Third Quarter Results - Pt 2

Nokia Corporation 19 October 2001 Part 2 CONSOLIDATED PROFIT AND LOSS ACCOUNT, IAS, EUR million (unaudited) Pro forma Pro forma Reported Reported 7-9/01 7-9/00 7-9/01 7-9/00 Net sales 7 050 7 575 7 050 7 575 Cost of sales -4 573 -4 915 -4 573 -4 915 Research and development -675 -613 -675 -613 expenses Selling, general and -731 -694 -731 -694 administrative expenses One-time charges 1) - - -714 Amortization of goodwill - - -73 -31 Operating profit 1 071 1 353 284 1 322 Share of results of associated -9 -5 -9 -5 companies Financial income and expenses 6 18 6 18 Profit before tax and minority 1 068 1 366 281 1 335 interests Tax -298 -394 -85 -394 Minority interests -10 -49 -10 -49 Net profit 760 923 186 892 Earnings per share, EUR Net profit Basic 0.16 0.20 0.04 0.19 Diluted 0.16 0.19 0.04 0.19 Average number of shares (1 000 shares) Basic 4701821 4679976 4701821 4679976 Diluted 4771603 4793623 4771603 4793623 Depreciation and amortization, 341 279 total Non-recurring items 1) One-time charges, see page 2 CONSOLIDATED PROFIT AND LOSS ACCOUNT, IAS, EUR million (unaudited) Pro forma Pro forma Reported Reported 1-9/01 1-9/00 1-9/01 1-9/00 Net sales 22 403 21 092 22 403 21 092 Cost of sales 1) -14 157 -13 130 -14 228 -13 130 Research and development -2 235 -1 820 -2 235 -1 820 expenses Selling, general and -2 363 -2 009 -2 502 -2 009 administrative expenses 2) One-time charges 3) - - -714 - Amortization of goodwill - - -215 -83 Operating profit 3 648 4 133 2 509 4 050 Share of results of -9 -9 -9 -9 associated companies Financial income and expenses 80 51 80 51 Profit before tax and 3 719 4 175 2 580 4 092 minority interests Tax -1 019 -1 248 -766 -1 248 Minority interests -64 -110 -64 -110 Net profit 2 636 2 817 1 750 2 734 Earnings per share, EUR Net profit Basic 0.56 0.60 0.37 0.59 Diluted 0.55 0.59 0.37 0.57 Average number of shares (1 000 shares) Basic 4696591 4669034 4696591 4669034 Diluted 4783567 4792321 4783567 4792321 Depreciation and 1014 686 amortization, total Non-recurring items 1) Non-recurring charges of EUR 71 million from Q2 2) Non-recurring charges, total of EUR 139 million from Q2, including EUR 54 million impairment of goodwill, and EUR 24 million gain from the disposal of certain production operations. 3) One-time charges from Q3, see page 2. CONSOLIDATED PROFIT AND LOSS ACCOUNT, IAS, EUR million (unaudited) Pro forma Reported 1-12/00 1-12/00 Net sales 30 376 30 376 Cost of sales -19 072 -19 072 Research and development expenses -2 584 -2 584 Selling, general and administrative -2 859 -2 804 expenses 1) Amortization of goodwill - -140 Operating profit 5 861 5 776 Share of results of associated companies -16 -16 Financial income and expenses 102 102 Profit before tax and minority interests 5 947 5 862 Tax -1 780 -1 784 Minority interests -140 -140 Net profit 4 027 3 938 Earnings per share, EUR Net profit Basic 0.86 0.84 Diluted 0.84 0.82 Average number of shares (1 000 shares) Basic 4 673 162 4 673 162 Diluted 4 792 980 4 792 980 Depreciation and amortization, total 1 009 Non-recurring items 1) Change in accounting method related to pensions, EUR 55 million positive item NET SALES BY BUSINESS GROUP, EUR million (unaudited) 7-9/2001 7-9/2000 1-9/2001 1-9/2000 1-12/2000 Nokia Networks 1 659 1 926 5 577 5 353 7 714 Nokia Mobile Phones 5 269 5 456 16 448 15 178 21 887 Nokia Ventures 140 209 443 613 854 Organization Inter-business group -18 -16 -65 -52 -79 eliminations Nokia Group 7 050 7 575 22 403 21 092 30 376 OPERATING PROFIT BY BUSINESS GROUP, EUR million (unaudited) Pro forma 7-9/2001 7-9/2000 1-9/2001 1-9/2000 1-12/2000 Nokia Networks 155 357 819 993 1 400 Nokia Mobile Phones 1 002 1 069 3 169 3 453 4 897 Nokia Ventures -72 -60 -267 -203 -307 Organization Common Group Expenses -14 -13 -73 -110 -129 Nokia Group 1 071 1 353 3 648 4 133 5 861 Goodwill amortization 7-9/2001 7-9/2000 1-9/2001 1-9/2000 1-12/2000 Nokia Networks -26 -8 -64 -23 -42 Nokia Mobile Phones -23 -1 -70 -3 -18 Nokia Ventures -24 -22 -81 -57 -80 Organization Common Group Expenses - - - - - Total -73 -31 -215 -83 -140 Non-recurring items 7-9/2001 7-9/2000 1-9/2001 1-9/2000 1-12/2000 Nokia Networks -714 - -755 - - Nokia Mobile Phones - - -35 - - Nokia Ventures - - -134 - - Organization Common Group Expenses - - - - 55 Total -714 - -924 - 55 Reported 7-9/2001 7-9/2000 1-9/2001 1-9/2000 1-12/2000 Nokia Networks -585 349 - 970 1 358 Nokia Mobile Phones 979 1 068 3 064 3 450 4 879 Nokia Ventures -96 -82 -482 -260 -387 Organization Common Group Expenses -14 -13 -73 -110 -74 Nokia Group 284 1 322 2 509 4 050 5 776 CONSOLIDATED BALANCE SHEET, IAS, EUR million (unaudited) 30.9.2001 30.9.2000 31.12.2000 ASSETS Fixed assets and other non-current assets