Final Results-Part II
Telefonica SA
28 February 2005
RESULTS BY BUSINESS LINES
Other businesses
DIRECTORIES BUSINESS
During the year 2004, TPI Group's operating revenues increased by 6.6% to 605.9
million euros, despite the negative performance of Latin American currencies
against the euro. The Group's EBITDA amounted to 210.1 million euros, 17.0%
higher than the figure of 2003 and net profit grew by 24.2% up to 111.9 million
euros. These results are explained by:
• The good performance of advertising revenues within Spain, which improved
by 4.4% compared to 2003 up to 411.7 million euros.
• The revenues of Publiguias, the Chilean subsidiary, increased by 1.9% in
local currency, despite the non publication of Adenda, the addendum of the
Santiago de Chile residential White Pages directory, a biannual book.
However, advertising revenues showed a sound evolution, growing at 6.8% in
local currency. EBITDA improved 5.0% also in local currency, with an
increase of 1.1 percentage points in the EBITDA margin up to 37.6%.
• TPI Brazil experienced a decrease in revenues of 9.6% in local currency
due to more strict receivables and sales policies. However, during the
fourth quarter, publishing revenues climbed by 15.5% like for like. TPI
Brasil reduced its negative EBITDA by 3.7% in local currency to -4.9 million
euros, being newly affected by higher bad debt provisions coming from 2003.
• The increase in total revenues at TPI Peru of 8.4% in local currency. It
must be highlighted the contribution of the Internet business, which
experienced a revenues increase of 61.4% and accounts for 6.8% of total
advertising revenues. EBITDA rose by 30.5% up to 7.8 million euros, also in
local currency, due to efficiencies in costs.
With these results, TPI easily exceeds the initial 2004 year-end forecasts
announced during May 2004 of growth at constant exchange rates in revenues (+3/
+5%) and EBITDA (+9/+11%). At constant rates, revenues increased by 7.4% and
EBITDA by 17.6%.
Espana, which includes the revenues of TPI Edita (former Goodman Business
Press), increased its contribution to Group's revenues by 2 percentage points up
to 80.0%. EBITDA contribution of TPI Spain amounted 85.6% of total Group's
EBITDA. Excluding the revenues of TPI Edita, TPI Espana revenues rose by 8.9% to
484.7 million euros, mainly due to the following three factors:
• The Editorial business, which grew by 3.0% up to 371.9 million euros. This
division registered an organic growth, like for like, of 2.1% and 5.6%
experienced by the 110 Yellow Pages directories (105 directories in 2003)
and the 60 White Pages directories (62 directories in 2003), respectively
published.
• The advertising revenues related with the Internet Business, which rose by
16.4% up to 31.0 million euros and the advertising revenues related to
telephony information services, which reached 4.5 million euros, registering
an increase of 14.7%.
• And the strong performance achieved by the telephony traffic business line
(11888), whose revenues soared by 95.2% up to 46.6 million euros, and
represents 9.6% of total TPI Spain revenues.
In turn, EBITDA of Spain jumped by 18.3% up to 180.2 million euros, thanks to
the good evolution of operating revenues and cost control.
Latin America contributed with the remaining 20.0% of revenues and 14.4% of
EBITDA (positive EBITDA of 30.3 million euros). TPI Chile was the biggest Latin
American contributor to both revenues (73.7 million euros) and EBITDA (27.7
million euros).
In turn, the directories business of the Telefonica Group, which includes the
Argentinean company Telinver, recorded during 2004 an increase in total revenues
of 6.6% up to 628.1 million euros compared with 2003. EBITDA amounted 215.2
million euros, representing a year-on-year increase of 16.9%.
TPI - PAGINAS AMARILLAS GROUP
SELECTED OPERATING DATA IN SPAIN
Unaudited figures
January - December
2004 2003 % Chg
Books Published
Yellow Pages* 110 105
White Pages 60 62
(Euros in millions)
Revenue Breakdown (1) 484.7 445.3 8.9
Advertising 411.7 394.5 4.4
Publishing 371.9 361.2 3.0
Yellow Pages 296.3 291.1 1.8
White Pages 69.1 66.1 4.5
Verticals 6.5 4.0 63.8
Europages 31.0 26.7 16.4
Internet 4.5 4.0 14.7
Operator Assisted Yellow Pages 4.3 2.7 59.9
Others 46.6 23.9 95.2
Telephony Traffic 24.9 24.6 1.4
Operator 1.6 2.4 (33.9)
Others
*Includes a breakdown by residential/business services and pocket guides.
(1) TPI Espana includes Telefonica Publicidad e Informacion S.A. and 11888
Servicio de Consulta Telefonica S.A.U. results. TPI Edita (former Goodman
Business Press) is not included.
TPI - PAGINAS AMARILLAS GROUP
CONSOLIDATED INCOME STATEMENT
Unaudited figures (Euros in millions)
January - December October - December
2004 2003 % Chg 2004 2003 % Chg
Operating revenues 605.9 568.6 6.6 160.7 148.2 8.4
Operating expenses (395.8) (389.0) 1.7 (111.7) (106.7) 4.7
EBITDA 210.1 179.6 17.0 48.9 41.5 17.9
Depreciation and amortization (24.5) (30.0) (18.1) (8.5) (10.9) (22.2)
Operating profit 185.6 149.6 24.0 40.4 30.5 32.3
Profit from associated companies (0.6) (1.2) (46.1) (0.1) (0.2) (23.5)
Financial net income (expense) (2.9) (2.6) 9.7 (1.4) 0.1 c.s.
Amortization of goodwill (6.6) (3.0) 115.9 (1.3) (0.8) n.s.
Consolidation adjustments 0.0 0.6 n.s. 0.0 0.0 n.s.
Extraordinary net income (expense) (0.4) (0.8) (53.9) 0.0 0.3 (93.1)
Income before taxes 175.1 142.5 22.9 37.6 30.0 25.4
Income taxes (63.8) (48.9) 30.5 (17.9) (10.9) 63.9
Net income before minority interests 111.3 93.7 18.9 19.7 19.1 3.4
Minority interests 0.5 (3.6) c.s. 0.0 (0.1) c.s.
Net income 111.9 90.1 24.2 19.7 19.0 4.1
DIRECTORIES BUSINESS
CONSOLIDATED INCOME STATEMENT
Unaudited figures (Euros in millions)
January - December October - December
2004 2003 % Chg 2004 2003 % Chg
Operating revenues 628.1 589.3 6.6 175.8 163.5 7.5
Internal expend capitalized in fixed assets (1) 0.0 0.0 n.s. 0.0 0.0 n.s.
Operating expenses (378.7) (375.9) 0.8 (111.2) (111.4) (0.1)
Other net operating income (expense) (34.2) (29.4) 16.4 (11.4) (6.5) 75.3
EBITDA 215.2 184.0 16.9 53.2 45.6 16.5
Depreciation and amortization (25.1) (30.8) (18.3) (8.5) (11.1) (23.4)
Operating profit 190.1 153.3 24.0 44.6 34.5 29.4
Profit from associated companies (0.6) (1.2) (46.1) (0.1) (0.2) (23.5)
Financial net income (expense) (6.0) (6.6) (8.3) (2.2) (0.6) 260.0
Amortization of goodwill (6.6) (2.5) 165.6 (1.3) (0.8) 71.6
Extraordinary net income (expense) (2.4) (1.7) 42.3 (1.4) 0.2 c.s.
Income before taxes 174.4 141.4 23.4 39.6 33.1 19.7
Income taxes (62.3) (48.9) 27.5 (16.4) (10.9) 50.2
Net income before minority interests 112.1 92.5 21.2 23.2 22.2 4.7
Minority interests 0.5 (3.7) c.s. (0.1) (0.2) (60.5)
Net income 112.6 88.8 26.9 23.2 22.0 5.2
Note: Telefonica Directories Business includes Telinver (Argentina).
