KONE Corporation's financial statement bulletin 2009
(Thomson Reuters ONE) - KONE Corporation, stock exchange release, January 26, 2010 at 12:30 p.m. EETKONE 2009October-December 2009: Strong year-end- In October-December 2009, orders received totaled EUR 813.5 (10-12/2008:845.2) million. Orders received declined by 3.8% at historical exchange rates,but increased by 0.3% at comparable exchange rates.- Net sales decreased by 0.3% to EUR 1,427 (1,432) million. At comparableexchange rates it grew by 2.3%.- Operating income was EUR 202.7 (189.2) million or 14.2% (13.2%) of net sales.- Cash flow was exceptionally strong at EUR 198.2 (88.5) million.January-December 2009: Overall good performance- In January-December 2009, orders received totaled EUR 3,432 (2008: 3,948)million. Orders received declined by 13.0%, or 12.7% at comparable exchangerates. At the end of December 2009, the order book was EUR 3,309 (3,577)million.- Net sales increased by 3.1% to EUR 4,744 (4,603) million. At comparableexchange rates, the growth was 3.7%.- Operating income, excluding a one-time restructuring cost, was EUR 600.3(558.4) million or 12.7% (12.1%) of net sales. The operating income, includingthe one-time restructuring cost of EUR 33.6 million related to the fixed costadjustment program, was EUR 566.7 million. Earnings per share were 1.84 (1.66).- Cash flow was exceptionally strong at EUR 825.1 (527.4) million.- In 2010, KONE's net sales is estimated to decline approximately 5% atcomparable exchange rates. The operating income (EBIT) is expected to be in therange of EUR 560-610 million.- The Board proposes a dividend of EUR 0.65 per class B share from the year2009. Further the Board proposes an extra dividend of EUR 0.65 per class B sharedue to the centennial year 2010 of KONE and therefore the total proposeddividend is 1.30 per class B share.Key Figures 10-12/ 10-12/ Change 1-12/ 1-12/ Change 2009 2008 % 2009 2008 %-------------------------------------------------------------------------------- Orders received MEUR 813.5 845.2 -3.8 3,432.4 3,947.5 -13.0 Order book MEUR 3,309.1 3,576.7 -7.5 3,309.1 3,576.7 -7.5 Sales MEUR 1,426.8 1,431.6 -0.3 4,743.7 4,602.8 3.1 Operating income MEUR 202.7 189.2 7.1 600.3 1) 558.4 7.5 Operating income % 14.2 13.2 12.7 1) 12.1 Cash flow from Operations (before financing items and taxes) MEUR 198.2 88.5 825.1 527.4 Net income MEUR 166.6 147.9 466.4 418.1 Total comprehensive income MEUR 165.9 156.6 449.5 436.7 Basic earnings per share EUR 0.66 0.59 1.84 1.66 Interest- bearing net debt MEUR -504.7 -58.3 -504.7 -58.3 Total equity/ total assets % 47.0 39.0 47.0 39.0 Gearing % -37.7 -5.6 -37.7 -5.6( )1) Excluding a MEUR 33.6 one-time restructuring cost related to the fixed costsadjustment program, which was booked in the second quarter.KONE President & CEO, Matti Alahuhta, in conjunction with the review:"I am very pleased with our 2009 results. Our personnel has done an excellentjob in a very demanding environment. I therefore want to thank every KONEemployee for a work well done.EBIT continued to grow. We made good progress in the service business. Thequality and efficiency of the new equipment deliveries developed very positivelyas well. I am particularly delighted with the exceptionally strong cash flowduring the year. The orders received development in the fourth quarter was alsopleasing. This was the case particularly in China, where our market positioncontinued to strengthen.From this strong position, we have now started in a good spirit our efforts tocontinue to develop our business in order to reach a good performance again in2010."Analyst and media meeting and conference callA meeting for the press, conducted in Finnish, will be held on Tuesday, January26, 2010 at 2:15 p.m. Eastern European Time.A telephone conference and a meeting for analysts, conducted in English, willbegin at 3:45 p.m. Eastern European Time. The meeting can also be followed as awebcast on www.kone.com.Both meetings will take place in the KONE Building, located at Keilasatama 3,Espoo, Finland.Telephone conference numbers:US callers: +1 866 458 4087Non-US callers: +44 203 043 2436Participant code: KONEAn on demand version of the telephone conference will be available onwww.kone.com later the same day.About KONEKONE's objective is to offer the best people flow experience by developing anddelivering solutions that enable people to move smoothly, safely, comfortablyand without waiting in buildings in an increasingly urbanizing environment. KONEprovides its customers with industry-leading elevators, escalators andinnovative solutions for modernization and maintenance, and is one of the globalleaders in its industry. In 2009, KONE had annual net sales of EUR 4.7 billionand almost 34,000 employees. KONE class B shares are listed on the NASDAQ OMXHelsinki in Finland.www.kone.comFor further information please contact:Henrik Ehrnrooth, CFO, tel. +358 (0) 204 75 4260Sender:KONE CorporationHenrik EhrnroothCFOAnne KorkiakoskiExecutive Vice President,Marketing and CommunicationsFinancial statement bulletin 2009Accounting PrinciplesThe information presented in this report is based on the audited KONE 2009Financial Statements, that has been released together with this report. KONECorporation's financial statement bulletin has been prepared in line with IAS34, `Interim Financial Reporting´. KONE has applied the same accountingprinciples in the preparation of the interim report as in its financialstatements for 2009.October-December 2009 reviewOperating environment in October-DecemberIn the fourth quarter of 2009, demand for new equipment continued to weaken inmost geographical regions. Good growth was however seen in some markets inAsia-Pacific. In addition, residential segment in Northern Europe started todevelop favorably. The modernization markets were competitive but continued tobe stable and provided growth opportunities. Global maintenance markets, whichare less cyclical by nature, continued to grow, but became increasinglycompetitive.In the Europe, Middle East and Africa (EMEA) region, the business environment innew equipment markets continued to weaken, but varied from country to country.In new equipment, the residential activity improved in Sweden, Finland andAustria. The weakest markets were Russia, Italy, United Kingdom and especiallySpain. The demand for modernization was stable overall with France, Sweden,Finland and Austria showing good development. The maintenance markets continuedto develop well in EMEA.In the Americas region, the new equipment markets continued to decline. In theUnited States, aggressive pricing was frequently noticed in major projects.Modernization activity remained relatively stable, and some strength was seen inthe public works segment as a result of federal stimulus money which isavailable for public housing, schools, hospitals and government facilities. Thenew equipment market in Canada showed signs of bottoming. In Mexico, the newequipment market also continued to be weak, but was bottoming. Maintenancemarkets in North America developed well, but were increasingly competitive.In the Asia-Pacific region, the new equipment market development in China waspositive during the fourth quarter and the market in India started also to pickup. Other markets in the region remained weak. In China, real estate investmentsincreased