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{ "value": "6653000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:Cash", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-786": { "value": "1157000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashEquivalents", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2025-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-787": { "value": "886000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashEquivalents", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-788": { "value": "592000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:CashEquivalents", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-789": { "value": "
Note 1. Background and
general\u00a0information
Telef\u00f3nica, S.A. and its subsidiaries and investees
(hereinafter also referred to as Telef\u00f3nica, the Company,
the Telef\u00f3nica Group or the Group) make up an
integrated and diversified telecommunications group
operating mainly in Europe and Latin America . The
Group\u2019s activity is centered around services of fixed and
wireless telephony, broadband, Internet, data traffic, Pay
TV and other digital services.
The parent company of the Group is Telef\u00f3nica, S.A., a
public limited company incorporated on April 19, 1924 for
an indefinite period. Its registered office is at calle Gran
V\u00eda 28, Madrid (Spain).
Appendix I lists the main companies composing the
Telef\u00f3nica Group, their corporate purpose, country,
functional currency, share capital, the Group\u2019s effective
shareholding and their method of consolidation.
As a multinational telecommunications company which
operates in regulated markets, the Group is subject to
different laws and regulations in each of the jurisdictions
in which it operates, pursuant to which permits,
concessions or licenses must be obtained in certain
circumstances to provide the various services. In
addition, certain fixed and wireless telephony services
are provided under regulated rate and price systems.
Key regulatory issues, and concessions and licenses held
by the Telef\u00f3nica Group are detailed in Appendix VI.
The accompanying consolidated financial statements for
the year ended December\u00a031, 2024 were approved by
the Company\u2019s Board of Directors at its meeting on
February 26, 2025 for submission for approval at the
General Shareholders\u2019 Meeting, which is expected to
occur without modification to the consolidated financial
statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-790": { "value": "Telef\u00f3nica, S.A.", "dimensions": { "concept": "ifrs-full:NameOfUltimateParentOfGroup", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-791": { "value": "Telef\u00f3nica, S.A.", "dimensions": { "concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-792": { "value": "Telef\u00f3nica, S.A.", "dimensions": { "concept": "ifrs-full:NameOfParentEntity", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-793": { "value": "S.A.", "dimensions": { "concept": "ifrs-full:LegalFormOfEntity", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-794": { "value": "Europe and Latin America", "dimensions": { "concept": "ifrs-full:PrincipalPlaceOfBusiness", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-795": { "value": "services of fixed and wireless telephony, broadband, Internet, data traffic, Pay TV and other digital services", "dimensions": { "concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-796": { "value": "calle Gran V\u00eda 28, Madrid (Spain)", "dimensions": { "concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-797": { "value": "Spain", "dimensions": { "concept": "ifrs-full:DomicileOfEntity", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-798": { "value": "Spain", "dimensions": { "concept": "ifrs-full:CountryOfIncorporation", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-799": { "value": "
The accompanying consolidated financial statements for
the year ended December\u00a031, 2024 were approved by
the Company\u2019s Board of Directors at its meeting on
February 26, 2025 for submission for approval at the
General Shareholders\u2019 Meeting, which is expected to
occur without modification to the consolidated financial
statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAuthorisationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-800": { "value": "
Note 2. Basis of presentation of
the consolidated financial
statements
The accompanying consolidated financial statements
were prepared from the accounting records of
Telef\u00f3nica, S.A. and each of the companies comprising
the Telef\u00f3nica Group, whose separate financial
statements were prepared in accordance with the
generally accepted accounting principles applicable in
the various countries in which they are located, and for
the purposes of these consolidated financial statements
are presented in accordance with the International
Financial Reporting Standards (IFRS) adopted by the
European Union, which for the purposes of the
Telef\u00f3nica Group are not different from those issued by
the International Accounting Standards Board (IASB).
These consolidated financial statements present fairly, in
all material respects, the consolidated equity and
financial position at December 31, 2024, and of the
consolidated results of operations, changes in
consolidated equity and the consolidated cash flows
obtained and used in the year then ended.
The euro is the Group\u2019s reporting currency.\u00a0The figures
in these consolidated financial statements are expressed
in million euros, unless indicated otherwise, and may
therefore be rounded.
Note 3 contains a detailed description of the most
significant accounting policies used to prepare these
consolidated financial statements.
Materiality criteria
These consolidated financial statements do not include
certain information or disclosures that, not having to be
presented due to their qualitative significance, were
deemed to be immaterial or of no relevance pursuant to
the concepts of materiality or relevance defined in the
IFRS conceptual framework, insofar as the Telef\u00f3nica
Group\u2019s consolidated financial statements, taken as a
whole, are concerned.
Comparative information and main
changes in the consolidation scope
For comparative purposes, the accompanying
consolidated financial statements for 2024 include the
figures for 2023, and the consolidated income
statement, the consolidated statement of
comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of
cash flows, and the notes thereto for the year then
ended, on a voluntary basis, they also include those of
2022.
The main events and changes in the consolidation scope
affecting comparability of the consolidated information
(see Appendix I for a detailed description of the
consolidation scope and the changes during the year)
are as listed below.
Exchange rates evolution
Variation of average exchange rate vs euro
2024 vs 2023
2023 vs 2022
Brazilian real
(7.0%)
0.3%
Pound sterling
2.7%
(2.0%)
New peruvian sol
(0.3%)
(0.4%)
Chilean peso
(11.2%)
1.1%
Colombian peso
5.8%
(4.3%)
Mexican peso
(2.8%)
10.3%
Variation of closing exchange rate vs euro
2024 vs 2023
2023 vs 2022
Brazilian real
(16.9%)
4.1%
Pound sterling
4.8%
2.1%
New peruvian sol
4.8%
(0.7%)
Argentine peso
(16.7%)
(78.8%)
Chilean peso
(6.4%)
(5.7%)
Colombian peso
(7.8%)
21.6%
Mexican peso
(13.5%)
11.2%
In 2024, there was a negative impact on Equity
attributable to equity holders of the Parent Company for
translation differences amounting to 2,174 million euros
(positive impact of 419 million euros in 2023) mainly due
to the depreciation of the Brazilian real (see Note 17.f).
Valuation of non-current assets of Telef\u00f3nica
M\u00f3viles Argentina, S.A. (Telef\u00f3nica Argentina)
In 2018 Argentina became a hyperinflationary economy.
The annual inflation rates for 2024 and 2023 in
Argentina were 118% and 211%, respectively (see Note
3.a).
The exchange rate used to translate inflation-adjusted
items denominated in Argentine pesos in the 2024
financial statements is the official exchange rate as of
December\u00a031, 2024 which was 1,073.18 Argentine pesos
per euro, compared to 893.45 Argentine pesos per euro
at December\u00a031, 2023 (a depreciation of around 17% per
year). The Equity attributable to equity holders of the
Parent Company increased by 899 million euros in 2024
due to the translation differences of the financial
statements of Telef\u00f3nica Argentina (see Note 17.f).
In 2024, Telef\u00f3nica Argentina achieved the business
plans in force during the year. However, high levels of
inflation generated a very significant increase in the
carrying amount of non-current assets, with an
appreciation of the Argentine peso in real terms during
2024 of more than 80%. Thus, the inflation adjustment of
intangible assets and tangible fixed assets of Telef\u00f3nica
Argentina in 2024 was 1,279 million euros (see notes 6
and 8).
For this reason, the Group has calculated the
recoverable value of these assets as of December\u00a031,
2024, with the following valuation assumptions:
\u2022 Revenue growth (average over business plan period):
8.8%
\u2022 Operating margin (average over business plan period):
20.4%
\u2022 CapEx to sales ratio (average over business plan
period): 10.9%
\u2022 Discount rate (WACC): 17% (25% before tax)
\u2022 Perpetuity growth rate: 3%
As a result of this analysis, Telef\u00f3nica's management has
estimated that the recoverable value of the assets
assigned to the cash-generating unit would be lower
than their carrying amount as of December\u00a031, 2024. The
Group has recorded an impairment loss on intangible
assets and property, plant and equipment, proportional
to their net carrying amount, amounting to 436 million
euros and 838 million euros, respectively (see notes 6
and 8).
The tax effect of the impairment losses recorded is a
lower deferred tax expense due to the variation in
temporary differences associated with these assets,
amounting to 446 million euros (see Note 25).
Following the recording of these impairment losses, the
carrying amount of Telef\u00f3nica Argentina's net assets as
of December\u00a031, 2024 amounts to 1,175 million euros
(1,149 million euros as of December\u00a031, 2023).
The contribution of Telef\u00f3nica Argentina to the
consolidated revenues for 2024, after its conversion to
euros, has been 2,226 million euros (1,237 million euros in
2023) and the contribution to the operating income,
before the impairment losses described above, has been
a loss of 84 million euros (a loss of 199 million euros in
2023).
On February 24, 2025, Telef\u00f3nica sold all the shares that
it held in Telef\u00f3nica M\u00f3viles Argentina, S.A. (see Note
31).
ICSID Arbitration Telef\u00f3nica, S.A. vs. Republic of
Colombia
On November 12, 2024 Telef\u00f3nica obtained a favorable
award regarding the investment dispute with the
Republic of Colombia submitted to the International
Centre for Settlement of Investment Disputes (\u201cICSID\u201d)\u00a0
(see Note 29.a).
The Court has stated that the Republic of Colombia
failed to comply with its obligation to grant fair and
equitable treatment to Telef\u00f3nica's investments under
Article 2(3) of the APPRI, and has ordered it to pay the
amount of 380 million U.S. dollars (approximately 358
million euros recorded in Other income, see Note 26)
plus compound interest at a rate of 5% per year as
compensation for the damages caused. Accrued interest
as of December 31, 2024 amounts to 154 million euros
(Note 19).
On November 27, 2024, the Republic of Colombia
submitted to the ICSID an application for annulment and
a request for suspension of enforcement of the award. In
accordance with ICSID procedures, in these situations,
enforcement of the award is provisionally suspended
until a new court decides on the request, within a
maximum period of 30 days since its constitution. At the
date of preparation of these financial statements, the
court has not been constituted, although its constitution
is expected in the short term.
Following the legal analysis carried out, Telef\u00f3nica's
management considers that the award represents a firm
right to collection, and therefore it has been recorded in
the financial statements as of December 31, 2024.The
amount owed by the Republic of Colombia as of that
date is recorded in \"Short-term credits\" (see Note 15) of
the consolidated statement of financial position.
VMED O2 UK joint venture
On June 1, 2021, the joint venture in the United Kingdom
(see Note 10) owned 50% by Telef\u00f3nica and Liberty
Global plc called VMED O2 UK Limited (\"VMO2\"), was
established.
Telef\u00f3nica received dividends from VMO2 amounting to
425 million pounds sterling (approximately 512 million
euros), 1,000 million pounds sterling (approximately 1,154
million euros), and 800 million pounds sterling (909
million euros) in 2024, 2023 and 2022, respectively (see
Note 28).
The share of (loss) income of VMO2 accounted for by
the equity method in the consolidated income
statements of the Telef\u00f3nica Group amounted to an
income of 89 million euros in 2024, a loss of 2,030 million
euros in 2023, and an income of 292 million euros in
2022 (see Note 10). The loss in 2023 included the effect
of the impairment of goodwill recorded by VMO2 in the
amount of 3,572 million euros with an impact of 1,786
million euros on the consolidated income statement of
the Telef\u00f3nica Group (see Note 10).
Acquisition of mobile assets of Oi Group
On April\u00a020, 2022, the closing of the transaction related
to the Purchase Agreement for Acquisition of Unidade
Produtiva Isolada (UPI) Mobile Assets of Oi Group took
place, and Telef\u00f3nica Brasil acquired, on such date, all
the shares of the company Garliava RJ Infraestrutura e
Redes de Telecomunica\u00e7\u00f5es S.A. (Garliava), to which
the mobile assets of Oi Group assigned to Telef\u00f3nica
Brazil had been contributed, under the segregation plan
stated in the Oi Agreement.
Telef\u00f3nica Brasil thus acquired its share of mobile assets
of the Oi Group for an amount, which was subject to
adjustments, of 5,373 million Brazilian reais
(approximately 1,063 million euros at the exchange rate
at such date). A payment of 4,885 million Brazilian reais
(approximately 972 million euros) was made at closing of
the transaction. The remaining amount, equivalent to
10% of the payment made on that date, is withheld
subject to certain price adjustments and potential
indemnification obligations contained in the purchase
agreement for the acquisition of mobile assets of the Oi
Group.
The total consideration also included 110 million Brazilian
reais subject to the fulfilment of certain targets, and
other costs amounting to 8 million Brazilian reais. Thus,
the total consideration transferred amounted to 5,492
million Brazilian reais (1,093 million euros at the date of
the closing of the transaction).
On the date of approval of the consolidated financial
statements for the year 2022, the Company had
concluded the report for the allocation of the purchase
price. The fair value assigned to Oi's licenses amounted
to 520 million euros. The goodwill amounted to 676
million euros (see Note 5).
In October 2023, the arbitration proceeding between
the parties ended (see Note 29.c), resulting on a final
price the for the UPI Mobile Assets assigned to
Telef\u00f3nica Brasil of 5,129 million Brazilian reais as of the
closing date (compared to the 5,373 million Brazilian
reais of the initial price). As a result, 50% of the retained
amount (488 million reais), plus applicable interest was
offset against the amount allocated as debt and the
other 50%, in the updated amount of 277 million reais (51
million euros at such date), was withdrawn by Telef\u00f3nica
Brasil before the Arbitration Chamber (see Note 5).
Agreement between Telef\u00f3nica de Espa\u00f1a and
Telef\u00f3nica Infra with Vauban Infrastructure
Partners and Credit Agricole Assurance for the
establishment of Bluevia
In July 2022, an agreement was reached between
Telef\u00f3nica de Espa\u00f1a and Telef\u00f3nica Infra with the
consortium formed by Vauban Infrastructure Partners
(Vauban) and Cr\u00e9dit Agricole Assurances (CAA) for the
establishment of a company, Bluevia Fibra, S.L. for the
deployment and commercialization of a fiber to the
home network mainly in rural areas in Spain.
On December 20, 2022 once the regulatory
authorizations were obtained and after the fulfillment of
the remaining agreed conditions, the transaction was
completed.
The consortium formed by CAA and Vauban has
acquired 45% of the Company for a total amount of 1,021
million euros in cash, paid on the closing of the
agreement (see Note 28). The transaction had no impact
on the consolidated income statements of the
Telef\u00f3nica Group as it consisted on the sale of minority
interest, with Telef\u00f3nica retaining control over Bluevia.
The impact of this transaction in equity attributable to
equity holders of the parent was an increase of 986
million euros in \"Retained earnings\". In addition, there
was in increase in equity attributable to non-controlling
interest amounting to 23 million euros (see Note 17).
The difference between the tax value of the assets
transferred to Bluevia and their carrying amount in the
Group's consolidated annual accounts generated a
deferred tax asset for deductible temporary differences
amounting to 548 million euros (see Note 25).
Collective Bargaining Agreement and Collective
Redundancies Plan
On December 28, 2023, certain subsidiaries of
Telef\u00f3nica Spain and the most representative Trade
Union Organizations reached an agreement to sign the
III Collective Bargaining Agreement valid until December
31, 2026 and can be extended for a further year, with the
aim of moving towards a more digital, flexible company
prepared for future challenges in a highly competitive
context. These agreements were endorsed on January 3,
2024.
In addition, and in parallel, these subsidiaries agreed to
execute the Collective Redundancies Plan, which
provided for collective redundancies affecting up to a
total of 3,420 employees. Employees who turned 56
years or older in 2024 and with a seniority of more than
15 years were able to adhere to the Collective
Redundancies Plan. However, targets were established
that resulted in limits on joining in critical areas or
additional redundancies based on business reasons.
In \"Personnel expenses\" of the consolidated income
statement for the year 2023, a provision of 1,320 million
euros before taxes (see Note 24) corresponding to
Telef\u00f3nica Spain, based on the present value of the
estimated payment flows resulting from the Collective
Redundancies Plan.
Public Offers for the Acquisition of Shares of
Telef\u00f3nica Deutschland
On November 7, 2023, Telef\u00f3nica, through its subsidiary
Telef\u00f3nica Local Services GmbH, launched a partial
voluntary public tender offer for shares of Telef\u00f3nica
Deutschland Holding AG (\u201cTelef\u00f3nica Deutschland\u201d).
The Offer acceptance period began on December 5,
2023 and ended on January 17, 2024 (both inclusive).
At the date of the Offer announcement, Telef\u00f3nica was
the owner, directly or indirectly, of 71.81% of the share
capital and voting rights of Telef\u00f3nica Deutschland and,
consequently, the Offer was announced on shares
representing approximately 28.19% remaining.
On December 31, 2023, Telef\u00f3nica owned 82.43% of the
share capital of Telef\u00f3nica Deutschland (70.58% as of
December 31, 2022), having made direct purchases on
the market for an amount of 816 million euros (see Note
27.h y 28).
These purchases made in 2023 produced an increase of
46 million euros in the equity attributed to the parent
company and a decrease of 866 million euros in the
equity attributed to minority interests (see Note 17 h).
The Offer was settled on January 26, 2024 reaching
94.12% of the share capital, including acquisitions
through the Offer and acquisitions in the market until
that date (See Note 31).
On March 20, 2024, a public tender offer was launched
with the aim of acquiring the shares of Telef\u00f3nica
Deutschland that were not directly or indirectly owned
by Telef\u00f3nica at that time (the \u201cTender Offer\u201d). The
consideration offered to Telef\u00f3nica Deutschland
shareholders was 2.35 euros in cash per share. The offer
closed on April 18, 2024.
Once the tender offer was completed, and also
combined with direct purchases on the market,
Telef\u00f3nica held 96.85% of the share capital and voting
rights of Telef\u00f3nica Deutschland.
These purchases made in 2024 have resulted in an
increase of 28 million euros in the equity attributed to
the parent company and a decrease of 1,057 million
euros in the equity attributed to minority interests (see
Note 17).
Impairment of Telef\u00f3nica's assets in Peru and
Ordinary Insolvency Procedure
In 2024, an impairment loss of the entire remaining
goodwill assigned to the cash-generating unit in Per\u00fa
amounting to 226 million euros was recorded (see Note
7), as well as 34 million euros allocated to the fiber optics
business in Peru (see Note 30). Additionally, until the
carrying amount and the recoverable amount of the
CGU are equal, an impairment loss of intangible assets
has been recorded amounting to 54 million euros (see
Note 6).
Likewise, in 2024, Telef\u00f3nica del Per\u00fa has reversed
deferred tax assets for loss carryforwards amounting to
91 million euros (see Note 25).
As a result of the above, as of December\u00a031, 2024, the
carrying amount of Telef\u00f3nica del Per\u00fa's net assets
amounts to 124 million euros.
Additionally, following the analysis of the recoverability
of the assets of Pangea (the wholesale fiber optic
company in Peru) at the end of 2024, an impairment of
property, plant and equipment amounting to 108 million
euros has been recorded, as well as a reversal of
deferred tax assets amounting to 13 million euros (see
Note 30).
On February 14, 2025 the Board of Directors of
Telef\u00f3nica del Per\u00fa S.A.A. with the aim of achieving an
orderly restructuring liabilities of said company, resolved
to invoke the Ordinary Insolvency Procedure of
Telef\u00f3nica del Per\u00fa, established under the Peruvian
regulation (see Note 31). In order to facilitate the
invocation, Telef\u00f3nica Hispanoam\u00e9rica has granted a
credit facility of up to 1,549 million Peruvian soles
(approximately 394 million euros), subject to strict
conditionality and with a maturity of eighteen months, to
meet exclusively operational cash requirements of
Telef\u00f3nica del Per\u00fa. The financial situation of Telef\u00f3nica
del Per\u00fa has been very negatively affected by tax
contingencies that are more than 20 years old (see Tax
litigation in Telef\u00f3nica del Per\u00fa in Note 25), as well as by
administrative decisions which have placed the
company in a competitive disadvantage within a
particularly challenging market environment. In relation
to the abovementioned tax contingencies, Telef\u00f3nica is
currently in arbitration before the ICSID (see Note 29.a).
Telef\u00f3nica del Per\u00fa\u2019s liabilities are not guaranteed by
any other company of the Telef\u00f3nica Group.
Impairment of goodwill assigned to the Chilean
CGU
In the Telef\u00f3nica Hispam segment, an impairment of
goodwill assigned to the cash-generating unit in Chile
amounting to 397 million euros was recorded in 2024
(see Note 7).
Alternative measures not defined in
IFRS
In addition to the measures expressly defined in the
IFRS, the Group also uses a series of other measures for
decision-making because they provide additional
information useful to assess the Group\u2019s performance,
solvency and liquidity. These measures should not be
viewed in isolation or as a substitute for the measures
presented according to the IFRS.
Starting in 2024, Telef\u00f3nica has made modifications to
some of its alternative performance measures.
Currently, in addition to EBITDA (previously called
Operating profit before depreciation and amortization, or
OIBDA), the Company has provided objectives on CapEx
ex spectrum and EBITDAaL-CapEx ex spectrum,
implicitly indicating EBITDAaL, in line with sector trends
and taking into account the importance of leases in
operations. For this reason, EBITDA (previously OIBDA) is
no longer explicitly presented in the consolidated
income statements, although its reconciliation with the
Profit for the period is presented below, along with the
rest of the operating metrics.
Likewise, in 2024 the definition of the Free Cash Flow
measure has been modified. Now the coupon payments
of hybrid instruments (undated deeply subordinated
securities), the payments of employee benefit
commitments (payment of the principal of the debt
contracted), are deducted, and only the dividends
received from the VMO2 joint venture are considered
when they come from the free cash flow generated by
this company (thus excluding cash inflows from possible
recapitalizations of VMO2 which are decided annually
based on market conditions). In this way, a clearer view
of recurring available cash generation is provided.
The definitions of the debt indicators (Net financial debt,
Net financial debt plus leases, and Net financial debt
plus leases and plus commitments) have not been
modified.
Below is the definition of the main alternative measures
not defined in the IFRS used by the Group, and their
reconciliation with the financial statements.
EBITDA, EBITDAaL and EBITDAaL-CapEx excluding
spectrum
EBITDA is calculated by excluding from the result of the
period the income tax, the net financial expense, the
result of investments accounted for by the equity
method and the depreciation and amortization of the
period.
EBITDAaL (EBITDA after Leases) is calculated by
deducting from EBITDA the expenses for amortization of
the rights of use and the interest on lease liabilities (see
Note 20).
EBITDAaL-CapEx ex spectrum is defined as EBITDAaL
less investment in intangible assets and property, plant
and equipment (CapEx), excluding those investments
related to spectrum acquisitions.
We believe it is important to consider CapEx excluding
spectrum acquisitions, along with EBITDAaL to more
comprehensively evaluate the performance of the
telecommunications business.
The Group uses these measures internally to evaluate
business performance, to establish operational and
strategic objectives and in the budgeting process.
EBITDA, EBITDAaL and EBITDAaL-CapEx are commonly
reported and widespread measures among analysts,
investors and other stakeholders in the
telecommunications sector, although they are not
indicators defined in IFRS and may, therefore, not be
comparable with other similar indicators used by other
companies. These measures should not be considered
as substitutes for Operating income.
The following table details the reconciliation between
EBITDA, EBITDAaL and EBITDAaL-CapEx ex spectrum
with the Telef\u00f3nica Group's profit for the period 2024,
2023 and 2022:
Millions of euros
2024
2023
2022
Profit for the period
209
(574)
2,319
Corporate income tax
348
(899)
641
Profit before taxes
557
(1,473)
2,960
Net financial expense
1,789
1,904
1,313
Share of income (loss)
of investments
accounted for the
equity method
49
2,162
(217)
Operating income
2,395
2,593
4,056
Depreciation and
amortization
8,799
8,797
8,796
EBITDA
11,194
11,390
12,852
Leases amortization
(Note 20)
(2,235)
(2,159)
(2,064)
Financial expenses on
lease liabilities (Note 20)
(511)
(435)
(394)
Operating income
before depreciation
and amortization and
after leases
(EBITDAaL)
8,448
8,796
10,394
Capital expenditures in
intangible assets (Note
6)
1,799
1,838
1,530
Capital expenditures in
property, plant and
equipment (Note 8)
3,676
3,741
4,289
CapEx
5,475
5,579
5,819
Spectrum acquisitions
(Note 6)
(157)
(183)
(173)
CapEx excluding
spectrum acquisitions
5,318
5,396
5,646
EBITDAaL - CapEx
excluding spectrum
acquisitions
3,130
3,400
4,748
The following tables present the reconciliation of
EBITDA, EBITDAaL and EBITDAaL-CapEx excluding
spectrum to Operating income for each business
segment for the 2024, 2023 and 2022:
2024
Millions of euros
Telef\u00f3nica
Spain
Telef\u00f3nica
Germany
Telef\u00f3nica
Brazil
Telef\u00f3nica
Hispam
Other
companies
Elimina-
tions
Total Group
Operating income
2,412
539
1,642
(2,051)
(247)
100
2,395
Depreciation and amortization
2,202
2,226
2,474
1,651
281
(35)
8,799
EBITDA
4,614
2,765
4,116
(400)
34
65
11,194
Rights of use amortization
(577)
(688)
(594)
(370)
(26)
20
(2,235)
Financial expenses for leases
(51)
(66)
(281)
(112)
(4)
3
(511)
EBITDAaL
3,986
2,011
3,241
(882)
4
88
8,448
CapEx
1,571
1,141
1,583
1,001
185
(6)
5,475
Spectrum acquisitions
(25)
\u2014
(4)
(128)
\u2014
\u2014
(157)
CapEx excluding spectrum
acquisitions
1,546
1,141
1,579
873
185
(6)
5,318
EBITDAaL - CapEx excluding
spectrum acquisitions
2,440
870
1,662
(1,755)
(181)
94
3,130
2023
Millions of euros
Telef\u00f3nica
Spain
Telef\u00f3nica
Germany
Telef\u00f3nica
Brazil
Telef\u00f3nica
Hispam
Other
companies
Elimina-
tions
Total Group
Operating income
1,029
317
1,617
(47)
(289)
(34)
2,593
Depreciation and amortization
2,200
2,323
2,511
1,557
244
(38)
8,797
EBITDA
3,229
2,640
4,128
1,510
(45)
(72)
11,390
Rights of use amortization
(510)
(673)
(621)
(350)
(26)
21
(2,159)
Financial expenses for leases
(36)
(36)
(258)
(104)
(3)
2
(435)
EBITDAaL
2,683
1,931
3,249
1,056
(74)
(49)
8,796
CapEx
1,607
1,133
1,671
938
230
\u2014
5,579
Spectrum acquisitions
(20)
\u2014
(12)
(151)
(1)
1
(183)
CapEx excluding spectrum
acquisitions
1,587
1,133
1,659
787
229
1
5,396
EBITDAaL - CapEx excluding
spectrum acquisitions
1,096
798
1,590
269
(303)
(50)
3,400
2022
Millions of euros
Telef\u00f3nica
Spain
Telef\u00f3nica
Germany
Telef\u00f3nica
Brazil
Telef\u00f3nica
Hispam
Other
companies
Elimina-
tions
Total Group
Operating income
2,431
263
1,363
159
(124)
(36)
4,056
Depreciation and amortization
2,157
2,295
2,369
1,799
218
(42)
8,796
EBITDA
4,588
2,558
3,732
1,958
94
(78)
12,852
Rights of use amortization
(410)
(636)
(563)
(454)
(22)
21
(2,064)
Financial expenses for leases
(15)
(16)
(238)
(123)
(2)
\u2014
(394)
EBITDAaL
4,163
1,906
2,931
1,381
70
(57)
10,394
CapEx
1,550
1,209
1,795
1,058
212
(5)
5,819
Spectrum acquisitions
\u2014
\u2014
(35)
(138)
(1)
1
(173)
CapEx excluding spectrum
acquisitions
1,550
1,209
1,760
920
211
(4)
5,646
EBITDAaL - CapEx excluding
spectrum acquisitions
2,613
697
1,171
461
(141)
(53)
4,748
Debt indicators
As calculated by us, net financial debt includes:
(A)\u00a0 adding the following liabilities:
i. Current and non-current financial liabilities in our
consolidated statement of financial position (which
includes the negative mark-to-market value of
derivatives),
ii. Other liabilities included in \"Payables and other
non-current liabilities\", \"Payables and other current
liabilities\" (mainly corresponding to payables for
deferred payment of radio spectrum that have an
explicit financial component and supplier financing
for customer financing of terminal sales) and \"Current
tax payables\", and\u00a0
iii. Financial liabilities included in \"Liabilities
associated with non-current assets and disposal
groups held for sale\".\u00a0
(B)\u00a0 subtracting the following amounts from the resulting
amount of the preceding step:
i. \"Cash and cash equivalents\",
ii. \"Other current financial assets\" (which include
short-term derivatives),
iii. Cash and other current financial assets included in
\"Non-current assets and disposal groups held for
sale\",
iv. The positive mark-to-market value of derivatives
with a maturity beyond one year,
v. Other interest-bearing assets (included in
\"Financial assets and other non-current assets\",
\"Receivables and other current assets\" and \"Tax
receivables\" in our consolidated statement of
financial position). \"Financial assets and other non-
current assets\" includes derivatives, installments for
long-term sales of terminals to customers and other
long-term financial assets, and \"Receivables and
other current assets\" includes the customer financing
of terminal sales classified as short-term.
vi. Mark-to-market adjustment by cash flow hedging
activities related to debt, and
vii. Fair value of derivatives adjustment used for the
economic hedging of gross commitments related to
employee benefits.
We calculate net financial debt plus leases by adding
lease liabilities calculated under IFRS 16 (including those
corresponding to the companies held for sale) to net
financial debt and deducting assets from subleases.
We calculate net financial debt plus commitments by
adding gross commitments related to employee benefits
and the fair value of the derivatives used for the
economic hedging of such commitments to net financial
debt, and deducting the value of long-term assets
associated with those commitments related to employee
benefits and the tax benefits arising from the future
payments of those commitments related to employee
benefits. Gross commitments related to employee
benefits are current and non-current provisions
recorded for certain employee benefits such as
termination plans, post-employment defined benefit
plans and other benefits.
We believe that net financial debt, net financial debt plus
leases, net financial debt plus commitments and net
financial debt plus leases plus commitments are
meaningful for investors and analysts because they
provide an analysis of our solvency using the same
measures used by our management. We use them to
calculate internally certain solvency and leverage ratios.
Nevertheless, none of them as calculated by us should
be considered as a substitute for gross financial debt as
presented in the consolidated statement of financial
position.
The following table presents a reconciliation of net
financial debt, net financial debt plus leases, net financial
debt plus commitments and net financial debt plus
leases plus commitments as of December 31, 2024 and
2023 to the Telef\u00f3nica Group\u2019s gross financial debt as
indicated in the consolidated statement of financial
position.
Millions of euros
12/31/2024
12/31/2023
Non-current financial liabilities
33,192
33,360
Current financial liabilities
5,590
3,701
Gross financial debt
38,782
37,061
Cash and cash equivalents
(8,062)
(7,151)
Other current financial assets
(1,789)
(1,066)
Cash and other current financial assets included in \"Non-current assets and disposal groups
held for sale\" (Note 30)
(11)
(13)
Positive mark-to-market value of long-term derivative instruments (Note 12)
(2,605)
(1,940)
Other liabilities included in \"Payables and other non- current liabilities\"
1,818
1,750
Other liabilities included in \"Payables and other current liabilities\" and \"Current tax payables\"
532
446
Other assets included in \"Financial assets and other non-current assets\"
(1,093)
(1,481)
Other assets included in \"Receivables and other current assets\"
(794)
(711)
Mark-to-market adjustment by cash flow hedging activities related to debt
505
659
Fair value of derivatives adjustment used for the economic hedging of gross commitments
related to employee benefits
(122)
(205)
Net financial debt
27,161
27,349
Net Lease liabilities
8,275
8,920
Net financial debt plus leases
35,436
36,269
Gross commitments related to employee benefits and associated economic hedging
5,215
6,159
Value of associated long-term assets
(120)
(114)
Tax benefits
(1,306)
(1,535)
Net commitments related to employee benefits
3,789
4,510
Net financial debt plus commitments
30,950
31,859
Net financial debt plus leases plus commitments (*)
39,225
40,779
(*) Includes assets and liabilities considered to be Net financial debt plus leases plus commitments related to employee benefits for companies classified as
held for sale (see Note 30).
Free Cash Flow
The Group\u2019s Free Cash Flow is calculated starting from
\u201cNet cash flow provided by operating activities\u201d as
indicated in the consolidated statement of cash flows
(see Note 28); deducting (Payments on investments)/
Proceeds from the sale of investments in property, plant
and equipment and intangible assets, net, (excluding
spectrum payments), dividends paid to minority
shareholders, hybrid instruments coupons payments and
lease principal payments.
Following the changes made in 2024 to some of the
Group's alternative performance measures, the
dividends received from VMO2 included in the
calculation of Telef\u00f3nica's Free Cash Flow depend on
the cash generation of the VMO2 business during each
year. The amount included in 2024, 2023 and 2022 is
detailed below:
Millions of euros
2024
2023
2022
Net cash provided by
operating activities
3,577
3,080
3,466
Capital expenditures, net
(1,775)
(1,652)
(1,786)
Operating-related vendor
financing additions
3,771
2,886
2,072
Principal payments on vendor
financing
(4,756)
(3,232)
(2,738)
Principal payments on leases
(232)
(252)
(232)
Total (100% VMO2)
585
830
782
50%
292
415
391
VMO2 dividends received
by Telef\u00f3nica Group
(Note 28)
512
1,154
909
less 50%
(292)
(415)
(391)
less: Impact of exchange
rates (*)
(6)
(3)
11
Dividends received from
VMO2 not included in the
calculation of the
Telef\u00f3nica Group's Free
Cash Flow
214
736
529
(*) Difference between the average exchange rate and the
exchange rate of the dividend payment.
We believe that free cash flow is a meaningful measure
for investors and analysts because it provides an analysis
of the cash flow available to protect solvency levels and
to remunerate the parent company\u2019s shareholders. The
same measure is used internally by our management.
Nevertheless, adjusted free cash flow as calculated by
us should not be considered as a substitute for the
various flows of cash as presented in the consolidated
statements of cash flows.
The following table presents the reconciliation between
the Telef\u00f3nica Group\u2019s Net cash flow provided by
operating activities as indicated in the consolidated
statement of cash flows (see Note 28) and the free cash
flow according to the new definition explained above for
the periods 2024 2023 and 2022:
Millions of euros
2024
2023
2022
Net cash flow provided by
operating activities (Note
28)
10,994
11,649
11,764
Except: dividends received
from VMO2 not included in
the calculation of the
Telef\u00f3nica Group's Free
Cash Flow
(214)
(736)
(529)
(Payments on investments)/
Proceeds from the sale of
property, plant and
equipment and intangible
assets, net (Note 28)
(5,521)
(5,851)
(5,508)
Except: Spectrum payments
(Note 28)
46
128
27
Dividends paid to minority
shareholders (Note 28)
(167)
(439)
(438)
Hybrid instruments coupon
payments (Note 28)
(361)
(329)
(268)
Lease principal payments
(Note 20 and 28)
(2,143)
(2,114)
(1,996)
Free Cash Flow
2,634
2,308
3,052
As stated in Note 2, the Group\u2019s consolidated financial
statements have been prepared in accordance with
IFRSs and interpretations issued by the International
Accounting Standards Board (IASB) and the IFRS
Interpretations Committee (IFRIC) as endorsed by the
European Commission for use in the European Union
(IFRSs - EU).
Accordingly, only the most significant accounting
policies used in preparing the accompanying
consolidated financial statements, in light of the nature
of the Group\u2019s activities, are set out below, as well as the
accounting policies applied where IFRSs permit a policy
choice, and those that are specific to the sector in which
the Group operates.
o) New IFRS and interpretations of
the International Financial Reporting
Interpretations Committee (IFRIC)
The accounting policies applied in the preparation of the
consolidated financial statements for the year ended
December\u00a031, 2024 are consistent with those used in the
preparation of the Group\u2019s consolidated annual financial
statements for the year ended December\u00a031, 2023, with
the exception of the following amendments to existing
standards issued by the IASB and endorsed by the
European Union for application in Europe, which have
been applied for the first time for the annual period
commencing on January\u00a01, 2024.
Early Adoption of Amendments to IAS 21: Lack
of Exchangeability
The Group has elected to early adopt the amendments
to IAS 21 The Effects of Changes in Foreign Exchange
Rates, concerning the lack of exchangeability of
currencies, issued by the IASB in August 2023 and
endorsed by the EU for application in Europe in
November 2024.
These amendments require an entity to apply a
consistent approach to assessing whether a currency is
exchangeable into another currency at a measurement
date and for a specified purpose, and to determining the
appropriate spot exchange rate to use in cases where
exchangeability is absent.
The Group operates in Venezuela, an environment with
significant foreign exchange controls and restrictions
established by the authorities, considered as a
hyperinflationary economy since 2009. In accordance
with the amendments, the Group has assessed the
exchangeability of the Venezuelan bolivar to determine
the appropriate exchange rate for consolidation
purposes. Pursuant to the amendments, the Group uses
official rates to translate the cash and cash equivalents
in foreign currency balance, and alternative exchange
rates based on published inflation rates (or, if
unavailable, estimated rates) to translate the remaining
inflation-adjusted bolivar-denominated items in the
consolidated financial statements. The application of
these amendments enhances transparency and
accuracy in the presentation of the economic and
financial position of the Group\u2019s Venezuelan operations.
Adopting these amendments has not required
retrospective adjustments to comparative information
for prior periods. Instead, at the date of initial application,
January 1, 2024, the Group is required to translate the
affected amounts at appropriate spot exchange rates
with an adjustment to retained earnings and to
translation differences, amounting to -224 million euros
and 366 million euros, respectively (see Note 17.g).
Also, the Group has considered the additional
disclosures required by the new amendments in
preparing the annual consolidated financial information
(see section (a) above).
Amendments to IAS 1: Classification of
Liabilities as Current or Non-Current
The amendments clarify whether debt and other
liabilities with an uncertain settlement date should be
classified as current or non-current in the statement of
financial position, depending on the rights that exist at
the end of the reporting period. The amendments also
address the classification requirements for debt a
company might settle by converting it into equity.
The amendments clarify, not change, existing
requirements and affect only the presentation of
liabilities in the statement of financial position \u2014 not the
amount or timing of recognition of any asset, liability
income or expenses, or the information that entities
disclose about those items.
The application of these amendments for the current
reporting period did not have a significant impact on the
Group\u2019s consolidated financial statements.
Amendments to IAS 1: Non-Current Liabilities
with Covenants
These amendments are intended to improve the
information companies provide about long-term debt
with covenants by enabling investors to understand the
risk that such debt could become repayable within
twelve months.
