ELISAANNUALREPORT2013
Tableofcontents
Accountingprinciples
CorporateGovernance
36
Notestothefinancialstatements
CorporateGovernanceStatement
3
BoardofDirectors
5
MembersoftheBoardofDirectors
ExecutiveBoardandCEO
MembersoftheExecutiveBoard
IncentivePlan
8
12
13
17
Notes1-36
Keyindicators
44
82
Parentcompanyfinancialstatements
Incomestatement
86
Balancesheet
87
Cashflowstatement
88
Notes
Descriptionofthekeyfeaturesintheinternal
Accountingprinciples
controlandriskmanagementsystems
associatedwiththefinancialreportingprocess
19
Auditors
22
Companyinsidersandinsideradministration
23
89
Notestothefinancialstatements
Notes1-20
Sharesandshareholders
91
102
Board'sproposalconcerningthedisposalof
Financials
ThereportoftheBoardofDirectors2013
profits
107
Auditor'sreport
108
24
Consolidatedfinancialstatements
Consolidatedincomestatement
32
Consolidatedstatementoffinancialposition
33
Consolidatedstatementofcashflows
34
Consolidatedstatementofchangesin
shareholders'equity
35
Notes
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
2
CORPORATEGOVERNANCE
ELISAANNUALREPORT2013
CorporateGovernanceStatement
ElisaobservestheCorporateGovernanceCodeofthe
FinnishSecuritiesMarketAssociation.TheCodeis
availableforviewingontheAssociation’swebsiteat:
www.cgfinland.fi.Elisadepartsinnorespectfromthe
recommendationsoftheCode.Elisa’sfinancial
statements,includingareportonoperations,willbe
availableonElisa’swebsiteatwww.elisa.com.
GeneralMeetingofShareholdersand
ArticlesofAssociation
GeneralMeetingofShareholdersisElisa’shighest
decisionmakingbody,whichapproves,amongother
things,theincomestatementandbalancesheet.It
alsodeclaresthedividendtobepaidattheBoardof
Directors’proposal,appointsmemberstotheBoardof
Directors,appointstheauditors,andapprovesthe
dischargeofthemembersoftheBoardofDirectors
andtheCEOfromliability.
NoticesofGeneralMeetingsofShareholdersare
postedonElisa’swebsite,andtheinformationabout
thetimeandplace,aswellasthewebsiteaddress,are
givenbyannouncementinoneFinnishnewspaperno
laterthan21dayspriortothemeeting,asrequiredin
theArticlesofAssociation.Astockexchangereleaseis
alsoissuedoneachnotice.ItisavailableonElisa’s
website.Theagendaofthemeetingisspecifiedinthe
notice.ProposalsoftheBoardofDirectorstobe
submittedtothemeetingmaybeviewedonElisa’s
websitepriortothemeeting.
Shareholders’NominationBoard
Elisa'sannualgeneralmeetingdecidedin2012to
establishashareholders'nominationboardwhichisa
bodywithresponsibilityforpreparingtheproposalsto
theannualgeneralmeetingfortheelectionand
remunerationofthemembersofboardofdirectorsof
Elisaandacceptedacharterforthenominationboard.
Shareholders'nominationboardhasbeenestablishedfor
thetimebeing.Thetermofeachnominationboard
expireswhenthenextshareholders'nominationboard
hasbeenappointed.
Thebiggestshareholdersweredeterminedinthe
shareholderregisterofElisaat31August2013,who
namedthememberstothenominationboard.The
compositionofthenominationboardfrom
September2013hasbeen:
• EijaAilasmaa,Chair(appointedbySolidiumOy)
• PekkaPajamo(VarmaMutualPensionInsurance
Company)
• TimoRitakallio(IlmarinenMutualPensionInsurance
Company)
• JormaEräkare(NordeaFinlandFund)
• RaimoLind(chairmanoftheboardofElisa
Corporation)
Thenominationboardconvenedafterthe2013AGM2
timeswiththepreviouscompositionandthecommittee
Elisa’sArticlesofAssociationmaybeexaminedon
namedinSeptember2013convened3timesbeforethe
decisiononproposalsinJanuary2014.Inadditiontothe
Elisa’swebsiteatwww.elisa.com.Anydecisionsto
amendtheArticlesofAssociationaretakenbya
meetingsthecandidateswereinterviewedoutsidethe
meetings.Thenominationboarddiscussedthesizeofthe
GeneralMeetingofShareholders.
boardandpresentcompositionaswellasthe
competences,thatwereseenbestforthecompany.The
Elisa’s2014AnnualGeneralMeetingwillbeheld
2April2014at2:00p.m.attheHelsinkiFairCentre,
Congressentrance,Messuaukio1,Helsinki.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
nominationboardalsolookedintotheremunerationof
theboardmembers.
3
ELISAANNUALREPORT2013
CORPORATEGOVERNANCE
Thenominationboardinformedon27January2014
Elisaboarditsproposalstotheannualgeneral
meeting.
Elisashareholders'nominationboardproposestothe
annualgeneralmeetingthat
• theremunerationtobesameaspreviousyear,
however,removingtothelockupperiodof4years
• numberofboardmemberstobe7
• RaimoLind,LeenaNiemistö,EiraPalin-Lehtinen,
JaakkoUotilaandMikaVehviläinentobereelected
• PetteriKoponenandSeijaTurunentobeelected
asnewmemberstotheboard.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
4
CORPORATEGOVERNANCE
ELISAANNUALREPORT2013
BoardofDirectors
CharteroftheBoard
TheBoardattendstotheadministrationandproper
organizationofthecompany’soperationsin
accordancewiththeFinnishLimitedLiability
CompaniesActandotherregulations.TheBoard
decidesonmatterswhichunderlawaresubjectto
decisionbytheBoard.Thecompany’sBoardof
Directorshasadoptedacharterforitself.
Inthecharter,theBoardistaskedwithdetermining
thecompany’sstrategicchoicesandthetargetsfor
Elisa’smanagement,andwithmonitoringthe
achievementofthese.TheBoardshallalsoappointthe
CEOanddecideonthecompositionoftheExecutive
Board.TheBoardregularlymonitorsfinancial
performanceandthedevelopmentofthecompany’s
financialstandingonthebasisofmanagement
reports.TheBoardalsosupervisesthecomplianceof
Elisa’sadministration,andthemanagementof
businessandotherrisks.TheBoardaddressesmajor
investmentsinanddisposalofbusinessesorassets,
andalsosetstheboundariesforthecompany’s
managementinexecutingoperativeinvestmentsand
financialarrangements.
Accordingtothecharter,thefollowingareparticularly
subjecttotheBoard’sdecision:
• Elisa’sstrategicchoices
• distributionpolicy
• conveningandsubmittingproposalstoGeneral
Meetings
• mattershavingtodowithElisa’sstockandElisa
shareholders
• majormergersandacquisitions,aswellas
investments
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
• financialstatementsandinterimreports
• appointment,dismissalandtermsofemploymentof
theCEOandmembersoftheExecutiveBoard.
Thecharteralsospecifiesothermatterstobeaddressed
bytheBoard,suchasadoptingtheannualfinancialplan,
theprinciplesofthecompany’sorganizationandthe
mainbusinesspolicies.TheBoardconductsanannual
self-evaluationofitsactivitiesexecutedintheformofa
questionnaire.MembersoftheBoardofDirectorsarenot
allowedtoparticipateindecisionmakingforwhichthey
mustlegallydisqualifythemselvesduetoconflictof
interests.
Meetingsandremuneration
Asarule,theBoardconvenes8–10timesayear.In2013,
themembersoftheBoardwerepaidthefollowing
emoluments,whichweredecideduponandsetbythe
AnnualGeneralMeeting:
• AmonthlyremunerationfeefortheChairman
EUR9,000permonth
• AmonthlyremunerationfeefortheDeputy
ChairmanandchairmanoftheAuditCommittee
EUR6,000permonth
• Amonthlyremunerationfeeforthemembers
EUR5,000permonth
• AmeetingremunerationfeeEUR500/meeting/
participant.
Themonthlyremunerationfees(deductedbytax
withheldatthecalculatedrateof60percent)areused
forpurchasesofElisashareseveryquarter.Theshares
aresubjecttoatransferrestrictionof4yearsduringthe
termofserviceontheBoard.Therestrictionislifted
whenBoardmembershipends.
5
CORPORATEGOVERNANCE
ELISAANNUALREPORT2013
In2013,atotalof2,619Elisashareswerepurchased
toMrRaimoLind,theChairmanoftheBoard;1,746
sharestoMrAriLehtoranta,theDeputyChairman;
ThesharespurchasedforthecurrentmembersofElisa’s
BoardofDirectorson31December2013werenot
registeredinthemembers’book-entryaccountsuntil
1,453sharestoMsLeenaNiemistö;1,746sharestoMs
EiraPalin-Lehtinen,1,453sharestoMrMikaSalmi,
3January2014,andarethusnotincludedinthefollowing
figures.
1,043toMrJaakkoUotila,and1,453toMrMika
Vehviläinen.
ElisaBoardmembers’shareholdingsinElisa,(companiesunder
thememberscontrol)
Numberofshares,31Dec.2013
RaimoLind,ChairmanoftheBoard
AriLehtoranta,DeputyChairmanoftheBoard
9,499
8,341
LeenaNiemistö,member
5,248
EiraPalin-Lehtinen,member
MikaSalmi,member
6,485
2,218
JaakkoUotila,member
736
MikaVehviläinen,member
2,368
In2013,theBoardofDirectorsconvened18times.The
averageattendancerateatBoardmeetingswas
AuditCommittee
97percent.
TheAuditCommitteeistaskedwithsupervisingthe
properorganizationofthecompany’saccountingand
Compensation&NominationCommittee
Accordingtoitscharter,theCompensation&
NominationCommitteedealswithandpreparesthe
appointmentanddismissalofpersonswithin
management,themanagementsuccessionplanning
anddevelopment,mattersassociatedwithlong-term
incentiveschemesapplicabletomanagement,and
othermattersrelatingtotheremunerationof
management.TheCommitteeshallalsodealwith
incentiveschemesforElisa’spersonnel.
In2013,theCompensation&NominationCommittee
comprisedChairmanoftheBoardMrRaimoLind
(CommitteeChairman)andmembersMrAriLehtoranta
andMrMikaVehviläinen.In2013,theCompensation&
NominationCommitteeconvened3timesandthe
attendanceratewas89percent.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
financialadministration,financing,internalandfinancial
auditing,andriskmanagement.Accordingtothecharter,
thefollowinginparticularshallbeaddressedand
preparedbytheAuditCommittee:
• significantchangesinrecognitionprinciples
• significantchangesinitemsmeasuredinthebalance
sheet
• follow-uptoensuretheindependenceoftheauditor
• mattersreportedbyinternalauditing
• financialstatements,interimreportsandCorporate
GovernanceStatement
• riskreportsandorganizationofriskmanagement
• organizationoffinancialadministrationand
financing.
6
ELISAANNUALREPORT2013
CORPORATEGOVERNANCE
TheAuditCommitteealsoregularlyreviewsreports
frominternalauditingandthefinancialauditors,and
preparesaproposalonauditorelectionforthe
GeneralMeeting.
In2013,theAuditCommitteewaschairedbyMsEira
Palin-LehtinenwithMsLeenaNiemistöandMrJaakko
UotilaasAuditCommitteemembers.In2013,theAudit
Committeeconvened5timesandtheattendancerate
was93percent.Theprincipalauditoralsoattends
AuditCommitteemeetings.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
7
ELISAANNUALREPORT2013
CORPORATEGOVERNANCE
BoardofDirectors
AccordingtotheArticlesofAssociation,Elisa’sBoard
ofDirectorscomprisesaminimumof5andamaximum
of9members.ThemembersoftheBoardare
appointedattheAnnualGeneralMeetingforaoneyeartermofofficestartingatthecloseoftherelevant
GeneralMeeting,andendingatthecloseofthenext
GeneralMeetingafterthenewappointmentsare
made.TheBoardofDirectorselectsachairmanand
deputychairmanfromamongitsmembers.
AllBoardmembersareindependentofthecompanyand
ofthecompany’smajorshareholders.
Initsorganizingmeeting,theBoardofDirectorsannually
decidesuponcommittees,theirchairmenandmembers.
In2013,theactingcommitteeswere:theCompensation
&NominationCommitteeandtheAuditCommittee.The
dutiesandchartersofthecommitteesareadoptedby
theBoardofDirectors.
Atpresent,theBoardofDirectorscomprises7
members.TheAnnualGeneralMeetingof
25March2013electedthefollowingBoardmembers:
MrRaimoLind(Chairman),MrAriLehtoranta(Deputy
Chairman),MsLeenaNiemistö,MsEiraPalin-Lehtinen,
MrMikaSalmi,MrJaakkoUotilaandMrMika
Vehviläinen.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
8
ELISAANNUALREPORT2013
CORPORATEGOVERNANCE
Back:MikaSalmi(left),AriLehtoranta,MikaVehviläinenandJaakkoUotila
Front:LeenaNiemistö(left),ChairmanoftheBoardRaimoLindandEiraPalin-Lehtinen
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
9
ELISAANNUALREPORT2013
CORPORATEGOVERNANCE
MikaSalmi
Membersince2012
b.1965
BSc.(Econ.)1987,MBAINSEAD1992
Keyemploymenthistory:creativeLIVEinc,CEOandmemberoftheExecutiveBoardsince2012.
MainBoardmembershipsandpublicdutiescurrentlyundertaken:BoardmemberofINSEAD;votingmember,
AcademyofTelevisionArtsandSciences.
AriLehtoranta
Vicechairmanoftheboard,membersince2009
b.1963
MSc(electricalengineering)
Keyemploymenthistory:KoneCorporation,ExecutiveVicePresident,CentralandNorthEuropeandCustomer
Experience.MemberoftheExecutiveBoardsince2008.
MainBoardmembershipsandpublicdutiescurrentlyundertaken:MemberoftheBoardofCaverion
Corporationsince2013.
MikaVehviläinen
Membersince2012
b.1961
MSc(Econ.andBA)HSE1986
Keyemploymenthistory:CEO,Cargotecsince2013.CEO,Finnair2010-2013.
MainBoardmembershipsandpublicdutiescurrentlyundertaken:VaconOyj,ViceChairmanoftheboard.
JaakkoUotila
Membersince2013
b.1949
MSc,Pharmaseutics,HelsinkiUniversity1977andMScofManagement,CaliforniaAmericanUniversity1990
Keyemploymenthistory:CEOAlkoOy2001-2012.CEOYliopistonApteekki1996-2001.
MainBoardmembershipsandpublicdutiescurrentlyundertaken:MemberoftheBoardofMedifonOyand
CisaOy.
LeenaNiemistö
Membersince2010
b.1963
MD,PhD,SpecialistinPhysicalandRehabilitationMedicine
Keyemploymenthistory:DextraOy,CEOsince2003,PihlajalinnaOy,VicePresidentsince2013.
MainBoardmembershipsandpublicdutiescurrentlyundertaken:MemberoftheBoardofIlmarinenMutual
PensionInsuranceCompany;Lääkäripalveluyrityksetry;HandelsbankenFinland;PihlajalinnaOy;HLDHealthyLife
DevicesOy;ModzOyandAprovixAb.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
10
ELISAANNUALREPORT2013
CORPORATEGOVERNANCE
RaimoLind
ChairmanoftheBoard,membersince2009
b.1953
BSc(Econ.),graduated1975fromHelsinkiSchoolofEconomicsandBusinessAdministration,andwithMSc(Econ.)in
1980
Keyemploymenthistory:WärtsiläGroup,ExecutiveVicePresidentandDeputytothePresident2005-2013.
WärtsiläGroupVicePresident,CFOsince1998.
MainBoardmembershipsandpublicdutiescurrentlyundertaken:DeputyChairmanoftheBoard,Sato
Corporationuntil03/2013;memberofRepresentativeAssemblyofConfederationofFinnishIndustriesEK.
EiraPalin-Lehtinen
Membersince2008
b.1950
LL.M.,trainedonthebench
Keyemploymenthistory:ExecutiveVicePresidentforNordeawithresponsibilityforNordicprivatebanking
businessandwealthmanagementuntiltheendof2007.
MainBoardmembershipsandpublicdutiescurrentlyundertaken:MemberoftheBoardofSampoplc;The
SibeliusAcademyFoundation;TheFinnishFoundationforSharePromotionandJalkapallo-Säätiö.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
11
CORPORATEGOVERNANCE
ELISAANNUALREPORT2013
ExecutiveBoardandCEO
Elisa'sExecutiveBoard
Elisa’sExecutiveBoardpreparesthecompany
strategy,directsthecompany’sregularoperations,
monitorsthedevelopmentofresults,anddealswith
issueshavingsubstantialfinancialorotherimpactson
Thefollowingtablepresentsthecompositionofthe
ExecutiveBoardandthemembers’holdings
(on31December2013).
Elisa.
ElisaExecutiveBoard’sholdingsinElisa
MrVeli-MattiMattila,CEO
Numberofshares,31Dec.2013
74,731
MrAskoKänsälä,ExecutiveVicePresident,ConsumerCustomers
63,753
MrPasiMäenpää,ExecutiveVicePresident,CorporateCustomers
MrTimoKatajisto,ExecutiveVicePresident,Production
MrJariKinnunen,CFO
15,089
4,548
26,611
MsMerjaRanta-aho,ExecutiveVicePresident,HR
MsKatiyeVuorela,ExecutiveVicePresident,Corporate
Communications
10,212
MrSamiYlikortes,ExecutiveVicePresident,Administration
27,639
ChiefExecutiveOfficer
Elisa’sChiefExecutiveOfficer(CEO)isresponsiblefor
theday-to-daybusinessactivitiesandadministration
ofthecompanyinaccordancewithinstructionsand
ordersfromtheBoardofDirectorsandwiththe
FinnishLimitedLiabilityCompaniesAct.TheCEOis
appointedbytheBoardofDirectors.TheCEOisalso
responsibleforensuringthatthecompany’s
accountingpracticescomplywiththelawandthat
financialmattersarehandledinareliablemanner.Mr
Veli-MattiMattilaservedasCEOin2013.
ThetotalsalarypaidtoCEOVeli-MattiMattilainthe
financialyearwasEUR688,634.14consistingofa
fixedsalaryincludingtaxablebenefits
(EUR21,107.98),andaperformance-basedbonus
(EUR154,226.16).Theperformance-basedbonuscan
totalamaximumof90percentofthetaxableincome.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
747
Elisa’sCEOispartthelongtermshare-basedincentive
systemforthekeypersonnelintheElisaGroup(below,
Incentiveplansforkeypersonnel).
Elisa’sCEOisentitledtoretireattheageof60.The
supplementarypensionarrangementisbasedona
definedcontributionplan.Thesupplementarypension
insurancecontributionthatcoversthepensionasofthe
ageof62wasEUR143,172.99for2013.Theadditional
liabilityaccruedwithregardtotheageof60and61
(EUR209,263.00)wasenteredinthecompany’sbalance
sheet.Elisa’sCEOisentitledtoapaid-uppension.
TheperiodofnoticefortheCEOis6monthsfromElisa’s
sideand3monthsfromtheCEO’sside.Shouldthe
contractbeterminatedbyElisa,theChiefExecutive
Officerisentitledtoreceiveaseverancepaymentthat
equalsthetotalsalaryof24monthsminushisorher
salaryoftheperiodofnotice.CEOVeli-MattiMattilaheld
74,731sharesinElisaon31December2013.
12
CORPORATEGOVERNANCE
ELISAANNUALREPORT2013
MembersoftheExecutiveBoard
Veli-MattiMattila
AskoKänsälä
b.1961,M.Sc.(Tech.),MBA,joinedthecompany
in2003
b.1957,M.Sc.(Tech.),joinedthecompanyin
2003
Mainoccupation:ChiefExecutiveOfficer
Mainoccupation:
ExecutiveVicePresident,ConsumerCustomers
Keyemploymenthistory:
CEOofOyLMEricssonAb1997–2003.Hehasheld
variouspositionsintheEricssonGroupinFinlandand
theUSAsince1986.MrMattila’spreviouscareeralso
includesexpertadvisorytasksatSwissAscom
HaslerAG.
Publicdutiescurrentlyundertaken:
MemberoftheBoardofDirectorsofSampoLtd,
memberoftheSupervisoryBoardoftheFinnishFair
Association,memberofRepresentativeAssemblyof
ConfederationofFinnishIndustriesEK,andmember
oftheBoardofDirectorsoftheservicesector
employers'associationcalledPALTA.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
Keyemploymenthistory:
SalesDirectorfortheNordicandBalticsalesunitof
theEricssonGroup,memberofthemanagement
group2001–2003;SalesDirectorofOyLMEricsson
Ab1996–2001;Tekes,theFinnishFundingAgency
forTechnologyandInnovation,Counsellor,Industry
andTechnology1993–1996;SalesManagerat
HewlettPackardOy1987–1993.
Publicdutiescurrentlyundertaken:
DeputyChairmanoftheBoardofDirectorsofFicom
(2014).
13
CORPORATEGOVERNANCE
ELISAANNUALREPORT2013
PasiMäenpää
TimoKatajisto
b.1965,DiplomainComputerScience,MBA,
joinedthecompanyin2006
b.1968,M.Sc.(Tech.),joinedthecompanyin
2008
Mainoccupation:
ExecutiveVicePresident,CorporateCustomers
Mainoccupation:
ExecutiveVicePresident,Production
Keyemploymenthistory:
CEOatCiscoSystemsFinlandOy2002–2006;
RegionalManagerforCentralEuropeatNetigy
Corporation2000–2002;VicePresident,Salesfor
EuropeandtheUSAatFujitsu1999–2000;Salesand
CountryManageratOracleCorporationinNorthern,
CentralandEasternEurope1990–1999.
Keyemploymenthistory:
MemberoftheExecutiveBoardofNokiaSiemens
Networksin2007,StrategicProjectsandQuality;
MemberoftheExecutiveBoardofNokiaNetworks
2005–2007,ProductionandNetworkInstallation;
variouspositionsatNokiaNetworksandits
predecessorNokiaTelecommunications,1992–
2005.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
14
CORPORATEGOVERNANCE
ELISAANNUALREPORT2013
JariKinnunen
KatiyeVuorela
b.1962,M.Sc.(Econ.&Bus.Adm.),joinedthe
companyin1999
b.1968,M.Sc.(Econ.&Bus.Adm.),joinedthe
companyin2008
Mainoccupation:ChiefFinancialOfficer
Mainoccupation:
ExecutiveVicePresident,CorporateCommunications
Keyemploymenthistory:
CEOandPresidentofYomiPlcin2004;CFOofElisa
KommunikationGmbHinGermany1999–2004;
ManagingDirectorofPolarInternationalLtd1996–
1999andController1990–1996;ControlleratOy
AlftanAb1987–1990.
Publicdutiescurrentlyundertaken:
MemberoftheFinanceandTaxCommitteeinthe
ConfederationofFinnishIndustriesEK.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
Keyemploymenthistory:
ParocGroupHoldingOy,VicePresident,
Communicationsfrom2000to2008;Lotus
DevelopmentFinlandOy,anIBMsubsidiary,
MarketingandCommunicationsManagerfrom1998
to2000;NokiaTelecommunications(the
predecessorofNokiaSiemensNetworks),Dedicated
Networksbusinessunit,MarketingCommunications
Managerfrom1994to1998.
15
CORPORATEGOVERNANCE
ELISAANNUALREPORT2013
SamiYlikortes
MerjaRanta-aho
b.1967,M.Sc.(Econ.&Bus.Adm.),LL.M.,joined
thecompanyin1996
b.1966,M.Sc.(Psychology),Lic.Techn.(Work
andorganizationpsychology),joinedthe
companyin2001
Mainoccupation:
ExecutiveVicePresident,Administration
Keyemploymenthistory:
ExecutiveVicePresident,Administration,since
2000;secretarytotheBoardofDirectors
1998 2007;positionsinaccountingmanagementat
UnileverFinlandOy1991–1996
Publicdutiescurrentlyundertaken:
MemberofLaborMarketCommitteeofService
SectorEmployersAssociationPALTA.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
Mainoccupation:ExecutiveVicePresident,HR
Keyemploymenthistory:
ExecutiveVicePresident,Administration,since2013.
VicePresident,HR,inElisaConsumerCustomers
Business2009-2013.VariouspositionsinElisaand
Radiolinjahumanresourcesdevelopment20012009.HelsinkiUniversityofTechnology,researcher
andteacherfrom1992-2001andpositionsin
communications1990–2001.
16
ELISAANNUALREPORT2013
CORPORATEGOVERNANCE
IncentivePlan
ExecutiveBoardIncentivePlan
PerformanceSharePlanfor2011
MembersoftheExecutiveBoardarepaidatotal
salary,whichincludessalaryinmoneyandtaxable
benefitsfortheuseofacompany-ownedcarand
telephone.
ThePerformanceSharePlan,includesthreeperformance
periods,thecalendaryearsof2012–2014,2013–2015
and2014–2016.Therewardsequalatmostthevalueof
some3.3millionsharesinElisa.TheBoardofDirectors
willdecideonthePlan’sperformancecriteriaandtheir
targetsatthebeginningofeachperformanceperiod.
Inaddition,membersoftheExecutiveBoardarepaida
performance-basedbonusbasedonfinancialtargets
setbythecompany’sBoardofDirectors.
Elisa’sExecutiveBoardiscoveredbythecompany’s
long-termshare-basedincentivescheme.Thetotal
salarypaidtomembersoftheExecutiveBoardinthe
financialyearwasEUR1,785,836.43,whichconsists
ofafixedsalary,includingtaxablebenefits
(EUR70,625.50),andaperformance-basedbonus
(EUR331,211.38).
Elisa’sExecutiveBoardispartthelongtermsharebasedincentivesystemforthekeypersonnelinthe
ElisaGroup(below,Incentiveplansforkeypersonnel).
ThemembersofElisa’sExecutiveBoard,withthe
exceptionoftheCEO,areentitledtoretireattheage
of62.Thepensionsarebasedonadefined
contributionplan.Theannualsupplementarypension
insurancecontributioninrespectoftheExecutive
ThePlan’spotentialrewardovertheperformanceperiod
of2012–2014,2013–2015,and2014–2016isbasedon
theincreaseintheConsumerCustomerandCorporate
Customersegments’newbusinessrevenuesandon
Elisa’searningspershare(EPS).In2015,2016and2017
respectively,therewardwillbepaidpartlyinthe
company’ssharesandpartlyincash.Theportionpayable
incashcoverstaxesandtax-likecostsarisingfromthe
reward.Norewardispaidifakeyperson’semployment
endsbeforetherewardpayment.ThePlan’stargetgroup
consistsofabout160personsandtherewardsequalat
mostthevalueofsome1millionsharesinElisaforeach
year,includingtheportionpayableincash.
RestrictedStockPlanfor2011
TheRestrictedStockPlan,coversthecalendaryearsof
2012–2018.Thelock-upperiodfortherewardspaid
BoardwasEUR117,509.46.Themembersofthe
ExecutiveBoardareentitledtoapaid-uppension.
throughtheRestrictedStockPlanisaboutthreeyears.
Therewardispaidonlyifakeyperson’semploymentis
validwhentherewardisduetobepaid.Therewardsto
ThesalariesandotherremunerationoftheCEOand
othermembersoftheExecutiveBoard,aswellastheir
bepaidthroughthisstockplanequalatmostthevalueof
some0.5millionsharesinElisa,includingtheportion
long-termincentiveschemes,aredecideduponbythe
BoardofDirectors.
payableincash.Sofar,nodecisionshavebeenmadeon
thebasisofthisPlan.
Incentiveplanforkeypersonnel
On19December2011,Elisa’sBoardofDirectors
decidedonshare-basedincentivesystemsforthekey
personnelintheElisaGroup.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
17
CORPORATEGOVERNANCE
ELISAANNUALREPORT2013
Share-basedincentivesystemfor2008
On22December2008,Elisa’sBoardofDirectors
decidedonasharebasedincentivesystemforthekey
personnelintheElisaGroup.Thesystemconsistedof
threeearningperiods:calendaryears2009,2010and
2011.Bonuseshavebeenpaidearlieryearsandlockupperiodhasendedattheendof2013.Moredetails
aredescribedintheparentcompany’sfinancial
statements.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
18
CORPORATEGOVERNANCE
ELISAANNUALREPORT2013
Descriptionofthekeyfeaturesinthe
internalcontrolandriskmanagement
systemsassociatedwiththefinancial
reportingprocess
Theobjectiveoftheinternalcontrolandrisk
managementsystemsassociatedwithElisa’sfinancial
basedbonussystem.Individualtargetsandobjectives
aresetinappraisalsandtarget-settingdiscussions,and
reportingprocessistoobtainreasonableassurance
thatthecompany’sfinancialstatementsandfinancial
reportingarereliable,andthattheyhavebeen
preparedincompliancewiththelaws,regulationsand
generallyacceptedaccountingprinciples,aswellas
withotherregulationsapplicabletopubliclisted
companies.Internalcontrolandriskmanagement
proceduresareintegratedintothecompany’s
operationsandprocesses.Elisa’sinternalcontrolcan
bedescribedusingtheinternationalCOSOframework.
resultsandoperationsareassessedparticularlyfrom
thevalueperspective.
Controlenvironment
Thekeyrisksassociatedwiththeaccuracyoffinancial
reportinghavebeenidentifiedinaprocess-specificrisk
analysis.Riskassessmentalsocoverstherisksrelatedto
Elisa’scontrolenvironmentisbasedonthecompany’s
values,goal-orientedmanagement,andonthe
describedandmonitoredprocesses,practices,policies
andguidelines.Elisa’sfinancialadministrationis
responsiblefortheinternalcontrolsoffinancial
reporting.
Annualbusinessandstrategyplanningprocessesand
target-setting,aswellasrollingmonthlyfinancial
forecasts,representakeyelementinElisa’sbusiness
andperformancemanagement.Financialresultsare
assessedagainsttheforecast,theannualplan,the
previousyear’sresults,andthestrategicplan.
TargetsaresetfortheElisaGroupandforeachunit,
andindividualtargetsarespecifiedinsemi-annual
appraisalbasedonthescorecardandperformance-
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
Riskassessment
RiskassessmentisanintegralpartofElisa’splanning
process.Thepurposeofriskassessmentistoidentify
andanalyzerisksthatcouldaffecttheachievementof
specifiedtargets,andtoidentifymeasurestoreduce
risks.
misuseandresultingfinanciallosses,aswellasthe
misappropriationofthecompany’sotherassets.
Controls
Controlmeasuresconsistofautomaticandmanual
reconciliations,controlandinstructionsintegratedinto
theprocesseswiththeobjectiveofensuringthe
accuracyoffinancialreportingandthemanagementof
therisksinvolved.Thereportingcontrolmechanism
processeshavebeendocumented.Keycontrol
mechanismsalsoincludeinformationsystemaccess
rightsmanagement,authorizations,andthecontrolled
andtestedimplementationofinformationsystem
changes.