due to the improved lending environment for home buyers and landdevelopers. The Indian new equipment market grew in the fourth quarter from alow level. In Australia, the new equipment market was weak, but the tenderingactivity improved somewhat. In Southeast Asia, construction markets remainedweak. However, signs of a recovery were seen, but decision making remained slow.Maintenance markets in Asia-Pacific developed favorably.Financial performance in October-DecemberKONE's orders received in the fourth quarter of 2009 declined by 3.8% andtotaled EUR 813.5 (10-12/2008: 845.2) million. At comparable exchange rates,orders received increased by 0.3%. The Asia-Pacific region showed growth inorders received. This was achieved especially because of continued very strongdevelopment in orders received in China. Orders received grew also in India andAustralia in the fourth quarter. In the EMEA region, the level of ordersreceived in new equipment was also at the 2008 level. This is good evidence ofKONE's continuously improved competitiveness and that development actions takenhave been effective. In modernization, KONE's progress in orders received wasgood especially in France, Sweden, Finland, the Netherlands and Italy.Maintenance contracts are not included in orders received.KONE's largest orders in October-December 2009 were an order to supply newelevators and escalators for the Erasmus Medical Centre expansion in Rotterdam,The Netherlands. KONE also received two orders in the United Arab Emirates: tosupply elevators for the Elite Residence Tower in Dubai and for the Gate Towersdevelopment in Abu Dhabi. In China, KONE won an order to supply escalators andelevators for Beijing's rapidly expanding subway system and an order to supplyall elevators and escalators for the Leatop Plaza building in Guangzhou, China.In addition, KONE won a six-year contract from Storstockholms Lokaltrafik AB,Sweden, to maintain all elevator and escalator units installed in Stockholm'smetro stations.KONE's net sales declined by 0.3% as compared to October-December 2008 andtotaled EUR 1,427 (1,432) million. At comparable exchange rates sales grew by2.3%.New equipment sales accounted for EUR 686.5 (705.5) million of the total whichrepresented a decline of 2.7% over the comparison period. At comparable exchangerates, it grew by 0.9%.Service sales (maintenance and modernization) increased by 2.0% and totaled EUR740.3 (726.1) million. At comparable exchange rates, the growth was 3.6%.Maintenance continued to grow well. However, modernization deliveries were loweras compared to the strong level of the fourth quarter in 2008.The operating income for the October-December period totaled EUR 202.7 (189.2)or 14.2% (13.2%) of net sales. The good operating income was primarily a resultof the development programs that have led to favorable progress in themaintenance business as well as in installation productivity and better quality.In addition, reduced sourcing costs and tight cost control contributed to thepositive result. Cash flow was exceptionally strong EUR 198.2 (88.5) million,which was a result of the improved operating income and a reduced net workingcapital. The progress in net working capital was largely due to a constantstrong focus on payment terms and a reduced level of inventories.Sales by geographical areas, MEUR 10-12/ 10-12/ 1-12/ 1-12/ 2009 % 2008 % 2009 % 2008 %---------------------------------------------------------- EMEA 1) 904.0 64 934.1 65 2,953.4 62 3,001.5 65 Americas 275.4 19 278.6 20 970.2 21 888.3 19 Asia-Pacific 247.4 17 218.9 15 820.1 17 713.0 16---------------------------------------------------------- Total 1,426.8 1,431.6 4,743.7 4,602.8----------------------------------------------------------1) EMEA = Europe, Middle East, AfricaReview January - December 2009KONE's operating environmentDue to the global economic and financial crisis, new equipment markets weakenedduring 2009. As the year progressed the market situation became increasinglymixed, with most markets continuing to weaken but with some markets alreadyshowing positive development. The modernization markets remained quite stabledespite the weak environment, and the size of the market was approximately thesame in monetary value as the year before. Maintenance markets, which are lesscyclical by nature, continued to grow. The growth was supported by highconversions of installed equipment into the maintenance base which was due tostrong new equipment deliveries in prior years. The lag between the installationof new equipment to the conversion into maintenance is typically 12 months butcan be up to 30 months. The maintenance market became increasingly competitivethroughout the year.In the European, Middle East and African region (EMEA), the markets were verychallenging and continued to decline throughout the year. At the end of the yearhowever, signs of recovery were seen in certain residential markets, especiallyin Sweden, Finland and Austria. The market in Germany was quite resilientthroughout the year. The new equipment market in the United Kingdom continued toweaken towards the end of the year when it seemed to have bottomed out in someresidential segments at a low level, but the commercial segment continued toweaken. The new equipment markets in the southern parts of Europe continued tobecome weaker and the markets in the Middle East and Russia were very weak. Themodernization market was stable mainly due to the European Safety Norms forexisting Lifts (SNEL) and the need for upgrades of an aging equipment base. Themaintenance market continued to grow, but was increasingly competitive in EMEA.In the Americas region, the new equipment markets weakened significantlycompared to the previous year. The new equipment market in the United States hasbeen demanding since the beginning of 2007. The infrastructure market increasedpartly due to stimulus activity during the second half of the year, but was verycompetitive because of the increasing aggressive pricing behavior. Themodernization market was relatively stable as a result of federal stimulus moneywhich was available for public housing, schools, hospitals and governmentfacilities. The market in Canada was challenging, but stabilized towards the endof the year. In Mexico, the market was, up to the fourth quarter for the mostparts consistent with those of the United States, but in the fourth quarter itshowed signs of bottoming. The maintenance markets continued to grow, but washighly competitive.In the Asia-Pacific region, the positive market development continued in China,but most other markets declined. Positive signs could however be seen in severalmarkets towards the end of the year. Urbanization continued to drive growth inChina, where the new equipment market was also weaker in the beginning of 2009but strengthened throughout the year to show some growth compared to 2008. Realestate investments, construction areas, completed areas and sale of completeddwellings all showed growth compared to the previous year. The government easedreserve requirements for banks to increase lending activity to stimulate realestate developments and housing sale, but tightened it at the end of the year tomoderate the growth in these sectors. Especially the infrastructure andaffordable housing markets grew, driven by stimulus