3rd Qtr & 9 Mths Results-Pt 3

Telefonica SA
16 November 2001


PART 3

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ADDENDUM

COMPANIES INCLUDED IN EACH FINANCIAL STATEMENT

- Telefonica,  S.A.  directly participates in the  share  capital  &   Endemol  
Entertainment Holding, N.V. and Mediaways  GmbH  Internet  Services, S.A., which
have been considered into telefonica  Media,   S.A. and Telefonica Data, S.K., 
respectively.

- Furthermore,  Telefonica,  SA  has participated  directly  in  CEI   Citicorp 
Holdings  until May 2001, when  it  was  contributed  to Telefonica 
Latinoamerica. For the purpose of this report,  the 50%  stake held by this 
company in Cointel was consolidated within Telefonica  Latinoamerica(Telefonica 
Internacional, S.A),  which, in  turn,  holds 52.88% of the capital of 
Telefonica. de  Argentina (TASA).  Also,  CEI  holds 26.82% of Atlantida  de  
Comunicaciones, S.A.  (ATCO)  and  26.82% of AC Inversora,  S.A.  which,  for  
the purposes   of  the  pro-forma  financial  statements, are 100%
consolidated in Telefonica Media.

- With respect  to  the  acquisitions made  by  Telefonica,  S.A. in fiscal  
2000  in  the  share capital of Telefonica  de  Argentina, Telecomunicaciones de
Sao Paulo, S.K (Telesp)  and  Telefonica  del Peru,  S.A.,  the  contribution of
these  stakes  to  Telefonica Latinoamerica,  Telefonica Moviles, S.A, y 
Telefonica Data,  S.A. was assumed as of the beginning of the year, in the 
proportion  in which  each  of these, after the spin-off carried out, 
consolidate the  business  which  the Latin American companies  carry  out  in
fixed telephony, mobile  telephony and data transmission, respectively.

-In  the  case  of  Company  do Telecomunicaciones  de  Chile,  S.A. (CTC),in 
which Telefonica Latinoamerica has a stake, although its process of separation  
has  not  yet  started, its data transmission  activity  has already been  
assigned  to  Telefonica Data,  On  the  other  hand, Telefonica. Latinoamerica 
does  not include  the mobile telephony business, carried out by Telefonica
Movil   (Startel),   with   pro-forma  presentation   of   results
exclusively for the fixed telephony activity in Latin America.


SIGNIFICANT EVENTS:

- On  October 30, Telefonica de Espana announced a reduction in rates effective 
as of October 31, this being the fifth reduction  for  the year.  The 7% global 
decline  in  rates  satisfies  price cap regulations.  With this last decrease, 
the per minute  price  during daytime  hours  (from  8:00 a.m. to 8:00  p.m)  
for  provincial  and interprovincial  calls will be 23.43% and 18.64% lower,  
respectively, while rates for international calls will drop by 9.28% for all  
rate zones.

- On  the same date, Telefonica Moviles Espana renewed GPRS services offer with 
a new rate schedule and expanded service to include  the prepaid  segment. The 
new rate is based on a usage charge of  0.025 euros  per  Kb.  A GPRS package 
will also be marketed; it  includes connection plus a handset at a price of 
179.70 euros. For  contract customers,  in  addition  to usage charges,  bonus  
plans  will  be offered that will allow each user to choose his plan based  on  
the type of usage.

- On  October 23, Telefonica Moviles consolidated the brands  of  the Mexico 
companies Cedetel, Norcel, Movitel and Baja  Celular  under the  trade  name of 
Telefonica Moviles Mexico. At the same time, Telefonica MoviStar became the new 
image for marketing products  and services in its stares, service centers; and 
points of sale in  the retail  network. Two days later, Javier Zorrilla was 
named  CEO  of Telefonica,  Moviles  Mexico, having  served  as  Director  of  
the Division of Sales and Territories at Telefonica Moviles Espana.

- On  October  18,  Terra  Lycos  announced  the  acquisition of  the trademark,
domains and principal assets of Decompras.com from  El Sitio,  the  Internet 
platform of Claxson Interactive Group,Inc., with  a  view  to establishing the 
largest market for e-commerce in Mexico and Latin America. Decompras.com is the 
leading e-commerce company  in Mexico and Latin America, with sales of nearly  
$7M  in  2000. With this purchase, Terra Lycos consolidate its expansion  in the
Internet market for that continent by strengthening its line of e-commerce 
products and services.

