Telefonaktiebolaget LM Ericsson (ERIC) 6-K Current report (foreign)

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN ISSUER

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

April 21, 2016

Commission File Number

000-12033

LM ERICSSON TELEPHONE COMPANY

(Translation of registrant’s name into English)

Torshamnsgatan 21, Kista

SE-164 83, Stockholm, Sweden

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.Form 20-F  x Form 40-F  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ¨

Announcement of LM Ericsson Telephone Company, April 21, 2016 regarding “Ericsson first quarter report 2016”.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

TELEFONAKTIEBOLAGET LM ERICSSON (publ)
By:	/s/    NINAMACPHERSON
	Nina Macpherson
	Senior Vice President and
	General Counsel
By:	/s/    HELENANORRMAN
	Helena Norrman
	Senior Vice President
	Corporate Marketing & Communications Officer

Date:April 21, 2016

FIRST QUARTER

REPORT 2016

Stockholm, April 21, 2016

FIRST QUARTER HIGHLIGHTS		Read more (page)
•	Sales as reported decreased by -2% YoY. Sales, adjusted for comparable units and currency, decreased by -1% YoY.	3
•	Sales declined following weak development in Europe and a weak macro-economic environment in some emerging markets.	3
•	Sales grew in North America, Mainland China and in South East Asia.	3
•	IPR licensing revenues grew YoY, mainly driven by recently signed contracts which included certain one-time items.	3
•	Gross margin declined to 33.3% (35.4%), mainly due to lower margins in Global Services, higher share of mobile broadband coverage projects in parts of Asia and lower software sales in IP and core networks.	3
•	Operating margin increased to 6.7% (4.0%) YoY, driven by improvements in Networks, partly offset by lower profitability in Global Services.	4
•	In addition to the SEK 9 b. global cost and efficiency program, measures were started in the quarter to adapt the operations to current mobile broadband project volumes. Therefore, the estimate for 2016 restructuring charges increases to SEK 4-5 b. from previous SEK 3-4 b.	3
•	The company today announces structural changes to further accelerate strategy execution and drive efficiency and growth harder across the company.	2
•	Cash flow from operating activities was SEK -2.4 (-5.9) b.	9

SEK b.	Q1 2016			Q1 2015			YoY change			Q4 2015			QoQ change
Net sales		52.2			53.5			-2	%		73.6			-29	%
Sales growth adj. for comparable units and currency		—			—			-1	%		—			-28	%
Gross margin		33.3	%		35.4	%		—			36.3	%		—
Gross margin excluding restructuring charges		33.9	%		36.3	%		—			36.6	%		—
Operating income		3.5			2.1			63	%		11.0			-69	%
Operating income excluding restructuring charges		4.1			2.7			50	%		11.7			-65	%
Operating margin		6.7	%		4.0	%		—			15.0	%		—
Operating margin excluding restructuring charges		7.9	%		5.1	%		—			16.0	%		—
Net income		2.1			1.5			45	%		7.0			-70	%
EPS diluted, SEK		0.60			0.40			50	%		2.15			-72	%
EPS (Non-IFRS), SEK1)		0.87			0.77			13	%		2.50			-65	%
Cash flow from operating activities		-2.4			-5.9			-60	%		21.9			-111	%
Net cash, end of period2)		36.5			39.7			-8	%		41.2			-11	%

¹⁾  EPS, diluted, excl. amortizations and write-downs of acquired intangible assets, and restructuring.

²⁾  The definition of Net cash is changed to exclude post-employment benefits, see accounting policies page 24.

1      Ericsson  |  First Quarter Report 2016

CEO COMMENTS

Sales, adjusted for comparable units and currency, were stable YoY. Growth in North America, Mainland China and South East Asia was offset by weak development in Europe and some emerging markets. Profitability increased YoY, driven by improvements in Networks while Global Services had a challenging quarter.

Business

Segment Networks sales declined slightly YoY. A continued weak macro-economic environment impacted sales negatively in some emerging markets in the Middle East and Latin America. In addition, sales in Europe were down primarily driven by completion of mobile broadband projects in 2015. Mobile broadband sales in North America and South East Asia grew and the fast pace of 4G deployments in Mainland China continued. IPR licensing revenues grew YoY, mainly driven by recently signed contracts which included certain one-time items. Software sales in IP and core networks declined.

Sales in segment Global Services declined YoY. This was mainly due to lower Network Rollout activities in Europe and Latin America. Professional Services sales were stable with growth in Consulting and Systems Integration driven by transformation projects and stable Managed Services sales with 21 contracts signed in the quarter.

Sales in Support Solutions increased YoY due to higher IPR licensing revenues. The underlying demand remains strong in OSS and BSS as data growth and increased focus on customer experience drives operators to transform their OSS and BSS solutions.

Profitability

Gross margin declined despite higher IPR licensing revenues. The main reasons were lower margins in Global Services, a higher share of mobile broadband coverage projects in parts of Asia and lower software sales in IP and core networks. Operating margin increased YoY to 6.7% (4.0%), driven by reduced operating expenses and a positive currency effect.

Segment Networks operating margin improved through higher profitability in Radio supported by growth in IPR licensing revenues. Global Services had a challenging quarter partly due to lower mobile broadband coverage activities, leading to temporarily larger losses in Network Rollout. In addition, Professional Services margin declined as a large number of systems integration transformation projects are in a start-up phase.

Cash flow

We ended the quarter with a negative cash flow from operating activities of SEK -2.4 b. which is a significant improvement compared with a year ago. As cash flow is volatile between quarters it should be viewed on a full-year basis. Our full-year cash conversion target of more than 70% remains.

Focus 2016

When announcing the year-end results 2015, we presented three focus areas for 2016. The first focus area relates to our Core business where we will capture business opportunities in 4G and extend our leadership in 5G. At the Mobile World Congress (MWC) in Barcelona in March, we demonstrated our 5G leadership both technically and commercially through 21 customer contracts as well as industry and academia research cooperation.

The second focus area for 2016 is to improve profitability in the targeted growth areas. Sales in these areas showed growth mainly driven by professional services. We will continue to put stronger focus on software sales and recurring business to increase profitability.

The third focus area for 2016 is to improve cost and efficiency in order to stay competitive across the entire business.

The global cost and efficiency program is progressing according to plan and contributed with savings of SEK 0.5 b. in operating expenses in the quarter. We are confident in our ability to achieve net annual savings of SEK 9 b. during 2017 compared with 2014.

In the quarter, we began to take additional measures beyond the SEK 9 b. cost and efficiency program. Hence, we are adapting our operations to current mobile broadband project volumes, which primarily impacts service delivery. The additional measures are reflected in an increased estimate for the 2016 restructuring charges.

Structural changes

We are today announcing structural changes to further accelerate strategy execution and drive efficiency and growth even harder across the company. We will create a leaner, more fit for purpose, organization to cater to the needs of different customer segments and to faster capture market opportunities. As 5G, the Internet of Things and Cloud drive the next phase of industry development, the time is right to make this change.

The new structure will have five business units and one dedicated customer group for Industry & Society, in line with the company focus on core business, targeted growth areas and cost and efficiency. The changes will make it easier for our customers to do business with us, whether they are operators, media companies or other industries.

We are not satisfied with our overall growth and profitability development over the past years and I am convinced this will make us more competitive and enable us to grow both our company and our earnings.

Hans Vestberg

President and CEO

2      Ericsson  |  First Quarter Report 2016

FINANCIAL HIGHLIGHTS

SEK b.	Q1 2016			Q1 2015			YoY change			Q4 2015			QoQ change
Net sales		52.2			53.5			-2	%		73.6			-29	%
Of which Networks		25.8			26.4			-2	%		37.3			-31	%
Of which Global Services		23.0			23.9			-4	%		30.7			-25	%
Of which Support Solutions		3.4			3.1			10	%		5.6			-40	%
Of which Modems		—			0.1			—			—			—
Gross income		17.4			19.0			-8	%		26.7			-35	%
Gross margin (%)		33.3	%		35.4	%		—			36.3	%		—
Research and development expenses		-7.5			-8.5			-12	%		-7.9			-6	%
Selling and administrative expenses		-6.7			-7.1			-6	%		-8.0			-16	%
Other operating income and expenses		0.3			-1.2			—			0.3			7	%
Operating income		3.5			2.1			63	%		11.0			-69	%
Operating margin		6.7	%		4.0	%		—			15.0	%		—
for Networks		11	%		2	%		—			19	%		—
for Global Services		3	%		7	%		—			8	%		—
for Support Solutions		7	%		3	%		—			30	%		—
for Modems		—			0	%		—			—			—
Financial net		-0.5			-0.1			—			-0.7			-36	%
Taxes		-0.9			-0.6			45	%		-3.3			-73	%
Net income		2.1			1.5			45	%		7.0			-70	%
Restructuring charges		-0.6			-0.6			3	%		-0.7			-10	%

FIRST QUARTER COMMENTS

Net sales

Sales as reported decreased by -2% YoY. Sales, adjusted for comparable units and currency, decreased by -1%.

Segment Networks sales declined slightly YoY. A weak macro-economic environment impacted sales negatively in some emerging markets in the Middle East and Latin America. In addition, sales in Europe were down primarily driven by completion of mobile broadband projects in 2015. Mobile broadband sales in North America grew and the fast pace of 4G deployments in Mainland China continued. IPR licensing revenues grew YoY, mainly driven by recently signed contracts which included certain one-time items. Software sales in IP and core networks declined.