19
CORPORATEGOVERNANCE
ELISAANNUALREPORT2013
Thefinancialdevelopmentofbusinessoperationsis
constantlymonitoredonaunitbasis.Financial
managementdiscussesanyexceptionalitemsand
Control
recognitionsinitsmeetingsandinvestigatesthe
causesandreasonsforanychangesintherolling
supervisingtheproperorganizationofthecompany’s
accountingandfinancialadministration,internaland
monthlyforecasts.
Financialinformationand
communication
ExternalCommunications
TheobjectiveofElisa’sexternalcommunicationsisto
providetimely,equal,transparentandaccurate
informationtoallinterestgroupsatthesametime.
Communicationsmustcomplywithallthelaws,
regulations,instructionsandotherrulesapplicableto
listedcompanies.Informationiscommunicated
throughstockexchangeandpressreleases,andonthe
company’swebsite.Elisa’sfinancialinformationmay
onlybedisclosedbytheCEO,CFO,InvestorRelations
Director,andtheGroupTreasurer.Elisahasasilent
periodforthe2weeksprecedingthedisclosureof
financialperformanceinformation.
Internalcommunications
Keyinstructions,policiesandproceduresareavailable
tothepersonnelinthecompany’sintranetandinother
sharedmedia.Personnelarealsoinformedofthekey
instructionsandchangesinvariousbriefings,bye-mail
andthrougheverydaysupervisorywork.Trainingand
guidanceonhowtocomplywiththerulesand
requirementsarearrangedasnecessary.Inaddition,
regularinformationandtrainingareprovidedtothe
financialorganization,particularlyregardingany
changesinaccounting,reportinganddisclosure
requirements.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
TheBoardofDirectors’AuditCommitteeistaskedwith
financialauditingandriskmanagement.TheBoardof
Directorsreviewsandapprovesinterimreportsand
financialstatementsbulletinsinitsregularmeetings
priortopublication.Elisa’sBoardofDirectorsand
ExecutiveBoardmonitortheGroup’sandthebusiness
units’resultsandperformanceonamonthlybasis.Elisa’s
financialadministrationcontinuouslyassessesitsown
controlsforfunctionalityandsufficiency.Inaddition,
Elisa’sinternalauditingfunctionauditsthereliabilityof
financialreportingwithintheframeworkofitsannual
auditplan.
Riskmanagement
Riskmanagementisdescribedinmoredetailunder
sections“CharteroftheBoard”,“theAuditCommittee”
and“Descriptionofthekeyfeaturesoftheinternal
controlandriskmanagementsystemsassociatedwith
thefinancialreportingprocess”.Thecompanyclassifies
risksintostrategic,operational,hazardandfinancial
risks.Thehazardrisksareidentifiedandinsuranceis
takenouttodealwiththeserisks.Elisausesanexternal
insurancebrokertoestablishtheprobabilityoftherisk
andthevalueoftheinsurance.
Internalauditing
Thepurposeofinternalauditingistoassistthe
organizationinachievingitsgoalsbyevaluatingand
investigatingitsfunctionsandbymonitoringcompliance
withcorporateregulations.Forthispurpose,internal
auditingproducesanalyses,assessments,
recommendationsandinformationforusebythe
20
ELISAANNUALREPORT2013
CORPORATEGOVERNANCE
BoardofDirectorsandcompany’sseniormanagement.
ReportsoncompletedauditsaresubmittedtotheCEO,
theBoardofDirectorsandthemanagementoftheunit
audited,andtotheAuditCommittee,whennecessary.
Internationalinternalauditingstandards(IIA)formthe
foundationforinternalauditing.Internalauditingis
independentoftherestoftheorganization.The
startingpointforinternalauditingisbusiness
managementandtheworkiscoordinatedwiththe
Auditors.Anannualauditingplanandauditingreport
arepresentedtotheBoardofDirectors’Audit
Committee.Internalauditingmayalsocarryout
separatelyagreedauditsonspecificissuesatthe
requestoftheBoardofDirectorsandElisa’sExecutive
Board.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
21
ELISAANNUALREPORT2013
CORPORATEGOVERNANCE
Auditors
Theauditors’principaldutyistoensurethatthe
financialstatementshavebeenpreparedin
accordancewiththevalidregulations,sothatthe
statementsgiveatrueandfairviewofthecompany’s
performanceandfinancialposition,aswellasother
necessaryinformation,tothecompany’s
stakeholders.
Otherkeygoalsare:toensurethatinternalcontrols
andriskmanagementhavebeendulyorganizedand
theorganizationoperatesincompliancewith
instructionsandwithintheframeworkofissued
authorizations.Themutualdivisionoflaborbetween
externalandinternalauditingisorganizedsothat
internalauditingwillensurethattheorganization
operatesinaccordancewiththecompany’sinternal
guidelines.
Intheyearunderreview,Elisa’sauditorwasKPMGOyAb,
authorizedpublicaccountants,withMrEsaKailiala(APA)
servingasprincipalauditor.
Forthe2013financialperiod,theauditingfeesofthe
Finnishgroupcompaniestotaledapproximately
EUR260,000.00,ofwhichtheparentcompany
accountedforEUR180,000.00.Theauditingfeesforthe
foreigngroupcompanieswereEUR10,000.00.
TheauditingfirmhasbeenpaidfeesofEUR344,000.00
forservicesnotassociatedwithauditing.Theseservices
hadtodowithmergersandacquisitions,taxservices,a
reviewofregulationaccountingandotherexpert
services.Thefeesincludepaymentstoatrainings
providerTeleware,whichispartoftheKPMGGroup.
ThesepaymentstotaledEUR70,000.00andrelated
mainlytoElisa’sactualoperations.
Thecompanyhadoneexternalauthorizedauditing
companyin2013.Theauditingcompanymustbeduly
authorizedbytheCentralChamberofCommerce.The
auditors’termofofficeisthecurrentfinancialperiod
forwhichtheyareappointed.Thedutiesofthe
auditorsendatthecloseofthefirstAnnualGeneral
Meetingfollowingtheexpirationoftheirtermof
office.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
22
CORPORATEGOVERNANCE
ELISAANNUALREPORT2013
Companyinsidersandinsider
administration
ElisahasadoptedtheInsiderGuidelinespreparedby
theHelsinkiStockExchange,whichenteredintoforce
on9October2009.
InaccordancewiththeSecuritiesMarketsAct,Elisa’s
publicinsidersincludethemembersofElisa’sBoardof
Directors,theChiefExecutiveOfficer,andtheprincipal
auditorforthecompanywithintheauditingfirm.In
additiontothis,thepublicinsidersalsoincludethe
membersofElisa’sExecutiveBoard.Information
concerninginsidersasrequiredbylawispublishedin
Elisa’spublicinsidersregister.Thisinformationalso
includespersonscloselyassociatedwiththepublic
insiders,i.e.relatedparties,andcorporationswhich
arecontrolledbytherelatedpartiesoronwhichthey
exerciseaninfluence.Informationabouttheholdings
ofpublicinsidersisavailableonElisa’swebsiteat
www.elisa.com.
Elisa’sLegalAffairsdepartmentmonitorscompliance
withtheinsiderregulationsandmaintainsthecompany’s
insiderregisterstogetherwithEuroclearFinlandOy.
Insiderinformationisreviewedatleastonceayear.
WhentradinginElisa’ssecurities,permanentinsiders
shouldconsideritstimingtoensureitwillnotweakenthe
trustofthegeneralpublicinthesecuritiesmarkets.
Permanentinsidersarenotallowedtotradeinthe
company’ssecuritiesduringthe14daysprecedingthe
publicationofthecompany’sinterimreportorannual
accounts(=closedwindow).Itisadvisableforinsidersto
onlymakelong-terminvestmentsinElisaandconduct
theirtradingwithinthe14daysfollowingthepublication
ofElisa’sfinancialresults.Inaddition,thoseinvolvedin
anyinsiderprojectsmustnottradeinthecompany’s
securitiesduringtheproject.
Elisaalsohasanumberofcompany-specificinsiders
consistingofothermanagementandfinancial
administrationpersonnel.Projectspecificinsiders
havealsobeendefinedwherenecessary.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
23
FINANCIALS
ELISAANNUALREPORT2013
ThereportoftheBoardofDirectors2013
TheFinancialreporthasbeenpreparedinaccordancewiththeInternationalFinancialReportingStandards(IFRS).
Marketsituation
The competitive environment has been keen during the year. Especially during the ﬁrst half of the year, price campaigning was
exceptionally strong. The mobile subscription base and the use of data services continued to evolve favourably. The mobile
smartphone market is growing rapidly. Approximately 85 per cent of the mobile handsets sold are smartphones. This further
increasestheuseofmobiledataservices.Anotherfactorcontributingtothemobilemarketgrowthhasbeentheincreasedcoverage
ofnew4Gspeeds.Thenumberandusageoftraditionalfixednetworksubscriptionsdecreased.
The markets for new visual communications (e.g. videoconferencing), IT outsourcing and IPTV entertainment services have
continuedtodevelopfavourably.Thedemandforothernewconsumeronlineservicesisalsogrowing.
Revenue,earningsandfinancialposition
Revenueandearnings
EURmillion
2013
2012
2011
Revenue
EBITDA
1,547
491
1,553
501
1,530
506
EBITDA-%
EBITDAexcludingnon-recurringitems
31.7
508
32.3
501
33.1
501
EBITDA-%excludingnon-recurringitems
EBIT
32.8
281
32.3
299
32.3
295
EBIT-%
EBITexcludingnon-recurringitems
18.1
298
19.2
299
19.3
295
EBIT-%excludingnon-recurringitems
19.3
19.2
Returnonequity,%
22.9
24.7
Revenuewasatthepreviousyear'slevel.PositivecontributorstorevenueincludedthePPOandSulakeacquisitions,Corporate
19.3
24.1
Customers’ICTservices,suchasVideoconferencingandITservices,andConsumerCustomers'onlineservicesliketheElisaViihde
IPTVservice.Lowermobileterminationratesaswellasthedecreaseinusageoftraditionalfixedtelecomservicesinbothsegments
affectedrevenuenegatively,asdidthedecreaseinmobileservicerevenueduetoincreasedpricecompetitioninthefirsthalfofthe
year.
ReportedEBITDAincludesnon-recurringitemsofEUR17million,whichrelatestopersonnelreductions.EBITDAexcludingnonrecurringitemsgrewby1percent,mainlyduetoacquisitionsandthecostefficiencymeasures.EBITDAwasnegativelyaffectedby
increasedcampaigninginmobileservicesinthefirsthalfoftheyear,andinvestmentinICTandonlineservices'growth.EBIT
excludingnon-recurringitemswasatthepreviousyear'slevel.Depreciationsgrewduetohigherdepreciationlevelsintheacquired
companies.
NetfinancialincomeandexpensesimprovedtoEUR-26(-30)million.AloweredinterestrateafterpartialrefinancingofEUR300
milliondebtdecreasednetfinancialexpenses.In2012thefinancialexpensesincludedanon-recurringwrite-downofEUR3million
frominvestmentsavailableforsale.IncometaxesintheincomestatementamountedtoEUR-58(-60)million.Elisa’snetprofitwas
EUR196(209)million.TheGroup’searningspershareamountedtoEUR1.25(1.33),andexcludingnon-recurringitemsEUR1.33
(1.35).
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
24
FINANCIALS
ELISAANNUALREPORT2013
Financialposition
EURmillion
End2013
End2012
End2011
Netdebt
971
839
788
Netdebt/EBITDA(1
2.0
1.7
1.6
Gearingratio,%
112.6
99.3
93.8
Equityratio,%
EURmillion
37.3
2013
42.3
2012
42.3
2011
(2
84
155
Cashflowafterinvestments
1)(interest-bearingdebt–financialassets)/(4previousquarters’EBITDAexclusiveofnon-recurringitems)
207
2)
FullyearcashflowafterinvestmentsexcludinginvestmentsinPPOandSulakesharesEUR177(155)million
Elisa’scashflowafterinvestmentswasEUR84(155)million,andexcludingacquisitionsEUR177(155)million.Itwasnegatively
affectedby800MHzlicensefeepaymentsofEUR12millioninFinlandandEstonia.Comparedtothepreviousyear,cashflowwas
positivelyaffectedbynetworkingcapitalchange,aswellasdecreasedfinancialexpensesandpaidtaxes.
Elisa’sfinancialpositionandliquidityremainedgood.
Changesincorporatestructure
On15February,ElisaincreaseditsownershipInSulakeCorporationto100percent.Sulakehasbeenconsolidatedfrom
1February2013onwards.
On25April,theFinnishCompetitionandConsumerAuthorityapprovedthetransactioninwhichElisaacquiredPPO'sTelecomandIT
operations.TheacquisitionalsoincludedPPO'sholdingsinKymenPuhelinOyandTelekareliaOy.Thetransactionwascompletedby
30April2013andacquiredcompanieswereconsolidatedintoElisa'sfinancialstatementseffective1May2013.
InJune,Elisa'swhollyownedsubsidiaryPPO-YhtiötOy,anditssubsidiariesKymenPuhelinOyandTelekareliaOysignedplanstomerge
withElisa.
ExtraordinaryshareholdermeetingsofKymenPuhelinon21August2013andTelekareliaon22August2013approvedthemergers.
On23August2013,theBoardofDirectorsofElisaapprovedthemergers.
Theregistrationdateofthemergerswas31December2013.Themergerconsiderationsareexplainedinmoredetailinthesection
"Shares"andinthesection"Sharesandshareholders"oftheconsolidatedfinancialstatements.
On30September,ElisadivestedPPO'shomeappliancebusinessinYlivieska,RaaheandKokkola.Theannualrevenueofthedivested
businessisapproximatelyEUR5million.ThetransactionhadnoimpactonElisa’sresult.
ConsumerCustomersbusiness
EURmillion
2013
2012
Revenue
EBITDA
EBITDA-%
949
295
31.1
962
307
31.9
304
32.1
307
31.9
EBITDAexcl.non-recurringitems
EBITDA-%excl.non-recurringitems
EBIT
178
192
EBITexcl.non-recurringitems
187
192
CAPEX
132
114
Revenuedecreasedby1percent.Thedecreaseinusageoftraditionalfixedtelecomservicesaffectedrevenuenegatively,asdidthe
decreaseinmobileservicesduetoincreasedpricecompetitioninthefirsthalfoftheyear,aswellasthelowermobiletermination
rates.Theacquisitionsandgrowthinonlineservicescontributedpositivelytorevenue.
EBITDAincludesnon-recurringitemsofEUR9millionwhichrelatetopersonnelreductions.EBITDAexcludingnon-recurringitems
decreasedby1percentmainlyduetodecreaseinrevenue.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
25
FINANCIALS
ELISAANNUALREPORT2013
CorporateCustomersbusiness
EURmillion
2013
2012
Revenue
EBITDA
EBITDA-%
598
195
32.7
591
194
32.8
204
34.1
194
32.8
EBITDAexcl.non-recurringitems
EBITDA-%excl.non-recurringitems
EBIT
103
107
EBITexcl.non-recurringitems
111
107
CAPEX
108
80
Revenueincreasedby1percent.AcquisitionsandgrowthinICTservicescontributedpositivelytorevenue.Lowerinterconnection
androamingfees,adecreaseinmobileservicerevenueandtraditionalfixednetworkbusinessaffectedrevenuenegatively.
EBITDAincludesnon-recurringitemsofEUR8millionwhichrelatetopersonnelreductions.EBITDAexcludingnon-recurringitems
grewby5percent,mainlyasaresultofanincreaseinrevenueandcostefficiencymeasures.
Personnel
In2013,theaveragenumberofpersonnelatElisawas4,320(3,973).EmployeeexpensestotalledEUR270(237)million,which
includeanon-recurringrestructuringcostofEUR17million.Personnelattheendof2013amountedto4,217(3,863).Personnelby
segmentattheendoftheperiod:
End2013
End2012
ConsumerCustomers
2,424
2,182
CorporateCustomers
1,793
1,681
Total
4,217
3,863
TheincreaseinthenumberofpersonnelwasattributablemainlytothePPOandSulakeacquisitionsandgrowthinthecorporateICT
service.
Investments
EURmillion
Capitalexpenditure,ofwhich
ConsumerCustomers
CorporateCustomers
Shares
2013
240
193
132
108
150
114
80
0
2012
Total
390
193
In2013,themaincapitalexpendituresrelatedtothecapacityandcoverageincreaseofthe3Gand4Gnetworks,aswellastoother
networkandITinvestments.Capitalexpenditureincludes800MHzLTElicencesofEUR38million,ofwhichEUR33millionrelatesto
FinlandandEUR5milliontoEstonia.Licenceinvestmentisequallyallocatedtobothcustomersegments.Investmentsinshares
relatestoPPOandSulakeacquisitionsandmergerconsiderationsandacquisitionsofminorityshareholdersatKymenPuhelinand
Telekarelia.
Financingarrangementsandratings
On17September2013,ElisaplacedanewEUR300millionseniorunsecuredbondthatmaturesinJanuary2021andpaysanannual
couponof2.75percent,whichwillbeusedamongtheotherstorefinancehigherinterestratedebt.Thebondwasissuedunder
Elisa’sEUR1billionEMTN(EuroMediumTermNote)programmeandlistedontheLuxembourgStockExchange.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
26
FINANCIALS
ELISAANNUALREPORT2013
Validfinancingarrangements
EURmillion
Committedcreditlines
300
0.0
250
101.0
1,000
761.7
Rating
Outlook
Baa2
BBB
Stable
Stable
Commercialpaperprogram(1
EMTNprogram(2
1)
2)
Inuseon
Maximumamount
31Dec.2013
Domesticcommercialpaperprogram,notcommitted
EuropeanMediumTermNoteprogram,notcommitted
Long-termcreditratings
Creditratingagency
Moody’sInvestorServices
Standard&Poor’s
TheGroup’scashandundrawncommittedcreditlinestotalledEUR438(340)millionon31December2013.
Share
SharetradingvolumesandclosingpricesarebasedonthetradesmadeontheNASDAQOMXHelsinki.
Tradingofshares
Sharestraded,millions
Volume,EURmillion
%ofshares
Sharesandmarketvalues
Totalnumberofshares
Treasuryshares
Outstandingshares
2013
2012
128.1
2,068.4
76.6
116.5
1,935.4
69.7
End2013
End2012
167,335,073
7,986,043
159,349,030
167,167,782
10,288,116
156,879,666
Closingprice,EUR
19.26
16.73
Marketcapitalisation,EURmillion
3,069
2,625
Treasuryshares,%
4.77
6.15
Elisasharesarealsotradedinalternativemarketplaces.AccordingtotheFidessaFragmentationreport,thetradingvolumesinthese
marketsin2013were93(104)percentofNASDAQOMXHelsinki.Thetotaltradingvolumeinallmarketplacesrepresents
approximately148(151)percentofoutstandingshares.
Totalnumberof
Changeinequity,
Numberofshares
shares
Treasuryshares
Outstandingshares
EUR
Sharesat31Dec.2012
Shareissue(1
Optionsubscriptionsin2013
(2
Cancellationofshares(3
ShareIssue
(4
Returnedshares(5
167,167,782
10,288,116
156,879,666
-303,599
4,629,890
336,878
2,929,052
-2,000,000
-2,000,000
1,830,413
1,526
Sharesat31Dec.2013
167,335,073
7,986,043
159,349,030
1)Stockexchangebulletin25April2013,2)Stockexchangebulletins20March2013and19June2013,3)Stockexchangebulletin
7November2013,4)Stockexchangebulletin31December2013and5)Sharesreturnedduring2013fromshareincentiveplans
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
27
FINANCIALS
ELISAANNUALREPORT2013
Options
Totalnumberofoptions
HeldbyElisaornotdistributed
Usedinsharesubscription
Terminated
Outstanding
Lastsubscriptionprice,EUR
Subscriptionperiod
2007A
2007B
2007C
Total
850,000
0
12,375
837,625
0
850,000
0
581,999
268,001
0
850,000
0
603,700
246,300
0
2,550,000
0
1,198,074
1,351,926
0
1Oct.2009–
31May2011
1Oct.2010–
31May2012
8.67
1Oct.2011–
31May2013
Thelasttrancheofthe2007optionsexpiredon31May2013.Therearenooutstandingoptions.
Attheendoftheyear,Elisa’stotalnumbertheshareswas167,335,073(167,167,782),allwithinoneshareseries.
During2013,atotalof1,526sharesfromtheshareincentiveplanswerereturnedtothecompany.
InApril,ElisadistributedadividendofEUR1.30pershare,totallingEUR204million,inaccordancewiththedecisionofthe
shareholdersattheAnnualGeneralMeeting.
Sharessubscribedwithoptions
Equity
Subscribedbetween
5Dec.2012–6March2013
Registerdate
2007C
increase(1
20March2013
6,400
63,808
7March2013–31May2013
19June2013
330,478
2,865,244
Total
336,878
2,929,052
1)
ThesubscriptionpricehasbeenbookedintoElisa’sreserveforinvestednon-restrictedequity
Formoreinformation,seeNote27oftheconsolidatedfinancialstatementandtheStockexchangereleaseof18December2007.
Researchanddevelopment
The majority of the service development occurs during the ordinary course of business and is accounted for as a normal operating
expense. Elisa invested EUR 10 million in research and development, of which EUR 8 million has been capitalised in 2013
(EUR7millionin2012andEUR5millionin2011),correspondingto0.6percentofrevenue(0.6percentin2012and0.3percentin
2011).
TheAnnualGeneralMeeting
On 25 March 2013, Elisa’s Annual General Meeting decided to pay a dividend of EUR 1.30 per share based on the 2012 ﬁnancial
statements.Thedividendwaspaidtoshareholderson9April2013.
The Annual General Meeting adopted the ﬁnancial statements for 2012. The members of the Board of Directors and the CEO were
dischargedfromliabilityfor2012.
ThenumberofthemembersoftheBoardofDirectorswasconﬁrmedatseven.AriLehtoranta,RaimoLind,LeenaNiemistöandEira
Palin-Lehtinen, Mika Salmi and Mika Vehviläinen were re-elected as members of the Board of Directors and Jaakko Uotila as a new
memberoftheBoardofDirectors.TheBoardofDirectorselectedRaimoLindastheChairmanoftheBoardandAriLehtorantaasthe
DeputyChairman.RaimoLind(Chairman),AriLehtorantaandMikaVehviläinenwereappointedtotheNominationandCompensation
Committee.EiraPalin-Lehtinen(Chair),LeenaNiemistöandJaakkoUotilawereappointedtotheAuditCommittee.
KPMGOyAb,authorisedpublicaccountants,wasappointedthecompany’sauditor.APAEsaKailialaistheresponsibleauditor.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
28
ELISAANNUALREPORT2013
FINANCIALS
TheBoardofDirectors'authorisations
The Annual General Meeting 2013 decided on the authorization to repurchase or accept as pledge the company’s own shares. The
repurchase may be directed. The amount of shares under this authorization is 5 million shares at maximum. The authorization is
effectiveuntil30June2014.
TheAnnualGeneralMeetingof2010approvedtheproposaloftheBoardofDirectorsontheissuanceofsharesaswellastheissuance
of special rights entitled to shares. The issue may be directed. The authorisation is effective until 30 June 2014. A maximum
aggregatenumberofsharestobeissuedundertheauthorisationis15million,ofwhich2.4millionshareshasbeenissued.
ElisaShareholders'NominationBoard
Theshareholders' NominationBoardwasestablishedin2012bytheAnnualGeneralMeeting.Its’dutyistoprepareproposalsforthe
electionandremunerationofthemembersoftheBoardofDirectorsofElisafortheAnnualGeneralMeeting.
ThecompositionofElisa'sShareholders'NominationBoardisasfollows:
•MsEijaAilasmaa,ViceChairmanoftheBoardofSolidiumOy
•MrPekkaPajamo,CFO,VarmaMutualPensionInsuranceCompany
•MrTimoRitakallio,DeputyCEO,IlmarinenMutualPensionInsuranceCompany
•MrJormaEräkare,HeadofFinnishEquities,NordeaFinlandFund
•MrRaimoLind,ChairmanoftheBoardofElisa
TheNominationBoardelectedEijaAilasmaaasthechair.
Significantlegalandregulatoryissues
On24April2013,theFinnishCompetitionandConsumerAuthority(FCCA)approvedthetransactioninwhichElisaacquirestheentire
share capital of a company comprised of ﬁxed-line operator PPO's Telecom and IT operations. The acquisition also includes PPO's
holdingsofKymenPuhelinOyandTelekareliaOy.
The transaction was completed by 30 April 2013 and the acquired companies were consolidated into Elisa's ﬁnancial statements
effective1May2013.
As a condition for the acquisition, FCCA ruled that the overlapping consumer business broadband networks and ﬁbre-optic
connections, as well as the approximately 2,700 related customer agreements in Joensuu, Kontiolahti and Outokumpu in Eastern
Finlandbedivested.
According to the Finnish Competition and Consumer Authority’s condition for the PPO acquisition, Elisa has divested in October
approximately2,700customeragreementsintheJoensuu,KontiolahtiandOutokumpuareasineasternFinland.
FCCA announced that it took Elisa's paper invoice pricing practise for consumer customers' telephone subscriptions to the Market
Court.
TheauctionfortheLTE800MHzspectrumendedon30October2013.Elisawon2×10MHzofspectrum.Thefeeforthelicenseis
EUR 33.3 million and it will be paid in 5 annual instalments in 2013–2017. The license is valid from 1 January 2014 to
31December2033.Thelicenseconditionsincludeabuildingcommitmentof97percentpopulationcoveragewithin5years.
Elisawon2×10MHzintheLTE800MHzspectrumauctioninEstoniaon12August2013.ThefeeforthelicensewasEUR5millionand
itwasfullypaidinAugust.
SubstantialrisksanduncertaintiesassociatedwithElisa’soperations
RiskmanagementispartofElisa’sinternalcontrolsystem.Itaimstoensurethatrisksaffectingthecompany’sbusinessareidentiﬁed,
influencedandmonitored.Thecompanyclassifiesrisksintostrategic,operational,hazardandfinancialrisks.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
29
ELISAANNUALREPORT2013
FINANCIALS
Strategicandoperationalrisks
The telecommunications industry is under intense competition in Elisa’s main market areas, which may have an impact on Elisa’s
business. The telecommunications industry is subject to heavy regulation. Elisa and its businesses are monitored and regulated by
severalpublicauthorities.ThisregulationalsoaffectsthepricelevelofsomeproductsandservicesofferedbyElisa.Regulationmay
alsorequireinvestmentswhichhavelongpaybacktimes.
TherapiddevelopmentsintelecommunicationstechnologymayhaveasignificantimpactonElisa’sbusiness.
Elisa’smainmarketisFinland,wherethenumberofmobilephonesperinhabitantisamongthehighestintheworld,andgrowthin
subscriptionsisthuslimited.Furthermore,thevolumeofphonetraﬃconElisa’sﬁxednetworkhasdecreasedduringthelastyears.
Thesefactorsmaylimitopportunitiesforgrowth.
Hazardrisks
The company’s core operations are covered by insurance against damage and interruptions caused by accidents and disasters.
Accidentrisksalsoincludelitigationandclaims.
Financialrisks
In order to manage the interest rate risk, the Group’s loans and investments are diversiﬁed in ﬁxed- and variable-rate instruments.
Interestrateswapscanbeusedtomanagetheinterestraterisk.
AsmostofElisa'soperationsandcashflowaredenominatedineuros,theexchangerateriskisminor.
TheobjectiveofliquidityriskmanagementistoensuretheGroup’sﬁnancinginallcircumstances.Elisahascashreserves,committed
creditfacilitiesandasustainablecashflowtocoveritsforeseeablefinancingneeds.
Liquid assets are invested within conﬁrmed limits to ﬁnancially solid banks, domestic companies and institutions. Credit risk
concentrationsinaccountsreceivableareminorasthecustomerbaseiswide.
AdetaileddescriptionoffinancialriskmanagementcanbefoundinNote34oftheconsolidatedfinancialstatement.
Corporateresponsibility
DemandforICTandonlineservicescontinuedtogrowandtheycarriedareductioninthecarbondioxidefootprintofatotalof21,965
tCO2 ,showinga15percentgrowthinreduction.Thecarbonfootprintinmobiledataimprovedby46percent(0.27kg/GB(1). Elisa’s
datacentresimprovedtheirenergyefficiencyshowing3,797tCO2 savings.Elisasaved678(340)tCO2 ine-billing.
Fromsummer2013,allElisa’senergyprocurementisbasedonrenewableenergysourceswhichcarryaCertiﬁcateofOrigin.Elisa’s
environmentalreportingwasawardedbyCarbonDisclosureProject(CDP)in2013.
Elisainvestsinflexiblework.2013personnelsurveyresultwassecondbestovera10-yearperiod.
Elisawillpublishitsfirstonlineresponsibilityreportinannualreport2013.ResponsibilityreportincorporatestheGRIindex(2 .
1)
Kg/GBisanefficiencymeasureshowinghowmuchcarbondioxideisproducedbytransmittingagigabyteofinformation.
2)CorporatesocialresponsibilityreportingisbasedonGRI(GlobalReportingInitiativa)framework.
CorporateGovernanceStatement
Elisa will publish a separate Corporate Governance Statement during week 11 (beginning 10 March 2014) on its website at
www.elisa.com.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
30
FINANCIALS
ELISAANNUALREPORT2013
Eventsafterthefinancialperiod
TheShareholders’NominationBoardofElisaCorporationproposestotheAnnualGeneralMeetingof2April2014thatthenumberof
membersoftheBoardofDirectorstobeseven.TheNominationBoardproposesthatMrRaimoLind,MsLeenaNiemistö,MsEiraPalinLehtinen,MrJaakkoUotilaandMrMikaVehviläinenbere-electedasmembersoftheBoard.MrMikaSalmiandMrAriLehtorantawere
notavailableforre-election.TheNominationBoardproposesthatMrPetteriKoponenandMsSeijaTurunenaretobeelectedasnew
membersoftheBoard.
TheBoardofDirectorswillasktheAnnualGeneralMeetinganauthorisationoftheissuanceofsharesaswellastheissuanceofspecial
rights entitled to shares. The issue may be directed. The authorisation is effective until 30 June 2016 and it replaces the operative
authorisation.Amaximumaggregateof15millionofthecompany’ssharescanbeissuedundertheauthorisation.
Outlookandguidancefor2014
The macroeconomic environment in Finland is still expected to be weak in 2014. Competition in the Finnish telecommunications
marketalsoremainschallenging.
Fullyearrevenueisestimatedtobeatthesamelevelorslightlyhigherthanin2013.Mobiledata,ICTandnewonlineservicesaswell
ascompletedacquisitionsareexpectedtoincreaserevenue.Full-yearEBITDA,excludingnon-recurringitems,isanticipatedtobeat
thesamelevelasin2013orslightlyhigher.Full-yearcapitalexpenditureisexpectedtobemaximum12percentofrevenue.Elisa’s
financialpositionandliquidityaregood.
