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Name of each exchange | ||
Title of each class | on which registered | |
American Depositary Shares Shares | New York Stock Exchange New York Stock Exchange(1) |
(1) | Not for trading, but only in connection with the registration of American Depositary Shares representing these shares, pursuant to the requirements of the Securities and Exchange Commission. |
Large accelerated filerx | Accelerated filero | Non-accelerated filero |
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• | the timing of product, services and solution deliveries; | |
• | our ability to develop, implement and commercialize new products, services, solutions and technologies; | |
• | expectations regarding market growth, developments and structural changes; | |
• | expectations regarding our mobile device volume growth, market share, prices and margins; | |
• | expectations and targets for our results of operations; | |
• | the outcome of pending and threatened litigation; | |
• | expectations regarding the successful completion of contemplated acquisitions on a timely basis and our ability to achieve the set targets upon the completion of such acquisitions; and | |
• | statements preceded by “believe,” “expect,” “anticipate,” “foresee,” “target,” “estimate,” “designed,” “plans,” “will” or similar expressions |
1. | competitiveness of our product, service and solutions portfolio; | |
2. | the extent of the growth of the mobile communications industry and general economic conditions globally; | |
3. | the growth and profitability of the new market segments that we target and our ability to successfully develop or acquire and market products, services and solutions in those segments; | |
4. | our ability to successfully manage costs; | |
5. | the intensity of competition in the mobile communications industry and our ability to maintain or improve our market position or respond successfully to changes in the competitive landscape; | |
6. | the impact of changes in technology and our ability to develop or otherwise acquire complex technologies as required by the market, with full rights needed to use; | |
7. | timely and successful commercialization of complex technologies as new advanced products, services and solutions; | |
8. | our ability to protect the complex technologies, which we or others develop or that we license, from claims that we have infringed third parties’ intellectual property rights, as well as our unrestricted use on commercially acceptable terms of certain technologies in our products, services and solution offerings; | |
9. | our ability to protect numerous Nokia and Nokia Siemens Networks patented, standardized or proprietary technologies from third-party infringement or actions to invalidate the intellectual property rights of these technologies; |
10. | Nokia Siemens Networks’ ability to achieve the expected benefits and synergies from its formation to the extent and within the time period anticipated and to successfully integrate its operations, personnel and supporting activities; |
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11. | whether, as a result of investigations into alleged violations of law by some current or former employees of Siemens AG (“Siemens”), government authorities or others take further actions against Siemensand/or its employees that may involve and affect the carrier-related assets and employees transferred by Siemens to Nokia Siemens Networks, or there may be undetected additional violations that may have occurred prior to the transfer, or ongoing violations that may have occurred after the transfer, of such assets and employees that could result in additional actions by government authorities; | |
12. | any impairment of Nokia Siemens Networks customer relationships resulting from the ongoing government investigations involving the Siemens carrier-related operations transferred to Nokia Siemens Networks; | |
13. | occurrence of any actual or even alleged defects or other quality issues in our products, services and solutions; | |
14. | our ability to manage efficiently our manufacturing and logistics, as well as to ensure the quality, safety, security and timely delivery of our products, services and solutions; | |
15. | inventory management risks resulting from shifts in market demand; | |
16. | our ability to source sufficient amounts of fully functional components and sub-assemblies without interruption and at acceptable prices; | |
17. | any disruption to information technology systems and networks that our operations rely on; | |
18. | developments under large, multi-year contracts or in relation to major customers; | |
19. | economic or political turmoil in emerging market countries where we do business; | |
20. | our success in collaboration arrangements relating to development of technologies or new products, services and solutions; | |
21. | the success, financial condition and performance of our collaboration partners, suppliers and customers; | |
22. | exchange rate fluctuations, including, in particular, fluctuations between the euro, which is our reporting currency, and the US dollar, the Chinese yuan, the UK pound sterling and the Japanese yen, as well as certain other currencies; | |
23. | the management of our customer financing exposure; | |
24. | allegations of possible health risks from electromagnetic fields generated by base stations and mobile devices and lawsuits related to them, regardless of merit; | |
25. | unfavorable outcome of litigations; | |
26. | our ability to recruit, retain and develop appropriately skilled employees; | |
27. | the impact of changes in government policies, laws or regulations; and | |
28. | our ability to effectively and smoothly implement our new organizational structure; |
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Year ended December 31, | ||||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007(1) | 2007(1) | |||||||||||||||||||
(EUR) | (EUR) | (EUR) | (EUR) | (EUR) | (USD) | |||||||||||||||||||
(in millions, except per share data) | ||||||||||||||||||||||||
Profit and Loss Account Data | ||||||||||||||||||||||||
Net sales | 29 533 | 29 371 | 34 191 | 41 121 | 51 058 | 74 560 | ||||||||||||||||||
Operating profit | 4 960 | 4 326 | 4 639 | 5 488 | 7 985 | 11 660 | ||||||||||||||||||
Profit before tax | 5 294 | 4 705 | 4 971 | 5 723 | 8 268 | 12 074 | ||||||||||||||||||
Profit attributable to equity holders of the parent | 3 543 | 3 192 | 3 616 | 4 306 | 7 205 | 10 521 | ||||||||||||||||||
Earnings per share (for profit attributable to equity holders of the parent) | ||||||||||||||||||||||||
Basic earnings per share | 0.74 | 0.69 | 0.83 | 1.06 | 1.85 | 2.70 | ||||||||||||||||||
Diluted earnings per share | 0.74 | 0.69 | 0.83 | 1.05 | 1.83 | 2.67 | ||||||||||||||||||
Cash dividends per share(2) | 0.30 | 0.33 | 0.37 | 0.43 | 0.53 | 0.77 | ||||||||||||||||||
Average number of shares (millions of shares) | ||||||||||||||||||||||||
Basic | 4 761 | 4 593 | 4 366 | 4 063 | 3 885 | 3 885 | ||||||||||||||||||
Diluted | 4 761 | 4 600 | 4 371 | 4 087 | 3 932 | 3 932 |
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Year ended December 31, | ||||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007(1) | 2007(1) | |||||||||||||||||||
(EUR) | (EUR) | (EUR) | (EUR) | (EUR) | (USD) | |||||||||||||||||||
(in millions, except per share data) | ||||||||||||||||||||||||
Balance Sheet Data | ||||||||||||||||||||||||
Fixed assets and other non-current assets | 3 991 | 3 315 | 3 501 | 4 031 | 8 305 | 12 128 | ||||||||||||||||||
Cash and other liquid assets(3) | 11 296 | 11 542 | 9 910 | 8 537 | 11 753 | 17 163 | ||||||||||||||||||
Other current assets | 8 787 | 7 966 | 9 041 | 10 049 | 17 541 | 25 615 | ||||||||||||||||||
Total assets | 24 074 | 22 823 | 22 452 | 22 617 | 37 599 | 54 906 | ||||||||||||||||||
Capital and reserves attributable to equity holders of the parent | 15 302 | 14 385 | 12 309 | 11 968 | 14 773 | 21 573 | ||||||||||||||||||
Minority interests | 164 | 168 | 205 | 92 | 2 565 | 3 746 | ||||||||||||||||||
Long-term interest-bearing liabilities | 20 | 19 | 21 | 69 | 203 | 296 | ||||||||||||||||||
Other long-term liabilities | 308 | 275 | 247 | 327 | 1 082 | 1 580 | ||||||||||||||||||
Borrowings due within one year | 471 | 215 | 377 | 247 | 1 071 | 1 564 | ||||||||||||||||||
Other current liabilities | 7 809 | 7 761 | 9 293 | 9 914 | 17 905 | 26 147 | ||||||||||||||||||
Total shareholders’ equity and liabilities | 24 074 | 22 823 | 22 452 | 22 617 | 37 599 | 54 906 | ||||||||||||||||||
Net interest-bearing debt(4) | (10 805 | ) | (11 308 | ) | (9 512 | ) | (8 221 | ) | (10 479 | ) | (15 302 | ) | ||||||||||||
Share capital | 288 | 280 | 266 | 246 | 246 | 359 |
(1) | As from April 1, 2007, our consolidated financial data includes that of Nokia Siemens Networks on a fully consolidated basis. Nokia Siemens Networks, a company jointly owned by Nokia and Siemens, is comprised of our former Networks business group and Siemens’ carrier-related operations for fixed and mobile networks. Accordingly, our consolidated financial data for the year ended December 31, 2007 is not directly comparable to our consolidated financial data for the prior years. Our consolidated financial data for the years prior to the year ended December 31, 2007 included our former Networks business group only. | |
(2) | The cash dividend for 2007 is what the Board of Directors will propose for shareholders’ approval at the Annual General Meeting convening on May 8, 2008. | |
(3) | Cash and other liquid assets consist of the following captions from our consolidated balance sheets: (1) bank and cash, (2) available-for-sale investments, cash equivalents, and (3) available-for-sale investments, liquid assets. | |
(4) | Net interest-bearing debt consists of borrowings due within one year and long-term interest-bearing liabilities, less cash and other liquid assets. |
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EUR millions | ||||||||
Number of shares | (in total) | |||||||
2003 | 95 338 500 | 1 363 | ||||||
2004 | 214 119 700 | 2 661 | ||||||
2005 | 315 010 000 | 4 265 | ||||||
2006 | 212 340 000 | 3 412 | ||||||
2007 | 180 590 000 | 3 884 |
EUR millions | ||||||||||||
EUR per share | USD per ADS | (in total) | ||||||||||
2003 | 0.30 | 0.36 | 1 439 | |||||||||
2004 | 0.33 | 0.43 | 1 539 | |||||||||
2005 | 0.37 | 0.46 | 1 641 | |||||||||
2006 | 0.43 | 0.58 | 1 761 | |||||||||
2007 | 0.53 | (1) | — | (2) | 2 111 | (1) |
(1) | To be proposed by the Board of Directors for shareholders’ approval at the Annual General Meeting convening on May 8, 2008. |
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(2) | The final US dollar amount will be determined on the basis of the decision of the Annual General Meeting and the dividend payment date. |
Exchange Rates | ||||||||||||||||
Rate at | Average | Highest | Lowest | |||||||||||||
For the year ended December 31: | period end | rate | rate | rate | ||||||||||||
(USD per EUR) | ||||||||||||||||
2003 | 1.2597 | 1.1411 | 1.2597 | 1.0361 | ||||||||||||
2004 | 1.3538 | 1.2478 | 1.3625 | 1.1801 | ||||||||||||
2005 | 1.1842 | 1.2400 | 1.3476 | 1.1667 | ||||||||||||
2006 | 1.3197 | 1.2661 | 1.3327 | 1.1860 | ||||||||||||
2007 | 1.4603 | 1.3797 | 1.4862 | 1.2904 | ||||||||||||
For the month ended: | ||||||||||||||||
September 30, 2007 | 1.4219 | 1.3924 | 1.4219 | 1.3606 | ||||||||||||
October 31, 2007 | 1.4468 | 1.4237 | 1.4468 | 1.4092 | ||||||||||||
November 30, 2007 | 1.4688 | 1.4675 | 1.4862 | 1.4435 | ||||||||||||
December 31, 2007 | 1.4603 | 1.4559 | 1.4759 | 1.4344 | ||||||||||||
January 31, 2008 | 1.4841 | 1.4728 | 1.4877 | 1.4574 | ||||||||||||
February 29, 2008 | 1.5187 | 1.4759 | 1.5187 | 1.4495 |
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• | In 1967, we took our current form as Nokia Corporation under the laws of the Republic of |
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Finland. This was the result of the merger of three Finnish companies: Nokia AB, a wood-pulp mill founded in 1865; Finnish Rubber Works Ltd, a manufacturer of rubber boots, tires and other rubber products founded in 1898; and Finnish Cable Works Ltd, a manufacturer of telephone and power cables founded in 1912. |
• | We entered the telecommunications equipment market in 1960 when an electronics department was established at Finnish Cable Works to concentrate on the production of radio-transmission equipment. | |
• | Regulatory and technological reforms have played a role in our success. Deregulation of the European telecommunications industries since the late 1980s has stimulated competition and boosted customer demand. | |
• | In 1982, we introduced the first fully-digital local telephone exchange in Europe, and in that same year we introduced the world’s first car phone for the Nordic Mobile Telephone analogue standard. | |
• | The technological breakthrough of GSM, which made more efficient use of frequencies and had greater capacity in addition to high-quality sound, was followed by the European resolution in 1987 to adopt GSM as the European digital standard by July 1, 1991. | |
• | The first GSM call was made with a Nokia phone over the Nokia-built network of a Finnish operator called Radiolinja in 1991, and in the same year Nokia won contracts to supply GSM networks in other European countries. | |
• | In the early 1990s, we made a strategic decision to make telecommunications our core business, with the goal of establishing leadership in every major global market. Basic industry and non-telecommunications operations—including paper, personal computer, rubber, footwear, chemicals, power plant, cable, aluminum and television businesses—were divested during the period from 1989 to 1996. | |
• | Mobile communications evolved rapidly during the 1990s and early 2000s, creating new opportunities for devices in entertainment and enterprise use. This trend—where mobile devices increasingly support the features of single-purposed product categories such as music players, cameras, pocketable computers and gaming consoles—is often referred to as digital convergence. | |
• | Nokia Siemens Networks began operations on April 1, 2007. The company, jointly owned by Nokia and Siemens and consolidated by Nokia, combines Nokia’s networks business and Siemens’ carrier-related operations for fixed and mobile networks. |
• | Devices, responsible for developing the best device portfolio for the marketplace, including sourcing of components; |
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• | Services & Software, reflecting our strategic emphasis on developing and growing our offering of consumer Internet services and enterprise solutions and software; | |
• | Markets, responsible for the management of our supply chains, sales channels, brand and marketing activities; and | |
• | ACorporate Development Office, reported under Corporate Functions, which has been established to focus on our strategy and future growth, and to provide operational support for integration across all the units. |
• | Lead and win in mobile devices | |
• | Grow consumer Internet services | |
• | Accelerate adoption of business solutions |
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• | Leverage scale and transform to solutions in infrastructure |
• | Consumer understanding | |
• | Brand | |
• | Technology and architecture | |
• | Channels and supply chain |
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• | Nokia Ad Business: solutions allowing advertisers to reach their audiences through mobile devices. | |
• | Nokia Intellisync E-mail: a cost-effective solution for wireless e-mail that functions on a broad range of mobile devices from Nokia and other manufacturers. | |
• | Nokia Music Store: users can browse, download and stream tracks from both international and local artists on major and independent labels. Tracks can also be downloaded directly to a mobile device over the air, and track listings can be synchronized between a PC and a mobile device. The Nokia Music Store went live in the United Kingdom in November 2007 and will go live in certain other markets during 2008. | |
• | Nokia Maps: offers search, routing, city guides andturn-by-turn voice-guided navigation on a mobile device. | |
• | Nokia Internet communitiessuch as WidSets, which allows people to create, publish, enjoy and share their favorite Internet content on their mobile phones; and MOSH, which allows developers to publish applications and other content for any mobile device. |
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• | In February 2006, we acquired Intellisync, a leading provider of software that enables operators to provide mobile device management services to enterprise customers and allows companies to self-manage their mobile devices. | |
• | In October 2006, we acquired Loudeye, a global leader in digital music platforms and digital media distribution services; and gate5, a leading supplier of mapping, routing and navigation software and services. | |
• | In July 2007, we acquired Twango, which provides a comprehensive media sharing solution for organizing and sharing photos, videos and other personal media. By acquiring Twango, Nokia will be able to offer people an easy way to share multimedia content through their desktop and mobile devices. | |
• | In October 2007, we acquired Enpocket, a global leader in mobile advertising with technology and services for planning, creating, executing, measuring and optimizing mobile advertising campaigns. | |
• | Also in October 2007, Nokia and NAVTEQ announced a definitive agreement for Nokia to acquire NAVTEQ, a leading provider of comprehensive digital map information for automotive navigation systems, mobile navigation devices, Internet-based mapping applications, and government and business solutions. The NAVTEQ acquisition is still pending and subject to customary closing conditions, including regulatory approvals. By acquiring NAVTEQ, we aim to ensure the continued development of our context and geographical services through Nokia Maps as we move from simple navigation to a broader range of location-based services, such as pedestrian navigation and targeted advertising. | |
• | In December 2007, we acquired Avvenu, a company providing secure remote access and private sharing technology that allows users to access and view PC files remotely. |
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• | The announcement and shipments of seven devices with functions and features specially designed for consumers in emerging markets: Nokia 1200, Nokia 1208, Nokia 1650, Nokia 2505, Nokia 2630, Nokia 2660 and Nokia 2760. |
• | Shipments of the slim and stylish Nokia 6300 GSM device, announced in late 2006. | |
• | The announcement of the Nokia 3110 Evolve, a mobile device with bio-covers made from more than 50% renewable material. | |
• | The announcement and shipments of the Nokia 6110 Navigator, an HSDPA device with GPS and AGPS. | |
• | The announcement and shipments of the Nokia 6500 classic, a thin 3G phone with a sleek design; and the Nokia 6120 classic, Nokia’s smallest 3G device. | |
• | The announcement and shipments of the Nokia 6555, the first phone with a unique smooth-back fold design. In the US, the Nokia 6555 is exclusively available from AT&T. | |
• | The announcement and shipments of the Nokia 6263 device for the US market, complete withe-mail capability and support for attachments, a 1.3 megapixel camera, video recorder and music player. |
• | The announcement of a new music range with first shipments of the Nokia 5610 XpressMusic and the Nokia 5310 XpressMusic. | |
• | The announcement and shipments of the Nokia 7900 Prism and the Nokia 7500 Prism. The Prism collection features a diamond-cut design with sharp angled lines, geometric patterns and graphic light-refracting colors. | |
• | The announcement and shipments of the Nokia 8800 Arte and the announcement of the Nokia 8800 Sapphire Arte, bringing 3G to the highly acclaimed Nokia 8800 series. |
• | The announcement and shipments of the Nokia 2505, a sleek fold-style CDMA phone; the Nokia 7088, the first CDMA model in the popular L’Amour Collection; and the Nokia 2135, a compact device with a contemporary design and solid basic features. |
• | The Vertu Ascent Ferrari 1947 Limited Edition. Each piece is individually given a serial number from 1 to 1947, paying homage to the year the first Ferrari car was built. The Vertu Ascent |
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Ferrari 1960 Limited Edition was also announced, with serial numbers from 01 to 060, to celebrate Ferrari’s 60th anniversary. |
• | The next generation of Vertu Ascent handsets: The Vertu Ascent Ti collection, handcrafted from Titanium, and available in red, brown and black. | |
• | Vertu Signature announcements: Vertu Signature Yellow & White Diamonds; Vertu Signature Black & White Diamonds; Vertu Signature Rose Gold Pink Diamonds; and Vertu Signature Rose Gold Pink Sapphires. | |
• | The Vertu Constellation Burgundy and the Vertu Constellation Mixed Metals. |
• | Multimedia continued to build the Nokia Nseries sub-brand and multimedia computer product category, and developed and brought to market Nokia’s first Internet services, such as Nokia Maps and the Nokia Music Store. | |
• | Key volume devices for 2007 included the Nokia N95, and Nokia’s flagship products for technology enthusiasts, the Nokia N70 and the Nokia N73. We shipped approximately 38 million Nokia Nseries devices in 2007. | |
• | Important new products launched and shipping included the Nokia N95 8GB, which follows on from the success of the original Nokia N95 with a larger display, enhanced usage times and 8 gigabytes memory capacity; the Nokia N81, an entertainment focused multimedia computer; and the Nokia N82, a multimedia computer optimized for photography, navigation and Internet connectivity. | |
• | Multimedia also announced and started shipments of the Nokia N810 Internet Tablet with slide-out keyboard, built-in GPS, digital audio/video playback and WLAN capability for VoIP calling. |
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• | Imaging: We are developing photo and video applications for Nokia Nseries multimedia computers that allow easy capturing, editing, printing, sharing and storing of photos and video. | |
• | Music: We are developing the complete Nokia music experience, which includes the Nokia Music Store and other applications and features that allow people to discover, purchase, enjoy, create and manage music on their Nokia Nseries devices and personal computers. | |
• | Internet and computing: We are developing applications for Nokia Nseries multimedia computers in the areas of Internet services, software additions and personal organizers. | |
• | TV and video: We are developing applications for the DVB-H standard, as well as applications that allow easy downloading and streaming of Internet-based video. | |
• | Games: We are developing the N-Gage platform and N-Gage Arena gaming community, as well as the Nokia SNAP mobile gaming platform, to support a broader population of Java-based mobile phones. | |
• | Navigation and search: We are developing search, maps and other location-based applications. |
• | Four new Nokia Eseries business devices were announced and started shipping: Nokia E90 Communicator, Nokia E61i, Nokia E65 and Nokia E51. The four dual-mode devices, capable of utilizing both cellular and Wi-Fi networks, are designed to offer faster and better quality access to important business information and processes over wireless technologies. | |
• | The Nokia Eseries became available in the United States through complementary channels, including Ingram Micro and Dell.com, for businesses and consumers. | |
• | Nokia Call Connect for Cisco became commercially available, allowing businesses to route calls through corporate PBXs instead of cellular networks, with the aim of realizing significant cost savings and improved worker flexibility, collaboration and productivity. | |
• | Nokia Intellisync Mobile Suite 8.0 was launched. This comprehensive platform of wirelesse-mail, file synchronization and application synchronization features is designed to bring flexibility and cost-control. | |
• | New device management features for Nokia Intellisync Mobile Suite were announced, including wider device support, remote control, improved theft-loss protection and hardware control. | |
• | The Nokia Intellisync Mobile Suite customer base was expanded to include more than 40 operators around the globe by December 31, 2007, with more than 3.7 million user licenses signed. |
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• | Three new IP security appliances were launched: Nokia IP290, Nokia IP690 and Nokia IP2450. The appliances are based on a scalable new hardware platform design aimed at offering better IT investment protection and a greater choice of security software applications to address emerging threats to company networks and data. | |
• | Nokia announced collaboration with Check Point and Intel aimed at improving enterprise security by delivering new security appliances that inspect network traffic in multi-gigabit environments. The Nokia IP2450 security platform was the first product announced as part of this collaboration. | |
• | The first Accelerated Data Path (ADP) Service Modules were delivered, as was the latest version of the Nokia IPSO operating system—IPSO 6.0—aimed at allowing customers to expand the performance of their Nokia IP Security appliances. | |
• | The new Nokia for Business Channel Program came to market in January 2007 and more than 500 accredited partners joined during the year. In October 2007, we announced plans to expand the program to include operators and independent software vendors. |
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• | We continued to build the Nokia Nseries and Nokia Eseries sub-brands with important campaigns for the Nokia N95, Nokia N95 8GB and N81 multimedia computers, as well as for the Nokia E90 Communicator and Nokia E65 business-focused devices. | |
• | As part of our retail activities, we opened a new Flagship Store in Shanghai during 2007. We also opened a flagship store in London during February 2008, bringing the total number of Flagship Stores to eight. Our Flagship Stores sell a wide range of Nokia products and provide a Nokia-branded experience directly to consumers in some of the world’s major cities. | |
• | We increased our digital marketing efforts by building electronic marketing campaigns that engage consumers within social networks, both online and on mobile devices. This type of social media engagement has enabled a continuous dialogue with consumers who are at the forefront of the social web phenomenon. | |
• | During 2007, we began implementing an eight-step program designed to increase consumer retention and loyalty. The eight focus areas cover both Nokia’s consumer value proposition in terms of the portfolio of products and services we offer and the delivery of the value proposition to the consumers in terms of our sales and marketing activities with distribution channel partners. |