Sales dropped in segment Global Services YoY. This was mainly due to lower Network Rollout activities in Europe and Latin America. Professional Services sales were stable with growth in Consulting and Systems Integration driven by transformation projects. Managed Services sales were stable with 21 contracts signed in the quarter.

Sales in Support Solutions increased YoY due to higher IPR licensing revenues. Software sales in OSS and BSS declined. However, the underlying demand remains strong in OSS and BSS as data growth and increased focus on customer experience drives operators to transform their OSS and BSS solutions.

Group sales as reported decreased by -29% QoQ following a seasonally strong Q4 and lower IPR licensing revenues.

Gross margin

Gross margin declined YoY despite higher IPR licensing revenues and increased capacity sales in North America. Lower margin in Global Services, higher share of mobile broadband coverage projects in parts of Asia and lower software sales in IP and core networks impacted gross margin negatively.

Gross margin declined sequentially, mainly due to lower IPR licensing revenues, higher share of services sales and lower margin in Global Services.

Restructuring charges and cost and efficiency program

Restructuring charges were stable YoY and declined QoQ.

The global cost and efficiency program is progressing according to plan. The target remains, to achieve net annual savings of SEK 9 b. during 2017 relative to 2014.

In the quarter, the company began to take additional measures beyond the cost and efficiency program, impacting primarily service delivery. With current visibility, total restructuring charges for 2016 are estimated to be SEK 4-5 b. compared with previous estimate of SEK 3-4 b.

Operating expenses

Operating expenses decreased to SEK 14.2 (15.6) b. due to increased capitalization of development expenses, savings related to the cost and efficiency program and reduced amortizations of intangible assets. Savings related to the cost and efficiency program were SEK 0.5 b. YoY.

3      Ericsson  |  First Quarter Report 2016

Other operating income and expenses

Other operating income and expenses improved YoY. The revaluation and realization effects of currency hedge contracts were SEK 0.2 b. This is to be compared with SEK -0.1 b. in Q4 2015 and SEK -1.4 b. in Q1 2015.

The main part of the currency hedge contract balance is in USD. The SEK strengthened against the USD between Dec 31, 2015 (SEK/USD rate 8.40) and March 31, 2016 (SEK/USD rate 8.10).

Operating income

Operating income increased YoY, supported by reduced operating expenses, a positive effect from currency hedge contracts and increased IPR licensing revenues. The increase in operating income was partly offset by a lower gross income.

Operating income decreased QoQ due to lower sales, lower IPR licensing revenues and lower gross margin. The decrease in operating income was partly offset by reduced operating expenses.

Financial net

Financial net decreased YoY mainly due to negative revaluation effects of foreign currency. Financial net improved QoQ following lower financial expenses.

Taxes

The tax rate was stable YoY and declined slightly QoQ.

Net income and EPS

Net income and EPS diluted increased YoY following higher operating income and decreased QoQ. EPS diluted was SEK 0.60 (0.40), EPS (Non-IFRS) was SEK 0.87 (0.77).

Employees

The number of employees on March 31, 2016 was 115,300 compared with 116,281 on Dec 31, 2015. Reductions as part of the global cost and efficiency program continued. However, the number of Ericsson services professionals remained unchanged at 66,000 on March 31, 2016.

Modems

The discontinuation of the modems business was completed in Q3 2015.

4      Ericsson  |  First Quarter Report 2016

REGIONAL SALES

	First quarter 2016								Change
SEK b.	Networks		Global Services		Support Solutions		Total		YoY			QoQ
North America		6.3		6.1		0.8		13.2		8	%		-23	%
Latin America		2.0		1.8		0.2		4.0		-12	%		-34	%
Northern Europe and Central Asia		1.3		0.8		0.1		2.2		-18	%		-22	%
Western and Central Europe		1.3		2.5		0.1		4.0		-17	%		-26	%
Mediterranean		1.5		2.7		0.1		4.3		-14	%		-38	%
Middle East		1.4		1.9		0.3		3.6		-21	%		-41	%
Sub-Saharan Africa		0.9		1.1		0.2		2.1		-2	%		-26	%
India		1.3		1.2		0.2		2.7		-24	%		-15	%
North East Asia		3.5		1.9		0.1		5.6		-7	%		-37	%
South East Asia and Oceania		3.2		1.9		0.1		5.2		22	%		-2	%
Other1)		3.1		1.1		1.2		5.4		43	%		-40	%
Total		25.8		23.0		3.4		52.2		-2	%		-29	%

¹⁾  Region “Other” includes licensing revenues, broadcast services, power modules, mobile broadband modules, Ericsson-LG Enterprise and other businesses.

North America

Sales grew in comparison with a weak first quarter 2015, driven by increased mobile broadband capacity investments to cater to mobile data traffic growth. The need for ICT transformation remains and is creating opportunities in Support Solutions and Professional Services.

Latin America

Mobile broadband investments continued to decline, impacted by local currency depreciation. However, mobile broadband investments in Mexico increased YoY.

Northern Europe and Central Asia

The mobile broadband investments in Russia continued to be weak. Professional Services grew, primarily in the Nordics, where managed services and ICT transformation were the main drivers.

Western and Central Europe

After a period of significant investments in network build-out, operators are moving focus to invest in capacity and quality in order to improve end-user experience. This resulted in a mobile broadband sales decline compared with last year. Professional services sales remained stable.

Mediterranean

Sales declined due to lower investments in mobile broadband infrastructure as major projects were completed. ICT transformation for TV & Media developed favorably.

Middle East

Networks sales declined due to lower infrastructure investments, driven by a challenging macro-economic environment partly linked to lower oil prices.

Sub-Saharan Africa

Mobile broadband sales increased somewhat as certain markets are investing in network modernization and introduction of 4G. Global Services sales decreased, mainly as a result of de-scoping of managed services contracts in a few markets.

India

4G deployments started at the end of 2015, however, overall mobile broadband sales slowed as a result of delays in spectrum auctions and spectrum trading deals between operators. The positive development in Professional Services continued.

North East Asia

4G deployments in Mainland China continued as projected, while core network deployments were slower than a year ago. Japan had a strong quarter mainly due to fiscal year-end investments. In Korea, investments slowed further due to delayed spectrum auctions.

South East Asia and Oceania

Sales growth was primarily driven by mobile broadband expansion in Bangladesh. Professional Services developed favorably, mainly driven by Managed Services. Support Solutions developed positively, driven by OSS and BSS transformation projects, primarily in Australia.

Other

IPR licensing revenues grew YoY, mainly driven by recently signed contracts which included certain one-time items.

5      Ericsson  |  First Quarter Report 2016

SEGMENT RESULTS

NETWORKS

SEK b.	Q1 2016			Q1 2015			YoY change			Q4 2015			QoQ change
Net sales		25.8			26.4			-2	%		37.3			-31	%
Sales growth adj. for comparable units and currency		—			—			-3	%		—			-30	%
Operating income		2.7			0.6			362	%		7.2			-62	%
Operating income excluding restructuring charges		3.0			0.8			296	%		7.4			-59	%
Operating margin		11	%		2	%		—			19	%		—
Operating margin excluding restructuring charges		12	%		3	%		—			20	%		—
EBITA margin		11	%		5	%		—			21	%		—
Restructuring charges		-0.3			-0.2			71	%		-0.3			14	%

Net sales

Sales as reported decreased by -2% YoY mainly due to lower software sales in IP and core networks as well as lower mobile broadband investments in India following a delayed spectrum auction. In North America, mobile broadband sales grew driven by capacity investments. 4G deployments in Mainland China continued at a fast pace. IPR licensing revenue grew YoY.

Sales growth was strong in some emerging markets such as Mexico and Bangladesh. Other emerging markets, such as Brazil and parts of the Middle East, remained weak, negatively impacted by a weak macro-economic environment. Sales in Europe declined YoY as major projects were completed in 2015. Sales, adjusted for comparable units and currency, decreased by -3% YoY.

Sales decreased QoQ, following a seasonally strong Q4 2015. The decrease was mainly due to lower IPR licensing revenues and lower sales in Mainland China and in North America. Sequentially, the business mix was unchanged, with a large share of hardware sales.

In the quarter, Ericsson announced the acquisition of NodePrime, a software platform development company. The acquisition aims to strengthen Ericsson’s leadership in next- generation software-defined infrastructure.

Deliveries of Ericsson Radio System started at the end of 2015 and will scale to address all regions and ramp to larger volumes during the latter part of this year.

Operating income and margin

Operating income and margin increased YoY mainly due to higher IPR licensing revenues, lower operating expenses, higher mobile broadband capacity sales in North America and a positive effect from currency hedge contracts. This was partly offset by lower software sales in IP and core networks and a higher share of coverage business in emerging markets.

Sequentially, operating income and margin decreased due to lower sales and lower IPR licensing revenues.

The effect of currency hedge contracts was positive at SEK 0.2 (-1.1) b. in the quarter. In Q4 2015, the effect of currency hedge contracts was negative at SEK -0.2 b.