IAS 1 requires a company to classify debt as non-current
only if the company can avoid settling the debt in the 12
months after the reporting date. However, a company\u2019s
ability to do so is often subject to complying with
covenants. These amendments specify that covenants
to be complied with after the reporting date do not
affect the classification of debt as current or non-current
at the reporting date. Instead, the amendments require a
company to disclose information about these covenants
in the notes to the financial statements.
The application of these amendments for the current
reporting period did not have a significant impact on the
Group\u2019s consolidated financial statements.
Amendments to IFRS 16 \u2013 Lease Liability in a
Sale and Leaseback Transaction
These narrow-scope amendments to IFRS 16 Leases
provide specific guidelines for measuring the lease
liability arising in sale and leaseback transactions for
seller-lessees in a way that does not result in the
recognition of any amount of the gain or loss that relates
to the right of use it retains.
The application of these amendments for the current
reporting period did not have a significant impact on the
Group\u2019s consolidated financial statements.
Amendments to IFRS 7 and IFRS 9 \u2013 Supplier
Finance Arrangements
These amendments clarify the characteristics of supplier
finance arrangements and introduce new disclosure
requirements about such arrangements. The new
disclosures are intended to provide information that
enables investors to understand the effects of supplier
finance arrangements on an entity\u2019s liabilities, cash flows
and exposure to liquidity risk.
As a transitional relief, during this first year of application,
entities are not required to disclose specified opening
balances or comparative information.
The adoption of these amendments for the current
reporting period did not have a significant impact on the
Group\u2019s consolidated financial statements.
New standards and amendments to standards
issued but not effective as of December\u00a031,
2024.
At the date of preparation of the consolidated financial
statements, the following new standards and
amendments to existing standards had been published,
but their application is not mandatory:
Standards and amendments
Mandatory application: annual periods
beginning on or after
Amendments to IFRS 9 and IFRS 7
Amendments to the Classification and
Measurement of Financial Instruments
January 1, 2026
Amendments to IFRS 9 and IFRS 7
Contracts Referencing Nature-dependent
Electricity
January 1, 2026
Annual Improvements to IFRS Accounting Standards\u2014Volume 11
January 1, 2026
IFRS 18
Presentation and Disclosure in Financial
Statements
January 1, 2027
IFRS 19
Subsidiaries without Public Accountability:
Disclosures
January 1, 2027
The Group is currently assessing the impact that the
adoption of these new pronouncements will have on the
consolidated financial statements at the time of initial
application. In particular, IFRS 18 will replace IAS 1
Presentation of Financial Statements and introduces,
among other changes, new requirements for
presentation within the statement of profit or loss,
including new totals and subtotals. Furthermore, all
income and expenses must be classified into the
following categories: operating, investing, financing,
income taxes, and discontinued operations, with the first
three being new. Entities will be affected by these new
requirements. IFRS 18 and all consequential
amendments are effective for periods beginning on or
after January 1, 2027, with retrospective application
required. The Group is currently working to identify the
impacts these new criteria will have on the primary
financial statements and notes to the financial
statements. Our preliminary assessment suggests that
adopting IFRS 18 will mainly affect the presentation of
items in the income statement, without causing changes
in their recognition or measurement.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-801": { "value": "
The accompanying consolidated financial statements
were prepared from the accounting records of
Telef\u00f3nica, S.A. and each of the companies comprising
the Telef\u00f3nica Group, whose separate financial
statements were prepared in accordance with the
generally accepted accounting principles applicable in
the various countries in which they are located, and for
the purposes of these consolidated financial statements
are presented in accordance with the International
Financial Reporting Standards (IFRS) adopted by the
European Union, which for the purposes of the
Telef\u00f3nica Group are not different from those issued by
the International Accounting Standards Board (IASB).
These consolidated financial statements present fairly, in
all material respects, the consolidated equity and
financial position at December 31, 2024, and of the
consolidated results of operations, changes in
consolidated equity and the consolidated cash flows
obtained and used in the year then ended.
The euro is the Group\u2019s reporting currency.\u00a0The figures
in these consolidated financial statements are expressed
in million euros, unless indicated otherwise, and may
therefore be rounded.
Note 3 contains a detailed description of the most
significant accounting policies used to prepare these
consolidated financial statements.
Materiality criteria
These consolidated financial statements do not include
certain information or disclosures that, not having to be
presented due to their qualitative significance, were
deemed to be immaterial or of no relevance pursuant to
the concepts of materiality or relevance defined in the
IFRS conceptual framework, insofar as the Telef\u00f3nica
Group\u2019s consolidated financial statements, taken as a
whole, are concerned.
The main companies of the Telef\u00f3nica Group
The table below lists the main companies comprising the
Telef\u00f3nica Group at December 31, 2024 and the main
investments consolidated using the equity method.
Included for each company are the company name,
corporate purpose, country, functional currency, share
capital (in millions of functional currency units), the
Telef\u00f3nica Group\u2019s effective shareholding and the
company or companies through which the Group holds
a stake.", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-802": { "value": "
Exchange rates evolution
Variation of average exchange rate vs euro
2024 vs 2023
2023 vs 2022
Brazilian real
(7.0%)
0.3%
Pound sterling
2.7%
(2.0%)
New peruvian sol
(0.3%)
(0.4%)
Chilean peso
(11.2%)
1.1%
Colombian peso
5.8%
(4.3%)
Mexican peso
(2.8%)
10.3%
Variation of closing exchange rate vs euro
2024 vs 2023
2023 vs 2022
Brazilian real
(16.9%)
4.1%
Pound sterling
4.8%
2.1%
New peruvian sol
4.8%
(0.7%)
Argentine peso
(16.7%)
(78.8%)
Chilean peso
(6.4%)
(5.7%)
Colombian peso
(7.8%)
21.6%
Mexican peso
(13.5%)
11.2%
In 2024, there was a negative impact on Equity
attributable to equity holders of the Parent Company for
translation differences amounting to 2,174 million euros
(positive impact of 419 million euros in 2023) mainly due
to the depreciation of the Brazilian real (see Note 17.f).
Valuation of non-current assets of Telef\u00f3nica
M\u00f3viles Argentina, S.A. (Telef\u00f3nica Argentina)
In 2018 Argentina became a hyperinflationary economy.
The annual inflation rates for 2024 and 2023 in
Argentina were 118% and 211%, respectively (see Note
3.a).
The exchange rate used to translate inflation-adjusted
items denominated in Argentine pesos in the 2024
financial statements is the official exchange rate as of
December\u00a031, 2024 which was 1,073.18 Argentine pesos
per euro, compared to 893.45 Argentine pesos per euro
at December\u00a031, 2023 (a depreciation of around 17% per
year). The Equity attributable to equity holders of the
Parent Company increased by 899 million euros in 2024
due to the translation differences of the financial
statements of Telef\u00f3nica Argentina (see Note 17.f).
In 2024, Telef\u00f3nica Argentina achieved the business
plans in force during the year. However, high levels of
inflation generated a very significant increase in the
carrying amount of non-current assets, with an
appreciation of the Argentine peso in real terms during
2024 of more than 80%. Thus, the inflation adjustment of
intangible assets and tangible fixed assets of Telef\u00f3nica
Argentina in 2024 was 1,279 million euros (see notes 6
and 8).
For this reason, the Group has calculated the
recoverable value of these assets as of December\u00a031,
2024, with the following valuation assumptions:
\u2022 Revenue growth (average over business plan period):
8.8%
\u2022 Operating margin (average over business plan period):
20.4%
\u2022 CapEx to sales ratio (average over business plan
period): 10.9%
\u2022 Discount rate (WACC): 17% (25% before tax)
\u2022 Perpetuity growth rate: 3%
As a result of this analysis, Telef\u00f3nica's management has
estimated that the recoverable value of the assets
assigned to the cash-generating unit would be lower
than their carrying amount as of December\u00a031, 2024. The
Group has recorded an impairment loss on intangible
assets and property, plant and equipment, proportional
to their net carrying amount, amounting to 436 million
euros and 838 million euros, respectively (see notes 6
and 8).
The tax effect of the impairment losses recorded is a
lower deferred tax expense due to the variation in
temporary differences associated with these assets,
amounting to 446 million euros (see Note 25).
Following the recording of these impairment losses, the
carrying amount of Telef\u00f3nica Argentina's net assets as
of December\u00a031, 2024 amounts to 1,175 million euros
(1,149 million euros as of December\u00a031, 2023).
The contribution of Telef\u00f3nica Argentina to the
consolidated revenues for 2024, after its conversion to
euros, has been 2,226 million euros (1,237 million euros in
2023) and the contribution to the operating income,
before the impairment losses described above, has been
a loss of 84 million euros (a loss of 199 million euros in
2023).
On February 24, 2025, Telef\u00f3nica sold all the shares that
it held in Telef\u00f3nica M\u00f3viles Argentina, S.A. (see Note
31).
The composition of and movements in net intangible
assets in 2024 and 2023 are as follows:
2024
Millions of
euros
Balance at
12/31/2023
First
application
of IAS 21
Additions(1)
Amorti-
zation
Impair-
ments
Transfers
and
others
Translation
differences
Inflation
adjustments
Business
combi-
nations
Balance at
12/31/2024
Service
concession
arrangements
and licenses
6,886
4
157
(757)
(485)
1
(536)
376
21
5,667
Software
3,089
4
510
(1,410)
(21)
1,139
(222)
29
(14)
3,104
Customer
base
386
\u2014
\u2014
(238)
\u2014
\u2014
(1)
(1)
5
151
Trademarks
235
\u2014
\u2014
(32)
\u2014
\u2014
(18)
\u2014
2
187
Other
intangible
assets
58
\u2014
20
(25)
\u2014
8
(1)
\u2014
4
64
Intangible
assets in
process
716
\u2014
1,109
\u2014
\u2014
(1,104)
(28)
5
4
702
Total
intangible
assets
11,370
8
1,796
(2,462)
(506)
44
(806)
409
22
9,875
(1) Total additions of intangible assets in 2024 amounted to 1,799 million euros, including the additions corresponding to companies held for sale during the annual
reporting period (see Note 2).
2023
Millions of euros
Balance at
12/31/2022
Additions
Amorti-
zation
Dispo-
sals
Impair-
ments
Transfers
and
others
Trans-
lation
diffe-
rences
Inflation
adjust-
ments
Business
combi-
nations
Balance at
12/31/2023
Service concession
arrangements and licenses
7,550
183
(840)
\u2014
\u2014
2
(205)
196
\u2014
6,886
Software
2,800
486
(1,356)
(1)
\u2014
1,122
18
20
\u2014
3,089
Customer base
721
\u2014
(333)
\u2014
\u2014
(3)
4
\u2014
(3)
386
Trademarks
263
\u2014
(33)
\u2014
\u2014
\u2014
5
\u2014
\u2014
235
Other intangible assets
39
20
(21)
\u2014
(2)
5
2
\u2014
15
58
Intangible assets in process
644
1,149
\u2014
(1)
\u2014
(1,076)
(7)
7
\u2014
716
Total intangible assets
12,017
1,838
(2,583)
(2)
(2)
50
(183)
223
12
11,370
Movement in goodwill
The movement in goodwill assigned to each Group
segment was as follows:
2024
Millions of euros
Balance at
12/31/2023
Additions
Disposals
Write-offs
Transfers
Exchange
rate impact
Balance at
12/31/2024
Telef\u00f3nica Spain
4,291
\u2014
\u2014
\u2014
\u2014
\u2014
4,291
Telef\u00f3nica Brazil
8,076
28
\u2014
\u2014
\u2014
(1,364)
6,740
Telef\u00f3nica Germany
4,386
\u2014
\u2014
\u2014
\u2014
\u2014
4,386
Telef\u00f3nica Hispam
1,108
\u2014
(16)
(623)
\u2014
(51)
418
Others
847
\u2014
\u2014
(243)
\u2014
22
626
Total
18,708
28
(16)
(866)
\u2014
(1,393)
16,461
2023
Millions of euros
Balance at
12/31/2022
Additions
Disposals
Write-offs
Transfers
Exchange
rate impact
Balance at
12/31/2023
Telef\u00f3nica Spain
4,291
\u2014
\u2014
\u2014
\u2014
\u2014
4,291
Telef\u00f3nica Brazil
7,752
5
\u2014
\u2014
\u2014
319
8,076
Telef\u00f3nica Germany
4,386
\u2014
\u2014
\u2014
\u2014
\u2014
4,386
Telef\u00f3nica Hispam
1,215
\u2014
\u2014
(58)
(36)
(13)
1,108
Others
827
11
\u2014
\u2014
\u2014
9
847
Total
18,471
16
\u2014
(58)
(36)
315
18,708
The composition and movements in 2024 and 2023 of
the items comprising net \"Property, plant and
equipment\" were as follows:
2024
Millions of euros
Balance at
12/31/2023
First
applica-
tion of
IAS 21
Addi-
tions(1)
Depre-
ciation
Dispo
-sals
Impair-
ments
Transfers
and
others
Translation
differences
Inflation
adjust-
ments
Business
combi-
nations
Balance at
12/31/2024
Land and buildings
2,516
15
22
(209)
(21)
(175)
116
(119)
166
15
2,326
Plant and
machinery
17,947
23
1,041
(3,680)
(13)
(642)
2,263
(1,071)
583
70
16,521
Furniture, tools
and other items
618
3
81
(213)
(2)
(24)
146
(40)
46
(10)
605
PP&E in progress
1,863
61
2,479
\u2014
(12)
(5)
(2,421)
(108)
117
13
1,987
Total\u00a0 PP&E
22,944
102
3,623
(4,102)
(48)
(846)
104
(1,338)
912
88
21,439
(1) Total additions of property, plant and equipment in 2024 amounted to 3,676 million euros, including the additions corresponding to companies held for sale
during the annual reporting period (see Note 2).
2023
Millions of euros
Balance at
12/31/2022
Additions(1)
Depre-
ciation
Disposals
Impair-
ments
Transfers
and others
Translation
differences
Inflation
adjust-
ments
Balance at
12/31/2023
Land and buildings
2,641
21
(206)
(21)
\u2014
145
(188)
124
2,516
Plant and machinery
18,165
1,123
(3,650)
(14)
\u2014
2,399
(525)
449
17,947
Furniture, tools and
other items
576
136
(199)
4
\u2014
112
(43)
32
618
PP&E in progress
2,332
2,420
\u2014
(38)
(3)
(2,826)
(110)
88
1,863
Total\u00a0 PP&E
23,714
3,700
(4,055)
(69)
(3)
(170)
(866)
693
22,944
(1) Total additions of property, plant and equipment in 2023 amounted to 3,741 million euros, including the additions corresponding to companies held for sale
during the annual reporting period (see Note 2).
2024
Millions of euros
Balance at
12/31/2023
First
applica-
tion of
IAS 21
Additions
Amorti-
zation
Dispo-
sals
Business
combi-
nations
Transfers
and
others
Translation
differences
and inflation
adjustments
Balance at
12/31/2024
Rights of use on land
and natural properties
834
\u2014
226
(250)
(13)
5
(16)
29
815
Rights of use on
buildings
4,287
\u2014
1,200
(1,151)
(32)
17
(18)
(403)
3,900
Rights of use on plant
and machinery
3,080
15
634
(756)
(15)
\u2014
(2)
(9)
2,947
Other rights of use
247
\u2014
82
(78)
(1)
\u2014
1
(6)
245
Total of rights of use
8,448
15
2,142
(2,235)
(61)
22
(35)
(389)
7,907
2023
Millions of euros
Balance at
12/31/2022
Additions
Amortization
Disposals
Transfers
and others
Translation
differences
and inflation
adjustments
Balance at
12/31/2023
Rights of use on\u00a0 land and
natural properties
885
194
(231)
(10)
\u2014
(4)
834
Rights of use on buildings
4,130
1,345
(1,172)
(95)
1
78
4,287
Rights of use on plant and
machinery
3,037
752
(686)
(26)
3
\u2014
3,080
Other rights of use
227
100
(70)
(2)
(6)
(2)
247
Total of rights of use
8,279
2,391
(2,159)
(133)
(2)
72
8,448
Millions of euros
Invest-
ments
Other long-
term credits
Deposits
and
guarantees
Trade
receivables
Long-term
receivables
for
subleases
Impairment
of trade
receivables
Balance at 12/31/2022
497
981
1,163
1,019
19
(128)
Additions
17
114
9
610
4
(38)
Disposals
(17)
(310)
(111)
(303)
(1)
16
Translation differences
(1)
(17)
30
37
\u2014
(11)
Fair value adjustments and financial updates
115
26
35
1
\u2014
\u2014
Transfers and other
5
(53)
(160)
(315)
(8)
36
Balance at 12/31/2023
616
741
966
1,049
14
(125)
Additions
30
132
11
623
11
(59)
Disposals
(150)
(107)
(18)
(366)
\u2014
34
Translation differences
(4)
(35)
(104)
(41)
(1)
18
Fair value adjustments and financial updates
94
10
23
(16)
\u2014
\u2014
Transfers and other
(1)
(139)
(187)
(304)
(7)
26
Balance at 12/31/2024
585
602
691
945
17
(106)
Millions of
euros
Impairment provision at December 31, 2022
2,891
Allowances
582
Transfers
48
Amounts applied
(481)
Translation differences and other
(48)
Impairment provision at December 31, 2023
2,992
Allowances
613
Transfers
27
Amounts applied
(527)
Translation differences and other
(57)
Impairment provision at December 31, 2024
3,048
f) Translation differences
The breakdown of the accumulated contribution of
translation differences attributable to equity holders of
the parent at December 31 is as follows:
Millions of euros
2024
2023
2022
Brazilian real
(15,786)
(13,612)
(14,031)
Pound sterling
309
(97)
(322)
Venezuelan bolivar
(3,253)
(3,686)
(3,734)
Argentine peso
(1,112)
(2,011)
(1,364)
Other currencies
(1,437)
(1,280)
(1,272)
Total Group
(21,279)
(20,686)
(20,723)
The accumulated negative translation differences
corresponding to Telef\u00f3nica M\u00f3viles Argentina, S.A. (see
Note 31) amounted to 1,107 million euros as of December
31, 2024 (2,006 million euros as of December 31, 2023).
g) Adjustment on initial application
of IAS 21
The early adoption of the amendments to IAS 21
following its approval by the European Union in
November 2024 (see Note 3) has had a negative impact
on retained earnings amounting to 224 million euros and
a positive impact on translation differences amounting
to 366 million. The impact on the Group's Equity
amounted to 142 million euros.
Millions of euros
Balance at
12/31/2023
Additions
Disposals
Transfers
Balance at
12/31/2024
Long-term contractual assets (Note 12)
325
162
(10)
(189)
288
Contractual assets
326
162
(10)
(189)
289
Impairment losses
(1)
\u2014
\u2014
\u2014
(1)
Short-term contractual assets (Note 14)
202
268
(426)
189
229
Contractual assets
209
270
(426)
188
236
Impairment losses
(7)
(2)
\u2014
1
(7)
Total
527
430
(436)
\u2014
517
Millions of euros
Balance at
12/31/2022
Additions
Disposals
Transfers
Balance at
12/31/2023
Long-term contractual assets (Note 12)
359
118
(17)
(135)
325
Contractual assets
360
118
(17)
(135)
326
Impairment losses
(1)
\u2014
\u2014
\u2014
(1)
Short-term contractual assets (Note 14)
195
276
(403)
134
202
Contractual assets
202
277
(404)
134
209
Impairment losses
(7)
(1)
1
\u2014
(7)
Total
554
394
(420)
(1)
527
Millions of euros
Balance at
12/31/2023
Additions
Disposals
Transfers
Translation
differences and
inflation
adjustments
Balance at
12/31/2024
Non-current capitalized costs (Note 12)
1,001
885
(5)
(764)
(44)
1,073
Of obtaining a contract
774
759
(5)
(601)
(56)
871
Of fulfilling a contract
227
126
\u2014
(163)
12
202
Impairment losses
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Current capitalized costs (Note 14)
998
671
(1,332)
761
(4)
1,094
Of obtaining a contract
815
573
(1,077)
599
(21)
889
Of fulfilling a contract
183
98
(255)
162
17
205
Impairment losses
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Total
1,999
1,556
(1,337)
(3)
(48)
2,167
Millions of euros
Balance at
12/31/2022
Additions
Disposals
Transfers
Translation
differences and
inflation
adjustments
Balance at
12/31/2023
Non-current capitalized costs
(Note 12)
854
838
(2)
(682)
(7)
1,001
Of obtaining a contract
610
694
(1)
(536)
7
774
Of fulfilling a contract
244
144
(1)
(146)
(14)
227
Impairment losses
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Current capitalized costs (Note
14)
885
620
(1,175)
684
(16)
998
Of obtaining a contract
710
534
(967)
538
\u2014
815
Of fulfilling a contract
175
86
(208)
146
(16)
183
Impairment losses
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Total
1,739
1,458
(1,177)
2
(23)
1,999
Millions of euros
Balance at
12/31/2023
Additions
Disposals
(previous
years)
Disposals
(current
year)
Transfers
Translation
differences and
inflation
adjustments
Balance at
12/31/2024
Long-term contractual liabilities (Note
21)
778
250
(1)
\u2014
(222)
8
813
Short-term contractual liabilities (Note
22)
1,035
5,624
(969)
(4,809)
220
(37)
1,064
Total
1,813
5,874
(970)
(4,809)
(2)
(29)
1,877
Millions of euros
Balance at
12/31/2022
Additions
Disposals
(previous
years)
Disposals
(current
year)
Transfers
Translation
differences
and inflation
adjustments
Balance at
12/31/2023
Long-term contractual
liabilities (Note 21)
891
162
(2)
(1)
(279)
7
778
Short-term contractual
liabilities (Note 22)
1,038
5,374
(973)
(4,700)
286
10
1,035
Total
1,929
5,536
(975)
(4,701)
7
17
1,813
Millions of euros
2025
2026
2027
Subsequent
years
Total
Contractual liabilities, activation fees
8
3
2
2
15
Contractual liabilities, sales of prepay cards
560
\u2014
\u2014
\u2014
560
Contractual liabilities, services
214
34
15
96
359
Contractual liabilities, sales of handsets
34
6
\u2014
\u2014
40
Contractual liabilities, irrevocable rights to use
73
63
57
434
627
Other contractual liabilities
175
25
21
55
276
Maturity of performance obligations
1,064
131
95
587
1,877
", "dimensions": { "concept": "ifrs-full:DisclosureOfEffectOfChangesInForeignExchangeRatesExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-803": { "value": "
Note 3. Accounting policies
As stated in Note 2, the Group\u2019s consolidated financial
statements have been prepared in accordance with
IFRSs and interpretations issued by the International
Accounting Standards Board (IASB) and the IFRS
Interpretations Committee (IFRIC) as endorsed by the
European Commission for use in the European Union
(IFRSs - EU).
Accordingly, only the most significant accounting
policies used in preparing the accompanying
consolidated financial statements, in light of the nature
of the Group\u2019s activities, are set out below, as well as the
accounting policies applied where IFRSs permit a policy
choice, and those that are specific to the sector in which
the Group operates.
a) Hyperinflationary economies
Venezuela has been considered a hyperinflationary
economy since 2009.
Pursuant to the amendments to IAS 21 The Effects of
Changes in Foreign Exchange Rates, early adopted in
2024 (see section (o) below and Note 17), the Group
determines whether the Venezuelan bolivar is
exchangeable, and which spot exchange rate to use
when exchangeability is lacking. Based on its
assessment, the Group uses official rates to translate
cash and cash equivalents in foreign currency and
alternative estimated rates of exchange, based on
inflation rates, to translate the remaining inflation-
adjusted bolivar-denominated items in the consolidated
financial statements. Prior to these amendments, in the
absence of official rates considered representative, the
Group\u2019s policy required the use of an estimated
exchange rate \u2013referred to as synthetic exchange rate\u2013
to translate all items denominated in bolivars for the
purposes of the consolidated financial statements.
The estimated exchange rate is calculated considering
published inflation rates or, if unavailable, estimated
rates. On an annual basis, these rates are 61.5% , 189.8%
and 174.3% for 2024, 2023 and 2022, respectively.
The estimated exchange rate as of the closing date of
each reporting period, amounts to 81.85 digital bolivars
per U.S. dollar, 159.45 digital bolivars per U.S. dollar and
45.18 digital bolivars per U.S. dollar as of December\u00a031,
2024, 2023 and 2022, respectively. In turn, the official
reference exchange rate at December 31, 2024 was
52.027 VED/USD ( 35.959 VED/USD and 17.489VED/USD
at December 31, 2023 and 2022, respectively).
As of the date of initial application of the amendments,
January\u00a01, 2024, the reference exchange rate amounted
to 159.45 VED/USD whereas the estimated exchange
rate amounted to 50.68 digital bolivars per U.S. dollar.
In 2018 Argentina became a hyperinflationary economy.
In order to restate its financial statements, the Company
uses the series of indices defined by resolution JG No.
539/18 issued by the Federaci\u00f3n Argentina de Consejos
Profesionales de Ciencias Econ\u00f3micas (FACPCE), based
on the National Consumer Price Index (IPC) published
by the Instituto Nacional de Estad\u00edstica y Censos
(INDEC) of the Argentine Republic and the Wholesale
Internal Price Index (IPIM) published by FACPCE. The
cumulative index at December 31, 2024, 2023 and 2022
is 7,694.0%, 3,533.2% and 1,134.6%, respectively, while on
an annual basis the index for 2024 is 117.8% (211.4% and
95.0% in 2023 and 2022 , respectively).
The exchange rate used to translate inflation-adjusted
items denominated in Argentine pesos in the 2024
financial statements is the closing exchange rate as of
December 31, 2024 which was 1,073.18 Argentine pesos
per euro (893.45 and 189.08 Argentine pesos per euro at
December\u00a031, 2023 and 2022, respectively).
The Group includes in a single line item (\"Translation
Differences\") all the equity effects derived from
hyperinflation. This is as follows: (a) the restatement for
inflation of the financial statements of the Group
companies operating in hyperinflationary economies,
and (b) the effects of translating their respective
financial statements into euros using the exchange rate
at the end of the period.
b) Translation methodology
The income statements and statements of cash flows of
the Telef\u00f3nica Group\u2019s foreign subsidiaries (except
Venezuela and Argentina) were translated into euros at
the average exchange rates for the year, as a rate that
approximates the exchange rates at the dates of the
transactions.
c) Goodwill
After initial recognition, goodwill is carried at cost, less
any accumulated impairment losses. Goodwill is
recognized as an asset denominated in the currency of
the company acquired and is tested for impairment
annually at the least, or more frequently, if there are
certain events or changes indicating the possibility that
the carrying amount may not be fully recoverable. The
potential impairment loss is determined by assessing the
recoverable amount of the cash generating unit (or
group of cash generating units) to which the goodwill is
allocated from the acquisition date.
d) Intangible assets
Intangible assets are carried at acquisition or production
cost, less any accumulated amortization or any
accumulated impairment losses.
Intangible assets are amortized on a straight-line basis
according to the following:
\u2022 Licenses granted to the Telef\u00f3nica Group by various
public authorities to provide telecommunications
services and the value allocated to licenses held by
certain companies at the time they were included in
the Telef\u00f3nica Group (\u201cService concession
arrangements and licenses\u201d) are amortized on a
straight-line basis over the duration of related licenses
from the moment commercial operation begins.
\u2022 The allocation of acquisition costs attributable to
customers acquired in business combinations, as well
as the acquisition value of these types of assets in a
third-party transaction for consideration (Customer
base) are amortized on a straight-line basis over the
estimated period of the customer relationship. The
term length is between three and fourteen years,
based on the customer segment (residential, business,
etc.) and the business model (prepaid, postpaid, etc.).
\u2022 Software is amortized on a straight-line basis over its
useful life, generally estimated to be between two and
five years.
e) Property, plant and equipment
Property, plant and equipment is carried at cost, net of
government grants received, less any accumulated
depreciation and any accumulated impairment in value.
Cost includes, among others, direct labor used in
installation and the allocable portion of the indirect costs
required for the related asset. The latter two items are
recorded as revenue under the concept \"Own work
capitalized\" of the line item Other income.
Interest and other financial expenses incurred and
directly attributable to the acquisition or construction of
qualifying assets are capitalized. Qualifying assets for the
Telef\u00f3nica Group are those assets that require a period
of at least 18 months to bring the assets to the condition
necessary for their intended use or sale.
The Group\u2019s subsidiaries depreciate their property, plant
and equipment, from the time they can be placed in
service, amortizing the cost of the assets, net of their
residual values on a straight-line basis over the assets\u2019
estimated useful lives, which are calculated in
accordance with technical studies that are revised
periodically in light of technological advances and the
rate of dismantling, as follows:
Years of estimated
useful life
Buildings
25\u00a0 \u2013\u00a0 40
Plant and machinery
4\u00a0 \u2013\u00a0 30
Furniture, tools and other items
2\u00a0 \u2013\u00a0 10
f) Impairment of non-current assets
All non-current assets, including goodwill and
investments in associates and joint ventures, are
assessed at each reporting date for indicators of
impairment. Whenever such indicators exist, or in the
case of assets which are subject to an annual
impairment test, the recoverable amount is estimated.
An asset\u2019s recoverable amount is the higher of fair value
less costs to sell and value in use. In assessing value in
use, the estimated future post-tax cash flows deriving
from the use of the asset or its cash generating unit, as
applicable, are discounted to their present value using a
post-tax discount rate that reflects current market
assessments of the time value of money and the risks
specific to the asset, provided that the result obtained is
the same that would be obtained by discounting pre-tax
cash flows at a pre-tax discount rate.
The Group bases the calculation of impairment on the
approved business plans of the various cash generating
units to which the assets are allocated. The projected
cash flows, based on the approved strategic business
plans, cover a period of five years. Starting with the sixth
year, an expected constant growth rate is applied.
g) Lease agreements
The determination of whether an arrangement is, or
contains a lease is based on the substance of the
agreement and requires an assessment of whether the
fulfillment of the arrangement is dependent on the use
of a specific asset and the agreement conveys a right to
the use of the asset.
At the inception date of the lease (i.e. the date when the
underlying asset is available for use), a lessee recognizes
a right of use asset that represents the right to use the
underlying asset over the term of the lease, and a lease
liability for the present value of the lease payments
payable over the lease term \u2013 discounted using the
incremental borrowing rate at the start date of the lease.
Rights of use assets are measured at cost, less
accumulated depreciation and impairment losses, and
are adjusted for any remeasurement of lease liabilities.
The cost of rights of use assets includes the amount of
initial direct costs incurred and lease payments made
before the commencement date less incentives
received. Right-of-use assets are depreciated on a
straight-line basis over the shorter of the estimated
useful life of the underlying asset and the lease term.
Lease payments include fixed payments (including in-
substance fixed payments) less any lease incentive
receivable, variable lease payments that depend on an
index or rate, and amounts expected to be paid as
residual value guarantees. Similarly, the measurement of
the lease liability includes the exercise price of a
purchase option, if the lessee is reasonably certain to
exercise that option, and payments of penalties for early
termination, if the lease term reflects the lessee
exercising such cancellation option. After the
commencement date, the amount of the lease liabilities
is increased to reflect the accrual of interest and
reduced for the payments made. In addition to this, the
carrying amount of the lease liability is remeasured in
certain cases, such as changes in the lease term,
changes in future lease payments resulting from a
change in an index or rate used to determine those
payments. The amount of such remeasurement is
generally recognized against an adjustment to the right-
of-use asset.
The Group uses the \"low value\" asset lease recognition
exemption for office equipment and the short-term lease
recognition exemption for all leases with a term of 12
months or less. Therefore, lease payments in such cases
are recognized as an expense on a straight-line basis
over the lease term.
The Group recognizes non-lease components
separately from lease components for those classes of
assets in which non-lease components are significant
with respect to the total value of the arrangement.
The Group determines the lease term as the non-
cancellable term of the contract, together with any
period covered by an extension (or termination) option
whose exercise is discretionary for the Group, if there is
reasonable certainty that it will be exercised (or it will not
be exercised). In its assessment, the Group considers all
available information by asset class in the industry and
evaluates all relevant factors (technology, regulation,
competition, business model) that create an economic
incentive to exercise or not a renewal/cancellation
option. Notably, the Group takes into consideration the
time horizon of the strategic planning of its operations.
After the commencement date, the Group reassesses
the lease term if there is a significant event or change in
circumstances that is within its control that may affect
its ability to exercise (or not to exercise) an option to
extend or terminate (for example, a change in business
strategy).
Where the Group acts as a lessor, leases are classified
between operating and finance leases. Leases in which
the lessor retains a significant portion of the risks and
rewards of ownership of the leased asset are treated as
operating leases. Otherwise, the lease is a finance lease.
h) Investment in associates and joint
arrangements
The Group assesses whether it has significant influence
not only on the basis of its ownership percentage but
also on the existence of qualitative factors such as
representation on the board of directors of the investee,
its participation in decision-making processes,
interchange of managerial personnel and access to
technical information.
The Group assesses rights and obligations agreed to by
the parties to a joint arrangement and, when relevant,
other facts and circumstances in order to determine
whether the joint arrangement in which it is involved is a
joint venture or a joint operation.
Upon the sale or contribution of a controlled business to
an associate or joint venture, the Group measures and
recognizes any retained interest at its fair value. Any
difference between the carrying amount of the business
contributed and the fair value of the retained investment
and the consideration received from disposal is
recognized in full in profit or loss.
i) Financial assets and liabilities
Financial Assets
All regular way purchases and sales of financial assets
are recognized in the statement of financial position on
the trade date, i.e. the date that the Company commits
to purchase or sell the asset.
The Group applies an impairment model for financial
assets based on expected credit losses, using a
simplified method for certain short- and long-term
assets (commercial receivables, lease receivables and
contractual assets).
Under this simplified approach, credit impairment is
recognized by reference to expected credit losses over
the life of the asset. For this purpose the Group uses
matrices based on historical bad debt experience by
geographical area on a portfolio segmented by customer
category according to credit pattern. The matrix for each
category has a defined time horizon divided into
intervals in accordance with the collection management
policy and is fed with historical data that covers at least
24 collection cycles. This data is updated on a regular
basis. Based on the information observable at each
close, the Group assesses the need to adjust the rates
resulting from these matrices, considering current
conditions and future economic forecasts.
Derivative financial instruments and hedge
accounting
The accounting treatment of any gain or loss resulting
from changes in the fair value of a derivative depends on
whether the derivative in question meets all the criteria
for hedge accounting and, if appropriate, on the nature
of the hedge.
Changes in fair value of derivatives that qualify as fair
value hedging instruments are recognized in the income
statement, together with changes in the fair value of the
hedged asset or liability attributable to the risk being
hedged.
Changes in the fair value of derivatives that qualify and
have been designated as cash flow hedges, which are
highly effective, are recognized in equity. The ineffective
portion is recognized immediately in the income
statement. Fair value changes recognized in equity
arising from hedges that relate to firm commitments or
forecast transactions that result in the recognition of
non-financial assets or liabilities are included in the initial
carrying amount of those assets or liabilities. Otherwise,
changes in fair value previously recognized in equity are
recognized in the income statement in the period in
which the hedged transaction affects profit or loss.
An instrument designated to hedge foreign currency
exposure from a net investment in a foreign operation is
accounted for in a similar manner to cash flow hedges.
When the Group chooses not to apply hedge
accounting criteria, gains or losses resulting from
changes in the fair value of derivatives are taken directly
to the income statement. In this respect, transactions
used to reduce the exchange rate risk of income
contributed by foreign subsidiaries are not treated as
hedging transactions.
j) Audio-visual rights
Audio-visual rights which will generally be consumed in
a period of less than twelve months, as well as own
content whose production cycle will in no case exceed
thirty-six months, are included in inventories.
The cost of film, documentary, short film and series
rights acquired from third parties is charged to the
income statement on a straight-line basis from the time
of first broadcasting or release until the completion of
the rights.
In-house produced programs and series and program
titles are charged at the time of their broadcast or up to
thirty-six months from the date of release, depending on
their nature and broadcasting strategy. The cost of in-
house productions that the Group expects to recover
through sale to third parties is recognized as an
intangible asset.
The cost of broadcasting rights that have expired or
whose recovery value is estimated to be lower than the
acquisition cost is recognized directly as an expense.
Broadcasting rights to football and motor sports events,
including their inherent production costs, are charged to
the income statement on a straight-line basis over
twelve months from the start of the season, while rights
to other premium sports are charged over the period of
the competition. All other sports rights are recognized in
the income statement upon first broadcast. When these
rights are paid for prior to the moment of allocation to
the income statement, and the terms and conditions of
the agreement involve performance obligations that still
have to be fulfilled in the future by both parties (also
known as executory contracts), prepaid amounts are
recognized as prepayments under \"Other current
assets\".
k) Pensions and other employee
obligations
Provisions required to cover the accrued liability for
defined benefit pension plans are determined using the
projected unit credit actuarial valuation method. The
calculation is based on demographic and financial
assumptions determined at a country level, and in
consideration of the macroeconomic environment. The
discount rates are determined based on high quality
market yield curves. Plan assets are measured at fair
value.
Provisions for post-employment benefits (e.g. early
retirement or other) are calculated individually based on
the terms agreed with the employees. In some cases,
these may require actuarial valuations based on both
demographic and financial assumptions.
l) Revenues and expenses
The Telef\u00f3nica Group revenues are derived principally
from providing the following telecommunications
services: traffic, connection fees, regular (normally
monthly) network usage fees, interconnection, network
and equipment leasing, handset sales and other digital
services such as Pay TV and value-added services or
maintenance. Products and services may be sold
separately or bundled in promotional packages.
Revenues from calls carried on Telef\u00f3nica\u2019s networks
(traffic) entail an initial call establishment fee plus a
variable call rate, based on call length, distance and type
of service. Both fixed and wireless traffic is recognized as
revenue as service is provided. For prepaid calls, the
amount of unused traffic generates deferred revenues
presented in Contractual liabilities on the statement of
financial position.
Revenues from traffic sales and services at a fixed rate
over a specified period of time (flat rate) are recognized
on a straight-line basis over the term covered by the rate
paid by the customer.
Installation fees are taken to the income statement on a
straight-line basis over the related period. Equipment
leases and other services are taken to the income
statement as they are consumed.
Interconnection revenues from fixed-wireless and
wireless-fixed calls and other customer services are
recognized in the period in which the calls are made.
Revenues from handset and equipment sales are
recognized once the sale is considered complete, i.e.,
generally when delivered to the end customer.
When the Group is in an intermediary position between
a supplier/vendor and an end customer, it must
determine if it is supplying the product or service as the
principal in the transaction or if it is acting as an agent on
behalf of the supplier (manufacturer, wholesaler). The
distinction involves identifying who controls the goods
or services being provided and who is the primary
obligor to satisfy the performance obligations in the
arrangement. Control is often evidenced when, in the
delivery to the end customer, the Group provides
significant integration of the goods and services from a
third party vendor into its own goods and services. In
addition to this, assessment of the primary obligor
includes the analysis of indicators such as: whether the
Group's responsibilities require infrastructure and
resources with specific functionalities, who acts as the
main customer contact, who manages claims and
provides support services, and who has discretion
setting the final price. This principal/agent assessment
affects the timing and amount of revenue recognized in
the financial statements, either on a gross basis as the
principal or on a net basis as the agent, representing the
margin earned by the Group for arranging the
transaction between the principal and the customer.
