Registration No. 001-13202
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
for the fiscal year ended December 31, 2006
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
for the transition period from to
Commission File Number: 001-13202
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
Nokia Retirement Savings and Investment Plan
Nokia Inc.
6000 Connection Drive
Irving, Texas 75039
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Nokia Corporation
Keilalahdentie 4, P.O. Box 226
FIN-00045 NOKIA GROUP
Espoo, Finland
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Nokia Retirement Savings and Investment Plan
TABLE OF CONTENTS
Page
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Report of Independent Registered Public Accounting Firm 5
Financial Statements as of December 31, 2006 and 2005 6
for the years then ended
Signature Page 15
Index To Exhibits 16
Consent of Independent Registered Public Accounting Firm 17
Nokia Retirement Savings
and Investment Plan
Report on Audit of Financial Statements and
Supplemental Schedule
December 31, 2006 and 2005
Nokia Retirement Savings and Investment Plan
Contents
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Page(s)
Report of Independent Registered Public Accounting Firm......................1
Financial Statements
Statements of Net Assets Available for Benefits at
December 31, 2006 and 2005 .................................................2
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 2006........................................3
Notes to Financial Statements............................................4 - 8
Supplemental Schedule
Schedule H, Line 4i - Schedule of Assets at December 31, 2006................9
Note: Other schedules required by section 2520-103.10 of the Department of
Labor's Rules and Regulations for Reporting and Disclosure under ERISA have been
omitted because they are not applicable.
Report of Independent Registered Public Accounting Firm
To the Participants and Administrator of
Nokia Retirement Savings and Investment Plan:
In our opinion, the accompanying statements of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Nokia Retirement Savings and Investment Plan (the "Plan") at December 31,
2006 and 2005, and the changes in net assets available for benefits for the year
ended December 31, 2006 in conformity with accounting principles generally
accepted in the United States of America. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
at end of year is presented for the purpose of additional analysis and is not a
required part of the basic financial statements but is supplementary information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. This
supplemental schedule is the responsibility of the Plan's management. The
supplemental schedule has been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Dallas, Texas
June 25, 2007
Nokia Retirement Savings and Investment Plan
Statements of Net Assets Available for Benefits
December 31, 2006 and 2005
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2006 2005
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Assets
Investments, at fair value $600,736,511 $490,737,740
Receivables
Employer contributions 1,420,022 12,255,610
Participant contributions 1,995,858 1,793,695
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3,415,880 14,049,305
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Cash 35,915 30,944
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Total assets 604,188,306 504,817,989
Liabilities
Accrued expenses 124,579 76,964
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Net assets available for benefits $604,063,727 $504,741,025
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The accompanying notes are an integral part of these financial statements.
2
Nokia Retirement Savings and Investment Plan
Statement of Changes in Net Assets Available for Benefits
For the Year Ended December 31, 2006
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Investment income
Net appreciation in fair value of investments $39,858,256
Dividend and interest income 26,784,822
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66,643,078
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Contributions
Employer 35,538,225
Participant 48,839,818
Rollovers 5,855,672
90,233,715
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Deductions
Benefit payments and withdrawals (57,106,937)
Administrative expenses (447,154)
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Total deductions (57,554,091)
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Increase in net assets available for benefits 99,322,702
Net assets available for benefits
Beginning of year 504,741,025
---------------
End of year $604,063,727
---------------
The accompanying notes are an integral part of these financial statements.
3
Nokia Retirement Savings and Investment Plan
Notes to Financial Statements
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1. Description of Plan
The following description of the Nokia Retirement Savings and Investment
Plan(the "Plan") provides only general information. More complete
information regarding items such as eligibility requirements, vesting and
benefit provisions may be found in the summary plan description, which has
been distributed to all Plan participants, and also in the Plan document,
which is available to all Plan participants upon request.
General
The Plan is a defined contribution plan that covers eligible employees of
Nokia, Inc. (the "Company" or "Nokia"). The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA").
The Plan administrator, Nokia, retains responsibility for oversight of the
Plan and the Plan's day-to-day administration.
