asdiscussed in the "Cost Reduction Activities and Planned OperationalAdjustments"section below.

Operating Margin

The lower year-on-year Devices & Services non-IFRS operating margin in thefourth 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 thefourth quarter 2012 was primarily due to higher gross margin and to alesserextent lower operating expenses.

Cost Reduction Activities and Planned Operational Adjustments



+-------------------------------------------------------------------------+
|DEVICES & SERVICES RESTRUCTURING SUMMARY |
+-------------+-------------+-------------+---------+--------+------------+
| | | | Q1/2013| 2013 | |
| | |Cumulative up|(approxi-|(approx-| Total|
| | Q4/2012| to Q4/2012| mate| imate|(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-IFRSoperatingexpenses to an annualized run rate of approximately EUR 3.0 billion by theendof 2013.

At the end of the fourth quarter 2012, Devices & Services and CorporateCommonhad approximately 33 200 employees, a reduction of approximately 16 500comparedto fourth quarter 2011, and approximately 5 000 compared to third quarter2012.

In connection with the implementation of our strategy announced in February2011, we have announced and made a number of changes to our operations. Inthefourth quarter of 2012, we recognized a net benefit of EUR 73 millionrelated torestructuring provision releases and impairments related to ourrestructuringactivities in Devices & Services. By the end of the fourth quarter 2012, wehadrecorded cumulative Devices & Services restructuring charges and otherassociated items of approximately EUR 1.4 billion. In total, we expect nowcumulative Devices & Services restructuring charges of approximately EUR1.6billion before the end of 2013. This is approximately EUR 200 million lessthanwhat we estimated earlier.

By the end of the fourth quarter 2012, Devices & Services had cumulativerestructuring related cash outflows of approximately EUR 1.1 billion. WeexpectDevices & Services restructuring related cash outflows to be approximatelyEUR150 million in first quarter 2013 and approximately EUR 300 million in fullyear2013. Of the total expected charges relating to restructuring activities ofapproximately EUR 1.6 billion, we expect Devices & Services non-cashcharges tobe approximately EUR 200 million. This means that we also now expect totalrestructuring related cash outflows to be approximately EUR 200 millionlessthan what we estimated earlier.

SMART DEVICES

The following table sets forth a summary of the results for our SmartDevicesbusiness unit for the periods indicated, as well as the year-on-year andsequential 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 theproportionate allocation of operating expenses being affected by therelativemix of sales and gross profit performance between Mobile Phones and SmartDevices, resulting in lower relative allocations to Smart Devices in thefirst,second, third and fourth quarters 2012. Accordingly, fourth quarter 2012operating expenses are not directly comparable to fourth quarter 2011operatingexpenses.

Net Sales

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

Volume

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

The year-on-year decline in our Smart Devices volumes in the fourth quarter2012 continued to be driven by the strong momentum of competing smartphoneplatforms and our portfolio transition from Symbian devices to Lumiadevices.The decline was primarily due to lower Symbian device volumes, partiallyoffsetby higher Lumia device volumes. On a geographical basis, the decrease involumeswas due to lower volumes in Greater China, Europe, Asia-Pacific, MiddleEast andAfrica and Latin America, partially offset by an increase in volumes inNorthAmerica.

On a sequential basis, the increase in our Smart Devices volumes in thefourthquarter 2012 was primarily due to higher Lumia device volumes, partiallyoffsetby lower Symbian device volumes. On a geographical basis, the increase involumes 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 quarter2012was primarily due to a positive mix shift towards sales of our Lumiadeviceswhich carry a higher ASP than our Symbian devices, partially offset by ourpricing actions taken in previous quarters in 2012 related to certain Lumiadevices.

Sequentially, the increase in our Smart Devices ASP in the fourth quarter2012was primarily due to a positive mix shift towards sales of our newlylaunchedLumia devices which had a higher ASP, partially offset by general priceerosion.The ASP of our Lumia devices in the fourth quarter 2012 was EUR 192,compared toEUR 160 in the third quarter 2012. The increase in Lumia ASPs was primarilydueto a positive mix shift towards sales of our newly launched Lumia deviceswhichhad a higher ASP.

Gross Margin

The year-on-year decline in our Smart Devices gross margin in the fourthquarter2012 was primarily due to greater price erosion than cost erosion,partiallyoffset by a positive product mix shift towards higher gross margin Lumiadevicesas well as the absence of Symbian related allowances which were recognizedinthe fourth quarter 2011. From an operating system perspective, theyear-on-yeardecline in our Smart Devices gross margin in the fourth quarter 2012 wasprimarily due to a lower Symbian gross margin.

On a sequential basis, the increase in our Smart Devices gross margin inthefourth quarter 2012 was primarily due to the absence of approximately EUR120million of inventory related allowances which were recognized in the thirdquarter 2012 as well as a positive product mix shift towards higher grossmargindevices, and lower Symbian fixed costs per unit. From an operating systemperspective, the sequential increase in our Smart Devices gross margin inthefourth quarter was primarily due to a higher Lumia gross margin as well asahigher Symbian gross margin.

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

MOBILE PHONES

The following table sets forth a summary of the results for our MobilePhonesbusiness unit for the periods indicated, as well as the year-on-year andsequential growth rates.



+-------------------------------------------------------------------------+
|MOBILE PHONES |
|RESULTS SUMMARY |
+------------------------------------+-------+-------+------+------+------+
| | Q4/| Q4/| YoY| Q3/| QoQ|
| | 2012| 2011|Change| 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 theproportionate allocation of operating expenses being affected by therelativemix of sales and gross profit performance between Mobile Phones and SmartDevices, resulting in higher relative allocations to Mobile Phones in thefirst,second, third and fourth quarters 2012. Accordingly, fourth quarter 2012operating expenses are not directly comparable to fourth quarter 2011operatingexpenses.

Net Sales

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

Volume

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

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

On a sequential basis, the increase in our Mobile Phones volumes in thefourthquarter 2012 was primarily due to the increase in volumes of our lowerpriceddevices that we sell to our customers for below EUR 30. Volumes of ourhigherpriced devices that we sell to our customers for above EUR 30 alsoincreased,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 quarter2012 wasprimarily due to general price erosion and an increased proportion of salesoflower priced devices, partially offset by the net positive impact relatedtoforeign currency fluctuations.

On a sequential basis, our Mobile Phones ASP was flat in the fourth quarter2012 as a mix shift towards higher priced devices, including our full touchAshasmartphones, as well as the net positive impact from foreign currencyfluctuations were offset by general price erosion.

Gross Margin

The year-on-year decline in our Mobile Phones gross margin in the fourthquarter2012 was primarily due to a negative product mix shift towards lower grossmargin devices, as well as the net negative impact related to foreigncurrencyfluctuations.

On a sequential basis, the increase in our Mobile Phones gross margin inthefourth quarter 2012 was primarily due to greater cost erosion than priceerosion, partially offset by the net negative impact related to foreigncurrencyfluctuations.

LOCATION & COMMERCE

On November 13, 2012, Nokia introduced HERE, the new brand for its locationandmapping service. For financial reporting purposes, the Location & Commercebusiness will be renamed as the HERE business, starting with the firstquarter2013.

The following table sets forth a summary of the results for Location &Commercefor the periods indicated, as well as the year-on-year and sequentialgrowthrates.



+----------------------------------------------------------------------+
|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 contentlicenses tovehicle customers due to higher consumer uptake of vehicle navigationsystems.In the fourth quarter 2012, the sequential increase in external Location &Commerce net sales was primarily due to a higher consumer uptake of vehiclenavigation systems as well as seasonally higher sales to personalnavigationdevices customers.

In the fourth quarter 2012, the year-on-year and sequential declines ininternalLocation & Commerce net sales were due to declines in sales to our SmartDevicesbusiness unit.

Gross Margin

On a year-on-year basis, the increase in Location & Commerce non-IFRS grossmargin in the fourth quarter 2012 was primarily due to lower deferred costofsales associated with internal sales and a higher gross margin within thevehicle segment, partially offset by lower sales to personal navigationdevicecustomers.