(1) Including work in process.
RESULTS BY BUSINESS LINES
Other businesses
TERRA NETWORKS GROUP
In 2004, the operating revenues obtained by Terra Networks amounted 539.2
million euros, representing a decrease of 1.1% over 2003. It is important to
highlight that the year on year variation is affected by the changes produced in
the consolidation perimeter with the sale of Lycos, Inc. shares in October 2004.
Therefore, excluding this variation and the negative impact in exchange rates
fluctuations, total revenues would have increased 8%.
The Strategic Alliance with Telefonica Group has reached a revenue figure for
Terra Networks Group of 133.8 million euros at the end of December 2004 compared
with 101.1 million euros obtained in the same period of 2003.
The revenues breakdown by business line was as follows: 43.8% Access revenues
(+7.0% y-o-y), 22.1% Advertising and Online revenues (-16.3% y-o-y), 22.6% Value
added & Contents services revenues (+2.8% y-o-y) and the remaining 11.5%
Corporate Services and others revenues (-2.4% y-o-y).
Regarding the geographical revenues breakdown, Spain continues to be the biggest
contributor, weighting 44.4% of total revenues (37.2% in 2003), followed by
Brazil with 27.5% of total revenues (26.1% in 2003) and USA with 16.2% of total
revenues (23.1% in 2003). The remaining 11.9% mainly comes from Mexico (5.5%)
and Chile (5.3%).
During 2004, Terra Espana experienced a year over year revenues growth of 18.3%
to 220.3 million euros, mainly due to the growth registered in both ADSL access
subscribers (+14.0%) and VAS&Contents subscribers (+55.9%). As of December 31st,
2004, Terra Espana accounts for 336,259 paying subscribers, of which 147,223 are
narrowband clients and 189,036 are broadband clients. Moreover, Terra Espana has
2.1 million paying customers that have signed up for VAS & Contents products.
During this fourth quarter, it should be mentioned, among the new products and
services launched, the migration of ADSL Home clients to ADSL Plus platform in
order to increase portfolio quality and migrate all clients to higher
value-added products. It is also important to highlight the launch of Football
and Music, two news products that were followed by an important advertising
investment.
Brazil revenues stood at 148.8 million euros, registering an increase of 4.4%
over 2003 (+9.8% in local currency). Terra Brasil has exceeded the 1.25 million
paying access subscribers figure, of which 724,728 are broadband clients. Terra
consolidates its leadership in Brazil in access paying subscribers in internet,
and holds more than 50% market share in the broadband market. During this fourth
quarter, it should be mentioned, among the new products and services launched,
the incorporation of new European tournaments in the Sports channel and the
packages (UEFA and European Championships) for mobile and Internet.
EBITDA for 2004 stood at 20.9 million euros, representing a positive EBITDA
margin of 3.9% (-7.2% in 2003), compared with the negative 39.5 million euros
reached in 2003. This margin improvement has been possible through higher
revenues coming from our main markets and savings obtained in all operating
expenses. It should be mentioned the sharp decrease in personal costs (-20.0% in
2004) due to the headcount reduction carried out during 2004 (-28.8% to 1,606
employees).
The Alliance with Telefonica registered coverage of the value committed for the
whole year (79.6 million euros) of 101.3%.
Terra Networks registered a positive net income of 164.0 million euros compared
to a net loss of 172.7 million euros in 2003. Due to the incorporation of Terra
Networks within the fiscal perimeter of Telefonica Group during the year, Terra
Networks materialized in 2004 a tax credit of 306.5 million euros coming mainly
from the sale of Lycos Inc.. Also in 2004, Terra Networks recognized an
extraordinary loss of 25.8 million euros mainly resulted from the headcount
reduction carried out.
At the end of December 2004, Terra Networks's client base reached 6.3 million
paying subscribers (+24.8% over 2003). Access clients accounted for 1.8 million
(+8.6% vs. 2003), of which more than 1.1 million are broadband clients, the
majority of them being ADSL (+66.0% y-o-y).
It should be mentioned that 71.1% of the company's total paying customers had
signed up for VAS & Contents products. These clients have increased 32.8% in the
last twelve months up to 4.5 million, of which 3.2 come from the Strategic
Alliance with Telefonica.
At the end of December 2004, Terra Networks had a cash position of 529 million
euros.
TERRA NETWORKS GROUP
SELECTED OPERATING DATA
Unaudited figures (Thousands)
December
2004 2003 % Chg
Total Pay Subscribers 6,279.9 5,032.5 24.8
Access 1,815.7 1,672.0 8.6
Narrowband 747.6 1,028.4 (27.3)
Broadband 1,068.0 643.6 66.0
OBP (CSP/Portal) 4,464.3 3,360.5 32.8
Broadband Access Subscribers by Country 1,068.0 643.6 66.0
Spain 189.0 165.9 14.0
Latin America 879.0 477.7 84.0
Employees (units) 1,606 2,255 (28.8)
TERRA NETWORKS GROUP
CONSOLIDATED INCOME STATEMENT
Unaudited figures (Euros in millions)
January - December October - December
2004 2003 % Chg 2004 2003 % Chg
Operating revenues 539.2 545.1 (1.1) 132.9 155.0 (14.3)
Internal expend capitalized in fixed assets (1) 0.7 0.9 (20.1) 0.1 0.2 (69.1)
Operating expenses (510.4) (577.8) (11.7) (114.1) (145.7) (21.7)
Other net operating income (expense) (8.7) (7.7) 12.5 (2.3) (1.9) 22.9
EBITDA 20.9 (39.5) c.s. 16.5 7.6 117.0
Depreciation and amortization (79.5) (78.7) 1.0 (31.3) (21.6) 44.9
Operating profit (58.6) (118.2) (50.4) (14.8) (14.0) 5.7
Profit from associated companies (14.6) (34.7) (58.1) (1.7) (19.7) (91.4)
Financial net income (expense) 18.3 57.7 (68.3) 1.9 30.7 (93.7)
Amortization of goodwill (64.8) (82.3) (21.2) (5.9) (19.9) (70.6)
Extraordinary net income (expense) (25.8) 4.5 c.s. 4.0 (12.9) c.s.
Income before taxes (145.6) (173.0) (15.9) (16.4) (35.8) (54.1)
Income taxes 306.5 (0.3) c.s. 277.1 (0.0) c.s.
Net income before minority interests 160.9 (173.2) c.s. 260.7 (35.8) c.s.
Minority interests 3.1 0.5 n.s. 0.1 0.1 56.2
Net income 164.0 (172.7) c.s. 260.8 (35.7) c.s.
(1) Including work in process.
RESULTS BY BUSINESS LINES
Other businesses
ATENTO GROUP
The last quarter of 2004 reflected the results of the commercial effort made
throughout the year, consolidating the revenue growth registered since the
beginning of the year. By geographical countries, the commercial agreements that
have contributed the most to this evolution are as follows:
• In Brazil, the operations with VIVO, Unibanco and Telesp, which continued
with a sound growth rate, and the new clients Bradesco, Microsoft, Telemig
and Sul America.
• In Spain, the agreement with BBVA and the services with Gas Natural,
Repsol and Serviberia.
• In Mexico, the increased activity with BBVA and the consolidation of the
agreements with Amex, Infonatel, GE Seguros and British American Tobacco.
• In Puerto Rico, the agreement with AT&T.
• In Chile, the sales coming from Correos de Chile, Autopista Central and
Banco Paris.
• In Venezuela, the services with Electricidad de Caracas and Citibank.
• In Argentina, the increased activity with TASA and Unifon.