packages. The new equipmentmarket in India declined during the first half of the year but the residentialconstruction activity started to grow from its low level in the second half ofthe year. In Australia, the construction activity weakened due to high vacancyrates, but some improvements in tender activity were seen towards the end of theyear. In Southeast-Asia, the construction market remained weak during 2009.However, the tendering activity also improved towards the end of the year, butdecision making remained slow. The maintenance market, in Asia-Pacific developedfavorably.Orders received and Order bookKONE's orders received decreased by approximately 13% as compared to 2008, andtotaled EUR 3,432 (2008: 3,948) million. At comparable exchange rates, ordersreceived also decreased about 13%. KONE was successful in many markets that areimportant for the company. The performance in orders received was strongest inAsia-Pacific, with China developing very positively throughout the year.Maintenance contracts are not included in orders received.The order book decreased from the end of 2008 by approximately 7% and stood atEUR 3,309 (3,577) million at the end of December 2009. At comparable exchangerates, the decrease was approximately 8%. As earlier, the margin of the orderbook remained at a good level.In the EMEA region, orders received declined in the continuously weakeningmarket during the first nine months. In the fourth quarter orders received grew.In new equipment, KONE's development in orders received varied from country tocountry. KONE performed particularly well in Germany, where the orders receiveddevelopment was positive compared to the year before. The most negativedevelopment during 2009 was seen in the Middle East, Russia, Spain, the UnitedKingdom and Ireland. In the modernization market KONE's orders received grew.The development was best in France, Sweden and Finland.In the Americas, KONE experienced a good order intake during the first half ofthe year despite the weak market environment as KONE's advanced elevator andescalator solutions in new equipment and modernization increased customerawareness. During the second half of the year competition increased, andaggressive pricing behavior became apparent especially in major projects. KONEincreased its market share in 2009 as compared to 2008. Despite the decline inorders received, KONE continued to improve its customer satisfaction and qualityas well as maintaining its healthy margin in the order book.In the Asia-Pacific region, new equipment orders declined slightly. In China,however, KONE's new equipment order intake continued to develop positively andthe company succeeded to further strengthen its position in the highly competednew equipment market. In 2009, KONE was again one of the fastest growingelevator companies in China. KONE is the fourth largest company in its industryin the Chinese market. In Southeast-Asia, India and Australia orders receiveddeclined compared to 2008.Net salesKONE's net sales grew by approximately 3% as compared to the prior year, andtotaled EUR 4,744 (4,603) million. Growth at comparable exchange rates wasapproximately 4%. Net sales growth was almost entirely organic. The amount ofsales consolidated from the companies acquired in 2009 did not have a materialimpact on the Group sales for the financial period.New equipment sales accounted for EUR 2,211 (2,190) million of the total andrepresented approximately 1% growth over the comparison period. At comparableexchange rates, the growth was approximately 2%. New equipment sales accountedfor 47% (48) of total sales.Service (maintenance and modernization) sales increased by 5% and totaled EUR2,533 (2,413) million. At comparable exchange rates, the growth wasapproximately 6%. In 2009, maintenance accounted for 34% (33) and modernizationfor 19% (19) of total sales. KONE's maintenance base grew during 2009, fed bythe company's strong order book and a high conversion rate.The distribution of net sales was, 62% (65) EMEA, 21% (19), Americas and 17%(16) Asia-Pacific. The largest individual countries in terms of net sales in2009 were the United States, France and China.Financial resultKONE's operating income excluding a one-time restructuring cost was EUR 600.3(558.4) million or 12.7% (12.1) of net sales. The operating income including theone-time restructuring cost of EUR 33.6 million related to the fixed costadjustment program, was EUR 566.7 million or 11.9% of net sales. The growth inoperating income was the result of improved competitiveness in the new equipmentbusiness, favorable progress in the maintenance business, installationproductivity and better quality. In addition, reduced sourcing costs and tightcost control contributed to the positive result development already during thesecond quarter but especially during the latter part of the year. Net financingitems were EUR 19.8 (2.8) million and included dividends received from ToshibaElevator and Building Systems Corporation (TELC).KONE's income before taxes was EUR 594.6 (563.8) million. Taxes totaled EUR128.2 (145.7) million. In 2009, the effective tax rate resulting from theoperations for the financial year was 25.5% (25.8).However, taking into accountprior year taxes and reassessment of deferred tax assets, the effective tax ratewas 21.6% for the financial year. The reassessment of deferred tax assets isbased on the realized and expected profit estimate of the business operations.Net income for the financial period was EUR 466.4 (418.1) million.The profit attributable to shareholders was EUR 465.6 (417.3) million,corresponding to earnings per share of EUR 1.84 (1.66). Equity per share was EUR5.28 (4.10).Consolidated statement of financial position and Cash flowIn 2009 KONE's financial position strengthened further and the company had apositive net cash position at the end of the year.Cash flow generated from operations (before financing items and taxes) was EUR825.1 (527.4) million.The cash flow was exceptionally strong in 2009. The primary drivers of thestrong cash flow were the growth in the operating income and a substantialimprovement in net working capital. The progress in net working capital waslargely due to a constant strong focus on payment terms and a reduced level ofinventories.Net working capital was EUR -228.7 ( -76.4) million, including financing itemsand taxes.At the end of 2009, interest-bearing assets exceeded interest-bearing debts andthe net cash position totaled EUR 504.7 (58.3) million. Gearing was -37.7%(-5.6). KONE's total equity/total assets ratio was 47.0% (39.0).Capital expenditure and acquisitionsKONE's capital expenditure, including acquisitions, totaled EUR 92.5 (134.4)million. Capital expenditure, excluding acquisitions, was mainly related tofacilities and equipment in R&D, IT and production. Acquisitions accounted forEUR 46.0 (60.0) million of this figure. Acquisitions made during the accountingperiod had no material effect on the 2009 figures.In 2009, KONE completed the acquisition of FairWay Elevator Inc, an independentelevator service company in the Philadelphia area of the United States. Throughthis acquisition, KONE established itself as one of the largest elevator andescalator companies in the Philadelphia region. In addition, KONE acquired ExcelElevator Inc, an independent elevator service