As filed with the Securities and Exchange Commission on July 14, 2006
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, 2005
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
for the transition period from to
Commission File Number: 1-13202
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
----
Report of Independent Accountants 5
Financial Statements as of December 31, 2005 and 2004 6
for the years then ended
Signature Page 15
Index To Exhibits 16
Consent of Independent Auditors 17
Nokia Retirement Savings
and Investment Plan (As
Amended and Restated 2004)
Report on Audit of Financial Statements and
Supplemental Schedule
December 31, 2005 and 2004
Nokia Retirement Savings and Investment Plan
(As Amended and Restated 2004)
Contents
--------------------------------------------------------------------------------
Page(s)
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Report of Independent Registered Public Accounting Firm...............................1
Financial Statements
Statements of Net Assets Available for Benefits at December 31, 2005 and 2004.........2
Statement of Changes in Net Assets Available for Benefits for the Year Ended
December 31, 2005...................................................................3
Notes to Financial Statements.....................................................4 - 8
Supplemental Schedule
Schedule H, Line 4i - Schedule of Assets at December 31, 2005.........................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 (As Amended and Restated 2004)
In our opinion, the accompanying statements of net assets available for benefits
and the related statements 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 (as Amended and Restated
2004) (the "Plan") at December 31, 2005 and 2004, and the changes in net assets
available for benefits for the year ended December 31, 2005 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
------------------------------
Dallas, Texas USA
July 14, 2006
Nokia Retirement Savings and Investment Plan
(As Amended and Restated 2004)
Statements of Net Assets Available for Benefits
December 31, 2005 and 2004
--------------------------------------------------------------------------------
2005 2004
--------------- ---------------
Assets
Investments, at fair value $490,768,684 $401,348,744
Receivables
Employer contributions 12,255,610 11,712,774
Participant contributions 1,793,695 1,632,363
--------------- ---------------
Total Assets 504,817,989 414,693,881
Liabilities
Accrued expenses 76,964 119,366
--------------- ---------------
Net assets available for benefits $504,741,025 $414,574,515
=============== ===============
The accompanying notes are an integral part of these financial statements.
2
Nokia Retirement Savings and Investment Plan
(As Amended and Restated 2004)
Statement of Changes in Net Assets Available for Benefits
For the Year Ended December 31, 2005
--------------------------------------------------------------------------------
Investment income
Net appreciation in fair value of investments $ 30,212,530
Dividend and interest income 15,183,365
-------------------
45,395,895
-------------------
Contributions
Employer 44,807,499
Participant 43,402,673
Rollovers 2,650,545
-------------------
90,860,717
-------------------
Deductions
Benefit payments and withdrawals (45,378,408)
Administrative expenses (711,694)
-------------------
Total deductions (46,090,102)
-------------------
Increase in net assets available for benefits 90,166,510
Net assets available for benefits
Beginning of year 414,574,515
-------------------
End of year $ 504,741,025
===================
The accompanying notes are an integral part of these financial statements.
3
Nokia Retirement Savings and Investment Plan
(As Amended and Restated 2004)
Notes to Financial Statements
--------------------------------------------------------------------------------
1. Description of Plan
The following description of the Nokia Retirement Savings and Investment
Plan (as Amended and Restated 2004) (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.
The Plan changed both record keeper and trustee as of April 1, 2005.
Eligibility
Employees are eligible to participate in the Plan after completing one
hour of service and attaining age 18; however, individuals identified as
interns 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 $14,000 (the maximum annual salary deferral
contribution limit as set forth by the Internal Revenue Code
(the "Code")) for the 2005 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 $4,000 during
fiscal 2005. Contributions made by participants are invested based on
each participant's election.
Participant contributions are matched by the Company in cash at the rate
of one dollar per dollar up to 6% of the participants' eligible earnings.
These funds are deposited according to the participants' current
investment elections.
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 2005, the Company made a discretionary
contribution of $11,202,268.
Participant and Company contributions are subject to certain IRS
limitations.
Participant Accounts
Each participant's account is credited with the participant's voluntary
contributions, the employer's contribution and an allocation of
investment income from each fund as defined in the Plan
4
Nokia Retirement Savings and Investment Plan
(As Amended and Restated 2004)
Notes to Financial Statements
--------------------------------------------------------------------------------
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.
Participants may determine their own investment mix in their accounts.
During the conversion to the new record keeper and trustee, mapping of
participants' funds was determined by the plan administrator.
Participant Loans
Participants are able to borrow from their fund accounts a minimum of
$1,000 up to a maximum of the lesser of (i) $50,000 or (ii) 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 2035, 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 10
percent at December 31, 2005. Principal and interest is paid 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.
Payment of Benefits
Upon termination of employment for reasons other than disability or
death, participants' benefits will be payable as follows (subject to
spouses' rights, if any):
- Nokia ADR Shares are paid out in cash or certificates. 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, 2005 and 2004 forfeited non-vested accounts totaled
$644,728 and $448,356, respectively. These accounts will be used to
reduce future employer contributions and/or pay Plan administrative fees
and certain investment charges. Also, in 2005, employer contributions
were reduced by $2,153,713, and Plan administrative fees and certain
investment charges of $398,703 were paid from forfeited non-vested
accounts.