Atento Group operating revenues during 2004 amounted to 611.7 million euros,
24.1% more than in the same period of 2003. This increase was primarily due to
Atento Spain (revenues +29.4%), Atento Brazil (revenues +18.3%), Atento Mexico
(revenues +68.2%), Atento Argentina (revenues +77.4%) and Atento Puerto Rico
(revenues +71.6%). Excluding the negative exchange rate effect, revenues would
have increased by 28.4%. During the fourth quarter, the revenue growth trend
experienced since the second quarter of 2004 was consolidated, reaching the
highest level of revenues in the history of the Atento Group (178.9 million
euros).
The contribution of the external clients of the Telefonica Group continued its
upwards trend, reaching 44.1% of total revenues at the end of 2004, compared
with 37.0% in December 2003, as a result of the aforementioned commercial
progress.
By geographical regions, both Spain and Brazil contributed with 71.4% of total
revenues, the same percentage as in 2003, although Spain individually increased
its contribution to 39.0% (37.5% in 2003) and Brazil, in turn, reduced it to
32.4% (33.9% twelve months ago). Regarding the remaining countries, Mexico
increased its contribution (7.1% vs. 5.2% a year ago), as well as Argentina
(2.7% vs. 1.9% in December 2003) and Puerto Rico (2.8% vs. 2.0% twelve months
ago).
Operating expenses registered in 2004 a growth of 22.2% up to 524.0 million
euros (+26.3% in constant euros), primarily due to an increase in personnel
expenses (+25.4%) as a result of greater activity.
Cumulative EBITDA for the year stood at 90.8 million euros, a figure 36.6%
higher than in 2003 (+44.3% excluding the exchange rate effect). EBITDA margin
rose to 14.9%, a 1.4 percentage points improvement on the figure twelve months
ago. This margin places the Atento Group among the most profitable companies in
the 'Contact Center' sector.
The operating profit for 2004 amounted to 54.4 million euros compared with the
14.3 million euros registered during January-December 2003, due to a higher
EBITDA and a decrease in depreciations (-30.3% year-on-year) as a result of the
degree of maturity achieved in operations.
Net income in 2004 reached 18.2 million euros (-16.2 million euros compared to
2003). During the fourth quarter of 2004, the Atento Group recorded a positive
net income of 6.9 million euros for the fifth consecutive quarter.
At operating level, the Atento Group had 30,566 positions in place at December
31st 2004, 4,866 more than one year ago. The average number of occupied
positions for 2004 was 22,116, representing a level of occupation of 75% (74% in
2003).
Cumulative CapEx at the end of the fourth quarter totaled 22.8 million euros,
showing a year-on-year increase of 76.5%. This increase was mainly due to the
investments made by Atento Brazil to attend new services and clients at the new
Contact Center in Sao Bento and at the extended call center in Barrafunda, as
well as the opening of new platforms in Spain to attend new services and the
implementation of the new call center in Chile (Vicuna) and Mexico (Puebla).
Finally, operating free cash flow (EBITDA-CapEx) reached 68.0 million euros
compared with the 53.6 million euros generated in 2003.
ATENTO GROUP
CONSOLIDATED INCOME STATEMENT
Unaudited figures (Euros in millions)
January - December October - December
2004 2003 % Chg 2004 2003 % Chg
Operating revenues 611.7 493.0 24.1 178.9 136.3 31.2
Operating expenses (524.0) (429.0) 22.2 (154.0) (111.8) 37.7
Other net operating income (expense) 3.1 2.5 23.9 1.1 1.0 3.4
EBITDA 90.8 66.5 36.6 25.9 25.5 1.4
Depreciation and amortization (36.4) (52.2) (30.3) (8.2) (11.5) (28.8)
Operating profit 54.4 14.3 n.s. 17.7 14.0 26.3
Financial net income (expense) (17.6) (30.3) (42.0) (4.3) (6.2) (31.3)
Amortization of goodwill (6.0) (6.9) (12.2) (1.5) (1.6) (8.3)
Extraordinary net income (expense) (4.5) 2.9 c.s. (0.2) 1.0 c.s.
Income before taxes 26.3 (20.0) c.s. 11.7 7.2 63.8
Income taxes (6.5) 4.6 c.s. (4.2) (3.7) 12.5
Net income before minority interests 19.8 (15.5) c.s. 7.5 3.4 119.5
Minority interests (1.6) (0.8) 103.3 (0.6) (0.4) 46.4
Net income 18.2 (16.2) c.s. 6.9 3.0 130.3
RESULTS BY BUSINESS LINES
Other businesses
CONTENT AND MEDIA BUSINESS
The Content and Media Business obtained operating revenues of 1,219.1 million
euros at 2004 year end, compared with the 1,378.5 million euros registered
during the same period of last year, mainly due to the consolidation by the
global integration method of the results of Antena 3 and its subsidiary Onda
Cero until the end of June 2003, along with Euroleague Marketing during the
first nine months of the year. These companies were subsequently removed from
the consolidation perimeter of the Telefonica Group. Without taking into account
these changes in the consolidation perimeter, consolidated revenues would grow
10.9% in relation to the same period of the previous year, mainly due to the
positive performance of Endemol and ATCO in Argentina.
The consolidated EBITDA amounted to 182.6 million euros, compared with 210.3
million euros in 2003. Without taking into account the aforementioned changes in
the consolidation perimeter, the EBITDA growth would have been 9.2%.
The process of divestiture of non-strategic assets continued during the fourth
quarter of 2004, being totally removed from the consolidation perimeter the
Group's stake on Rodven, the Venezuelan music producer, and having agreed the
sale of Torneos y Competencias, the owner of the Argentinean football league
content rights. Furthermore, Telefonica has reached to a selling agreement with
Prisa Group in relation to the ownership of the Argentinean radio stations LS4
Radio Continental and Radio Estereo (100% owned by ATCO Group), subject to final
approval by the Argentinean competition defence authorities.
ENDEMOL
The Endemol Group generated revenues of 1,033.7 million euros during the year
2004, which was 13.1% more than in the previous year. Endemol obtained EBITDA of
180.9 million euros, up by 9.9% year-on-year, and it is noteworthy to highlight
the achievement of an EBITDA margin of 17.5%, in line with the previous year's
figure.
These results are due primarily to the good behavior of operations in
competitive markets where Endemol has operations, like United Kingdom and the
USA. The US subsidiary reached a year-on-year increase of 128.1% in revenues,
measured in local currency, due to the successful adaptation of Endemol format
library to the US market and the rebroadcast of past produced TV programs
through a local TV channels group, leaded by NBC. Even though Western Europe
continues to be the main contributor to Endemol Group revenues (76.7%), Endemol
USA represents the 13.2% in 2004 vs. 7.2% in 2003.
ATCO
Throughout the year 2004, the advertising market in Argentina has consolidated
the good trend initiated in 2003, having registered year-on-year growth of
approximately 39% in Capital and Gran Buenos Aires areas. At the end of 2004,
Telefe reaffirmed its position as the audience leader both on total population
and commercial audience, reaching 37.8% and 40.9% shares in these two metrics,
respectively, and followed by Canal 13, its main competitor, with 27.4% and
30.3% shares.
As a result of the aforementioned audience figures, cumulative advertising
market share achieved at the end of 2004 is 44.9% in Capital and Gran Buenos
Aires areas, 12.3 percentage points. higher than its main competitor's, and 4.5
percentage points higher than the one achieved in the same period of last year.
The company obtained revenues at the end of the year of 330.4 million pesos,
38.0% more than in 2003 and EBITDA climbed to 53.9 million pesos, 37.6 million
pesos higher than registered at the end of 2003.