company based in Los Angeles.Excel has a great reputation in the Southern California market for its qualitywork in modernizing vertical transportation systems as well as its significantmaintenance base. In addition, KONE made several smaller acquisition during2009.Research and developmentResearch and development expenses totaled EUR 62.0 (58.3) million, representing1.3% (1.3) of net sales. R&D expenses include development of new productconcepts and further developments of existing products and services. KONE'selevators and escalators are based on energy-efficient technology.With focus on key customer segments and emerging people flow requirements, KONEintroduced in the elevator and escalator business many new product and serviceenhancements that fulfill its customers´ needs better and make it easier to dobusiness with KONE.KONE released new solutions for the infrastructure, modernization and affordablehousing segments. In addition, new solutions for the 2-3 landingmachine-room-less segment in the United States were introduced. The focus hasmainly been on solutions that deliver improved performance, fresh visual optionsand improved energy-efficiency. The KONE JumpLift solution is an example of theexpanded elevator offering. This innovative offering puts the elevator intooperation already as the building is under construction, enabling more efficientflow of workers, delivering improved safety and productivity to the job site.With priority on energy efficiency and industry-leading standard design, KONElaunched both in North America and Asia-Pacific award-winning car andsignalization designs, along with energy-efficient lighting and improvedoperating functionality.In Europe, KONE introduced an innovative control system solution providingseamless integration between building door access, elevator performance, andlighting control. This innovation has been recognized by building owners andtheir tenants as an attractive People Flow solution that creates realdifferentiation in the residential segment.In addition, KONE launched new escalator releases to further gain market sharein the retail and infrastructure segments. The cost structure has been improvedand the application scope has been enlarged by adding a full outdoor solutionpackage to the offering as well as several new visual design components. Inaddition, an optimized motor was taken into use to reduce power consumtion. Tofurther differentiate the escalator offering from that of the competition, aninnovative solution to display commercial or safety related information on theescalator step was added to the offering.KONE Corporation was awarded GOOD DESIGN awards in 2008 and 2009 for itsinnovative designs for new elevator design concepts and for its new designsignalization series. KONE is the first elevator and escalator company to everreceive such a prestigious award. Founded in 1950, GOOD DESIGN is renowned asone of the most recognized design awards program in the world. The awards aregiven by The Chicago Athenaeum and The European Centre for Architecture ArtDesign and Urban Studies to highlight the best new designs and designinnovations for products and graphics made between 2006 and 2008.Other important events during the financial periodIn connection with the first quarter result, KONE announced that it intends toreduce the 2010 run-rate of fixed costs by EUR 40 million due to the weak newequipment market. The plans for the program were communicated in connection withthe second quarter result. The annual impact of this fixed cost reduction planis expected to be at least EUR 40 million starting in 2010. The total one-timerestructuring cost relating to this program is EUR 33.6 million, which wasbooked in the second quarter of 2009. The fixed cost adjustment program hasprogressed according to plan during 2009.The majority of the fixed cost savings are being achieved through organizationaldevelopment. The organizational structures are, as a result of this developmentflatter, and bring management closer to customers, broaden the span of controlfor managers to ensure better hands-on management and ensure uniforms structuresglobally to improve internal collaboration. The program improves the efficiencyand speed of KONE. Selective actions are also taken in the supply chain andoutsourcing. In addition to these actions, an overall tighter cost controlcontinues throughout the company.The program is estimated to decrease approximately 500 jobs globally. A majorityof this decrease has already been completed. Simultaneously, KONE continues torecruit in certain markets that are providing growth opportunities, such asChina.A fine for the European Commission's decision of EUR 142 million, was recognizedas a provision in the first quarter of 2007 and booked into interest-bearingdebts in the consolidated statement of financial position during the secondquarter of 2007. In June 2009, KONE re-paid the long term loan to the Europeancommision. As KONE has appealed the decision, the size of the fine might howeverstill change.PersonnelThe objective of KONE's personnel strategy is to help the company meet itsbusiness targets. The main goals of this strategy are to further secure theavailability, engagement, motivation and continuous development of itspersonnel. All of KONE's activities are guided by ethical principles. Thepersonnel's rights and responsibilities include the right to a safe and healthyworking environment, personal wellbeing as well as the prohibition of any kindof discrimination.In 2009, personnel development activities continued in line with the "PeopleLeadership" program that was created in early 2008. The purpose of the programis to improve leadership capabilities in order to inspire, engage and developpeople for outstanding performance. Two new leadership programs were rolled out:the Supervisor Development Program for first level line managers and LeadershipLift for top management. Over 2500 supervisors globally were trained in peopleleadership and the roll-out for further modules in operational excellence andprocess capabilities were started. Five leadership programs, with more than 200top management participants, were completed at International Institute forManagement Development (IMD). A new leadership program for middle management wascreated and piloted for roll-out in 2010. Many other training and developmentactions continued both on local and global levels.The work to further harmonize the key people processes continued. A globalresourcing system and a harmonized recruitment policy were taken into use acrossKONE while development work for a common tool for performance and compensationmanagement was finalized. A global employee master data system was rolled out inpilot countries and the plan for 2010 roll-outs was completed. Harmonized roledescriptions along with a global grading system were launched and implementedacross KONE.The Agile KONE program, which intends to increase speed and takemanagement closer to the customer through flatter organizations and wider spansof control, was implemented in Europe.A global employee survey was carried out with all-time high responses andengagement rates. Actions to address the identified development areas were takenin various countries. Planning for the new survey in 2010 was started.The efforts to improve workplace safety continued