6      Ericsson  |  First Quarter Report 2016

GLOBAL SERVICES

SEK b.	Q1 2016			Q1 2015			YoY change			Q4 2015			QoQ change
Net sales		23.0			23.9			-4	%		30.7			-25	%
Of which Professional Services		17.9			18.1			-1	%		23.1			-22	%
Of which Managed Services		7.4			7.5			-2	%		8.2			-10	%
Of which Network Rollout		5.1			5.8			-12	%		7.6			-33	%
Sales growth adj. for comparable units and currency		—			—			0	%		—			-23	%
Operating income		0.6			1.7			-62	%		2.5			-75	%
Of which Professional Services		1.3			2.1			-39	%		2.7			-52	%
Of which Network Rollout		-0.6			-0.4			52	%		-0.2			257	%
Operating margin		3	%		7	%		—			8	%		—
for Professional Services		7	%		12	%		—			12	%		—
for Network Rollout		-13	%		-7	%		—			-2	%		—
Operating income excluding restructuring charges		1.0			2.1			-54	%		2.7			-65	%
Operating margin excluding restructuring charges		4	%		9	%		—			9	%		—
EBITA margin		4	%		8	%		—			9	%		—
Restructuring charges		-0.3			-0.4			-25	%		-0.2			48	%

Net sales

Sales as reported decreased -4% YoY, with a decline in Network Rollout due to lower mobile broadband coverage activities in Europe and Latin America. Professional Services sales were stable with growth in Consulting and Systems Integration driven by transformation projects. Managed Services sales were stable with 21 contracts signed in the quarter. Sales, adjusted for comparable units and currency, were flat YoY.

Sales decreased by -25% QoQ following a strong Q4.

Operating income and margin

Operating income decreased YoY in Global Services with reduced profitability in both Network Rollout and Professional Services.

While the underlying profitability in Network Rollout remained stable, lower volumes in mobile broadband rollout led to temporary losses due to under-absorption of resources.

Professional Services margin declined as a large number of systems integration transformation projects are in a start-up phase.

To improve profitability, additional measures are being taken to adapt the service delivery operations to current mobile broadband project volumes.

	Q1 2016		Q1 2015		Full year 2015
Number of signed Managed Services contracts		21		27		101
Number of signed significant consulting & systems integration contracts1)		13		13		66

¹⁾ In the areas of OSS and BSS, IP, Service Delivery Platforms and data center build projects.

7      Ericsson  |  First Quarter Report 2016

SUPPORT SOLUTIONS

SEK b.	Q1 2016			Q1 2015			YoY change			Q4 2015			QoQ change
Net sales		3.4			3.1			10	%		5.6			-40	%
Sales growth adj. for comparable units and currency		—			—			5	%		—			-39	%
Operating income		0.2			0.1			190	%		1.7			-86	%
Operating income excluding restructuring charges		0.3			0.1			—			1.9			—
Operating margin		7	%		3	%		—			30	%		—
Operating margin excluding restructuring charges		8	%		3	%		—			34	%		—
EBITA margin		15	%		10	%		—			34	%		—
Restructuring charges		0.0			0.0			16	%		-0.2			-90	%

Net sales

Sales as reported increased 10% YoY, due to higher IPR licensing revenues. Software sales in OSS and BSS declined due to lower software licenses sales in the quarter. The overall transition of business models, from traditional telecom software licenses to recurrent license revenue deals, continues. The underlying demand remains strong in OSS and BSS as data growth and increased focus on customer experience drives operators to transform their OSS and BSS solutions.

TV & Media sales were flat YoY with contribution from the recent acquisition of Envivio, a global leader in software-based video encoding. In the IP transformation of the media industry there is a high level of engagement around next-generation TV and Media platforms. Ericsson is well positioned through the cloud-based video storage and TV platform solutions.

Sales, adjusted for comparable units and currency, increased by 5%.

Sales declined QoQ following a seasonally strong Q4.

Operating income and margin

Operating income and margin improved YoY, mainly driven by increased IPR licensing revenues.

The effect of currency hedge contracts was SEK 0.0 (-0.1) b.

8      Ericsson  |  First Quarter Report 2016

CASH FLOW

SEK b.	Q1 2016			Q1 2015			Q4 2015
Net income reconciled to cash		3.6			3.1			11.0
Changes in operating net assets		-6.0			-9.0			10.9
Cash flow from operating activities		-2.4			-5.9			21.9
Cash flow from investing activities		-1.0			-2.1			-12.8
Cash flow from financing activities		0.1			0.9			-0.7
Net change in cash and cash equivalents		-4.3			-5.7			6.3
Cash conversion (%)		-65	%		-188	%		200	%

Cash flow from operating activities was SEK -2.4 (-5.9) b. Compared with last year, cash flow from operating activities has improved despite payouts of short-term variable compensation (such payouts were made in the second quarter last year). The improvement is mainly related to stable pace of deployments in Mainland China, capacity sales in North America and higher IPR licensing payments.

Cash outlays of SEK 0.5 b. related to restructuring charges were made in the quarter.

Cash flow from investing activities was impacted by investments in property, plant and equipment of SEK -1.5 b., related to continued investments in Global ICT centers. In addition capitalized development expenses of SEK -1.2 b. were made. Cash flow from financing activities amounted to SEK 0.1 b in the quarter.

Working capital KPIs, number of days	Jan-Mar 2016		Jan-Dec 2015		Jan-Sep 2015		Jan-Jun 2015		Jan-Mar 2015
Sales outstanding (target: <90)		108		87		113		112		125
Inventory (target:<65)		80		64		72		74		82
Payable (target:>60)		58		53		55		57		64

9      Ericsson  |  First Quarter Report 2016

FINANCIAL POSITION

SEK b.	Mar 31 2016			Mar 31 2015			Dec 31 2015
+ Short-term investments		25.1			30.8			26.0
+ Cash and cash equivalents		35.9			35.3			40.2
Gross cash		61.0			66.1			66.3
- Interest bearing liabilities		24.5			26.3			25.1
Net cash		36.5			39.7			41.2
Equity		145.6			149.1			147.4
Total assets		280.3			303.0			284.4
Capital turnover (times)		1.1			1.1			1.3
Return on capital employed (%)		6.9	%		5.8	%		11.6	%
Equity ratio (%)		52.0	%		49.2	%		51.8	%
Return on equity (%)		5.4	%		3.6	%		9.3	%

Net cash decreased by SEK 4.7 b. in the quarter as a result of increased working capital and investing activities. Total net cash position was SEK 36.5 b.

The definition of Net cash was changed to exclude post-employment benefits. For a definition, see accounting policies page 24. Post-employment benefits were SEK 25.7 b. compared with SEK 22.7 b. Dec 31, 2015, following lower discount rates.

The average maturity of long-term borrowings as of March 31, 2016, was 4.5 years, compared with 5.6 years 12 months earlier.

Debt maturity profile, Parent Company

10      Ericsson  |  First Quarter Report 2016

PARENT COMPANY

Income after financial items was SEK 0.4 (1.9) b. The decrease was mainly due to lower recognized dividends from subsidiaries than a year ago.

Major changes in the Parent Company’s financial position for the period; decreased cash, cash equivalents and short-term investments of SEK 4.0 b. and decreased current and non-current liabilities to subsidiaries of SEK 4.9 b. At the end of the quarter, cash, cash equivalents and short-term investments amounted to SEK 44.7 (49.6) b.

The Parent Company has recognized dividends from subsidiaries of SEK 0.2 b. in the quarter.

In accordance with the conditions of the long-term variable compensation program (LTV) for Ericsson employees, 3,065,164 shares from treasury stock were distributed to employees or sold during the first quarter. The holding of treasury stock at March 31, 2016, was 46,302,477 Class B shares.

11      Ericsson  |  First Quarter Report 2016

OTHER INFORMATION

Ericsson and Adaptix have reached a settlement agreement resolving all of the remaining pending litigations

As disclosed in the 2015 Annual Report, Ericsson is involved in several patent infringement lawsuits against Adaptix Inc. who has filed several suits in the Eastern District of Texas in the US and the Tokyo District Court in Japan, alleging that Ericsson infringe patents assigned to Adaptix.

In January 2016, the Tokyo District Court found that Ericsson did not infringe the asserted patent. As Adaptix did not appeal within the term for appeal to the High Court, the judgment became final. In March 2016, Adaptix and Ericsson reached a settlement agreement, resolving all of the remaining pending litigations.

Patent infringement lawsuit against Micromax

As previously reported, Ericsson filed in 2013 a patent infringement lawsuit in the Delhi High Court against Indian handset company Micromax. As part of its defense, Micromax filed a complaint with the Competition Commission of India (CCI) which the CCI referred to the Director General’s Office for an in-depth investigation. In January 2014, the CCI opened another investigation against Ericsson based on claims made by Intex Technologies (India) Limited. Ericsson has challenged CCI’s jurisdiction in these cases before the Delhi High Court. On March 30, 2016, the Delhi High Court issued an order finding that the CCI has jurisdiction. Ericsson is appealing that order to the Division Bench of the Delhi High Court.

POST-CLOSING EVENTS

Ericsson to acquire NodePrime to acceleratesoftware-defined infrastructure

On April 5, 2016, Ericsson announced its intention to further invest in NodePrime to acquire 100% of its operations and talents based in San Francisco. NodePrime’s platform is already integrated in Ericsson Hyperscale Datacenter System 8000. The platform enables data-driven automated decisions, driving complex, massive-scale configuration. The acquisition is strategic to Ericsson’s cloud offering.

Resolutions at the AGM

On April 13, 2016, Ericsson held its AGM in Stockholm. The proposed dividend of SEK 3.70 per share was approved by the AGM. In accordance with the proposal of the Nomination Committee, Leif Johansson was reelected Chairman of the Board of Directors.

Nora Denzel, Börje Ekholm, Ulf J. Johansson, Kristin Skogen Lund, Sukhinder Singh Cassidy, Hans Vestberg and Jacob Wallenberg were re-elected to the Board and Kristin S. Rinne and Helena Stjernholm were elected new Board members.

In accordance with the Board of Directors’ proposal, the AGM resolved to approve the Guidelines for remuneration to Group management.