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• | The new company defined its values and introduced ethics and integrity guidelines, as well as a compliance program, for all its employees. | |
• | Nokia Siemens Networks showed its commitment to emerging markets with the expansion of R&D capacity in Chengdu, China and the investment of USD 100 million to strengthen operations in India. The company also moved its Services business unit to India. | |
• | Deals signed in India included a USD 500 million network expansion contract with Idea Cellular and a USD 900 millionend-to-end network expansion with Bharti Airtel; and in China a EUR 180 million GSM/EDGE deal with Henan MCC. | |
• | Nokia Siemens Networks won a deal with Sprint Nextel to become an infrastructure provider for its 4G WiMAX network; won the first commercial deployment for itsI-HSPA solution with TerreStar; won a trial deal with Verizon for LTE; and was chosen together with Panasonic by NTT DoCoMo in Japan for its super 3G (LTE) base station project. | |
• | Nokia Siemens Networks demonstrated the world’s first multi-user field trial in an urban environment using LTE technology, which delivers data rates up to 10 times the current level. Nokia Siemens Networks also became the first company to successfully deploy hybrid backhaul in a live network, aimed at allowing operators to reduce costs while boosting capacity. | |
• | The company signed a cooperation agreement with Intel in IPTV; and launched a new 3G Femto Home Access solution and then struck Femto cooperation deals with Airvana Inc. and Thomson. | |
• | Nokia Siemens Networks announced an energy efficiency solution designed to lower customers’ energy consumption and operating expenses. | |
• | Nokia Siemens Networks reached a USD 935 million agreement on supplying 2G and 3G network equipment to Zain in Saudi Arabia. |
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• | Element Operationsensures that equipment within the network is maintained efficiently | |
• | Network Managementintegrates the management of multiple network technologies | |
• | Service Managementautomates the customer management of the operator and ensures end-users receive high-quality services | |
• | Middlewareprovides a common software layer within the operator’s network | |
• | Business Support Systemsprovides prepaid, charging and care solutions |
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• | A greater choice of devices compatible with hearing aids | |
• | Enhanced software for converting text to speech, a pre-installed font magnifier, a talking alarm, and a speaking clock for customers with vision loss | |
• | Nokia Conversation, an application aimed at making it easier for customers who rely on text for communication to keep track of their messages |
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• | Achieving Together | |
• | Very Human | |
• | Engaging You | |
• | Passion for Innovation |
• | Focus on Customers | |
• | Win Together | |
• | Innovate | |
• | Communicate Openly | |
• | Inspire |
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• | designing products to minimize environmental impacts over the entire lifecycle | |
• | reducing suppliers impacts through supplier network management | |
• | focusing on environmental management of our own operations | |
• | reducing impacts at the end of our equipment’s useful life by recovering materials and energy and reusing or disposing of substances properly |
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Nokia | Nokia | |||||||||
Country of | Ownership | Voting | ||||||||
Company | Incorporation | Interest | Interest | |||||||
Nokia Inc | United States | 100 | % | 100 | % | |||||
Nokia GmbH | Germany | 100 | % | 100 | % | |||||
Nokia UK Limited | England & Wales | 100 | % | 100 | % | |||||
Nokia TMC Limited | South Korea | 100 | % | 100 | % | |||||
Nokia Telecommunications Ltd | China | 83.9 | % | 83.9 | % | |||||
Nokia Finance International B.V. | The Netherlands | 100 | % | 100 | % | |||||
Nokia Komárom Kft | Hungary | 100 | % | 100 | % | |||||
Nokia India Pvt Ltd | India | 100 | % | 100 | % | |||||
Nokia Spain S.A.U. | Spain | 100 | % | 100 | % | |||||
Nokia Italia S.p.A | Italy | 100 | % | 100 | % | |||||
Nokia do Brazil Technologia Ltda | Brazil | 100 | % | 100 | % | |||||
Nokia Siemens Networks B.V. | The Netherlands | 50 | %(1) | 50 | %(1) | |||||
Nokia Siemens Networks Oy | Finland | 50 | % | 50 | % | |||||
Nokia Siemens Networks GmbH & Co KG | Germany | 50 | % | 50 | % | |||||
Nokia Siemens Networks Pvt. Ltd. | India | 50 | % | 50 | % |
(1) | Nokia Siemens Networks B.V., the ultimate parent of the Nokia Siemens Networks group, is owned approximately 50% by each of Nokia and Siemens and consolidated by Nokia. Nokia effectively controls Nokia Siemens Networks as it has the ability to appoint key officers and the majority of the members of its Board of Directors and, accordingly, Nokia consolidates Nokia Siemens Networks. |
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Productive | ||||||
Capacity, Net | ||||||
Country | Location and Products | (m2)(1) | ||||
BRAZIL | Manaus: mobile devices | 26 709 | ||||
CHINA | Beijing: mobile devices | 24 108 | ||||
Dongguan: mobile devices | 23 480 | |||||
Beijing: switching systems | 7 461 | |||||
Shanghai: base stations, broadband access systems, base stations controllers, transmission systems | 20 797 | |||||
Suzhou: base stations | 9 071 | |||||
FINLAND | Salo: mobile devices | 31 182 | ||||
Oulu: base stations | 13 309 | |||||
Espoo: switching systems, microwave radio products | 9 002 | |||||
GERMANY | Bochum: mobile devices | 30 318 | ||||
Berlin: optical transmission systems | 13 558 | |||||
Bruchsal: switching systems, transmission systems, broadband access systems | 28 616 | |||||
Durach: base stations, microwave radio products, base station controllers | 17 470 | |||||
HUNGARY | Komárom: mobile devices | 36 876 | ||||
INDIA | Chennai: mobile devices | 22 940 | ||||
Calcutta: switching systems, broadband access systems, transmission systems | 8 766 | |||||
MEXICO | Reynosa: mobile devices | 21 151 | ||||
REPUBLIC OF KOREA | Masan: mobile devices | 31 357 | ||||
UNITED KINGDOM | Fleet: mobile devices | 2 728 |
(1) | Productive capacity equals the total area allotted to manufacturing and to the storage of manufacturing-related materials. |
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Year Ended December 31, | ||||||||||||||||||||||||
2007 | 2006 | 2005 | ||||||||||||||||||||||
Net | Operating | Net | Operating | Net | Operating | |||||||||||||||||||
Sales | Profit/(Loss) | Sales | Profit/(Loss) | Sales | Profit/(Loss) | |||||||||||||||||||
(EUR millions) | ||||||||||||||||||||||||
Mobile Phones | 25 083 | 5 434 | 24 769 | 4 100 | 20 811 | 3 598 | ||||||||||||||||||
Multimedia | 10 538 | 2 230 | 7 877 | 1 319 | 5 981 | 836 | ||||||||||||||||||
Enterprise Solutions | 2 070 | 267 | 1 031 | (258 | ) | 861 | (258 | ) | ||||||||||||||||
Nokia Siemens Networks | 13 393 | (1 308 | ) | 7 453 | 808 | 6 557 | 855 | |||||||||||||||||
Common Group Expenses | — | 1 362 | — | (481 | ) | — | (392 | ) | ||||||||||||||||
Eliminations | (26 | ) | — | (9 | ) | — | (19 | ) | — | |||||||||||||||
Total | 51 058 | 7 985 | 41 121 | 5 488 | 34 191 | 4 639 | ||||||||||||||||||
* | As of April 1, 2007, Nokia results include those of Nokia Siemens Networks on a fully consolidated basis. Nokia Siemens Networks, a company jointly owned by Nokia and Siemens, is comprised of our former Networks business group and Siemens’ carrier-related operations for fixed and mobile networks. Accordingly, the results of the Nokia Group and Nokia Siemens Networks for the year ended December 31, 2007 are not directly comparable to the results for the years ended December 31, 2006 and 2005, respectively. Nokia’s 2006 and 2005 results included our former Networks business group only. |
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Year Ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
Europe | 39 | % | 38 | % | 42 | % | ||||||
Middle East & Africa | 14 | % | 13 | % | 13 | % | ||||||
China | 12 | % | 13 | % | 11 | % | ||||||
Asia-Pacific | 22 | % | 20 | % | 18 | % | ||||||
North America | 5 | % | 7 | % | 8 | % | ||||||
Latin America | 8 | % | 9 | % | 8 | % | ||||||
Total | 100 | % | 100 | % | 100 | % | ||||||
* | As of April 1, 2007, Nokia results include those of Nokia Siemens Networks on a fully consolidated basis. Nokia Siemens Networks, a company jointly owned by Nokia and Siemens, is comprised of our former Networks business group and Siemens’ carrier-related operations for fixed and mobile networks. Accordingly, the results of the Nokia Group and Nokia Siemens Networks for the year ended December 31, 2007 are not directly comparable to the results for the years ended December 31, 2006 and 2005, respectively. Nokia’s 2006 and 2005 results included our former Networks business group only. |
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(Based on Nokia Estimates)
Year Ended | Year Ended | Year Ended | ||||||||||||||||||
December 31, | Change (%) | December 31, | Change (%) | December 31, | ||||||||||||||||
2007 | 2006 to 2007 | 2006 | 2005 to 2006 | 2005 | ||||||||||||||||
(Units in millions, except percentage data) | ||||||||||||||||||||
Europe | 284 | 3 | % | 276 | 16 | % | 238 | |||||||||||||
Middle East & Africa | 126 | 19 | % | 106 | 68 | % | 63 | |||||||||||||
China | 173 | 34 | % | 129 | 29 | % | 100 | |||||||||||||
Asia-Pacific | 254 | 34 | % | 189 | 27 | % | 149 | |||||||||||||
North America | 170 | 6 | % | 160 | 13 | % | 142 | |||||||||||||
Latin America | 130 | 10 | % | 118 | 15 | % | 103 | |||||||||||||
Total | 1 137 | 16 | % | 978 | 23 | % | 795 | |||||||||||||
Year Ended | Year Ended | Year Ended | ||||||||||||||||||
December 31, | Change (%) | December 31, | Change (%) | December 31, | ||||||||||||||||
2007 | 2006 to 2007 | 2006 | 2005 to 2006 | 2005 | ||||||||||||||||
(Units in millions, except percentage data) | ||||||||||||||||||||
Europe | 117.2 | 17.7 | % | 99.6 | 13 | % | 88.5 | |||||||||||||
Middle East & Africa | 75.6 | 42.1 | % | 53.2 | 36 | % | 39.2 | |||||||||||||
China | 70.7 | 38.6 | % | 51.0 | 56 | % | 32.6 | |||||||||||||
Asia-Pacific | 112.9 | 41.5 | % | 79.8 | 65 | % | 48.4 | |||||||||||||
North America | 19.4 | (23.3 | )% | 25.3 | (2 | )% | 25.8 | |||||||||||||
Latin America | 41.3 | 7.0 | % | 38.6 | 27 | % | 30.4 | |||||||||||||
Total | 437.1 | 25.8 | % | 347.5 | 31 | % | 264.9 | |||||||||||||
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(Based on Nokia Estimate)
Year Ended | Year Ended | Year Ended | ||||||||||||||||||
December 31, | Change (%) | December 31, | Change (%) | December 31, | ||||||||||||||||
2007 | 2006 to 2007 | 2006 | 2005 to 2006 | 2005 | ||||||||||||||||
(EUR billions, except percentage data) | ||||||||||||||||||||
Europe | 33 | 0 | % | 33 | 6 | % | 31 | |||||||||||||
Middle East & Africa | 9 | 13 | % | 8 | 0 | % | 8 | |||||||||||||
China | 11 | 0 | % | 11 | 10 | % | 10 | |||||||||||||
Asia-Pacific | 27 | 4 | % | 26 | 18 | % | 22 | |||||||||||||
North America | 26 | (4 | )% | 27 | 0 | % | 27 | |||||||||||||
Latin America | 8 | 0 | % | 8 | (11 | )% | 9 | |||||||||||||
Total | 114 | 1 | % | 113 | 6 | % | 107 | |||||||||||||
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Year Ended | Year Ended | Year Ended | ||||||||||
December 31, | December 31, | December 31, | ||||||||||
2007 | 2006 | 2005 | ||||||||||
(EUR millions) | ||||||||||||
Europe | 5 359 | 2 707 | 2 813 | |||||||||
Middle East & Africa | 1 515 | 546 | 274 | |||||||||
China | 1 350 | 885 | 695 | |||||||||
Asia-Pacific | 3 350 | 1 758 | 1 197 | |||||||||
North America | 616 | 758 | 816 | |||||||||
Latin America | 1 202 | 799 | 762 | |||||||||
Total | 13 393 | 7 453 | 6 557 | |||||||||
* | As of April 1, 2007, Nokia results include those of Nokia Siemens Networks on a fully consolidated basis. Nokia Siemens Networks, a company jointly owned by Nokia and Siemens, is comprised of our former Networks business group and Siemens’ carrier-related operations for fixed and mobile networks. Accordingly, the results of the Nokia Group and Nokia Siemens Networks for the year ended December 31, 2007 are not directly comparable to results for the years ended December 31, 2006 and 2005, respectively. Nokia’s 2006 and 2005 results included our former Networks business group only. |
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• | significant underperformance relative to historical or projected future results; | |
• | significant changes in the manner of our use of the acquired assets or the strategy for our overall business; and | |
• | significantly negative industry or economic trends. |
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Year Ended | Year Ended | Percentage | ||||||||||||||||||
December 31, | Percentage of | December 31, | Percentage of | Increase/ | ||||||||||||||||
2007 | Net Sales | 2006 | Net Sales | (Decrease) | ||||||||||||||||
(EUR millions, except percentage data) | ||||||||||||||||||||
Net sales | 51 058 | 100.0 | % | 41 121 | 100.0 | % | 24 | % | ||||||||||||
Cost of sales | (33 754 | ) | (66.1 | )% | (27 742 | ) | (67.5 | )% | 22 | % | ||||||||||
Gross profit | 17 304 | 33.9 | % | 13 379 | 32.5 | % | 29 | % | ||||||||||||
Research and development expenses | (5 647 | ) | (11.1 | )% | (3 897 | ) | (9.5 | )% | 45 | % | ||||||||||
Selling and marketing expenses | (4 380 | ) | (8.6 | )% | (3 314 | ) | (8.1 | )% | 32 | % | ||||||||||
Administrative and general expenses | (1 180 | ) | (2.3 | )% | (666 | ) | (1.6 | )% | 77 | % | ||||||||||
Other operating income and expenses | 1 888 | 3.7 | % | (14 | ) | 0.0 | % | |||||||||||||
Operating profit | 7 985 | 15.6 | % | 5 488 | 13.3 | % | 45 | % | ||||||||||||
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Year Ended | Year Ended | Percentage | ||||||||||||||||||
December 31, | Percentage of | December 31, | Percentage of | Increase/ | ||||||||||||||||
2007 | Net Sales | 2006 | Net Sales | (Decrease) | ||||||||||||||||
(EUR millions, except percentage data) | ||||||||||||||||||||
Net sales | 25 083 | 100.0 | % | 24 769 | 100.0 | % | 1 | % | ||||||||||||
Cost of sales | (16 555 | ) | (66.0 | )% | (17 489 | ) | (70.6 | )% | (5 | )% | ||||||||||
Gross profit | 8 528 | 34.0 | % | 7 280 | 29.4 | % | 17 | % | ||||||||||||
Research and development expenses | (1 270 | ) | (5.1 | )% | (1 227 | ) | (5.0 | )% | 4 | % | ||||||||||
Selling and marketing expenses | (1 708 | ) | (6.8 | )% | (1 649 | ) | (6.6 | )% | 4 | % | ||||||||||
Administrative and general expenses | (84 | ) | (0.3 | )% | (79 | ) | (0.3 | )% | 6 | % | ||||||||||
Other operating income and expenses | (32 | ) | (0.1 | )% | (225 | ) | (0.9 | )% | (86 | )% | ||||||||||
Operating profit | 5 434 | 21.7 | % | 4 100 | 16.6 | % | 33 | % | ||||||||||||
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Year Ended | Year Ended | Percentage | ||||||||||||||||||
December 31, | Percentage of | December 31, | Percentage of | Increase/ | ||||||||||||||||
2007 | Net Sales | 2006 | Net Sales | (Decrease) | ||||||||||||||||
(EUR millions, except percentage data) | ||||||||||||||||||||
Net sales | 10 538 | 100.0 | % | 7 877 | 100.0 | % | 34 | % | ||||||||||||
Cost of sales | (6 298 | ) | (59.8 | )% | (4 800 | ) | (60.9 | )% | 31 | % | ||||||||||
Gross profit | 4 240 | 40.2 | % | 3 077 | 39.1 | % | 38 | % | ||||||||||||
Research and development expenses | (1 011 | ) | (9.6 | )% | (902 | ) | (11.5 | )% | 12 | % | ||||||||||
Selling and marketing expenses | (921 | ) | (8.7 | )% | (780 | ) | (9.9 | )% | 18 | % | ||||||||||
Administrative and general expenses | (55 | ) | (0.5 | )% | (45 | ) | (0.6 | )% | 22 | % | ||||||||||
Other operating income and expenses | (23 | ) | (0.2 | )% | (31 | ) | (0.4 | )% | (26 | )% | ||||||||||
Operating profit | 2 230 | 21.2 | % | 1 319 | 16.7 | % | 69 | % | ||||||||||||
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Year Ended | Year Ended | Percentage | ||||||||||||||||||
December 31, | Percentage of | December 31, | Percentage of | Increase/ | ||||||||||||||||
2007 | Net Sales | 2006 | Net Sales | (Decrease) | ||||||||||||||||
(EUR millions, except percentage data) | ||||||||||||||||||||
Net sales | 2 070 | 100.0 | % | 1 031 | 100.0 | % | 101 | % | ||||||||||||
Cost of sales | (1 124 | ) | (54.3 | )% | (582 | ) | (56.5 | )% | 93 | % | ||||||||||
Gross profit | 946 | 45.7 | % | 449 | 43.5 | % | 110 | % | ||||||||||||
Research and development Expenses | (273 | ) | (13.2 | )% | (319 | ) | (30.9 | )% | (14 | )% | ||||||||||
Selling and marketing Expenses | (308 | ) | (14.9 | )% | (306 | ) | (29.7 | )% | 1 | % | ||||||||||
Administrative and general Expenses | (77 | ) | (3.7 | )% | (75 | ) | (7.3 | )% | 3 | % | ||||||||||
Other operating income and expenses | (21 | ) | (1.0 | )% | (7 | ) | (0.6 | )% | 200 | % | ||||||||||
Operating profit | 267 | 12.9 | % | (258 | ) | (25.0 | )% | |||||||||||||
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Year Ended | Year Ended | Percentage | ||||||||||||||||||
December 31, | Percentage of | December 31, | Percentage of | Increase/ | ||||||||||||||||
2007 | Net Sales | 2006 | Net Sales | (Decrease) | ||||||||||||||||
(EUR millions, except percentage data) | ||||||||||||||||||||
Net sales | 13 393 | 100.0 | % | 7 453 | 100.0 | % | 80 | % | ||||||||||||
Cost of Sales | (9 876 | ) | (73.7 | )% | (4 910 | ) | (65.9 | )% | 101 | % | ||||||||||
Gross profit | 3 517 | 26.3 | % | 2 543 | 34.1 | % | 38 | % | ||||||||||||
Research and development expenses | (2 746 | ) | (20.5 | )% | (1 180 | ) | (15.8 | )% | 133 | % | ||||||||||
Selling and marketing expenses | (1 394 | ) | (10.4 | )% | (544 | ) | (7.3 | )% | 156 | % | ||||||||||
Administrative and general expenses | (701 | ) | (5.2 | )% | (245 | ) | (3.3 | )% | 186 | % | ||||||||||
Other income and expenses | 16 | 0.01 | % | 234 | 3.1 | % | (93 | )% | ||||||||||||
Operating profit | (1 308 | ) | (9.8 | )% | 808 | 10.8 | % | |||||||||||||
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Year Ended | Year Ended | Percentage | ||||||||||||||||||
December 31, | Percentage of | December 31, | Percentage of | Increase/ | ||||||||||||||||
2006 | Net Sales | 2005 | Net Sales | (Decrease) | ||||||||||||||||
(EUR millions, except percentage data) | ||||||||||||||||||||
Net sales | 41 121 | 100.0 | % | 34 191 | 100.0 | % | 20 | % | ||||||||||||
Cost of sales | (27 742 | ) | (67.5 | )% | (22 209 | ) | (65.0 | )% | 25 | % | ||||||||||
Gross profit | 13 379 | 32.5 | % | 11 982 | 35.0 | % | 12 | % | ||||||||||||
Research and development expenses | (3 897 | ) | (9.5 | )% | (3 825 | ) | (11.2 | )% | 2 | % | ||||||||||
Selling and marketing expenses | (3 314 | ) | (8.1 | )% | (2 961 | ) | (8.7 | )% | 12 | % | ||||||||||
Administrative and general expenses | (666 | ) | (1.6 | )% | (609 | ) | (1.8 | )% | 9 | % | ||||||||||
Other operating income and expenses | (14 | ) | 52 | 0.2 | % | |||||||||||||||
Operating profit | 5 488 | 13.3 | % | 4 639 | 13.6 | % | 18 | % | ||||||||||||
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Year Ended | Year Ended | Percentage | ||||||||||||||||||
December 31, | Percentage of | December 31, | Percentage of | Increase/ | ||||||||||||||||
2006 | Net Sales | 2005 | Net Sales | (Decrease) | ||||||||||||||||
(EUR millions, except percentage data) | ||||||||||||||||||||
Net sales | 24 769 | 100.0 | % | 20 811 | 100.0 | % | 19 | % | ||||||||||||
Cost of sales | (17 489 | ) | (70.6 | )% | (14 331 | ) | (68.9 | )% | 22 | % | ||||||||||
Gross profit | 7 280 | 29.4 | % | 6 480 | 31.1 | % | 12 | % | ||||||||||||
Research and development expenses | (1 227 | ) | (5.0 | )% | (1 245 | ) | (6.0 | )% | (1 | )% | ||||||||||
Selling and marketing expenses | (1 649 | ) | (6.6 | )% | (1 541 | ) | (7.4 | )% | 7 | % | ||||||||||
Administrative and general expenses | (79 | ) | (0.3 | )% | (68 | ) | (0.3 | )% | 16 | % | ||||||||||
Other operating income and expenses | (225 | ) | (0.9 | )% | (28 | ) | (0.1 | )% | ||||||||||||
Operating profit | 4 100 | 16.6 | % | 3 598 | 17.3 | % | 14 | % | ||||||||||||
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Year Ended | Year Ended | Percentage | ||||||||||||||||||
December 31, | Percentage of | December 31, | Percentage of | Increase/ | ||||||||||||||||
2006 | Net Sales | 2005 | Net Sales | (Decrease) | ||||||||||||||||
(EUR millions, except percentage data) | ||||||||||||||||||||
Net sales | 7 877 | 100.0 | % | 5 981 | 100.0 | % | 32 | % | ||||||||||||
Cost of sales | (4 800 | ) | (60.9 | )% | (3 492 | ) | (58.4 | )% | 37 | % | ||||||||||
Gross profit | 3 077 | 39.1 | % | 2 489 | 41.6 | % | 24 | % | ||||||||||||
Research and development expenses | (902 | ) | (11.5 | )% | (860 | ) | (14.4 | )% | 5 | % | ||||||||||
Selling and marketing expenses | (780 | ) | (9.9 | )% | (705 | ) | (11.8 | )% | 11 | % | ||||||||||
Administrative and general expenses | (45 | ) | (0.6 | )% | (38 | ) | (0.6 | )% | 18 | % | ||||||||||
Other operating income and expenses | (31 | ) | (0.4 | )% | (50 | ) | (0.8 | )% | 38 | % | ||||||||||
Operating profit | 1 319 | 16.7 | % | 836 | 14.0 | % | 58 | % | ||||||||||||
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Year Ended | Year Ended | Percentage | ||||||||||||||||||
December 31, | Percentage of | December 31, | Percentage of | Increase/ | ||||||||||||||||
2006 | Net Sales | 2005 | Net Sales | (Decrease) | ||||||||||||||||
(EUR millions, except percentage data) | ||||||||||||||||||||
Net sales | 1 031 | 100.0 | % | 861 | 100.0 | % | 20 | % | ||||||||||||
Cost of sales | (582 | ) | (56.5 | )% | (459 | ) | (53.3 | )% | (27 | )% | ||||||||||
Gross profit | 449 | 43.5 | % | 402 | 46.7 | % | 12 | % | ||||||||||||
Research and development expenses | (319 | ) | (30.9 | )% | (329 | ) | (38.2 | )% | (3 | )% | ||||||||||
Selling and marketing expenses | (306 | ) | (29.7 | )% | (221 | ) | (25.7 | )% | 38 | % | ||||||||||
Administrative and general expenses | (75 | ) | (7.3 | )% | (74 | ) | (8.6 | )% | 1 | % | ||||||||||
Other operating income and expenses | (7 | ) | (0.6 | )% | (36 | ) | (4.2 | )% | (81 | )% | ||||||||||
Operating profit | (258 | ) | (25.0 | )% | (258 | ) | (30.0 | )% | — | |||||||||||
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Year Ended | Year Ended | Percentage | ||||||||||||||||||
December 31, | Percentage of | December 31, | Percentage of | Increase/ | ||||||||||||||||
2006 | Net Sales | 2005 | Net Sales | (Decrease) | ||||||||||||||||
(EUR millions, except percentage data) | ||||||||||||||||||||
Net sales | 7 453 | 100.0 | % | 6 557 | 100.0 | % | 14 | % | ||||||||||||
Cost of Sales | (4 910 | ) | (65.9 | )% | (3 967 | ) | (60.5 | )% | 24 | % | ||||||||||
Gross profit | 2 543 | 34.1 | % | 2 590 | 39.5 | % | (2 | )% | ||||||||||||
Research and development expenses | (1 180 | ) | (15.8 | )% | (1 170 | ) | (17.8 | )% | 1 | % | ||||||||||
Selling and marketing expenses | (544 | ) | (7.3 | )% | (475 | ) | (7.3 | )% | 15 | % | ||||||||||
Administrative and general expenses | (245 | ) | (3.3 | )% | (211 | ) | (3.2 | )% | 16 | % | ||||||||||
Other income and expenses | 234 | 3.1 | % | 121 | 1.8 | % | 93 | % | ||||||||||||
Operating profit | 808 | 10.8 | % | 855 | 13.0 | % | (5 | )% | ||||||||||||
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Short-term | Standard & Poor’s | A-1 | ||
Moody’s | P-1 | |||
Long-term | Standard & Poor’s | A | ||
Moody’s | A1 |
At December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
(EUR millions) | ||||||||||||
Financing commitments | 270 | 164 | 13 | |||||||||
Outstanding long-term loans (net of allowances and write-offs) | 10 | 19 | 63 | |||||||||
Current portion of outstanding long-term loans (net of allowances andwrite-offs) | 156 | — | — | |||||||||
Outstanding financial guarantees and securities pledged | 130 | 23 | — | |||||||||
Total | 566 | 206 | 63 | |||||||||
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2008 | 2009-2010 | 2011-2012 | Thereafter | Total | ||||||||||||||||
(EUR millions) | ||||||||||||||||||||
Guarantees of Nokia’s performance | 1 417 | 737 | 74 | 201 | 2 429 | |||||||||||||||
Financial guarantees and securities pledged on behalf of third parties | 128 | 2 | — | — | 130 | |||||||||||||||
Total | 1 545 | 739 | 74 | 201 | 2 559 | |||||||||||||||
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2008 | 2009-2010 | 2011-2012 | Thereafter | Total | ||||||||||||||||
(EUR millions) | ||||||||||||||||||||
Long-term liabilities | 173 | 41 | 106 | 175 | 495 | |||||||||||||||
Operating leases | 281 | 375 | 213 | 129 | 998 | |||||||||||||||
Inventory purchases | 2 454 | 114 | 42 | — | 2 610 | |||||||||||||||
Total | 2 908 | 530 | 361 | 304 | 4 103 | |||||||||||||||
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Chairman Jorma Ollila, b. 1950 | Chairman of the Board of Directors of Nokia Corporation. Chairman of the Board of Directors of Royal Dutch Shell Plc. Board member since 1995. Chairman since 1999. | |
Master of Political Science (University of Helsinki), Master of Science (Econ.) (London School of Economics), Master of Science (Eng.) (Helsinki University of Technology). | ||
Chairman and CEO, Chairman of the Group Executive Board of Nokia Corporation1999-2006, President and CEO, Chairman of the Group Executive Board of Nokia Corporation1992-1999, President of Nokia Mobile Phones1990-1992, Senior Vice President, Finance of Nokia1986-1989. Holder of various managerial positions at Citibank within corporate banking1978-1985. | ||
Member of the Board of Directors of Ford Motor Company, Vice Chairman of the Board of Directors of UPM-Kymmene Corporation (until March 26, 2008), Vice Chairman of the Board of Directors of Otava Books and Magazines Group Ltd and member of the Board of Directors of Fruugo Inc. Chairman of the Boards of Directors and the Supervisory Boards of The Research Institute of the Finnish Economy ETLA and Finnish Business and Policy Forum EVA. Chairman of The European Round Table of Industrialists. Vice Chairman of the Independent Reflection Group of the Council of the European Union considering the future of the European Union. | ||
Vice Chair Dame Marjorie Scardino, b. 1947 | Chief Executive and member of the Board of Directors of Pearson plc. Board member since 2001. | |
B.A. (Baylor University), J.D. (University of San Francisco). |
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Chief Executive of The Economist Group1993-1997, President of the North American Operations of The Economist Group1985-1993, lawyer1976-1985 and publisher of The Georgia Gazette newspaper1978-1985. | ||
Georg Ehrnrooth, b. 1940 | Board member since 2000. | |
Master of Science (Eng.) (Helsinki University of Technology). | ||
President and CEO of Metra Corporation1991-2000, President and CEO of Lohja Corporation1979-1991. Holder of various executive positions at Wärtsilä Corporation within production and management1965-1979. | ||
Chairman of the Board of Directors of Sampo Plc., member of the Board of Directors of Oy Karl Fazer Ab and Sandvik AB (publ). Vice Chairman of the Boards of Directors of The Research Institute of the Finnish Economy ETLA and Finnish Business and Policy Forum EVA. | ||
