Helena Norrman - Senior Vice President of Communications and Head of Group Function Communications Hans Vestberg - Chief Executive Officer, President and Director Johan Wibergh - Executive Vice President and Head of Business Unit Networks Per Borgklint - Senior Vice President and Head of Business Unit Support Solutions Jan Frykhammar - Chief Financial Officer, Executive Vice President and Head of Group Function Finance

Stuart Jeffrey - Nomura Securities Co. Ltd., Research Division Edward F. Snyder - Charter Equity Research Mark Sue - RBC Capital Markets, LLC, Research Division Alexander Peterc - Exane BNP Paribas, Research Division Gareth Jenkins - UBS Investment Bank, Research Division Mark McKechnie - Evercore Partners Inc., Research Division Pierre Ferragu - Sanford C. Bernstein & Co., LLC., Research Division Francois Meunier - Morgan Stanley, Research Division

Welcome to the Ericsson's Analyst and Media Conference Call for their Fourth Quarter and Full Year Report. To view visual aids for this call, please log onto www.ericsson.com/press or www.ericsson.com/investors. [Operator Instructions] As a reminder, replay will be available one hour after today's conference. Helena Norrman will now open the call.

Hello, all, and welcome to this conference call for the fourth quarter and full year 2012. With me here today, I have our CEO, Hans Vestberg; CFO, Jan Frykhammar; Head of Support Solutions, Per Borgklint; and Head of Networks, Johan Wibergh. We will, as always, start with a brief presentation, followed by a Q&A. But first, I have to make the usual reminder that we, during the call today, will be making forward-looking statements. These statements are based on our current expectations and certain planning assumptions, which are subject to risks and uncertainties. The actual results may differ materially due to factors mentioned in today's press release and discussed in this conference call. We encourage you to read about these risks and uncertainties in our earnings report, as well as in our annual report. And with that said, I would like to hand the call over to Hans Vestberg.

Thank you, Helena, and welcome, everybody. Let me start by going over a little bit on the key developments in the market in 2012. I think it's no surprise to you that this was the year, 2012, of mass-market adoption of smartphones. In the fourth quarter, 40% of all phones shipped were smartphone, and this, of course, a very important leading indicator that the pattern of usage of smartphones compared to feature phones is significantly different. Another thing that we already talked in the beginning of 2012 about was that we envisioned and forecasted that the operator would focus much more on high-performance mobile broadband networks and efficiency, and we have seen that through the year. It is really the competitive advantage that many operator are trying to get by handing a much better mobile broadband experience to the consumers, so that's very important. We have also seen in 2012 a broad introduction of LTE. Still not that many subscribers worldwide compared to totality, but we'll see more and more market deciding for LTE and also getting licenses for LTE. And there are some certain markets that are ahead when it comes to subscribers. I would say Korea, Japan and the U.S. are in the lead there, but we also see now introduction in many other regions. This drives, at the same time, a need for HSPA investment in order to have performance, as well as a consumer experience on the mobile broadband. During 2012, there we also had macroeconomic and political uncertainties in certain regions. I have to say there's the same regions, markets or macroeconomic challenges we have had through the year, no new ones and has remained quite the same. And that was also for political uncertainty during the year in markets in Middle East and Africa. So all in all, we haven't seen any worsening. I would say we see more of a stability when it comes to those 2 factors, and that we will see going in now to 2013 how it will continue. But so far, we don't see any worsenings. Remarkable is that we are now passing 1.5 billion mobile broadband subscriptions, which is a 50% increase in 1 year. If we then talk a little bit about Ericsson and where we are here, and of course, the year ended on a flat sales compared to 2011. However, with some trend shifts within Global Services and Support Solutions had a growth year, strong growth year; while Networks had a decline in the full year, where of course, CDMA played a vital role, as that declined with some 40% year-over-year or 2011 versus 2012. That was expected, as we all know, as the investments are moving to LTE for the CDMA operators. We can also say we're having important LTE wins in 2012, with a good and high market share and lately, of course, a lot of LTE decisions we're taking in Latin America. The year also have a lot of critical strategic decisions for the company: we decided for our Support Solutions strategy with OSS/BSS and Media; we also decided for an IPR strategy, which are, we believe, 2 important pillars for Ericsson going forward. We did acquisitions in areas like OSS with Telcordia and ConceptWave. And we also acquired ourself much deeper into Media with the Technicolor acquisition, and then also BelAir as a good complement to our portfolio with their Wi-Fi solutions. That was some of them, but definitely a year where we focused more on our base business. And then in February, we finally did or finalized the divestment of Sony Ericsson. If you look at the net income for full year, that is clearly down compared to 2011, very much impacted by the ST-Ericsson. ST-Ericsson, both the writeoff that we preannounced in the fourth quarter, but also the ongoing carrying losses for ST-Ericsson through the year. There is, of course, the business mix with higher share coverage projects than capacity projects and the European modernization, which both in Networks but also in Network Rollouts. Known facts during the year, which we've been working with, it's no surprise but definitely they're weighing on net income. You can also finally say that on the cash conversion, we hit our target above 70%, with well above reaching 116%. Jan will come back to our cash flow in the fourth quarter. Of course, we'll always would like to look at cash flow over a full year perspective as quarters may vary. But definitely, a good year of operational cash flow for Ericsson. Fourth quarter, a couple of highlights. 5% growth, all segments growing, and that's, of course, a little bit of a trend shift as we have had Networks for a couple of quarters having negative growth after a very strong 2011; 5 out of 10 regions growing, and we had sequential growth of 23%. One thing that we said is that we had -- of the 5 regions growing, we have, of course, North America continue to be very strong with a good growth in the fourth quarter. But we also saw a little bit of a pickup on CDMA investments, but we see that as temporary, and it will continue to decline. Profitability in the fourth quarter. Gross margin came up sequentially and year-over-year, both on mix and the improvement or share of Services and Networks. Operating margin went up to 7.1%, SEK 4.8 billion, so 17% growth compared to last year. We had an impact of restructuring that was higher this Q4 compared to last Q4. Of course, on net income, we had a big impact on the ST-Ericsson charge of SEK 8 billion. Then I leave over to Johan to talk about Networks.