Elisa is continuing its cost eﬃciency measures, in the areas of streamlining product portfolio and IT systems and operations,
increasingcustomerserviceandsalesefficiency,aswellasreducinggeneraladministrationcosts.
Elisa's transformation into a provider of new, exciting and relevant services for its customers is continuing. Long-term growth and
profitabilityimprovementwillderivefrommobiledatamarketgrowth,aswellasnewonlineandICTservices.
Profitdistribution
Accordingto Elisa’sdistributionpolicyproﬁtdistributionis80–100percentofthepreviousﬁscalyear’snetproﬁt. Inaddition,any
possibleexcesscapitalcanbedistributedtoshareholders.Whenmakingthedistributionproposalordecision,theBoardofDirectors
willtakeintoconsiderationthecompany'sﬁnancialposition,futureﬁnancialneedsandﬁnancialtargets.Proﬁtdistributionincludes
dividendpayment,capitalrepaymentandpurchaseoftreasuryshares.
TheBoardofDirectorsproposestotheAnnualGeneralMeetingadividendofEUR1.30pershare.Thedividendpaymentcorresponds
to104percentofthefinancialperiod’snetprofit.
Shareholders who are listed in the company’s register of shareholders maintained by Euroclear Finland Ltd on 7 April 2014 are
entitledtofundsdistributedbytheGeneralMeeting.TheBoardofDirectorsproposesthatthepaymentdatebe15April2014.The
profitfortheperiodshallbeaddedtoretainedearnings.
The Board of Directors decided also to propose to the General Meeting that the Board of Directors be authorised to acquire a
maximumof5milliontreasuryshares,whichcorrespondsto3percentofthetotalshares.
BOARDOFDIRECTORS
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
31
FINANCIALS
ELISAANNUALREPORT2013
Consolidatedincomestatement
EURmillion
Revenue
Otheroperatingincome
Materialsandservices
Note
Employeeexpenses
2013
2012
1,4
5
6,35
1,547.4
4.0
-619.9
1,553.4
4.7
-655.6
7,27
-270.0
-237.0
Otheroperatingexpenses
EBITDA
Depreciationandamortisation
8
1
1,10
-170.8
490.7
-210.1
-164.5
501.1
-202.1
EBIT
Financialincome
1
11
280.6
10.3
298.9
9.4
Financialexpense
11
-36.2
-39.5
Shareofassociatedcompanies’profit
Profitbeforetax
Incometaxes
Netprofit
Attributableto
12
0.0
254.6
-58.2
196.3
0.1
268.9
-60.4
208.5
196.6
-0.2
196.3
208.7
-0.2
208.5
Equityholdersoftheparent
Non-controllinginterests
Earningspershare(EUR/share)calculatedfromthe
profitattributabletoequityholdersoftheparent:
Basicanddiluted
13
1.25
1.33
Diluted
Averagenumberofoutstandingshares(1,000shares):
13
1.25
1.33
Basic
Diluted
13
13
157,269
157,269
156,548
156,685
Consolidatedstatementofcomprehensiveincome
EURmillion
Note
Profitfortheperiod
2013
196.3
Othercomprehensiveincome,netoftax
Itemswhichmaybereclassifiedsubsequentlytoprofitorloss:
19
Translationdifferences
Financialassetsavailable-for-sale
Itemswhicharenotreclassifiedsubsequentlytoprofitorloss:
-0.2
1.1
0.9
Remeasurementsofthenetdefinedbenefitliability
Totalcomprehensiveincome
Totalcomprehensiveincomeattributableto:
Equityholdersoftheparent
Non-controllinginterests
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
2012
208.5
0.0
-1.3
-1.3
-6.3
-4.5
190.9
202.7
191.2
-0.2
190.9
202.9
-0.2
202.7
32
FINANCIALS
ELISAANNUALREPORT2013
Consolidatedstatementoffinancialposition
EURmillion
Note
ASSETS
Non-currentassets
Property,plantandequipment
Goodwill
Otherintangibleassets
14
15
15
713.6
832.4
143.3
Investmentsinassociatedcompanies
16
17,18,19
2.4
6.5
22.5
19.9
13.5
12.1
Financialassetsavailable-for-sale
Deferredtaxassets
31Dec.2013
31Dec.2012
616.1
797.1
101.3
70.5
45.1
1,798.3
1,598.1
Currentassets
Inventories
Tradeandotherreceivables
22
23
55.5
327.3
59.4
310.0
Taxreceivables
5.4
1.4
Cashandcashequivalents
TOTALASSETS
EQUITYANDLIABILITIES
SHAREHOLDERS'EQUITY
Sharecapital
24
1
137.8
526.0
2,324.3
83.0
39.8
410.6
2,008.7
83.0
Treasuryshares
Contingencyreserve
-148.2
3.4
-194.1
3.4
Fairvaluereserve
Otherfunds
-3.2
381.0
2.0
381.0
Reserveforinvestednon-restrictedequity
Retainedearnings
90.9
453.4
52.7
514.2
860.3
1.9
862.2
21.0
13.8
2.4
829.7
35.6
902.5
267.4
0.3
12.6
279.3
559.6
1,462.1
2,324.3
842.1
2.8
844.9
16.9
7.1
3.3
702.8
13.7
743.8
243.3
0.8
0.3
175.6
419.9
1,163.8
2,008.7
Otherreceivables
Equityattributabletoequityholdersoftheparent
Non-controllinginterests
TOTALSHAREHOLDERS'EQUITY
LIABILITIES
Non-currentliabilities
Deferredtaxliabilities
Pensionobligations
Provisions
Financialliabilities
Otherliabilities
Currentliabilities
Tradeandotherpayables
Taxliabilities
Provisions
Financialliabilities
TOTALLIABILITIES
TOTALEQUITYANDLIABILITIES
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
21
17,18,20,25,28
26,27
21
28
29
30
31
31
29
30
33
FINANCIALS
ELISAANNUALREPORT2013
Consolidatedstatementofcashflows
EURmillion
Cashflowfromoperatingactivities
Netprofit
Adjustments
Depreciationandamortisation
Financialincome(-)andexpense(+)
10
Gains(-)andlosses(+)onthedisposaloffixedassets
Increase(+)/decrease(-)inprovisionsintheincomestatement
Otheradjustments
Changeinworkingcapital
Increase(-)/decrease(+)intradeandotherreceivables
Increase(-)/decrease(+)ininventories
Note
Increase(+)/decrease(-)intradeandotherpayables
2013
2012
254.6
210.1
25.9
268.9
202.1
30.1
-1.0
5.1
-12.3
227.9
-13.5
6.4
-0.5
-0.7
-5.6
225.4
-14.2
-19.2
2.1
-16.1
Dividendsreceived
Interestreceived
-4.9
0.5
9.7
-49.5
1.0
8.7
Interestpaid
Taxespaid
-34.9
-64.9
-39.8
-72.3
Netcashflowfromoperations
Cashflowfrominvestingactivities
Acquisitionsofsubsidiaries
388.1
-91.4
342.5
Contingentconsiderationofsubsidiaries
Capitalexpenditure(1
Proceedsfromdisposalofsubsidiaries
-1.7
-0.7
-212.5
-188.9
0.1
0.6
Proceedsfromdisposaloftangibleandintangibleassets
Netcashflowusedininvestingactivities
Cashflowfromfinancingactivities
1.4
-304.1
1.3
-187.7
Proceedsfromlong-termborrowings
Repaymentoflong-termborrowings
300.1
-82.1
150.9
-0.3
Increase(+)/decrease(-)inshort-termborrowings
1.5
-119.6
Repaymentoffinanceleaseliabilities
-4.8
-6.0
Proceedsfromincreaseinreserveforinvestednon-restrictedequity
2.9
4.4
Proceedsfromthesaleoftreasuryshares
4.6 Acquisitionofnon-controllinginterests
-4.0 Dividendspaid
-204.2
-203.5
Netcashusedinfinancingactivities
14.0
-174.0
Changeincashandcashequivalents
98.1
-19.2
Cashandcashequivalentsatthebeginningoftheperiod
39.8
59.0
Cashandcashequivalentsattheendoftheperiod
24
137.8
39.8
1)Thetotalinvestmentsin800MHzspectrumlicensesareEUR38.4million,ofwhichyear2013cashfloweffectisEUR11.8million.
TheFinnish800MHzspectrumlicenseEUR33.3millionwillbepaidin5annualinstallmentsin2013–2017.TheEstonianlicenseEUR
5.1millionwaspaidinoneinstallmentin2013.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
34
FINANCIALS
ELISAANNUALREPORT2013
Consolidatedstatementofchangesinshareholders'equity
EURmillion
Shareholders’
equity
at1Jan.2012
AdoptionofIAS19R
Shareholders’
equity
at1Jan.2012
Equityattributabletoequityholdersoftheparent
Share
capital
Treasury
shares
Other
reserves
Reserve
for
invested
nonrestricted
equity
83.0
-197.0
392.3
48.3
510.3
836.8
3.5
840.3
-2.0
-2.0
83.0
-197.0
392.3
48.3
508.4
834.8
3.5
838.5
208.7
-0.2
208.5
Retained
earnings
Total
Noncontrolling
interests
Total
shareholders
equity
Profitfortheperiod
208.7
Translationdifferences
0.0
0.0
0.0
-4.5
-4.5
-4.5
-1.3
-1.3
-1.3
-5.8
Remeasurementsofthe
netdefinedbenefit
liability
Financialassetsavailablefor-sale
Totalcomprehensive
income
Dividends
Share-based
compensation
Optionsexercised
2.9
Otherchanges
Shareholders’
equity
at31Dec.2012
83.0
4.4
208.7
202.9
-0.2
202.7
-203.4
-203.4
-0.5
-204.0
3.5
6.4
6.4
0.0
-2.8
4.4
-2.8
-2.8
4.4
-194.1
386.4
52.7
514.2
842.2
2.8
844.9
Profitfortheperiod
196.6
-0.2
196.3
196.6
Translationdifferences
-0.2
-0.2
-0.2
-6.3
-6.3
-6.3
1.1
1.1
1.1
-5.2
196.4
191.2
-0.2
190.9
-203.2
-203.2
-0.6
-203.8
3.2
3.2
3.2
-1.3
40.0
40.0
-39.9
0.0
0.0
Remeasurementsofthe
netdefinedbenefit
liability
Financialassetsavailablefor-sale
Totalcomprehensive
income
Dividends
Share-based
compensation
Disposalofnewand
treasuryshares
Cancellationoftreasury
shares
Acquisitionofsubsidiary
withnon-controlling
interests
Acquisitionofnoncontrollinginterests
6.0
39.9
Optionsexercised
Shareholders’
equity
at31Dec.2013
83.0
-148.2
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
35.3
381.2
0.0
23.2
23.2
-15.9
-15.9
-23.2
-39.1
2.9
2.9
2.9
90.9
453.4
860.3
1.9
862.2
35
FINANCIALS
ELISAANNUALREPORT2013
Notestotheconsolidatedfinancialstatements
Basicinformationonthegroup
ElisaCorporation(“Elisa”or“theGroup”)engagesintelecommunicationsactivities,providingdatacommunicationsservicesin
Finlandandinselectedinternationalmarketareas.TheparentcompanyoftheGroupisElisaCorporation(“theparent”)withdomicile
inHelsinki,anditsregisteredaddressisRatavartijankatu5.Thesharesoftheparentcompany,ElisaCorporation,havebeenlistedon
theNASDAQOMXHelsinkisince1999.
On6February2014Elisa'sBoardofDirectorshasacceptedthisfinancialstatementtobepublished.Acopyoftheconsolidated
financialstatementsisavailablefromElisa’sheadofficeatRatavartijankatu5,Helsinki,oronthecompany’swebsitewww.elisa.com.
Basisofpresentationoffinancialstatements
Elisa’sconsolidatedfinancialstatementsarepreparedinaccordancewithInternationalFinancialReportingStandardsincluding
adherencewithIASandIFRSstandardsandSICandIFRICinterpretationsvalidasat31December2013.TheInternationalFinancial
ReportingStandardsrefertostandardsandinterpretationsthathavebeenapprovedforapplicationintheEUintheFinnish
AccountingActandtheprovisionsissuedpursuanttoitaccordingtotheproceduresprovidedforinEUregulation(EC)No.1606/2002
(“IFRS”).
Theconsolidatedfinancialstatementshavebeenpreparedunderthehistoricalcostconvention,exceptforfinancialassetsavailablefor-sale,financialassetsandliabilitiesrecognisedatfairvaluethroughprofitorloss,share-basedpaymentsandderivatives.The
financialstatementsarepresentedinEURmillionandthefiguresareroundedtoonedecimalplace.
ThepreparationofconsolidatedfinancialstatementsinconformitywithIFRSrequirestheapplicationofjudgmentbytheGroup
managementinmakingestimatesanddecisions.Informationondecisionsrequiringmanagementjudgmentontheapplicationof
appropriateaccountingprinciplesthathaveamaterialimpactontheconsolidatedfinancialstatementsarepresentedinthe
Accountingprinciplesunder”Theaccountingpoliciesthatrequiremanagement’sjudgmentsandsourcesofestimationuncertainty”.
Appliednewandrevisedstandardsandinterpretations
AsaresultoftheadoptionoftheamendedIAS19EmployeeBenefits-standard,actuarialgainsandlossesarerecordeddirectlyinthe
consolidatedstatementofcomprehensiveincomeandthenetdefinedbenefitpensionliabilityisrecognisedonthestatementof
financialposition.Theimpactoftheadoptionon31December2012wasareductionofEUR6.5millioningroupequityandanincrease
ofpost-employeeliabilitiesofEUR5.9million.ThereductionintheGroup'stotalcomprehensiveincomein2012wasEUR4.5million.
Thecomparativefinancialinformationfor2012hasbeenrevisedinaccordancewiththeamendedaccountingstandard.
AsaresultofamendedIAS1PresentationofFinancialStatementsothercomprehensiveincomefortheperiodisgroupedintothose
thatwillnotbereclassifiedsubsequentlytoprofitorlossandthatcanbereclassifiedsubsequentlytoprofitorloss.
IFRS13FairValueMeasurementimpactsonthenotestotheconsolidatedfinancialstatements.Thesechangesdonothavea
significantimpactontheGroup’sfinancialstatements.
TheAnnualImprovementsofIFRSstandardsadoptedasof1January2013didnothaveanimpactontheconsolidatedfinancial
statement.
Consolidatedaccountingprinciples
Combinationprinciples
Subsidiaries
Theconsolidatedfinancialstatementsincludetheparentcompany,ElisaCorporation,andthosesubsidiariesinwhichtheparent
companyhas,directlyorindirectly,morethan50percentofvotingrightsoroverwhichtheparentcompanyotherwiseexercises
control.Eventhoughtheentityhadlessthan50percentofthevotingrights,controloveranentityispresumedtoexistwhenthe
Grouphasthroughanagreementtherighttomorethan50percentofthevotingrights,theGrouphasthepowertogovernthe
operatingandfinancialpoliciesoftheentity,theGrouphasthepowertoappointorremovethemajorityofthemembersoftheboard
oftheentitywhichexercisescontrolintheGrouporhastherighttousemajorityvoteintheboardoftheentity.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
36
ELISAANNUALREPORT2013
FINANCIALS
Subsidiariesareconsolidatedfromthedateofacquisition.Similarly,divestedcompaniesareconsolidateduntilthedateofdisposal.
Theacquisitionmethodisusedintheaccountingfortheeliminationofinternalownership.Allintra-grouptransactions,gainonthe
saleofinventoriesandfixedassets,intra-groupreceivables,payablesanddividendsareeliminated.
Changesintheparent’sownershipinterestinasubsidiarythatdonotresultinalossofcontrolareaccountedforequitytransactions.
Asatthedatewhencontrolislost,anyinvestmentretainedintheformersubsidiaryisrecognisedatfairvalueandthedifferenceis
recordedthroughprofitorloss.Identifiableassetsacquiredandassumedliabilitiesaremeasuredattheirfairvalueasofthe
acquisitiondate.Changesinthecontingentconsiderationandacquisition-relatedexpensesarerecognisedasanexpenseinthe
incomestatement.Inabusinesscombinationachievedinstages,thepreviouslyheldequityinterestintheacquireeisremeasuredat
itsacquisition-datefairvalueandtheresultinggainorlossisrecognisedinprofitorloss.Againresultingfromabargainpurchaseis
recognisedinprofitorloss.
Non-controllinginterestsaremeasuredeitherattheamountwhichequalsthenon-controllinginterests’proportionateshareinthe
recognisedamountsoftheacquiree'sidentifiablenetassetsoratfairvalue.Themethodtobeusedisselectedonacase-by-case
basis.Changesinnon-controllinginterestsarerecognisedinretainedearnings.
Profitfortheperiodattributabletotheequityholdersoftheparentandnon-controllinginterestsispresentedseparatelyinthe
consolidatedincomestatement.Non-controllinginterestsarepresentedseparatelyfromtheequityoftheownersoftheparentin
theconsolidatedstatementoffinancialposition.Lossesexceedingtheshareofownershipareallocatedtonon-controllinginterests.
Associates
AssociatedcompaniesareentitiesoverwhichtheGroupexercisessignificantinfluence.Significantinfluenceispresumedtoexist
whentheGroupownsover20percentofthevotingrightsofthecompanyorwhentheGroupotherwiseexercisessignificant
influencebutdoesnorexercisecontrol.Associatedcompaniesareconsolidatedinaccordancewiththeequitymethodofaccounting.
IftheGroup’sshareoflossesofanassociateexceedsitsinterestintheassociate,theinvestmentisrecognisedonthebalancesheet
atzerovalueandthegroupdiscontinuesrecognisingitsshareoffurtherlossesunlesstheGrouphasotherobligationsforthe
associatedcompany.Associatedcompaniesareconsolidatedfromthedatethecompanybecomesanassociateanddivested
companiesareconsolidateduntilthedateofdisposal.
Jointventures
JointventuresarecompaniesoverwhichtheGroupexercisesjointcontrolwithotherparties.Assetsunderjointcontrolare
consolidatedusingtheproportionalconsolidationmethod.TheGroupappliesthemethodtotheconsolidationofmutualrealestate
companies.
Conversionofitemsdenominatedinaforeigncurrency
Theconsolidatedfinancialstatementshavebeenpresentedineuro,whichisthefunctionalandpresentationcurrencyoftheparent
company.
Transactionsinforeigncurrencies
Transactionsinforeigncurrenciesaretranslatedintofunctionalcurrencyattheratesofexchangeprevailingatthedatesof
transactions.Monetaryitemshavebeentranslatedintothefunctionalcurrencyusingtheratesofexchangeasattheyear-endand
non-monetaryitemsusingtheratesofexchangeatthedatesoftransactions,excludingitemsmeasuredatfairvalue,whichhavebeen
translatedusingtheratesofexchangeonthedateofvaluation.Gainsandlossesarisingfromthetranslationarerecognisedinthe
profitorloss.ForeignexchangegainsandlossesfromoperationsareincludedwithinthecorrespondingitemsaboveEBIT.Foreign
exchangegainsandlossesfromloansdenominatedinaforeigncurrencyareincludedwithinfinancialincomeandexpenses.
ThetranslationofforeignGroupcompanies’financialstatements
TheincomestatementsofforeignGroupcompaniesaretranslatedintoeurousingtheweightedaveragerateofexchangeofthe
financialyearandthestatementsoffinancialpositionusingtheratesofexchangeasattheyear-end.Differencesresultingfromthe
translationoftheresultfortheperiodatadifferentrateontheincomestatementandonthestatementoffinancialpositionare
recognisedinothercomprehensiveincomeastranslationdifferenceswithinconsolidatedshareholders’equity.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
37
ELISAANNUALREPORT2013
FINANCIALS
Revenuerecognitionprinciples
Revenueincludesnormalsalesincomefrombusinessoperationsdeductedbytaxesrelatedtosalesanddiscountsgranted.Salesare
recognisedoncetheservicehasbeenrenderedtothecustomeroroncethesignificantrisksandrewardsrelatedtotheownershipof
thegoodshavebeentransferredtothebuyer.Servicerevenueisrecognisedwhenitisprobablethateconomicbenefitwillflowto
theGroupandwhentheincomeandcostsassociatedwiththetransactioncanbemeasuredreliably.Revenueandexpensesrelatedto
long-termprojectsarerecognisedonthebasisofthepercentageofcompletionwhenthefinaloutcomeoftheprojectcanbe
estimatedreliably.Thepercentageofcompletionisdeterminedasaproportionofhoursworkedtotheestimatedtotalnumberof
hoursofwork.Whenitislikelythattotalcoststocompletetheprojectwillexceedtotalcontractrevenue,theexpectedlossis
recognisedasanexpenseimmediately.
TheGrouprevenueconsistsmainlyofincomefromvoiceanddatatraffic,periodicfees,openingfeesandmaintenancefees,aswellas
incomefromequipmentsales.Salesarerecognisedasrevenueoncetheservicehasbeenrenderedeitheronthebasisofrealised
trafficvolumesorthevalidityofacontract.Openingfeesarerecognisedatthetimeofconnection.Revenuesfromprepaidmobile
phonecardsarerecognisedovertheperiodofestimateduseofthecards.Servicefeesinvoicedfromacustomeronbehalfofathirdpartycontentserviceproviderarenotrecognisedasrevenue.
Aservicecontractmayincludethedeliveryorrenderingofaproductandaserviceoraccessright(servicebundle).Theshareof
revenueattributabletotheproductisrecognisedseparatelyfromtheservicerevenue.
Long-termservicecontractscoveringawiderangeofcommunicationsservicesforcorporatecustomersarerecognisedovertheterm
ofthecontract.Customersareusuallynotentitledtoredeemtheequipmentattheendoftheserviceperiod.
CustomersbelongingtoloyaltyprogrammesareentitledtocertaindiscountsonservicesandproductsprovidedbytheGroup.
Discountsearnedbycustomersarerecognisedasreductionofrevenue.TheGroupdoesnotcurrentlyhaveanyvalidloyalty
programmes.
EBIT
Earningsbeforeinterestandtaxes(”EBIT”)standsforrevenueandotheroperatingincomedeductedbyoperatingexpenses
(materialsandservicesadjustedbychangeininventories,employeeexpensesandotheroperatingexpenses),depreciationand
amortisation.
Currenttaxesanddeferredtaxes
Thetaxexpenseintheincomestatementcomprisescurrenttaxanddeferredtax.Incometaxesforthefinancialyeararecalculated
fromtaxableprofitwithreferencetoavalidtaxrateandareadjustedbypossiblepreviousyears’taxes.
Deferredtaxesarecalculatedfromalltemporarydifferencesarisingbetweentaxbasesofassetsandliabilitiesandtheircarrying
amountsintheconsolidatedfinancialstatements.Principaltemporarydifferencesarisefromtaxlossescarriedforward,depreciation
differenceandbetweenthefairvalueandtaxbaseofidentifiablenetassetsacquiredinbusinesscombinations.Deferredtaxisnot
recognisedongoodwillimpairmentthatisnotdeductiblefortaxpurposes.Deferredtaxisnotrecognisedonnon-distributable
profitsofsubsidiariesinsofarasthereisnoprofitdistributiondecisionintheforeseeablefuture.Nodeferredtaxisrecognisedon
valuationdifferencesofsharesforwhichgainonsalewouldbetax-deductible.
Deferredincometaxassetsarerecognisedonlytotheextentthatitisprobablethatfuturetaxableprofitwillbeavailableagainst
whichthetemporarydifferencescanbeutilised.Deferredtaxliabilitiesarerecognizedinthebalancesheetintotal.
Interestanddividends
Interestincomeisrecognisedusingtheeffectiveinterestmethod,anddividendincomeisrecognisedwhentherighttoreceive
paymentisestablished.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
38
FINANCIALS
ELISAANNUALREPORT2013
IntangibleAssets
Goodwill
Goodwillarisingfrombusinesscombinationspriorto2004,isaccountedforinaccordancewiththepreviousfinancialstatements
regulationsandthatbookvalueistheassumedIFRSacquisitioncost.Businesscombinationsincurringbetween1January2004and31
December2009havebeenaccountedforinaccordancewithIFRS3(2004).Goodwillarisingfrombusinesscombinationsincurring
after1January2010representstheexcessoftheconsiderationtransferredovertheGroup’sinterestinthenetfairvalueofthe
identifiablenetassetsacquiredandtheamountofnon-controllinginterestandinabusinesscombinationachievedinstages,the
acquisition-datefairvalueoftheequityinterest.
Goodwillisnotamortised.Goodwillistestedforimpairmentannually,ormorefrequentlyifeventsorcircumstancesindicatea
potentialimpairment.Forthepurposeofimpairmenttesting,goodwillisallocatedtocash-generatingunits(CGU’s)including
ConsumerCustomersandCorporateCustomers.Goodwilliscarriedatitscostlessanyaccumulatedimpairmentlosses.
Researchanddevelopment
Researchcostsarerecordedasanexpenseintheincomestatement.Developmentexpensesarerecognisedonthestatementof
financialpositionfromthedatetheproductistechnicallyfeasible,itcanbeutilisedcommerciallyandfutureeconomicbenefitis
expectedfromtheproduct.Otherwisedevelopmentcostsarerecordedasanexpense.Developmentcostsinitiallyrecognisedas
expensesarenotcapitalisedatalaterdate.
Otherintangibleassets
Anintangibleassetisrecognisedonlyifitisprobablethattheexpectedfutureeconomicbenefitsthatareattributabletotheasset
willflowtotheGroupandthecostoftheassetcanbemeasuredreliably.Subsequentcostsrelatedtointangibleassetsarecapitalised
onlyifthefutureeconomicbenefitsthatwillflowtotheGroupexceedthelevelofperformanceoriginallyassessed.Inothercases,
thecostsarerecognisedasanexpenseasincurred.
Inconnectionwithbusinesscombinations,intangibleassets(suchascustomerbaseandbrand)aremeasuredatfairvalue.Other
intangibleassetsaremeasuredatoriginalacquisitioncostandamortisedonastraight-linebasisovertheirestimatedusefullife.
Amortisationperiodsforintangibleassets:
Customerbase
Brand
Developmentexpenses
4–5years
10years
3years
ITsoftware
Otherintangibleassets
5years
5–10years
Property,plantandequipment
Property,plantandequipmentarerecognisedinthestatementoffinancialpositionatcost.Property,plantandequipmentarestated
atcostlessaccumulateddepreciationandimpairments.Depreciationisrecordedonastraight-linebasisovertheusefullives.The
residualvalueandtheusefullifeofanassetisreviewedattheyear-endandadjustedasnecessary.
Subsequentcosts,suchasrenewalsandmajorrenovationprojects,arecapitalisedwhenitisprobablethatfutureeconomicbenefits
willflowtotheGroup.Ordinaryrepair,serviceandmaintenancecostsarechargedtoexpenseduringthefinancialperiodinwhichthey
areincurred.
Expectedusefullivesofproperty,plantandequipment:
Buildingsandconstructions
Machineryandequipmentinbuildings
Telecommunicationsnetwork(line,backbone,area,
subscription,cableTV)
Exchangesandconcentrators(fixedandmobilecore)
Equipmentforthenetworkandexchanges
Telecommunicationterminals
Othermachineryandequipment
Landareasarenotdepreciated.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
25–40years
10–25years
8–15years
6–10years
3–8years
1–4years
3–5years
39
FINANCIALS
ELISAANNUALREPORT2013
Governmentgrants
Governmentgrantsrelatedtotheacquisitionofproperty,plantandequipment,arerecordedasareductionofthecarryingvalueof
property,plantandequipment.Thegrantsarerecognisedinincomeaslowerdepreciationchargesovertheusefullifeoftheasset.
Governmentgrantsassociatedwithdevelopmentprojectsarerecognisedasotheroperatingincomewhentherelatedcostsare
recognisedasexpenses.Governmentgrantsassociatedwithcapitaliseddevelopmentcostsarerecordedasareductionofcost.
Financialassetsandliabilities
Financialassets
TheGroupclassifiesitsfinancialassetsasfinancialassetsatfairvaluethroughprofitorloss,loansandreceivablesandfinancialassets
available-for-sale.Theclassificationoffinancialassetstakesplaceatinitialrecognitionanddependsonthepurposeforwhichthe
financialassetswereacquired.Thepurchasesandsalesoffinancialassetsarerecognisedonthesettlementdate.Financialassetsare
derecognisedoncethecontractualrightstothecashflowsfromthefinancialassetexpiresoronceithastransferredsubstantiallyall
therisksandrewardsofownershipofthefinancialassetoutsidetheGroup.
Financialassetsrecognisedatfairvaluethroughprofitorlossareincludedincurrentassets.Thiscategoryincludesmoneymarket
fundsandcommercialpaper.Investmentsinmoneymarketfundsconsistoffundsthatmakeinvestmentsinhigh-qualityeurodenominatedfixedincomesecuritiesissuedbyenterprisesandpubliccorporationsoperatingintheEuropeanEconomicArea.
CommercialpaperconsistsofdebtsecuritiesissuedbyFinnishcompanieswithagoodcreditrating.Bothrealisedandunrealised
gainsandlossesfromchangesinfairvaluearerecognisedinprofitorlossduringthefinancialperiodinwhichtheyincur.
Derivativesarerecognisedatcostasfinancialassetsorliabilitiesonthedateofacquisitionandaresubsequentlyremeasuredattheir
fairvalue.Thechangesinfairvalueareimmediatelyrecognisedwithinfinancialitemsinincomestatement.Thefairvalueof
derivativesisexpectedtoapproximatethequotedmarketpriceor,ifthisisnotavailable,fairvalueisestimatedusingcommonlyused
valuationmethods.TheGroupdoesnotapplyhedgeaccounting.
Loansandreceivablesarevaluedatamortisedcostandareincludedeitherincurrentfinancialassets,orinnon-currentfinancial
assetsiftheyfallduewithinmorethan12months.Inadditiontoloanreceivables,thiscategoryincludestradereceivablesandother
receivables.Tradereceivablesarerecognisedattheoriginalinvoicedamount.TheGrouprecognisesanimpairmentlossontrade
receivablesifpaymentisdelayedbymorethan90daysorifasalesreceivableisconsideredasfinallylost.Totheextentthattrade
receivablesaresold,theimpairmentlossisreduced.
Financialassetsavailable-for-saleareincludedinnon-currentassets.Equityinvestments,excludinginvestmentsinassociated
companiesandmutualrealestatecompanies,areclassifiedasfinancialassetsavailable-for-saleandaregenerallymeasuredatfair
value.Valuesofequitiesthatcannotbemeasuredreliablyarereportedatcostlessimpairment.Fairvaluesoffinancialassets
available-for-salearemeasuredeitheronthebasisofthevalueofcomparablecompanies,thediscountedcashflowmethodorby
usingquotedmarketrates.Changesinthefairvalueofequityinvestmentsarerecognizedwithinothercomprehensiveincome.When
theequityinvestmentissold,accumulatedchangesinfairvaluearereleasedfromshareholders’equityandrecognisedinprofitor
loss.