Lalita D. Gupte, b. 1948 | Non-executive Chairman of the ICICI Venture Funds Management Co Ltd. Board member since May 3, 2007. | |
B.A. in Economics (University of Delhi) and Master of Management Studies (University of Bombay). | ||
Joint Managing Director of ICICI Bank Limited1999-2006, Deputy Managing Director of ICICI Bank1996-1999, Executive Director on the Board of Directors of ICICI Limited1994-1996. Various leadership positions in Corporate and Retail Banking, Strategy and Resources, and International Banking in ICICI Limited and subsequently in ICICI Bank Ltd since 1971. | ||
Member of the Board of Directors of Bharat Forge Ltd, Kirloskar Brothers Ltd, FirstSource Solutions Ltd, Godrej Properties Ltd, HPCL-Mittal Energy Ltd. and a non-profit micro-finance institution. Member of the Board of Management of SVKM’s NMIMS University. | ||
Dr. Bengt Holmström, b. 1949 | Paul A. Samuelson Professor of Economics at MIT, joint appointment at the MIT Sloan School of Management. Board member since 1999. | |
Bachelor of Science (Helsinki University), Master of Science (Stanford University), Doctor of Philosophy (Stanford University). | ||
Edwin J. Beinecke Professor of Management Studies at Yale University1985-1994. | ||
Member of the Board of Directors of Kuusakoski Oy. Member of the American Academy of Arts and Sciences and Foreign Member of The Royal Swedish Academy of Sciences. | ||
Prof. Dr. Henning Kagermann,b. 1947 | CEO and Chairman of the Executive Board of SAP AG. Board member since May 3, 2007. | |
Ph.D. in Theoretical Physics (Technical University of Brunswick). |
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Co-chairman of the Executive Board of SAP1998-2003. A number of leadership positions in SAP since 1982. Member of SAP Executive Board since 1991. Taught physics and computer science at the Technical University of Brunswick and the University of Mannheim1980-1992, became professor in 1985. | ||
Member of the Supervisory Boards of Deutsche Bank AG and Münchener Rückversicherungs-Gesellschaft AG (Munich Re). Member of the Honorary Senate of the Foundation Lindau Nobelprizewinners. | ||
Olli-Pekka Kallasvuo, b. 1953 | President and CEO of Nokia Corporation. Board member since May 3, 2007. | |
LL.M. (University of Helsinki). | ||
President and COO of Nokia Corporation2005-2006, Executive Vice President and General Manager of Nokia Mobile Phones2004-2005, Executive Vice President, CFO of Nokia1999-2003, Executive Vice President of Nokia Americas and President of Nokia Inc.1997-1998, Executive Vice President, CFO of Nokia1992-1996, Senior Vice President, Finance of Nokia1990-1991. | ||
Member of the Board of Directors of EMC Corporation. Chairman of the Board of Directors of Nokia Siemens Networks B.V. | ||
Per Karlsson, b. 1955 | Independent Corporate Advisor. Board member since 2002. | |
Degree in Economics and Business Administration (Stockholm School of Economics). | ||
Executive Director, with mergers and acquisitions advisory responsibilities, at Enskilda M&A, Enskilda Securities (London)1986-1992. Corporate strategy consultant at the Boston Consulting Group (London)1979-1986. | ||
Member of the Board of Directors of IKANO Holdings S.A. | ||
Keijo Suila, b. 1945 | Board member since 2006. | |
B.Sc. (Economics and Business Administration) (Helsinki University of Economics and Business Administration). | ||
President and CEO of Finnair Oyj1999-2005. Chairman of oneworld airline alliance2003-2004 and member of various international aviation and air transportation associations1999-2005. Holder of various executive positions, including Vice Chairman and Executive Vice President, at Huhtamäki Oyj, Leaf Group and Leaf Europe1985-1998. | ||
Vice Chairman of the Board of Directors of Kesko Corporation. Member of the Board of Directors of The Finnish Fair Corporation. | ||
Vesa Vainio, b. 1942 | Board member since 1993. | |
LL.M. (University of Helsinki). | ||
Chairman1998-1999 and2000-2002 and Vice Chairman1999-2000 of the Board of Directors of Nordea AB (publ). |
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Chairman of the Executive Board and CEO of Union Bank of Finland1992-1995 and Merita Bank Ltd and CEO of Merita Ltd1995-1997. President of Kymmene Corporation1991-1992. Holder of various other executive positions in Finnish industry1972-1991. | ||
Chairman of the Board of Directors of UPM-Kymmene Corporation until March 26, 2008. |
Chairman Olli-Pekka Kallasvuo, b. 1953 | President and CEO of Nokia Corporation. Group Executive Board member since 1990, Chairman since 2006. With Nokia1980-1981, rejoined 1982. | |
LL.M. (University of Helsinki). | ||
President and COO of Nokia Corporation2005-2006, Executive Vice President and General Manager of Nokia Mobile Phones2004-2005, Executive Vice President, CFO of Nokia1999-2003, Executive Vice President of Nokia Americas and President of Nokia Inc.1997-1998, Executive Vice President, CFO of Nokia1992-1996, Senior Vice President, Finance of Nokia1990-1991. |
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Member of the Board of Directors of Nokia Corporation and EMC Corporation. Chairman of the Board of Directors of Nokia Siemens Networks B.V. | ||
Robert Andersson, b. 1960 | Executive Vice President, Devices Finance, Strategy and Strategic Sourcing. Group Executive Board member since 2005. Joined Nokia in 1985. | |
Master of Business Administration (George Washington University), Master of Science (Economics and Business Administration) (Swedish School of Economics and Business Administration, Helsinki). | ||
Executive Vice President of Customer and Market Operations2005-2007, Senior Vice President of Customer and Market Operations, Europe, Middle East and Africa2004-2005, Senior Vice President of Nokia Mobile Phones in Asia-Pacific2001-2004, Vice President of Sales for Nokia Mobile Phones in Europe and Africa1998-2001. Various managerial positions within Nokia Mobile Phones, Nokia Consumer Electronics and Nokia Data1985-1998. | ||
Simon Beresford-Wylie, b. 1958 | Chief Executive Officer, Nokia Siemens Networks. Group Executive Board member since 2005. Joined Nokia 1998. | |
Bachelor of Arts (Economic Geography and History) (Australian National University). | ||
Executive Vice President and General Manager of Networks2005-2007. Senior Vice President of Nokia Networks, Asia-Pacific2003-2004, Senior Vice President, Customer Operations of Nokia Networks2002-2003, Vice President, Customer Operations of Nokia Networks2000-2002, Managing Director of Nokia Networks in India and Area General Manager, South Asia1999-2000, Regional Director of Business Development, Project and Trade Finance of Nokia Networks, Asia-Pacific1998-1999, Chief Executive Officer of Modi Telstra, India1995-1998, General Manager, Banking and Finance, Corporate and Government business unit of Telstra Corporation1993-1995, holder of executive positions in the Corporate and Government business units of Telstra Corporation1989-1993, holder of executive, managerial and clerical positions in the Australian Commonwealth Public Service1982-1989. | ||
Member of the Board of Directors of the Vitec Group. | ||
Timo Ihamuotila, b. 1966 | Executive Vice President, Sales. Group Executive Board member since April 1, 2007. With Nokia1993-1996, rejoined 1999. | |
Master of Science (Economics) (Helsinki School of Economics), Licentiate of Science (Finance) (Helsinki School of Economics). | ||
Executive Vice President, Sales and Portfolio Management, Mobile Phones, 2007. Senior Vice President, CDMA Business Unit, Mobile Phones2004-2007,Vice President, Finance, |
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Corporate Treasurer of Nokia Corporation2000-2004, Director of Corporate Finance1999-2000, Vice President of Nordic Derivates Sales, Citibank plc1996-1999, Manager of Dealing & Risk Management of Nokia1993-1996, Analyst, Assets and Liability Management, Kansallis Bank1990-1993. | ||
Mary T. McDowell, b. 1964 | Executive Vice President, Chief Development Officer. Group Executive Board member since 2004. Joined Nokia 2004. | |
Bachelor of Science (Computer Science) (College of Engineering at the University of Illinois). | ||
Executive Vice President and General Manager of Enterprise Solutions2004-2007. Senior Vice President, Strategy and Corporate Development of Hewlett-Packard Company 2003, Senior Vice President & General Manager, Industry-Standard Servers of Hewlett-Packard Company2002-2003, Senior Vice President & General Manager, Industry-Standard Servers of Compaq Computer Corporation1998-2002, Vice President, Marketing, Server Products Division of Compaq Computer Corporation1996-1998. Holder of executive, managerial and other positions at Compaq Computer Corporation1986-1996. | ||
Hallstein Moerk, b. 1953 | Executive Vice President, Human Resources. Group Executive Board member since 2004. Joined Nokia 1999. | |
Diplomøkonom (Econ.) (Norwegian School of Management). Holder of various positions at Hewlett-Packard Corporation1977-1999. | ||
Member of the Board of Advisors of Center for HR Strategy, Rutgers University. Fellow of Academy of Human Resources, Class of 2007. | ||
Dr. Tero Ojanperä, b. 1966 | Executive Vice President, Entertainment and Communities. Group Executive Board member since 2005. Joined Nokia 1990. | |
Master of Science (University of Oulu), Ph.D. (Delft University of Technology, The Netherlands). | ||
Executive Vice President, Chief Technology Officer2006-2007. Executive Vice President & Chief Strategy Officer2005-2006, Senior Vice President, Head of Nokia Research Center2003-2004. Vice President, Research, Standardization and Technology of IP Mobility Networks, Nokia Networks1999-2002. Vice President, Radio Access Systems Research and General Manager of Nokia Networks in Korea, 1999. Head of Radio Access Systems Research, Nokia Networks1998-1999, Principal Engineer, Nokia Research Center,1997-1998. | ||
A member of Young Global Leaders. | ||
Niklas Savander, b. 1962 | Executive Vice President, Services & Software. Group Executive Board Member 2006. Joined Nokia 1997. |
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Master of Science (Eng.) (Helsinki University of Technology), Master of Science (Economics and Business Administration) (Swedish School of Economics and Business Administration, Helsinki). | ||
Executive Vice President, Technology Platforms2006-2007. Senior Vice President and General Manager of Nokia Enterprise Solutions, Mobile Devices Business Unit2003-2006, Senior Vice President, Nokia Mobile Software, Market Operations2002-2003, Vice President, Nokia Mobile Software, Strategy, Marketing & Sales2001-2002, Vice President and General Manager of Nokia Networks, Mobile Internet Applications 2000-2001, Vice President of Nokia Network Systems, Marketing1997-1998. Holder of executive and managerial positions at Hewlett-Packard Company1987-1997. | ||
Member of the Board of Directors of Nokia Siemens Networks B.V. Vice Chairman of the Board of Directors of Tamfelt Oyj. Member of the Board of Directors and secretary of Waldemar von Frenckells Stiftelse. | ||
Richard A. Simonson, b. 1958 | Executive Vice President, Chief Financial Officer. Group Executive Board member since 2004. Joined Nokia 2001. | |
Bachelor of Science (Mining Eng.) (Colorado School of Mines), Master of Business Administration (Finance) (Wharton School of Business at University of Pennsylvania). | ||
Vice President & Head of Customer Finance of Nokia Corporation2001-2003, Managing Director of Telecom & Media Group of Barclays 2001, Head of Global Project Finance and other various positions at Bank of America Securities 1985-2001. | ||
Member of the Board of Directors of Nokia Siemens Networks B.V. Member of the Board of Directors of Electronic Arts, Inc. Member of the Board of Trustees of International House—New York. Member of US Treasury Advisory Committee on the Auditing Profession. | ||
Veli Sundbäck, b. 1946 | Executive Vice President, Corporate Relations and Responsibility. Group Executive Board member since 1996. Joined Nokia 1996. | |
LL.M. (University of Helsinki). | ||
Secretary of State at the Ministry for Foreign Affairs1993-1995, Under-Secretary of State for External Economic Relations at the Ministry for Foreign Affairs1990-1993. | ||
Member of the Board of Directors of Finnair Oyj. Member of the Board and its executive committee, Confederation of Finnish Industries (EK), Vice Chairman of the Board, Technology Industries of Finland, Vice Chairman of the Board of the International Chamber of Commerce, Finnish Section, Chairman of the Board of the Finland—China Trade Association. |
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Anssi Vanjoki, b. 1956 | Executive Vice President, Markets. Group Executive Board member since 1998. Joined Nokia 1991. | |
Master of Science (Econ.) (Helsinki School of Economics and Business Administration). | ||
Executive Vice President and General Manager of Multimedia2004-2007. Executive Vice President of Nokia Mobile Phones1998-2003, Senior Vice President, Europe & Africa of Nokia Mobile Phones1994-1998, Vice President, Sales of Nokia Mobile Phones1991-1994, 3M Corporation1980-1991. Chairman of the Board of Directors of Amer Group Plc. | ||
Dr. Kai Öistämö, b. 1964 | Executive Vice President, Devices. Group Executive Board Member since 2005. Joined Nokia in 1991. | |
Doctor of Technology (Signal Processing), Master of Science (Engineering) (Tampere University of Technology). | ||
Executive Vice President and General Manager of Mobile Phones2005-2007. Senior Vice President, Business Line Management, Mobile Phones2004-2005, Senior Vice President, Mobile Phones Business Unit, Nokia Mobile Phones2002-2003, Vice President, TDMA/GSM 1900 Product Line, Nokia Mobile Phones1999-2002, Vice President, TDMA Product Line1997-1999, various technical and managerial positions in Nokia Consumer Electronics and Nokia Mobile Phones1991-1997. | ||
Member of the Board of Directors of the Finnish Funding Agency for Technology and Innovation (Tekes). Chairman of the Research and Technology Committee of the Confederation of Finnish Industries (EK). |
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Position | 2007 | 2006 | 2005 | |||||||||
(EUR) | ||||||||||||
Chair | 375 000 | 375 000 | 165 000 | |||||||||
Vice Chair | 150 000 | 137 500 | 137 500 | |||||||||
Member | 130 000 | 110 000 | 110 000 | |||||||||
Chair of Audit Committee | 25 000 | 25 000 | 25 000 | |||||||||
Member of Audit Committee | 10 000 | 10 000 | 10 000 | |||||||||
Chair of Personnel Committee | 25 000 | 25 000 | 25 000 | |||||||||
Total | 1 775 000 | 1 472 500 | 1 262 500 | |||||||||
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Change in | ||||||||||||||||||||||||||||||||
Pension Value | ||||||||||||||||||||||||||||||||
Fees | Non-Equity | and Nonqualified | ||||||||||||||||||||||||||||||
Earned or | Incentive | Deferred | ||||||||||||||||||||||||||||||
Paid in | Stock | Plan | Compensation | All Other | ||||||||||||||||||||||||||||
Cash | Awards | Option Awards | Compensation | Earnings | Compensation | Total | ||||||||||||||||||||||||||
Year | (EUR)(1) | (EUR)(2) | (EUR)(2) | EUR(2) | (EUR)(2) | (EUR)(2) | (EUR) | |||||||||||||||||||||||||
Jorma Ollila, Chair(3) | 2007 | 375 000 | – | – | – | – | – | 375 000 | ||||||||||||||||||||||||
Marjorie Scardino, Vice Chair(4) | 2007 | 150 000 | – | – | – | – | – | 150 000 | ||||||||||||||||||||||||
Georg Ehrnrooth(5) | 2007 | 155 000 | – | – | – | – | – | 155 000 | ||||||||||||||||||||||||
Lalita D. Gupte(6) | 2007 | 140 000 | – | – | – | – | – | 140 000 | ||||||||||||||||||||||||
Bengt Holmström | 2007 | 130 000 | – | – | – | – | – | 130 000 | ||||||||||||||||||||||||
Olli-Pekka Kallasvuo(7) | 2007 | 130 000 | – | – | – | – | – | 130 000 | ||||||||||||||||||||||||
Henning Kagermann | 2007 | 130 000 | – | – | – | – | – | 130 000 | ||||||||||||||||||||||||
Per Karlsson(8) | 2007 | 155 000 | – | – | – | – | – | 155 000 | ||||||||||||||||||||||||
Keijo Suila(9) | 2007 | 140 000 | – | – | – | – | – | 140 000 | ||||||||||||||||||||||||
Vesa Vainio(10) | 2007 | 140 000 | – | – | – | – | – | 140 000 | ||||||||||||||||||||||||
(11) |
(1) | Approximately 60% of each Board member’s annual remuneration is paid in cash and the remaining 40% in Nokia shares acquired from the market. | |
(2) | Not applicable to any non-executive member of the Board of Directors. | |
(3) | This table includes remuneration paid to Mr. Ollila, Chairman, for his services as Chairman of the Board. Based on the long-term equity incentives granted earlier to Mr. Ollila pursuant to his prior position as the CEO of Nokia until June 1, 2006, Mr. Ollila received EUR 70 838 for taxable benefit concerning payment of the Finnish transfer tax and relatedgross-up in respect of settlements under performance and restricted share plans made to all participants of those plans who were Finnish tax residents. | |
(4) | The 2007 fee of Ms. Scardino was paid for her services as Vice Chair of the Board. | |
(5) | The 2007 fee paid to Mr. Ehrnrooth amounted to a total of EUR 155 000, consisting of a fee of EUR 130 000 for services as a member of the Board and EUR 25 000 for services as Chairman of the Audit Committee. | |
(6) | The 2007 fee paid to Ms. Gupte amounted to a total of EUR 140 000, consisting of a fee of EUR 130 000 for services as a member of the Board and EUR 10 000 for services as a member of the Audit Committee. | |
(7) | This table includes remuneration paid to Mr. Kallasvuo, President and CEO, for his services as a member of the Board, only. For the compensation paid for his services as the President and CEO, see “—Executive Compensation—Actual Executive Compensation for 2007—Summary Compensation Table 2007” below. | |
(8) | The 2007 fee paid to Mr. Karlsson amounted to a total of EUR 155 000, consisting of a fee of EUR 130 000 for services as a member of the Board and EUR 25 000 for services as Chairman of the Personnel Committee. |
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(9) | The 2007 fee paid to Mr. Suila amounted to a total of EUR 140 000, consisting of a fee of EUR 130 000 for services as a member of the Board and EUR 10 000 for services as a member of the Audit Committee. | |
(10) | The 2007 fee paid to Mr. Vainio amounted to a total of EUR 140 000, consisting of a fee of EUR 130 000 for services as a member of the Board and EUR 10 000 for services as a member of the Audit Committee. | |
(11) | Daniel R. Hesse was paid the annual fee of EUR 130 000, prior to his resignation that was announced on December 28, 2007. |
• | competitive base pay rates; and | |
• | short- and long-term incentives that are intended to result in competitive total compensation package. |
• | attract and retain outstanding executive talent; | |
• | deliver a significant amount of performance-related variable compensation for the achievement of both short- and long-term stretch goals; | |
• | appropriately balance rewards between both Nokia’s and an individual’s performance; and | |
• | align the interests of the executive officers with those of the shareholders through long-term incentives in the form of equity-based awards. |
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• | The compensation levels for similar positions (in terms of scope of position, revenues, number of employees, global responsibility and reporting relationships) in relevant comparison companies; | |
• | The performance demonstrated by the executive officer during the last year; | |
• | The size and impact of the role on Nokia’s overall performance and strategic direction; | |
• | The internal comparison to the compensation levels of the other executive officers of Nokia; and | |
• | Past experience and tenure in role. |
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Minimum | Target | Maximum | ||||||||||||
Position | Performance | Performance | Performance | Measurement Criteria | ||||||||||
President and CEO | 0 | % | 100 | % | 225 | % | (a) Financial Objectives (includes targets for net sales, operating profit and operating cash flow measures) | |||||||
0 | % | 25 | % | 37.5 | % | (c) Total Shareholder Return(1) (comparison made with key competitors in the high technology and telecommunications industries over one, three and five year periods | ||||||||
0 | % | 25 | % | 37.5 | % | (d) Strategic Objectives | ||||||||
Total | 0 | % | 150 | % | 300 | % | ||||||||
Group Executive Board | 0 | % | 75 | % | 168.75 | % | (a) Financial Objectives (includes targets for net sales, operating profit and operating cash flow); and | |||||||
(b) Individual Strategic Objectives (as described below) | ||||||||||||||
0 | % | 25 | % | 37.5 | % | (c) Total Shareholder Return(1)(2) | ||||||||
Total | 0 | % | 100 | % | 206.25 | % | ||||||||
(1) | Total shareholder return reflects the change in Nokia’s share price during a respective time period added with the value of dividends per share paid during the said period, divided by Nokia’s share price at the beginning of the period. The calculation is the same also for each company in the said peer group. | |
(2) | Only some members of the Group Executive Board are eligible for the additional 25% total shareholder return element. |
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Number of | ||||||||||||
Members | Cash | |||||||||||
December 31, | Incentive | |||||||||||
Year | 2007 | Base Salaries(3) | Payments(1)(2)(3) | |||||||||
EUR | EUR | |||||||||||
2007 | 12 | 5 354 176 | 8 280 615 |
(1) | Includes payments pursuant to cash incentive arrangements for the 2007 calendar year paid or payable by Nokia for the respective fiscal year. The cash incentives are paid as a percentage of annual base salary based on Nokia’s short-term cash incentives. | |
(2) | Excluding any gains realized upon exercise of stock options, which are described in “Item 6.E Share Ownership.” | |
(3) | Includes base salary and bonuses to Simon Beresford-Wylie, EVP and General Manager Networks of Nokia for the period until March 31, 2007 and Chief Executive Officer of Nokia Siemens Networks for the remainder of 2007 and to Timo Ihamuotila from April 1, 2007. |
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Total Number | ||||||||||||
Group Executive Board(3) | Total | of Participants | ||||||||||
Performance Shares at Threshold(2) | 286 000 | 2 163 901 | 5 300 | |||||||||
Stock Options | 572 000 | 3 211 965 | 2 800 | |||||||||
Restricted Shares | 390 000 | 1 749 433 | 300 |
(1) | The equity-based incentive grants are generally forfeited if the employment relationship terminates with Nokia prior to vesting. The settlement is conditional upon performance and service conditions, as determined in the relevant plan rules. For a description of our equity plans, see Note 22 to our consolidated financial statements included in Item 18 of this annual report. | |
(2) | At maximum performance, the settlement amounts to four times the number of performance shares originally granted at threshold. | |
(3) | Including Timo Ihamuotila from April 1, 2007. |
Change in | ||||||||||||||||||||||||||||||||||||
Pension Value | ||||||||||||||||||||||||||||||||||||
and Nonqualified | ||||||||||||||||||||||||||||||||||||
Name and | Non-Equity | Deferred | ||||||||||||||||||||||||||||||||||
Principal | Stock | Option | Incentive Plan | Compensation | All Other | |||||||||||||||||||||||||||||||
Position(1) | Year(*) | Salary | Bonus(2) | Awards(3) | Awards(3) | Compensation(**) | Earnings | Compensation | Total | |||||||||||||||||||||||||||
EUR | EUR | EUR | EUR | EUR | EUR | EUR | EUR | |||||||||||||||||||||||||||||
Olli-Pekka Kallasvuo | 2007 | 1 037 619 | 2 348 877 | 4 112 581 | 693 141 | — | 956 333 | (4)(5) | 183 603 | (6) | 9 332 153 | |||||||||||||||||||||||||
President and CEO | 2006 | 898 413 | 664 227 | 1 529 732 | 578 465 | — | 1 496 883 | (4) | 38 960 | 5 206 680 | ||||||||||||||||||||||||||
2005 | 623 524 | 947 742 | ||||||||||||||||||||||||||||||||||
Richard Simonson | 2007 | 488 422 | 827 333 | 1 576 376 | 234 310 | — | 46 699 | (8) | 3 173 141 | |||||||||||||||||||||||||||
EVP and Chief Financial | 2006 | 460 070 | 292 673 | 958 993 | 194 119 | — | 84 652 | 1 990 507 | ||||||||||||||||||||||||||||
Officer(7) | 2005 | 461 526 | 634 516 | |||||||||||||||||||||||||||||||||
Anssi Vanjoki | 2007 | 556 381 | 900 499 | 1 602 605 | 239 829 | — | 18 521 | (4) | 49 244 | (9) | 3 367 078 | |||||||||||||||||||||||||
EVP, Markets | 2006 | 505 343 | 353 674 | 938 582 | 222 213 | — | 215 143 | (4) | 29 394 | 2 264 349 | ||||||||||||||||||||||||||
2005 | 476 000 | 718 896 | ||||||||||||||||||||||||||||||||||
Mary McDowell | 2007 | 444 139 | 769 773 | 1 551 482 | 396 169 | — | 32 463 | (10) | 3 194 027 | |||||||||||||||||||||||||||
EVP, Chief Development | 2006 | 466 676 | 249 625 | 786 783 | 213 412 | — | 45 806 | 1 762 302 | ||||||||||||||||||||||||||||
Officer(7) | ||||||||||||||||||||||||||||||||||||
Kai Öistämö | 2007 | 382 667 | 605 520 | 1 412 371 | 223 284 | — | 41 465 | (4) | 32 086 | (11) | 2 697 393 | |||||||||||||||||||||||||
EVP, Devices |
(1) | The positions set forth in this table are the current positions of the named executives. Mr. Kallasvuo was President and COO until June 1, 2006. Until December 31, 2007, Mr. Vanjoki was Executive Vice President and General Manager of Multimedia; Ms. McDowell, Executive Vice President and General Manager of Enterprise Solutions; and Mr. Öistämö, Executive Vice President and General Manager of Mobile Phones. | |
(2) | Bonus payments are part of Nokia’s short-term cash incentives. The amount consists of the bonus awarded and paid or payable by Nokia for the respective fiscal year. | |
(3) | Amounts shown represent share-based compensation expense recognized in the respective fiscal year for all outstanding equity grants in accordance with IFRS 2, Share-based payment. | |
(4) | The change in pension value represents the proportionate change in Nokia’s liability related to the individual executive. These executives participate in the Finnish TyEL pension system that provides for a retirement benefit based on years of service and earnings according to the prescribed statutory system. The TyEL system is a partly funded and a partly pooled “pay as you go” system. The figures shown represent only the change in liability for the funded portion. The method used to derive the actuarial IFRS valuation is based upon salary information at the respective year-end. Actuarial assumptions including salary increases and inflation have been determined to arrive at the valuation at the respective year end |
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(5) | The change in pension value for Mr. Kallasvuo includes EUR 148 333 for the proportionate change in the company’s liability related to the individual under the funded part of the Finnish TyEL pension (see footnote 4 above). In addition, it includes EUR 808 000 for the change in liability in the early retirement benefit at the age of 60 provided under his service contract. | |