On a sequential basis, the increase in Location & Commerce non-IFRS grossmarginin the fourth quarter 2012 was primarily due to lower deferred cost ofsalesassociated with internal sales, a higher gross margin within the vehiclesegment, and seasonally higher sales to personal navigation devicecustomers.

Operating Expenses

Location & Commerce non-IFRS research and development expenses decreased10%year-on-year due to cost reductions. On a sequential basis, research anddevelopment expenses increased 5% sequentially in the fourth quarter 2012primarily due to increased project spending relating to softwaredevelopment andmap creation.

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

Location & Commerce non-IFRS administrative and general expenses increased6%year-on-year and increased 12% sequentially in the fourth quarter 2012. Onayear-on-year and sequential basis, the increase was primarily due to thehigheruse of services provided by shared support functions.

Location & Commerce non-IFRS other income and expense for the fourthquarter2012 was approximately zero, compared to expense of EUR 3 million in thefourthquarter 2011 and approximately zero in the third quarter 2012.

Operating Margin

The year-on-year increase in Location & Commerce non-IFRS operating margininthe fourth quarter 2012 was primarily due to lower operating expenses andhighergross margin, partially offset by lower net sales.

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

NOKIA SIEMENS NETWORKS

The following table sets forth a summary of the results for Nokia SiemensNetworks for the periods indicated, as well as the year-on-year andsequentialgrowth 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 theperiodsindicated, as well as the year-on-year and sequential growth rates, bygeographic 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 thefourthquarter 2012 was primarily due to higher sales of both infrastructureequipmentand services, partially offset by a decline in sales of business areas notconsistent with Nokia Siemens Networks' strategic focus. On a regionalbasis,the year-on-year growth was primarily due to higher net sales in AsiaPacific,most notably in Japan which saw strong growth in sales of bothinfrastructureequipment and services, as well as in North America which also saw stronggrowthin sales of both infrastructure equipment and services. This was partiallyoffset by lower sales in Europe, most notably in Western Europe due todeclinesin sales of both infrastructure equipment and services. In the fourthquarter2012, Nokia Siemens Networks net sales benefited from non-recurring IPRincomeof approximately EUR 30 million.

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

At constant currency Nokia Siemens Networks' net sales would have increased1%year-on-year and increased 16% sequentially.

Gross Margin

On a year-on-year basis, the increase in Nokia Siemens Networks' non-IFRSgrossmargin in the fourth quarter 2012 was due to favorable product and regionalmixtowards higher gross margin revenues, particularly in infrastructureequipmentand to a lesser extent services, driven mainly by Nokia Siemens Networkspriority markets including Japan, Korea and North America, partially offsetbylower infrastructure equipment gross margin in Europe. In addition, theyear-on-year increase in Nokia Siemens Networks non-IFRS gross margin wasalso due tostructural cost savings in its production overheads as part of its broadercostsavings targets.

On a sequential basis, the increase in Nokia Siemens Networks' non-IFRSgrossmargin in the fourth quarter 2012 was due to favorable product and regionalmixtowards higher gross margin revenues, in both services and infrastructureequipment, driven mainly by Latin America, North America and Europe,partiallyoffset by Asia Pacific most notably in Japan. In addition, the sequentialincrease in Nokia Siemens Networks non-IFRS gross margin was also due toseasonally strong high gross margin software sales as well as structuralcostsavings in its production overheads as part of its broader cost savingstargets.

Operating Expenses

Nokia Siemens Networks' non-IFRS research and development expensesdecreased10% year-on-year in the fourth quarter 2012 primarily due to improvementsinoverall research and development efficiency. Sequentially, Nokia SiemensNetworks' non-IFRS research and development expenses increased 7% primarilydueto higher accrued incentive expenses consistent with Nokia SiemensNetworks'business performance in the fourth quarter 2012, partially offset by costcontrol initiatives.

Year-on-year, Nokia Siemens Networks' non-IFRS sales and marketing expensesdecreased 11% in the fourth quarter 2012 primarily due to structural costsavings, partially offset by higher accrued incentive expenses consistentwithNokia Siemens Networks' business performance in the fourth quarter 2012. Onasequential basis, Nokia Siemens Networks non-IFRS sales and marketingexpensesincreased 3% in the fourth quarter 2012 primarily due to higher accruedincentive expenses consistent with Nokia Siemens Networks' businessperformancein the fourth quarter 2012, partially offset by structural cost savings.

Nokia Siemens Networks' non-IFRS administrative and general expensesdecreased13% year-on-year in the fourth quarter 2012 primarily due to structuralcostsavings. On a sequential basis, Nokia Siemens Networks non-IFRSadministrativeand general expenses increased 5% in the fourth quarter 2012, primarily duehigher accrued incentive expenses consistent with Nokia Siemens Networks'business performance in the fourth quarter 2012, as well as higher expensereallocation to other function costs, which more than offset structuralcostsavings.

Nokia Siemens Networks' non-IFRS other income and expense for the fourthquarter2012 was an expense of EUR 16 million, compared to income of EUR 5 millioninthe fourth quarter 2011 and expense of EUR 8 million in the third quarter2012. On both a year-on-year and sequential basis, this was primarily due tochangesin the doubtful account allowances.

Operating Margin

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

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

Strategy Update and Global Restructuring Program



+-------------------------------------------------------------------------+
|NOKIA SIEMENS NETWORKS RESTRUCTURING SUMMARY |
+-------------+---------+----------+---------+--------+---------+---------+
| | |Cumulative| | | | |
| | | up to| Q1/2013| 2013 | 2014 | Total|
| | Q4/2012| Q4/2012|(approxi-|(approx-|(approxi-|(approxi-|
| |(approxi-| (approxi-| mate| imate| mate| mate|
|EUR (million)| mate)| mate)|estimate)|estimate|estimate)|estimate)|
+-------------+---------+----------+---------+--------+---------+---------+
|Restructuring| | | | | | |
|related | | | Not| Not| Not| |
|charges | 257| 1 300| provided|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 tofocus onmobile broadband and services and the launch of an extensive globalrestructuring program.

At the end of the fourth quarter 2012, Nokia Siemens Networks hadapproximately58 400 employees, a reduction of approximately 15 300 compared to fourthquarter2011, and approximately 2 200 compared to third quarter 2012.

Nokia Siemens Networks now targets to reduce its non-IFRS annualizedoperatingexpenses and production overheads by more than EUR 1 billion by the end of2013, compared to the end of 2011. Nokia Siemens Networks previous targetwas toreduce its non-IFRS annualized operating expenses and production overheadsbyEUR 1 billion by the end of 2013, compared to the end of 2011. While thesesavings are expected to come largely from organizational streamlining, thecompany will also target areas such as real estate, information technology,product and service procurement costs, overall general and administrativeexpenses, and a significant reduction of suppliers in order to furtherlowercosts and improve quality.

By the end of the fourth quarter of 2012, Nokia Siemens Networks hadrecordedcumulative restructuring charges and other associated items ofapproximately EUR1.3 billion related to this restructuring program. In total we now expectcumulative Nokia Siemens Networks' restructuring charges of approximatelyEUR1.3 billion by the end of 2013, virtually all of which have now beenrecognized.This is approximately EUR 100 million more than our previous estimate.

By the end of the fourth quarter 2012, Nokia Siemens Networks hadcumulativerestructuring related cash outflows of approximately EUR 650 millionrelated tothis restructuring program. Nokia Siemens Networks expectsrestructuring-relatedcash outflows to be approximately EUR 200 million in the first quarter2013,approximately EUR 450 million for the full year 2013, and approximately EUR200million for the full year 2014 related to this restructuring program. Thismeansthat we also now expect total restructuring related cash outflows to beapproximately EUR 100 million more than what we estimated earlier.

Nokia Siemens Networks is focused on maintaining a strong financialposition andliquidity profile. Cash generation is a clear priority at Nokia SiemensNetworks, and the company intends to be self-funding in all aspects of itsoperations.

Q4 OPERATING HIGHLIGHTS

NOKIA OPERATING HIGHLIGHTS

- Nokia completed its divestment of Vertu, the global leader in luxurymobilephones, to EQT VI. As part of the transaction, approximately 1 000employeeshave transferred with Vertu. Nokia retains a 10% minority shareholding inVertu.

