Nokia 2005 Annual Report Download - page 163

Notes to the Consolidated Financial Statements (Continued)
4. Percentage of completion
Contract sales recognized under the cost-to-cost method of percentage of completion accounting
were EUR 5,520 million in 2005 (EUR 5,197 million in 2004 and EUR 4,807 million in 2003). Billings
in advance of contract revenues, included in prepaid income under accrued expenses, were
EUR 148 million at December 31, 2005 (EUR 185 million in 2004 and EUR 195 million in 2003).
Contract revenues recorded prior to billings, included in accounts receivable, were EUR 0 million at
December 31, 2005 (EUR 80 million in 2004 and EUR 665 million in 2003).
5. Personnel expenses
2004 2003
2005 As revised As revised
EURm EURm EURm
Wages and salaries ........................................ 3,127 2,805 2,501
Share-based compensation expense, total ...................... 104 62 41
Pension expenses, net ...................................... 252 253 184
Other social expenses ...................................... 394 372 341
Personnel expenses as per profit and loss account ............... 3,877 3,492 3,067
Share based compensation expense includes pension and other social costs of EUR 9 million in
2005 (EUR 2 million in 2004 and EUR 0 million in 2003) based upon the related employee benefit
charge recognized during the year.
The net of tax share-based compensation expense amounted to EUR 82 million in 2005
(EUR 60 million in 2004 and EUR 41 million in 2003).
Pension expenses, comprised of multi-employer, insured and defined contribution plans were
EUR 206 million in 2005 (EUR 192 million in 2004 and EUR 146 million in 2003).
2005 2004 2003
Average personnel
Mobile Phones ............................................. 2,647 2,853
Multimedia ............................................... 2,750 2,851
Enterprise Solutions ........................................ 2,185 2,167
Networks ................................................. 17,676 15,463
Common Group Functions ................................... 31,638 30,177
Nokia Group .............................................. 56,896 53,511 51,605
6. Pensions
The most significant pension plans are in Finland and are comprised of the Finnish state TEL
system with benefits directly linked to employee earnings. These benefits are financed in two
distinct portions. The majority of benefits are financed by contributions to a central pool with the
majority of the contributions being used to pay current benefits. The other part comprises
reserved benefits which are pre-funded through the trustee-administered Nokia Pension
Foundation. The pooled portion of the TEL system is accounted for as a defined contribution plan
and the reserved portion as a defined benefit plan. The foreign plans include both defined
contribution and defined benefit plans.
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