- On  October 17, Terra Espana rolled out its new ADSL product,  known as  ADSL 
Plus,  the  only product offering  services  and  content tailored  to  users  
of this technology. The monthly  fee  for  the service  is  42 euros. From the 
standpoint of content,  Terra  ADSL customers  will have exclusive access to the
Multimedia  Zone  (which has  more  than  220,000 page views and nearly 50,000  
video  clips served  up  per day, in addition to offering a video  catalog  with
over  12,000  titles  classified by subject),  benefiting  from  the streaming  
media possibilities available with ADSL, taking advantage of its higher 
capacity, throughput, always-on connection, etc. Since this  technology was 
launched, more than 10,000 new users have been added, with up to 1,500 new 
subscribers in a single day. All  told, the  number of Terra Lycos ADSL 
customers has surpassed the 100,000 mark.

- On  the  same  day, Terra Lycos and the BBVA Group announced  the founding  of
a  company  (Iniciativas Residenciales  en  Internet,  S.A.-I.R.I.S.A.-), with 
each partner holding a 50% interest,  for the development  and  management of a 
vertical portal devoted  to real estate, which will operate under the trade name
Atrea.

- On  October  11,  Group  3G,  a Telefonica  Moviles  subsidiary  in Germany,  
introduced  the  trade  name  it  will  use   to   offer telecommunications  
services  in  that  country  (Quam),  with  the  commercial  rollout date 
expected before year's end. An advertising campaign on both TV and print media 
was launched on October  15  to introduce the name on the market.

- On  September 27, Telefonica was selected to enter to the Dow  Jones
Sustainability World index, effective as of October 5,  This  index includes  
312 international companies from 62 different  industries in  26  nations,  each
of which stands out for its achievements  in the  economic,  environmental  and 
social  spheres,  and  it  has  a combined  market  capitalization of 6.2  
trillion  euros.  Apart from  Telefonica,  10 other telecommunications  
companies  are  on this  index  (Sonera, Vodafone, Telecel, Telstra,  Telus,  
Deutsche Telekom, BT, Cable&Wireless, Telia and Swisscom).

- On  September  14,  Telefonica Moviles announced  its  decision  to cancel  
the tender offer for 54.32% of Celular CRT initiated  this past  February 27. 
This decision was made as consequence of  market volatility, heightened by the 
events of September 11 in  the  U.S., placed at risk the efficient execution of 
the transaction.

- Pursuant  to the agreement reached between Telefonica and Iberdrola on April  
9,  2001, providing for Telefonica to acquire  Iberdrola entire equity   
interest  in  the  Brazilian   telecommunications companies  of  which  both are
shareholders  (Telesp,  Celular  CRT Participacoes,  Tele  Sudeste  Celular  
Participacoes,  Tele  Leste Celular Partcipacoes), on   September 11 the 
Brazilian telecommunications  regulatory  agency  (ANATEL)  approved  without
restrictions the transfer of stock of either the holding  companies or the  
cellular  carriers  Celular  CRT  Participacoes,  TeleSudeste Celular  
Participacoes, and Tele Leste Celular Participacoes.  Once the  approval  is  
finalized, the shares  will  be  transferred  as agreed, subject to Brazilian 
legal provisions and to approval  from the Central Bank of Brazil or other 
agencies as needed.

- On  September 7, Telefonica de Espana rolled out its  retail line of  ADSL 
services aimed at home users and businesses, adding to the package  already  
available to phone carriers and Internet  service providers (wholesale offer). 
This new service will allow flat rate Internet  access  24  hours a day with no 
limit  on  the  size  of downloads as well as access to the Telefonica portal, 
bit rates of  up to 2 Mbps, a permanent connection and simultaneous telephone
usage.  It is available over basic telephone lines as well as  over ISDN  and  
allows  for auto-installation. Depending  on  bit  rate, prices are as follows: 
for 256 Mps: 39., for 512 Kbps: 75. and  for 2000  Mps: 150,. The possibility of
an ADSL line is available  to 86%  of  phone  lines  throughout the country, and
Telefonica  de Espana has plans to achieve 90% coverage by year's end.