Thank you very much, Hans. So as was already said, I mean, Networks had a much better Q4. And earlier in the year, it was overall a very challenging year, but it came back somewhat in Q4, up 6% year-over-year, where it becomes 9% organic, FX adjusted. It was a high business activity in North America and Japan. I also think it's encouraging to say that 6 out of 10 market regions had growth year-over-year. And we see also continued decline of GSM sales in China. It was not a surprise, that was already announced, but it's still a fact. Looking on Q4 then, we said it was 31% up quarter-over-quarter; CDMA, strong quarter; and overall, strong results for 2012, really grateful for that. However, of course, looking on 2013, we know that there will be a continued rapid decline of CDMA sales. On the Q4 operating margin, 8% compared to year-over-year and 8% in Q4 '11. We had a positive impact from higher sales, also negative impact from restructuring. And quarter-on-quarter, the CDMA capacity, was thankful but not the full answer. And moving then to next slide, looking on the business and the underlying drivers, I think there are a couple things to highlight here. So first of all, on the Packet Core side and SSR, we have talked about that before. And we launched that in the beginning of 2012. I have to say that orders have been above my expectations. It's encouraging to see that we now, with 19 new contracts in Q4, summing up to 39, and strong positive feedback from customers, and they're really doing great on that. It's important here to remember that it is now, to a very large extent, connected to the mobile side. And in 2013, we will start working more actively on the fix side. LTE, in our product portfolio, it's really good. I think we already feel that we are in a very strong position, and we are very much encouraged to see the wins happening in Latin America, where we seem to be approaching 60% market share on those awarded deals of LTE in Latin America despite very tough competition and still ending up in acceptable profitability. We also saw a comeback on microwave transport during the fourth quarter, which was encouraging. Another thing when it comes to LTE was what we announced in December, which was the world's first combined LTE network. We have both the 2 technologies, FDD and TDD, the 2 different versions of LTE, running in the same base station, allowing handovers between these 2 standards. That's a first. We also see a continued interest in the market of how we change the traditional telephony, the voice calls, from the old technology. That's called circuit switch over to the new technology that's called VoLTE on LTE networks. That will drive sales of IMS. It's a market that Ericsson has been investing in for a long time. We are the market leader, with 60 commercial installations of IMS, and I think this is promising for the future. Then very much the focus we have in Networks is to make sure we continue the very high and good operational performance and focus on profitability. And I have to remind you back on the Investor Day in November, talked about 3 items to get back to double-digit operating margin. The first one is commercial excellence, and it's a lot regarding pricing here. We are really in an industry where you can't -- that doesn't totally deliver enough profitability, so it doesn't give much room for price movement. The second one is effectiveness in the internal organization. We have a big focus on Lean overall in the organization to drive efficiencies. And thirdly, it's overall cost savings. And these things will help us to return to double-digit operating margins. And with that, back to you, Hans.

