Good morning. My name is (Latanya) and I will be your conference operator today. At this time, I would like to welcome everyone to the Nokia Second Quarter 2011 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions) I will now turn the call over to Mr. Matt Shimao, Host of Investor Relations. Sir, you may begin your conference. Matt Shimao – Head of Investor Relations: Ladies and gentlemen, welcome to Nokia’s second quarter 2011 conference call. I am Matt Shimao, Head of Nokia Investor Relations; Stephen Elop, President and CEO of Nokia; and Timo Ihamuotila, CFO of Nokia are here in Espoo with me today. During this call, we will be making forward-looking statements regarding the future business and financial performance of Nokia and its industry. These statements are predictions that involve risks and uncertainties. Actual results may therefore differ materially from the results we currently expect. Factors that could cause such differences can be both external such as general, economic and industry conditions, as well as internal operating factors. We have identified these in more detail on pages 12 through 39 of our 2010 20-F and in our quarterly results press release issued today. Please note that our quarterly results press release, the complete interim report with tables and the presentation on our website include non-IFRS results information in addition to the reported results information. Our complete interim report with tables available on our website includes a detailed explanation of the content of the non-IFRS information and a reconciliation between the non-IFRS and the reported information. With that, Stephen, over to you. Stephen Elop – President and Chief Executive Officer: Thank you, Matt. Welcome, ladies and gentleman and thank you…

Your first question comes from the line of Tim Long with Bank of Montreal. Tim Long – Bank of Montreal: Thank you. Just a question on the IPR pretty sizable in the quarter, it looked like most of the profits there. Could you just talk to us a little bit about how much of that was catch up and how much would you say is going to be recurring? And maybe just a little view, should we expect in the future that we will get a much more meaningful contribution from IPR as you exert your patent portfolio across the industry? Thank you.

Okay, Timo here. Thanks for the question. Yes, you're right. We had this €430 million IPR, and this is actually a one-time item related to both past as well as partly to Q2, but it should not be viewed as anything that signals something about the future quarters. Now, we are expecting a slight increase on our running IPR income as well, but again this €430 million is not in any ways a signal of the magnitude.

Thanks, Tim. Operator next question please.

Our first question comes from the line of Andrew Gardiner with Barclays Capital. Andrew Gardiner – Barclays Capital: Hi, good morning. Thank you very much for taking my question. I was just interested in a bit more detail around the 3Q guidance. I appreciate as you said that the visibility isn’t as good today as it once was, and clearly you left out the revenue guidance that you previously provided. But in terms of how you’re getting to the 3Q margin guidance of around break-even, I’m just wondering what should the team some moving parts for you? Are you expecting to get to that kind of a margin by showing slight sales growth in the quarter, or is it more likely to come from further operating expense cuts that you can realize sooner rather than later. So, just a bit of clarity around the key drivers from your point of view would be very helpful?

Thanks for the question. Let me comment generally without providing additional guidance if you may. The way we are looking at this; first of all, the comments I made early in the prepared remarks are relevant here in terms of seeing improved stability and therefore some improvements in visibility as we exit Q2 as we saw in the latter weeks of Q2 and these early weeks of Q3, balanced with the fact that we are going through a transition that there are changes ahead in the marketplace because of our unique circumstances and so forth. And so as we considered guidance, we were concerned about how close we could come or how well we could guide on the top line. As it relates to OpEx and what we provided, you noticed we broadened the range a little bit to give some indication of that visibility, but we are also taking steps, as we indicated in my remarks to be accelerating the pace of OpEx reductions and so forth. And therefore, we had increased confidence both being able to guide for the bottom line and also to provide a comment about cash during the half as well?

So, maybe if I’ll just give a brief comment as well on some of the additional drivers as was said so again as part of the guidance, also this slightly increase, just adding to Stephen said slight increase on the IPR side what we spoke about and then regarding OpEx, of course we are trying to pull our targets forward as much as possible, but we also need to market our products and we need to drive the channel on the sellout. So, that is also happening. So, regarding OpEx we need to take both of these dynamics into account when we look at Q2 OpEx.