CHANGES TO THE SPHERE AND ACCOUNTING CRITERIA OF CONSOLIDATION

TELEFONICA

As  part  of the reorganization plan of the Telefonica Group by business lines, 
Telefonica Moviles, S.A. Telefonica. DataCorp, SA and Telefonica Internacional, 
S.A. implemented several capital increases during the  first nine   month  of  
the fiscal  year.  In  exchange  for  such  increases, Telefonica S.A., made a 
non-monetary contribution of its shares  of  the capital of Telefonica de 
Argentina, S.A., Telefonica del Peru, S.A.A.  and Telecomunicacoes de Sao Paulo,
S.A. (TELESP).

- Telefonica  Moviles  received shares of Telefonica  de  Argentina  and
  Telefonica  del  Peru,  representing 97.93% of the  Argentine  company
  Telefonica  Comunicaciones Personales, S.A. and 97.06% of  the  Peruvian
  company Telefonica  Moviles Peru Holding, S.A.A., which  companies  arose
  from the spin-off of the mobile businesses in Argentina and Peru.

- Telefonica  DataCorp  received shares of Telefonica  de  Argentina  and
  Telefonica  del  Peru,  representing 97.92% of the  Argentine  company
  Advance,  S.A. and 93.22% of the Peruvian company Telefonica Data  Peru,
  S.A.A.,  as well as the assets and liabilities of the data business owned
  by Telefonica de Argentina and Telefonica del Peru.

- Telefonica,  Internacional,  S.A.  received  shares  of Telefonica de
  Argentina and Telefonica del Peru, calculated on the basis of the  value
  of  the assets and liabilities of fixed telephony and complementaries,
  owned by Telefonica de Argentina and Telefonica del Peru.

- Telefonica Internacional, S.A. received 306,211,253,813 shares representing   
  61.96% of the capital of the Brazilian company Telesp.

These  contributions  have  not  modified  the  consolidation  sphere  as
compared to the first nine months of the previous fiscal year.

In  the  month of January, Telefonica, S.A. acquired 100% of Mediaways GmbH for 
an amount of 1,472.9 million euros. The company was included in the sphere  of  
consolidation of the Telefonica  Group  by  the  global integration method.

In  the  month  of  February, Telefonica, S.A. formed the 100%-owned affiliate 
Telefonica Gestion de Servicios Compartidos, S.A., disbursing  in full an 
initial capital of 60,102 euros. The company was included in  the sphere  of 
consolidation in the consolidated financial statements of  the Telefonica Group 
by the global integration method.

In   the  month  of  June,  Telefonica,  S.A.  increased  its  capital  by
122,560,575 shares with a face value of 1 euro and with an issue  premium of   
4.5 euros  per  share.  In  exchange  for  this  capital  increase, Telefonica  
received, as a non-monetary contribution of  Motorola,  certain investments  in 
mobile business in Mexico: 100% of the capital  of  the company Corporacion 
Integral de Comunicacion, S.A. de C.V.;

100%  of the capital of the company Grupo Corporativo del Norte, S.A.; 79% of  
the capital of the company Telefonica Celular del Norte, S.A.  de  C.V. (the  
remaining  21% is contributed indirectly through  the  acquisition  of 100%, of 
Corporacion Integral de Comunicacion, S.A. de C.V.); 73.81% of the capital of 
Celular de Telefonia, S.A. de C.V. (the remaining  26.19% is  indirectly  
contributed  through the acquisition  of  100%  of  Grupo Corporativo  del 
Norte, S.A. de C.V.); 100% of Baja Celular Mejicana, SA de CV; 0.00001% of the 
capital of Baja Celular Servicios Compartidos, S.A. (the remaining 99.99999% is 
contributed  indirectly through the acquisition of 100% of Baja Celular 
Mexicana, S.A. de C.V.); 0.00001% of the capital of Tamcel, S.A. de C.V. (the 
remaining 99.99999% is contributed indirectly through the acquisition of 100% of
Baja Celular Mexicana, S.A. de CV);  22% of the capital of Movitel del Noroeste,
S.A.  de  C.V. (the remaining 68% is contributed indirectly through the 
acquisition of 100% of  Tamcel, S.A. de C.V.); 22% of the capital of the 
Moviservicios, S.A. de C.V. (the remaining 68% is contributed indirectly through
the acquisitions of 100% of the Tamcel, S.A. de CM) and 22% of the  capital  of
the  Movicelular,  S.A. de C.V. (the remaining 68% is contributed  indirectly
through the acquisition of 100% of Tamcel, S.A. de C.V.). In addition, as a
complement  to  this  operation, Telefonica contributed  in  cash  12.33
million  euros.  These  as were contributed in  the  month  of  July  to
Telefonica  Moviles, S.A. which increased its capital stock by  203  million
shares that were fully suscribed by Telefonica, S.A. These companies have
been fully consolidated.