Eligibility
Employees are eligible to participate in the Plan after completing one hour
of service and attaining age 18; however, individuals identified as
interns, part time and cooperatives in the payroll system are not eligible
to participate in the Plan.
Contributions
Participant contributions take the form of before-tax contributions and are
deferred from federal income taxes. The Plan does not allow for voluntary
after-tax contributions for employees working in the United States.
Voluntary after-tax contributions are permitted with respect to those
participants who are working outside the United States on temporary
assignments.
Participants may also contribute rollover contributions from other
qualified plans.
Participants contribute a percentage of their compensation, as defined in
the Plan agreement. The maximum contribution rate is 50% of eligible
compensation of which up to $15,000 (the maximum annual salary deferral
contribution limit as set forth by the Internal Revenue Code (the "Code")
for 2006 plan year) may be made pre-tax. All participants who are eligible
to make elective deferrals under the Plan and those who have attained age
50 before the close of the Plan year are eligible to make additional
catch-up contributions of up to $5,000 during fiscal 2006.
Participant contributions are matched by the Company in cash at the rate of
one dollar per dollar up to 8% of the participants' eligible earnings.
Contributions made by participants and the related company match are
invested based on each participant's election and can be in any combination
of investment options under the Plan including Fidelity mutual funds, Nokia
ADR shares, and common stocks and other mutual funds through a
self-directed brokerage option. There are no restrictions on moving
participant money and related Company contributions out of the Nokia stock
investment option.
The employer may also make a discretionary contribution based on the
Company meeting its performance targets as determined by the employer at
its sole discretion. In 2006, the Company did not make a discretionary
contribution.
Participant and Company contributions are subject to certain IRS
limitations.
4
Nokia Retirement Savings and Investment Plan
Notes to Financial Statements
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Participant Accounts
Each participant's account is credited with the participant's voluntary
contributions, the employer's matching contribution, an allocation of the
employer's discretionary contribution, if any, and an allocation of
investment income from each fund as defined in the Plan agreement. The
benefit to which a participant is entitled is the benefit that can be
provided from the participant's vested account. Additionally, the Plan has
certain expenses that are deducted from participant accounts.
Plan earnings are allocated to a participant's account at the rate
attributable to the participant's specific account balance on each day the
New York Stock Exchange is open for business or any other day selected by
the Plan's 401(k) committee.
Participant Loans
Participants are able to borrow from their fund accounts a minimum of
$1,000 up to a maximum of the lesser of $50,000 or 50% of their vested
account balance at market interest rates payable under various term lengths
specified in the loan agreement. The loans, maturing at various dates
through 2036, are collateralized by the balance in the participant's
account. The loans bear interest rates that reflect the prime rate for the
month when issued and ranged from 4 percent to 9.5 percent at December 31,
2006. Principal and interest is repaid ratably through bi-monthly payroll
deductions.
Vesting
Participants vest in employer contributions at a rate of 25% per year of
service, reaching full vesting after four years of service. Participants
are always fully vested in their contributions and earnings thereon.
Payment of Benefits
Upon termination of employment for reasons other than disability or death,
participants' benefits will be payable as follows (subject to spousal
rights, if any):
- Nokia ADR shares are paid out in cash or certificates as
requested by the participant. Fractional shares are paid in cash.
- A participant whose vested account is more than $1,000 may elect
to have benefits paid in a lump-sum payment or may choose to
leave funds in the Plan up to age 70 1/2.
- A participant who has a vested account balance of $1,000 or less
will automatically be paid in a lump-sum payment.
Forfeitures
At December 31, 2006 and 2005, forfeited non-vested accounts totaled
$1,080,998 and $644,728 respectively. These accounts will be used to
reduce future employer contributions and/or pay Plan administrative fees
and certain investment charges. In 2006, employer contributions were
reduced by $1,055,420, and Plan administrative fees and certain investment
charges of $370,392 were paid, from forfeited non-vested accounts.