Thanks Andrew. Operator, next question, please.

Your next question comes from the line of Stuart Jeffrey with Nomura. Stuart Jeffrey – Nomura: Hi, there. Thank you. I was hoping if you could perhaps cast a bit more light on the mobile devices business. Historically, because the volumes are so big, it’s quite hard for new products to have a material impact for some quarters. I was wondering if you could just perhaps take us through some of the competitive issues, suddenly changed things during Q2 after three quarters of stability, it takes time to ramp up products. So, maybe you can just help us understand the dynamics in that business which was obviously very high margin for some time and where you think you can get close to those historic margins going forward? Thanks.

Thanks for the question. I think a couple of things I would highlight here. First of all, as it relates to the mobile phone business, it too was part of the work that we had to do from an inventory perspective, particularly in China, less so in India. So, we definitely had to consider that as we went through Q2. As we highlighted in the Q1 call, Q2 was an important turning point as it relates to mobile phones’ product strategy, specifically the introduction of the dual SIM product line. This is a very significant change in India now spreading to other parts of Southeast Asia, you will see it other markets in the quarters ahead. And in terms of the ramp up potential there, we think we are on a very good ramp from the early signs that we have is still early, but nonetheless there is a quite a bit of enthusiasm about what the future holds. And if you do some channel checks and so forth in India for example, I think you’ll get some of those signs. The other thing that is worth noting here is that we didn't just enter the dual SIM market as another dual SIM provider. There is some very specific differentiation. For example in the C2-03, the capability for the device to actually think about or remember or manage five different SIM cards while easily swapping them without turning the power off, without losing the time that’s on the device, and so forth. All of that type of innovation as we bring a next-generation of dual SIM to the market, I think pertains well for the future of gross margins and so forth. It's hard to comment overall and where that ends up, but nonetheless we’ve got some important steps that are now in place and taking hold. So, we’re encouraged by that.

Maybe if I add a quick comment what we’ve spoken about earlier as well is that regarding mobile phones we have said that we will increase our investment in to that business really to drive innovation there and to drive that web for the next strategy. So that also needs to be taken into account when thinking about those parameters.

Thanks, Stuart. Operator, next question please.

Your next question comes from the line of Andrew Griffin with Bank of America. Andrew Griffin – Bank of America: Hi, there. Thanks for the question. Your China business fell by 50% quarter-on-quarter, I mean that seems to be much bigger than just the competitive situation and you had mentioned inventory correction. But, could you give us a little bit more flavor of exactly what went on there? It looks as though the business just lost control of what was going on downstream.

So, let me try and characterize the dynamics in China, because as you look at that that number, just as you said, what exactly happened. First of all from a competitive perspective it is the case that the challenges that began very much in the west with various products and so forth is spreading from west to east. So there is increased competitive pressures in China. And that is evident from a number of different indicators, certainly including ours as well. That being said, if you have a situation where inventory levels are rising while those competitive pressures are increasing and demand is perhaps moving down. Then you may exit the quarter with a perception of your inventory circumstances as we described at the end of Q1. But, as you get into Q2 and truly understand the level of demand and therefore where you really are from an inventory perspective, you got to take very decisive actions and that’s precisely what we did in China in Q2. And so when thinking about the pattern of numbers in China, the as reported Q1 to Q2 shift is really what’s reported and so forth, but nonetheless, we have to take into account what was going on with inventory levels at the time in the phase of some softening of demand. So, there is softening of demand, but the inventory movements were substantial.

Okay, thank you Andrew. Operator, next question please.

Your next question comes from the line of Gareth Jenkins with UBS. Gareth Jenkins – UBS: Thanks. Just on product strategy, I guess, two short product strategy questions. Firstly, I just wonder whether there is any change in terms of go-to-market in regions such as Japan. Are there any markets where maybe yield takes some volume off the table to benefit ASP? And then secondly just in terms of the, you see right product, Windows Mango product, the device launch, I just wondered when you launch in markets with the N9 also running alongside. Will you actually launch two products in the same market or you actually go-to-market in with different phones in different markets? Thanks.