with an improvement target of15% in IIFR (industrial injury frequency rate). Close cooperation with theemployees to promote safety continued. The improved safety awareness wasconfirmed by "KONE's commitment to employee safety" being the highest singlescore in the employee survey. Regular virtual safety meetings worldwide wereheld to share information on best practices and new developments concerningsafety.KONE had 33,988 (34,831) employees at the end of 2009. The average number ofemployees was 34,276 (33,935).The geographical distribution of KONE employees was 55% (56) in EMEA, 17% (17)in the Americas and 28% (27) in Asia-Pacific.EnvironmentKONE's aim is to be the eco-efficiency leader in its industry. The earlycredentials of the company's eco-efficiency relate to the KONE EcoDisc hoistingmachine, a permanent magnet gearless motor innovation. It consumes 70% lessenergy than a hydraulic drive and 40% less than a geared traction elevatordrive, thus making it one of the most eco-efficient solutions on the markettoday. EcoDisc hoisting does not need any oil. It regenerates energy back to thebuildings power network and has eco-lighting and a compact design based onrecyclable materials.In order to enhance eco-efficiency leadership, "Environmental Excellence" wasselected as one of KONE's five development programs. Environmental Excellenceembraces actions aiming to develop KONE's innovation leadership in the area ofeco-efficiency. It also intends to minimize KONE's carbon footprint and toensure the compliance of KONE's suppliers with the corresponding requirementsand environmental targets.KONE set an ambitious target for 2010, which aimed to continue reducing theelectricity consumption of its volume elevators by 50% by the end of 2010,compared to the 2008 base value. During 2009, KONE's new volume elevators'energy consumption was reduced about 30% compared to the base level of 2008.KONE has also set an annual 5% carbon footprint reduction target for its ownoperations. KONE had its carbon footprint assessed in 2008 by a third party inaccordance with the Greenhouse Gas Protocol guidelines (GHG Protocol). Thelargest part of KONE's entire global impact relates to the amount of electricityused by KONE equipment in their lifetime, underlining the importance ofenergy-efficient innovations for elevators and escalators. The most significantCarbon dioxide (CO2) impact of KONE's own operations relate to the company'svehicle car fleet, electricity consumption and logistics. As a consequence,projects to renew KONE's global car fleet and to reduce needs for air travel areongoing. Electricity consumption and logistics related eco-efficiencyinitiatives have also been implemented in 2009.Capital and risk managementKONE's business activities are exposed to risks, which may arise from itsoperations or changes in the business environment. The risk factors listed belowcan potentially have an adverse affect on KONE's business operations andfinancial position and hence the shareholder value of the company. Other risks,which are currently either unknown or considered immaterial to KONE, may howeverbecome material in the future.A continuing global economic slowdown or a renewed weakening of the globaleconomy may bring about a further decrease in the number of new equipment andmodernization orders received, cancellation of agreed deliveries, or delays inthe commencement of projects. A significant part of KONE's sales consists ofservices which are less susceptible to the effects of economic cycles, but whichare very labor-intensive. The profit development of the Group could be adverselyaffected if the productivity targets in the service business are not met or ifit is not possible to efficiently reallocate personnel resources in response toreduced business opportunities.A big proportion of KONE's new equipment sales take place in the form of majorconstruction projects in which KONE is a subcontractor. In these projects,KONE's project management organization cooperates with the main contractors'project organization. Supply chains, the high technology featured in componentsand technologically demanding installation processes may make it more difficultto achieve the quality, cost or schedule objectives set for the project. Commonproject management methodology and tools together with related global trainingprograms are used for managing project risks.KONE's business activities are dependent on the uninterrupted operation andreliability of sourcing channels, production plants, logistics processes and theIT systems used. These risks are controlled by analyzing and improving the faulttolerance of processes and by increasing the readiness for transferring themanufacturing of critical components from one production line to another. KONEactively monitors the operations and financial strength of its key suppliers.The aim is also to secure the availability of alternative sourcing channels forcritical components and services. Additionally, KONE has a global propertydamage and business interruption insurance program in place.A renewed economic downturn may affect the liquidity and payment schedules ofKONE's customers and lead to credit losses. KONE's `tender to cash´ processdefines the rules for tendering, authorizations and credit control. Advancepayments, documentary credits and guarantees are used in the payment terms tominimize the risks related to accounts receivable. KONE proactively manages itsaccount receivable in order to minimize the risk of customer defaults. Thecustomer base of KONE consists of a large number of customers in several marketareas.KONE operates internationally and is, thus, exposed to currency risks arisingfrom exchange rate fluctuations related to currency flows from sales andpurchases and from translation of statement of financial position items offoreign subsidiaries into euros. The KONE Treasury function manages exchangerates and other financial risks centrally on the basis of principles approved bythe Board of Directors.Changes in raw material prices are reflected directly in the production costs ofcomponents made by KONE, such as doors and cars, and indirectly in the prices ofpurchased components. In order to reduce the fluctuation of raw material pricesand their impact on the price of components, KONE has for 2010 entered intofixed price contracts for a substantial part of the most significant materials.The maintenance business deploys a significant fleet of service vehicles, whichexplains why oil price fluctuations have an effect on the cost of maintenance.For further information regarding financial risks, please refer note 2 in theconsolidated financial statements.Appointment to the Executive BoardKONE appointed Henrik Ehrnrooth M.Sc. (Econ) Executive Vice President, Finance(Chief Financial Officer) and a Member of the Executive Board as of May1, 2009. Henrik Ehrnrooth succeeded Aimo Rajahalme, who served as CFO since1991.Decisions of the Annual General MeetingKONE Corporation's Annual General Meeting was held in Helsinki on February23, 2009. The meeting approved the financial statements and discharged theresponsible parties from liability for the January 1-December 31, 2008 financialperiod.The number of Members of the Board of Directors was confirmed as eight and itwas decided to elect one deputy Member. Re-elected as