In  the  month of September, Telefonica, S.A. acquired 114,500 shares  of the  
affiliate company Telefonica Publicidad e Informacion, S.A.  (T.P.I.)for  the  
amount  0.36  million  euros, a transaction  that  generated  a consolidated  
goodwill  of  0.32 million euros.  With  this  transaction, Telefonica now holds
a stake of 59.9% in the capital of T.P.I. The  company continues  to  be  
consolidated  in  the  financial  statements  of   the Telefonica Group by the 
global integration method.

TELEFONICA PUBLICIDAD E INFORMACION

The  company  Goodman Business Press, S.A. acquired in  fiscal  2000,  was
included in the sphere of consolidation of the Telefonica Group  in  the present
fiscal year by the global integration method.

As  a  consequence  of  the  event indicated in the  previous  paragraph,
Goodman's  100%-held affiliate Cernet was also included in the  sphere  of
consolidation  for this fiscal year by the global integration  method  in 2001; 
it is a company dedicated to Web page design. The company Buildnet, S.A., 
46.35%-held  by  Telefonica  Publicidad  e  Informacion, S.A. and 51.24%-held  
by  Goodman, was consolidated by  the  global  integration method in 2001 (in 
2000 it was Integrated by the equity method).

TERRA-LYCOS GROUP

During  the  first nine months of the fiscal year, Terra  Networks,  S.A.
participated in the formation of the Spanish company Azeler Automocion, S.A. 
with an initial capital of 8.41 million euros, subscribed and paid up 50% by 
Terra Networks, S.A. The company was included at acquisition cost in the 
consolidated financial statements of Telefonica Group.

Also during the first quarter of fiscal 2001, Terra Networks formed the l00%
owned  companies  Terra Networks Financial  Services  USA  LLC,  Terra Networks 
Maroc and Terra Networks Caribe, an investment of 12.12  million euros, 0.01 
million euros and 0.26 million euros, respectively. The first of  these  
companies  was  included in the financial  statements  of  the Telefonica  Group
by the global integration method; the other  two  were booked at acquisition 
cost.

To  establish  an  online  financial services  site, through  agreements reached
with  BBVA, in the month of August of the current  fiscal year, Terra Networks, 
S.A. acquired 49% of the capital of Uno-e Bank, S.A., for  a total  of  160.43 
million euros. The transaction generated a consolidated goodwill  of  130.25 
million euros in the consolidated accounts  of  the Telefonica  Group.  The 
company has been included in  the  consolidation sphere of the Telefonica Group 
by the equity method.

TELEFONICA. LATINOAMERICA GROUP (TELEFONICA INTERNACIONAL, S.A.)

Telefonica Internacional, S.A. has sold this year 35.86% of its capital in  the 
Argentine company Cablevision, SA, obtaining capital  gains  of 255.8  million  
euros.  The company was eliminated  from  the  sphere  of consolidation of 
Telefonica Group.

Telefonica Internacional, S.A. acquired  an  additional  100%  of  the capital  
of Telefonica. Peru Holding, SA,, at a cost of 220.76  million euros.  The  
transaction  generated a  consolidation  goodwill  of  46.27 million  euros. 
With this acquisition, Telefonica Internacional becomes the only shareholder of 
the aforementioned company. The company continues to be consolidated in the 
financial statements of the Telefonica Group by the global integration method.

During the course of the current fiscal year, Telefonica Internacional
executed a share purchase option with BBVA for the stake holding in Sao Paulo 
Telecomunicacoes Holding, S.A., a company which in turn holds  shares of Telesp 
Participacoes, S.A. This transaction has increased the stake  in  the capital of
SPT Holding by 0.5292%, at a transaction cost of 80.10 million euros.  The  
company  continues  to  be  consolidated  in  the  financial statements of the 
Telefonica Group by the global integration method.

The  parent company the Telefonica Internacional increased its stakes in the  
affiliates Telefonica del Peru, Telefonica de Argentina, Telesp  and CEI  
Citicorps  Holdings,  by contributing the aforementioned  stakes  of Telefonica,
S.A.

