Year 2000 Project
NOKIA CORPORATION
22 July 1999
NOKIA YEAR 2000 READINESS DISCLOSURE AT JUNE 30, 1999
Nokia's activities related to the Year 2000 issues in the second
quarter 1999 continued to be focused on products and systems,
production systems, R&D systems, after sales systems, information
systems, facilities and supplier readiness. Nokia also continued
to develop contingency plans to meet foreseen as well as
unexpected Year 2000 issues.
The Nokia Year 2000 Project
Nokia's Year 2000 Project includes identifying potential risk
areas, increasing risk awareness, and introducing action plans and
guidelines for managing Year 2000 issues. The Project is divided
into subprojects addressing the Year 2000 issues in products and
systems, production systems, R&D systems and after sales systems
within Nokia Telecommunications, Nokia Mobile Phones and Other
Operations, which includes Nokia Communications Products, Nokia
Ventures Organization and Nokia Research Center. The Year 2000
subprojects for information systems, facilities systems and
supplier readiness are Nokia-wide.
During the second quarter, Nokia implemented a process to include
the Year 2000 issues related to acquired business entities in its
Year 2000 Project. Nokia continues to assess the Year 2000 status
of these business entities, including testing and verification.
Due to this, certain timeframes announced for Nokia's various Year
2000 subprojects as well as its general statements on Year 2000
readiness status may not be applicable to the business entities
acquired as of the fourth quarter 1998 onwards.
Products and systems
According to testing and verification, most of Nokia's
infrastructure related products and terminal products, including
mobile phones, display products, digital multimedia terminals and
battery chargers for mobile phones are Year 2000 compliant. For
those products which to date are not compliant but can be made
Year 2000 compliant, Nokia has introduced relevant compliance
solutions. As announced, a small number of Nokia's products will
not be made compliant. These include a limited number of old
products no longer manufactured or for which new products have
been substituted.
Production systems, R&D systems, after sales systems and other
information systems
Nokia has completed the categorization of its production systems
in critical or non-critical and, according to testing and
verification, its critical production systems are Year 2000
compliant. Nokia also continues to upgrade the non-critical
production systems hardware and software and is testing their Year
2000 compliance. Based on testing and verification, Nokia's
critical R&D systems are compliant and Nokia will continue to test
and verify its other R&D related systems.
Nokia continues to have plans to have its critical after-sales
systems to be Year 2000 compliant during the third quarter 1999
and to have its other critical information systems compliant
during the second half of 1999.
Facilities
Nokia has identified the relevant Year 2000 issues for its
facilities systems and equipment and categorized its facilities as
critical or non-critical. During the second quarter, Nokia
continued the necessary Year 2000 analysis and upgrades of the
critical facilities systems. As announced earlier, Nokia plans to
have the necessary upgrades completed during the second half of
1999.
Suppliers
Nokia continued to verify and audit the status of its sourced
items as well as the continued performance of its suppliers into
the year 2000. Nokia has categorized its suppliers as critical or
non-critical. Due to incomplete information received from certain
suppliers as well as certain recently acquired new suppliers not
yet been verified, Nokia is continuing its supplier verification
process and has plans to complete the verification of all of its
critical suppliers as well as their continued performance into the
year 2000 during the third quarter 1999.
Contingency planning, costs and risks
Nokia believes that the planning and implementing of necessary
Year 2000 upgrades will reduce the possible Year 2000 risks
related to its products, services and its own operations. During
the second half of 1999, Nokia will organize contingency plan
rehearsals. Nokia also plans to have special taskforces available
throughout the critical change-over period.
At Nokia, Year 2000 contingency plans to date include: setting up
a Year 2000 Operations Center for each subproject; introducing
complementary suppliers, hardware and software components and/or
raw materials and services; manufacturing and holding certain
special stock; and assisting critical suppliers in their Year 2000
upgrading. Nokia will also continue its contingency planning and,
to the extent it determines that Year 2000 issues have not been
appropriately addressed, implement these plans, during the second
half of 1999.
Nokia's estimate of its direct Year 2000 costs remains to be EUR
75.7 million. At the end of June 1999, Nokia had spent
approximately 80% of the estimated aggregate amount. Cost
estimates may vary in the future and will be updated as Nokia
learns additional information concerning the status of its own and
relevant third parties' Year 2000 compliance.
Currency rate June 30, 1999 1 EUR = 1.034 USD
It should be noted that certain statements herein which are not
historical facts, including, without limitation those regarding 1)
the projected extent and timing of Year 2000 compliance for
Nokia's products, systems, and facilities as well as those of
third parties with which Nokia is involved, 2) the estimated costs
of Year 2000 compliance activities, including actions currently
contemplated and actions, including operating models and
contingency plans, decided upon in the future, 3) the continuation
of production activities over year-end 1999, 4) the estimated
impact on Nokia's business, results and financial condition of
failures by it or third parties, with which Nokia is involved, to
adequately address Year 2000 issues, and 5) certain statements
preceded by 'believes', 'expects', 'aims', 'intends', 'estimates',
'anticipates', or similar expressions, are forward looking
statements. Because such statements involve risks and
uncertainties, actual events may differ materially from those
currently expected by Nokia. Factors that could cause such
differences include, but are not limited to 1) additional
information Nokia may discover concerning the status of Year 2000
compliance of the products, systems and facilities or those of
third parties as part of Nokia's Year 2000 Project, 2) failures of
others, including public utilities, financial institutions,
communications companies, transportation providers, customers,
suppliers, computer manufacturers and software providers, as well
as other providers of resources of which Nokia relies, to
identify, disclose and address Year 2000 issues accurately and on
a timely basis, 3) the inability of Year 2000 consultants, experts
and advisers to adequately identify and address Year 2000 issues
as planned, 4) changes in technologies or methodologies used in
identifying and addressing Year 2000 issues in products, systems
and facilities, 5) the effectiveness and costs of operating models
and contingency plans Nokia may develop as it learns more about
the status of its own and others' Year 2000 compliance and
readiness, and 6) factors that could affect Nokia's business,
results and financial condition generally, including the risk
factors specified in Nokia' s Form 20-F for the year ended
December 31, 1998.
THE NOKIA YEAR 2000 READINESS DISCLOSURE PUBLISHED ON JULY 22,
1999 CONTINUES NOKIA'S QUARTERLY REPORTING ON YEAR 2000 ISSUES AND
UPDATES THE DISCLOSURES PUBLISHED ON NOVEMBER 16, 1998, JANUARY
29, 1999 AND APRIL 22, 1999. NOKIA'S NEXT YEAR 2000 READINESS
DISCLOSURE WILL BE PUBLISHED ON OCTOBER 21, 1999.
Further information:
Marja-Terttu Verho
Senior Manager, Nokia Corporate Communications
Tel. +358 9 1807 286
Fax +358 9 652 409
www.nokia.com
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