Ericsson completed acquisition of Ericpol

On April 20, 2016, Ericsson completed the acquisition of Ericpol’s operations in Poland and Ukraine. Ericpol has been a supplier to Ericsson for over 20 years in the area of software development, during which time Ericsson has been Ericpol’s largest customer. Approximately 2,300 employees in Poland and Ukraine will join Ericsson. The closing follows the announcement on October 15, 2015 that Ericsson was entering into an agreement to purchase Ericpol’s Polish and Ukrainian operations.

12      Ericsson  |  First Quarter Report 2016

RISK FACTORS

Ericsson’s operational and financial risk factors and uncertainties are described in our Annual Report 2015.

Risk factors and uncertainties in focus short-term for the Parent Company and the Ericsson Group include, but are not limited to:

• Potential negative effects on operators’ willingness to invest in network development due to uncertainty in the financial markets and a weak economic business environment, or reduced consumer telecom spending, or increased pressure on us to provide financing, or delayed auctions of spectrums;

• Uncertainty regarding the financial stability of suppliers, for example due to lack of financing;

• Effects on gross margins and/or working capital of the business mix in the Networks segment between capacity sales and new coverage build-outs;

• Effects on gross margins of the business mix in the Global Services segment including proportion of new network build-outs and share of new managed services deals with initial transition costs;

• Effects of the ongoing industry consolidation among our customers as well as between our largest competitors, e.g. with postponed investments and intensified price competition as a consequence;

• New JV arrangements or partnerships which may not be successful and expose us to future costs;

• Changes in foreign exchange rates, in particular USD;

• Political unrest or instability in certain markets;

• Effects on production and sales from restrictions with respect to timely and adequate supply of materials, components and production capacity and other vital services on competitive terms;

• No guarantees that specific restructuring or cost-savings initiatives will be sufficient, successful or executed in time to deliver any improvements in short-term earnings;

• Cyber security incidents, which may have material negative impact.

Ericsson stringently monitors the compliance with all relevant trade regulations and trade embargos applicable to dealings with customers operating in countries where there are trade restrictions or trade restrictions are discussed. Moreover, Ericsson operates globally in accordance with Group policies and directives for business ethics and conduct.

Stockholm, April 21, 2016

Telefonaktiebolaget LM Ericsson

Hans Vestberg, President and CEO

Org. Nr 556016-0680

This report has not been reviewed by Telefonaktiebolaget LM Ericsson’s auditors.

Date for next report: July 19, 2016

13      Ericsson  |  First Quarter Report 2016

EDITOR’S NOTE

Ericsson invites media, investors and analysts to a press conference at the Ericsson Studio, Grönlandsgången 4, Stockholm, at 09.00 (CET), April 21, 2016. A financial analyst, investor and media conference call will begin at 14.00 (CET).

Live webcast of the press conference and conference call as well as supporting slides will be available at www.ericsson.com/press and www.ericsson.com/investors

Video material will be published during the day on www.ericsson.com/press

For further information, please contact:

Helena Norrman, Senior Vice President, Chief Marketing and Communications Officer

Phone: +46 10 719 34 72

E-mail: investor.relations@ericsson.com or

media.relations@ericsson.com

Telefonaktiebolaget LM Ericsson

Org. number: 556016-0680

Torshamnsgatan 21

SE-164 83 Stockholm

Phone: +46 10 719 00 00

www.ericsson.com

Investors
Peter Nyquist, Vice President,
Head of Investor Relations
Phone:	+46 10 714 64 49, +46 70 575 29 06
E-mail:	peter.nyquist@ericsson.com
Stefan Jelvin, Director,
Investor Relations
Phone:	+46 10 714 20 39, +46 70 986 02 27
E-mail:	stefan.jelvin@ericsson.com
Åsa Konnbjer, Director,
Investor Relations
Phone:	+46 10 713 39 28, +46 73 082 59 28
E-mail:	asa.konnbjer@ericsson.com
Rikard Tunedal, Director,
Investor Relations
Phone:	+46 10 714 54 00, +46 761 005 400
E-mail:	rikard.tunedal@ericsson.com
Media
Ola Rembe, Vice President,
Head of External Communications
Phone:	+46 10 719 97 27, +46 73 024 48 73
E-mail:	media.relations@ericsson.com
Corporate Communications
Phone:	+46 10 719 69 92
E-mail:	media.relations@ericsson.com

14      Ericsson  |  First Quarter Report 2016

SAFE HARBOR STATEMENT

All statements made or incorporated by reference in this release, other than statements or characterizations of historical facts, are forward-looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by us. Forward-looking statements can often be identified by words such as “anticipates”, “expects”, “intends”, “plans”, “predicts”, “believes”, “seeks”, “estimates”, “may”, “will”, “should”, “would”, “potential”, “continue”, and variations or negatives of these words, and include, among others, statements regarding: (i) strategies, outlook and growth prospects; (ii) positioning to deliver future plans and to realize potential for future growth; (iii) liquidity and capital resources and expenditure, and our credit ratings; (iv) growth in demand for our products and services; (v) our joint venture activities; (vi) economic outlook and industry trends; (vii) developments of our markets; (viii) the impact of regulatory initiatives; (ix) research and development expenditures; (x) the strength of our competitors; (xi) future cost savings; (xii) plans to launch new products and services; (xiii) assessments of risks; (xiv) integration of acquired businesses; (xv) compliance with rules and regulations and (xvi) infringements of intellectual property rights of others.

In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These forward-looking statements speak only as of the date hereof and are based upon the information available to us at this time. Such information is subject to change, and we will not necessarily inform you of such changes. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors. Important factors that may cause such a difference for Ericsson include, but are not limited to: (i) material adverse changes in the markets in which we operate or in global economic conditions; (ii) increased product and price competition; (iii) reductions in capital expenditure by network operators; (iv) the cost of technological innovation and increased expenditure to improve quality of service; (v) significant changes in market share for our principal products and services; (vi) foreign exchange rate or interest rate fluctuations; and (vii) the successful implementation of our business and operational initiatives.

15      Ericsson  |  First Quarter Report 2016

FINANCIAL STATEMENTS AND

ADDITIONAL INFORMATION

Contents
Financial statements
Consolidated income statement	17
Statement of comprehensive income	17
Consolidated balance sheet	18
Consolidated statement of cash flows	19
Consolidated statement of changes in equity	20
Consolidated income statement – isolated quarters	20
Consolidated statement of cash flows – isolated quarters	21
Parent Company income statement	22
Parent Company statement of comprehensive income	22
Parent Company balance sheet	23
Additional information
Accounting policies	24
Net sales by segment by quarter	25
Sales growth adjusted for comparable units and currency	26
Operating income by segment by quarter	27
Operating margin by segment by quarter	27
EBITA by segment by quarter	28
EBITA margin by segment by quarter	28
Net sales by region by quarter	29
Net sales by region by quarter (cont.)	30
Top 5 countries in sales	30
Net sales by region by segment	31
Provisions	32
Information on investments	32
Reconciliation tables, non-IFRS measures	33
Other information	34
Number of employees	34
Restructuring charges by function	35
Restructuring charges by segment	35

16      Ericsson  |  First Quarter Report 2016

CONSOLIDATED INCOME STATEMENT

	Jan-Mar									Jan-Dec
SEK million	2016			2015			Change			2015
Net sales		52,209			53,520			-2	%		246,920
Cost of sales		-34,819			-34,556			1	%		-161,101
Gross income		17,390			18,964			-8	%		85,819
Gross margin (%)		33.3	%		35.4	%					34.8	%
Research and development expenses		-7,485			-8,487			-12	%		-34,844
Selling and administrative expenses		-6,720			-7,131			-6	%		-29,285
Operating expenses		-14,205			-15,618			-9	%		-64,129
Other operating income and expenses		273			-1,240						153
Shares in earnings of JV and associated companies		17			27						-38
Operating income		3,475			2,133			63	%		21,805
Financial income		-89			684						525
Financial expenses		-377			-740						-2,458
Income after financial items		3,009			2,077			45	%		19,872
Taxes		-903			-623						-6,199
Net income		2,106			1,454			45	%		13,673
Net income attributable to:
Stockholders of the Parent Company		1,966			1,319						13,549
Non-controlling interests		140			135						124
Other information
Average number of shares, basic (million)		3,258			3,244						3,249
Earnings per share, basic (SEK)1)		0.60			0.41						4.17
Earnings per share, diluted (SEK)1)		0.60			0.40						4.13

¹⁾  Based on Net income attributable to stockholders of the Parent Company.