This is particularly relevant for the Group in connection
with digital services, such as streaming TV content,
software licenses and other cloud-based products and
services.
For bundled packages that include multiple elements
sold in the fixed, wireless, Internet and television
businesses it is determined whether it is necessary to
identify the separate performance obligations and apply
the corresponding revenue recognition policy to each
one. Total package revenues are allocated among the
identified performance obligations based on their
respective standalone selling prices.
As connection or initial activation fees, or upfront non-
refundable fees, are not separately identifiable
performance obligations in these types of packages, any
consideration received from the customer for these
items is allocated to the remaining elements.
When the customer has a right of return, the agreed
consideration is considered variable. The Group
estimates the amount of variable consideration to which
it is entitled using the expected value method
(probability-weighted possible amounts), considering all
historical, current and forecast information that is
reasonably available, and only to the extent that it
determines that it is highly probable that a significant
reversal in the amount of cumulative revenue
recognized will not occur.
Expenses relating to customer contracts (mainly,
commissions payable to dealers for customer
acquisitions) are recognized as an asset to the extent
that they are incremental and are expected to be
recovered. Subsequently, these costs are amortized over
the same term as the revenues associated with such
contract are recognized, unless the expected
amortization period is one year or less, in which case
they are expensed as incurred. For the purposes of
allocating to profit or loss the incremental costs of
obtaining a contract with indefinite duration, renewal
periods are taken into consideration, estimated on the
basis of the customer churn rate, unless there are
contract renewal costs which are commensurate with
those incurred in the initial contract.
As part of our strategy, the Group has increased its use
of renewable energy through power purchase
agreements (PPAs) to purchase energy from sustainable
sources, such as wind and solar. These contracts often
have a long term and provide the Group with a
mechanism to ensure the supply of green energy at
fixed prices. When these arrangements involve physical
delivery of electricity and are entered into for the
purpose of receiving the energy for the entity\u2019s expected
purchase, sale or usage requirements (i.e. volume
agreed does not exceed actual and expected power
needs), the contract is for \u201cown use\u201d and is generally
accounted for as power purchases or sales when the
underlying transactions take place.
m) Non-current assets held for sale
The Group classifies non-current assets and disposal
groups as held for sale if their carrying amounts will be
recovered principally through a sale transaction rather
than through continuing use. Non-current assets and
disposal groups classified as held for sale are measured
at the lower of their carrying amount and fair value less
costs to sell and are presented separately in the
statement of financial position as \u201cNon-current assets
and disposal groups held for sale\u201d and \u201cLiabilities
associated with non-current assets and disposal groups
held for sale\u201d. Once classified as held for sale property,
plant and equipment and intangible assets (including
right-of-use assets) are no longer depreciated or
amortized.
The criteria for held for sale classification is regarded as
met only when the Group determines the sale to be
highly probable: management is committed to a decision
to sell and all actions required to complete the sale
indicate that it is unlikely that significant changes to the
sale will be made or that the decision will be withdrawn.
In addition, the asset or disposal group is available for
immediate sale in its present condition (subject only to
terms that are usual and customary for such
transactions) and the sale is expected to be completed
within one year from the date of the classification.
n) Use of estimates
The key assumptions concerning the future and other
relevant sources of uncertainty in estimates at the
reporting date that could have a significant impact on
the consolidated financial statements within the next
financial year are discussed below.
A significant change in the facts and circumstances on
which these estimates and related judgments are based
could have a material impact on the Group\u2019s results and
financial position. Accordingly, sensitivity analysis are
disclosed for the most relevant situations (see Notes 7
and 24).
Non-current assets and goodwill
The accounting treatment of investments in non-current
assets such as property, plant and equipment, intangible
assets and interests in associates and joint ventures,
entails the use of estimates to determine the useful life
for depreciation and amortization purposes and to
assess fair value at their acquisition dates for assets
acquired in business combinations.
Determining useful life requires making estimates in
connection with future technological developments and
alternative uses for assets. There is a significant element
of judgment involved in making technological
development assumptions, since the timing and scope
of future technological advances are difficult to predict.
Also, upon the sale or contribution of a controlled
business to an associate or joint venture, the Group
measures and recognizes any retained interest at its fair
value. The fair value assigned to the retained investment
is determined on the basis of its business plan, including
significant judgments when considering significant
assumptions such as long-term EBITDA margin, long-
term capital expenditure ratio, discount rate and
perpetuity growth rate which would be significantly
affected by the future trends in the economic,
competitive, regulatory and technological environment.
The decision to recognize an impairment loss involves
developing estimates that include, among others, an
analysis of the causes of the potential impairment, as
well as its timing and expected amount. Furthermore,
additional factors are taken into account, such as the
situation of the macroeconomic environment, regulatory
and competitive developments, technological
obsolescence, the discontinuation of certain services as
well as other changes in circumstances, that highlight
the need to assess a potential impairment.
The Telef\u00f3nica Group evaluates its cash-generating
units\u2019 performance on a regular basis to identify potential
impairments of goodwill and other non-current assets.
Determining the recoverable amount of the cash-
generating units also entails the use of assumptions and
estimates and requires a significant element of
judgment.
Deferred income taxes
The Group assesses the recoverability of deferred tax
assets based on estimates of future earnings, and of all
the options available to achieve an outcome, it considers
the most efficient one in tax terms within the legal
framework the Group is subject to. Such recoverability
ultimately depends on the Group\u2019s ability to generate
taxable earnings over the period for which the deferred
tax assets remain deductible. This analysis is based on
the estimated schedule for reversing deferred tax
liabilities, as well as estimates of taxable earnings, which
are sourced from internal projections that are
continuously updated to reflect the latest trends.
The recognition of tax assets and liabilities depends on a
series of factors, including estimates as to the timing and
realization of deferred tax assets and the projected tax
payment schedule. Actual Group company income tax
receipts and payments could differ from the estimates
made by the Group as a result of changes in tax
legislation, the outcome of underway tax proceedings or
unforeseen future transactions that could affect tax
balances.
Provisions
Provisions are recorded when, at the end of the period,
we have a present obligation as a result of past events,
whose settlement requires an outflow of resources that
is considered probable and can be measured reliably.
This obligation may be legal or constructive, arising from,
but not limited to, regulation, contracts, common
practice or public commitments, which have created a
valid expectation for third parties that we will assume
certain responsibilities.\u00a0 The amount recorded is the best
estimation performed by the management in respect of
the expenditure that will be required to settle the
obligations, considering all the information available at
the closing date, including the advice of external
experts, such as legal advisors or consultants.
Should we be unable to reliably measure the obligation,
no provision would be recorded and information would
then be presented in the notes to the Consolidated
Financial Statements.
Because of the inherent uncertainties in this estimation,
actual expenditures may be different from the originally
estimated amount recognized.
Revenue recognition
Bundled offers
Bundled offers that combine different elements are
assessed to determine whether it is necessary to
separate the different identifiable components and apply
the corresponding revenue recognition policy to each
element. Total package revenues are allocated among
the identified elements based on their respective
standalone selling prices.
Determining standalone selling prices for each identified
element requires estimates that are complex due to the
nature of the business.
A change in estimates of standalone selling prices could
affect the apportionment of revenue among the
elements and, as a result, the timing of recognition of
revenues.
Leases
Accounting for rights and obligations as a lessee under a
lease contract requires the use of estimations to
determine the lease term in contracts that include
extension options or early termination options.
Determining the lease term involves making estimates
over the time horizon of the Group's strategic planning
process with respect to relevant factors such as
expected technological progress, possible regulatory
developments, market and competition trends or
changes in the business model. The assumptions
regarding these variables involve a significant degree of
judgment to the extent that the timing and nature of
future changes are difficult to anticipate.
Due to the uncertainties inherent to these estimates,
changes in the assumptions made in respect of
uncertain matters when determining the lease term of a
lease contract may have an impact on the amounts of
the right of use assets and lease liabilities recognized on
the basis of the estimates made by the Group.
o) New IFRS and interpretations of
the International Financial Reporting
Interpretations Committee (IFRIC)
The accounting policies applied in the preparation of the
consolidated financial statements for the year ended
December\u00a031, 2024 are consistent with those used in the
preparation of the Group\u2019s consolidated annual financial
statements for the year ended December\u00a031, 2023, with
the exception of the following amendments to existing
standards issued by the IASB and endorsed by the
European Union for application in Europe, which have
been applied for the first time for the annual period
commencing on January\u00a01, 2024.
Early Adoption of Amendments to IAS 21: Lack
of Exchangeability
The Group has elected to early adopt the amendments
to IAS 21 The Effects of Changes in Foreign Exchange
Rates, concerning the lack of exchangeability of
currencies, issued by the IASB in August 2023 and
endorsed by the EU for application in Europe in
November 2024.
These amendments require an entity to apply a
consistent approach to assessing whether a currency is
exchangeable into another currency at a measurement
date and for a specified purpose, and to determining the
appropriate spot exchange rate to use in cases where
exchangeability is absent.
The Group operates in Venezuela, an environment with
significant foreign exchange controls and restrictions
established by the authorities, considered as a
hyperinflationary economy since 2009. In accordance
with the amendments, the Group has assessed the
exchangeability of the Venezuelan bolivar to determine
the appropriate exchange rate for consolidation
purposes. Pursuant to the amendments, the Group uses
official rates to translate the cash and cash equivalents
in foreign currency balance, and alternative exchange
rates based on published inflation rates (or, if
unavailable, estimated rates) to translate the remaining
inflation-adjusted bolivar-denominated items in the
consolidated financial statements. The application of
these amendments enhances transparency and
accuracy in the presentation of the economic and
financial position of the Group\u2019s Venezuelan operations.
Adopting these amendments has not required
retrospective adjustments to comparative information
for prior periods. Instead, at the date of initial application,
January 1, 2024, the Group is required to translate the
affected amounts at appropriate spot exchange rates
with an adjustment to retained earnings and to
translation differences, amounting to -224 million euros
and 366 million euros, respectively (see Note 17.g).
Also, the Group has considered the additional
disclosures required by the new amendments in
preparing the annual consolidated financial information
(see section (a) above).
Amendments to IAS 1: Classification of
Liabilities as Current or Non-Current
The amendments clarify whether debt and other
liabilities with an uncertain settlement date should be
classified as current or non-current in the statement of
financial position, depending on the rights that exist at
the end of the reporting period. The amendments also
address the classification requirements for debt a
company might settle by converting it into equity.
The amendments clarify, not change, existing
requirements and affect only the presentation of
liabilities in the statement of financial position \u2014 not the
amount or timing of recognition of any asset, liability
income or expenses, or the information that entities
disclose about those items.
The application of these amendments for the current
reporting period did not have a significant impact on the
Group\u2019s consolidated financial statements.
Amendments to IAS 1: Non-Current Liabilities
with Covenants
These amendments are intended to improve the
information companies provide about long-term debt
with covenants by enabling investors to understand the
risk that such debt could become repayable within
twelve months.
IAS 1 requires a company to classify debt as non-current
only if the company can avoid settling the debt in the 12
months after the reporting date. However, a company\u2019s
ability to do so is often subject to complying with
covenants. These amendments specify that covenants
to be complied with after the reporting date do not
affect the classification of debt as current or non-current
at the reporting date. Instead, the amendments require a
company to disclose information about these covenants
in the notes to the financial statements.
The application of these amendments for the current
reporting period did not have a significant impact on the
Group\u2019s consolidated financial statements.
Amendments to IFRS 16 \u2013 Lease Liability in a
Sale and Leaseback Transaction
These narrow-scope amendments to IFRS 16 Leases
provide specific guidelines for measuring the lease
liability arising in sale and leaseback transactions for
seller-lessees in a way that does not result in the
recognition of any amount of the gain or loss that relates
to the right of use it retains.
The application of these amendments for the current
reporting period did not have a significant impact on the
Group\u2019s consolidated financial statements.
Amendments to IFRS 7 and IFRS 9 \u2013 Supplier
Finance Arrangements
These amendments clarify the characteristics of supplier
finance arrangements and introduce new disclosure
requirements about such arrangements. The new
disclosures are intended to provide information that
enables investors to understand the effects of supplier
finance arrangements on an entity\u2019s liabilities, cash flows
and exposure to liquidity risk.
As a transitional relief, during this first year of application,
entities are not required to disclose specified opening
balances or comparative information.
The adoption of these amendments for the current
reporting period did not have a significant impact on the
Group\u2019s consolidated financial statements.
New standards and amendments to standards
issued but not effective as of December\u00a031,
2024.
At the date of preparation of the consolidated financial
statements, the following new standards and
amendments to existing standards had been published,
but their application is not mandatory:
Standards and amendments
Mandatory application: annual periods
beginning on or after
Amendments to IFRS 9 and IFRS 7
Amendments to the Classification and
Measurement of Financial Instruments
January 1, 2026
Amendments to IFRS 9 and IFRS 7
Contracts Referencing Nature-dependent
Electricity
January 1, 2026
Annual Improvements to IFRS Accounting Standards\u2014Volume 11
January 1, 2026
IFRS 18
Presentation and Disclosure in Financial
Statements
January 1, 2027
IFRS 19
Subsidiaries without Public Accountability:
Disclosures
January 1, 2027
The Group is currently assessing the impact that the
adoption of these new pronouncements will have on the
consolidated financial statements at the time of initial
application. In particular, IFRS 18 will replace IAS 1
Presentation of Financial Statements and introduces,
among other changes, new requirements for
presentation within the statement of profit or loss,
including new totals and subtotals. Furthermore, all
income and expenses must be classified into the
following categories: operating, investing, financing,
income taxes, and discontinued operations, with the first
three being new. Entities will be affected by these new
requirements. IFRS 18 and all consequential
amendments are effective for periods beginning on or
after January 1, 2027, with retrospective application
required. The Group is currently working to identify the
impacts these new criteria will have on the primary
financial statements and notes to the financial
statements. Our preliminary assessment suggests that
adopting IFRS 18 will mainly affect the presentation of
items in the income statement, without causing changes
in their recognition or measurement.
", "dimensions": { "concept": "ifrs-full:DisclosureOfMaterialAccountingPolicyInformationExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-804": { "value": "
As stated in Note 2, the Group\u2019s consolidated financial
statements have been prepared in accordance with
IFRSs and interpretations issued by the International
Accounting Standards Board (IASB) and the IFRS
Interpretations Committee (IFRIC) as endorsed by the
European Commission for use in the European Union
(IFRSs - EU).
", "dimensions": { "concept": "ifrs-full:StatementOfIFRSCompliance", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-805": { "value": "
a) Hyperinflationary economies
Venezuela has been considered a hyperinflationary
economy since 2009.
Pursuant to the amendments to IAS 21 The Effects of
Changes in Foreign Exchange Rates, early adopted in
2024 (see section (o) below and Note 17), the Group
determines whether the Venezuelan bolivar is
exchangeable, and which spot exchange rate to use
when exchangeability is lacking. Based on its
assessment, the Group uses official rates to translate
cash and cash equivalents in foreign currency and
alternative estimated rates of exchange, based on
inflation rates, to translate the remaining inflation-
adjusted bolivar-denominated items in the consolidated
financial statements. Prior to these amendments, in the
absence of official rates considered representative, the
Group\u2019s policy required the use of an estimated
exchange rate \u2013referred to as synthetic exchange rate\u2013
to translate all items denominated in bolivars for the
purposes of the consolidated financial statements.
The estimated exchange rate is calculated considering
published inflation rates or, if unavailable, estimated
rates. On an annual basis, these rates are 61.5% , 189.8%
and 174.3% for 2024, 2023 and 2022, respectively.
The estimated exchange rate as of the closing date of
each reporting period, amounts to 81.85 digital bolivars
per U.S. dollar, 159.45 digital bolivars per U.S. dollar and
45.18 digital bolivars per U.S. dollar as of December\u00a031,
2024, 2023 and 2022, respectively. In turn, the official
reference exchange rate at December 31, 2024 was
52.027 VED/USD ( 35.959 VED/USD and 17.489VED/USD
at December 31, 2023 and 2022, respectively).
As of the date of initial application of the amendments,
January\u00a01, 2024, the reference exchange rate amounted
to 159.45 VED/USD whereas the estimated exchange
rate amounted to 50.68 digital bolivars per U.S. dollar.
In 2018 Argentina became a hyperinflationary economy.
In order to restate its financial statements, the Company
uses the series of indices defined by resolution JG No.
539/18 issued by the Federaci\u00f3n Argentina de Consejos
Profesionales de Ciencias Econ\u00f3micas (FACPCE), based
on the National Consumer Price Index (IPC) published
by the Instituto Nacional de Estad\u00edstica y Censos
(INDEC) of the Argentine Republic and the Wholesale
Internal Price Index (IPIM) published by FACPCE. The
cumulative index at December 31, 2024, 2023 and 2022
is 7,694.0%, 3,533.2% and 1,134.6%, respectively, while on
an annual basis the index for 2024 is 117.8% (211.4% and
95.0% in 2023 and 2022 , respectively).
The exchange rate used to translate inflation-adjusted
items denominated in Argentine pesos in the 2024
financial statements is the closing exchange rate as of
December 31, 2024 which was 1,073.18 Argentine pesos
per euro (893.45 and 189.08 Argentine pesos per euro at
December\u00a031, 2023 and 2022, respectively).
The Group includes in a single line item (\"Translation
Differences\") all the equity effects derived from
hyperinflation. This is as follows: (a) the restatement for
inflation of the financial statements of the Group
companies operating in hyperinflationary economies,
and (b) the effects of translating their respective
financial statements into euros using the exchange rate
at the end of the period.", "dimensions": { "concept": "ifrs-full:DisclosureOfHyperinflationaryReportingExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-807": { "value": "
b) Translation methodology
The income statements and statements of cash flows of
the Telef\u00f3nica Group\u2019s foreign subsidiaries (except
Venezuela and Argentina) were translated into euros at
the average exchange rates for the year, as a rate that
approximates the exchange rates at the dates of the
transactions.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-806": { "value": "
b) Translation methodology
The income statements and statements of cash flows of
the Telef\u00f3nica Group\u2019s foreign subsidiaries (except
Venezuela and Argentina) were translated into euros at
the average exchange rates for the year, as a rate that
approximates the exchange rates at the dates of the
transactions.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-809": { "value": "
c) Goodwill
After initial recognition, goodwill is carried at cost, less
any accumulated impairment losses. Goodwill is
recognized as an asset denominated in the currency of
the company acquired and is tested for impairment
annually at the least, or more frequently, if there are
certain events or changes indicating the possibility that
the carrying amount may not be fully recoverable. The
potential impairment loss is determined by assessing the
recoverable amount of the cash generating unit (or
group of cash generating units) to which the goodwill is
allocated from the acquisition date.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-808": { "value": "
c) Goodwill
After initial recognition, goodwill is carried at cost, less
any accumulated impairment losses. Goodwill is
recognized as an asset denominated in the currency of
the company acquired and is tested for impairment
annually at the least, or more frequently, if there are
certain events or changes indicating the possibility that
the carrying amount may not be fully recoverable. The
potential impairment loss is determined by assessing the
recoverable amount of the cash generating unit (or
group of cash generating units) to which the goodwill is
allocated from the acquisition date.
d) Intangible assets
Intangible assets are carried at acquisition or production
cost, less any accumulated amortization or any
accumulated impairment losses.
Intangible assets are amortized on a straight-line basis
according to the following:
\u2022 Licenses granted to the Telef\u00f3nica Group by various
public authorities to provide telecommunications
services and the value allocated to licenses held by
certain companies at the time they were included in
the Telef\u00f3nica Group (\u201cService concession
arrangements and licenses\u201d) are amortized on a
straight-line basis over the duration of related licenses
from the moment commercial operation begins.
\u2022 The allocation of acquisition costs attributable to
customers acquired in business combinations, as well
as the acquisition value of these types of assets in a
third-party transaction for consideration (Customer
base) are amortized on a straight-line basis over the
estimated period of the customer relationship. The
term length is between three and fourteen years,
based on the customer segment (residential, business,
etc.) and the business model (prepaid, postpaid, etc.).
\u2022 Software is amortized on a straight-line basis over its
useful life, generally estimated to be between two and
five years.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-810": { "value": "
d) Intangible assets
Intangible assets are carried at acquisition or production
cost, less any accumulated amortization or any
accumulated impairment losses.
Intangible assets are amortized on a straight-line basis
according to the following:
\u2022 Licenses granted to the Telef\u00f3nica Group by various
public authorities to provide telecommunications
services and the value allocated to licenses held by
certain companies at the time they were included in
the Telef\u00f3nica Group (\u201cService concession
arrangements and licenses\u201d) are amortized on a
straight-line basis over the duration of related licenses
from the moment commercial operation begins.
\u2022 The allocation of acquisition costs attributable to
customers acquired in business combinations, as well
as the acquisition value of these types of assets in a
third-party transaction for consideration (Customer
base) are amortized on a straight-line basis over the
estimated period of the customer relationship. The
term length is between three and fourteen years,
based on the customer segment (residential, business,
etc.) and the business model (prepaid, postpaid, etc.).
\u2022 Software is amortized on a straight-line basis over its
useful life, generally estimated to be between two and
five years.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-811": { "value": "
Intangible assets are amortized on a straight-line basis
according to the following:
\u2022 Licenses granted to the Telef\u00f3nica Group by various
public authorities to provide telecommunications
services and the value allocated to licenses held by
certain companies at the time they were included in
the Telef\u00f3nica Group (\u201cService concession
arrangements and licenses\u201d) are amortized on a
straight-line basis over the duration of related licenses
from the moment commercial operation begins.
\u2022 The allocation of acquisition costs attributable to
customers acquired in business combinations, as well
as the acquisition value of these types of assets in a
third-party transaction for consideration (Customer
base) are amortized on a straight-line basis over the
estimated period of the customer relationship. The
term length is between three and fourteen years,
based on the customer segment (residential, business,
etc.) and the business model (prepaid, postpaid, etc.).
\u2022 Software is amortized on a straight-line basis over its
useful life, generally estimated to be between two and
five years.
The Group\u2019s subsidiaries depreciate their property, plant
and equipment, from the time they can be placed in
service, amortizing the cost of the assets, net of their
residual values on a straight-line basis over the assets\u2019
estimated useful lives, which are calculated in
accordance with technical studies that are revised
periodically in light of technological advances and the
rate of dismantling, as follows:
Years of estimated
useful life
Buildings
25\u00a0 \u2013\u00a0 40
Plant and machinery
4\u00a0 \u2013\u00a0 30
Furniture, tools and other items
2\u00a0 \u2013\u00a0 10
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-814": { "value": "
e) Property, plant and equipment
Property, plant and equipment is carried at cost, net of
government grants received, less any accumulated
depreciation and any accumulated impairment in value.
Cost includes, among others, direct labor used in
installation and the allocable portion of the indirect costs
required for the related asset. The latter two items are
recorded as revenue under the concept \"Own work
capitalized\" of the line item Other income.
Interest and other financial expenses incurred and
directly attributable to the acquisition or construction of
qualifying assets are capitalized. Qualifying assets for the
Telef\u00f3nica Group are those assets that require a period
of at least 18 months to bring the assets to the condition
necessary for their intended use or sale.
The Group\u2019s subsidiaries depreciate their property, plant
and equipment, from the time they can be placed in
service, amortizing the cost of the assets, net of their
residual values on a straight-line basis over the assets\u2019
estimated useful lives, which are calculated in
accordance with technical studies that are revised
periodically in light of technological advances and the
rate of dismantling, as follows:
Years of estimated
useful life
Buildings
25\u00a0 \u2013\u00a0 40
Plant and machinery
4\u00a0 \u2013\u00a0 30
Furniture, tools and other items
2\u00a0 \u2013\u00a0 10
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentPropertyExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-813": { "value": "
e) Property, plant and equipment
Property, plant and equipment is carried at cost, net of
government grants received, less any accumulated
depreciation and any accumulated impairment in value.
Cost includes, among others, direct labor used in
installation and the allocable portion of the indirect costs
required for the related asset. The latter two items are
recorded as revenue under the concept \"Own work
capitalized\" of the line item Other income.
Interest and other financial expenses incurred and
directly attributable to the acquisition or construction of
qualifying assets are capitalized. Qualifying assets for the
Telef\u00f3nica Group are those assets that require a period
of at least 18 months to bring the assets to the condition
necessary for their intended use or sale.
The Group\u2019s subsidiaries depreciate their property, plant
and equipment, from the time they can be placed in
service, amortizing the cost of the assets, net of their
residual values on a straight-line basis over the assets\u2019
estimated useful lives, which are calculated in
accordance with technical studies that are revised
periodically in light of technological advances and the
rate of dismantling, as follows:
Years of estimated
useful life
Buildings
25\u00a0 \u2013\u00a0 40
Plant and machinery
4\u00a0 \u2013\u00a0 30
Furniture, tools and other items
2\u00a0 \u2013\u00a0 10
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-812": { "value": "
e) Property, plant and equipment
Property, plant and equipment is carried at cost, net of
government grants received, less any accumulated
depreciation and any accumulated impairment in value.
Cost includes, among others, direct labor used in
installation and the allocable portion of the indirect costs
required for the related asset. The latter two items are
recorded as revenue under the concept \"Own work
capitalized\" of the line item Other income.
Interest and other financial expenses incurred and
directly attributable to the acquisition or construction of
qualifying assets are capitalized. Qualifying assets for the
Telef\u00f3nica Group are those assets that require a period
of at least 18 months to bring the assets to the condition
necessary for their intended use or sale.
The Group\u2019s subsidiaries depreciate their property, plant
and equipment, from the time they can be placed in
service, amortizing the cost of the assets, net of their
residual values on a straight-line basis over the assets\u2019
estimated useful lives, which are calculated in
accordance with technical studies that are revised
periodically in light of technological advances and the
rate of dismantling, as follows:
Years of estimated
useful life
Buildings
25\u00a0 \u2013\u00a0 40
Plant and machinery
4\u00a0 \u2013\u00a0 30
Furniture, tools and other items
2\u00a0 \u2013\u00a0 10
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingCostsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-815": { "value": "
f) Impairment of non-current assets
All non-current assets, including goodwill and
investments in associates and joint ventures, are
assessed at each reporting date for indicators of
impairment. Whenever such indicators exist, or in the
case of assets which are subject to an annual
impairment test, the recoverable amount is estimated.
An asset\u2019s recoverable amount is the higher of fair value
less costs to sell and value in use. In assessing value in
use, the estimated future post-tax cash flows deriving
from the use of the asset or its cash generating unit, as
applicable, are discounted to their present value using a
post-tax discount rate that reflects current market
assessments of the time value of money and the risks
specific to the asset, provided that the result obtained is
the same that would be obtained by discounting pre-tax
cash flows at a pre-tax discount rate.
The Group bases the calculation of impairment on the
approved business plans of the various cash generating
units to which the assets are allocated. The projected
cash flows, based on the approved strategic business
plans, cover a period of five years. Starting with the sixth
year, an expected constant growth rate is applied.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-816": { "value": "
g) Lease agreements
The determination of whether an arrangement is, or
contains a lease is based on the substance of the
agreement and requires an assessment of whether the
fulfillment of the arrangement is dependent on the use
of a specific asset and the agreement conveys a right to
the use of the asset.
At the inception date of the lease (i.e. the date when the
underlying asset is available for use), a lessee recognizes
a right of use asset that represents the right to use the
underlying asset over the term of the lease, and a lease
liability for the present value of the lease payments
payable over the lease term \u2013 discounted using the
incremental borrowing rate at the start date of the lease.
Rights of use assets are measured at cost, less
accumulated depreciation and impairment losses, and
are adjusted for any remeasurement of lease liabilities.
The cost of rights of use assets includes the amount of
initial direct costs incurred and lease payments made
before the commencement date less incentives
received. Right-of-use assets are depreciated on a
straight-line basis over the shorter of the estimated
useful life of the underlying asset and the lease term.
Lease payments include fixed payments (including in-
substance fixed payments) less any lease incentive
receivable, variable lease payments that depend on an
index or rate, and amounts expected to be paid as
residual value guarantees. Similarly, the measurement of
the lease liability includes the exercise price of a
purchase option, if the lessee is reasonably certain to
exercise that option, and payments of penalties for early
termination, if the lease term reflects the lessee
exercising such cancellation option. After the
commencement date, the amount of the lease liabilities
is increased to reflect the accrual of interest and
reduced for the payments made. In addition to this, the
carrying amount of the lease liability is remeasured in
certain cases, such as changes in the lease term,
changes in future lease payments resulting from a
change in an index or rate used to determine those
payments. The amount of such remeasurement is
generally recognized against an adjustment to the right-
of-use asset.
The Group uses the \"low value\" asset lease recognition
exemption for office equipment and the short-term lease
recognition exemption for all leases with a term of 12
months or less. Therefore, lease payments in such cases
are recognized as an expense on a straight-line basis
over the lease term.
The Group recognizes non-lease components
separately from lease components for those classes of
assets in which non-lease components are significant
with respect to the total value of the arrangement.
The Group determines the lease term as the non-
cancellable term of the contract, together with any
period covered by an extension (or termination) option
whose exercise is discretionary for the Group, if there is
reasonable certainty that it will be exercised (or it will not
be exercised). In its assessment, the Group considers all
available information by asset class in the industry and
evaluates all relevant factors (technology, regulation,
competition, business model) that create an economic
incentive to exercise or not a renewal/cancellation
option. Notably, the Group takes into consideration the
time horizon of the strategic planning of its operations.
After the commencement date, the Group reassesses
the lease term if there is a significant event or change in
circumstances that is within its control that may affect
its ability to exercise (or not to exercise) an option to
extend or terminate (for example, a change in business
strategy).
Where the Group acts as a lessor, leases are classified
between operating and finance leases. Leases in which
the lessor retains a significant portion of the risks and
rewards of ownership of the leased asset are treated as
operating leases. Otherwise, the lease is a finance lease.
Leases
Accounting for rights and obligations as a lessee under a
lease contract requires the use of estimations to
determine the lease term in contracts that include
extension options or early termination options.
Determining the lease term involves making estimates
over the time horizon of the Group's strategic planning
process with respect to relevant factors such as
expected technological progress, possible regulatory
developments, market and competition trends or
changes in the business model. The assumptions
regarding these variables involve a significant degree of
judgment to the extent that the timing and nature of
future changes are difficult to anticipate.
Due to the uncertainties inherent to these estimates,
changes in the assumptions made in respect of
uncertain matters when determining the lease term of a
lease contract may have an impact on the amounts of
the right of use assets and lease liabilities recognized on
the basis of the estimates made by the Group.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-820": { "value": "
h) Investment in associates and joint
arrangements
The Group assesses whether it has significant influence
not only on the basis of its ownership percentage but
also on the existence of qualitative factors such as
representation on the board of directors of the investee,
its participation in decision-making processes,
interchange of managerial personnel and access to
technical information.
The Group assesses rights and obligations agreed to by
the parties to a joint arrangement and, when relevant,
other facts and circumstances in order to determine
whether the joint arrangement in which it is involved is a
joint venture or a joint operation.
Upon the sale or contribution of a controlled business to
an associate or joint venture, the Group measures and
recognizes any retained interest at its fair value. Any
difference between the carrying amount of the business
contributed and the fair value of the retained investment
and the consideration received from disposal is
recognized in full in profit or loss.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-819": { "value": "
h) Investment in associates and joint
arrangements
The Group assesses whether it has significant influence
not only on the basis of its ownership percentage but
also on the existence of qualitative factors such as
representation on the board of directors of the investee,
its participation in decision-making processes,
interchange of managerial personnel and access to
technical information.
The Group assesses rights and obligations agreed to by
the parties to a joint arrangement and, when relevant,
other facts and circumstances in order to determine
whether the joint arrangement in which it is involved is a
joint venture or a joint operation.
Upon the sale or contribution of a controlled business to
an associate or joint venture, the Group measures and
recognizes any retained interest at its fair value. Any
difference between the carrying amount of the business
contributed and the fair value of the retained investment
and the consideration received from disposal is
recognized in full in profit or loss.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsInJointVentures", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-818": { "value": "
h) Investment in associates and joint
arrangements
The Group assesses whether it has significant influence
not only on the basis of its ownership percentage but
also on the existence of qualitative factors such as
representation on the board of directors of the investee,
its participation in decision-making processes,
interchange of managerial personnel and access to
technical information.
The Group assesses rights and obligations agreed to by
the parties to a joint arrangement and, when relevant,
other facts and circumstances in order to determine
whether the joint arrangement in which it is involved is a
joint venture or a joint operation.
Upon the sale or contribution of a controlled business to
an associate or joint venture, the Group measures and
recognizes any retained interest at its fair value. Any
difference between the carrying amount of the business
contributed and the fair value of the retained investment
and the consideration received from disposal is
recognized in full in profit or loss.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociatesAndJointVenturesExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-817": { "value": "
h) Investment in associates and joint
arrangements
The Group assesses whether it has significant influence
not only on the basis of its ownership percentage but
also on the existence of qualitative factors such as
representation on the board of directors of the investee,
its participation in decision-making processes,
interchange of managerial personnel and access to
technical information.
The Group assesses rights and obligations agreed to by
the parties to a joint arrangement and, when relevant,
other facts and circumstances in order to determine
whether the joint arrangement in which it is involved is a
joint venture or a joint operation.
Upon the sale or contribution of a controlled business to
an associate or joint venture, the Group measures and
recognizes any retained interest at its fair value. Any
difference between the carrying amount of the business
contributed and the fair value of the retained investment
and the consideration received from disposal is
recognized in full in profit or loss.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociates", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-825": { "value": "
i) Financial assets and liabilities
Financial Assets
All regular way purchases and sales of financial assets
are recognized in the statement of financial position on
the trade date, i.e. the date that the Company commits
to purchase or sell the asset.
The Group applies an impairment model for financial
assets based on expected credit losses, using a
simplified method for certain short- and long-term
assets (commercial receivables, lease receivables and
contractual assets).
Under this simplified approach, credit impairment is
recognized by reference to expected credit losses over
the life of the asset. For this purpose the Group uses
matrices based on historical bad debt experience by
geographical area on a portfolio segmented by customer
category according to credit pattern. The matrix for each
category has a defined time horizon divided into
intervals in accordance with the collection management
policy and is fed with historical data that covers at least
24 collection cycles. This data is updated on a regular
basis. Based on the information observable at each
close, the Group assesses the need to adjust the rates
resulting from these matrices, considering current
conditions and future economic forecasts.
Derivatives policy
At December\u00a031, 2024 , the nominal value of outstanding
derivatives with external counterparties amounted to
84,933 million euros equivalent, a 4.7% increase from
December\u00a031, 2023 ( 81,097 million euros equivalent).
This figure is inflated by the use in some cases of several
levels of derivatives applied to the nominal value of a
single underlying liability. For example, a foreign
currency loan can be hedged into floating rate, and then
each interest rate period can be fixed using a fixed rate
hedge, or FRA (Forward Rate Agreement) The high
volume is also due to the fact that when a derivative
transaction is canceled, the company may either cancel
the derivative or take the opposite position, which
cancels out the variability thereof. The second option is
usually chosen in order to cut costs. Even using such
techniques to reduce the position, it is still necessary to
take extreme care in the use of derivatives to avoid
potential problems arising through error or a failure to
understand the real position and its associated risks.
The main principles in the management of derivatives
are detailed below:
1) Derivatives based on a clearly identified hedged items.
Telef\u00f3nica\u2019s derivatives policy emphasizes the following
points:
\u2022 Acceptable underlyings include assets and liabilities,
profits, revenues and cash flows in either a company\u2019s
functional currency or another currency. These flows
can be contractual (debt and interest payments,
settlement of foreign currency payables, etc.),
reasonably certain or foreseeable (PP&E purchases,
future debt issues, commercial paper programs, etc.).
The acceptability of an underlying asset in the above
cases does not depend on whether it complies with
accounting rules requirements for hedge accounting,
as is required in the case of certain intra-group
transactions, for instance. Parent company
investments in subsidiaries with functional currencies
other than the euro also qualify as acceptable
underlying assets.
\u2022 Economic hedges are hedges that have a designated
underlying asset and that, under certain
circumstances, may offset the changes in the value of
the underlying asset. These economic hedges may not
always meet the requirements to be treated as hedges
for accounting purposes. The decision to arrange
these hedges if they do not meet certain requirements
will depend on the marginal impact on the income
statement and, therefore, on how far this may
compromise the goal of having a stable income
statement. In any case, the changes are recognized in
the income statement.
2) Matching of the hedged item to one side of the
derivative.
This matching basically applies to foreign currency debt
and derivatives hedging foreign currency payments by
Telef\u00f3nica Group subsidiaries. The aim is to eliminate
the risk arising from changes in foreign currency interest
rates. Nonetheless, even when the aim is to achieve
perfect hedging for all cash flows, the lack of liquidity in
certain markets, especially in Latin American currencies,
has meant that historically there have been mismatches
between the terms of the hedges and those of the debts
they are meant to hedge. The Telef\u00f3nica Group intends
to reduce these mismatches, provided that doing so
does not involve disproportionate costs. In this regard, if
adjustment does prove too costly, the financial timing of
the underlying asset in foreign currency will be modified
in order to minimize interest rate risk in foreign currency.
In certain cases, the timing of the underlying as defined
for derivative purposes may not be exactly the same as
the timing of the contractual underlying.
3) Matching the company contracting the derivative and
the company that owns the hedged item.
Generally, the aim is to ensure that the hedging
derivative and the hedged asset or liability belong to the
same company. Sometimes, however, the holding
companies (Telef\u00f3nica, S.A. and Telef\u00f3nica
Latinoam\u00e9rica Holding, S.L.) have arranged hedges on
behalf of a subsidiary that owns the underlying asset.
The main reasons for separating the hedge and the
underlying asset were the chance of differences in the
legal validity of local and international hedges (as a
result of unforeseen legal changes) and the different
credit ratings of the counterparties (of the Telef\u00f3nica
Group companies as well as those of the banks).
4) Ability to measure the derivative\u2019s fair value using the
valuation systems available to the Telef\u00f3nica Group.
Telef\u00f3nica uses several tools to evaluate and manage
the risk involved in derivatives and debt. Among these
tools are the Calypso system, extensively used in various
financial institutions, and the specialized libraries in the
MBRM financial calculation, both of which are
widespread throughout the market and have shown
proven reliability. In order to perform these calculations,
customary market techniques are used when
configuring the calculation methods, and information
from money market curves is used on a daily basis as
market inputs (swaps, depos, FRA, etc.) for interest rates,
official fixings for exchange rates and the interest rates
and volatility matrices for interest and exchange rates
that are listed in the multi-contributor systems, Reuters
and Bloomberg. For those yield curves that are less
liquid or whose prices published in Reuters and
Bloomberg are considered not to adequately reflect the
market situation, these curves will be requested from
relevant banks in these markets.
5) Sale of options only when there is an underlying
exposure.
