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Name of each exchange | ||
Title of each class | on which registered | |
American Depositary Shares Shares, par value EUR 0.06 | 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. |
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• | the timing of product and solution deliveries; | |
• | our ability to develop, implement and commercialize new products, 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; | |
• | expected timing, scope and effects of the merger of Nokia’s and Siemens’ communications service provider businesses; and | |
• | statements preceded by “believe,” “expect,” “anticipate,” “foresee,” “target,” “estimate,” “designed,” “plans,” “will” or similar expressions |
1. | competitiveness of our product portfolio; | |
2. | our ability to identify key market trends and to respond timely and successfully to the needs of our customers; | |
3. | the extent of the growth of the mobile communications industry, as well as the growth and profitability of the new market segments within that industry which we target; | |
4. | the availability of new products and services by network operators and other market participants; | |
5. | our ability to successfully manage costs; | |
6. | the intensity of competition in the mobile communications industry and our ability to maintain or improve our market position and respond successfully to changes in the competitive landscape; | |
7. | 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; | |
8. | timely and successful commercialization of complex technologies as new advanced products and solutions; | |
9. | 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 and solution offerings; |
10. | our ability to protect numerous Nokia patented, standardized, or proprietary technologies from third party infringement or actions to invalidate the intellectual property rights of these technologies; | |
11. | our ability to manage efficiently our manufacturing and logistics, as well as to ensure the quality, safety, security and timely delivery of our products and solutions; | |
12. | inventory management risks resulting from shifts in market demand; |
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13. | our ability to source quality components and sub-assemblies without interruption and at acceptable prices; |
14. | satisfaction or waiver of the conditions to the merger of Nokia’s networks business and Siemens’ carrier-related operations for fixed and mobile networks to form Nokia Siemens Networks, including achievement of agreement between Nokia and Siemens on the results and consequences of a Siemens compliance review, and agreement of a number of detailed implementation steps, and closing of the transaction, and Nokia’s and Siemens’ ability to successfully integrate the operations, personnel and supporting activities of their respective businesses; | |
15. | whether, as a result of investigations into alleged violations of law by some current or former employees of Siemens, government authorities or others take actions against Siemens and/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 occur after the transfer, of such assets and employees that could result in additional actions by government authorities; | |
16. | the expense, time, attention and resources of Nokia Siemens Networks and our management to detect, investigate and resolve any situations related to alleged violations of law involving the assets and employees of Siemens carrier-related operations transferred to Nokia Siemens Networks; | |
17. | 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; | |
18. | developments under large, multi-year contracts or in relation to major customers; | |
19. | general economic conditions globally and, in particular, 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 and solutions; | |
21. | the success, financial condition and performance of our collaboration partners, suppliers and customers; | |
22. | any disruption to information technology systems and networks that our operations rely on; | |
23. | 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; | |
24. | the management of our customer financing exposure; | |
25. | allegations of possible health risks from electromagnetic fields generated by base stations and mobile devices and lawsuits related to them, regardless of merit; | |
26. | unfavorable outcome of litigations; |
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27. | our ability to recruit, retain and develop appropriately skilled employees; and | |
28. | the impact of changes in government policies, laws or regulations; |
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Year ended December 31, | |||||||||||||||||||||||||
2002 | 2003 | 2004 | 2005 | 2006 | 2006 | ||||||||||||||||||||
(EUR) | (EUR) | (EUR) | (EUR) | (EUR) | (USD) | ||||||||||||||||||||
(in millions, except per share data) | |||||||||||||||||||||||||
Profit and Loss Account Data | |||||||||||||||||||||||||
Amounts in accordance with IFRS | |||||||||||||||||||||||||
Net sales | 30 016 | 29 533 | 29 371 | 34 191 | 41 121 | 54 267 | |||||||||||||||||||
Operating profit | 4 780 | 4 960 | 4 326 | 4 639 | 5 488 | 7 243 | |||||||||||||||||||
Profit before tax | 4 917 | 5 294 | 4 705 | 4 971 | 5 723 | 7 553 | |||||||||||||||||||
Profit attributable to equity holders of the parent | 3 381 | 3 543 | 3 192 | 3 616 | 4 306 | 5 683 | |||||||||||||||||||
Earnings per share (for profit attributable to equity holders of the parent) | |||||||||||||||||||||||||
Basic earnings per share | 0.71 | 0.74 | 0.69 | 0.83 | 1.06 | 1.40 | |||||||||||||||||||
Diluted earnings per share | 0.71 | 0.74 | 0.69 | 0.83 | 1.05 | 1.39 | |||||||||||||||||||
Cash dividends per share(1) | 0.28 | 0.30 | 0.33 | 0.37 | 0.43 | 0.57 | |||||||||||||||||||
Average number of shares (millions of shares) | |||||||||||||||||||||||||
Basic | 4 751 | 4 761 | 4 593 | 4 366 | 4 063 | 4 063 | |||||||||||||||||||
Diluted | 4 788 | 4 761 | 4 600 | 4 371 | 4 087 | 4 087 | |||||||||||||||||||
Amounts in accordance with US GAAP | |||||||||||||||||||||||||
Net income | 3 603 | 4 097 | 3 343 | 3 582 | 4 275 | 5 642 | |||||||||||||||||||
Earnings per share (net income) | |||||||||||||||||||||||||
Basic earnings per share | 0.76 | 0.86 | 0.73 | 0.82 | 1.05 | 1.39 | |||||||||||||||||||
Diluted earnings per share | 0.75 | 0.86 | 0.73 | 0.82 | 1.05 | 1.39 | |||||||||||||||||||
Balance Sheet Data | |||||||||||||||||||||||||
Amounts in accordance with IFRS | |||||||||||||||||||||||||
Fixed assets and other non-current assets(2) | 5 896 | 3 991 | 3 315 | 3 501 | 4 031 | 5 320 | |||||||||||||||||||
Cash and other liquid assets(3) | 9 351 | 11 296 | 11 542 | 9 910 | 8 537 | 11 266 | |||||||||||||||||||
Other current assets | 8 234 | 8 787 | 7 966 | 9 041 | 10 049 | 13 262 | |||||||||||||||||||
Total assets | 23 481 | 24 074 | 22 823 | 22 452 | 22 617 | 29 848 | |||||||||||||||||||
Capital and reserves attributable to equity holders of the parent(2) | 14 435 | 15 302 | 14 385 | 12 309 | 11 968 | 15 794 | |||||||||||||||||||
Minority interests | 173 | 164 | 168 | 205 | 92 | 121 | |||||||||||||||||||
Long-term interest-bearing liabilities | 187 | 20 | 19 | 21 | 69 | 91 | |||||||||||||||||||
Other long-term liabilities | 274 | 308 | 275 | 247 | 327 | 432 | |||||||||||||||||||
Borrowings due within one year | 377 | 471 | 215 | 377 | 247 | 326 | |||||||||||||||||||
Other current liabilities | 8 035 | 7 809 | 7 761 | 9 293 | 9 914 | 13 084 | |||||||||||||||||||
Total shareholders’ equity and liabilities | 23 481 | 24 074 | 22 823 | 22 452 | 22 617 | 29 848 | |||||||||||||||||||
Net interest-bearing debt(4) | (8 787 | ) | (10 805 | ) | (11 308 | ) | (9 512 | ) | (8 221 | ) | (10 849 | ) | |||||||||||||
Share capital | 287 | 288 | 280 | 266 | 246 | 325 | |||||||||||||||||||
Amounts in accordance with US GAAP | |||||||||||||||||||||||||
Total assets(2) | 23 041 | 24 109 | 22 985 | 22 725 | 22 835 | 30 135 | |||||||||||||||||||
Shareholders’ equity(2) | 14 214 | 15 501 | 14 640 | 12 622 | 12 112 | 15 984 |
(1) | The cash dividend for 2006 is what the Board of Directors will propose for shareholders’ approval at the Annual General Meeting convening on May 3, 2007. |
(2) | Total assets and shareholders’ equity have each been increased by EUR 154 million for all periods presented to adjust for incometax-related items in periods prior to 2002. These increases were recorded in connection with a change in the method by which the company assesses materiality. See Notes 1 and 38 to our consolidated financial statements included in Item 18 of this annual report on Form 20-F. |
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(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. |
EUR millions | ||||||||
Number of shares | (in total) | |||||||
2002 | 900 000 | 17 | ||||||
2003 | 95 338 500 | 1 363 | ||||||
2004 | 214 119 700 | 2 661 | ||||||
2005 | 315 010 000 | 4 265 | ||||||
2006 | 212 340 000 | 3 412 |
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EUR millions | ||||||||||||
EUR per share | USD per ADS | (in total) | ||||||||||
2002 | 0.28 | 0.30 | 1 341 | |||||||||
2003 | 0.30 | 0.36 | 1 439 | |||||||||
2004 | 0.33 | 0.43 | 1 539 | |||||||||
2005 | 0.37 | 0.46 | 1 641 | |||||||||
2006 | 0.43 | (1) | — | (2) | 1 761 | (1) |
(1) | To be proposed by the Board of Directors for shareholders’ approval at the Annual General Meeting convening on May 3, 2007. |
(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. |
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Exchange Rates | ||||||||||||||||
Rate at | Average | Highest | Lowest | |||||||||||||
For the year ended December 31: | period end | rate | rate | rate | ||||||||||||
(USD per EUR) | ||||||||||||||||
2002 | 1.0485 | 0.9495 | 1.0485 | 0.8594 | ||||||||||||
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 |
For the month ended: | ||||||||||||||||
September 30, 2006 | 1.2687 | 1.2722 | 1.2833 | 1.2648 | ||||||||||||
October 31, 2006 | 1.2773 | 1.2617 | 1.2773 | 1.2502 | ||||||||||||
November 30, 2006 | 1.3261 | 1.2888 | 1.3261 | 1.2705 | ||||||||||||
December 31, 2006 | 1.3197 | 1.3205 | 1.3327 | 1.3073 | ||||||||||||
January 31, 2007 | 1.2998 | 1.2993 | 1.3286 | 1.2904 | ||||||||||||
February 28, 2007 | 1.3230 | 1.3080 | 1.3246 | 1.2933 |
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• | In 1967, we took our current form as Nokia Corporation, a corporation under the laws of the Republic of 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. | |
• | Nokia 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 andnon-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. As a result, our organization evolved to consist of two main business groups, Nokia Mobile Phones and Nokia Networks. | |
• | Mobile communications evolved rapidly during the 1990s and early 2000s, creating new opportunities for devices in entertainment and enterprise use. | |
• | In January 2004, Nokia reorganized into four business groups—Mobile Phones, Multimedia, Enterprise Solutions and Networks—to further align the company’s overall structure with its strategy; to better position each business group to meet the specific needs of new and increasingly diverse market segments; to increase Nokia’s operational efficiency; and to maintain economies of scale. | |
• | On June 19, 2006, Nokia and Siemens announced plans to combine Nokia’s networks business and Siemens’ carrier-related operations for fixed and mobile networks to form a new company called Nokia Siemens Networks, owned by Nokia and Siemens and consolidated by Nokia. The new company is expected to begin operations around the end of March 2007. |
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• | Customer and Market Operations is responsible for sales and marketing, manufacturing and logistics, and sourcing and procurement for mobile devices from Mobile Phones, Multimedia and Enterprise Solutions. | |
• | Technology Platforms delivers leading technologies and platforms to Nokia’s business groups and external customers. | |
• | Various other Nokia-wide horizontal units drive and manage specific Nokia assets. These include Brand and Design, Developer Support, Research and Venturing, and Business Infrastructure. | |
• | Corporate Functions supports Nokia’s businesses with company-wide strategies and services. |
• | Create winning devices | |
• | Embrace consumer Internet services |
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• | Deliver enterprise solutions | |
• | Build scale in networks | |
• | Expand professional services |
• | Brand and design | |
• | Customer engagement and fulfillment | |
• | Technology and architecture |
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• | The formation in the fourth quarter of a Nokia research and development unit in San Diego, USA, dedicated to the North American market, with a specific focus on Broad Appeal products. | |
• | Announcement and first shipments of Nokia’s first Universal Mobile Access, or UMA, products, the Nokia 6136 and Nokia 6086. | |
• | The strengthening of Mobile Phones mid-range offering with the announcement and first shipments of several GSM quadband (850/900/1800/1900) models, such as the Nokia 6125, Nokia 6131 and Nokia 6133. | |
• | The strengthening of Mobile Phones WCDMA offering with the announcement and first shipments of the Nokia 6151 and Nokia 6288; the first shipments of the Nokia 6233 and Nokia 6234; and the announcement of the Nokia 6290. | |
• | Announcement of the thin and stylish Nokia 6300. |
• | The refreshment of the look and feel of the popular Nokia 8800 with the announcement and first shipments of the Nokia 8800 Sirocco Edition, featuring a sliding stainless steel case. | |
• | Announcement and first shipments of the “L’Amour II” collection of fashion-inspired mobile phones, in three different form factors and two distinct color schemes, including Nokia’s first fashion 3G phone. | |
• | The expansion of Nokia’s range of music-optimized devices with the announcement and first shipments of the Nokia 5300 XpressMusic, Nokia 5200 and Nokia 3250 XpressMusic. | |
• | A new edition to Nokia’s “active” product offering with the announcement and first shipments of the Nokia 5500 Sport, a smartphone with a sleek, sporty design and athletic lifestyle appeal. |
• | The refreshment of the popular Nokia 1100 series with the announcement and first shipments of the Nokia 1110i and Nokia 1112 black and white display models. | |
• | Announcement and first shipments of the Nokia 2310, Nokia 2610 and Nokia 2626 color display models, widening Nokia’s color screen product offering for entry users. |
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• | Vertu’s third collection, Constellation, available in 18 carat yellow gold or stainless steel, and with a variety of leather trims and bezel finishes. | |
• | The third limited edition in the Ascent Collection, celebrating the legendary racetracks of the world, and a Collectors’ limited edition box set featuring all six limited edition handsets in a specially designed carbon fiber and titanium box. | |
• | The 2006 Signature Diamond Collection, including a limited edition handset in collaboration with French jeweler Boucheron. |
• | In the third quarter, we announced the acquisitions of 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. The acquisitions, both of which were completed during the fourth quarter 2006, are intended to accelerate the development of Nokia’s music and location-based experiences for consumers. | |
• | Strong consumer demand for Nokia Nseries multimedia computers, including the Nokia N70, Nokia N72 and Nokia N73. | |
• | Shipments from the third quarter of the Nokia N93, the first Nokia device featuring optical zoom and DVD-like quality video recording. | |
• | The announcement of the Nokia N95, featuring support for high-speed mobile connectivity over HSDPA and WLAN and a Global Positioning System with the Maps application. |
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• | Shipments from the second quarter of the Nokia N91, featuring a 4GB hard disk and WLAN connectivity. | |
• | Shipments from the fourth quarter of the Nokia N92, featuring an integrated DVB-H receiver that enables broadcast TV services on a mobile device. | |
• | In the third quarter, we launched the Nokia podcasting application, which enables people to discover and download Internet-based podcasts directly to their Nokia Nseries multimedia computer. We also launched Music Recommenders, an online music community, in the fourth quarter 2006. |
• | 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 music applications and features that allow people to discover, purchase, enjoy and manage music on their Nokia Nseries devices and on 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. During 2007 we plan to expand theN-Gage multiplayer platform to various Nokia S60 based devices. | |
• | Navigation and search: We are developing search, maps and other location-based applications. |
• | Nokia Eseries first shipments – Nokia E60, Nokia E61, Nokia E70, Nokia E50 and Nokia E62 – a range of devices designed for business users and the IT organizations that support them. The |
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devices differ in terms of physical design and features, and use a single software platform that can be integrated with different applications and corporate solutions. | ||
• | In February, Nokia acquired Intellisync Corporation (“Intellisync”), which has become an integral part of the Mobility Solutions unit within Enterprise Solutions. During the year we further developed the Intellisync device management software offering, which enables operators to provide mobile device management services to enterprise customers, and allows companies to self-manage their mobile devices. | |
• | Announcement of collaboration on business telephony with Alcatel. The Intellisync Call Connect solution from Nokia integrates the Nokia Eseries devices with the Alcatel OmniPCX telephone switch. | |
• | Announcement of plans to offer Sourcefire’s Intrusion Prevention System in Nokia’s portfolio of high-performance IP Security Platforms. | |
• | The launch of a global Nokia for Business channel program to enable sales of Nokia products and solutions through complementary Value Added Reseller, or VAR, systems integrator, and distributor channels. | |
• | First shipments of new security appliances for the firewall market, the IP390 and IP560. |
• | Produces mobile devices specifically for business use that address companies’ security, manageability, cost and ease-of-use concerns. | |
• | Our product portfolio contains devices with both cellular connectivity, such as GSM and 3G/WCDMA, and non-cellular connectivity, such as WLAN. | |
• | Our mobile devices support network connectivity, personal information management and e-mail access, connectivity to IT infrastructures, device management, and security solutions. | |
• | Current products include the Nokia E50, Nokia E60, Nokia E61, Nokia E62, Nokia E65 and Nokia E70, as well as the Nokia 9300, Nokia 9300i, and the Nokia 9500 Communicator. |
• | Develops software solutions for mobile e-mail, business telephony, device management and other mobile data services. | |
• | Under the Intellisync brand name, we deliver wireless e-mail and other applications over an array of devices and application platforms across carrier networks. | |
• | We also work with external vendors such as Good (acquired by Motorola in January 2007), IBM, Microsoft, Research in Motion, Seven and Visto to make Nokia’s mobile devices compatible with their solutions. | |
• | We work with leading vendors like Avaya, Alcatel and Cisco to connect our mobile devices to corporate fixed line telephone networks, or PBXs, over cellular and WLAN technologies. |
• | Offers a broad range of application and secure connectivity offerings designed to help companies grant their employees access to corporate information, and establish secure remote connections between their corporate network, their offices and their employees’ mobile devices and computers. | |
• | Offerings consist primarily of firewall gateways and software-based tools that operate with both Nokia and non-Nokia devices, as well as with other existing IT infrastructures. |
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• | Nokia’s security appliances run software from Checkpoint Corporation and SourceFire. Nokia and Checkpoint have common distributors, integrators and Value Added Resellers, or VARs, that integrate Nokia gateways with Checkpoint software for customers. Nokia also provides end user and reseller support for these security products. |
• | Sales to corporate customers, the management of relationships with IT distributors, systems integrator and VARs, as well as specialized sales resources for selling Enterprise Solutions products to operator customers. | |
• | Management of the services business, which includes support services for corporate customers and resellers, as well as professional services to help corporate customers with more complex mobility solutions. |
• | A EUR 580 million GSM/GPRS network expansion frame agreement with China Mobile. | |
• | A contract to deploy 3G/WCDMA forT-Mobile in the United States. | |
• | Major managed services contracts: |
– | A USD 400 million network expansion and managed services contract with Bharti Airtel in India. | |
– | A USD 230 million managed services deal with Vodafone Australia. | |
– | A5-year managed services deal with Hutchison Essar Limited in India. |
• | The first public references for Nokia’s innovative Flexi WCDMA Base Station were announced with TIM Hellas Greece, Telkomsel Indonesia, Vivatel Bulgaria, Taiwan Mobile, Ukrtelecom in Ukraine, Wind Italy, Indosat Indonesia and T-Mobile USA. | |
• | The unveiling of the Nokia Flexi WiMAX Base Station and the Flexi EDGE Base Station. | |
• | Expansion of Nokia’s global footprint for HSDPA, with a cumulative total of more than 40 customers by the end of 2006. | |
• | Vodafone Group’s selection of Nokia as a preferred supplier of IP Multimedia Subsystem, or IMS, to Vodafone affiliates worldwide. | |
• | A USD 150 million contract with Canada’s TELUS to deploy a next-generation IP broadband access network. | |