Thank you very much. I will back in for Magnus today, that is not here. In Kista, he's on a business trip for doing business. Out in the world. So on the Services then, the fourth quarter growth of 4%, both for the whole Global Services and Professional Services. We continue to see good growth in Managed Services, Consulting and System Integration. And that's very much driven, of course, by the focus by operators on operational efficiency and to reduce costs. In the fourth quarter, we also had 15 new contracts in Managed Services that were signed. Network Rollout only grew 3%, but that's, of course, from a high level. We have established ourself on a high level on Network Rollout, and the project activity was very high in the fourth quarter. Looking at the full year, a growth of 12%; Professional, 14%; we added almost SEK 15 billion in more sales in 2012 in Services. So this was a year, compared to 2011, where we had strong growth in Services. If you look at the profitability, remained flat, 6%, and decreased a little bit from the third quarter, mainly because of the mix that were more Network Rollout or the totality that moved it down. If you look at Professional Services, the operating margin maintained 15%, which is a high level, where we have been for quite a while in that bracket, between some 13% to 16%, very much fueled, of course, off efficiency improvements. Rollout, same level of loss, as we saw in the fourth quarter last year and sequentially worsening, and that's, of course, due to the much higher degree of projects we concluded and worked with in the fourth quarter, which is very usual for a fourth quarter. Full year margin declined slightly on a percentage point of view, but that is more driven about Network Rollout. Professional Services improved their operating margin to 14% in the year of 12% growth -- 14% growth, which is very good. So I leave it back to Per for Support Solutions.

Thank you, Hans. So hi, everyone. So Quarter 4 sales was up some 6% year-over-year, and organic FX adjusted sales was some plus 4% year-over-year. During the year, we had -- in the quarter, we added some SEK 0.6 billion sales from the acquisition acquired, Telcordia. We have also, as you recall, divested IPX. And in Q4 '11, IPX was delivering some SEK 0.4 billion sales, which is done, of course, comparable, makes it a bit difficult to compare quarter-over-quarter from 2011. Organic FX adjusted sales grew some 21% quarter-over-quarter. The operating margin ended at 8% in Q4. Then we should take into consideration the fact that in Q3, we had both a gain from the sale of IPX but also restructuring charges in Q4, which means that quarter-over-quarter, we had a decline. But of course, if you take that into consideration, you will see a bit of a different picture. 2012 full year, we have moved from losses in 2011 into profitability. We are growing our top line, and we are full-steam ahead executing on our strategy and focusing our business further. And we see a continuous demand for OSS solutions with our customers and BSS, and this drives -- of course, is driven from the fact that there is a need for efficiency and adapt to the next-generation mobile broadband networks and the smartphone revolution that Hans was mentioning earlier on. And on top of that, we also see the Media gets more and more focus from our customers, where we see clear growth and momentum. Thank you.

Thank you, Per. I will be brief on the regions. We have talked a little bit about them, just mentioning a couple of them. Of course, North America, very strong year-over-year growth, 51%, despite the CDMA decline. I mention Western Europe and Central Europe, which had a growth in the fourth quarter with 3%, very much driven by Networks. Another region that could be highlighted is Sub-Saharan Africa that ended on the growth for 12% for the full year and 11% in the quarter, very much on the investment levels on 3G in the reading happening. India, that has for several quarters now been down for main port networks, I'll have to say, due to the regulatory environment. It came back to growth in the fourth quarter of 5%. China and Northeast Asia had, of course, strong Japan. On the other hand, the 2G in China continued to go down as they are transitioning into LTE, which made that reading going down both full year and in the quarter. Maybe worth highlighting the others, where we can see that our IP or licensing business grew to SEK 6.6 billion compared to SEK 6.2 billion last year, 2011. Here we, of course, in 2011 had some oneoff items as well, so we see continuous good recurring growth on our licensing business, which was outlined in our strategy. We also need to notice here that IPX was divested in the third quarter and is included here for comparison reason, meaning that, that is part of the decline here. Very good. I think that leaves me to handing over to Jan.

