Nokia 2005 Annual Report Download - page 46

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
5.A Operating Results
This section begins with an overview of our four business groups and the principal factors and
trends affecting our results of operations. The overview is followed by a discussion of our critical
accounting policies and estimates that we believe are important to understanding the assumptions
and judgments reflected in our reported financial results. We then present a detailed analysis of
our results of operations for the last three fiscal years, as well as our liquidity and capital
resources.
The following should be read in conjunction with our consolidated financial statements included
in Item 18 of this annual report on Form 20-F and ‘‘Item 3.D Risk Factors.’’ Our financial
statements and the financial information discussed below have been prepared in accordance with
IFRS. For a discussion of the principal differences between IFRS and US GAAP, see ‘‘—Results of
Operations—Principal Differences between IFRS and US GAAP’’ below and Note 39 to our
consolidated financial statements.
Overview
Nokia is the world’s largest manufacturer of mobile devices and a leader in mobile network
equipment, solutions and services. We also provide equipment, solutions and services for
corporate customers.
Nokia is organized in four business groups: Mobile Phones, Multimedia, Enterprise Solutions and
Networks. There are also two horizontal groups that support the mobile device business groups:
Customer and Market Operations and Technology Platforms. In addition, the structure includes
common group functions that consist of common research and general group functions.
Mobile Phones connects people by providing expanding mobile voice and data capabilities across a
wide range of mobile devices. Multimedia brings connected mobile multimedia experiences to
consumers in the form of advanced mobile devices and applications. Enterprise Solutions offers
businesses and institutions a broad range of products and solutions, including enterprise-grade
mobile devices, underlying security infrastructure, software and services. Networks provides
network infrastructure, communications and networks service platforms, as well as professional
services to operators and service providers.
For the purposes of the discussion under ‘‘—Principal Factors Affecting our Results of Operations—
Mobile Devices’’ and ‘‘Item 5.C Research and Development, Patents and Licenses’’, our mobile device
net sales and costs include the total net sales and costs of the Mobile Phones and Multimedia
business groups as well as the Mobile Devices business unit of the Enterprise Solutions business
group. Mobile device net sales and costs exclude the Security & Mobile Connectivity business unit
of the Enterprise Solutions business group. The results of that business unit historically have been
immaterial.
Business segment data in the following discussion and analysis is prior to inter-segment
eliminations. See Note 3 to our consolidated financial statements included in Item 18 of this
annual report on Form 20-F.
Nokia’s current business group reporting structure was effective as of January 1, 2004. The
information for the fiscal year 2003 has been regrouped to reflect that business group structure as
if it had been in existence during that year.
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