• | Nokia reached the 100th mobile softswitch customer milestone following a deal with SFR France. |
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• | We introduced a renewed category model to drive product segmentation and encourage a fundamental change in the way trade customers and consumers choose and buy our devices – shifting from a product focus to an experience focus. We are now marketing our devices around four different categories – Live, Connect, Achieve and Explore – with the aim of addressing a specific set of customer needs and making it easier for consumers to choose a device aligned with their lifestyle. | |
• | We continued with our roll-out of Nokia Flagship stores to improve the consumer retail experience, opening stores in Chicago, Helsinki, Hong Kong, Mexico City and New York during 2006. | |
• | We renewed the Nokia website to ensure that our online digital presence continues to support our consumer relationship management strategy. Our website records millions of visitors annually and we believe a world-class online presence plays a key role in our customer retention efforts. |
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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 do Brazil Technologia Ltda | Brazil | 100% | 100% | |||||||
Nokia India Ltd | India | 100% | 100% | |||||||
Nokia Italia S.p.A | Italy | 100% | 100% |
Productive | ||||||
Capacity, Net | ||||||
Country | Location and Product | (m2)(1) | ||||
BRAZIL | Manaus (mobile devices) | 10 973 | ||||
CHINA | Beijing (mobile devices) | 24 108 | ||||
Dongguan (mobile devices) | 33 357 | |||||
Suzhou (base stations, cellular network transmission products) | 7 243 | |||||
Beijing (home location registers, mobile switch centers, base station controllers) | 2 118 | |||||
FINLAND | Salo (mobile devices) | 29 833 | ||||
Rusko (base stations) | 13 288 | |||||
Espoo (switching systems, base station controllers, transcoders, radio access products) | 9 744 | |||||
Limingantulli (plug-in units for both GSM and WCDMA base station product families) | 4 587 | |||||
GERMANY | Bochum (mobile devices) | 34 332 | ||||
HUNGARY | Komárom (mobile devices) | 30 985 | ||||
INDIA | Chennai (mobile devices, base station controllers) | 23 770 | ||||
MEXICO | Reynosa (mobile device batteries, mobile devices) | 23 784 | ||||
REPUBLIC OF KOREA | Masan (mobile devices) | 34 468 | ||||
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, | ||||||||||||||||||||||||
2006 | 2005 | 2004 | ||||||||||||||||||||||
Net | Operating | Net | Operating | Net | Operating | |||||||||||||||||||
Sales | Profit/(Loss) | Sales | Profit/(Loss) | Sales | Profit/(Loss) | |||||||||||||||||||
(EUR millions) | ||||||||||||||||||||||||
Mobile Phones | 24 769 | 4 100 | 20 811 | 3 598 | 18 521 | 3 786 | ||||||||||||||||||
Multimedia | 7 877 | 1 319 | 5 981 | 836 | 3 676 | 175 | ||||||||||||||||||
Enterprise Solutions | 1 031 | (258 | ) | 861 | (258 | ) | 839 | (210 | ) | |||||||||||||||
Networks | 7 453 | 808 | 6 557 | 855 | 6 431 | 884 | ||||||||||||||||||
Common Group Expenses | — | (481 | ) | — | (392 | ) | — | (309 | ) | |||||||||||||||
Eliminations | (9 | ) | — | (19 | ) | — | (96 | ) | — | |||||||||||||||
Total | 41 121 | 5 488 | 34 191 | 4 639 | 29 371 | 4 326 | ||||||||||||||||||
Year Ended December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
Europe | 38% | 42% | 42% | |||||||||
Middle East & Africa | 13% | 13% | 12% | |||||||||
China | 13% | 11% | 10% | |||||||||
Asia-Pacific | 20% | 18% | 16% | |||||||||
North America | 7% | 8% | 12% | |||||||||
Latin America | 9% | 8% | 8% | |||||||||
Total | 100% | 100% | 100% | |||||||||
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Year Ended | Year Ended | Year Ended | ||||||||||||||||||
December 31, | Change (%) | December 31, | Change (%) | December 31, | ||||||||||||||||
2006 | 2005 to 2006 | 2005 | 2004 to 2005 | 2004 | ||||||||||||||||
(Units in millions, except percentage data) | ||||||||||||||||||||
Europe | 276 | 16 | % | 238 | 20 | % | 198 | |||||||||||||
Middle East & Africa | 106 | 68 | % | 63 | 62 | % | 39 | |||||||||||||
China | 129 | 29 | % | 100 | 19 | % | 84 | |||||||||||||
Asia-Pacific | 189 | 27 | % | 149 | 18 | % | 126 | |||||||||||||
North America | 160 | 13 | % | 142 | 16 | % | 122 | |||||||||||||
Latin America | 118 | 15 | % | 103 | 39 | % | 74 | |||||||||||||
Total | 978 | 23 | % | 795 | 24 | % | 643 | |||||||||||||
Year Ended | Year Ended | Year Ended | ||||||||||||||||||
December 31, | Change (%) | December 31, | Change (%) | December 31, | ||||||||||||||||
2006 | 2005 to 2006 | 2005 | 2004 to 2005 | 2004 | ||||||||||||||||
(Units in millions, except percentage data) | ||||||||||||||||||||
Europe | 99.6 | 13 | % | 88.5 | 28 | % | 69.2 | |||||||||||||
Middle East & Africa | 53.2 | 36 | % | 39.2 | 41 | % | 27.8 | |||||||||||||
China | 51.0 | 56 | % | 32.6 | 72 | % | 18.9 | |||||||||||||
Asia-Pacific | 79.8 | 65 | % | 48.4 | 39 | % | 34.8 | |||||||||||||
North America | 25.3 | (2 | )% | 25.8 | (10 | )% | 28.8 | |||||||||||||
Latin America | 38.6 | 27 | % | 30.4 | 8 | % | 28.2 | |||||||||||||
Total | 347.5 | 31 | % | 264.9 | 28 | % | 207.7 | |||||||||||||
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Year Ended | Year Ended | Year Ended | ||||||||||||||||||
December 31, | Change (%) | December 31, | Change (%) | December 31, | ||||||||||||||||
2006 | 2005 to 2006 | 2005 | 2004 to 2005 | 2004 | ||||||||||||||||
(EUR billions, except percentage data) | ||||||||||||||||||||
Europe | 14.0 | 1 | % | 13.9 | 9 | % | 12.8 | |||||||||||||
Middle East & Africa | 5.8 | 28 | % | 4.5 | 15 | % | 3.9 | |||||||||||||
China | 5.9 | 1 | % | 5.8 | (9 | )% | 6.3 | |||||||||||||
Asia-Pacific | 13.1 | 32 | % | 9.9 | 20 | % | 8.2 | |||||||||||||
North America | 10.1 | (8 | )% | 10.9 | 11 | % | 9.9 | |||||||||||||
Latin America | 3.8 | (11 | )% | 4.3 | 21 | % | 3.5 | |||||||||||||
Total | 52.7 | 7 | % | 49.3 | 10 | % | 44.6 | |||||||||||||
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Year ended | Year Ended | Year Ended | ||||||||||||||||||
December 31, | Change (%) | December 31, | Change (%) | December 31, | ||||||||||||||||
2006 | 2005 to 2006 | 2005 | 2004 to 2005 | 2004 | ||||||||||||||||
(EUR millions, except percentage data) | ||||||||||||||||||||
Europe | 2 707 | (4 | )% | 2 813 | 1 | % | 2 774 | |||||||||||||
Middle East & Africa | 546 | 99 | % | 274 | (13 | )% | 316 | |||||||||||||
China | 885 | 27 | % | 695 | (20 | )% | 872 | |||||||||||||
Asia-Pacific | 1 758 | 47 | % | 1 197 | 27 | % | 942 | |||||||||||||
North America | 758 | (7 | )% | 816 | (19 | )% | 1 008 | |||||||||||||
Latin America | 799 | 5 | % | 762 | 47 | % | 520 | |||||||||||||
Total | 7 453 | 14 | % | 6 557 | 2 | % | 6 432 | |||||||||||||
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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/ | ||||||||||||||||
2006 | Net Sales | 2005 | Net Sales | (Decrease) | ||||||||||||||||
(EUR millions, except percentage data) | ||||||||||||||||||||
Net sales | 41 121 | 100 | % | 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 loss | (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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Year Ended | Year Ended | Percentage | ||||||||||||||||||
December 31, | Percentage of | December 31, | Percentage of | Increase/ | ||||||||||||||||
2005 | Net Sales | 2004 | Net Sales | (Decrease) | ||||||||||||||||
(EUR millions, except percentage data) | ||||||||||||||||||||
Net sales | 34 191 | 100.0 | % | 29 371 | 100.0 | % | 16 | % | ||||||||||||
Cost of sales | (22 209 | ) | (65.0 | )% | (18 179 | ) | (61.9 | )% | 22 | % | ||||||||||
Gross profit | 11 982 | 35.0 | % | 11 192 | 38.1 | % | 7 | % | ||||||||||||
Research and development expenses | (3 825 | ) | (11.2 | )% | (3 776 | ) | (12.9 | )% | 1 | % | ||||||||||
Selling and marketing expenses | (2 961 | ) | (8.7 | )% | (2 564 | ) | (8.7 | )% | 15 | % | ||||||||||
Administrative and general expenses | (609 | ) | (1.8 | )% | (611 | ) | (2.1 | )% | — | |||||||||||
Other operating income and expenses | 52 | 0.2 | % | 181 | 0.6 | % | (71 | )% | ||||||||||||
Amortization of goodwill | — | — | (96 | ) | (0.3 | )% | (100 | )% | ||||||||||||
Operating profit | 4 639 | 13.6 | % | 4 326 | 14.7 | % | 7 | % | ||||||||||||
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Year Ended | Year Ended | Percentage | ||||||||||||||||||
December 31, | Percentage of | December 31, | Percentage of | Increase/ | ||||||||||||||||
2005 | Net Sales | 2004 | Net Sales | (Decrease) | ||||||||||||||||
(EUR millions, except percentage data) | ||||||||||||||||||||
Net sales | 20 811 | 100 | % | 18 521 | 100.0 | % | 12 | % | ||||||||||||
Cost of sales | (14 331 | ) | (68.9 | )% | (12 045 | ) | (65.0 | )% | 19 | % | ||||||||||
Gross profit | 6 480 | 31.1 | % | 6 476 | 35.0 | % | — | |||||||||||||
Research and development expenses | (1 245 | ) | (6.0 | )% | (1 196 | ) | (6.5 | )% | 4 | % | ||||||||||
Selling and marketing expenses | (1 541 | ) | (7.4 | )% | (1 300 | ) | (7.0 | )% | 19 | % | ||||||||||
Administrative and general expenses | (68 | ) | (0.3 | )% | (96 | ) | (0.5 | )% | (29 | )% | ||||||||||
Other operating income and expenses | (28 | ) | (0.1 | )% | (21 | ) | (0.1 | )% | 33 | % | ||||||||||
Amortization of goodwill | — | — | (77 | ) | (0.4 | )% | (100 | )% | ||||||||||||
Operating profit | 3 598 | 17.3 | % | 3 786 | 20.4 | % | (5 | )% | ||||||||||||
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Year Ended | Year Ended | Percentage | ||||||||||||||||||
December 31, | Percentage of | December 31, | Percentage of | Increase/ | ||||||||||||||||
2005 | Net Sales | 2004 | Net Sales | (Decrease) | ||||||||||||||||
(EUR millions, except percentage data) | ||||||||||||||||||||
Net sales | 5 981 | 100 | % | 3676 | 100.0 | % | 63 | % | ||||||||||||
Cost of sales | (3 492 | ) | (58.4 | )% | (2 118 | ) | (57.6 | )% | 65 | % | ||||||||||
Gross profit | 2 489 | 41.6 | % | 1558 | 42.4 | % | 60 | % | ||||||||||||
Research and development expenses | (860 | ) | (14.4 | )% | (863 | ) | (23.5 | )% | — | |||||||||||
Selling and marketing expenses | (705 | ) | (11.8 | )% | (488 | ) | (13.2 | )% | 44 | % | ||||||||||
Administrative and general expenses | (38 | ) | (0.6 | )% | (36 | ) | (1.0 | )% | 6 | % | ||||||||||
Other operating income and expenses | (50 | ) | (0.8 | )% | 16 | 0.4 | % | — | ||||||||||||
Amortization of goodwill | — | — | (12 | ) | (0.3 | )% | — | |||||||||||||
Operating profit | 836 | 14.0 | % | 175 | 4.8 | % | 378 | % | ||||||||||||
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Year Ended | Year Ended | Percentage | ||||||||||||||||||
December 31, | Percentage of | December 31, | Percentage of | Increase/ | ||||||||||||||||
2005 | Net Sales | 2004 | Net Sales | (Decrease) | ||||||||||||||||
(EUR millions, except percentage data) | ||||||||||||||||||||
Net sales | 861 | 100.0 | % | 839 | 100.0 | % | 3 | % | ||||||||||||
Cost of sales | (459 | ) | (53.3 | )% | (475 | ) | (56.6 | )% | (3 | )% | ||||||||||
Gross profit | 402 | 46.7 | % | 364 | 43.4 | % | 10 | % | ||||||||||||
Research and development expenses | (329 | ) | (38.2 | )% | (304 | ) | (36.2 | )% | 8 | % | ||||||||||
Selling and marketing expenses | (221 | ) | (25.7 | )% | (199 | ) | (23.7 | )% | 11 | % | ||||||||||
Administrative and general expenses | (74 | ) | (8.6 | )% | (61 | ) | (7.3 | )% | 21 | % | ||||||||||
Other operating income and expenses | (36 | ) | (4.2 | )% | (4 | ) | (0.5 | )% | — | |||||||||||
Amortization of goodwill | — | — | (6 | ) | (0.7 | )% | 100 | % | ||||||||||||
Operating loss | (258 | ) | (30.0 | )% | (210 | ) | (25.0 | )% | 23 | % | ||||||||||
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Year Ended | Year Ended | Percentage | ||||||||||||||||||
December 31, | Percentage of | December 31, | Percentage of | Increase/ | ||||||||||||||||
2005 | Net Sales | 2004 | Net Sales | (Decrease) | ||||||||||||||||
(EUR millions, except percentage data) | ||||||||||||||||||||
Net sales | 6 557 | 100.0 | % | 6 431 | 100.0 | % | 2 | % | ||||||||||||
Cost of Sales | (3 967 | ) | (60.5 | )% | (3 688 | ) | (57.3 | )% | 8 | % | ||||||||||
Gross profit | 2 590 | 39.5 | % | 2 743 | 42.7 | % | (6 | )% | ||||||||||||
Research and development expenses | (1 170 | ) | (17.8 | )% | (1 194 | ) | (18.6 | )% | (2 | )% | ||||||||||
Selling and marketing expenses | (475 | ) | (7.3 | )% | (503 | ) | (7.8 | )% | 6 | % | ||||||||||
Administrative and general expenses | (211 | ) | (3.2 | )% | (210 | ) | (3.3 | )% | — | |||||||||||
Other income and expenses | 121 | 1.8 | % | 48 | 0.7 | % | 152 | % | ||||||||||||
Amortization of goodwill | — | — | — | — | — | |||||||||||||||
Operating profit | 855 | 13.0 | % | 884 | 13.7 | % | (3 | )% | ||||||||||||
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Short-term | Standard & Poor’s | A-1 | ||
Moody’s | P-1 | |||
Long-term | Standard & Poor’s | A | ||
Moody’s | A1 |
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At December 31, | ||||||||||||
2006 | 2005 | 2004 | ||||||||||
(EUR millions) | ||||||||||||
Financing commitments | 164 | 13 | 56 | |||||||||
Outstanding long-term loans (net of allowances and write-offs) | 19 | 63 | — | |||||||||
Outstanding financial guarantees and securities pledged | 23 | — | 3 | |||||||||
Total | 206 | 63 | 59 | |||||||||
2007 | 2008-2009 | 2010-2011 | Thereafter | Total | ||||||||||||||||
(EUR millions) | ||||||||||||||||||||
Guarantees of Nokia’s performance | 175 | 45 | 30 | 9 | 259 | |||||||||||||||
Financial guarantees and securities pledged on behalf of third parties | — | 4 | — | 19 | 23 | |||||||||||||||
Total | 175 | 49 | 30 | 28 | 282 | |||||||||||||||
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2007 | 2008-2009 | 2010-2011 | Thereafter | Total | ||||||||||||||||
(EUR millions) | ||||||||||||||||||||
Long-term liabilities | — | — | — | 192 | 192 | |||||||||||||||
Operating leases | 214 | 269 | 111 | 71 | 665 | |||||||||||||||
Inventory purchases | 1 630 | — | — | — | 1 630 | |||||||||||||||
Total | 1 844 | 269 | 111 | 263 | 2 487 | |||||||||||||||
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 Corporation 1999-2006, President and CEO, Chairman of the Group Executive Board of Nokia Corporation 1992-1999, President of Nokia Mobile Phones 1990-1992, Senior Vice President, Finance of Nokia 1986-1989. Holder of |
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various managerial positions at Citibank within corporate banking 1978-1985. | ||
Member of the Board of Directors of Ford Motor Company, Vice Chairman of the Board of Directors of UPM-Kymmene Corporation, Vice Chairman of the Board of Directors of Otava Books and Magazines Group Ltd. Chairman of the Boards of Directors and the Supervisory Boards of Finnish Business and Policy Forum EVA and The Research Institute of the Finnish Economy ETLA. Chairman of The European Round Table of Industrialists. | ||
Vice Chairman Paul J. Collins, b. 1936 | Board member since 1998. Vice Chairman since 2000. | |
B.B.A. (University of Wisconsin), M.B.A. (Harvard Business School). | ||
Vice Chairman of Citigroup Inc. 1998-2000, Vice Chairman and member of the Board of Directors of Citicorp and Citibank N.A. 1988-2000. Holder of various executive positions at Citibank within investment management, investment banking, corporate planning as well as finance and administration 1961-1988. | ||
Member of the Board of Directors of BG Group and The Enstar Group, Inc. Member of the Supervisory Board of Actis Capital LLP. | ||
Georg Ehrnrooth, b. 1940 | Board member since 2000. | |
Master of Science (Eng.) (Helsinki University of Technology). | ||
President and CEO of Metra Corporation 1991-2000, President and CEO of Lohja Corporation 1979-1991. Holder of various executive positions at Wärtsilä Corporation within production and management 1965-1979. | ||
Chairman of the Board of Directors of Sampo Plc. Vice Chairman of the Board of Directors of Rautaruukki Corporation, 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. | ||
Daniel R. Hesse, b. 1953 | Chairman and Chief Executive Officer of EMBARQ Corporation. Board member since 2005. | |
B.A. (University of Notre Dame), M.B.A. (Cornell University), M.S. (Massachusetts Institute of Technology). | ||
CEO of Sprint Communication, Local Telecommunications Division 2005-2006, Chairman, President and CEO of Terabeam 2000-2004, President and CEO of AT&T Wireless Services 1997-2000, Executive Vice President of AT&T 1997-2000. Various managerial positions in AT&T 1977-1997. | ||
Member of the Board of Directors of VF Corporation. Member of the National Board of Governors of the Boys & Girls Clubs of America. |
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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 University 1985-1994. 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. | ||
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. | ||
Board member of IKANO Holdings S.A. | ||
Dame Marjorie Scardino, b. 1947 | Chief Executive and member of the Board of Directors of Pearson plc. Board member since 2001. | |
B.A. (Baylor), J.D. (University of San Francisco). | ||
Chief Executive of The Economist Group 1993-1997, President of the North American Operations of The Economist Group 1985-1993, lawyer 1976-1985 and publisher ofThe Georgia Gazettenewspaper 1978-1985. | ||
Keijo Suila, b. 1945 | Board member since March 30, 2006. | |
B.Sc. (Economics and Business Administration) (Helsinki University of Economics and Business Administration). | ||
President and CEO of Finnair Oyj 1999-2005. Holder of various executive positions, including Vice Chairman and Executive Vice President, at Huhtamäki Oyj, Leaf Group and Leaf Europe during 1985-1998. Chairman of oneworld airline alliance 2003-2004 and member of various international aviation and air transportation associations 1999-2005. | ||
Vice Chairman of the Board of Directors of Kesko Corporation, and Vice Chairman of the Supervisory Board of the Finnish Fair Corporation. | ||
Vesa Vainio, b. 1942 | Board member since 1993. | |
LL.M. (University of Helsinki). | ||
Chairman 1998-1999 and 2000-2002 and Vice Chairman 1999-2000 of the Board of Directors of Nordea AB (publ). Chairman of the Executive Board and CEO of Merita Bank Ltd and CEO of Merita Ltd 1992-1997. President of Kymmene |
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Corporation 1991-1992. Holder of various other executive positions in Finnish industry 1972-1991. | ||
Chairman of the Board of Directors of UPM-Kymmene Corporation. |
Chairman Olli-Pekka Kallasvuo, b. 1953 | President and CEO of Nokia Corporation. Group Executive Board member since 1990. Group Executive Board Chairman since 2006. With Nokia 1980-81, rejoined 1982. | |
LL.M. (University of Helsinki). | ||
President and COO of Nokia Corporation 2005-2006, Executive Vice President and General Manager of Mobile Phones 2004-2005, Executive Vice President, CFO of Nokia 1999-2003, Executive Vice President of Nokia Americas and President of |
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Nokia Inc. 1997-1998, Executive Vice President, CFO of Nokia 1992-1996, Senior Vice President, Finance of Nokia1990-1991. | ||
Member of the Board of Directors of EMC Corporation. | ||
Robert Andersson, b. 1960 | Executive Vice President of Customer and Market Operations. 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). | ||
Senior Vice President of Customer and Market Operations, Europe, Middle East and Africa 2004-2005, Senior Vice President of Nokia Mobile Phones in Asia-Pacific 2001-2004, Vice President of Sales for Nokia Mobile Phones in Europe and Africa 1998-2001. | ||
Simon Beresford-Wylie, b. 1958 | Executive Vice President and General Manager of Networks. Group Executive Board member since 2005. Joined Nokia 1998. | |
Bachelor of Arts (Economic Geography and History) (Australian National University). | ||
Senior Vice President of Nokia Networks, Asia-Pacific 2003-2004, Senior Vice President, Customer Operations of Nokia Networks, 2002- 2003, Vice President, Customer Operations of Nokia Networks 2000-2002, Managing Director of Nokia Networks in India and Area General Manager, South Asia 1999-2000, Regional Director of Business Development, Project and Trade Finance of Nokia Networks, Asia-Pacific 1998-1999, Chief Executive Officer of Modi Telstra, India 1995-1998, General Manager, Banking and Finance, Corporate and Government business unit of Telstra Corporation 1993-1995, holder of executive positions in the Corporate and Government business units of Telstra Corporation 1989-1993, holder of executive, managerial and clerical positions in the Australian Commonwealth Public Service 1982-1989. | ||
Member of the Board of Directors of the Vitec Group. | ||
Mary T. McDowell, b. 1964 | Executive Vice President and General Manager of Enterprise Solutions. Group Executive Board member since 2004. Joined Nokia 2004. | |
Bachelor of Science (Computer Science) (College of Engineering at the University of Illinois). | ||
Senior Vice President, Strategy and Corporate Development of Hewlett-Packard Company 2003, Senior Vice President & General Manager, Industry-Standard Servers of Hewlett-Packard Company 2002-2003, Senior Vice President & General Manager, Industry-Standard Servers of Compaq Computer Corporation 1998-2002, Vice President, Marketing, Server |
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Products Division of Compaq Computer Corporation 1996-1998. Holder of executive, managerial and other positions at Compaq Computer Corporation 1986-1996. | ||
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 Corporation 1977-1999. | ||
Member of the Board of Advisors of Center for HR Strategy, Rutgers University. | ||
Dr. Tero Ojanperä, b. 1966 | Executive Vice President, Chief Technology Officer. 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 Strategy Officer 2005-2006, Senior Vice President, Head of Nokia Research Center 2002-2004. Vice President, Research, Standardization and Technology of IP Mobility Networks, Nokia Networks 1999-2001. Vice President, Radio Access Systems Research and General Manager of Nokia Networks in Korea, 1999. Head of Radio Access Systems Research, Nokia Networks 1998-1999, Principal Engineer, Nokia Research Center, 1997-1998. | ||
Chairman of Nokia Foundation. A member of Young Global Leader. | ||