5
Nokia Retirement Savings and Investment Plan
Notes to Financial Statements
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Plan Termination
While it has not expressed any intent to do so, the Company may
discontinue the Plan at any time subject to the provisions of ERISA. In
the event of Plan termination participants will become 100% vested in
their accounts.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements have been prepared on the accrual
basis of accounting, in accordance with accounting principles generally
accepted in the United States.
Investment Valuation and Income Recognition
Investments in Nokia American Depository Shares (Nokia ADR shares) and
common stocks are valued at quoted market prices on the last business day
of the year. Mutual funds are valued at the net asset value of shares held
by the Plan at year-end. Participant loans are valued at cost, plus accrued
interest, which approximates fair value. Purchases and sales of securities
are recorded on a trade-date basis. Dividend income is recorded on the
ex-dividend date. Interest income is recognized on the accrual basis.
The Plan presents in the statement of changes in net assets available for
benefits the net appreciation (depreciation) in the fair value of its
investments which consists of the realized gains and losses and the
unrealized appreciation (depreciation) on those investments.
Plan Expenses
Expenses incurred by the Plan for audit fees, certain administration fees
and certain investment charges are paid by the Plan. All other operating
expenses of the Plan are paid by the Company.
Risks and Uncertainties
The Plan invests in various investment securities. Investment securities
are exposed to various risks such as interest rate, market, and credit
risks. Due to the level of risk associated with certain investment
securities, it is at least reasonably possible that changes in the values
of investment securities will occur in the near term and that such changes
could materially affect participants' account balances and the amounts
reported in the statement of net assets available for benefits.
Financial instruments which potentially subject the Plan to concentrations
of credit risk consist of the Plan's investments and contributions
receivable.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements. Estimates also affect
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Benefits
Benefit distributions to participants are recorded when paid.
6
Nokia Retirement Savings and Investment Plan
Notes to Financial Statements
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3. Investments
As of December 31, 2006, net assets available for benefits in the amount of
$477,222,502, $98,002,852, $5,853,870 and $8,737,518 were invested in
mutual funds, Nokia ADR shares, common stocks and money market funds,
respectively, managed by Fidelity Investments.
At December 31, 2006, approximately 16% of the Plan's assets are invested
in the Nokia ADR shares (22% at December 31, 2005). There were 4,822,975
shares at 20.32 per share at December 31, 2006. There were 5,655,732 shares
at $18.30 per share at December 31, 2005.
Investments that individually represent 5% or more of the Plan's net
assets, at fair value as of December 31, 2006 and 2005:
2006 2005
--------------- ---------------
American Depository Shares
Nokia ADR shares $98,002,852 $103,499,896
Mutual Funds
Allianz NFJ Small Cap Value Fund 59,063,785 46,854,868
American Balanced Fund 29,827,415 27,063,265
American EuroPacific Growth Fund 80,166,921 50,804,321
American Funds Growth Fund of America 38,596,218 27,710,988
Fidelity Managed Income Portfolio II Fund 71,798,473 66,546,670
PIMCO Total Return Fund 32,257,660 30,269,138
Vanguard Institutional Index Fund 62,929,982 53,137,164
During 2006, the Plan's investments (including investments bought, sold and
held during the year) appreciated in value by $39,858,256 as follows:
Nokia ADR shares 11,702,951
Common stocks 151,715
Mutual funds 28,003,590
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$ 39,858,256
4. Tax Status
The Internal Revenue Service has determined and informed the Company in a
letter dated November 22, 2002 that the Plan, as then designed, was in
compliance with the applicable requirements of the Code. The Plan has been
amended since receipt of the determination letter; however, the Plan
administrator believes that the Plan is currently designed and being
operated in compliance with the applicable requirements of the Code.
Therefore, no provision for income taxes has been included in the Plan's
financial statements.
7
Nokia Retirement Savings and Investment Plan
Notes to Financial Statements
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5. Related Party Transactions
The Plan purchased and sold approximately $11,866,023 and $28,847,837 in
Nokia ADR shares, respectively, during 2006. The Nokia ADR shares were
bought/sold in the open market at quoted fair market values at the date of
purchase/sale.