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.
5
Nokia Retirement Savings and Investment Plan
(As Amended and Restated 2004)
Notes to Financial Statements
--------------------------------------------------------------------------------
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 Stock 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 that 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.
3. Investments
As of December 31, 2005, net assets available for benefits in the amount
of $372,035,872, $103,499,896, and $3,069,513 were invested in mutual
funds, Nokia ADR Shares, and Common stock respectively, managed by
Fidelity Investments.
6
Nokia Retirement Savings and Investment Plan
(As Amended and Restated 2004)
Notes to Financial Statements
--------------------------------------------------------------------------------
At December 31, 2005, approximately 22% of the Plan's assets are invested
in the Nokia ADR Shares. There were 5,655,732 shares at $18.30 per share
at December 31, 2005. There were 6,440,498 shares at $15.67 per share at
December 31, 2004.
Investments that individually represent 5% or more of the Plan's net
assets, at fair value as of December 31, 2005 and 2004:
2005 2004
------------ ------------
American Depository Shares
Nokia ADR Shares $103,499,896 $100,922,604
Mutual Funds
Allianz NFJ Small Cap Value Fund 46,854,868 -
American Balanced Fund 27,063,265 9,537,636
American EuroPacific Growth Fund 50,804,321 4,840,005
American Funds Growth Fund of America 27,710,988 4,112,999
Fidelity Managed Income Portfolio II Fund 66,546,670 -
PIMCO Total Return Fund 30,269,138 23,642,423
Vanguard Institutional Index Fund 53,137,164 -
American Express Trust Income Fund III - 57,451,383
SSGA Funds S&P 500 Index Fund - 40,102,332
Templeton Foreign Fund - 21,855,297
Dreyfus Emerging Leaders Fund - 18,828,406
During 2005, the Plan's investments (including investments bought, sold
and held during the year) appreciated in value by $30,212,530 as follows:
Nokia ADR Shares $ 17,693,785
Common Stock 299,171
Mutual funds 12,219,574
----------------
$ 30,212,530
----------------
4. Tax Status
The Internal Revenue Service has ruled, in a favorable determination
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.
5. Related Party Transactions
The Plan purchased and sold approximately $8,600,000 and $21,600,000 in
Nokia ADR shares respectively, during 2005.
Nokia ADR Shares were bought/sold in the open market at quoted fair
market values at the date of purchase/sale. The share price at December
31, 2005 was $18.30.
7
Nokia Retirement Savings and Investment Plan
(As Amended and Restated 2004)
Notes to Financial Statements
--------------------------------------------------------------------------------
The Fidelity Managed Income Portfolio II Fund and The Fidelity
Institutional Cash Portfolio Money Market Class I Fund are related
parties, as noted on Schedule H.
All assets of the Plan are held in the Nokia Retirement Savings and
Investment Plan which is administered by Fidelity Investments Retirement
Services as the record keeper and Fidelity Management Trust Company as
the trustee.
6. Subsequent Event
Effective July 1, 2006 the employer match is increased from 6% of
eligible compensation to 8%. The Plan will implement auto enrollment at
3% of eligible compensation for new hires beginning in the third quarter
of 2006.
8
SUPPLEMENTAL SCHEDULE
(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 46,854,868
American Balanced Fund Mutual fund 27,063,265
American EuroPacific Growth Fund Mutual fund 50,804,321
American Funds Growth Fund of America Mutual fund 27,710,988
Calamos Growth Fund Mutual fund 14,443,587
* Fidelity Managed Income Portfolio II Fund Mutual fund 66,546,670
* Nokia ADR Shares ADR Shares 103,499,896
* Fidelity Institutional Cash Portfolio Money Market Mutual fund 4,856,049
Class I Fund
PIMCO Total Return Fund Mutual fund 30,269,138
Vanguard Institutional Index Fund Mutual fund 53,137,164
Vanguard Small Cap Growth Fund Mutual fund 9,783,053
Vanguard Target Retirement 2005 Fund Mutual fund 281,677
Vanguard Target Retirement 2015 Fund Mutual fund 1,540,819
Vanguard Target Retirement 2025 Fund Mutual fund 2,407,571
Vanguard Target Retirement 2035 Fund Mutual fund 3,998,111
Vanguard Target Retirement 2045 Fund Mutual fund 2,321,427
Vanguard Target Retirement Fund Mutual fund 97,449
Vanguard Windsor Mutual fund 7,277
Vanguard Windsor II Fund Mutual fund 17,264,594
Wells Fargo Mid-Cap Value Fund Mutual fund 8,680,854
BrokerageLink Common stock and 7,036,503
Mutual
Funds
Participant Loans Interest Rates 12,163,403
varying between
4% and 10%
maturing at
various dates
through 2035
--------------
$490,768,684
==============
* 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: July 14, 2006 By: /s/ Linda Fontenaux
--------------------------------
Name: Linda Fontenaux
Title: Plan Administrator
10
INDEX TO EXHIBITS
Exhibit No. Exhibit Page Number
23 Consent of PricewaterhouseCoopers LLP, 12
Independent Auditors.
11