CONTENT AND MEDIA BUSINESS
CONSOLIDATED INCOME STATEMENT
Unaudited figures (Euros in millions)
January - December October - December
2004 2003 % Chg 2004 2003 % Chg
Operating revenues 1,219.1 1,378.5 (11.6) 387.2 341.8 13.3
Internal expend capitalized in fixed assets (1) 0.2 0.1 90.8 (0.0) (0.0) 200.0
Operating expenses (1,027.9) (1,179.7) (12.9) (328.8) (287.8) 14.3
Other net operating income (expense) (8.9) 11.4 c.s. (2.7) (4.5) (39.1)
EBITDA 182.6 210.3 (13.2) 55.6 49.5 12.4
Depreciation and amortization (30.5) (49.9) (39.0) (9.2) (10.5) (11.8)
Operating profit 152.1 160.4 (5.1) 46.4 39.0 18.9
Profit from associated companies (20.9) (95.2) (78.1) (7.1) (22.9) (68.8)
Financial net income (expense) (104.1) (61.5) 69.2 (81.0) (14.4) n.s.
Amortization of goodwill (121.1) (102.5) 18.2 (29.3) (32.1) (8.7)
Extraordinary net income (expense) (32.7) 327.9 c.s. 7.4 367.9 (98.0)
Income before taxes (126.7) 229.0 c.s. (63.5) 337.6 c.s.
Income taxes 66.3 (105.1) c.s. 25.4 (63.8) c.s.
Net income before minority interests (60.4) 123.9 c.s. (38.2) 273.8 c.s.
Minority interests (5.1) (4.2) 19.7 (1.7) 0.0 c.s.
Net income (65.5) 119.7 c.s. (39.9) 273.8 c.s.
(1) Including work in process.
RESULTS BY BUSINESS LINES
Other businesses
TELEFONICA DEUTSCHLAND GROUP
Telefonica Deutschland Group obtained operating revenues of 319.5 million euros
in 2004, a decrease of 16.5% year on year, due primarily to the reduction in
revenues from narrowband services which has not yet been offset by the increase
in broadband business, which nearly accounted for 14.2% of the revenues.
With respect to the broadband business, an due to its wholesale nature, a new
method of equivalent ADSL lines accounting has been adopted, regarding the total
broadband capacity contracted per client. Thus, the total number of equivalent
ADSL lines in service for both German and UK markets reaches the figure of
497,180, which compares with the equivalent figure of 302,761 in 2003, providing
services to four out of five top main ISPs in Germany.
EBITDA reached a total of 3.5 million euros in 2004, with an EBITDA margin of
1.1% which compares with the 22.3 million euros registered in the previous year.
TELEFONICA DEUTSCHLAND GROUP
SELECTED FINANCIAL DATA
Unaudited figures (Euros in millions)
January - December October - December
2004 2003 % Chg 2004 2003 % Chg
Operating revenues 319.5 382.7 (16.5) 72.6 94.3 (22.9)
EBITDA 3.5 22.3 (84.3) (1.0) 11.2 c.s.
EBITDA margin 1.1% 5.8% (4.7 p.p.) (1.3%) 11.9% (13.2 p.p.)
ADDENDA
Companies included in each Financial Statement
Based on what was indicated at the start of this report, the results breakdown
of Telefonica Group are detailed according to the business in which the Group
has a presence. The main differences between this view and the one that would
apply attending to the legal structure, are the following:
• Telefonica, S.A. directly participates in the share capital of Endemol
Entertainment Holding, N.V., which has been included in Telefonica de
Contenidos Group. Furthermore, in the fiscal year 2003 the results from the
participation, and following divestiture, in Antena 3 de Television, S.A.,
were integrated within the Telefonica de Contenidos Group results, although
it had been participated directly by Telefonica S.A. through a part of the
year. The results from the Sogecable stake have been also assigned to
Telefonica de Contenidos Group, even though a part of the investment is
legally dependent upon Telefonica, S.A.
• Telefonica Holding Argentina, S.A. holds 4.706% of Atlantida de
Comunicaciones, S.A. (ATCO) and 26.82% of AC Inversora, S.A. which, for
those purposes, are considered to be part of Telefonica de Contenidos Group,
consolidating 100% share capital of both companies.
• In the case of Compania de Telecomunicaciones de Chile, S.A. (CTC),
participated by Telefonica Latinoamerica, the activities of the mobile
telephony business in Chile have been sold to Telefonica Moviles Group in
the third quarter of fiscal year 2004, although the results of this company
have been assigned to the mobile business from the beginning of the year.
• The participation of Telefonica Group in IPSE 2000 SpA is assigned to the
cellular business, also including the investment legally dependent upon
Telefonica DataCorp, S.A.
• In the case of Telefonica de Argentina (TASA), participated by Telefonica
Latinoamerica Group, Telinver has been assigned to the directories business,
in line with our vision for the total Telefonica's directories business.
• Telefonica Data Group, legally dependent upon Telefonica S.A., has been
segregated and subsequentally integrated into the fixed line activities both
in Spain and Latin America for presentation purposes, and according to
geographic criteria. The stakes not included in neither of the previous
geographic areas will be consolidated directly by Telefonica S.A. In this
sense, the stakes in Telefonica Data Espana, S.A.U. and Soluciones Group
have been sold to Telefonica de Espana S.A.U. in the third quarter of 2004,
although the results of both companies had been assigned to the fixed line
business in Spain from the beginning of the year.
• Emergia Group, now denominated Telefonica International Wholesale Services
America, S.A. (Uruguay), directly participated by Telefonica S.A., has been
consolidated within the Telefonica Latinoamerica Group.
ADDENDA
Key Holdings of the Telefonica Group and its Subsidiaries detailed by business
lines
TELEFONICA GROUP
% Part
Telefonica de Espana 100.00%
Telefonica Moviles 92.46%
Telefonica Latinoamerica 100.00%
TPI Group 59.90%
Terra Networks Group (1) 75.87%
Telefonica de Contenidos 100.00%
Atento Group 91.35%
(1) Efective participation: 76.80%. Including Terra's shares in treasury stock.
TELEFONICA DE ESPANA GROUP
% Part
Telyco 100.00%
Telefonica Telecomunic. Publicas 100.00%
Telefonica Soluciones Sectoriales 100.00%
Telefonica Empresas Espana 100.00%
T. Soluciones de Informatica y 100.00%
Comunicaciones de Espana
TELEFONICA LATINOAMERICA GROUP
% Part
Telesp 87.49%
Telefonica del Peru 98.19%
Telefonica de Argentina 98.03%
TLD Puerto Rico 98.00%
CTC Chile 44.89%
Telefonica Data Colombia 65.00%
Telefonica Empresas Brasil 93.98%
Telefonica Empresas Peru 97.07%
Telefonica Data Argentina 97.92%
Telefonica Data USA 100.00%
T. Internacional Wholesale Serv. (TIWS) 100.00%
TELEFONICA MOVILES GROUP
% Part
Telefonica Moviles Espana 100.00%
Brasilcel (1) 50.00%
TCP Argentina 97.93%
TEM Peru 97.97%
T. Moviles Mexico 92.00%
TEM El Salvador 91.75%
TEM Guatemala 100.00%
Telefonica Movil Chile 100.00%
Telcel (Venezuela) 100.00%
TEM Colombia 100.00%
Comunicaciones Moviles del Peru 99.85%
TEM Guatemala y Cia 100.00%
Otecel (Ecuador) 100.00%
TEM Panama 99.57%
Abiatar (Uruguay) 100.00%
Telefonia Celular Nicaragua 100.00%
Group 3G (Germany) 57.20%
IPSE 2000 (Italy) (2) 45.59%
3G Mobile AG (Switzerland) 100.00%
Medi Telecom 32.18%
Telefonica Moviles Interacciona 100.00%
Mobipay Espana 13.36%
Mobipay Internacional 50.00%
T. Moviles Soluciones y Aplicac. (Chile) 100.00%
(1) Joint Venture which fully consolidates TeleSudeste Celular Participacoes,
Celular CRT Participacoes, TeleLeste Celular Participacoes and Telesp Celular
Participacoes. Telesp Celular Participacoes fully consolidates Global Telecom
Participacoes and, from May 2003, TeleCentro Oeste Participacoes. The
participation that consolidate of Brasilcel in their subsidiaries in December
2004 are the following: TeleSudeste Celular Participacoes 90.9%; Telesp Celular
Participacoes 65.1%; Global Telecom Participacoes 65.1%; Celular CRT
Participacoes 65.9%; TeleLeste Celular Participacoes 50.6% and TeleCentro Oeste
Participacoes 33.0%.
