Nokia 2006 Annual Report Download - page 11

(3) Cash and other liquid assets consist of the following captions from our consolidated balance
sheets: (1) bank and cash, (2) availableforsale investments, cash equivalents, and (3) available
forsale investments, liquid assets.
(4) Net interestbearing debt consists of borrowings due within one year and longterm interest
bearing liabilities, less cash and other liquid assets.
Distribution of Earnings
We distribute retained earnings, if any, within the limits set by the Finnish Companies Act. We make
and calculate the distribution, if any, either in the form of cash dividends, share buybacks, or in
some other form or a combination of these. There is no specific formula by which the amount of a
distribution is determined, although some limits set by law are discussed below. The timing and
amount of future distributions of retained earnings, if any, will depend on our future results and
financial condition.
Under the Finnish Companies Act, we may distribute retained earnings on our shares only upon a
shareholders’ resolution and subject to limited exceptions, in the amount proposed by our Board of
Directors. The amount of any distribution is limited to the amount of distributable earnings of the
parent company pursuant to the last annual accounts approved by our shareholders, taking into
account the material changes in the financial situation of the company after the end of the last
financial period and a statutory requirement that the distribution of earnings must not result in
insolvency of the company. Subject to exceptions relating to the right of minority shareholders to
request otherwise, the distribution may not exceed the amount proposed by the Board of Directors.
Share Buybacks
Under the Finnish Companies Act, Nokia Corporation may repurchase its own shares pursuant to
either a shareholders’ resolution or an authorization to the Board of Directors approved by the
company’s shareholders. The authorization may amount to a maximum of 10% of all the shares of
the company (up to 5% until 2005) and its maximum length is 18 months (up to 12 months until
2006). The Board of Directors of Nokia has been regularly authorized by our shareholders in the
Annual General Meetings to repurchase Nokia’s own shares since 2001, and during the past three
years the authorization covered 230 million shares in 2004, 443.2 million shares in 2005 and
405 million shares in 2006. The amount authorized each year has been at or slightly under the
maximum limit provided by the Finnish Companies Act.
On January 25, 2007, we announced that the Board of Directors will propose for shareholders’
approval at the Annual General Meeting, convening on May 3, 2007, a new authorization to
repurchase a maximum of 380 million shares which corresponds to less than 10% of Nokia’s share
capital and total voting rights.
The table below sets forth actual share buybacks by the Group in respect of each fiscal year
indicated.
EUR millions
Number of shares (in total)
2002 ********************************************************** 900 000 17
2003 ********************************************************** 95 338 500 1 363
2004 ********************************************************** 214 119 700 2 661
2005 ********************************************************** 315 010 000 4 265
2006 ********************************************************** 212 340 000 3 412
For more information about share buybacks during 2006, see ‘‘Item 16E Purchases of Equity
Securities by the Issuer and Affiliated Purchasers.’’
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