- Nokia entered into a new patent license agreement with Research InMotion. Theagreement results in settlement of all existing patent litigation betweenthecompanies and withdrawal of pending actions in the US, UK and Canadarelated toa recent arbitration tribunal decision.

- Nokia sold its head office building in Espoo, Finland, to Finland-basedExilion and has leased it back from Exilion on a long-term lease. Thesellingprice was EUR 170 million.

- Nokia completed an offering of EUR 750 million of senior unsecured convertiblebonds due 2017 convertible into ordinary shares of Nokia Corporation. Nokiaintends to use the net proceeds of the offering to prudently manage itscapitalstructure, proactively address upcoming maturities while preservingexistingpools 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,thefirst devices in Nokia's Windows Phone 8 range. The Lumia 920 is theflagshipWindows Phone 8 smartphone, introducing the latest advances in NokiaPureViewimaging innovation. The Lumia 820 brings high end smartphone innovationlikewireless charging, super-sensitive touch displays and new augmented realityexperiences, starting with Nokia City Lens, to a midrange price point.

- Nokia and Verizon Wireless commenced shipments of the Nokia Lumia 822,whichprovides Verizon Wireless customers with the high-end smartphone featuresof theNokia Lumia 820 in a unique design package running on America's largest 4GLTEnetwork.

- Nokia and China Mobile announced the Lumia 920T, the first TD-SCDMAWindowsPhone in China. With optical image stabilization, world class location andnavigation services, and built-in wireless charging, the Lumia 920T is theworld's most innovative smartphone with the world's largest mobileoperator.

- Nokia introduced the Nokia Lumia 620, the third and most affordable initsrange of Windows Phone 8 smartphones. Alongside the flagship Nokia Lumia920 andmid-range Nokia Lumia 820, the Nokia Lumia 620 comes in a compact, colorfuldesign 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 anddualSIM versions. Both devices reflect Nokia's heritage by combining stylishdesignand long-lasting battery life. The Nokia Asha 205 and Nokia 206 are thefirstMobile Phones devices to include Nokia's exclusive Slam feature, whichenablesconsumers to share multimedia content such as photos and videos with nearbyfriends almost instantly. Slam works with most Bluetooth-enabled mobilephoneswithout the need to pair devices, and without the recipient needing to alsohaveSlam.

- Nokia commenced shipments of the Nokia Asha 308 and Asha 309, modelsofferinga fluid 'swipe' user interface and an open environment for third-partyapplication development.

LOCATION & COMMERCE OPERATING HIGHLIGHTS

- Location & Commerce introduced a new brand -HERE -for our location-basedproducts and services and has begun adopting the HERE brand in theportfolio.HERE is the first location cloud to deliver the world's best maps andlocationexperiences across multiple screens and operating systems. With the newbrand,HERE, Nokia aims to inspire a new generation of location services anddevicesthat make the mobile experience more personally significant for peopleeverywhere. For financial reporting purposes, the Location & Commercebusinesswill be renamed as the HERE business, starting with the first quarter 2013.

- To further extend its location services, Location & Commerce launched amapsapplication for iOS under the HERE brand. Based on HTML5, it includesofflinecapabilities, voice-guided walk navigation, and public transportdirections. Theapplication is available for free download from Apple's App Store.

- Nokia announced a strategic partnership with Mozilla to bring newlocationexperiences to the Firefox OS. Nokia plans to debut a mobile Web version ofHEREMaps for the new Firefox OS next year. The companies are working togethertogive people the best mapping experience on Firefox OS.

- Nokia acquired earthmine inc. earthmine's reality capture and processingtechnologies will become integral parts of the 3D map making capabilitiesofHERE.

- Nokia introduced LiveSight, a technology based on a highly accurate, 3Dmap ofthe world. LiveSight enables a precise and intuitive augmented realityexperience. Nokia City Lens, which was developed exclusively for NokiaLumiadevices and uses a phone's camera viewfinder to make discovering the worldaseasy as lifting up a phone, is the first application providing aLiveSight-enabled experience.

- Oracle developed a built-in link between Oracle Fusion MiddlewareMapViewerand the Nokia Location Platform (NLP). This link removes the barrier tocustomized map integration and extends the benefits of global maps forbusinessuse to Oracle users.


- Nokia's Location & Commerce business continued to strengthen itsportfolio oflocation-based offerings for both Windows Phone 8 and Windows Phone 7.5:

- Location & Commerce brought its signature applications to the Nokia Lumiarange on Windows Phone 8, including true offline maps for Nokia Maps andNokiaDrive+ (beta).

- Location & Commerce continued its support for Nokia's Lumia range onWindowsPhone 7.5 with new releases of Nokia Transport and Nokia Drive, extendingtheavailability of the My Commute feature in Nokia Drive from five to 26countries. In addition, Location & Commerce also released a beta update to Nokia CityLensfor Lumia on Windows Phone 7.5, its LiveSight-based augmented realityapplication, which turns the phone's camera viewfinder into a new way toseeinformation about restaurants, shops, hotels and more overlaid onto thesurfacesof buildings for the most intuitive way to find hidden gems.

- After announcing in early 2012 that it is teaming with Groupon to bringlocaland national deals to Nokia customers and integrating Groupon Now! dealsintoNokia Maps for the Lumia range in the third quarter, Location & Commercenowalso integrated Groupon Now! deals into its maps desktop offering onhere.com.

NOKIA SIEMENS NETWORKS OPERATING HIGHLIGHTS

- Nokia Siemens Networks continued its mobile broadband deal momentum,addingcommercial LTE deals in the fourth quarter, including: delivering a large,multi-city, TD-LTE deployment for China Mobile; preparing O2's network inthe UKto deliver LTE services across London and the south-east of England, aheadof ananticipated rapid launch of 4G in early 2013; completing the first 4Gpilotwith TD-LTE technology in Southern Europe for COTA, a new player in Spanishtelecoms, and Wimax Online; and helping Vodacom become the first operatortointroduce voice and SMS alongside LTE in South Africa.

- Nokia Siemens Networks provided GSM and 3G mobile broadbandinfrastructure andservices in Central and East Java, Sumatra, and Kalimantan for Indosat inIndonesia; and deployed Wide Band Adaptive Multi-Rate (WB-AMR) software forSmart Communications 3G network in Mega Manila in the Philippines,providinghigh-definition (HD) voice services to subscribers.

- Nokia Siemens Networks combined three powerful WCDMA software featureswiththe introduction of its Liquid Radio WCDMA software suite to deliver fasterdatauploads and extract the full benefit from network resources and smartphonecapabilities, helping operators improve customer satisfaction and cut churnwhile increasing revenue from greater 3G availability. Nokia SiemensNetworksalso launched a new package of services to ensure operators have the mostprofitable blend of macro and small cells for mobile broadband, as well asa newsecond-generation 3G femto access point that provides mobile coverage inthehome or small office.

- Nokia Siemens Networks' Flexi Zone was awarded the 'Best of 4G award' at4GWorld in Chicago, in the Radio Access Network (RAN) and Small CellTechnologyProduct category for its RAN & small cell technology product, based on thecompany's Liquid Radio architecture, recognizing mobile broadbandinnovativedesign, small cell technology and approach. In a recent proof of conceptprojectbased on Liquid Core architecture, Nokia Siemens Networks and a leadingglobaloperator jointly demonstrated that core virtualization and cloud managementareviable technologies for deployment by operators.

- In Services, Nokia Siemens Networks launched an industry-first capabilitycenter - Service Operations and Management solution - which combinesinsightsrelated to service performance with operations functions to enableoperators tomanage mobile broadband services and tackle service degradation beforesubscribers experience poor quality.

- Nokia Siemens Networks enhanced its award-winning Customer ExperienceManagement (CEM) on Demand portal by adding three new software contentpacks andrelated services to help operators pinpoint actionable problems oninternet-based maps in seconds and rank the individual customer perceptionof any problemthey experience, in addition to providing trends in service use, networkperformance and customer experience.