Itemsmeasuredatfairvaluearecategorizedusingthethree-levelvaluehierarchy.Level1includesinstrumentswithquotedpricesin
activemarkets.ListedsharesownedbytheGrouparecategorisedatlevel1.Level2includesinstrumentswithobservableprices
basedonmarketdata.TheGroup’sinterestrateswapsandcurrencyswapsarecategorisedatlevel2.Level3includesinstruments
withpricesthatarenotbasedonverifiablemarketdatabutinsteadonthecompany’sinternalinformation,forexample.The
contingentconsiderationrelatingtobusinesscombinationsarecategorisedatlevel3.SeeNote17.
Cashandcashequivalents
Cashandcashequivalentsconsistofcashatbankandinhand,short-termbankdepositsandothershort-termhighlyliquid
investmentswithmaturitylessthan3months.
Financialliabilities
Financialliabilitiesareinitiallyrecognisedatfairvalueequalingthenetproceedsreceived.Financialliabilitiesaresubsequently
measuredatamortisedcostbyusingtheeffectiveinterestmethod.Transactioncostsareincludedwithinthecostoffinancial
liabilities.Financialliabilitiesarerecordedwithinnon-currentandcurrentliabilitiesandtheymaybenon-interestorinterestbearing.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
40
FINANCIALS
ELISAANNUALREPORT2013
Impairment
TheGroupassessesattheendofeachreportingperiodwhetherthereisobjectiveevidencethatanassetisimpaired.Ifsuchevidence
exists,therecoverableamountoftheassetisassessed.Regardlessofanyexistenceofimpairmentindications,therecoverable
amountofgoodwillandintangibleassetsunderconstructionisalsoannuallyassessed.TheGroupdoesnothaveanyintangibleassets
withanindefiniteusefullife.Theneedforimpairmentisassessedatthelevelofcash-generatingunits.
Valueinuseisthepresentvalueofthefuturecashflowsexpectedtobederivedfromanassetitemoracash-generatingunit.An
impairmentlossisrecognisedwhenthecarryingamountofanassetexceedsitsrecoverableamount.Animpairmentlossis
recognisedimmediatelyintheincomestatement.Ifanimpairmentlossisallocatedtoacash-generatingunit,itisfirstallocatedto
reducethecarryingamountofanygoodwillallocatedtothecash-generatingunitandthentotheotherassetsoftheunitonaprorata
basis.Animpairmentlossisreversedifthereareindicationsthatachangeincircumstanceshastakenplaceandtheasset’s
recoverableamounthaschangedsincetheimpairmentlosswasrecognised.However,thereversalofanimpairmentlosswillnever
exceedthecarryingamountoftheassethadnoimpairmentlossbeenrecognised.Animpairmentlossrecognisedforgoodwillis
neverreversedunderanycircumstances.
Inventories
Inventoriesarestatedatthecostofanacquisitionoratthenetrealisablevalueiflowerthatthecost.Thecostisdeterminedusinga
weightedaverageprice.
Treasuryshares
Elisasharesownedbytheparentcompany(treasuryshares)arereportedasdeductionfromequity.
Provisionsandcontingentliabilities
Aprovisionisrecognisedwhenthecompanyhasalegalorconstructiveobligationasaresultofpastevent,itisprobablethatan
outflowofresourceswillberequiredtosettletheobligationandareliableestimateoftheamountoftheobligationcanbemade.
Contingentliabilitiesarepossibleobligationsthatarisefrompasteventsandtheirexistenceisconfirmedonlybytheoccurrenceor
non-occurrenceofoneormoreuncertainfutureeventsnotwhollywithinthecontroloftheentity.Contingentliabilitiesalsoinclude
presentobligationsthatarisefrompasteventsbutitisnotprobablethatanoutflowofresourceswillberequiredtosettlethe
obligationsortheamountoftheobligationscannotbemeasuredwithsufficientreliability.Contingentliabilitiesarenotrecognised
inthestatementoffinancialposition.
Employeebenefits
Pensionobligations
Pensionsareclassifiedaseitherdefinedcontributionordefinedbenefitplans.Inadefinedcontributionplan,theGrouphasnolegal
orconstructiveobligationtopayfurthercontributionsifthefundisunabletopayallemployeesthebenefitsrelatingtoemployee
service.Thepremiumsfordefinedcontributionpensionplansarerecognisedasexpensesduringthefinancialyearinwhichthey
incur.Adefinedbenefitplanisapensionplanthatisnotadefinedcontributionplan.
Groups’definedbenefitobligationhasbeencalculatedseparatelyfromeachplanbyusingtheProjectedUnitCreditMethod.Pension
expensescalculatedbyauthorisedactuariesarerecognisedinprofitorlossovertheemployees’workinglives.Therateusedto
discountthepresentvalueofthedefinedbenefitobligationisdeterminedbyreferencetomarketyieldsonhighqualitycorporate
bondsandifitisnotavailable,themarketyieldsongovernmentbondsareused.Thematurityofthecorporatebondsandgovernment
bondsaresubstantiallyconsistentwiththematurityofthepensionobligation.Thepresentvalueofdefinedbenefitobligationis
reducedbythefairvalueoftheplanassetsattheendofthereportingperiod.Thenetdefinedbenefitpensionliabilityisrecognised
onthestatementoffinancialposition.
Currentservicecostandnetinterestofthenetdefinedbenefitliabilityarerecordedinemployeeexpensesintheincomestatement.
Theremeasurementsofthenetdefinedbenefitliability,forexampleactuarialgainsandlossesandthereturnonplanassets,are
recognisedinothercomprehensiveincomeduringthefinancialperiodinwhichtheyincur.
TheimpactsoftheadoptionoftherevisedIAS19havebeenpresentedinAppliednewandrevisedstandardsandinterpretations.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
41
FINANCIALS
ELISAANNUALREPORT2013
Performance-basedbonusschemeandpersonnelfund
Allemployeesareincludedinaperformance,incentiveorcommission-basedbonusscheme.TheGroupalsohasapersonnelfund.
Thecostsfortheperformance-basedbonusschemeandpersonnelfundarerecognisedonaccrualbasisandthecostsarebasedon
thebestavailableestimateofrealisedamounts.
Share-basedincentives
TheaimoftheGroup’sshare-basedincentiveplansisthelong-termcommitmentoftopmanagementtotheimprovementofthe
company’svalue.Theamountoftheawardtobepaidistiedtotheaccomplishmentoftherelatedtargets.Share-basedincentive
plansaremeasuredatfairvalueatthedateofgrantandarechargedtotheincomestatementasfollows:thecashportionofthe
rewardisallocateduntiltheendofthemonthprecedingthemonthoftheactualpaymentandtheshareportionoftherewardis
allocatedoverthecommitmentperiod.Theproportionsettledinsharesisrecognisedinequity,whiletheproportionsettledincash
isrecognisedasaliability.Iftheassumptionregardingtherealisednumberofshareschanges,anadjustmentisrecordedthrough
profitandloss.Thefairvalueoftheportionsettledincashshallbereassessedattheendofeachfinancialperioduntiltheendofthe
monthprecedingthemonthduringwhichtherewardispaid.Transferrestrictionsrelatedtotheschemearenottakenintoaccountin
fairvaluationorexpenserecognition.Theplansdonotinvolveanyothernon-marketbasedtermsandconditions.
On18December2007,Elisa’sBoardofDirectorsdecidedtograntstockoptionstotheGroup’skeyemployeesandafully-owned
subsidiaryofElisaCorporation,FoneticOy.Stockoptionsaremeasuredatfairvalueatthedateofgrantandchargedtotheincome
statementovertheperiodbetweenthedateofgrantandthebeginningofexerciseperiod.Theexpensedeterminedatthedateof
grantisbasedontheGroup'sassessmentofthenumberofoptionsthatareexpectedtovestattheendofthevestingperiod.Thefair
valueofoptionsisdeterminedbyusingtheBlack-Scholesoptionpricingmodel.Estimatesofthefinalnumberofoptionsareupdated
attheendofeachfinancialperiod,andthechangesintheseestimatesarerecognisedinprofitorloss.Whenoptionsareexercised,
paymentsreceivedforsharesubscriptionsnetoftransactioncostsarerecognisedinthereserveforinvestednon-restrictedequityin
accordancewiththetermsandconditionsoftheplan.
Leases
Thegroupasalessee
Leasesinwhichtherisksandrewardsofownershipareretainedbythelessorareclassifiedasoperatingleases.Paymentsmadeunder
operatingleasesarechargedtotheincomestatementonastraight-linebasisovertheleaseterm.
Leasesoftangibleassets,inwhichtheGrouphassubstantiallyalltherisksandrewardsoftheownership,areclassifiedasfinance
leases.Assetsacquiredonfinanceleasesarerecognisedinthestatementoffinancialpositionatthebeginningoftheleaseperiodat
theloweroffairvalueoftheleasedassetorthepresentvalueoffutureminimumleasepayments.Assetsacquiredunderfinance
leasesaredepreciatedovertheshorterofusefullifeoftheassetortheleaseperiod.Minimumleasepaymentsareapportioned
betweenfinancialexpensesandthereductionoftheoutstandingliabilityovertheleaseperiodsoastoproduceaconstantperiodic
rateofinterestontheremainingbalanceoftheliability.Financeleaseliabilitiesarerecognisedininterest-bearingliabilities.The
Grouphasprimarilyleasedtelecommunicationsnetworksandfacilities,ITservers,videoconferenceequipmentsandinfrastructure
underfinanceleases.
Thegroupasalessor
TheGroupactsasalessorintwodifferenttypesofleasearrangementsthatareaccountedforoperatingleases:telecompremisesand
carrierservices.Rentalincomefromsuchleasesisrecognisedasrevenueovertheleaseperiod.Rentalincomefromrealestate
leasesisrecordedinotheroperatingincomeovertheleaseperiod.
TheGroupactsasalessorinleasearrangementsforvideoconferencingequipmentthatareaccountedforasafinancelease.Atthe
timeofsaleoftheequipment,theproceedsarerecordedasrevenueandareceivableatapresentvalue.Rentalincomeisrecordedas
financialincomeandasareductionofreceivableovertheleaseperiodreflectingaconstantperiodicrateofreturnonthenet
investment.
Theaccountingpoliciesthatrequiremanagement'sjudgementsandsourcesof
estimationuncertainty
Thepreparationoffinancialstatementsrequirestheapplicationofjudgmentinmakingestimatesandassumptions.Actualresults
maydifferfromtheestimatesandassumptionsmade.Inaddition,theapplicationoftheaccountingprinciplesalsorequiresthe
applicationofjudgment.Theestimatesarebasedonthemanagement’sbestviewattheendofthefinancialperiod.Anychangesin
estimatesandassumptionsarerecognisedinthefinancialyearduringwhichtheestimateorassumptionisadjustedaswellasinall
subsequentperiods.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
42
ELISAANNUALREPORT2013
FINANCIALS
Impairmenttesting
Goodwillandintangibleassetsunderconstructionaretestedforimpairmentannuallyormorefrequentlyifeventsorcircumstances
indicateapotentialimpairment.Therecoverableamountofcash-generatingunitsisdeterminedbycalculationsbasedonvaluein
use,thepreparationofwhichrequiresestimatesandassumptions.Themainuncertaintiesareassociatedwiththeestimatedlevelof
revenueandprofitabilityandthediscountrate.Anychangesmayleadtotherecognitionofimpairmentlosses.Thecarryingvalueof
goodwillisEUR832.4millionat31December2013.SeeNote15.
Share-basedincentiveplans
Theexpenserecognitionfortheshare-basedincentiveplansisbasedonanestimateofthefulfillmentoftheshareincentiveplan
criteriaandthedevelopmentofElisashareprice.Thefulfillmentoftheshareincentiveplancriteriaandthedevelopmentoftheshare
pricemightdeviatefromtheestimates.Share-basedcompensationexpenseswereEUR6.2millionin2013andtheliabilityrelatingto
share-basedincentiveplansasat31December2013wasEUR5.0million.SeeNote27.
Incomeandexpenses
Themeasurementandallocationofincomeandexpensestotheappropriatefinancialperiodispartiallybasedonestimatesfrompast
experience.
Taxes
Particularlyasattheendofeachfinancialperiod,theGroupassessestheprobabilityofsubsidiariesgeneratingtaxableincome
againstwhichunusedtaxlossescanbeutilised.Theappropriatenessforrecognisingotherdeferredtaxassetsisalsodeterminedas
attheendofeachfinancialperiod.Changesintheestimatesmayleadtotherecognitionofsignificanttaxexpenses.Asat
31December2013,theGrouphasEUR13.5milliondeferredtaxreceivables.
ApplicationofnewandrevisedaccountingpronouncementsunderIFRS
On1January2014,theGroupwilladoptthefollowingnewandrevisedconsolidationstandards,providingtheyareapprovedbytheEU
bytheplanneddateofadoption.
•IFRS10ConsolidatedFinancialStatements,IFRS11JointArrangements,IFRS12DisclosureofInterestinOtherEntities,IAS27
SeparateFinancialStatementsandIAS28InvestmentsinAssociatesandJointVentures.IFRS11changesthegroup’sconsolidationof
jointventurefromtheproportionalconsolidationtotheequitymethod.ThechangedoesnothaveasignificantimpactontheGroup’s
financialstatements.
On1January2015,theGroupwilladoptthefollowingnewstandard,providingitisapprovedbytheEUbytheplanneddateof
adoption.
•IFRS9FinancialInstruments.Inaccordancewiththestandard,financialassetsaremeasuredatfairvalueunlesscertainconditions
requiremeasurementatamortisedcost.Themixedmeasurementmodelisalsosimplified.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
43
FINANCIALS
ELISAANNUALREPORT2013
1.OperatingSegments
TheGroup'sreportablesegmentsarebasedontheinternalreportingprovidedtomanagement.Elisa'sinternalorganizationaland
managementstructureisbasedonacustomer-orientedoperatingmodel.TheGroup'sreportableoperatingsegmentsareConsumer
CustomersandCorporateCustomers.
TheConsumerCustomerssegmentprovidesconsumersandhouseholdswithtelecommunicationsservices,suchasvoiceanddata
services.TheCorporateCustomerssegmentprovidestothecorporateandcommunitycustomersvoiceanddataservices,ICT
solutionsandcontactcenterservices.
Thesegmentsarecontrolledbythesegment-specificperformancereportingthatincludesexternalrevenue,EBITDA,EBITand
investments.Financialitems,shareofassociatedcompanies’profitandincometaxesarenotallocatedtooperatingsegments.The
costsofproductionandsupportfunctionsareallocatedtooperatingsegmentsonthematchingprinciple.OperationsinEstoniaare
dividedintotheConsumerCustomersandCorporateCustomersoperatingsegmentsonthebasisofcustomeraccounts.
Segmentassetsconsistofintangibleandtangibleassets,inventories,tradeandothernon-interestbearingreceivables.Deferred
taxes,investmentsinassociatedcompanies,financialassetsavailable-for-sale,interest-bearingreceivables,financialitemsand
incometaxreceivablesarenotincludedinsegmentassets.Managementreportingdoesnotincludesegmentliabilities.
Theaccountingprinciplesofthesegmentsarethesameasthoseusedinthepreparationofthefinancialstatements.
ThereportedgeographicalareasareFinland,RestofEuropeandOthercountries.Revenuesarepresentedonthebasisofthe
customerlocation.Assetsarepresentedonthebasisoflocation.
OperatingSegments
2013
EURmillion
Revenue
EBITDA
Depreciationandamortisation
EBIT
Financialincome
Financialexpense
Shareofassociatedcompanies’profit
Profitbeforetax
Investments
Assets
2012
EURmillion
Revenue
EBITDA
Depreciationandamortisation
EBIT
Financialincome
Financialexpense
Shareofassociatedcompanies’profit
Profitbeforetax
Investments
Assets
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
Consumer
Customers
Corporate
Customers
Unallocated
items
Group
total
949.1
598.3
1,547.4
295.2
-117.6
195.5
-92.5
490.7
-210.1
177.6
103.0
10.3
-36.2
280.6
10.3
-36.2
132.4
1,211.9
107.7
835.6
0.0
276.8
0.0
254.6
240.1
2,324.3
Consumer
Customers
Corporate
Customers
Unallocated
items
Group
total
962.4
307.0
-115.0
191.9
113.6
1,145.7
591.1
194.1
-87.1
107.0
79.9
760.3
9.4
-39.5
0.1
102.7
1,553.4
501.1
-202.1
298.9
9.4
-39.5
0.1
268.9
193.4
2,008.7
44
FINANCIALS
ELISAANNUALREPORT2013
Productandserviceinformation
2013
EURmillion
Revenue
2012
Mobile
FixedNetwork
Communications
andother
Group
927.5
619.8
total
1,547.4
Fixed
EURmillion
Revenue
Geographicalinformation
Mobile
Communications
1,001.0
Network
andother
552.4
2013
Restof
Other
Finland
Europe
countries
Revenue
1,443.0
116.4
Assets
2012
2,671.9
162.5
EURmillion
1,553.4
Eliminations
Group
total
3.8
-15.8
1,547.4
0.8
-510.8
Restof
Other
Finland
Europe
countries
Revenue
1,432.4
133.8
Assets
1,863.1
145.6
EURmillion
Group
total
2,324.3
Group
4.9
Eliminations
total
-17.6
1,553.4
2,008.7
2.Acquisitions
Acquisitionsin2013
AcquisitionofSulakeCorporationOy
On15February,ElisaincreaseditsownershipinSulakeCorporationfrom24percentto100percentbypurchasingsharesfromother
principalshareholders.
SulakecreatessocialmeetingplacesandgamesontheInternet.Thebest-knownSulakeserviceisHabboHotel,whichistargetedat
teenagers.Sulake'sglobalclientbase,brand,communityplatformandbusinesscompetence,combinedwithElisa'sexpertise,provide
newkindoffutureopportunities.
ThepurchasepricewasEUR6.2million.Thefairvalueofpreviouslyheldsharesintheacquiredentityatthetimeofacquisitionwas
EUR6.4million.IncludingpreviousownershipthebusinesscombinationresultedingoodwillofEUR15.0million.Thegoodwill
resultedfrompositivefutureoutlookofnewservicesandisnottaxdeductible.
Sulakeisconsolidatedfrom1February2013onwards.RevenueaftertheacquisitionwasEUR12.9millionandprofitfortheperiod
EUR-3.7million.Hadtheacquisitionbeendoneasofthebeginningoftheyear,theimpactonGrouprevenueandprofitfortheperiod
wouldhavebeenEUR14.2millionandEUR-4.1millionrespectively.
ThetransactionsbetweentheGroupandtheacquiredcompanyatthetimeoftheacquisitionhavebeentakenintoaccountinthe
consolidationofthebusinessoperations.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
45
FINANCIALS
ELISAANNUALREPORT2013
Considerationtransferred
EURmillion
Cashpaid
Previousownership
Settlementofpre-existingrelationship
Totalcostofacquisition
Analysisofnetassetsacquired
6.2
6.4
EURmillion
2.3
15.0
Carryingamount
Intangibleassets
Tangibleassets
Tradeandothercurrentreceivables
4.0
0.3
2.9
Cashandcashequivalents
Financialliabilities
Tradepayablesandothercurrentliabilities
1.6
-4.1
-4.7
Purchasepricepaidincash
Cashandcashequivalentsoftheacquiredentity
Effectsofacquisitiononcashflow
EURmillion
Goodwillarisingfrombusinesscombination
EURmillion
Considerationtransferred(includingearlierownership)
-6.2
1.6
-4.6
15.0
Netassetacquired
Goodwill
TheEUR0.1millionexpensesrelatedtotheacquisitionhavebeenrecordedinotheroperatingexpensesintheconsolidated
statementofcomprehensiveincome.Theexpensesareduetotransfertax.
AcquisitionofPPO-YhtiötOy
0.0
0.0
15.0
On30April2013,ElisaacquiredallsharesofafixednetworkoperatorPPO-YhtiötOyand11percentofTelekareliaOy'ssharecapital.
Withtheacquisition,theGroup'sownershipinTelekareliaOywas67percentandinKymenPuhelinOy46percent.KymenPuhelinOy
isconsolidatedtotheGroupbasedoncontroloveranentity.InadditionElisaacquired54percentofKymenPuhelinOyoutstanding
sharecapitaland33percentofTelekareliaOyoutstandingsharecapitalduringyear2013increasingtheownershipto100percent.
ThroughthisacquisitionElisastrengthensitsmarketpositioninthefieldofactivityofPPO-YhtiötOyanditssubsidiaries.
ThepurchasepricewasEUR104.3millionincludingacontingentconsiderationofEUR1.6million.TheGroupisunderwrittentopay
thecontingentconsiderationifitsellsinterestsfromspesifiedassociatesthathavetransferedtotheGroupintheacquisition.The
contingentconsiderationisrecognisedatfairvalue.
AsapartoftheacquisitiontheGrouphasrecognisedacontingentliabilityofEUR6.3millionrelatedtoaguaranteeliabilitygivenby
TelekareliaOyandKymenPuhelinOy.HadtheseliabilitiesrealisedthesellerisobligatedtorefundamaximumofEUR3.1millionof
thepurschaseprice.
EUR5.2millionoftheacquisitioncostwasallocatedtocustomerbase,whichisamortisedin5years.TheacquisitionresultedinEUR
19.1milliongoodwillrelatingtomarketaccessinthefieldofactivityofthepurchasedentities.Goodwillisnottaxdeductible.
Companiesareconsolidatedfrom1May2013onwards.RevenueaftertheacquisitionwasEUR57.9millionandprofitfortheperiod
EUR11.6million.Hadtheacquisitionbeenmadeasofthebeginningoftheyear,theimpactonGrouprevenueandprofitforthe
periodwouldhavebeenEUR88.0millionandEUR8.8millionrespectively.
Therewerenopre-existingrelationshipsbetweentheGroupandtheacquiredcompanyatthetimeoftheacquisitionthatshouldbe
takenintoaccountintheconsolidationofthebusinessoperations.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
46
FINANCIALS
ELISAANNUALREPORT2013
Considerationtransferred
EURmillion
Cashpaid
Considerationreceivable
Contingentconsideration
Totalcostofacquisition
Analysisofnetassetsacquired
105.9
-3.1
EURmillion
1.6
104.3
Carryingamount
Customerbase
Otherintangibleassets
Tangibleassets
5.2
3.8
96.2
Equityinvestmentsandfunds
Deferredtaxassets
Inventories
Tradeandotherreceivables
Cashandcashequivalents
Deferredtaxliabilities
5.6
4.5
3.7
12.8
19.1
-9.9
Provisions
Financialliabilities
Tradepayablesandotherliabilities
-6.3
-8.8
-17.4
108.4
Purchasepricepaidincash
Cashandcashequivalentsoftheacquiredentity
Effectsofacquisitiononcashflow
EURmillion
Goodwillarisingfrombusinesscombination
-105.9
19.1
-86.8
EURmillion
Considerationtransferred
104.3
Noncontrollinginterestmeasuredbasedonproportionateshareintherecognisedamountsoftheidentifiable
netassets
23.2
Netassetacquired
108.4
Goodwill
19.1
ExpensesrelatedtotheacquisitionofEUR1.6(0.3)millionwererecordedinotheroperatingexpensesintheconsolidatedstatement
ofcomprehensiveincome.Theexpensesaremainlyduetotransfertax.
AfterthetransactiontheselleracquiredElisaOyjshares.Thetransactionispresentedasproceedsfromthesaleoftreasurysharesin
theconsolidatedstatementofcashflows.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
47
FINANCIALS
ELISAANNUALREPORT2013
Acquisitionofnon-controllinginterests
Thegroupacquired54percentofKymenPuhelinOyand33percentcentofTelekareliaOybetween10Juneand31December2013.
AftertheseacquisitiontheGroupownsallsharesofKymenPuhelinOyandTelekareliaOy.Thebookvalueofnetassetson
31December2013wereEUR40.0millioninKymenPuhelinandEUR23.2millioninTelekarelia.DuetotheacquisitionsthenoncontrollinginterestdecreasedbyEUR23.2millionandtheequitybyEUR15.9million.
EURmilllion
Considerationpaidwithshares
35.3
Cashpaid
3.9
Considerationtransferred
39.2
Non-controllinginterests
23.2
ThaacquisitionseffectonGroupsearnings
15.9
ExpensesrelatedtotheacquisitionofEUR0.1millionwererecordedinotheroperatingexpensesintheconsolidatedstatementof
comprehensiveincome.
KymenPuhelinOy,TelekareliaOyandPPOYhtiötOyweremergedintoElisaOyjon31December2013.
Acquisitionsforthepreviousperiods
On4November2010ElisaacquiredalloftheissuedsharesofAppelsiiniFinlandOy.TheacquisitioncostofEUR19.7millionincluded
acontingentconsiderationofEUR2.6million,whichwasbasedonthecombinedservicerevenueoftheacquiredentityfor2011–
2012.Uponthesettlementofthecontingentconsiderationduringtheperiod,theGrouprecordedanexpenseofEUR0.8million.
Acquisitionsin2012
Therewerenoanyacquisitionsduring2012.
3.Disposals
Disposalsin2013
DisposalofPPOPalvelutOy
ElisadivestedthefullyownedPPOPalvelutOyon30September2013.ThesalespricewasEUR0.2million.Thedivestmentdidn't
affectconsolidatedincomestatement.TheimpactofthelossesincurredduringtheperiodofownershipbytheGroupareincludedin
theconsolidatedstatementofcomprehensiveincome.
PPOPalvelutOy'sresulthasbeenconsolidatedintheGroupfrom1Mayuntil30September2013.
Netassetsofthesoldentity
EURmillion
Carryingamount
Tangibleassets
Inventories
Tradeandothercurrentreceivables
Cashandcashequivalents
Tradepayablesandothercurrentliabilities
Effectsofdisposaloncashflow
EURmillion
Salespricereceivedincash
Cashandcashequivalentsofthesoldentity
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
0.1
1.1
0.5
0.1
-0.8
1.0
0.2
-0.1
0.1
48
FINANCIALS
ELISAANNUALREPORT2013
Disposalsin2012
DisposalofKiinteistöOyPaimionPuhelimenkulma
Elisadivesteditsshareof77percentinKiinteistöOyPaimionPuhelimenkulmaon29May2012.ThesalespricewasEUR0.6million.
ThedivestmentresultedinalossofEUR0.2millionrecordedwithinOtheroperatingexpensesintheConsolidatedincome
statement.ThelosswasinfluencedbytheamountofgainsincurredduringtheperiodofownershipbytheGroup.
TheGrouphasconsolidatedtheresultsofKiinteistöOyPaimionPuhelimenkulmauntil31May2012.
Netassetsofthesoldentity
EURmillion
Carryingamount
Tangibleassets
EURmillion
Effectsofdisposaloncashflow
0.8
Salespricereceivedincash
4.Revenue
EURmillion
Renderingofservices
Equipmentsales
0.6
2013
2012
1,333.1
214.3
1,547.4
1,359.3
194.1
1,553.4
2013
2012
1.4
0.1
0.7
0.2
5.Otheroperatingincome
EURmillion
Gainondisposalsofproperty,plantandequipment
Governmentgrants
2.4
Otheritems(1
4.0
1)
Otheritemsincluderentalincomefromrealestate,incomefrompatentsandotherincomeitemsnotassociatedwithordinary
operatingactivities.
6.Materialsandservices
3.8
4.7
EURmillion
2013
2012
Purchasesofmaterials,suppliesandgoods
Changeininventories
252.5
3.8
274.5
-15.6
Externalservices
363.6
619.9
396.7
655.6
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
49
FINANCIALS
ELISAANNUALREPORT2013
7.Employeeexpenses
EURmillion
Salariesandwages
Share-basedcompensationexpenses
Pensionexpenses–definedcontributionplans
Pensionexpenses–definedbenefitplans
Otherstatutoryemployeecosts
2013
2012
215.0
6.2
187.4
6.5
34.5
0.6
31.1
0.2
13.6
11.8
270.0
2013
237.0
2012
Averagenumberofpersonnel
AmoredetailedanalysisofdefinedbenefitpensionplansisincludedinNote28.
4,320
EURmillion
3,973
Managementremuneration
2013
2012
ManagingDirectorsanddeputies(1
2.0
2.5
MembersanddeputymembersofBoardsofDirectors
1) ThesalarycostincludesEUR0.6millionofshare-basedcompensationexpensesin2012.
ManagingDirectors'pensioncommitments
TheretirementageoftheGroupcompanies’ManagingDirectorsis60–63years.
0.6
0.5
Employmentbenefitsforkeymanagement
KeymanagementconsistsofElisa'sBoardofDirectors,theCEOandtheExecutiveBoard.
EURmillion
2013
2012
BoardofDirectors
ManagingDirector
0.5
0.7
0.4
0.7
ExecutiveBoard
1.7
1.7
Share-basedcompensationexpenses(1
2.1
1.9
5.0
4.7
1)
Theshare-basedcompensationexpensesin2013areEUR6.2(6.5)million,ofwhichEUR2.1(1.9)millionisallocatedtotheCEOand
ExecutiveBoard.Thetermsandconditionsofshare-basedincentiveplansaredescribedunderNote27.
EURmillion
2013
2012
Remunerationsandothershort-termemployeebenefits
Post-employmentbenefits
2.9
0.3
2.8
0.2
Share-basedbenefits
2.1
1.9
5.3
4.9
Managementremunerationisdescibedunderparentcompany'sNote4.
TheperiodofnoticefortheCEOis6monthsfromtheGroup'ssideand3monthsfromtheCEO'sside.Shouldthecontractbe
terminatedbytheGroup,theChiefExecutiveOfficerisentitledtoreceiveaseverancepaymentequallingthetotalsalaryof24
monthsdeductedbythenoticeperiodsalary.TheperiodofnoticeforothermembersoftheExecutiveBoardis6monthsfromthe
Group'sside.InadditiontothenoticeperiodsalarythemembersoftheExecutiveBoardareentitledtoreceiveaseverancepayment
equallingthetotalsalaryof9months.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
50
ELISAANNUALREPORT2013
FINANCIALS
OnthebasisoftheexecutiveagreementtheGroupCEOisentitledtoretireattheageof60.TheCEO'spensionarrangementisacash
basedplan.Thepensionbenefitincludesvestedrights.Thecompanyisliableforthepensionattheageof60and61andtherelated
accumulatedliabilityEUR0.7millionisincludedinpensionobligationsonthebalancesheet.Pensionwillaccrueannuallyattherate
of5.1percentoftheannualincomeunderTyel(EmployeesPensionsAct).Startingattheageof62,thepensionwillaccrueatthe
rateof20.7percentoftheannualincomeunderTyelinthemanagement'sgroupsupplementarypensioninsurance.Othermembers
oftheExecutiveBoardappointedbeforeyear2009areentitledtoretireattheageof62onthebasisoftheirexecutiveagreements.