Niklas Savander, b. 1962 | Executive Vice President, Technology Platforms. Group Executive Board Member 2006. Joined Nokia 1997. | |
Master of Science (Eng.) (Helsinki University of Technology), Master of Science (Economics and Business Administration) (Swedish School of Economics and Business Administration, Helsinki). | ||
Senior Vice President and General Manager of Nokia Enterprise Solutions, Mobile Devices Business Unit 2003-2006, Senior Vice President, Nokia Mobile Software, Market Operations 2002-2003, Vice President, Nokia Mobile Software, Strategy, Marketing & Sales 2001-2002, Vice President and General Manager of Nokia Networks, Mobile Internet Applications 2000-2001, Vice President of Nokia Network Systems, Marketing 1997-1998. Holder of executive and managerial positions at Hewlett-Packard Company 1987-1997. | ||
Member 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. |
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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 Corporation 2001-2003, 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 Electronic Arts, Inc. Member of the Board of Trustees of International House —New York. | ||
Veli Sundbäck, b. 1946 | Executive Vice President, Corporate Relations and Responsibility of Nokia Corporation. Group Executive Board member since 1996. Joined Nokia 1996. | |
LL.M. (University of Helsinki). | ||
Executive Vice President, Corporate Relations and Trade Policy of Nokia Corporation 1996-. Secretary of State at the Ministry for Foreign Affairs 1993-1995, Under-Secretary of State for External Economic Relations at the Ministry for Foreign Affairs 1990-1993. | ||
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. | ||
Anssi Vanjoki, b. 1956 | Executive Vice President and General Manager of Multimedia. Group Executive Board member since 1998. Joined Nokia 1991. | |
Master of Science (Econ.) (Helsinki School of Economics and Business Administration). | ||
Executive Vice President of Nokia Mobile Phones 1998-2003, Senior Vice President, Europe & Africa of Nokia Mobile Phones 1994-1998, Vice President, Sales of Nokia Mobile Phones 1991-1994, 3M Corporation 1980-1991. | ||
Chairman of the Board of Directors of Amer Group Plc. | ||
Dr. Kai Öistämö, b. 1964 | Executive Vice President and General Manager of Mobile Phones. Group Executive Board Member since 2005. Joined Nokia in 1991. | |
Doctor of Technology (Signal Processing), Master of Science (Engineering) (Tampere University of Technology). | ||
Senior Vice President, Business Line Management, Mobile Phones 2004-2005; Senior Vice President, Mobile Phones Business Unit, Nokia Mobile Phones 2002-2003; Vice |
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President, TDMA/GSM 1900 Product Line, Nokia Mobile Phones 1999-2002; Vice President, TDMA Product Line 1997-1999; Holder of technical and managerial positions in Nokia Consumer Electronics and Nokia Mobile Phones, 1991-1997. |
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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Change in | ||||||||||||||||||||||||||||||||
Pension Value | ||||||||||||||||||||||||||||||||
Fees | Non-Equity | and Nonqualified | ||||||||||||||||||||||||||||||
Earned or | Incentive | Deferred | ||||||||||||||||||||||||||||||
Paid in | Stock | Plan | Compensation | All Other | ||||||||||||||||||||||||||||
Cash | Awards | Options Awards | Compensation | Earnings | Compensation | Total | ||||||||||||||||||||||||||
Year | (EUR)(1) | (EUR)(2) | (EUR)(2) | EUR(2) | (EUR)(2) | (EUR)(2) | (EUR) | |||||||||||||||||||||||||
Chairman, Jorma Ollila(3) | 2006 | 375 000 | – | – | – | – | – | 375 000 | ||||||||||||||||||||||||
Paul J. Collins(4) | 2006 | 162 500 | – | – | – | – | – | 162 500 | ||||||||||||||||||||||||
Georg Ehrnrooth(5) | 2006 | 120 000 | – | – | – | – | – | 120 000 | ||||||||||||||||||||||||
Daniel R. Hesse | 2006 | 110 000 | – | – | – | – | – | 110 000 | ||||||||||||||||||||||||
Bengt Holmström | 2006 | 110 000 | – | – | – | – | – | 110 000 | ||||||||||||||||||||||||
Per Karlsson(6) | 2006 | 135 000 | – | – | – | – | – | 135 000 | ||||||||||||||||||||||||
Marjorie Scardino | 2006 | 110 000 | – | – | – | – | – | 110 000 | ||||||||||||||||||||||||
Keijo Suila(7) | 2006 | 120 000 | – | – | – | – | – | 120 000 | ||||||||||||||||||||||||
Vesa Vainio(8) | 2006 | 120 000 | – | – | – | – | – | 120 000 | ||||||||||||||||||||||||
(9) |
(1) | Approximately 60% of each Board member’s annual remuneration is paid in cash and the balance in Nokia shares acquired from the market. |
(2) | Not applicable to any non-executive member of the Board of Directors. |
(3) | This table includes fees paid for Mr. Ollila, Chairman, for his services as Chairman of the Board. For compensation paid in his role as CEO until June 1, 2006, please refer to Summary Compensation Table on page 90. |
(4) | The 2006 fee of Mr. Collins amounted to a total of EUR 162 500, consisting of a fee of EUR 137 500 for services as Vice Chairman of the Board and EUR 25 000 for services as Chairman of the Personnel Committee. |
(5) | The 2006 fee of Mr. Ehrnrooth 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. |
(6) | The 2006 fee 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. |
(7) | 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. |
(8) | The 2006 fee 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. |
(9) | Edouard Michelin, who was elected as a member of the Board in the Annual General meeting on March 30, 2006, was paid the annual fee of EUR 110 000 prior to his accidental death in May 2006. |
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• | provide competitive base pay rates, | |
• | provide a total compensation that is competitive with the relevant market, | |
• | attract and retain outstanding executive talent, | |
• | deliver significant variable cash compensation for the achievement of stretch goals, 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 benchmark 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. |
• | Base salariestargeted at globally competitive market levels. | |
• | Short-term cash incentivestied directly to performance and representing a significant portion of an executive officer’s total annual cash compensation. Theshort-term cash incentiveopportunity is expressed as a percentage of the executive officer’s annual base salary. These award opportunities and measurement criteria are presented in the table below. The incentive payout formula is determined by two main factors: (a) a comparison of Nokia’s actual performance to pre-established targets for net sales, operating profit and operating cash flow and (b) a comparison of each executive officer’s individual performance to his/her predefined targets. Certain executive officers may also have objectives related to market share, quality, technology innovation, new product revenue, or other objectives of key strategic importance which require a discretionary assessment of performance by the Personnel Committee of the Board. The target setting as well as the weighting of each measure also require the Personnel Committee’s approval. The final incentive payout is determined by multiplying each executive’s eligible salary by: (1) his/her incentive target percent; and (2) the results of above mentioned factors (a) and (b). The Personnel Committee of the Board may also apply discretion when evaluating actual results against targets and the resulting incentive payouts. In certain exceptional situations, the actual short-term cash incentive awarded to the executive officer could be zero. The maximum payout is only possible with maximum performance on all measures. |
A portion of the short-term cash incentives is paid twice each year based on the performance for each of Nokia’s short-term plans that end on June 30 and December 31 of each year. Another portion is paid annually at the end of the year, based on the Personnel Committee’s assessment of Nokia’s total shareholder return compared to key competitors in the high technology and telecommunications industries and relevant market indices over one-, three- and five-year periods. In the case of the President and CEO, the annual incentive award is also partly based on his performance compared against strategic leadership objectives. |
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Minimum | Target | Maximum | ||||||||||||
Position | Performance | Performance | Performance | Measurement Criteria | ||||||||||
President and CEO(1) | 0 | % | 100 | % | 225 | % | Financial Objectives (includes targets for net sales, operating profit and operating cash flow measures) | |||||||
0 | % | 25 | % | 37.50 | % | Total Shareholder Return (comparison made with key competitors in the high technology and telecommunications industries over one, three and five year periods) | ||||||||
0 | % | 25 | % | 37.50 | % | Strategic Objectives | ||||||||
Total | 0 | % | 150 | % | 300 | % | ||||||||
Group Executive Board | 0 | % | 75 | % | 168.75 | % | Financial & Strategic Objectives | |||||||
0 | % | 25 | % | 37.50 | % | Total Shareholder Return(2) | ||||||||
Total | 0 | % | 100 | % | 206.25 | % |
(1) | Olli-Pekka Kallasvuo’s discretionary annual incentive of 100% tied to financial objectives and 25% tied to total shareholder return covered his position as President and COO until May 31, 2006 and his position as President and CEO from June 1, 2006 onwards. The additional incentive of 25% tied to strategic objectives became effective as of June 1, 2006, and is, therefore, prorated for seven months. |
(2) | Only some of the Group Executive Board members are eligible for the additional 25% total shareholder return element. |
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Number of | ||||||||||||
Members | Cash | |||||||||||
December 31, | Incentive | |||||||||||
Year | 2006 | Base Salaries(3) | Payments(1)(2) | |||||||||
EUR | EUR | |||||||||||
2006 | 11 | 5 273 684 | 3 300 759 |
(1) | Includes payments pursuant to cash incentive arrangements for the 2006 calendar 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 pay and bonuses to Pertti Korhonen for the period until March 31, 2006, to Jorma Ollila until May 31, 2006 (including his compensation as CEO only) and to Niklas Savander as from April 1, 2006. |
Total Number | ||||||||||||
Group Executive Board(3) | Total | of Participants | ||||||||||
Performance Shares at Threshold(2) | 380 000 | 5 140 736 | 13 500 | |||||||||
Stock Options | 1 520 000 | 11 421 939 | 5 200 | |||||||||
Restricted Shares | 405 000 | 1 669 050 | 250 |
(1) | The equity-based incentive grants are generally forfeited if the employment relationship terminates with Nokia. 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 23 to our consolidated financial statements included in Item 18 of this annual report on Form 20-F. |
(2) | At maximum performance, the settlement amounts to four times the number of performance shares originally granted at threshold. |
(3) | Including Pertti Korhonen until March 31, 2006, Jorma Ollila until May 31, 2006 and Niklas Savander from April 1, 2006. |
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Change in | |||||||||||||||||||||||||||||||||||||
Pension Value | |||||||||||||||||||||||||||||||||||||
and Nonqualified | |||||||||||||||||||||||||||||||||||||
Name and | Non-Equity | Deferred | |||||||||||||||||||||||||||||||||||
Principal | Stock | Option | Incentive Plan | Compensation | All Other | ||||||||||||||||||||||||||||||||
Position | Year** | Salary | Bonus(1) | Awards(2) | Awards(2) | Compensation | Earnings | Compensation | Total | ||||||||||||||||||||||||||||
EUR | EUR | EUR | EUR | EUR | EUR | EUR | EUR | ||||||||||||||||||||||||||||||
Jorma Ollila | 2006 | 609 524 | 643 942 | 5 105 118 | 1 220 610 | * | (3) | 662 764 | (5) | 8 241 955 | |||||||||||||||||||||||||||
Chairman of the Board | 2005 | 1 500 000 | 3 212 037 | (4) | |||||||||||||||||||||||||||||||||
and former CEO (CEO | 2004 | 1 475 238 | 1 936 221 | ||||||||||||||||||||||||||||||||||
until June 1) | |||||||||||||||||||||||||||||||||||||
Olli-Pekka Kallasvuo | 2006 | 898 413 | 664 227 | 1 529 732 | 578 465 | * | 1 496 883 | (3)(6) | 38 960 | (7) | 5 206 680 | ||||||||||||||||||||||||||
President and CEO | 2005 | 623 524 | 947 742 | ||||||||||||||||||||||||||||||||||
(President and COO until June 1) | 2004 | 584 000 | 454 150 | ||||||||||||||||||||||||||||||||||
Richard Simonson | 2006 | (8) | 460 070 | 292 673 | 958 993 | 194 119 | * | 84 652 | (9) | 1 990 507 | |||||||||||||||||||||||||||
EVP and Chief Financial Officer | 2005 | 461 526 | 634 516 | ||||||||||||||||||||||||||||||||||
Anssi Vanjoki | 2006 | 505 343 | 353 674 | 938 582 | 222 213 | * | 215 143 | (3) | 29 394 | (10) | 2 264 349 | ||||||||||||||||||||||||||
EVP and General Manager, | |||||||||||||||||||||||||||||||||||||
Multimedia | 2005 | 476 000 | 718 896 | ||||||||||||||||||||||||||||||||||
Mary McDowell | 2006 | (8) | 466 676 | 249 625 | 786 783 | 213 412 | * | 45 806 | (11) | 1 762 302 | |||||||||||||||||||||||||||
EVP and General Manager, | |||||||||||||||||||||||||||||||||||||
Enterprise Solutions | |||||||||||||||||||||||||||||||||||||
Hallstein Moerk | 2006 | (8) | 390 854 | 205 516 | 652 530 | 123 802 | * | (12) | 269 902 | (13) | 1 642 603 | ||||||||||||||||||||||||||
EVP and Head of Human | |||||||||||||||||||||||||||||||||||||
Resources |
(1) | 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. |
(2) | Amounts shown represent share based compensation expense recognized in 2006 for all outstanding equity grants in accordance IFRS 2, Share-based payment. |
(3) | The change in pension value represents the proportionate change in the company’s liability related to the individual executive. These executives participate in the Finnish TEL pension system that provides for a retirement benefit based on years of service and earnings according to the prescribed statutory system. The TEL 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 December 31, 2005. Actuarial assumptions including salary increases and inflation have been determined to arrive at the valuation at the year end 2006. |
(4) | Nokia’s liability of EUR 676 117 for Mr. Ollila’s disability benefit under the Finnish TEL pension (see footnote 3 above) was cancelled upon end of his employment effective on June 1, 2006. Furthermore, Nokia’s liability of EUR 4 787 000 for Mr. Ollila’s early retirement benefit at the age of 60 provided under his service agreement was also cancelled as of June 1, 2006. These resulted in a decrease of Nokia’s total liability of EUR 5 463 117. |
(5) | All other compensation for Mr. Ollila includes: EUR 375 000 for his services as Chairman of the Board or Directors, also disclosed in the Remuneration of the Board of Directors table on page 85; a payout of EUR 166 666 for unused vacation days upon end of employment; service awards in the amount of EUR 119 048 and EUR 2 050 for driver and mobile phone. |
(6) | The change in pension value for Mr. Kallasvuo includes EUR 194 883 for the proportionate change in the company’s liability related to the individual under the funded part of the Finnish TEL pension (see footnote 3 above). In addition, it includes EUR 1 302 000 for the change in liability in the early retirement benefit at the age of 60 provided under his service contract. |
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(7) | All other compensation for Mr. Kallasvuo includes: EUR 21 240 for car allowance, EUR 10 000 for financial counseling, EUR 4 680 for driver and EUR 3 040 for mobile phone and club membership. |
(8) | Salaries, benefits and perquisites of Mr. Simonson, Mr. Moerk and Ms. McDowell are paid and denominated in USD. Amounts were converted to EUR using year-end 2006 USD/EUR exchange rate of 1.31. |
(9) | All other compensation for Mr. Simonson includes: EUR 13 282 company contributions to the 401(k) plan, EUR 23 419 company contributions to the Restoration and Deferral Plan, EUR 21 519 provided as benefit under Nokia’s relocation policy, EUR 12 977 for car allowance and EUR 13 454 for financial counseling. |
(10) | All other compensation for Mr. Vanjoki includes: EUR 19 154 for car allowance; EUR 10 000 for financial counseling and the remainder for mobile phone. |
(11) | All other compensation for Ms. McDowell includes: EUR 13 282 company contributions to the 401(k) plan, EUR 13 105 company contributions to the Restoration and Deferral Plan, EUR 2 688 provided as benefit under Nokia’s relocation policy, EUR 12 977 for car allowance and EUR 3 753 for financial counseling. |
(12)�� | The change in pension value for Mr. Moerk was reduced by EUR 80 000. This represents the change in Nokia’s liability in the retirement benefit at age of 62 provided under his service contract. |
(13) | All other compensation for Mr. Moerk includes: EUR 245 434 provided as a benefit under Nokia’s expatriate policy and EUR 24 468 for car allowance, financial counseling and Employee Stock Purchase Plan benefit. |
* | None of the named executive officers participated in a formulated, non-discretionary, incentive plan. Annual incentive payments are included under the “Bonus” column. |
** | History has been provided for those data elements previously disclosed. |
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) | |||||||||||||||||||||||||||
Jorma Ollila Chairman of the Board and former CEO (CEO until June 1) | 2006 | May 5 | 400 000 | 18.02 | 1 349 229 | 100 000 | 400 000 | 100 000 | 4 666 937 | |||||||||||||||||||||||||||
Olli-Pekka Kallasvuo President and CEO (President and COO until June 1) | 2006 | May 5 | 300 000 | 18.02 | 1 011 922 | 75 000 | 300 000 | 100 000 | 3 668 604 | |||||||||||||||||||||||||||
Richard Simonson EVP and Chief Financial Officer | 2006 | May 5 | 100 000 | 18.02 | 337 307 | 25 000 | 100 000 | 25 000 | 1 102 125 | |||||||||||||||||||||||||||
Anssi Vanjoki EVP and General Manager, Multimedia | 2006 | May 5 | 100 000 | 18.02 | 337 307 | 25 000 | 100 000 | 25 000 | 1 102 125 | |||||||||||||||||||||||||||
Mary McDowell EVP and General Manager, Enterprise Solutions | 2006 | May 5 | 100 000 | 18.02 | 337 307 | 25 000 | 100 000 | 25 000 | 1 102 125 | |||||||||||||||||||||||||||
Hallstein Moerk EVP and Head of Human Resources | 2006 | May 5 | 60 000 | 18.02 | 202 384 | 15 000 | 60 000 | 15 000 | 661 275 |
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(1) | Including all grants made during 2006. Stock option grants were made under the Nokia Stock Option Plan 2005, performance share grants under the Nokia Performance Share Plan 2006 and restricted share grants under the Nokia Restricted Share Plan 2006. |
(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 18.02. The Helsinki Stock Exchange closing market price at grant date was EUR 17.97. |
(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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(1) | Average Annual Net Sales Growth: performance period2007-2009, and |
(2) | Reported, basic EPS:2009. |
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Maximum Number of Planned Grants under | ||||
Plan type | the 2007 Equity Program in 2007 | |||
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 originally granted (at threshold), i.e. a total of 12 million Nokia shares. |
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2006 | 2005 | 2004 | ||||||||||
Mobile Phones | 3 639 | 2 647 | 2 853 | |||||||||
Multimedia | 3 058 | 2 750 | 2 851 | |||||||||
Enterprise Solutions | 2 264 | 2 185 | 2 167 | |||||||||
Networks | 20 277 | 17 676 | 15 463 | |||||||||
Customer and Market Operations | 23 323 | 18 642 | 17 095 | |||||||||
Technology Platforms | 5 874 | 6 629 | 6 351 | |||||||||
Common Group Functions | 6 889 | 6 367 | 6 731 | |||||||||
Nokia Group | 65 324 | 56 896 | 53 511 | |||||||||
Finland | 24 091 | 23 628 | 22 922 | |||||||||
Other European countries | 14 490 | 13 051 | 12 215 | |||||||||
Middle-East & Africa | 724 | 250 | 118 | |||||||||
China | 6 893 | 5 466 | 4 782 | |||||||||
Asia-Pacific | 7 915 | 3 593 | 2 833 | |||||||||
North America | 6 050 | 6 680 | 7 235 | |||||||||
Latin America | 5 161 | 4 228 | 3 406 | |||||||||
Nokia Group | 65 324 | 56 896 | 53 511 | |||||||||
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Shares(1) | ADSs | |||||||
Jorma Ollila(2) | 286 468 | 0 | ||||||
Paul J. Collins | 0 | 122 626 | ||||||
Georg Ehrnrooth(3) | 314 996 | 0 | ||||||
Daniel R. Hesse | 0 | 5 696 | ||||||
Bengt Holmström | 16 606 | 0 | ||||||
Per Karlsson(3) | 19 538 | 0 | ||||||
Marjorie Scardino | 0 | 14 018 | ||||||
Keijo Suila | 2 570 | 0 | ||||||
Vesa Vainio | 27 784 | 0 | ||||||
Total | 667 962 | 142 340 | ||||||
(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 the company’s CEO until June 1, 2006 and received stock options, performance shares and restricted shares in that capacity until the said date. Mr. Ollila’s holdings of long-term equity-based incentives are outlined in footnote 5 under “Stock Option Ownership of the Group Executive Board” on page 105 and, in footnote 6 under “Performance Shares and Restricted Shares” on page 107. |
(3) | Mr. Ehrnrooth’s and Mr. Karlsson’s holdings include both shares held personally and shares held through a company. |
Shares Receivable | ||||||||||||||||
Shares | Through | |||||||||||||||
Receivable | Performance | Shares Receivable | ||||||||||||||
Through Stock | Shares at | Through Restricted | ||||||||||||||
Shares | Options | Threshold(3) | Shares | |||||||||||||
Number of Equity Instruments Held by Group Executive Board | 519 716 | 2 755 806 | 477 360 | 884 500 | ||||||||||||
% of the Share Capital(1) | 0.013 | 0.069 | 0.012 | 0.022 | ||||||||||||
% of the Total Outstanding Equity Incentives (per Instrument)(2) | — | 3.007 | 3.784 | 14.584 |
(1) | The percentage is calculated in relation to the outstanding share capital and total voting rights of the company, excluding shares held by the 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. At maximum performance, the settlement amounts to four times the number of performance shares originally granted (at threshold). Due to the interim payout in 2006, the maximum number of Nokia shares deliverable under the performance share plan 2004 equals three times the number of performance shares originally granted (at threshold). |
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Shares | ADSs | |||||||