- Guangdong Mobile, China Mobile's largest subsidiary, selected NokiaSiemensNetworks' Customer Experience Management engine Serve at Once Intelligence(SAI)customer and business analysis suite to boost subscriber loyalty andrevenuethrough analysis of real time customer insights. In December, Nokia SiemensNetworks provided a unified network and service management dashboardsolution aspart of its CEM portfolio, including a video wall bigger than a tenniscourt,for Bharti Airtel in Gurgaon, India, to give the operator a completenetworkview and ensure the best possible service quality and user experience.

- Nokia Siemens Networks continued to drive towards its strategic focus onMobile Broadband, announcing it had reached an agreement to sell itsOpticalNetworks business to Marlin Equity Partners and its Business SupportSystemsbusiness to Redknee. It also completed the divestment of the assets of thenon-core IPTV business to Belgacom and Accenture.

NOKIA IN JANUARY -DECEMBER 2012

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

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

In 2012, our net sales decreased 22% to EUR 30.2 billion (EUR 38.7 billionin2011). Net sales of Devices & Services decreased 34% to EUR 15.7 billion(EUR23.9 billion). Net sales of Smart Devices decreased 50% to EUR 5 446million(EUR 10 820 million). Net sales of Mobile Phones decreased 21% to EUR 9 436million (EUR 11 930 million). Net sales of Location & Commerce increased 1%toEUR 1 103 million (EUR 1 091 million). Net sales of Nokia Siemens Networksdecreased 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%), LatinAmerica13% (11%) and North America 7% (4%). The 10 markets in which we generatedthegreatest net sales in 2012 were, in descending order of magnitude, China,India,Japan, the United States, Brazil, Germany, Russia, the United Kingdom,Indonesiaand Italy together representing approximately 52% of total net sales in2012. Incomparison, the 10 markets in which we generated the greatest net sales in2011were China, India, Brazil, Russia, Germany, Japan, the United States, theUnitedKingdom, Italy and Spain, together representing approximately 52% of totalnetsales in 2011.

Our gross margin in 2012 was 27.8%, compared to 29.4% in 2011. Gross profitinDevices & Services decreased to EUR 3 346 million (gross profit of EUR 6640million), representing a gross margin of 21.3% (27.7%). Gross profit ofSmartDevices decreased to EUR 479 million (EUR 2 561 million), representing 8.8%ofSmart Devices net sales (23.7%). Gross profit of Mobile Phones decreasedto EUR2 211 million (EUR 3 117 million), representing 23.4% of Mobile Phones netsales(26.1%). Gross profit in Location & Commerce was EUR 875 million (grossprofitof EUR 877 million), representing a gross margin of 79.3% (80.4%). Grossprofitin Nokia Siemens Networks increased to EUR 4 169 million (gross profit EUR3 842 million), representing a gross margin of 30.3% (27.4%).

Our 2012 operating loss was EUR 2.3 billion, compared with an operatingloss ofEUR 1.1 billion in 2011. Our 2012 operating margin was -7.6% (-2.8%). Ouroperating loss in 2012 included purchase price accounting items and otherspecial items of net negative EUR 2.4 billion (net negative EUR 2.9billion).Operating loss in Devices & Services was EUR 1 100 million (operatingprofit ofEUR 884 million), representing an operating margin of -7.0% (3.7%).Devices &Services operating profit in 2012 included purchase price accounting itemsandother special items of net negative EUR 397 million (net negative EUR 799million). 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 481million),representing 5.6% of Mobile Phones net sales (12.4%). Operating loss inLocation & Commerce was EUR 301 million (operating loss of EUR 1 526million),representing an operating margin of -27.3% (-139.9%). Location & Commerceoperating loss included purchase price accounting items and other specialitemsof negative EUR 455 million (net negative EUR 1.6 billion). Operating lossinNokia Siemens Networks was EUR 799 million (operating loss EUR 300million),representing an operating margin of -5.8% (-2.1%). Nokia Siemens Networksoperating loss in 2012 included purchase price accounting items and otherspecial items of net negative EUR 1.6 billion (net negative EUR 0.5billion).Group Common Functions expense totaled EUR 103 million in 2012, compared toEUR131 million in 2011.

Our research and development expenses were EUR 4.8 billion in 2012,compared toEUR 5.6 billion in 2011. Research and development costs represented 15.8%of ournet sales in 2012 (14.4%). Research and development expenses includedpurchaseprice accounting items and other special items of EUR 378 million in 2012(EUR412 million).

In 2012, our selling and marketing expenses were EUR 3.2 billion, comparedtoEUR 3.8 billion in 2011. Selling and marketing expenses represented 10.6%of ournet sales in 2012 (9.7%). Selling and marketing expenses included purchasepriceaccounting items and other special items of EUR 314 million in 2012 (EUR422million).

Administrative and general expenses were EUR 1.0 billion in 2012, comparedtoEUR 1.1 billion in 2011. Administrative and general expenses were equal to3.2%of our net sales in 2012 (2.8%). Administrative and general expensesincluded nospecial items in 2012 (EUR 1 million in 2011).

Financial income and expenses, net, was an expense of EUR 340 million in2012(EUR 102 million). The higher net expense in 2012 was primarily driven byhighernet costs related to hedging our cash balances and unfavorable fluctuationsincertain foreign currency exchange rates.

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

The following chart sets out Nokia Group's cash flow for the fiscal years2012and 2011 and financial position at the end of each of those years, as wellasthe 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-bearingliabilities.

Year-on-year, net cash and other liquid assets decreased by EUR 1.2 billionin2012, primarily due to cash outflows related to restructuring ofapproximatelyEUR 1.5 billion, the payment of the dividend of approximately EUR 750million in2012 and cash outflows related to net financial expenses and taxes as wellascapital expenditures. This was partially offset by positive overall netcashfrom operating activities, excluding cash outflows related torestructuring, netfinancial expenses and taxes, as well as cash flows related to the receiptofquarterly platform support payments from Microsoft (which commenced in thefourth quarter 2011).

In 2012, Nokia Siemens Networks' contribution to net cash from operatingactivities was approximately EUR 1.6 billion, primarily due to net workingcapital changes. At the end of 2012, Nokia Siemens Networks' contributionto theNokia gross cash was EUR 2.4 billion and contribution to Nokia's net cashwasEUR 1.3 billion.

The following discussion of Nokia's three businesses -Devices & Services,Location & Commerce and Nokia Siemens Networks -includes information on anon-IFRS, or underlying business performance, basis. Non-IFRS resultsexcludespecial items for all periods. In addition, non-IFRS results excludeintangibleasset amortization, other purchase price accounting related items andinventoryvalue adjustments arising from i) the formation of Nokia Siemens Networksandii) all business acquisitions completed after June 30, 2008. See note 1 toourSummary Financial Information table above for information about ourunderlyingnon-IFRS results.

Devices & Services

The following chart sets out a summary of the results for our Devices &Servicesbusiness and the year-on-year growth rates for the fiscal years 2012 and2011.



+------------------------------------------------------+
| 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 netsales.

Net Sales

The following chart sets out the net sales for our Devices & Servicesbusinessand year-on-year growth rates by geographic area for the fiscal years 2012and2011. The IPR income referred to in the paragraph above has been allocatedtothe 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 lowervolumesin both Smart Devices and Mobile Phones as well as a lower ASP in MobilePhones,partially offset by a higher ASP in Smart Devices. Devices & Services Othernetsales decreased in 2012 due to lower non-recurring IPR income, thedivestment ofVertu during the fourth quarter 2012 and lower spare parts sales.

At a constant currency, Devices & Services net sales would have decreased36%compared to 2011.

Smart Devices continued to transition as Symbian volumes decreasedsequentiallyevery quarter in 2012. Lumia device volumes grew in the first half of 2012byexpanding geographical distribution as well as new product launches, butwerenegatively affected in the third quarter 2012 by product transitions. Inthefourth quarter 2012, Smart Devices net sales grew sequentially as Nokiastartedshipping new Lumia devices, although volumes were adversely affected bysupplyconstraints as we ramped up our production capacity, particularly relatedto theLumia 920. Smart Devices shipped a total of 13.4 million Lumia devices in2012.

During the first half of 2012, Mobile Phones was negatively affected byaggressive price competition and the lack of affordable full touch devices.Towards the end of the second quarter 2012 Mobile Phones introducedaffordableAsha full touch smartphones and sold 15.8 million units in the second half2012.

