Nokia 2006 Annual Report Download - page 168

Notes to the Consolidated Financial Statements (Continued)
11. Financial income and expenses
2006 2005 2004
EURm EURm EURm
Income from availableforsale investments
Dividend income ***************************************************** —122
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
During 2005, Nokia sold the remaining holdings in the subordinated convertible perpetual bonds
issued by France Telecom. As a result, the Group booked a total net gain of EUR 57 million (EUR
106 million in 2004) in other financial income, of which EUR 53 million (EUR 104 million in 2004)
was recycled from fair value and other reserves in shareholders’ equity. See Notes 16 and 21.
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)
The differences between income tax expense computed at statutory rates (in Finland 26% in 2006
and 2005 and 29% in 2004) and income taxes recognized in the consolidated income statement is
reconciled as follows at December 31:
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) 860
Adoption of IAS 39(R) and IFRS 2 ************************************ ——11
Other ************************************************************* (31) (26) 46
Income tax expense ************************************************** 1 357 1 281 1 446
In the beginning of 2005, the corporate tax rate in Finland was reduced from 29% to 26%. The
impact of the change on the profit and loss account through change in deferred taxes in 2004 was
EUR 26 million.
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