(6) | All other compensation for Mr. Kallasvuo in 2007 includes: EUR 130 000 for his services as member of the Board of Directors, see also “—Board of Directors—Remuneration of the Board of Directors in 2007” above; EUR 21 300 for car allowance; EUR 10 000 for financial counseling; EUR 17 383 for a taxable benefit concerning payment of the Finnish transfer tax and relatedgross-up in respect of settlements under performance and restricted share plans made to all participants of those plans who were Finnish tax residents; and EUR 4 920 for driver and for mobile phone. | |
(7) | Salaries, benefits and perquisites of Ms. McDowell and Mr. Simonson are paid and denominated in USD. Amounts were converted to EUR using year-end 2007 USD/EUR exchange rate of 1.47. For year 2006, amounts were converted to EUR using year-end 2006 USD/EUR exchange rate of 1.31. | |
(8) | All other compensation for Mr. Simonson in 2007 includes: EUR 10 544 company contributions to the 401(k) plan, EUR 11 565 for car allowance, EUR 10 548 for financial counseling, EUR 9 691 provided as benefit under Nokia’s relocation policy and EUR 4 351 Employee Stock Purchase Plan benefit. | |
(9) | All other compensation for Mr. Vanjoki in 2007 includes: EUR 22 020 for car allowance, EUR 16 984 taxable benefit concerning payment of the Finnish transfer tax and relatedgross-up in respect of settlements under performance and restricted share plans made to all participants of those plans who were Finnish tax residents; EUR 10 000 for financial counseling and the remainder for mobile phone. | |
(10) | All other compensation for Ms. McDowell in 2007 includes: EUR 9 184 company contributions to the 401(k) plan, EUR 11 565 for car allowance, EUR 10 531 for financial counseling and the remainder for benefit provided under Nokia’s relocation policy. | |
(11) | All other compensation for Mr. Öistämö in 2007 includes: EUR 13 777 for car allowance, EUR 8 069 taxable benefit concerning payment of the Finnish transfer tax and relatedgross-up in respect of settlements under performance and restricted share plans made to all participants of those plans who were Finnish tax residents; EUR 10 000 for financial counseling and the remainder for mobile phone. | |
(*) | History has been provided for those data elements previously disclosed. | |
(**) | None of the named executive officers participated in a formulated, non-discretionary incentive plan. Annual incentive payments are included under the “Bonus” column. |
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Number of | Performance | Performance | ||||||||||||||||||||||||||||||||||
Shares | Grant | Grant Date | Shares at | Shares at | Restricted | Grant Date | ||||||||||||||||||||||||||||||
Name and Principal | Grant | underlying | Price | Fair Value(2) | Threshold | Maximum | Shares | Fair Value(3) | ||||||||||||||||||||||||||||
Position | Year | Date | Options | (EUR) | (EUR) | (Number) | (Number) | (Number) | (EUR) | |||||||||||||||||||||||||||
Olli-Pekka Kallasvuo President and CEO | 2007 | May 11 | 160 000 | 18.39 | 581 690 | 80 000 | 320 000 | 100 000 | 5 709 382 | |||||||||||||||||||||||||||
Richard Simonson EVP and Chief Financial Officer | 2007 | May 11 | 55 000 | 18.39 | 199 956 | 27 500 | 110 000 | 35 000 | 1 978 385 | |||||||||||||||||||||||||||
Anssi Vanjoki EVP, Markets | 2007 | May 11 | 55 000 | 18.39 | 199 956 | 27 500 | 110 000 | 35 000 | 1 978 385 | |||||||||||||||||||||||||||
Mary McDowell EVP, Chief Development Officer | 2007 | May 11 | 55 000 | 18.39 | 199 956 | 27 500 | 110 000 | 35 000 | 1 978 385 | |||||||||||||||||||||||||||
Kai Öistämö EVP, Devices | 2007 | May 11 | 55 000 | 18.39 | 199 956 | 27 500 | 110 000 | 35 000 | 1 978 385 |
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(1) | Including all grants made during 2007. Grants were made under the Nokia Stock Option Plan 2007, the Nokia Performance Share Plan 2007 and the Nokia Restricted Share Plan 2007, respectively. | |
(2) | The fair values of stock options equal the estimated fair value on the grant date, calculated using the Black-Scholes model. The stock option exercise price is EUR 18.39. The Helsinki Stock Exchange closing market price at the grant date was EUR 18.42. | |
(3) | The fair value of performance shares and restricted shares equals the estimated fair value on grant date. The estimated fair value is based on the grant date market price of the Nokia share less the present value of dividends expected to be paid during the vesting period. The value of performance shares is presented on the basis of a number of shares which is two times the number at threshold. |
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Interim | ||||||||||||||||
Performance | measurement | 1st (interim) | 2nd (final) | |||||||||||||
Plan | period | period | settlement | settlement | ||||||||||||
2004 | 2004-2007 | 2004-2005 | 2006 | 2008 | ||||||||||||
2005 | 2005-2008 | 2005-2006 | 2007 | 2009 | ||||||||||||
2006 | 2006-2008 | N/A | N/A | 2009 | ||||||||||||
2007 | 2007-2009 | N/A | N/A | 2010 |
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Maximum Number of Planned Grants under | ||||
Plan type | the 2008 Equity Program in 2008 | |||
Stock Options | 5 million | |||
Restricted Shares | 4 million | |||
Performance Shares at Threshold(1) | 3 million |
(1) | The maximum number of shares to be delivered at maximum performance is four times the number at threshold, i.e., a total of 12 million Nokia shares. |
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2007 | 2006 | 2005 | ||||||||||
Mobile Phones | 3 475 | 3 639 | 2 647 | |||||||||
Multimedia | 3 708 | 3 058 | 2 750 | |||||||||
Enterprise Solutions | 2 095 | 2 264 | 2 185 | |||||||||
Nokia Siemens Networks(1) | 50 336 | 20 277 | 17 676 | |||||||||
Customer and Market Operations | 28 739 | 23 323 | 18 642 | |||||||||
Technology Platforms | 6 116 | 5 874 | 6 629 | |||||||||
Common Group Functions | 6 065 | 6 889 | 6 367 | |||||||||
Nokia Group | 100 534 | 65 324 | 56 896 | |||||||||
Finland | 24 698 | 24 091 | 23 628 | |||||||||
Other European countries | 30 488 | 14 490 | 13 051 | |||||||||
Middle-East & Africa | 3 384 | 724 | 250 | |||||||||
China | 11 410 | 6 893 | 5 466 | |||||||||
Asia-Pacific | 14 873 | 7 915 | 3 593 | |||||||||
North America | 5 674 | 6 050 | 6 680 | |||||||||
Latin America | 10 007 | 5 161 | 4 228 | |||||||||
Nokia Group | 100 534 | 65 324 | 56 896 | |||||||||
(1) | As of April 1, 2007, our consolidated financial data include that of Nokia Siemens Networks on a fully consolidated basis. Nokia Siemens Networks, a company jointly owned by Nokia and Siemens, is comprised of our former Networks business group and Siemens’ carrier-related operations for fixed and mobile networks. Accordingly, the average numbers of personnel for 2007 are not directly comparable to the average numbers of personnel for 2006 and 2005. |
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Shares(1) | ADSs | |||||||
Jorma Ollila(2) | 389 578 | — | ||||||
Marjorie Scardino | — | 17 263 | ||||||
Georg Ehrnrooth(3) | 318 347 | — | ||||||
Lalita D. Gupte | — | 3 027 | ||||||
Bengt Holmström | 19 416 | — | ||||||
Henning Kagermann | 2 810 | — | ||||||
Olli-Pekka Kallasvuo(4) | 166 059 | — | ||||||
Per Karlsson(3) | 22 889 | — | ||||||
Keijo Suila | 5 597 | — | ||||||
Vesa Vainio | 30 811 | — | ||||||
Total | 955 507 | 20 290 | ||||||
(1) | The number of shares includes not only shares acquired as compensation for services rendered as a member of the Board of Directors, but also shares acquired by any other means. | |
(2) | For Mr. Ollila, this table includes his share ownership, only. Mr. Ollila was entitled to retain all vested and unvested stock options, performance shares and restricted shares granted to him in respect of his services as the CEO of Nokia prior to June 1, 2006 as approved by the Board of Directors. Therefore, in addition to the above-presented share ownership, Mr. Ollila held, as of December 31, 2007; a total of 1 800 000 stock options, 300 000 performance shares (at threshold) and 200 000 restricted shares. The information relating to stock options held by Mr. Ollila as at December 31, 2007 is represented in the table below. |
Total Intrinsic Value of | ||||||||||||||||||||||||||
Exercise | Stock Options, | |||||||||||||||||||||||||
Price per | December 31, 2007 | |||||||||||||||||||||||||
Stock Option | Share | Number of Stock Options | (EUR) | |||||||||||||||||||||||
Category | Expiration Date | (EUR) | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||||
2002 A/B | December 31, 2007 | 17.89 | — | — | — | — | ||||||||||||||||||||
2003 2Q | December 31, 2008 | 14.95 | 600 000 | — | 6 942 000 | — | ||||||||||||||||||||
2004 2Q | December 31, 2009 | 11.79 | 325 000 | 75 000 | 4 787 250 | 1 104 750 | ||||||||||||||||||||
2005 2Q | December 31, 2010 | 12.79 | 225 000 | 175 000 | 3 089 250 | 2 402 750 | ||||||||||||||||||||
2006 2Q | December 31, 2011 | 18.02 | 125 000 | 275 000 | 1 062 500 | 2 337 500 |
Number of stock options in the above table equals the number of underlying shares represented by the option entitlement. Stock options vest over four years: 25% after one year and 6.25% each quarter thereafter. The intrinsic value of the stock options in the above table is based on the difference between the exercise price of the options and the closing market price of Nokia shares on the Helsinki Stock Exchange as at December 28, 2007 of EUR 26.52. | ||
(3) | Mr. Ehrnrooth’s and Mr. Karlsson’s holdings include both shares held personally and shares held through a company. | |
(4) | For Mr. Kallasvuo, this table includes his share ownership only. Mr. Kallasvuo’s holdings of long-term equity-based incentives are outlined below in “—Stock Option Ownership of the Group Executive Board” and “—Performance Shares and Restricted Shares.” |
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Shares | Shares | |||||||||||||||||||
Receivable | Receivable | Shares | ||||||||||||||||||
Shares | Through | Through | Receivable | |||||||||||||||||
Receivable | Performance | Performance | Through | |||||||||||||||||
Through Stock | Shares at | Shares at | Restricted | |||||||||||||||||
Shares | Options | Threshold(3) | Maximum(4) | Shares | ||||||||||||||||
Number of Equity Instruments Held by Group Executive Board | 642 429 | 2 693 844 | 569 600 | 2 835 637 | 1 087 500 | |||||||||||||||
% of the Share Capital(1) | 0.017 | 0.070 | 0.015 | 0.074 | 0.028 | |||||||||||||||
% of the Total Outstanding Equity Incentives (per Instrument)(2) | — | 7.769 | 8.709 | 6.266 | 18.139 |
(1) | The percentage is calculated in relation to the outstanding share capital and total voting rights of the company, excluding shares held by Nokia Group. | |
(2) | The percentage is calculated in relation to the total outstanding equity incentives per instrument, i.e., stock options, performance shares and restricted shares, as applicable. | |
(3) | Performance shares at threshold represent the original grant. Due to the interim payouts, the participants have already received threshold number of Nokia shares under 2004 and 2005 plans. Therefore, the shares receivable under the 2004 and 2005 performance share plans equal to zero. | |
(4) | At maximum performance under the performance share plans 2006 and 2007, the number of Nokia shares deliverable equals four times the number of performance shares originally granted (at threshold). Due to the interim payout (at threshold) in 2006 and based on the actual level of the performance criteria for the performance period, the number of Nokia shares deliverable under the performance share plan 2004 equals 2.39 times the number of performance shares originally granted (at threshold). Due to the interim payout (at threshold) in 2007, the maximum number of Nokia shares deliverable under the performance share plan 2005 equals three times the number of performance shares originally granted (at threshold). |
Shares | ADSs | |||||||
Olli-Pekka Kallasvuo | 166 059 | — | ||||||
Robert Andersson | 28 580 | — | ||||||
Simon Beresford-Wylie | 25 436 | — | ||||||
Timo Ihamuotila | 31 637 | — | ||||||
Mary McDowell | 31 029 | 5 000 | ||||||
Hallstein Moerk | 37 209 | 3 213 | ||||||
Tero Ojanperä | 16 135 | — | ||||||
Niklas Savander | 30 367 | — | ||||||
Richard Simonson | 53 746 | 21 514 | ||||||
Veli Sundbäck | 117 774 | — | ||||||
Anssi Vanjoki | 60 799 | — | ||||||
Kai Öistämö | 13 931 | — | ||||||
Total | 612 702 | 29 727 | ||||||
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Exercise | Total Intrinsic Value of | |||||||||||||||||||||||||||
Price | Stock Options, | |||||||||||||||||||||||||||
per | December 31, 2007 | |||||||||||||||||||||||||||
Stock Option | Expiration | Share | Number of Stock Options(1) | (EUR)(2) | ||||||||||||||||||||||||
Category | Date | (EUR) | Exercisable | Unexercisable | Exercisable(3) | Unexercisable | ||||||||||||||||||||||
Olli-Pekka Kallasvuo | 2002 A/B | December 31, 2007 | 17.89 | — | — | — | — | |||||||||||||||||||||
2003 2Q | December 31, 2008 | 14.95 | 120 000 | — | 1 388 400 | — | ||||||||||||||||||||||
2004 2Q | December 31, 2009 | 11.79 | 48 750 | 11 250 | 718 088 | 165 713 | ||||||||||||||||||||||
2005 2Q | December 31, 2010 | 12.79 | 33 750 | 26 250 | 463 388 | 360 413 | ||||||||||||||||||||||
2005 4Q | December 31, 2010 | 14.48 | 43 750 | 56 250 | 526 750 | 677 250 | ||||||||||||||||||||||
2006 2Q | December 31, 2011 | 18.02 | 93 750 | 206 250 | 796 875 | 1 753 125 | ||||||||||||||||||||||
2007 2Q | December 31, 2012 | 18.39 | — | 160 000 | — | 1 300 800 | ||||||||||||||||||||||
Robert Andersson | 2002 A/B | December 31, 2007 | 17.89 | — | — | — | — | |||||||||||||||||||||
2003 2Q | December 31, 2008 | 14.95 | — | — | — | — | ||||||||||||||||||||||
2004 2Q | December 31, 2009 | 11.79 | 8 450 | 1 950 | 124 469 | 28 724 | ||||||||||||||||||||||
2005 2Q | December 31, 2010 | 12.79 | 6 750 | 5 250 | 92 678 | 72 083 | ||||||||||||||||||||||
2005 4Q | December 31, 2010 | 14.48 | 12 250 | 15 750 | 147 490 | 189 630 | ||||||||||||||||||||||
2006 2Q | December 31, 2011 | 18.02 | — | 55 000 | — | 467 500 | ||||||||||||||||||||||
2007 2Q | December 31, 2012 | 18.39 | — | 32 000 | — | 260 160 | ||||||||||||||||||||||
Simon Beresford-Wylie(4) | 2002 A/B | December 31, 2007 | 17.89 | — | — | — | — | |||||||||||||||||||||
2003 2Q | December 31, 2008 | 14.95 | 13 000 | — | 150 410 | — | ||||||||||||||||||||||
2004 2Q | December 31, 2009 | 11.79 | 8 125 | 1 875 | 119 681 | 27 619 | ||||||||||||||||||||||
2005 2Q | December 31, 2010 | 12.79 | 27 750 | 26 250 | 381 008 | 360 413 | ||||||||||||||||||||||
2006 2Q | December 31, 2011 | 18.02 | 31 250 | 68 750 | 265 625 | 584 375 | ||||||||||||||||||||||
Timo Ihamuotila | 2002 A/B | December 31, 2007 | 17.89 | 7 | — | 60 | — | |||||||||||||||||||||
2003 2Q | December 31, 2008 | 14.95 | — | — | — | — | ||||||||||||||||||||||
2004 2Q | December 31, 2009 | 11.79 | — | 1 500 | — | 22 095 | ||||||||||||||||||||||
2005 2Q | December 31, 2010 | 12.79 | — | 6 300 | — | 86 499 | ||||||||||||||||||||||
2006 2Q | December 31, 2011 | 18.02 | — | 9 900 | — | 84 150 | ||||||||||||||||||||||
2007 2Q | December 31, 2012 | 18.39 | — | 32 000 | — | 260 160 | ||||||||||||||||||||||
Mary McDowell | 2003 4Q | December 31, 2008 | 15.05 | 65 625 | 4 375 | 752 719 | 50 181 | |||||||||||||||||||||
2004 2Q | December 31, 2009 | 11.79 | 40 625 | 9 375 | 598 406 | 138 094 | ||||||||||||||||||||||
2005 2Q | December 31, 2010 | 12.79 | 33 750 | 26 250 | 463 388 | 360 413 | ||||||||||||||||||||||
2006 2Q | December 31, 2011 | 18.02 | 31 250 | 68 750 | 265 625 | 584 375 | ||||||||||||||||||||||
2007 2Q | December 31, 2012 | 18.39 | — | 55 000 | — | 447 150 | ||||||||||||||||||||||
Hallstein Moerk | 2002 A/B | December 31, 2007 | 17.89 | — | — | — | — | |||||||||||||||||||||
2003 2Q | December 31, 2008 | 14.95 | — | — | — | — | ||||||||||||||||||||||
2004 2Q | December 31, 2009 | 11.79 | — | 5 625 | — | 82 856 | ||||||||||||||||||||||
2005 2Q | December 31, 2010 | 12.79 | — | 17 500 | — | 240 275 | ||||||||||||||||||||||
2006 2Q | December 31, 2011 | 18.02 | 18 750 | 41 250 | 159 375 | 350 625 | ||||||||||||||||||||||
2007 2Q | December 31, 2012 | 18.39 | — | 32 000 | — | 260 160 | ||||||||||||||||||||||
Tero Ojanperä | 2002 A/B | December 31, 2007 | 17.89 | — | — | — | — | |||||||||||||||||||||
2003 2Q | December 31, 2008 | 14.95 | 16 000 | — | 185 120 | — | ||||||||||||||||||||||
2004 2Q | December 31, 2009 | 11.79 | 8 125 | 1 875 | 119 681 | 27 619 | ||||||||||||||||||||||
2005 2Q | December 31, 2010 | 12.79 | 22 500 | 17 500 | 308 925 | 240 275 | ||||||||||||||||||||||
2006 2Q | December 31, 2011 | 18.02 | 18 750 | 41 250 | 159 375 | 350 625 | ||||||||||||||||||||||
2007 2Q | December 31, 2012 | 18.39 | — | 32 000 | — | 260 160 | ||||||||||||||||||||||
Niklas Savander | 2002 A/B | December 31, 2007 | 17.89 | — | — | — | — | |||||||||||||||||||||
2003 2Q | December 31, 2008 | 14.95 | — | — | — | — | ||||||||||||||||||||||
2004 2Q | December 31, 2009 | 11.79 | 640 | 1 920 | 9 427 | 28 282 | ||||||||||||||||||||||
2005 2Q | December 31, 2010 | 12.79 | 875 | 6 125 | 12 014 | 84 096 | ||||||||||||||||||||||
2006 2Q | December 31, 2011 | 18.02 | 3 750 | 41 250 | 31 875 | 350 625 | ||||||||||||||||||||||
2007 2Q | December 31, 2012 | 18.39 | — | 32 000 | — | 260 160 | ||||||||||||||||||||||
Richard Simonson | 2002 A/B | December 31, 2007 | 17.89 | — | — | — | — | |||||||||||||||||||||
2003 2Q | December 31, 2008 | 14.95 | 11 500 | — | 133 055 | — | ||||||||||||||||||||||
2004 2Q | December 31, 2009 | 11.79 | 40 625 | 9 375 | 598 406 | 138 094 | ||||||||||||||||||||||
2005 2Q | December 31, 2010 | 12.79 | 33 750 | 26 250 | 463 388 | 360 413 | ||||||||||||||||||||||
2006 2Q | December 31, 2011 | 18.02 | 31 250 | 68 750 | 265 625 | 584 375 | ||||||||||||||||||||||
2007 2Q | December 31, 2012 | 18.39 | — | 55 000 | — | 447 150 |
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Exercise | Total Intrinsic Value of | |||||||||||||||||||||||||||
Price | Stock Options, | |||||||||||||||||||||||||||
per | December 31, 2007 | |||||||||||||||||||||||||||
Stock Option | Expiration | Share | Number of Stock Options(1) | (EUR)(2) | ||||||||||||||||||||||||
Category | Date | (EUR) | Exercisable | Unexercisable | Exercisable(3) | Unexercisable | ||||||||||||||||||||||
Veli Sundbäck | 2002 A/B | December 31, 2007 | 17.89 | — | — | — | — | |||||||||||||||||||||
2003 2Q | December 31, 2008 | 14.95 | 50 000 | — | 578 500 | — | ||||||||||||||||||||||
2004 2Q | December 31, 2009 | 11.79 | 24 375 | 5 625 | 359 044 | 82 856 | ||||||||||||||||||||||
2005 2Q | December 31, 2010 | 12.79 | 22 500 | 17 500 | 308 925 | 240 275 | ||||||||||||||||||||||
2006 2Q | December 31, 2011 | 18.02 | 18 750 | 41 250 | 159 375 | 350 625 | ||||||||||||||||||||||
2007 2Q | December 31, 2012 | 18.39 | — | 32 000 | — | 260 160 | ||||||||||||||||||||||
Anssi Vanjoki | 2002 A/B | December 31, 2007 | 17.89 | — | — | — | — | |||||||||||||||||||||
2003 2Q | December 31, 2008 | 14.95 | — | — | — | — | ||||||||||||||||||||||
2004 2Q | December 31, 2009 | 11.79 | — | 11 250 | — | 165 713 | ||||||||||||||||||||||
2005 2Q | December 31, 2010 | 12.79 | — | 26 250 | — | 360 413 | ||||||||||||||||||||||
2006 2Q | December 31, 2011 | 18.02 | — | 68 750 | — | 584 375 | ||||||||||||||||||||||
2007 2Q | December 31, 2012 | 18.39 | — | 55 000 | — | 447 150 | ||||||||||||||||||||||
Kai Öistämö | 2002 A/B | December 31, 2007 | 17.89 | — | — | — | — | |||||||||||||||||||||
2003 2Q | December 31, 2008 | 14.95 | 727 | — | 8 411 | — | ||||||||||||||||||||||
2004 2Q | December 31, 2009 | 11.79 | 1 250 | 1 875 | 18 413 | 27 619 | ||||||||||||||||||||||
2005 2Q | December 31, 2010 | 12.79 | 1 600 | 5 600 | 21 968 | 76 888 | ||||||||||||||||||||||
2005 4Q | December 31, 2010 | 14.48 | 3 500 | 15 750 | 42 140 | 189 630 | ||||||||||||||||||||||
2006 2Q | December 31, 2011 | 18.02 | 31 250 | 68 750 | 265 625 | 584 375 | ||||||||||||||||||||||
2007 2Q | December 31, 2012 | 18.39 | — | 55 000 | — | 447 150 | ||||||||||||||||||||||
Stock options held by the members of the Group Executive Board on December 31, 2007, Total | 979 299 | 1 714 545 | 11 463 724 | 16 163 936 | ||||||||||||||||||||||||
All outstanding stock option plans (global plans), Total | 20 869 758 | 13 803 554 | 248 800 175 | 139 926 235 |
(1) | Number of stock options equals the number of underlying shares represented by the option entitlement. Stock options vest over four years: 25% after one year and 6.25% each quarter thereafter. | |
(2) | The intrinsic value of the stock options is based on the difference between the exercise price of the options and the closing market price of Nokia shares on the Helsinki Stock Exchange as at December 28, 2007 of EUR 26.52. | |
(3) | For gains realized upon exercise of stock options for the members of the Group Executive Board, see the table in “—Stock Option Exercises and Settlement of Shares” below. | |
(4) | From April 1, 2007, Mr. Beresford-Wylie has participated in a long-term cash incentive plan sponsored by Nokia Siemens Networks instead of the long-term equity-based plans of Nokia. |
Performance Shares | ||||||||||||||||||||||||||||
Number of | Number of | Restricted Shares | ||||||||||||||||||||||||||
Performance | Performance | Intrinsic Value | Number of | Intrinsic Value | ||||||||||||||||||||||||
Shares at | Shares at | December 31, | Plan | Restricted | December 31, | |||||||||||||||||||||||
Plan Name(1) | Threshold(2) | Maximum(2) | 2007(3) (EUR) | Name(4) | Shares | 2007(5) (EUR) | ||||||||||||||||||||||
Olli-Pekka Kallasvuo | 2004 | 15 000 | 35 850 | 950 742 | ||||||||||||||||||||||||
2005 | 15 000 | 45 000 | 1 193 400 | 2005 | 70 000 | 1 856 400 | ||||||||||||||||||||||
2006 | 75 000 | 300 000 | 6 552 786 | 2006 | 100 000 | 2 652 000 | ||||||||||||||||||||||
2007 | 80 000 | 320 000 | 6 571 490 | 2007 | 100 000 | 2 652 000 | ||||||||||||||||||||||
Robert Andersson | 2004 | 2 600 | 6 214 | 164 795 | ||||||||||||||||||||||||
2005 | 3 000 | 9 000 | 238 680 | 2005 | 28 000 | 742 560 | ||||||||||||||||||||||
2006 | 20 000 | 80 000 | 1 747 410 | 2006 | 20 000 | 530 400 | ||||||||||||||||||||||
2007 | 16 000 | 64 000 | 1 314 298 | 2007 | 25 000 | 663 000 |
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Performance Shares | ||||||||||||||||||||||||||||
Number of | Number of | Restricted Shares | ||||||||||||||||||||||||||
Performance | Performance | Intrinsic Value | Number of | Intrinsic Value | ||||||||||||||||||||||||
Shares at | Shares at | December 31, | Plan | Restricted | December 31, | |||||||||||||||||||||||
Plan Name(1) | Threshold(2) | Maximum(2) | 2007(3) (EUR) | Name(4) | Shares | 2007(5) (EUR) | ||||||||||||||||||||||
Simon Beresford-Wylie(6) | 2004 | 2 500 | 5 975 | 158 457 | ||||||||||||||||||||||||
2005 | 15 000 | 45 000 | 1 193 400 | 2005 | 35 000 | 928 200 | ||||||||||||||||||||||
2006 | 25 000 | 100 000 | 2 184 262 | 2006 | 25 000 | 663 000 | ||||||||||||||||||||||
Timo Ihamuotila | 2004 | 2 000 | 4 780 | 126 766 | ||||||||||||||||||||||||
2005 | 3 600 | 10 800 | 286 416 | 2005 | 25 000 | 663 000 | ||||||||||||||||||||||
2006 | 3 600 | 14 400 | 314 534 | 2006 | 4 500 | 119 340 | ||||||||||||||||||||||
2007 | 16 000 | 64 000 | 1 314 298 | 2007 | 25 000 | 663 000 | ||||||||||||||||||||||
Mary McDowell | 2004 | 12 500 | 29 875 | 792 285 | ||||||||||||||||||||||||
2005 | 15 000 | 45 000 | 1 193 400 | 2005 | 35 000 | 928 200 | ||||||||||||||||||||||
2006 | 25 000 | 100 000 | 2 184 262 | 2006 | 25 000 | 663 000 | ||||||||||||||||||||||
2007 | 27 500 | 110 000 | 2 258 950 | 2007 | 35 000 | 928 200 | ||||||||||||||||||||||
Hallstein Moerk | 2004 | 7 500 | 17 925 | 475 371 | ||||||||||||||||||||||||
2005 | 10 000 | 30 000 | 795 600 | 2005 | 25 000 | 663 000 | ||||||||||||||||||||||
2006 | 15 000 | 60 000 | 1 310 557 | 2006 | 15 000 | 397 800 | ||||||||||||||||||||||
2007 | 16 000 | 64 000 | 1 314 298 | 2007 | 25 000 | 663 000 | ||||||||||||||||||||||
Tero Ojanperä | 2004 | 2 500 | 5 975 | 158 457 | ||||||||||||||||||||||||
2005 | 10 000 | 30 000 | 795 600 | 2005 | 25 000 | 663 000 | ||||||||||||||||||||||
2006 | 15 000 | 60 000 | 1 310 557 | 2006 | 15 000 | 397 800 | ||||||||||||||||||||||
2007 | 16 000 | 64 000 | 1 314 298 | 2007 | 25 000 | 663 000 | ||||||||||||||||||||||
Niklas Savander | 2004 | 2 560 | 6 118 | 162 260 | ||||||||||||||||||||||||
2005 | 3 500 | 10 500 | 278 460 | 2005 | 25 000 | 663 000 | ||||||||||||||||||||||
2006 | 15 000 | 60 000 | 1 310 557 | 2006 | 15 000 | 397 800 | ||||||||||||||||||||||
2007 | 16 000 | 64 000 | 1 314 298 | 2007 | 25 000 | 663 000 | ||||||||||||||||||||||
Richard Simonson | 2004 | 12 500 | 29 875 | 792 285 | ||||||||||||||||||||||||
2005 | 15 000 | 45 000 | 1 193 400 | 2005 | 35 000 | 928 200 | ||||||||||||||||||||||
2006 | 25 000 | 100 000 | 2 184 262 | 2006 | 25 000 | 663 000 | ||||||||||||||||||||||
2007 | 27 500 | 110 000 | 2 258 950 | 2007 | 35 000 | 928 200 | ||||||||||||||||||||||
Veli Sundbäck | 2004 | 7 500 | 17 925 | 475 371 | ||||||||||||||||||||||||
2005 | 10 000 | 30 000 | 795 600 | 2005 | 25 000 | 663 000 | ||||||||||||||||||||||
2006 | 15 000 | 60 000 | 1 310 557 | 2006 | 15 000 | 397 800 | ||||||||||||||||||||||
2007 | 16 000 | 64 000 | 1 314 298 | 2007 | 25 000 | 663 000 | ||||||||||||||||||||||
Anssi Vanjoki | 2004 | 15 000 | 35 850 | 950 742 | ||||||||||||||||||||||||
2005 | 15 000 | 45 000 | 1 193 400 | 2005 | 35 000 | 928 200 | ||||||||||||||||||||||
2006 | 25 000 | 100 000 | 2 184 262 | 2006 | 25 000 | 663 000 | ||||||||||||||||||||||
2007 | 27 500 | 110 000 | 2 258 950 | 2007 | 35 000 | 928 200 | ||||||||||||||||||||||
Kai Öistämö | 2004 | 2 500 | 5 975 | 158 457 | ||||||||||||||||||||||||
2005 | 3 200 | 9 600 | 254 592 | 2005 | 25 000 | 663 000 | ||||||||||||||||||||||
2006 | 25 000 | 100 000 | 2 184 262 | 2006 | 25 000 | 663 000 | ||||||||||||||||||||||
2007 | 27 500 | 110 000 | 2 258 950 | 2007 | 35 000 | 928 200 | ||||||||||||||||||||||
Performance Shares and Restricted Shares held by the Group Executive Board, Total | 772 560 | 2 835 637 | 63 049 281 | 1 087 500 | 28 840 500 | |||||||||||||||||||||||
All outstanding Performance Shares and Restricted Shares (Global plans), Total | 13 554 558 | 45 254 618 | 1 066 777 076 | 5 915 929 | 156 890 437 |
(1) | The performance period for the 2004 plan was2004-2007, with one interim measurement period for fiscal years2004-2005. The performance period for the 2005 plan is2005-2008, with one interim measurement period for fiscal years2005-2006. The performance period for the 2006 plan is2006-2008, without any interim measurement period. The performance period for the 2007 plan is2007-2009, without any interim measurement period. | |
(2) | For the performance share plans 2004, 2005, 2006 and 2007, the number of performance shares at threshold represents the number of performance shares granted. This number will vest as Nokia shares should the pre-determined threshold performance levels of Nokia be met. Under 2004 and 2005 performance share plans, the participants have already received threshold number of Nokia shares in connection with interim payout. The maximum number of Nokia shares will vest should |