Okay. Thank you, Hans. And so then a few comments on the P&L and balance sheet for me. So gross margin, we have the usual drivers of our gross margin, which is business mix, modernization projects in Europe and share of the Services business. We had a gross margin of 31.1% in the quarter. That's an improvement both year-over-year and quarter-over-quarter. If you look at the comparison with the third quarter, the gross margin has improved, thanks to some of the increase in software business, also a lower Global Services share and this temporary CDMA capacity business. If you look at the other important driver, European modernization projects, we continue to gradually then finalize these projects. They will be with us through 2013. But we continue then to foresee that the negative impact will continue to gradually decline during 2013. We also then have a comment in the business mix, saying that we believe with the current visibility we have that the business mix will shift towards more of capacity business in the second half of 2013. If we take the next slide then, which is then going into operating expense, not a lot to say. Some seasonality in the operating expense, also some impact of the increased restructuring charges, all the numbers is in the report. Organic, excluding acquisition and restructuring charges, a reduction by 3% year-over-year. We also say that with the current portfolio we have and the programs we have in place, we believe that the R&D expenses for 2013 will decrease somewhat. On the restructuring charges, as anticipated, SEK 1.7 billion, quite big charge in the quarter. This is excluding joint ventures. We have the ongoing redundancy process in Sweden. We will -- our belief is that we will be able to conclude the negotiations with the unions by end of the first quarter. But as soon as we have done that, we will communicate that to you and also the level of charge related to the redundancy program. If we then look at taxes, which is also an item in this report worthwhile to highlight, we had a high effective tax rate in the quarter. It's related to the non-tax-deductible ST-Ericsson charge, but also since we have deferred tax assets, we get a negative impact, short term, of the lower corporate income tax in Sweden. And then as usual, we do business in many markets that has different income tax levels. So there are 3 main elements to this. If we go to ST-Ericsson Q4, I think the most important thing to focus on here is, obviously, the impact on the balance sheet of all the transactions that we have made here in December. So what we have done is that we have written down our investments or what used to be then the loan to ST-Ericsson to reflect the fair market value, it's an impact of SEK 4.7 billion. We have also set aside a provision that is then related to the strategic options that we have at hand, all in all, SEK 3.3 billion. And in addition then, the operating loss for ST-Ericsson valued at IFRS of SEK 500 million. So this means that we have -- by the end of December 2012, we do not have any remaining ST-Ericsson investments on our balance sheet, nor the group balance sheet, nor the parent company balance sheet. Our intent is then to -- as we start to execute on the strategic options we have at hand, costs and cash related to the strategic options will be booked against these provisions. So with these provisions, it will be sufficient to cover these options. Our expectation is that the JV line there will be 0 when it comes to ST-Ericsson during 2013. We also continue to have the view that the modern technology that sits in ST-Ericsson has a strategic value to the wireless industry. On the balance sheet, a good end of the year. You see for yourself, days sales outstanding at 86 days, somewhat of an increase in customer financing, nothing dramatic. Inventory, good work by the organization. Also this quarter -- I should say, Q3, we started to see some improvements and then also continued in the fourth quarter -- all of this leading to a good improvement in the cash position, which you have on the next slide. So if we then look at the net cash, that's improved by close to SEK 10 billion in the quarter. That's driven by operating cash flow. It's both the income, but the biggest item is the working capital release. Then also you can see SEK 6.2 billion negative there on investing, SEK 5 billion of those is conversion of the short-term loan to equity, which then impacts investing cash flow. And earlier, we had the loan then booked as a short-term investment and it did not impact on the net cash position. But now we have it as investment, and therefore, the net cash position is impacted. Nevertheless, we have a good improvement in net cash of close to SEK 10 billion in the quarter. Now I hand over back to Hans.

Thank you, Jan. Okay, we summarize it up, starting by talking about the proposed dividend. The board sat down before releasing the fourth quarter report to review the dividend proposal for the AGM using the dividend policy that we have, looking back at the 2012 year, so its earnings and cash generation, as well as looking into the coming years' business plan and expected economic development. That led to that the board proposed to the AGM dividend of SEK 2.75 per share, which is an increase with 10% compared to last year. And that would be in a total, if the AGM would approve it, at SEK 9.1 billion dividend. Next slide, talking about the performance, our performance targets are intact. We have 2 programs rolling right now. The only difference is the growth rates of sales, which is a little bit different from the first program compared to the second program. These are the targets that the board has given management. You can say on the growth, we are, of course, haven't seen any growth this year, but we had 12% last year. So we have from 2010 growth, and we will, of course, then continue to focus on grow faster than market. On operating income, very challenging targets here given that the ST-Ericsson impact is quite significant, led to that we have a decline here, and we had a decline also in 2011. And remember, here in 2010, we excluded restructurings, so we started from that level which we are comparing to. However, strong cash conversion. There we made a target, and that's a yearly target. And that we made -- we did not make it last year, but we made it this year. And if you look at that trajectory, the years are low -- that we have lower growth, we have always exceeded the 70%, and the year of 2011, where we had high growth in special networks, we're a little bit tougher with it. But we are committed to see that we at least convert 70% to cash. Finalizing quickly, we are in a phase of strategy execution, seeing that our portfolio is as accurate as possible for our customer, seeing that we leverage our investment that we have in market share that we have done, R&D, as well as investment in our product portfolio with acquisitions, et cetera. We will continue to be focused on cost and efficiency, as Jan has mentioned and Johan has mentioned, and all will be based on that we should and will focus very much on being the technology and service leader in this industry and keeping our #1 position in the segments we're acting will be important for us. So we'll continue with that fight, and we think we have a good plan for it. Thank you very much.

Thank you, Hans. At this point in time, we have come to opening the Q&A. So operator, please.