STATEMENT OF COMPREHENSIVE INCOME

	Jan-Mar				Jan-Dec
SEK million	2016		2015		2015
Net income		2,106		1,454		13,673
Other comprehensive income
Items that will not be reclassified to profit or loss
Remeasurements of defined benefits pension plans incl. asset ceiling		-3,502		-3,211		-2,026
Tax on items that will not be reclassified to profit or loss		953		694		721
Items that may be reclassified to profit or loss
Cash flow hedges
Gains/losses arising during the period		—		—		—
Reclassification adjustments for gains/losses included in profit or loss		—		—		—
Revaluation of other investments in shares and participations
Fair value remeasurement		-4		181		457
Changes in cumulative translation adjustments		-1,133		4,409		-604
Share of other comprehensive income on JV and associated companies		-376		-4		141
Tax on items that may be reclassified to profit or loss		—		—		—
Total other comprehensive income, net of tax		-4,062		2,069		-1,311
Total comprehensive income		-1,956		3,523		12,362
Total comprehensive income attributable to:
Stockholders of the Parent Company		-2,093		3,305		12,218
Non-controlling interest		137		218		144

17      Ericsson  |  First Quarter Report 2016

CONSOLIDATED BALANCE SHEET

SEK million	Mar 31 2016		Dec 31 2015
ASSETS
Non-current assets
Intangible assets
Capitalized development expenses		6,349		5,493
Goodwill		40,316		41,087
Intellectual property rights, brands and other intangible assets		8,400		9,316
Property, plant and equipment		16,127		15,901
Financial assets
Equity in JV and associated companies		851		1,210
Other investments in shares and participations		1,090		1,275
Customer finance, non-current		1,663		1,739
Other financial assets, non-current		4,997		5,634
Deferred tax assets		14,117		13,183
		93,910		94,838
Current assets
Inventories		32,252		28,436
Trade receivables		66,701		71,069
Customer finance, current		2,346		2,041
Other current receivables		24,105		21,709
Short-term investments		25,077		26,046
Cash and cash equivalents		35,934		40,224
		186,415		189,525
Total assets		280,325		284,363
EQUITY AND LIABILITIES
Equity
Stockholders’ equity		144,699		146,525
Non-controlling interest in equity of subsidiaries		945		841
		145,644		147,366
Non-current liabilities
Post-employment benefits		25,715		22,664
Provisions, non-current		158		176
Deferred tax liabilities		2,098		2,472
Borrowings, non-current		22,110		22,744
Other non-current liabilities		1,834		1,851
		51,915		49,907
Current liabilities
Provisions, current		3,374		3,662
Borrowings, current		2,414		2,376
Trade payables		21,549		22,389
Other current liabilities		55,429		58,663
		82,766		87,090
Total equity and liabilities		280,325		284,363
Of which interest-bearing liabilities		24,524		25,120
Of which net cash		36,487		41,150
Assets pledged as collateral		2,513		2,526
Contingent liabilities		918		922

18      Ericsson  |  First Quarter Report 2016

CONSOLIDATED STATEMENT

OF CASH FLOWS

	Jan-Mar					Jan-Dec
SEK million	2016			2015		2015
Operating activities
Net income		2,106			1,454		13,673
Adjustments to reconcile net income to cash
Taxes		-1,208	��		-1,921		-2,835
Earnings/dividends in JV and associated companies		-16			-22		130
Depreciation, amortization and impairment losses		2,097			2,681		10,206
Other		652			944		3,110
		3,631			3,136		24,284
Changes in operating net assets
Inventories		-4,212			-4,019		-366
Customer finance, current and non-current		-251			-258		824
Trade receivables		3,408			2,037		7,000
Trade payables		-617			-1,668		-2,676
Provisions and post-employment benefits		-14			-166		544
Other operating assets and liabilities, net		-4,317			-4,962		-9,013
		-6,003			-9,036		-3,687
Cash flow from operating activities		-2,372			-5,900		20,597
Investing activities
Investments in property, plant and equipment		-1,474			-2,367		-8,338
Sales of property, plant and equipment		44			75		1,301
Acquisitions/divestments of subsidiaries and other operations, net		-108			-58		-2,200
Product development		-1,208			-294		-3,302
Other investing activities		735			118		-543
Short-term investments		1,013			399		5,095
Cash flow from investing activities		-998			-2,127		-7,987
Cash flow before financing activities		-3,370			-8,027		12,610
Financing activities
Dividends paid		-33			-25		-11,337
Other financing activities		94			899		627
Cash flow from financing activities		61			874		-10,710
Effect of exchange rate changes on cash		-981			1,476		-2,664
Net change in cash and cash equivalents		-4,290			-5,677		-764
Cash and cash equivalents, beginning of period		40,224			40,988		40,988
Cash and cash equivalents, end of period		35,934			35,311		40,224

19      Ericsson  |  First Quarter Report 2016

CONSOLIDATED STATEMENT

OF CHANGES IN EQUITY

	Jan-Mar				Jan-Dec
SEK million	2016		2015		2015
Opening balance		147,366		145,309		145,309
Total comprehensive income		-1,956		3,523		12,362
Sale/repurchase of own shares		29		46		169
Stock purchase plan		238		198		865
Dividends paid		-33		-25		-11,337
Transactions with non-controlling interests		—		—		-2
Closing balance		145,644		149,051		147,366

CONSOLIDATED INCOME STATEMENT

- ISOLATED QUARTERS

	2016			2015
Isolated quarters, SEK million	Q1			Q4			Q3			Q2			Q1
Net sales		52,209			73,568			59,161			60,671			53,520
Cost of sales		-34,819			-46,899			-39,110			-40,536			-34,556
Gross income		17,390			26,669			20,051			20,135			18,964
Gross margin (%)		33.3	%		36.3	%		33.9	%		33.2	%		35.4	%
Research and development expenses		-7,485			-7,921			-8,540			-9,896			-8,487
Selling and administrative expenses		-6,720			-7,996			-6,393			-7,765			-7,131
Operating expenses		-14,205			-15,917			-14,933			-17,661			-15,618
Other operating income and expenses		273			254			80			1,059			-1,240
Shares in earnings of JV and associated companies		17			29			-121			27			27
Operating income		3,475			11,035			5,077			3,560			2,133
Financial income		-89			-109			188			-238			684
Financial expenses		-377			-619			-809			-290			-740
Income after financial items		3,009			10,307			4,456			3,032			2,077
Taxes		-903			-3,329			-1,338			-909			-623
Net income		2,106			6,978			3,118			2,123			1,454
Net income attributable to:
Stockholders of the Parent Company		1,966			7,056			3,080			2,094			1,319
Non-controlling interests		140			-78			38			29			135
Other information
Average number of shares, basic (million)		3,258			3,254			3,251			3,247			3,244
Earnings per share, basic (SEK)1)		0.60			2.17			0.95			0.64			0.41
Earnings per share, diluted (SEK)1)		0.60			2.15			0.94			0.64			0.40

¹⁾  Based on Net income attributable to stockholders of the Parent Company.

20      Ericsson  |  First Quarter Report 2016

CONSOLIDATED STATEMENT

OF CASH FLOWS - ISOLATED QUARTERS

	2016		2015
Isolated quarters, SEK million	Q1		Q4		Q3		Q2		Q1
Operating activities
Net income		2,106		6,978		3,118		2,123		1,454
Adjustments to reconcile net income to cash
Taxes		-1,208		395		51		-1,360		-1,921
Earnings/dividends in JV and associated companies		-16		-33		136		49		-22
Depreciation, amortization and impairment losses		2,097		2,521		2,425		2,579		2,681
Other		652		1,092		1,052		22		944
		3,631		10,953		6,782		3,413		3,136
Changes in operating net assets
Inventories		-4,212		3,496		-226		383		-4,019
Customer finance, current and non-current		-251		302		375		405		-258
Trade receivables		3,408		2,754		-1,421		3,630		2,037
Trade payables		-617		886		-494		-1,400		-1,668
Provisions and post-employment benefits		-14		-673		-302		1,685		-166
Other operating assets and liabilities, net		-4,317		4,141		-3,154		-5,038		-4,962
		-6,003		10,906		-5,222		-335		-9,036
Cash flow from operating activities		-2,372		21,859		1,560		3,078		-5,900
Investing activities
Investments in property, plant and equipment		-1,474		-1,740		-1,807		-2,424		-2,367
Sales of property, plant and equipment		44		92		59		1,075		75
Acquisitions/divestments of subsidiaries and other operations, net		-108		-945		-1,028		-169		-58
Product development		-1,208		-1,183		-982		-843		-294
Other investing activities		735		-418		37		-280		118
Short-term investments		1,013		-8,613		3,631		9,678		399
Cash flow from investing activities		-998		-12,807		-90		7,037		-2,127
Cash flow before financing activities		-3,370		9,052		1,470		10,115		-8,027
Financing activities
Dividends paid		-33		—		-277		-11,035		-25
Other financing activities		94		-669		-34		431		899
Cash flow from financing activities		61		-669		-311		-10,604		874
Effect of exchange rate changes on cash		-981		-2,109		-171		-1,860		1,476
Net change in cash and cash equivalents		-4,290		6,274		988		-2,349		-5,677
Cash and cash equivalents, beginning of period		40,224		33,950		32,962		35,311		40,988
Cash and cash equivalents, end of period		35,934		40,224		33,950		32,962		35,311

21      Ericsson  |  First Quarter Report 2016

PARENT COMPANY INCOME STATEMENT

	Jan-Mar				Jan-Dec
SEK million	2016		2015		2015
Net sales		—		—		—
Cost of sales		—		—		—
Gross income		—		—		—
Operating expenses		-223		-289		-1,040
Other operating income and expenses		574		693		2,889
Operating income		351		404		1,849
Financial net		11		1,451		14,952
Income after financial items		362		1,855		16,801
Transfers to (-) / from untaxed reserves		—		—		-1,500
Taxes		-45		-119		-208
Net income		317		1,736		15,093

PARENT COMPANY STATEMENT

OF COMPREHENSIVE INCOME

	Jan-Mar				Jan-Dec
SEK million	2016		2015		2015
Net income		317		1,736		15,093
Revaluation of other investments in shares and participations
Fair value remeasurement		5		181		457
Total other comprehensive income, net of tax		5		181		457
Total comprehensive income		322		1,917		15,550

22      Ericsson  |  First Quarter Report 2016

PARENT COMPANY BALANCE SHEET

SEK million	Mar 31 2016		Dec 31 2015
ASSETS
Fixed assets
Intangible assets		742		809
Tangible assets		443		456
Financial assets		99,716		99,914
		100,901		101,179
Current assets
Inventories		—		—
Receivables		25,355		25,692
Short-term investments		23,713		25,506
Cash and cash equivalents		20,931		23,118
		69,999		74,316
Total assets		170,900		175,495
STOCKHOLDERS’ EQUITY, PROVISIONS AND LIABILITIES
Equity
Restricted equity		48,018		48,018
Non-restricted equity		42,925		42,578
		90,943		90,596
Provisions		809		807
Non-current liabilities		45,853		46,457
Current liabilities		33,295		37,635
Total stockholders’ equity, provisions and liabilities		170,900		175,495
Assets pledged as collateral		513		526
Contingent liabilities		22,955		22,461

23      Ericsson  |  First Quarter Report 2016

ACCOUNTING POLICIES

THE GROUP

This interim report is prepared in accordance with IAS 34. The term “IFRS” used in this document refers to the application of IAS and IFRS as well as interpretations of these standards as issued by IASB’s Standards Interpretation Committee (SIC) and IFRS Interpretations Committee (IFRIC). The accounting policies adopted are consistent with those of the annual report for the year ended December 31, 2015, and should be read in conjunction with that annual report.