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the predetermined maximum performance levels be met. The maximum number of performance shares equals four times the number originally granted (at threshold). Due to the interim payout (at threshold) in 2006 and based on the actual level of the performance criteria for the performance period, the number of Nokia shares deliverable under the performance share plan 2004 equals 2.39 times the number of performance shares originally granted (at threshold). Due to the interim payout (at threshold) in 2007, the maximum number of Nokia shares deliverable under the performance share plan 2005 equals three times the number of performance shares originally granted (at threshold). | ||
(3) | The intrinsic value is based on the closing market price of a Nokia share on the Helsinki Stock Exchange as at December 28, 2007 of EUR 26.52. The value of performance shares is presented on the basis of Nokia’s estimation of the number of shares expected to vest. For performance share plan 2004 the value of performance shares is presented on the basis of actual number of shares expected to vest. | |
(4) | Under the restricted share plans 2004, 2005, 2006 and 2007 awards have been granted quarterly. For the major part of the awards made under these plans the restriction period ended for the 2004 plan on October 1, 2007; and will end for the 2005 plan, on October 1, 2008; for the 2006 plan, on October 1, 2009; and for the 2007 plan, on October 1, 2010. | |
(5) | The intrinsic value is based on the closing market price of a Nokia share on the Helsinki Stock Exchange as at December 28, 2007 of EUR 26.52. | |
(6) | From April 1, 2007, Mr. Beresford-Wylie has participated in a long-term cash incentive plan sponsored by Nokia Siemens Networks instead of the long-term equity-based plans of Nokia. |
Stock Option | Performance Share | Restricted Share | ||||||||||||||||||||||||||
Awards(1) | Awards(2) | Awards(3) | ||||||||||||||||||||||||||
Options | Value | Shares | Value | Shares | Value | |||||||||||||||||||||||
Exercised | Realized | Delivered | Realized | Delivered | Realized | |||||||||||||||||||||||
Name | Year | (Number) | (EUR) | (Number) | (EUR) | (Number) | (EUR) | |||||||||||||||||||||
Olli-Pekka Kallasvuo | 2007 | 175 000 | 150 518 | 15 000 | 301 500 | 35 000 | 651 000 | |||||||||||||||||||||
Robert Andersson | 2007 | 73 000 | 381 620 | 3 000 | 60 300 | 15 000 | 388 200 | |||||||||||||||||||||
Simon Beresford-Wylie | 2007 | 6 000 | 87 300 | 15 000 | 301 500 | — | — | |||||||||||||||||||||
Timo Ihamuotila | 2007 | 30 223 | 218 849 | 3 600 | 72 360 | 15 000 | 388 200 | |||||||||||||||||||||
Mary McDowell | 2007 | — | — | 15 000 | 301 500 | 20 000 | 331 600 | |||||||||||||||||||||
Hallstein Moerk | 2007 | 83 750 | 707 937 | 10 000 | 201 000 | 20 000 | 372 000 | |||||||||||||||||||||
Kai Öistämö | 2007 | 23 989 | 121 392 | 3 200 | 64 320 | 15 000 | 388 200 | |||||||||||||||||||||
Tero Ojanperä | 2007 | 14 500 | 151 380 | 10 000 | 201 000 | 15 000 | 388 200 | |||||||||||||||||||||
Niklas Savander | 2007 | 64 180 | 427 001 | 3 500 | 70 350 | 16 500 | 427 020 | |||||||||||||||||||||
Richard Simonson | 2007 | 15 000 | 42 750 | 15 000 | 301 500 | 25 000 | 465 000 | |||||||||||||||||||||
Veli Sundbäck | 2007 | 40 000 | 209 350 | 10 000 | 201 000 | 20 000 | 372 000 | |||||||||||||||||||||
Anssi Vanjoki | 2007 | 156 250 | 1 461 900 | 15 000 | 301 500 | 35 000 | 651 000 |
(1) | Value realized on exercise is based on the total gross value received in 2007 in respect of stock options sold on the Helsinki Stock Exchange (transferable stock options) and on the difference between the Nokia share price and exercise price of options (non-transferable stock options). | |
(2) | Represents interim payout at threshold for the 2005 performance share grant. Value is based on the market price of the Nokia share on the Helsinki Stock Exchange as at May 21, 2007 of EUR 20.10. |
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(3) | Delivery of Nokia shares vested from the 2003 grant to Ms. McDowell and from the 2004 grant to the other members of the Group Executive Board. Value is based on the market price of the Nokia share on the Helsinki Stock Exchange for the grant of Ms. McDowell on January 29, 2007 of EUR 16.58; Mr. Kallasvuo, Mr. Moerk, Mr. Simonson, Mr. Sundbäck and Mr. Vanjoki as at May 7, 2007 of EUR 18.60; and Mr. Andersson; Mr. Ihamuotila; Mr. Ojanperä, Mr. Savander and Mr. Öistämö on October 22, 2007 of EUR 25.88. |
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Helsinki | New York | |||||||||||||||
Stock | Stock | |||||||||||||||
Exchange | Exchange | |||||||||||||||
Price per share | Price per ADS | |||||||||||||||
High | Low | High | Low | |||||||||||||
(EUR) | (USD) | |||||||||||||||
2003 | 16.16 | 11.44 | 18.45 | 12.67 | ||||||||||||
2004 | 18.79 | 8.97 | 23.22 | 11.03 | ||||||||||||
2005 | 15.75 | 10.75 | 18.62 | 13.92 | ||||||||||||
2006 | ||||||||||||||||
First Quarter | 17.49 | 14.81 | 21.28 | 17.72 | ||||||||||||
Second Quarter | 18.65 | 15.21 | 23.10 | 19.13 | ||||||||||||
Third Quarter | 16.78 | 14.61 | 21.41 | 18.43 | ||||||||||||
Fourth Quarter | 16.14 | 14.91 | 20.93 | 19.34 | ||||||||||||
Full Year | 18.65 | 14.61 | 23.10 | 17.72 | ||||||||||||
2007 | ||||||||||||||||
First Quarter | 17.69 | 14.63 | 23.14 | 19.08 | ||||||||||||
Second Quarter | 21.78 | 16.98 | 29.01 | 22.70 | ||||||||||||
Third Quarter | 26.73 | 20.01 | 37.94 | 27.71 | ||||||||||||
Fourth Quarter | 28.60 | 24.80 | 41.10 | 35.31 | ||||||||||||
Full Year | 28.60 | 14.63 | 41.10 | 19.08 | ||||||||||||
Most recent six months | ||||||||||||||||
September 2007 | 26.73 | 24.21 | 37.94 | 33.37 | ||||||||||||
October 2007 | 27.64 | 24.80 | 39.91 | 35.31 | ||||||||||||
November 2007 | 28.60 | 25.39 | 41.10 | 36.87 | ||||||||||||
December 2007 | 27.58 | 25.00 | 40.24 | 36.23 | ||||||||||||
January 2008 | 25.78 | 20.72 | 38.14 | 31.70 | ||||||||||||
February 2008 | 25.70 | 23.62 | 38.25 | 34.59 |
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2007 | 2006 | |||||||||||||||
Nokia Siemens | ||||||||||||||||
Nokia | Networks | Total | Total | |||||||||||||
(EUR millions) | ||||||||||||||||
Audit Fees(1) | 5.3 | 12.7 | 18.0 | 5.2 | ||||||||||||
Audit-Related Fees(2) | 3.6 | 24.3 | 27.9 | 7.1 | ||||||||||||
Tax Fees(3) | 5.0 | 2.3 | 7.3 | 6.8 | ||||||||||||
All Other Fees(4) | 0.2 | — | 0.2 | 0.4 | ||||||||||||
Total | 14.1 | 39.3 | 53.4 | 19.5 | ||||||||||||
(1) | Audit Fees consist of fees billed for the annual audit of the company’s consolidated financial statements and the statutory financial statements of the company’s subsidiaries. They also include fees billed for other audit services, which are those services that only the independent auditor reasonably can provide, and include the provision of comfort letters and consents in connection with statutory and regulatory filings and the review of documents filed with the SEC and other capital markets or local financial reporting regulatory bodies. The fees for 2007 include EUR 2.9 million of accrued audit fees for the 2007 year-end audit that were not billed until 2008. There were no unbilled audit fees at year-end 2006. | |
(2) | Audit-Related Fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the company’s financial statements or that are traditionally performed by the independent auditor, and include consultations concerning financial accounting and reporting standards; advice on tax accounting matters; advice and assistance in connection with local statutory accounting requirements; due diligence related to acquisitions; financial due diligence in connection with provision of funding to customers, reports in relation to covenants in loan agreements; employee benefit plan audits and reviews; and audit procedures in connection with investigations and the compliance program implemented at Nokia Siemens Networks related to the Siemens’ carrier-related operations transferred to Nokia Siemens Networks. The fees for 2007 include EUR 1.0 million of accrued audit related fees that were not billed until 2008. The fees for 2006 include EUR 1.5 million of accrued audit related fees that were not billed until 2007. The amounts paid by Nokia to PricewaterhouseCoopers include EUR 23.9 million and EUR 0.3 million that Nokia has recovered or will be able to recover from a third party for 2007 and 2006, respectively. | |
(3) | Tax fees include fees billed for (i) corporate and indirect compliance including preparation and/or review of tax returns, preparation, review and/or filing of various certificates and forms and consultation regarding tax returns and assistance with revenue authority queries; (ii) transfer pricing advice and assistance with tax clearances; (iii) customs duties reviews and advise; (iii) consultations and tax audits (assistance with technical tax queries and tax audits and appeals and advise on mergers, acquisitions and restructurings) and (iv) personal compliance (preparation of individual tax returns and registrations for employees (non-executives), assistance with applying visa, residency, work permits and tax status for expatriates) and (v) consultation and planning (advise on stock based remuneration, local employer tax laws, social security laws, employment laws and compensation programs, tax implications on short-term international transfers). The tax fees for 2007 include EUR 2.1 million of accrued tax fees that were not billed until 2008. The tax fees for 2006 include EUR 0.4 million of accrued tax fees that were not billed until 2007. | |
(4) | All Other Fees include fees billed for company establishment, forensic accounting, data security and occasional training or reference materials and services. |
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(c) Total Number | ||||||||||||||||
of Shares | (d) Maximum | |||||||||||||||
Purchased as | Number of Shares | |||||||||||||||
Part of Publicly | that May Yet Be | |||||||||||||||
(a) Total Number | (b) Average Price | Announced | Purchased Under | |||||||||||||
of Shares | Paid per Share(4) | Plans or | the Plans or | |||||||||||||
Period | Purchased(3) | (EUR) | Programs(3) | Programs | ||||||||||||
January 1/1/07-1/31/07 | 2 530 000 | 16.66 | 2 530 000 | 275 510 000 | (1) | |||||||||||
February 2/1/07-2/28/07 | 23 360 000 | 17.10 | 23 360 000 | 252 150 000 | (1) | |||||||||||
March 3/1/07-3/31/07 | 19 330 000 | 16.47 | 19 330 000 | 232 820 000 | (1) | |||||||||||
April 4/1/07-4/30/07 | — | — | — | — | ||||||||||||
May 5/1/07-5/31/07 | 28 270 000 | 19.23 | 28 270 000 | 351 730 000 | (2) | |||||||||||
June 6/1/07-6/30/07 | 21 440 000 | 21.10 | 21 440 000 | 330 290 000 | (2) | |||||||||||
July 7/1/07-7/31/07 | — | — | — | 330 290 000 | (2) | |||||||||||
August 8/1/07-8/31/07 | 25 810 000 | 22.20 | 25 810 000 | 304 480 000 | (2) | |||||||||||
September 9/1/07-9/30/07 | 24 190 000 | 24.97 | 24 190 000 | 280 290 000 | (2) | |||||||||||
October 10/1/07-10/31/07 | 7 050 000 | 26.95 | 7 050 000 | 273 240 000 | (2) | |||||||||||
November 11/1/07-11/30/07 | 17 420 000 | 26.63 | 17 420 000 | 255 820 000 | (2) | |||||||||||
December 12/1/07-12/31/07 | 11 190 000 | 26.43 | 11 190 000 | 244 630 000 | (2) | |||||||||||
Total | 180 590 000 | 180 590 000 | ||||||||||||||
(1) | On March 30, 2006, the Annual General Meeting authorized the Board of Directors to resolve to repurchase a maximum of 405 million Nokia shares by using funds available for distribution of profits. The authorization was effective until March 30, 2007. |
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(2) | On May 3, 2007, the Annual General Meeting authorized the Board of Directors to resolve to repurchase a maximum of 380 million Nokia shares by using funds available for distribution of profits. The authorization is effective until June 30, 2008. |
Consolidated Financial Statements | ||||
Report of Independent Registered Public Accounting Firm | F-1 | |||
Consolidated Profit and Loss Accounts | F-3 | |||
Consolidated Balance Sheets | F-4 | |||
Consolidated Cash Flow Statements | F-5 | |||
Consolidated Statements of Changes in Shareholders’ Equity | F-7 | |||
Notes to the Consolidated Financial Statements | F-9 |
ITEM 19. | EXHIBITS |
1 | Articles of Association of Nokia Corporation. | |||
*4 | .1 | Amended and Restated Framework Agreement among Siemens AG and Nokia Corporation and Nokia Siemens Networks B.V. dated as of June 19, 2006 and as amended and restated as of January 24, 2007. | ||
4 | .2 | Agreement and Plan of Merger by and among Nokia Inc., North Acquisition Corp. and NAVTEQ Corporation dated as of October 1, 2007. | ||
6 | . | See Note 28 to our consolidated financial statements included in Item 18 of this annual report for information on how earnings per share information was calculated. | ||
8 | . | List of significant subsidiaries. | ||
12 | .1 | Certification of Olli-Pekka Kallasvuo, Chief Executive Officer of Nokia Corporation, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
12 | .2 | Certification of Richard A. Simonson, Chief Financial Officer of Nokia Corporation, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
13 | . | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
15 | .(a). | Consent of Independent Registered Public Accounting Firm. |
* | Incorporated by reference to our annual report onForm 20-F for the fiscal year ended December 31, 2006. |
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Espoo, Finland
March 19, 2008
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Financial Year Ended December 31 | |||||||||||||||
Notes | 2007 | 2006 | 2005 | ||||||||||||
EURm | EURm | EURm | |||||||||||||
Net sales | 51 058 | 41 121 | 34 191 | ||||||||||||
Cost of sales | (33 754 | ) | (27 742 | ) | (22 209 | ) | |||||||||
Gross profit | 17 304 | 13 379 | 11 982 | ||||||||||||
Research and development expenses | (5 647 | ) | (3 897 | ) | (3 825 | ) | |||||||||
Selling and marketing expenses | (4 380 | ) | (3 314 | ) | (2 961 | ) | |||||||||
Administrative and general expenses | (1 180 | ) | (666 | ) | (609 | ) | |||||||||
Other income | 6 | 2 312 | 522 | 285 | |||||||||||
Other expenses | 6,7 | (424 | ) | (536 | ) | (233 | ) | ||||||||
Operating profit | 2-9 | 7 985 | 5 488 | 4 639 | |||||||||||
Share of results of associated companies | 14,31 | 44 | 28 | 10 | |||||||||||
Financial income and expenses | 10 | 239 | 207 | 322 | |||||||||||
Profit before tax | 8 268 | 5 723 | 4 971 | ||||||||||||
Tax | 11 | (1 522 | ) | (1 357 | ) | (1 281 | ) | ||||||||
Profit before minority interests | 6 746 | 4 366 | 3 690 | ||||||||||||
Minority interests | 459 | (60 | ) | (74 | ) | ||||||||||
Profit attributable to equity holders of the parent | 7 205 | 4 306 | 3 616 | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
EUR | EUR | EUR | ||||||||||
Earnings per share | 28 | |||||||||||
(for profit attributable to the equity holders of the parent) | ||||||||||||
Basic | 1.85 | 1.06 | 0.83 | |||||||||
Diluted | 1.83 | 1.05 | 0.83 |
2007 | 2006 | 2005 | ||||||||||
Average number of shares (000’s shares) | 28 | |||||||||||
Basic | 3 885 408 | 4 062 833 | 4 365 547 | |||||||||
Diluted | 3 932 008 | 4 086 529 | 4 371 239 |
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December 31 | ||||||||||||
Notes | 2007 | 2006 | ||||||||||
EURm | EURm | |||||||||||
ASSETS | ||||||||||||
Non-current assets | ||||||||||||
Capitalized development costs | 12 | 378 | 251 | |||||||||
Goodwill | 12 | 1 384 | 532 | |||||||||
Other intangible assets | 12 | 2 358 | 298 | |||||||||
Property, plant and equipment | 13 | 1 912 | 1 602 | |||||||||
Investments in associated companies | 14 | 325 | 224 | |||||||||
Available-for-sale investments | 15 | 341 | 288 | |||||||||
Deferred tax assets | 24 | 1 553 | 809 | |||||||||
Long-term loans receivable | 16,25 | 10 | 19 | |||||||||
Other non-current assets | 44 | 8 | ||||||||||
8 305 | 4 031 | |||||||||||
Current assets | ||||||||||||
Inventories | 17,19 | 2 876 | 1 554 | |||||||||
Accounts receivable, net of allowances for doubtful accounts (2007: EUR 332 million, 2006: EUR 212 million) | 19,35 | 11 200 | 5 888 | |||||||||
Prepaid expenses and accrued income | 18 | 3 070 | 2 496 | |||||||||
Current portion of long-term loans receivable | 35 | 156 | — | |||||||||
Other financial assets | 239 | 111 | ||||||||||
Available-for-sale investments, liquid assets | 15,35 | 4 903 | 5 012 | |||||||||
Available-for-sale investments, cash equivalents | 15,32,35 | 4 725 | 2 046 | |||||||||
Bank and cash | 32,35 | 2 125 | 1 479 | |||||||||
29 294 | 18 586 | |||||||||||
Total assets | 37 599 | 22 617 | ||||||||||
SHAREHOLDERS’ EQUITY AND LIABILITIES | ||||||||||||
Capital and reserves attributable to equity holders of the parent | ||||||||||||
Share capital | 21 | 246 | 246 | |||||||||
Share issue premium | 644 | 2 707 | ||||||||||
Treasury shares, at cost | (3 146 | ) | (2 060 | ) | ||||||||
Translation differences | (163 | ) | (34 | ) | ||||||||
Fair value and other reserves | 20 | 23 | (14 | ) | ||||||||
Reserve for invested non-restricted equity | 3 299 | — | ||||||||||
Retained earnings | 13 870 | 11 123 | ||||||||||
14 773 | 11 968 | |||||||||||
Minority interests | 2 565 | 92 | ||||||||||
Total equity | 17 338 | 12 060 | ||||||||||
Non-current liabilities | ||||||||||||
Long-term interest-bearing liabilities | 23,35 | 203 | 69 | |||||||||
Deferred tax liabilities | 24 | 963 | 205 | |||||||||
Other long-term liabilities | 119 | 122 | ||||||||||
1 285 | 396 | |||||||||||
Current liabilities | ||||||||||||
Current portion of long-term loans | 35 | 173 | — | |||||||||
Short-term borrowings | 35 | 898 | 247 | |||||||||
Accounts payable | 35 | 7 074 | 3 732 | |||||||||
Accrued expenses | 25 | 7 114 | 3 796 | |||||||||
Provisions | 27 | 3 717 | 2 386 | |||||||||
18 976 | 10 161 | |||||||||||
Total shareholders’ equity and liabilities | 37 599 | 22 617 | ||||||||||
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Financial Year Ended December 31 | ||||||||||||||||
Notes | 2007 | 2006 | 2005 | |||||||||||||
EURm | EURm | EURm | ||||||||||||||
Cash flow from operating activities | ||||||||||||||||
Profit attributable to equity holders of the parent | 7 205 | 4 306 | 3 616 | |||||||||||||
Adjustments, total | 32 | 1 269 | 1 857 | 1 774 | ||||||||||||
Profit attributable to equity holders of the parent before change in net working capital | 8 474 | 6 163 | 5 390 | |||||||||||||
Change in net working capital | 32 | 605 | (793 | ) | (366 | ) | ||||||||||
Cash generated from operations | 9 079 | 5 370 | 5 024 | |||||||||||||
Interest received | 362 | 235 | 353 | |||||||||||||
Interest paid | (59 | ) | (18 | ) | (26 | ) | ||||||||||
Other financial income and expenses, net | (43 | ) | 54 | 47 | ||||||||||||
Income taxes paid, net received | (1 457 | ) | (1 163 | ) | (1 254 | ) | ||||||||||
Net cash from operating activities | 7 882 | 4 478 | 4 144 | |||||||||||||
Cash flow from investing activities | ||||||||||||||||
Acquisition of Group companies, net of acquired cash | 253 | (517 | ) | (92 | ) | |||||||||||
Purchase of current available-for-sale investments, liquid assets | (4 798 | ) | (3 219 | ) | (7 277 | ) | ||||||||||
Purchase of non-current available-for-sale investments | (126 | ) | (88 | ) | (89 | ) | ||||||||||
Purchase of shares in associated companies | (25 | ) | (15 | ) | (16 | ) | ||||||||||
Additions to capitalized development costs | (157 | ) | (127 | ) | (153 | ) | ||||||||||
Long-term loans made to customers | (261 | ) | (11 | ) | (56 | ) | ||||||||||
Proceeds from repayment and sale of long-term loans receivable | 163 | 56 | — | |||||||||||||
Recovery of impaired long-term loans made to customers | — | 276 | — | |||||||||||||
Proceeds from (+) / payment of (-) other long-term receivables | 5 | (3 | ) | 14 | ||||||||||||
Proceeds from (+) / payment of (-) short-term loans receivable | (119 | ) | 199 | 182 | ||||||||||||
Capital expenditures | (715 | ) | (650 | ) | (607 | ) | ||||||||||
Proceeds from disposal of shares in Group companies, net of disposed cash | — | — | 5 | |||||||||||||
Proceeds from disposal of shares in associated companies | 6 | 1 | 18 | |||||||||||||
Proceeds from disposal of businesses | — | — | 95 | |||||||||||||
Proceeds from maturities and sale of current available-for-sale investments, liquid assets | 4 930 | 5 058 | 9 402 | |||||||||||||
Proceeds from sale of current available-for-sale investments | — | — | 247 | |||||||||||||
Proceeds from sale of non-current available-for-sale investments | 50 | 17 | 3 | |||||||||||||
Proceeds from sale of fixed assets | 72 | 29 | 167 | |||||||||||||
Dividends received | 12 | — | 1 | |||||||||||||
Net cash from (used in) investing activities | (710 | ) | 1 006 | 1 844 |
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Financial Year Ended December 31 | ||||||||||||||||
Notes | 2007 | 2006 | 2005 | |||||||||||||
EURm | EURm | EURm | ||||||||||||||
Cash flow from financing activities | ||||||||||||||||
Proceeds from stock option exercises | 987 | 46 | 2 | |||||||||||||
Purchase of treasury shares | (3 819 | ) | (3 371 | ) | (4 258 | ) | ||||||||||
Proceeds from long-term borrowings | 115 | 56 | 5 | |||||||||||||
Repayment of long-term borrowings | (16 | ) | (7 | ) | — | |||||||||||
Proceeds from (+) / repayment of (-) short-term borrowings | 661 | (137 | ) | 212 | ||||||||||||
Dividends paid | (1 760 | ) | (1 553 | ) | (1 531 | ) | ||||||||||
Net cash used in financing activities | (3 832 | ) | (4 966 | ) | (5 570 | ) | ||||||||||
Foreign exchange adjustment | (15 | ) | (51 | ) | 183 | |||||||||||
Net increase (+) / decrease (-) in cash and cash equivalents | 3 325 | 467 | 601 | |||||||||||||
Cash and cash equivalents at beginning of period | 3 525 | 3 058 | 2 457 | |||||||||||||
Cash and cash equivalents at end of period | 6 850 | 3 525 | 3 058 | |||||||||||||
Cash and cash equivalents comprise of: | ||||||||||||||||
Bank and cash | 2 125 | 1 479 | 1 565 | |||||||||||||
Current available-for-sale investments, cash equivalents | 15,35 | 4 725 | 2 046 | 1 493 | ||||||||||||
6 850 | 3 525 | 3 058 | ||||||||||||||
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Fair | ||||||||||||||||||||||||||||||||||||||||||||
value | Reserve for | |||||||||||||||||||||||||||||||||||||||||||
Share | and | invested | Before | |||||||||||||||||||||||||||||||||||||||||
Number of | Share | issue | Treasury | Translation | other | non-restricted | Retained | minority | Minority | |||||||||||||||||||||||||||||||||||
shares (000’s) | capital | premium | shares | differences | reserves | equity | earnings | interests | interests | Total | ||||||||||||||||||||||||||||||||||
Balance at December 31, 2004 | 4 486 941 | 280 | 2 366 | (2 022 | ) | (126 | ) | 13 | — | 13 874 | 14 385 | 168 | 14 553 | |||||||||||||||||||||||||||||||
Tax benefit on stock options exercised | (2 | ) | (2 | ) | (2 | ) | ||||||||||||||||||||||||||||||||||||||
Translation differences | 406 | 406 | 31 | 437 | ||||||||||||||||||||||||||||||||||||||||
Net investment hedge losses | (211 | ) | (211 | ) | (211 | ) | ||||||||||||||||||||||||||||||||||||||
Cash flow hedges, net of tax | (132 | ) | (132 | ) | (132 | ) | ||||||||||||||||||||||||||||||||||||||
Available-for-sale investments, net of tax | (57 | ) | (57 | ) | (57 | ) | ||||||||||||||||||||||||||||||||||||||
Other decrease, net | (55 | ) | (55 | ) | 1 | (54 | ) | |||||||||||||||||||||||||||||||||||||
Profit | 3 616 | 3 616 | 74 | 3 690 | ||||||||||||||||||||||||||||||||||||||||
Total recognized income and expense | — | (2 | ) | — | 195 | (189 | ) | — | 3 561 | 3 565 | 106 | 3 671 | ||||||||||||||||||||||||||||||||
Stock options exercised | 125 | 2 | 2 | 2 | ||||||||||||||||||||||||||||||||||||||||
Stock options exercised related to acquisitions | (1 | ) | (1 | ) | (1 | ) | ||||||||||||||||||||||||||||||||||||||
Share-based compensation(1) | 79 | 79 | 79 | |||||||||||||||||||||||||||||||||||||||||
Acquisition of treasury shares | (315 174 | ) | (4 268 | ) | (4 268 | ) | (4 268 | ) | ||||||||||||||||||||||||||||||||||||
Reissurance of treasury shares | 484 | 10 | 10 | 10 | ||||||||||||||||||||||||||||||||||||||||
Cancellation of treasury shares | (14 | ) | 14 | 2 664 | (2 664 | ) | — | — | ||||||||||||||||||||||||||||||||||||
Dividend | (1 463 | ) | (1 463 | ) | (69 | ) | (1 532 | ) | ||||||||||||||||||||||||||||||||||||
Total of other equity movements | (14 | ) | 94 | (1 594 | ) | — | — | (4 127 | ) | (5 641 | ) | (69 | ) | (5 710 | ) | |||||||||||||||||||||||||||||
Balance at December 31, 2005 | 4 172 376 | 266 | 2 458 | (3 616 | ) | 69 | (176 | ) | — | 13 308 | 12 309 | 205 | 12 514 | |||||||||||||||||||||||||||||||
Tax benefit on stock options exercised | 23 | 23 | 23 | |||||||||||||||||||||||||||||||||||||||||
Excess tax benefit on share-based compensation | 14 | 14 | 14 | |||||||||||||||||||||||||||||||||||||||||
Translation differences | (141 | ) | (141 | ) | (13 | ) | (154 | ) | ||||||||||||||||||||||||||||||||||||
Net investment hedge gains, net of tax | 38 | 38 | 38 | |||||||||||||||||||||||||||||||||||||||||
Cash flow hedges, net of tax | 171 | 171 | 171 | |||||||||||||||||||||||||||||||||||||||||
Available-for-sale investments, net of tax | (9 | ) | (9 | ) | (9 | ) | ||||||||||||||||||||||||||||||||||||||
Other decrease, net | (52 | ) | (52 | ) | (1 | ) | (53 | ) | ||||||||||||||||||||||||||||||||||||
Profit | 4 306 | 4 306 | 60 | 4 366 | ||||||||||||||||||||||||||||||||||||||||
Total recognized income and expense | — | 37 | — | (103 | ) | 162 | — | 4 254 | 4 350 | 46 | 4 396 | |||||||||||||||||||||||||||||||||
Stock options exercised | 3 046 | 0 | 43 | 43 | 43 | |||||||||||||||||||||||||||||||||||||||
Stock options exercised related to acquisitions | (1 | ) | (1 | ) | (1 | ) | ||||||||||||||||||||||||||||||||||||||
Share-based compensation(1) | 219 | 219 | 219 | |||||||||||||||||||||||||||||||||||||||||
Settlement of performance and restricted shares | 2 236 | (69 | ) | 38 | (31 | ) | (31 | ) | ||||||||||||||||||||||||||||||||||||
Acquisition of treasury shares | (212 340 | ) | (3 413 | ) | (3 413 | ) | (3 413 | ) | ||||||||||||||||||||||||||||||||||||
Reissuance of treasury shares | 412 | 4 | 4 | 4 | ||||||||||||||||||||||||||||||||||||||||
Cancellation of treasury shares | (20 | ) | 20 | 4 927 | (4 927 | ) | — | — | ||||||||||||||||||||||||||||||||||||
Dividend | (1 512 | ) | (1 512 | ) | (40 | ) | (1 552 | ) | ||||||||||||||||||||||||||||||||||||
Acquisition of minority interests | — | (119 | ) | (119 | ) | |||||||||||||||||||||||||||||||||||||||
Total of other equity movements | (20 | ) | 212 | 1 556 | — | — | (6 439 | ) | (4 691 | ) | (159 | ) | (4 850 | ) | ||||||||||||||||||||||||||||||
Balance at December 31, 2006 | 3 965 730 | 246 | 2 707 | (2 060 | ) | (34 | ) | (14 | ) | — | 11 123 | 11 968 | 92 | 12 060 | ||||||||||||||||||||||||||||||
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Fair | ||||||||||||||||||||||||||||||||||||||||||||
value | Reserve for | |||||||||||||||||||||||||||||||||||||||||||
Share | and | invested | Before | |||||||||||||||||||||||||||||||||||||||||
Number of | Share | issue | Treasury | Translation | other | non-restricted | Retained | minority | Minority | |||||||||||||||||||||||||||||||||||