[Operator Instructions] We now have the first question from Mr. Stuart Jeffrey from Nomura. Stuart Jeffrey - Nomura Securities Co. Ltd., Research Division: A clarification question, you talk about the mix shift towards capacity. I was wondering if you could expand on that and perhaps talk about whether or not you're talking about an absolute dollar increase in capacity revenues or if it's more if that mix shift is primarily driven by a decline in coverage. The reason I asked that is because there's a headline quoting I think Jan this morning saying that the move towards capacity may reduce the top line, so was hoping you can perhaps explain that a bit more. And perhaps I guess explain about your visibility into capacity spending plans given that historically the order to delivery timetable has been so short. I'd be interested in how -- you talk -- how you get your visibility into the second half.

Okay. Stuart, I will start. It's Jan here. So to start with, when we talk about the business mix, it's obviously the ratios between coverage and capacity, and you're right that when it comes to -- if everything else is equal, the capacity phase may not generate as much top line but higher margin because of the deliverables in the capacity phase are more software and also other type of professional services. When it comes to visibility, I mean, the way we look at this is, obviously, we track the fundamentals in the industry, which you do as well. But we also track, of course, the installed base of RBS 6000 that we have and with the current visibility we have as well on possible expansion on those and so forth. That's how we make these judgments. Hans, do you want to add anything?

No, I can only that because I think that's absolutely right, and the other portion is, of course, after several quarters right now, I would estimate 5, 6 quarter where we've had higher or high degree of coverage projects, we always will have a shift on that. So there's also a degree that, that will go down. And of course, on the projects that are long term, those we have a good visibility on. But as you rightfully mentioned, capacity can be altered very quickly, so there is a different visibility. But we have a good visibility on the coverage projects, where we are with them, how far we have come to the penetration. And that should be added to Jan's comment.

Mr. Edward Snyder from Charter Equity Research is on line with a question. Edward F. Snyder - Charter Equity Research: Hans, back to the same question maybe from a different angle here. It certainly seems like the mix would decline given all the coverage modernization you have now. But given you've installed quite a bit of new equipment, what gives you confidence that you're going to need a big capacity expansion in the near term versus just, say, all the coverage and modernization bleeding off? And then, Jan, we're finally returning to revenue levels that we saw probably in 2008, but gross margins still remain several hundred basis points lower. Given all that you've accomplished in restructuring, cost savings, cash conversions, should we expect a rebound to at least those level if not higher than that given that you're a lot more efficient today than you were, say, in 2008?

I can start. I think I will -- as you tweak the question a little bit from a different angle, I think the answer is pretty much the same. But I think you're right that the coverage projects are twofold. And one is, of course, the European modernization that we talked a lot about, that is part of this. And of course, that portion will go down at least as we see it right now, and that -- by that, you understand that there will be, from a share point of view, a higher capacity then. But that is the current visibility we have right now. So of course, it can change, but right now, we have that visibility. And we have talked before that the mix will prevail in the previous quarter. This quarter, we say that it will prevail in the first half year, and we'll see a gradual shift in the second half year. I think that would sort of -- so it's not the short term here. Remember, we are saying it's the second half of 2013. On the gross margins, I can start them, and you can -- if you go back to 2008, we had a different mix then also. We need to remember that gross margin is, of course, important for every segment. But as a combination of it, it can both go up and down and still we can do more bottom line. So what we are focusing very much in turn is the gross margin on the different units, and then seeing that we get the bottom line out of it because by nature, Services has the lower gross margin because they have a lot less of R&D. And Networks and Support Solutions are higher because they have R&D. So I think the gross margin will be a reflection of our mix as well.

Okay. So I'll try to add. I think a couple of important things that you said there, Hans, the word gradual is obviously very important. Second half is another very important word. I also think that, to add to Hans there on Services share, that's important. We were -- we have been quite radio-centric in the Networks mix the last 2 years. If you look back, as far back as 2007, 2008, we also had back then a big modernization of the circuit switch core networks that was ongoing globally, whereby layered architecture core was introduced. And why we in the report now try to track wins and talk about the Packet Core wins, talk about the voice over LTE and so forth is because it's very important for us if you look mid to long term to really get also into what we could call the new core revenues, so that we can improve margins not only by means of selling more software into the radio installed base, but also get into new core-related revenues. That's what I wanted to add, Hans.

Mark Sue from RBC Capital Markets is online with a question. Mark Sue - RBC Capital Markets, LLC, Research Division: Hans, at a high level, does it feel as if the industry has fundamentally changed? The consolidation is showing in more rationale behavior. Are vendors fighting less for footprint? Or does it feel as if new entrants, such as Samsung and others, might still imply that some of your margin improvements may be temporary in nature? Just how you see the big picture of the industry going forward. And Jan, the comfort and the confidence to increase your dividend, that implies better cash flow visibility, some of that due to capacity improvements and better margins in the second half. Does it also imply that Ericsson may not only be a dividend payer, but also increasingly a -- can the company be a dividend grower?