Members of the Board wereMatti Alahuhta, Reino Hanhinen, Antti Herlin, Sirkka H?l?en-Lindfors andSirpa Pietik?en and as deputy Member Jussi Herlin. Anne Brunila, JuhaniKaskeala and Shunichi Kimura were elected as new Members of the Board ofDirectors.At its meeting held after the Annual General Meeting, the Board of Directorselected, from among its members, Antti Herlin as its Chair and SirkkaH?l?en-Lindfors as Vice Chair.Antti Herlin was elected as Chairman of the Audit Committee. SirkkaH?l?en-Lindfors and Anne Brunila were elected as independent Members of theAudit Committee.Antti Herlin was elected as Chairman of the Nomination and CompensationCommittee. Reino Hanhinen and Juhani Kaskeala were elected as independentMembers of the Nomination and Compensation Committee.The Annual General Meeting confirmed an annual compensation of EUR 54,000 forthe Chairman of the Board, EUR 42,000 for the Vice Chairman, EUR 30,000 forBoard Members and EUR 15,000 for the deputy Member. In addition, a compensationof EUR 500 was approved for attendance at Board and Committee meetings.The Annual General Meeting approved the Board of Directors proposal torepurchase KONE's own shares. Altogether, no more than 25,570,000 shares may berepurchased, of which no more than 3,810,000 may be class A shares and21,760,000 class B shares, taking into consideration the provisions of theCompanies Act regarding the maximum amount of own shares that the Company isallowed to possess. The minimum and maximum consideration for the shares to bepurchased is determined for both class A and class B shares on the basis of thetrading price for class B shares determined on the NASDAQ OMX Helsinki Ltd. onthe time of purchase.In addition, the Annual General Meeting authorized the Board of Directors todecide on the distribution of any shares repurchased by the company. Theauthorization is limited to a maximum of 3,810,000 class A shares and21,760,000 class B shares. The Board shall have the right to decide to whom toissue the shares, i.e. to issue shares in deviation from the pre-emptive rightsof shareholders.These authorizations shall remain in effect for a period of one year from thedate of the decision of the Annual General Meeting.Authorized public accountants Heikki Lassila and PricewaterhouseCoopers Oy werere-nominated as the Company´s auditors.The Annual General Meeting approved the Board's proposal for dividends of EUR0.645 for each of the 38,104,356 class A shares and EUR 0.65 for the214,643,060 outstanding class B shares. The date of record for dividenddistribution was February 26, 2009, and dividends were paid on March 5, 2009.Share capital and Market capitalizationThe KONE 2005B options based on the KONE Corporation 2005 option program werelisted on the main list of the NASDAQ OMX Helsinki Ltd. on June 1, 2005. Eachoption entitled its holder to subscribe for twelve (12) class B shares at aprice of EUR 4.02 per share. As the 2005B options subscription period ended onMarch 31, 2009, 4,660 remaining series B options held by the subsidiary expired.The remaining 19,504 options had been used and the shares were entered in theFinnish Trade Register in March and April 2009.In 2005, KONE also granted a conditional option program, 2005C. The 2005C stockoptions were listed on the NASDAQ OMX Helsinki Ltd. as of April 1, 2008. Thetotal number of 2005C stock options is 2,000,000 of which 522,000 are owned by asubsidiary of KONE Corporation. Each option right entitles its owner tosubscribe for two (2) KONE Corporation class B shares at a price of EUR 11.90per share. At the end of December 2009, the remaining 2005C options entitledtheir holders to subscribe for 3,153,250 class B shares. The subscription periodfor series C options will end on April 30, 2010.In December 2007, KONE Corporation's Board of Directors granted stock optionrights to approximately 350 employees of KONE's global organization. Thedecision was based on the authorization received from the Annual General Meetingmeeting at February 26, 2007. The maximum number of options is 2,000,000. Eachoption right will entitle its owner to subscribe for two (2) new class B shares.The share subscription period for 2007 stock option will be April1, 2010-April 30, 2012. The share subscription period begins April 1, 2010, asthe average turnover growth of the KONE Group for financial years 2008 and 2009exceeded market growth and as the earnings before interest and taxes (EBIT) ofthe KONE Group for the financial year 2008 exceeded the EBIT for the financialyear 2007, and the EBIT for the financial year 2009 exceeded the EBIT for thefinancial year 2008 as required in the terms of the stock options. For furtherinformation regarding stock options, please refer to note 21 in the consolidatedfinancial statements.As of December 31, 2009, KONE's share capital was EUR 64,606,717.50, comprising220,322,514 listed class B shares and 38,104,356 unlisted class A shares.KONE´s market capitalization was EUR 7,601 million on December 31, 2009,disregarding own shares in the Group's possession. Market capitalization iscalculated on the basis of both the listed B shares and the unlisted A sharesexcluding treasury shares. Class A shares are valued at the closing price of theclass B shares.Repurchase of KONE sharesOn the basis of the Annual General Meeting's authorization, KONE Corporation'sBoard of Directors decided to commence repurchasing shares at the earliest onMarch 3, 2009.During the financial year, KONE did not use its authorization to repurchase itsown shares.In April 2009, 195,264 KONE class B shares assigned to the share-based incentiveplan for the company's senior management were transferred from KNEBV IncentiveOy to the participants due to achieved targets for the financial year 2008. Atthe end of December, the Group had 4,710,242 class B shares in its possession.The shares in the Group's possession represent 2.1% of the total number of classB shares. This corresponds to 0.8% of the total voting rights.Shares traded on the NASDAQ OMX Helsinki Ltd.The NASDAQ OMX Helsinki Ltd. traded 160.9 million KONE Corporation's class Bshares in 2009, equivalent to a turnover of EUR 3,399 million. The share priceon December 30, 2009 was EUR 29.96. The highest quotation was EUR 30.40 and thelowest 13.80.Market outlook 2010The good development is expected to expand in the new equipment market in theAsia-Pacific region. In EMEA and North America, the market will continue todecline in most countries, however stabilization is expected towards the end ofthe year. The modernization market will be at about last year's level.Themaintenance market will continue to develop well, but remain very competitive.Outlook 2010KONE's net sales is estimated to decline approximately 5% at comparable exchangerates.The operating income (EBIT)is expected to be in the range of EUR 560-610million.The Board's proposal for the distribution of profitThe parent company's non-restricted equity on December 31, 2009 is EUR1,561,214,658.74 of which net profit from the financial year is EUR181,888,247.92.The Board of Directors proposes to the Annual General Meeting that a dividend ofEUR 0.6475 be paid on the outstanding 38,104,356 class A shares and EUR 0.65 onthe outstanding 215,633,008 class B shares. Further the Board proposes an extradividend of EUR 0.6475 to be paid on the