Thecontractualrighthasbeencoveredwithasupplementarypensioninsurance.
Share-basedcompensationgrantedtothemanagement
Noshare-basedcompensationsweregrantedin2013.
ThemaximumawardgrantedfortheExecutiveBoardunderthe2012–2014planequalsthevalueof239,000shares,ofwhichthe
valueof80,000sharesisthemaximumawardfortheCEO.Theawardwillbepaidafterthepublicationof2014financialstatements.
ThemaximumawardgrantedfortheExecutiveBoardunderthe2013–2015planequalsthevalueof240,000shares,ofwhichthe
valueof80,000sharesisthemaximumawardfortheCEO.Theawardwillbepaidafterthepublicationof2015financialstatements.
Elisasharesheldbythekeymanagement
ThemembersofElisa'sBoardofDirectors,theCEO,themembersoftheExecutiveBoardandtheirfamilymembersheldatotalof
258,279sharesandvotes,correspondingto0.15percentofallsharesandvotes.
Employeebonusandincentiveschemes
Performance-basedbonusscheme
Allemployeesareincludedinperformance,incentiveorcommission-basedbonusscheme.Rewardsarebasedonfinancialand
operationalmetricsofElisaanditsunits.Targetsaresetandthemaximumamountofrewardisconfirmedsemi-annually.Someofthe
Group'skeypersonnelwerewithintheshare-basedcompensationplanin2013.
Personnelfund
TheobjectiveofthepersonnelfundistosecurethecommitmentofthepersonneltoElisa’slong-termobjectivesandtoreinforce
theirinterestinthecompany’sfinancialsuccessanditsmetrics.
Theevaluationtoolfortheperformance-basedbonussystemistheearningspershare(EPS)andrevenueincreaseofnewservices.
TheBoardofDirectorsmakesannualdecisionsontheperformance-basedbonusschemeanddefinesthevaluesthatdeterminethe
rewardamount.
ThemembersofthepersonnelfundincludetheemployeesofElisaexceptfortheGroup'spersonnelthatisincludedwithinthescope
ofeithertheshareincentiveplanorthestockoptionplan.
EUR0.9(1.3)millionwasrecordedinthepersonnelfundfromwhichEUR0.6(1.2)millionwasbasedonthe2013earnings.
Share-basedincentiveplan
On19December2011Elisa'sBoardofDirectorsdecidedonashare-basedincentiveplanforkeypersonnelfor2012–2018.On
18December2008,Elisa'sBoardofDirectorsdecidedonashare-basedincentiveplanforkeymanagementfor2009–2011.Theplans
aredescribedunderNote27.
Stockoptionplan
On18December2007,Elisa'sBoardofDirectorsdecidedtoofferamaximumof2,550,000stockoptionsforsubscriptionbyElisa
Group'skeypersonnelandFoneticOy,afully-ownedsubsidiaryofElisaCorporation.Thestockoptionplanexpiredin2013.Theplanis
describedindetailunderNote27.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
51
FINANCIALS
ELISAANNUALREPORT2013
8.Auditorfees
EURmillion
2013
2012
Auditing
0.3
0.2
Taxadvisoryservices
0.1
0.1
Educationservices
Otherservices
0.1
0.2
0.1
0.2
0.6
0.6
2013
2012
2.2
7.9
2.3
7.2
9.Researchanddevelopmentcosts
EURmillion
Researchanddevelopmentcostsrecognisedasexpenses
Capitaliseddevelopmentcosts
10.0
Focusareasforresearchanddevelopmentactivitiesin2013includedcontactlesspayment,visualcommunicationservicesand
developmentofIT-services.
9.5
10.Depreciationandamortisation
EURmillion
Depreciationoftangibleassets
Buildingsandconstructions
Ownedbuildingsandconstructions
Buildingsandconstructionsonfinancelease
Telecomdevices,machinesandequipment
Ownedtelecomdevices,machinesandequipment
Assetsonfinancelease
Othertangibleassets
Amortisationofintangibleassets
Customerbase
Otherintangibleassets
EUR0.2(0.0)millionassetimpairmentswererecognised.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
2013
2012
10.4
0.4
10.5
0.4
151.6
2.0
147.2
2.8
0.6
165.0
0.9
161.8
4.1
4.1
40.8
44.9
36.3
40.4
209.9
202.1
52
FINANCIALS
ELISAANNUALREPORT2013
11.Financialincomeandexpense
EURmillion
2013
Financialincome
2012
Dividendincomefromfinancialassetsavailable-for-sale
Interestandfinancialincomefromloansandotherreceivables
0.5
2.4
1.0
1.3
Interestincomefromderivatives
7.1
7.1
Otherfinancialincome
Gains/lossesoffinancialassetsatfairvaluethroughprofitorloss,
derivativesnotinhedgeaccounting
0.6
0.3
-0.4
10.3
-0.4
9.4
-27.2
-27.9
Financialexpense
Interestexpensesonfinancialliabilitiesmeasuredatamortisedcost
Otherfinancialexpensesonfinancialliabilitiesmeasuredatamortisedcost
-1.1
-0.6
Interestexpensesonderivatives
Otherinterestexpenses
-6.7
-0.1
-6.8
-0.2
Impairmentoffinancialassetsavailable-for-sale
Otherfinancialexpenses
-0.4
-0.6
-3.3
-0.7
-36.2
-39.5
ForeignexchangerategainsandlossesincludedinEBITarenotmaterial.
12.Incometaxes
EURmillion
2013
Taxesfortheperiod
2012
-59.6
-61.2
Taxesforpreviousperiods
-0.1
0.2
Deferredtaxes
Deferredtaxesforpreviousperiods
0.2
-0.2
0.2
0.4
1.5
-58.2
-60.4
ImpactofthechangeinFinnishtaxrateondeferredtax
Incometaxesrecogniseddirectlyincomprehensiveincome:
2013
EURmillion
2012
Before
Tax
After
Before
Tax
taxes
effect
taxes
taxes
effect
After
taxes
Remeasurementsofthenetdefined
benefitliability
-7.4
1.1
6.3 -6.0
1.5
-4.5
Othercomprehensiveincomeitemsdonotincludetaxes.Theothercomprehensiveincomeitemsconsistofchangesinthefairvalue
offinancialassetsavailable-for-saleandtranslationdifferences.Thechangeinfairvalueistax-freebecausetheGroup'sownershipof
thecompanyexceeds10percent.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
53
FINANCIALS
ELISAANNUALREPORT2013
Reconciliationofthetaxexpenseintheincomestatementandtaxescalculatedatthestatutorytaxrate24.5percentintheGroup’s
countryofincorporation:
EURmillion
2013
2012
Profitbeforetax
Taxaccordingtothedomestictaxrate
254.6
-62.4
268.9
-65.9
0.0
0.6
Taxeffectsofthefollowing:
Tax-freegains/lossesonthedisposalofshares
Non-deductibleexpenses
-5.0
-0.8
Taxeffectsofforeignsubsidiaries
Useoftaxlossesthathavenotbeenrecognisedbefore
4.2
2.1
4.6
Taxesforpreviousperiods
Changeindefferedtaxes-Finnishtaxratechange
0.1
1.5
0.7
Otheritems
1.3
0.4
Taxesintheincomestatement
-58.2
-60.4
Effectivetaxrate,%
22.9
22.5
TheFinnishcorporationtaxratechangefrom24.5percentto20.0percentwasenacted17December2013anditbecameeffective
from1January2014.Asaresulttherelevantdeferredtaxbalanceswereremeasuredforthefinancialstatement2013.
13.Earningspershare
Undilutedearningspersharearecalculatedbydividingtheprofitfortheperiodattributabletotheequityholdersoftheparentbythe
weightedaveragenumberofsharesoutstandingduringthefinancialyear.
2013
2012
Profitfortheperiodattributabletotheequityholdersofthe
parent(EURmillion)
196.6
208.7
Weightedaveragenumberofsharesduringthefinancialyear(1,000pcs)
157,269
156,548
Undilutedearningspershare(EUR/share)
1.25
1.33
Thecalculationofearningspershareadjustedfordilutiontakesthedilutingeffectoftheconversionofallpotentialordinaryshares
intoaccountintheweightedaveragenumberofshares.
2013
2012
ProfitfortheperiodforthepurposeofcalculatingEPSadjustedfordilution
(EURmillion)
Weightedaveragenumberofsharesduringthefinancialyear(1,000pcs)
Impactofstockoptions(1,000pcs)
WeightedaveragenumberofsharesforthepurposeofcalculatingEPS
adjustedfordilution(1,000pcs)
Earningspershareadjustedfordilution(EUR/share)
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
196.6
208.7
157,269
156,548
137
157,269
1.25
156,685
1.33
54
FINANCIALS
ELISAANNUALREPORT2013
14.Property,plantandequipment
2013
Tangible
assetsunder
Landand
Buildingsand
Machinery
Other
tangible
waterareas
constructions
andequipment
assets
construction
Total
Acquisitioncost
at1Jan.2013
6.7
227.8
2,572.9
35.6
26.1
2,869.1
Additions
0.1
6.0
140.4
0.0
19.7
166.3
Companiesacquired
Disposals
1.2
0.0
8.2
-0.5
79.9
-6.0
0.1
0.0
7.5
-0.1
96.9
-6.7
Companiessold
Reclassifications
0.1
0.0
4.3
-0.1
27.2
-31.4
-0.1
0.1
0.0
-0.3
0.1
-0.1
8.0
245.8
2,814.0
35.7
21.9
3,125.4
107.8
10.8
2,111.4
153.6
34.0
0.6
2,253.2
165.0
-0.4
-5.8
-0.2
-6.2
-0.2
EURmillion
Translationdifferences
Acquisitioncost
at31Dec.2013
Accumulateddepreciation
andimpairments
at1Jan.2013
Depreciation
Accumulateddepreciation
ondisposalsand
reclassifications
Translationdifferences
Accumulateddepreciation
andimpairment
at31Dec.2013
Bookvalue
at1Jan.2013
118.3
2,259.0
34.6
2,411.8
6.7
120.0
461.5
1.6
26.1
615.9
Bookvalue
at31Dec.2013
8.0
127.5
555.1
1.1
21.9
713.6
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
55
FINANCIALS
ELISAANNUALREPORT2013
2012
EURmillion
Acquisitioncost
at1Jan.2012
Additions
Disposals
Companiessold
Reclassifications
Acquisitioncost
at31Dec.2012
Accumulateddepreciation
andimpairments
at1Jan.2012
Depreciation
Other
Tangible
Landand
waterareas
Buildingsand
constructions
Machinery
andequipment
tangible
assets
assetsunder
construction
Total
6.8
0.1
222.6
4.0
2,440.4
146.7
35.6
30.8
9.6
2,736.2
160.5
-0.1
-0.2
0.1
-0.5
-0.9
2.7
-26.1
-0.1
12.0
0.0
0.0
-14.3
-26.7
-1.2
0.4
6.7
227.8
2,572.9
35.6
26.1
2,869.1
97.8
10.9
1,987.5
150.0
33.2
0.9
2,118.5
161.8
Accumulateddepreciation
ondisposalsand
reclassifications
-0.9
-26.1
-27.0
Accumulateddepreciation
andimpairment
at31Dec.2012
107.8
2,111.4
34.0
2,253.2
Bookvalue
at1Jan.2012
6.8
124.8
452.9
2.4
30.8
617.7
Bookvalue
at31Dec.2012
6.7
120.0
461.5
1.6
26.1
615.9
Commitmentstopurchaseproperty,plantandequipmentandintangibleassetsat31December2013wereEUR38.6(35.9)million.
Additionsin2013includeEUR2.9(3.1)millionproperty,plantandequipmentleasedunderfinanceleaseagreements.
Property,plantandequipmentincludeassetsleasedunderfinanceleaseagreementsas
follows:
2013
EURmillion
Acquisitioncost
Accumulateddepreciation
Bookvalueat31Dec.2013
2012
EURmillion
Buildingsand
constructions
Machineryand
equipment
17.4
4.5
12.9
110.0
97.2
12.8
Total
127.4
101.7
25.7
Acquisitioncost
Accumulateddepreciation
17.4
4.1
106.9
95.2
124.3
99.3
Bookvalueat31Dec.2012
13.4
11.7
25.1
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
56
FINANCIALS
ELISAANNUALREPORT2013
15.Intangibleassets
2013
EURmillion
Customerbase
797.1
82.5
377.0
12.2
1,268.8
32.7
35.3
5.2
7.8
-1.1
41.2(1
0.2
48.5
-1.1
8.6
0.0
-7.7
0.8
0.0
832.4
87.7
424.8
45.9
1,390.8
76.9
4.1
293.5
41.0
370.4
45.1
Companiesacquired
Disposals
Accumulatedamortisation
at31Dec.2013
Bookvalueat1Jan.2013
Goodwill
Additions
Accumulateddepreciationon
disposal
Other
intangible
assets
Acquisitioncostat1Jan.2013
Reclassifications
Translationdifferences
Acquisitioncost
at31Dec.2013
Accumulatedamortisation
at1Jan.2013
Amortisation
-0.4
Intangible
assetsunder
construction
Total
73.8
-0.4
797.1
81.0
5.6
334.1
83.4
12.2
415.1
898.4
832.4
6.7
90.7(2
45.9
975.7
Goodwill
Customerbase
Other
intangible
assets
Intangible
assetsunder
construction
Total
797.1
89.2
-6.7
348.1
24.0
-5.6
14.2
9.0
1,248.6
33.0
-12.2
10.4
-11.0
-0.5
797.1
82.5
377.0
12.2
1,268.8
79.5
4.1
262.8
36.3
342.3
40.4
-6.7
-5.6
-12.2
76.9
9.7
293.5
85.3
14.2
370.4
906.3
Bookvalueat31Dec.2012
797.1
5.6
83.4 (2
1)IncludestheFinnish800MHzspectrumlicenseincarryingamountofEUR33.3million.
12.2
898.4
Bookvalueat31Dec.2013
2012
EURmillion
Acquisitioncostat1Jan.2012
Additions
Disposals
Reclassifications
Acquisitioncost
at31Dec.2012
Accumulatedamortisation
at1Jan.2012
Amortisation
Accumulateddepreciationon
disposal
Accumulatedamortisation
at31Dec.2012
Bookvalueat1Jan.2012
797.1
2)IncludesITsoftwareforabookvalueofEUR57.1(59.0)millionandbrandforabookvalueofEUR7.9(12.2)million.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
57
FINANCIALS
ELISAANNUALREPORT2013
Goodwillimpairmenttesting
GoodwillisallocatedtotheGroup’scashgeneratingunitsasfollows:
EURmillion
2013
2012
ConsumerCustomers
503.7
480.2
CorporateCustomers
328.7
316.9
832.4
797.1
ThereportedoperatingsegmentsbasedontheElisaorganisationalandmanagementstructureareConsumerCustomersand
CorporateCustomers.Furthermore,theoperatingsegmentsarethelowestlevelatwhichthecompanymanagementmonitorsthe
goodwill.
TheGroupdoesnothaveanyotherintangibleassetswithanindefiniteusefullife.
Inimpairmentteststherecoverableamountofthesegmentsisdeterminedbasedonthevalueinuse,whichiscalculatedonthebasis
ofprojecteddiscountedcashflows(DCFmodel).Thecashflowsprojectionsarebasedonplansapprovedbythemanagement
coveringa5-yearperiod.Theprojectionsaremostlyconsistentwithinformationfromexternalsourcesandreflectactual
development.Thediscountrateusedisfrom7.91percentto7.92percentdependingonthesegment.Cashflowsafter5yearshave
beenprojectedbyestimatingthechangeinfuturecashflowsaszero.Asaresultoftheperformedimpairmenttests,thereisnoneed
forimpairmentofthesegments’goodwill.UseoftheDCFmodelrequiresforecastsandassumptionsconcerningmarketgrowth,
prices,volumedevelopment,investmentneedsandgeneralinterestrate.Themajorsensitivitiesintheperformanceareassociated
withtheforecastrevenueandprofitabilitylevels.
Sensitivityanalysis
Consumer
Corporate
Consumer
Corporate
Customers
Customers
Customers
Customers
Projectionparametersapplied
2013
2013
2012
2012
AmountinexcessofCGUcarryingvalue,
EURmillion
2,359
1,253
3,028
1,329
33.3
EBITDAmarginonaverage,%(1
35.9
35.6
35.4
Horizongrowth,%
0.0
0.0
0.0
0.0
Pre-taxdiscountrate,%
1)Onaverageduring5-yearprojectionperiod
7.9
7.9
6.8
6.8
Consumer
Corporate
Consumer
Corporate
Customers
Customers
Customers
Customers
Changeinprojectionparametersthat
makesthefairvalueequaltobookvalue
2013
2013
2012
2012
EBITDAmarginonaverage,%
Horizongrowth,%
Pre-taxdiscountrate,%
-17.0
-56.0
20.0
-14.4
-35.2
16.5
-19.2
-55.9
22.0
-13.5
-21.8
14.2
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
58
FINANCIALS
ELISAANNUALREPORT2013
16.Investmentsinassociatedcompanies
EURmillion
2013
Atbeginningofperiod
Shareofperiodsprofit
2012
6.5
-0.1
0.1
0.0
Businesscombinations
2.4
Reclassification
-6.5
6.4
Attheendofperiod
2.4
6.5
Elisa'sholdingsinassociatesarepresentedunderNote35.
DuringthecomparisonyearElisa'sholdinginSulakeCorporationOyincreasedfrom17percentto24percent.Asaresulttheshares
whichhadbeenpreviouslyclassifiedasavailableforsalehadbeenclassifiedasassociatedcompanysharessince31December2012.
DuringthereportingperiodtheholdinginSulakeincreasedfrom24percentto100percentandthecompanyisconsolidatedfrom
1February2013onwards.
AsaresultoftheacquisitionofPPO-YhtiötOythegroupreceivedthefollowingnewassociates:FNE-FinlandOy,HelmivisioOy,
KiinteistöOyKiihtelysvaaranOravanpyörä,SofteraOyjaSuperHeadEndFinlandOy.
17.Financialassetsrecognisedatfairvalue
EURmillion
Financialassetsrecognisedatfairvalue
Financialassetsavailable-for-sale
Otherliabilities
EURmillion
2013
0.0
6.9
2.0
8.8
2012
Level1
Level2
6.9
6.9
Level1
0.0
0.0
Level2
Level3
2.0
2.0
Level3
Financialassetsrecognisedatfairvalue
0.4
0.4
Financialassetsavailable-for-sale
Otherliabilities
5.7
2.1
8.3
5.7
5.7
0.4
2.1
2.1
Level3reconciliation
Otherliabilities
EURmillion
Balanceatthebeginning
Increaseofcontingentconsideration
Remeasurementofcontingentconsideration
Paymentofcontingentconsideration
2013
2012
2.1
2.8
1.6
0.8
-2.5
-0.7
Balanceattheend
2.0
2.1
Level3includescontingentconsiderationsrelatingtobusinesscombinations.Changesinthefairvalueofcontingentconsiderations
arerecognisedinotheroperatingexpenses.
Accordingtomanagementestimation,iftheinformationwhichdefinesthefairvalueoflevel3financialinstrumentsischangedtoa
possiblealternativehypothesis,itwouldnotoutstandinglychangethefairvaluesoflevel3itemsatfairvaluesconsideringthesmall
amountofliabilities.
Forrecognitionoflevels,seeAccountingPolicies,FinancialAssetsandLiabilities.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
59
FINANCIALS
ELISAANNUALREPORT2013
18.Carryingamountsoffinancialassetsandliabilitiesbycategory
2013
EURmillion
Non-currentfinancial
assets
Financialassetsavailablefor-sale
Receivables
Currentfinancialassets
Tradeandother
receivables
Non-currentfinancial
liabilities
Financialliabilities
Otherliabilities(2
Currentfinancialliabilities
Financialliabilities
Financial
assets/
liabilities
recognised
atfairvalue
throughprofit
Financial
assets
available-
Loansand
Note
for-sale
receivables
orloss(1
19
20
22.5
23
Financial
liabilities
measuredat
amortised
Book
values
Fair
values
70.4
0.1
22.5
70.5
22.5
70.5
22.5
327.3
0.1
327.3
327.3
397.7
420.3
420.3
30
829.7
829.7
837.2
29.4
29.4
29.4
30
279.3
279.3
280.4
31
261.4
1,399.7
261.4
1,399.7
261.4
1,408.3
31
Tradeandotherpayables
(2
1)Assetsdefinedassuchatinitialrecognition
2)Excludingadvancesreceived
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
60
FINANCIALS
ELISAANNUALREPORT2013
2012
Financial
assets/
liabilities
recognised
Financial
assets
EURmillion
Non-currentfinancial
assets
Financialassetsavailablefor-sale
Receivables
Currentfinancialassets
Tradeandother
receivables
Non-currentfinancial
liabilities
Financialliabilities
19
20
19.9
(2
44.6
31
30
31
1)
Assetsdefinedassuchatinitialrecognition
0.4
Book
values
Fair
values
0.4
310.0
354.6
19.9
30
measuredat
amortised
orloss(1
Financial
liabilities
atfairvalue
throughprofit
Loansand
receivables
23
Otherliabilities(2
Currentfinancialliabilities
Financialliabilities
Tradeandotherpayables
availablefor-sale
Note
19.9
45.1
310.0
375.0
19.9
45.1
310.0
375.0
702.8
702.8
723.9
7.6
7.6
7.6
175.6
175.6
175.1
237.7
237.7
237.7
1,123.7
1,123.7
1,144.3
2)Excludingadvancesreceived
Thefairvaluesofeachfinancialassetandliabilityitemarepresentedinmoredetailunderthespecifiednotenumber.
19.Financialassetsavailable-for-sale
EURmillion
Publiclylistedshares
Unlistedshares
Themostsignificantunlistedequityinvestments
EURMillion
2013
6.9
15.7
22.5
5.7
14.2
2013
AnviaOyj
8.6
DatawellOy
2.1
10.7
Theunlistedequityinvestmentsarerecognisedatacquisitioncostlesspossibleimpairment,ifthefairvalueoftheequity
investmentscannotbedeterminedreliably.
ChangesinthefairvalueoflistedsharesEUR-1.1(-1.3)millionhavebeenrecognisedinothercomprehensiveincome.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
2012
19.9
2012
8.6
2.1
10.7
61
FINANCIALS
ELISAANNUALREPORT2013
20.Non-currentreceivables
EURmillion
2013
Loanreceivables
2012
0.1
Loanreceivablesfromassociated
Tradereceivables
Financeleasereceivables
0.1
46.2
15.8
0.1
27.4
9.0
Prepaymentsandaccruedincome
8.0
Derivatives
0.1
Othernon-currentreceivables
0.3
70.5
DerivativesareclassifiedunderFinancialassets/liabilitiesrecognisedatfairvaluethroughprofitorloss.Othernon-current
receivablesareclassifiedunderLoansandreceivables.
Theeffectiveinterestrateonreceivables(currentandnon-current)was0.28(0.16)percent.
8.0
0.4
0.1
45.1
Grossfinanceleasereceivables-maturityofminimumleasepaymentreceivables
2013
2012
Notlaterthanoneyear
Laterthanoneyearnotlaterthanfiveyears
10.1
15.3
6.7
10.0
Grossinvestmentinfinanceleases
Unearnedfinanceincome
Presentvalueoffinanceleasereceivables
25.4
-1.0
24.4
16.8
-0.3
16.5
EURmillion
Maturityofpresentvalueoffutureminimunleasepaymentreceivables
EURmillion
Notlaterthanoneyear
Laterthanoneyearnotlaterthanfiveyears
2013
2012
8.6
7.4
15.8
24.4
9.0
16.5
Elisaactsasalessorinfinanceleasearrangementsconcerningvideoconferenceequipment.Leaseperiodsvaryfromoneto5years
andconditionsvaryintermsofindexclauses.
21.Deferredtaxreceivablesandliabilities
Thechangeindeferredtaxreceivablesandliabilitiesduring2013
Recognised
inconsolidated
statementof
Recognised
Deferredtaxreceivables
EURmillion
1Jan.2013
inincome
statement
Business
combinations
Financeleaseagreements
2.7
-0.1
2.6
Internalmargins
Share-basedincentiveplan
Fairvaluemeasurementof
tangibleandintangibleassets
inbusinesscombinations
Othertemporarydifferences
5.6
1.6
-1.5
1.2
4.1
2.8
0.0
2.2
12.1
-4.4
0.7
-4.1
4.5
4.5
1.0
1.0
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
comprehensive
income
31Dec.2013
0.1
3.9
13.5
62
FINANCIALS
ELISAANNUALREPORT2013
Deferredtaxliabilities
EURmillion
1Jan.2013
Recognised
inincome
statement
Business
combinations
5.0
-3.0
1.3
Fairvaluemeasurementof
tangibleandintangibleassets
inbusinesscombinations
Accumulateddepreciation
difference
31Dec.2013
3.3
9.5
-5.7
8.5 12.3
Othertemporarydifferences
2.4
2.8
0.2 5.4
16.9
-5.8
9.9 21.0
TheGrouphadEUR43.7(2.4)millionofunusedtaxlossesat31December2013,forwhichnotaxreceivablehasbeenrecognised.
Theselossesexpirein2014–2022.Thechangecomparedtoyear2012resultsmainlyfromtheacquisitionofSulakeCorporationOy.
NotaxliabilityhasbeenrecognisedfortheuntaxedretainedearningsEUR145.8millionoftheEstoniansubsidiaryasnoprofit
distributiondecisionorplansforprofitdistributionexistforthetimebeing.
During2013,theFinnishcorporationtaxratechangedfrom24.5percentto20.0percent.Thechangewasenacted
17December2013anditbecameeffectivefrom1January2014.Asaresultthedeferredtaxbalanceswereremeasuredforthe
financialstatement2013.
Deferredtaxliabilitiesandreceivablesarenotoffset.
Thechangeindeferredtaxreceivablesandliabilitiesduring2012
Deferredtaxreceivables
EURmillion
1Jan.2012
Recognised
inincome
statement
2.8
-0.1
1.4
6.2
0.7
-1.0
-0.6
0.9
1.1
12.2
0.7
-0.1
Financeleaseagreements
Negativedepreciation
difference
Internalmargins
Share-basedincentiveplan
Othertemporarydifferences
Deferredtaxliabilities
EURmillion
1Jan.2012
Recognised
inincome
statement
2.7
0.4
5.6
1.6
31Dec.2012
1.8
12.1
31Dec.2012
Fairvaluemeasurementof
tangibleandintangibleassets
inbusinesscombinations
Accumulateddepreciation
difference
Othertemporarydifferences
7.1
-2.1
5.0
10.2
1.8
-0.7
0.6
19.1
-2.2
9.5
2.4
22.Inventories
EURmillion
16.9
2013
2012
Materialsandsupplies
Workinprogress
Finishedgoods
7.0
0.0
48.5
16.3
0.1
43.1
AnimpairmentofEUR0.1(0.1)milliononinventorieswasrecognisedduringtheperiod.
55.5
59.4
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
63
FINANCIALS
ELISAANNUALREPORT2013
23.Tradeandotherreceivables
EURmillion
2013
Tradereceivables
2012
290.9
282.3
-7.1
8.6
25.1
0.1
-7.6
7.4
21.3
0.0
Receivablesfromassociatedcompanies
0.0
Otherreceivables
9.6
327.3
Prepaymentsandaccruedincomeincludeinterestreceivablesandaccrualsfromoperatingactivities.
0.9
5.6
310.0
Allowancesfordoubtfulaccounts
Financeleasereceivables
Prepaymentsandaccruedincome
Loanreceivables
Tradereceivablesbyage
EURmillion
2013
2012
Notdue
247.9
249.2
Overdue
Lessthan30days
31-60days
61-90days
25.4
5.3
3.2
18.6
3.8
2.1
Morethan90days
2.0
1.1
283.8
274.8
Thebookvalueoftradereceivablesapproximatestheirfairvalue.ThecreditriskontradereceivablesisdescribedinNote34.The
maximumcreditriskisthevalueoftradereceivablesontheclosingoftheaccounts,EUR283.8million.
24.Cashandcashequivalents
EURmillion
2013
2012
Cashassets
Deposits
Commercialpapers(under3months)
72.8
22.0
43.0
137.8
39.8
39.8
25.Derivativeinstruments
Nominalvaluesofderivatives
EURmillion
Interestrate
andcurrency
swaps
Periodofvalidity
Lessthan
1–5
Over
1year
years
5years
151.5
2013
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
3.0
2012
Periodofvalidity
Lessthan
1–5
Over
1year
years
5years
150.0
64
FINANCIALS
ELISAANNUALREPORT2013
Fairvaluesofderivatives
2013
EURmillion
Interestrate
andcurrency
swaps
Negative
fairvalue
fairvalue
Total
0.1
0.0
0.0
2012
Positive
Determinationoffairvalue
Positive
Negative
fairvalue
fairvalue
Total
0.4
0.4
Thefairvalueofderivativeinstrumentsisdeterminedusingmarketpricesquotedonafunctionalmarket,thecashflowdiscounting
methodoroptionpricingmodels.
Elisa'sinterestrateswapsarecategorizedatthefairvaluehierarchylevel2.SeeNote17.
26.Equity
Sharecapitalandtreasuryshares
EURmillion
1Jan.2012
Subscriptionrightsused
31Dec.2012
Subscriptionrightsused
Shareissue
Numberof
shares
Share
Treasury
(thousands)
capital
shares
83.0
-197.0
2.9
166,663
505
167,168
337
1,830
83.0
-194.1
6.0
Cancellationoftreasuryshares
-2,000 39.9
31Dec.2013
167,335
83.0
-148.2
Thecompany'spaid-insharecapitalregisteredintheTradeRegisterwasEUR83,033,008(83,033,008)attheendoftheperiod.
AccordingtoitsArticlesofAssocation,ElisaCorporationonlyhasoneseriesofshares,eachshareentitlingtoonevote.Inaccordance
withtheArticlesofAssociation,themaximumnumberofsharesis1,000(1,000)millionshares.Allissuedshareshavebeenpaid.
Sharesdonothavenominalvalue.
TreasurysharesincludetheacquisitioncostoftreasurysharesheldbytheGroup.