Good question. The industry fundamentals, of course, we have had this quarter right now, we had 2012. I mean, if you reflect over 2012, of course, it was a tough year. We are not happy with our profitability on the full year for sure, so we have more to do. And then if we look into the industry, there are logical development that can happen in the industry, meaning that it's tougher and tougher, but some sort of calming down when it comes to competition. There are, of course, less of new modernizations coming up. We had the whole European, which was a onetime sort of event, which we don't have right now. It's much more spread out. So I guess we'll wait. I haven't seen any change in the competition during the last couple of years. If I will make it out, it has been pretty much the same. But I think also we can manage that. We have been proving that we can manage it, and we will continue to manage it. And then if it come to some logic in the market, that will be a positive effect for us. But right now, we are planning for continue to be efficient, being good in our pricing, seeing that we have the best product, and that's on being possible for us to continue to grow our result, which we have a focus on.

Okay. So on the dividend side, to begin with, if you look at Page 5 in the press release, we -- first and foremost, this dividend level is a proposal to our annual general assembly, to start with, from the board. If you look at Page 5 in the press release, there we repeat the dividend policy and the judgments that the board looks at when they suggest the dividend. And they look both at the performance and balance sheet structure, in this case, for 2012. And they also look at their best assessment that we have as leaders and the board and of the coming year's business plans. So this is -- this suggests the dividend is a reflection of that. It's not at the same time saying that we are going to have a dividend of XYZ going forward. It's a decision that the board takes each and every year. Mark Sue - RBC Capital Markets, LLC, Research Division: I see. But the overall view is that the business is more predictable, hence your business is more manageable?

Again, it's, of course, a board resolution and proposal, and I would say that we -- I think it reflects, of course, that we have a fairly good balance sheet. I think that's important, of course, and that we have created cash this year and how we look on going forward. But again, it's nothing that we change our dividend policy. That will be the same, and this is what the board have proposed. And this is one of the few things that we on management, of course, are not deciding on. It's a board decision. I'm a board member, but I'm one of several board members. So I guess we need to refer that back to the board as they are doing the proposal.

Alexander Peterc from Exane BNP Paribas is online with a question. Alexander Peterc - Exane BNP Paribas, Research Division: I just like you to elaborate a little bit on the nature of LTE upgrades in the European footprint you have modernized with single run. First, how does the software content, that's these upgrades to LTE, compare to the current mix of software versus hardware in Networks? And secondly, does such an LTE upgrade in a modernized ground [ph] footprint qualify as capacity, and is a progressive ramp in LTE upgrades in Europe a part of your indication that the business mix should improve in H2?

Okay, so this is Johan Wibergh. Thank you for that easy question. So when it comes to the things you mentioned about, there's -- there will be, not only now, but for the coming years a big feature growth in LTE. You mentioned LTE advanced, et cetera. And then every year, every several years now, there will be a lot of new things coming out, and we release software twice per year. And of course, they -- and also some in the future there, they will also require hardware modernization because some of the new features that will come on in coming years will require the operators even to change out some of the hardware. On top of that, the operators will add on more frequencies in coming years because more spectrum will become available, and hence they will also invest in more radio equipment. The general software, that we sell them twice per year, that is sold them as providing features, and that is not related as capacity. On top of that then, there's capacity growth depending on the amount of usage. That is connected to the amount of the users that are using that network at the same time or logging into that network. And so that is on top of it. So that's -- so that hence you will have a combination of coverage and capacity in Europe over the coming years.

Gareth Jenkins from UBS is online with a question. Gareth Jenkins - UBS Investment Bank, Research Division: Just a couple. You had very good growth in Intellectual Property revenues during the course of the last year, and I just wondered what you expect going forwards from here. Do you expect continued growth, especially given you had a oneoff, I think, in 2011? And secondly, just wondered if you could talk a bit more to OpEx and given the headcount reductions that you're seeing domestically, what your expectations are, both for R&D but also for SG&A. And then finally, I think there's a -- saw a few issues around CDMA, this quarter had very good sequential growth. Could you just elaborate a bit in terms of the nature of that growth, was it software driven, how sustainable is it going forward?