There is no significant difference between IFRS effective as per March 31, 2016 and IFRS as endorsed by the EU.

Net Cash

The definition of Net Cash has been adjusted in order to more clearly represent Ericsson’s ability to meet financial obligations. Post-employment benefits will no longer be included in the calculation of Net Cash. Net Cash for prior periods has been recalculated using the new definition. The revised definition is as follows:

Net Cash: Cash and cash equivalents plus short-term investments less interest-bearing liabilities (which include: non-current borrowings and current borrowings).

Accounting for bonds

Due to the conditions in the market for government and mortgage bonds in Sweden, Ericsson now intends to hold bonds purchased in its “Asset management” portfolio until maturity instead of intending to hold them for trading. Bonds purchased in this portfolio after January 1, 2016 will be classified as available-for-sale. There were no purchases made in Q1 2016. The impact of this change on the financial statements will be disclosed in the interim report following the first purchase of bonds.

24      Ericsson  |  First Quarter Report 2016

NET SALES BY SEGMENT BY QUARTER

	2016			2015
Isolated quarters, SEK million	Q1			Q4			Q3			Q2			Q1
Networks		25,820			37,304			28,817			31,163			26,436
Global Services		23,018			30,670			27,055			26,392			23,901
Of which Professional Services		17,932			23,072			20,545			20,001			18,131
Of which Managed Services		7,352			8,214			7,976			8,150			7,501
Of which Network Rollout		5,086			7,598			6,510			6,391			5,770
Support Solutions		3,371			5,594			3,289			3,092			3,074
Modems		—			—			—			24			109
Total		52,209			73,568			59,161			60,671			53,520
	2016			2015
Sequential change, percent	Q1			Q4			Q3			Q2			Q1
Networks		-31	%		29	%		-8	%		18	%		-22	%
Global Services		-25	%		13	%		3	%		10	%		-20	%
Of which Professional Services		-22	%		12	%		3	%		10	%		-15	%
Of which Managed Services		-10	%		3	%		-2	%		9	%		-3	%
Of which Network Rollout		-33	%		17	%		2	%		11	%		-31	%
Support Solutions		-40	%		70	%		6	%		1	%		-23	%
Modems		—			—			—			—			—
Total		-29	%		24	%		-2	%		13	%		-21	%
	2016			2015
Year over year change, percent	Q1			Q4			Q3			Q2			Q1
Networks		-2	%		9	%		-4	%		8	%		8	%
Global Services		-4	%		3	%		11	%		14	%		17	%
Of which Professional Services		-1	%		8	%		15	%		21	%		20	%
Of which Managed Services		-2	%		6	%		11	%		26	%		30	%
Of which Network Rollout		-12	%		-9	%		-2	%		-2	%		9	%
Support Solutions		10	%		40	%		8	%		9	%		11	%
Modems		—			—			—			—			—
Total		-2	%		8	%		3	%		11	%		13	%
	2016			2015
Year to date, SEK million	Jan-Mar			Jan-Dec			Jan-Sep			Jan-Jun			Jan-Mar
Networks		25,820			123,720			86,416			57,599			26,436
Global Services		23,018			108,018			77,348			50,293			23,901
Of which Professional Services		17,932			81,749			58,677			38,132			18,131
Of which Managed Services		7,352			31,841			23,627			15,651			7,501
Of which Network Rollout		5,086			26,269			18,671			12,161			5,770
Support Solutions		3,371			15,049			9,455			6,166			3,074
Modems		—			133			133			133			109
Total		52,209			246,920			173,352			114,191			53,520
	2016			2015
Year to date, year over year change, percent	Jan-Mar			Jan-Dec			Jan-Sep			Jan-Jun			Jan-Mar
Networks		-2	%		5	%		4	%		8	%		8	%
Global Services		-4	%		11	%		14	%		16	%		17	%
Of which Professional Services		-1	%		15	%		19	%		21	%		20	%
Of which Managed Services		-2	%		17	%		22	%		28	%		30	%
Of which Network Rollout		-12	%		-2	%		1	%		3	%		9	%
Support Solutions		10	%		19	%		9	%		10	%		11	%
Modems		—			—			—			—			—
Total		-2	%		8	%		8	%		12	%		13	%

25      Ericsson  |  First Quarter Report 2016

SALES GROWTH ADJUSTED FOR

COMPARABLE UNITS AND CURRENCY

	2016			2015
Sequential change, percent	Q1			Q4			Q3			Q2			Q1
Networks		-30	%		30	%		-6	%		16	%		-28	%
Global Services		-23	%		17	%		2	%		10	%		-26	%
Support Solutions		-39	%		70	%		7	%		-3	%		-31	%
Total		-28	%		26	%		-2	%		12	%		-28	%
	2016			2015
Isolated quarter, year over year change, percent	Q1			Q4			Q3			Q2			Q1
Networks		-3	%		0	%		-15	%		-9	%		-9	%
Global Services		0	%		-4	%		-2	%		-2	%		-2	%
Support Solutions		5	%		22	%		-8	%		-13	%		-11	%
Total		-1	%		-1	%		-9	%		-6	%		-6	%
	2016			2015
Year to date, year over year change, percent	Jan-Mar			Jan-Dec			Jan-Sep			Jan-Jun			Jan-Mar
Networks		-3	%		-8	%		-11	%		-9	%		-9	%
Global Services		0	%		-2	%		-2	%		-2	%		-2	%
Support Solutions		5	%		0	%		-10	%		-12	%		-11	%
Total		-1	%		-5	%		-7	%		-6	%		-6	%

26      Ericsson  |  First Quarter Report 2016

OPERATING INCOME

BY SEGMENT BY QUARTER

	2016		2015
Isolated quarters, SEK million	Q1		Q4		Q3		Q2		Q1
Networks		2,724		7,154		2,764		2,435		590
Global Services		644		2,530		2,364		1,640		1,681
Of which Professional Services		1,293		2,712		2,386		2,403		2,109
Of which Network Rollout		-649		-182		-22		-763		-428
Support Solutions		238		1,668		-6		-240		82
Modems		—		1		-1		7		0
Unallocated1)		-131		-318		-44		-282		-220
Total		3,475		11,035		5,077		3,560		2,133
	2016		2015
Year to date, SEK million	Jan-Mar		Jan-Dec		Jan-Sep		Jan-Jun		Jan-Mar
Networks		2,724		12,943		5,789		3,025		590
Global Services		644		8,215		5,685		3,321		1,681
Of which Professional Services		1,293		9,610		6,898		4,512		2,109
Of which Network Rollout		-649		-1,395		-1,213		-1,191		-428
Support Solutions		238		1,504		-164		-158		82
Modems		—		7		6		7		0
Unallocated1)		-131		-864		-546		-502		-220
Total		3,475		21,805		10,770		5,693		2,133

¹⁾  “Unallocated” consists mainly of costs for corporate staff, non-operational capital gains and losses.

OPERATING MARGIN

BY SEGMENT BY QUARTER

As percentage of net sales, isolated quarters	2016			2015
	Q1			Q4			Q3			Q2			Q1
Networks		11	%		19	%		10	%		8	%		2	%
Global Services		3	%		8	%		9	%		6	%		7	%
Of which Professional Services		7	%		12	%		12	%		12	%		12	%
Of which Network Rollout		-13	%		-2	%		0	%		-12	%		-7	%
Support Solutions		7	%		30	%		0	%		-8	%		3	%
Modems		—			—			—			—			—
Total		7	%		15	%		9	%		6	%		4	%
As percentage of net sales, year to date	2016			2015
	Jan-Mar			Jan-Dec			Jan-Sep			Jan-Jun			Jan-Mar
Networks		11	%		10	%		7	%		5	%		2	%
Global Services		3	%		8	%		7	%		7	%		7	%
Of which Professional Services		7	%		12	%		12	%		12	%		12	%
Of which Network Rollout		-13	%		-5	%		-6	%		-10	%		-7	%
Support Solutions		7	%		10	%		-2	%		-3	%		3	%
Modems		—			—			—			—			—
Total		7	%		9	%		6	%		5	%		4	%

27      Ericsson  |  First Quarter Report 2016

EBITA

BY SEGMENT BY QUARTER

	2016		2015
Isolated quarters, SEK million	Q1		Q4		Q3		Q2		Q1
Networks		2,956		7,668		3,233		3,014		1,218
Global Services		837		2,770		2,604		1,918		1,952
Of which Professional Services		1,459		2,915		2,605		2,635		2,344
Of which Network Rollout		-622		-145		-1		-717		-392
Support Solutions		496		1,892		226		-4		308
Modems		—		1		-1		7		0
Unallocated1)		-130		-317		-44		-281		-220
Total		4,159		12,014		6,018		4,654		3,258
	2016		2015
Year to date, SEK million	Jan-Mar		Jan-Dec		Jan-Sep		Jan-Jun		Jan-Mar
Networks		2,956		15,133		7,465		4,232		1,218
Global Services		837		9,244		6,474		3,870		1,952
Of which Professional Services		1,459		10,499		7,584		4,979		2,344
Of which Network Rollout		-622		-1,255		-1,110		-1,109		-392
Support Solutions		496		2,422		530		304		308
Modems		—		7		6		7		0
Unallocated1)		-130		-862		-545		-501		-220
Total		4,159		25,944		13,930		7,912		3,258

¹⁾  “Unallocated” consists mainly of costs for corporate staff, non-operational capital gains and losses.