Treasuryshares
TreasurysharesheldbytheGroup/ElisaCorporation
at1Jan.2012
Transfer,Shareincentiveplan
TreasurysharesheldbytheGroup/ElisaCorporation
at31Dec.2012
Restored,Shareincentiveplan
Disposaloftreasuryshares
Cancellationoftreasuryshares
TreasurysharesheldbytheGroup/ElisaCorporation
at31Dec.2013
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
Accounting
countervalue
EUR
Holding,%
ofshares
andvotes
10,288,116
1,526
5,110,155
6.15
-303,599
-2,000,000
7,986,043
3,962,734
4.77
Sharespcs
10,435,275
-147,159
65
FINANCIALS
ELISAANNUALREPORT2013
Otherreserves
Reservefor
Contingency
Fair
value
Other
invested
nonrestricted
reserve
reserve
reserves
equity
Total
3.4
7.8
-1.3
381.0
48.3
440.6
-1.3
-4.5
381.0
4.4
52.7
EURmillion
1Jan.2012
Financialassetsavailable-for-sale
Remeasurementsofthenetdefined
benefitliability
Stockoptionsexercised
31Dec.2012
Financialassetsavailable-for-sale
Remeasurementsofthenetdefined
benefitliability
3.4
2.0
1.1
-4.5
4.4
439.1
1.1
-6.3
Shareissue
35.3
Stockoptionsexercised
2.9
31Dec.2013
3.4
-3.2
381.0
90.9
TheEUR3.4millioncontingencyreserveincludestheamounttransferredfromthedistributableequityundertheArticlesof
-6.3
35.3
2.9
472.1
AssociationorbyadecisionbytheGeneralMeeting.ThefairvaluereserveofEUR-3.2millionincludeschangesinthefairvalueofthe
financialassetsavailable-for-saleandtheremeasurementsofthenetdefinedbenefitliability.TheotherreservesofEUR381.0
millionwereformedthroughtheuseofanequityissueinacquisitions.TranslationdifferencesamountedtoEUR-0.1million.
Thereserveforinvestednon-restrictedequityincludestheproportionofsharesubscriptionpricesnotrecognisedassharecapitalin
accordancewithshareissueterms.In2013,EUR35.3millionwasrecognisedinthereserveforinvestednon-restrictedequitydueto
thedisposaloftreasurysharesrelatedtobusinesscombinations.
27.Share-basedpayments
On19December2011,Elisa'sBoardofDirectorsdecidedontheimplementationof2newshare-basedincentiveplans.
Share-basedincentiveplan2012–2014
Thefirstperformance-basedshareincentiveplanhas3vestingperiods:calendaryears2012–2014,2013–2015and2014–2016.The
maximumawardoftheplanequalsthevalueof3,315,000Elisashares.TheBoardofDirectorsdecidestheearningscriteriaandthe
targetsseparatelyforeachplaninthebeginningofthevestingperiod.Aftertheendofeachvestingperiod,theawardispaidasa
combinationofcompanysharesandcashwithin1monthfollowingthecompletionoffinancialstatements.Ifthecontractof
employmentisterminatedbeforethepaymentoftheaward,noawardshallbepaid.
Theearningscriteriaforthe2012–2014planarebasedonrevenuegrowthofnewbusinessoperationsandearningspershare.The
numberofkeypersonnelparticipatinginthe2012–2014planis160andtheawardequalsthevalueof983,000Elisashares.
Theearningscriteriaforthe2013–2015planarebasedonrevenuegrowthofnewbusinessoperationsandearningspershare.The
numberofkeypersonnelparticipatinginthe2013–2015planis157andtheawardequalsthevalueof983,500Elisashares.
Theearningscriteriaforthe2014–2016planarebasedonrevenuegrowthofnewbusinessoperationsandearningspershare.The
numberofkeypersonnelparticipatinginthe2014–2016planis154andtheawardequalsthevalueof996,500Elisashares.
Share-basedincentiveplan2012–2018
Theothershareincentiveplancoverscalendaryears2012–2018.Theawardsgrantedundertheplanhaveavestingperiodof
approximately3years.Thepontentialawardisbasedonthevalidityofthekeypersonnelcontractofemployment.Themaximum
amountofawardspaidundertheplanequalthevalueof500,000Elisashares.Resolutionsrelatingtothisplanhavenotyetbeen
made.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
66
FINANCIALS
ELISAANNUALREPORT2013
Share-basedincentiveplanfor2009–2011
On18December2008,Elisa'sBoardofDirectorsdecidedontheimplementationofashare-basedincentiveplan.Undertheplan,
membersofkeymanagementareeligibletoreceiveElisasharesasarewardfortheirperformanceover3calendaryearlongearnings
periods.Theearningperiodsarecalendaryears2009,2010and2011.Theshare-basedpaymentsofyears2009,2010and2011have
ended.
TheBoardofDirectorsdecidedtheearningscriteriaandthetargetsseparatelyforeachearningsperiod.Theamountoftheawardto
bepaidundertheshare-basedincentiveplanwastiedtotheaccomplishmentoftherelatedtargets.Aftertheendofeachvesting
period,theawardwaspaidasacombinationofcompanysharesandcashwithin1monthfollowingthecompletionoffinancial
statements.Themaximumawardoftheplanwas1,100,000sharesfromwhich408,619sharesweretransferred.9,632fromthe
transferredshareswerereturned.Themaximumamountoftheawardequalsthevalueof2,200,000Elisashares.
Therewardforthe2011share-basedincentiveplanwasdeterminedonthebasisofthedevelopmentofearningspershareand
revenuein2011.ThetotalawardamountedtoEUR5.6million,ofwhichEUR2.9millionwaspaidincash.Inaccordancewiththe
decisionoftheBoardofDirectors,Elisatransferred152,503sharesto159personscoveredbytheincentiveschemeon1March2012,
ofwhich44,345sharesweretransferredtomembersoftheManagementBoardand13,645sharesweretransferredtotheCEO.
3,832ofthetransferredshareswerereturnedtothecompanyduring2012and1,526shareswerereturnedduring2013.
Therewardforthe2010share-basedincentiveplanwasdeterminedonthebasisofthedevelopmentofearningspershareand
revenuein2010.ThetotalawardamountedtoEUR3.5million,ofwhichEUR1.8millionwaspaidincash.Inaccordancewiththe
decisionoftheBoardofDirectors,Elisatransferred99,483sharesto48personscoveredbytheincentiveschemeon1March2011,
ofwhich37,648sharesweretransferredtomembersoftheManagementBoardand4,408sharesweretransferredtotheCEO.252
ofthetransferredshareswerereturnedtothecompanyduring2011and1,512shareswerereturnedduring2012.
Therewardforthe2009shareincentiveplanwasdeterminedonthebasisofthedevelopmentofearningspershareandrevenuein
2009.ThetotalrewardamountedtoEUR5.1million,ofwhichEUR2.7millionwaspaidincash.Inaccordancewiththedecisionofthe
BoardofDirectors,Elisatransferred156,633sharesto47personscoveredbytheincentiveschemeon1March2010,ofwhich52,715
sharesweretransferredtomembersoftheManagementBoardand20,083sharesweretransferredtotheCEO.2,510ofthe
transferredshareswerereturnedtothecompanyon1June2010.
Ifthecontractofemploymentisterminatedbeforethepaymentoftheaward,noawardshallbepaid.TheCEOmustholdone-halfof
thesharesreceivedundertheplanforaslongasheservesastheCEO.Othersmustholdallsharesreceivedundertheplanforone
yearandtwo-thirdsofthesharesfortwoyearsaftertheendofeachvestingperiod.Theawardistobereturnedifthecontractof
employmentisterminatedorcancelledduringtherestrictionperiodbythecompanyortheemployee.
ExpensesrecognisedforshareincentiveplanwasEUR6.2(6.4)millionin2013.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
67
FINANCIALS
ELISAANNUALREPORT2013
Amountofshareincentivesandtermsandassumptionsinthefairvaluecalculation
Numberofawardsgranted
2011
2010
2009
plan
plan
plan
907,000
630,000
624,000
31Dec.2010
31Dec.2009
31Dec.2008
Fairvalueofshareatthedateofgrant,EUR(1
Sharepriceatthedateofgrant,EUR
15.47
15.16
11.50
16.27
15.96
12.30
Estimatedrealisationofsharepriceafteronecommittedyear(2
18.37
17.99
13.59
Estimatedrealisationofsharepriceaftertwocommitedyears(2
Vestingperiodstarts
Vestingperiodends
19.72
19.30
14.48
Grantdate
Restrictionperiodends
Estimatedrealisationofearningscriteriaatthebeginningof
vestingperiod,%
Realisationofearningscriteria,%
Distributednumber
Returnednumber
1Jan.2011
31Dec.2011
31Dec.2013
1Jan.2010
31Dec.2010
31Dec.2012
50
50
36
40
152,503
-5,358
Shareprice,EUR
17.91
Distributednumberoutofthemaximumnumberofshare
awardsgranted,%
17
Numberofparticipantsintheplan
159
1)
Thefairvalueoftheshareisthegrantdatesharepricelessestimateddividend.
2)
99,483
-1,764
16
50
31Dec.2011
67
16.71
1Jan.2009
31Dec.2009
53
156,633
-2,510
15.42
25
47
TheestimatedrealisationofsharepriceiscalculatedusingtheCAPmodel(CapitalAssetPricingModel).Thebasicvariablesinthe
modelareinterestratelevel,generalriskpremiumandtheso-calledbetariskontheElisashare.
Amountofshareincentivesandtermsandassumptionsinthefairvaluecalculation
Numberofawardsgranted
Grantdate
Fairvalueofshareatthedateofgrant,EUR
Sharepriceatthedateofgrant,EUR
(1
Estimatedrealisationofsharepriceaftervestingandrestriction
period2)
Vestingperiodstarts
2014
2013
plan
plan
plan
996,500
983,500
983,000
31Dec.2013
31Dec.2012
31Dec.2011
15.36
12.83
12.23
19.26
16.73
16.13
19.54
1Jan.2014
16.24
1Jan.2013
2012
16.16
1Jan.2012
Vestingandrestrictionperiodends
31Dec.2016
31Dec.2015
31Dec.2014
Estimatedrealisationofearningscriteriaatthebeginningof
vestingperiod,%
50
50
72
Numberofparticipantsintheplan
154
157
160
1)
Thefairvalueoftheshareisthegrantdatesharepricelessestimateddividend.Estimateddividendusedinthecalculationequals
thepreviousperioddividendofEUR1.30pershare.
2)
TheestimatedrealisationofsharepriceiscalculatedusingtheCAPmodel(CapitalAssetPricingModel).Thebasicvariablesinthe
modelareinterestratelevel,generalriskpremiumandtheso-calledbetariskontheElisashare.Theassumeddividendisthe
previousperioddividend.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
68
FINANCIALS
ELISAANNUALREPORT2013
Stockoptionplan2007
On18December2007,Elisa'sBoardofDirectorsdecidedtoissuestockoptionstotheGroup'skeyemployeesandafully-owned
subsidiaryofthecompany.Thestockoptionschemeistargetedatapproximately150keyemployeeswhoarenotincludedinthe
share-basedincentiveplanforseniormanagement.Thestockoptionsaregrantedwithoutconsideration.Nonewoptionrightsare
grantedfromthestockoptionplan.
Thestockoptionsentitletothesubscriptionofatotalof2,550,000newsharesortreasuryshares.Theoptionsaredividedinto
options2007A,2007Band2007C,850,000ineachseries.Basedonthestock-options1,198,074sharesweresubscribed.
Termsofthearrangement
Optionplan
Optionplan
Optionplan
2007A
2007B
2007C
3.5
3.5
3.5
1Dec.2009–
31May2011
1Dec.2010–
31May2012
1Dec.2011–
31May2013
1Nov.–30Nov.2007
Numberof
1Nov.–30Nov.2008
Numberof
1Nov.–30Nov.2009
Numberof
options
options
options
Validityperiod(years)
Exerciseperiod
Exercisepriceassessmentdate(1
Sharesunderoption1Jan.2012
Total
238,198
605,000
843,198
Exercised
-238,197
-266,822
-505,019
Expired
Expired,instock
-1
-268,000
-1
-268,000
Sharesunderoption31Dec.2012
338,178
338,178
Granted
Expired
-336,878
-1,300
-336,878
-1,300
Expired,instock
-245,000
-245,000
0
245,000
0
245,000
0
11.89
0
338,178
0
13.99
0
338,178
0
6.87(2
9.97
(2
Sharesunderoption31Dec.2013
Instock31Dec.2012
Instock31Dec.2013
Optionsexerciseable31Dec.2012
Optionsexerciseable31Dec.2013
Initialexerciseprice,EUR
Exerciseprice31Dec.2012,EUR
0
20.84
Exerciseprice31Dec.2013,EUR
1)AverageElisasharepriceweightedbytradingvolumeatNASDAQOMXHelsinkiOy
8.67
2)Exercisepriceatthetimeofexpiry
Fairvaluesofstockoptions
ElisacalculatesthefairvalueofstockoptionsusingtheBlack-Scholesmodelatthedateofgrant.Thefairvalueisrecognisedas
personnelexpensesoverthevestingperiod.Grantdateisthedateonwhichtherecipientconfirmsinwritingtheacceptanceofthe
stockoptions.Noexpenseswererecognisedforthestockoptionplanduring2012and2013.
28.Pensionobligations
PensionschemesforElisa'spersonnelinFinlandarearrangedthroughpensioninsurancecompaniesforstatutorypensioninsurance
(TyEL)andthroughlifeinsurancecompanyforsupplementarypensioncover.TheFinnishTyELsystemisadefinedcontributionplan.
SomesupplementarypensionplansandpensionplansundertheresponsibilityofElisahavebeenclassifiedasdefinedbenefitplans.
OnlyElisaCorporationhasdefinedbenefitplans.
Thepensionplansofforeignsubsidiariesaredefinedcontributionplans.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
69
FINANCIALS
ELISAANNUALREPORT2013
Thenetdefinedbenefitobligationrecognisedinthestatementoffinancialpositionis
determinedasfollows:
2013
EURmillion
Presentvalueofunfundedobligations
Presentvalueoffundedobligations
Fairvalueofplanassets
Netliability(-)/receivable(+)inthestatementoffinancialposition
-1.3
-67.1
55.2
-48.5
42.5
-13.8
Pensionexpensesrecognisedinthestatementofcomprehensiveincome:
2013
EURmillion
Expenserecognisedinprofitorloss
2012
-1.9
-7.1
2012
Servicecost
Netinterest
0.3
0.4
0.1
0.1
Settlements
-0.1
0.0
Remeasurements
Taxeffectoftheremeasurements
0.6
7.5
-1.2
6.3
0.2
6.0
-1.5
4.5
Reconciliationofthenetdefinedbenefitobligationsinthestatementoffinancialposition:
EURmillion
Netdefinedbenefitobligationatthebeginningoftheperiod
Pensionexpensesrecognisedinthestatementofcomprehensiveincome
Remeasurements
Settlements
Netdefinedbenefitobligationattheendofperiod
Changesinthepresentvalueoftheobligation:
2013
2012
7.1
0.6
2.4
0.2
7.5
6.0
-1.5
13.8
-1.4
7.1
EURmillion
2013
2012
Obligationatthebeginningoftheperiod
-49.8
-45.7
Currentservicecost
-0.3
-0.1
Interestexpenses
Remeasurements
-2.0
Actuarialgain(+)orloss(-)arisingfromchangesindemographic
assumptions
Gain(+)orloss(-)arisingfromexperienceadjustments
Benefitspaid
Settlements
Obligationattheendofperiod
Changesinthefairvalueofplanassets:
-2.0
0.3
-6.8
-22.0
0.8
4.4
0.3
4.0
0.0
-69.0
-49.8
2013
2012
Fairvalueofplanassetsatthebeginningoftheperiod
42.5
43.2
Interestincomes
Remeasurements,gain(+)orloss(-)
1.6
14.2
1.9
0.0
Benefitspaid
-4.4
-4.0
Contributionspaidbyemployer
Settlements
1.5
-0.2
1.4
0.0
EURmillion
Fairvalueofplanassetsattheendofperiod
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
55.2
42.5
70
FINANCIALS
ELISAANNUALREPORT2013
Theprincipalactuarialassumptionsused:
Discountrate,%
Futuresalaryincrease,%
Futurepensionincrease,%
Sensitivityanalysisofdefinedbenefitobligation:
2013
2012
3.00
3.30
3.00
3.30
2.00
2.10
Effectonthenetdefinedbenefitobligation,
Changeinactuarialassumptions
EURmillion
Discountrate+0.5%
-3.9
Futuresalaryincrease+0.5%
Futurepensionincrease+0.5%
+0.3
+4.5
Expectedmortality+1year
+2.7
Whencalculatingachangeinoneassumptionofthesensitivityanalysis,theotherassumptionsareassumedtoremainunchanged.In
practice,thisisnotlikelytohappenandsomechangesintheassumptionsmaycorrelatewitheachother.Thefiguresinthesensitivity
analysishavebeencalculatedbyusingthesamemethodwhichisappliedwhencalculatingdefinedbenefitobligation.
DefinedbenefitobligationsexposetheGrouptovariousrisks.Decreasesinthegainofcorporatebonds,higherinflationandhigher
expectedretirementmaypredisposetheGrouptothegrowthofdefinedbenefitobligation.Ontheotherhand,sincethefairvalueof
assetsiscalculatedusingthesamediscountratewhichisusedwhilecalculatingtheobligation,thechangeinthediscountratewill
affectonlythenetdefinedbenefitobligation.Similarly,riseinlifeexpectancywillincreasetheassetsandaffectthenetdefined
benefitobligation.
Weightedaveragedurationoftheobligationis15.9years.
TheGroupexpectstocontributeEUR1.5(1.0)milliontodefinedbenefitpensionplansin2014.
Thedefinedbenefitassetsexistinalifeinsurancecompanyandthedistributionofassetsmeasuredatfairvalueisnotavailable.
29.Provisions
EURmillion
Termination
benefits
Other
Total
1.2
2.4
6.4
3.6
6.4
17.2
-0.9
-0.7
17.2
-1.6
Utilisedprovisions
-4.7
-5.8
-10.5
31Dec.2013
EURmillion
12.8
2.3
1Jan.2013
Businesscombinations
Increasesinprovisions
Reversalsofunusedprovisions
2013
15.1
2012
Long-termprovisions
2.4
3.3
Short-termprovisions
12.6
15.1
0.3
3.6
Terminationbenefits
AsapartoftheGroup'srationalisationElisahascarriedoutstatutoryemployeenegotiationsleadingtopersonnelreductionsin2013.
Therestructuringprovisionincludesprovisionsforbothunemploymentpensionsandotherexpensesduetoredundancies.The
provisionsassociatedwithredundancieswillberealisedin2014,andtheprovisionassociatedwithunemploymentpensionswillbe
realisedin2014–2015.
Otherprovisions
Otherprovisionsincludeanenvironmentalprovisionmadefortelephonepolesandwarrantyprovisionsrecognisedintheacquisition
ofPPO-YhtiötOy,ofwhichEUR5.8millionhasbeenusedin2013.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
71
FINANCIALS
ELISAANNUALREPORT2013
30.Financialliabilities
2013
2012
Balance
Fair
Balance
Fair
sheetvalues
values
sheetvalues
values
Bonds
588.6
596.1
449.8
Bankloans
Loansfrompensionfunds
209.6
1.0
209.6
1.0
220.5
0.2
0.2
30.2
829.7
30.2
837.2
EURmillion
Non-current
Capitalloans
Financeleaseliabilities
Current
Bonds
Bankloans
Loansfrompensionfunds
Financeleaseliabilities
Commercialpaper
161.4
11.8
162.5
11.8
0.1
5.0
0.1
5.0
101.0
101.0
470.9
220.5
32.5
702.8
32.5
723.9
75.0
0.5
74.4
0.5
4.7
4.7
95.5
95.5
279.3
280.4
175.6
175.1
1,109.0
1,117.5
878.4
899.0
InterestbearingliabilitiesincludeatotalofEUR35.2(37.2)millionofsecuredliabilities(financeleaseliabilities).Insubstancethe
financeleaseliabilitiesaresecuredliabilities,sincerightstotheleasedpropertywillreverttothelessorifpaymentsareneglected.
BoththeloansfrompensionfundsandthecapitalloanscametothegroupfromtheacquisitionofPPOYhtiötOy.Theloansfrom
pensionfundsarefromKotkanPuhelinyhdistyksenEläkesäätiö.
Allfinancialliabilitiesaredenominatedineuros.Financialliabilitiesaremeasuredatamortisedcost.Thefairvaluesoffinancial
liabilitiesarebasedonquotedmarketpricesorhavebeencalculatedbydiscountingtherelatedcashflowbythemarketrateof
interestonthebalancesheetdate.
Theaveragematurityofnon-currentliabilitieswas5.6(4.6)yearsandeffectiveaveragerateofinterest2.5(2.8)percent.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
72
FINANCIALS
ELISAANNUALREPORT2013
Contract-basedcashflowsontherepaymentoffinancialliabilitiesandcosts
2013
EURmillion
Bonds
Financialcosts
Repayments
Bankloans
Financialcosts
Repayments
Committedcreditlimits
Financialcosts
Repayments
Commercialpaper
Financialcosts
Repayments
Loansfrompensionfunds
Financialcosts
Repayments
Capitalloans
Financialcosts
Repayments
Financeleaseliabilities
Financialcosts
Repayments
Interestrateswap
Tradepayables
Financialcosts
Repayments
Total
2012
EURmillion
Bonds
Financialcosts
Repayments
Bankloans
Financialcosts
Repayments
Committedcreditlimits
Repayments
Commercialpaper
Financialcosts
Repayments
Financeleaseliabilities
Financialcosts
Repayments
Interestrateswap
Tradepayables
Financialcosts
2014
2015
2016
2017
2018
2019–
Total
178.8
15.0
15.0
15.0
15.0
631.5
870.3
17.1
161.7
15.0
0.0
15.0
0.0
15.0
0.0
15.0
0.0
31.5
600.0
108.6
761.7
15.2
15.0
134.0
10.0
59.9
0.0
234.0
4.4
10.8
4.3
10.7
3.3
130.7
0.9
9.1
0.8
59.1
0.0
0.0
13.6
220.4
1.0
1.0
0.0
1.0
0.0
1.0
101.0
101.0
0.5
100.5
0.5
100.5
0.1
0.1
0.1
0.1
0.1
0.6
1.2
0.0
0.1
0.0
0.1
0.0
0.1
0.0
0.1
0.0
0.1
0.0
0.5
0.1
1.0
0.0
0.1
0.0
0.0
0.0
0.2
0.3
0.0
0.0
0.0
0.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.2
0.0
0.2
7.5
2.5
6.2
2.3
5.2
2.1
3.9
2.0
2.9
1.6
57.9
38.0
83.6
48.4
5.0
3.9
3.1
1.9
1.3
19.9
35.2
-0.4
138.3
-0.4
138.3
24.1
21.6
20.5
17.9
17.4
69.5
170.9
417.5
441.6
14.8
36.4
133.9
154.4
11.1
28.9
60.5
77.9
620.6
690.2
1,258.5
1,429.4
2013
2014
2015
91.7
16.7
176.1
14.4
6.8
6.8
75.0
161.7
0.0
9.4
4.6
13.7
4.5
13.5
4.3
4.8
9.3
9.2
0.2
0.2
95.5
0.4
95.1
7.4
2.7
4.7
2016
6.8
6.8
2017
2018–
Total
6.8
6.8
313.5
13.5
601.6
64.9
0.0
0.0
300.0
536.7
133.4
4.2
10.0
0.9
59.9
0.8
239.9
19.2
129.2
9.1
59.1
220.7
0.2
0.2
95.5
0.4
95.1
6.2
5.5
4.7
3.7
60.9
88.4
2.5
3.7
2.3
3.2
2.1
2.6
2.0
1.7
39.6
21.3
51.2
37.2
-0.4
126.3
-0.4
-0.8
126.3
24.0
21.0
13.4
13.0
9.7
53.9
134.9
Repayments
306.1
174.7
12.4
131.8
10.8
380.4
1,016.2
Total
330.1
195.7
25.8
144.9
20.5
434.3
1,151.2
Futurefinancialcostsonvariable-ratefinancialliabilitiesandinterestrateswapshavebeencalculatedattheinterestrateprevailing
ontheperiodenddate.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
73
FINANCIALS
ELISAANNUALREPORT2013
Bonds
Intheframeworkofitsbondprogramme,theparentcompanyhasissuedthefollowingbonds:
31Dec.2013
EMTNprogramme
2001/EUR1,000
million
Balance
Nominal
Nominal
Fairvalue
EURmillion
sheetvalue
EURmillion
value
EURmillion
interest
rate-%
Effective
interest-%
Maturitydate
II/2007(1
162.5
161.4
161.7
4.750
4.789
3March2014
I/2012(1
297.3
289.4
300.0
2.250
2.403
4Oct.2019
I/2013
298.8
299.2
300.0
2.750
2.785
22Jan.2021
758.6
750.0
761.7
Thefairvalueofbondsisbasedonmarketquotes.
1)
On4October2012,Elisaexchangedbondsissuedin2007withanominalvalueofEUR138.3millionandmaturityin2014,tonew
bondsthatmaturein2019.
Grossfinanceleaseliabilities-maturityofminimumleasepayments
2013
EURmillion
Notlaterthanoneyear
Laterthanoneyearnotlaterthanfiveyears
Laterthanfiveyears
Grossfinanceleaseliabilities
Futurefinancingcharges
Presentvalueoffinanceleaseliabilities
Maturityofpresentvalueoffinanceleaseliabilities
2012
7.5
7.4
18.5
20.1
57.7
83.7
60.9
88.4
-48.5
-51.2
35.2
37.2
2013
2012
Notlaterthanoneyear
Laterthanoneyearnotlaterthanfiveyears
5.0
10.3
4.7
11.2
Laterthanfiveyears
19.9
21.3
EURmillion
35.2
TheGroupleasestelecomfacilities,mobileandopticfibrenetworksandserversaswellasvideoconferenceequipmentand
infrastructureunderfinanceleasearrangements.Theconditionsvaryintermsofpurchaseoptions/redemptionclauses,index
clausesandleaseperiods.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
37.2
74
FINANCIALS
ELISAANNUALREPORT2013
31.Tradepayablesandotherliabilities
EURmillion
Non-current
Advancesreceived
2013
2012
6.2
6.1
Otherliabilities(1
29.4
7.6
Current
35.6
13.7
138.3
126.3
6.0
47.6
5.6
40.1
Tradepayables
Advancesreceived
Accruedemployee-relatedexpenses
Otheraccruals
Otherliabilities
26.1
23.2
49.4
267.4
48.0
243.2
303.0
256.8
Thecurrentvalueoftradepayablesandotherliabilitiesisareasonableestimateoftheirfairvalue.ThepaymenttimesfortheGroup's
tradepayablescorrespondtoconventionalcorporatetermsofpayment.Otheraccrualsincludeinterestexpenseandotherregular
expenseaccruals.
1)Includesnon-currentliabilitiesofEUR20.0millionrelatedtothe800MHzspectrumlicense.
32.Operatingleases
Groupasalessee
Thefutureminimumleasepaymentsundernon-cancellableoperatingleases:
EURmillion
Notlaterthanoneyear
Laterthanoneyearnotlaterthanfiveyears
Laterthanfiveyears
2013
2012
28.8
37.0
30.2
38.0
6.9
7.0
72.7
75.3
Elisa'soperatingleasesincludemainlybusinesspremises,telecomfacilities,officeequipmentandcars.Theleaseperiodsrangefrom
1monthtomorethan50yearsfortelecomfacilities.
AtotalofEUR58.4(53.6)millionwaspaidasleaseexpensesonthebasisofotherleasecontractsandrecognisedthroughprofitor
lossin2013.
Groupasalessor
Thefutureminimumleasepaymentsundernon-cancellableoperatingleases:
2013
2012
Notlaterthanoneyear
1.8
1.8
Laterthanoneyearnotlaterthanfiveyears
0.0
0.1
EURmillion
1.8
1.9
Elisaactsasalessorforconventionalleasecontractsofrealestatesandleasecontractsfortelecompremisesandequipmentspace.
Theleasecontractperiodsaremainlyshortandtheirdurationis1–6months.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
75
FINANCIALS
ELISAANNUALREPORT2013
33.Collateral,commitmentsandotherliabilities
EURmillion
2013
Onbehalfofowncommitments
Mortgages
2012
14.5
4.8
Pledgedsecurities
2.9
Deposits
Guarantees
0.8
1.1
Onbehalfofassociatedcompanies
Other
Onbehalfofothers
0.9
0.0
Guarantees(1
0.6
Other
0.0
20.0
Othercontractualobligations
0.5
6.2
Repurchaseobligations
Letterofcredit
0.1
0.1
0.0
1)
Elisahasguaranteedsmallshort-termloansoflessthanEUR20,000forpersonnel.Themaximumamountoftheguaranteelimitwas
EUR0.5(0.5)millionat31December2013.
Realestateinvestments
RealestateinvestmentsVATrefundliabilityisEUR33.3(29.4)millionat31December2013.
34.Financialriskmanagement
ElisaCorporation'scentralisedfinancingfunctionisresponsibleforexchangerate,interestrate,liquidity,andrefinancingrisksfor
theentireGroup.Theprinciplesoffinancingpolicy,suchasfundingandinvestmentprinciples,areannuallydiscussedandratifiedby
theCommitteeforAuditingoftheBoardofDirectors.Fundingrisksaremonitoredasapartoftheregularbusinessmonitoring
procedure.
Marketrisks
Interestraterisk
Elisaisexposedtointerestrateriskmainlythroughitsfinancialliabilities.Inordertomanageinterestraterisk,theGroup’sborrowing
andinvestmentsarediversifiedinfixed-andvariable-rateinstruments.Derivativefinancialinstrumentsmayalsobeusedin
managinginterestraterisk.Theaimistohedgethenegativeeffectscausedbychangesintheinterestratelevel.Hedgeaccountingis
notappliedtothederivatives.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
76
FINANCIALS
ELISAANNUALREPORT2013
Timingofinterestratechangesforinterest-bearingfinancialliabilities(EURmillion),
31Dec.2013,atnominalvalue
lessthan
1to5
Over5years
Timeofinterestratechange
1year
yearsperiod
period
Total
Variable-ratefinancinginstruments
Commercialpaperloans
101.0
101.0
101.4
101.4
5.0
5.0
Bankloans
Financeleaseliabilities
Fixed-ratefinancinginstruments
Bonds
161.7
1.0
120.0
Bankloans
Loansfrompensionfunds
Capitalloans
Financeleaseliabilities
0.2
600.0
761.7
120.0
1.0
0.2
10.3
130.3
19.9
30.2
370.3
619.9
1,120.5
TheGroup'sinterest-bearingfinancialassetsasat31December2013consistofcommercialpapersandbankdepositsamoutedtoEUR
65.0millionandcashinbankamountedtoEUR72.8million.
Thesensitivityanalysisincludesfinancialliabilitiesatthebalancesheetdate.Thechangeintheinterestratelevelisassumedtobe
onepercentagepoint.Theinterestratepositionisassumedtoincludeinterest-bearingfinancialliabilitiesandreceivables,aswellas
interestrateswaps,onthebalancesheetdateassumingthatallcontractswouldbevalidunchangedfortheentireyear.
