Nokia 2006 Annual Report Download - page 191

Notes to the Consolidated Financial Statements (Continued)
33. Related party transactions (Continued)
employees on international assignments. The contributions to NIEBP are funded twothirds by Nokia
and onethird by the employee. Because Mr. BeresfordWylie also participates in the Finnish TEL
system, the company contribution to NIEBP is 1.3% of annual earnings.
34. Notes to cash flow statement
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
The Group did not engage in any material noncash investing activities for all periods presented.
35. Subsequent event
Nokia Siemens Networks
In June 2006, Nokia and Siemens A.G. (Siemens) announced plans to form Nokia Siemens Networks
that will combine Nokia’s networks business and Siemens’ carrierrelated operations for fixed and
mobile networks in a new company owned by Nokia and Siemens. Nokia and Siemens will each own
approximately 50% of Nokia Siemens Networks. However, Nokia will effectively control Nokia
Siemens Networks as it has the ability to appoint key officers and the majority of the members of its
Board of Directors. Accordingly, Nokia will consolidate Nokia Siemens Networks.
Nokia Siemens Networks is expected to start its operations around the end of March 2007 subject to
the satisfaction or waiver of the conditions to the merger, including achievement of agreement
between Nokia and Siemens on the results and consequences of a Siemens compliance review, and
the agreement of a number of detailed implementation steps.
The Group is in the process of evaluating the net assets acquired and expects to finalize the
purchase price allocation and to realize a gain on this transaction during 2007.
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