shares (000’s) | capital | premium | shares | differences | reserves | equity | earnings | interests | interests | Total | ||||||||||||||||||||||||||||||||||
Balance at December 31, 2006 | 3 965 730 | 246 | 2 707 | (2 060 | ) | (34 | ) | (14 | ) | — | 11 123 | 11 968 | 92 | 12 060 | ||||||||||||||||||||||||||||||
Excess tax benefit on share-based compensation | 128 | 128 | 128 | |||||||||||||||||||||||||||||||||||||||||
Translation differences | (167 | ) | (167 | ) | 16 | (151 | ) | |||||||||||||||||||||||||||||||||||||
Net investment hedge gains, net of tax | 38 | 38 | 38 | |||||||||||||||||||||||||||||||||||||||||
Cash flow hedges, net of tax | (11 | ) | (11 | ) | (11 | ) | ||||||||||||||||||||||||||||||||||||||
Available-for-sale investments, net of tax | 48 | 48 | 48 | |||||||||||||||||||||||||||||||||||||||||
Other decrease, net | (40 | ) | (40 | ) | (40 | ) | ||||||||||||||||||||||||||||||||||||||
Profit | 7 205 | 7 205 | (459 | ) | 6 746 | |||||||||||||||||||||||||||||||||||||||
Total recognized income and expense | — | 128 | — | (129 | ) | 37 | — | 7 165 | 7 201 | (443 | ) | 6 758 | ||||||||||||||||||||||||||||||||
Stock options exercised | 57 269 | 0 | 46 | 932 | 978 | 978 | ||||||||||||||||||||||||||||||||||||||
Stock options exercised related to acquisitions | (3 | ) | (3 | ) | (3 | ) | ||||||||||||||||||||||||||||||||||||||
Share-based compensation | 228 | �� | 228 | 228 | ||||||||||||||||||||||||||||||||||||||||
Settlement of performance and restricted shares | 3 138 | (104 | ) | 58 | 9 | (37 | ) | (37 | ) | |||||||||||||||||||||||||||||||||||
Acquisition of treasury shares | (180 590 | ) | (3 884 | ) | (3 884 | ) | (3 884 | ) | ||||||||||||||||||||||||||||||||||||
Reissuance of treasury shares | 403 | 7 | 7 | 7 | ||||||||||||||||||||||||||||||||||||||||
Cancellation of treasury shares | 2 733 | (2 733 | ) | — | — | |||||||||||||||||||||||||||||||||||||||
Share premium reduction and transfer | (2 358 | ) | 2 358 | — | — | |||||||||||||||||||||||||||||||||||||||
Dividend | (1 685 | ) | (1 685 | ) | (75 | ) | (1 760 | ) | ||||||||||||||||||||||||||||||||||||
Minority interest on formation of Nokia Siemens Networks | — | 2 991 | 2 991 | |||||||||||||||||||||||||||||||||||||||||
Total of other equity movements | 0 | (2 191 | ) | (1 086 | ) | — | — | 3 299 | (4 418 | ) | (4 396 | ) | 2 916 | (1 480 | ) | |||||||||||||||||||||||||||||
Balance at December 31, 2007 | 3 845 950 | 246 | 644 | (3 146 | ) | (163 | ) | 23 | 3 299 | 13 870 | 14 773 | 2 565 | 17 338 | |||||||||||||||||||||||||||||||
(1) | In 2005 and 2006, share-based compensation is shown net of deferred compensation recorded related to social security costs on share-based payments. |
F-8
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1. | Accounting principles |
• | IFRS 7 Financial Instruments: Disclosures. The impact of the new standard has been to expand the disclosures provided in the financial statements regarding the Group’s financial instruments. The Group’s financial instruments include available-for-sale investments, derivatives, loans receivable and payable and accounts receivable and payable. |
• | IFRIC 8, Scope of IFRS 2 requires consideration of transactions involving the issuance of equity instruments where the identifiable consideration received is less than the fair value of the equity instruments issued to establish whether or not they fall within the scope of IFRS 2. | |
• | IFRIC 9, Reassessment of Embedded Derivatives requires an entity to assess whether an embedded derivative is required to be separated from the host contract and accounted for as a derivative when the entity first becomes a party to the contract. | |
• | IAS 1 (Amendment), Presentation of Financial Statements: Capital Disclosures requires qualitative and quantitative disclosures to enable users to evaluate an entity’s objectives, policies and processes for managing capital. |
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1. | Accounting principles (Continued) |
F-10
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1. | Accounting principles (Continued) |
F-11
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1. | Accounting principles (Continued) |
F-12
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1. | Accounting principles (Continued) |
Buildings and constructions | 20 - 33 years | |||
Production machinery, measuring and test equipment | 1 - 3 years | |||
Other machinery and equipment | 3 - 10 years |
F-13
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1. | Accounting principles (Continued) |
F-14
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1. | Accounting principles (Continued) |
F-15
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1. | Accounting principles (Continued) |
F-16
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1. | Accounting principles (Continued) |
F-17
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1. | Accounting principles (Continued) |
F-18
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1. | Accounting principles (Continued) |
F-19
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1. | Accounting principles (Continued) |
F-20
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1. | Accounting principles (Continued) |
F-21
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1. | Accounting principles (Continued) |
F-22
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1. | Accounting principles (Continued) |
2. | Segment information |
F-23
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2. | Segment information (Continued) |
Nokia | Total | Common | ||||||||||||||||||||||||||||||
Mobile | Enterprise | Siemens | reportable | Group | Elimina- | |||||||||||||||||||||||||||
2007 | Phones | Multimedia | Solutions | Networks(1) | segments | Functions | tions | Group | ||||||||||||||||||||||||
EURm | EURm | EURm | EURm | EURm | EURm | EURm | EURm | |||||||||||||||||||||||||
Profit and Loss Information | ||||||||||||||||||||||||||||||||
Net sales to external customers | 25 083 | 10 537 | 2 048 | 13 376 | 51 044 | 14 | 51 058 | |||||||||||||||||||||||||
Net sales to other segments | — | 1 | 22 | 17 | 40 | (14 | ) | (26 | ) | — | ||||||||||||||||||||||
Depreciation and amortization | 239 | 109 | 32 | 714 | 1 094 | 112 | 1 206 | |||||||||||||||||||||||||
Impairments | — | — | — | 27 | 27 | 36 | 63 | |||||||||||||||||||||||||
Operating profit/(loss)(2) | 5 434 | 2 230 | 267 | (1 308 | ) | 6 623 | 1 362 | 7 985 | ||||||||||||||||||||||||
Share of results of associated companies | — | — | — | 4 | 4 | 40 | 44 | |||||||||||||||||||||||||
Balance Sheet Information | ||||||||||||||||||||||||||||||||
Capital expenditures(3) | 250 | 100 | 16 | 182 | 548 | 167 | 715 | |||||||||||||||||||||||||
Segment assets(4)(8) | 5 234 | 2 339 | 777 | 15 564 | 23 914 | 1 713 | (365 | ) | 25 262 | |||||||||||||||||||||||
of which: | ||||||||||||||||||||||||||||||||
Investments in associated companies | — | — | — | 58 | 58 | 267 | 325 | |||||||||||||||||||||||||
Unallocated assets(5)(8) | 12 337 | |||||||||||||||||||||||||||||||
Total assets | 37 599 | |||||||||||||||||||||||||||||||
Segment liabilities(6)(9) | 6 060 | 2 309 | 509 | 9 700 | 18 578 | 592 | (418 | ) | 18 752 | |||||||||||||||||||||||
Unallocated liabilities(7)(9) | 1 509 | |||||||||||||||||||||||||||||||
Total liabilities | 20 261 | |||||||||||||||||||||||||||||||
Total | Common | |||||||||||||||||||||||||||||||
Mobile | Enterprise | reportable | Group | Elimina- | ||||||||||||||||||||||||||||
2006 | Phones | Multimedia | Solutions | Networks | segments | Functions | tions | Group | ||||||||||||||||||||||||
EURm | EURm | EURm | EURm | EURm | EURm | EURm | EURm | |||||||||||||||||||||||||
Profit and Loss Information | ||||||||||||||||||||||||||||||||
Net sales to external customers | 24 769 | 7 877 | 1 015 | 7 453 | 41 114 | 7 | 41 121 | |||||||||||||||||||||||||
Net sales to other segments | — | — | 16 | — | 16 | (7 | ) | (9 | ) | — | ||||||||||||||||||||||
Depreciation and amortization | 279 | 99 | 36 | 203 | 617 | 95 | 712 | |||||||||||||||||||||||||
Impairments | — | — | — | — | — | 51 | 51 | |||||||||||||||||||||||||
Operating profit/(loss)(2) | 4 100 | 1 319 | (258 | ) | 808 | 5 969 | (481 | ) | 5 488 | |||||||||||||||||||||||
Share of results of associated companies | — | — | — | — | — | 28 | 28 | |||||||||||||||||||||||||
Balance Sheet Information | ||||||||||||||||||||||||||||||||
Capital expenditures(3) | 244 | 73 | 30 | 126 | 473 | 177 | 650 | |||||||||||||||||||||||||
Segment assets(4) | 4 921 | 1 474 | 604 | 3 746 | 10 745 | 1 190 | (31 | ) | 11 904 | |||||||||||||||||||||||
of which: | ||||||||||||||||||||||||||||||||
Investments in associated companies | — | — | — | — | — | 224 | 224 | |||||||||||||||||||||||||
Unallocated assets(5)(8) | 10 713 | |||||||||||||||||||||||||||||||
Total assets | 22 617 | |||||||||||||||||||||||||||||||
Segment liabilities(6) | 5 140 | 1 622 | 395 | 1 703 | 8 860 | 337 | (333 | ) | 8 864 | |||||||||||||||||||||||
Unallocated liabilities(7)(9) | 1 693 | |||||||||||||||||||||||||||||||
Total liabilities | 10 557 | |||||||||||||||||||||||||||||||
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2. | Segment information (Continued) |
Total | Common | |||||||||||||||||||||||||||||||
Mobile | Enterprise | reportable | Group | Elimina- | ||||||||||||||||||||||||||||
2005 | Phones | Multimedia | Solutions | Networks | segments | Functions | tions | Group | ||||||||||||||||||||||||
EURm | EURm | EURm | EURm | EURm | EURm | EURm | EURm | |||||||||||||||||||||||||
Profit and Loss Information | ||||||||||||||||||||||||||||||||
Net sales to external customers | 20 811 | 5 979 | 839 | 6 556 | 34 185 | 6 | 34 191 | |||||||||||||||||||||||||
Net sales to other segments | — | 2 | 22 | 1 | 25 | (6 | ) | (19 | ) | — | ||||||||||||||||||||||
Depreciation and amortization | 247 | 83 | 22 | 241 | 593 | 119 | 712 | |||||||||||||||||||||||||
Impairment and customer finance charges | — | 36 | — | — | 36 | 30 | 66 | |||||||||||||||||||||||||
Operating profit/(loss) | 3 598 | 836 | (258 | ) | 855 | 5 031 | (392 | ) | 4 639 | |||||||||||||||||||||||
Share of results of associated companies | — | — | — | — | — | 10 | 10 |
(1) | As from April 1, 2007, Nokia consolidated financial data includes that of Nokia Siemens Networks on a fully consolidated basis. Nokia Siemens Networks, a company jointly owned by Nokia and Siemens, is comprised of our former Networks business group and Siemens’ carrier-related operations for fixed and mobile networks. Accordingly, our consolidated financial data for the year ended at December 31, 2007 is not directly comparable to our consolidated financial data for the prior years. Our consolidated financial data for the years prior to the year ended at December 31, 2007 included our former Networks business group only. | |
(2) | Common Group Functions operating profit in 2007 includes a non-taxable gain of EUR 1 879 million related to the formation of Nokia Siemens Networks. Networks operating profit in 2006 includes a gain of EUR 276 million relating to a partial recovery of a previously impaired financing arrangement with Telsim. | |
(3) | Including goodwill and capitalized development costs, capital expenditures in 2007 amount to EUR 1 753 million (EUR 1 240 million in 2006). The goodwill and capitalized development costs consist of EUR 33 million in 2007 (EUR 60 million in 2006) for Mobile Phones, EUR 21 million in 2007 (EUR 171 million in 2006) for Multimedia, EUR 15 million in 2007 (EUR 271 million in 2006) for Enterprise Solutions, EUR 888 million in 2007 (EUR 88 million in 2006) for Nokia Siemens Networks and EUR 81 million in 2007 (EUR 0 million in 2006) for Common Group Functions. | |
(4) | Comprises intangible assets, property, plant and equipment, investments, inventories and accounts receivable as well as prepaid expenses and accrued income except those related to interest and taxes for Mobile Phones, Multimedia and Enterprise Solutions. In addition, Nokia Siemens Networks’ assets include cash and other liquid assets, available-for-sale investments, long-term loans receivable and other financial assets as well as interest and tax related prepaid expenses and accrued income. These are directly attributable to Nokia Siemens Networks as it is a separate legal entity. | |
(5) | Unallocated assets include cash and other liquid assets, available-for-sale investments, long-term loans receivable and other financial assets as well as interest and tax related prepaid expenses and accrued income for Mobile Phones, Multimedia, Enterprise Solutions and Common Group Functions. | |
(6) | Comprises accounts payable, accrued expenses and provisions except those related to interest and taxes for Mobile Phones, Multimedia and Enterprise Solutions. In addition, Nokia Siemens Networks’ liabilities include non-current liabilities and short-term borrowings as well as interest and tax related prepaid income, accrued expenses and provisions. These are directly attributable to Nokia Siemens Networks as it is a separate legal entity. |
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2. | Segment information (Continued) |
(7) | Unallocated liabilities include non-current liabilities and short-term borrowings as well as interest and tax related prepaid income, accrued expenses and provisions related to Mobile Phones, Multimedia, Enterprise Solutions and Common Group Functions. | |
(8) | Tax related prepaid expenses and accrued income, and deferred tax assets amount to EUR 2 060 million in 2007 (EUR 1 240 million in 2006). | |
(9) | Tax related to accrued expenses and deferred tax liabilities amount to EUR 2 099 million in 2007 (EUR 497 million in 2006). |
Net sales to external customers by geographic area by location of customer | 2007 | 2006 | 2005 | |||||||||
EURm | EURm | EURm | ||||||||||
Finland | 322 | 387 | 331 | |||||||||
China | 5 898 | 4 913 | 3 403 | |||||||||
India | 3 684 | 2 713 | 2 022 | |||||||||
Germany | 2 641 | 2 060 | 1 982 | |||||||||
Great Britain | 2 574 | 2 425 | 2 405 | |||||||||
USA | 2 124 | 2 815 | 2 743 | |||||||||
Other | 33 815 | 25 808 | 21 305 | |||||||||
Total | 51 058 | 41 121 | 34 191 | |||||||||
Segment assets by geographic area | 2007 | 2006 | ||||||||||
EURm | EURm | |||||||||||
Finland | 5 595 | 4 165 | ||||||||||
China | 2 480 | 1 257 | ||||||||||
India | 1 028 | 618 | ||||||||||
Germany | 2 842 | 615 | ||||||||||
Great Britain | 649 | 523 | ||||||||||
USA | 1 279 | 1 270 | ||||||||||
Other | 11 389 | 3 456 | ||||||||||
Total | 25 262 | 11 904 | ||||||||||
Capital expenditures by market area | 2007 | 2006 | 2005 | |||||||||
EURm | EURm | EURm | ||||||||||
Finland | 237 | 275 | 259 | |||||||||
China | 125 | 125 | 93 | |||||||||
India | 72 | 65 | 31 | |||||||||
Germany | 67 | 23 | 26 | |||||||||
Great Britain | 26 | 11 | 12 | |||||||||
USA | 21 | 63 | 74 | |||||||||
Other | 167 | 88 | 112 | |||||||||
Total(1) | 715 | 650 | 607 | |||||||||
(1) | Including goodwill and capitalized development costs, capital expenditures amount to EUR 1 753 million in 2007 (EUR 1 240 million in 2006 and EUR 760 million in 2005). The goodwill and capitalized development costs in 2007 consist of EUR 78 million in USA (EUR 268 million in USA in 2006 and EUR 0 million in USA in 2005) and EUR 960 million in other areas (EUR 321 million in 2006 and EUR 153 million in 2005). |
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3. | Percentage of completion |
4. | Personnel expenses |
2007 | 2006 | 2005 | ||||||||||
EURm | EURm | EURm | ||||||||||
Wages and salaries | 4 664 | 3 457 | 3 127 | |||||||||
Share-based compensation expense, total | 236 | 192 | 104 | |||||||||
Pension expenses, net | 420 | 310 | 252 | |||||||||
Other social expenses | 618 | 439 | 394 | |||||||||
Personnel expenses as per profit and loss account | 5 938 | 4 398 | 3 877 | |||||||||
2007 | 2006 | 2005 | ||||||||||
Average personnel | ||||||||||||
Mobile Phones | 3 475 | 3 639 | 2 647 | |||||||||
Multimedia | 3 708 | 3 058 | 2 750 | |||||||||
Enterprise Solutions | 2 095 | 2 264 | 2 185 | |||||||||
Nokia Siemens Networks | 50 336 | 20 277 | 17 676 | |||||||||
Common Group Functions | 40 920 | 36 086 | 31 638 | |||||||||
Nokia Group | 100 534 | 65 324 | 56 896 | |||||||||
5. | Pensions |
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5. | Pensions (Continued) |
F-28
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5. | Pensions (Continued) |
2007 | 2006 | |||||||||||||||
Domestic | Foreign | Domestic | Foreign | |||||||||||||
Plans | Plans | Plans | Plans | |||||||||||||
EURm | EURm | EURm | EURm | |||||||||||||
Present value of defined benefit obligations at beginning of year | (1 031 | ) | (546 | ) | (890 | ) | (495 | ) | ||||||||
Foreign exchange | — | 27 | — | (3 | ) | |||||||||||
Current service cost | (59 | ) | (66 | ) | (63 | ) | (38 | ) | ||||||||
Interest cost | (50 | ) | (54 | ) | (40 | ) | (26 | ) | ||||||||
Plan participants’ contributions | — | (8 | ) | — | (7 | ) | ||||||||||
Actuarial gain (loss) | 115 | 126 | (51 | ) | 14 | |||||||||||
Acquisitions | — | (780 | ) | — | — | |||||||||||
Curtailment | 3 | 1 | 3 | — | ||||||||||||
Settlements | — | 15 | — | — | ||||||||||||
Benefits paid | 11 | 30 | 10 | 9 | ||||||||||||
Present value of defined benefit obligations at end of year | (1 011 | ) | (1 255 | ) | (1 031 | ) | (546 | ) | ||||||||
Plan assets at fair value at beginning of year | 985 | 424 | 904 | 372 | ||||||||||||
Foreign exchange | — | (27 | ) | — | 3 | |||||||||||
Expected return on plan assets | 49 | 46 | 41 | 21 | ||||||||||||
Actuarial gain (loss) on plan assets | (33 | ) | (2 | ) | (8 | ) | (3 | ) | ||||||||
Employer contribution | 73 | 90 | 59 | 32 | ||||||||||||
Plan participants’ contributions | — | 8 | — | 8 | ||||||||||||
Benefits paid | (11 | ) | (30 | ) | (11 | ) | (9 | ) | ||||||||
Settlements | — | (3 | ) | — | — | |||||||||||
Acquisitions | — | 605 | — | — | ||||||||||||
Plan assets at fair value at end of year | 1 063 | 1 111 | 985 | 424 | ||||||||||||
Surplus/(Deficit) | 52 | (144 | ) | (46 | ) | (122 | ) | |||||||||
Unrecognized net actuarial (gains)/losses | 97 | (41 | ) | 187 | 89 | |||||||||||
Prepaid/(Accrued) pension cost in balance sheet | 149 | (185 | ) | 141 | (33 | ) | ||||||||||
2007 | 2006 | 2005 | ||||||||||
EURm | EURm | EURm | ||||||||||
Current service cost | 125 | 101 | 69 | |||||||||
Interest cost | 104 | 66 | 58 | |||||||||
Expected return on plan assets | (95 | ) | (62 | ) | (64 | ) | ||||||
Net actuarial losses recognized in year | 10 | 8 | 9 | |||||||||
Past service cost gain (-) loss (+) | — | 3 | 1 | |||||||||
Transfer from central pool | — | — | (24 | ) | ||||||||
Curtailment | (1 | ) | (4 | ) | (3 | ) | ||||||
Settlement | (12 | ) | — | — | ||||||||
Total, included in personnel expenses | 131 | 112 | 46 | |||||||||
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5. | Pensions (Continued) |
2007 | 2006 | |||||||
EURm | EURm | |||||||
Prepaid pension cost at beginning of year | 108 | 127 | ||||||
Net income (expense) recognized in the profit and loss account | (131 | ) | (112 | ) | ||||
Contributions paid | 163 | 91 | ||||||
Acquisitions | (175 | ) | — | |||||
Foreign currency exchange rate change | (1 | ) | 2 | |||||
Prepaid (accrued) pension cost at end of year(1) | (36 | ) | 108 | |||||
(1) | included within prepaid expenses and accrued income/accrued expenses. |
2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||
EURm | EURm | EURm | EURm | EURm | ||||||||||||||||
Present value of defined benefit obligation | (2 266 | ) | (1 577 | ) | (1 385 | ) | (1 125 | ) | (1 009 | ) | ||||||||||
Plan assets at fair value | 2 174 | 1 409 | 1 276 | 1 071 | 887 | |||||||||||||||
Deficit | (92 | ) | (168 | ) | (109 | ) | (54 | ) | (122 | ) | ||||||||||
2007 | 2006 | |||||||||||||||
Domestic | Foreign | Domestic | Foreign | |||||||||||||
% | % | % | % | |||||||||||||
Discount rate for determining present values | 5.50 | 5.40 | 4.60 | 4.78 | ||||||||||||
Expected long-term rate of return on plan assets | 5.30 | 5.10 | 4.60 | 5.50 | ||||||||||||
Annual rate of increase in future compensation levels | 3.00 | 3.30 | 3.50 | 3.59 | ||||||||||||
Pension increases | 2.70 | 2.30 | 2.00 | 2.69 |
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5. | Pensions (Continued) |
2007 | 2006 | |||||||||||||||
Domestic | Foreign | Domestic | Foreign | |||||||||||||
% | % | % | % | |||||||||||||
Asset category: | ||||||||||||||||
Equity securities | 12 | 11 | 11 | 27 | ||||||||||||
Debt securities | 78 | 85 | 75 | 61 | ||||||||||||
Insurance contracts | 0 | 3 | — | 11 | ||||||||||||
Real estate | 1 | 1 | 1 | — | ||||||||||||
Short-term investments | 9 | — | 13 | 1 | ||||||||||||
Total | 100 | 100 | 100 | 100 | ||||||||||||
6. | Other operating income and expenses |
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6. | Other operating income and expenses (Continued) |
7. | Impairment |
2007 | 2006 | 2005 | ||||||||||
EURm | EURm | EURm | ||||||||||
Available-for-sale investments | 29 | 18 | 30 | |||||||||
Investments in associated companies | 7 | — | — | |||||||||
Capitalized development costs | 27 | — | — | |||||||||
Other intangible assets | — | 33 | — | |||||||||
Total, net | 63 | 51 | 30 | |||||||||
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7. | Impairment (Continued) |
8. | Acquisitions |
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8. | Acquisitions (Continued) |
2007 | 2006 | |||||||||||||||||||||||
January - | April - | January - | April - | |||||||||||||||||||||
Net sales, EUR million | March | December | Total | March | December | Total | ||||||||||||||||||
Nokia Networks | 1 697 | * | 1 697 | 1 699 | 5 754 | 7 453 | ||||||||||||||||||
Nokia Siemens Networks | * | 11 696 | 11 696 | N/A | N/A | N/A | ||||||||||||||||||
Total | 1 697 | 11 696 | 13 393 | 1 699 | 5 754 | 7 453 | ||||||||||||||||||
2007 | 2006 | |||||||||||||||||||||||
January - | April - | January - | April - | |||||||||||||||||||||
Operating profit, EUR million | March | December | Total | March | December | Total | ||||||||||||||||||
Nokia Networks | 78 | * | 78 | 149 | 659 | 808 | ||||||||||||||||||
Nokia Siemens Networks | * | (1 386 | ) | (1 386 | ) | N/A | N/A | N/A | ||||||||||||||||
Total | 78 | (1 386 | ) | (1 308 | ) | 149 | 659 | 808 | ||||||||||||||||
* | No results presented as Nokia Siemens Networks began operations on April 1, 2007 |
Carrying Amount | Fair Value | Useful lives | ||||||||||
EURm | EURm | |||||||||||
Intangible assets subject to amortization: | ||||||||||||
Customer relationships | — | 1 290 | 6 years | |||||||||
Developed technology | — | 710 | 4 years | |||||||||
License to use trade name and trademark | — | 350 | 5 years | |||||||||
Capitalized development costs | 143 | 154 | 3 years | |||||||||
Other intangible assets | 47 | 47 | 3-5 years | |||||||||
190 | 2 551 | |||||||||||
Property, plant & equipment | 371 | 344 | ||||||||||
Deferred tax assets | 111 | 181 | ||||||||||
Other non-current assets | 153 | 153 | ||||||||||
Non-current assets | 825 | 3 229 | ||||||||||
Inventories | 1 010 | 1 138 | ||||||||||
Accounts receivable | 3 135 | 3 087 | ||||||||||
Prepaid expenses and accrued income | 870 | 846 | ||||||||||
Other financial assets | 55 | 55 | ||||||||||
Bank and cash | 382 | 382 | ||||||||||
Current Assets | 5 452 | 5 508 | ||||||||||
Total assets acquired | 6 277 | 8 737 |
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8. | Acquisitions (Continued) |
Carrying Amount | Fair Value | Useful lives | ||||||||||
EURm | EURm | |||||||||||
Deferred tax liabilities | 171 | 997 | ||||||||||
Long-term interest-bearing liabilities | 34 | 34 | ||||||||||
Non-current liabilities | 205 | 1 031 | ||||||||||
Short-term borrowings | 231 | 213 | ||||||||||
Accounts payable | 1 539 | 1 491 | ||||||||||
Accrued expenses | 1 344 | 1 502 | ||||||||||
Provisions | 463 | 397 | ||||||||||
Current liabilities | 3 577 | 3 603 | ||||||||||
Total liabilities assumed | 3 782 | 4 634 | ||||||||||
Minority interest | 110 | 108 | ||||||||||
Net assets acquired | 2 385 | 3 995 | ||||||||||
Cost of Acquisition | 5 500 | |||||||||||
Goodwill | 1 505 | |||||||||||
Less non-controlling interest in goodwill | 753 | |||||||||||
Plus costs directly attributable to the acquisition | 51 | |||||||||||
Goodwill arising on formation of Nokia Siemens Networks | 803 | |||||||||||
• | Enpocket Inc., based in Boston, USA, a global leader in mobile advertising providing technology and services that allow brands to plan, create, execute, measure and optimise mobile advertising campaigns around the world. The Group acquired 100% ownership interest in Enpocket Inc. on October 5, 2007. | |
• | Avvenu Inc., based in Palo Alto, USA, provides internet services that allow anyone to use their mobile devices to securely access, use and share personal computer files. The Group acquired 100% ownership interest in Avvenu Inc. on December 5, 2007. | |
• | Twango, provides a comprehensive media sharing solution for organising and sharing photos, videos and other personal media. The Group acquired substantially all assets of Twango on July 25, 2007. |
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8. | Acquisitions (Continued) |
February 10, 2006 | ||||
EURm | ||||
Intangible assets subject to amortization: | ||||
Technology related intangible assets | 38 | |||
Other intangible assets | 22 | |||
60 | ||||
Deferred tax assets | 45 | |||
Other non-current assets | 16 | |||
Non-current assets | 121 | |||
Goodwill | 290 | |||
Current assets | 42 | |||
Total assets acquired | 453 | |||
Deferred tax liabilities | 23 | |||
Other non-current liabilties | 1 | |||
Non-current liabilities | 24 | |||
Current liabilities | 104 | |||
Total liabilities assumed | 128 | |||
Net assets acquired | 325 | |||
• | Nokia Telecommunications Ltd, based in BDA, Beijing, a leading mobile communications manufacturer in China. The Group acquired an additional 22% ownership interest in Nokia Telecommunications Ltd. on June 30, 2006. | |
• | Loudeye Corporation, based in Bristol, England a global leader of digital music platforms and digital media distribution services. The Group acquired a 100% ownership interest in Loudeye Corporation on October 16, 2006. | |
• | gate5 AG, based in Berlin, Germany, a leading supplier of mapping, routing and navigation software and services. The Group acquired a 100% ownership interest in gate5 AG on October 15, 2006. |
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Table of Contents
8. | Acquisitions (Continued) |
9. | Depreciation and amortization |
2007 | 2006 | 2005 | ||||||||||
EURm | EURm | EURm | ||||||||||
Depreciation and amortization by function | ||||||||||||
Cost of sales | 303 | 279 | 242 | |||||||||
Research and development(1) | 523 | 312 | 349 | |||||||||
Selling and marketing(1) | 232 | 9 | 9 | |||||||||
Administrative and general | 148 | 111 | 99 | |||||||||
Other operating expenses | — | 1 | 13 | |||||||||
Total | 1 206 | 712 | 712 | |||||||||
(1) | In 2007, depreciation and amortization allocated to research and development and selling and marketing included amortization of acquired intangible assets of EUR 136 million and EUR 214 million, respectively. |