Olli-Pekka Kallasvuo | 130 000 | 0 | ||||||
Robert Andersson | 16 260 | 0 | ||||||
Simon Beresford-Wylie | 17 924 | 0 | ||||||
Mary McDowell | 7 935 | 5 000 | ||||||
Hallstein Moerk | 36 074 | 0 | ||||||
Tero Ojanperä | 1 174 | 0 | ||||||
Niklas Savander | 11 868 | 0 | ||||||
Richard Simonson | 26 621 | 20 000 | ||||||
Veli Sundbäck | 128 524 | 0 | ||||||
Anssi Vanjoki | 113 050 | 0 | ||||||
Kai Öistämö | 5 286 | 0 | ||||||
Total | 494 716 | 25 000 | ||||||
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Total Intrinsic Value of | ||||||||||||||||||||||||||
Exercise | Stock Options, | |||||||||||||||||||||||||
Price | December 31, 2006 | |||||||||||||||||||||||||
per | Number of Stock Options(2) | (EUR)(3) | ||||||||||||||||||||||||
Stock Option | Expiration | Share | ||||||||||||||||||||||||
Category(1) | Date | (EUR) | Exercisable | Unexercisable | Exercisable(4) | Unexercisable | ||||||||||||||||||||
Olli-Pekka Kallasvuo | 2001 A/B | December 31, 2006 | 36.75 | 100 000 | 0 | 0 | 0 | |||||||||||||||||||
2001 C 4Q/01 | December 31, 2006 | 26.67 | 50 000 | 0 | 0 | 0 | ||||||||||||||||||||
2002 A/B | December 31, 2007 | 17.89 | 175 000 | 0 | 0 | 0 | ||||||||||||||||||||
2003 2Q | December 31, 2008 | 14.95 | 97 500 | 22 500 | 51 675 | 11 925 | ||||||||||||||||||||
2004 2Q | December 31, 2009 | 11.79 | 33 750 | 26 250 | 124 538 | 96 863 | ||||||||||||||||||||
2005 2Q | December 31, 2010 | 12.79 | 18 750 | 41 250 | 50 438 | 110 963 | ||||||||||||||||||||
2005 4Q | December 31, 2010 | 14.48 | 0 | 100 000 | 0 | 100 000 | ||||||||||||||||||||
2006 2Q | December 31, 2011 | 18.02 | 0 | 300 000 | 0 | 0 | ||||||||||||||||||||
Robert Andersson | 2001 A/B | December 31, 2006 | 36.75 | 21 500 | 0 | 0 | 0 | |||||||||||||||||||
2001 C 4Q/01 | December 31, 2006 | 26.67 | 10 750 | 0 | 0 | 0 | ||||||||||||||||||||
2002 A/B | December 31, 2007 | 17.89 | 30 000 | 0 | 0 | 0 | ||||||||||||||||||||
2003 2Q | December 31, 2008 | 14.95 | 14 625 | 3 375 | 7 751 | 1 789 | ||||||||||||||||||||
2004 2Q | December 31, 2009 | 11.79 | 5 850 | 4 550 | 21 587 | 16 790 | ||||||||||||||||||||
2005 2Q | December 31, 2010 | 12.79 | 3 750 | 8 250 | 10 088 | 22 193 | ||||||||||||||||||||
2005 4Q | December 31, 2010 | 14.48 | 0 | 28 000 | 0 | 28 000 | ||||||||||||||||||||
2006 2Q | December 31, 2011 | 18.02 | 0 | 80 000 | 0 | 0 | ||||||||||||||||||||
Simon Beresford-Wylie | 2001 A/B | December 31, 2006 | 36.75 | 14 000 | 0 | 0 | 0 | |||||||||||||||||||
2001 C 4Q/01 | December 31, 2006 | 26.67 | 7 000 | 0 | 0 | 0 | ||||||||||||||||||||
2002 A/B | December 31, 2007 | 17.89 | 0 | 0 | 0 | 0 | ||||||||||||||||||||
2003 2Q | December 31, 2008 | 14.95 | 10 558 | 2 442 | 5 596 | 1 294 | ||||||||||||||||||||
2004 2Q | December 31, 2009 | 11.79 | 5 625 | 4 375 | 20 756 | 16 144 | ||||||||||||||||||||
2005 2Q | December 31, 2010 | 12.79 | 18 750 | 41 250 | 50 438 | 110 963 | ||||||||||||||||||||
2006 2Q | December 31, 2011 | 18.02 | 0 | 100 000 | 0 | 0 | ||||||||||||||||||||
Mary McDowell | 2003 4Q | December 31, 2008 | 15.05 | 48 125 | 21 875 | 20 694 | 9 406 | |||||||||||||||||||
2004 2Q | December 31, 2009 | 11.79 | 28 125 | 21 875 | 103 781 | 80 719 | ||||||||||||||||||||
2005 2Q | December 31, 2010 | 12.79 | 18 750 | 41 250 | 50 438 | 110 963 | ||||||||||||||||||||
2006 2Q | December 31, 2011 | 18.02 | 0 | 100 000 | 0 | 0 | ||||||||||||||||||||
Hallstein Moerk | 2001 A/B | December 31, 2006 | 36.75 | 30 000 | 0 | 0 | 0 | |||||||||||||||||||
2001 C 4Q/01 | December 31, 2006 | 26.67 | 15 000 | 0 | 0 | 0 | ||||||||||||||||||||
2002 A/B | December 31, 2007 | 17.89 | 30 000 | 0 | 0 | 0 | ||||||||||||||||||||
2003 2Q | December 31, 2008 | 14.95 | 16 250 | 3 750 | 8 613 | 1 988 | ||||||||||||||||||||
2004 2Q | December 31, 2009 | 11.79 | 3 750 | 13 125 | 13 838 | 48 431 | ||||||||||||||||||||
2005 2Q | December 31, 2010 | 12.79 | 12 500 | 27 500 | 33 625 | 73 975 | ||||||||||||||||||||
2006 2Q | December 31, 2011 | 18.02 | 0 | 60 000 | 0 | 0 | ||||||||||||||||||||
Tero Ojanperä | 2001 A/B | December 31, 2006 | 36.75 | 12 500 | 0 | 0 | 0 | |||||||||||||||||||
2001 C 4Q/01 | December 31, 2006 | 26.67 | 6 250 | 0 | 0 | 0 | ||||||||||||||||||||
2002 A/B | December 31, 2007 | 17.89 | 14 500 | 0 | 0 | 0 | ||||||||||||||||||||
2003 2Q | December 31, 2008 | 14.95 | 13 000 | 3 000 | 6 890 | 1 590 | ||||||||||||||||||||
2004 2Q | December 31, 2009 | 11.79 | 5 625 | 4 375 | 20 756 | 16 144 | ||||||||||||||||||||
2005 2Q | December 31, 2010 | 12.79 | 12 500 | 27 500 | 33 625 | 73 975 | ||||||||||||||||||||
2006 2Q | December 31, 2011 | 18.02 | 0 | 60 000 | 0 | 0 |
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Total Intrinsic Value of | ||||||||||||||||||||||||||
Exercise | Stock Options, | |||||||||||||||||||||||||
Price | December 31, 2006 | |||||||||||||||||||||||||
per | Number of Stock Options(2) | (EUR)(3) | ||||||||||||||||||||||||
Stock Option | Expiration | Share | ||||||||||||||||||||||||
Category(1) | Date | (EUR) | Exercisable | Unexercisable | Exercisable(4) | Unexercisable | ||||||||||||||||||||
Niklas Savander | 2001 A/B | December 31, 2006 | 36.75 | 12 500 | 0 | 0 | 0 | |||||||||||||||||||
2001 C 4Q/01 | December 31, 2006 | 26.67 | 6 250 | 0 | 0 | 0 | ||||||||||||||||||||
2002 A/B | December 31, 2007 | 17.89 | 21 500 | 0 | 0 | 0 | ||||||||||||||||||||
2003 2Q | December 31, 2008 | 14.95 | 10 558 | 2 442 | 5 596 | 1 294 | ||||||||||||||||||||
2004 2Q | December 31, 2009 | 11.79 | 5 760 | 4 480 | 21 254 | 16 531 | ||||||||||||||||||||
2005 2Q | December 31, 2010 | 12.79 | 4 375 | 9 625 | 11 769 | 25 891 | ||||||||||||||||||||
2006 2Q | December 31, 2011 | 18.02 | 0 | 60 000 | 0 | 0 | ||||||||||||||||||||
Richard Simonson | 2001 C 3Q/01 | December 31, 2006 | 20.61 | 36 000 | 0 | 0 | 0 | |||||||||||||||||||
2002 A/B | December 31, 2007 | 17.89 | 15 000 | 0 | 0 | 0 | ||||||||||||||||||||
2003 2Q | December 31, 2008 | 14.95 | 9 337 | 2 163 | 4 949 | 1 146 | ||||||||||||||||||||
2004 2Q | December 31, 2009 | 11.79 | 28 125 | 21 875 | 103 781 | 80 719 | ||||||||||||||||||||
2005 2Q | December 31, 2010 | 12.79 | 18 750 | 41 250 | 50 438 | 110 963 | ||||||||||||||||||||
2006 2Q | December 31, 2011 | 18.02 | 0 | 100 000 | 0 | 0 | ||||||||||||||||||||
Veli Sundbäck | 2001 A/B | December 31, 2006 | 36.75 | 40 000 | 0 | 0 | 0 | |||||||||||||||||||
2001 C 4Q/01 | December 31, 2006 | 26.67 | 20 000 | 0 | 0 | 0 | ||||||||||||||||||||
2002 A/B | December 31, 2007 | 17.89 | 40 000 | 0 | 0 | 0 | ||||||||||||||||||||
2003 2Q | December 31, 2008 | 14.95 | 40 625 | 9 375 | 21 531 | 4 969 | ||||||||||||||||||||
2004 2Q | December 31, 2009 | 11.79 | 16 875 | 13 125 | 62 269 | 48 431 | ||||||||||||||||||||
2005 2Q | December 31, 2010 | 12.79 | 12 500 | 27 500 | 33 625 | 73 975 | ||||||||||||||||||||
2006 2Q | December 31, 2011 | 18.02 | 0 | 60 000 | 0 | 0 | ||||||||||||||||||||
Anssi Vanjoki | 2001 A/B | December 31, 2006 | 36.75 | 70 000 | 0 | 0 | 0 | |||||||||||||||||||
2001 C 4Q/01 | December 31, 2006 | 26.67 | 35 000 | 0 | 0 | 0 | ||||||||||||||||||||
2002 A/B | December 31, 2007 | 17.89 | 6 250 | 0 | 0 | 0 | ||||||||||||||||||||
2003 2Q | December 31, 2008 | 14.95 | 40 000 | 18 750 | 21 200 | 9 938 | ||||||||||||||||||||
2004 2Q | December 31, 2009 | 11.79 | 20 000 | 26 250 | 73 800 | 96 863 | ||||||||||||||||||||
2005 2Q | December 31, 2010 | 12.79 | 10 000 | 41 250 | 26 900 | 110 963 | ||||||||||||||||||||
2006 2Q | December 31, 2011 | 18.02 | 0 | 100 000 | 0 | 0 | ||||||||||||||||||||
Kai Öistämö | 2001 A/B | December 31, 2006 | 36.75 | 2 695 | 0 | 0 | 0 | |||||||||||||||||||
2001 C 4Q/01 | December 31, 2006 | 26.67 | 2 695 | 0 | 0 | 0 | ||||||||||||||||||||
2002 A/B | December 31, 2007 | 17.89 | 1 892 | 0 | 0 | 0 | ||||||||||||||||||||
2003 2Q | December 31, 2008 | 14.95 | 1 436 | 2 163 | 761 | 1 146 | ||||||||||||||||||||
2004 2Q | December 31, 2009 | 11.79 | 3 625 | 4 375 | 13 376 | 16 144 | ||||||||||||||||||||
2005 2Q | December 31, 2010 | 12.79 | 4 000 | 8 800 | 10 760 | 23 672 | ||||||||||||||||||||
2005 4Q | December 31, 2010 | 14.48 | 0 | 28 000 | 0 | 28 000 | ||||||||||||||||||||
2006 2Q | December 31, 2011 | 18.02 | 0 | 100 000 | 0 | 0 | ||||||||||||||||||||
Stock options held by the members of the Group Executive Board on December 31, 2006, Total(5) | 1 420 031 | 1 827 915 | 1 097 132 | 1 584 755 | ||||||||||||||||||||||
All outstanding stock option plans (global plans), Total | 68 744 405 | 22 911 996 | 27 319 485 | 26 518 296 |
(1) | Stock options granted under the 2001A/B, 2001 3Q/01 and 2001C 4Q/01 sub-categories expired as of December 31, 2006. |
(2) | Number of stock options equals the number of underlying shares represented by the option entitlement. Stock options vest over 4 years: 25% after one year and 6.25% each quarter thereafter. |
(3) | 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 of December 29, 2006 of EUR 15.48. |
(4) | For gains realized upon exercise of stock options for the members of the Group Executive Board please refer to Stock Options Exercises and Settlement of Shares table on page 108. |
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(5) | Mr. Ollila resigned as CEO and Chairman of the Group Executive Board effective June 1, 2006, and ceased employment with Nokia on that date. Mr. Korhonen resigned as member of the Group Executive Board effective April 1, 2006 and ceased employment with Nokia on May 31, 2006. The information relating to stock options held and retained by Mr. Ollila and Mr. Korhonen as of the date of resignation from the Group Executive Board is represented in the table below. |
Total Intrinsic Value of | ||||||||||||||||||||||||||||
Exercise | Stock Options | |||||||||||||||||||||||||||
Price per | Number of Stock Options(2) | (EUR)(8) | ||||||||||||||||||||||||||
Stock Option | Share | |||||||||||||||||||||||||||
Category(1) | Expiration Date | (EUR) | Exercisable | Unexercisable | Exercisable(4) | Unexercisable | ||||||||||||||||||||||
Jorma Ollila | 2001 A/B | December 31, 2006 | 36.75 | 1 000 000 | 0 | 0 | 0 | |||||||||||||||||||||
(as per | 2001 C 4Q/01 | December 31, 2006 | 26.67 | 0 | 0 | 0 | 0 | |||||||||||||||||||||
May 31, 2006)(6) | 2002 A/B | December 31, 2007 | 17.89 | 937 500 | 62 500 | 0 | 0 | |||||||||||||||||||||
2003 2Q | December 31, 2008 | 14.95 | 550 000 | 250 000 | 968 000 | 440 000 | ||||||||||||||||||||||
2004 2Q | December 31, 2009 | 11.79 | 175 000 | 225 000 | 861 000 | 1 107 000 | ||||||||||||||||||||||
2005 2Q | December 31, 2010 | 12.79 | 0 | 400 000 | 0 | 1 568 000 | ||||||||||||||||||||||
2006 2Q | December 31, 2011 | 18.02 | 0 | 400 000 | 0 | 0 | ||||||||||||||||||||||
Pertti Korhonen | 2001 A/B | December 31, 2006 | 36.75 | 30 000 | 0 | 0 | 0 | |||||||||||||||||||||
(as per | 2001 C 4Q/01 | December 31, 2006 | 26.67 | 15 000 | 0 | 0 | 0 | |||||||||||||||||||||
March 31, 2006)(7) | 2002 A/B | December 31, 2007 | 17.89 | 61 250 | 8 750 | 0 | 0 | |||||||||||||||||||||
2003 2Q | December 31, 2008 | 14.95 | 31 250 | 18 750 | 66 563 | 39 938 | ||||||||||||||||||||||
2004 2Q | December 31, 2009 | 11.79 | 18 750 | 31 250 | 99 188 | 165 313 | ||||||||||||||||||||||
2005 2Q | December 31, 2010 | 12.79 | 0 | 60 000 | 0 | 257 400 |
(6) | Mr. Ollila was entitled to retain all vested and unvested stock options granted to him prior to June 1, 2006 as approved by the Board of Directors. |
(7) | Mr. Korhonen’s stock option grants were forfeited upon termination of employment in accordance with the plan rules. |
(8) | 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 of May 31, 2006 of EUR 16.71 in respect of Mr. Ollila and as of March 31, 2006 of EUR 17.08 in respect of Mr. Korhonen. |
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Performance Shares | Restricted Shares | |||||||||||||||||||||||||||
Number of | Number of | |||||||||||||||||||||||||||
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) | 2006(3)(EUR) | Name(4) | Shares | 2006(5)(EUR) | ||||||||||||||||||||||
Olli-Pekka Kallasvuo | 2004 | 15 000 | 45 000 | 536 255 | 2004 | 35 000 | 541 800 | |||||||||||||||||||||
2005 | 15 000 | 60 000 | 881 715 | 2005 | 70 000 | 1 083 600 | ||||||||||||||||||||||
2006 | 75 000 | 300 000 | 2 987 751 | 2006 | 100 000 | 1 548 000 | ||||||||||||||||||||||
Robert Andersson | 2004 | 2 600 | 7 800 | 92 951 | 2004 | 15 000 | 232 200 | |||||||||||||||||||||
2005 | 3 000 | 12 000 | 176 343 | 2005 | 28 000 | 433 440 | ||||||||||||||||||||||
2006 | 20 000 | 80 000 | 796 734 | 2006 | 20 000 | 309 600 | ||||||||||||||||||||||
Simon Beresford-Wylie | 2004 | 2 500 | 7 500 | 89 376 | 2004 | 0 | 0 | |||||||||||||||||||||
2005 | 15 000 | 60 000 | 881 715 | 2005 | 35 000 | 541 800 | ||||||||||||||||||||||
2006 | 25 000 | 100 000 | 995 917 | 2006 | 25 000 | 387 000 | ||||||||||||||||||||||
Mary McDowell | 2004 | 12 500 | 37 500 | 446 879 | 2003 | 20 000 | 309 600 | |||||||||||||||||||||
2005 | 15 000 | 60 000 | 881 715 | 2005 | 35 000 | 541 800 | ||||||||||||||||||||||
2006 | 25 000 | 100 000 | 995 917 | 2006 | 25 000 | 387 000 | ||||||||||||||||||||||
Hallstein Moerk | 2004 | 7 500 | 22 500 | 268 128 | 2004 | 20 000 | 309 600 | |||||||||||||||||||||
2005 | 10 000 | 40 000 | 587 810 | 2005 | 25 000 | 387 000 | ||||||||||||||||||||||
2006 | 15 000 | 60 000 | 597 550 | 2006 | 15 000 | 232 200 | ||||||||||||||||||||||
Tero Ojanperä | 2004 | 2 500 | 7 500 | 89 376 | 2004 | 15 000 | 232 200 | |||||||||||||||||||||
2005 | 10 000 | 40 000 | 587 810 | 2005 | 25 000 | 387 000 | ||||||||||||||||||||||
2006 | 15 000 | 60 000 | 597 550 | 2006 | 15 000 | 232 200 | ||||||||||||||||||||||
Niklas Savander | 2004 | 2 560 | 7 680 | 91 521 | 2004 | 16 500 | 255 420 | |||||||||||||||||||||
2005 | 3 500 | 14 000 | 205 734 | 2005 | 25 000 | 387 000 | ||||||||||||||||||||||
2006 | 15 000 | 60 000 | 597 550 | 2006 | 15 000 | 232 200 | ||||||||||||||||||||||
Richard Simonson | 2004 | 12 500 | 37 500 | 446 879 | 2004 | 25 000 | 387 000 | |||||||||||||||||||||
2005 | 15 000 | 60 000 | 881 715 | 2005 | 35 000 | 541 800 | ||||||||||||||||||||||
2006 | 25 000 | 100 000 | 995 917 | 2006 | 25 000 | 387 000 | ||||||||||||||||||||||
Veli Sundbäck | 2004 | 7 500 | 22 500 | 268 128 | 2004 | 20 000 | 309 600 | |||||||||||||||||||||
2005 | 10 000 | 40 000 | 587 810 | 2005 | 25 000 | 387 000 | ||||||||||||||||||||||
2006 | 15 000 | 60 000 | 597 550 | 2006 | 15 000 | 232 200 | ||||||||||||||||||||||
Anssi Vanjoki | 2004 | 15 000 | 45 000 | 536 255 | 2004 | 35 000 | 541 800 | |||||||||||||||||||||
2005 | 15 000 | 60 000 | 881 715 | 2005 | 35 000 | 541 800 | ||||||||||||||||||||||
2006 | 25 000 | 100 000 | 995 917 | 2006 | 25 000 | 387 000 | ||||||||||||||||||||||
Kai Öistämö | 2004 | 2 500 | 7 500 | 89 376 | 2004 | 15 000 | 232 200 | |||||||||||||||||||||
2005 | 3 200 | 12 800 | 188 099 | 2005 | 25 000 | 387 000 | ||||||||||||||||||||||
2006 | 25 000 | 100 000 | 995 917 | 2006 | 25 000 | 387 000 | ||||||||||||||||||||||
Performance Shares and Restricted Shares held by the Group Executive Board Total(6) | 477 360 | 1 826 780 | 20 851 577 | 884 500 | 13 692 060 | |||||||||||||||||||||||
All outstanding Performance Shares and Restricted Shares (Global plans), Total | 12 311 989 | 45 798 454 | 554 183 057 | 5 985 476 | 92 655 168 |
(1) | The performance period for the 2004 plan is 2004–2007, with one interim measurement period for fiscal years 2004–2005. The performance period for the 2005 plan is 2005–2008, with one interim measurement period for fiscal years 2005–2006. The performance period for the 2006 plan is 2006–2008, without any interim measurement period. |
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(2) | For the performance share plans 2004, 2005 and 2006, 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. The maximum number of Nokia shares will vest should 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 in 2006, the maximum number of Nokia shares deliverable under the 2004 plan is equal to three times the number at threshold. |
(3) | The intrinsic value is based on the closing market price of a Nokia share on the Helsinki Stock Exchange as of December 29, 2006 of EUR 15.48. The value of performance shares is presented on the basis of the company’s estimation of the number of shares expected to vest. |
(4) | Under the restricted share plans 2003, 2004, 2005 and 2006 awards are granted once a quarter. For the major part of the awards made under these plans the restriction period ends for the 2003 plan, on October 1, 2006; for the 2004 plan, on October 1, 2007; for the 2005 plan, on October 1, 2008; and for the 2006 plan, on October 1, 2009. |
(5) | The intrinsic value is based on the closing market price of a Nokia share on the Helsinki Stock Exchange as of December 29, 2006 of EUR 15.48. |
(6) | Mr. Ollila resigned as CEO and Chairman of the Group Executive Board effective June 1, 2006, and ceased employment with Nokia on that date. Mr. Korhonen resigned as member of the Group Executive Board effective April 1, 2006 and ceased employment with Nokia on May 31, 2006. The information relating to performance shares and restricted shares held by Mr. Ollila and Mr. Korhonen as of the date of resignation from the Group Executive Board is represented in the table below. |
Performance Shares | Restricted Shares | |||||||||||||||||||||||||||
Number of | Number of | Number | ||||||||||||||||||||||||||
Performance | Performance | Intrinsic | of | Intrinsic | ||||||||||||||||||||||||
Plan | Shares at | Shares at | Value(9) | Plan | Restricted | Value(10) | ||||||||||||||||||||||
name(1) | Threshold(2) | Maximum(2) | (EUR) | name(4) | Shares | (EUR) | ||||||||||||||||||||||
Jorma Ollila (as per May 31, 2006)(7) | 2004 | 100 000 | 300 000 | 2 316 314 | 2004 | 100 000 | 1 671 000 | |||||||||||||||||||||
2005 | 100 000 | 400 000 | 5 160 441 | 2005 | 100 000 | 1 671 000 | ||||||||||||||||||||||
2006 | 100 000 | 400 000 | 3 342 000 | 2006 | 100 000 | 1 671 000 | ||||||||||||||||||||||
Pertti Korhonen (as per March 31, 2006)(8) | 2003 | 35 000 | 597 800 | |||||||||||||||||||||||||
2004 | 12 500 | 37 500 | 295 950 | 2004 | 25 000 | 427 000 | ||||||||||||||||||||||
2005 | 15 000 | 60 000 | 791 206 | 2005 | 35 000 | 597 800 |
(7) | Mr. Ollila was entitled to retain performance shares and restricted shares granted to him prior to June 1, 2006 as approved by the Board of Directors. |
(8) | Mr. Korhonen’s performance share and restricted share grants were forfeited upon termination of employment in accordance with the plan rules. |
(9) | The intrinsic value is based on the closing market price of Nokia shares on the Helsinki Stock Exchange as of May 31, 2006 of EUR 16.71 in respect of Mr. Ollila and as of March 31, 2006 of EUR 17.08 in respect of Mr. Korhonen. The value of performance shares is presented on the basis of the company’s estimation of the number of shares expected to vest. |
(10) | The intrinsic value is based on the closing market price of Nokia share on the Helsinki Stock Exchange as of May 31, 2006 of EUR 16.71 in respect of Mr. Ollila and as of March 31, 2006 of EUR 17.08 in respect of Mr. Korhonen. |
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Stock Option | Performance Shares | Restricted Shares | ||||||||||||||||||||||||||
Awards(1) | Awards(2) | Awards(3) | ||||||||||||||||||||||||||
Shares | Value | Shares | Value | Shares | Value | |||||||||||||||||||||||
Acquired | Realized | Delivered | Realized | Delivered | Realized | |||||||||||||||||||||||
Name | Year | (Number) | (EUR) | (Number) | (EUR) | (Number) | (EUR) | |||||||||||||||||||||
Olli-Pekka Kallasvuo | 2006 | 0 | 0 | 15 000 | 275 700 | 0 | 0 | |||||||||||||||||||||
Robert Andersson | 2006 | 0 | 0 | 2 600 | 47 788 | 0 | 0 | |||||||||||||||||||||
Simon Beresford-Wylie | 2006 | 14 000 | 11 480 | 2 500 | 45 950 | 22 000 | 343 200 | |||||||||||||||||||||
Mary McDowell | 2006 | 0 | 0 | 12 500 | 229 750 | 0 | 0 | |||||||||||||||||||||
Hallstein Moerk | 2006 | 13 125 | 87 544 | 7 500 | 137 850 | 26 000 | 405 600 | |||||||||||||||||||||
Kai Öistämö | 2006 | 16 076 | 55 954 | 2 500 | 45 950 | 8 750 | 136 500 | |||||||||||||||||||||
Tero Ojanperä | 2006 | 0 | 0 | 2 500 | 45 950 | 0 | 0 | |||||||||||||||||||||
Niklas Savander | 2006 | 0 | 0 | 2 560 | 47 053 | 9 750 | 152 100 | |||||||||||||||||||||
Richard Simonson | 2006 | 0 | 0 | 12 500 | 229 750 | 33 250 | 518 700 | |||||||||||||||||||||
Veli Sundbäck | 2006 | 0 | 0 | 7 500 | 137 850 | 0 | 0 | |||||||||||||||||||||
Anssi Vanjoki | 2006 | 157 500 | 303 588 | 15 000 | 275 700 | 0 | 0 |
(1) | Value realized on exercise is based on the total gross value received in 2006 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 2004 performance share grant. Value is based on the market price of the Nokia share on the Helsinki Stock Exchange as of April 24, 2006 of EUR 18.38. |
(3) | Delivery of Nokia shares vested from the 2003 grant. Value is based on the market price of the Nokia share on the Helsinki Stock Exchange as of October 23, 2006 of EUR 15.60. |
(4) | Jorma Ollila resigned as CEO and Chairman of the Group Executive Board effective June 1, 2006, and ceased employment with Nokia on that date. Mr. Korhonen resigned as member of the Group Executive Board effective April 1, 2006 and ceased employment with Nokia on May 31, 2006. The information relating to stock option exercises and settlement of shares regarding Mr. Ollila and Mr. Korhonen as at the date of resignation from the Group Executive Board is represented in the table below. |
Stock Option | Performance Shares | Restricted Shares | ||||||||||||||||||||||||||
Awards(1) | Awards(2) | Awards | ||||||||||||||||||||||||||
Shares | Value | Shares | Value | Shares | Value | |||||||||||||||||||||||
Acquired | Realized | Delivered | Realized | Delivered | Realized | |||||||||||||||||||||||
Name | Year | (Number) | (EUR) | (Number) | (EUR) | (Number) | (EUR) | |||||||||||||||||||||
Jorma Ollila (as per May 31, 2006) | 2006 | 500 000 | 19 958 | 100 000 | 1 838 000 | 0 | 0 | |||||||||||||||||||||
Pertti Korhonen (as per March 31, 2006) | 2006 | 0 | 0 | 12 500 | 229 750 | 0 | 0 |
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Helsinki | New York | |||||||||||||||
Stock | Stock | |||||||||||||||
Exchange | Exchange | |||||||||||||||
Price per share | Price per ADS | |||||||||||||||
High | Low | High | Low | |||||||||||||
(EUR) | (USD) | |||||||||||||||
2002 | 29.45 | 11.10 | 26.90 | 10.76 | ||||||||||||
2003 | 16.16 | 11.44 | 18.45 | 12.67 | ||||||||||||