Our overall Devices & Services net sales in 2012 benefited from therecognitionin Devices & Services Other of approximately EUR 50 million (EUR 450million in2011) of non-recurring IPR income. During the last two decades, we haveinvestedapproximately EUR 50 billion in research and development and built one ofthewireless industry's strongest and broadest IPR portfolios, withapproximately10 000 patent families. Nokia is a world leader in the development ofhandhelddevice and mobile communications technologies, which is also demonstratedby ourstrong patent position. Within Devices & Services Other, we estimate thatourcurrent 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 thefiscal 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 & Servicesvolumes in2012 was due to lower volumes in both Smart Devices and Mobile Phonesdiscussedbelow.

Average Selling Price

On a year-on-year basis, the overall decrease in our Devices & Services ASPwasdue to higher proportion of Mobile Phones volumes and lower Mobile PhonesASPs,partially offset by higher Smart Devices ASPs.

Gross Margin

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

Operating Expenses

Devices & Services non-IFRS operating expenses decreased 20% year-on-yearin2012. On a year-on-year basis, operating expenses related to Smart Devicesdecreased 32% in 2012, where Mobile Phones remained approximately on thesamelevel. In addition to the factors described below, the year-on-year changeswereaffected by the proportionate allocation of operating expenses beingaffected bythe relative mix of sales and gross profit performance between MobilePhones andSmart Devices. This resulted in higher and lower relative allocations toMobilePhones 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 &ServicesOther research and development expenses. The decreases in research anddevelopment expenses were due primarily to a focus on priority projects andcostcontrols 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,improvedefficiency in general marketing activities and business divestments.

Devices & Services non-IFRS administrative and general expenses decreased19%year-on-year in 2012, primarily due structural cost savings as well asbusinessdivestments.

In 2012, Devices & Services non-IFRS other income and expense had anegativeyear-on-year impact on profitability. Reported other income and expense wassignificantly less negative in 2012. Restructuring charges of EUR 550millionand related impairments of EUR 30 million, a benefit from cartel claimsettlements of EUR 56 million, a net gain from the sale of a real estate ofEUR79 million and a net gain from the divestment of the Vertu business of EUR52million were recognized in Devices & Services Other in 2012. Restructuringcharges of EUR 456 million, impairment of assets of EUR 90 million,Accenturedeal consideration of EUR 251 million, impairment of shares in anassociatedcompany of EUR 41 million and a benefit from a cartel claim settlement ofEUR49 million were recognized in Devices & Services Other in 2011.

Cost Reduction Activities and Planned Operational AdjustmentsNokia continues to target to reduce its Devices & Services non-IFRSoperatingexpenses to an annualized run rate of approximately EUR 3.0 billion by theendof 2013.

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

As of December 31, 2012, we had recognized cumulative net charges inDevices &Services of approximately EUR 1.4 billion related to restructuringactivities,which included restructuring charges and associated impairments. While thetotalextent of the restructuring activities is still to be determined, wecurrentlyanticipate cumulative charges in Devices & Services of approximately EUR1.6billion before the end of 2013. We also expect the total cash outflowsrelatedto our Devices & Services restructuring activities to be approximately EUR1.4billion.

Smart Devices

The following chart sets out a summary of the results for our Smart Devicesbusiness unit for the periods indicated, as well as the year-on-year growthrates.



+-----------------------------------------------------+
| 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 theproportionate allocation of operating expenses being affected by therelativemix of sales and gross profit performance between Mobile Phones and SmartDevices, resulting in lower relative allocations to Smart Devices in 2012.Accordingly, 2012 operating expenses are not directly comparable to 2011operating expenses.

Net Sales

The year-on-year decline in our Smart Devices net sales in 2012 wasprimarilydue to significantly lower volumes, partially offset by higher ASPs.

Volume

The year-on-year decrease in our Smart Device volumes in 2012 was driven bythestrong momentum of competing smartphone platforms relative to our Symbiandevices. On a geographical basis, the decrease in volumes was due to lowervolumes in Greater China, Europe, Asia Pacific, Middle East &Africa andLatinAmerica, 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 primarilydue toa positive mix shift towards sales of our Lumia devices which had a higherASP,a positive impact related to deferred revenue on services sold incombinationwith our devices as well as the net positive impact related to foreigncurrencyfluctuations, partially offset by general price erosion and our pricingactions.

Gross Margin

The year-on-year decline in our Smart Devices gross margin in 2012 wasprimarilydue to greater price erosion than cost erosion due to the competitiveenvironment, inventory related allowances of EUR 220 million in the secondquarter 2012 and EUR 120 million in the third quarter 2012, higher fixedcostsper unit because of lower sales volumes, and a negative product mix shifttowards lower gross margin devices.

Mobile Phones

The following chart sets out a summary of the results for our Mobile Phonesbusiness unit and year-on-year growth rates for the fiscal years 2012 and2011.



+----------------------------------------------------------------+
| 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 theproportionate allocation of operating expenses being affected by therelativemix of sales and gross profit performance between Mobile Phones and SmartDevices, resulting in higher relative allocations to Mobile Phones in 2012.Accordingly, 2012 operating expenses are not directly comparable to 2011operating expenses.

Net Sales

On a year-on-year basis, our Mobile Phones net sales decreased in 2012 duetolower volumes and ASPs.

Volume

The year-on-year decline in our Mobile Phones volumes in 2012 was due tothechallenging competitive environment and market environment, whichnegativelyaffected our volumes across the Mobile Phones portfolio. In particular, lowendsmartphones powered by the Android operating system proliferated at lowerpricepoints throughout 2012. During the second half of 2012, Mobile Phonesstartedshipping Asha full touch smartphones, which improved the competitiveness ofourhigher end Mobile Phones product portfolio. During the second half of 2012Mobile 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 dueto ahigher proportion of sales of lower priced devices and general priceerosion.

Gross Margin

The year-on-year decline in our Mobile Phones gross margin in 2012 wasprimarilydue to a higher proportion of sales of lower gross margin devices as wellas thenet negative impact related to foreign currency fluctuations.

Location & Commerce

On November 13, 2012, Nokia introduced HERE, the new brand for its locationandmapping service. For financial reporting purposes, the Location & Commercebusiness will be renamed as the HERE business, starting with the firstquarter2013.

The following chart sets out a summary of the results for Location &Commerceand 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 2012wasprimarily driven by higher sales of map content licenses to vehiclecustomers,partially offset by lower sales to personal navigation devices customers.

The year-on-year decline in Location & Commerce internal net sales wasprimarilydue to lower sales related to the large decline in Symbian volumesexperiencedsince 2010.

Gross Margin

On a year-on-year basis, the decrease in Location & Commerce non-IFRS grossmargin in 2012 was primarily due to lower personal navigation device saleswhichcarry a higher gross margin, partially offset by higher gross margin in thevehicle segment.

Operating Expenses

Location & Commerce non-IFRS research and development expenses decreased14%primarily driven by a focus on cost controls, lower project spending and ashiftof research and development operating expenses to cost of sales as a resultofthe 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 increased13%primarily driven by higher use of services provided by shared supportfunctions.

Nokia Siemens Networks

Nokia Siemens Networks completed the acquisition of Motorola Solutions'networksassets on April 30, 2011. Accordingly, the results of Nokia SiemensNetworks for2012 are not directly comparable to 2011.

The following chart sets out a summary of the results for Nokia SiemensNetworksand 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 andyear-on-year growth rates, by geographic area for fiscal years 2012 and2011.



+-------------------------------------------------+
| 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 primarilydueto the decline in sales of business areas not consistent with Nokia SiemensNetworks' strategic focus and lower infrastructure equipment sales,partiallyoffset by higher services net sales. On a full year basis, servicesrepresentedslightly more than 50% of Nokia Siemens Networks' net sales.

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

Gross Margin

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

Operating Expenses

Nokia Siemens Networks' non-IFRS research and development expensesdecreased 5%year-on-year in 2012 primarily due to structural cost saving actions andoverallresearch 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 expensesdecreased8% year-on-year in 2012 primarily due to structural cost saving actions.