10. | Financial income and expenses |
2007 | 2006 | 2005 | ||||||||||
EURm | EURm | EURm | ||||||||||
Dividend income on available-for-sale financial investments | — | — | 1 | |||||||||
Interest income on available-for-sale financial investments | 338 | 225 | 296 | |||||||||
Interest income on loans receivable carried at amortised cost | 1 | — | — | |||||||||
Interest expense on financial liabilities carried at amortised cost | (43 | ) | (22 | ) | (18 | ) | ||||||
Other financial income | 43 | 55 | 77 | |||||||||
Other financial expenses | (24 | ) | (18 | ) | (22 | ) | ||||||
Net foreign exchange gains (or net foreign exchange losses) | ||||||||||||
From foreign exchange derivatives designated at fair value through profit and loss accounts | 37 | 75 | (167 | ) | ||||||||
From balance sheet items revaluation | (118 | ) | (106 | ) | 156 | |||||||
Net gains (net losses) on other derivatives designated at fair value through profit and loss accounts | 5 | (2 | ) | (1 | ) | |||||||
Total | 239 | 207 | 322 | |||||||||
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11. | Income taxes |
2007 | 2006 | 2005 | ||||||||||
EURm | EURm | EURm | ||||||||||
Income tax expense | ||||||||||||
Current tax | (2 209 | ) | (1 303 | ) | (1 262 | ) | ||||||
Deferred tax | 687 | (54 | ) | (19 | ) | |||||||
Total | (1 522 | ) | (1 357 | ) | (1 281 | ) | ||||||
Finland | (1 323 | ) | (941 | ) | (759 | ) | ||||||
Other countries | (199 | ) | (416 | ) | (522 | ) | ||||||
Total | (1 522 | ) | (1 357 | ) | (1 281 | ) | ||||||
2007 | 2006 | 2005 | ||||||||||
EURm | EURm | EURm | ||||||||||
Income tax expense at statutory rate | 2 150 | 1 488 | 1 295 | |||||||||
Provisions without tax benefit/expense | 61 | 12 | 11 | |||||||||
Non-taxable gain on formation of Nokia Siemens Networks(1) | (489 | ) | — | — | ||||||||
Taxes for prior years | 20 | (24 | ) | 1 | ||||||||
Taxes on foreign subsidiaries’ profits in excess of (lower than) income taxes at statutory rates | (138 | ) | (73 | ) | (30 | ) | ||||||
Operating losses with no current tax benefit | 15 | — | — | |||||||||
Net increase in tax provisions | 50 | (12 | ) | 22 | ||||||||
Change in income tax rate(2) | (114 | ) | — | — | ||||||||
Deferred tax liability on undistributed earnings(3) | (37 | ) | (3 | ) | 8 | |||||||
Other | 4 | (31 | ) | (26 | ) | |||||||
Income tax expense | 1 522 | 1 357 | 1 281 | |||||||||
(1) | See Note 8. |
(2) | The change in income tax rate decreased Group tax expense primarily due to the impact of a decrease in the German statutory tax rate on deferred tax asset balances. |
(3) | The change in deferred tax liability on undistributed earnings mainly related to amendment of the FIN-US tax treaty, which abolished the withholding tax under certain conditions. |
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2007 | 2006 | |||||||
EURm | EURm | |||||||
Capitalized development costs | ||||||||
Acquisition cost January 1 | 1 533 | 1 445 | ||||||
Additions during the period | 157 | 127 | ||||||
Acquisitions | 154 | — | ||||||
Impairment losses | (27 | ) | — | |||||
Disposals during the period | — | (39 | ) | |||||
Accumulated acquisition cost December 31 | 1 817 | 1 533 | ||||||
Accumulated amortization January 1 | (1 282 | ) | (1 185 | ) | ||||
Disposals during the period | — | 39 | ||||||
Amortization for the period | (157 | ) | (136 | ) | ||||
Accumulated amortization December 31 | (1 439 | ) | (1 282 | ) | ||||
Net book value January 1 | 251 | 260 | ||||||
Net book value December 31 | 378 | 251 |
F-39
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12. | Intangible assets (Continued) |
2007 | 2006 | |||||||
EURm | EURm | |||||||
Goodwill | ||||||||
Acquisition cost January 1 | 532 | 90 | ||||||
Translation differences | (30 | ) | (26 | ) | ||||
Acquisitions | 882 | 488 | ||||||
Other changes | — | (20 | ) | |||||
Accumulated acquisition cost December 31 | 1 384 | 532 | ||||||
Net book value January 1 | 532 | 90 | ||||||
Net book value December 31 | 1 384 | 532 | ||||||
Other intangible assets | ||||||||
Acquisition cost January 1 | 772 | 676 | ||||||
Translation differences | (20 | ) | (21 | ) | ||||
Additions during the period | 102 | 99 | ||||||
Acquisitions | 2 437 | 122 | ||||||
Impairment losses | — | (33 | ) | |||||
Disposals during the period | (73 | ) | (71 | ) | ||||
Accumulated acquisition cost December 31 | 3 218 | 772 | ||||||
Accumulated amortization January 1 | (474 | ) | (465 | ) | ||||
Translation differences | 11 | 10 | ||||||
Disposals during the period | 73 | 66 | ||||||
Amortization for the period | (470 | ) | (85 | ) | ||||
Accumulated amortization December 31 | (860 | ) | (474 | ) | ||||
Net book value January 1 | 298 | 211 | ||||||
Net book value December 31 | 2 358 | 298 |
13. | Property, plant and equipment |
2007 | 2006 | |||||||
EURm | EURm | |||||||
Land and water areas | ||||||||
Acquisition cost January 1 | 78 | 82 | ||||||
Translation differences | (2 | ) | (1 | ) | ||||
Additions during the period | 4 | — | ||||||
Acquisitions | 5 | — | ||||||
Disposals during the period | (12 | ) | (3 | ) | ||||
Accumulated acquisition cost December 31 | 73 | 78 | ||||||
Net book value January 1 | 78 | 82 | ||||||
Net book value December 31 | 73 | 78 |
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13. | Property, plant and equipment (Continued) |
2007 | 2006 | |||||||
EURm | EURm | |||||||
Buildings and constructions | ||||||||
Acquisition cost January 1 | 925 | 865 | ||||||
Translation differences | (15 | ) | (11 | ) | ||||
Additions during the period | 97 | 123 | ||||||
Acquisitions | 58 | — | ||||||
Disposals during the period | (57 | ) | (52 | ) | ||||
Accumulated acquisition cost December 31 | 1 008 | 925 | ||||||
Accumulated depreciation January 1 | (230 | ) | (244 | ) | ||||
Translation differences | 3 | 4 | ||||||
Disposals during the period | 25 | 40 | ||||||
Depreciation for the period | (37 | ) | (30 | ) | ||||
Accumulated depreciation December 31 | (239 | ) | (230 | ) | ||||
Net book value January 1 | 695 | 621 | ||||||
Net book value December 31 | 769 | 695 | ||||||
Machinery and equipment | ||||||||
Acquisition cost January 1 | 3 707 | 3 735 | ||||||
Translation differences | (42 | ) | (62 | ) | ||||
Additions during the period | 448 | 466 | ||||||
Acquisitions | 264 | — | ||||||
Disposals during the period | (365 | ) | (432 | ) | ||||
Accumulated acquisition cost December 31 | 4 012 | 3 707 | ||||||
Accumulated depreciation January 1 | (2 966 | ) | (2 984 | ) | ||||
Translation differences | 34 | 48 | ||||||
Disposals during the period | 364 | 429 | ||||||
Depreciation for the period | (539 | ) | (459 | ) | ||||
Accumulated depreciation December 31 | (3 107 | ) | (2 966 | ) | ||||
Net book value January 1 | 741 | 751 | ||||||
Net book value December 31 | 905 | 741 |
F-41
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13. | Property, plant and equipment (Continued) |
2007 | 2006 | |||||||
EURm | EURm | |||||||
Other tangible assets | ||||||||
Acquisition cost January 1 | 22 | 17 | ||||||
Translation differences | (1 | ) | (1 | ) | ||||
Additions during the period | 2 | 6 | ||||||
Disposals during the period | (3 | ) | — | |||||
Accumulated acquisition cost December 31 | 20 | 22 | ||||||
Accumulated depreciation January 1 | (7 | ) | (6 | ) | ||||
Translation differences | — | — | ||||||
Disposals during the period | 1 | — | ||||||
Depreciation for the period | (3 | ) | (1 | ) | ||||
Accumulated depreciation December 31 | (9 | ) | (7 | ) | ||||
Net book value January 1 | 15 | 11 | ||||||
Net book value December 31 | 11 | 15 |
2007 | 2006 | |||||||
EURm | EURm | |||||||
Advance payments and fixed assets under construction | ||||||||
Net carrying amount January 1 | 73 | 120 | ||||||
Translation differences | — | (2 | ) | |||||
Additions | 123 | 213 | ||||||
Acquisitions | 17 | — | ||||||
Disposals | (2 | ) | (1 | ) | ||||
Transfers to: | ||||||||
Other intangible assets | (7 | ) | (37 | ) | ||||
Buildings and constructions | (29 | ) | (89 | ) | ||||
Machinery and equipment | (21 | ) | (131 | ) | ||||
Net carrying amount December 31 | 154 | 73 | ||||||
Total property, plant and equipment | 1 912 | 1 602 |
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14. | Investments in associated companies |
2007 | 2006 | |||||||
EURm | EURm | |||||||
Net carrying amount January 1 | 224 | 193 | ||||||
Translation differences | — | (2 | ) | |||||
Additions | 19 | 19 | ||||||
Acquisitions | 67 | — | ||||||
Deductions | (6 | ) | (1 | ) | ||||
Impairments | (7 | ) | — | |||||
Share of results | 44 | 28 | ||||||
Dividends | (12 | ) | — | |||||
Other movements | (4 | ) | (13 | ) | ||||
Net carrying amount December 31 | 325 | 224 | ||||||
15. | Available-for-sale investments |
2007 | 2006 | |||||||||||||||
Current | Non-current | Current | Non-current | |||||||||||||
EURm | EURm | EURm | EURm | |||||||||||||
Fixed income and money-market investments carried at fair value | 9 628 | — | 7 058 | — | ||||||||||||
Available for sale investments in publicly quoted equity shares | — | 10 | — | 8 | ||||||||||||
Other available for sale investments carried at fair value | — | 184 | — | 177 | ||||||||||||
Other available for sale investments carried at cost less impairment | — | 147 | — | 103 | ||||||||||||
9 628 | 341 | 7 058 | 288 | |||||||||||||
16. | Long-term loans receivable |
2007 | 2006 | |||||||||||||||
Carrying amount | Fair value | Carrying amount | Fair value | |||||||||||||
EURm | EURm | EURm | EURm | |||||||||||||
Long-term loans receivable carried at amortised cost | 10 | 10 | 19 | 19 | ||||||||||||
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16. | Long-term loans receivable (Continued) |
17. | Inventories |
2007 | 2006 | |||||||
EURm | EURm | |||||||
Raw materials, supplies and other | 591 | 360 | ||||||
Work in progress | 1 060 | 600 | ||||||
Finished goods | 1 225 | 594 | ||||||
Total | 2 876 | 1 554 | ||||||
18. | Prepaid expenses and accrued income |
19. | Valuation and qualifying accounts |
Balance at | Charged to | Balance | ||||||||||||||||||
beginning | cost and | at end | ||||||||||||||||||
Allowances on assets to which they apply: | of year | expenses | Deductions(1) | Acquisitions | of year | |||||||||||||||
EURm | EURm | EURm | EURm | EURm | ||||||||||||||||
2007 | ||||||||||||||||||||
Allowance for doubtful accounts | 212 | 38 | (72 | ) | 154 | 332 | ||||||||||||||
Excess and obsolete inventory | 218 | 145 | (202 | ) | 256 | 417 | ||||||||||||||
2006 | ||||||||||||||||||||
Allowance for doubtful accounts | 281 | 70 | (139 | ) | 212 | |||||||||||||||
Excess and obsolete inventory | 176 | 353 | (311 | ) | 218 | |||||||||||||||
2005 | ||||||||||||||||||||
Allowance for doubtful accounts | 361 | 80 | (160 | ) | 281 | |||||||||||||||
Excess and obsolete inventory | 172 | 376 | (372 | ) | 176 |
(1) | Deductions include utilization and releases of the allowances. |
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20. | Fair value and other reserves |
Hedging reserve, EURm | Available-for-sale investments, EURm | Total, EURm | ||||||||||||||||||||||||||||||||||
Gross | Tax | Net | Gross | Tax | Net | Gross | Tax | Net | ||||||||||||||||||||||||||||
Balance at December 31, 2004 | 14 | (3 | ) | 11 | 7 | (5 | ) | 2 | 21 | (8 | ) | 13 | ||||||||||||||||||||||||
Cash flow hedges: | ||||||||||||||||||||||||||||||||||||
Net fair value gains/(losses) | (327 | ) | 84 | (243 | ) | — | — | — | (327 | ) | 84 | (243 | ) | |||||||||||||||||||||||
Transfer to profit and loss account as adjustment to Net Sales | 568 | (147 | ) | 421 | — | — | — | 568 | (147 | ) | 421 | |||||||||||||||||||||||||
Transfer to profit and loss account as adjustment to Cost of Sales | (418 | ) | 108 | (310 | ) | — | — | — | (418 | ) | 108 | (310 | ) | |||||||||||||||||||||||
Available-for-sale Investments: | ||||||||||||||||||||||||||||||||||||
Net fair value gains/(losses) | — | — | — | (69 | ) | 6 | (63 | ) | (69 | ) | 6 | (63 | ) | |||||||||||||||||||||||
Transfer to profit and loss account on impairment | — | — | — | 9 | — | 9 | 9 | — | 9 | |||||||||||||||||||||||||||
Transfer of net fair value (gains)/losses to profit and loss account on disposal | — | — | — | (3 | ) | — | (3 | ) | (3 | ) | — | (3 | ) | |||||||||||||||||||||||
Balance at December 31, 2005 | (163 | ) | 42 | (121 | ) | (56 | ) | 1 | (55 | ) | (219 | ) | 43 | (176 | ) | |||||||||||||||||||||
Cash flow hedges: | ||||||||||||||||||||||||||||||||||||
Net fair value gains/(losses) | 61 | (16 | ) | 45 | — | — | — | 61 | (16 | ) | 45 | |||||||||||||||||||||||||
Transfer to profit and loss account as adjustment to Net Sales | (243 | ) | 68 | (175 | ) | — | — | — | (243 | ) | 68 | (175 | ) | |||||||||||||||||||||||
Transfer to profit and loss account as adjustment to Cost of Sales | 414 | (113 | ) | 301 | — | — | — | 414 | (113 | ) | 301 | |||||||||||||||||||||||||
Available-for-sale Investments: | ||||||||||||||||||||||||||||||||||||
Net fair value gains/(losses) | — | — | — | (42 | ) | 1 | (41 | ) | (42 | ) | 1 | (41 | ) | |||||||||||||||||||||||
Transfer to profit and loss account on impairment | — | — | — | 18 | — | 18 | 18 | — | 18 | |||||||||||||||||||||||||||
Transfer of net fair value (gains)/losses to profit and loss account on disposal | — | — | — | 14 | — | 14 | 14 | — | 14 | |||||||||||||||||||||||||||
Balance at December 31, 2006 | 69 | (19 | ) | 50 | (66 | ) | 2 | (64 | ) | 3 | (17 | ) | (14 | ) | ||||||||||||||||||||||
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20. | Fair value and other reserves (Continued) |
Hedging reserve, EURm | Available-for-sale investments, EURm | Total, EURm | ||||||||||||||||||||||||||||||||||
Gross | Tax | Net | Gross | Tax | Net | Gross | Tax | Net | ||||||||||||||||||||||||||||
Cash flow hedges: | ||||||||||||||||||||||||||||||||||||
Net fair value gains/(losses) | 29 | (7 | ) | 22 | — | — | — | 29 | (7 | ) | 22 | |||||||||||||||||||||||||
Transfer to profit and loss account as adjustment to Net Sales | (687 | ) | 186 | (501 | ) | — | — | — | (687 | ) | 186 | (501 | ) | |||||||||||||||||||||||
Transfer to profit and loss account as adjustment to Cost of Sales | 643 | (175 | ) | 468 | — | — | — | 643 | (175 | ) | 468 | |||||||||||||||||||||||||
Available-for-sale Investments: | ||||||||||||||||||||||||||||||||||||
Net fair value gains/(losses) | — | — | — | 32 | (1 | ) | 31 | 32 | (1 | ) | 31 | |||||||||||||||||||||||||
Transfer to profit and loss account on impairment | — | — | — | 29 | — | 29 | 29 | — | 29 | |||||||||||||||||||||||||||
Transfer of net fair value (gains)/losses to profit and loss account on disposal | — | — | — | (12 | ) | — | (12 | ) | (12 | ) | — | (12 | ) | |||||||||||||||||||||||
Balance at December 31, 2007 | 54 | (15 | ) | 39 | (17 | ) | 1 | (16 | ) | 37 | (14 | ) | 23 | |||||||||||||||||||||||
21. | The shares of the Parent Company |
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Table of Contents
21. | The shares of the Parent Company (Continued) |
22. | Share-based payment |
F-47
Table of Contents
22. | Share-based payment (Continued) |
F-48
Table of Contents
22. | Share-based payment (Continued) |
Vesting status | ||||||||||||||||||||
Number | (as percentage | Exercise | ||||||||||||||||||
Plan | Stock | of partici- | of total number | Exercise period | price/ | |||||||||||||||
(year of | options | pants | Option | of stock options | First vest | Last vest | Expiry | share | ||||||||||||
launch) | outstanding | (approx.) | (sub)category | outstanding) | date | date | date | EUR | ||||||||||||
2001(1),(2) | — | — | 2001C1Q/02 | Expired | April 1, 2003 | April 3, 2006 | December 31, 2007 | 26.06 | ||||||||||||
2001C3Q/02 | Expired | October 1, 2003 | October 2, 2006 | December 31, 2007 | 12.99 | |||||||||||||||
2001C4Q/02 | Expired | January 2, 2004 | January 2, 2007 | December 31, 2007 | 16.86 | |||||||||||||||
2002A+B | Expired | July 1, 2003 | July 3, 2006 | December 31, 2007 | 17.89 | |||||||||||||||
2003(2) | 17 113 788 | 14 000 | 2003 2Q | 100.00 | July 1, 2004 | July 2, 2007 | December 31, 2008 | 14.95 | ||||||||||||
2003 3Q | 100.00 | October 1, 2004 | October 1, 2007 | December 31, 2008 | 12.71 | |||||||||||||||
2003 4Q | 93.75 | January 3, 2005 | January 2, 2008 | December 31, 2008 | 15.05 | |||||||||||||||
2004 2Q | 81.25 | July 1, 2005 | July 1, 2008 | December 31, 2009 | 11.79 | |||||||||||||||
2004 3Q | 75.00 | October 3, 2005 | October 1, 2008 | December 31, 2009 | 9.44 | |||||||||||||||
2004 4Q | 68.75 | January 2, 2006 | January 2, 2009 | December 31, 2009 | 12.35 | |||||||||||||||
2005(2) | 14 498 513 | 5 000 | 2005 2Q | 56.25 | July 1, 2006 | July 1, 2009 | December 31, 2010 | 12.79 | ||||||||||||
2005 3Q | 50.00 | October 1, 2006 | October 1, 2009 | December 31, 2010 | 13.09 | |||||||||||||||
2005 4Q | 43.75 | January 1, 2007 | January 1, 2010 | December 31, 2010 | 14.48 | |||||||||||||||
2006 1Q | 37.50 | April 1, 2007 | April 1, 2010 | December 31, 2011 | 14.99 | |||||||||||||||
2006 2Q | 31.25 | July 1, 2007 | July 1, 2010 | December 31, 2011 | 18.02 | |||||||||||||||
2006 3Q | 25.00 | October 1, 2007 | October 1, 2010 | December 31, 2011 | 15.37 | |||||||||||||||
2006 4Q | — | January 1, 2008 | January 1, 2011 | December 31, 2011 | 15.38 | |||||||||||||||
2007(2) | 3 061 011 | 3 000 | 2007 1Q | — | April 1, 2008 | April 1, 2011 | December 31, 2011 | 17.00 | ||||||||||||
2007 2Q | — | July 1, 2008 | July 1, 2011 | December 31, 2012 | 18.39 | |||||||||||||||
2007 3Q | — | October 1, 2008 | October 1, 2011 | December 31, 2012 | 21.86 | |||||||||||||||
2007 4Q | — | January 1, 2009 | January 1, 2012 | December 31, 2012 | 27.53 |
(1) | The stock options under the 2001 plan were listed on the Helsinki Stock Exchange. | |
(2) | The Group’s current global stock option plans have a vesting schedule with a 25% vesting one year after grant, and quarterly vesting thereafter, each of the quarterly lots representing 6.25% of the total grant. The grants vest fully in four years. |
Number of | Weighted average | Weighted average | ||||||||||
shares | exercise price | share price(2) | ||||||||||
EUR | EUR | |||||||||||
Shares under option at January 1, 2005 | 142 957 316 | 23.29 | ||||||||||
Granted | 8 552 160 | 12.82 | ||||||||||
Exercised | 724 796 | 10.94 | 13.42 | |||||||||
Forfeited | 5 052 794 | 17.86 | ||||||||||
Shares under option at December 31, 2005 | 145 731 886 | 22.97 | ||||||||||
Granted | 11 421 939 | 16.79 | ||||||||||
Exercised | 3 302 437 | 13.71 | 16.70 | |||||||||
Forfeited | 2 888 474 | 15.11 | ||||||||||
Expired | 57 677 685 | 33.44 |
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22. | Share-based payment (Continued) |
Number of | Weighted average | Weighted average | ||||||||||
shares | exercise price(2) | share price(2) | ||||||||||
EUR | EUR | |||||||||||
Shares under option at December 31, 2006 | 93 285 229 | 16.28 | ||||||||||
Granted | 3 211 965 | 18.48 | ||||||||||
Exercised | 57 776 205 | 16.99 | 21.75 | |||||||||
Forfeited | 1 992 666 | 15.13 | ||||||||||
Expired | 1 161 096 | 17.83 | ||||||||||
Shares under option at December 31, 2007 | 35 567 227 | 15.28 | ||||||||||
Options exercisable at December 31, 2004 (shares) | 83 667 122 | 26.18 | ||||||||||
Options exercisable at December 31, 2005 (shares) | 112 095 407 | 25.33 | ||||||||||
Options exercisable at December 31, 2006 (shares) | 69 721 916 | 16.65 | ||||||||||
Options exercisable at December 31, 2007 (shares) | 21 535 000 | 14.66 |
(1) | Includes also a minor number of stock options granted under other than global equity plans. For further information see “Other equity plans for employees” below. | |
(2) | The weighted average exercise price and the weighted average share price do not incorporate the effect of transferable stock option exercises by option holders not employed by the Group. |
Options outstanding | ||||||||||||
Weighted average | ||||||||||||
remaining | ||||||||||||
Exercise prices | Number of | contractual life | Weighted average | |||||||||
EUR | shares | in years | exercise price EUR | |||||||||
0.75 - 11.96 | 4 140 394 | 2.60 | 11.10 | |||||||||
12.06 - 14.48 | 5 939 886 | 2.99 | 12.84 | |||||||||
14.95 - 17.61 | 13 805 227 | 1.10 | 14.97 | |||||||||
18.02 - 38.34 | 11 681 720 | 4.21 | 18.36 | |||||||||
35 567 227 | ||||||||||||
2007 | 2006 | 2005 | ||||
Weighted average expected dividend yield | 2.30% | 2.08% | 2.50% | |||
Weighted average expected volatility | 25.24% | 24.09% | 25.92% | |||
Risk-free interest rate | 3.79% - 4.19% | 2.86% - 3.75% | 2.16% - 3.09% | |||
Weighted average risk-free interest rate | 4.09% | 3.62% | 2.60% | |||
Expected life (years) | 3.59 | 3.60 | 3.59 | |||
Weighted average share price, EUR | 18.49 | 17.84 | 13.20 |
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22. | Share-based payment (Continued) |
Performance | ||||||||||||||||||||||||
shares | Number of | Interim | ||||||||||||||||||||||
outstanding | participants | measurement | Performance | 1st (interim) | 2nd (final) | |||||||||||||||||||
Plan | at threshold | (approx.) | period | period | settlement | settlement | ||||||||||||||||||
2004 | 3 195 197 | 10 000 | 2004-2005 | 2004-2007 | 2006 | 2008 | ||||||||||||||||||
2005 | 3 819 347 | 11 000 | 2005-2006 | 2005-2008 | 2007 | 2009 | ||||||||||||||||||
2006 | 4 432 655 | 12 000 | N/A | 2006-2008 | N/A | 2009 | ||||||||||||||||||
2007 | 2 107 359 | 5 000 | N/A | 2007-2009 | N/A | 2010 |
Threshold Performance | Maximum Performance | |||||||||
Average Annual | Average Annual | |||||||||
Plan | EPS(1) | Net Sales Growth(1) | EPS(1) | Net Sales Growth(1) | ||||||
EUR | EUR | |||||||||
2004 | Interim measurement | 0.80 | 4% | 0.94 | 16% | |||||
Performance period | 0.84 | 8% | 1.18 | 20% | ||||||
2005 | Interim measurement | 0.75 | 3% | 0.96 | 12% | |||||
Performance period | 0.82 | 8% | 1.33 | 17% | ||||||
2006 | Performance period | 0.96 | 11% | 1.41 | 26% | |||||
2007 | Performance period | 1.26 | 9.5% | 1.86 | 20% |
(1) | Both the EPS and Average Annual Net Sales Growth criteria have an equal weight of 50%. |
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22. | Share-based payment (Continued) |
Weighted | ||||||||
Number of | average | |||||||
performance | grant date | |||||||
shares at | fair value | |||||||
threshold | EUR(2) | |||||||
Performance shares at January 1, 2005 | 3 910 840 | |||||||
Granted | 4 469 219 | 11.86 | ||||||
Forfeited | 337 242 | |||||||
Performance shares at December 31, 2005 | 8 042 817 | |||||||
Granted | 5 140 736 | 14.83 | ||||||
Forfeited | 569 164 | |||||||
Performance shares at December 31, 2006(3) | 12 614 389 | |||||||
Granted | 2 163 901 | 19.96 | ||||||
Forfeited | 1 001 332 | |||||||
Vested(4) | 222 400 | |||||||
Performance shares at December 31, 2007(5) | 13 554 558 |
(1) | Includes also a minor number of performance shares granted under other than global equity plans. For further information see “Other equity plans for employees” below. | |
(2) | The fair value of performance shares is estimated based on the grant date market price of the Company’s share less the present value of dividends expected to be paid during the vesting period. | |
(3) | Based on the performance of the Group during the Interim Measurement Period2004-2005, under the 2004 Performance Share Plan, both performance criteria were met. Hence, 3 595 339 Nokia shares equalling the threshold number were delivered in 2006. | |
The performance shares related to the interim settlement of the 2004 Performance Share Plan are included in the number of performance shares outstanding at December 31, 2006 as these performance shares will remain outstanding until the final settlement in 2008. The final payout, in 2008, will be adjusted by the shares delivered based on the Interim Measurement Period. | ||
(4) | Includes also performance shares vested under other than global equity plans. | |
(5) | Based on the performance of the Group during the Interim Measurement Period2005-2006, under the 2005 Performance Share Plan, both performance criteria were met. Hence, 3 980 572 Nokia shares equalling the threshold number were delivered in 2007. The performance shares related to the interim settlement of the 2005 Performance Share Plan are included in the number of performance shares outstanding at December 31, 2007 as these performance shares will remain outstanding until the final settlement in 2009. The final payout, in 2009, if any, will be adjusted by the shares delivered based on the Interim Measurement Period. |
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22. | Share-based payment (Continued) |
Weighted | ||||||||
average | ||||||||
Number of | grant date | |||||||
Restricted | fair value | |||||||
Shares | EUR(2) | |||||||
Restricted Shares at January 1, 2005 | 2 319 430 | |||||||
Granted | 3 016 746 | 12.14 | ||||||
Forfeited | 150 500 | |||||||
Restricted Shares at December 31, 2005 | 5 185 676 | |||||||
Granted | 1 669 050 | 14.71 | ||||||
Forfeited | 455 100 | |||||||
Vested | 334 750 | |||||||
Restricted Shares at December 31, 2006 | 6 064 876 | |||||||
Granted | 1 749 433 | 24.37 | ||||||
Forfeited | 297 900 | |||||||
Vested | 1 521 080 | |||||||
Restricted Shares at December 31, 2007 | 5 995 329 |
(1) | Includes also a minor number of restricted shares granted under other than global equity plans. For further information see “Other equity plans for employees” below. | |
(2) | The fair value of restricted shares is estimated based on the grant date market price of the Company’s share less the present value of dividends expected to be paid during the vesting period. |
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23. | Long-term interest-bearing liabilities |
2007 | 2006 | |||||||||||||||
Carrying amount | Fair value | Carrying amount | Fair value | |||||||||||||
EURm | EURm | EURm | EURm | |||||||||||||
Long-term interest-bearing liabilities carried at amortised cost | 203 | 203 | 69 | 69 | ||||||||||||
Fair value is estimated based on the current market values of similar instruments |
24. | Deferred taxes |
2007 | 2006 | |||||||
EURm | EURm | |||||||
Deferred tax assets: | ||||||||
Intercompany profit in inventory | 87 | 34 | ||||||
Tax losses carried forward | 314 | 41 | ||||||
Warranty provision | 132 | 134 | ||||||
Other provisions | 292 | 253 | ||||||
Depreciation differences and untaxed reserves | 367 | 104 | ||||||
Share-based compensation | 227 | 70 | ||||||
Other temporary differences | 134 | 173 | ||||||
Total deferred tax assets | 1 553 | 809 | ||||||
Deferred tax liabilities: | ||||||||
Depreciation differences and untaxed reserves | (165 | ) | (23 | ) | ||||
Fair value gains/losses | (40 | ) | (16 | ) | ||||
Undistributed earnings | (31 | ) | (65 | ) | ||||
Other temporary differences(1) | (727 | ) | (101 | ) | ||||
Total deferred tax liabilities | (963 | ) | (205 | ) | ||||
Net deferred tax asset | 590 | 604 | ||||||
The tax charged to shareholders’ equity is as follows: | ||||||||
Fair value and other reserves, fair value gains/losses and excess tax benefit onshare-based compensation | 133 | (43 | ) |
(1) | In 2007, other temporary differences included a deferred tax liability of EUR 563 million arising from purchase price allocation related to Nokia Siemens Networks. |
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25. | Accrued expenses |