EBITA MARGIN

BY SEGMENT BY QUARTER

As percentage of net sales, isolated quarters	2016			2015
	Q1			Q4			Q3			Q2			Q1
Networks		11	%		21	%		11	%		10	%		5	%
Global Services		4	%		9	%		10	%		7	%		8	%
Of which Professional Services		8	%		13	%		13	%		13	%		13	%
Of which Network Rollout		-12	%		-2	%		0	%		-11	%		-7	%
Support Solutions		15	%		34	%		7	%		0	%		10	%
Modems		—			—			—			—			—
Total		8	%		16	%		10	%		8	%		6	%
As percentage of net sales, year to date	2016			2015
	Jan-Mar			Jan-Dec			Jan-Sep			Jan-Jun			Jan-Mar
Networks		11	%		12	%		9	%		7	%		5	%
Global Services		4	%		9	%		8	%		8	%		8	%
Of which Professional Services		8	%		13	%		13	%		13	%		13	%
Of which Network Rollout		-12	%		-5	%		-6	%		-9	%		-7	%
Support Solutions		15	%		16	%		6	%		5	%		10	%
Modems		—			—			—			—			—
Total		8	%		11	%		8	%		7	%		6	%

28      Ericsson  |  First Quarter Report 2016

NET SALES

BY REGION BY QUARTER

	2016			2015
Isolated quarters, SEK million	Q1			Q4			Q3			Q2			Q1
North America		13,182			17,082			14,355			14,578			12,246
Latin America		4,040			6,106			5,610			5,067			4,574
Northern Europe & Central Asia1) 2)		2,222			2,847			2,520			2,556			2,726
Western & Central Europe2)		3,953			5,320			4,540			5,131			4,741
Mediterranean2)		4,296			6,971			5,470			5,887			4,982
Middle East		3,567			6,089			5,728			6,515			4,517
Sub Saharan Africa		2,120			2,847			2,691			2,653			2,158
India		2,683			3,172			3,629			3,049			3,531
North East Asia		5,579			8,916			6,348			6,943			6,030
South East Asia & Oceania		5,199			5,329			4,750			4,897			4,259
Other1) 2)		5,368			8,889			3,520			3,395			3,756
Total		52,209			73,568			59,161			60,671			53,520
1) Of which in Sweden		1,113			972			1,135			598			1,091
2) Of which in EU		9,229			12,644			10,584			11,453			10,904
	2016			2015
Sequential change, percent	Q1			Q4			Q3			Q2			Q1
North America		-23	%		19	%		-2	%		19	%		-6	%
Latin America		-34	%		9	%		11	%		11	%		-30	%
Northern Europe & Central Asia1) 2)		-22	%		13	%		-1	%		-6	%		-33	%
Western & Central Europe2)		-26	%		17	%		-12	%		8	%		-22	%
Mediterranean2)		-38	%		27	%		-7	%		18	%		-34	%
Middle East		-41	%		6	%		-12	%		44	%		-34	%
Sub Saharan Africa		-26	%		6	%		1	%		23	%		-17	%
India		-15	%		-13	%		19	%		-14	%		49	%
North East Asia		-37	%		40	%		-9	%		15	%		-35	%
South East Asia & Oceania		-2	%		12	%		-3	%		15	%		-14	%
Other1) 2)		-40	%		153	%		4	%		-10	%		-19	%
Total		-29	%		24	%		-2	%		13	%		-21	%
1) Of which in Sweden		15	%		-14	%		90	%		-45	%		4	%
2) Of which in EU		-27	%		19	%		-8	%		5	%		-24	%
	2016			2015
Year-over-year change, percent	Q1			Q4			Q3			Q2			Q1
North America		8	%		31	%		2	%		-4	%		0	%
Latin America		-12	%		-7	%		-5	%		-6	%		-3	%
Northern Europe & Central Asia1) 2)		-18	%		-30	%		-20	%		-6	%		12	%
Western & Central Europe2)		-17	%		-13	%		-2	%		12	%		8	%
Mediterranean2)		-14	%		-7	%		5	%		7	%		4	%
Middle East		-21	%		-11	%		-5	%		44	%		17	%
Sub Saharan Africa		-2	%		9	%		10	%		41	%		19	%
India		-24	%		34	%		81	%		85	%		108	%
North East Asia		-7	%		-3	%		-10	%		8	%		23	%
South East Asia & Oceania		22	%		8	%		25	%		34	%		24	%
Other1) 2)		43	%		91	%		4	%		1	%		15	%
Total		-2	%		8	%		3	%		11	%		13	%
1) Of which in Sweden		2	%		-7	%		4	%		-41	%		9	%
2) Of which in EU		-15	%		-12	%		-1	%		11	%		12	%

29      Ericsson  |  First Quarter Report 2016

NET SALES

BY REGION BY QUARTER,CONT.

	2016			2015
Year to date, SEK million	Jan-Mar			Jan-Dec			Jan-Sep			Jan-Jun			Jan-Mar
North America		13,182			58,261			41,179			26,824			12,246
Latin America		4,040			21,357			15,251			9,641			4,574
Northern Europe & Central Asia1) 2)		2,222			10,649			7,802			5,282			2,726
Western & Central Europe2)		3,953			19,732			14,412			9,872			4,741
Mediterranean2)		4,296			23,310			16,339			10,869			4,982
Middle East		3,567			22,849			16,760			11,032			4,517
Sub Saharan Africa		2,120			10,349			7,502			4,811			2,158
India		2,683			13,381			10,209			6,580			3,531
North East Asia		5,579			28,237			19,321			12,973			6,030
South East Asia & Oceania		5,199			19,235			13,906			9,156			4,259
Other1) 2)		5,368			19,560			10,671			7,151			3,756
					��
Total		52,209			246,920			173,352			114,191			53,520
1) Of which in Sweden		1,113			3,796			2,824			1,689			1,091
2) Of which in EU		9,229			45,585			32,941			22,357			10,904
Year to date, year-over-year change, percent	2016			2015
	Jan-Mar			Jan-Dec			Jan-Sep			Jan-Jun			Jan-Mar
North America		8	%		7	%		-1	%		-2	%		0	%
Latin America		-12	%		-5	%		-5	%		-5	%		-3	%
Northern Europe & Central Asia1) 2)		-18	%		-14	%		-6	%		3	%		12	%
Western & Central Europe2)		-17	%		0	%		6	%		10	%		8	%
Mediterranean2)		-14	%		1	%		5	%		6	%		4	%
Middle East		-21	%		7	%		16	%		32	%		17	%
Sub Saharan Africa		-2	%		18	%		22	%		30	%		19	%
India		-24	%		74	%		91	%		97	%		108	%
North East Asia		-7	%		2	%		5	%		15	%		23	%
South East Asia & Oceania		22	%		21	%		28	%		29	%		24	%
Other1) 2)		43	%		33	%		7	%		8	%		15	%
Total		-2	%		8	%		8	%		12	%		13	%
1) Of which in Sweden		2	%		-8	%		-9	%		-16	%		9	%
2) Of which in EU		-15	%		1	%		7	%		12	%		12	%

TOP 5 COUNTRIES IN SALES

	Q1						Jan-Dec
Country	2016			2015			2015
United States		27	%		23	%		26	%
China		9	%		8	%		8	%
India		5	%		7	%		5	%
Japan		4	%		3	%		3	%
Italy		3	%		3	%		3	%