Thanks for your questions. First of all, with the Windows Phone product, there are market opportunities that open up to us that we have not been availing of ourselves so far. For example, certain technologies where we are absent right now, CDMA is one example. There is obviously increased potential to go after CDMA markets. We believe there is increased potential to go after TD-SCDMA markets as well. So, from a technology perspective, opportunities are opening because of the shift in strategy and openings sooner than could have been the case with other strategies. Also the case from a geographic perspective, there are opportunities geographically to look at other markets. We have not made any announcements in that space at this time. So, those opportunities clearly exist for us. As it relates to which products, which markets, we don’t have specific announcements today as to which product should be placed into which markets or where they will begin and so forth, but it is the case that the N9 is intended to be a regionally targeted products. And in terms of making decisions about where it should go, certainly we will consider the strength of Symbian in those markets, we will consider the timing of potential Windows Phone products in those markets, and a variety of other factors. So, the question you ask is an insightful one in terms of trying to assess how do we balance this in terms of where we focus launch dollars market-by-market and/or operator-by-operator. Gareth Jenkins – UBS: Thanks.

Thank you, Gareth. Thanks Gareth. Operator, next question please.

Your next question comes from the line of Ittai Kidron with Oppenheimer. Ittai Kidron – Oppenheimer: Question with regards to the cost savings, Timo, you talked about the €1 billion that you are going to exceed that target, couple of questions in respect of that, first can you give us a little bit sense of the magnitude how much above €1 billion do you think you can achieve? And second is there any difference since you seem to be running ahead on plan on that? Is there also a change in the linearity by which the benefits from this cost savings will be reflected in your P&L meaning could we see some of that more early in ‘12 versus more later in ‘12 and ‘13?

Yeah, thanks for the questions. We said both exceed as well as accelerate. Clearly, we are working on both of these. And maybe I will deal with accelerate topics first, because typically in this kind of business, you have certain levers but you don’t have a huge amount of levers very short-term. So, we can of course and are looking at things like subcontracting, we are looking at our IT system. So, we absolutely meet all that on the short and medium-term while of course we are investing and building for the future. And then things like travel and so forth are under very tight scrutiny at the moment. So, that’s kind of like the accelerate part. Then on the magnitude, clearly, we are expecting this to be somewhat material as we are spelling out a new target, but I can’t give you anymore tight figures at this point.

And if I could just also comment on the sources of OpEx potential, part of what we are seeing is as we have gone through the first phases of restructuring as we have done our first consultation, as we have a larger group of the company involved in the planning of the future of what we need to do and so forth. We are in a position to identify for example, how do we deploy our marketing dollars most effectively? How do we make sure that every sales dollar is effectively spent? Of course, we have some areas where when we look at location and commerce coming together, how do you structure that optimally first new mission and so forth. All of which can contribute to how we are planning our OpEx in the future. So, a number of these things as you take the first step and open up the next door, you can continue through that. As I mentioned in my scripts as well, as it relates to our manufacturing and supply operation, the opportunities consolidate supplies, drive improvements on manufacturing and so forth. Those opportunities are steadily flowing in and that’s why we have confidence in our ability to raise the OpEx savings target.

If I may just one thing, which I want to mention is, of course we made a very clear plans when we announced the restructuring after Q1 and we have those plans in place and of course we are also looking to accelerate executing of these plans, which we already had and that we can do.

Thanks, Itta. Operator next question please.

Your next question comes from the line of Tim Boddy with Goldman Sachs. Tim Boddy – Goldman Sachs: To ask more about whether the guidance of cash flow represents some kind of changes strategy, what is really more important to you now, is it protecting the channel, protecting your position or is it preserving your liquidity and cash position. Because I guess thinking about the dynamics in cash flow you’ve got to restructure in a sense of restructuring significant, we just been discussing in the handset business. To help me understand you’re thinking about liquidity relative to kind of market position. Thank you.