Intangible assets 2 491 1 527 1 994 Property, plant and equipment 2 601 2 637 2 732 Investments in associated 58 83 61 companies Available-for-sale investments 405 309 392 Deferred tax assets 629 501 401 Long-term loan receivables 819 712 808 7 003 5 769 6 388 Current assets Inventories 1 910 2 420 2 263 Receivables 6 999 7 182 7 056 Available-for-sale investments 2 739 2 620 2 774 Bank and cash 1 559 1 497 1 409 13 207 13 719 13 502 Total assets 20 210 19 488 19 890 SHAREHOLDERS' EQUITY AND LIABILITIES Shareholders' equity Share capital 283 281 282 Share issue premium 1 997 1 690 1 695 Treasury shares -40 -184 -157 Equity adjustments 224 435 347 Retained earnings 9 074 7 433 8 641 11 538 9 655 10 808 Minority interests 193 195 177 Long-term liabilities Long-term interest bearing 243 186 173 liabilities Deferred tax liabilities 81 69 69 Other long-term liabilities 64 72 69 388 327 311 Current liabilities Short-term borrowings 782 1 110 1 069 Current portion of long-term 4 48 47 debt Accounts payable 2 520 2 898 2 814 Accrued expenses 2 751 3 301 2 860 Provisions 2 034 1 954 1 804 8 091 9 311 8 594 Total shareholders' equity and 20 210 19 488 19 890 liabilities Interest-bearing liabilities 1 029 1 344 1 289 Shareholders' equity per share, EUR 2.45 2.06 2.30 Number of shares (1000 shares) * 4 716 080 4 683 825 4 692 133 * Shares owned by Group companies are excluded CONSOLIDATED CASH FLOW STATEMENT, IAS, EUR million (unaudited) 1-9/2001 1-9/2000 1-12/2000 Cash flow from operating activities Net profit 1 750 2 734 3 938 Adjustments, total 2 521 1 952 2 805 Net profit before change in net 4 271 4 686 6 743 working capital Change in net working capital 452 -1 031 -1 377 Cash generated from operations 4 723 3 655 5 366 Interest received 211 197 255 Interest paid -138 -81 -115 Other financial income and expenses 41 -413 -454 Income taxes paid -961 -1 013 -1 543 Net cash from operating activities 3 876 2345 3 509 Cash flow from investing activities Acquisition of Group companies, net of acquired cash -131 2 -400 Investments in other shares - 95 -118 -111 Additions in capitalized development -327 -298 -393 costs Long-term loans receivable from -756 -651 -776 customers Capital expenditures -821 -1 171 -1 580 Proceeds from disposal of Group companies, net of disposed cash - 2 4 Proceeds from sale of available-for- 103 68 75 sale investments Proceeds from sale of fixed assets 230 154 221 Dividends received 27 49 51 Net cash used in investing activities -1 770 -1 963 -2 909 Cash flow from financing activities Proceeds from issuance of share 14 52 72 capital Treasury shares acquired -21 -35 -160 Capital investment by minority 2 3 7 shareholders Long-term liabilities, proceeds 49 -71 -82 from/payment of Short-term borrowings, proceeds -548 124 133 from/payment of Long-term receivables, proceeds -20 - - from/payment of Short-term receivables, proceeds -41 387 378 from/payment of Dividends paid -1 354 -1 012 -1 004 Net cash used in financing activities -1 919 -552 -656 Foreign exchange impact on cash -72 128 80 Net increase in cash and cash 115 -42 24 equivalents Cash and cash equivalents at beginning 4 183 4 159 4 159 of period Cash and cash equivalents at end of 4 298 4 117 4 183 period CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY, EUR million (unaudited) Share Share Treas Transl Fair Retain Total capital issue ury ation value ed prem shares differ and earn ium ences other ings Reser ves Balance at 279 1 079 -24 243 5 801 7 378 December 31, 1999 Share issue 2 536 538 Acquisition of -160 -160 treasury shares Stock options issued 75 75 on acquisitions Dividend -931 -931 Translation 192 192 differences Change in accounting -206 -206 policy Other 35 35 increase/decrease, net Net profit 2 734 2 734 Balance at 281 1 690 -184 435 7 433 9 655 September 30, 2000 Balance at 282 1 695 -157 347 - 8 641 10 808 December 31, 2000 Share issue 1 345 346 Acquisition of -21 -21 treasury shares Disposal of treasury -53 138 85 shares Stock options issued 20 20 on acquisitions Stock options -10 -10 exercised related to acquisitions Dividend -1 314 -1 314 Translation -60 -60 differences Effect of change in -56 -56 accounting principle (IAS 39) Cash flow hedges and fair -7 -7 value adjustments Other -3 -3 increase/decrease, net Net profit 1 750 1 750 Balance at 283 1 997 -40 287 -63 9 074 11 538 September 30, 2001 COMMITMENTS AND CONTINGENCIES, EUR million (unaudited) GROUP 30.9.2001 30.9.2000 31.12.2000 Collateral for own commitments Mortgages 10 12 12 Assets pledged 3 4 4 Collateral given on behalf of other companies Assets pledged 23 - 23 Contingent liabilities on behalf of Group companies Other guarantees 555 607 656 Contingent liabilities on behalf of other companies Guarantees for loans 74 372 298 Other guarantees 1 Leasing obligations 1 301 879 895 NOTIONAL AMOUNTS OF DERIVATIVE FINANCIAL INSTRUMENTS, EUR million (unaudited) 1) 30.9.2001 30.9.2000 31.12.2000 Foreign exchange forward contracts 2)3) 8 130 9 854 10 497 Currency options bought 980 1 539 2 165 Currency options sold 929 1 355 2 029 Interest rate forward and futures - - - contracts 2) Interest rate swaps - 250 250 Cash settled equity swaps 4) 267 350 336 1) The notional amounts of derivatives summarized here do not represent amounts exchanged by the parties and, thus are not a measure of the exposure of Nokia caused by its use of derivatives. 