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

Operating Margin

The higher year-on-year Nokia Siemens Networks non-IFRS operating margin in2012 primarily reflected the higher gross margin and lower operatingexpenses.

Strategy Update and Global Restructuring Program

On November 23, 2011 Nokia Siemens Networks announced its strategy to focusonmobile broadband and services and the launch of an extensive globalrestructuring program.

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

Nokia Siemens Networks now targets to reduce its non-IFRS annualizedoperatingexpenses and production overheads by more than EUR 1 billion by the end of2013, compared to the end of 2011. Nokia Siemens Networks previous targetwas toreduce its non-IFRS annualized operating expenses and production overheadsbyEUR 1 billion by the end of 2013, compared to the end of 2011. While thesesavings are expected to come largely from organizational streamlining, thecompany will also target areas such as real estate, information technology,product and service procurement costs, overall general and administrativeexpenses, and a significant reduction of suppliers in order to furtherlowercosts and improve quality.

During 2012, Nokia Siemens Networks recognized restructuring charges andotherassociated items of EUR 1.3 billion related to this restructuring program,resulting in cumulative charges of approximately EUR 1.3 billion. In totalwenow expect cumulative Nokia Siemens Networks restructuring charges ofapproximately EUR 1.3 billion by the end of 2013, virtually all of whichhavenow been recognized. By the end of 2012, Nokia Siemens Networks hadcumulativerestructuring related cash outflows of approximately EUR 650 millionrelated tothis restructuring program. Nokia Siemens Networks expectsrestructuring-related cash outflows to be approximately EUR 450 million forthe full year 2013, andapproximately EUR 200 million for the full year 2014 related to thisrestructuring program.

Nokia Siemens Networks is focused on maintaining a strong financialposition andliquidity profile. Cash generation is a clear priority at Nokia SiemensNetworks, and the company intends to be self-funding in all aspects of itsoperations.

FULL YEAR 2012 OPERATING HIGHLIGHTS

NOKIA OPERATING HIGHLIGHTS

- Nokia outlined a range of actions -planned or since completed -aimed atsharpening its strategy, improving its operating model and returning the companyto profitable growth. The measures included:

- Reductions within certain research and development projects, resulting intheclosure of Nokia's facilities in Ulm, Germany and Burnaby, Canada;

- The transfer of device assembly from our production facilities in KomarominHungary and Reynosa in Mexico to Nokia facilities in Asia, where themajority ofcomponent suppliers are based. The Komarom and Reynosa facilities are nowfocusing on smartphone product customization.

- The consolidation of certain manufacturing operations, resulting in theclosure of its manufacturing facility in Salo, Finland;

- Nokia, and De' Longhi SpA, a global leader in household appliances,agreedterms for De' Longhi to acquire Nokia's production facility in Cluj,Romania.

- Focusing of marketing and sales activities, including prioritizing keymarkets;

- Streamlining of corporate and support functions.

Since the end of 2012, Nokia has also announced a range of planned changestostreamline its IT organization. Nokia believes these changes will increaseoperational efficiency and reduce operating costs, creating an ITorganizationappropriate for Nokia's current size and scope. As part of the plannedchanges,Nokia plans to transfer certain activities and up to 820 employees to HCLTechnologies and TATA Consultancy Services.

- There were various changes in the Nokia Leadership Team during 2012.Changesincluded:

- Marko Ahtisaari was appointed Executive Vice President of Design andmember ofthe Nokia Leadership Team as from February 1, 2012.

- Juha Putkiranta was appointed Executive Vice President of Operations andmember of the Nokia Leadership Team as from July 1, 2012.

- Timo Toikkanen was appointed Executive Vice President of Mobile Phonesandmember of the Nokia Leadership Team as from July 1, 2012.

- Chris Weber was appointed Executive Vice President of Sales and Marketingandmember of the Nokia Leadership Team as from July 1, 2012.

Further, during 2012, the following members resigned from the NokiaLeadershipTeam:

- Jerri DeVard, formerly Executive Vice President and Chief MarketingOfficer,resigned from the Nokia Leadership Team effective as from July 1, 2012.

- Colin Giles, formerly Executive Vice President of Sales, resigned fromtheNokia Leadership Team effective as from July 1, 2012.

- Mary T. McDowell, formerly Executive Vice President of Mobile Phonesresignedfrom the Nokia Leadership Team effective as from July 1, 2012.

- Niklas Savander, formerly Executive Vice President of Markets resignedfromthe Nokia Leadership Team effective as from July 1, 2012.

- Esko Aho, formerly Executive Vice President of Corporate Relations andResponsibility resigned from the Nokia Leadership Team.

- Nokia completed the acquisition of all technologies and intellectualpropertyfrom Scalado AB to strengthen Nokia's leading position in mobile imaging.Aspart of the transaction, approximately 50 world-class imaging specialiststransferred to Nokia.

- Nokia divested Vertu, its luxury mobile phones business to EQT VI, aEuropeanprivate equity firm.

- Nokia started development of a new manufacturing facility in Vietnam toservethe feature phone market.

- Nokia was again selected as a component of the Dow Jones SustainabilityWorldIndex (DJSI) and Dow JonesSustainability Europe Index in the DJSI 2012 Review.

- Nokia was included by the Carbon Disclosure Project (CDP) in the CarbonDisclosure Leadership Index and the Carbon Performance Leadership Index,receiving recognition both for its disclosure of climate change informationandthe 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 rangeofWindows 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,thelatest generation of the Windows Phone platform. Nokia started selling thefirstproducts running Windows Phone 8 -the flagship Nokia Lumia 920 and themid-rangeNokia Lumia 820 - in select markets including China, Germany, the UnitedKingdomand the United States Nokia has also launched in markets such as India aswellas introduced the Nokia 620 in select markets, with Lumia smartphones nowavailable in more than 90 markets around the world. Nokia's first WindowsPhone8 products showcase the best of Windows Phone 8, which for the first timesharesmany core technologies with the wider Windows ecosystem. Windows Phone 8alsointroduced multi-core processor support, NFC (near field communication)technology, and support for higher screen resolutions, as well as increasedlanguage support and new capabilities in imaging and application.

- Nokia continued to support the growth of the Windows Phone ecosystem. Thenumber of applications in the Windows Phone Marketplace grew to more than125 000 by the end of 2012, up from more than 50 000 at the start of theyear.

- During our transition to Windows Phone through 2012, we continued to shipdevices based on Symbian. The Nokia 808 PureView, a device which showcasesourimaging capabilities and which came to market in mid-2012, was the lastSymbiandevice from Nokia.

- Nokia announced a range of wireless charging accessories andpartnerships. TheFatboy Recharge Pillow provides an alternative way to charge the Lumia 920andLumia 820 wirelessly, while HARMAN'S JBL brand introduced the JBL PowerUP,awireless charging docking station with high quality audio in retro stylingandthe JBL PlayUp for high quality portable audio. Nokia also agreed withVirginAtlantic to put wireless charging stations in its London Heathrow Clubhouselounge and with Coffee Bean & Tea Leaf to put charging plates on tables insomeof their cafés.

- Nokia announced the launch of Nokia Music in the United States, furtherexpanding the number of markets in which the free music streaming serviceis nowavailable. Nokia Music is a free mobile experience exclusive to Nokia Lumiahandsets, providing consumers with a simple and delightful way to discoverandenjoy music.

MOBILE PHONES

- Mobile Phones continued to expand Nokia's Asha range of products withtechnological and design innovations, including launching full touch modelssuchas the Asha 308 and Asha 309. These two models offer a fluid 'swipe' userinterface and an open environment for third-party application development

-characteristics which helped earn the complete Asha touch range fullsmartphoneclassification from global market research companies and analysts such asGfK.

- Nokia introduced the Nokia 206 in both a single and dual SIM version. TheNokia 206 includes Nokia's exclusive Slam feature, which enables consumerstoshare multimedia content like photos and videos with nearby friends almostinstantly. Slam works with most Bluetooth-enabled mobile phones without theneedto pair devices, and without the recipient needing to also have Slam.

- Nokia unveiled Nokia Life+, the latest evolution of its widely-used NokiaLifeservice. Nokia Life+ is a Web application, which will provide millions ofpeoplewith valuable information on education, health and "infotainment" topics.NokiaLife+ will be supported by the Nokia Asha 308 and Nokia Asha 309smartphonesalongside a wide range of Nokia mobile phones.