On  January  30, 2001, Telefonica de Argentina approved the reorganization
of  certain  businesses,  including those of its subsidiaries  TCP S.A., 
Advance, S.A. and TYSSA S.A.  On January 1, 2001 there were spin-offs  and
mergers  at  Telinver S.A., Advance S.A. and TCP S.A. On February 1, 2001
commitments  were  made between TASA, Advance and TMA, S.A. (Telefonica
Moviles Argentina) for corporate reorganizations.

ADMIRA MEDIA GROUP

In  January,  Grupo Endemol acquired the remaining 60% of Endemol  France for  
an amount of 159.3 million Euros. The company was included in the financial  
statements  of  Telefonica Group by the global integration method.

In  the  month of September, Telefonica. Media, S.A. acquired  47.5% of Tick  
Tack  Ticket,  S.A.,  at a transaction cost of  6.01 million euros.  The
transaction generated a consolidation goodwill of 4.15 million euros for the 
Telefonica Group. The company has been included in the consolidation sphere of 
the Telefonica Group by the equity method.

TELEFONICA DATACORP GROUP

On  January  16,  Telefonica Data Mexico (formerly Optel)  increased  its
capital by 16,992,251 shares, which were all acquired by Telefonica Data 
Holding,  On March 6, it increased its capital by 16,743,904, shares with
Telefonica Data Holding acquiring 5,228,385 shares and T. Datacorp 11,515,519  
shares. After these increases, the capital of Telefonica Data Mexico is 
241,738,667.8 Mexican pesos and the holding in the Company is as follows:

-T. Data Holding Mexico 52.04%

-T. Data Holding 20.41%

-T. Datacorp 18.37%

The  Spanish company Telefonica Data Caribe, S.A., 100%-owned subsidiary of  
Telefonica  DataCorp, S.A. had a 50% participation in the formation  of
Telefonica  DataCorp, for an investment of 106.59 thousand  euros.  The company 
was included in the financial statements of Grupo Telefonica  at its acquisition
cost.

TELEFONICA DE ESPANA GROUP

In   March,   all  the  shares  of  Telefonica  Sistemas  de  Informacion
Geografica, S.A., a company 100%-owned by Telefonica de Espana, S.A.U., were 
sold to T. Sistemas de Ingenieria de Productos, S.A., for 1.38 million Euros,  
generating a profit in the consolidated accounts of the Telefonica Group  of  
5.02  million Euros. The company, which was  included  in  the financial  
statements  of  Telefonica Group by  the  global  integration method, was 
eliminated tom the Group's sphere of consolidation.

TELEFONICA MOVILES GROUP

The  Spanish company MoviPay International, S.A., 50%-held by  Telefonica
Moviles,  and included in the financial statements of Telefonica Moviles Group 
in fiscal 2000 at its acquisition cost, is consolidated by the equity method in 
this fiscal year.

ATENTO GROUP

In  June,  the  company Atento Chile, S.A., increased its capital  by  3,338,287
shares  of  1,000  pesos  each;  the increase  was  fully  subscribed  by
Compania  de Telecomunicaciones de Chile, S.A. (CTC), a company indirectly
held  by the Telefonica Group at 43.64%, included in the Annual Accounts  of 
Telefonica Group by the global integration method.

After this operation, the Atento Group reduced its stake in Atento Chile from 
99.99% to 70% approximately, while CTC now has 29.99% of the capital of that 
company. The Telefonica Group obtained in this operation through the reduction 
of the direct and indirect holding in the capital of Atento Chile. a profit of 
0.82 million euros, reflected in the consolidated financial statements of 
Telefonica Group under the heading 'profits from sales of holdings in       
consolidated companies'. Atento Chile continues being included in the sphere of 
consolidation of the Telefonica Group through the global integration method.


Telefonica, S.A.

