Nokia 2009 Annual Report Download - page 100

EUR 646 million of restructuring charges and purchase price accounting related items of
EUR 477 million. Nokia Siemens Networks’ operating margin for 2009 was negative 13.0% compared
with negative 2.0% in 2008. The increased operating loss resulted primarily from a nontax
deductible impairment of goodwill of EUR 908 million and lower net sales, the impact of which was
partially offset by lower cost of sales and lower operating expenses including the effects of reduced
restructuring charges in 2009.
Group Common Functions
Group Common Functions’ expenses totaled EUR 134 million in 2009 compared to EUR 396 million in
2008. In 2008, Corporate Common Functions’ operating profit included a EUR 217 million loss due to
transfer of Finnish pension liabilities to pension insurance companies.
Net Financial Income and Expenses
During 2009, Nokia’s interest expense was EUR 265 million, compared with net financial income of
EUR 2 million in 2008. This change was primarily caused by lower interest income due to a decrease
of assets and exceptionally low interest rates, as well as an increase in interest expenses due to the
issuance of longterm debt.
The net debt to equity ratio was negative 25% at December 31, 2009 compared with a net debt to
equity ratio of negative 14% at December 31, 2008. See Item 5B. “Liquidity and Capital Resources”
below.
Profit Before Taxes
Profit before tax and minority interests decreased 81% to EUR 962 million in 2009 compared with
EUR 4 970 million in 2008. Taxes amounted to EUR 702 million and EUR 1 081 million in 2009 and
2008, respectively. The effective tax rate increased to 73.0% in 2009 compared with 21.8% in 2008,
primarily due to the nontax deductible impairment of Nokia Siemens Networks goodwill and certain
Nokia Siemens Network’s tax deductible temporary differences for which no deferred tax assets were
recognized due to uncertainty of utilization in these items. These were offset by the positive effect
from the development and outcome of various prior year items impacting Nokia taxes. In 2008, taxes
included the positive impact of EUR 128 million due to recognition of certain tax benefits from prior
years.
Minority Interests
Minority shareholders’ interest in our subsidiaries’ losses totaled EUR 631 million in 2009 compared
with minority shareholders’ interest in our subsidiaries’ losses of EUR 99 million in 2008. The change
was primarily due to an increase in Nokia Siemens Networks’ losses.
Profit Attributable to Equity Holders of the Parent and Earnings per Share
Profit attributable to equity holders of the parent in 2009 totaled EUR 891 million compared with
EUR 3 988 million in 2008, representing a yearonyear decrease of 78% in 2008. Earnings per share
in 2009 decreased to EUR 0.24 (basic) and EUR 0.24 (diluted) compared with EUR 1.07 (basic) and
EUR 1.05 (diluted) in 2008.
2008 compared with 2007
As of January 1, 2008, our three mobile device business groups, Mobile Phones, Multimedia and
Enterprise Solutions, and the supporting horizontal groups were replaced by an integrated business
segment, Devices & Services. Results for Nokia and its reportable segments for the year ended
December 31, 2007 have been regrouped for comparability purposes according to the new reportable
segments.
98