(2) Aditionally, Telefonica Group has a 4.08% of IPSE 2000 through Telefonica
DataCorp.
TPI - PAGINAS AMARILLAS GROUP
% Part
TPI Edita 100.00%
Publiguias (Chile) 100.00%
TPI Brasil 100.00%
TPI Peru 100.00%
11888 Servicios de Consulta Telefonica 100.00%
TERRA NETWORKS GROUP
% Part
Lycos Europe 32.10%
Terra Networks Peru 99.99%
Terra Networks Mexico 99.99%
Terra Networks USA 100.00%
Terra Networks Guatemala 100.00%
Terra Networks Venezuela 100.00%
Terra Networks Brasil 100.00%
Terra Networks Argentina 99.99%
Terra Networks Espana 100.00%
Terra Networks Chile 100.00%
Terra Networks Colombia 99.99%
Ifigenia Plus 100.00%
EducaTerra 100.00%
R.U.M.B.O. 50.00%
Uno-E Bank 33.00%
One Travel.com (1) 54.15%
(1) In February 2005, the agreement of sale has been reached.
ATENTO GROUP
% Part
Atento Teleservicios Espana, S.A. 100.00%
Atento Brasil, S.A. 100.00%
Atento Argentina, S.A. 100.00%
Atento de Guatemala, S.A. 100.00%
Atento Mexicana, S.A. de C.V. 100.00%
Atento Peru, S.A.C. 99.46%
Atento Chile, S.A. 77.58%
Atento Maroc, S.A. 100.00%
Atento El Salvador, S.A. de C.V. 100.00%
TELEFONICA DE CONTENIDOS GROUP
% Part
Telefe 100.00%
Endemol 99.70%
Torneos y Competencias (1) 20.00%
Telefonica Servicios de Musica 100.00%
Sogecable 23.83%
Telefonica Servicios Audiovisuales 100.00%
Hispasat 13.23%
(1) In January 2005, it has been sold.
ADDENDA
Significant Events
• On February 23, 2005, the Board of Directors of both Telefonica, S.A. and
Terra Networks, S.A. have each adopted, a Merger Plan for the acquisition of
Terra Networks, S.A., with the termination, through dissolution without
liquidation, of the former company, and the en bloc transmission of all of
its assets to the latter company, which, through universal succession, will
acquire the rights and obligations of Terra Networks, S.A.
The exchange ratio which was determined on the basis of the real value of
the corporate assets and liabilities of both companies, will be the
following: Two shares of Telefonica, S.A., each having a par value of one
euro, for every nine Terra Networks, S.A. shares, each having a par value of
two euros.
Moreover, the Board of Directors of Terra Networks, S.A. has proposed to
Telefonica, S.A. the distribution to Terra Networks, S.A.'shareholders, a
cash dividend of 0.60 euros per share, that will be charged against
Additional Paid-in Capital Reserve.
• On February 17, 2005, TPI's Board of Directors agreed to submit to the
next General Shareholders' Meeting corresponding to fiscal year 2004, a
proposal to distribute a dividend of 0.30 euros per share, which amounts to
a 20% increase against 2003. The payout came to 97% of the net profit of the
TPI Group and 99% of the net profit of TPI S.A. The dividend will be paid
after the amortization of the treasury stock actually held by the company
(7,212,147 shares, representing 1.96% of the share capital), previously
attached to the hedging of the Stock Options program, ended on November
2003; decision that will also be submitted for the approval to the next
General Shareholders' Meeting.
• On February 15, 2005, Telefonica S.A. treasury stock position was
246,104,407 shares representing 4.996% of its current share capital.
• On February 11, 2005, Terra Networks agreed the sale of its 54.1% stake in
Onetravel.com Inc, in the context of several agreements reached between
Onetravel.com Inc, and the American company RCG Companies, driven to the
merger of both entities. The final amount for the whole agreement is 25.5
million dollars.
• On January 26, 2005, Telefonica's Board of Directors agreed the payment of
a dividend of 0.5 euros per share corresponding to fiscal year 2004 charged
against both earnings and reserves. The corresponding corporate agreements
will be adopted for such purpose. The intention of the Board is also to
maintain the same minimum dividend for fiscal year 2005.
The proposal will be for the dividend corresponding to the fiscal year 2004,
to be distributed in two payments. The first (interim dividend from 2004 net
income) on May 13th, 2005 of a fix gross amount of 0.23 euros and the second
(dividend in cash from the Additional Paid-in Capital Reserve) on November
11th, 2005 of a fixed amount of 0.27 euros per share.
• On January 7 2005, the acquisition of 100% of BellSouth Chile operator was
completed for an enterprise value of 532 million dollars, and on January 11
2005, the acquisition of 100% of BellSouth Argentina was completed for an
enterprise value of 988 million dollars.
• In January 2005, after the close of fiscal year 2004, the capital increase
carried out by Telesp Celular Participacoes' (TCP) was fully subscribed for
an amount of approximately 2,054 million reais. The proceeds raised will be
used in part to finance TCP's increased stake in Tele Centro Oeste (TCO) and
the remainder will be used to partially repay short-term debt and improve
the company's capital structure. Through this operation Brasilcel's stake in
TCP's share capital increases to 65.70%.
• On November 24, 2004, the Board of Directors agreed to submit to the next
General Shareholders' Meeting corresponding to fiscal year 2004, a proposal
to distribute Telefonica, S.A. treasury stock among its shareholders in the
proportion of one (1) share for every twenty five (25) shares. The
distribution will be charged against paid-in capital reserves.
• On November 22, 2004, pursuant to the agreement in principle reached
between the parties, the ATCO Group, subsidiary of Telefonica de Contenidos,
S.A., entered into an agreement to sell 100% of the share capital of the
companies Radio Continental LS4, S.A. and Radio Estereo, S.A., radio
operators in Argentina of the Telefonica Group, to the PRISA Group member
companies, GLR Services Inc. and Corporacion Argentina de Radiodifusion,
S.A., for 10.5 million dollars. Execution of the transaction is subject to
administrative authorisation by the Argentinean authorities.
ADDENDA
Changes to the Perimeter and Accounting Criteria of Consolidation
In the period January-December of 2004, the following changes have occurred in
the consolidation perimeter:
TELEFONICA GROUP
• During 2004, Telefonica Group has purchased 71,693 shares in the Dutch
company Endemol Entertainment Holding, N.V. (Endemol) for 1.79 million
euros. After this transaction, Telefonica Group's stake in Endemol has
reached 99.70%. The company continues to be fully consolidated within the
Telefonica Group.
• Likewise, Telefonica S.A. has purchased 52,820,862 shares of Portugal
Telecom, S.G.P.S., S.A. during 2004 for 475.14 million euros, highlighting a
consolidated goodwill of 344.52 million euros. In addition, on December 29,
Portugal Telecom announced a share capital reduction by cancelling
87,799,950 shares in treasury stock, equivalent to 7% of its share capital.