2004 | 18.79 | 8.97 | 23.22 | 11.03 | ||||||||||||
2005 | ||||||||||||||||
First Quarter | 12.36 | 10.75 | 16.41 | 13.92 | ||||||||||||
Second Quarter | 14.39 | 11.29 | 17.60 | 14.68 | ||||||||||||
Third Quarter | 15.03 | 12.53 | 18.03 | 15.18 | ||||||||||||
Fourth Quarter | 15.75 | 13.28 | 18.62 | 15.90 | ||||||||||||
Full Year | 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 |
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Helsinki | New York | |||||||||||||||
Stock | Stock | |||||||||||||||
Exchange | Exchange | |||||||||||||||
Price per share | Price per ADS | |||||||||||||||
High | Low | High | Low | |||||||||||||
(EUR) | (USD) | |||||||||||||||
Most recent six months | ||||||||||||||||
September 2006 | 16.13 | 14.77 | 20.65 | 18.84 | ||||||||||||
October 2006 | 16.09 | 15.30 | 20.36 | 19.35 | ||||||||||||
November 2006 | 16.14 | 15.19 | 20.93 | 19.34 | ||||||||||||
December 2006 | 15.63 | 14.91 | 20.55 | 19.96 | ||||||||||||
January 2007 | 16.91 | 14.63 | 19.08 | 21.74 | ||||||||||||
February 2007 | 17.69 | 16.49 | 22.10 | 23.14 |
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VaR | 2006 | 2005 | ||||||
EURm | EURm | |||||||
At December 31 | 21.6 | 12.4 | ||||||
Average for the year | 24.6 | 10.2 | ||||||
Range for the year | 17.1-34.6 | 3.3-29.3 |
VaR | 2006 | 2005 | ||||||
EURm | EURm | |||||||
At December 31 | 4.8 | 6.9 | ||||||
Average for the year | 6.3 | 10.0 | ||||||
Range for the year | 4.4-9.3 | 6.9-15.3 |
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VaR | 2006 | 2005 | ||||||
EURm | EURm | |||||||
At December 31 | 0.1 | 0.1 | ||||||
Average for the year | 0.1 | 0.2 | ||||||
Range for the year | 0.1-0.2 | 0.1-0.2 |
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2006 | 2005 | |||||||
(EUR millions) | ||||||||
Audit Fees(1) | 5.2 | 5.3 | ||||||
Audit-Related Fees(2) | 7.1 | 1.0 | ||||||
Tax Fees(3) | 6.8 | 5.9 | ||||||
All Other Fees(4) | 0.4 | 0.1 | ||||||
Total | 19.5 | 12.3 | ||||||
(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 and the review of documents filed with the SEC and other capital markets or local financial reporting regulatory bodies. There were no unbilled audit fees at year-end 2006. The fees for 2005 include EUR 1.4 million of accrued audit fees for the 2005 year-end audit that were not billed until 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; internal control matters and services in anticipation of the company’s compliance with Section 404 of the Sarbanes-Oxley Act of 2002; advice and assistance in connection with local statutory accounting requirements; due diligence related to acquisitions; employee benefit plan audits and reviews; and miscellaneous reports in connection with grant applications. The fees for 2006 include EUR 1.5 million of accrued audit related fees that were not billed until 2007. This amount includes EUR 0.3 million that Nokia will recover from a third party. There were no unbilled audit-related fees at year-end 2005. |
(3) | Tax Fees include fees billed for tax compliance services, including the preparation of original and amended tax returns and claims for refund; tax consultations, such as assistance and representation in connection with tax audits and appeals, tax advice related to mergers and acquisitions, transfer pricing, and requests for rulings or technical advice from taxing authorities; tax planning services; and expatriate tax compliance, consultation and planning services. The tax fees for 2006 include EUR 0.4 million of accrued tax fees that were not billed until 2007. There were no unbilled tax fees at year-end 2005. |
(4) | All Other Fees include fees billed for company establishment, forensic accounting and occasional training 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 1/1/06-1/31/06 | 0 | 0 | 0 | 182 190 000(1 | ) | |||||||||||
February 2/1/06-2/28/06 | 28 700 000 | 15.80 | 28 700 000 | 153 490 000(1 | ) | |||||||||||
March 3/1/06-3/31/06 | 56 180 000 | 16.49 | 56 180 000 | 97 310 000(1 | ) | |||||||||||
April 4/1/06-4/30/06 | 3 690 000 | 18.41 | 3 290 000 | 401 710 000(2 | ) | |||||||||||
May 5/1/06-5/31/06 | 18 920 000 | 17.28 | 18 920 000 | 382 790 000(2 | ) | |||||||||||
June 6/1/06-6/30/06 | 13 390 000 | 16.10 | 13 390 000 | 369 400 000(2 | ) | |||||||||||
July 7/1/06-7/31/06 | 7 060 000 | 15.47 | 6 960 000 | 362 440 000(2 | ) | |||||||||||
August 8/1/06-8/31/06 | 22 960 000 | 15.91 | 22 960 000 | 339 480 000(2 | ) | |||||||||||
September 9/1/06-9/30/06 | 16 090 000 | 15.35 | 16 090 000 | 323 390 000(2 | ) | |||||||||||
October 10/1/06-10/31/06 | 8 200 000 | 15.49 | 8 200 000 | 315 190 000(2 | ) | |||||||||||
November 11/1/06-11/30/06 | 25 270 000 | 15.48 | 25 270 000 | 289 920 000(2 | ) | |||||||||||
December 12/1/06-12/31/06 | 11 880 000 | 15.30 | 11 880 000 | 278 040 000(2 | ) | |||||||||||
Total | 212 340 000 | 211 840 000 | ||||||||||||||
(1) | On April 7, 2005, the Annual General Meeting authorized the Board to resolve to repurchase a maximum of 443.2 million Nokia shares by using funds available for distribution of profits. The authorization was effective until April 7, 2006. |
(2) | On March 30, 2006, the Annual General Meeting authorized the Board to resolve to repurchase a maximum of 405 million Nokia shares by using funds available for distribution of profits. The authorization is effective until March 30, 2007. |
(3) | The difference between the “Total Number of Shares Purchased” and the “Total Number of Shares Purchased as Part of Publicly Announced Plans and Programs” represents repurchases of a total of 500 000 shares in open-market transactions effected by affiliates of Nokia Corporation to cover the Group’s obligations in connection with certain employee stock option plans. |
(4) | When ADRs were purchased the USD price paid was converted into EUR by using the noon buying rate as of the date of purchase |
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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 |
*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. | ||
6 | . | See Note 30 to our consolidated financial statements included in Item 18 of this annual report on Form 20-F 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 on Form 20-F for the fiscal year ended December 31, 2000. |
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F-2
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F-3
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Financial year ended December 31 | ||||||||||||||||
Notes | 2006 | 2005 | 2004 | |||||||||||||
EURm | EURm | EURm | ||||||||||||||
Net sales | 41 121 | 34 191 | 29 371 | |||||||||||||
Cost of sales | (27 742 | ) | (22 209 | ) | (18 179 | ) | ||||||||||
Gross profit | 13 379 | 11 982 | 11 192 | |||||||||||||
Research and development expenses | (3 897 | ) | (3 825 | ) | (3 776 | ) | ||||||||||
Selling and marketing expenses | 6 | (3 314 | ) | (2 961 | ) | (2 564 | ) | |||||||||
Administrative and general expenses | (666 | ) | (609 | ) | (611 | ) | ||||||||||
Other income | 7 | 522 | 285 | 343 | ||||||||||||
Other expenses | 7, 8 | (536 | ) | (233 | ) | (162 | ) | |||||||||
Amortization of goodwill | 10 | — | — | (96 | ) | |||||||||||
Operating profit | 2-10 | 5 488 | 4 639 | 4 326 | ||||||||||||
Share of results of associated companies | 15, 33 | 28 | 10 | (26 | ) | |||||||||||
Financial income and expenses | 11 | 207 | 322 | 405 | ||||||||||||
Profit before tax | 5 723 | 4 971 | 4 705 | |||||||||||||
Tax | 12 | (1 357 | ) | (1 281 | ) | (1 446 | ) | |||||||||
Profit before minority interests | 4 366 | 3 690 | 3 259 | |||||||||||||
Minority interests | (60 | ) | (74 | ) | (67 | ) | ||||||||||
Profit attributable to equity holders of the parent | 4 306 | 3 616 | 3 192 | |||||||||||||
2006 | 2005 | 2004 | |||||||||||||||
EUR | EUR | EUR | |||||||||||||||
Earnings per share | 30 | ||||||||||||||||
(for profit attributable to the equity holders of the parent) | |||||||||||||||||
Basic | 1.06 | 0.83 | 0.69 | ||||||||||||||
Diluted | 1.05 | 0.83 | 0.69 | ||||||||||||||
Average number of shares (000’s shares) | 30 | 2006 | 2005 | 2004 | |||||||||||||
Basic | 4 062 833 | 4 365 547 | 4 593 196 | ||||||||||||||
Diluted | 4 086 529 | 4 371 239 | 4 600 337 |
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December 31 | ||||||||||||
Notes | 2006 | 2005 | ||||||||||
EURm | EURm | |||||||||||
ASSETS | ||||||||||||
Non-current assets | ||||||||||||
Capitalized development costs | 13 | 251 | 260 | |||||||||
Goodwill | 13 | 532 | 90 | |||||||||
Other intangible assets | 13 | 298 | 211 | |||||||||
Property, plant and equipment | 14 | 1 602 | 1 585 | |||||||||
Investments in associated companies | 15 | 224 | 193 | |||||||||
Available-for-sale investments | 16 | 288 | 246 | |||||||||
Deferred tax assets | 26 | 809 | 846 | |||||||||
Long-term loans receivable | 17 | 19 | 63 | |||||||||
Other non-current assets | 8 | 7 | ||||||||||
4 031 | 3 501 | |||||||||||
Current assets | ||||||||||||
Inventories | 18, 20 | 1 554 | 1 668 | |||||||||
Accounts receivable, net of allowances for doubtful accounts (2006: EUR 212 million, 2005: EUR 281 million) | 19, 20 | 5 888 | 5 346 | |||||||||
Prepaid expenses and accrued income | 19 | 2 496 | 1 938 | |||||||||
Other financial assets | 111 | 89 | ||||||||||
Available-for-sale investments, liquid assets | 16 | 5 012 | 6 852 | |||||||||
Available-for-sale investments, cash equivalents | 16, 34 | 2 046 | 1 493 | |||||||||
Bank and cash | 34 | 1 479 | 1 565 | |||||||||
18 586 | 18 951 | |||||||||||
Total assets | 22 617 | 22 452 | ||||||||||
SHAREHOLDERS’ EQUITY AND LIABILITIES | ||||||||||||
Capital and reserves attributable to equity holders of the parent | ||||||||||||
Share capital | 22 | 246 | 266 | |||||||||
Share issue premium | 2 707 | 2 458 | ||||||||||
Treasury shares, at cost | (2 060 | ) | (3 616 | ) | ||||||||
Translation differences | (34 | ) | 69 | |||||||||
Fair value and other reserves | 21 | (14 | ) | (176 | ) | |||||||
Retained earnings | 24 | 11 123 | 13 308 | |||||||||
11 968 | 12 309 | |||||||||||
Minority interests | 92 | 205 | ||||||||||
Total equity | 12 060 | 12 514 | ||||||||||
Non-current liabilities | 25 | |||||||||||
Long-term interest-bearing liabilities | 69 | 21 | ||||||||||
Deferred tax liabilities | 26 | 205 | 151 | |||||||||
Other long-term liabilities | 122 | 96 | ||||||||||
396 | 268 | |||||||||||
Current liabilities | ||||||||||||
Short-term borrowings | 27 | 247 | 377 | |||||||||
Accounts payable | 3 732 | 3 494 | ||||||||||
Accrued expenses | 28 | 3 796 | 3 320 | |||||||||
Provisions | 29 | 2 386 | 2 479 | |||||||||
10 161 | 9 670 | |||||||||||
Commitments and contingencies | 31 | |||||||||||
Total shareholders’ equity and liabilities | 22 617 | 22 452 | ||||||||||
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Financial year ended | |||||||||||||||||
December 31 | |||||||||||||||||
Notes | 2006 | 2005 | 2004 | ||||||||||||||
EURm | EURm | EURm | |||||||||||||||
Cash flow from operating activities | |||||||||||||||||
Profit attributable to equity holders of the parent | 4 306 | 3 616 | 3 192 | ||||||||||||||
Adjustments, total | 34 | 1 857 | 1 774 | 2 059 | |||||||||||||
Profit attributable to equity holders of the parent before change in net working capital | 6 163 | 5 390 | 5 251 | ||||||||||||||
Change in net working capital | 34 | (793 | ) | (366 | ) | 241 | |||||||||||
Cash generated from operations | 5 370 | 5 024 | 5 492 | ||||||||||||||
Interest received | 235 | 353 | 204 | ||||||||||||||
Interest paid | (18 | ) | (26 | ) | (26 | ) | |||||||||||
Other financial income and expenses, net received | 54 | 47 | 41 | ||||||||||||||
Income taxes paid | (1 163 | ) | (1 254 | ) | (1 368 | ) | |||||||||||
Net cash from operating activities | 4 478 | 4 144 | 4 343 | ||||||||||||||
Cash flow from investing activities | |||||||||||||||||
Acquisition of Group companies, net of acquired cash | (517 | ) | (92 | ) | — | ||||||||||||
Purchase of current available-for-sale investments, liquid assets | (3 219 | ) | (7 277 | ) | (10 318 | ) | |||||||||||
Purchase of non-current available-for-sale investments | (88 | ) | (89 | ) | (388 | ) | |||||||||||
Purchase of shares in associated companies | (15 | ) | (16 | ) | (109 | ) | |||||||||||
Additions to capitalized development costs | (127 | ) | (153 | ) | (101 | ) | |||||||||||
Long-term loans made to customers | (11 | ) | (56 | ) | — | ||||||||||||
Proceeds from repayment and sale of long-term loans receivable | 56 | — | 368 | ||||||||||||||
Recovery of impaired long-term loans made to customers | 276 | — | — | ||||||||||||||
Proceeds from (+)/ payment of (-) other long-term receivables | (3 | ) | 14 | 2 | |||||||||||||
Proceeds from short-term loans receivable | 199 | 182 | 66 | ||||||||||||||
Capital expenditures | (650 | ) | (607 | ) | (548 | ) | |||||||||||
Proceeds from disposal of shares in Group companies, net of disposed cash | — | 5 | 1 | ||||||||||||||
Proceeds from disposal of shares in associated companies | 1 | 18 | — | ||||||||||||||
Proceeds from disposal of businesses | — | 95 | — | ||||||||||||||
Proceeds from maturities and sale of current available-for-sale investments, liquid assets | 5 058 | 9 402 | 9 737 | ||||||||||||||
Proceeds from sale of current available-for-sale investments | — | 247 | 587 | ||||||||||||||
Proceeds from sale of non-current available-for-sale investments | 17 | 3 | 346 | ||||||||||||||
Proceeds from sale of fixed assets | 29 | 167 | 6 | ||||||||||||||
Dividends received | — | 1 | 22 | ||||||||||||||
Net cash from (used in) investing activities | 1 006 | 1 844 | (329 | ) |
F-6
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Financial year ended | |||||||||||||||||
December 31 | |||||||||||||||||
Notes | 2006 | 2005 | 2004 | ||||||||||||||
EURm | EURm | EURm | |||||||||||||||
Cash flow from financing activities | |||||||||||||||||
Proceeds from stock option exercises | 46 | 2 | — | ||||||||||||||
Purchase of treasury shares | (3 371 | ) | (4 258 | ) | (2 648 | ) | |||||||||||
Proceeds from long-term borrowings | 56 | 5 | 1 | ||||||||||||||
Repayment of long-term borrowings | (7 | ) | — | (3 | ) | ||||||||||||
Proceeds from (+)/ repayment of (-) short-term borrowings | (137 | ) | 212 | (255 | ) | ||||||||||||
Dividends paid | (1 553 | ) | (1 531 | ) | (1 413 | ) | |||||||||||
Net cash used in financing activities | (4 966 | ) | (5 570 | ) | (4 318 | ) | |||||||||||
Foreign exchange adjustment | (51 | ) | 183 | (23 | ) | ||||||||||||
Net increase (+)/ decrease (-) in cash and cash equivalents | 467 | 601 | (327 | ) | |||||||||||||
Cash and cash equivalents at beginning of period | 3 058 | 2 457 | 2 784 | ||||||||||||||
Cash and cash equivalents at end of period | 3 525 | 3 058 | 2 457 | ||||||||||||||
Cash and cash equivalents comprise of: | |||||||||||||||||
Bank and cash | 1 479 | 1 565 | 1 090 | ||||||||||||||
Current available-for-sale investments, cash equivalents | 16, 37 | 2 046 | 1 493 | 1 367 | |||||||||||||
3 525 | 3 058 | 2 457 | |||||||||||||||
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Fair | |||||||||||||||||||||||||||||||||||||||||
value | |||||||||||||||||||||||||||||||||||||||||
Share | and | Before | |||||||||||||||||||||||||||||||||||||||
Number of | Share | issue | Treasury | Translation | other | Retained | minority | Minority | |||||||||||||||||||||||||||||||||
shares | capital | premium | shares | differences | reserves | earnings(1) | interests | interests | Total | ||||||||||||||||||||||||||||||||
(000’s) | |||||||||||||||||||||||||||||||||||||||||
Group, EURm | |||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2004 | 4 700 268 | 288 | 2 313 | (1 373 | ) | (85 | ) | 80 | 14 079 | 15 302 | 164 | 15 466 | |||||||||||||||||||||||||||||
Translation differences | (119 | ) | (119 | ) | (16 | ) | (135 | ) | |||||||||||||||||||||||||||||||||
Net investment hedge gains | 78 | 78 | 78 | ||||||||||||||||||||||||||||||||||||||
Cash flow hedges, net of tax | (1 | ) | (1 | ) | (1 | ) | |||||||||||||||||||||||||||||||||||
Available-for-sale investments, net of tax | (66 | ) | (66 | ) | (66 | ) | |||||||||||||||||||||||||||||||||||
Other decrease, net | (1 | ) | (1 | ) | (5 | ) | (6 | ) | |||||||||||||||||||||||||||||||||
Profit | 3 192 | 3 192 | 67 | 3 259 | |||||||||||||||||||||||||||||||||||||
Total recognized income and expense | — | — | — | (41 | ) | (67 | ) | 3 191 | 3 083 | 46 | 3 129 | ||||||||||||||||||||||||||||||
Stock options exercised | 5 | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Stock options exercised related to acquisitions | (8 | ) | (8 | ) | (8 | ) | |||||||||||||||||||||||||||||||||||
Share-based compensation(2) | 53 | 53 | 53 | ||||||||||||||||||||||||||||||||||||||
Acquisition of treasury shares | (214 120 | ) | (2 661 | ) | (2 661 | ) | (2 661 | ) | |||||||||||||||||||||||||||||||||
Reissuance of treasury shares | 788 | 14 | 14 | 14 | |||||||||||||||||||||||||||||||||||||
Cancellation of treasury shares | (8 | ) | 8 | 1 998 | (1 998 | ) | — | — | |||||||||||||||||||||||||||||||||
Dividend | (1 398 | ) | (1 398 | ) | (42 | ) | (1 440 | ) | |||||||||||||||||||||||||||||||||
Total of other equity movements | (8 | ) | 53 | (649 | ) | — | — | (3 396 | ) | (4 000 | ) | (42 | ) | (4 042 | ) | ||||||||||||||||||||||||||
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(2) | 79 | 79 | 79 | ||||||||||||||||||||||||||||||||||||||
Acquisition of treasury shares | (315 174 | ) | (4 268 | ) | (4 268 | ) | (4 268 | ) | |||||||||||||||||||||||||||||||||
Reissuance 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 | |||||||||||||||||||||||||||||
F-8
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Fair | |||||||||||||||||||||||||||||||||||||||||
value | |||||||||||||||||||||||||||||||||||||||||
Share | and | Before | |||||||||||||||||||||||||||||||||||||||
Number of | Share | issue | Treasury | Translation | other | Retained | minority | Minority | |||||||||||||||||||||||||||||||||
shares | capital | premium | shares | differences | reserves | earnings(1) | interests | interests | Total | ||||||||||||||||||||||||||||||||
(000’s) | |||||||||||||||||||||||||||||||||||||||||
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(2) | 2 236 | 219 | 219 | 219 | |||||||||||||||||||||||||||||||||||||
Settlement of performance shares | (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 | ||||||||||||||||||||||||||||
(1) | Opening retained earnings has been increased by EUR 154 million for recognition of certain additional items relating to periods prior to 2002. See Note 1 and Note 26. |
(2) | Share-based compensation is shown net of deferred compensation recorded related to social security costs on share-based payments. |
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1. | Accounting principles |
• | The Group adopted Amendment to IAS 19, Actuarial Gains and Losses, Group Plans and Disclosures, which introduced the option of an alternative recognition approach for actuarial gains and losses. The Group did not adopt this alternative option. | |
• | The Group adopted Amendment to IAS 39, Cash Flow Hedge Accounting of Forecast Intragroup Transactions, where an entity may designate intragroup transactions as hedged items if certain criteria are fulfilled. | |
• | The Group adopted Amendment to IAS 39, The Fair Value Option, which restricts use of the fair value option for financial instruments to certain circumstances. | |
• | The Group adopted Amendments to IAS 39 and IFRS 4, Financial Guarantee Contracts, in which all financial guarantee contracts are initially recognized at fair value and subsequently measured at the higher of either the amount determined in accordance with IAS 37 or the amount initially recognized less any cumulative amortization. | |
• | The Group adopted IFRIC 4, Determining whether an Arrangement contains a Lease, where if fulfillment of an arrangement is dependent on the use of a specific asset and conveys a right to use, the arrangement contains a lease. |
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F-15
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Buildings and constructions | 20 - 33 years | |
Production machinery, measuring and test equipment | 1 - 3 years | |
Other machinery and equipment | 3 - 10 years |
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• | 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. The Group will apply IFRIC 8 from annual periods beginning January 1, 2007, but it is not expected to have any impact on the Group’s accounts. | |
• | 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. The Group will apply IFRIC 9 from January 1, 2007, but it is not expected to have a material impact on the Group’s accounts; | |
• | 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. The Group will adopt IAS 1 on January 1, 2007 and does not expect the adoption of this amendment to have a material impact on the disclosures. |
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• | IFRS 7, Financial Instruments: Disclosures, includes a comprehensive set of qualitative and quantitative disclosures on risk exposures from all financial instruments. The Group will adopt IFRS 7 on January 1, 2007 and does not expect the adoption of this standard to have a material impact on the disclosures. | |
• | IFRS 8, Operating Segments requires that segments are identified and reported based on a risk and return analysis. Under IFRS 8, segments are components of an entity regularly reviewed by an entity’s chief operating decision-maker. Given the delayed implementation date for this standard, it has not been practicable to evaluate the impact of this standard. |
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Total | Common | |||||||||||||||||||||||||||||||||
Mobile | Enterprise | reportable | Group | Elimina- | ||||||||||||||||||||||||||||||
Phones | Multimedia | Solutions | Networks | segments | Functions | tions | Group | |||||||||||||||||||||||||||
2006 | 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 | |||||||||||||||||||||||||||
Impairment and customer finance charges | — | — | — | — | — | 51 | 51 | |||||||||||||||||||||||||||
Operating profit/(loss)(1) | 4 100 | 1 319 | (258 | ) | 808 | 5 969 | (481 | ) | 5 488 | |||||||||||||||||||||||||
Share of results of associated companies | — | — | — | — | — | 28 | 28 | |||||||||||||||||||||||||||
Balance Sheet Information | ||||||||||||||||||||||||||||||||||
