PARENT COMPANY INFORMATION

Net sales for the year amounted to SEK 0.3 (5.1) billion and income after financial items was SEK 8.1 (19.4) billion. Effective January 1, 2009, the right to all license revenues from third parties related to patent licenses was transferred to Ericsson AB, a wholly owned subsidiary, and consequently net sales in 2009 were insignificant compared to 2008.

Major changes in the Parent Company's financial position for the year include investments in the joint venture ST-Ericsson of SEK 8.6 billion, decreased current and non-current receivables from subsidiaries of SEK 10.1 billion, decreased other current receivables of SEK 2.0 billion, increased cash, cash equivalents and short-term investments of SEK 3.2 billion, increased current and non-current liabilities to subsidiaries of SEK 5.0 billion and decreased other current liabilities of SEK 7.4 billion.

At year end, cash, cash equivalents and short-term investments amounted to SEK 62.4 (59.2) billion.

As per December 31, 2009, guarantees to Sony Ericsson amount to SEK 0.8 b. and are reported as Contingent Liabilities.

In accordance with the conditions of the long-term variable remuneration program (LTV) for Ericsson employees, 3,237,304 shares from treasury stock were sold or distributed to employees during the fourth quarter and 9,087,564 shares during the year. In the second quarter 27,000,000 treasury shares were repurchased. The holding of treasury stock at December 31, 2009, was 78,978,533 Class B shares

DIVIDEND PROPOSAL

The Board of Directors will propose to the Annual General Meeting a dividend of SEK 2.00 (1.85) per share, representing some SEK 6.4 (6.0) b., and April 16, 2010, as record day for payment of dividend.

ANNUAL REPORT

The annual report will be made available to shareholders on our website www.ericsson.com and at the Ericsson headquarters, Torshamnsgatan 23, Stockholm, approximately two weeks prior to the Annual General Meeting. 

ANNUAL GENERAL MEETING OF SHAREHOLDERS

The Annual General Meeting of shareholders will be held on April 13, 15.00 (CET) at Kistamässan, Stockholm.

OTHER INFORMATION

Ericsson to acquire majority of Nortel's GSM business

On November 25, 2009, Ericsson was selected to acquire certain assets of the Carrier Networks division relating to Nortel's GSM business in the US and Canada. The purchase is an asset transaction at the cash purchase price of USD 70 million on a cash and debt free basis. Ericsson's bid was made together with Kapsch CarrierCom AG of Austria that will acquire the remaining assets outside North America at a price of USD 33 million.

The operations generated approximately USD 400 million of sales in 2008 and have approximately 350 employees.

Consummation of the transaction is subject to approval of US and Canadian bankruptcy courts and the satisfaction of regulatory and other conditions.

Ericsson to acquire Pride Spa

On January 12, 2010, Ericsson announced that it has agreed to acquire Pride Spa in Italy, a consulting and systems integration company. With the added 1,000 employees the number of services professionals now amounts to 40,000 globally. Closing is expected by February 1, 2010.

Appointments

Jan Frykhammar has been appointed CFO and Executive Vice President.

Magnus Mandersson has been appointed head of business unit Global Services and is also a member of the Group Management Team.

Rima Qureshi has been appointed head of business unit CDMA Mobile Systems and member of the Group Management Team. She is also head of Ericsson Response.

Gary Pinkham, presently head of Global Investor and Analyst Relations, has been appointed head of Corporate Affairs and Communications in North America.

Cesare Avenia, presently head of market unit South East Europe, has been appointed Chief Brand Officer and member of the Group Management Team.

Håkan Eriksson, CTO and member of the Group Management Team, has, in addition to his present responsibilities, been appointed head of Ericsson in Silicon Valley.

Johan Wibergh, head of business unit Networks and member of the Group Management Team, has been appointed Executive Vice President.

Assessment of risk environment

Ericsson's operational and financial risk factors and uncertainties are described under "Risk factors Assess­ment of risk environment" in our Annual Report 2008.

Risk factors and uncertainties in focus during the forthcoming six-month period for the Parent Company and the Ericsson Group include:

·   potential negative effects of the continued uncertainty in the financial markets and the weak economic business environment on operators' willingness to invest in network development as well as uncertainty regarding the financial stability of suppliers, for example due to lack of borrowing facilities, or reduced consumer telecom spending, or increased pressure on us to provide financing;

·   effects on gross margins and/or working capital of the product mix in the Networks segment between sales of software, upgrades and extensions and the pro-portion of new network build-outs and break-in contracts;

·   a volatile sales pattern in the Multimedia segment or variability in our overall sales seasonality could make it more difficult to forecast future sales;

·   results and capital needs of our two major joint ven­tures, Sony Ericsson and ST-Ericsson, which both are negatively affected to a larger extent than our three other segments by the current economic slowdown;

·   effects of the ongoing industry consolidation among our customers as well as between our largest competitors, e.g. intensified price competition;

·   changes in foreign exchange rates, in particular USD and EUR;

·   continued political unrest or instability in certain markets.

Ericsson conducts business in certain countries which are subject to trade restrictions or which are focused on by certain investors. We stringently follow all relevant regulations and trade embargos applicable to us in our dealings with customers operating in such countries. Moreover, Ericsson operates globally in accordance with Group level policies and directives for business ethics and conduct. In no way should our business activities in these countries be construed as supporting a particular political agenda or regime. We have activities in such countries mainly due to that certain customers with multi-country operations put demands on us to support them in all of their markets.

Please refer further to Ericsson's Annual Report 2008, where we describe our risks and uncertainties along with our strategies and tactics to mitigate the risk exposures or limit unfavorable outcomes.

Stockholm, January 25, 2010

Hans Vestberg, President and CEO

Telefonaktiebolaget LM Ericsson (publ)

Date for next report: April 23, 2010

AUDITORS' REVIEW REPORT

We have reviewed this report for the period January 1 to December 31, 2009, for Telefonaktiebolaget LM Ericsson (publ). The board of directors and the CEO are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.

We conducted our review in accordance with the Standard on Review Engagements SÖG 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity, issued by FAR SRS. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing in Sweden, RS, and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit.

Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act regarding the Group and with the Swedish Annual Accounts Act regarding the Parent Company.

source:c114en