2) Notional amounts outstanding include positions, which have been closed off. 3) Notional amount includes contracts used to hedge the net investments in foreign subsidiaries. 4) Cash settled equity swaps are used to hedge risks relating to incentive programs and investments activities Closing rate, 1 EUR = 0.926 USD Change in Accounting Principles The Group has adopted, beginning January 1, 2001, IAS 39, Financial instruments: recognition and measurement. The impact of the changes in policy on opening shareholders' equity is quantified as follows: Total shareholders' equity at 31 December 2000 as previously reported 10 808 IAS 39 transition adjustments: Fair value adjustments to available-for-sale debt and equity investments 1) 58 Transfer of gains and losses on qualifying cash flow hedging derivatives 2) -114 Total shareholders' equity at 1 January 2001 10 752 1) Available-for-sale investments in debt and equity securities and investments in unlisted equity shares are measured at fair value unless investments are held for trading or originated loans or unlisted equities cannot be measured reliably. 2) Gains and losses on foreign exchange forward contracts that are properly designated and are highly effective as cash flow hedges of highly probable forecast foreign currency cash flows are deferred in a hedging reserve within equity. Previously, such gains and losses were reported as deferred income or expenses. It should be noted that certain statements herein which are not historical facts, including, without limitation those regarding 1) the timing of product deliveries; 2) the Company's ability to develop and implement new products and technologies; 3) expectations regarding market growth and developments; 4) expectations for growth and profitability; and 5) statements preceded by 'believes', 'expects', 'anticipates', 'foresees', or similar expressions, are forward-looking statements. Because such statements involve risks and uncertainties, actual results may differ materially from the results currently expected by the Company. Factors that could cause such differences include, but are not limited to 1) industry conditions, such as the strength of product demand, the intensity of competition, pricing pressures, the acceptability of new product introductions such as Internet-ready phones, the introduction of new products by competitors, the impact of changes in technology, including the Company's success in the emerging 3G market, the introduction and marketing of new products and services by operators, the ability of the Company to source components from third parties without interruption and at reasonable prices, demand for vendor financing and the Company's ability and willingness to provide such financing and to mitigate the related exposure, and the success and financial condition of the Company's strategic partners and customers; 2) operating factors, such as continued success of manufacturing activities and the achievement of manufacturing efficiencies therein, continued success of product development and inventory risks due to shifts in market demand; 3) general economic conditions in the Company's principal geographic markets and in the wireless telecommunications industry as a whole, and fluctuations in exchange rates, including in particular the impact of the exchange rate between the Euro and the US dollar; as well as 4) the risk factors specified on pages 10 to 16 of the Company's Form 20-F for the year ended December 31, 2000. NOKIA Helsinki, October 19, 2001 For more information: Lauri Kivinen, Corporate Communications, tel. +358 7180 34495 Ulla James, Investor Relations, tel. +1 972 894 4880 Antti Raikkonen, Investor Relations, tel. +358 7180 34290 www.nokia.com - Nokia will report 4Q 2001 results on January 24, 2002 and plans a mid-quarter update on December 11, 2001. - Results announcements for 1Q, 2Q and 3Q, 2002 are planned for April 18, July 18 and October 17, respectively. - The Annual General Meeting is expected to be held on March 21,2002.

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