Capital expenditures(2) | 244 | 73 | 30 | 126 | 473 | 177 | 650 | |||||||||||||||||||||||||||
Segment assets(3)of which: | 4 921 | 1 474 | 604 | 3 746 | 10 745 | 1 190 | (31 | ) | 11 904 | |||||||||||||||||||||||||
Investments in associated companies | — | — | — | — | — | 224 | 224 | |||||||||||||||||||||||||||
Unallocated assets(4) | 10 713 | |||||||||||||||||||||||||||||||||
Total assets | 22 617 | |||||||||||||||||||||||||||||||||
Segment liabilities(5) | 5 140 | 1 622 | 395 | 1 703 | 8 860 | 337 | (333 | ) | 8 864 | |||||||||||||||||||||||||
Unallocated liabilities(6) | 1 693 | |||||||||||||||||||||||||||||||||
Total liabilities | 10 557 | |||||||||||||||||||||||||||||||||
Total | Common | |||||||||||||||||||||||||||||||||
Mobile | Enterprise | reportable | Group | Elimina- | ||||||||||||||||||||||||||||||
Phones | Multimedia | Solutions | Networks | segments | Functions | tions | Group | |||||||||||||||||||||||||||
2005 | 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 | |||||||||||||||||||||||||||
Balance Sheet Information | ||||||||||||||||||||||||||||||||||
Capital expenditures(2) | 273 | 77 | 24 | 102 | 476 | 131 | 607 | |||||||||||||||||||||||||||
Segment assets(3)of which: | 4 355 | 1 374 | 202 | 3 437 | 9 368 | 1 135 | (53 | ) | 10 450 | |||||||||||||||||||||||||
Investments in associated companies | — | — | — | — | — | 193 | 193 | |||||||||||||||||||||||||||
Unallocated assets(4) | 12 002 | |||||||||||||||||||||||||||||||||
Total assets | 22 452 | |||||||||||||||||||||||||||||||||
Segment liabilities(5) | 4 772 | 1 505 | 315 | 1 607 | 8 199 | 241 | (156 | ) | 8 284 | |||||||||||||||||||||||||
Unallocated liabilities(6) | 1 654 | |||||||||||||||||||||||||||||||||
Total liabilities | 9 938 | |||||||||||||||||||||||||||||||||
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Total | Common | ||||||||||||||||||||||||||||||||
Mobile | Enterprise | reportable | Group | Elimina- | |||||||||||||||||||||||||||||
Phones | Multimedia | Solutions | Networks | segments | Functions | tions | Group | ||||||||||||||||||||||||||
2004 | EURm | EURm | EURm | EURm | EURm | EURm | EURm | EURm | |||||||||||||||||||||||||
Profit and Loss Information | |||||||||||||||||||||||||||||||||
Net sales to external customers | 18 443 | 3 653 | 815 | 6 431 | 29 342 | 29 | 29 371 | ||||||||||||||||||||||||||
Net sales to other segments | 78 | 23 | 24 | — | 125 | (29 | ) | (96 | ) | — | |||||||||||||||||||||||
Depreciation and amortization | 306 | 77 | 23 | 314 | 720 | 148 | 868 | ||||||||||||||||||||||||||
Impairment and customer finance charges | — | — | — | 115 | 115 | 11 | 126 | ||||||||||||||||||||||||||
Operating profit/(loss) | 3 786 | 175 | (210 | ) | 884 | 4 635 | (309 | ) | 4 326 | ||||||||||||||||||||||||
Share of results of associated companies | — | — | — | — | — | (26 | ) | (26 | ) |
(1) | Networks operating profit includes a gain of EUR 276 million relating to a partial recovery of a previously impaired financing arrangement with Telsim. |
(2) | Including goodwill and capitalized development costs, capital expenditures in 2006 amount to EUR 1 240 million (EUR 760 million in 2005). The goodwill and capitalized development costs consist of EUR 60 million in 2006 (EUR 31 million in 2005) for Mobile Phones, EUR 171 million in 2006 (EUR 16 million in 2005) for Multimedia, EUR 271 million in 2006 (EUR 5 million in 2005) for Enterprise Solutions, EUR 88 million in 2006 (EUR 93 million in 2005) for Networks and EUR 0 million in 2006 (EUR 8 million in 2005) for Common Group Functions. |
(3) | 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. |
(4) | 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, accrued income and deferred tax assets. Tax related prepaid expenses and accrued income, and deferred tax assets amount to EUR 1 240 million in 2006 (EUR 1 281 million in 2005). |
(5) | Comprises accounts payable, accrued expenses and provisions except those related to interest and taxes. |
(6) | Unallocated liabilities includenon-current liabilities andshort-term borrowings as well as interest and tax related prepaid income, accrued expenses and provisions. Tax related accrued expenses and deferred tax liabilities amount to EUR 497 million in 2006 (EUR 433 million in 2005). |
2006 | 2005 | 2004 | ||||||||||
Net sales to external customers by geographic area by location of customer | EURm | EURm | EURm | |||||||||
Finland | 387 | 331 | 351 | |||||||||
China | 4 913 | 3 403 | 2 678 | |||||||||
USA | 2 815 | 2 743 | 3 430 | |||||||||
India | 2 713 | 2 022 | 1 369 | |||||||||
Great Britain | 2 425 | 2 405 | 2 269 | |||||||||
Germany | 2 060 | 1 982 | 1 730 | |||||||||
Other | 25 808 | 21 305 | 17 544 | |||||||||
Total | 41 121 | 34 191 | 29 371 | |||||||||
F-24
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Segment assets by geographic area | 2006 | 2005 | ||||||||||
EURm | EURm | |||||||||||
Finland | 4 165 | 3 619 | ||||||||||
China | 1 257 | 1 120 | ||||||||||
USA | 1 270 | 1 437 | ||||||||||
India | 618 | 416 | ||||||||||
Great Britain | 523 | 437 | ||||||||||
Germany | 615 | 390 | ||||||||||
Other | 3 456 | 3 031 | ||||||||||
Total | 11 904 | 10 450 | ||||||||||
Capital expenditures by market area | 2006 | 2005 | 2004 | |||||||||
EURm | EURm | EURm | ||||||||||
Finland | 275 | 259 | 216 | |||||||||
China | 125 | 93 | 57 | |||||||||
USA | 63 | 74 | 80 | |||||||||
India | 65 | 31 | 3 | |||||||||
Great Britain | 11 | 12 | 5 | |||||||||
Germany | 23 | 26 | 20 | |||||||||
Other | 88 | 112 | 167 | |||||||||
Total(1) | 650 | 607 | 548 | |||||||||
(1) | Including goodwill and capitalized development costs, capital expenditures amount to EUR 1 240 million in 2006 (EUR 760 million in 2005 and EUR 649 million in 2004). The goodwill and capitalized development costs in 2006 consist of EUR 268 million in USA (EUR 0 million in USA in 2005 and EUR 0 million in USA in 2004) and EUR 321 million in other areas (EUR 153 million in 2005 and EUR 101 million in 2004). |
F-25
Table of Contents
2006 | 2005 | 2004 | ||||||||||
EURm | EURm | EURm | ||||||||||
Wages and salaries | 3 457 | 3 127 | 2 805 | |||||||||
Share-based compensation expense, total | 192 | 104 | 62 | |||||||||
Pension expenses, net | 310 | 252 | 253 | |||||||||
Other social expenses | 439 | 394 | 372 | |||||||||
Personnel expenses as per profit and loss account | 4 398 | 3 877 | 3 492 | |||||||||
2006 | 2005 | 2004 | |||||||||||
Average personnel | |||||||||||||
Mobile Phones | 3 639 | 2 647 | 2 853 | ||||||||||
Multimedia | 3 058 | 2 750 | 2 851 | ||||||||||
Enterprise Solutions | 2 264 | 2 185 | 2 167 | ||||||||||
Networks | 20 277 | 17 676 | 15 463 | ||||||||||
Common Group Functions | 36 086 | 31 638 | 30 177 | ||||||||||
Nokia Group | 65 324 | 56 896 | 53 511 | ||||||||||
F-26
Table of Contents
2006 | 2005 | |||||||||||||||
Domestic | Foreign | Domestic | Foreign | |||||||||||||
Plans | Plans | Plans | Plans | |||||||||||||
EURm | EURm | EURm | EURm | |||||||||||||
Present value of defined benefit obligations at beginning of year | (890 | ) | (495 | ) | (727 | ) | (398 | ) | ||||||||
Foreign currency exchange rate changes | — | (3 | ) | — | (3 | ) | ||||||||||
Current service cost | (63 | ) | (38 | ) | (48 | ) | (21 | ) | ||||||||
Interest cost | (40 | ) | (26 | ) | (36 | ) | (22 | ) | ||||||||
Plan participants’ contributions | — | (7 | ) | — | (6 | ) | ||||||||||
Actuarial (loss) gain | (51 | ) | 14 | (91 | ) | (52 | ) | |||||||||
Curtailment | 3 | — | 3 | — | ||||||||||||
Benefits paid | 10 | 9 | 9 | 7 | ||||||||||||
Present value of defined benefit obligations at end of year | (1 031 | ) | (546 | ) | (890 | ) | (495 | ) | ||||||||
Plan assets at fair value at beginning of year | 904 | 372 | 768 | 303 | ||||||||||||
Foreign currency exchange rate changes | — | 3 | — | 3 | ||||||||||||
Expected return on plan assets | 41 | 21 | 46 | 18 | ||||||||||||
Actuarial gain (loss) on plan assets | (8 | ) | (3 | ) | 56 | 22 | ||||||||||
Employer contribution | 59 | 32 | 19 | 27 | ||||||||||||
Plan participants’ contributions | — | 8 | — | 6 | ||||||||||||
Transfer from central pool | — | — | 24 | — | ||||||||||||
Benefits paid | (11 | ) | (9 | ) | (9 | ) | (7 | ) | ||||||||
Plan assets at fair value at end of year | 985 | 424 | 904 | 372 | ||||||||||||
(Deficit)/Surplus | (46 | ) | (122 | ) | 14 | (123 | ) | |||||||||
Unrecognized net actuarial losses | 187 | 89 | 128 | 105 | ||||||||||||
Unrecognized past service cost | — | — | 3 | — | ||||||||||||
Prepaid/(Accrued) pension cost in balance sheet | 141 | (33 | ) | 145 | (18 | ) | ||||||||||
F-27
Table of Contents
2006 | 2005 | 2004 | ||||||||||
EURm | EURm | EURm | ||||||||||
Current service cost | 101 | 69 | 62 | |||||||||
Interest cost | 66 | 58 | 56 | |||||||||
Expected return on plan assets | (62 | ) | (64 | ) | (56 | ) | ||||||
Net actuarial losses recognized in year | 8 | 9 | — | |||||||||
Past service cost gain (-) loss (+) | 3 | 1 | (1 | ) | ||||||||
Transfer from central pool | — | (24 | ) | — | ||||||||
Curtailment | (4 | ) | (3 | ) | — | |||||||
Total, included in personnel expenses | 112 | 46 | 61 | |||||||||
2006 | 2005 | |||||||
EURm | EURm | |||||||
Prepaid pension costs at beginning of year | 127 | 126 | ||||||
Net income (expense) recognized in the profit and loss account | (112 | ) | (46 | ) | ||||
Contributions paid | 91 | 46 | ||||||
Foreign currency exchange rate changes | 2 | 1 | ||||||
Prepaid pension costs at end of year(1) | 108 | 127 | ||||||
(1) | included within prepaid expenses and accrued income |
2006 | 2005 | 2004 | 2003 | 2002 | ||||||||||||||||
EURm | EURm | EURm | EURm | EURm | ||||||||||||||||
Present value of defined benefit obligation | (1 577 | ) | (1 385 | ) | (1 125 | ) | (1 009 | ) | (800 | ) | ||||||||||
Plan assets at fair value | 1 409 | 1 276 | 1 071 | 887 | 762 | |||||||||||||||
Deficit | (168 | ) | (109 | ) | (54 | ) | (122 | ) | (38 | ) | ||||||||||
2006 | 2005 | |||||||||||||||
Domestic | Foreign | Domestic | Foreign | |||||||||||||
% | % | % | % | |||||||||||||
Discount rate for determining present values | 4.60 | 4.78 | 4.20 | 4.55 | ||||||||||||
Expected long-term rate of return on plan assets | 4.60 | 5.50 | 4.44 | 5.49 | ||||||||||||
Annual rate of increase in future compensation levels | 3.50 | 3.59 | 3.50 | 3.91 | ||||||||||||
Pension increases | 2.00 | 2.69 | 2.00 | 2.55 |
F-28
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2006 | 2005 | |||||||||||||||
Domestic | Foreign | Domestic | Foreign | |||||||||||||
% | % | % | % | |||||||||||||
Asset Category: | ||||||||||||||||
Equity securities | 11 | 27 | 25 | 26 | ||||||||||||
Debt securities | 75 | 61 | 72 | 62 | ||||||||||||
Insurance contracts | — | 11 | — | 11 | ||||||||||||
Real estate | 1 | — | 2 | — | ||||||||||||
Short-term investments | 13 | 1 | 1 | 1 | ||||||||||||
Total | 100 | 100 | 100 | 100 | ||||||||||||
6. | Advertising and promotional expenses |
7. | Other operating income and expenses |
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7. | Other operating income and expenses (Continued) |
8. | Impairment |
Common | ||||||||||||||||||||||||
Mobile | Enterprise | Group | ||||||||||||||||||||||
Phones | Multimedia | Solutions | Networks | Functions | Group | |||||||||||||||||||
EURm | EURm | EURm | EURm | EURm | EURm | |||||||||||||||||||
2006 | ||||||||||||||||||||||||
Impairment of available-for-sale investments | — | — | — | — | 18 | 18 | ||||||||||||||||||
Impairment of other intangible assets | 33 | — | — | — | — | 33 | ||||||||||||||||||
Total, net | 33 | — | — | — | 18 | 51 | ||||||||||||||||||
2005 | ||||||||||||||||||||||||
Impairment of available-for-sale investments | — | — | — | — | 30 | 30 | ||||||||||||||||||
Total, net | — | — | — | — | 30 | 30 | ||||||||||||||||||
2004 | ||||||||||||||||||||||||
Impairment of available-for-sale investments | — | — | — | — | 11 | 11 | ||||||||||||||||||
Impairment of capitalized development costs | — | — | — | 115 | — | 115 | ||||||||||||||||||
Total, net | — | — | — | 115 | 11 | 126 | ||||||||||||||||||
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9. | Acquisitions |
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 liabilities | 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. |
F-31
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9. | Acquisitions (Continued) |
• | 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. |
10. | Depreciation and amortization |
2006 | 2005 | 2004 | ||||||||||
EURm | EURm | EURm | ||||||||||
Depreciation and amortization by function | ||||||||||||
Cost of sales | 279 | 242 | 196 | |||||||||
Research and development | 312 | 349 | 431 | |||||||||
Selling and marketing | 9 | 9 | 14 | |||||||||
Administrative and general | 111 | 99 | 123 | |||||||||
Other operating expenses | 1 | 13 | 8 | |||||||||
Amortization of goodwill | — | — | 96 | |||||||||
Total | 712 | 712 | 868 | |||||||||
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11. | Financial income and expenses |
2006 | 2005 | 2004 | |||||||||||
EURm | EURm | EURm | |||||||||||
Income from available-for-sale investments | |||||||||||||
Dividend income | — | 1 | 22 | ||||||||||
Interest income | 223 | 295 | 299 | ||||||||||
Other financial income | 55 | 77 | 178 | ||||||||||
Foreign exchange gains and losses | (31 | ) | (11 | ) | 8 | ||||||||
Interest expense | (22 | ) | (18 | ) | (22 | ) | |||||||
Other financial expenses | (18 | ) | (22 | ) | (80 | ) | |||||||
Total | 207 | 322 | 405 | ||||||||||
12. | Income taxes |
2006 | 2005 | 2004 | |||||||||||
EURm | EURm | EURm | |||||||||||
Income tax expense | |||||||||||||
Current tax | (1 303 | ) | (1 262 | ) | (1 403 | ) | |||||||
Deferred tax | (54 | ) | (19 | ) | (43 | ) | |||||||
Total | (1 357 | ) | (1 281 | ) | (1 446 | ) | |||||||
Finland | (941 | ) | (759 | ) | (1 128 | ) | |||||||
Other countries | (416 | ) | (522 | ) | (318 | ) | |||||||
Total | (1 357 | ) | (1 281 | ) | (1 446 | ) | |||||||
2006 | 2005 | 2004 | |||||||||||
EURm | EURm | EURm | |||||||||||
Income tax expense at statutory rate | 1 488 | 1 295 | 1 372 | ||||||||||
Amortization of goodwill | — | — | 28 | ||||||||||
Provisions without income tax benefit/expense | 12 | 11 | — | ||||||||||
Taxes for prior years | (24 | ) | 1 | (34 | ) | ||||||||
Taxes on foreign subsidiaries’ profits lower than income taxes at statutory rate | (73 | ) | (30 | ) | (130 | ) | |||||||
Net change in provisions | (12 | ) | 22 | 67 | |||||||||
Change in deferred tax rate | — | — | 26 | ||||||||||
Deferred tax liability on undistributed earnings | (3 | ) | 8 | 60 | |||||||||
Adoption of IAS 39(R) and IFRS 2 | — | — | 11 | ||||||||||
Other | (31 | ) | (26 | ) | 46 | ||||||||
Income tax expense | 1 357 | 1 281 | 1 446 | ||||||||||
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12. | Income taxes (Continued) |
13. | Intangible assets |
2006 | 2005 | |||||||
EURm | EURm | |||||||
Capitalized development costs | ||||||||
Acquisition cost January 1 | 1 445 | 1 322 | ||||||
Additions during the period | 127 | 153 | ||||||
Disposals during the period | (39 | ) | (30 | ) | ||||
Accumulated acquisition cost December 31 | 1 533 | 1 445 | ||||||
Accumulated amortization January 1 | (1 185 | ) | (1 044 | ) | ||||
Disposals during the period | 39 | 30 | ||||||
Amortization for the period | (136 | ) | (171 | ) | ||||
Accumulated amortization December 31 | (1 282 | ) | (1 185 | ) | ||||
Net book value January 1 | 260 | 278 | ||||||
Net book value December 31 | 251 | 260 | ||||||
Goodwill | ||||||||
Acquisition cost January 1 | 90 | 1 298 | ||||||
Transfer of accumulated amortization on adoption of IFRS 3 | — | (1 208 | ) | |||||
Translation differences | (26 | ) | — | |||||
Additions during the period (Note 9) | 488 | — | ||||||
Other changes | (20 | ) | — | |||||
Accumulated acquisition cost December 31 | 532 | 90 | ||||||
Net book value January 1 | 90 | 90 | ||||||
Net book value December 31 | 532 | 90 | ||||||
Other intangible assets | ||||||||
Acquisition cost January 1 | 676 | 631 | ||||||
Translation differences | (21 | ) | 3 | |||||
Additions during the period | 99 | 59 | ||||||
Acquisition of subsidiary (Note 9) | 122 | — | ||||||
Impairment losses | (33 | ) | — | |||||
Disposals during the period | (71 | ) | (17 | ) | ||||
Accumulated acquisition cost December 31 | 772 | 676 | ||||||
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13. | Intangible assets (Continued) |
2006 | 2005 | |||||||
EURm | EURm | |||||||
Accumulated amortization January 1 | (465 | ) | (422 | ) | ||||
Translation differences | 10 | 7 | ||||||
Disposals during the period | 66 | 14 | ||||||
Amortization for the period | (85 | ) | (64 | ) | ||||
Accumulated amortization December 31 | (474 | ) | (465 | ) | ||||
Net book value January 1 | 211 | 209 | ||||||
Net book value December 31 | 298 | 211 |
14. | Property, plant and equipment |
2006 | 2005 | |||||||
EURm | EURm | |||||||
Land and water areas | ||||||||
Acquisition cost January 1 | 82 | 104 | ||||||
Translation differences | (1 | ) | 1 | |||||
Additions during the period | — | 5 | ||||||
Disposals during the period | (3 | ) | (28 | ) | ||||
Accumulated acquisition cost December 31 | 78 | 82 | ||||||
Net book value January 1 | 82 | 104 | ||||||
Net book value December 31 | 78 | 82 | ||||||
Buildings and constructions | ||||||||
Acquisition cost January 1 | 865 | 910 | ||||||
Translation differences | (11 | ) | 16 | |||||
Additions during the period | 123 | 29 | ||||||
Disposals during the period | (52 | ) | (90 | ) | ||||
Accumulated acquisition cost December 31 | 925 | 865 | ||||||
Accumulated depreciation January 1 | (244 | ) | (220 | ) | ||||
Translation differences | 4 | (1 | ) | |||||
Disposals during the period | 40 | 12 | ||||||
Depreciation for the period | (30 | ) | (35 | ) | ||||
Accumulated depreciation December 31 | (230 | ) | (244 | ) | ||||
Net book value January 1 | 621 | 690 | ||||||
Net book value December 31 | 695 | 621 | ||||||
Machinery and equipment | ||||||||
Acquisition cost January 1 | 3 735 | 3 340 | ||||||
Translation differences | (62 | ) | 149 | |||||
Additions during the period | 466 | 470 | ||||||
Disposals during the period | (432 | ) | (224 | ) | ||||
Accumulated acquisition cost December 31 | 3 707 | 3 735 | ||||||
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14. | Property, plant and equipment (Continued) |
2006 | 2005 | |||||||
EURm | EURm | |||||||
Accumulated depreciation January 1 | (2 984 | ) | (2 650 | ) | ||||
Translation differences | 48 | (111 | ) | |||||
Disposals during the period | 429 | 217 | ||||||
Depreciation for the period | (459 | ) | (440 | ) | ||||
Accumulated depreciation December 31 | (2 966 | ) | (2 984 | ) | ||||
Net book value January 1 | 751 | 690 | ||||||
Net book value December 31 | 741 | 751 | ||||||
Other tangible assets | ||||||||
Acquisition cost January 1 | 17 | 21 | ||||||
Translation differences | (1 | ) | 1 | |||||
Additions during the period | 6 | 1 | ||||||
Disposals during the period | — | (6 | ) | |||||
Accumulated acquisition cost December 31 | 22 | 17 | ||||||
Accumulated depreciation January 1 | (6 | ) | (11 | ) | ||||
Translation differences | — | 1 | ||||||
Disposals during the period | — | 6 | ||||||
Depreciation for the period | (1 | ) | (2 | ) | ||||
Accumulated depreciation December 31 | (7 | ) | (6 | ) | ||||
Net book value January 1 | 11 | 10 | ||||||
Net book value December 31 | 15 | 11 |
2006 | 2005 | ||||||||
EURm | EURm | ||||||||
Advance payments and fixed assets under construction | |||||||||
Net carrying amount January 1 | 120 | 40 | |||||||
Translation differences | (2 | ) | 2 | ||||||
Additions | 213 | 105 | |||||||
Disposals | (1 | ) | — | ||||||
Transfers to: | |||||||||
Other intangible assets | (37 | ) | (3 | ) | |||||
Buildings and constructions | (89 | ) | (4 | ) | |||||
Machinery and equipment | (131 | ) | (20 | ) | |||||
Net carrying amount December 31 | 73 | 120 | |||||||
Total property, plant and equipment | 1 602 | 1 585 |
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15. | Investments in associated companies |
2006 | 2005 | |||||||
EURm | EURm | |||||||
Net carrying amount January 1 | 193 | 200 | ||||||
Translation differences | (2 | ) | 8 | |||||
Additions | 19 | 12 | ||||||
Disposals | (1 | ) | (17 | ) | ||||
Share of results | 28 | 10 | ||||||
Other movements | (13 | ) | (20 | ) | ||||
Net carrying amount December 31 | 224 | 193 | ||||||
16. | Available-for-sale investments |
2006 | 2005 | |||||||
EURm | EURm | |||||||
Fair value at January 1 | 8 591 | 10 876 | ||||||
Translation differences | (44 | ) | 49 | |||||
Deductions, net | (1 184 | ) | (2 276 | ) | ||||
Fair value gains (losses) | 1 | (28 | ) | |||||
Impairment charges (Note 8) | (18 | ) | (30 | ) | ||||
Fair value at December 31 | 7 346 | 8 591 | ||||||
Non-current | 288 | 246 | ||||||
Current, liquid assets | 5 012 | 6 852 | ||||||
Current, cash equivalents | 2 046 | 1 493 |
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16. | Available-for-sale investments (Continued) |
17. | Long-term loans receivable |
2006 | 2005 | |||||||
EURm | EURm | |||||||
Under 1 year | — | 56 | ||||||
Between 1 and 2 years | 7 | — | ||||||
Between 2 and 5 years | 12 | 7 | ||||||
Over 5 years | — | — | ||||||
19 | 63 | |||||||
2006 | 2005 | |||||||
EURm | EURm | |||||||
Raw materials, supplies and other | 360 | 361 | ||||||
Work in progress | 600 | 685 | ||||||
Finished goods | 594 | 622 | ||||||
Total | 1 554 | 1 668 | ||||||
19. | Accounts receivables and prepaid expenses and accrued income |
Balance at | Charged to | Balance | ||||||||||||||
beginning | cost and | at end | ||||||||||||||
Allowances on assets to which they apply: | of year | expenses | Deductions(1) | of year | ||||||||||||
EURm | EURm | EURm | EURm | |||||||||||||
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(2) | 172 | 376 | (372 | ) | 176 | |||||||||||
2004 | ||||||||||||||||
Allowance for doubtful accounts | 367 | 155 | (161 | ) | 361 | |||||||||||
Excess and obsolete inventory | 188 | 308 | (324 | ) | 172 |
(1) | Deductions include utilization and releases of the allowances. |
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(2) | In 2005, reported deductions inadvertently excluded certain items. The previously reported 2005 deductions of EUR 249 million were adjusted to the current amount of EUR 372 million and the reported ending balance was similarly adjusted. This matter affected the disclosure only and had no impact on the balance sheet, profit and loss or cash flow. |