2013
2012
EURmillion
Changeininterestratelevel+/-1%
Exchangeraterisk
Income
statement
+/-1.5
Shareholders’
equity
Income
statement
+/-2.0
Shareholders’
equity
MostofElisaGroup’scashflowsaredenominatedineuro,whichmeansthatthecompany'sexposuretoexchangeraterisk(economic
riskandtransactionrisk)isminor.Exchangeraterisksassociatedwithbusinessarisefrominternationalinterconnectiontrafficand,to
aminorextent,acquisitions.ThemostimportantcurrenciesaretheInternationalMonetaryFund'sSpecialDrawingRights(SDR),the
USdollar(USD)andtheSwedishkrona(SEK),theimpactofothercurrenciesisnotmaterial.Noexchangeratehedgingwasused
duringtheperiod.Thecompany'sfinancialliabilitiesdonotinvolveexchangeraterisk.
Thetranslationdifferenceexposureforforeignsubsidiariesincludedinconsolidatedequityisminor.Thetranslationdifference
exposurehasnotbeenhedgedduringtheperiod.
Foreignexchangeexposure31December2013
EURmillion
Tradereceivables
Tradepayables
SDR
USD
2.9
0.1
3.2
2.1
SEK
0.5
0.1
Foreignexchangeexposure31December2012
EURmillion
SDR
USD
Tradereceivables
Tradepayables
3.3
0.4
5.1
1.3
SEK
0.2
0.1
AchangeoftwentypercentagepointsinSDRwouldimpactconsolidatedprofitbeforetaxbyEUR+/-0.1(+/-0.4)million,inUSDEUR
+/-0.4(+/-0.2)millionandinSEKEUR+/-0.1(+/-0.0)million.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
77
FINANCIALS
ELISAANNUALREPORT2013
Liquidityrisk
TheobjectiveofliquidityriskmanagementistoensuretheGroup’sfinancinginallcircumstances.Thecompany'smostimportant
financingarrangementisanEMTNprogrammeofEUR1,000million,underwhichbondshavebeenissuedforEUR761.7million.The
companyalsohasaEUR250millioncommercialpaperprogrammeandcommittedrevolvingcreditfacilityofEUR300million.Boththe
EUR170millionrevolvingcreditfacilityvaliduntil3June2018andtheEUR130millionrevolvingcreditfacilityvaliduntil
21November2014wereundrawnasof31December2013.ThemarginofthelimitsisdeterminedbytheGroups'creditrating.
Aspartofensuringitsfinancing,Elisahasacquiredinternationalcreditratings.Moody’sInvestorServiceshaveratedElisa’slong-term
commitmentsasBaa2(outlookstable).Standard&Poor'shasratedthecompany'slong-termcommitmentsasBBB(outlookstable)and
short-termcommitmentsasA-2.
Cashinhandandatbanks,andunusedcommittedlimits
EURmillion
2013
2012
Cashandbank
137.8
39.8
Creditlimits
300.0
300.0
437.8
339.8
CashandbankaswellasunusedcommittedcreditlimitsdeductedbycommercialpapersissuedbyElisaamountedtoEUR336.8
(244.3)millionon31December2013.
Contract-basedcashflowsforfinancialliabilitiesarepresentedunderNote30.
Creditrisk
Financialinstrumentscontainanelementofriskoftherespectivepartiesfailingtofulfiltheirobligations.Liquidassetsareinvested
withinconfirmedlimitstoinvestmenttargetswithagoodcreditrating.Investmentsandthelimitsspecifiedforthemarereviewed
annually,ormoreoftenifnecessary.DerivativecontractsareonlysignedwithFinnishandforeignbankswithgoodcreditratings.
Thebusinessunitsareliableforcreditriskassociatedwithaccountsreceivable.Theunitshavecreditpoliciespreparedinwritingthat
aremainlyconsistentwithuniformprinciples.Thecreditratingsofnewcustomersarereviewedfromexternalsourcesalwayswhen
sellingproductsorservicesinvoicedinarrears.Incaseofadditionalsalestoexistingcustomers,creditworthinessisreviewedonthe
basisofthecompany'sownaccounts.TheGroupmayalsocollectadvanceorguaranteepaymentsinaccordancewithitscreditpolicy.
CreditriskconcentrationsinaccountsreceivableareminorastheGroup'scustomerbaseiswide;the10largestcustomersrepresent
approximately5percentofcustomerinvoicing.EUR7.1(7.6)millionofuncertainreceivableshavebeendeductedfromconsolidated
accountsreceivable.TheGroup’spreviousexperienceinthecollectionoftradereceivablescorrespondstotherecognised
impairment.FurthermoretheGroupsellsthetradereceivablesofdefinedcustomergroupsthatareoverduebyanaverageof136
days.Basedonthesefacts,themanagementisconfidentthattheGroup’stradereceivablesdonotinvolveanysubstantialcreditrisk.
Themaximumcreditriskasat31December2013isthevalueoftradereceivablesEUR283.8million.Theagedistributionoftrade
receivablesisdescribedinNote23.
Otherpricerisk
Elisa'sfinancialassetsavailable-for-saleconsistmostlyofpubliclylistedsharesinComptelCorporation.Thesensitivityanalysis
includessharesatthebalancesheetdate.Theanalysisassumesachangeof20percentagepointsintheshareprice.
2013
2012
EURmillion
ChangeinComptelshareprice+/20%
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
Income
Shareholders’
Income
Shareholders’
statement
equity
statement
equity
+/-0
+/-1.4
+/-0
+/-1.1
78
FINANCIALS
ELISAANNUALREPORT2013
Notesonthecapitalstructure
Elisa'scapitalconsistsofequityandliabilities.Todevelopitsbusiness,Elisamaycarryoutexpansioninvestmentsandacquisitions
thatmaybefinancedthroughequityorthroughliabilitiesdirectlyorindirectly.
Thetargetforthecompany'sequityratioisover35percentandnetdebt/EBITDA1.5to2.0.Thenetdebt/EBITDAindicatoris
calculatedexclusiveofnon-recurringitems.
Thecompany'sdistributionofprofittoshareholdersconsistsofdividends,capitalrepaymentandpurchaseoftreasuryshares.
Effectiveprofitdistributionis80percentto100percentofprofitfortheperiod.Furthermore,additionalprofitdistributiontothe
shareholdersmayoccur.Whenproposingordecidingonthedistribution,theBoardtakesintoaccountthecompany'sfinancial
position,futurefinancingneeds,andthesetfinancialobjectives.
Capitalstructureandkeyindicators
EURmillion
2013
2012
Interest-bearingnetdebt
971.2
838.6
862.2
1,833.4
844.9
1,683.5
Totalequity
Totalcapital
Gearingratio
Netdebt/EBITDA
Equityratio
Availablesourcesoffinancing
112.6
2.0
37.3
99.3
1.7
42.3
Withregardtoequityfinancing,thecompany'sobjectiveistomaintainsufficientflexibilityfortheBoardofDirectorstoissueshares.
TheAnnualGeneralMeetingdecidestheamountoftheshareissueauthorisation.Theauthorisationhasbeenusedmainlyin
connectionwithmergersandacquisitions.
Shareholders’equity
2013
2012
Treasuryshares,1,000
Shareissueauthorisation,1,000
7,986
12,614
10,288
14,748
Maximumtotal,1,000(1
12,614
14,748
Shareprice
19.26
16.73
Total,EURmillion
242.9
246.7
Withregardtoliabilityfinancing,thecompanymaintainsloanprogrammesandcreditarrangementsthatallowquickissuance.The
arrangementsarecommittedandnon-committed,andallowissuancesfordifferentmaturities.
Debtcapital
2013
2012
Commercialpaperprogramme(non-committed)(2
149.0
154.5
Revolvingcredits(committed)(3
300.0
300.0
(4
238.3
463.3
EMTNprogramme(non-committed)
Total,EURmillion
687.3
917.8
Totalequityanddebtcapital
930.2
1,164.5
1)
Theauthorisationtoissuesharesat31December2013amountedtoamaximumof12,614,002shares.Thismaybeeffected
throughanissueofnewsharesorsaleoftreasuryshares.
2)
ThecommercialpaperprogrammeamountstoEUR250million,ofwhichEUR101.0millionwasinuseat31December2013.
3)ElisahastwocommittedrevolvingcreditfacilitiestoatotalofEUR300million.Bothfacilitieswereunusedat31December2013.
4)
ElisahasanEuropeanMediumTermNoteprogramme(EMTN)toatotalofEUR1,000million.EUR761.7millionwasinuseat
31December2013.Theprogramwasupdatedon14May2013anditisvalidforoneyearasoftheupdate.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
79
FINANCIALS
ELISAANNUALREPORT2013
35.Relatedpartytransactions
TheGroup'srelatedpartiesconsistoftheparentcompany,subsidiaries,associatesandjointventures,aswellasElisa'sBoardof
Directors,theCEOandtheExecutiveBoard.
TheElisaGroupstructureisasfollows31December2013:
TheparentcompanyoftheGroupisElisaCorporation.
Subsidiaries
Group's
ownership,%
Helsinki
100
AppelsiiniFinlandOy
Domicile
AredivOy
Oulu
62
BCCFinlandOy
EcositeOy
Vaasa
Espoo
100
100
ElisaEestiAs
Tallinn
100
ElisaHongKongLimited
ElisaRahoitusOy
HongKong
Helsinki
100
100
EniaOy
Helsinki
100
EpicTVSAS
FiasetOy
ChamonixMontBlanc
Helsinki
100
100
FoneticOy
Jyväskylä
100
GisforestOy
HelsinginNettiMediaOy
Kajaani
Helsinki
100
100
JMSGroupOy
KarelsatOy
Helsinki
Joensuu
100
100
KiinteistöOyRaisionLuolasto
Espoo
100
KiinteistöOyRinnetorppa
KiinteistöOyTapiolanLuolasto
Kuusamo
Espoo
80
100
KotkanTietoruutuOy
Kotka
100
KYMPOy
KympnetOy
Kotka
Kotka
100
100
KymtelOy
Kotka
100
LNSKommunikationAB
OptimiratkaisutOy
Stockholm
Kotka
100
100
PlanetmediaOy
Kotka
100
PreminetOy
OOOLNR
Helsinki
St.Petersburg
100
100
VideraLLC
St.Petersburg
100
SulakeCorporationOy
SulakeSuomiOy
Helsinki
Helsinki
100
100
SulakeDanmarkAbs
Copenhagen
100
SulakeNorgeAB
SulakeSverigeAB
Oslo
Stockholm
100
100
SulakeUKLtd
TTGSulakeBV
London
Amsterdam
100
100
SulakeSchwitzerlandGmbH
Zürich
100
SulakeDeutschlandGmbH
SulakeItaliaS.R.L
Kelkheim
Roma
100
100
HabboHotelS.L(Spain)
Madrid
100
SulakeBrasil
SulakeInc
SaoPaolo
LosAngeles
100
100
SulakeSingaporePteLtd
Singapore
100
TampereenTietoverkkoOy
TansecOy
Tampere
Kotka
63
100
TelcontOy
Kotka
67
VideraOy
Oulu
69
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
80
FINANCIALS
ELISAANNUALREPORT2013
OneConferenceAb
VideraNorgeAs
Solna
Oslo
XenexTelecomOy
69
69
Tuusula
69
ViskeOy
Jointventures
Raahe
100
KiinteistöOyBrahenkartano
Associates
FNE-FinlandOy
Kontiolahti
46
HelmivisioOy
Kotka
40
KiinteistöOyHelsinginSentnerikuja6
KiinteistöOyHerrainmäenLuolasto
Helsinki
Tampere
50
50
KiinteistöOyKiihtelysvaaranOravanpyörä
Joensuu
25
KiinteistöOyLauttasaarentie19
KiinteistöOyRuneberginkatu43
Helsinki
Helsinki
42
30
KiinteistöOyStenbäckinkatu5
SofteraOy
Helsinki
Helsinki
40
34
SuperHeadEndFinlandOy
Helsinki
36
Turku
60
SuomenNumerotNUMPACOy
Helsinki
33
SignificantchangesinownershipofsubsidiariesarepresentedinNotes2.and3.andchangesinownershipofassociatesinNote16.
OtherchangesintheGroupstructurearedescribedbelow:
VideraLLCwasfoundedon21March2013.ThewhollyownedsubsidiarywasconsolidatedwiththeGroupsincethefoundation.
On31December2013PPOYhtiötOy,TelekareliaOyandKymenPuhelinOyweremergedintoElisaCorporation.Themergersdonot
affecttheconsolidatedfinancialstatements.
SulakeFranceEURLwasliquidatedon14May2013,SulakeAustraliaPtyLtdwasliquidatedon7August2013,SulakeCanadaIncwas
liquidatedon31August2013andSulakeCorporationChinaRep.wasliquidatedon19December2013.Theliquidationsdonotaffect
theconsolidatedfinancialstatements.
Thetransactionscarriedoutwithrelatedparties:
2013
EURmillion
Associatesandjointventures
2012
EURmillion
Sales
0.2
Sales
Purchases
2.2
Purchases
Receivables
0.1
Receivables
Associatesandjointventures
0.6
EmployeebenefitstokeymanagementarepresentedunderNote7andcontingentliabilitiesonbehalfofassociatedcompanies
underNote33.
0.9
36.Eventsafterthebalancesheetdate
Therehavebeennosignificanteventsafterthebalancesheetdate.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
81
FINANCIALS
ELISAANNUALREPORT2013
KeyindicatorsdescribingtheGroup’sfinancialdevelopment
INCOMESTATEMENT
Revenue,EURmillion
Changeofrevenue,%
EBITDA(EURmillion)
EBITDAas%ofrevenue
2013
1,547
-0.4
491
31.7
2012
2011
1,553
1.5
501
32.3
1,530
4.6
506
33.1
EBIT,EURmillion
EBITas%ofrevenue
Profitbeforetax,EURmillion
Profitbeforetaxas%ofrevenue
Returnonequity(ROE),%
281
18.1
255
16.5
22.9
299
19.2
269
17.3
24.7
295
19.3
265
17.3
24.1
Returnoninvestment(ROI),%
Researchanddevelopmentcosts,EURmillion
15.3
10
17.4
9
17.9
5
0.6
99.3
1.0
42.3
0.3
Gearingratio,%
Currentratio
Equityratio,%
0.6
112.6
1.0
37.3
93.8
0.8
42.3
Non-interestbearingliabilities,EURmillion
Interestbearingnetdebt
353
971.2
285
838.6
312
788.0
Balancesheettotal,EURmillion
INVESTMENTSINSHARES
Purchasesofshares,EURmillion
CAPITALEXPENDITURES
Investments,EURmillion
2,324
150
240
2,009
193
1,999
0
197
Researchanddevelopmentcostsas%ofrevenue
BALANCESHEET
Investmentsas%ofrevenue
15.5
12.5
PERSONNEL
Averagenumberofemployeesduringtheperiod
4,320
3,973
Revenue/employee,EUR1,000
358
391
Theorderbookisnotshownbecausesuchinformationisimmaterialowingtothenatureofthecompany’sbusiness.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
12.9
3,757
407
82
FINANCIALS
ELISAANNUALREPORT2013
Formulaeforfinancialsummaryindicators
EBITDA
EBIT+depreciation,amortisationandimpairment
Profitfortheperiod+incometaxes+financialincomeandexpense
+shareofassociatedcompanies'profit
Profitfortheperiod
EBIT
Returnonequity(ROE),%
Returnoninvestment(ROI),%
x100
Totalshareholders'equity(onaverageduringtheyear)
Profitbeforetaxes+interestandotherfinancialexpenses
x100
Totalequity+interestbearingliabilities(onaverageduringtheyear)
Interest-bearingliabilities-Cashandcashequivalentsandfinancialassetsat
Gearingratio,%
fairvaluethroughprofitorloss
x100
Totalshareholders’equity
Currentratio
Equityratio,%
Currentassets
Currentliabilities-advancepaymentsreceived
Totalshareholders’equity
Balancesheettotal-advancepaymentsreceived
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
x100
83
FINANCIALS
ELISAANNUALREPORT2013
Per-shareindicators(1
Sharecapital,EUR
Numberofsharesatyear-end
Averagenumberofshares
Numberofsharesatyear-end,diluted
Averagenumberofshares,diluted
2013
157,269,132
159,349,030
157,269,132
156,548,402
157,016,312
156,685,047
155,878,493
156,528,070
156,178,823
3,069
2,625
2,520
1.25
1.33
1.29
1.30(5
104.0
5.41
1.30
1.30
97.5
5.37
100.6
5.36
14.8
12.6
12.5
Payoutratio,%
Equitypershare,EUR
P/Eratio
(2
6.7
Percentageofsharestraded
7.8
Closingpriceatyear-end,EUR
Lowestprice,EUR
Highestprice,EUR
2011
83,033,008.00
156,227,740
Dividendpershare,EUR
Totaltradingvolume,1,000shares
83,033,008.00
156,879,666
Earningspershare(EPS),EUR
TradingofsharesinNASDAQOMXHelsinki(3
2012
83,033,008.00
159,349,030
Marketcapitalisation,EURmillion(2
Effectivedividendyield,%
ShareperformanceinNASDAQOMXHelsinki
Meanprice,EUR
8.1
16.15
16.61
15.41
19.26
13.37
19.49
16.73
14.84
17.97
16.13
12.70
17.00
128,100
116,534
121,878
77
70
73
(4
1)ThenumbersofsharesarepresentedwithouttreasurysharesheldbyElisaGroup.Treasuryshareshavebeenaccountedforinthe
calculationoftheindicators.
2)
Calculatedonthebasisoftheclosingpriceonthelasttradingdayoftheyear.
3)Elisashareisalsotradedinalternativemarketplaces.AccordingtotheFidessaFragmentationreport,thetradingvolumesinthese
marketsin2013wereapproximately93(104)percentofNASDAQOMXHelsinki.
4)Calculatedinproportiontotheaveragenumberofsharesfortheperiod.
5)
TheBoardofDirectorsproposesadividendpaymentofEUR1.30pershare.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
84
FINANCIALS
Formulaeforper-shareindicators
ELISAANNUALREPORT2013
Earningspershare(EPS)
Dividendpershare(1
Effectivedividendyield,%
Payoutratio,%(1
Equitypershare
P/Eratio(Price/Earnings)
Profitfortheperiodattributabletotheequityholdersoftheparent
Averagenumberofsharesduringtheperiodadjustedforissues
Dividendadjustedforissues
Numberofsharesatthebalancesheetdateadjustedforissues
Dividendpershare
x100
Sharepriceatthebalancesheetdateadjustedforissues
Dividendpershare
x100
Earningspershare
Equityattributabletoequityholdersoftheparent
Numberofsharesatthebalancesheetdateadjustedforissues
Sharepriceonthebalancesheetdate
Earningspershare
1)
Thecalculationformulasapplyalsotothecapitalrepaymentindicators.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
85
FINANCIALS
ELISAANNUALREPORT2013
Incomestatement,parentcompany,FAS
Note
2013
2012
Revenue
Changeininventories
Otheroperatingincome
Materialsandservices
Personnelexpenses
Depreciationandamortisation
Otheroperatingexpenses
Operatingprofit
1
2
3
4
5
1,305.9
0.0
5.1
-563.0
-192.2
-190.8
-142.5
222.6
1,374.1
-0.2
6.4
-615.8
-179.6
-194.2
-150.3
240.4
Financialincomeandexpenses
7
-25.7
-28.5
Profitbeforeextraordinaryitems
Extraordinaryitems
8
196.9
18.2
211.8
9.1
215.1
220.9
9
10
-11.2
-59.2
0.2
-56.2
144.7
164.8
EURmillion
Profitafterextraordinaryitems
Appropriations
Incometaxes
Profitfortheperiod
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
86
FINANCIALS
ELISAANNUALREPORT2013
Balancesheet,parentcompany,FAS
EURmillion
Note
31Dec.2013
31Dec.2012
ASSETS
Fixedassets
Intangibleassets
Tangibleassets
Investments
11
11
12
478.8
558.7
341.6
447.8
490.6
283.8
Currentassets
Inventories
Non-currentreceivables
Currentreceivables
Financialsecurities
Cashandbank
13
14
15
1,379.2
42.0
93.1
301.9
43.0
82.7
1,222.2
48.4
61.0
276.2
29.0
562.6
414.7
TOTALASSETS
1,941.8
1,636.9
16
Sharecapital
Treasuryshares
83.0
-148.1
83.0
-194.0
Contingencyreserve
Reserveforinvestednon-restrictedequity
3.4
77.8
3.4
50.8
Retainedearnings
Profitfortheperiod
287.6
144.7
367.2
164.8
Accumulatedappropriations
448.5
27.4
475.4
Provisionsforliabilitiesandcharges
Liabilities
Non-currentliabilities
17
18
14.2
917.7
3.1
689.3
Currentliabilities
19
533.9
1,451.6
469.1
1,158.4
1,941.8
1,636.9
SHAREHOLDERS’EQUITYANDLIABILITIES
Shareholders’equity
TOTALSHAREHOLDERS'EQUITYANDLIABILITIES
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
87
FINANCIALS
ELISAANNUALREPORT2013
Cashflowstatement,parentcompany,FAS
EURmillion
Cashflowfromoperatingactivities
Profitbeforeextraordinaryitems
Adjustments:
Depreciationandamortisation
Otherincomeandexpenseswithnopaymentrelation
Financialincome(-)andexpense(+)
Gains(-)andlosses(+)onthedisposaloffixedassets
Gains(-)andlosses(+)onthedisposalofinvestments
Changeinprovisionsintheincomestatement
Cashflowbeforechangeinworkingcapital
Increase(+)/decrease(-)inworkingcapital
Cashflowbeforefinancialitemsandtaxes
Dividendsreceived
Investmentsinsharesandotherfinancialassets
Proceedsfromdisposalofsharesandotherfinancialassets
Loansgranted
Repaymentofloanreceivables
Netcashflowusedininvestingactivities
Cashflowafterinvestingactivities
Cashflowfromfinancingactivities
Proceedsfromlong-termborrowings
Repaymentoflong-termborrowings
Changeinshort-termborrowings
Proceedsfromincreaseinreserveforinvestednon-restrictedequity
Proceedsfromthesaleoftreasuryshares
Dividendspaid
Netcashflowusedinfinancingactivities
Changeincashandcashequivalents
Cashandcashequivalentsatthebeginningoftheperiod
Cashandcashequivalentsreceivedthroughbusinesscombinationsand
mergers
Cashandcashequivalentsattheendoftheperiod
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
196.9
Interestreceived
Interestpaid
Incometaxespaid
Netcashflowfromoperatingactivities
Cashflowfrominvestingactivities
Capitalexpenditure
Proceedsfromdisposaloftangibleandintangibleassets
2013
2012
211.8
190.8
7.5
25.7
-0.8
0.0
10.7
430.7
-4.7
426.0
1.6
194.2
28.5
-0.6
0.5
-0.7
433.8
-42.8
391.0
1.8
9.1
8.1
-34.4
-60.1
342.1
-39.1
-66.1
295.7
-174.0
1.4
-162.7
1.3
-125.0
0.0
-6.8
0.6
-24.7
1.0
-14.5
10.2
-321.3
20.8
378.0
-79.5
-44.3
2.9
4.6
-202.6
59.1
79.8
29.0
16.8
125.7
-171.9
123.7
150.9
-99.6
4.4
-203.0
-147.3
-23.5
52.6
29.0
88
FINANCIALS
ELISAANNUALREPORT2013
Notestothefinancialstatementsoftheparentcompany
Accountingprinciples
ElisaCorporation’sfinancialstatementshavebeenpreparedinaccordancewiththeaccountingprinciplesbasedonFinnish
accountinglegislation.
Comparabilitywithpreviousyearfigures
Thefollowingshouldbeconsideredwhencomparingcurrentperiodwithpreviousperiodfigures:
•mergerlossesofEUR26.7millionarerecognisedasgoodwillin2013and
•amergerprofitofEUR9.7millionareincludedwithinextraordinaryitemsfor2012.
Itemsdenominatedinforeigncurrencies
Transactionsdenominatedinaforeigncurrencyarerecordedattheratesofexchangeprevailingatthedatesoftransactions.Asatthe
year-endassetsandliabilitiesdenominatedinaforeigncurrencyarevaluedattheaverageratequotedbytheEuropeanCentralBank
asatyear-end.
Fixedassets
Thecarryingvalueofintangibleandtangibleassetsisstatedatcostlessaccumulateddepreciation,amortisationandimpairments.
Internallygeneratedfixedassetsaremeasuredatvariablecosts.
Thedifferencebetweendepreciationaccordingtoplanandtotaldepreciationpresentedisunderappropriationsintheparent
company’sincomestatementandtheaccumulateddepreciationdifferenceispresentedunderaccumulatedappropriationsinthe
shareholders’equityandliabilitiesinthebalancesheet.Thenegativedepreciationdifferencetransferredfrommergedcompaniesis
recognisedasincome.Depreciationaccordingtoplanisrecognisedonastraight-linebasisovertheusefullivesfromtheoriginal
acquisitioncost.
Theusefullivesaccordingtoplanforthedifferentassetgroupsare:
Intangiblerights
3–5years
Otherexpenditurewithlong-termeffects
Buildingsandconstructions
5–10years
25–40years
Machineryandequipmentinbuildings
Telephoneexchanges
Cablenetwork
Telecommunicationterminals
Othermachinesandequipment
10–25years
6–10years
8–15years
1–4years
3–5years
Inventories
Inventoriesarestatedatthelowestofvariablecosts,acquisitionpriceorthelikelydisposal,orrepurchaseprice.Costisdetermined
usingaweightedaverageprice.
Marketablesecurities
Investmentsinmoneymarketfundsarerecognizedattherepurchaseprice.Investmentsincertificatesofdepositandcommercial
paperarerecognisedattheacquisitioncost,asthedifferencebetweentherepurchasepriceandcostofacquisitionisnotsignificant.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
89
ELISAANNUALREPORT2013
FINANCIALS
Recognitionprinciples
Salesarerecognisedasincomeatthetimeoftransferandincomefromservicesisrecognisedoncetheserviceshavebeenrendered.
Interconnectionfeesthatareinvoicedfromthecustomerandpaidassuchtoothertelephonecompaniesarepresentedasa
deductionitemundersalesincome(FinnishAccountingStandardsBoard1995/1325).
Theprofitfromthesalesofbusinessoperations,sharesandfixedassets,subsidiesreceivedandrentalincomefrompremisesare
presentedunderotheroperatingincome.
Researchanddevelopment
Researchcostsarechargedtoexpenseontheincomestatement.Productdevelopmentexpensesarerecognisedinthebalancesheet
fromthedatetheproductistechnicallyfeasible,itcanbeutilisedcommerciallyandfuturefinancialbenefitisexpectedfromthe
product.Inothercases,developmentcostsarerecordedasanexpense.Developmentcostspreviouslyrecognisedasexpensesare
notcapitalisedlater.
Governmentgrantsforproductdevelopmentprojectsandthelikearerecognisedunderotheroperatingincomewhentheproduct
developmentcostsarerecognisedasannualexpenses.Ifagovernmentgrantisassociatedwithcapitalisedproductdevelopment
costs,thegrantreducesthecapitalisedacquisitioncost.
Futureexpensesandlosses
Probablefutureexpensesandlossesrelatedtothecurrentorapriorfinancialperiodwithoutacorrespondingincomearerecognised
intheincomestatement.Suchitemsarerecognisedinthebalancesheetunderprovisionsifareliableestimateoftheamountor
timingoftheobligationcannotbemade.Otherwisetheobligationisrecognisedwithinaccruals.
Extraordinaryincomeandexpenses
ExtraordinaryitemsincludegainsandlossesrelatedtoGroupcontributionsandmergers.
Incometaxes
Incometaxesforthefinancialyeararerecognisedintheincomestatement.Nodeferredtaxliabilitiesandreceivableshavebeen
recognisedinthefinancialstatements.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
90
FINANCIALS
ELISAANNUALREPORT2013
1.Revenue
EURmillion
Sales
Interconnectionfeesandotheradjustments
Geographicaldistribution
Finland
RestofEurope
Othercountries
2013
1,394.8
-88.9
1,305.9
1,273.5
29.3
3.2
1,305.9
2012
1,496.9
-122.8
1,374.1
1,332.9
36.3
4.9
1,374.1
2.Otheroperatingincome
EURmillion
2013
2012
Gainondisposaloffixedassets
1.2
0.6
Others(1
3.9
5.8
5.1
6.4
1)Otheroperatingincomeitemsmainlyincluderentalincomeofrealestate,incomefrompatents,managementfeeincomecharged
fromsubsidiariesandmiscellaneusotheroperatingincome.
3.Materialsandservices
EURmillion
Materials,suppliesandgoods
2013
2012
155.3
13.4
179.2
-13.6
Externalservices
168.7
394.3
165.7
450.2
563.0
615.8
Purchases
Changeininventories
4.Personnelexpenses
EURmillion
Salariesandwages
Pensioncosts
Otherstatutoryemployeecosts
Personnelonaverage
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
2013
157.4
28.2
6.6
192.2
2,722
2012
146.4
26.9
6.3
179.6
2,691
91
FINANCIALS
ELISAANNUALREPORT2013
CEOremuneration
2013
2012
Fixedsalary
513,300.00
531,143.23
Performance-basedbonus
154,226.16
180,091.34
21,107.98
18,975.77
EUR
Fringebenefits
497,587.24
Share-basedpayments(1
688,634.14
1,227,797.58
1)ElisaCorporationchangedthemeasurementperiodoftheshare-basedincentiveplanto3yearsin2012.Accordingly,therewereno
paymentsundertheplanin2013.
InaccordancewithemployeespensionsactandonthebasisofCEOremuneration,EUR178,000(152,000)inpensioncostshasbeen
recognisedinprofitorloss.TheCEOisentitledtoretirementattheageof60.SeeNote7totheconsolidatedfinancialstatements.
TheBoardofDirectors'remuneration
EUR
RistoSiilasmaa
2013
2012
78,500.00
74,000.00
115,000.00
105,000.00
67,000.00
79,000.00
66,000.00
75,000.00
AriLehtoranta
RaimoLind
LeenaNiemistö
EiraPalin-Lehtinen
29,500.00
MikaSalmi
65,000.00
JaakkoUotila
49,500.00
47,000.00
MikaVehviläinen
66,000.00
48,000.00
520,000.00
444,500.00
ThefollowingcompensationdeterminedbytheAnnualGeneralMeetingwaspaidtotheMembersoftheBoard:monthly
remunerationfeefortheChairmanEUR9,000permonth:monthlyremunerationfeefortheDeputyChairmanandchairmanofthe
CommitteeforAuditingEUR6,000permonth,monthlyremunerationfeefortheMembersEUR5,000permonth,andmeeting
remunerationfeeEUR500/meeting/participant.Themonthlyremunerationfees(deductedbytax)areusedtopurchaseElisashares
everyquarterend.Thesharesaresubjecttoatransferrestrictionof4yearsduringthetermofBoardservice.Therestrictionislifted
whenBoardmembershipends.
