Nokia 2012 Annual Report Download - page 234

The expected long-term rate of return on plan assets is based on the expected return multiplied with
the respective percentage weight of the market-related value of plan assets. The expected return is
defined on a uniform basis, reflecting long-term returns, current market conditions and strategic asset
allocation.
The Group’s pension plan weighted average asset allocation as a percentage of Plan Assets at
December 31, 2012, and 2011, by asset category are as follows:
2012 2011
%%
Asset category:
Equity securities ............................................................. 22 20
Debt securities ............................................................... 60 62
Insurance contracts ........................................................... 88
Short-term investments ........................................................ 33
Others ..................................................................... 77
Total ....................................................................... 100 100
The objective of the investment activities is to maximize the excess of plan assets over projected
benefit obligations, within an accepted risk level, taking into account the interest rate and inflation
sensitivity of the assets as well as the obligations. Derivative instruments can be used to change the
portfolio asset allocation and risk characteristics.
The foreign pension plan assets include a self investment through a loan provided to Nokia by the
Group’s German pension fund of EUR 69 million (EUR 69 million in 2011). See Note 31.
The actual return on plan assets was EUR 147 million in 2012 (EUR 63 million in 2011).
In 2013, the Group expects to make contributions of EUR 35 million to its defined benefit pension
plans.
6. Expenses by nature
2012 2011 2010
EURm EURm EURm
Cost of material ................................................. 13 697 18 331 20 917
Personnel expenses .............................................. 5 750 7 014 6 881
Depreciation and amortization ...................................... 1 326 1 562 1 771
Advertising and promotional expenses ............................... 984 1 212 1 291
Warranty costs .................................................. 312 671 894
Other costs and expenses ......................................... 8 663 8 948 8 441
Total of Cost of sales, Research and development, Selling and marketing
and Administrative and general expenses .......................... 30 732 37 738 40 195
7. Other income and expenses
Other income totaled EUR 403 million in 2012 (EUR 221 million in 2011 and EUR 476 million in 2010).
Other expenses totaled EUR 2 150 million in 2012 (EUR 1 125 million in 2011 and EUR 657 million in
2010).
F-33