After these operations, Telefonica has increased its direct stake in the
company to 8.55%. The direct and indirect effective stake of Telefonica
Group is 9.58%. The company continues to consolidate by the equity method in
the financial statements of Telefonica Group.
• The Spanish company Inmobiliaria Telefonica, S.L.U. has been dissolved
without liquidation through the transfer of all its assets and liabilities
to its sole shareholder Telefonica, S.A. and its later extinction. The
company, which was consolidated within Telefonica Group's financial
statements by the full integration method, has been removed from the
consolidation perimeter.
• The US companies Telefonica B2B, Inc. and Telefonica USA, Inc., which used
to be consolidated within Telefonica Group's financial statements by the
full integration method, have been removed from the consolidation perimeter,
the companies being liquidated and dissolved and their assets and
liabilities transferred to their sole shareholder, Telefonica, S.A.
• The company Zeleris Soluciones Integrales, S.L.U. has been taken over by
the wholly-owned subsidiary of Telefonica, S.A., Telefonica Gestion de
Servicios Compartidos Espana, S.A., increasing its share capital by 5.47
million euros and receiving all of the shares comprising the capital of
Zeleris in exchange. As a result of the afore-mentioned merger, the company
Zeleris Espana, S.A.U., subsidiary of Zeleris Soluciones Integrales, S.A.,
becomes a 100% subsidiary of Telefonica Gestion de Servicios Compartidos
Espana, S.A. This company continues to be included in the consolidation
perimeter of the Telefonica Group using the full integration method.
• In 2004, the Spanish company Telefonica Investigacion y Desarrollo, S.A.
has constituted the Mexican company Telefonica Investigacion y Desarrollo
Mexico, S.A., subscribing and paying for all of its share capital,
consisting of 50,000 shares at a par value of 1 Mexican peso each. The
company has been included in the Telefonica Group's consolidation perimeter
under the full consolidation method.
• In November, the Spanish companies Telefonica Participaciones, S.A.U. and
Telefonica Emisiones, S.A.U. were constituted, both with a share capital
represented by 62,000 shares with a par value of one euro each, all
subscribed and paid for by the unique shareholder, Telefonica, S.A.
• In December, the Luxemburg company Altair Assurances, S.A. was
incorporated with an initial capital of 6 million euros. The wholly-owned
Telefonica Group subsidiaries, the Luxemburg company Casiopea Reaseguradora,
S.A. and the Spanish company Seguros de Vida y Pensiones Antares, S.A., have
subscribed and paid for all of this company's share capital: the former
owning 95% and the latter 5%.
• In December, the Peruvian company Telfisa Peru, S.A.C. was incorporated
with an initial share capital of 12 million nuevos soles. The Telefonica
Group subscribed and paid for all the initial share capital.
TELEFONICA DE ESPANA GROUP
• As part of its ongoing process to restructure its group of companies,
Telefonica Cable, S.A., a wholly-owned subsidiary of Telefonica de Espana,
S.A., has taken over the following local operators: Telefonica Cable
Asturias S.A., Telefonica Cable Valencia S.A., Telefonica Cable Extremadura
S.A. and Telefonica Cable Balears S.A. All of these companies, which were
fully consolidated within the Telefonica Group, have been removed from the
Group's consolidation perimeter this year.
• The 2.13% stake that Telefonica de Espana, S.A. owned in the French
company Eutelsat, S.A., was sold for 44.83 million euros, resulting in a
21.43 million euros net capital gain. In addition, the 0,75% stake in the
Dutch company New Skies Satellites, B.V. of Telefonica de Espana S.A. has
been sold for 6.02 million euros, having generated a capital gain of 5.95
million euros. Both companies were recorded within the 'Other investments'
item of the Telefonica Group's consolidated balance sheet.
• The Spanish company Telefonica Mobile Solutions, S.A.U. has been taken
over by its parent company Telefonica Soluciones de Informatica y
Comunicaciones de Espana, S.A.U. This company, which used to be consolidated
within Telefonica Group's financial statements by the full integration
method, has been removed from the consolidation perimeter.
TELEFONICA LATINOAMERICA GROUP
• The Brazilian company Aix Participacoes, which was integrated by the
equity method in the consolidated accounts of the Telefonica Group in 2003,
is now incorporated using the proportional integration method.
• The U.S. company Katalyx, Inc. took over the U.S. companies Adquira, Inc.
and Katalyx Transportation, LLC. Both companies, which were integrated in
2003 in the consolidated accounts of the Telefonica Group using the full
integration method, have been removed from the consolidation perimeter.
• The Peruvian company Telefonica Empresas Peru, S.A.A. has taken over the
Peruvian company Telefonica Servicios Financieros, S.A.C. The company, which
in 2003 was integrated in the consolidated accounts of the Telefonica Group
using the full integration method, has been removed from the consolidation
perimeter.
• On July 8 2004, Telefonica Internacional Chile S.A. purchased 3,000,000
ADRs in Compania de Telecomunicaciones de Chile S.A. (CTC), representing
12,000,000 Series A shares equivalent to a 1.25% stake in the company,
giving the Telefonica Group a 44.89% stake. The price paid for the deal was
37.07 million of U.S. dollars. The company continues to consolidate in the
financial statements of the Telefonica Group by the full integration method.
• On April 26 2004, as it was mentioned before CTC sold to Telefonica
Publicidad e Informacion S.A. it stake in the Chilean company Impresora y
Comercial Publiguias S.A. (9%).
• After the approval for the CTC Board of Directors on May 18 2004 and its
afterwards ratification in the AGM on July 15 2004 the sell of a 100% of
Telefonica Movil Chile, S.A. to Telefonica Moviles S.A. was formalized.
• In line with a share buy-back program, the subsidiary Telefonica del Peru,
S.A.A. has purchased shares in the market, raising Telefonica Group's
effective shareholding from 97.21% to 98.19%, for an amount of 21.90 million
of nuevos soles, approximately 5.3 million euros. The company continues to
consolidate in the financial statements of the Telefonica Group by the full
integration method.
• In November, Telefonica del Peru S.A.A. bought 99.99% of the shares in
Antena 3 Producciones S.A. for the sum of 3.85 million dollars,
approximately 2.9 million euros. The company has been included in the
Telefonica Group financial statements under the full consolidation method.
• Telefonica del Peru, S.A.A. disposed of all of its approximately 0.83%
stake in the Dutch company New Skies Satellites, B.V. for 7.84 million
dollars, around 5.9 million euros. The company was registered in the 'Other
investments' item on the Telefonica Group's consolidated balance sheet.
• Regarding the Katalyx Group, the Mexican subsidiaries Katalyx Construction
Mexico, S.R.L., Katalyx Health Mexico, S.R.L., Katalyx Cataloguing Mexico,
S.R.L. de C.V., Katalyx Food Service Mexico, S.R.L. de C.V. and Katalyx
Transportation Mexico, Llc. and the Argentinean companies Katalyx
Transportation Argentina, S.R.L., Katalyx Construction Argentina, Katalyx
Food Service Argentina, S.R.L., Katalyx Cataloguing Argentina, S.R.L. y
Katalyx Argentina, S.A. have been dissolved or are currently being
liquidated. All of these companies, which in 2003 were integrated in the
consolidated accounts of the Telefonica Group using the full integration
method, have been removed from the consolidation perimeter.
• The Argentinean company Adquira Argentina, S.L. has been taken over by the
company Telefonica Data Argentina, S.A. The company, which in 2003 was
integrated in the consolidated accounts of the Telefonica Group using the
full integration method, has been removed from the consolidation perimeter.