Hedging | Available-for-sale | ||||||||||||||||||||||||||||||||||||
reserve | investments | Total | |||||||||||||||||||||||||||||||||||
Gross | Tax | Net | Gross | Tax | Net | Gross | Tax | Net | |||||||||||||||||||||||||||||
Balance at December 31, 2003 | 14 | (2 | ) | 12 | 83 | (14 | ) | 69 | 97 | (16 | ) | 80 | |||||||||||||||||||||||||
Cash flow hedges: | |||||||||||||||||||||||||||||||||||||
Fair value losses in period | — | (1 | ) | (1 | ) | — | — | — | — | (1 | ) | (1 | ) | ||||||||||||||||||||||||
Available-for-sale investments: | |||||||||||||||||||||||||||||||||||||
Net fair value gains/(losses) | — | — | — | 18 | (1 | ) | 17 | 18 | (1 | ) | 17 | ||||||||||||||||||||||||||
Transfer to profit and loss account on impairment | — | — | — | 11 | — | 11 | 11 | — | 11 | ||||||||||||||||||||||||||||
Transfer of fair value gains to profit and loss account on disposal | — | — | — | (105 | ) | 10 | (95 | ) | (105 | ) | 10 | (95 | ) | ||||||||||||||||||||||||
Transfer of fair value losses to profit and loss account on disposal | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Balance at December 31, 2004 | 14 | (3 | ) | 11 | 7 | (5 | ) | 2 | 21 | (8 | ) | 13 | |||||||||||||||||||||||||
Cash flow hedges: | |||||||||||||||||||||||||||||||||||||
Fair value gains/(losses) in period | (177 | ) | 45 | (132 | ) | — | — | — | (177 | ) | 45 | (132 | ) | ||||||||||||||||||||||||
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 fair value gains to profit and loss account on disposal | — | — | — | (5 | ) | — | (5 | ) | (5 | ) | — | (5 | ) | ||||||||||||||||||||||||
Transfer of fair value losses to profit and loss account on disposal | — | — | — | 2 | — | 2 | 2 | — | 2 | ||||||||||||||||||||||||||||
Balance at December 31, 2005 | (163 | ) | 42 | (121 | ) | (56 | ) | 1 | (55 | ) | (219 | ) | 43 | (176 | ) | ||||||||||||||||||||||
Cash flow hedges: | |||||||||||||||||||||||||||||||||||||
Fair value gains/(losses) in period | 232 | (61 | ) | 171 | — | — | — | 232 | (61 | ) | 171 | ||||||||||||||||||||||||||
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 fair value 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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21. | Fair value and other reserves (Continued) |
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F-42
Table of Contents
Vesting status | ||||||||||||||||||||||||||
Stock | Number | (as percentage | Exercise period | Exercise | ||||||||||||||||||||||
Plan | options | of partici- | of total number | price/ | ||||||||||||||||||||||
(year of | out- | pants | Option (sub) | of stock options | First vest | Last vest | Expiry | share | ||||||||||||||||||
launch) | standing | (approx.) | category | outstanding) | date | date | date | EUR | ||||||||||||||||||
2001(1),(2) | 44 978 614 | 24 000 | 2001A+B | Expired | July 1, 2002 | July 1, 2005 | December 31, 2006 | 36.75 | ||||||||||||||||||
2001C3Q/01 | Expired | October 1, 2002 | October 3, 2005 | December 31, 2006 | 20.61 | |||||||||||||||||||||
2001C4Q/01 | Expired | January 2, 2003 | January 2, 2006 | December 31, 2006 | 26.67 | |||||||||||||||||||||
2001C1Q/02 | 100.00 | April 1, 2003 | April 3, 2006 | December 31, 2007 | 26.06 | |||||||||||||||||||||
2001C3Q/02 | 100.00 | October 1, 2003 | October 2, 2006 | December 31, 2007 | 12.99 | |||||||||||||||||||||
2001C4Q/02 | 93.75 | January 2, 2004 | January 2, 2007 | December 31, 2007 | 16.86 | |||||||||||||||||||||
2002A+B | 100.00 | July 1, 2003 | July 3, 2006 | December 31, 2007 | 17.89 | |||||||||||||||||||||
2003(2) | 29 255 968 | 19 000 | 2003 2Q | 81.25 | July 1, 2004 | July 2, 2007 | December 31, 2008 | 14.95 | ||||||||||||||||||
2003 3Q | 75.00 | October 1, 2004 | October 1, 2007 | December 31, 2008 | 12.71 | |||||||||||||||||||||
2003 4Q | 68.75 | January 3, 2005 | January 2, 2008 | December 31, 2008 | 15.05 | |||||||||||||||||||||
2004 2Q | 56.25 | July 1, 2005 | July 1, 2008 | December 31, 2009 | 11.79 | |||||||||||||||||||||
2004 3Q | 50.00 | October 3, 2005 | October 1, 2008 | December 31, 2009 | 9.44 | |||||||||||||||||||||
2004 4Q | 43.75 | January 2, 2006 | January 2, 2009 | December 31, 2009 | 12.35 | |||||||||||||||||||||
2005(2) | 17 421 819 | 5 000 | 2005 2Q | 31.25 | July 1, 2006 | July 1, 2009 | December 31, 2010 | 12.79 | ||||||||||||||||||
2005 3Q | 25.00 | October 1, 2006 | October 1, 2009 | December 31, 2010 | 13.09 | |||||||||||||||||||||
2005 4Q | 0.00 | January 1, 2007 | January 1, 2010 | December 31, 2010 | 14.48 | |||||||||||||||||||||
2006 1Q | 0.00 | April 1, 2007 | April 1, 2010 | December 31, 2011 | 14.99 | |||||||||||||||||||||
2006 2Q | 0.00 | July 1, 2007 | July 1, 2010 | December 31, 2011 | 18.02 | |||||||||||||||||||||
2006 3Q | 0.00 | October 1, 2007 | October 1, 2010 | December 31, 2011 | 15.37 | |||||||||||||||||||||
2006 4Q | 0.00 | January 1, 2008 | January 1, 2011 | December 31, 2011 | 15.38 |
(1) | The stock options under the 2001 plan are listed on the Helsinki Stock Exchange. |
(2) | The Group’s current global stock option plans have a vesting schedule with 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. |
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Number of | Weighted average | Weighted average | Aggregate intrinsic | |||||||||||||
shares | exercise price | share price | value | |||||||||||||
EUR | EUR | EURm | ||||||||||||||
Shares under option at December 31, 2003 | 238 993 617 | 27.90 | 10 | |||||||||||||
Granted | 7 172 424 | 11.88 | ||||||||||||||
Exercised | 781 338 | 8.33 | 12.49 | 3 | ||||||||||||
Forfeited | 4 733 995 | 19.55 | ||||||||||||||
Expired | 97 693 392 | 33.99 | ||||||||||||||
Shares under option at December 31, 2004 | 142 957 316 | 23.29 | 3 | |||||||||||||
Granted | 8 552 160 | 12.82 | ||||||||||||||
Exercised | 724 796 | 10.94 | 13.42 | 2 | ||||||||||||
Forfeited | 5 052 794 | 17.86 | ||||||||||||||
Shares under option at December 31, 2005 | 145 731 886 | 22.97 | 61 | |||||||||||||
Granted(1) | 11 421 939 | 16.79 | ||||||||||||||
Exercised | 3 302 437 | 13.71 | 16.70 | 10 | ||||||||||||
Forfeited | 2 888 474 | 15.11 | ||||||||||||||
Expired | 57 677 685 | 33.44 | ||||||||||||||
Shares under option at December 31, 2006 | 93 285 229 | 16.28 | 63 | |||||||||||||
Options exercisable at December 31, 2004 (shares) | 83 667 122 | 26.18 | 3 | |||||||||||||
Options exercisable at December 31, 2005 (shares) | 112 095 407 | 25.33 | 17 | |||||||||||||
Options exercisable at December 31, 2006 (shares) | 69 721 916 | 16.65 | 32 |
(1) | Includes options converted in acquisitions. |
Options outstanding | Vested options outstanding | |||||||||||||||||||||||
Weighted | ||||||||||||||||||||||||
Weighted average | average | Weighted | ||||||||||||||||||||||
remaining | remaining | average | ||||||||||||||||||||||
Exercise prices | Number of | contractual life in | Weighted average | Number of | contractual | exercise price | ||||||||||||||||||
EUR | shares | years | exercise price EUR | shares | life in years | EUR | ||||||||||||||||||
0.68 - 11.79 | 6 407 858 | 3.68 | 10.98 | 3 302 237 | 3.32 | 11.01 | ||||||||||||||||||
12.06 - 14.86 | 8 132 229 | 3.95 | 12.84 | 2 595 071 | 3.68 | 12.80 | ||||||||||||||||||
14.95 - 17.87 | 24 150 595 | 2.06 | 14.96 | 18 790 492 | 2.00 | 14.96 | ||||||||||||||||||
17.89 | 44 643 161 | 1.00 | 17.89 | 44 555 120 | 1.00 | 17.89 | ||||||||||||||||||
18.02 - 42.85 | 9 951 386 | 4.90 | 18.47 | 478 996 | 2.90 | 27.38 | ||||||||||||||||||
93 285 229 | 69 721 916 | |||||||||||||||||||||||
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Table of Contents
2006 | 2005 | 2004 | ||||||||||
Weighted average expected dividend yield | 2.08% | 2.50% | 2.44% | |||||||||
Weighted average expected volatility | 24.09% | 25.92% | 33.00% | |||||||||
Risk-free interest rate | 2.86% - 3.75% | 2.16% - 3.09% | 2.24% - 4.22% | |||||||||
Weighted average risk-free interest rate | 3.62% | 2.60% | 3.07% | |||||||||
Expected life (years) | 3.60 | 3.59 | 3.20 | |||||||||
Weighted average share price | 17.84 | 13.20 | 11.84 |
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Table of Contents
Performance | Number of | Interim | ||||||||||||||||||||||
shares | participants | measurement | Performance | 1st (interim) | 2nd (final) | |||||||||||||||||||
Plan | outstanding | (approx.) | period | period | settlement | settlement | ||||||||||||||||||
2004 | 3 449 502 | 11 000 | 2004-2005 | 2004-2007 | 2006 | 2008 | ||||||||||||||||||
2005 | 4 107 301 | 12 000 | 2005-2006 | 2005-2008 | 2007 | 2009 | ||||||||||||||||||
2006 | 4 755 186 | 13 000 | N/A | 2006-2008 | N/A | 2009 |
Threshold Performance | Maximum Performance | |||||||||
Average Annual | Average Annual | |||||||||
Plan | EPS(1) | Net Sales Growth(1) | EPS(1) | Net Sales Growth(1) | ||||||
2004 | Interim measurement | 0.80 | 4% | 0.94 | 16% | |||||
Performance period | 0.84 | 4% | 1.18 | 16% | ||||||
Number of shares vesting(2) | 1.72 million | 1.72 million | 6.90 million | 6.90 million | ||||||
2005 | Interim measurement | 0.75 | 3% | 0.96 | 12% | |||||
Performance period | 0.82 | 3% | 1.33 | 12% | ||||||
Number of shares vesting(2) | 2.05 million | 2.05 million | 8.21 million | 8.21 million | ||||||
2006 | Performance period | 0.96 | 5% | 1.41 | 20% | |||||
Number of shares vesting(2) | 2.38 million | 2.38 million | 9.51 million | 9.51 million |
(1) | Both the EPS and Average Annual Net Sales Growth criteria have an equal weight of 50%. |
(2) | A performance share represents the grant at threshold. At maximum performance, the settlement amounts to four times the number of performance shares originally granted at threshold. |
Weighted | ||||||||||||||||
Number of | average | Weighted average | Aggregate | |||||||||||||
performance | grant date | remaining | intrinsic | |||||||||||||
shares at | fair value | contractual | value | |||||||||||||
threshold | EUR (1) | term (years) | EURm(2) | |||||||||||||
Performance shares at January 1, 2005 | 3 910 840 | 10.58 | 3.25 | 91 | ||||||||||||
Granted | 4 469 219 | 11.86 | 3.74 | |||||||||||||
Forfeited | 337 242 | 10.74 | 3.88 | |||||||||||||
Performance shares at December 31, 2005 | 8 042 817 | 11.28 | 2.79 | 344 | ||||||||||||
Granted(3) | 5 140 736 | 14.83 | 2.48 | |||||||||||||
Forfeited | 569 164 | 12.30 | 1.34 | |||||||||||||
Performance shares at December 31, 2006(4) | 12 614 389 | 12.93 | 1.91 | 557 |
(1) | 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. |
(2) | The aggregate intrinsic value reflects management’s estimate of the number of shares expected to vest. |
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(3) | Includes a minor number of performance shares granted under other employee equity plans than the global plans. |
(4) | Based on the performance of the Group during the Interim Measurement Period 2004-2005, 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 with an intrinsic value of EUR 66 million. 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, if any, will be adjusted by the shares delivered based on the Interim Measurement Period. |
Weighted | ||||||||||||||||
Weighted | average | |||||||||||||||
average | remaining | Aggregate | ||||||||||||||
Number of | grant date | contractual | intrinsic | |||||||||||||
Restricted | fair value | term | value | |||||||||||||
Shares | EUR (1) | (years) | EURm | |||||||||||||
Restricted Shares at December 31, 2004 | 2 319 430 | 11.55 | 2.06 | 27 | ||||||||||||
Granted | 3 016 746 | 12.14 | 2.76 | |||||||||||||
Forfeited | 150 500 | 14.31 | 0.74 | |||||||||||||
Restricted Shares at December 31, 2005 | 5 185 676 | 11.59 | 2.06 | 80 | ||||||||||||
Granted(2) | 1 669 050 | 14.71 | 2.65 | |||||||||||||
Forfeited | 455 100 | 12.20 | 0.87 | |||||||||||||
Vested | 334 750 | 12.33 | 0.00 | 5 | ||||||||||||
Restricted Shares at December 31, 2006 | 6 064 876 | 12.27 | 1.69 | 94 |
(1) | 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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(2) | Includes a minor number of restricted shares granted under other employee equity plans than the global plans. |
2006 | ||||
EURm | ||||
Retained earnings | 11 123 | |||
Translation differences (distributable earnings) | (282 | ) | ||
Treasury shares | (2 060 | ) | ||
Other non-distributable items: | ||||
Portion of untaxed reserves | 115 | |||
Distributable earnings December 31 | 8 896 | |||
Repayment | ||||||||||||
Outstanding | date beyond | Outstanding | ||||||||||
December 31, 2006 | 5 years | December 31, 2005 | ||||||||||
EURm | EURm | EURm | ||||||||||
Long-term interest-bearing liabilities | 69 | 69 | 21 | |||||||||
Other long-term liabilities | 122 | 122 | 96 | |||||||||
191 | 191 | 117 | ||||||||||
Deferred tax liabilities | 205 | 151 | ||||||||||
Total long-term liabilities | 396 | 268 | ||||||||||
EUR | USD | |||||||
97.00 | % | 3.00 | % |
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Table of Contents
2006 | 2005 | ||||||||
EURm | EURm | ||||||||
Deferred tax assets: | |||||||||
Intercompany profit in inventory | 34 | 49 | |||||||
Tax losses carried forward | 41 | 7 | |||||||
Warranty provision(1) | 134 | 151 | |||||||
Other provisions(1) | 253 | 280 | |||||||
Fair value gain/losses | — | 43 | |||||||
Depreciation differences and untaxed reserves | 104 | 88 | |||||||
Other temporary differences(2) | 243 | 228 | |||||||
Total deferred tax assets | 809 | 846 | |||||||
Deferred tax liabilities: | |||||||||
Depreciation differences and untaxed reserves | (23 | ) | (24 | ) | |||||
Fair value gains/losses | (16 | ) | — | ||||||
Undistributed earnings | (65 | ) | (68 | ) | |||||
Other temporary differences | (101 | ) | (59 | ) | |||||
Total deferred tax liabilities | (205 | ) | (151 | ) | |||||
Net deferred tax asset | 604 | 695 | |||||||
The tax charged to shareholders’ equity is as follows: | |||||||||
Fair value and other reserves, fair value gains/losses and excess tax benefit on share-based compensation | (43 | ) | 93 |
(1) | Deferred tax assets have been increased in all periods presented by EUR 154 million for recognition of certain additional items relating to periods prior to 2002. See Note 1. |
(2) | In 2006, other temporary differences include deferred tax of EUR 70 million arising from share-based compensation. |
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2006 | 2005 | |||||||
EURm | EURm | |||||||
Social security, VAT and other taxes | 966 | 790 | ||||||
Wages and salaries | 250 | 231 | ||||||
Advance payments | 303 | 268 | ||||||
Other | 2 277 | 2 031 | ||||||
Total | 3 796 | 3 320 | ||||||
IPR | ||||||||||||||||||||
Warranty | infringements | Tax | Other | Total | ||||||||||||||||
EURm | EURm | EURm | EURm | EURm | ||||||||||||||||
At December 31, 2005 | 1 181 | 396 | 386 | 516 | 2 479 | |||||||||||||||
Exchange differences | (11 | ) | — | — | — | (11 | ) | |||||||||||||
Additional provisions | 894 | 179 | 65 | 262 | 1 400 | |||||||||||||||
Changes in estimates | (105 | ) | (72 | ) | (49 | ) | (101 | ) | (327 | ) | ||||||||||
Charged to profit and loss account | 789 | 107 | 16 | 161 | 1 073 | |||||||||||||||
Utilized during year | (761 | ) | (219 | ) | — | (175 | ) | (1 155 | ) | |||||||||||
At December 31, 2006 | 1 198 | 284 | 402 | 502 | 2 386 | |||||||||||||||
2006 | 2005 | |||||||||||||||||||
EURm | EURm | |||||||||||||||||||
Analysis of total provisions at December 31: | ||||||||||||||||||||
Non-current | 690 | 788 | ||||||||||||||||||
Current | 1 696 | 1 691 |
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30. | Earnings per share |
2005 | 2004 | ||||||||||||||
2006 | As revised | As revised | |||||||||||||
Numerator (EURm) | |||||||||||||||
Basic/Diluted: | |||||||||||||||
Profit attributable to equity holders of the parent | 4 306 | 3 616 | 3 192 | ||||||||||||
Denominator (000’s Shares) | |||||||||||||||
Basic: | |||||||||||||||
Weighted average shares | 4 062 833 | 4 365 547 | 4 593 196 | ||||||||||||
Effect of dilutive securities: | |||||||||||||||
stock options, restricted shares and performance shares | 23 696 | 5 692 | 7 141 | ||||||||||||
Diluted: | |||||||||||||||
Adjusted weighted average shares and assumed conversions | 4 086 529 | 4 371 239 | 4 600 337 | ||||||||||||
2006 | 2005 | |||||||
EURm | EURm | |||||||
Collateral for our own commitments | ||||||||
Property under mortgages | 18 | 18 | ||||||
Assets pledged | 27 | 10 | ||||||
Contingent liabilities on behalf of Group companies | ||||||||
Other guarantees | 358 | 276 | ||||||
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) | 23 | — | ||||||
Other guarantees | 2 | 2 | ||||||
Financing commitments | ||||||||
Customer finance commitments(1) | 164 | 13 | ||||||
Venture fund commitments(2) | 208 | 230 |
(1) | See also note 37 b). |
(2) | See also note 37 a). |
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Operating | |||||
leases | |||||
Leasing payments, EURm | |||||
2007 | 176 | ||||
2008 | 135 | ||||
2009 | 109 | ||||
2010 | 67 | ||||
2011 | 48 | ||||
Thereafter | 80 | ||||
Total | 615 | ||||
2006 | 2005 | 2004 | ||||||||||
EURm | EURm | EURm | ||||||||||
Transactions with associated companies | ||||||||||||
Share of results of associated companies | 28 | 10 | (26 | ) | ||||||||
Dividend income | 1 | 1 | 2 | |||||||||
Share of shareholders’ equity of associated companies | 61 | 33 | 37 | |||||||||
Liabilities to associated companies | 14 | 14 | 3 |
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2006 | 2005 | 2004 | ||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||
Jorma Ollila | 609 524 | 643 942 | 6 325 728 | 1 500 000 | 3 212 037 | 3 389 994 | 1 475 238 | 1 936 221 | 2 109 863 | |||||||||||||||||||||||||||
Chairman of the Board(1) | ||||||||||||||||||||||||||||||||||||
Olli-Pekka Kallasvuo | 898 413 | 664 227 | 2 108 197 | 623 524 | 947 742 | 666 313 | 584 000 | 454 150 | 394 979 | |||||||||||||||||||||||||||
President and CEO(2) |
(1) | CEO and Chairman until June 1, 2006. |
(2) | President and CEO as from June 1, 2006; and President and COO October 1, 2005-June 1, 2006; Executive Vice President and General Manager of Mobile Phones January 1, 2004-October 1, 2005. |
2006 | 2006 | 2005 | 2005 | 2004 | 2004 | |||||||||||||||||||
Gross | Shares | Gross | Shares | Gross | Shares | |||||||||||||||||||
Annual Fee | Received | Annual Fee | Received | Annual Fee | Received | |||||||||||||||||||
EUR(1) | EUR(1) | EUR(1) | ||||||||||||||||||||||
Board of Directors | ||||||||||||||||||||||||
Jorma Ollila(2) | 375 000 | 8 035 | 165 000 | 5 011 | 150 000 | 4 834 | ||||||||||||||||||
Chairman | ||||||||||||||||||||||||
Paul J. Collins(3) | 162 500 | 3 481 | 162 500 | 4 935 | 150 000 | 4 834 | ||||||||||||||||||
Vice Chairman | ||||||||||||||||||||||||
Georg Ehrnrooth(4) | 120 000 | 2 570 | 120 000 | 3 644 | 100 000 | 3 223 | ||||||||||||||||||
Daniel R. Hesse(5) | 110 000 | 2 356 | 110 000 | 3 340 | — | — | ||||||||||||||||||
Dr. Bengt Holmström(6) | 110 000 | 2 356 | 110 000 | 3 340 | 100 000 | 3 223 | ||||||||||||||||||
Per Karlsson(7) | 135 000 | 2 892 | 135 000 | 4 100 | 125 000 | 4 029 | ||||||||||||||||||
Dame Marjorie Scardino(8) | 110 000 | 2 356 | 110 000 | 3 340 | 100 000 | 3 223 | ||||||||||||||||||
Keijo Suila(9) | 120 000 | 2 570 | — | — | — | — | ||||||||||||||||||
Vesa Vainio(10) | 120 000 | 2 570 | 120 000 | 3 644 | 100 000 | 3 223 | ||||||||||||||||||
(11) | ||||||||||||||||||||||||
(12) |
(1) | Approximately 60 % of the gross annual fee is paid in cash. Approximately 40 % is paid in Nokia shares acquired from the market 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. |
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(3) | The 2006 and 2005 fees of Mr. Collins amounted to a total of EUR 162 500, consisting of a fee of EUR 137 500 for services as Vice Chairman of the Board and EUR 25 000 for services as Chairman of the Personnel Committee. The 2004 fee of Mr. Collins amounted to a total of EUR 150 000, consisting of a fee of EUR 125 000 for services as Vice Chairman of the Board and EUR 25 000 for services as Chairman of the Personnel Committee. |
(4) | The 2006 and 2005 fees of Mr. Ehrnrooth 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. The 2004 fee of Mr. Ehrnrooth amounted to EUR 100 000 for services as a member of the Board. |
(5) | The 2006 and 2005 fees of Mr. Hesse amounted to EUR 110 000 for services as a member of the Board. |
(6) | The 2006 and 2005 fees of Mr. Holmström amounted to EUR 110 000 for services as a member of the Board. The 2004 fee of Mr. Holmström amounted to EUR 100 000 for services as a member of the Board. |
(7) | 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. The 2004 fee of Mr. Karlsson amounted to a total of EUR 125 000, consisting of a fee of EUR 100 000 for services as member of the Board and EUR 25 000 for services as Chairman of the Audit Committee. |
(8) | The 2006 and 2005 fees of Ms. Scardino amounted to EUR 110 000 for services as a member of the Board. The 2004 fee of Ms. Scardino amounted to EUR 100 000 for services as a member of the Board. |
(9) | 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. Mr. Suila is a Nokia Board member since 2006. |
(10) | 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. The 2004 fee of Mr. Vainio amounted to EUR 100 000 for services as a member of the Board. |
(11) | Edouard Michelin was paid the gross annual fee of EUR 110 000 for services as a member of the Board prior to his accidental death in May 2006. This amount included 2 356 shares. The 2005 fee of Mr. Michelin amounted to EUR 110 000 for services as a member of the Board, which amount included 3 340 shares. |
(12) | Arne Wessberg served as a member of the Board until March 30, 2006. The 2005 fee of Mr. Wessberg 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. The total amount included 3 644 shares. The 2004 fee of Mr. Wessberg amounted to EUR 100 000 for services as a member of the Board, which amount included 3 223 shares. |
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2006 | 2005 | 2004 | |||||||||||
EURm | EURm | EURm | |||||||||||
Adjustments for: | |||||||||||||
Depreciation and amortization (Note 10) | 712 | 712 | 868 | ||||||||||
(Profit)/loss on sale of property, plant and equipment and available-for-sale investments | (4 | ) | (131 | ) | 26 | ||||||||
Income taxes (Note 12) | 1 357 | 1 281 | 1 446 | ||||||||||
Share of results of associated companies (Note 33) | (28 | ) | (10 | ) | 26 | ||||||||