30      Ericsson  |  First Quarter Report 2016

NET SALES

BY REGION BY SEGMENT

	Q1 2016
SEK million	Networks			Global Services			Support Solutions			Total
North America		6,341			6,078			763			13,182
Latin America		2,023			1,815			202			4,040
Northern Europe & Central Asia		1,342			807			73			2,222
Western & Central Europe		1,295			2,522			136			3,953
Mediterranean		1,459			2,690			147			4,296
Middle East		1,407			1,896			264			3,567
Sub Saharan Africa		869			1,087			164			2,120
India		1,279			1,228			176			2,683
North East Asia		3,544			1,917			118			5,579
South East Asia & Oceania		3,185			1,928			86			5,199
Other		3,076			1,050			1,242			5,368
Total		25,820			23,018			3,371			52,209
Share of Total		50	%		44	%		6	%		100	%
	Q1 2016
Sequential change, percent	Networks			Global Services			Support Solutions			Total
North America		-20	%		-20	%		-50	%		-23	%
Latin America		-29	%		-39	%		-23	%		-34	%
Northern Europe & Central Asia		-6	%		-39	%		-25	%		-22	%
Western & Central Europe		-30	%		-22	%		-45	%		-26	%
Mediterranean		-45	%		-33	%		-42	%		-38	%
Middle East		-49	%		-37	%		-21	%		-41	%
Sub Saharan Africa		-45	%		-4	%		23	%		-26	%
India		-26	%		-7	%		31	%		-15	%
North East Asia		-39	%		-33	%		-50	%		-37	%
South East Asia & Oceania		21	%		-21	%		-67	%		-2	%
Other		-49	%		43	%		-41	%		-40	%
Total		-31	%		-25	%		-40	%		-29	%
	Q1 2016
Year over year change, percent	Networks			Global Services			Support Solutions			Total
North America		23	%		-4	%		-4	%		8	%
Latin America		-6	%		-18	%		-7	%		-12	%
Northern Europe & Central Asia		-26	%		-4	%		-1	%		-18	%
Western & Central Europe		-21	%		-14	%		-19	%		-17	%
Mediterranean		-24	%		-8	%		0	%		-14	%
Middle East		-41	%		-2	%		44	%		-21	%
Sub Saharan Africa		15	%		-7	%		-31	%		-2	%
India		-39	%		11	%		-46	%		-24	%
North East Asia		-11	%		-5	%		97	%		-7	%
South East Asia & Oceania		32	%		9	%		8	%		22	%
Other		44	%		47	%		57	%		43	%
Total		-2	%		-4	%		10	%		-2	%

31      Ericsson  |  First Quarter Report 2016

PROVISIONS

	2016		2015
Isolated quarters, SEK million	Q1		Q4		Q3		Q2		Q1
Opening balance		3,838		4,331		5,354		4,056		4,427
Additions		492		589		695		2,777		915
Utilization/Cash out		-667		-1,096		-1,545		-1,217		-1,204
Of which restructuring		-487		-754		-1,103		-472		-437
Reversal of excess amounts		-67		87		-168		-161		-236
Reclassification, translation difference and other		-64		-73		-5		-101		154
Closing balance		3,532		3,838		4,331		5,354		4,056
	2016		2015
Year to date, SEK million	Jan-Mar		Jan-Dec		Jan-Sep		Jan-Jun		Jan-Mar
Opening balance		3,838		4,427		4,427		4,427		4,427
Additions		492		4,976		4,387		3,692		915
Utilization/Cash out		-667		-5,062		-3,966		-2,421		-1,204
Of which restructuring		-487		-2,766		-2,012		-909		-437
Reversal of excess amounts		-67		-478		-565		-397		-236
Reclassification, translation difference and other		-64		-25		48		53		154
Closing balance		3,532		3,838		4,331		5,354		4,056

INFORMATION ON INVESTMENTS

Investments in assets subject to depreciation, amortization, impairment and write-downs

	2016		2015
Isolated quarters, SEK million	Q1		Q4		Q3		Q2		Q1
Additions
Property, plant and equipment		1 474		1,739		1,807		2,424		2,367
Capitalized development expenses1)		1 208		1,183		982		843		294
IPR, brands and other intangible assets		5		23		10		26		11
Total		2 687		2,945		2,799		3,293		2,672
Depreciation, amortization and impairment losses
Property, plant and equipment		1 062		1,194		1,129		1,152		1,214
Capitalized development expenses		351		349		354		333		342
IPR, brands and other intangible assets, etc.		684		978		942		1,094		1,125
Total		2 097		2,521		2,425		2,579		2,681

¹⁾  Including reclassification

32      Ericsson  |  First Quarter Report 2016

RECONCILIATION TABLES, NON-IFRS

MEASURES

CASH CONVERSION

	2016			2015
Isolated quarters, SEK million	Q1			Q4			Q3			Q2			Q1
Net income		2,106			6,978			3,118			2,123			1,454
Net income reconciled to cash		3,631			10,953			6,782			3,413			3,136
Cash flow from operating activities		-2,372			21,859			1,560			3,078			-5,900
Cash conversion		-65.3	%		199.6	%		23.0	%		90.2	%		-188.1	%

NET CASH - END OF PERIOD

SEK million	Mar 31 2016		Dec 31 2015
Cash and cash equivalents		35,934		40,224
+ Short term investments		25,077		26,046
- Borrowings, non-current		22,110		22,744
- Borrowings, current		2,414		2,376
Net cash, end of period		36,487		41,150

33      Ericsson  |  First Quarter Report 2016

OTHER INFORMATION

	Jan-Mar						Jan-Dec
SEK million	2016			2015			2015
Number of shares and earnings per share
Number of shares, end of period (million)		3,305			3,305			3,305
Of which class A-shares (million)		262			262			262
Of which class B-shares (million)		3,043			3,043			3,043
Number of treasury shares, end of period (million)		46			60			49
Number of shares outstanding, basic, end of period (million)		3,259			3,245			3,256
Numbers of shares outstanding, diluted, end of period (million)		3,293			3,277			3,289
Average number of treasury shares (million)		47			61			56
Average number of shares outstanding, basic (million)		3,258			3,244			3,249
Average number of shares outstanding, diluted (million)1)		3,292			3,276			3,282
Earnings per share, basic (SEK)		0.60			0.41			4.17
Earnings per share, diluted (SEK)1)		0.60			0.40			4.13
Earnings per share (Non-IFRS), diluted (SEK)2)		0.74			0.64			4.99
Earnings per share (Non-IFRS, excluding restructuring), diluted (SEK) 2)		0.87			0.77			6.06
Ratios
Days sales outstanding		108			125			87
Inventory turnover days		80			82			64
Payable days		58			64			53
Equity ratio (%)		52.0	%		49.2	%		51.8	%
Return on equity (%)		5.4	%		3.6	%		9.3	%
Return on capital employed (%)		6.9	%		5.8	%		11.6	%
Capital turnover (times)		1.1			1.1			1.3
Cash conversion %		-65.3	%		-188.1	%		84.8	%
Exchange rates used in the consolidation 3)
SEK/EUR- closing rate		9.23			9.29			9.17
SEK/USD- closing rate		8.11			8.64			8.40
Other
Regional inventory, end of period		18,089			20,000			15,453
Export sales from Sweden		23,254			26,151			117,486

¹⁾  Potential ordinary shares are not considered when their conversion to ordinary shares would increase earnings per share.

²⁾  Excluding amortizations and write-downs of acquired intangibles.

³⁾  Translation method changed from 2015. Monthly rates used to translate transactions are available on www.ericsson.com/thecompany/investors

NUMBER OF EMPLOYEES

	2016		2015
End of period	Mar 31		Dec 31		Sep 30		Jun 30		Mar 31
North America		14 081		14,548		14,669		14,975		15,156
Latin America		9 836		10,412		10,754		10,823		10,970
Northern Europe & Central Asia1)		20 167		20,700		20,953		21,441		21,556
Western & Central Europe		12 100		12,220		12,042		12,400		12,575
Mediterranean		12 906		12,702		12,748		12,925		13,363
Middle East		3 608		3,639		3,634		3,717		3,813
Sub Saharan Africa		2 377		2,301		2,306		2,389		2,442
India		22 424		21,999		21,343		21,353		21,215
North East Asia		13 623		13,706		13,782		13,104		13,488
South East Asia & Oceania		4 178		4,054		4,009		4,056		4,128
Total		115 300		116,281		116,240		117,183		118,706
1) Of which in Sweden		16 290		17,041		17,242		17,560		17,569

34      Ericsson  |  First Quarter Report 2016

RESTRUCTURING CHARGES BY FUNCTION

	2016		2015
Isolated quarters, SEK million	Q1		Q4		Q3		Q2		Q1
Cost of sales		-328		-282		-351		-1,157		-484
Research and development expenses		-257		-305		-547		-1,118		-51
Selling and administrative expenses		-47		-117		-80		-469		-79
Total		-632		-704		-978		-2,744		-614
	2016		2015
Year to date, SEK million	Jan-Mar		Jan-Dec		Jan-Sep		Jan-Jun		Jan-Mar
Cost of sales		-328		-2,274		-1,992		-1,641		-484
Research and development expenses		-257		-2,021		-1,716		-1,169		-51
Selling and administrative expenses		-47		-745		-628		-548		-79
Total		-632		-5,040		-4,336		-3,358		-614

RESTRUCTURING CHARGES BY SEGMENT

	2016		2015
Isolated quarters, SEK million	Q1		Q4		Q3		Q2		Q1
Networks		-295		-259		-565		-1,842		-173
Global Services		-315		-213		-358		-691		-419
Of which Professional Services		-237		-60		-316		-175		-140
Of which Network Rollout		-78		-153		-42		-516		-279
Support Solutions		-22		-230		-37		-194		-19
Modems		—		1		-1		-12		-3
Unallocated		—		-3		-17		-5		—
Total		-632		-704		-978		-2,744		-614
	2016		2015
Year to date, SEK million	Jan-Mar		Jan-Dec		Jan-Sep		Jan-Jun		Jan-Mar
Networks		-295		-2,839		-2,580		-2,015		-173
Global Services		-315		-1,681		-1,468		-1,110		-419
Of which Professional Services		-237		-691		-631		-315		-140
Of which Network Rollout		-78		-990		-837		-795		-279
Support Solutions		-22		-480		-250		-213		-19
Modems		—		-15		-16		-15		-3
Unallocated		—		-25		-22		-5		—
Total		-632		-5,040		-4,336		-3,358		-614

35      Ericsson  |  First Quarter Report 2016