• The Venezuelan company Compania Anonima Nacional de Telefonos de
Venezuela, C.A. (CANTV), in which the Telefonica Group has a 6.91% stake,
included in the Telefonica Group financial statements under the equity
method, has been removed from the Telefonica Group consolidation perimeter.
This change was due to the only representative of Telefonica Internacional
leaving the CANTV Board of Directors following a decision adopted by the
CANTV Meeting of Shareholders held on March 31 2004.
• In December, the Brazilian company Telecomunicacoes de Sao Paulo, S.A.
(TELESP) signed a purchasing contract the entire shareholding in the company
Santa Genovense Participacoes Ltd., a holding company owning all of the
shares in the company Atrium Telecomunicacoes Ltda., for the sum of 113.44
million reais, approximately 31 million euros, generating goodwill of 33.14
million euros. The company has been included in the Telefonica Group
consolidated financial statements under the full consolidation method.
TELEFONICA MOVILES Group
• The company Mobipay Espana, S.A. increased its share capital by 3.78
million euros during 2004. Telefonica Moviles Espana, S.A. subscribed in the
capital increase by purchasing the shares necessary to increase its stake in
the company from 13.33% to the current 13.36%. The company continues to be
included in the consolidation perimeter of the Telefonica Group by the
equity method.
• In August 2004, Brasilcel N.V. and Telesp Celular Participacoes, S.A.
(TCP) announced their intention to launch voluntary tender offers for Tele
Sudeste Celular Participacoes, S.A., Tele Leste Celular Participacoes, S.A.,
Celular CRT Participacoes, S.A and Tele Centro Oeste Celular Participacoes,
S.A (TCO) respectively. These tender offers were completed in October.
The following information shows the stake Brasilcel, N.V. and TCP had in
these subsidiaries prior to the tender offers and the stake obtained with
the purchase of the shares as a result of the bids:
Brasilcel Stake prior to Stake after the TCP Stake prior to Stake after the
the bids bids the bids bids
Tele Sudeste 86.7% 90.9%
Tele Leste 27.9% 50.6% TCO 28.9% 50.6%
CRT 51.5% 67.0%
These bids involved actual payments of approximately 607 million reaies for
Brasilcel, N.V. and 902 million reaies for TCP.
• Acquisition of an additional 13.95% stake in the share capital of the
Spanish company Mobipay Internacional, S.A., reaching a 50% stake in the
company. The company, which was integrated in the consolidated accounts of
the Telefonica Group using the equity method, consolidates as from June 1st
by the proportional method.
• At the end of June 2004 Brasilcel acquired NTT DoCoMo Inc. and Itochu
Corporation shareholdings in the share capital of Sudestelcel Participacoes,
S.A., holding that controls a 10,5% stake in Tele Sudeste Celular
Participacoes, S.A. for an amount of 20.84 million euros. Through this
operation, Brasilcel now controls 100% of Sudestelcel Participacoes, S.A.
and continues to consolidate in Brasilcel Group's financial statements by
the full integration method. Likewise, Brasilcel Group consolidates by the
proportional method in Telefonica Group's financial statements.
• On July 23 2004, a 100% of the Chilean company Telefonica Movil de Chile,
S.A. was acquired to Compania de Telecomunicaciones de Chile, S.A., a
subsidiary of Telefonica Internacional, S.A. The total amount paid by
Telefonica Moviles for this acquisition was 1,058 million dollars. Through
this operation, the Telefonica Group has increased its effective stake in
the capital from 44.89% to the current 92.46%. The company continues to
consolidate in the financial statements of the Telefonica Group by the full
integration method.
• The mergers of the following Mexican companies became effective on
September 25 2004: Movicelular, S.A. de C.V. merged with Movitel del
Noroeste, S.A. de C.V. to form a company known as Movitel del Noroeste, S.A.
de C.V., and Tamcel, S.A. de C.V. merged with Baja Celular Mexicana, S.A. de
C.V. to form a company known as Baja Celular Mexicana, S.A. de C.V. Both
subsidiaries continue to consolidate by the full integration method in the
financial statements of the Telefonica Group.
• On March 5 2004, Telefonica Moviles, S.A. reached an agreement with
BellSouth Corporation ('BellSouth') to purchase 100% of BellSouth's stake in
its operators in Argentina, Chile, Peru, Venezuela, Colombia, Ecuador,
Uruguay, Guatemala, Nicaragua and Panama.
The actual transfer of the companies' shares depended, among other factors,
on the obtaining of the necessary regulatory authorization in each country
and the necessary approval of minority shareholders. The actual transfer of
the operators' share capital took place in 2004 and January 2005. Hence,
100% of BellSouth's stake in Ecuador, Guatemala and Panama was transferred
on October 14 2004, Colombia, Nicaragua, Peru, Uruguay and Venezuela on
October 28 2004, Chile on January 7 2005 and Argentina on January 11 2005.
This agreement meant valuing 100% of the companies at 5,850 million dollars
and assuming their net debt. The total purchase price for Telefonica
Moviles, adjusted to include the net debt of all the companies, totaled
3,252.54 million euros (not including Chile and Argentina).
Below are details of the values allocated to each of the operations and the
purchase price for Telefonica Moviles:
• Purchase of 100% of the operator Otecel, S.A. (Ecuador) for a total
company value of 833 million dollars. The purchase price for Telefonica
Moviles, adjusted to include the company's net debt, totaled 663.43 million
euros.
• Purchase of 100% of BellSouth Guatemala, S.A. for a total company value of
175 million dollars. The purchase price for Telefonica Moviles, adjusted to
include the company's net debt, totaled 92.54 million euros.
• Purchase of 99.57% of BellSouth Panama, S.A. for a total company value of
657 million dollars. The purchase price for Telefonica Moviles, adjusted to
include the company's net debt, totaled 549.28 million euros.
• Purchase of 100% of Telcel, S.A. (Venezuela) for a total company value of
1,195 million dollars. The purchase price for Telefonica Moviles, adjusted
to include the company's net debt, totaled 1,223.98 million euros.
• Purchase of 100% of Telefonica Moviles Colombia, S.A. for a total company
value of 1,050 million dollars. The purchase price for Telefonica Moviles,
adjusted to include the company's net debt, totaled 517.46 million euros.
• Purchase of 99.85% of Comunicaciones Moviles del Peru, S.A. for a total
company value of 210 million dollars. The purchase price for Telefonica
Moviles, adjusted to include the company's net debt, totaled 7.70 million
euros.
• Purchase of 100% of Telefonia Celular de Nicaragua, S.A. for a total
company value of 150 million dollars. The purchase price for Telefonica
Moviles, adjusted to include the company's net debt, totaled 148.74 million
euros.
• Purchase of 100% of Abiatar, S.A. for a total company value of 60 million
dollars. The purchase price for Telefonica Moviles, adjusted to include the
company's net debt, totaled 49.42 million euros.
TPI GROUP
• In 2004, the Parent Company Telefonica Publicidad e Informacion S.A., has
purchased an additional 49% stake of the share capital of its Chilean
subsidiary Impresora y Comercial Publiguias for 65.6 million euros, reaching
a 100% stake in the company. In this deal, 9% of the share capital has been
bought to the Chilean Compania de Telecomunicaciones de Chile, S.A., a
subsidiary of Telefonica Group. The company continues to consolidate in the
financial statements of Group Telefonica by the full integration method.
• On August 13th 2004, the Chilean company Edinet America S.A. (previously
Urge Chile, S.A.) increased its capital by 218.81 million Chilean pesos
(0.29 million euros), fully subscribed and paid up by Publiguias Holding,
S.A.. Following this operation, the TPI Group shareholding in the company
reached 99.978%, compared with the previous 99.90%. In November, the Chilean
company Impresora y Comercial Publiguias, S.A. purchased a 0.022% stake in
Edinet America, S.A. Through this operation, the Telefonica Publicidad e
Informacion Group now controls 100% of the Chilean company. The company
remains in the Telefonica Group scope of consolidation, under the full
consolidation method.