Telef\u00f3nica considers the sale of options when: i) there is
an underlying exposure (on the consolidated statement
of financial position or associated with a highly probable
cash outflow) that would offset the potential loss for the
year if the counterparty exercised the option. This
exposure does not have to be treated as a purchased
option, but rather it can be another type of hedged item
(in these cases, hedge accounting does not apply since
this hedging instrument does not meet the criteria
required by accounting standards to treat the sale of
options as hedging instruments), or ii) the option is part
of a structure in which another derivative offsets any
loss. The sale of options is also permitted in option
structures where, at the moment they are taken out, the
net premium is either positive or zero.
For instance, it would be possible to sell short-term
options on interest rate swaps that entitle the
counterparty to receive a certain fixed interest rate,
below the level prevailing at the time the option was
sold. This would mean that if rates fell and the
counterparty exercised its option, the Group would swap
part of its debt from floating rate to a lower fixed rate,
having received a premium.
6) Hedge accounting.
The main risks that may qualify for hedge accounting are
as follows:
\u2022 Variations in market interest rates (either money-
market rates, credit spreads or both) that affect the
value of the underlying asset or the measurement of
the cash flows.
\u2022 Variations in exchange rates that change the value of
the underlying asset in the company\u2019s functional
currency and affect the measurement of the cash flow
in the functional currency.
\u2022 Variations in the valuation of any financial asset,
particularly shares of companies included in the
portfolio of \u201cEquity instruments\u201d.
\u2022 Variations in the price of commodities related to
contracts that the Group has with third parties.
Regarding the underlying:
\u2022 Hedges can cover all or part of the value of the
underlying.
\u2022 The risk to be hedged can be for the whole period of
the transaction or for only part of the period.
\u2022 The underlying may be a highly probable future
transaction, or a contractual underlying (loan, foreign
currency payment, investment, financial asset, etc.) or
a combination of both that defines an underlying with
a longer term.
The main coverage instruments used are:
\u2022 Forwards / NDF: they are used mainly for exchange
rate hedges related to commercial positions in foreign
currency. They can also be used to hedge financing in
foreign currency and net investment hedge in foreign
currency.
\u2022 Exchange Rate Options: in some cases, this type of
instruments can be used linked to future CapEx and
OpEx operations and investments and divestments in
foreign currency.
\u2022 Spots: for purchases and sales of currencies that are
made same day value or two days\u2019 value. Generally
used for operational needs or for divestments of
operations in foreign currency.
\u2022 Currency swaps: this type of transaction is generally
executed to hedge bonds issuance or loans issued in
foreign currency or net investment hedge.
\u2022 Interest Swaps / Interest Rate Options: these
instruments are used to manage the interest rate of
the debt portfolio. Their use of them is ruled by the
Financial Expenses Budget with the objective of its
fulfillment. Both the volume to be contracted and the
maturity of these products are determined by the
underlying assets to be hedged.
It is possible that in several markets the maturity, as
well as the low liquidity, does not allow to contract a
\"perfect\u201d hedge, but this circumstance will have to be
analyzed case by case.
\u2022 CDS: in order to manage the counterparty credit risk
or CVA / DVA, CDS operations can be arranged to
mitigate this risk.
\u2022 Derivatives of Commodities associated to:
\u25aa Price risk hedge (mainly Electricity) associated
with the Group's own contracts.
\u25aa Supporting the business lines that may need it and
always hedging the commercial risks of the signed
contracts. They would be settled by differences,
this is, in a non-deliverable format.
\u2022 Equity Derivatives: these are derivatives that address
strategic decisions or hedging needs, either to hedge
future investments or hedge existing risks. They
protect Telef\u00f3nica from the potential appreciation or
depreciation in the price of the shares they hold as
underlying.
Between the hedged item and the hedging instrument
there is an economic relationship, this is, in general
terms they move in opposite directions due to the same
risk or risk covered. In other words, there must be an
expectation that the value of the hedging instrument
and the value of the hedged item will change
systematically in opposite directions in response to the
movements of one of the following elements:
\u2022 the same underlying item; or
\u2022 Underlying items that are economically related in such
sense that they respond similarly to the risk that is
being hedged.
Depending on the complexity of the hedge relationship
and the way in which the hedge has been structured, a
quantitative or qualitative analysis will have to be
performed to demonstrate that there is an economic
relationship between the hedged item and the hedging
instrument.
This may on occasion mean that the hedging
instruments have longer terms than the related
contractual underlying. This happens when the
Telef\u00f3nica Group enters into long-term swaps, caps or
collars to protect the Group against interest rate
increases that may raise the financial expense of its
promissory notes, commercial paper and some floating
rate loans which mature earlier than their hedges. These
floating rate financing programs are highly likely to be
renewed and Telef\u00f3nica commits to this by defining the
underlying asset in a more general way as a floating rate
financing program whose term coincides with the
maturity of the hedge. In those cases in which the
underlying assets representing the risk hedged are
canceled or refinanced early, and if there is an open risk
with similar characteristics as the underlying asset that
was canceled or refinanced early, either because there
is new financing or because there is an underlying asset
with similar characteristics and risk profile, the hedge
may remain in force with the derivatives assigned
thereto and the risk will be subject to the hedge
arranged in the aforementioned refinancing. When
either of these situations occurs, the effectiveness of the
hedge will be reviewed taking into account the new
situation.
There can be three types of hedges:
\u2022 Fair value hedges.
\u2022 Cash flow hedges. Such hedges can be set at any
value of the risk to be hedged (interest rates,
exchange rates, etc.) or for a defined range (interest
rates between 2% and 4% , above 4%, etc.). In this last
case, the hedging instrument used is options.
\u2022 Hedges of net investment in consolidated foreign
subsidiaries. Generally, such hedges are arranged by
Telef\u00f3nica, S.A. and other Telef\u00f3nica holding
companies. Wherever possible, these hedges are
implemented through real debt in foreign currency.
Often, however, this is not always possible as many
Latin American currencies are non-convertible,
making it impossible for non-resident companies to
issue local currency debt. It may also be that, due to
the debt market deepness, the debt in the currency
concerned is not enough to accommodate the
required hedge, or that an acquisition is made in cash
with no need for market financing. In these
circumstances derivatives either forwards or cross-
currency swaps are mainly used to hedge the net
investment.
When using options, forwards or cross-currency swaps
as hedging instruments, the exclusion of the time value
of the option, the element at maturity of the forward and
the currency spread of the cross-currency swap of the
hedging relationship are evaluated on a case by case
basis, in order to be treated as hedge costs.
Hedges can comprise a combination of different
derivatives.
Management of accounting hedges is not static, and the
hedging relationship may change before maturity. The
interruption of the hedge accounting is possible within
the framework of the management of financial risks and
described in the internal document of \u201cfinancial risks
management and hedging strategy under IFRS 9\u201d. To
gauge the efficiency of transactions defined as
accounting hedges, the Group analyzes the extent to
which the changes in the fair value or in the cash flows
attributable to the hedged item would offset the
changes in fair value or cash flows attributable to the
hedged risk using a linear regression model
prospectively. To evaluate the effectiveness of hedges,
under IFRS 9, there is no numerical range under which it
is accepted that a hedge is effective and hence the
hedge accounting standards are applicable. Therefore,
Telef\u00f3nica considers that if there is an economic
relationship, not dominated by changes in credit risk and
if the appropriate hedging rationale has been
designated, the requirements for effectiveness are met.
However, at the moment when ineffectiveness arises,
Telef\u00f3nica will evaluate whether there is still an
economic relationship or whether the designated
hedging rationale is appropriate. The possible sources of
ineffectiveness that Telef\u00f3nica can have when
designing a hedging relationship and that will be
considered when establishing the hedging rationale are:
\u2022 The hedging instrument and the hedged item have
different maturity dates, initial dates, contract dates,
repricing dates, etc.
\u2022 The hedging instrument starts with initial value and a
financing effect is produced.
\u2022 When the underlying items have different sensitivity
and are not homogeneous, for example EURIBOR 3M
versus EURIBOR 6M.
The main guiding principles for risk management are laid
down by Telef\u00f3nica\u2019s Finance Department and
implemented by the company financial officers (who are
responsible for balancing the interests of each company
and those of the Telef\u00f3nica Group). The Corporate
Finance Department may allow exceptions to this policy
where these can be justified, normally when the market
is too thin for the volume of transactions required or on
clearly limited and small risks. New companies joining
the Telef\u00f3nica Group as a result of mergers or
acquisitions may also need time to adapt.
7) Cancellation of derivatives.
When a derivative transaction is canceled, the Company
may:
\u2022 Cancel the derivative and pay its market value.
\u2022 Take the opposite position which cancels out the
variability thereof, if cancellation costs are high or if it
is recommended for operating or business reasons.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-824": { "value": "
i) Financial assets and liabilities
Financial Assets
All regular way purchases and sales of financial assets
are recognized in the statement of financial position on
the trade date, i.e. the date that the Company commits
to purchase or sell the asset.
The Group applies an impairment model for financial
assets based on expected credit losses, using a
simplified method for certain short- and long-term
assets (commercial receivables, lease receivables and
contractual assets).
Under this simplified approach, credit impairment is
recognized by reference to expected credit losses over
the life of the asset. For this purpose the Group uses
matrices based on historical bad debt experience by
geographical area on a portfolio segmented by customer
category according to credit pattern. The matrix for each
category has a defined time horizon divided into
intervals in accordance with the collection management
policy and is fed with historical data that covers at least
24 collection cycles. This data is updated on a regular
basis. Based on the information observable at each
close, the Group assesses the need to adjust the rates
resulting from these matrices, considering current
conditions and future economic forecasts.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-823": { "value": "
i) Financial assets and liabilities
Financial Assets
All regular way purchases and sales of financial assets
are recognized in the statement of financial position on
the trade date, i.e. the date that the Company commits
to purchase or sell the asset.
The Group applies an impairment model for financial
assets based on expected credit losses, using a
simplified method for certain short- and long-term
assets (commercial receivables, lease receivables and
contractual assets).
Under this simplified approach, credit impairment is
recognized by reference to expected credit losses over
the life of the asset. For this purpose the Group uses
matrices based on historical bad debt experience by
geographical area on a portfolio segmented by customer
category according to credit pattern. The matrix for each
category has a defined time horizon divided into
intervals in accordance with the collection management
policy and is fed with historical data that covers at least
24 collection cycles. This data is updated on a regular
basis. Based on the information observable at each
close, the Group assesses the need to adjust the rates
resulting from these matrices, considering current
conditions and future economic forecasts.
Derivatives policy
At December\u00a031, 2024 , the nominal value of outstanding
derivatives with external counterparties amounted to
84,933 million euros equivalent, a 4.7% increase from
December\u00a031, 2023 ( 81,097 million euros equivalent).
This figure is inflated by the use in some cases of several
levels of derivatives applied to the nominal value of a
single underlying liability. For example, a foreign
currency loan can be hedged into floating rate, and then
each interest rate period can be fixed using a fixed rate
hedge, or FRA (Forward Rate Agreement) The high
volume is also due to the fact that when a derivative
transaction is canceled, the company may either cancel
the derivative or take the opposite position, which
cancels out the variability thereof. The second option is
usually chosen in order to cut costs. Even using such
techniques to reduce the position, it is still necessary to
take extreme care in the use of derivatives to avoid
potential problems arising through error or a failure to
understand the real position and its associated risks.
The main principles in the management of derivatives
are detailed below:
1) Derivatives based on a clearly identified hedged items.
Telef\u00f3nica\u2019s derivatives policy emphasizes the following
points:
\u2022 Acceptable underlyings include assets and liabilities,
profits, revenues and cash flows in either a company\u2019s
functional currency or another currency. These flows
can be contractual (debt and interest payments,
settlement of foreign currency payables, etc.),
reasonably certain or foreseeable (PP&E purchases,
future debt issues, commercial paper programs, etc.).
The acceptability of an underlying asset in the above
cases does not depend on whether it complies with
accounting rules requirements for hedge accounting,
as is required in the case of certain intra-group
transactions, for instance. Parent company
investments in subsidiaries with functional currencies
other than the euro also qualify as acceptable
underlying assets.
\u2022 Economic hedges are hedges that have a designated
underlying asset and that, under certain
circumstances, may offset the changes in the value of
the underlying asset. These economic hedges may not
always meet the requirements to be treated as hedges
for accounting purposes. The decision to arrange
these hedges if they do not meet certain requirements
will depend on the marginal impact on the income
statement and, therefore, on how far this may
compromise the goal of having a stable income
statement. In any case, the changes are recognized in
the income statement.
2) Matching of the hedged item to one side of the
derivative.
This matching basically applies to foreign currency debt
and derivatives hedging foreign currency payments by
Telef\u00f3nica Group subsidiaries. The aim is to eliminate
the risk arising from changes in foreign currency interest
rates. Nonetheless, even when the aim is to achieve
perfect hedging for all cash flows, the lack of liquidity in
certain markets, especially in Latin American currencies,
has meant that historically there have been mismatches
between the terms of the hedges and those of the debts
they are meant to hedge. The Telef\u00f3nica Group intends
to reduce these mismatches, provided that doing so
does not involve disproportionate costs. In this regard, if
adjustment does prove too costly, the financial timing of
the underlying asset in foreign currency will be modified
in order to minimize interest rate risk in foreign currency.
In certain cases, the timing of the underlying as defined
for derivative purposes may not be exactly the same as
the timing of the contractual underlying.
3) Matching the company contracting the derivative and
the company that owns the hedged item.
Generally, the aim is to ensure that the hedging
derivative and the hedged asset or liability belong to the
same company. Sometimes, however, the holding
companies (Telef\u00f3nica, S.A. and Telef\u00f3nica
Latinoam\u00e9rica Holding, S.L.) have arranged hedges on
behalf of a subsidiary that owns the underlying asset.
The main reasons for separating the hedge and the
underlying asset were the chance of differences in the
legal validity of local and international hedges (as a
result of unforeseen legal changes) and the different
credit ratings of the counterparties (of the Telef\u00f3nica
Group companies as well as those of the banks).
4) Ability to measure the derivative\u2019s fair value using the
valuation systems available to the Telef\u00f3nica Group.
Telef\u00f3nica uses several tools to evaluate and manage
the risk involved in derivatives and debt. Among these
tools are the Calypso system, extensively used in various
financial institutions, and the specialized libraries in the
MBRM financial calculation, both of which are
widespread throughout the market and have shown
proven reliability. In order to perform these calculations,
customary market techniques are used when
configuring the calculation methods, and information
from money market curves is used on a daily basis as
market inputs (swaps, depos, FRA, etc.) for interest rates,
official fixings for exchange rates and the interest rates
and volatility matrices for interest and exchange rates
that are listed in the multi-contributor systems, Reuters
and Bloomberg. For those yield curves that are less
liquid or whose prices published in Reuters and
Bloomberg are considered not to adequately reflect the
market situation, these curves will be requested from
relevant banks in these markets.
5) Sale of options only when there is an underlying
exposure.
Telef\u00f3nica considers the sale of options when: i) there is
an underlying exposure (on the consolidated statement
of financial position or associated with a highly probable
cash outflow) that would offset the potential loss for the
year if the counterparty exercised the option. This
exposure does not have to be treated as a purchased
option, but rather it can be another type of hedged item
(in these cases, hedge accounting does not apply since
this hedging instrument does not meet the criteria
required by accounting standards to treat the sale of
options as hedging instruments), or ii) the option is part
of a structure in which another derivative offsets any
loss. The sale of options is also permitted in option
structures where, at the moment they are taken out, the
net premium is either positive or zero.
For instance, it would be possible to sell short-term
options on interest rate swaps that entitle the
counterparty to receive a certain fixed interest rate,
below the level prevailing at the time the option was
sold. This would mean that if rates fell and the
counterparty exercised its option, the Group would swap
part of its debt from floating rate to a lower fixed rate,
having received a premium.
6) Hedge accounting.
The main risks that may qualify for hedge accounting are
as follows:
\u2022 Variations in market interest rates (either money-
market rates, credit spreads or both) that affect the
value of the underlying asset or the measurement of
the cash flows.
\u2022 Variations in exchange rates that change the value of
the underlying asset in the company\u2019s functional
currency and affect the measurement of the cash flow
in the functional currency.
\u2022 Variations in the valuation of any financial asset,
particularly shares of companies included in the
portfolio of \u201cEquity instruments\u201d.
\u2022 Variations in the price of commodities related to
contracts that the Group has with third parties.
Regarding the underlying:
\u2022 Hedges can cover all or part of the value of the
underlying.
\u2022 The risk to be hedged can be for the whole period of
the transaction or for only part of the period.
\u2022 The underlying may be a highly probable future
transaction, or a contractual underlying (loan, foreign
currency payment, investment, financial asset, etc.) or
a combination of both that defines an underlying with
a longer term.
The main coverage instruments used are:
\u2022 Forwards / NDF: they are used mainly for exchange
rate hedges related to commercial positions in foreign
currency. They can also be used to hedge financing in
foreign currency and net investment hedge in foreign
currency.
\u2022 Exchange Rate Options: in some cases, this type of
instruments can be used linked to future CapEx and
OpEx operations and investments and divestments in
foreign currency.
\u2022 Spots: for purchases and sales of currencies that are
made same day value or two days\u2019 value. Generally
used for operational needs or for divestments of
operations in foreign currency.
\u2022 Currency swaps: this type of transaction is generally
executed to hedge bonds issuance or loans issued in
foreign currency or net investment hedge.
\u2022 Interest Swaps / Interest Rate Options: these
instruments are used to manage the interest rate of
the debt portfolio. Their use of them is ruled by the
Financial Expenses Budget with the objective of its
fulfillment. Both the volume to be contracted and the
maturity of these products are determined by the
underlying assets to be hedged.
It is possible that in several markets the maturity, as
well as the low liquidity, does not allow to contract a
\"perfect\u201d hedge, but this circumstance will have to be
analyzed case by case.
\u2022 CDS: in order to manage the counterparty credit risk
or CVA / DVA, CDS operations can be arranged to
mitigate this risk.
\u2022 Derivatives of Commodities associated to:
\u25aa Price risk hedge (mainly Electricity) associated
with the Group's own contracts.
\u25aa Supporting the business lines that may need it and
always hedging the commercial risks of the signed
contracts. They would be settled by differences,
this is, in a non-deliverable format.
\u2022 Equity Derivatives: these are derivatives that address
strategic decisions or hedging needs, either to hedge
future investments or hedge existing risks. They
protect Telef\u00f3nica from the potential appreciation or
depreciation in the price of the shares they hold as
underlying.
Between the hedged item and the hedging instrument
there is an economic relationship, this is, in general
terms they move in opposite directions due to the same
risk or risk covered. In other words, there must be an
expectation that the value of the hedging instrument
and the value of the hedged item will change
systematically in opposite directions in response to the
movements of one of the following elements:
\u2022 the same underlying item; or
\u2022 Underlying items that are economically related in such
sense that they respond similarly to the risk that is
being hedged.
Depending on the complexity of the hedge relationship
and the way in which the hedge has been structured, a
quantitative or qualitative analysis will have to be
performed to demonstrate that there is an economic
relationship between the hedged item and the hedging
instrument.
This may on occasion mean that the hedging
instruments have longer terms than the related
contractual underlying. This happens when the
Telef\u00f3nica Group enters into long-term swaps, caps or
collars to protect the Group against interest rate
increases that may raise the financial expense of its
promissory notes, commercial paper and some floating
rate loans which mature earlier than their hedges. These
floating rate financing programs are highly likely to be
renewed and Telef\u00f3nica commits to this by defining the
underlying asset in a more general way as a floating rate
financing program whose term coincides with the
maturity of the hedge. In those cases in which the
underlying assets representing the risk hedged are
canceled or refinanced early, and if there is an open risk
with similar characteristics as the underlying asset that
was canceled or refinanced early, either because there
is new financing or because there is an underlying asset
with similar characteristics and risk profile, the hedge
may remain in force with the derivatives assigned
thereto and the risk will be subject to the hedge
arranged in the aforementioned refinancing. When
either of these situations occurs, the effectiveness of the
hedge will be reviewed taking into account the new
situation.
There can be three types of hedges:
\u2022 Fair value hedges.
\u2022 Cash flow hedges. Such hedges can be set at any
value of the risk to be hedged (interest rates,
exchange rates, etc.) or for a defined range (interest
rates between 2% and 4% , above 4%, etc.). In this last
case, the hedging instrument used is options.
\u2022 Hedges of net investment in consolidated foreign
subsidiaries. Generally, such hedges are arranged by
Telef\u00f3nica, S.A. and other Telef\u00f3nica holding
companies. Wherever possible, these hedges are
implemented through real debt in foreign currency.
Often, however, this is not always possible as many
Latin American currencies are non-convertible,
making it impossible for non-resident companies to
issue local currency debt. It may also be that, due to
the debt market deepness, the debt in the currency
concerned is not enough to accommodate the
required hedge, or that an acquisition is made in cash
with no need for market financing. In these
circumstances derivatives either forwards or cross-
currency swaps are mainly used to hedge the net
investment.
When using options, forwards or cross-currency swaps
as hedging instruments, the exclusion of the time value
of the option, the element at maturity of the forward and
the currency spread of the cross-currency swap of the
hedging relationship are evaluated on a case by case
basis, in order to be treated as hedge costs.
Hedges can comprise a combination of different
derivatives.
Management of accounting hedges is not static, and the
hedging relationship may change before maturity. The
interruption of the hedge accounting is possible within
the framework of the management of financial risks and
described in the internal document of \u201cfinancial risks
management and hedging strategy under IFRS 9\u201d. To
gauge the efficiency of transactions defined as
accounting hedges, the Group analyzes the extent to
which the changes in the fair value or in the cash flows
attributable to the hedged item would offset the
changes in fair value or cash flows attributable to the
hedged risk using a linear regression model
prospectively. To evaluate the effectiveness of hedges,
under IFRS 9, there is no numerical range under which it
is accepted that a hedge is effective and hence the
hedge accounting standards are applicable. Therefore,
Telef\u00f3nica considers that if there is an economic
relationship, not dominated by changes in credit risk and
if the appropriate hedging rationale has been
designated, the requirements for effectiveness are met.
However, at the moment when ineffectiveness arises,
Telef\u00f3nica will evaluate whether there is still an
economic relationship or whether the designated
hedging rationale is appropriate. The possible sources of
ineffectiveness that Telef\u00f3nica can have when
designing a hedging relationship and that will be
considered when establishing the hedging rationale are:
\u2022 The hedging instrument and the hedged item have
different maturity dates, initial dates, contract dates,
repricing dates, etc.
\u2022 The hedging instrument starts with initial value and a
financing effect is produced.
\u2022 When the underlying items have different sensitivity
and are not homogeneous, for example EURIBOR 3M
versus EURIBOR 6M.
The main guiding principles for risk management are laid
down by Telef\u00f3nica\u2019s Finance Department and
implemented by the company financial officers (who are
responsible for balancing the interests of each company
and those of the Telef\u00f3nica Group). The Corporate
Finance Department may allow exceptions to this policy
where these can be justified, normally when the market
is too thin for the volume of transactions required or on
clearly limited and small risks. New companies joining
the Telef\u00f3nica Group as a result of mergers or
acquisitions may also need time to adapt.
7) Cancellation of derivatives.
When a derivative transaction is canceled, the Company
may:
\u2022 Cancel the derivative and pay its market value.
\u2022 Take the opposite position which cancels out the
variability thereof, if cancellation costs are high or if it
is recommended for operating or business reasons.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-822": { "value": "
i) Financial assets and liabilities
Financial Assets
All regular way purchases and sales of financial assets
are recognized in the statement of financial position on
the trade date, i.e. the date that the Company commits
to purchase or sell the asset.
The Group applies an impairment model for financial
assets based on expected credit losses, using a
simplified method for certain short- and long-term
assets (commercial receivables, lease receivables and
contractual assets).
Under this simplified approach, credit impairment is
recognized by reference to expected credit losses over
the life of the asset. For this purpose the Group uses
matrices based on historical bad debt experience by
geographical area on a portfolio segmented by customer
category according to credit pattern. The matrix for each
category has a defined time horizon divided into
intervals in accordance with the collection management
policy and is fed with historical data that covers at least
24 collection cycles. This data is updated on a regular
basis. Based on the information observable at each
close, the Group assesses the need to adjust the rates
resulting from these matrices, considering current
conditions and future economic forecasts.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-821": { "value": "
i) Financial assets and liabilities
Financial Assets
All regular way purchases and sales of financial assets
are recognized in the statement of financial position on
the trade date, i.e. the date that the Company commits
to purchase or sell the asset.
The Group applies an impairment model for financial
assets based on expected credit losses, using a
simplified method for certain short- and long-term
assets (commercial receivables, lease receivables and
contractual assets).
Under this simplified approach, credit impairment is
recognized by reference to expected credit losses over
the life of the asset. For this purpose the Group uses
matrices based on historical bad debt experience by
geographical area on a portfolio segmented by customer
category according to credit pattern. The matrix for each
category has a defined time horizon divided into
intervals in accordance with the collection management
policy and is fed with historical data that covers at least
24 collection cycles. This data is updated on a regular
basis. Based on the information observable at each
close, the Group assesses the need to adjust the rates
resulting from these matrices, considering current
conditions and future economic forecasts.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialLiabilitiesExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-826": { "value": "
Financial Assets
All regular way purchases and sales of financial assets
are recognized in the statement of financial position on
the trade date, i.e. the date that the Company commits
to purchase or sell the asset.
The Group applies an impairment model for financial
assets based on expected credit losses, using a
simplified method for certain short- and long-term
assets (commercial receivables, lease receivables and
contractual assets).
Under this simplified approach, credit impairment is
recognized by reference to expected credit losses over
the life of the asset. For this purpose the Group uses
matrices based on historical bad debt experience by
geographical area on a portfolio segmented by customer
category according to credit pattern. The matrix for each
category has a defined time horizon divided into
intervals in accordance with the collection management
policy and is fed with historical data that covers at least
24 collection cycles. This data is updated on a regular
basis. Based on the information observable at each
close, the Group assesses the need to adjust the rates
resulting from these matrices, considering current
conditions and future economic forecasts.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-827": { "value": "
The Group applies an impairment model for financial
assets based on expected credit losses, using a
simplified method for certain short- and long-term
assets (commercial receivables, lease receivables and
contractual assets).
Under this simplified approach, credit impairment is
recognized by reference to expected credit losses over
the life of the asset. For this purpose the Group uses
matrices based on historical bad debt experience by
geographical area on a portfolio segmented by customer
category according to credit pattern. The matrix for each
category has a defined time horizon divided into
intervals in accordance with the collection management
policy and is fed with historical data that covers at least
24 collection cycles. This data is updated on a regular
basis. Based on the information observable at each
close, the Group assesses the need to adjust the rates
resulting from these matrices, considering current
conditions and future economic forecasts.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-828": { "value": "
Derivative financial instruments and hedge
accounting
The accounting treatment of any gain or loss resulting
from changes in the fair value of a derivative depends on
whether the derivative in question meets all the criteria
for hedge accounting and, if appropriate, on the nature
of the hedge.
Changes in fair value of derivatives that qualify as fair
value hedging instruments are recognized in the income
statement, together with changes in the fair value of the
hedged asset or liability attributable to the risk being
hedged.
Changes in the fair value of derivatives that qualify and
have been designated as cash flow hedges, which are
highly effective, are recognized in equity. The ineffective
portion is recognized immediately in the income
statement. Fair value changes recognized in equity
arising from hedges that relate to firm commitments or
forecast transactions that result in the recognition of
non-financial assets or liabilities are included in the initial
carrying amount of those assets or liabilities. Otherwise,
changes in fair value previously recognized in equity are
recognized in the income statement in the period in
which the hedged transaction affects profit or loss.
An instrument designated to hedge foreign currency
exposure from a net investment in a foreign operation is
accounted for in a similar manner to cash flow hedges.
When the Group chooses not to apply hedge
accounting criteria, gains or losses resulting from
changes in the fair value of derivatives are taken directly
to the income statement. In this respect, transactions
used to reduce the exchange rate risk of income
contributed by foreign subsidiaries are not treated as
hedging transactions.
Derivatives policy
At December\u00a031, 2024 , the nominal value of outstanding
derivatives with external counterparties amounted to
84,933 million euros equivalent, a 4.7% increase from
December\u00a031, 2023 ( 81,097 million euros equivalent).
This figure is inflated by the use in some cases of several
levels of derivatives applied to the nominal value of a
single underlying liability. For example, a foreign
currency loan can be hedged into floating rate, and then
each interest rate period can be fixed using a fixed rate
hedge, or FRA (Forward Rate Agreement) The high
volume is also due to the fact that when a derivative
transaction is canceled, the company may either cancel
the derivative or take the opposite position, which
cancels out the variability thereof. The second option is
usually chosen in order to cut costs. Even using such
techniques to reduce the position, it is still necessary to
take extreme care in the use of derivatives to avoid
potential problems arising through error or a failure to
understand the real position and its associated risks.
The main principles in the management of derivatives
are detailed below:
1) Derivatives based on a clearly identified hedged items.
Telef\u00f3nica\u2019s derivatives policy emphasizes the following
points:
\u2022 Acceptable underlyings include assets and liabilities,
profits, revenues and cash flows in either a company\u2019s
functional currency or another currency. These flows
can be contractual (debt and interest payments,
settlement of foreign currency payables, etc.),
reasonably certain or foreseeable (PP&E purchases,
future debt issues, commercial paper programs, etc.).
The acceptability of an underlying asset in the above
cases does not depend on whether it complies with
accounting rules requirements for hedge accounting,
as is required in the case of certain intra-group
transactions, for instance. Parent company
investments in subsidiaries with functional currencies
other than the euro also qualify as acceptable
underlying assets.
\u2022 Economic hedges are hedges that have a designated
underlying asset and that, under certain
circumstances, may offset the changes in the value of
the underlying asset. These economic hedges may not
always meet the requirements to be treated as hedges
for accounting purposes. The decision to arrange
these hedges if they do not meet certain requirements
will depend on the marginal impact on the income
statement and, therefore, on how far this may
compromise the goal of having a stable income
statement. In any case, the changes are recognized in
the income statement.
2) Matching of the hedged item to one side of the
derivative.
This matching basically applies to foreign currency debt
and derivatives hedging foreign currency payments by
Telef\u00f3nica Group subsidiaries. The aim is to eliminate
the risk arising from changes in foreign currency interest
rates. Nonetheless, even when the aim is to achieve
perfect hedging for all cash flows, the lack of liquidity in
certain markets, especially in Latin American currencies,
has meant that historically there have been mismatches
between the terms of the hedges and those of the debts
they are meant to hedge. The Telef\u00f3nica Group intends
to reduce these mismatches, provided that doing so
does not involve disproportionate costs. In this regard, if
adjustment does prove too costly, the financial timing of
the underlying asset in foreign currency will be modified
in order to minimize interest rate risk in foreign currency.
In certain cases, the timing of the underlying as defined
for derivative purposes may not be exactly the same as
the timing of the contractual underlying.
3) Matching the company contracting the derivative and
the company that owns the hedged item.
Generally, the aim is to ensure that the hedging
derivative and the hedged asset or liability belong to the
same company. Sometimes, however, the holding
companies (Telef\u00f3nica, S.A. and Telef\u00f3nica
Latinoam\u00e9rica Holding, S.L.) have arranged hedges on
behalf of a subsidiary that owns the underlying asset.
The main reasons for separating the hedge and the
underlying asset were the chance of differences in the
legal validity of local and international hedges (as a
result of unforeseen legal changes) and the different
credit ratings of the counterparties (of the Telef\u00f3nica
Group companies as well as those of the banks).
4) Ability to measure the derivative\u2019s fair value using the
valuation systems available to the Telef\u00f3nica Group.
Telef\u00f3nica uses several tools to evaluate and manage
the risk involved in derivatives and debt. Among these
tools are the Calypso system, extensively used in various
financial institutions, and the specialized libraries in the
MBRM financial calculation, both of which are
widespread throughout the market and have shown
proven reliability. In order to perform these calculations,
customary market techniques are used when
configuring the calculation methods, and information
from money market curves is used on a daily basis as
market inputs (swaps, depos, FRA, etc.) for interest rates,
official fixings for exchange rates and the interest rates
and volatility matrices for interest and exchange rates
that are listed in the multi-contributor systems, Reuters
and Bloomberg. For those yield curves that are less
liquid or whose prices published in Reuters and
Bloomberg are considered not to adequately reflect the
market situation, these curves will be requested from
relevant banks in these markets.
5) Sale of options only when there is an underlying
exposure.
Telef\u00f3nica considers the sale of options when: i) there is
an underlying exposure (on the consolidated statement
of financial position or associated with a highly probable
cash outflow) that would offset the potential loss for the
year if the counterparty exercised the option. This
exposure does not have to be treated as a purchased
option, but rather it can be another type of hedged item
(in these cases, hedge accounting does not apply since
this hedging instrument does not meet the criteria
required by accounting standards to treat the sale of
options as hedging instruments), or ii) the option is part
of a structure in which another derivative offsets any
loss. The sale of options is also permitted in option
structures where, at the moment they are taken out, the
net premium is either positive or zero.
For instance, it would be possible to sell short-term
options on interest rate swaps that entitle the
counterparty to receive a certain fixed interest rate,
below the level prevailing at the time the option was
sold. This would mean that if rates fell and the
counterparty exercised its option, the Group would swap
part of its debt from floating rate to a lower fixed rate,
having received a premium.
6) Hedge accounting.
The main risks that may qualify for hedge accounting are
as follows:
\u2022 Variations in market interest rates (either money-
market rates, credit spreads or both) that affect the
value of the underlying asset or the measurement of
the cash flows.
\u2022 Variations in exchange rates that change the value of
the underlying asset in the company\u2019s functional
currency and affect the measurement of the cash flow
in the functional currency.
\u2022 Variations in the valuation of any financial asset,
particularly shares of companies included in the
portfolio of \u201cEquity instruments\u201d.
\u2022 Variations in the price of commodities related to
contracts that the Group has with third parties.
Regarding the underlying:
\u2022 Hedges can cover all or part of the value of the
underlying.
\u2022 The risk to be hedged can be for the whole period of
the transaction or for only part of the period.
\u2022 The underlying may be a highly probable future
transaction, or a contractual underlying (loan, foreign
currency payment, investment, financial asset, etc.) or
a combination of both that defines an underlying with
a longer term.
The main coverage instruments used are:
\u2022 Forwards / NDF: they are used mainly for exchange
rate hedges related to commercial positions in foreign
currency. They can also be used to hedge financing in
foreign currency and net investment hedge in foreign
currency.
\u2022 Exchange Rate Options: in some cases, this type of
instruments can be used linked to future CapEx and
OpEx operations and investments and divestments in
foreign currency.
\u2022 Spots: for purchases and sales of currencies that are
made same day value or two days\u2019 value. Generally
used for operational needs or for divestments of
operations in foreign currency.
\u2022 Currency swaps: this type of transaction is generally
executed to hedge bonds issuance or loans issued in
foreign currency or net investment hedge.
\u2022 Interest Swaps / Interest Rate Options: these
instruments are used to manage the interest rate of
the debt portfolio. Their use of them is ruled by the
Financial Expenses Budget with the objective of its
fulfillment. Both the volume to be contracted and the
maturity of these products are determined by the
underlying assets to be hedged.
It is possible that in several markets the maturity, as
well as the low liquidity, does not allow to contract a
\"perfect\u201d hedge, but this circumstance will have to be
analyzed case by case.
\u2022 CDS: in order to manage the counterparty credit risk
or CVA / DVA, CDS operations can be arranged to
mitigate this risk.
\u2022 Derivatives of Commodities associated to:
\u25aa Price risk hedge (mainly Electricity) associated
with the Group's own contracts.
\u25aa Supporting the business lines that may need it and
always hedging the commercial risks of the signed
contracts. They would be settled by differences,
this is, in a non-deliverable format.
\u2022 Equity Derivatives: these are derivatives that address
strategic decisions or hedging needs, either to hedge
future investments or hedge existing risks. They
protect Telef\u00f3nica from the potential appreciation or
depreciation in the price of the shares they hold as
underlying.
Between the hedged item and the hedging instrument
there is an economic relationship, this is, in general
terms they move in opposite directions due to the same
risk or risk covered. In other words, there must be an
expectation that the value of the hedging instrument
and the value of the hedged item will change
systematically in opposite directions in response to the
movements of one of the following elements:
\u2022 the same underlying item; or
\u2022 Underlying items that are economically related in such
sense that they respond similarly to the risk that is
being hedged.
Depending on the complexity of the hedge relationship
and the way in which the hedge has been structured, a
quantitative or qualitative analysis will have to be
performed to demonstrate that there is an economic
relationship between the hedged item and the hedging
instrument.
This may on occasion mean that the hedging
instruments have longer terms than the related
contractual underlying. This happens when the
Telef\u00f3nica Group enters into long-term swaps, caps or
collars to protect the Group against interest rate
increases that may raise the financial expense of its
promissory notes, commercial paper and some floating
rate loans which mature earlier than their hedges. These
floating rate financing programs are highly likely to be
renewed and Telef\u00f3nica commits to this by defining the
underlying asset in a more general way as a floating rate
financing program whose term coincides with the
maturity of the hedge. In those cases in which the
underlying assets representing the risk hedged are
canceled or refinanced early, and if there is an open risk
with similar characteristics as the underlying asset that
was canceled or refinanced early, either because there
is new financing or because there is an underlying asset
with similar characteristics and risk profile, the hedge
may remain in force with the derivatives assigned
thereto and the risk will be subject to the hedge
arranged in the aforementioned refinancing. When
either of these situations occurs, the effectiveness of the
hedge will be reviewed taking into account the new
situation.
There can be three types of hedges:
\u2022 Fair value hedges.
\u2022 Cash flow hedges. Such hedges can be set at any
value of the risk to be hedged (interest rates,
exchange rates, etc.) or for a defined range (interest
rates between 2% and 4% , above 4%, etc.). In this last
case, the hedging instrument used is options.
\u2022 Hedges of net investment in consolidated foreign
subsidiaries. Generally, such hedges are arranged by
Telef\u00f3nica, S.A. and other Telef\u00f3nica holding
companies. Wherever possible, these hedges are
implemented through real debt in foreign currency.
Often, however, this is not always possible as many
Latin American currencies are non-convertible,
making it impossible for non-resident companies to
issue local currency debt. It may also be that, due to
the debt market deepness, the debt in the currency
concerned is not enough to accommodate the
required hedge, or that an acquisition is made in cash
with no need for market financing. In these
circumstances derivatives either forwards or cross-
currency swaps are mainly used to hedge the net
investment.
When using options, forwards or cross-currency swaps
as hedging instruments, the exclusion of the time value
of the option, the element at maturity of the forward and
the currency spread of the cross-currency swap of the
hedging relationship are evaluated on a case by case
basis, in order to be treated as hedge costs.
Hedges can comprise a combination of different
derivatives.