I’ll take the question first of all from a general perspective and that is, is clearly a balance of all of those things, depending on the nature of various markets protecting shelf space maybe more or less important relative to our influence over those particular channels. We think very differently about pricing and so forth in operator-managed or operator high influence markets relative to open markets, where we have more direct connection with the pricing strategies. So, there are a number of those things that we try and keep in balance. Now, as it relates to liquidity and cash, what we specifically wanted to signal, was our sense of confidence around the cash position, noting that Q2 had a number of factors in it like the dividend, like the Motorola acquisition cost and so forth. But we wanted to signal clearly that, even although Q2 had a number of these factors we wanted to give you a clear signal that we would be, in exiting Q4 and a cash position that was in excess of where we are today.

So, clearly if I may comment, so drivers for the net cash position statement clearly, was the main driver as Stephen was saying. It is the performance in operating cash flow. We also are expecting to get some negative cash based restructuring charges in, but we are also expecting to get a positive impact from some of the partnership and royalty contracts what we had. So, those are the drivers behind that.

Thank you, Tim. Operator next question please.

Your next question comes from the line of Pierre Ferragu with Bernstein. Pierre Ferragu – Bernstein: Thank you. You mentioned macroeconomic environment are the potential swing factor for your guidance for the third quarter. What have you seen so far in terms of the economic environment, does that impact negatively, you sales in Europe and Middle East and what sort of scenario do you see going forward? Where do you see potential risk? Thank you.

Yes, we mentioned the macro because clearly we all know that there is lots going on in Europe in particular and we also have some inflationary pressures in the so called, let’s say emerging markets in general. But there is nothing more to that. We just simply want to recognize that we see that risk of course regarding sales performance in general. We run many scenarios and take these the impacts into account as well as similar general performance and other things. So, that’s why. Pierre Ferragu – Bernstein: So, you haven’t seen any weakness so far like that you would associate to evolution of the macroeconomic environment?

As we said, we did not see the impact from the inflation so for that’s what I have said on remarks. And also if you look at the situation Europe sort of being able to isolate that impact at the moment, I don’t think we have visibility to that at the moment. But of course we don’t know what is going to happen especially in southern Europe that is an important market for us.

Thanks, Pierre. Operator next question please.

Your next question comes from the line of Alexandre Peterc with Exane BNP. Alexandre Peterc – Exane BNP: Thanks, taking for my question. I just would like to focus on the financing of NSN for a moment. Would you explain how NSN financed the Motorola acquisition and whether that was drawdown on the revolving credit that was already €100 million drawn by end 2010 and if so what’s the way forward for NSN financing given that this revolver of NSN expires in May 2012?

Yeah, we said that the Motorola acquisition was paid in cash and it’s been financed by short term debt in the NSN, and that’s how it is. What comes to the NSN financial plans and what Stephen and myself both said we are working now together with Siemens for a best possible solution for the business, ultimate we have to drive for the success of the business and top line growth will give us opportunities to concentrate our investment into the key core areas of mobile broadband and certain key services and then of course we are planning to take up OpEx out as well, but we don’t have anything further to say at the moment about the financing. Alexandre Peterc – Exane BNP: Thanks a lot.

Operator, next question please.

Our next question comes from the line of Kulbinder Garcha with Credit Suisse. Kulbinder Garcha – Credit Suisse: Hi, thanks for the taking the question. And I just want to clarify, on the inventory reduction that you mentioned in Europe and China, I think, can you give us some idea of the magnitude of it? I’m just trying to think how much selling versus sellthrough really changed from Q1 to Q2. And then the other question which is actually the more important one. The question for Stephen really, what are the challenges you have based up on the Windows software and architecture to actually bring Windows phones to a really lower price point, and the reason why I ask is that right now the Windows specification seemed to be very high end, and if you want to get volume for it out there even during 2012, I’m just thinking maybe the second half of it not early in the year, is that possible, any kind of color that would be helpful.