5.Depreciationandamortisation
EURmillion
Amortisationofintangibleassets
Depreciationoftangibleassets
SpecificationofdepreciationbybalancesheetitemsisincludedinNote11.
2013
59.8
131.0
190.8
2012
59.1
135.1
194.2
6.Auditorfees
EURmillion
2013
2012
Auditing
0.2
0.1
Taxadvisoryservices
Educationservices
Otherservices
0.1
0.1
0.2
0.1
0.1
0.2
0.5
0.5
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
92
FINANCIALS
ELISAANNUALREPORT2013
7.Financialincomeandexpenses
EURmillion
Interestincomeandotherfinancialincome
Dividendsreceived
fromGroupcompanies
fromothers
Interestcostsandotherfinancialexpenses
toGroupcompanies
2012
toothers
Impairment
1.1
0.5
1.6
Otherinterestandfinancialincome
fromGroupcompanies
fromothers
2013
0.9
0.9
1.8
0.5
8.6
0.3
8.0
9.1
10.7
8.3
10.1
-2.5
-2.3
-32.7
-1.2
-36.4
-33.1
-3.3
-38.7
-25.7
-28.5
8.Extraordinaryitems
EURmillion
Extraordinaryincome
Groupcontributionsreceived
Mergerprofit(1
Extraordinaryexpenses
Groupcontributionsgiven
1)ThemergerofElisaLinksat31December2012.
2013
2012
22.4
9.7
-4.2
18.2
-0.6
9.1
9.Appropriations
EURmillion
Changeindepreciationdifference
2013
-11.2
2012
0.2
10.Incometaxes
EURmillion
2013
2012
Regularbusiness
Extraordinaryitems
-63.5
4.5
-56.3
-0.2
Previousperiodtaxes
-0.1
-59.2
0.2
-56.2
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
93
FINANCIALS
ELISAANNUALREPORT2013
11.Intangibleandtangibleassets
2013
EURmillion
Acquisitioncost
at1Jan.2013
Transferredinmerger
Additions
Disposals
Reclassifications
Acquisitioncost
at31Dec.2013
Accumulatedamortisation
at1Jan.2013
Transferredinmerger
Amortisationforthe
period
Accumulatedamortisation
at31Dec.2013
Bookvalue
at31Dec.2013
2013
Accumulateddepreciation
at31Dec.2013
Bookvalue
at31Dec.2013
Intangible
rights
16.2
27.2
0.7
3.9
-0.1
0.1
2.6
-0.3
1.1
19.6
769.1
0.7
26.6
303.4
0.9
17.6
-0.1
3.4
796.4
325.2
Under
construction
Total
7.5
1,123.4
2.3
88.9
-0.6
1.8
38.2
0.0
-2.8
42.9
1,215.9
402.6
0.7
246.7
0.7
675.5
1.9
5.1
3.1
28.2
23.3
59.6
270.6
12.0
7.6
23.0
431.4
8.8
365.0
Tangibleassets
54.6
Landand
water
Buildings
andconstructions
Machinery
and
equipment
Other
tangible
assets
4.8
1.0
0.0
0.0
73.9
15.6
1.8
-0.5
0.9
2,300.1
153.7
122.8
-26.7
14.8
34.7
0.1
5.8
Other
intangible
assets
Goodwill
19.4
0.5
31.7
7.0
IntangibleAssets
Development
costs
EURmillion
Acquisitioncost
at1Jan.2013
Transferredinmerger
Additions
Disposals
Reclassifications
Acquisitioncost
at31Dec.2013
Accumulateddepreciation
at1Jan.2013
Transferredinmerger
Accumulateddepreciation
ofdisposalsand
reclassifications
Depreciationfortheperiod
5.8
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
91.6
2,564.8
38.8
7.8
1,872.5
100.8
-0.4
4.0
-26.6
126.5
50.2
41.4
2,073.1
491.7
42.9
Under
construction
21.7
1.0
13.8
0.5
33.8
0.9
19.0
478.8
2,435.2
171.4
138.3
-27.3
-1.8
-17.5
34.7
737.0
Total
33.3
0.0
2,715.8
1,944.6
108.6
-27.0
131.0
19.0
2,157.1
558.7
94
FINANCIALS
ELISAANNUALREPORT2013
IntangibleAssets
2012
EURmillion
Acquisitioncost
at1Jan.2012
Transferredinmerger
Additions
Disposals
Reclassifications
Acquisitioncost
at31Dec.2012
Accumulatedamortisation
at1Jan.2012
Transferredinmerger
Amortisationforthe
period
Accumulatedamortisation
at31Dec.2012
Bookvalue
at31Dec.2012
2012
Disposals
Reclassifications
Acquisitioncost
at31Dec.2012
Accumulateddepreciation
at1Jan.2012
Transferredinmerger
Accumulateddepreciation
ofdisposalsand
reclassifications
Depreciationfortheperiod
Accumulateddepreciation
at31Dec.2012
Bookvalue
at31Dec.2012
Intangible
costs
rights
6.0
2.0
22.9
0.5
5.3
3.8
3.0
16.2
0.0
16.4
0.3
3.5
2.7
7.0
9.3
19.4
Other
intangible
Under
Goodwill
assets
construction
Total
769.1
283.7
0.1
14.0
1,095.5
2.6
4.3
-10.7
25.2
-10.7
10.8
11.8
7.8
769.1
59.1
246.7
402.6
1.8
-0.6
1.0
-27.7
9.9
35.4
-0.5
3.9
4.8
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
38.8
35.1
2,300.1
1,763.6
6.3
-27.7
130.3
1,123.4
24.8
Machinery
and
equipment
28.2
0.0
73.9
7.5
614.8
1.6
-0.1
0.0
366.5
Tangibleassets
71.7
303.4
221.9
0.0
2,178.0
10.0
130.0
4.8
374.4
7.8
Buildings
andconstructions
4.8
27.2
2.2
1.3
Landand
water
EURmillion
Acquisitioncost
at1Jan.2012
Transferredinmerger
Additions
Development
1,872.5
427.6
56.7
Other
tangible
assets
26.9
32.4
5.9
0.8
33.3
1.4
21.7
447.8
2,316.0
10.0
137.6
-39.4
11.0
34.7
675.5
Total
-11.0
0.0
7.5
Under
construction
34.7
2,435.2
1,831.3
6.3
-28.2
135.1
21.7
1,944.6
490.6
95
FINANCIALS
ELISAANNUALREPORT2013
12.Investments
2013
EURmillion
Acquisitioncostat1Jan.2013
Transferredinmerger
Additions
Disposals
Reclassifications
Acquisitioncostat31Dec.2013
Impairmentat1Jan.2013
Shares
Receivables
Group
companies
Associated
companies
Other
companies
Group
companies
Total
255.1
67.7
123.3
-146.7
6.4
10.5
2.5
-6.4
22.8
3.8
0.0
0.0
2.2
0.9
8.2
-0.6
290.6
74.9
131.4
-147.3
305.9
-3.6
6.5
26.6
-3.3
10.7
349.7
-6.8
-1.2
-4.5
22.0
10.7
-1.2
-8.1
341.6
Additions
Impairmentat31Dec.2013
-3.6
Bookvalueat31Dec.2013
302.3
6.5
AlistofthesubsidiariesisavailableunderNote35intheconsolidatedfinancialstatements.
2012
Shares
Receivables
Group
Associated
Other
Group
companies
companies
companies
companies
Total
Acquisitioncostat1Jan.2012
261.0
4.1
29.1
2.3
296.6
Additions
Disposals
Reclassifications
Acquisitioncostat31Dec.2012
Impairmentat1Jan.2012
Additions
Impairmentat31Dec.2012
Bookvalueat31Dec.2012
6.1
-11.9
255.1
-3.6
-3.6
251.6
6.4
10.5
10.5
0.0
-6.4
22.8
-3.3
-3.3
19.5
0.0
-0.2
2.2
2.2
6.1
-12.1
290.6
-3.6
-3.3
-6.8
283.8
EURmillion
13.Inventories
EURmillion
2013
2012
Materialsandsupplies
Workinprogress
Finishedgoods
Otherinventories
13.4
0.0
28.1
0.5
15.3
0.1
32.1
0.0
Advancepayment
42.0
0.9
48.4
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
96
FINANCIALS
ELISAANNUALREPORT2013
14.Non-currentreceivables
EURmillion
ReceivablesfromGroupcompanies
Loanreceivables
Receivablesfromassociates
Loanreceivables
Receivablesfromothers
Loanreceivables
Tradereceivables
Prepaymentsandaccruedincome
Otherreceivables
(1
1)
2013
18.1
0.1
0.1
0.1
42.8
24.6
17.6
18.1
0.1
60.5
93.1
43.0
61.0
Breakdownofprepaymentandaccruedincome
Rentadvances
Transactioncostsandlossesrelatedtoloanissuance
2012
32.5
7.5
7.7
10.1
10.5
17.6
18.1
15.Currentreceivables
EURmillion
ReceivablesfromGroupcompanies
2013
2012
Loanreceivables
6.5
2.9
Tradereceivables
Prepaymentsandaccruedincome
1.4
2.5
2.1
2.2
26.7
37.1
0.1
7.3
0.0
240.7
0.9
246.8
18.7
19.4
5.3
264.7
1.8
267.9
301.9
276.2
6.0
1.6
6.1
0.8
Transactioncostsandlossesrelatedtoloanissuance
2.1
2.0
Taxes
Otherbusinessexpenseadvances
0.8
8.1
0.3
10.2
18.7
19.4
Otherreceivables
Receivablesfromassociates
Loanreceivables
Receivablesfromothers
Tradereceivables
Prepaymentsandaccruedincome(1
Otherreceivables
1)Breakdownofprepaymentandaccruedincome
Interest
Rentadvances
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
97
FINANCIALS
ELISAANNUALREPORT2013
16.Shareholders’equity
EURmillion
Sharecapitalat1Jan.
2013
2012
83.0
83.0
Sharecapitalat31Dec.
Treasurysharesat1Jan.
83.0
-194.0
83.0
-196.9
Share-basedpayment
Treasurysharesat31Dec.
Contingencyreserveat1Jan.
45.9
-148.1
3.4
2.9
-194.0
3.4
3.4
50.8
2.9
3.4
46.4
4.4
24.1
77.8
532.1
50.8
573.6
-204.0
0.7
-203.4
Contingencyreserveat31Dec.
Reserveforinvestednon-restrictedequityat1Jan.
Sharesubscriptiononthegroundsofstockoptions
Directedissue
Reserveforinvestednon-restrictedequityat31Dec.
Retainedearningsat1Jan.
Dividenddistribution
Withdrawalofdividendliabilities
Disposaloftreasuryshares
-1.4
-2.9
-39.9
287.6
144.7
367.2
164.8
448.5
287.6
-148.1
475.4
367.2
-194.0
Reserveforinvestednon-restrictedequity
Profitfortheperiod
77.8
144.7
50.8
164.8
362.1
389.0
Cancellationoftreasuryshares
Retainedearningsat31Dec.
Profitfortheperiod
Distributableearnings
Retainedearnings
Treasuryshares
17.Provisions
EURmillion
Provisionforunemploymentpensions
2013
2012
2.2
2.2
Otherprovisionsforliabilitiesandcharges(1
12.0
1.0
14.2
3.1
1)Otherprovisionsconsistofsalaries,includingrelatedstatutoryemployeecostsforemployeesnotrequiredtoworkduringtheir
severanceperiod,provisionforvacantpremisesandprovisionforotheroperatingexpenses.
ProvisionsofEUR4.7(0.6)millionwereusedin2013.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
98
FINANCIALS
ELISAANNUALREPORT2013
18.Non-currentliabilities
EURmillion
Interest-bearing
LiabilitiestoGroupcompanies
Otherliabilities
Liabilitiestoothers
2013
78.0
600.0
Loansfromfinancialinstitutions
Loansfrompensionfunds
209.4
1.0
Liabilitiestoothers
Accrualsanddeferredincome
Liabilitiesmaturingafterfiveyears
Bonds
Loansfromfinancialinstitutions
1)Breakdownofaccrualsanddeferredincome
Rentadvances
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
810.4
888.4
20.0
Otherliabilities(1
2012
Bonds
Non-interestbearing
461.7
220.0
681.7
681.7
9.4
7.6
29.4
917.7
7.6
689.3
600.00
9.4
300.00
54.5
7.6
99
FINANCIALS
ELISAANNUALREPORT2013
19.Currentliabilities
EURmillion
Interest-bearing
LiabilitiestoGroupcompanies
Groupaccount
Loansfrompensionfunds
Commercialpaper
Tradepayables
Accrualsanddeferredincome
Accrualsanddeferredincome(1
Otherliabilities
1)Breakdownofaccrualsanddeferredincome
79.6
161.7
11.4
0.1
304.0
75.0
95.5
170.5
250.1
9.6
0.0
4.4
0.6
13.2
10.2
Advancesreceived
Tradepayables
0.1
29.8
8.8
0.1
Otherliabilities
Liabilitiestoothers
79.6
0.1
101.0
274.2
2012
Bonds
Loansfromfinancialinstitutions
Non-interestbearing
LiabilitiestoGroupcompanies
29.8
Otherliabilities
Liabilitiestoothers
2013
3.8
118.6
3.9
109.1
53.5
53.2
40.8
216.7
42.5
208.7
229.9
533.9
219.0
469.1
Holidaypay,performance-basedbonusesandrelatedstatutoryemployee
costs
33.4
32.7
Interest
Directtaxes
16.3
0.2
15.9
0.7
Rentadvances
1.4
1.3
Advanceincome
Others
1.7
0.5
2.6
0.0
53.5
53.2
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
100
FINANCIALS
ELISAANNUALREPORT2013
20.Collateral,commitmentsandotherliabilities
Collateral
2013
2012
0.6
0.7
Guarantees
Businessmortgages
1.1
6.1
Realestatemortgages
1.2
0.1
0.6
9.7
0.5
1.2
2013
2012
0.4
0.5
1.0
0.3
1.2
0.5
1.7
2.2
EURmillion
Onbehalfofowncommitments
Bankdeposits
Pledgedsecurities
Onbehalfofothers
Guarantees
Leasingandrentalliabilities
EURmillion
Leasingliabilitiesontelecomnetworks(1
Duewithinoneyear
Duelaterthanoneyearanduptofiveyears
Duelaterthanfiveyears
Otherleasingliabilities
Duewithinoneyear
(2
6.7
5.0
6.1
22.7
0.1
11.1
28.3
38.1
25.9
51.3
86.3
152.6
97.9
175.0
177.1
188.3
Letterofcredit
Realestateleases(3
Duelaterthanfiveyears
12.3
3.7
Duelaterthanoneyearanduptofiveyears
Duelaterthanfiveyears
Duewithinoneyear
Duelaterthanoneyearanduptofiveyears
1)Consistsofcertainindividualisedmobilenetworkequipmentandaccessfeesforbackboneconnections.
2)Leasingliabilitiesconsistmainlyofleasesofcars,officeandITequipment.
3)
Realestateleasescompriserentalagreementsrelatingtobusiness,officeandtelecompremises.Realestateleasesarepresented
atnominalamounts.
Derivativeinstruments
EURmillion
2013
2012
Interestrateandcurrencyswaps
Nominalvalue
154.5
150.0
Fairvaluerecognisedinthebalancesheet
Realestateinvestments
0.0
0.4
VATrefundliabilityofrealestateinvestmentsisEUR31.6(27.7)millionat31December2013.
Environmentalcosts
Environmentalcostsdidnothaveanymaterialimpactontheresultfortheperiodorfinancialpositionduringthefinancialperiod.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
101
ELISAANNUALREPORT2013
FINANCIALS
Sharesandshareholders
1.Sharecapitalandshares
Thecompany’spaid-insharecapitalregisteredintheTradeRegisterstoodatEUR83,033,008attheendofthefinancialyear.
AccordingtotheArticlesofAssociation,theminimumnumberofsharesis50,000,000andthemaximumis1,000,000,000.Attheend
ofthefinancialyear,thenumberofElisaCorporationshareswas167,335,073,allwithinoneshareseries.
2.AuthorisationsoftheBoardofDirectors
On18March2010theAnnualGeneralMeetingauthorisedtheBoardofDirectorstodecideonanewshareissue,transferoftreasury
sharesownedbythecompanyand/orgrantingofspecialrightsreferredtoinChapter10,Section1oftheFinnishCompaniesAct
subjecttothefollowing:
TheauthorisationallowstheBoardofDirectorstoissueamaximumof15,000,000sharesinoneorseveralissues.Theshareissueand
sharesgrantedbyvirtueofspecialrightsareincludedintheaforementionedmaximumnumber.Themaximumnumberis
approximately9percentoftheentirestock.
TheshareissuecanbefreeorforconsiderationandcanbedirectedtotheCompanyitself.TheauthorisationentitlestheBoardto
makeadirectedissue.Theauthorisationmaybeusedformakingacquisitionsorimplementingotherarrangementsrelatedtothe
Company’sbusiness,tofinanceinvestments,toimprovethecompany’sfinancialstructure,orforotherpurposesdecidedbythe
BoardofDirectors.
TheBoardofDirectorsshallhavetherighttodecideonallothermattersrelatedtotheshareissue.Theauthorisationshallbeinforce
until30June2014anditannulstheauthorisationgivenbytheAnnualGeneralMeetingtotheBoardofDirectorson18March2009.
TheAnnualGeneralMeetingon25March2013authorizedtheBoardofDirectorstodecideontheacquisitionoftreasuryshares
subjecttothefollowing:
TheBoardofDirectorsmaydecidetoacquireorpledgeonnon-restrictedequityamaximumof5,000,000treasuryshares.The
acquisitionmaytakeplaceasoneorseveralblocksofshares.Theconsiderationpayableforthesharesshallnotbemorethanthe
ultimatemarketprice.InpurchasingtheCompany’sownsharesderivative,sharelendingandothercontractscustomaryinthecapital
marketmaybeconcludedpursuanttolawandtheapplicablelegalprovisions.TheauthorisationentitlestheBoardofDirectorstopass
aresolutiontopurchasethesharesbymakinganexceptiontothepurchaseofsharesrelativetothecurrentholdingsofthe
shareholders.
ThetreasurysharesmaybeusedformakingacquisitionsorimplementingotherarrangementsrelatedtotheCompany’sbusiness,to
improvetheCompany’sfinancialstructure,tobeusedaspartoftheincentivecompensationplan,orforthepurposeofotherwise
assigningorcancellingtheshares.
TheBoardofDirectorsshallhavetherighttodecideonallothermattersrelatedtothepurchaseoftheCompany’sownshares.The
authorisationisinforceuntil30June2014anditannulstheauthorisationgivenbytheAnnualGeneralMeetingtotheBoardof
Directorson4April2012.
3.Treasuryshares,shareissuesandcancellations
Atthebeginningofthefinancialperiod,Elisaheld10,288,116treasuryshares.
TheAnnualGeneralMeetingheldon25March2013authorisedtheBoardofDirectorstoacquireandassigntreasuryshares.The
authorisationappliestoamaximumof5,000,000treasuryshares.Onthebasisoftheauthorisation,Elisahasnotacquiredtreasury
shares.
AspartofthePPOacquisitionElisacarriedoutashareissuebasedonElisa'sBoard'sdecisionwhereCo-operativePPOdescribed
303,599ElisasharesheldbyElisa.Thesharesweretransferredon30April2013.On17October2013,Elisa'sBoardofDirectors
decidedtocancel2,000,000treasuryshares.Thecorrespondingcancellationinthenumberofshareshasbeenenteredintothe
FinnishTraderegisteron7November2013.Inaccordancewiththetermsandconditionsoftheshare-basedincentiveplan,1,526
sharesreturnedtoElisaastheresultoftheterminationofemploymentduring2013.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
102
FINANCIALS
ELISAANNUALREPORT2013
InconnectiontoKymenPuhelinOyandTelekareliaOymergerson31December2013Elisagaveasmergerconsideration1,830,413
newElisashares.
Attheendofthefinancialperiod,Elisaheld7,986,043treasuryshares.
TheElisasharesheldbyElisadonothaveanysubstantialimpactonthedistributionofholdingsandvotesinthecompany.They
represent4.77percentofallsharesandvotes.
4.Managementinterests
TheaggregatenumberofsharesheldbyElisa’sBoardofDirectorsandtheCEOon31December2013was109,192sharesandvotes,
whichrepresented0.07percentofallsharesandvotes.
5.Shareperformance
TheElisashareclosedatEUR19.26on31December2013.ThehighestquotationoftheyearwasEUR19.49andthelowestEUR
13.37.TheaveragepricewasEUR16.15.
Attheendofthefinancialyear,themarketcapitalisationofElisa’soutstandingshareswasEUR3,069million.
6.Quotationandtrading
TheElisashareisquotedontheMainListoftheNASDAQOMXHelsinkiwiththetickerELI1V.Theaggregatevolumeoftradingonthe
NASDAQOMXHelsinkibetween1Januaryand31December2013was128,099,876sharesforanaggregatepriceofEUR2,068
million.Thetradingvolumerepresented76,6percentoftheoutstandingnumberofsharesattheclosingofthefinancialyear.
7.Distributionofholdingbyshareholdergroupsat31December2013
1.Privatecompanies
Number
Proportion
ofall
ofshares
shares%
26,698,900
15.96
4,999,760
16,344,562
7,042,187
2.99
9.77
4.21
2.Financialandinsuranceinstitutions
3.Publiccorporations
4.Non-profitorganisations
5.Households
6.Foreign
7.Nomineeregistered
53,370,177
1,960,331
48,933,113
31.89
1.17
29.24
7,986,043
167,335,073
4.77
100.00
ElisaGroup
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
103
FINANCIALS
ELISAANNUALREPORT2013
8.Distributionofholdingbyamountat31December2013
Numberof
shareholders
%
Number
ofshares
%
36,003
183,057
6,388
15.94
81.05
2.83
1,900,279
39,747,455
15,420,482
1.14
23.75
9.22
10,001–100,000
100,001–1,000,000
1,000,001–
358
40
8
0.16
0.02
0.00
9,078,251
9,248,860
34,126,666
5.43
5.53
20.39
Nomineeregistered
225854
100.00
48,933,113
158,455,106
29.24
94.69
Sizeofholding
1–100
101–1,000
1,001–10,000
Inspecialaccounts,ElisaCommon
Clearingaccount(1
Sharestoberegistered2)
ElisaGroup
392,697
0.23
501,227
0.30
7,986,043
4.77
Issuedamount
167,335,073
100.00
1)SharesinCommonClearingaccountincludeshareswhichhavenotbeentransferredtotheshareowners'book-entryaccountsatthe
timeof,orsubsequentto,enteringthesharesintotheFinnishbook-entrysystem.
2)SharesissuedwiththemergerofTelekareliaOyandKymenPuhelinOythathasnotbeentransferredtoownersbook-entry
accounts.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
104
FINANCIALS
ELISAANNUALREPORT2013
9.Largestshareholdersat31December2013
Name
1.SolidiumOy
2.VarmaMutualPensionInsuranceCompany
3.IlmarinenMutualPensionInsuranceCompany
4.SwissNationalBank
5.TheStatePensionFund
6.CityofHelsinki
7.KPYSijoitusLLC
8.NordeaFinnishEquityFund
9.TheSocietyofSwedishLiteratureinFinland
10.PensionFenniaMutualInsuranceCompany
11.NordeaNordicSmallCapFund
12.NordeaBankFinlandPLC
13.NordeaProSuomiFund
14.SigridJuseliusFoundation
15.DanskeInvestFinnishInstitutionalEquityFund
16.MandatumLifeUnit-linked
17.FolkhälsanSamfundet
18.Co-operativePPO
19.DanskeInvestFinnishEquityFund
20.CityofVantaa
ElisaGroup
ElisaPersonnelFund
KotkanPuhelinyhdistysPensionFund
ElisaCommonClearingaccount(1
Sharestoberegistered(2
Nomineeregistered
Shareholdersnotspecifiedhere
Numberof
shares
%
16,801,000
9,231,976
2,649,335
10.04
5.52
1.58
1,677,502
1,565,000
1,124,690
1,077,163
900,000
775,342
1.00
0.94
0.67
0.64
0.54
0.46
493,000
491,000
440,850
400,000
352,000
0.29
0.29
0.26
0.24
0.21
331,290
329,112
315,113
303,599
297,978
0.20
0.20
0.19
0.18
0.18
258,738
39,814,688
0.15
23.79
7,986,043
4.77
147,459
6,336
0.09
0.00
392,697
0.23
501,227
0.30
48,933,113
29.24
69,553,510
41.57
167,335,073
100.00
1)
SharesinCommonClearingaccountincludeshareswhichhavenotbeentransferredtotheshareowners'book-entryaccountsatthe
timeof,orsubsequentto,enteringthesharesintotheFinnishbook-entrysystem.
2)
SharesissuedwiththemergerofTelekareliaOyandKymenPuhelinOythathasnotbeentransferredtoownersbook-entry
accounts.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
105
ELISAANNUALREPORT2013
FINANCIALS
Dailypricedevelopment,closingpriceinEUR
Tradingvolume,sharespermonth(millions)
SharetradingvolumesarebasedonthetradesmadeinNASDAQOMXHelsinki.Elisashareisalsotradedin
alternativemarketplaces.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
106
FINANCIALS
ELISAANNUALREPORT2013
Board'sproposalconcerningthedisposalofprofits
Accordingtotheconsolidatedbalancesheetof31December2013,theparentcompany’sshareholders’equityisEUR
448,512,161.42ofwhichdistributablefundsaccountforEUR362,097,217.15.
Theparentcompany’sprofitfortheperiod1Januaryto31December2013wasEUR144,746,182.03.
TheBoardofDirectorsproposestotheGeneralMeetingofShareholdersthatthedistributablefundsbeusedasfollows:
•adividendofEUR1.30pershareshallbepaidforatotalofEUR207,153,739.00
•nodividendshallbepaidonsharesintheparentcompany’spossession
•EUR154,943,478.15shallberetainedinshareholders’equity.
SignaturestotheBoardofDirectors'reportandfinancial
statements
Helsinki,6February2014
RaimoLind
AriLehtoranta
LeenaNiemistö
ChairmanoftheBoardofDirectors
EiraPalin-Lehtinen
MikaSalmi
JaakkoUotila
MikaVehviläinen
Veli-MattiMattila
PresidentandCEO
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
107
ELISAANNUALREPORT2013
FINANCIALS
Auditor’sreport
TotheAnnualGeneralMeetingofElisaCorporation
Wehaveauditedtheaccountingrecords,thefinancialstatements,thereportoftheBoardofDirectors,andtheadministrationofElisa
Corporationfortheyearended31December2013.Thefinancialstatementscomprisetheconsolidatedstatementoffinancial
position,incomestatement,statementofcomprehensiveincome,statementofchangesinequityandstatementofcashflows,and
notestotheconsolidatedfinancialstatements,aswellastheparentcompany’sbalancesheet,incomestatement,cashflow
statementandnotestothefinancialstatements.
ResponsibilityoftheBoardofDirectorsandthePresidentandCEO
TheBoardofDirectorsandthePresidentandCEOareresponsibleforthepreparationofconsolidatedfinancialstatementsthatgivea
trueandfairviewinaccordancewithInternationalFinancialReportingStandards(IFRS)asadoptedbytheEU,aswellasforthe
preparationoffinancialstatementsandthereportoftheBoardofDirectorsthatgiveatrueandfairviewinaccordancewiththelaws
andregulationsgoverningthepreparationofthefinancialstatementsandthereportoftheBoardofDirectorsinFinland.TheBoardof
directorsisresponsiblefortheappropriatearrangementofthecontrolofthecompany’saccountsandfinances,andthePresidentand
CEOshallseetoitthattheaccountsofthecompanyareincompliancewiththelawandthatitsfinancialaffairshavebeenarrangedina
reliablemanner.
Auditor’sResponsibility
Ourresponsibilityistoexpressanopiniononthefinancialstatements,ontheconsolidatedfinancialstatementandonthereportof
theBoardofDirectorsbasedonouraudit.TheAuditingActrequiresthatwecomplywiththerequirementsofprofessionalethics.We
conductedourauditinaccordancewithgoodauditingpracticeinFinland.Goodauditingpracticerequiresthatweplanandperform
theaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsandthereportoftheBoardofDirectorsarefree
frommaterialmisstatement,andwhetherthemembersoftheBoardofDirectorsoftheparentcompanyorthePresidentandCEOare
guiltyofanactornegligencewhichmayresultinliabilityindamagestowardsthecompanyorhaveviolatedtheLimitedLiability
CompaniesActorthearticlesofassociationofthecompany.
Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresinthefinancialstatementsand
thereportoftheBoardofDirectors.Theproceduresselecteddependontheauditor’sjudgment,includingtheassessmentofthe
risksofmaterialmisstatement,whetherduetofraudorerror.Inmakingthoseriskassessments,theauditorconsidersinternal
controlrelevanttotheentity’spreparationoffinancialstatementsandreportoftheBoardofDirectorsthatgiveatrueandfairviewin
ordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopiniononthe
effectivenessofthecompany’sinternalcontrol.Anauditalsoincludesevaluatingtheappropriatenessofaccountingpoliciesused
andthereasonablenessofaccountingestimatesmadebymanagement,aswellasevaluatingtheoverallpresentationofthefinancial
statementsandthereportoftheBoardofDirectors.
Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.
Opinionontheconsolidatedfinancialstatements
Inouropinion,theconsolidatedfinancialstatementsgiveatrueandfairviewofthefinancialposition,financialperformance,and
cashflowsofthegroupinaccordancewithInternationalFinancialReportingStandards(IFRS)asadoptedbytheEU.
Opiniononthecompany’sfinancialstatementsandthereportoftheBoardofDirectors
Inouropinion,thefinancialstatementsandthereportoftheBoardofDirectorsgiveatrueandfairviewofboththeconsolidatedand
theparentcompany’sfinancialperformanceandfinancialpositioninaccordancewiththelawsandregulationsgoverningthe
preparationofthefinancialstatementsandthereportoftheBoardofDirectorsinFinland.TheinformationinthereportoftheBoard
ofDirectorsisconsistentwiththeinformationinthefinancialstatements.
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
108
ELISAANNUALREPORT2013
FINANCIALS
Otheropinions
Wesupporttheadoptionofthefinancialstatements.TheproposalbytheBoardofDirectorsregardingthetreatmentofdistributable
fundsisincompliancewiththeLimitedLiabilityCompaniesAct.WesupportthattheBoardofDirectorsoftheparentcompanyandthe
PresidentandCEObedischargedfromliabilityforthefinancialperiodauditedbyus.
Helsinki,February6,2014
KPMGOYAB
EsaKailiala
AuthorizedPublicAccountant
ThisreportisgeneratedaccordingtoElisa’sonlineannualreport2013.
Pleasevisitwww.elisa.fi/annualreport-2013forthefullonlinereport.
109