Nokia 2006 Annual Report Download - page 46
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ITEM 4A. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
5.A Operating Results
This section begins with an overview of 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.
In June 2006, Nokia and Siemens announced plans to form Nokia Siemens Networks that will
combine Nokia’s networks business and Siemens’ carrierrelated operations for fixed and mobile
networks in a new company owned approximately 50% by each of Nokia and Siemens and
consolidated by Nokia. Nokia Siemens Networks is expected to start its operations around the end of
March 2007. See ‘‘Item 4.B Business Review—Nokia Siemens Networks’’ below. All references in this
Item 5 are to our Networks business group prior to the formation of Nokia Siemens Networks, unless
otherwise indicated.
The following should be read in conjunction with our consolidated financial statements included in
Item 18 of this annual report on Form 20F 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 38 to our consolidated financial
statements.
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.
Business segment data in the following discussion and analysis is prior to intersegment
eliminations. See Note 2 to our consolidated financial statements included in Item 18 of this annual
report on Form 20F.
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