Nokia 2015 Annual Report Download - page 52

50 NOKIA IN 2015
Results of operations continued
In 2014, our selling, general and administrative expenses were
EUR1453 million, a decrease of EUR 30 million or 2%, compared
toEUR 1483 million in 2013. Selling, general and administrative
expenses represented 12.4% of our net sales in 2014 compared to
12.6% in 2013. The decrease in selling, general and administrative
expenses was primarily attributable to the decrease in selling, general
and administrative expenses in Nokia Networks. The decrease was
partially oset by an increase in selling, general and administrative
expenses in Group Common Functions and Nokia Technologies.
Thedecrease in selling, general and administrative expenses in Nokia
Networks was primarily attributable to structural cost savings from
Nokia Networks global restructuring program. The decrease was
partially oset by headcount increases related to an increased
focuson growth. The increase in selling, general and administrative
expenses in Group Common Functions was primarily attributable to
transaction-related costs resulting from the Sale of the D&S Business.
The increase inselling, general and administrative expenses in
NokiaTechnologies was primarily attributable to increased activities,
such as building the technology and brand licensing units, related
toanticipated and ongoing patent licensing cases, as well as higher
business support costs. In 2014, selling, general and administrative
expenses included EUR 30 million of transaction-related costs.
Selling,general and administrative expenses included purchase price
accounting-related items of EUR 35 million in 2014 compared to
EUR80 million in 2013.
Other income and expenses was a net expense of EUR 94 million in
2014, compared to a net expense of EUR 513 million in 2013. The
change in other income and expenses was primarily attributable to
Nokia Networks, partially oset by Group Common Functions. In 2014,
Nokia Networks other income and expenses included restructuring
andassociated charges of EUR 57 million and anticipated contractual
remediation costs of EUR 31 million. In 2013, Nokia Networks other
income and expenses included restructuring andassociated charges
of EUR 570 million.
Operating prot
Our operating prot in 2014 was EUR 1 412 million, an increase
ofEUR740 million, or 110%, compared to an operating prot of
EUR 672 million in 2013. The increase in operating prot was
attributable to both Nokia Networks and Nokia Technologies. Our
operating prot in 2014 included purchase price accounting-related
items, restructuring charges and other special items of EUR 188 million
compared to EUR 716 million in 2013. Our operating margin in 2014
was 12.0% compared to5.7% in 2013.
Financial income and expenses
Financial income and expenses in 2014 was a net expense of
EUR 401 million, compared to a net expense of EUR 277 million
in2013. The higher net nancial expense in 2014 was primarily
attributable to aEUR 123 million one–time charge related to the
redemption of materially all of Nokia Networks’ borrowings, and
anon-cash charge ofEUR 57 million related to the repayment
ofEUR1500 million convertible bond issued to Microsoft.
Thesecharges were partially oset by reduced interest expenses
andlowernet foreign exchange losses.
Refer to “—Liquidity and capital resources” below.
Prot before tax
Continuing operations’ prot before tax was EUR 999 million in 2014,
compared to EUR 399 million in 2013.
Income tax
Income taxes for Continuing operations was a net benet of
EUR 1 719 million in 2014, a change of EUR 1 990 million compared
toa net expense of EUR 271 million in 2013. The net income tax
benet was primarily attributable to the recognition of EUR 2 126
million deferred tax assets from the reassessment of recoverability
oftax assets in Finland and Germany in 2014, which resulted in a
EUR 2 034 million non-cash tax benet in the third quarter 2014.
Following the global restructuring actions taken primarily in 2012
and2013 to reduce annualized operating expenses and production
overheads; andthe recent protability of Nokia Networks, the
divestment of thepreviously loss-making Devices & Services business;
and forecasts of future protability for Continuing operations, we were
able to re-establish a pattern of sucient protability in Finland and
Germanyto utilize the cumulative losses, foreign tax credits and
othertemporary dierences. A signicant portion of our Finnish
andGerman deferred tax assets are indenite in nature and available
against future Finnish and German tax liabilities.
Non-controlling interests
Prot for Continuing operations attributable to non-controlling
interests was EUR 8 million in 2014, compared to a loss attributable to
non-controlling interests of EUR 145 million in 2013. The change was
primarily attributable to our acquisition of Siemens’ stake in Nokia
Networks (formerly Nokia Siemens Networks) in August 2013, which
signicantly reduced non-controlling interests in that business.
Prot/loss attributable to equity holders of the parent and
earningsper share
Prot attributable to equity holders of the parent in 2014 equaled
EUR3 462 million, compared to a loss of EUR 615 million in 2013.
Continuing operations generated a prot attributable to equity
holders of the parent in 2014, equaling EUR 2 710 million, compared
to EUR 273 million in 2013. Prot attributable to equity holders of
theparent in 2014 was favorably impacted by the recognition of
EUR 2 126 million deferred tax assets. Nokia Group’s total EPS in 2014
increased to EUR 0.94 (basic) and EUR 0.85 (diluted), compared to EUR
(0.17) (basic) and EUR (0.17) (diluted) in 2013. FromContinuing
operations, EPS in 2014 increased to EUR 0.73 (basic) and EUR 0.67
(diluted), compared to EUR 0.07 (basic) and EUR 0.07 (diluted) in 2013.