Consolidated Income Statement Full Consolidation
Unaudited figures

                                 January-September   %     July-September    % 
                                 2001      2000   Change  2001      2000  Change
    
Operating revenues            23.083,4  20,754.6  11,2   7.780,7  7.476,6   4,1
Internal expend capitalized   
 in fixed assets(1)              483,8     657,7 (26,4)    160,2    217.0 (26,2)
Operating expenses           (13.326,6)(12.177,5)  9,4  (4.411,8)(4.467,4) (1,2)
 Supplies                     (5.116,5) (4.229,9) 21,0  (1.663,5)(1.589,1)  4,7
 Personnel Expenses           (3.969,0) (3.737,4)  6,2  (1.282,5)(1.352,3) (5,2)
 Subcontracs                  (3.841,4) (3.891,2) (1,3) (1.319,6)(1.424,8) (7,4)
 Taxes                          (399.8)   (319,0) 25,3    (146,2)  (101,3) 50,4
EBITDA                          9.641,2  8.886,8   8,5   3.284,6  3.063,7   7,2
Depreciation & amortization   (5.483,8) (5.048,3)  8,6  (1.865,1) 1.749,1)  6,6

0perating Profit               4.157,4   3.838,5   8,3   1.419,4  1.314,6   8,0
Profit from associated 
 companies                      (278.1)    (91,9)202,6     (97,8)   (38,5)154,1
Financial income(expense) net (1.346,8) (1.300,9)  3,5    (420,0)  (528,8)(20,6)
Amortization of goodwill        (645,7)   (290,2)122,5    (162,5)  (126,6) 28,4
Extraordinary income 
(expense)net                      92,9     414,5 (77,6)   (110,4)   108,5(201,8)
Income before taxes            1.979,9   2.570,3 (23,0)    628,8    729,1 (13,8)

Income taxes                    (655,0)   (657,8) (0,4)   (195,9)  (203,7) (3,8)

Net income before minority
 interests                     1.324,8   1.912,3 (30,7)    432,9    525,4 (17,6)

Minority interests               266,2    (428,6)  c.s.      9,5    (30,8)  c.s.

Net income                     1.591,0   1.483,7   7,2     442,4    494,7 (10,6)

Outstanding shares(million)(2) 4.586,7   3.716,9  23,4   4.586,7  3.716,9  23,4

Net income per share              0,35      0,40 (13,1)     0,10     0,13 (27,5)

(1) Including work in process.
(2) Average number of shares in the period.  The figure includes capital 
increases to fund the acquisition of new shareholdings in Telefonica de 
Argentina, Telefonica del Peru, Telesp, Telesudeste, Endemol, ATCO and Motorola 
assets, and the issuence of new shares in respect of convertible bonds, weighted
for the number of days over which they have traded.  Bonus issues charged to 
reserves are excluded from calculations, as they involve no change in the 
ownership structure.

Total number of outstanding shares at the end of the period was  4,671,915,885.


Telefonica, S.A.
Full Consolidation

Consolidated Balance Sheet
Unaudited figures
                                                               Euros in millions
                                            September                  % 
                                          2001       2000            Change
                                        
Subscribed shares not pad-in             391,8        3,8             n.s.
Long-term assets                      65.224,8   59,094,8            10,4
 Start up expenses                       654,5      317,8           105,9
 Intangible net assets                20.409,5    7.222,8           182,6
 Fixed net assets                     36.520,6   39.657,2            (7,9)
 Investments                           7.640,2   11.887,1           (35,7)
Goodwill on consolidation              9.320,2    6.455,0            44,4
Deferred expenses                        829,8    1.163,6           (28,7)
Current assets                        15.798,9   17.262,8            (8,6)
 Inventories                             824,8      866,6            (4,8)
 Accounts receivable                  10.139,6    9.674,1             4,8
 Short-term investments                3.043,3    6.017,5           (49,4)
 Cash and banks                          580,0      351,7            64,9
 Other                                 1.211,2      372,9           224,8

Assets = Liabilities                  91.565,4   84.000,0             9,0

Shareholders' equity                  26.208,7   24.468,0             7,1
Minority interests                     8.214,2    5.400,6            52,1
Badwill on consolidation                  23,5        0,0             n.s.
Deferred income                        1.252,6    1.145,5             9,3
Provisions for risks and expenses      6.386,1    6.797,6            (6,1)
Accrued taxes payable                  2.470,3    1.237,7            99,6
Long-term debt                        22.526,4   23.162,4            (2,7)
Short-term debt including 
 current maturities                   10.827,4   11.242,3            (3,7)
Interest payable                         332,1      398,7           (16,7)
Other creditors                       13.324,2   10.147,3            31,3
 
Financial Data
Consolidated net debt (1)               29.731     28.035             6,0
Consolidated debt ratio (2)               43,9%      46,5%           (2,6p.p.)