The Plan is administered by Fidelity Investments Institutional Operations
Company as the record keeper and Fidelity Management Trust Company as the
trustee. Accordingly, transactions with the Fidelity Managed Income
Portfolio II Fund and the Fidelity Institutional Cash Portfolio Money
Market Class I Fund investments qualify as party-in-interest transactions.
Fees of $2,528,014 were paid to Fidelity in 2006 as an adjustment to the
rate of return on Plan investments.
6. Subsequent Event
In 2007, Nokia Siemens Network, a 50-50 joint venture between Nokia and
Siemens was formed. Effective April 1, 2007, the Plan was revised to become
a Multi Employer Plan to include participants from Nokia Siemens Network.
Effective January 1, 2007, the Plan implemented automatic enrollment at 3%
of eligible compensation for new hires and are invested into the American
Balanced Fund Class R4 until the employee designates their own investment
allocation.
8
Nokia Retirement Savings and Investment Plan
Notes to Financial Statements
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SUPPLEMENTAL SCHEDULE
Nokia Retirement Savings and Investment Plan
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
At December 31, 2006
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(a) (b) (c) (d) (e)
Identity of Issue, Borrower, Lessor Description of Current
or Similar Party Investment Cost** Value
- ----------------------------------------------------------------- ------------------------------------------------
Allianz NFJ Small Cap Value Fund Mutual fund $59,063,785
American Balanced Fund Mutual fund 29,827,415
American EuroPacific Growth Fund Mutual fund 80,166,921
American Funds Growth Fund of America Mutual fund 38,596,218
Calamos Growth Fund Mutual fund 18,031,498
* Fidelity Managed Income Portfolio II Fund Mutual fund 71,798,473
* Nokia ADR Shares ADR shares 98,002,852
* Fidelity Institutional Cash Portfolio Money Market Mutual fund 5,138,571
Class I Fund
PIMCO Total Return Fund Mutual fund 32,257,660
Vanguard Institutional Index Fund Mutual fund 62,929,982
Vanguard Small Cap Growth Fund Mutual fund 14,109,441
Vanguard Target Retirement 2005 Fund Mutual fund $514,712
Vanguard Target Retirement 2015 Fund Mutual fund 2,453,517
Vanguard Target Retirement 2025 Fund Mutual fund 6,454,540
Vanguard Target Retirement 2035 Fund Mutual fund 7,725,129
Vanguard Target Retirement 2045 Fund Mutual fund 5,614,866
Vanguard Target Retirement Fund Mutual fund 471,075
Vanguard Windsor II Fund Mutual fund 24,518,080
Wells Fargo Mid-Cap Value Fund Mutual fund 18,245,660
BrokerageLink Common stocks and 13,896,347
mutual funds
* Participant loans receivable Interest rates 10,919,769
varying between
4% and 9.5%
maturing at
various dates
through 2036
---------------
$600,736,511
===============
* Party-in-interest
** Not applicable due to investments being participant-directed.
9
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange
Act of 1934, the trustees (or other persons who administer the Plan) have duly
caused this Annual Report to be signed on its behalf by the undersigned hereunto
duly authorized.
Nokia Retirement Savings and Investment Plan
Date: June 25, 2007 By: /s/ Linda Fontenaux
----------------------------------
Name: Linda Fontenaux
Title: Plan Administrator
INDEX TO EXHIBITS
Exhibit No. Exhibit Page Number
23 Consent of PricewaterhouseCoopers LLP,
Independent Registered Public Accounting Firm
Exhibit 23
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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We hereby consent to the incorporation by reference in the Registration
Statemcnt on Form S-8 (No. 333-12366, No. 333-93770, and No. 333-141674) of
Nokia Corporation of our report dated June 25, 2007 relating to the financial
statements of Nokia Retirement Savings and Investment Plan as of December 31,
2006 and 2005 and for the year ended December 31, 2006, which appears in this
Form 11-K.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Dallas, Texas
June 25, 2007