Great, thanks for the questions. First of all, the inventory reduction and so forth in China. We’re not providing the specific numbers, but they were substantial. And of course part of it is always inventory you can see, sometimes it’s inventory that you can’t see and how you measure a market as complex as China. But nonetheless the stability that we saw in the latter part of the quarter was very much related to improvements in the inventory circumstances throughout the country. So, we’re definitely encouraged by that. With respect to Windows phone and moving down in price points, the challenges with that are very much putting the teams together, having the plans, making the right technology decisions and so forth. And that work is well underway. We’re not providing any specific guidance as to what devices, at what points and what time. But, I have said in, I think some of the very important – or sorry, very initial announcements as it relates to Windows phone that it was a specific criterion for us to ensure that we have visibility with the engineers all signed up on to taking Windows phone substantially down in price. So, we are now in the process of executing on that plan. Kulbinder Garcha – Credit Suisse: And the Europe and China inventory.

Yeah, on the inventory question, I mean, we said that growing into Q2 we were slightly above our normal four to six weeks and now said that we are close to the mid point. So if you calculate one week from there and take our average volumes, I mean, that’s close enough Q1, Q2 average something like that and ASP. So, that will give an indication of that, of the magnitude.

Number of calculations will be done there.

Thank you, Kulbinder. Operator, next question please.

And our final question comes from the line of Mike Walkley with Canaccord Genuity. Michael Walkley – Canaccord Genuity: Great, thank you. Stephen just building on the last question on the price points for Windows longer term. In the intermediate term, can you just discuss kind of the industry competitiveness. We’re starting to see, Android, touch screens, smartphones hitting the sub €200 price points. How do you compete in that kind of €100 to €200 price range? It sounds like you’re doing well in the sub €50 phones for mobile phones, but can you talk about Android prices falling and how you can be competitive, as you get Windows down the price curve?

Sure, and thanks for the question. The short answer to your question is with Windows phone, we are very specifically targeting a broad range of prices and bringing Windows phone down in the price point. But if I may add to the answer, you used the word differentiation and so forth. That’s a really important element of why we made the Windows phone selection is because of our belief in our ability to fundamentally differentiate with our partner Microsoft relative to the Android ecosystem. One of the things that I think underscores that and really sets the tone for the next couple of years around this whole ecosystem is what has been shown just a couple of times by Microsoft as it relates to Windows. I’m talking about big Windows, as in tablets, slates, PCs, and so forth. And you’ll notice that now for the first time in public, you can get a sense that hundreds of millions of people will quite rapidly be exposed to what is known internally as the metro user interface that essentially displays out the live tiles, the ability to swipe that whole user paradigm as something that’s coming to Big Windows as well. The reason of that significant is in terms of the familiarity with the user experience and the opportunity for developers to build applications over time that reached the broadest possible footprint. You can see the scenarios lining up with that a supportive effect from Windows gives us even better opportunities for differentiation over the future. So we didn’t mention it in the calls, but that was a significant moment in people understanding how Windows Phone and Big Windows relate over time.

Yeah. Okay, Timo here, before we close, I need to make a correction on NSN cash part contribution. So, at the end of Q2, NSN cash contribution to Nokia’s gross cash was €662 million and NSN’s contribution to Nokia’s net cash was negative €1.2 billion. And this is actually the same item what I called out already earlier, i.e., NSN had an approximately €250 million headwind related to the timing of certain NSN customer payments, which were collected already early in Q3. However, they were not taken into account in these numbers, apologies for that.

Stephen, I will now hand it back to you for closing. Stephen Elop – President and Chief Executive Officer: Great, thank you Matt and thank you Timo. So, everyone on the call, thank you again for joining us on today’s call. To summarize, Q2 was a difficult quarter, but as we head into Q3, our team is executing very well against our strategy and we are starting to see a very positive impact on the help of Nokia, which gives us great hope for the future. So, thank you all for joining us today.