Minority interest | 60 | 74 | 67 | ||||||||||
Financial income and expenses (Note 11) | (207 | ) | (322 | ) | (405 | ) | |||||||
Impairment charges (Note 8) | 51 | 66 | 129 | ||||||||||
Share-based compensation | 192 | 104 | 62 | ||||||||||
Premium return | — | — | (160 | ) | |||||||||
Customer financing impairment charges and reversals | (276 | ) | — | — | |||||||||
Adjustments, total | 1 857 | 1 774 | 2 059 | ||||||||||
Change in net working capital | |||||||||||||
(Increase)/decrease in short-term receivables | (1 770 | ) | (896 | ) | 372 | ||||||||
Decrease/(increase) in inventories | 84 | (301 | ) | (193 | ) | ||||||||
Increase in interest-free short-term borrowings | 893 | 831 | 62 | ||||||||||
Change in net working capital | (793 | ) | (366 | ) | 241 | ||||||||
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36. | Principal Nokia Group companies at December 31, 2006 |
Parent | Group | |||||||||
holding | majority | |||||||||
% | % | |||||||||
US | Nokia Inc. | — | 100.00 | |||||||
DE | Nokia GmbH | 100.00 | 100.00 | |||||||
GB | Nokia UK Limited | — | 100.00 | |||||||
KR | Nokia TMC Limited | 100.00 | 100.00 | |||||||
CN | Nokia Telecommunications Ltd | 4.50 | 83.90 | |||||||
NL | Nokia Finance International B.V | 100.00 | 100.00 | |||||||
HU | Nokia Komárom Kft | 100.00 | 100.00 | |||||||
BR | Nokia do Brazil Technologia Ltda | 99.99 | 100.00 | |||||||
IN | Nokia India Ltd | 99.99 | 100.00 | |||||||
IT | Nokia Italia S.p.A. | 100.00 | 100.00 |
Symbian Limited | — | 47.90 |
37. | Risk management |
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37. | Risk management (Continued) |
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37. | Risk management (Continued) |
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37. | Risk management (Continued) |
Financing | ||||||||||||
Outstanding | commitments | Total | ||||||||||
EURm | EURm | EURm | ||||||||||
Total Portfolio | 42 | 164 | 206 |
Maturity date | Maturity date | |||||||||||||||||||||||||||||||||||
less than 12 Months | 12 months or more | Total | ||||||||||||||||||||||||||||||||||
Fair | Unrealized | Unrealized | Fair | Unrealized | Unrealized | Fair | Unrealized | Unrealized | ||||||||||||||||||||||||||||
2006 | Value | Losses | Gains | Value | Losses | Gains | Value | Losses | Gains | |||||||||||||||||||||||||||
Governments | 10 | — | — | 2 360 | (38 | ) | — | 2 370 | (38 | ) | — | |||||||||||||||||||||||||
Banks | 2 861 | (2 | ) | — | 860 | (8 | ) | 1 | 3 721 | (10 | ) | 1 | ||||||||||||||||||||||||
Corporates | 136 | — | — | 260 | (3 | ) | — | 396 | (3 | ) | — | |||||||||||||||||||||||||
Asset backed securities | 98 | — | — | 473 | (1 | ) | 2 | 571 | (1 | ) | 2 | |||||||||||||||||||||||||
3 105 | (2 | ) | — | 3 953 | (50 | ) | 3 | 7 058 | (52 | ) | 3 | |||||||||||||||||||||||||
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37. | Risk management (Continued) |
Maturity date | Maturity date | |||||||||||||||||||||||||||||||||||
less than 12 Months | 12 months or more | Total | ||||||||||||||||||||||||||||||||||
Fair | Unrealized | Unrealized | Fair | Unrealized | Unrealized | Fair | Unrealized | Unrealized | ||||||||||||||||||||||||||||
2005 | Value | Losses | Gains | Value | Losses | Gains | Value | Losses | Gains | |||||||||||||||||||||||||||
Governments | 30 | — | — | 3 919 | (32 | ) | 2 | 3 949 | (32 | ) | 2 | |||||||||||||||||||||||||
Banks | 2 962 | (3 | ) | — | 803 | (5 | ) | 1 | 3 765 | (7 | ) | 1 | ||||||||||||||||||||||||
Corporates | 60 | — | — | 433 | (1 | ) | 2 | 459 | (1 | ) | 2 | |||||||||||||||||||||||||
Asset backed securities | 25 | — | — | 112 | — | — | 172 | — | — | |||||||||||||||||||||||||||
3 077 | (3 | ) | — | 5 267 | (38 | ) | 5 | 8 345 | (41 | ) | 5 | |||||||||||||||||||||||||
2006 | 2005 | |||||||
EURm | EURm | |||||||
Fixed rate investments | 5 853 | 7 531 | ||||||
Floating rate investments | 1 205 | 814 | ||||||
Total | 7 058 | 8 345 | ||||||
(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 2006 and 2005. |
(2) | Weighted average interest rate for fixed income and money-market investments was 3.33% in 2006 and 3.52% in 2005. |
(3) | Included within fixed income and money-market investments is EUR 10 million of restricted cash at December 31, 2006 (10 million at December 31, 2005) |
Revolving Credit Facility of USD 2 000 million, maturing in 2012 | |
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 |
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37. | Risk management (Continued) |
Short-term | Standard & Poor’s | A-1 | ||
Moody’s | P-1 | |||
Long-term | Standard & Poor’s | A | ||
Moody’s | A1 |
2006 | 2005 | |||||||
EURm | EURm | |||||||
Foreign exchange forward contracts(2) | 29 859 | 29 991 | ||||||
Currency options bought(2) | 404 | 284 | ||||||
Currency options sold(2) | 193 | 165 | ||||||
Interest rate swaps (receive fixed interest) | — | 50 | ||||||
Cash settled equity options(3) | 45 | 150 |
(1) | 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. |
(2) | As at December 31, 2006 notional amounts include contracts amounting to EUR 2.4 billion used to hedge the shareholders’ equity of foreign subsidiaries (at December 31, 2005 EUR 2.4 billion). |
(3) | Cash settled equity options are used to hedge risk relating to incentive programs and investment activities. |
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37. | Risk management (Continued) |
2006 | 2005 | ||||||||
EURm | EURm | ||||||||
Derivatives with positive fair value(1): | |||||||||
Forward foreign exchange contracts(2) | 65 | 60 | |||||||
Currency options | 2 | 1 | |||||||
Cash settled equity options | 7 | 8 | |||||||
Derivatives with negative fair value(1): | |||||||||
Forward foreign exchange contracts(2) | (63 | ) | (97 | ) | |||||
Currency options | (3 | ) | — | ||||||
Cash settled equity options | (2 | ) | — |
(1) | Out of the forward foreign exchange contracts and currency options, fair value net EUR 25 million gain was designated for hedges of net investment in foreign subsidiaries as at December 31, 2006 (net EUR 27 million loss at December 31, 2005) and reported within translation differences. |
(2) | Out of the outstanding foreign exchange forward contracts, fair value net EUR 1 million loss was designated for cash flow hedges as at December 31, 2006 (net EUR 3 million loss at December 31, 2005) and reported in fair value and other reserves. The total gain and loss of foreign exchange forward contracts designated for cash flow hedges and reported in fair value and other reserves was net EUR 69 million gain as at December 31, 2006 (net EUR 163 million loss at December 31, 2005). |
38. | Differences between International Financial Reporting Standards and US Generally Accepted Accounting Principles |
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38. | Differences between International Financial Reporting Standards and US Generally Accepted Accounting Principles (Continued) |
2006 | 2005 | 2004 | |||||||||||
EURm | EURm | EURm | |||||||||||
Reconciliation of profit attributable to equity holders of the parent under IFRS to net income under US GAAP: | |||||||||||||
Profit attributable to equity holders of the parent reported under IFRS | 4 306 | 3 616 | 3 192 | ||||||||||
US GAAP adjustments: | |||||||||||||
Pensions | (1 | ) | (3 | ) | — | ||||||||
Development costs | (55 | ) | 10 | 42 | |||||||||
Share-based compensation expense | (8 | ) | (39 | ) | 39 | ||||||||
Cash flow hedges | — | (12 | ) | 31 | |||||||||
Amortization of identifiable intangible assets acquired | — | — | (11 | ) | |||||||||
Impairment of identifiable intangible assets acquired | — | — | (47 | ) | |||||||||
Amortization of goodwill | — | — | 106 | ||||||||||
Other differences | 22 | (1 | ) | (6 | ) | ||||||||
Deferred tax effect of US GAAP adjustments | 11 | 11 | (3 | ) | |||||||||
Net income under US GAAP | 4 275 | 3 582 | 3 343 | ||||||||||
2006 | 2005 | 2004 | |||||||||||
EUR | EUR | EUR | |||||||||||
Earnings per share (net income): | |||||||||||||
Basic | 1.05 | 0.82 | 0.73 | ||||||||||
Diluted | 1.05 | 0.82 | 0.73 | ||||||||||
Average number of shares (000’s shares): | |||||||||||||
Basic | 4 062 833 | 4 365 547 | 4 593 196 | ||||||||||
Diluted | 4 086 529 | 4 371 239 | 4 600 337 |
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38. | Differences between International Financial Reporting Standards and US Generally Accepted Accounting Principles (Continued) |
2006 | 2005 | 2004 | ||||||||||||
EURm | EURm | EURm | ||||||||||||
Presentation of comprehensive income under US GAAP: | ||||||||||||||
Net income under US GAAP | 4 275 | 3 582 | 3 343 | |||||||||||
Other comprehensive income (loss): | ||||||||||||||
Foreign currency translation adjustment | (92 | ) | 272 | (67 | ) | |||||||||
Additional minimum liability, net of tax of EUR -5 million in 2006 and EUR 5 million in 2005 | 7 | (8 | ) | — | ||||||||||
Net gain (losses) on cash flow hedges, net of tax of EUR 61 million in 2006, EUR 43 million in 2005 and EUR 8 million in 2004 | 171 | (122 | ) | (23 | ) | |||||||||
Net unrealized (losses) gains on securities: | ||||||||||||||
Net unrealized holding (losses) gains during the year, net of tax of EUR 1 million in 2006, EUR 6 million in 2005 and EUR -2 million in 2004 | (40 | ) | (81 | ) | 2 | |||||||||
Transfer to profit and loss account on impairment | 18 | 9 | 11 | |||||||||||
Less: Reclassification adjustment on disposal, net of tax of EUR 0 million in 2006 and 2005 and EUR 10 million in 2004 | 14 | (3 | ) | (95 | ) | |||||||||
Other comprehensive income (loss) | 78 | 67 | (172 | ) | ||||||||||
Comprehensive income under US GAAP | 4 353 | 3 649 | 3 171 | |||||||||||
2006 | 2005 | ||||||||
EURm | EURm | ||||||||
Reconciliation of total equity under IFRS to total shareholders’ equity under US GAAP: | |||||||||
Total equity reported under IFRS | 12 060 | 12 514 | |||||||
Less minority interests | (92 | ) | (205 | ) | |||||
Capital and reserves attributable to equity holders of the parent under IFRS | 11 968 | 12 309 | |||||||
US GAAP adjustments: | |||||||||
Pensions (1) | (276 | ) | (65 | ) | |||||
Development costs | (102 | ) | (47 | ) | |||||
Share issue premium | 143 | 135 | |||||||
Share-based compensation | (143 | ) | (135 | ) | |||||
Amortization of identifiable intangible assets acquired | (62 | ) | (62 | ) | |||||
Impairment of identifiable intangible assets acquired | (47 | ) | (47 | ) | |||||
Amortization of goodwill | 432 | 432 | |||||||
Impairment of goodwill | 255 | 255 | |||||||
Translation of goodwill | (231 | ) | (242 | ) | |||||
Other differences | 29 | 6 | |||||||
Deferred tax effect of US GAAP adjustments | 146 | 83 | |||||||
Total shareholders’ equity under US GAAP | 12 112 | 12 622 | |||||||
(1) | The pension adjustment in 2005 consisted of adjustments for pension expense and additional minimum liability. |
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38. | Differences between International Financial Reporting Standards and US Generally Accepted Accounting Principles (Continued) |
2006 | ||||
EURm | ||||
Total shareholders’ equity under US GAAP before adoption of FAS 158 | 12 274 | |||
Adoption of FAS 158 | (222 | ) | ||
Deferred tax | 60 | |||
Total shareholders’ equity under US GAAP after adoption of FAS 158 | 12 112 | |||
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38. | Differences between International Financial Reporting Standards and US Generally Accepted Accounting Principles (Continued) |
2006 | ||||
EURm | ||||
Net pension asset recognized for IFRS | 108 | |||
Difference in unrecognized amounts | (53 | ) | ||
Additional minimum liability | (1 | ) | ||
Net pension asset recognized for US GAAP before adoption of FAS 158 | 54 | |||
Adoption of FAS 158 | (222 | ) | ||
Net pension liability recognized for US GAAP after adoption of FAS 158 | (168 | ) | ||
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38. | Differences between International Financial Reporting Standards and US Generally Accepted Accounting Principles (Continued) |
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38. | Differences between International Financial Reporting Standards and US Generally Accepted Accounting Principles (Continued) |
EURm | ||||
2007 | 152 | |||
2008 | 73 | |||
2009 | 41 | |||
2010 | 23 | |||
2011 | 10 | |||
Thereafter | 148 | |||
447 | ||||
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38. | Differences between International Financial Reporting Standards and US Generally Accepted Accounting Principles (Continued) |
Common | ||||||||||||||||||||||||
Mobile | Enterprise | Group | ||||||||||||||||||||||
Phones | Multimedia | Solutions | Networks | Functions | Group | |||||||||||||||||||
EURm | EURm | EURm | EURm | EURm | EURm | |||||||||||||||||||
Balance as of January 1, 2005 | 57 | 5 | 35 | 249 | 9 | 355 | ||||||||||||||||||
Goodwill disposed | — | — | — | — | (9 | ) | (9 | ) | ||||||||||||||||
Translation adjustment | 45 | — | 4 | 28 | — | 77 | ||||||||||||||||||
Balance as of December 31, 2005 | 102 | 5 | 39 | 277 | — | 423 | ||||||||||||||||||
Additions | 51 | 147 | 290 | — | — | 488 | ||||||||||||||||||
Translation adjustment | 29 | 7 | (28 | ) | (23 | ) | — | (15 | ) | |||||||||||||||
Balance as of December 31, 2006 | 182 | 159 | 301 | 254 | — | 896 | ||||||||||||||||||
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38. | Differences between International Financial Reporting Standards and US Generally Accepted Accounting Principles (Continued) |
Long lived assets by location of assets (1): | 2006 | 2005 | ||||||
EURm | EURm | |||||||
Finland | 755 | 745 | ||||||
China | 219 | 174 | ||||||
USA | 117 | 126 | ||||||
India | 77 | 31 | ||||||
Great Britain | 107 | 107 | ||||||
Germany | 103 | 110 | ||||||
Other | 224 | 292 | ||||||
Group | 1 602 | 1 585 | ||||||
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38. | Differences between International Financial Reporting Standards and US Generally Accepted Accounting Principles (Continued) |
Capital additions to long lived assets (1): | 2006 | 2005 | ||||||
EURm | EURm | |||||||
Mobile Phones | 19 | 23 | ||||||
Multimedia | 10 | 10 | ||||||
Enterprise Solutions | 5 | 7 | ||||||
Networks | 116 | 94 | ||||||
Common Group Functions | 413 | 414 | ||||||
Group | 563 | 548 | ||||||
(1) | Long-lived assets include property, plant and equipment. |
2004 | |||||
Net income under US GAAP (EURm) | |||||
As reported | 3 343 | ||||
Add: Share-based employee compensation expense included in reported net income under US GAAP, net of tax | 1 | ||||
Deduct: Total share-based employee compensation expense determined under fair value method for all awards, net of tax | (116 | ) | |||
Net income under US GAAP (EURm) | |||||
Pro forma | 3 228 | ||||
Basic and diluted earnings per share (EUR) | |||||
As reported | 0.73 | ||||
Pro forma | 0.70 |
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38. | Differences between International Financial Reporting Standards and US Generally Accepted Accounting Principles (Continued) |
2006 | 2005 | ||||||||
EURm | EURm | ||||||||
Current assets: | |||||||||
Intercompany profit in inventory | 34 | 49 | |||||||
Warranty provision | 68 | 74 | |||||||
Other provisions | 96 | 28 | |||||||
Tax losses carried forward | — | 6 | |||||||
Other temporary differences | 115 | 191 | |||||||
313 | 348 | ||||||||
Non-current assets: | |||||||||
Tax losses carried forward | 48 | 26 | |||||||
Warranty provision | 66 | 77 | |||||||
Other provisions | 157 | 252 | |||||||
Depreciation differences and untaxed reserves | 104 | 85 | |||||||
Fair value gains/losses | — | 43 | |||||||
Other temporary differences | 128 | 40 | |||||||
503 | 523 | ||||||||
Deferred tax assets | 816 | 871 | |||||||
Less: valuation allowance | (7 | ) | (25 | ) | |||||
Total deferred tax assets | 809 | 846 | |||||||
Current deferred tax liabilities | (27 | ) | (26 | ) | |||||
Non-current deferred tax liabilities: | |||||||||
Depreciation differences and untaxed reserves | (14 | ) | (13 | ) | |||||
Fair value gains/losses | (16 | ) | — | ||||||
Undistributed earnings | (65 | ) | (68 | ) | |||||
Other temporary differences | (83 | ) | (44 | ) | |||||
(178 | ) | (125 | ) | ||||||
Total deferred tax liabilities | (205 | ) | (151 | ) | |||||
Net deferred tax asset | 604 | 695 | |||||||
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38. | Differences between International Financial Reporting Standards and US Generally Accepted Accounting Principles (Continued) |
2006 | 2005 | 2004 | ||||||||||
EURm | EURm | EURm | ||||||||||
Service cost — benefits earned during the year(1) | 101 | 69 | 62 | |||||||||
Interest on projected benefit obligation | 66 | 58 | 56 | |||||||||
Expected return on assets | (62 | ) | (64 | ) | (56 | ) | ||||||
Amortization of prior service cost | 5 | 3 | 2 | |||||||||
Recognized net actuarial (gain) loss | 4 | 5 | (5 | ) | ||||||||
Amortization of transition asset | 1 | 1 | 1 | |||||||||
Transfer from central pool | — | (24 | ) | — | ||||||||
Curtailment | (5 | ) | — | — | ||||||||
Net periodic pension cost | 110 | 48 | 60 | |||||||||
(1) | Excludes premiums associated with pooled benefits. |
2006 | 2005 | |||||||||||||||
Domestic | Foreign | Domestic | Foreign | |||||||||||||
plans | plans | plans | plans | |||||||||||||
EURm | EURm | |||||||||||||||
Projected benefit obligation at beginning of year | (890 | ) | (495 | ) | (727 | ) | (398 | ) | ||||||||
Foreign currency exchange rate changes | — | (3 | ) | — | (3 | ) | ||||||||||
Service cost | (63 | ) | (38 | ) | (48 | ) | (21 | ) | ||||||||
Interest on projected benefit obligation | (40 | ) | (26 | ) | (36 | ) | (22 | ) | ||||||||
Plan participants’ contributions | — | (7 | ) | — | (6 | ) | ||||||||||
Actuarial gain (loss) | (51 | ) | 14 | (91 | ) | (52 | ) | |||||||||
Curtailment | 2 | — | 3 | — | ||||||||||||
Benefits paid | 11 | 9 | 9 | 7 | ||||||||||||
Projected benefit obligation at end of year | (1 031 | ) | (546 | ) | (890 | ) | (495 | ) | ||||||||
Plan assets at fair value at beginning of year | 904 | 373 | 768 | 303 | ||||||||||||
Foreign currency exchange rate changes | — | 3 | — | 4 | ||||||||||||
Actual return on plan assets | 33 | 18 | 102 | 40 | ||||||||||||
Employer contribution | 59 | 32 | 19 | 27 | ||||||||||||
Plan participants’ contributions | — | 7 | — | 6 | ||||||||||||
Transfer from central pool | — | — | 24 | — | ||||||||||||
Benefits paid | (11 | ) | (9 | ) | (9 | ) | (7 | ) | ||||||||
Plan assets at fair value at end of year | 985 | 424 | 904 | 373 | ||||||||||||
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38. | Differences between International Financial Reporting Standards and US Generally Accepted Accounting Principles (Continued) |
2006 | 2005 | |||||||||||||||
Domestic | Foreign | Domestic | Foreign | |||||||||||||
plans | plans | plans | plans | |||||||||||||
EURm | EURm | |||||||||||||||
Excess (deficit) of plan assets over projected benefit obligation | (46 | ) | (122 | ) | 14 | (122 | ) | |||||||||
Unrecognized transition asset | 1 | — | 1 | — | ||||||||||||
Unrecognized net actuarial loss | 146 | 51 | 84 | 66 | ||||||||||||
Unamortized prior service cost | 25 | — | 30 | — | ||||||||||||
126 | (71 | ) | 129 | (56 | ) | |||||||||||
Additional minimum liability | — | (1 | ) | — | (13 | ) | ||||||||||
Net amount recognized before adoption of FAS 158 | 126 | (72 | ) | 129 | (69 | ) | ||||||||||
Adoption of SFAS 158 | (172 | ) | (50 | ) | ||||||||||||
Net amount recognized after adoption of FAS 158 | (46 | ) | (122 | ) | ||||||||||||
2006 | ||||
EURm | ||||
Unrecognized transition asset | 1 | |||
Unrecognized net actuarial loss | 197 | |||
Unamortized prior service cost | 25 | |||
Unrecognised amounts in accumulated other comprehensive income | 223 | |||
2006 | 2005 | |||||||||||||||
Domestic | Foreign | Domestic | Foreign | |||||||||||||
plans | plans | plans | plans | |||||||||||||
EURm | EURm | |||||||||||||||
Prepaid benefit cost | 131 | 58 | 129 | 60 | ||||||||||||
Accrued benefit liability | (5 | ) | (130 | ) | — | (129 | ) | |||||||||
Accumulated other comprehensive income | 1 | — | 13 | |||||||||||||
Net amount recognized | 126 | (71 | ) | 129 | (56 | ) | ||||||||||
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38. | Differences between International Financial Reporting Standards and US Generally Accepted Accounting Principles (Continued) |
2006 | 2005 | |||||||||||||||
Domestic | Foreign | Domestic | Foreign | |||||||||||||
% | % | % | % | |||||||||||||
Discount rate for determining present values | 4.60 | 4.78 | 4.20 | 4.55 | ||||||||||||
Expected long term rate of return on plan assets | 4.60 | 5.50 | 4.44 | 5.49 | ||||||||||||
Annual rate of increase in future compensation levels | 3.50 | 3.59 | 3.50 | 3.91 | ||||||||||||
Pension increases | 2.00 | 2.69 | 2.00 | 2.55 |
2006 | 2005 | |||||||||||||||
Domestic | Foreign | Domestic | Foreign | |||||||||||||
% | % | % | % | |||||||||||||
Discount rate for determining present values | 4.20 | 4.55 | 4.75 | 5.00 | ||||||||||||
Expected long term rate of return on plan assets | 4.44 | 5.49 | 5.00 | 5.31 | ||||||||||||
Annual rate of increase in future compensation levels | 3.50 | 3.91 | 3.50 | 3.82 | ||||||||||||
Pension increases | 2.00 | 2.55 | 2.00 | 2.38 |
Domestic | Foreign | |||||||
Pension | Pension | |||||||
Benefits | Benefits | |||||||
EURm | EURm | |||||||
2007 | 12 | 9 | ||||||
2008 | 16 | 9 | ||||||
2009 | 20 | 10 | ||||||
2010 | 23 | 10 | ||||||
2011 | 26 | 11 | ||||||
2012-2016 | 174 | 64 |
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38. | Differences between International Financial Reporting Standards and US Generally Accepted Accounting Principles (Continued) |
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38. | Differences between International Financial Reporting Standards and US Generally Accepted Accounting Principles (Continued) |
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38. | Differences between International Financial Reporting Standards and US Generally Accepted Accounting Principles (Continued) |
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NOKIA CORPORATION |
By: | /s/Anja Korhonen |
Name: Anja Korhonen | |
Title: Senior Vice President, Corporate Controller |
By: | /s/Kaarina Stahlberg |
Name: Kaarina Stahlberg | |
Title: Vice President, Assistant General Counsel | |
March 12, 2007 |
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