First, with CDMA, as we've said, the CDMA had a temporary catch-up on capacity in the fourth quarter. We don't envision that CDMA will come back and start growing again. The customers we have, they are moving quickly to LTE with consumer base. They will, of course -- remember that we have 2 pieces of CDMA business: one which is in services, which is technical support and the maintenance and so on, and that continues because there's going to be subscriber on CDMA; and then we have the piece that is reported in segment Networks, which are related to the equipment. And here, we actually said we don't -- we clearly believe that, that will continue to go down on CDMA. But we saw a catch-up here on CDMA in the fourth quarter. Still, it's down compared to last year, when the whole CDMA business on equipment started to go down. On IPR, yes, we saw a growth on IPRs and licensing to SEK 6.6 billion. As we outlined a new strategy last year, and we firmly believe that we have a very good portfolio and that the whole industry builds on standard technology, and I believe also we are taking a larger share of the whole R&D in the industry. We believe, of course, that cross-licensing will -- going forward, will be important, especially as we see more electronics companies coming into telecoms and whoever else wants to enter in when it comes to the infrastructure. So of course, we -- as we outlined a new strategy, we believe strongly in our portfolio, and we are following the FRAND rules. Anybody that wants to have an access to our licensing, they will get it on a very reasonable and nondiscretionary -- discriminatory, I guess that was the right word, level. So we will continue with that. And for that, we believe it is a good area of growth for us.

Okay, Gareth, I will comment a little bit -- it's Jan here -- on the operating expense then. So on the R&D side, to begin today with what we -- the mood we are into now is defined continuous improvement and continuous improvements in ways of working and efficiencies. At the same time, of course, we intend to continue to invest around the assets we have, which is global scale, services leadership and technology leadership. But we are in the mood of continuous improvements, continuously trying to find efficiencies and so forth. The statement in the report around R&D expenditures, for instance, is there to put a cap on the spend and tell you that our aim is to decrease it somewhat. But we are in that mood of fine-tuning, finding the relevant new competencies, transforming competencies and so forth. That goes both for SG&A, as well as for R&D.

Mark McKechnie from Evercore Partners is online with a question. Mark McKechnie - Evercore Partners Inc., Research Division: I wanted to dig in. I know people have asked a lot about the gross margins, pretty nice uptick. And of course, your CDMA was up 58% sequential. I guess people are trying to figure that out. But you gave a number for CDMA mix I think a couple quarters ago, SEK 1.5 billion or so. So I don't know if you can tell us how much your CDMA was as a percentage of total, how impactful it was on the gross margins, and would you expect going into the first half of next year and second half of next year to kind of that bump in gross margins to fall off in March and June because of the falloff in CDMA? That's it. And then the second question was just to clear up on ST-Ericsson. Just to be clear, are you essentially done putting money into this ST-Ericsson? And maybe you could talk a little bit about what your exit options are there.

I'll take ST-Ericsson, and Jan will come back on CDMA. On ST-Ericsson, as we have said, the only clear decision we have taken that we are not pursuing, to buy out the 50% from STMicroelectronics. That leaves a set of different type of options for the 2 shareholders and which, as we have a shareholders agreement, it has to be mutually agreed what type of options we are going for, and that we are discussing right now. The options that we have had -- that we have at hand today, those are of the magnitude that we should be able to cover the provisions we are taking for this year inside that. But that is -- that's where we are today. And we will come back as soon as we know what strategic options we will take, and that we have agreed with the other shareholder. But today, not more than that I can say.

Okay. And it's also, I think, on that topic then, the SEK 3.3 billion in provision, has also a cash flow element of the same amount, just so we are clear on that. On the CDMA, well, I think the main thing to mention there is, of course, that if you look at the full year, we had a decline in revenue of 40%, and we have also in the business been working on the cost structures throughout the year. I'm not going to go into commenting exactly how the gross margin looks for CDMA, but the business fundamentally is coming down, and we are adjusting our cost structure as a result of that. The big impact in terms of impact on the income has happened during 2012, last year.

Pierre Ferragu from Bernstein is online with a question. Pierre Ferragu - Sanford C. Bernstein & Co., LLC., Research Division: Could you give us a geographic view of what -- how things are going at the moment with your clients? If you take your main regions, maybe Europe, North America, South America, Asia and Middle East and Africa, what are operators discussing with you at the moment and how do you see the market playing out qualitatively in 2013 for your main regions, that would be very helpful.