(1) Net debt: Long-term debt + Short-term debt including current maturities -   
    Short-term investments - Cash and banks.
(2) Debt ratio: Net debt/(Shareholders' equity + Minority Interests + Deferred  
    income + Accrued taxes payable + Net debt).


Telefonica de Espana

Selected Operating Data
Unaudited figures

                                          

                                               September               %
                                           2001         2000          Change
 
Lines In service (thousands) (1)         20.662,6     20.052,7          3,0%
ISDN basic access                         773.985      539.020         43,6%
ISDN primary access                        15.666       12.652         23.9%
Lines in service/100 Inhabitants (1)        51,8%        50,3%          1,5p.p.
                                                     
ADSL connections                         223.158       25.314           n.s.
% ADSL coverage                            87,6%        60,6%         27,0p.p.

Traffic (million of minutes)             102.308       76.663          33,5%
Employees                                 40.948       44.919          -8.8%
Lines/employees(1)                         504,6        446,4          13,0%
                                               
(1) Basic telephony lines (including public telephones, Ibercom, ISDN and
    connections lines with PABX)


Telefonica de Espana

Telefonica de Espana (individual) operating revenues
Unaudited figures

                                          January-September               %
                                         2001          2000             Change

Revenue derived from usage               4.372,3       4.339,6            0,8

 Local                                   1.359,5       1.309,5            3,8
 Provincial                                423,7         418,3            1,3
 Domestic long distance                    700,1         754,8           (7,3)
 International long distance(outgoing)(1)  509,4         413,4           23,2
 Fixed to mobile                         1.117,5       1.157,0           (3,4)
 Interconnection International (incoming)  224,1         178,1           25,9
 Interconnection National Operators(1)     402,0         302,0           33,1
 Others                                   (364.0)       (193,6)          88,1

Monthly fee                              2.461,3       2.297,5            7,1
Connection fee                             200,0         215,8           (7,3)
Customer equipments                        200,6         111,1           80,6
Others (2)                                 164,3         172,3           (4,6)  
             
Total operating revenues                 7.398,6       7.136,3            3,7


(1) Net of foreign participation 
(2) Including special services, IRIS services and others.


Telefonica de Espana Group

Consolidated Income Statement
Unaudited figures


                               January-September   %      July-September    % 
                               2001      2000    Change  2001      2000  Change
    
Operating revenues            7.670,6   7.601,1   0,9   2.510,8  2.552,3   (1,6)
 Telefonica de Espana         7.398.6   7.136,3   3,7   2.413,0  2.350,8    2,6 
 Others and eliminations        272,0     464,8 (41,5)     97,8   201,4   (51,4)
Internal expend capitalized   
 in fixed assets(1)             130,3     186,6 (30,2)     41,4     57,2  (27,7)
Operating expenses           (4.183,1) (4.395,2) (4,8) (1.432,4)(1.558,3)  (8,1)
Other operating income
 (expense) net                 (134,6)    (10,4)  n.s.    (76,7)   (11,7) 557,9

EBITDA                        3.483,3  3.382,0   3,0   1.043,1  1.039,5     0,3 
Depreciation & amortization  (2.114,7)(2.176,8) (2,9)   (733,3)  (703,6)    4,2 
0perating Profit              1.368,6  1.205,3  13,6     309,8    336,0    (7,8)
Profit from associated 
 companies                       (1,3)     0,1   c.s.     (0,7)    (0,2)  325,9
Financial income(expense) net  (299,7)   (378,6)(20,8)    (95,6) ( 114,2) (16,3)
Amortization of goodwill         (0,5)     (0,2)123,7      (0,4)    (0,1) 361,5
Extraordinary income 
(expense)net                    164,8      39,6 316,2      35,2    (79,1)  c.s.
Income before taxes           1.231,9     866,1  42,2     248,4    142,5   74,3

Income taxes                   (330,4)   (232,0) 42,4     (67,3)   (25,6) 163,1

Net income before minority
 interests                      901,6     634,1  42,2     181,1    116,9   54,9

Minority interests               (0,0)      0,2   c.s.     (0,0)     0,0   c.s.

Net income                      901,5     634,3  42,1     181,0    117,0   54,8

                       
(1) Including works in process

Note: TTP has been included on the accounts of Telefonica de Espana, both in    
      2000 and 2001.
Note: Telefonica Sistemas Group and TSIP are not consolidated in Telefonica de
      Espana, both in 2000 and 2001.




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