TERRA NETWORKS GROUP
• Emplaza, S.A., in which the Terra Lycos Group had a 20% stake and that was
no longer included in the consolidation perimeter as of June 2003 because it
was not running any business, was dissolved and liquidated and in January
2004.
• In March 2004 Lycos, Inc. sold its stakes in Wit Capital and GSI Global
Sports. These companies were recorded under the 'Other investments' item.
Capital gains from selling these stakes amounted to 0.15 million euros.
• During 2004, Lycos Inc. sold its minority stakes in Amazon, Interland,
Cross Media, Easy Link, Fast, Autobytel y Total Sports, registering a loss
of 5.32 million euros. All these companies were included under the 'Other
investments' item.
• In June, 100% of the Mexican company Tecnologia and SVA, S.A. has been
sold, generating a capital gain of 10.77 million euros. This company, which
used to be consolidated in Telefonica Group's financial statements by the
full integration method, has been removed from the consolidation perimeter.
• During 2004, Terra Networks Asociadas, S.L. has increased capital in the
company Inversis Networks, S.A. by 1.60 million euros. Its stake in the
company stood at 10.68%. The company is recorded within the 'Other
investments' item of the Telefonica Group's consolidated balance sheet.
• On September 2 2004, Terra Networks Asociadas, S.L. sold its entire stake
in the company A Tu Hora S.L., which is not operational, to Telepizza, which
until then owned a 50% stake in the company. The company, which was included
until now in the consolidation perimeter of Telefonica Group by the equity
method, has been removed.
• On October 5 2004, Terra Networks, S.A. and Daum Communications, Corp.
reached an agreement on the sale of Lycos, Inc., once obtained the necessary
administrative authorizations and approval from the US authorities for the
Defense of Competition. The sale price was established at 108 million
dollars, generating a capital gain of 26.17 million euros. Prior to the sale
of Lycos, Inc., and as part of the operation, Lycos, Inc. transferred assets
amounting 332.9 million euros to Terra Networks, S.A. on September 30th
2004.
• In November 2004, Terra increased its capital to offset losses in the
subsidiary Terra Networks Colombia, S.A. for the sum of 0.3 million euros,
in which no local shareholders took part. After this operation, the
percentage of minority interest fell from the previous 32% to the current
5%. The company remains on the Telefonica Group financial statements by the
full consolidation method.
• The merger of the wholly-owned subsidiary Ordenamiento de Links
Especializados, S.L. (OLE) with Terra Networks Espana, S.A. was completed in
December 2004. OLE, which in the previous year was included in the
Telefonica Group consolidation perimeter by the full consolidation method,
has been removed.
ATENTO GROUP
• In March 2004, took place the sale of 100% of the shares in Atento
Guatemala Comercial, S.A. The company has been removed from the
consolidation perimeter of the Telefonica Group, in which it was fully
consolidated.
• Atento USA, Inc., has been dissolved and all its assets and liabilities
were transferred to its parent company Atento Holding Inc. effective January
1, 2004. The company, which in 2003 was included in the consolidated
financial statements of the Telefonica Group by the full consolidation
method, has been removed from the consolidation perimeter.
• On April 30, the US company Atento Holding Inc. has been dissolved and all
its assets and liabilities transferred to its Dutch parent company Atento
N.V. This company, which used to be consolidated in Telefonica Group's
financial statements by the full integration method, has been removed from
the consolidation perimeter.
• Atento Teleservicios Espana, S.A took over its wholly-owned subsidiary
Leader Line, S.A. on July 16th 2004. The company, which until then was
consolidated in the financial statements of the Telefonica Group by the full
integration method, has been removed from the consolidation perimeter.
• The Mexican company Atento Atencion y Servicios, S.A. de CV. was
incorporated on September 1st 2004, its entire initial share capital for
49,999 Mexican pesos was subscribed and fully paid up by Atento Mexicana,
S.A. de C.V., and 1 Mexican Peso by the company, also Mexican, Atento
Servicios, S.A. de C.V. The company is now incorporated in the consolidated
accounts of the Telefonica Group using the full integration method.
• On September 30 2004, the company Atento Uruguay, S.A. was dissolued and
liquidated, being all its assets and liabilities transferred to its parent
company Atento Argentina, S.A. The company, which until then was included in
the Telefonica Group consolidated financial statements by the full
consolidation method, has been removed from the consolidation perimeter.
TELEFONICA CONTENIDOS GROUP
• In July 2004, the sale of 70% of the Spanish company Lola Films, S.A. to
its minority shareholder was executed.
Telefonica, S.A. sold 38,853,403 shares in the company Pearson Plc, 4.88% of
its share capital, on the London stock exchange for an approximate value of
350 million euros.
Both companies, which were included in the consolidated perimeter of the
Telefonica Group, the first one by the full integration method and the
second one by the equity method, have been removed from the consolidation
perimeter.
• The group's parent company has taken over its Spanish subsidiaries
Telefonica Medios de Comunicacion, S.A., Telefonica Media Internacional y de
Contenidos, S.A., Producciones Multitematicas, S.A. and Gestora de Medios
Audiovisuales de Futbol, S.L. The Spanish company Corporacion Admira Media,
S.A. was dissolved and liquidated in June this year. All of these companies,
which were consolidated in Telefonica Group's financial statements by the
full integration method, have been removed from the consolidation perimeter.
• In October 2004, Telefonica de Contenidos, S.A. disposed of its entire
shareholding in the companies Lideres Entertainment Group, Inc and Fieldy
BV. These companies, which were included on the Telefonica Group
consolidated financial statements by the equity method, have been removed
from the consolidation perimeter.
• Telefonica de Contenidos' 20% stake in the Argentinean company Torneos y
Competencias, S.A. has been classified in the Telefonica Group consolidated
financial statements as a short-term investment, as the agreements to sell
this investment were at an advanced stage at the end of the year and were
eventually sold in January 2005 for an amount of 3 million dollars.
DISCLAIMER
This document contains statements that constitute forward looking statements in
its general meaning and within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements appear in a number of places in this
document and include statements regarding the intent, belief or current
expectations of the customer base, estimates regarding future growth in the
different business lines and the global business, market share, financial
results and other aspects of the activity and situation relating to the Company.
The forward-looking statements in this document can be identified, in some
instances, by the use of words such as 'expects', 'anticipates', 'intends',
'believes', and similar language or the negative thereof or by forward-looking
nature of discussions of strategy, plans or intentions.
Such forward-looking statements are not guarantees of future performance and
involve risks and uncertainties and actual results may differ materially from
those in the forward looking statements as a result of various factors.
Analysts and investors are cautioned not to place undue reliance on those
forward looking statements which speak only as of the date of this presentation.
Telefonica undertakes no obligation to release publicly the results of any
revisions to these forward looking statements which may be made to reflect
events and circumstances after the date of this presentation, including, without
limitation, changes in Telefonica's business or acquisition strategy or to
reflect the occurrence of unanticipated events. Analysts and investors are
encouraged to consult the Company's Annual Report as well as periodic filings
filed with the relevant Securities Markets Regulators, and in particular with
the Spanish Market Regulator
For additional information, please contact.
Investor Relations
Gran Via, 28 - 28013 Madrid (Spain)
Phone number:
+34 91 584 4700
Fax number:
+34 91 531 9975
Email:
Ezequiel Nieto -
ezequiel.nieto@telefonica.es
Diego Maus - dmaus@telefonica.es
Dolores Garcia - dgarcia@telefonica.es
ir@telefonica.es
www.telefonica.es/investors
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