Thank you. Let me get to make an attempt on that, and of course, that will reflect more what we are talking about today more than any guidance for 2013. But definitely, North America is a lot of technology shift, and many of the operators there are going for LTE. And the consumer demand up to the end of the year, which I -- that's the only thing I refer to, was good. So of course, that means that the investments continued during 2012, but very much focused on technology and a shift to LTE. If we then look at Latin America, which was a little bit slower in the second half, there of course, a lot of new 4G licenses has been awarded, and decision has been made by operators on 4G. So that's a little bit of the feeling on the discussions there. In Europe, the level of activities has been quite high due to the modernization through the year. So we are working here and discussing modernization, getting in new technologies in many markets. So that's happening from an activity point of view. Very much also focused on efficiency, where our Managed Services portfolio is playing a vital role for many of the operators in the region. If you take Africa and Middle East, they have sort of rebounded a little bit and are flat to growing from, of course, lower levels here. Here, 3G is still the main driver of mobile broadband. But also a lot of discussion on efficiency and also our Support Solution portfolio when it comes to BSS in this region, which -- and as you might remember, the mobile payment is with EMTN in Africa, et cetera. So here is an area of innovation where we are strong in our OSS/BSS portfolio. India, here we have had good discussion and work on the services. We both build our competence center but also doing business networks, as we have discussed, has been lower for that and for reasons that are known. Where the technology in China, we have to talk a lot about that meaning that the 2G investments are lower in China right now, waiting for the 4G decision. That doesn't mean that we don't have activities. 3G, we have higher activities only in China, but -- and we have on the large-scale field trials at the same time in China, but that's not offsetting any 2G decline. Japan has been through the year a lot about mobile broadband introduction on new LTE devices. And then Southeast Asia, there we have a couple of strong markets that has come back in the second half, a lot about mobile broadband, but also efficiency in those markets, and the OSS/BSS portfolio. So that reflects a little bit where they are. They're all very much in mobile broadband in many markets, efficiency, and we have our stronghold on our OSS/BSS portfolio that's going to be crucial for sort of transforming the data plans or the mobile broadband charging to much more flexible and agile systems. Pierre Ferragu - Sanford C. Bernstein & Co., LLC., Research Division: And maybe a quick follow-up on Europe. How do you see the transition from like the modernization efforts into rolling out new technologies? Do you think it's something on which you have some visibility in terms of timing? Is it something that you're going to come through rapidly after the end of modernization projects or might there be a gap between the 2? And then as in Europe, overall investments have been slightly lower. If you look at your network sales, do you see places where capacity constraints could become a problem in the next 12 months?

On the first question, on the modernization, when that's -- when those projects will be finished, there's a little bit different how much capacity are bought on the beginning between operator -- our operators. You cannot generalize what will happen. Some has bought more capacity from beginning. Some has bought less. So how that will pan out will be a little bit more driven by the consumer demand and the smartphones coming into the market than anything else. And so I think that's important. It's important when we talk about investment in Europe that the activity level is high. We're doing a lot on new technology in the region. But from a CapEx point of view, you're right, it's not that high money. But from activity level, rolling out new technologies, it's quite many of the big European markets, they are changing technology going to market, the radio standard, enabling the technology with 4G. So that is happening even though it's not reflecting in money because, as you remember, the European modernization was a sort of a footprint that would be established where the competition was at highest.

Our final question comes from Francois Meunier from Morgan Stanley. Francois Meunier - Morgan Stanley, Research Division: Hans, congratulation on the results of all the team. That's very good, especially on the cash. I'm very impressed by the cash conversion rate. On that topic, how do you see next year shaping out? Is it something like the usual seasonality with low cash conversion in H1 and then improving in H2? Or do you see anything different given -- as the guidance you've given on coverage versus capacity?

I'm -- it's Jan here. We have -- our statement is the same that we have done several times. I mean, you need to look at our cash flow on the full year perspective. So there are some seasonality in the operating cash flow generation, that's clear. However, what we are trying to work as a change program in the company is towards an improved or reduced cycle time in all our projects, and that's called order to cash. That's hopefully then going to start to show improvements in these patterns over several years, right. It's a long-term initiative. But if you just ask about 2013 or 2012 or 2011, we have had some seasonality in the cash flow generation, that's clear. I think also, before I hand over to Helena, I think it's worthwhile for me as to say one thing and remind all of you, when you are looking at sales estimates and all of those great things, please remember that we have a model when we do our net sales. That is called averaging on FX, which means that we basically take the closing rates of each month, and you add them all together to get to an average exchange rate, which we then use to value our top line, and that's good because it smoothens out FX movements. Then what is important to remember is that when there is a new year, you reset the clock. And right now, if you look at dollars versus Swedish kronor average rate, it's disclosed in the report. I think it's some 6.73. And spot rates right now is around 6.50. So please keep that in mind also when you look at modeling. Francois Meunier - Morgan Stanley, Research Division: Okay. If I'm allowed a last question, maybe, I think you're in litigation with Samsung and apparently, they haven't paid much IP royalties to you for the past 18 months. Is it something which was visible in the margins in the past year basically, if those affected didn't pay?

I can only say we have not had the cross license for the last 18 months, meaning that we have not yet any license payment from Samsung. Again, we, of course, have had a long discussion and negotiation with them, but we came to the conclusion we cannot come to an agreement on the FRAND terms of the licensing, and that's why we launched that litigation by year-end last year. So now we're going to see how that process continues.

Okay. With that, we have come to the end of this call. I say thank you all for joining. We hope to see you at Mobile World Congress in Barcelona in February. Please don't hesitate to contact the IR team or Media Relations team to help us set up the program. And with that, thank you for joining and talk to you next time.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.