- The Nokia Xpress browser, Nokia's cloud-accelerated browser for Series 40devices, continued to grow rapidly with support for 38 devices in 87languagesand more than 200 countries. The Nokia Xpress browser is the first of itskindto support web apps, and since the release of the SDK in 2011, developersupporthas continued to grow.

LOCATION & COMMERCE OPERATING HIGHLIGHTS

- Nokia introduced a new brand -HERE -for our location-based products andservices and has begun adopting the HERE brand in the portfolio. HERE isthefirst location cloud to deliver the world's best maps and locationexperiencesacross multiple screens and operating systems.

- To further extend its location services, Nokia launched a mapsapplication foriOS under the HERE brand.

- Nokia announced a strategic partnership with Mozilla to bring newlocationexperiences to the Firefox OS.

- Nokia acquired earthmine inc. earthmine's reality capture and processingtechnologies will become integral parts of the 3D map making capabilitiesofHERE,

- Nokia introduced LiveSight, a technology based on a highly accurate, 3Dmap ofthe world. LiveSight provides a precise and intuitive augmented realityexperience.

- Location & Commerce continued to grow the Nokia Location Platform (NLP),anadvanced location platform which offers numerous opportunities upon whichthirdparties can build. During the year, among others, Amazon became an NLPlicenseefor maps and geocoding and Ford's research organization selected the NLP toleverage Nokia's high-quality global location content as well as scalablecloudservices and APIs.

- As part of its commitment to strengthen the Windows Phone ecosystem,Nokiaintegrated the NLP into Windows Phone 8 OS to power location-basedexperiencesbuilt for Windows Phone 8, including access to offline maps

- Location & Commerce agreed a partnership with Groupon to bring local andnational deals to Nokia customer and released a new version of Nokia Mapsforthe Lumia range that integrates Groupon Now! deals into the app.

- Location & Commerce introduced My Commute, a new feature of Nokia Drivethatlearns people's driving preferences and uses information about the latesttraffic conditions to help people choose between the different routes theyusually take to get to the places they travel most.

- Location & Commerce brought Nokia City Lens, an augmented realityapplication,to the Nokia Lumia smartphone range and continued to update it throughouttheyear.

- Location & Commerce released Nokia Transport, a mobile application fortheLumia range providing underground, tram, suburban train and bus directionsformore than 500 cities in 46 countries in a convenient way, and furtherupdatedthe application during the year.

- Location & Commerce continued to build partnerships with a number ofmajorindustry players, particularly in the area of automotive-grade maps contentandsolutions. We are providing content to partners including Audi, BMWChrysler,Dacia, ESRI, Ford, Garmin, Hyundai, Kia, Mercedes, Nikon, Pioneer, Scania,Toyota and Volkswagen.

- In indoor mapping, Location & Commerce continued to steadily increase itscoverage of venues and buildings around the world and now covers 5 100venuesand altogether 18 000 buildings in 40 countries.

NOKIA SIEMENS NETWORKS OPERATING HIGHLIGHTS

- Nokia Siemens Networks added significant commercial LTE deals during2012,including; a major contract with SOFTBANK MOBILE Corp. in Japan to upgradeitsmobile broadband capacity across the country, supplying, deploying andintegrating its HSPA+ (3G) and FDD LTE (4G) networks; deploying theworld'sfirst multi-technology, multi-vendor self-organizing 3G and 4G mobilenetworksfor KDDI, also in Japan; and supporting T-Mobile's 4G network evolutionplanwith the modernization of its GSM, HSPA+ core and radio accessinfrastructure inkey 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,withother mobile broadband deals including with: Bharti Airtel in India;Telkomselin Indonesia; KT in Korea; Singapore's StarHub; Tele2 in Estonia, LatviaandLithuania; Hrvatski Telekom in Croatia; T-Mobile and Orange in Poland;Polkomtel in Poland; Si.mobil in Slovenia; COTA and Wimax Online in Spain;ZainKSA in Saudi Arabia; TOT in Thailand; Optus in Australia; MobileTeleSystems inRussia; O2 in the UK; Vodacom in South Africa; Saudi Telecom Company; andChinaMobile.

- Nokia Siemens Networks demonstrated its commitment to staying at theforefrontof mobile broadband innovation with the opening of a mobile broadbandtestingand development facility which opened in Silicon Valley in the UnitedStates. In other LTE technology developments, Nokia Siemens Networks: launched its"FlexiZone" approach to mobile broadband coverage, which will deliverfaster andmore flexible 4G across areas with a very high user density moreefficiently andcost effectively; and expanded its portfolio, to enable smooth 4G rolloutsusingthe 'Digital Dividend' in the Asia Pacific region, Latin America and otherpartsof the world.

- Nokia Siemens Networks also launched a new CDMA base station, bringingthebenefits of its globally recognized Flexi Multiradio Base Station platformtoCDMA operators whilst reducing base station operating costs by up to 70%,andwith 4G upgrade capability underlining Nokia Siemens Networks' commitmenttomobile broadband technology evolution.

- Nokia Siemens Networks unveiled its 'Intelligent IP Edge', the world'smostadvanced network gateway that enables operators to deliver a better mobilebroadband experience and reduce running costs using Nokia Siemens Networks'Liquid Net approach. Nokia Siemens Networks and Juniper Networks announcedthelaunch of the "Integrated Packet Transport Network", addressing the needforservice providers to simplify network architecture and giving operatorsmoreflexibility in their transport networks in a cost effective way, reflectingNokia Siemens Networks Liquid Net approach to transforming networks to copewithunpredictability and increasing network demand.

- Nokia Siemens Networks extended its comprehensive small cells portfoliowiththe launch of an enhanced range of picocell base stations and 3G Femtoaccesspoints, and announced a US-based trial of its Hot Zone approach forincreasingnetwork capacity in the Chicago area.

- The launch of the Customer Experience Management (CEM) on Demand portalin thefirst quarter allowed Nokia Siemens Networks to showcase a new way ofhandlingrelationships with the world's six billion mobile users. Nokia SiemensNetworkswas recognized for its advances in CEM at the Global Telecoms Business(GTB)Innovation Awards 2012 in the wireless infrastructure category where it wonajoint award with Telkomsel for its use of Nokia Siemens Networks' CEM onDemandportfolio. Guangdong MCC in China has signed up to Nokia Siemens Networks'CEMsoftware and services, enabling it to improve customer experience byproviding aunified view of its customer data and continuous reporting of usage trends.

- During the year, Nokia Siemens Networks completed the sale of itsmicrowavetransport business to DragonWave, the sale of its fixed line BroadbandAccessbusiness to ADTRAN and the divestment of the assets of the non-core IPTVbusiness to Belgacom and Accenture. It also announced it had reached anagreement to sell its Optical Networks business to Marlin Equity Partnersandits 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 JanuarytoDecember 2012 was 112 256, of which the average number of employees atLocation& Commerce and Nokia Siemens Networks was 6 441 and 64 052 respectively. AtDecember 31, 2012, Nokia Group employed a total of 97 798 people (130 050peopleat December 31, 2011), of which 6 186 were employed by Location & Commerce(6659 people at December 31, 2011) and 58 411 were employed by Nokia SiemensNetworks (73 686 people at December 31, 2011).

SHARES

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

DIVIDEND

To ensure strategic flexibility, the Nokia Board of Directors will proposethatno dividend payment will be made for 2012 (EUR 0.20 per share for 2011).Nokia'sfourth quarter 2012 financial performance combined with this dividendproposalfurther solidifies the company's strong liquidity position.