Management of accounting hedges is not static, and the
hedging relationship may change before maturity. The
interruption of the hedge accounting is possible within
the framework of the management of financial risks and
described in the internal document of \u201cfinancial risks
management and hedging strategy under IFRS 9\u201d. To
gauge the efficiency of transactions defined as
accounting hedges, the Group analyzes the extent to
which the changes in the fair value or in the cash flows
attributable to the hedged item would offset the
changes in fair value or cash flows attributable to the
hedged risk using a linear regression model
prospectively. To evaluate the effectiveness of hedges,
under IFRS 9, there is no numerical range under which it
is accepted that a hedge is effective and hence the
hedge accounting standards are applicable. Therefore,
Telef\u00f3nica considers that if there is an economic
relationship, not dominated by changes in credit risk and
if the appropriate hedging rationale has been
designated, the requirements for effectiveness are met.
However, at the moment when ineffectiveness arises,
Telef\u00f3nica will evaluate whether there is still an
economic relationship or whether the designated
hedging rationale is appropriate. The possible sources of
ineffectiveness that Telef\u00f3nica can have when
designing a hedging relationship and that will be
considered when establishing the hedging rationale are:
\u2022 The hedging instrument and the hedged item have
different maturity dates, initial dates, contract dates,
repricing dates, etc.
\u2022 The hedging instrument starts with initial value and a
financing effect is produced.
\u2022 When the underlying items have different sensitivity
and are not homogeneous, for example EURIBOR 3M
versus EURIBOR 6M.
The main guiding principles for risk management are laid
down by Telef\u00f3nica\u2019s Finance Department and
implemented by the company financial officers (who are
responsible for balancing the interests of each company
and those of the Telef\u00f3nica Group). The Corporate
Finance Department may allow exceptions to this policy
where these can be justified, normally when the market
is too thin for the volume of transactions required or on
clearly limited and small risks. New companies joining
the Telef\u00f3nica Group as a result of mergers or
acquisitions may also need time to adapt.
7) Cancellation of derivatives.
When a derivative transaction is canceled, the Company
may:
\u2022 Cancel the derivative and pay its market value.
\u2022 Take the opposite position which cancels out the
variability thereof, if cancellation costs are high or if it
is recommended for operating or business reasons.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-829": { "value": "
j) Audio-visual rights
Audio-visual rights which will generally be consumed in
a period of less than twelve months, as well as own
content whose production cycle will in no case exceed
thirty-six months, are included in inventories.
The cost of film, documentary, short film and series
rights acquired from third parties is charged to the
income statement on a straight-line basis from the time
of first broadcasting or release until the completion of
the rights.
In-house produced programs and series and program
titles are charged at the time of their broadcast or up to
thirty-six months from the date of release, depending on
their nature and broadcasting strategy. The cost of in-
house productions that the Group expects to recover
through sale to third parties is recognized as an
intangible asset.
The cost of broadcasting rights that have expired or
whose recovery value is estimated to be lower than the
acquisition cost is recognized directly as an expense.
Broadcasting rights to football and motor sports events,
including their inherent production costs, are charged to
the income statement on a straight-line basis over
twelve months from the start of the season, while rights
to other premium sports are charged over the period of
the competition. All other sports rights are recognized in
the income statement upon first broadcast. When these
rights are paid for prior to the moment of allocation to
the income statement, and the terms and conditions of
the agreement involve performance obligations that still
have to be fulfilled in the future by both parties (also
known as executory contracts), prepaid amounts are
recognized as prepayments under \"Other current
assets\".", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForMeasuringInventories", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-830": { "value": "
k) Pensions and other employee
obligations
Provisions required to cover the accrued liability for
defined benefit pension plans are determined using the
projected unit credit actuarial valuation method. The
calculation is based on demographic and financial
assumptions determined at a country level, and in
consideration of the macroeconomic environment. The
discount rates are determined based on high quality
market yield curves. Plan assets are measured at fair
value.
Provisions for post-employment benefits (e.g. early
retirement or other) are calculated individually based on
the terms agreed with the employees. In some cases,
these may require actuarial valuations based on both
demographic and financial assumptions.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-831": { "value": "
l) Revenues and expenses
The Telef\u00f3nica Group revenues are derived principally
from providing the following telecommunications
services: traffic, connection fees, regular (normally
monthly) network usage fees, interconnection, network
and equipment leasing, handset sales and other digital
services such as Pay TV and value-added services or
maintenance. Products and services may be sold
separately or bundled in promotional packages.
Revenues from calls carried on Telef\u00f3nica\u2019s networks
(traffic) entail an initial call establishment fee plus a
variable call rate, based on call length, distance and type
of service. Both fixed and wireless traffic is recognized as
revenue as service is provided. For prepaid calls, the
amount of unused traffic generates deferred revenues
presented in Contractual liabilities on the statement of
financial position.
Revenues from traffic sales and services at a fixed rate
over a specified period of time (flat rate) are recognized
on a straight-line basis over the term covered by the rate
paid by the customer.
Installation fees are taken to the income statement on a
straight-line basis over the related period. Equipment
leases and other services are taken to the income
statement as they are consumed.
Interconnection revenues from fixed-wireless and
wireless-fixed calls and other customer services are
recognized in the period in which the calls are made.
Revenues from handset and equipment sales are
recognized once the sale is considered complete, i.e.,
generally when delivered to the end customer.
When the Group is in an intermediary position between
a supplier/vendor and an end customer, it must
determine if it is supplying the product or service as the
principal in the transaction or if it is acting as an agent on
behalf of the supplier (manufacturer, wholesaler). The
distinction involves identifying who controls the goods
or services being provided and who is the primary
obligor to satisfy the performance obligations in the
arrangement. Control is often evidenced when, in the
delivery to the end customer, the Group provides
significant integration of the goods and services from a
third party vendor into its own goods and services. In
addition to this, assessment of the primary obligor
includes the analysis of indicators such as: whether the
Group's responsibilities require infrastructure and
resources with specific functionalities, who acts as the
main customer contact, who manages claims and
provides support services, and who has discretion
setting the final price. This principal/agent assessment
affects the timing and amount of revenue recognized in
the financial statements, either on a gross basis as the
principal or on a net basis as the agent, representing the
margin earned by the Group for arranging the
transaction between the principal and the customer.
This is particularly relevant for the Group in connection
with digital services, such as streaming TV content,
software licenses and other cloud-based products and
services.
For bundled packages that include multiple elements
sold in the fixed, wireless, Internet and television
businesses it is determined whether it is necessary to
identify the separate performance obligations and apply
the corresponding revenue recognition policy to each
one. Total package revenues are allocated among the
identified performance obligations based on their
respective standalone selling prices.
As connection or initial activation fees, or upfront non-
refundable fees, are not separately identifiable
performance obligations in these types of packages, any
consideration received from the customer for these
items is allocated to the remaining elements.
When the customer has a right of return, the agreed
consideration is considered variable. The Group
estimates the amount of variable consideration to which
it is entitled using the expected value method
(probability-weighted possible amounts), considering all
historical, current and forecast information that is
reasonably available, and only to the extent that it
determines that it is highly probable that a significant
reversal in the amount of cumulative revenue
recognized will not occur.
Expenses relating to customer contracts (mainly,
commissions payable to dealers for customer
acquisitions) are recognized as an asset to the extent
that they are incremental and are expected to be
recovered. Subsequently, these costs are amortized over
the same term as the revenues associated with such
contract are recognized, unless the expected
amortization period is one year or less, in which case
they are expensed as incurred. For the purposes of
allocating to profit or loss the incremental costs of
obtaining a contract with indefinite duration, renewal
periods are taken into consideration, estimated on the
basis of the customer churn rate, unless there are
contract renewal costs which are commensurate with
those incurred in the initial contract.
As part of our strategy, the Group has increased its use
of renewable energy through power purchase
agreements (PPAs) to purchase energy from sustainable
sources, such as wind and solar. These contracts often
have a long term and provide the Group with a
mechanism to ensure the supply of green energy at
fixed prices. When these arrangements involve physical
delivery of electricity and are entered into for the
purpose of receiving the energy for the entity\u2019s expected
purchase, sale or usage requirements (i.e. volume
agreed does not exceed actual and expected power
needs), the contract is for \u201cown use\u201d and is generally
accounted for as power purchases or sales when the
underlying transactions take place.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForExpensesExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-832": { "value": "
The Telef\u00f3nica Group revenues are derived principally
from providing the following telecommunications
services: traffic, connection fees, regular (normally
monthly) network usage fees, interconnection, network
and equipment leasing, handset sales and other digital
services such as Pay TV and value-added services or
maintenance. Products and services may be sold
separately or bundled in promotional packages.
Revenues from calls carried on Telef\u00f3nica\u2019s networks
(traffic) entail an initial call establishment fee plus a
variable call rate, based on call length, distance and type
of service. Both fixed and wireless traffic is recognized as
revenue as service is provided. For prepaid calls, the
amount of unused traffic generates deferred revenues
presented in Contractual liabilities on the statement of
financial position.
Revenues from traffic sales and services at a fixed rate
over a specified period of time (flat rate) are recognized
on a straight-line basis over the term covered by the rate
paid by the customer.
Installation fees are taken to the income statement on a
straight-line basis over the related period. Equipment
leases and other services are taken to the income
statement as they are consumed.
Interconnection revenues from fixed-wireless and
wireless-fixed calls and other customer services are
recognized in the period in which the calls are made.
Revenues from handset and equipment sales are
recognized once the sale is considered complete, i.e.,
generally when delivered to the end customer.
When the Group is in an intermediary position between
a supplier/vendor and an end customer, it must
determine if it is supplying the product or service as the
principal in the transaction or if it is acting as an agent on
behalf of the supplier (manufacturer, wholesaler). The
distinction involves identifying who controls the goods
or services being provided and who is the primary
obligor to satisfy the performance obligations in the
arrangement. Control is often evidenced when, in the
delivery to the end customer, the Group provides
significant integration of the goods and services from a
third party vendor into its own goods and services. In
addition to this, assessment of the primary obligor
includes the analysis of indicators such as: whether the
Group's responsibilities require infrastructure and
resources with specific functionalities, who acts as the
main customer contact, who manages claims and
provides support services, and who has discretion
setting the final price. This principal/agent assessment
affects the timing and amount of revenue recognized in
the financial statements, either on a gross basis as the
principal or on a net basis as the agent, representing the
margin earned by the Group for arranging the
transaction between the principal and the customer.
This is particularly relevant for the Group in connection
with digital services, such as streaming TV content,
software licenses and other cloud-based products and
services.
For bundled packages that include multiple elements
sold in the fixed, wireless, Internet and television
businesses it is determined whether it is necessary to
identify the separate performance obligations and apply
the corresponding revenue recognition policy to each
one. Total package revenues are allocated among the
identified performance obligations based on their
respective standalone selling prices.
As connection or initial activation fees, or upfront non-
refundable fees, are not separately identifiable
performance obligations in these types of packages, any
consideration received from the customer for these
items is allocated to the remaining elements.
When the customer has a right of return, the agreed
consideration is considered variable. The Group
estimates the amount of variable consideration to which
it is entitled using the expected value method
(probability-weighted possible amounts), considering all
historical, current and forecast information that is
reasonably available, and only to the extent that it
determines that it is highly probable that a significant
reversal in the amount of cumulative revenue
recognized will not occur.
Revenue recognition
Bundled offers
Bundled offers that combine different elements are
assessed to determine whether it is necessary to
separate the different identifiable components and apply
the corresponding revenue recognition policy to each
element. Total package revenues are allocated among
the identified elements based on their respective
standalone selling prices.
Determining standalone selling prices for each identified
element requires estimates that are complex due to the
nature of the business.
A change in estimates of standalone selling prices could
affect the apportionment of revenue among the
elements and, as a result, the timing of recognition of
revenues.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-833": { "value": "
Expenses relating to customer contracts (mainly,
commissions payable to dealers for customer
acquisitions) are recognized as an asset to the extent
that they are incremental and are expected to be
recovered. Subsequently, these costs are amortized over
the same term as the revenues associated with such
contract are recognized, unless the expected
amortization period is one year or less, in which case
they are expensed as incurred. For the purposes of
allocating to profit or loss the incremental costs of
obtaining a contract with indefinite duration, renewal
periods are taken into consideration, estimated on the
basis of the customer churn rate, unless there are
contract renewal costs which are commensurate with
those incurred in the initial contract.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForCustomerAcquisitionCostsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-835": { "value": "
m) Non-current assets held for sale
The Group classifies non-current assets and disposal
groups as held for sale if their carrying amounts will be
recovered principally through a sale transaction rather
than through continuing use. Non-current assets and
disposal groups classified as held for sale are measured
at the lower of their carrying amount and fair value less
costs to sell and are presented separately in the
statement of financial position as \u201cNon-current assets
and disposal groups held for sale\u201d and \u201cLiabilities
associated with non-current assets and disposal groups
held for sale\u201d. Once classified as held for sale property,
plant and equipment and intangible assets (including
right-of-use assets) are no longer depreciated or
amortized.
The criteria for held for sale classification is regarded as
met only when the Group determines the sale to be
highly probable: management is committed to a decision
to sell and all actions required to complete the sale
indicate that it is unlikely that significant changes to the
sale will be made or that the decision will be withdrawn.
In addition, the asset or disposal group is available for
immediate sale in its present condition (subject only to
terms that are usual and customary for such
transactions) and the sale is expected to be completed
within one year from the date of the classification.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleAndDiscontinuedOperationsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-834": { "value": "
m) Non-current assets held for sale
The Group classifies non-current assets and disposal
groups as held for sale if their carrying amounts will be
recovered principally through a sale transaction rather
than through continuing use. Non-current assets and
disposal groups classified as held for sale are measured
at the lower of their carrying amount and fair value less
costs to sell and are presented separately in the
statement of financial position as \u201cNon-current assets
and disposal groups held for sale\u201d and \u201cLiabilities
associated with non-current assets and disposal groups
held for sale\u201d. Once classified as held for sale property,
plant and equipment and intangible assets (including
right-of-use assets) are no longer depreciated or
amortized.
The criteria for held for sale classification is regarded as
met only when the Group determines the sale to be
highly probable: management is committed to a decision
to sell and all actions required to complete the sale
indicate that it is unlikely that significant changes to the
sale will be made or that the decision will be withdrawn.
In addition, the asset or disposal group is available for
immediate sale in its present condition (subject only to
terms that are usual and customary for such
transactions) and the sale is expected to be completed
within one year from the date of the classification.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-836": { "value": "
n) Use of estimates
The key assumptions concerning the future and other
relevant sources of uncertainty in estimates at the
reporting date that could have a significant impact on
the consolidated financial statements within the next
financial year are discussed below.
A significant change in the facts and circumstances on
which these estimates and related judgments are based
could have a material impact on the Group\u2019s results and
financial position. Accordingly, sensitivity analysis are
disclosed for the most relevant situations (see Notes 7
and 24).
Non-current assets and goodwill
The accounting treatment of investments in non-current
assets such as property, plant and equipment, intangible
assets and interests in associates and joint ventures,
entails the use of estimates to determine the useful life
for depreciation and amortization purposes and to
assess fair value at their acquisition dates for assets
acquired in business combinations.
Determining useful life requires making estimates in
connection with future technological developments and
alternative uses for assets. There is a significant element
of judgment involved in making technological
development assumptions, since the timing and scope
of future technological advances are difficult to predict.
Also, upon the sale or contribution of a controlled
business to an associate or joint venture, the Group
measures and recognizes any retained interest at its fair
value. The fair value assigned to the retained investment
is determined on the basis of its business plan, including
significant judgments when considering significant
assumptions such as long-term EBITDA margin, long-
term capital expenditure ratio, discount rate and
perpetuity growth rate which would be significantly
affected by the future trends in the economic,
competitive, regulatory and technological environment.
The decision to recognize an impairment loss involves
developing estimates that include, among others, an
analysis of the causes of the potential impairment, as
well as its timing and expected amount. Furthermore,
additional factors are taken into account, such as the
situation of the macroeconomic environment, regulatory
and competitive developments, technological
obsolescence, the discontinuation of certain services as
well as other changes in circumstances, that highlight
the need to assess a potential impairment.
The Telef\u00f3nica Group evaluates its cash-generating
units\u2019 performance on a regular basis to identify potential
impairments of goodwill and other non-current assets.
Determining the recoverable amount of the cash-
generating units also entails the use of assumptions and
estimates and requires a significant element of
judgment.
Deferred income taxes
The Group assesses the recoverability of deferred tax
assets based on estimates of future earnings, and of all
the options available to achieve an outcome, it considers
the most efficient one in tax terms within the legal
framework the Group is subject to. Such recoverability
ultimately depends on the Group\u2019s ability to generate
taxable earnings over the period for which the deferred
tax assets remain deductible. This analysis is based on
the estimated schedule for reversing deferred tax
liabilities, as well as estimates of taxable earnings, which
are sourced from internal projections that are
continuously updated to reflect the latest trends.
The recognition of tax assets and liabilities depends on a
series of factors, including estimates as to the timing and
realization of deferred tax assets and the projected tax
payment schedule. Actual Group company income tax
receipts and payments could differ from the estimates
made by the Group as a result of changes in tax
legislation, the outcome of underway tax proceedings or
unforeseen future transactions that could affect tax
balances.
Provisions
Provisions are recorded when, at the end of the period,
we have a present obligation as a result of past events,
whose settlement requires an outflow of resources that
is considered probable and can be measured reliably.
This obligation may be legal or constructive, arising from,
but not limited to, regulation, contracts, common
practice or public commitments, which have created a
valid expectation for third parties that we will assume
certain responsibilities.\u00a0 The amount recorded is the best
estimation performed by the management in respect of
the expenditure that will be required to settle the
obligations, considering all the information available at
the closing date, including the advice of external
experts, such as legal advisors or consultants.
Should we be unable to reliably measure the obligation,
no provision would be recorded and information would
then be presented in the notes to the Consolidated
Financial Statements.
Because of the inherent uncertainties in this estimation,
actual expenditures may be different from the originally
estimated amount recognized.
Revenue recognition
Bundled offers
Bundled offers that combine different elements are
assessed to determine whether it is necessary to
separate the different identifiable components and apply
the corresponding revenue recognition policy to each
element. Total package revenues are allocated among
the identified elements based on their respective
standalone selling prices.
Determining standalone selling prices for each identified
element requires estimates that are complex due to the
nature of the business.
A change in estimates of standalone selling prices could
affect the apportionment of revenue among the
elements and, as a result, the timing of recognition of
revenues.
Leases
Accounting for rights and obligations as a lessee under a
lease contract requires the use of estimations to
determine the lease term in contracts that include
extension options or early termination options.
Determining the lease term involves making estimates
over the time horizon of the Group's strategic planning
process with respect to relevant factors such as
expected technological progress, possible regulatory
developments, market and competition trends or
changes in the business model. The assumptions
regarding these variables involve a significant degree of
judgment to the extent that the timing and nature of
future changes are difficult to anticipate.
Due to the uncertainties inherent to these estimates,
changes in the assumptions made in respect of
uncertain matters when determining the lease term of a
lease contract may have an impact on the amounts of
the right of use assets and lease liabilities recognized on
the basis of the estimates made by the Group.", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-838": { "value": "
Non-current assets and goodwill
The accounting treatment of investments in non-current
assets such as property, plant and equipment, intangible
assets and interests in associates and joint ventures,
entails the use of estimates to determine the useful life
for depreciation and amortization purposes and to
assess fair value at their acquisition dates for assets
acquired in business combinations.
Determining useful life requires making estimates in
connection with future technological developments and
alternative uses for assets. There is a significant element
of judgment involved in making technological
development assumptions, since the timing and scope
of future technological advances are difficult to predict.
Also, upon the sale or contribution of a controlled
business to an associate or joint venture, the Group
measures and recognizes any retained interest at its fair
value. The fair value assigned to the retained investment
is determined on the basis of its business plan, including
significant judgments when considering significant
assumptions such as long-term EBITDA margin, long-
term capital expenditure ratio, discount rate and
perpetuity growth rate which would be significantly
affected by the future trends in the economic,
competitive, regulatory and technological environment.
The decision to recognize an impairment loss involves
developing estimates that include, among others, an
analysis of the causes of the potential impairment, as
well as its timing and expected amount. Furthermore,
additional factors are taken into account, such as the
situation of the macroeconomic environment, regulatory
and competitive developments, technological
obsolescence, the discontinuation of certain services as
well as other changes in circumstances, that highlight
the need to assess a potential impairment.
The Telef\u00f3nica Group evaluates its cash-generating
units\u2019 performance on a regular basis to identify potential
impairments of goodwill and other non-current assets.
Determining the recoverable amount of the cash-
generating units also entails the use of assumptions and
estimates and requires a significant element of
judgment.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-837": { "value": "
Non-current assets and goodwill
The accounting treatment of investments in non-current
assets such as property, plant and equipment, intangible
assets and interests in associates and joint ventures,
entails the use of estimates to determine the useful life
for depreciation and amortization purposes and to
assess fair value at their acquisition dates for assets
acquired in business combinations.
Determining useful life requires making estimates in
connection with future technological developments and
alternative uses for assets. There is a significant element
of judgment involved in making technological
development assumptions, since the timing and scope
of future technological advances are difficult to predict.
Also, upon the sale or contribution of a controlled
business to an associate or joint venture, the Group
measures and recognizes any retained interest at its fair
value. The fair value assigned to the retained investment
is determined on the basis of its business plan, including
significant judgments when considering significant
assumptions such as long-term EBITDA margin, long-
term capital expenditure ratio, discount rate and
perpetuity growth rate which would be significantly
affected by the future trends in the economic,
competitive, regulatory and technological environment.
The decision to recognize an impairment loss involves
developing estimates that include, among others, an
analysis of the causes of the potential impairment, as
well as its timing and expected amount. Furthermore,
additional factors are taken into account, such as the
situation of the macroeconomic environment, regulatory
and competitive developments, technological
obsolescence, the discontinuation of certain services as
well as other changes in circumstances, that highlight
the need to assess a potential impairment.
The Telef\u00f3nica Group evaluates its cash-generating
units\u2019 performance on a regular basis to identify potential
impairments of goodwill and other non-current assets.
Determining the recoverable amount of the cash-
generating units also entails the use of assumptions and
estimates and requires a significant element of
judgment.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForContingentLiabilitiesAndContingentAssetsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-839": { "value": "
Deferred income taxes
The Group assesses the recoverability of deferred tax
assets based on estimates of future earnings, and of all
the options available to achieve an outcome, it considers
the most efficient one in tax terms within the legal
framework the Group is subject to. Such recoverability
ultimately depends on the Group\u2019s ability to generate
taxable earnings over the period for which the deferred
tax assets remain deductible. This analysis is based on
the estimated schedule for reversing deferred tax
liabilities, as well as estimates of taxable earnings, which
are sourced from internal projections that are
continuously updated to reflect the latest trends.
The recognition of tax assets and liabilities depends on a
series of factors, including estimates as to the timing and
realization of deferred tax assets and the projected tax
payment schedule. Actual Group company income tax
receipts and payments could differ from the estimates
made by the Group as a result of changes in tax
legislation, the outcome of underway tax proceedings or
unforeseen future transactions that could affect tax
balances.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-841": { "value": "
Provisions
Provisions are recorded when, at the end of the period,
we have a present obligation as a result of past events,
whose settlement requires an outflow of resources that
is considered probable and can be measured reliably.
This obligation may be legal or constructive, arising from,
but not limited to, regulation, contracts, common
practice or public commitments, which have created a
valid expectation for third parties that we will assume
certain responsibilities.\u00a0 The amount recorded is the best
estimation performed by the management in respect of
the expenditure that will be required to settle the
obligations, considering all the information available at
the closing date, including the advice of external
experts, such as legal advisors or consultants.
Should we be unable to reliably measure the obligation,
no provision would be recorded and information would
then be presented in the notes to the Consolidated
Financial Statements.
Because of the inherent uncertainties in this estimation,
actual expenditures may be different from the originally
estimated amount recognized.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDecommissioningRestorationAndRehabilitationProvisionsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-840": { "value": "
Provisions
Provisions are recorded when, at the end of the period,
we have a present obligation as a result of past events,
whose settlement requires an outflow of resources that
is considered probable and can be measured reliably.
This obligation may be legal or constructive, arising from,
but not limited to, regulation, contracts, common
practice or public commitments, which have created a
valid expectation for third parties that we will assume
certain responsibilities.\u00a0 The amount recorded is the best
estimation performed by the management in respect of
the expenditure that will be required to settle the
obligations, considering all the information available at
the closing date, including the advice of external
experts, such as legal advisors or consultants.
Should we be unable to reliably measure the obligation,
no provision would be recorded and information would
then be presented in the notes to the Consolidated
Financial Statements.
Because of the inherent uncertainties in this estimation,
actual expenditures may be different from the originally
estimated amount recognized.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-842": { "value": "
Note 4. Segment information
In 2024 the Telef\u00f3nica Group is reporting financial
information, both internally and externally, according to
the following segments: Telef\u00f3nica Spain, VMO2
(recorded by the equity method), Telef\u00f3nica Germany,
Telef\u00f3nica Brazil and Telef\u00f3nica Hispam (formed by the
Group's operators in Colombia, Mexico, Venezuela,
Ecuador, Argentina, Chile, Peru and Uruguay).
In 2024, the impairment of goodwill of the cash-
generating unit in Peru and Chile is included in the
Telef\u00f3nica Hispam segment, and the impairment of
goodwill of Telef\u00f3nica Tech UK & Ireland and the BE-
terna Group is included in Other companies (see Note 7).
In 2023, the impairment of goodwill of the cash-
generating unit in Ecuador (see Note 7) is included in the
Telef\u00f3nica Hispam segment.
The segments referred to above include the information
relating to the fixed, mobile, cable, data, internet,
television and other digital services businesses provided
in each country. Intersegment transactions are carried
out as if on an arm's length basis.\u00a0
Information relating to other Group companies not
specifically included in these segments is reported
under \"Other companies\" (see Appendix I), which
includes Telef\u00f3nica, S.A. and other holding companies,
as well as companies whose main purpose is to provide
cross-sectional services to Group companies and other
operations not included in the segments. The
Incremental Group and BE-terna Group, acquired in
2022 (see Note 5), and Cancom Group, acquired in 2021,
are reported within \"Other companies\". \"Other
companies\" also includes the share of results of
investments accounted for by the equity method
corresponding to the fiber optic companies in which
Telef\u00f3nica Infra, S.L. has ownership interests (see Note
10).
The Group centrally manages borrowing activities,
mainly through Telef\u00f3nica, S.A. and other companies
(see Note 19, Appendix III and Appendix V), so most of
the Group's financial assets and liabilities are reported
under Other companies. In addition, Telef\u00f3nica, S.A. is
the head of the Telef\u00f3nica tax group in Spain (see Note
25). Therefore, a significant part of the deferred tax
assets and liabilities is included under Other companies.
For these reasons, the results of the segments are
disclosed through operating income.
Revenues and expenses arising from intra-group
invoicing for the use of the trademark and management
services were eliminated from the operating results of
each Group segment. The results of the holding
companies also exclude dividends from Group
companies and impairments of investments in Group
companies. These adjustments have no impact on the
Group\u2019s consolidated results. In addition, segment
reporting considers the impact of the purchase price
allocation to the assets acquired and the liabilities
assumed by the companies included in each segment.
The assets and liabilities presented in each segment are
those managed by the heads of each segment,
regardless of their legal structure.
The following table presents income, CapEx information (capital expenditures in
intangible assets and property, plant and equipment, see Notes 6 and 8) and
acquisitions of rights of use (see Note 9) regarding the Group\u2019s operating segments:
2024
Millions of euros
Telef\u00f3nica
Spain
VMO2
Telef\u00f3nica
Germany
Telef\u00f3nica
Brazil
Telef\u00f3nica
Hispam
Other
companies
Eliminations
Total Group
Revenues
12,791
\u2014
8,492
9,618
9,032
3,725
(2,343)
41,315
External revenues
12,510
\u2014
8,463
9,606
8,918
1,811
7
41,315
Intersegment revenues
281
\u2014
29
12
114
1,914
(2,350)
\u2014
Other operating income and expenses(1)
(8,177)
\u2014
(5,727)
(5,502)
(9,432)
(3,691)
2,408
(30,121)
EBITDA
4,614
\u2014
2,765
4,116
(400)
34
65
11,194
Depreciation and amortization
(2,202)
\u2014
(2,226)
(2,474)
(1,651)
(281)
35
(8,799)
Operating income (loss)
2,412
\u2014
539
1,642
(2,051)
(247)
100
2,395
Share of (loss) income of investments accounted for by the equity
method
(20)
89
\u2014
(1)
(41)
(76)
\u2014
(49)
CapEx
1,571
\u2014
1,141
1,583
1,001
185
(6)
5,475
Acquisitions of rights of use
350
\u2014
578
822
354
44
(6)
2,142
(1) Other operating income and expenses includes \u201cOther income\u201d, \u201cSupplies\u201d, \u201cPersonnel expenses\u201d and \u201cOther expenses\u201d.
2023
Millions of euros
Telef\u00f3nica
Spain
VMO2
Telef\u00f3nica
Germany
Telef\u00f3nica
Brazil
Telef\u00f3nica
Hispam
Other
companies
Eliminations
Total Group
Revenues
12,654
\u2014
8,614
9,650
8,381
3,553
(2,200)
40,652
External revenues
12,350
\u2014
8,585
9,637
8,284
1,790
6
40,652
Intersegment revenues
304
\u2014
29
13
97
1,763
(2,206)
\u2014
Other operating income and expenses(1)
(9,425)
\u2014
(5,974)
(5,522)
(6,871)
(3,598)
2,128
(29,262)
EBITDA
3,229
\u2014
2,640
4,128
1,510
(45)
(72)
11,390
Depreciation and amortization
(2,200)
\u2014
(2,323)
(2,511)
(1,557)
(244)
38
(8,797)
Operating income (loss)
1,029
\u2014
317
1,617
(47)
(289)
(34)
2,593
Share of\u00a0 income (loss) of investments accounted for by the
equity method
(23)
(2,030)
\u2014
\u2014
(3)
(106)
\u2014
(2,162)
CapEx
1,607
\u2014
1,133
1,671
938
230
\u2014
5,579
Acquisitions of rights of use
575
\u2014
624
815
387
48
(58)
2,391
(1)Other operating income and expenses includes \u201cOther income\u201d, \u201cSupplies\u201d, \u201cPersonnel expenses\u201d and \u201cOther expenses\u201d.
2022
Millions of euros
Telef\u00f3nica
Spain
VMO2
Telef\u00f3nica
Germany
Telef\u00f3nica
Brazil
Telef\u00f3nica
Hispam
Other
companies
Eliminations
Total Group
Revenues
12,497
\u2014
8,224
8,870
9,141
3,243
(1,982)
39,993
External revenues
12,224
\u2014
8,195
8,854
9,026
1,685
9
39,993
Intersegment revenues
273
\u2014
29
16
115
1,558
(1,991)
\u2014
Other operating income and expenses(1)
(7,909)
\u2014
(5,666)
(5,138)
(7,183)
(3,149)
1,904
(27,141)
EBITDA
4,588
\u2014
2,558
3,732
1,958
94
(78)
12,852
Depreciation and amortization
(2,157)
\u2014
(2,295)
(2,369)
(1,799)
(218)
42
(8,796)
Operating income (loss)
2,431
\u2014
263
1,363
159
(124)
(36)
4,056
Share of (loss) income\u00a0 of investments accounted for by the
equity method
(15)
292
\u2014
\u2014
(19)
(41)
\u2014
217
CapEx
1,550
\u2014
1,209
1,795
1,058
212
(5)
5,819
Acquisitions of rights of use
724
\u2014
594
596
514
17
3
2,448
(1)Other operating income and expenses includes \u201cOther income\u201d, \u201cSupplies\u201d, \u201cPersonnel expenses\u201d and \u201cOther expenses\u201d.
The table below shows the income, CapEx and acquisitions of rights of use of VMED
O2 UK (VMO2) in 2024, 2023 and 2022 (see Note 2). VMO2 is a joint venture 50%
owned by Telef\u00f3nica and Liberty Global and is recorded under the equity method
(see Note 10). The tables below show the information of the joint venture at 100%
and the reconciliation with the Telef\u00f3nica Group's share of income (loss) accounted
for by the equity method.
VMO2
Millions of euros
2024
2023
2022
Revenues
12,616
12,547
12,155
Other operating income and expenses
(8,149)
(8,116)
(7,754)
Impairment losses in goodwill
\u2014
(3,572)
\u2014
EBITDA
4,467
859
4,401
Depreciation and amortization
(3,371)
(3,685)
(4,170)
Operating income (loss)
1,096
(2,826)
231
Share of income of investments accounted for by the equity method
4
2
1
Financial income
51
55
24
Financial expenses
(1,578)
(1,436)
(1,020)
Realised and unrealised gains on derivative instruments, net
463
(924)
2,567
Foreign currency transaction losses, net
(34)
677
(1,296)
Net financial result
(1,098)
(1,628)
275
Result before taxation
2
(4,452)
507
Income tax
(22)
265
(15)
Result for the period
(20)
(4,187)
492
Attributable to non-controlling interests
(19)
\u2014
\u2014
Result for the period attributable to equity holders of the parent (100% VMO2)
(39)
(4,187)
492
50% attributable to Telef\u00f3nica Group
(20)
(2,094)
246
Share-based compensation
1
8
14
Sale of minority stake in Cornerstone
112
76
\u2014
Other adjustments
(5)
(20)
32
Share of (loss) income of investments accounted for by the equity method
89
(2,030)
292
Capital expenditures (CapEx) (100% VMO2)
2,580
2,408
2,707
Acquisitions of rights of use (100% VMO2)
539
135
118
The following table presents main assets and liabilities by segment:
2024
Millions of euros
Telef\u00f3nica
Spain
VMO2
Telef\u00f3nica
Germany
Telef\u00f3nica
Brazil
Telef\u00f3nica
Hispam
Other
companies
Eliminations
Total Group
Fixed assets
14,119
\u2014
10,710
15,348
5,627
1,971
\u2014
47,775
Rights of use
1,535
\u2014
3,064
2,058
1,177
132
(59)
7,907
Investments accounted for by the equity method
217
7,641
\u2014
4
187
388
(62)
8,375
Financial assets and other non-currents assets
1,126
\u2014
728
1,004
1,434
7,941
(4,830)
7,403
Deferred tax assets
2,507
\u2014
604
278
842
2,442
\u2014
6,673
Other current financial assets
33
\u2014
107
32
394
3,658
(2,424)
1,800
Non-current assets and disposal groups held for sale
\u2014
\u2014
\u2014
\u2014
79
59
\u2014
138
Total allocated assets
25,858
7,641
17,805
22,277
14,204
24,705
(11,988)
100,502
Non-current financial liabilities
507
\u2014
474
362
6,906
29,634
(4,691)
33,192
Non-current lease liabilities
988
\u2014
2,401
1,666
1,010
42
(30)
6,077
Deferred tax liabilities
86
\u2014
290
798
284
1,447
\u2014
2,905
Current financial liabilities
612
\u2014
771
270
765
6,903
(3,731)
5,590
Current lease liabilities
480
\u2014
606
702
444
36
(42)
2,226
Liabilities associated with non-current assets and disposal
groups held for sale
\u2014
\u2014
\u2014
\u2014
33
\u2014
\u2014
33
Total allocated liabilities
15,756
\u2014
9,373
8,743
14,265
41,508
(11,892)
77,753
2023
Millions of euros
Telef\u00f3nica
Spain
VMO2
Telef\u00f3nica
Germany
Telef\u00f3nica
Brazil
Telef\u00f3nica
Hispam
Other
companies
Eliminations
Total Group
Fixed assets
14,186
\u2014
11,114
18,749
6,742
2,243
(12)
53,022
Rights of use
1,771
\u2014
3,203
2,258
1,179
111
(74)
8,448
Investments accounted for by the equity method
233
7,774
\u2014
3
219
361
\u2014
8,590
Financial assets and other non-currents assets
1,058
\u2014
962
1,054
1,374
7,384
(4,564)
7,268
Deferred tax assets
2,676
\u2014
538
406
738
1,882
\u2014
6,240
Other current financial assets
36
\u2014
10
55
272
3,660
(2,955)
1,078
Non-current assets and disposal groups held for sale
\u2014
\u2014
\u2014
\u2014
273
\u2014
\u2014
273
Total allocated assets
27,119
7,774
18,565
26,114
15,019
23,096
(13,363)
104,324
Non-current financial liabilities
695
\u2014
1,235
688
6,164
28,948
(4,370)
33,360
Non-current lease liabilities
1,223
\u2014
2,559
1,817
1,111
44
(46)
6,708
Deferred tax liabilities
82
\u2014
254
927
601
838
\u2014
2,702
Current financial liabilities
1,458
\u2014
286
48
768
6,960
(5,819)
3,701
Current lease liabilities
486
\u2014
555
725
476
20
(23)
2,239
Liabilities associated with non-current assets and disposal groups
held for sale
\u2014
\u2014
\u2014
\u2014
37
\u2014
\u2014
37
Total allocated liabilities
16,869
\u2014
9,937
9,837
13,720
40,159
(13,294)
77,228
The detail of assets and liabilities of VMO2 is as follows (amounts corresponding to
100% of the company, see Note 10):
VMO2
Millions of euros
2024
2023
Fixed assets
40,079
38,817
Rights of use
1,073
773
Financial assets and other non-currents assets
1,481
1,741
Deferred tax assets
448
366
Other current financial assets
660
569
Total assets
48,247
46,455
Non-current financial liabilities
21,754
21,061
Non-current lease liabilities
950
663
Deferred tax liabilities
1
1
Current financial liabilities
4,970
4,165
Current lease liabilities
197
201
Total liabilities
32,804
30,727
The composition of segment revenues is as follows:
Millions of euros
2024
2023
2022
Country by segments
Fixed
Mobile
Others
and
elims.
Total
Fixed
Mobile
Others
and
elims.
Total
Fixed
Mobile
Others
and
elims.
Total
Spain (*)
12,791
12,654
12,497
Germany
857
7,596
39
8,492
827
7,767
20
8,614
806
7,394
24
8,224
Brazil
2,772
6,846
\u2014
9,618
2,858
6,792
\u2014
9,650
2,764
6,106
\u2014
8,870
Hispam
2,976
6,056
\u2014
9,032
2,888
5,493
\u2014
8,381
3,138
6,003
\u2014
9,141
Other and inter-segment eliminations
1,382
1,382
1,353
1,353
1,261
1,261
Total Group
41,315
40,652
39,993
Note: In the countries of Telef\u00f3nica Hispam segment with separate fixed and mobile operating companies, intercompany revenues were not considered.
(*) The detail of revenues for Telef\u00f3nica Spain is shown in the table below.
Given the convergence reached at Telef\u00f3nica Spain due to the high penetration of
convergent offers in Telef\u00f3nica Spain, the revenue breakdown by fixed and mobile is
less relevant in this segment. For this reason, management believes that the revenue
breakdown shown below is more meaningful.