2007 | 2006 | |||||||
EURm | EURm | |||||||
Social security, VAT and other taxes | 2 024 | 966 | ||||||
Wages and salaries | 865 | 250 | ||||||
Advance payments | 503 | 303 | ||||||
Other | 3 722 | 2 277 | ||||||
Total | 7 114 | 3 796 | ||||||
26. | Derivative financial instruments |
2007 | 2007 | |||||||||||||||
Assets | Liabilities | |||||||||||||||
Fair value(1) | Notional(2) | Fair value(1) | Notional(2) | |||||||||||||
EURm | EURm | EURm | EURm | |||||||||||||
Hedges of net investment in foreign subsidiaries: | ||||||||||||||||
Forward foreign exchange contracts | 22 | 1 264 | (6 | ) | 393 | |||||||||||
Currency options bought | — | 51 | — | — | ||||||||||||
Cash flow hedges: | ||||||||||||||||
Forward foreign exchange contracts | 89 | 15 718 | (64 | ) | 12 062 | |||||||||||
Currency options bought | 20 | 7 618 | — | — | ||||||||||||
Currency options sold | (25 | ) | 6 872 | |||||||||||||
Derivatives not designated in hedge accounting relationships carried at fair value through profit and loss: | ||||||||||||||||
Forward foreign exchange contracts | 22 | 2 831 | (49 | ) | 4 456 | |||||||||||
Currency options bought | 4 | 1 530 | — | — | ||||||||||||
Interest rate futures | 6 | 39 | — | — | ||||||||||||
Interest rate swaps | — | 43 | — | — | ||||||||||||
Cash settled equity options bought(3) | 41 | 63 | — | — | ||||||||||||
Cash settled equity options sold(3) | — | — | (23 | ) | 40 | |||||||||||
204 | 29 157 | (167 | ) | 23 823 | ||||||||||||
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26. | Derivative financial instruments (Continued) |
2006 | 2006 | |||||||||||||||
Assets | Liabilities | |||||||||||||||
Fair value(1) | Notional(2) | Fair value(1) | Notional(2) | |||||||||||||
EURm | EURm | EURm | EURm | |||||||||||||
Hedges of net investment in foreign subsidiaries: | ||||||||||||||||
Forward foreign exchange contracts | 27 | 1 561 | (6 | ) | 686 | |||||||||||
Currency options bought | — | 186 | — | — | ||||||||||||
Cash flow hedges: | ||||||||||||||||
Forward foreign exchange contracts | 27 | 1 783 | (51 | ) | 11 641 | |||||||||||
Derivatives not designated in hedge accounting relationships carried at fair value through profit and loss: | ||||||||||||||||
Forward foreign exchange contracts | 11 | 12 090 | (7 | ) | 2 098 | |||||||||||
Currency options bought | 2 | 218 | (1 | ) | 50 | |||||||||||
Currency options sold | — | — | (2 | ) | 143 | |||||||||||
Cash settled equity options bought(3) | 7 | 63 | — | — | ||||||||||||
Cash settled equity options sold(3) | — | — | (2 | ) | 18 | |||||||||||
74 | 15 901 | (69 | ) | 14 636 | ||||||||||||
(1) | The fair value of derivative financial instruments is included on the asset side under heading Other financial assets and on the liability side under Short term borrowings. | |
(2) | Includes the gross amount of all notional values for contracts that have not yet been settled or cancelled. The amount of notional value outstanding is not necessarily a measure or indication of market risk, as the exposure of certain contracts may be offset by that of other contracts. | |
(3) | Cash settled equity options are used to hedge risk relating to employee incentive programs and investment activities. |
27. | Provisions |
IPR | ||||||||||||||||||||||||
Warranty | Restructuring | infringements | Tax | Other | Total | |||||||||||||||||||
EURm | EURm | EURm | EURm | EURm | EURm | |||||||||||||||||||
At January 1, 2007 | 1 198 | 65 | 284 | 402 | 437 | 2 386 | ||||||||||||||||||
Exchange differences | (10 | ) | — | — | — | — | (10 | ) | ||||||||||||||||
Acquisitions | 263 | — | — | — | 134 | 397 | ||||||||||||||||||
Additional provisions | 1 127 | 744 | 345 | 59 | 548 | 2 823 | ||||||||||||||||||
Change in fair value | — | — | — | — | 16 | 16 | ||||||||||||||||||
Changes in estimates | (126 | ) | (53 | ) | (47 | ) | (9 | ) | (216 | ) | (451 | ) | ||||||||||||
Charged to profit and loss account | 1 001 | 691 | 298 | 50 | 348 | 2 388 | ||||||||||||||||||
Utilized during year | (963 | ) | (139 | ) | (37 | ) | — | (305 | ) | (1 444 | ) | |||||||||||||
At December 31, 2007 | 1 489 | 617 | 545 | 452 | 614 | 3 717 | ||||||||||||||||||
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27. | Provisions (Continued) |
2007 | 2006 | |||||||
EURm | EURm | |||||||
Analysis of total provisions at December 31: | ||||||||
Non-current | 1 323 | 690 | ||||||
Current | 2 394 | 1 696 |
28. | Earnings per share |
2007 | 2006 | 2005 | ||||||||||
Numerator/EURm | ||||||||||||
Basic/Diluted: | ||||||||||||
Profit attributable to equity holders of the parent | 7 205 | 4 306 | 3 616 | |||||||||
Denominator/1000 shares | ||||||||||||
Basic: | ||||||||||||
Weighted average shares | 3 885 408 | 4 062 833 | 4 365 547 | |||||||||
Effect of dilutive securities: | ||||||||||||
stock options, restricted shares and performance shares | 46 600 | 23 696 | 5 692 | |||||||||
Diluted: | ||||||||||||
Adjusted weighted average shares and assumed conversions | 3 932 008 | 4 086 529 | 4 371 239 | |||||||||
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29. | Commitments and contingencies |
2007 | 2006 | |||||||
EURm | EURm | |||||||
Collateral for our own commitments | ||||||||
Property under mortgages | 18 | 18 | ||||||
Assets pledged | 29 | 27 | ||||||
Contingent liabilities on behalf of Group companies | ||||||||
Other guarantees | 2 563 | 358 | ||||||
Collateral given on behalf of other companies | ||||||||
Securities pledged(1) | — | — | ||||||
Contingent liabilities on behalf of other companies | ||||||||
Financial guarantees on behalf of third parties(1) | 130 | 23 | ||||||
Other guarantees | 1 | 2 | ||||||
Financing commitments | ||||||||
Customer finance commitments(1) | 270 | 164 | ||||||
Venture fund commitments(2) | 251 | 208 |
(1) | See also note 35 b). | |
(2) | See also note 35 a). |
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29. | Commitments and contingencies (Continued) |
30. | Leasing contracts |
Operating | ||||
leases | ||||
Leasing payments, EURm | ||||
2008 | 281 | |||
2009 | 218 | |||
2010 | 157 | |||
2011 | 117 | |||
2012 | 96 | |||
Thereafter | 129 | |||
Total | 998 | |||
31. | Related party transactions |
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31. | Related party transactions (Continued) |
2007 | 2006 | 2005 | ||||||||||
EURm | EURm | EURm | ||||||||||
Transactions with associated companies | ||||||||||||
Share of results of associated companies | 44 | 28 | 10 | |||||||||
Dividend income | 12 | 1 | 1 | |||||||||
Share of shareholders’ equity of associated companies | 158 | 61 | 33 | |||||||||
Sales to associated companies | 82 | — | — | |||||||||
Purchases from associated companies | 125 | — | — | |||||||||
Receivables from associated companies | 61 | — | — | |||||||||
Liabilities to associated companies | 69 | 14 | 14 |
2007 | 2006 | 2005 | ||||||||||||||||||||||||||||||||||
Cash | Share-based | Cash | Share-based | Cash | Share-based | |||||||||||||||||||||||||||||||
Base | incentive | compensation | Base | incentive | compensation | Base | incentive | compensation | ||||||||||||||||||||||||||||
salary | payments | expense | salary | payments | expense | salary | payments | expense | ||||||||||||||||||||||||||||
EUR | EUR | EUR | EUR | EUR | EUR | EUR | EUR | EUR | ||||||||||||||||||||||||||||
Olli-Pekka Kallasvuo | 1 037 619 | 2 348 877 | 4 805 722 | 898 413 | 664 227 | 2 108 197 | 623 524 | 947 742 | 666 313 | |||||||||||||||||||||||||||
President and CEO(1) |
(1) | President and CEO as of June 1, 2006; and President and COO until June 1, 2006; Executive Vice President and General Manager and President of Mobile Phones January 1, 2004 — October 1, 2005. |
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31. | Related party transactions (Continued) |
2007 | 2007 | 2006 | 2006 | 2005 | 2005 | |||||||||||||||||||
Gross | Shares | Gross | Shares | Gross | Shares | |||||||||||||||||||
Annual Fee | Received | Annual Fee | Received | Annual Fee | Received | |||||||||||||||||||
EUR(1) | EUR(1) | EUR(1) | ||||||||||||||||||||||
Board of Directors | ||||||||||||||||||||||||
Chairman | ||||||||||||||||||||||||
Jorma Ollila(2) | 375 000 | 8 110 | 375 000 | 8 035 | 165 000 | 5 011 | ||||||||||||||||||
Vice Chairman | ||||||||||||||||||||||||
Dame Marjorie Scardino(3) | 150 000 | 3 245 | 110 000 | 2 356 | 110 000 | 3 340 | ||||||||||||||||||
Georg Ehrnrooth(4) | 155 000 | 3 351 | 120 000 | 2 570 | 120 000 | 3 644 | ||||||||||||||||||
Lalita D.Gupte(5) | 140 000 | 3 027 | — | — | — | — | ||||||||||||||||||
Dr. Bengt Holmström(6) | 130 000 | 2 810 | 110 000 | 2 356 | 110 000 | 3 340 | ||||||||||||||||||
Dr. Henning Kagermann | 130 000 | 2 810 | — | — | — | — | ||||||||||||||||||
Olli-Pekka Kallasvuo(7) | 130 000 | 2 810 | — | — | — | — | ||||||||||||||||||
Per Karlsson(8) | 155 000 | 3 351 | 135 000 | 2 892 | 135 000 | 4 100 | ||||||||||||||||||
Keijo Suila(9) | 140 000 | 3 027 | 120 000 | 2 570 | — | — | ||||||||||||||||||
Vesa Vainio(10) | 140 000 | 3 027 | 120 000 | 2 570 | 120 000 | 3 644 | ||||||||||||||||||
(11) |
(1) | Approximately 60% of the gross annual fee is paid in cash and the remaining 40% in Nokia shares purchased from the market and included in the table under “Shares Received.” |
(2) | This table includes fees paid for Mr. Ollila, Chairman, for his services as Chairman of the Board, only. |
(3) | The 2007 fee of Ms. Scardino amounted to a total of EUR 150 000 for services as Vice Chairman. The 2006 and 2005 fees of Ms. Scardino amounted to EUR 110 000 for services as a member of the Board. |
(4) | The 2007 fee of Mr. Ehrnrooth amounted to a total of EUR 155 000, consisting of a fee of EUR 130 000 for services as a member of the Board and EUR 25 000 for services as Chairman of the Audit Committee. The 2006 and 2005 fees of Mr. Ehrnrooth consisted of a fee of EUR 110 000 for services as a member of the Board and EUR 10 000 for services as a member of the Audit Committee. |
(5) | The 2007 fee of Ms. Gupte amounted total of EUR 140 000, consisting of fee of 130 000 for services as a member of the Board and EUR 10 000 for services as a member of the Audit Committee. |
(6) | The 2007 fee of Mr. Holmström amounted to EUR 130 000 for services as a member of the Board. The 2005 and 2006 fees of Mr. Holmström amounted to EUR 110 000 for services as a member of the Board. |
(7) | This table includes fees paid for Mr. Kallasvuo for his services as a member of the Board, only. |
(8) | The 2007 fee of Mr. Karlsson amounted to a total of EUR 155 000, consisting of a fee of EUR 130 000 for services as a member of the Board and EUR 25 000 for services as Chairman of the Personnel Committee. The 2006 and 2005 fees of Mr. Karlsson amounted to a total of EUR 135 000, consisting of a fee of EUR 110 000 for services as a member of the Board and EUR 25 000 for services as Chairman of the Audit Committee. |
(9) | The 2007 fee of Mr. Suila amounted to a total of EUR 140 000, consisting of a fee of EUR 130 000 for services as a member of the Board and EUR 10 000 for services as a member of the Audit Committee. The 2006 fee of Mr. Suila amounted to a total of EUR 120 000, consisting of a fee of EUR 110 000 for services as a member of the Board and EUR 10 000 for services as a member of the Audit Committee. |
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31. | Related party transactions (Continued) |
(10) | The 2007 fee of Mr.Vainio amounted to a total of EUR 140 000 consisting of a fee of EUR 130 000 for services as a member of the Board and EUR 10 000 for services as a member of the Audit Committee. The 2006 and 2005 fees of Mr. Vainio amounted to a total of EUR 120 000, consisting of a fee of EUR 110 000 for services as a member of the Board and EUR 10 000 for services as a member of the Audit Committee. |
(11) | Daniel R. Hesse, who was re-elected as a Nokia Board member in the Annual General Meeting on May 3, 2007, was paid the annual fee of EUR 130 000 for services as a member of the Board, prior to his resignation was announced on December 28, 2007. This amount included 2810 shares. The 2005 and 2006 fees of Mr. Hesse amounted to EUR 110 000 for services as a member of the Board, which amounts included 2 356 shares in 2006 and 3 340 in 2005. |
32. | Notes to cash flow statement |
2007 | 2006 | 2005 | ||||||||||
EURm | EURm | EURm | ||||||||||
Adjustments for: | ||||||||||||
Depreciation and amortization (Note 9,13) | 1 206 | 712 | 712 | |||||||||
Profit on sale of property, plant and equipment and available-for-sale investments | (1 864 | ) | (4 | ) | (131 | ) | ||||||
Income taxes (Note 11) | 1 522 | 1 357 | 1 281 | |||||||||
Share of results of associated companies (Note 14) | (44 | ) | (28 | ) | (10 | ) | ||||||
Minority interest | (459 | ) | 60 | 74 | ||||||||
Financial income and expenses (Note 10) | (239 | ) | (207 | ) | (322 | ) | ||||||
Impairment charges (Note 7) | 63 | 51 | 66 | |||||||||
Share-based compensation (Note 22) | 228 | 192 | 104 | |||||||||
Restructuring charges | 856 | — | — | |||||||||
Customer financing impairment charges and reversals | — | (276 | ) | — | ||||||||
Adjustments, total | 1 269 | 1 857 | 1 774 | |||||||||
Change in net working capital | ||||||||||||
Increase in short-term receivables | (2 146 | ) | (1 770 | ) | (896 | ) | ||||||
(Increase) Decrease in inventories | (245 | ) | 84 | (301 | ) | |||||||
Increase in interest-free short-term borrowings | 2 996 | 893 | 831 | |||||||||
Change in net working capital | 605 | (793 | ) | (366 | ) | |||||||
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32. | Notes to cash flow statement (Continued) |
33. | Subsequent events |
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33. | Subsequent events (Continued) |
34. | Principal Nokia Group companies at December 31, 2007 |
Parent | Group | |||||||||
holding | majority | |||||||||
% | % | |||||||||
US | Nokia Inc. | — | 100.0 | |||||||
DE | Nokia GmbH | 100.0 | 100.0 | |||||||
GB | Nokia UK Limited | — | 100.0 | |||||||
KR | Nokia TMC Limited | 100.0 | 100.0 | |||||||
CN | Nokia Telecommunications Ltd | 4.5 | 83.9 | |||||||
NL | Nokia Finance International B.V. | 100.0 | 100.0 | |||||||
HU | Nokia Komárom Kft | 100.0 | 100.0 | |||||||
IN | Nokia India Pvt Ltd | 100.0 | 100.0 | |||||||
ES | Nokia Spain S.A.U | 100.0 | 100.0 | |||||||
BR | Nokia do Brazil Technologia Ltda | 100.0 | 100.0 | |||||||
IT | Nokia Italia S.p.A. | 100.0 | 100.0 | |||||||
NL | Nokia Siemens Networks B.V. | — | 50.0 | (1) | ||||||
FI | Nokia Siemens Networks Oy | — | 50.0 | |||||||
DE | Nokia Siemens Networks GmbH & Co KG | — | 50.0 | |||||||
IN | Nokia Siemens Networks Pvt. Ltd. | — | 50.0 | |||||||
Associated companies | ||||||||||
Symbian Limited | — | 47.9 |
(1) | Nokia Siemens Networks B.V., the ultimate parent of the Nokia Siemens Networks group, is owned approximately 50% by each of Nokia and Siemens and consolidated by Nokia. Nokia effectively controls Nokia Siemens Networks as it has the ability to appoint key officers and the majority of the members of its Board of Directors, and accordingly, Nokia consolidates Nokia Siemens Networks. |
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34. | Principal Nokia Group companies at December 31, 2007 — (Continued) |
35. | Risk Management |
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35. | Risk Management (Continued) |
2007 | USD | JPY | GBP | INR | ||||||||||||
FX derivatives used as cash flow hedges (net amount)(1) | 803 | 1 274 | (656 | ) | — | |||||||||||
FX derivatives used as net investment hedges (net amount)(2) | — | — | — | (216 | ) | |||||||||||
FX exposure from balance sheet items (net amount)(3) | 2 204 | (739 | ) | 89 | 33 | |||||||||||
FX derivatives not designated in a hedge relationship and carried at fair value through profit and loss accounts (net amount)(3) | (2 361 | ) | 847 | (127 | ) | (51 | ) |
2006 | USD | JPY | GBP | CNY | ||||||||||||
FX derivatives used as cash flow hedges (net amount)(1) | (2 439 | ) | 1 626 | (526 | ) | — | ||||||||||
FX derivatives used as net investment hedges (net amount)(2) | (457 | ) | — | — | (785 | ) | ||||||||||
FX exposure from balance sheet items (net amount)(3) | 617 | (488 | ) | 196 | — | |||||||||||
FX derivatives not designated in a hedge relationship and carried at fair value through profit and loss accounts (net amount)(3) | (1 442 | ) | 564 | (235 | ) | — |
(1) | The FX derivatives are used to hedge the foreign exchange risk from forecasted highly probably cash flows related to sales, purchases and business acquisition activities. In some of the currencies, especially in US Dollar, Nokia has substantial foreign exchange risks in both estimated cash inflows and outflows, which have been netted in the table. See Note 20 for more details on hedge accounting. The underlying exposures which these hedges are entered for are not presented in the table, as they are not financial instruments as defined under IFRS 7. | |
(2) | The FX derivatives are used to hedge the Group’s net investment exposure. The underlying exposures which these hedges are entered for are not presented in the table, as they are not financial instruments as defined under IFRS 7. | |
(3) | The balance sheet items which are denominated in the foreign currencies are hedged by a portion of FX derivatives not designated in a hedge relationship and carried at fair value through profit and loss accounts, resulting in offsetting FX gains or losses in the financial income and expenses. |
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35. | Risk Management (Continued) |
2007 | 2006 | |||||||
Fixed rate instruments in available-for-sale investment | 7 716 | 5 853 | ||||||
Floating rate instruments in available-for-sale investment | 1 912 | 1 205 | ||||||
9 628 | 7 058 | |||||||
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35. | Risk Management (Continued) |
• | FX exposures from outstanding balance sheet items and other FX derivatives carried at fair value through profit and loss which are not in a hedge relationship and are mostly used for hedging balance sheet FX exposure. |
• | FX derivatives designated as forecasted cash flow hedges and net investment hedges. Most of the VaR is caused by these derivatives as forecasted cash flow and net investment exposures are not financial instruments as defined under IFRS 7 and thus not incluced in the VaR calculation. |
VaR from financial instruments(1) | ||||||||
2007 | 2006 | |||||||
At December 31 | 246 | 77 | ||||||
Average for the year | 96 | 92 | ||||||
Range for the year | 57-246 | 67-134 |
(1) | The increase in the VaR in year-over-year comparison is mainly attributable to increased hedging of forecasted cash flows due to a business acquisition. |
2007 | 2006 | |||||||
At December 31 | 8 | 11 | ||||||
Average for the year | 12 | 15 | ||||||
Range for the year | 5-27 | 10-21 |
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35. | Risk Management (Continued) |
2007 | 2006 | |||||||
At December 31 | 0.8 | 0.3 | ||||||
Average for the year | 0.5 | 0.3 | ||||||
Range for the year | 0.2-0.8 | 0.2-0.5 |
(b) | Credit Risk |
2007 | 2006 | |||||||
EURm | EURm | |||||||
Financial guarantees given on behalf of customers or suppliers | 130 | 23 | ||||||
Loan commitments given but not used | 270 | 164 | ||||||
400 | 187 | |||||||
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35. | Risk Management (Continued) |
2007 | 2006 | |||||||
Past due 1-30 days | 411 | 394 | ||||||
Past due31-180 days | 66 | 101 | ||||||
More than 180 days | 1 | 23 | ||||||
478 | 518 | |||||||
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35. | Risk Management (Continued) |
(1) | Fixed income and money-market investments include term deposits, investments in liquidity funds and investments in fixed income instruments classified as Available-for-sale. Available-for-sale investments are carried at fair value in 2007 and 2006. |
(2) | Included within fixed income and money-market investments is EUR 169 million of restricted investment at December 31, 2007 (EUR 10 million at December 31, 2006). They are restricted financial assets under various contractual or legal obligations. |
(c) | Liquidity Risk |
• | Revolving Credit Facility of USD 2 000 million, maturing 2008 | |
• | Credit Facility of EUR 500 million, maturing 2011 | |
• | Revolving Credit Facility of USD 2 000 million, maturing in 2012 | |
• | Euro Medium Term Note (EMTN) program, totaling EUR 3 000 million |
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35. | Risk Management (Continued) |
• | Local commercial paper program in Finland, totaling EUR 750 million | |
• | Euro Commercial Paper (ECP) program, totaling USD 500 million | |
• | US Commercial Paper (USCP) program, totaling USD 500 million |
Short-term: | Standard & Poor’sA-1 Moody’sP-1 |
Long-term: | Standard & Poor’s A Moody’s A1 |
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35. | Risk Management (Continued) |
Due between 3 | Due | |||||||||||||||||||
Due within 3 | and 12 | between 1 | Due between | Due beyond | ||||||||||||||||
At December 31, 2007 | months | months | and 3 years | 3 and 5 years | 5 years | |||||||||||||||
Non-current financial assets | ||||||||||||||||||||
Long-term loans receivable | — | — | 7 | 3 | 1 | |||||||||||||||
Other non-current assets | — | — | 6 | — | — | |||||||||||||||
Loan commitments obtained | — | 1 385 | 500 | 1 385 | — | |||||||||||||||
Current financial assets | ||||||||||||||||||||
Current portion of long-term loans receivable | 5 | 165 | — | — | — | |||||||||||||||
Short-term loans receivable | 16 | 8 | — | — | — | |||||||||||||||
Available-for-sale investments | 6 543 | 1 012 | 2 003 | 343 | 355 | |||||||||||||||
Cash | 2 125 | — | — | — | — | |||||||||||||||
Cash flows related to derivative financial assets net settled : | ||||||||||||||||||||
Derivative contracts—receipts | 24 | 15 | 8 | 1 | 1 | |||||||||||||||
Cash flows related to derivative financial assets gross settled: | ||||||||||||||||||||
Derivative contracts—receipts | 19 459 | 394 | 65 | — | — | |||||||||||||||
Derivative contracts—payments | (19 331 | ) | (384 | ) | (69 | ) | — | — | ||||||||||||
Accounts receivable(1)(2) | 7 398 | 1 720 | 381 | — | — | |||||||||||||||
Non-current financial liabilities | ||||||||||||||||||||
Long-term liabilities | (10 | ) | (3 | ) | (53 | ) | (130 | ) | (70 | ) | ||||||||||
Loan commitments given | (178 | ) | (39 | ) | (21 | ) | (18 | ) | (14 | ) | ||||||||||
Current financial liabilities | ||||||||||||||||||||
Current portion of long-term loans | (115 | ) | (61 | ) | — | — | — | |||||||||||||
Short-term liabilities | (617 | ) | (105 | ) | — | — | — | |||||||||||||
Cash flows related to derivative financial liabilities net settled: | ||||||||||||||||||||
Derivative contracts—payments | (13 | ) | (10 | ) | — | — | — | |||||||||||||
Cash flows related to derivative financial liabilities gross settled: | ||||||||||||||||||||
Derivative contracts—receipts | 16 207 | 635 | 70 | — | — | |||||||||||||||
Derivative contracts—payments | (16 317 | ) | (633 | ) | (65 | ) | — | — | ||||||||||||
Accounts payable(1) | (6 986 | ) | (88 | ) | — | — | — |
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35. | Risk Management (Continued) |
Due between 3 | Due | |||||||||||||||||||
Due within 3 | and 12 | between 1 | Due between | Due beyond | ||||||||||||||||
At December 31, 2006 | months | months | and 3 years | 3 and 5 years | 5 years | |||||||||||||||
Non-current financial assets | ||||||||||||||||||||
Long-term loans receivables | — | 1 | 11 | 14 | — | |||||||||||||||
Other non-current (financial) assets | — | 1 | 7 | — | — | |||||||||||||||
Loan commitments obtained | — | — | — | — | 1 524 | |||||||||||||||
Current financial assets | ||||||||||||||||||||
Short-term loans receivables | 23 | 4 | — | — | — | |||||||||||||||
Current portion of long-term loans receivable | — | — | — | — | — | |||||||||||||||
Available-for-sale investments | 2 454 | 801 | 3 396 | 547 | 374 | |||||||||||||||
Cash | 1 479 | — | 0 | — | — | |||||||||||||||
Cash flows related to derivative financial assets net settled : | ||||||||||||||||||||
Derivative contracts—receipts | — | 2 | 4 | 1 | — | |||||||||||||||
Cash flows related to derivative financial assets gross settled: | ||||||||||||||||||||
Derivative contracts—receipts | 15 032 | 408 | — | — | — | |||||||||||||||
Derivative contracts—payments | (14 986 | ) | (393 | ) | — | — | — | |||||||||||||
Accounts receivables(1)(2) | 4 456 | 950 | 115 | — | — | |||||||||||||||
Non-current financial liabilities | ||||||||||||||||||||
Long-term liabilities | 1 | 3 | 8 | 8 | 69 | |||||||||||||||
Loan commitments given | 164 | |||||||||||||||||||
Current financial liabilities | ||||||||||||||||||||
Current portion of long-term loans | — | — | — | — | — | |||||||||||||||
Short-term liabilities | (160 | ) | (2 | ) | — | — | — | |||||||||||||
Cash flows related to derivative financial liabilities net settled: | ||||||||||||||||||||
Derivative contracts—payments | — | (1 | ) | (1 | ) | — | — | |||||||||||||
Cash flows related to derivative financial liabilities gross settled: | ||||||||||||||||||||
Derivative contracts—receipts | 14 242 | 236 | — | — | — | |||||||||||||||
Derivative contracts—payments | (14 301 | ) | (244 | ) | — | — | — | |||||||||||||
Accounts payable | (3 706 | ) | (22 | ) | (4 | ) | — | — |
(1) | The fair values of trade receivables and payables are assumed to approximate their carrying values due to their short term nature. | |
(2) | Accounts receivable maturity analysis does not include accrued receivables and receivables accounted based on the percentage of completion method of EUR 1 700 million (2006: EUR 367 million). |
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35. | Risk Management (Continued) |
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By: | /s/ ANJA KORHONEN |
Title: | Senior Vice President, Corporate Controller |
By: | /s/ KAARINA STÅHLBERG |
Title: | Vice President, Assistant General Counsel |
Table of Contents
ITEM 19. | EXHIBITS |
1 | Articles of Association of Nokia Corporation. | |||
*4 | .1 | Amended and Restated Framework Agreement among Siemens AG and Nokia Corporation and Nokia Siemens Networks B.V. dated as of June 19, 2006 and as amended and restated as of January 24, 2007. | ||
4 | .2 | Agreement and Plan of Merger by and among Nokia Inc., North Acquisition Corp. and NAVTEQ Corporation dated as of October 1, 2007. | ||
6 | . | See Note 28 to our consolidated financial statements included in Item 18 of this annual report for information on how earnings per share information was calculated. | ||
8 | . | List of significant subsidiaries. | ||
12 | .1 | Certification of Olli-Pekka Kallasvuo, Chief Executive Officer of Nokia Corporation, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
12 | .2 | Certification of Richard A. Simonson, Chief Financial Officer of Nokia Corporation, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
13 | . | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
15 | .(a). | Consent of Independent Registered Public Accounting Firm. |
* | Incorporated by reference to our annual report onForm 20-F for the fiscal year ended December 31, 2006. |