The distributable funds on the balance sheet of the parent company as perDecember 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 risksanduncertainties and certain statements herein that are not historical factsareforward-looking statements, including, without limitation, those regarding:A)the expected plans and benefits of our partnership with Microsoft to bringtogether complementary assets and expertise to form a global mobileecosystemfor smartphones; B) the timing and expected benefits of our strategies,including expected operational and financial benefits and targets as wellaschanges in leadership and operational structure; C) the timing of thedeliveriesof our products and services; D) our ability to innovate, develop, executeandcommercialize new technologies, products and services; E) expectationsregardingmarket developments and structural changes; F) expectations and targetsregarding our industry volumes, market share, prices, net sales and marginsofour products and services; G) expectations and targets regarding ouroperationalpriorities and results of operations; H) expectations and targets regardingcollaboration and partnering arrangements; I) the outcome of pending andthreatened litigation and regulatory proceedings; J) expectations regardingthesuccessful completion of restructurings, investments, acquisitions anddivestments on a timely basis and our ability to achieve the financial andoperational 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 onmanagement's best assumptions and beliefs in light of the informationcurrentlyavailable to it. Because they involve risks and uncertainties, actualresultsmay differ materially from the results that we currently expect. Factors,including risks and uncertainties, that could cause these differencesinclude,but are not limited to: 1) our success in the smartphone market, includingourability to introduce and bring to market quantities of attractive,competitivelypriced Nokia products that operate on the Windows Phone operating systemthatare positively differentiated from our competitors' products, both outsideandwithin the Windows Phone ecosystem; 2) our ability to make Nokia productsthatoperate on the Windows Phone operating system a competitive choice forconsumers, and together with Microsoft, our success in encouraging andsupporting a competitive and profitable global ecosystem for Windows Phoneproducts that achieves sufficient scale, value and attractiveness to allmarketparticipants; 3) reduced demand for, and net sales of, Nokia Lumia productsthatoperate on the Windows Phone 7 operating system as a result of increasingavailability of Nokia Lumia products with the new Windows Phone 8 operatingsystem; 4) the expected continuing decline of sales of Symbian devices andthesignificantly diminishing viability of the Symbian smartphone platform; 5)ourability to produce attractive and competitive devices in our Mobile Phonesbusiness unit including feature phones and devices with moresmartphone-likefeatures such as full touch devices, in a timely and cost efficient mannerwithdifferentiated hardware, software, localized services and applications; 6)ourability to effectively and timely implement planned changes to ouroperationalstructure, including the planned restructuring measures, and tosuccessfullycomplete the planned investments, acquisitions and divestments in order toimprove our operating model and achieve targeted efficiencies andreductions inoperating expenses as well as our ability to accurately estimate therelatedrestructuring charges and restructuring related cash outflows; 7) ourfuturesales performance, among other factors, may require us to recognizeallowancesrelated to excess component inventory, future purchase commitments andinventorywrite-offs in our Devices & Services business; 8) our ability to realizeareturn on our investment in next generation devices, platforms and userexperiences; 9) the intensity of competition in the various markets wherewe dobusiness and our ability to maintain or improve our market position orrespondsuccessfully to changes in the competitive environment; 10) our ability toretain, motivate, develop and recruit appropriately skilled employees; 11)thesuccess of our Location & Commerce strategy, including our ability toestablisha successful location-based platform, extend our location-based servicesacrossdevices and operating systems, provide support for our Devices & Servicesbusiness and create new sources of revenue from our location-based servicesandcommerce assets; 12) our actual performance in the short-term and long-termcould be materially different from our forecasts, which could impact futureestimates of recoverable value of our reporting units and may result inimpairment charges; 13) our success in collaboration and partneringarrangementswith third parties, including Microsoft; 14) our ability to increase ourspeedof innovation, product development and execution to bring new innovativeandcompetitive mobile products and location-based or other services to themarketin a timely manner; 15) our dependence on the development of the mobile andcommunications industry, including location-based and other servicesindustries,in numerous diverse markets, as well as on general economic conditionsgloballyand regionally; 16) our ability to protect numerous patented standardizedorproprietary technologies from third-party infringement or actions toinvalidatethe intellectual property rights of these technologies and our ability tomaintain the existing sources of intellectual property related income orestablish new such sources; 17) our ability to maintain and leverage ourtraditional strengths in the mobile product market if we are unable toretainthe loyalty of our mobile operator and distributor customers and consumersas aresult of the implementation of our strategies or other factors; 18) thesuccess, financial condition and performance of our suppliers,collaborationpartners and customers; 19) our ability to manage efficiently ourmanufacturingand logistics, as well as to ensure the quality, safety, security andtimelydelivery of our products and services; 20) our ability to source sufficientamounts of fully functional quality components, sub-assemblies, softwareandservices on a timely basis without interruption and on favorable terms,particularly as we ramp our new Lumia smartphone devices; 21) our abilitytomanage our inventory and timely adapt our supply to meet changing demandsforour products, particularly as we ramp our new Lumia smartphone devices; 22)anyactual or even alleged defects or other quality, safety and security issuesinour products; 23) the impact of a cybersecurity breach or other factorsleadingto any actual or alleged loss, improper disclosure or leakage of anypersonal orconsumer data collected by us or our partners or subcontractors, madeavailableto us or stored in or through our products; 24) our ability to successfullymanage the pricing of our products and costs related to our products andoperations; 25) exchange rate fluctuations, including, in particular,fluctuations between the euro, which is our reporting currency, and the USdollar, the Japanese yen and the Chinese yuan, as well as certain othercurrencies; 26) our ability to protect the technologies, which we or othersdevelop or that we license, from claims that we have infringed thirdparties'intellectual property rights, as well as our unrestricted use oncommerciallyacceptable terms of certain technologies in our products and services; 27)theimpact of economic, political, regulatory or other developments on oursales,manufacturing facilities and assets located in emerging market countries;28)the impact of changes in government policies, trade policies, laws orregulations where our assets are located and where we do business; 29) thepotential complex tax issues and obligations we may incur to pay additionaltaxes in the various jurisdictions in which we do business and our actualoranticipated performance, among other factors, could result in allowancesrelatedto deferred tax assets, 30) any disruption to information technologysystems andnetworks that our operations rely on, which may be for instance caused byourinability to successfully and smoothly implement our plans to streamlineour ITorganization including the transfer of some activities and employees tostrategic partners; 31) unfavorable outcome of litigations and regulatoryproceedings; 32) allegations of possible health risks from electromagneticfields generated by base stations and mobile products and lawsuits relatedtothem, regardless of merit; 33) Nokia Siemens Networks ability to implementitsnew strategy and restructuring plan effectively and in a timely manner toimprove its overall competitiveness and profitability; 34) Nokia SiemensNetworks' success in the mobile broadband and services market and NokiaSiemensNetworks' ability to effectively and profitably adapt its business andoperations in a timely manner to the increasingly diverse service needs ofitscustomers; 35) Nokia Siemens Networks' ability to maintain or improve itsmarketposition or respond successfully to changes in the competitive environment;36)Nokia Siemens Networks' liquidity and its ability to meet its workingcapitalrequirements; 37) Nokia Siemens Networks' ability to timely introduce newcompetitive products, services, upgrades and technologies; 38) NokiaSiemensNetworks' ability to execute successfully its strategy for the acquiredMotorolaSolutions wireless network infrastructure assets; 39) developments underlarge,multi-year contracts or in relation to major customers in the networksinfrastructure and related services business; 40) the management of ourcustomerfinancing exposure, particularly in the networks infrastructure and relatedservices business; 41) whether ongoing or any additional governmentalinvestigations into alleged violations of law by some former employees ofSiemens may involve and affect the carrier-related assets and employeestransferred by Siemens to Nokia Siemens Networks; and 42) any impairment ofNokia Siemens Networks customer relationships resulting from ongoing or anyadditional governmental investigations involving the Siemenscarrier-relatedoperations transferred to Nokia Siemens Networks, as well as the riskfactorsspecified on pages 13-47 of Nokia's annual report on Form 20-F for the yearended December 31, 2011 under Item 3D. "Risk Factors." Other unknown orunpredictable factors or underlying assumptions subsequently proving to beincorrect could cause actual results to differ materially from those in theforward-looking statements. Nokia does not undertake any obligation topubliclyupdate or revise forward-looking statements, whether as a result of newinformation, future events or otherwise, except to the extent legallyrequired.

Nokia, Helsinki - January 24, 2013

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 includesthereview by the Board of Directors and the audited annual accounts, in week13 of2013.

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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(i) the releases contained herein are protected by copyright and other applicable laws; and

(ii) they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: NOKIA via Thomson Reuters ONE

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