Millions of euros
Telef\u00f3nica Spain
2024
2023
2022
Retailers
10,092
9,872
9,662
Wholesalers, mobile handsets sales and others
2,699
2,782
2,835
Total
12,791
12,654
12,497
", "dimensions": { "concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-843": { "value": "
Note 4. Segment information
In 2024 the Telef\u00f3nica Group is reporting financial
information, both internally and externally, according to
the following segments: Telef\u00f3nica Spain, VMO2
(recorded by the equity method), Telef\u00f3nica Germany,
Telef\u00f3nica Brazil and Telef\u00f3nica Hispam (formed by the
Group's operators in Colombia, Mexico, Venezuela,
Ecuador, Argentina, Chile, Peru and Uruguay).
In 2024, the impairment of goodwill of the cash-
generating unit in Peru and Chile is included in the
Telef\u00f3nica Hispam segment, and the impairment of
goodwill of Telef\u00f3nica Tech UK & Ireland and the BE-
terna Group is included in Other companies (see Note 7).
In 2023, the impairment of goodwill of the cash-
generating unit in Ecuador (see Note 7) is included in the
Telef\u00f3nica Hispam segment.
The segments referred to above include the information
relating to the fixed, mobile, cable, data, internet,
television and other digital services businesses provided
in each country. Intersegment transactions are carried
out as if on an arm's length basis.\u00a0
Information relating to other Group companies not
specifically included in these segments is reported
under \"Other companies\" (see Appendix I), which
includes Telef\u00f3nica, S.A. and other holding companies,
as well as companies whose main purpose is to provide
cross-sectional services to Group companies and other
operations not included in the segments. The
Incremental Group and BE-terna Group, acquired in
2022 (see Note 5), and Cancom Group, acquired in 2021,
are reported within \"Other companies\". \"Other
companies\" also includes the share of results of
investments accounted for by the equity method
corresponding to the fiber optic companies in which
Telef\u00f3nica Infra, S.L. has ownership interests (see Note
10).
The Group centrally manages borrowing activities,
mainly through Telef\u00f3nica, S.A. and other companies
(see Note 19, Appendix III and Appendix V), so most of
the Group's financial assets and liabilities are reported
under Other companies. In addition, Telef\u00f3nica, S.A. is
the head of the Telef\u00f3nica tax group in Spain (see Note
25). Therefore, a significant part of the deferred tax
assets and liabilities is included under Other companies.
For these reasons, the results of the segments are
disclosed through operating income.
Revenues and expenses arising from intra-group
invoicing for the use of the trademark and management
services were eliminated from the operating results of
each Group segment. The results of the holding
companies also exclude dividends from Group
companies and impairments of investments in Group
companies. These adjustments have no impact on the
Group\u2019s consolidated results. In addition, segment
reporting considers the impact of the purchase price
allocation to the assets acquired and the liabilities
assumed by the companies included in each segment.
The assets and liabilities presented in each segment are
those managed by the heads of each segment,
regardless of their legal structure.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSegmentReportingExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-844": { "value": "
Note 5. Business combinations
2024
Joint operation in Colombia
On February 26, 2024, Colombia Telecomunicaciones
S.A. ESP BIC and Colombia M\u00f3vil S.A. ESP signed a
binding framework agreement for the implementation of
a single mobile access network, through an independent
company, Unired Colombia, S.A.S, as well as for sharing
the radioelectric spectrum usage permits through a
Temporary Union, whose only users would be the two
shareholders participating in the aforementioned
agreement.
The transaction closed on December 20, 2024, with the
first transfer by the Ministry of Information Technology
and Communications of the permit for the access, use
and exploitation of 20 MHz of radioelectric spectrum for
the operation of land mobile radiocommunication
services in the national territory granted to Colombia
M\u00f3vil in favor of the Temporary Union. On this date,
Colombia Telecomunicaciones and Colombia M\u00f3vil
contributed their mobile infrastructure businesses and,
in addition to the payment of 25 million dollars
(approximately 24 million euros at the closing exchange
rate of December 31, 2024) by Colombia
Telecomunicaciones as equalization, both shareholders
obtained equal participation (50:50) in the joint
operation. This payment is scheduled to take place in
2025.
The following table summarizes the proportional share of
the fair value of the contributions made to the joint
operation by each of the parties:
Millions of euros
Intangible assets
11
Property, plant and equipment
88
Rights of use
22
Trade receivables
43
Total assets
164
Lease liabilities
2
Account payables
77
Provisions
1
Total liabilities
80
In addition, the goodwill allocated to the transaction
amounting to 16 million euros has been written off (see
Note 7). The result associated with the transaction
recorded in \"gains from sale of businesses\" has
amounted to 47 million euros (Note 26).
IPNET Group
On October 1, 2024, Telef\u00f4nica Cloud e Tecnologia do
Brasil S.A., a subsidiary of Telef\u00f3nica Brasil, completed
the acquisition of IPNET Servi\u00e7os em Nuvem e
Desenvolvimento de Sistemas Ltda. and IPNET USA,
LLC.
At the date of preparation of these consolidated
financial statements, the allocation of the purchase price
is provisional. The following table summarizes the
consideration, the fair values of the identifiable assets
acquired and the liabilities assumed at the time of the
acquisition and the preliminary goodwill:
Millions of euros
Consideration
37
Intangible assets
11
Customer relationships
5
Other intangible assets
6
Property, plant and equipment
\u2014
Other long term assets
16
Trade receivables
5
Other current assets
1
Loans
(1)
Trade payables
(5)
Deferred tax liabilities
(2)
Provisions
(16)
Fair value of net assets
9
Preliminary Goodwill
28
The total consideration was 224 million reais (equivalent
to 37 million euros). At the closing of the transaction a
payment was made amounting to 60 million reais (10
million euros, see Note 28) and the remaining amount
was pending payment as of December 31, 2024, in
accordance with the contractual clauses.
From the acquisition date until the conclusion of these
consolidated financial statements, IPNET contributed 11
million euros to consolidated revenues.
2023
During 2023, no significant business combinations have
taken place.
2022
Acquisition of mobile assets of Oi Group
On April 20, 2022, the closing of the transaction related
to the Purchase Agreement for Acquisition of UPI Mobile
Assets of Oi Group took place, and Telef\u00f3nica Brasil
acquired, on such date, all the shares of the company
Garliava RJ Infraestrutura e Redes de Telecomunica\u00e7\u00f5es
S.A. (Garliava), to which the mobile assets of Oi Group
assigned to Telef\u00f3nica Brasil had been contributed,
under the segregation plan stated in the Oi Agreement.
The mobile assets of Oi Group finally assigned to
Telef\u00f3nica Brasil were the following:
\u2022 Customers: approximately 12.5 million (equivalent to
30% of the total customer base of the mobile assets of
Oi Group) \u2013 according to ANATEL\u2019s February 2022
data;
\u2022 Spectrum: 43 MHz as national population-weighted
average (46% of the radiofrequency of the mobile
assets of Oi Group); and
\u2022 Infrastructure: contracts for the use of approximately
2.7 thousand sites of mobile access (corresponding to
19% of the sites of the mobile assets of Oi Group).
On the date of approval of the consolidated financial
statements for the year 2022, the Company had
concluded the report for the allocation of the purchase
price. The following table presents the consideration, the
fair value of the identifiable assets and the liabilities
assumed at the acquisition date and the goodwill:
Millions of euros
Consideration
1,093
Intangible assets
539
Licenses
520
Customer relationships
19
Property, plant and equipment
29
Rights of use
105
Deferred tax assets
44
Trade receivables
74
Other assets
30
Cash and cash equivalents
13
Lease liabilities
(117)
Trade payables
(24)
Provisions
(221)
Other liabilities
(55)
Fair value of net assets
417
Goodwill
676
The fair value of the licenses was determined using the
discounted cash flow method of the Income Approach,
which considers the earning capacity of the asset. The
amortization period of the licenses ranges from 5 to 15
years (average period of 10.08 years).
The fair value of trade receivables amounted to 74
million euros, which did not differ from the book value
consisting of a gross amount of 81 million euros, net of
estimated impairment losses of 7 million euros.
At the acquisition date, contingent liabilities were
recognized at fair value in the amount of 90 million
euros.
The contribution of Garliava since its inclusion in the
scope of consolidation and until December 31, 2022 was
206 million euros in revenues and 1 million euros in profit
for the period. The information was only available since
the mobile assets of Oi assigned to Telef\u00f3nica Brasil
were contributed to Garliava. Consequently, it was not
practicable to calculate these impacts as if the
transaction had taken place on January 1, 2022.
On October 3, 2022, Telef\u00f3nica Brasil, together with
Claro S.A. and TIM S.A., started an arbitration procedure
against the Seller (see Note 29.c). The Buyers made a
judicial deposit of the amount withheld from the
updated purchase price (see Note 15), until the dispute
arising from the price adjustment was resolved by
arbitration, corresponding to Telef\u00f3nica Brazil an amount
of 522 million reais at December\u00a031, 2022 (approximately
94 million euros).
In October 2023, the arbitration proceeding between
the parties ended (see Note 29.c), resulting on a final
price the for the UPI Mobile Assets assigned to
Telef\u00f3nica Brasil of 5,129 million Brazilian reais as of the
closing date (compared to the 5,373 million Brazilian
reais of the initial price, see Note 2). As a result, 50% of
the retained amount (488 million reais), plus applicable
interest was offset against the amount allocated as debt
and the other 50%, in the updated amount of 277 million
reais (51 million euros at such date), was withdrawn by
Telef\u00f3nica Brasil before the Arbitration Chamber.
The post-closing price adjustment occurred during the
second half of 2023, after the measurement period of
the\u00a0 purchase price allocation process. Therefore, the
impact generated by the post-closing price adjustment
was recorded in the 2023 income statement, with no
changes in the goodwill recorded as of December 31,
2022.
Completion of the purchase price allocation
process for Incremental Group
On March 21, 2022, Telef\u00f3nica Tech UK & Ireland, Ltd
completed the acquisition of 100% of the shares of the
British group Perpetual TopCo, Limited and affiliates
(Incremental Group), one of Microsoft's fastest-growing
business partners in the UK, for a 104 million euros
consideration (including potential contingent payments
linked to its future performance). In addition, at the
closing of the transaction a payment was made in the
amount of 91 million euros to cancel payment obligations
of the acquired companies.
At the date of preparation of the consolidated financial
statements for the year 2022, the purchase price
allocation was provisional. In 2023, the preliminary
allocation was reviewed within the twelve-month period
from the acquisition date,\u00a0 without any change in the fair
value of the assets and liabilities acquired.
The following table presents the consideration, the fair
value of assets and liabilities identified at the acquisition
date and the final goodwill:
Millions of euros
Share purchase price
104
Payment obligations cancelled
91
Total
195
Intangible assets
24
Customer relationships
23
Other intangible assets
1
Property, plant and equipment
1
Rights of use
1
Accounts receivable
11
Other assets
1
Cash and cash equivalents
9
Lease liabilities
(2)
Accounts payable
(3)
Deferred tax liabilities
(6)
Other liabilities
(11)
Fair value of net assets
25
Goodwill (Note 7)
170
The contribution of the Incremental Group to the profit
for the year 2022, after the impact of the amortization of
the assets identified in the purchase price allocation,
was a 1 million euro profit.
Completion of the purchase price allocation
process for BE-terna Group
On June 9, 2022, Telef\u00f3nica Cybersecurity & Cloud
Tech, S.L.U. completed the acquisition of 100% of the
shares of the German group BE-terna Acceleration
Holding GmbH and affiliates (\"BE-terna Group\"), for a 191
million euros consideration (including potential
contingent payments linked to its future performance).
In addition, at the closing of the transaction a payment
was made in the amount of 162 million euros to cancel
payment obligations of the acquired companies.
At the date of preparation of the consolidated financial
statements for the year 2022, the purchase price
allocation was provisional. In 2023, the preliminary
allocation was reviewed within the twelve-month period
from the acquisition date, resulting in a 3 million euro
increase in goodwill.
The following table presents the consideration, the fair
value of assets and liabilities identified at the acquisition
date and the final goodwill:
Millions of euros
Share purchase price
191
Payment obligations cancelled
162
Total
353
Intangible assets
73
Customer relationships
53
Other intangible assets
20
Property, plant and equipment
6
Right of use
5
Accounts receivable
19
Other assets
12
Cash and cash equivalents
17
Lease liabilities
(5)
Trade payables
(9)
Deferred tax liabilities
(20)
Current tax payables
(6)
Other liabilities
(21)
Fair value of net assets
71
Goodwill (Note 7)
282
The contribution of BE-terna Group to the profit for the
year 2022, after the impact of the amortization of the
assets identified in the purchase price allocation, was a 3
million euros loss.
2024
Millions of euros
Balance at
12/31/2023
First
applica-
tion of
IAS 21
Addi-
tions(1)
Depre-
ciation
Dispo
-sals
Impair-
ments
Transfers
and
others
Translation
differences
Inflation
adjust-
ments
Business
combi-
nations
Balance at
12/31/2024
Land and buildings
2,516
15
22
(209)
(21)
(175)
116
(119)
166
15
2,326
Plant and
machinery
17,947
23
1,041
(3,680)
(13)
(642)
2,263
(1,071)
583
70
16,521
Furniture, tools
and other items
618
3
81
(213)
(2)
(24)
146
(40)
46
(10)
605
PP&E in progress
1,863
61
2,479
\u2014
(12)
(5)
(2,421)
(108)
117
13
1,987
Total\u00a0 PP&E
22,944
102
3,623
(4,102)
(48)
(846)
104
(1,338)
912
88
21,439
(1) Total additions of property, plant and equipment in 2024 amounted to 3,676 million euros, including the additions corresponding to companies held for sale
during the annual reporting period (see Note 2).
2023
Millions of euros
Balance at
12/31/2022
Additions(1)
Depre-
ciation
Disposals
Impair-
ments
Transfers
and others
Translation
differences
Inflation
adjust-
ments
Balance at
12/31/2023
Land and buildings
2,641
21
(206)
(21)
\u2014
145
(188)
124
2,516
Plant and machinery
18,165
1,123
(3,650)
(14)
\u2014
2,399
(525)
449
17,947
Furniture, tools and
other items
576
136
(199)
4
\u2014
112
(43)
32
618
PP&E in progress
2,332
2,420
\u2014
(38)
(3)
(2,826)
(110)
88
1,863
Total\u00a0 PP&E
23,714
3,700
(4,055)
(69)
(3)
(170)
(866)
693
22,944
(1) Total additions of property, plant and equipment in 2023 amounted to 3,741 million euros, including the additions corresponding to companies held for sale
during the annual reporting period (see Note 2).
", "dimensions": { "concept": "ifrs-full:DisclosureOfBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-846": { "value": "
Note 6. Intangible assets
The composition of and movements in net intangible
assets in 2024 and 2023 are as follows:
2024
Millions of
euros
Balance at
12/31/2023
First
application
of IAS 21
Additions(1)
Amorti-
zation
Impair-
ments
Transfers
and
others
Translation
differences
Inflation
adjustments
Business
combi-
nations
Balance at
12/31/2024
Service
concession
arrangements
and licenses
6,886
4
157
(757)
(485)
1
(536)
376
21
5,667
Software
3,089
4
510
(1,410)
(21)
1,139
(222)
29
(14)
3,104
Customer
base
386
\u2014
\u2014
(238)
\u2014
\u2014
(1)
(1)
5
151
Trademarks
235
\u2014
\u2014
(32)
\u2014
\u2014
(18)
\u2014
2
187
Other
intangible
assets
58
\u2014
20
(25)
\u2014
8
(1)
\u2014
4
64
Intangible
assets in
process
716
\u2014
1,109
\u2014
\u2014
(1,104)
(28)
5
4
702
Total
intangible
assets
11,370
8
1,796
(2,462)
(506)
44
(806)
409
22
9,875
(1) Total additions of intangible assets in 2024 amounted to 1,799 million euros, including the additions corresponding to companies held for sale during the annual
reporting period (see Note 2).
2023
Millions of euros
Balance at
12/31/2022
Additions
Amorti-
zation
Dispo-
sals
Impair-
ments
Transfers
and
others
Trans-
lation
diffe-
rences
Inflation
adjust-
ments
Business
combi-
nations
Balance at
12/31/2023
Service concession
arrangements and licenses
7,550
183
(840)
\u2014
\u2014
2
(205)
196
\u2014
6,886
Software
2,800
486
(1,356)
(1)
\u2014
1,122
18
20
\u2014
3,089
Customer base
721
\u2014
(333)
\u2014
\u2014
(3)
4
\u2014
(3)
386
Trademarks
263
\u2014
(33)
\u2014
\u2014
\u2014
5
\u2014
\u2014
235
Other intangible assets
39
20
(21)
\u2014
(2)
5
2
\u2014
15
58
Intangible assets in process
644
1,149
\u2014
(1)
\u2014
(1,076)
(7)
7
\u2014
716
Total intangible assets
12,017
1,838
(2,583)
(2)
(2)
50
(183)
223
12
11,370
Additions of spectrum in 2024 amounted to 157 million
euros ( 183 million euros in 2023 ) .
In 2024 Telef\u00f3nica Hispam's intangible asset additions,
the following stand out: the acquisition of spectrum in
Colombia for 87 million euros (3,500 MHz, 850 MHz and
1,900 MHz bands), in Ecuador for 19 million euros
(extension of the operating license) and in Uruguay for
23 million euros (renewal of the 850 MHz and 1,900 MHz
bands).
Telef\u00f3nica Spain's spectrum additions in 2024 amounted
to 25 million euros.
In 2024,Telef\u00f3nica Brasil\u00a0 includes 4 million euros of the
renewal of the 850MHz band.
In 2023 Telef\u00f3nica Hispam, spectrum acquisitions stood
out in Argentina for 109 million euros in the 3.5 GHz
band, in Ecuador for 18 million euros and in Uruguay for
24 million euros.
Appendix VI contains the details of the main
concessions and licenses which the Group operates.
In 2024, Telef\u00f3nica Argentina recorded an impairment of
service concession arrangements and licenses and
software, amounting to 415 million euros and 21 million
euros, both with a corresponding entry under Other
expenses (see Note 26). Telef\u00f3nica Argentina's
intangible assets as of December\u00a031, 2024 amounting to
265 million euros (415 million euros as of December\u00a031,
2023).
In 2024, Telef\u00f3nica del Per\u00fa recorded an impairment of
service concession arrangements and licenses,
amounting to 54 million euros, with a corresponding
entry under Other expenses (see Note 26).
The effect of the translation into euros of the intangible
assets of the Group's companies in Argentina and
Venezuela and the effect of the inflation adjustments
(see Note 3.a), are shown in the columns \"Translation
differences\" and \"Inflation adjustments\", respectively.
The cost, accumulated amortization and impairment
losses of intangible assets at December\u00a031, 2024 and
2023 are as follows:
Balance at December 31, 2024
Millions of euros
Cost
Accumulated
amortization
Impairment
losses
Intangible assets
Service concession arrangements and licenses
15,018
(8,666)
(685)
5,667
Software
18,442
(15,300)
(38)
3,104
Customer base
2,265
(2,114)
\u2014
151
Trademarks
905
(718)
\u2014
187
Other intangible assets
794
(726)
(4)
64
Intangible assets in process
702
\u2014
\u2014
702
Total intangible assets
38,126
(27,524)
(727)
9,875
Balance at December 31, 2023
Millions of euros
Cost
Accumulated
amortization
Impairment
losses
Intangible assets
Service concession arrangements and licenses
16,056
(9,061)
(109)
6,886
Software
17,851
(14,753)
(9)
3,089
Customer base
4,166
(3,780)
\u2014
386
Trademarks
958
(723)
\u2014
235
Other intangible assets
867
(805)
(4)
58
Intangible assets in process
724
\u2014
(8)
716
Total intangible assets
40,622
(29,122)
(130)
11,370
Note 7. Goodwill
Movement in goodwill
The movement in goodwill assigned to each Group
segment was as follows:
2024
Millions of euros
Balance at
12/31/2023
Additions
Disposals
Write-offs
Transfers
Exchange
rate impact
Balance at
12/31/2024
Telef\u00f3nica Spain
4,291
\u2014
\u2014
\u2014
\u2014
\u2014
4,291
Telef\u00f3nica Brazil
8,076
28
\u2014
\u2014
\u2014
(1,364)
6,740
Telef\u00f3nica Germany
4,386
\u2014
\u2014
\u2014
\u2014
\u2014
4,386
Telef\u00f3nica Hispam
1,108
\u2014
(16)
(623)
\u2014
(51)
418
Others
847
\u2014
\u2014
(243)
\u2014
22
626
Total
18,708
28
(16)
(866)
\u2014
(1,393)
16,461
2023
Millions of euros
Balance at
12/31/2022
Additions
Disposals
Write-offs
Transfers
Exchange
rate impact
Balance at
12/31/2023
Telef\u00f3nica Spain
4,291
\u2014
\u2014
\u2014
\u2014
\u2014
4,291
Telef\u00f3nica Brazil
7,752
5
\u2014
\u2014
\u2014
319
8,076
Telef\u00f3nica Germany
4,386
\u2014
\u2014
\u2014
\u2014
\u2014
4,386
Telef\u00f3nica Hispam
1,215
\u2014
\u2014
(58)
(36)
(13)
1,108
Others
827
11
\u2014
\u2014
\u2014
9
847
Total
18,471
16
\u2014
(58)
(36)
315
18,708
In 2024, an impairment loss of the entire remaining
goodwill allocated to the cash-generating unit in Per\u00fa
amounting to 226 million euros has been recorded, with
a corresponding entry under Other expenses in the
consolidated income statement (see Note 26). In
addition, until the carrying amount and the recoverable
amount of the CGU are equal, an impairment loss on
intangible assets has been recorded amounting to 54
million euros (see Note 6), with a corresponding entry
under Other expenses (see Note 26). Telef\u00f3nica del
Per\u00fa, affected by an aggressive competitive
environment in both fixed and mobile, has registered a
lower achievement of the operating variables compared
to what was estimated in the impairment test of the
previous year. In this context, the latest business plans
approved by the Board of Directors of Telef\u00f3nica reflect
a reduction in the expected growth of the main
operating variables. The discount rate (WACC) used in
the estimation of the value in use as of December 31,
2024, was 9.5% (11.6% before taxes) and the perpetuity
growth rate used was 2.4%.
In addition, in the Telef\u00f3nica Hispam segment, an
impairment loss of the goodwill allocated to the cash-
generating unit in Chile amounting to 397 million euros
was recorded, with a corresponding entry under Other
expenses (see Note 26). Economic growth in Chile
continues at a low rate, with financial tensions and the
effects of the recent inflationary and cost shock
persisting, preventing further monetary easing. In this
context, weak domestic demand is expected to continue
and competitive intensity is expected to remain high. As
a result, lower expected growth of the main operating
variables has been estimated compared to the
impairment test of the previous year. The discount rate
(WACC) used in the estimation of the value in use as of
December 31, 2024, was 8.5% (10.4% before taxes) and
the perpetuity growth rate used was 2.8%.
Additionally, in 2024 impairments have been recorded
on the goodwill allocated to the cash-generating units of
Telef\u00f3nica Tech UK & Ireland, affected by the evolution
of the macroeconomic environment in the United
Kingdom (which has resulted in an increase in the
WACC discount rate to 9.4%, 11.4% before tax) and Be-
terna Group, for amounts of 192 million euros and 51
million euros, respectively (see Note 26).
Additions in 2024 correspond to the goodwill related to
the acquisition of IPNET (see Note 5).
The amount in disposals of Telef\u00f3nica Hispam in 2024
corresponds to the estimation of goodwill of the cash
generating unit Telef\u00f3nica Colombia allocated to the
agreement signed by Colombia Telecomunicaciones
S.A. ESP BIC and Colombia M\u00f3vil S.A. ESP (see Note 5).
In 2023, an impairment of goodwill assigned to the cash-
generating unit in Ecuador was recorded, amounting to
58 million euros, with a corresponding entry under Other
expenses (see Note 26).
The amount in transfers of Telef\u00f3nica Hispam in 2023
corresponded to the estimation of goodwill of the cash
generating unit of Per\u00fa allocated to the agreement
between Telef\u00f3nica Hispanoam\u00e9rica, S.A. and the group
Kohlberg Kravis Roberts \u2013 KKR & Co, Inc. and Entel Per\u00fa
S.A. (see Note 30).\u00a0
Cash-generating units
In order to test for impairment, goodwill was allocated to
the different cash-generating units (CGUs), which are
grouped into the following reportable operating
segments:
\u00a0Millions of euros
12/31/2024
12/31/2023
Telef\u00f3nica Spain
4,291
4,291
Telef\u00f3nica Brazil
6,740
8,076
Telef\u00f3nica Germany
4,386
4,386
Telef\u00f3nica Hispam
418
1,108
Colombia
136
164
Ecuador
79
75
Chile
179
615
Peru
\u2014
229
Uruguay
22
23
Others T. Hispam
2
2
Other companies
626
847
Telef\u00f3nica Tech UK & Ireland
268
438
BE-terna
230
282
Others
128
127
TOTAL
16,461
18,708
Goodwill is tested for impairment at the end of the year
using the business plans of the cash-generating units to
which the goodwill is assigned, approved by the Board
of Directors of Telef\u00f3nica.
The business plan covers a three-year period, including
the closing year. In order to complete the five years of
cash flows after the closing year, an additional
normalization period is added to the business plans on
the operating ratios until the terminal parameters are
reached. The consensus' forecasts are used as a
reference. For specific cases, extended business plans
are used to cover the five -year period of cash flows,
when the normalization period does not properly reflect
the expected evolution of the business.
Finally, to determine the terminal value of each CGU, a
constant free cash flows growth over time is assumed,
applying a terminal growth rate. The model used is
similar to the dividend discount model developed by
Gordon-Shapiro, internationally recognized for business
valuations.
The process of preparing the CGUs\u2019 business plans
considers the current market condition of each CGU,
analyzing the macroeconomic, competitive, regulatory
and technological environments, as well as the growth
opportunities of the CGUs, and the differentiation
capabilities compared to the competition based on
market projections. A growth target is therefore defined
for each CGU, based on the appropriate allocation of
operating resources and the capital investments
required to achieve the target. In addition, operating
efficiency improvements are defined, in line with the
strategic transformation initiatives, in order to increase
the forecasted operating cash flow. In this process, the
Group considers the compliance with business plans in
the past.
Main assumptions used in
calculating value in use \u00a0
CGUs\u2019 value in use are calculated based on the
approved business plans. Certain variables are then
considered, including the long-term EBITDA margin and
the long-term Capital Expenditure ratio (expressed as a
percentage of revenue), which are considered the key
operating variables to measure business performance
and to set financial targets. Finally, the discount rates
and the perpetuity growth rates are considered. \u00a0
The main variables considered for the most significant
CGUs (T. Brazil, T. Spain, and T. Germany) are described
below.
Revenues
In terms of revenues, the three-year plan reflects a trend
of stability or improvement.\u00a0
EBITDA margin and long-term Capital
Expenditure (CapEx) ratio
The values obtained, as described in the previous
paragraphs, are compared with the available data of
analysts and competitors in the geographic markets
where the Telef\u00f3nica Group operates.
In Europe, the long-term EBITDA margins two-year
estimates of Telef\u00f3nica Group's analysts are within a
range of 35% to 38% for Spain and 27% to 31% for
Germany.
In relation to the long-term ratio of CapEx over revenues
in the valuations performed for the impairment tests for
Spain and Germany, the ratios are within the range
estimated by the Telef\u00f3nica Group\u2019s analysts in terms of
investment needs (range between 10% and 12% for
Spain and between 11% and 17% for Germany).
As for the long-term EBITDA margin two -year estimates
of Telef\u00f3nica Group's analysts for the operator in Brazil, it
is in a range within 41% to 44%. Regarding investments,
the operator will invest in the horizon of the projected
plan a percentage that is aligned with the investment
needs planned for the development of its business,
which is located in a range between 10% and 16% .
Discount rate
The discount rate, applied to discount cash flows, is the
weighted average cost of capital (WACC), determined
by the weighted average cost of equity and cost of debt
according to the finance structure determined for each
CGU.
This rate is calculated using the capital asset pricing
model (CAPM), which considers the asset\u2019s systemic
risk, and the impact of those risks not already considered
on cash flows, such as country risk, business-specific
credit risk, currency risk and price risk specific to the
financial asset, constantly monitoring the fluctuations of
the financial markets.
The most significant components of WACC are
summarized as follows:
\u2022 Risk-Free Rate: defined as the interest rate offered by
long-term sovereign bonds. The rate is determined
using current market data and long-run equilibrium
rates estimates (according to standard econometric
models, supported by modeling of neutral rates
prepared by the central banks themselves) in which
the interest rates should be located, thus adjusting the
yields, influenced by central banks interventions.
\u2022 Political Risk Premium: adds the country's insolvency
risk due to political and/or financial events; calculation
is based on the quoted prices of credit default swaps
for each country or, the EMBI+ index published by JP
Morgan based on the information available and the
liquidity conditions of these swaps.
\u2022 Equity Risk Premium: the return in excess that equity
assets are expected to yield over the risk-free rate.
This is determined using a combination of historical
approaches (ex post) backed by external publications
and studies based on historical market returns series,
and prospective approaches (ex ante), based on
market publications, considering the medium- and
long-term profit expectations based on the degree of
maturity and development of each country.
\u2022 Beta Coefficient: a measure of the volatility, or
systematic risk, of an equity asset in comparison to the
entire market. It is estimated based on a series of
historical share prices of comparable companies listed
on the stock exchange, to estimate the correlation
between the company shares\u00b4 returns and the stock
market returns, of the country where the company is
listed.
The main underlying data used in these calculations are
obtained from independent and renowned external
information sources.
The discount rates applied to the cash flow projections
in 2024 and 2023 for the main CGUs are as follows:
2024
Discount rate in local
currency
Before tax
After-tax
Spain
8.6%
6.6%
Brazil
13.9%
11.5%
Germany
8.0%
5.5%
2023
Discount rate in local
currency
Before tax
After-tax
Spain
9.1%
7.0%
Brazil
14.8%
12.0%
Germany
8.4%
5.8%
Perpetuity growth rate
Cash flow projections from the sixth year are calculated
using an expected constant growth rate (g), considering
the analyst consensus estimates for each business,
based on the maturity of the industry and technology,
and the degree of development of each country. Each
indicator is compared to the forecasted long-term real
and nominal GDP growth of each country and growth
data from external sources, adjusting any particular case
with specific characteristics related to the business
evolution.
The perpetuity growth rates applied to the cash flow
projections in 2024 and 2023 for the main CGUs are as
follows:
Perpetuity growth rate
in local currency
2024
2023
Spain
0.8%
0.8%
Brazil
4.0%
4.0%
Germany
1.0%
1.0%
Perpetuity growth rates for 2024 have remained stable
compared to the previous year for the three main CGUs.
Sensitivity to changes in
assumptions
The Group performs a sensitivity analysis of the
impairment test by considering reasonable changes in
the main assumptions used in the test. For the main
CGU, the following maximum increases or decreases
were assumed, expressed in percentage points:\u00a0
Changes in key
assumptions,
In percentage points
Spain
Germany
Brazil
Financial variables
\u00a0
\u00a0
Discount rate
+/-0.5
+/-0.5
+/-1
Perpetuity growth
rates
+/-0.25
+/-0.25
+/-0.5
Long-term operating
variables
EBITDA Margin
+/-1.75
+/-1.5
+/-2
Ratio of CapEx/
Revenues
+/-0.875
+/-0.75
+/-1
The sensitivity analysis revealed that there is still room
between the recoverable value and the carrying amount
for the main CGUs at December\u00a031, 2024.
Regarding the CGU of Chile, in the sensitivity of the
calculation of the value in use to reasonable variations in
the key assumptions, an increase of around 50 basis
points in the WACC would generate an additional
impairment of goodwill in the amount of 107 million
euros, while a decrease of around 25 basis points in the
perpetual growth rate of 2.8% would have an extra
negative impact of 48 million euros on the valuation of
goodwill. Regarding the operating assumptions, a 1.25
percentage point decrease in the EBITDA margin would
generate an additional impairment of approximately 198
million euros, and a 0.6 percentage points increase in
the investment ratio would result in an additional
impairment of around 136 million euros.
Regarding the CGU of Telefonica Tech UK & Ireland, in
the sensitivity of the calculation of the value in use to
reasonable variations in the key assumptions, an
increase of around 50 basis points in the WACC would
generate an additional impairment of goodwill in the
amount of 28 million euros, while a decrease of around
25 basis points in the perpetual growth rate of 3% would
have an extra negative impact of 12 million euros on the
valuation of goodwill. Regarding the operating
assumptions, a 0.5 percentage point decrease in the
EBITDA margin would generate an additional
impairment of approximately 19 million euros, and a 0.25
percentage points increase in the investment ratio
would result in an additional impairment of around 9
million euros.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-845": { "value": "
Note 6. Intangible assets
The composition of and movements in net intangible
assets in 2024 and 2023 are as follows:
2024
Millions of
euros
Balance at
12/31/2023
First
application
of IAS 21
Additions(1)
Amorti-
zation
Impair-
ments
Transfers
and
others
Translation
differences
Inflation
adjustments
Business
combi-
nations
Balance at
12/31/2024
Service
concession
arrangements
and licenses
6,886
4
157
(757)
(485)
1
(536)
376
21
5,667
Software
3,089
4
510
(1,410)
(21)
1,139
(222)
29
(14)
3,104
Customer
base
386
\u2014
\u2014
(238)
\u2014
\u2014
(1)
(1)
5
151
Trademarks
235
\u2014
\u2014
(32)
\u2014
\u2014
(18)
\u2014
2
187
Other
intangible
assets
58
\u2014
20
(25)
\u2014
8
(1)
\u2014
4
64
Intangible
assets in
process
716
\u2014
1,109
\u2014
\u2014
(1,104)
(28)
5
4
702
Total
intangible
assets
11,370
8
1,796
(2,462)
(506)
44
(806)
409
22
9,875
(1) Total additions of intangible assets in 2024 amounted to 1,799 million euros, including the additions corresponding to companies held for sale during the annual
reporting period (see Note 2).
2023
Millions of euros
Balance at
12/31/2022
Additions
Amorti-
zation
Dispo-
sals
Impair-
ments
Transfers
and
others
Trans-
lation
diffe-
rences
Inflation
adjust-
ments
Business
combi-
nations
Balance at
12/31/2023
Service concession
arrangements and licenses
7,550
183
(840)
\u2014
\u2014
2
(205)
196
\u2014
6,886
Software
2,800
486
(1,356)
(1)
\u2014
1,122
18
20
\u2014
3,089
Customer base
721
\u2014
(333)
\u2014
\u2014
(3)
4
\u2014
(3)
386
Trademarks
263
\u2014
(33)
\u2014
\u2014
\u2014
5
\u2014
\u2014
235
Other intangible assets
39
20
(21)
\u2014
(2)
5
2
\u2014
15
58
Intangible assets in process
644
1,149
\u2014
(1)
\u2014
(1,076)
(7)
7
\u2014
716
Total intangible assets
12,017
1,838
(2,583)
(2)
(2)
50
(183)
223
12
11,370
Additions of spectrum in 2024 amounted to 157 million
euros ( 183 million euros in 2023 ) .
In 2024 Telef\u00f3nica Hispam's intangible asset additions,
the following stand out: the acquisition of spectrum in
Colombia for 87 million euros (3,500 MHz, 850 MHz and
1,900 MHz bands), in Ecuador for 19 million euros
(extension of the operating license) and in Uruguay for
23 million euros (renewal of the 850 MHz and 1,900 MHz
bands).
Telef\u00f3nica Spain's spectrum additions in 2024 amounted
to 25 million euros.
In 2024,Telef\u00f3nica Brasil\u00a0 includes 4 million euros of the
renewal of the 850MHz band.
In 2023 Telef\u00f3nica Hispam, spectrum acquisitions stood
out in Argentina for 109 million euros in the 3.5 GHz
band, in Ecuador for 18 million euros and in Uruguay for
24 million euros.
Appendix VI contains the details of the main
concessions and licenses which the Group operates.
In 2024, Telef\u00f3nica Argentina recorded an impairment of
service concession arrangements and licenses and
software, amounting to 415 million euros and 21 million
euros, both with a corresponding entry under Other
expenses (see Note 26). Telef\u00f3nica Argentina's
intangible assets as of December\u00a031, 2024 amounting to
265 million euros (415 million euros as of December\u00a031,
2023).
In 2024, Telef\u00f3nica del Per\u00fa recorded an impairment of
service concession arrangements and licenses,
amounting to 54 million euros, with a corresponding
entry under Other expenses (see Note 26).
The effect of the translation into euros of the intangible
assets of the Group's companies in Argentina and
Venezuela and the effect of the inflation adjustments
(see Note 3.a), are shown in the columns \"Translation
differences\" and \"Inflation adjustments\", respectively.
The cost, accumulated amortization and impairment
losses of intangible assets at December\u00a031, 2024 and
2023 are as follows:
Balance at December 31, 2024
Millions of euros
Cost
Accumulated
amortization
Impairment
losses
Intangible assets
Service concession arrangements and licenses
15,018
(8,666)
(685)
5,667
Software
18,442
(15,300)
(38)
3,104
Customer base
2,265
(2,114)
\u2014
151
Trademarks
905
(718)
\u2014
187
Other intangible assets
794
(726)
(4)
64
Intangible assets in process
702
\u2014
\u2014
702
Total intangible assets
38,126
(27,524)
(727)
9,875
Balance at December 31, 2023
Millions of euros
Cost
Accumulated
amortization
Impairment
losses
Intangible assets
Service concession arrangements and licenses
16,056
(9,061)
(109)
6,886
Software
17,851
(14,753)
(9)
3,089
Customer base
4,166
(3,780)
\u2014
386
Trademarks
958
(723)
\u2014
235
Other intangible assets
867
(805)
(4)
58
Intangible assets in process
724
\u2014
(8)
716
Total intangible assets
40,622
(29,122)
(130)
11,370
", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-848": { "value": "
The composition of and movements in net intangible
assets in 2024 and 2023 are as follows:
2024
Millions of
euros
Balance at
12/31/2023
First
application
of IAS 21
Additions(1)
Amorti-
zation
Impair-
ments
Transfers
and
others
Translation
differences
Inflation
adjustments
Business
combi-
nations
Balance at
12/31/2024
Service
concession
arrangements
and licenses
6,886
4
157
(757)
(485)
1
(536)
376
21
5,667
Software
3,089
4
510
(1,410)
(21)
1,139
(222)
29
(14)
3,104
Customer
base
386
\u2014
\u2014
(238)
\u2014
\u2014
(1)
(1)
5
151
Trademarks
235
\u2014
\u2014
(32)
\u2014
\u2014
(18)
\u2014
2
187
Other
intangible
assets
58
\u2014
20
(25)
\u2014
8
(1)
\u2014
4
64
Intangible
assets in
process
716
\u2014
1,109
\u2014
\u2014
(1,104)
(28)
5
4
702
Total
intangible
assets
11,370
8
1,796
(2,462)
(506)
44
(806)
409
22
9,875
(1) Total additions of intangible assets in 2024 amounted to 1,799 million euros, including the additions corresponding to companies held for sale during the annual
reporting period (see Note 2).