outstanding 38,104,356 class A sharesand EUR 0.65 on the outstanding 215,633,008 class B shares due to the centennialyear 2010 of KONE, resulting in a total proposed dividend of 1.295 per class Ashare and 1.30 per class B share. The total amount of proposed dividends will beEUR 329,668,051.42.The dividend is proposed to be paid on March 11, 2010. All the shares existingon the dividend record date are entitled to dividend for the year 2009, exceptfor the own shares held by the parent company.Further the Board of Directors proposes to the General Meeting that Board isauthorized to grant during year 2010 no more than EUR 3,500,000 to supportactivities of universities and colleges and that 100,000 treasury class B sharesof KONE Corporation is distributed without compensation to the KONE CorporationCentennial Foundation to be established and that Board is authorized to grantlater no more than EUR 100,000 to the KONE Corporation Centennial Foundation.Annual General Meeting 2010KONE Corporation's Annual General Meeting will be held at 11:00 a.m. on Monday,March 1, 2010 at Finlandia Hall, Mannerheimintie 13, in Helsinki, Finland.Helsinki, January 26, 2010KONE Corporation's Board of DirectorsThis bulletin contains forward-looking statements that are based on the currentexpectations, known factors, decisions and plans of the management of KONE.Although management believes that the expectations reflected in suchforward-looking statements are reasonable, no assurance can be given that suchexpectations will prove to be correct. Accordingly, results could differmaterially from those implied in the forward-looking statements as a result of,among other factors, changes in economic, market and competitive conditions,changes in the regulatory environment and other government actions andfluctuations in exchange rates.Consolidated statement of income 10-12/ 10-12/ 1-12/ 1-12/ MEUR 2009 % 2008 % 2009 % 2008 %------------------------------------------------------------------------- Sales 1,426.8 1,431.6 4,743.7 4,602.8 Costs and expenses -1,208.2 -1,227.1 -4,081.2 -3,979.6 Depreciation 15.9 -15.3 -62.2 -64.8 One-time restructuring cost - -33.6------------------------------------------------------------------------- Operating income 202.7 14.2 189.2 13.2 566.7 11.9 558.4 12.1 Share of associated companies' net income 3.5 0.9 8.1 2.6 Financing income 3.0 11.6 28.8 24.4 Financing expenses -1.5 -2.0 -9.0 -21.6------------------------------------------------------------------------- Income before taxes 207.7 14.6 199.7 13.9 594.6 12.5 563.8 12.2 Taxes -41.1 -51.8 -128.2 -145.7------------------------------------------------------------------------- Net income 166.6 11.7 147.9 10.3 466.4 9.8 418.1 9.1------------------------------------------------------------------------- Net income attributable to: Shareholders of the parent company 166.5 147.5 465.6 417.3 Non-controlling interests 0.1 0.4 0.8 0.8------------------------------------------------------------------------- Total 166.6 147.9 466.4 418.1-------------------------------------------------------------------------Earnings per share for profit attributable to the shareholders of the parentcompany, EUR 10-12/ 10-12/ 1-12/ 1-12/ 2009 2008 2009 2008 Basic earnings per share, EUR 0.66 0.59 1.84 1.66 Diluted earnings per share, EUR 0.65 0.59 1.83 1.65Consolidated statement of comprehensive income 10-12/ 10-12/ 1-12/ 1-12/ MEUR 2009 2008 2009 2008---------------------------------------------------------------------- Net income 166.6 147.9 466.4 418.1 Other comprehensive income, net of tax: Translation Differences 4.7 17.6 -7.3 38.0 Hedging of foreign subsidiaries 0.0 -15.5 -1.0 -22.9 Cash flow Hedges -5.4 6.6 -8.6 3.5---------------------------------------------------------------------- Other comprehensive income, net of tax -0.7 8.7 -16.9 18.6---------------------------------------------------------------------- Total comprehensive income 165.9 156.6 449.5 436.7---------------------------------------------------------------------- Total comprehensive income attributable to: Shareholders of the parent company 165.8 156.2 448.7 435.9 Non-controlling interests 0.1 0.4 0.8 0.8---------------------------------------------------------------------- Total 165.9 156.6 449.5 436.7Condensed consolidated statement of financial position Assets Dec 31, Dec 31, MEUR 2009 2009-------------------------------------------------------- Non-current assets Intangible assets 706.7 670.2 Tangible assets 200.5 214.7 Loans receivable and other interest-bearing assets 1.6 2.3 Deferred tax assets 152.8 122.1 Investments 156.0 169.1-------------------------------------------------------- Total non-current assets 1,217.6 1,178.4 Current assets Inventories 784.6 885.5 Advance payments received -832.4 -805.4 Accounts receivable and other non interest-bearing assets 1,056.1 1,046.5 Current deposits and loan receivables 421.2 204.0 Cash and cash equivalents 204.9 147.8-------------------------------------------------------- Total current assets 1,634.4 1,478.4-------------------------------------------------------- Total assets 2,852.0 2,656.8-------------------------------------------------------- Equity and liabilities Dec 31, Dec 31, MEUR 2009 2009-------------------------------------------------------- Equity 1,339.2 1,035.9 Non-current liabilities Loans 27.2 172.4 Deferred tax liabilities 42.4 39.7 Employee benefits 110.6 115.8-------------------------------------------------------- Total non-current liabilities 180.2 327.9 Provisions 100.3 49.9 Current liabilities Loans 95.8 123.4 Accounts payable and other liabilities 1,136.5 1,119.7-------------------------------------------------------- Total current liabilities 1,232.3 1,243.1-------------------------------------------------------- Total equity and liabilities 2,852.0 2,656.8--------------------------------------------------------Consolidated statement of changes in equity1) Share capital2) Share premium account3) Paid-up unrestricted equity reserve4) Fair value and other reserves5) Translation differences6) Own shares7) Retained earnings8) Net income for the period9) Non-controlling interests10) Total equity-------------------------------------------------------------------------- MEUR 1) 2) 3) 4) 5) 6) 7) 8) 9) 10)-------------------------------------------------------------------------- Jan 1, 2009 64.4 100.4 3.3 9.0 -16.2 -83.1 957.2 0.9 1,035.9-------------------------------------------------------------------------- Total comprehensive income for the period -8.6 -8.3 465.6 0.8 449.5 Transactions with shareholders and non- controlling interests: Dividends paid -164.1 -164.1 Issue of shares (option rights) 0.2 9.7 9.9 Purchase of own shares - Sale of own shares - Change in non- controlling interests -0.9 -0.9 Option and share-based compensation 3.0 5.9 8.9-------------------------------------------------------------------------- Dec 31, 2009 64.6 100.4 13.0 0.4 -24.5 -80.1 799.0 465.6 0.8 1,339.2-------------------------------------------------------------------------------------------------------------------------------------------------- MEUR 1) 2) 3) 4) 5) 6) 7) 8) 9) 10)------------------------------------------------------------------------ Jan 1, 2008 64.2 100.2 - 5.5 -31.3 -87.8 698.1 0.3 749.2------------------------------------------------------------------------ Total comprehensive income for the period 3.5 15.1 417.3 0.8 436.7 Transactions with shareholders and non- controlling interests: Dividends paid -163.6 -163.6 Issue of shares (option rights) 0.2 0.2 3.3 3.7 Purchase of own shares - Sale of own shares - Change in non- controlling interests -0.2 -0.2 Option and share-based compensation 4.7 5.4 10.1------------------------------------------------------------------------ Dec 31, 2008 64.4 100.4 3.3 9.0 -16.2 -83.1 539.9 417.3 0.9 1,035.9------------------------------------------------------------------------Condensed consolidated statement of cash flows 10-12/ 10-12/ 1-12/ 1-12/ MEUR 2009 2008 2009 2008---------------------------------------------- Operating income 202.7 189.2 566.7 558.4 Change in working capital before financial items and taxes -22.4 -116.0 194.2 -95.8 Depreciation and impairment 17.9 15.3 64.2 64.8---------------------------------------------- Cash flow from operations 198.2 88.5 825.1 527.4 Cash flow from financing items and taxes -24.0 -12.8 -123.7 -99.5---------------------------------------------- Cash flow from operating activities 174.2 75.7 701.4 427.9---------------------------------------------- Cash flow from investing activities -42.0 -31.7 -90.6 -128.6---------------------------------------------- Cash flow after investing activities 132.2 44.0 610.8 299.3---------------------------------------------- Purchase and sale of own shares - - - - Issue of shares 9.0 2.5 9.9 3.7 Dividends paid - - -164.0 -163.3 Change in deposits and loans receivable, net -141.5 -55.0 -220.9 -82.7 Change in loans payable 10.4 -22.7 -181.4 -62.7---------------------------------------------- Cash flow from financing activities -122.1 -75.2 -556.4 -305.0-------------------------------------------------------------------------------------------- Change in cash and cash equivalents 10.1 -31.2 54.4 -5.7---------------------------------------------- Cash and cash equivalents at end of period 204.9 147.8 204.9 147.8 Translation difference -2.3 4.5 -2.7 1.4 Cash and cash equivalents at beginning of period 192.5 183.5 147.8 154.9---------------------------------------------- Change in cash and cash equivalents 10.1 -31.2 54.4 -5.7----------------------------------------------Change in interest-bearing net debt 10-12/ 10-12/ 1-12/ 1-12/ MEUR 2009 2008 2009 2008---------------------------------------------- Interest-bearing net debt at beginning of period -358.8 -9.3 -58.3 91.7 Interest-bearing net debt at end of period -504.7 -58.3 -504.7 -58.3---------------------------------------------- Change in interest-bearing net debt -145.9 -49.0 -446.4 -150.0----------------------------------------------Key figures 1-12/ 1-12/ 2009 2008--------------------------------------- Basic earnings per share EUR 1.84 1.66 Diluted earnings per share EUR 1.83 1.65 Equity per share EUR 5.28 4.10 Interest-bearing net debt MEUR -504.7 -58.3 Total equity/ total assets % 47.0 39.0 Gearing % -37.7 -5.6 Return on equity % 39.3 46.8 Return on capital employed % 34.0 35.9 Total assets MEUR 2,852.0 2,656.8 Assets employed MEUR 834.5 977.6 Working capital including financing and tax items) MEUR -228.7 -76.4Sales by geographical regions 1-12/ 1-12/ MEUR 2009 % 2008 %------------------------------------ EMEA 2,953.4 62 3,001.5 65 Americas 970.2 21 888.3 19 Asia-Pacific 820.1 17 713.0 16------------------------------------ Total 4,743.7 4,602.8------------------------------------1) EMEA = Europe, Middle East, AfricaQuarterly Key Figures Q4/ Q3/ Q2/ Q1/ 2009 2009 2009 2009-------------------------------------------------- Orders received MEUR 813.5 766.5 953.9 898.5 Order book MEUR 3 309.1 3,603.4 3754.1 3,753.1 Sales MEUR 1 426.8 1,127.3 1168.6 1,021.0 Operating income MEUR 202.7 160.1 146.3 1) 91.2 Operating % income 14,2 14.2 12.5 1) 8.9 Q4/ Q3/ Q2/ Q1/ 2008 2008 2008 2008------------------------------------------------ Orders received MEUR 845.2 892.4 1,092.4 1,117.5 Order book MEUR 3,576.7 4,002.8 3,838.7 3,617.4 Sales MEUR 1,431.6 1,123.8 1,142.1 905.3 Operating income MEUR 189.2 146.0 136.7 86.5 Operating % income 13.2 13.0 12.0 9.6 Q4/ Q3/ Q2/ Q1/ 2007 2007 2007 2007--------------------------------------------------- Orders received MEUR 901.9 926.3 944.4 902.1 Order book MEUR 3,282.3 3,473.6 3,318.0 3,105.7 Sales MEUR 1,294.2 971.6 1,001.9 811.2 Operating income MEUR 160.8 2) 126.7 116.4 69.3 3) Operating % income 12.4 2) 13.0 11.6 8.5 3) Q4/2006 Q3/2006 Q2/2006 Q1/2006------------------------------------------------ Orders received MEUR 712.1 742.0 821.9 840.3 Order book MEUR 2,762.1 2,951.0 2,818.0 2,654.0 Sales MEUR 1,145.6 879.8 840.4 735.0 Operating income MEUR 123.4 101.1 83.9 51.7 Operating % income 10.8 11.5 10.0 7.01) Excluding a MEUR 33.6 one-time restructuring cost related to the fixed costadjustment program.2) Excluding a MEUR 22.5 provision for the Austrian cartel court's fine decisionand a MEUR 12.1 sales profit from the sale of KONE Building.3) Excluding a MEUR 142.0 fine for the European Commission´s decision.Orders received 1-12/ 1-12/ MEUR 2009 2008-------------------------- 3,432.4 3,947.5--------------------------Order book Dec 31, Dec 31, MEUR 2009 2008-------------------------- 3,309.1 3,576.7--------------------------Capital expenditure 1-12/ 1-12/ MEUR 2009 2008--------------------------------------- In fixed assets 40.9 65.1 In leasing agreements 5.6 9.3 In acquisitions 46.0 60.0--------------------------------------- Total 92.5 134.4---------------------------------------R&D expenditure 1-12/ 1-12/ MEUR 2009 2008-------------------------------------------------------- 62.0 58.3-------------------------------------------------------- R&D Expenditure as percentage of sales 1.3 1.3Number of employees 1-12/ 1-12/ Number of employees 2009 2008-------------------------------------------- Average 34,276 33,935 At the end of the period 33,988 34,831Notes on the consolidated financial statementsCommitments Dec 31, Dec 31, MEUR 2009 2008---------------------------------------------- Mortgages Group and parent company - 0.7 Pledged assets Group and parent company 1.9 2.0 Guarantees Associated companies 3.5 4.1 Others 6.4 7.2 Operating leases 162.0 171.7---------------------------------------------- Total 173.8 185.7----------------------------------------------The future minimum lease payments under non-cancellable operating leases Dec 31, Dec 31, MEUR 2009 2008-------------------------------------- Less than 1 year 41.0 43.3 1-5 years 91.6 96.9 Over 5 years 29.4 31.5-------------------------------------- Total 162.0 171.7--------------------------------------DerivativesFair values of derivative financial instruments Positive Negative Net Net fair fair fair fair value value value value Dec 31, Dec 31, Dec 31, Dec 31, MEUR 2009 2009 2009 2008----------------------------------------------------------- FX Forward contracts 4.2 6.8 -2.6 10.9 Currency options - - - 0.4 Cross-currency swaps, due under one year - 17.0 -17.0 1.8 Cross-currency swaps, due in 1-3 years - - - -22.7 Electricity derivatives 0.4 0.8 -0.4 -1.0----------------------------------------------------------- Total 4.6 24.6 -20.0 -10.6-----------------------------------------------------------Nominal values of derivative financial instruments Dec 31, Dec
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