2023
Millions of euros
Balance at
12/31/2022
Additions
Amorti-
zation
Dispo-
sals
Impair-
ments
Transfers
and
others
Trans-
lation
diffe-
rences
Inflation
adjust-
ments
Business
combi-
nations
Balance at
12/31/2023
Service concession
arrangements and licenses
7,550
183
(840)
\u2014
\u2014
2
(205)
196
\u2014
6,886
Software
2,800
486
(1,356)
(1)
\u2014
1,122
18
20
\u2014
3,089
Customer base
721
\u2014
(333)
\u2014
\u2014
(3)
4
\u2014
(3)
386
Trademarks
263
\u2014
(33)
\u2014
\u2014
\u2014
5
\u2014
\u2014
235
Other intangible assets
39
20
(21)
\u2014
(2)
5
2
\u2014
15
58
Intangible assets in process
644
1,149
\u2014
(1)
\u2014
(1,076)
(7)
7
\u2014
716
Total intangible assets
12,017
1,838
(2,583)
(2)
(2)
50
(183)
223
12
11,370
The composition and movements in 2024 and 2023 of
the items comprising net \"Property, plant and
equipment\" were as follows:
2024
Millions of euros
Balance at
12/31/2023
First
applica-
tion of
IAS 21
Addi-
tions(1)
Depre-
ciation
Dispo
-sals
Impair-
ments
Transfers
and
others
Translation
differences
Inflation
adjust-
ments
Business
combi-
nations
Balance at
12/31/2024
Land and buildings
2,516
15
22
(209)
(21)
(175)
116
(119)
166
15
2,326
Plant and
machinery
17,947
23
1,041
(3,680)
(13)
(642)
2,263
(1,071)
583
70
16,521
Furniture, tools
and other items
618
3
81
(213)
(2)
(24)
146
(40)
46
(10)
605
PP&E in progress
1,863
61
2,479
\u2014
(12)
(5)
(2,421)
(108)
117
13
1,987
Total\u00a0 PP&E
22,944
102
3,623
(4,102)
(48)
(846)
104
(1,338)
912
88
21,439
(1) Total additions of property, plant and equipment in 2024 amounted to 3,676 million euros, including the additions corresponding to companies held for sale
during the annual reporting period (see Note 2).
2023
Millions of euros
Balance at
12/31/2022
Additions(1)
Depre-
ciation
Disposals
Impair-
ments
Transfers
and others
Translation
differences
Inflation
adjust-
ments
Balance at
12/31/2023
Land and buildings
2,641
21
(206)
(21)
\u2014
145
(188)
124
2,516
Plant and machinery
18,165
1,123
(3,650)
(14)
\u2014
2,399
(525)
449
17,947
Furniture, tools and
other items
576
136
(199)
4
\u2014
112
(43)
32
618
PP&E in progress
2,332
2,420
\u2014
(38)
(3)
(2,826)
(110)
88
1,863
Total\u00a0 PP&E
23,714
3,700
(4,055)
(69)
(3)
(170)
(866)
693
22,944
(1) Total additions of property, plant and equipment in 2023 amounted to 3,741 million euros, including the additions corresponding to companies held for sale
during the annual reporting period (see Note 2).
2024
Millions of euros
Balance at
12/31/2023
First
applica-
tion of
IAS 21
Additions
Amorti-
zation
Dispo-
sals
Business
combi-
nations
Transfers
and
others
Translation
differences
and inflation
adjustments
Balance at
12/31/2024
Rights of use on land
and natural properties
834
\u2014
226
(250)
(13)
5
(16)
29
815
Rights of use on
buildings
4,287
\u2014
1,200
(1,151)
(32)
17
(18)
(403)
3,900
Rights of use on plant
and machinery
3,080
15
634
(756)
(15)
\u2014
(2)
(9)
2,947
Other rights of use
247
\u2014
82
(78)
(1)
\u2014
1
(6)
245
Total of rights of use
8,448
15
2,142
(2,235)
(61)
22
(35)
(389)
7,907
2023
Millions of euros
Balance at
12/31/2022
Additions
Amortization
Disposals
Transfers
and others
Translation
differences
and inflation
adjustments
Balance at
12/31/2023
Rights of use on\u00a0 land and
natural properties
885
194
(231)
(10)
\u2014
(4)
834
Rights of use on buildings
4,130
1,345
(1,172)
(95)
1
78
4,287
Rights of use on plant and
machinery
3,037
752
(686)
(26)
3
\u2014
3,080
Other rights of use
227
100
(70)
(2)
(6)
(2)
247
Total of rights of use
8,279
2,391
(2,159)
(133)
(2)
72
8,448
Note 26. Revenue and expenses
Depreciation and amortization
The breakdown of \u201cDepreciation and amortization\u201d on
the consolidated income statement is as follows:
Millions of euros
2024
2023
2022
Property, plant and
equipment (Note 8)
4,102
4,055
4,133
Intangible assets (Note 6)
2,462
2,583
2,599
Rights of use (Note 9)
2,235
2,159
2,064
Total
8,799
8,797
8,796
", "dimensions": { "concept": "ifrs-full:DisclosureOfDepreciationAndAmortisationExpenseExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-847": { "value": "
The composition of and movements in net intangible
assets in 2024 and 2023 are as follows:
2024
Millions of
euros
Balance at
12/31/2023
First
application
of IAS 21
Additions(1)
Amorti-
zation
Impair-
ments
Transfers
and
others
Translation
differences
Inflation
adjustments
Business
combi-
nations
Balance at
12/31/2024
Service
concession
arrangements
and licenses
6,886
4
157
(757)
(485)
1
(536)
376
21
5,667
Software
3,089
4
510
(1,410)
(21)
1,139
(222)
29
(14)
3,104
Customer
base
386
\u2014
\u2014
(238)
\u2014
\u2014
(1)
(1)
5
151
Trademarks
235
\u2014
\u2014
(32)
\u2014
\u2014
(18)
\u2014
2
187
Other
intangible
assets
58
\u2014
20
(25)
\u2014
8
(1)
\u2014
4
64
Intangible
assets in
process
716
\u2014
1,109
\u2014
\u2014
(1,104)
(28)
5
4
702
Total
intangible
assets
11,370
8
1,796
(2,462)
(506)
44
(806)
409
22
9,875
(1) Total additions of intangible assets in 2024 amounted to 1,799 million euros, including the additions corresponding to companies held for sale during the annual
reporting period (see Note 2).
2023
Millions of euros
Balance at
12/31/2022
Additions
Amorti-
zation
Dispo-
sals
Impair-
ments
Transfers
and
others
Trans-
lation
diffe-
rences
Inflation
adjust-
ments
Business
combi-
nations
Balance at
12/31/2023
Service concession
arrangements and licenses
7,550
183
(840)
\u2014
\u2014
2
(205)
196
\u2014
6,886
Software
2,800
486
(1,356)
(1)
\u2014
1,122
18
20
\u2014
3,089
Customer base
721
\u2014
(333)
\u2014
\u2014
(3)
4
\u2014
(3)
386
Trademarks
263
\u2014
(33)
\u2014
\u2014
\u2014
5
\u2014
\u2014
235
Other intangible assets
39
20
(21)
\u2014
(2)
5
2
\u2014
15
58
Intangible assets in process
644
1,149
\u2014
(1)
\u2014
(1,076)
(7)
7
\u2014
716
Total intangible assets
12,017
1,838
(2,583)
(2)
(2)
50
(183)
223
12
11,370
Movement in goodwill
The movement in goodwill assigned to each Group
segment was as follows:
2024
Millions of euros
Balance at
12/31/2023
Additions
Disposals
Write-offs
Transfers
Exchange
rate impact
Balance at
12/31/2024
Telef\u00f3nica Spain
4,291
\u2014
\u2014
\u2014
\u2014
\u2014
4,291
Telef\u00f3nica Brazil
8,076
28
\u2014
\u2014
\u2014
(1,364)
6,740
Telef\u00f3nica Germany
4,386
\u2014
\u2014
\u2014
\u2014
\u2014
4,386
Telef\u00f3nica Hispam
1,108
\u2014
(16)
(623)
\u2014
(51)
418
Others
847
\u2014
\u2014
(243)
\u2014
22
626
Total
18,708
28
(16)
(866)
\u2014
(1,393)
16,461
2023
Millions of euros
Balance at
12/31/2022
Additions
Disposals
Write-offs
Transfers
Exchange
rate impact
Balance at
12/31/2023
Telef\u00f3nica Spain
4,291
\u2014
\u2014
\u2014
\u2014
\u2014
4,291
Telef\u00f3nica Brazil
7,752
5
\u2014
\u2014
\u2014
319
8,076
Telef\u00f3nica Germany
4,386
\u2014
\u2014
\u2014
\u2014
\u2014
4,386
Telef\u00f3nica Hispam
1,215
\u2014
\u2014
(58)
(36)
(13)
1,108
Others
827
11
\u2014
\u2014
\u2014
9
847
Total
18,471
16
\u2014
(58)
(36)
315
18,708
In 2024, an impairment loss of the entire remaining
goodwill allocated to the cash-generating unit in Per\u00fa
amounting to 226 million euros has been recorded, with
a corresponding entry under Other expenses in the
consolidated income statement (see Note 26). In
addition, until the carrying amount and the recoverable
amount of the CGU are equal, an impairment loss on
intangible assets has been recorded amounting to 54
million euros (see Note 6), with a corresponding entry
under Other expenses (see Note 26). Telef\u00f3nica del
Per\u00fa, affected by an aggressive competitive
environment in both fixed and mobile, has registered a
lower achievement of the operating variables compared
to what was estimated in the impairment test of the
previous year. In this context, the latest business plans
approved by the Board of Directors of Telef\u00f3nica reflect
a reduction in the expected growth of the main
operating variables. The discount rate (WACC) used in
the estimation of the value in use as of December 31,
2024, was 9.5% (11.6% before taxes) and the perpetuity
growth rate used was 2.4%.
In addition, in the Telef\u00f3nica Hispam segment, an
impairment loss of the goodwill allocated to the cash-
generating unit in Chile amounting to 397 million euros
was recorded, with a corresponding entry under Other
expenses (see Note 26). Economic growth in Chile
continues at a low rate, with financial tensions and the
effects of the recent inflationary and cost shock
persisting, preventing further monetary easing. In this
context, weak domestic demand is expected to continue
and competitive intensity is expected to remain high. As
a result, lower expected growth of the main operating
variables has been estimated compared to the
impairment test of the previous year. The discount rate
(WACC) used in the estimation of the value in use as of
December 31, 2024, was 8.5% (10.4% before taxes) and
the perpetuity growth rate used was 2.8%.
Additionally, in 2024 impairments have been recorded
on the goodwill allocated to the cash-generating units of
Telef\u00f3nica Tech UK & Ireland, affected by the evolution
of the macroeconomic environment in the United
Kingdom (which has resulted in an increase in the
WACC discount rate to 9.4%, 11.4% before tax) and Be-
terna Group, for amounts of 192 million euros and 51
million euros, respectively (see Note 26).
2024
Millions of euros
Balance at
12/31/2023
First
applica-
tion of
IAS 21
Addi-
tions(1)
Depre-
ciation
Dispo
-sals
Impair-
ments
Transfers
and
others
Translation
differences
Inflation
adjust-
ments
Business
combi-
nations
Balance at
12/31/2024
Land and buildings
2,516
15
22
(209)
(21)
(175)
116
(119)
166
15
2,326
Plant and
machinery
17,947
23
1,041
(3,680)
(13)
(642)
2,263
(1,071)
583
70
16,521
Furniture, tools
and other items
618
3
81
(213)
(2)
(24)
146
(40)
46
(10)
605
PP&E in progress
1,863
61
2,479
\u2014
(12)
(5)
(2,421)
(108)
117
13
1,987
Total\u00a0 PP&E
22,944
102
3,623
(4,102)
(48)
(846)
104
(1,338)
912
88
21,439
(1) Total additions of property, plant and equipment in 2024 amounted to 3,676 million euros, including the additions corresponding to companies held for sale
during the annual reporting period (see Note 2).
2023
Millions of euros
Balance at
12/31/2022
Additions(1)
Depre-
ciation
Disposals
Impair-
ments
Transfers
and others
Translation
differences
Inflation
adjust-
ments
Balance at
12/31/2023
Land and buildings
2,641
21
(206)
(21)
\u2014
145
(188)
124
2,516
Plant and machinery
18,165
1,123
(3,650)
(14)
\u2014
2,399
(525)
449
17,947
Furniture, tools and
other items
576
136
(199)
4
\u2014
112
(43)
32
618
PP&E in progress
2,332
2,420
\u2014
(38)
(3)
(2,826)
(110)
88
1,863
Total\u00a0 PP&E
23,714
3,700
(4,055)
(69)
(3)
(170)
(866)
693
22,944
(1) Total additions of property, plant and equipment in 2023 amounted to 3,741 million euros, including the additions corresponding to companies held for sale
during the annual reporting period (see Note 2).
2024
Millions of euros
Balance at
12/31/2023
First
applica-
tion of
IAS 21
Additions
Amorti-
zation
Dispo-
sals
Business
combi-
nations
Transfers
and
others
Translation
differences
and inflation
adjustments
Balance at
12/31/2024
Rights of use on land
and natural properties
834
\u2014
226
(250)
(13)
5
(16)
29
815
Rights of use on
buildings
4,287
\u2014
1,200
(1,151)
(32)
17
(18)
(403)
3,900
Rights of use on plant
and machinery
3,080
15
634
(756)
(15)
\u2014
(2)
(9)
2,947
Other rights of use
247
\u2014
82
(78)
(1)
\u2014
1
(6)
245
Total of rights of use
8,448
15
2,142
(2,235)
(61)
22
(35)
(389)
7,907
2023
Millions of euros
Balance at
12/31/2022
Additions
Amortization
Disposals
Transfers
and others
Translation
differences
and inflation
adjustments
Balance at
12/31/2023
Rights of use on\u00a0 land and
natural properties
885
194
(231)
(10)
\u2014
(4)
834
Rights of use on buildings
4,130
1,345
(1,172)
(95)
1
78
4,287
Rights of use on plant and
machinery
3,037
752
(686)
(26)
3
\u2014
3,080
Other rights of use
227
100
(70)
(2)
(6)
(2)
247
Total of rights of use
8,279
2,391
(2,159)
(133)
(2)
72
8,448
The breakdown of financial assets and other non-
current assets of the Telef\u00f3nica Group at December 31,
2024 and December 31, 2023 is as follows:
Millions of euros
12/31/2024
12/31/2023
Non-current financial
assets (Note 16)
5,339
5,201
Investments
585
616
Credits and other financial
assets
602
741
Deposits and guarantees
691
966
Trade receivables
945
1,049
Receivables for subleases
17
14
Impairment of trade
receivables
(106)
(125)
Long-term derivative financial
assets (Note 19)
2,605
1,940
Other non-current assets
2,064
2,067
Contractual assets (Note 23)
288
325
Deferred expenses (Note 23)
1,073
1,001
Long-term receivables for
taxes
315
354
Prepayments
388
387
Total
7,403
7,268
Millions of euros
12/31/2024
12/31/2023
Audiovisual rights
243
242
Mobile terminals and other
equipments
681
636
Other inventories
77
91
Other advance payments
\u2014
1
Inventories impairment
provision
(47)
(41)
Inventories
954
929
Note 16. Breakdown of financial assets
The breakdown of financial assets of the Telef\u00f3nica Group at December\u00a031, 2024 is as follows:
December 31, 2024
\u00a0
Fair value through profit
or loss
\u00a0Fair value through other
comprehensive income
\u00a0
Measurement hierarchy
\u00a0
\u00a0
\u00a0
Millions of euros
Held for
trading
Fair value
option
Debt
instru-
ments
Equity
instru-
ments
Hedges
Level 1
(Quoted
prices)
Level 2 (Other
directly
observable
market inputs)
Level 3
(Inputs not
based on
observable
market data)
Amortized
cost
Total
carrying
amount
Total fair
value
Non-current financial assets (Note 12)
247
\u2014
218
543
2,441
523
2,912
14
1,890
5,339
5,339
Investments
42
\u2014
\u2014
543
\u2014
478
107
\u2014
\u2014
585
585
Credits and other financial assets
41
\u2014
18
\u2014
\u2014
45
\u2014
14
543
602
602
Deposits and guarantees
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
691
691
691
Derivative instruments
164
\u2014
\u2014
\u2014
2,441
\u2014
2,605
\u2014
\u2014
2,605
2,605
Trade receivables
\u2014
\u2014
200
\u2014
\u2014
\u2014
200
\u2014
745
945
839
Trade receivables for subleases
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
17
17
17
Impairment of trade receivables
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(106)
(106)
\u2014
Current financial assets
367
\u2014
894
\u2014
371
312
1,320
\u2014
15,794
17,426
17,426
Trade receivables (Note 14)
\u2014
\u2014
850
\u2014
\u2014
\u2014
850
\u2014
9,762
10,612
7,564
Impairment of trade receivables (Note 14)
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(3,048)
(3,048)
\u2014
Other current financial assets (Note 15)
367
\u2014
44
\u2014
371
312
470
\u2014
1,018
1,800
1,800
Cash and cash equivalents
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
8,062
8,062
8,062
Total
614
\u2014
1,112
543
2,812
835
4,232
14
17,684
22,765
22,765
The calculation of the fair values of the Telef\u00f3nica Group's debt instruments required an estimate, for each currency and counterparty, of a credit spread curve using the prices
of the Group's bonds and credit derivatives.
The breakdown of financial assets of the Telef\u00f3nica Group at December\u00a031, 2023 was as follows:
December 31, 2023
\u00a0
Fair value through profit
or loss
\u00a0Fair value through other
comprehensive income
\u00a0
Measurement hierarchy
\u00a0
\u00a0
\u00a0
Millions of euros
Held for
trading
Fair value
option
Debt
instru-
ments
Equity
instru-
ments
Hedges
Level 1
(Quoted
prices)
Level 2
(Other
directly
observable
market
inputs)
Level 3
(Inputs not
based on
observable
market
data)
Amortized
cost
Total
carrying
amount
Total fair
value
Non-current financial assets (Note 12)
224
\u2014
289
578
1,785
537
2,326
13
2,325
5,201
5,201
Investments
38
\u2014
\u2014
578
\u2014
510
106
\u2014
\u2014
616
616
Credits and other financial assets
31
\u2014
9
\u2014
\u2014
27
\u2014
13
701
741
741
Deposits and guarantees
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
966
966
966
Derivative instruments
155
\u2014
\u2014
\u2014
1,785
\u2014
1,940
\u2014
\u2014
1,940
1,940
Trade receivables
\u2014
\u2014
280
\u2014
\u2014
\u2014
280
\u2014
769
1,049
924
Trade receivables for subleases
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
14
14
14
Impairment of trade receivables
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(125)
(125)
\u2014
Current financial assets
291
\u2014
945
\u2014
271
293
1,214
\u2014
14,152
15,659
15,659
Trade receivables (Note 14)
\u2014
\u2014
854
\u2014
\u2014
\u2014
854
\u2014
9,568
10,422
7,430
Impairment of trade receivables (Note 14)
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(2,992)
(2,992)
\u2014
Other current financial assets (Note 15)
291
\u2014
91
\u2014
271
293
360
\u2014
425
1,078
1,078
Cash and cash equivalents
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
7,151
7,151
7,151
Total
515
\u2014
1,234
578
2,056
830
3,540
13
16,477
20,860
20,860
Other expenses
The breakdown of \u201cOther expenses\u201d is as follows:
Millions of euros
2024
2023
2022
Leases included in
\"Other expenses\" (1)
97
68
86
Other external
services
8,351
8,282
8,731
Taxes other than
income tax
831
753
834
Change in trade
provisions
719
734
693
Losses on disposal of
fixed assets, losses on
operations classified
as held for sale and\u00a0
sale of assets
1,525
33
124
Goodwill impairment
(Note 7)
866
58
\u2014
Other operating
expenses
165
370
273
Total
12,554
10,298
10,741
(1) According to IFRS 16, only short-term leases and leases involving low-value
assets or intangible assets are included (see Note 9).
\"Goodwill impairment\" in 2024 includes the impairment
of goodwill allocated to the cash-generating unit of Peru
(226 million euros), Chile (397 million euros), Telef\u00f3nica
Tech UK & Ireland (192 million euros) and the Be-terna
Group (51 million euros).
\"Goodwill impairment\" in 2023 included an impairment
of goodwill allocated to the Ecuador cash-generating
unit of 58 million euros.
\"Losses on disposal of fixed assets, losses on operations
classified as held for sale and sale of assets\" in 2024
includes mainly impairment losses on intangible assets
and property, plant and equipment in Telef\u00f3nica
Argentina amounting to 1,274 million euros (see Notes 2,
6 and 8), impairment losses on intangible assets of
Telef\u00f3nica del Per\u00fa amounting to 54 million euros (see
Notes 2 and 6), impairment losses on property, plant and
equipment of Pangea amounting to 108 million euros
(see Note 30) and the impairment of goodwill allocated
to the fiber optics business in Peru amounting to 34
million euros (see Note 30). In 2022 included impairment
losses on intangible assets and property, plant and
equipment of Telef\u00f3nica Argentina, for a total amount of
77 million euros.\u00a0
\"Other operating expenses\" in 2024 includes a lower
expense of 386 million Brazilian Reais (67 million euros at
the 2024 average exchange rate) referring to the
reversal of regulatory provisions of Telef\u00f3nica Brasil after
the Concession Migration Agreement signed between
Telef\u00f3nica Brasil and ANATEL (see notes 24.c and 29.a).
", "dimensions": { "concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-849": { "value": "
Note 7. Goodwill
Movement in goodwill
The movement in goodwill assigned to each Group
segment was as follows:
2024
Millions of euros
Balance at
12/31/2023
Additions
Disposals
Write-offs
Transfers
Exchange
rate impact
Balance at
12/31/2024
Telef\u00f3nica Spain
4,291
\u2014
\u2014
\u2014
\u2014
\u2014
4,291
Telef\u00f3nica Brazil
8,076
28
\u2014
\u2014
\u2014
(1,364)
6,740
Telef\u00f3nica Germany
4,386
\u2014
\u2014
\u2014
\u2014
\u2014
4,386
Telef\u00f3nica Hispam
1,108
\u2014
(16)
(623)
\u2014
(51)
418
Others
847
\u2014
\u2014
(243)
\u2014
22
626
Total
18,708
28
(16)
(866)
\u2014
(1,393)
16,461
2023
Millions of euros
Balance at
12/31/2022
Additions
Disposals
Write-offs
Transfers
Exchange
rate impact
Balance at
12/31/2023
Telef\u00f3nica Spain
4,291
\u2014
\u2014
\u2014
\u2014
\u2014
4,291
Telef\u00f3nica Brazil
7,752
5
\u2014
\u2014
\u2014
319
8,076
Telef\u00f3nica Germany
4,386
\u2014
\u2014
\u2014
\u2014
\u2014
4,386
Telef\u00f3nica Hispam
1,215
\u2014
\u2014
(58)
(36)
(13)
1,108
Others
827
11
\u2014
\u2014
\u2014
9
847
Total
18,471
16
\u2014
(58)
(36)
315
18,708
In 2024, an impairment loss of the entire remaining
goodwill allocated to the cash-generating unit in Per\u00fa
amounting to 226 million euros has been recorded, with
a corresponding entry under Other expenses in the
consolidated income statement (see Note 26). In
addition, until the carrying amount and the recoverable
amount of the CGU are equal, an impairment loss on
intangible assets has been recorded amounting to 54
million euros (see Note 6), with a corresponding entry
under Other expenses (see Note 26). Telef\u00f3nica del
Per\u00fa, affected by an aggressive competitive
environment in both fixed and mobile, has registered a
lower achievement of the operating variables compared
to what was estimated in the impairment test of the
previous year. In this context, the latest business plans
approved by the Board of Directors of Telef\u00f3nica reflect
a reduction in the expected growth of the main
operating variables. The discount rate (WACC) used in
the estimation of the value in use as of December 31,
2024, was 9.5% (11.6% before taxes) and the perpetuity
growth rate used was 2.4%.
In addition, in the Telef\u00f3nica Hispam segment, an
impairment loss of the goodwill allocated to the cash-
generating unit in Chile amounting to 397 million euros
was recorded, with a corresponding entry under Other
expenses (see Note 26). Economic growth in Chile
continues at a low rate, with financial tensions and the
effects of the recent inflationary and cost shock
persisting, preventing further monetary easing. In this
context, weak domestic demand is expected to continue
and competitive intensity is expected to remain high. As
a result, lower expected growth of the main operating
variables has been estimated compared to the
impairment test of the previous year. The discount rate
(WACC) used in the estimation of the value in use as of
December 31, 2024, was 8.5% (10.4% before taxes) and
the perpetuity growth rate used was 2.8%.
Additionally, in 2024 impairments have been recorded
on the goodwill allocated to the cash-generating units of
Telef\u00f3nica Tech UK & Ireland, affected by the evolution
of the macroeconomic environment in the United
Kingdom (which has resulted in an increase in the
WACC discount rate to 9.4%, 11.4% before tax) and Be-
terna Group, for amounts of 192 million euros and 51
million euros, respectively (see Note 26).
Additions in 2024 correspond to the goodwill related to
the acquisition of IPNET (see Note 5).
The amount in disposals of Telef\u00f3nica Hispam in 2024
corresponds to the estimation of goodwill of the cash
generating unit Telef\u00f3nica Colombia allocated to the
agreement signed by Colombia Telecomunicaciones
S.A. ESP BIC and Colombia M\u00f3vil S.A. ESP (see Note 5).
In 2023, an impairment of goodwill assigned to the cash-
generating unit in Ecuador was recorded, amounting to
58 million euros, with a corresponding entry under Other
expenses (see Note 26).
The amount in transfers of Telef\u00f3nica Hispam in 2023
corresponded to the estimation of goodwill of the cash
generating unit of Per\u00fa allocated to the agreement
between Telef\u00f3nica Hispanoam\u00e9rica, S.A. and the group
Kohlberg Kravis Roberts \u2013 KKR & Co, Inc. and Entel Per\u00fa
S.A. (see Note 30).\u00a0
Cash-generating units
In order to test for impairment, goodwill was allocated to
the different cash-generating units (CGUs), which are
grouped into the following reportable operating
segments:
\u00a0Millions of euros
12/31/2024
12/31/2023
Telef\u00f3nica Spain
4,291
4,291
Telef\u00f3nica Brazil
6,740
8,076
Telef\u00f3nica Germany
4,386
4,386
Telef\u00f3nica Hispam
418
1,108
Colombia
136
164
Ecuador
79
75
Chile
179
615
Peru
\u2014
229
Uruguay
22
23
Others T. Hispam
2
2
Other companies
626
847
Telef\u00f3nica Tech UK & Ireland
268
438
BE-terna
230
282
Others
128
127
TOTAL
16,461
18,708
Goodwill is tested for impairment at the end of the year
using the business plans of the cash-generating units to
which the goodwill is assigned, approved by the Board
of Directors of Telef\u00f3nica.
The business plan covers a three-year period, including
the closing year. In order to complete the five years of
cash flows after the closing year, an additional
normalization period is added to the business plans on
the operating ratios until the terminal parameters are
reached. The consensus' forecasts are used as a
reference. For specific cases, extended business plans
are used to cover the five -year period of cash flows,
when the normalization period does not properly reflect
the expected evolution of the business.
Finally, to determine the terminal value of each CGU, a
constant free cash flows growth over time is assumed,
applying a terminal growth rate. The model used is
similar to the dividend discount model developed by
Gordon-Shapiro, internationally recognized for business
valuations.
The process of preparing the CGUs\u2019 business plans
considers the current market condition of each CGU,
analyzing the macroeconomic, competitive, regulatory
and technological environments, as well as the growth
opportunities of the CGUs, and the differentiation
capabilities compared to the competition based on
market projections. A growth target is therefore defined
for each CGU, based on the appropriate allocation of
operating resources and the capital investments
required to achieve the target. In addition, operating
efficiency improvements are defined, in line with the
strategic transformation initiatives, in order to increase
the forecasted operating cash flow. In this process, the
Group considers the compliance with business plans in
the past.
Main assumptions used in
calculating value in use \u00a0
CGUs\u2019 value in use are calculated based on the
approved business plans. Certain variables are then
considered, including the long-term EBITDA margin and
the long-term Capital Expenditure ratio (expressed as a
percentage of revenue), which are considered the key
operating variables to measure business performance
and to set financial targets. Finally, the discount rates
and the perpetuity growth rates are considered. \u00a0
The main variables considered for the most significant
CGUs (T. Brazil, T. Spain, and T. Germany) are described
below.
Revenues
In terms of revenues, the three-year plan reflects a trend
of stability or improvement.\u00a0
EBITDA margin and long-term Capital
Expenditure (CapEx) ratio
The values obtained, as described in the previous
paragraphs, are compared with the available data of
analysts and competitors in the geographic markets
where the Telef\u00f3nica Group operates.
In Europe, the long-term EBITDA margins two-year
estimates of Telef\u00f3nica Group's analysts are within a
range of 35% to 38% for Spain and 27% to 31% for
Germany.
In relation to the long-term ratio of CapEx over revenues
in the valuations performed for the impairment tests for
Spain and Germany, the ratios are within the range
estimated by the Telef\u00f3nica Group\u2019s analysts in terms of
investment needs (range between 10% and 12% for
Spain and between 11% and 17% for Germany).
As for the long-term EBITDA margin two -year estimates
of Telef\u00f3nica Group's analysts for the operator in Brazil, it
is in a range within 41% to 44%. Regarding investments,
the operator will invest in the horizon of the projected
plan a percentage that is aligned with the investment
needs planned for the development of its business,
which is located in a range between 10% and 16% .
Discount rate
The discount rate, applied to discount cash flows, is the
weighted average cost of capital (WACC), determined
by the weighted average cost of equity and cost of debt
according to the finance structure determined for each
CGU.
This rate is calculated using the capital asset pricing
model (CAPM), which considers the asset\u2019s systemic
risk, and the impact of those risks not already considered
on cash flows, such as country risk, business-specific
credit risk, currency risk and price risk specific to the
financial asset, constantly monitoring the fluctuations of
the financial markets.
The most significant components of WACC are
summarized as follows:
\u2022 Risk-Free Rate: defined as the interest rate offered by
long-term sovereign bonds. The rate is determined
using current market data and long-run equilibrium
rates estimates (according to standard econometric
models, supported by modeling of neutral rates
prepared by the central banks themselves) in which
the interest rates should be located, thus adjusting the
yields, influenced by central banks interventions.
\u2022 Political Risk Premium: adds the country's insolvency
risk due to political and/or financial events; calculation
is based on the quoted prices of credit default swaps
for each country or, the EMBI+ index published by JP
Morgan based on the information available and the
liquidity conditions of these swaps.
\u2022 Equity Risk Premium: the return in excess that equity
assets are expected to yield over the risk-free rate.
This is determined using a combination of historical
approaches (ex post) backed by external publications
and studies based on historical market returns series,
and prospective approaches (ex ante), based on
market publications, considering the medium- and
long-term profit expectations based on the degree of
maturity and development of each country.
\u2022 Beta Coefficient: a measure of the volatility, or
systematic risk, of an equity asset in comparison to the
entire market. It is estimated based on a series of
historical share prices of comparable companies listed
on the stock exchange, to estimate the correlation
between the company shares\u00b4 returns and the stock
market returns, of the country where the company is
listed.
The main underlying data used in these calculations are
obtained from independent and renowned external
information sources.
The discount rates applied to the cash flow projections
in 2024 and 2023 for the main CGUs are as follows:
2024
Discount rate in local
currency
Before tax
After-tax
Spain
8.6%
6.6%
Brazil
13.9%
11.5%
Germany
8.0%
5.5%
2023
Discount rate in local
currency
Before tax
After-tax
Spain
9.1%
7.0%
Brazil
14.8%
12.0%
Germany
8.4%
5.8%
Perpetuity growth rate
Cash flow projections from the sixth year are calculated
using an expected constant growth rate (g), considering
the analyst consensus estimates for each business,
based on the maturity of the industry and technology,
and the degree of development of each country. Each
indicator is compared to the forecasted long-term real
and nominal GDP growth of each country and growth
data from external sources, adjusting any particular case
with specific characteristics related to the business
evolution.
The perpetuity growth rates applied to the cash flow
projections in 2024 and 2023 for the main CGUs are as
follows:
Perpetuity growth rate
in local currency
2024
2023
Spain
0.8%
0.8%
Brazil
4.0%
4.0%
Germany
1.0%
1.0%
Perpetuity growth rates for 2024 have remained stable
compared to the previous year for the three main CGUs.
Sensitivity to changes in
assumptions
The Group performs a sensitivity analysis of the
impairment test by considering reasonable changes in
the main assumptions used in the test. For the main
CGU, the following maximum increases or decreases
were assumed, expressed in percentage points:\u00a0
Changes in key
assumptions,
In percentage points
Spain
Germany
Brazil
Financial variables
\u00a0
\u00a0
Discount rate
+/-0.5
+/-0.5
+/-1
Perpetuity growth
rates
+/-0.25
+/-0.25
+/-0.5
Long-term operating
variables
EBITDA Margin
+/-1.75
+/-1.5
+/-2
Ratio of CapEx/
Revenues
+/-0.875
+/-0.75
+/-1
The sensitivity analysis revealed that there is still room
between the recoverable value and the carrying amount
for the main CGUs at December\u00a031, 2024.
Regarding the CGU of Chile, in the sensitivity of the
calculation of the value in use to reasonable variations in
the key assumptions, an increase of around 50 basis
points in the WACC would generate an additional
impairment of goodwill in the amount of 107 million
euros, while a decrease of around 25 basis points in the
perpetual growth rate of 2.8% would have an extra
negative impact of 48 million euros on the valuation of
goodwill. Regarding the operating assumptions, a 1.25
percentage point decrease in the EBITDA margin would
generate an additional impairment of approximately 198
million euros, and a 0.6 percentage points increase in
the investment ratio would result in an additional
impairment of around 136 million euros.
Regarding the CGU of Telefonica Tech UK & Ireland, in
the sensitivity of the calculation of the value in use to
reasonable variations in the key assumptions, an
increase of around 50 basis points in the WACC would
generate an additional impairment of goodwill in the
amount of 28 million euros, while a decrease of around
25 basis points in the perpetual growth rate of 3% would
have an extra negative impact of 12 million euros on the
valuation of goodwill. Regarding the operating
assumptions, a 0.5 percentage point decrease in the
EBITDA margin would generate an additional
impairment of approximately 19 million euros, and a 0.25
percentage points increase in the investment ratio
would result in an additional impairment of around 9
million euros.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGoodwillExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-850": { "value": "
In order to test for impairment, goodwill was allocated to
the different cash-generating units (CGUs), which are
grouped into the following reportable operating
segments:
\u00a0Millions of euros
12/31/2024
12/31/2023
Telef\u00f3nica Spain
4,291
4,291
Telef\u00f3nica Brazil
6,740
8,076
Telef\u00f3nica Germany
4,386
4,386
Telef\u00f3nica Hispam
418
1,108
Colombia
136
164
Ecuador
79
75
Chile
179
615
Peru
\u2014
229
Uruguay
22
23
Others T. Hispam
2
2
Other companies
626
847
Telef\u00f3nica Tech UK & Ireland
268
438
BE-terna
230
282
Others
128
127
TOTAL
16,461
18,708
Goodwill is tested for impairment at the end of the year
using the business plans of the cash-generating units to
which the goodwill is assigned, approved by the Board
of Directors of Telef\u00f3nica.
The business plan covers a three-year period, including
the closing year. In order to complete the five years of
cash flows after the closing year, an additional
normalization period is added to the business plans on
the operating ratios until the terminal parameters are
reached. The consensus' forecasts are used as a
reference. For specific cases, extended business plans
are used to cover the five -year period of cash flows,
when the normalization period does not properly reflect
the expected evolution of the business.
Finally, to determine the terminal value of each CGU, a
constant free cash flows growth over time is assumed,
applying a terminal growth rate. The model used is
similar to the dividend discount model developed by
Gordon-Shapiro, internationally recognized for business
valuations.
The process of preparing the CGUs\u2019 business plans
considers the current market condition of each CGU,
analyzing the macroeconomic, competitive, regulatory
and technological environments, as well as the growth
opportunities of the CGUs, and the differentiation
capabilities compared to the competition based on
market projections. A growth target is therefore defined
for each CGU, based on the appropriate allocation of
operating resources and the capital investments
required to achieve the target. In addition, operating
efficiency improvements are defined, in line with the
strategic transformation initiatives, in order to increase
the forecasted operating cash flow. In this process, the
Group considers the compliance with business plans in
the past.
Main assumptions used in
calculating value in use \u00a0
CGUs\u2019 value in use are calculated based on the
approved business plans. Certain variables are then
considered, including the long-term EBITDA margin and
the long-term Capital Expenditure ratio (expressed as a
percentage of revenue), which are considered the key
operating variables to measure business performance
and to set financial targets. Finally, the discount rates
and the perpetuity growth rates are considered. \u00a0
The main variables considered for the most significant
CGUs (T. Brazil, T. Spain, and T. Germany) are described
below.
Revenues
In terms of revenues, the three-year plan reflects a trend
of stability or improvement.\u00a0
EBITDA margin and long-term Capital
Expenditure (CapEx) ratio
The values obtained, as described in the previous
paragraphs, are compared with the available data of
analysts and competitors in the geographic markets
where the Telef\u00f3nica Group operates.
In Europe, the long-term EBITDA margins two-year
estimates of Telef\u00f3nica Group's analysts are within a
range of 35% to 38% for Spain and 27% to 31% for
Germany.
In relation to the long-term ratio of CapEx over revenues
in the valuations performed for the impairment tests for
Spain and Germany, the ratios are within the range
estimated by the Telef\u00f3nica Group\u2019s analysts in terms of
investment needs (range between 10% and 12% for
Spain and between 11% and 17% for Germany).
As for the long-term EBITDA margin two -year estimates
of Telef\u00f3nica Group's analysts for the operator in Brazil, it
is in a range within 41% to 44%. Regarding investments,
the operator will invest in the horizon of the projected
plan a percentage that is aligned with the investment
needs planned for the development of its business,
which is located in a range between 10% and 16% .
Discount rate
The discount rate, applied to discount cash flows, is the
weighted average cost of capital (WACC), determined
by the weighted average cost of equity and cost of debt
according to the finance structure determined for each
CGU.
This rate is calculated using the capital asset pricing
model (CAPM), which considers the asset\u2019s systemic
risk, and the impact of those risks not already considered
on cash flows, such as country risk, business-specific
credit risk, currency risk and price risk specific to the
financial asset, constantly monitoring the fluctuations of
the financial markets.
The most significant components of WACC are
summarized as follows:
\u2022 Risk-Free Rate: defined as the interest rate offered by
long-term sovereign bonds. The rate is determined
using current market data and long-run equilibrium
rates estimates (according to standard econometric
models, supported by modeling of neutral rates
prepared by the central banks themselves) in which
the interest rates should be located, thus adjusting the
yields, influenced by central banks interventions.
\u2022 Political Risk Premium: adds the country's insolvency
risk due to political and/or financial events; calculation
is based on the quoted prices of credit default swaps
for each country or, the EMBI+ index published by JP
Morgan based on the information available and the
liquidity conditions of these swaps.
\u2022 Equity Risk Premium: the return in excess that equity
assets are expected to yield over the risk-free rate.
This is determined using a combination of historical
approaches (ex post) backed by external publications
and studies based on historical market returns series,
and prospective approaches (ex ante), based on
market publications, considering the medium- and
long-term profit expectations based on the degree of
maturity and development of each country.
\u2022 Beta Coefficient: a measure of the volatility, or
systematic risk, of an equity asset in comparison to the
entire market. It is estimated based on a series of
historical share prices of comparable companies listed
on the stock exchange, to estimate the correlation
between the company shares\u00b4 returns and the stock
market returns, of the country where the company is
listed.
The main underlying data used in these calculations are
obtained from independent and renowned external
information sources.
The discount rates applied to the cash flow projections
in 2024 and 2023 for the main CGUs are as follows:
2024
Discount rate in local
currency
Before tax
After-tax
Spain
8.6%
6.6%
Brazil
13.9%
11.5%
Germany
8.0%
5.5%
2023
Discount rate in local
currency
Before tax
After-tax
Spain
9.1%
7.0%
Brazil
14.8%
12.0%
Germany
8.4%
5.8%
Perpetuity growth rate
Cash flow projections from the sixth year are calculated
using an expected constant growth rate (g), considering
the analyst consensus estimates for each business,
based on the maturity of the industry and technology,
and the degree of development of each country. Each
indicator is compared to the forecasted long-term real
and nominal GDP growth of each country and growth
data from external sources, adjusting any particular case
with specific characteristics related to the business
evolution.
The perpetuity growth rates applied to the cash flow
projections in 2024 and 2023 for the main CGUs are as
follows:
Perpetuity growth rate
in local currency
2024
2023
Spain
0.8%
0.8%
Brazil
4.0%
4.0%
Germany
1.0%
1.0%
Perpetuity growth rates for 2024 have remained stable
compared to the previous year for the three main CGUs.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-851": { "value": "
Note 8. Property, plant and
equipment
The composition and movements in 2024 and 2023 of
the items comprising net \"Property, plant and
equipment\" were as follows:
2024
Millions of euros
Balance at
12/31/2023
First
applica-
tion of
IAS 21
Addi-
tions(1)
Depre-
ciation
Dispo
-sals
Impair-
ments
Transfers
and
others
Translation
differences
Inflation
adjust-
ments
Business
combi-
nations
Balance at
12/31/2024
Land and buildings
2,516
15
22
(209)
(21)
(175)
116
(119)
166
15
2,326
Plant and
machinery
17,947
23
1,041
(3,680)
(13)
(642)
2,263
(1,071)
583
70
16,521
Furniture, tools
and other items
618
3
81
(213)
(2)
(24)
146
(40)
46
(10)
605
PP&E in progress
1,863
61
2,479
\u2014
(12)
(5)
(2,421)
(108)
117
13
1,987
Total\u00a0 PP&E
22,944
102
3,623
(4,102)
(48)
(846)
104
(1,338)
912
88
21,439
(1) Total additions of property, plant and equipment in 2024 amounted to 3,676 million euros, including the additions corresponding to companies held for sale
during the annual reporting period (see Note 2).
2023
Millions of euros
Balance at
12/31/2022
Additions(1)
Depre-
ciation
Disposals
Impair-
ments
Transfers
and others
Translation
differences
Inflation
adjust-
ments
Balance at
12/31/2023
Land and buildings
2,641
21
(206)
(21)
\u2014
145
(188)
124
2,516
Plant and machinery
18,165
1,123
(3,650)
(14)
\u2014
2,399
(525)
449
17,947
Furniture, tools and
other items
576
136
(199)
4
\u2014
112
(43)
32
618
PP&E in progress
2,332
2,420
\u2014
(38)
(3)
(2,826)
(110)
88
1,863
Total\u00a0 PP&E
23,714
3,700
(4,055)
(69)
(3)
(170)
(866)
693
22,944
(1) Total additions of property, plant and equipment in 2023 amounted to 3,741 million euros, including the additions corresponding to companies held for sale
during the annual reporting period (see Note 2).
Telef\u00f3nica Spain's investments in property plant and
equipment in 2024 and 2023 amounted to 1,052 and
1,092 million euros, respectively, focused on continuing
the deployment of the fiber optic network . In mobile
deployment, the development of the 5G network
continues.
Telef\u00f3nica Germany's investments in property, plant and
equipment in 2024 and 2023 amounted to 706 and 747
million euros, respectively. Most of the investment has
been allocated to expanding the footprint and capacity
of the 5G network, as well as strengthening the capacity
of the 4G network.
Telef\u00f3nica Brazil's investments in property, plant and
equipment in 2024 and 2023 amounted to 1,085 and
1,130 million euros, respectively. The investment has
been mainly allocated to the expansion of the 5G mobile
network, to ensure the quality of the 4G mobile network
and expand the customer base and network in the fixed
fiber business.
Telef\u00f3nica Hispam's investments in property, plant and
equipment in 2024 and 2023 amounted to 676 and 586
million euros, respectively. Investment remains focused
on improving mobile networks through coverage
expansions, capacity reinforcement and 5G deployment
in Argentina, Colombia, Uruguay and Chile.
\"Additions\" in 2024 includes government grants relating
to property, plant and equipment amounting to 199
million euros (60 million euros in 2023), which are
presented as a reduction of the book value of the related
assets.
In 2024, an impairment of land and buildings, plant and
machinery and furniture, tools and other items
corresponding to Telef\u00f3nica Argentina was recorded,
amounting to 175, 642 and 21 million euros, respectively,
with a counterpart entry in Other expenses (see Note
26). Property, plant and equipment of Telef\u00f3nica
Argentina as\u00a0 of December\u00a031, 2024 amounting to 734
million euros (889 million euros as of December\u00a031,
2023).
\"Business combinations\" in 2024 includes Property, plant
and equipment corresponding to the joint operation
formed by Colombia Telecomunicaciones S.A. ESP BIC
and Colombia M\u00f3vil S.A. ESP, amounting to 88 million
euros (see Note 5).
\"Transfers and others\" in 2024 includes 118 million euros
corresponding to the fiber assets of Telef\u00f3nica del Per\u00fa,
which at December\u00a031, 2023 were classified as non-
current assets held for sale and at December\u00a031, 2024
have been classified as tangible fixed assets, following
the redefinition of the agreement (see note 30).
\"Transfers and others\" in 2023 included the
reclassifications of fiber optic assets in Peru amounting
to 163 million euros to \"Non-current assets and disposal
groups held for sale\" of the statement of financial
position (see Note 30).
The effect of translation into euros of property, plant and
equipment of the Group's companies in Argentina and
Venezuela and the effect of the inflation adjustments
(see Note 3.a), are shown in the columns \"Translation
differences\" and \"Inflation adjustments\", respectively.
Telef\u00f3nica Group companies purchased insurance
policies to reasonably cover the possible risks to which
their property, plant and equipment used in operations
are subject, with suitable limits and coverage.
Additionally, as part of its commercial activities and
network deployment, the Group maintains several
property acquisition commitments. The timing of
scheduled payments in this regard is disclosed in Note
26.
The cost, accumulated depreciation and impairment
losses of property, plant and equipment at December\u00a031,
2024 and 2023 were as follows:
Balance at December 31, 2024
Millions of euros
Cost
Accumulated
depreciation
Impairment
losses
PP&E
Land and buildings
9,424
(6,827)
(271)
2,326
Plant and machinery
90,265
(72,614)
(1,130)
16,521
Furniture, tools and other items
5,334
(4,689)
(40)
605
PP&E in progress
2,005
\u2014
(18)
1,987
Total\u00a0 PP&E
107,028
(84,130)
(1,459)
21,439
Balance at December 31, 2023
Millions of euros
Cost
Accumulated
depreciation
Impairment
losses
PP&E
Land and buildings
8,689
(6,116)
(57)
2,516
Plant and machinery
88,224
(70,001)
(276)
17,947
Furniture, tools and other items
5,190
(4,558)
(14)
618
PP&E in progress
1,877
\u2014
(14)
1,863
Total\u00a0 PP&E
103,980
(80,675)
(361)
22,944
", "dimensions": { "concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-853": { "value": "
Note 9. Rights of use
The movement of rights of use in 2024 and 2023 is as
follows:
2024
Millions of euros
Balance at
12/31/2023
First
applica-
tion of
IAS 21
Additions
Amorti-
zation
Dispo-
sals
Business
combi-
nations
Transfers
and
others
Translation
differences
and inflation
adjustments
Balance at
12/31/2024
Rights of use on land
and natural properties
834
\u2014
226
(250)
(13)
5
(16)
29
815
Rights of use on
buildings
4,287
\u2014
1,200
(1,151)
(32)
17
(18)
(403)
3,900
Rights of use on plant
and machinery
3,080
15
634
(756)
(15)
\u2014
(2)
(9)
2,947
Other rights of use
247
\u2014
82
(78)
(1)
\u2014
1
(6)
245
Total of rights of use
8,448
15
2,142
(2,235)
(61)
22
(35)
(389)
7,907
2023
Millions of euros
Balance at
12/31/2022
Additions
Amortization
Disposals
Transfers
and others
Translation
differences
and inflation
adjustments
Balance at
12/31/2023
Rights of use on\u00a0 land and
natural properties
885
194
(231)
(10)
\u2014
(4)
834
Rights of use on buildings
4,130
1,345
(1,172)
(95)
1
78
4,287
Rights of use on plant and
machinery
3,037
752
(686)
(26)
3
\u2014
3,080
Other rights of use
227
100
(70)
(2)
(6)
(2)
247
Total of rights of use
8,279
2,391
(2,159)
(133)
(2)
72
8,448
The effect of the translation into euros of rights of use of
the Group's companies in Argentina and Venezuela,
together with the effect of the inflation adjustments (see
Note 3.a) is shown in the column \"Translation differences
and Inflation adjustments\".
\"Business combinations\" in 2024 includes the network
assets corresponding to the joint operation formed by
Colombia Telecomunicaciones S.A. ESP BIC and
Colombia M\u00f3vil S.A. ESP, amounting to 22 million euros
(see Note 5).
The cost and accumulated depreciation of the rights of
use at December 31, 2024 and 2023 are as follows:
Balance at December 31, 2024
Millions of
euros
Cost
Accumulated
depreciation
Rights of use
Rights of use
on land and
natural
properties
2,173
(1,358)
815
Rights of use
on buildings
9,525
(5,625)
3,900
Rights of use
on plant and
machinery
5,837
(2,890)
2,947
Other rights
of use
514
(269)
245
Total of
rights of use
18,049
(10,142)
7,907
Balance at December 31, 2023
Millions of
euros
Cost
Accumulated
depreciation
Rights of use
Rights of use
on land and
natural
properties
2,051
(1,217)
834
Rights of use
on buildings
9,411
(5,124)
4,287
Rights of use
on plant and
machinery
5,250
(2,170)
3,080
Other rights
of use
498
(251)
247
Total of
rights of use
17,210
(8,762)
8,448
The detail of expenses related to leases included in
Supplies and Other expenses (see Note 3.g) of the
consolidated income statement for 2024 and 2023 are
as follows.
Millions of euros
2024
2023
Short-term leases included in operating
results as supplies
64
73
Variable lease payments not included in the
measurement of lease liabilities
18
14
Total expenses as supplies
82
87
Short-term leases included in external
services
54
45
Leases of low-value assets included in
external services
7
7
Variable lease payments not included in the
measurement of lease liabilities
36
16
Total expenses as external services
(Note 26)
97
68
Total lease expenses
179
155
Note 20. Lease liabilities
The evolution of lease liabilities in 2024 and 2023 were
as follows:
Millions of euros
Lease liabilities
Balance at 12/31/2023
8,947
First application of IAS 21
4
Additions
2,082
Principal and interests payments
(2,647)
Principal payments (Note 28)
(2,143)
Interests payments
(504)
Disposals
(70)
Business combinations
2
Accrued interests
512
Translation differences and inflation
adjustments
(531)
Transfers and others
4
Balance at 12/31/2024
8,303
Millions of euros
Lease liabilities
Balance at 12/31/2022
8,677
Additions
2,382
Principal and interests payments
(2,559)
Principal payments (Note 28)
(2,114)
Interests payments
(445)
Disposals
(138)
Accrued interests
435
Translation differences and inflation
adjustments
62
Transfers and others
88
Balance at 12/31/2023
8,947
\"Additions\" includes fixed asset sale and leaseback
transactions, which amounted to 12 million euros in 2024
( 21 million euros in 2023). The gains recorded in 2024
and 2023 for sale and leaseback transactions amounted
to 17 million euros and 105 million euros, respectively
(see Note 26).
There are commitments for leases not started at
December\u00a031, 2024 amounting to 2,606 million euros,
mainly related to the sites construction agreement
between Telef\u00f3nica Germany GmbH and Telxius Towers
Germany GmbH (at December\u00a031, 2023 1,117 million
euros).
The maturity schedule of lease liabilities at December 31,
2024 is as follows:
Millions of euros
Current
Non-Current
Maturity
2025
2026
2027
2028
2029
Subsequent
years
Non-current
total
Total
Lease liabilities
2,339
1,666
1,401
1,179
983
1,890
7,119
9,458
", "dimensions": { "concept": "ifrs-full:DisclosureOfLeasesExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-852": { "value": "
Note 9. Rights of use
The movement of rights of use in 2024 and 2023 is as
follows:
2024
Millions of euros
Balance at
12/31/2023
First
applica-
tion of
IAS 21
Additions
Amorti-
zation
Dispo-
sals
Business
combi-
nations
Transfers
and
others
Translation
differences
and inflation
adjustments
Balance at
12/31/2024
Rights of use on land
and natural properties
834
\u2014
226
(250)
(13)
5
(16)
29
815
Rights of use on
buildings
4,287
\u2014
1,200
(1,151)
(32)
17
(18)
(403)
3,900
Rights of use on plant
and machinery
3,080
15
634
(756)
(15)
\u2014
(2)
(9)
2,947
Other rights of use
247
\u2014
82
(78)
(1)
\u2014
1
(6)
245
Total of rights of use
8,448
15
2,142
(2,235)
(61)
22
(35)
(389)
7,907
2023
Millions of euros
Balance at
12/31/2022
Additions
Amortization
Disposals
Transfers
and others
Translation
differences
and inflation
adjustments
Balance at
12/31/2023
Rights of use on\u00a0 land and
natural properties
885
194
(231)
(10)
\u2014
(4)
834
Rights of use on buildings
4,130
1,345
(1,172)
(95)
1
78
4,287
Rights of use on plant and
machinery
3,037
752
(686)
(26)
3
\u2014
3,080
Other rights of use
227
100
(70)
(2)
(6)
(2)
247
Total of rights of use
8,279
2,391
(2,159)
(133)
(2)
72
8,448
The effect of the translation into euros of rights of use of
the Group's companies in Argentina and Venezuela,
together with the effect of the inflation adjustments (see
Note 3.a) is shown in the column \"Translation differences
and Inflation adjustments\".
\"Business combinations\" in 2024 includes the network
assets corresponding to the joint operation formed by
Colombia Telecomunicaciones S.A. ESP BIC and
Colombia M\u00f3vil S.A. ESP, amounting to 22 million euros
(see Note 5).
The cost and accumulated depreciation of the rights of
use at December 31, 2024 and 2023 are as follows:
Balance at December 31, 2024
Millions of
euros
Cost
Accumulated
depreciation
Rights of use
Rights of use
on land and
natural
properties
2,173
(1,358)
815
Rights of use
on buildings
9,525
(5,625)
3,900
Rights of use
on plant and
machinery
5,837
(2,890)
2,947
Other rights
of use
514
(269)
245
Total of
rights of use
18,049
(10,142)
7,907
Balance at December 31, 2023
Millions of
euros
Cost
Accumulated
depreciation
Rights of use
Rights of use
on land and
natural
properties
2,051
(1,217)
834
Rights of use
on buildings
9,411
(5,124)
4,287
Rights of use
on plant and
machinery
5,250
(2,170)
3,080
Other rights
of use
498
(251)
247
Total of
rights of use
17,210
(8,762)
8,448
The detail of expenses related to leases included in
Supplies and Other expenses (see Note 3.g) of the
consolidated income statement for 2024 and 2023 are
as follows.
Millions of euros
2024
2023
Short-term leases included in operating
results as supplies
64
73
Variable lease payments not included in the
measurement of lease liabilities
18
14
Total expenses as supplies
82
87
Short-term leases included in external
services
54
45
Leases of low-value assets included in
external services
7
7
Variable lease payments not included in the
measurement of lease liabilities
36
16
Total expenses as external services
(Note 26)
97
68
Total lease expenses
179
155
", "dimensions": { "concept": "ifrs-full:DisclosureOfQuantitativeInformationAboutRightofuseAssetsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-855": { "value": "
Note 10. Associa tes and joint
ventures
The detail of investments accounted for by the equity
method and the share of (loss)/income of these
investments is the following:
% Holding
Investments accounted
for by the equity method
Share of (loss) income of investments
accounted for by the equity method
Millions of euros
12/31/2024
12/31/2023
2024
2023
2022
VMED O2 UK Limited
50%
7,641
7,774
89
(2,030)
292
Movistar Prosegur Alarmas
50%
213
230
(16)
(22)
(12)
FiBrasil Infraestructura e Fibra \u00d3tica, S.A.
50%
80
100
(1)
(4)
(8)
Unsere Gr\u00fcne Glasfaser (UGG)
50%
104
97
(77)
(55)
(64)
Opal Jvco Limited (nexfibre)
25%
94
55
(2)
(32)
26
Utiq, S.A.
25%
3
5
(4)
\u2014
\u2014
Others
8
4
(3)
(2)
(4)
Joint ventures
8,143
8,265
(14)
(2,145)
230
Daytona Midco, S.L. (Nabiax)
20%
\u2014
65
(7)
(1)
(1)
Adquira Espa\u00f1a, S.A.
44.44%
5
4
\u2014
\u2014
\u2014
HoldCo Infraco SpA. (Onnet Fibra Chile)
40%
119
150
(24)
7
\u2014
Alamo HoldCo S.L. (Onnet Fibra Colombia)
40%
11
14
(17)
(10)
(15)
Internet para todos S.A.C.
54.67%
57
55
\u2014
\u2014
(3)
Telef\u00f3nica Factoring Espa\u00f1a, S.A.
50%
8
7
4
4
4
Telef\u00f3nica Factoring do Brasil, Ltda.
50%
2
2
2
1
3
Telef\u00f3nica Factoring Peru, S.A.C.
50%
3
3
1
1
1
Telef\u00f3nica Factoring Colombia, S.A.
50%
1
1
1
1
1
Telef\u00f3nica Factoring M\u00e9xico, S.A.de C.V.
50%
\u2014
1
\u2014
\u2014
\u2014
Telef\u00f3nica Factoring Chile, SpA.
50%
1
1
\u2014
\u2014
\u2014
Telef\u00f3nica Factoring Ecuador, S.A.
50%
\u2014
\u2014
\u2014
\u2014
\u2014
Telef\u00f3nica Renting, S.A.
50%
9
1
4
\u2014
\u2014
Telef\u00f3nica Consumer Finance, Establecimiento
Financiero de Cr\u00e9dito, S.A.
50%
14
18
1
1
2
Movistar Consumer Finance Colombia SAS
50%
\u2014
\u2014
\u2014
(21)
(3)
Others
2
3
\u2014
\u2014
(2)
Associates
232
325
(35)
(17)
(13)
Total
8,375
8,590
(49)
(2,162)
217
The detail of the movement in investments accounted
for by the equity method in 2024 and 2023 is as follows:
Investments accounted for by the equity
method
Millions of
euros
Balance at 12/31/2022
11,587
Additions
236
Translation differences and other
comprehensive income (loss)
144
(Loss) income
(2,162)
Dividends
(1,218)
Transfers and others
3
Balance at 12/31/2023
8,590
Additions
160
Translation differences and other
comprehensive income (loss)
249
(Loss) income
(49)
Dividends
(520)
Transfers and others
(55)
Balance at 12/31/2024
8,375
Additions for the year ended December 31, 2024
includes the capital increase of 91 million euros in
Unsere Gr\u00fcne Glasfaser (UGG) (73 million euros for the
year 2023) and the capital increase in nexfibre
amounting to 38 million euros (33 million euros for the
year 2023, see Note 28).
Additions in 2023 included (70,960 million Chilean
pesos, equivalent to 73 million euros) corresponding to
the capital contribution made by Telef\u00f3nica Chile, S.A.
in HoldCo Infraco SpA (of which it owns 40% of the
capital) for the acquisition by InfraCo SpA (a subsidiary
of HoldCo InfraCo SpA) of the fiber optic assets owned
by Empresa Nacional de Telecomunicaciones S.A.
(\"Entel\") following its authorization by the National
Economic Prosecutor's Office on December 14, 2023.
\"Translation differences and other comprehensive
income (loss)\" for the year 2024 mainly includes the
impact of the pound sterling appreciation associated
with the investment in VMO2, amounting to 380 million
euros (219 million euros associated with sterling
appreciation for the year 2023) and the results of the
defined benefit pension plan in VMO2 amounting to 101
million euros (41 million euros for the year 2023). This
also includes losses imputed to equity on derivatives
financial instruments in Unsere Gr\u00fcne Glasfaser
amounting to 7 million euros ( 30 million euros gains for
the year 2023).
During the year ended December 31, 2024, dividends
amounting to 425 million pounds sterling, equivalent to
512 million euros, were received from VMO2 (1,000
million pounds sterling, equivalent to 1,154 million euros
during the year 2023, see Note 28). Additionally
included dividends amounting to 54 million euros from
Nabiax.
On November 7, 2024, Nabiax's majority shareholder,
Asterion Industrial Partners SGEIC, S.A. (\"Asterion\")
(80% stake), reached an agreement with the Aermont
Group to sell its shares in Nabiax. In compliance with
the provisions of the original shareholders' agreement
between Asterion and Telef\u00f3nica Infra, S.L. (which
owns the remaining 20%), Asterion has notified this
transaction to Telef\u00f3nica Infra, S.L. and has required it
to adhere to the aforementioned sale agreement.\u00a0In
2024 \"Transfers and others\" includes the
reclassification of the stake in Nabiax to \"Non-current
assets held for sale\" amounting to 58 million euros (see
Note 29.c and 30).
VMED O2 UK
Impairment of goodwill recorded by
VMO2 in 2023
As a result of the annual goodwill impairment test
analysis carried out by VMO2's management at the end
of 2023, VMO2 recorded an impairment of goodwill
amounting to 3,107 million pounds sterling
(approximately 3,572 million euros), mainly due to the
decrease in projected cash flows of VMO2 as a
consequence of the effects of macroeconomic
conditions and the competitive environment in the
United Kingdom and the increase in the discount rate
(WACC).
50% of this amount (approximately 1,786 million euros)
is reflected in Telef\u00f3nica's consolidated income
statement for the year 2023, as its share in the loss of
VMO2 accounted for by the equity method (see table
detailing the result from the equity method below).
The discount rate applied in the impairment test as of
December 31, 2023 was 7.5% after taxes. The terminal
growth rate considered was 1%.
Impairment analysis as of December 31,
2024
VMO2's management carried out the annual goodwill
impairment test at the end of 2024. Future cash flows
used in the value in use calculation were based on 10-
year financial forecasts included as a part of the
business plan approved by the VMO2 board of directors
for use in impairment testing, considering that in such
period the operating variables until the perpetuity
parameters are reached. This time horizon was used for
capital intensive projects such as the full fiber upgrade
plan.
As a result of this analysis, it has become clear that, as
of December 31, 2024, the value in use is above the
carrying amount of the cash-generating unit (CGU) to
which the goodwill is assigned, with a margin of around
800 million pounds sterling (around 965 million euros).
The growth projections and operating ratios included in
the estimation of the value in use are aligned with the
analyst ranges for comparable companies in the region.
In terms of revenue, despite the challenges of the
competitive environment, the strategic plan includes a
growth trend in long-term projections, in line with the
estimated evolution for the sector in the United
Kingdom. In relation to EBITDA margins two years
ahead, analyst estimates for comparable companies in
Europe are in a range of between 32% and 41%, while,
regarding long-term investment needs, the capex to
revenue ratio is in a range between 12% and 15%. The
WACC discount rate applied to the cash flow
projections stands at 7.7% at the end of December
2024. The perpetuity growth rate stands at 1%, below
the actual terminal growth forecast for the UK
economy. The analysis shows that the value in use is
higher than the book value of the investment at
December 31, 2024.
Regarding the sensitivity of the calculation to
reasonably possible variations in key assumptions:
\u2022 An increase of about 50 basis points over the WACC
rate used, of 7.7% would imply an impairment of
goodwill reported by VMO2 of around 1,700 million
pounds sterling (around 2,050 million euros).
\u2022 A decrease of around 25 basis points in the terminal
growth rate (1%), would have no impact on the
carrying amount of goodwill.
\u2022 Regarding the operating variables used, a decrease of
1 percentage point in the EBITDA margin or an
increase of 0.5 percentage points in the capex to
revenue ratio would have no impact on the carrying
amount of goodwill.
The carrying value of Telef\u00f3nica's equity-accounted
investment in VMO2 amounting to 7,641 million euros as
of December 31, 2024 (7,774 million euros as of
December\u00a031, 2023). Telef\u00f3nica has carried out an
additional analysis of the book value of its stake at the
end of the year, comparing it with its estimate of its
value in use. The key assumptions considered in the
calculation are the same as those used by VMO2 in
determining its value in use. As a result of this analysis,
no need to record any impairment has been identified.
Detail of the main items on the statements of financial
position and income statements of VMED O2 UK
Limited
Millions of euros
12/31/2024
12/31/2023
Non current assets
43,081
41,697
Intangible assets
7,682
8,379
Goodwill
21,404
20,427
Property, plant and equipment
10,994
10,011
Other non current assets
3,001
2,880
Current assets
5,166
4,758
Inventories
245
301
Current receivables and other current assets
2,900
2,882
Other current financial assets
660
567
Cash and cash equivalents
1,361
1,008
Total Assets
48,247
46,455
Non current liabilities
23,139
22,136
Non current financial liabilities
21,754
21,061
Non current lease liabilities
950
663
Other non current liabilities
435
412
Current liabilities
9,665
8,591
Current financial liabilities
4,970
4,165
Current lease liabilities
197
201
Other current liabilities
4,498
4,225
Total Liabilities
32,804
30,727
Equity attributable to non-controlling interests\u00a0 (100% VMO2)
252
261
Equity attributable to equity holders of the parent (100% VMO2)
15,191
15,467
50% Telef\u00f3nica Group
7,596
7,734
Acquisition costs
61
61
Other adjustments
(16)
(21)
Investments accounted for by the equity method
7,641
7,774
Millions of euros
2024
2023
2022
Revenues
12,616
12,547
12,155
Other operating income
516
516
551
Operating expenses
(8,665)
(8,632)
(8,305)
Impairment losses in goodwill
\u2014
(3,572)
\u2014
Depreciation and amortization (1)
(3,371)
(3,685)
(4,170)
Operating income (loss)
1,096
(2,826)
231
Share of income (loss) of investments accounted for by the equity method
4
2
1
Financial income
51
55
24
Financial expenses
(1,578)
(1,436)
(1,020)
Realized and unrealized gains on derivative instruments, net (2)
463
(924)
2,567
Foreign currency transaction losses, net
(34)
677
(1,296)
Net financial result
(1,098)
(1,628)
275
Result before taxation
2
(4,452)
507
Income tax
(22)
265
(15)
Result for the period
(20)
(4,187)
492
Attributable to non-controlling interests
(19)
\u2014
\u2014
Result for the period attributable to equity holders of the parent (100% VMO2)
(39)
(4,187)
492
50% attributable to Telef\u00f3nica Group
(20)
(2,094)
246
Share-based compensation (3)
1
8
14
Sale of a minority interest in Cornerstone (4)
112
76
\u2014
Other adjustments
(5)
(20)
32
Share of (loss) income of investments accounted for by the equity method
89
(2,030)
292
Other comprehensive income (100% VMO2)
(337)
(213)
(113)
(1) Includes amortization of the customer relationships recorded after the purchase price allocation, amounting to 1,012 million euros in 2024 (985 million euros
in 2023).
(2) VMO2\u00a0 entered into various derivative instruments to manage interest rate exposure and foreign currency exposure. Generally, VMO2 does not apply hedge
accounting to its derivative instruments. Accordingly, changes in the fair values of most of its derivatives are recorded in the finance results of its consolidated
income statement.
(3) Amount related to incentive awards held by certain employees of VMO2 associated with ordinary shares of Liberty Global and Telef\u00f3nica. Share-based
compensation expense is included in Operating expenses in the consolidated income statement of VMO2.
(4) In 2024 and 2023, VMO2 sold minority interests in its mobile towers joint operation Cornerstone. This amount reflects the change in the Telef\u00f3nica Group's
indirect ownership interest in Cornerstone (from\u00a0 25% to 16.67% in 2023, then 16.67% to 12.50% in 2024) and resulting from the inflow of resources from a third
party.
Commitments
Millions of euros
2025
2026
2027
2028
2029
Subsequent
years
Total
Purchase and other commitments
791
189
109
61
5
\u2014
1,155
Programming commitments
727
728
618
247
\u2014
\u2014
2,320
Network and connectivity commitments
773
112
31
29
24
204
1,173
Services agreements
236
231
197
175
180
77
1,096
Total commitments VMO2 (100%)
2,527
1,260
955
512
209
281
5,744
Purchase and other commitments include
unconditional and legally binding obligations related to
the purchase of customer premises and other
equipment and certain service-related commitments,
including call center, information technology and
maintenance services.
Programming commitments consist of obligations
associated with programming contracts that are
enforceable and legally binding that includes minimum
fees.
Network and connectivity commitments include service
commitments associated with the network extension
program in the U.K. and commitments associated with
the mobile virtual network operator (MVNO)
agreements.
On the date of constitution of the joint venture,
Telef\u00f3nica and Liberty Global entered with VMO2 into
certain service agreements included as \"Services
agreements\", either on a transitional or ongoing basis.
Likewise, Telef\u00f3nica licensed the use of Telef\u00f3nica and
O2 brand rights to VMO2 (see Note 29.c).
The breakdown of balances and transactions related to
associates and joint ventures recognized with VMO2 in
the consolidated statement of financial position and
consolidated income statement is as follows:
Millions of euros
12/31/2024
12/31/2023
Receivables and other assets from
associates and joint ventures
59
66
Payables and other liabilities to
associates and joint ventures
27
34
Millions of euros
2024
2023
2022
Revenue from operations
with associates and joint
ventures
135
134
130
Expenses from
operations with
associates and joint
ventures
44
63
63
Movistar Prosegur Alarmas
The breakdown of the key financial highlights of
Movistar Prosegur Alarmas group and the reconciliation
with the carrying amount in the Telef\u00f3nica Group at
December 31, 2024 and 2023 are as follows:
Millions of euros
12/31/2024
12/31/2023
Fixed assets
204
172
Other non-current assets
141
160
Non-current assets
345
332
Cash and equivalents
1
1
Other current assets
102
58
Current assets
103
59
Total assets
448
391
Non-current financial
liabilities
(205)
(175)
Other non-current liabilities
(78)
(63)
Non-current liabilities
(283)
(238)
Current financial liabilities
(100)
(102)
Other current liabilities
(65)
(43)
Current liabilities
(165)
(145)
Total liabilities
(448)
(383)
Net assets
\u2014
8
Purchase price allocation
Assets
42
76
Liabilities
(11)
(20)
Net assets
31
56
% Holding
50%
50%
Group\u2019s share in equity
15
32
Goodwill
198
198
Carrying amount in the
Telef\u00f3nica Group
213
230
Group UGG TopCo GmbH & Co KG
and UGG TopCo/HoldCo General
Partner GmbH (UGG Group)
Unsere Gr\u00fcne Glasfaser (UGG), is the joint venture of
Telef\u00f3nica (50%) and Allianz (50%), for the creation of
an independent operator for the deployment of fiber-
to-the-home (FTTH) in rural areas of Germany.
On December 4, 2024, UGG acquired Infrafibre
Germany (IFG), which owns a fiber network in Germany
and additionally two ISP brands, LEONET and
Breitbandversorgung Deutschland (BBV). This
transaction accelerates UGG's planned deployment
plan, replacing part of its future capex and reinforcing
its position as a provider of fiber optic infrastructure in
rural areas of Germany. UGG and IFG operate in 8
federal states (\"L\u00e4nder\"). The operation has been 100%
financed through the bank loan from UGG.
The summary of the magnitudes of the UGG Group and
the reconciliation with its carrying amount in the
Telef\u00f3nica Group at December 31, 2024 and 2023 are
shown below:
Millions of euros
12/31/2024
12/31/2023
Fixed assets
1,344
438
Other non-current assets
194
211
Non-current assets
1,538
649
Cash and equivalents
282
49
Other current assets
63
50
Current assets
345
99
Total assets
1,883
748
Non-current financial liabilities
(1,493)
(522)
Other non-current liabilities
(43)
(36)
Non-current liabilities
(1,536)
(558)
Current financial liabilities
(4)
(5)
Other current liabilities
(232)
(88)
Current liabilities
(236)
(93)
Total liabilities
(1,772)
(651)
Net assets
111
97
% Holding
50%
50%
Group\u2019s share in equity
55
49
Other adjustments
49
49
Carrying amount in the
Telef\u00f3nica Group
104
97
Commitments
The breakdown of purchase and other contractual
commitments of the UGG Group at December 31, 2024
is as follows:
Millions of euros
12/31/2024
Less than 1 year
431
1 to 3 years
305
3 to 5 years
275
More than five years
414
Total commitments UGG group (100%)
1,425
Opal Jvco Limited (nexfibre)
Opal Jvco Limited (nexfibre), the joint venture in which
Liberty Global and Telef\u00f3nica have a joint 50% stake
and Infrav\u00eda has the remaining 50%, aims to deploy
fiber-to-the-home (FTTH) in the UK. During 2024,
nexfibre has continued its fiber deployment.
The summary of the magnitudes of Opal Jvco Limited
and the reconciliation with its carrying amount in the
Telef\u00f3nica Group at December 31, 2024 and 2023 are
shown below:
Millions of euros
12/31/2024
12/31/2023
Fixed assets
1,833
840
Other non-current assets
185
98
Non-current assets
2,018
938
Cash and equivalents
37
23
Other current assets
62
54
Current assets
99
77
Total assets
2,117
1,015
Non-current financial liabilities
(1,453)
(593)
Other non-current liabilities
(3)
\u2014
Non-current liabilities
(1,456)
(593)
Current financial liabilities
(100)
(61)
Other current liabilities
(199)
(157)
Current liabilities
(299)
(218)
Total liabilities
(1,755)
(811)
Net assets
362
204
% Holding
25%
25%
Group\u2019s share in equity
90
51
Other adjustments
4
4
Carrying amount in the
Telef\u00f3nica Group
94
55
Commitments
The breakdown of purchase and other contractual
commitments of the Opal Jvco. Group at December 31
2024 is as follows:
Millions of euros
12/31/2024
Less than 1 year
678
1 to 3 years
122
3 to 5 years
67
More than five years
4
Total commitments Opal Jvco. group (100%)
871
Most of Opal Jvco. group's commitments are with
VMO2.
HoldCo Infraco SpA. (Onnet Fibra
Chile)
Holdco Infraco SpA, an associated company of the
Telef\u00f3nica Group through its subsidiary Telef\u00f3nica
Chile. S.A. (40%), provides telecommunications services
to wholesalers of fiber optic access to the home (FTTH)
and other services based on fiber optic infrastructure,
such as network construction, installation and
equipment of systems through its subsidiary Infraco
SpA.
The summary of the magnitudes of Holdco Infraco
Group and the reconciliation with its carrying amount in
the Telef\u00f3nica Group at December 31, 2024 and 2023
are shown below:
Millions of euros
12/31/2024
12/31/2023
Non-current assets
1,343
857
Cash and equivalents
11
27
Other current assets
84
182
Current assets
95
209
Total assets
1,438
1,066
Non-current financial liabilities
(892)
(521)
Other non-current liabilities
(304)
(293)
Non-current liabilities
(1,196)
(814)
Current financial liabilities
(34)
(3)
Other current liabilities
(102)
(78)
Current liabilities
(136)
(81)
Total liabilities
(1,332)
(895)
Net assets
106
171
Purchase price allocation
Assets
159
178
Liabilities
(43)
(48)
Net assets
116
130
% Holding
40%
40%
Group\u2019s share in equity
89
120
Other adjustments
30
30
Carrying amount in the
Telef\u00f3nica Group
119
150
Breakdown of balances and
transactions with associates and
joint ventures
The breakdown of items related to associates and joint
ventures recognized in the consolidated statements of
financial position and consolidated income statements
is as follows:
12/31/2024
12/31/2023
Millions of euros
Associates
Joint
ventures
Total
Associates
Joint
ventures
Total
Credits and other financial assets
244
2
246
263
2
265
Receivables and other assets (Note 14)
87
112
199
91
93
184
Financial liabilities
\u2014
10
10
\u2014
\u2014
\u2014
Non-current lease liabilities
60
9
69
37
\u2014
37
Non-current payables and other liabilities (Note 21)
433
1
434
236
4
240
Long-term contractual liabilities
31
52
83
44
54
98
Current lease liabilities
55
4
59
42
\u2014
42
Current payables and other liabilities (Note 22)
377
50
427
183
44
227
Short-term contractual liabilities
14
6
20
15
6
21
2024
2023
2022
Millions of euros
Associates
Joint
ventures
Total
Associates
Joint
ventures
Total
Associates
Joint
ventures
Total
Revenue from operations
520
251
771
473
223
696
209
251
460
Expenses from operations
677
136
813
634
136
770
199
116
315
Financial revenues
26
2
28
29
1
30
27
1
28
Financial expenses
45
1
46
9
7
16
1
9
10
\"Credits and other financial assets\" at December 31,
2024 includes loans granted and long-term trade
receivables amounting to 112 million euros and 14 million
euros, respectively by Colombia Telecomunicaciones,
S.A. ESP BIC to the associate company \u00c1lamo Holdco,
S.L. and it subsidiary Onnet Fibra Colombia S.A.S., (112
million euros and 29 million euros as of December 31,
2023, respectively). Additionally, this line includes at
December 31, 2024 long-term loans from Telef\u00f3nica
Chile to the associate company HoldCo Infraco, SpA
amounting to 118 million euros (121 million euros as of
December 31, 2023) of which 75 million euros
corresponds to the subordinated debt\u00a0 generated by
the sale of 40% of the fiber optic business (75 million
euros as of December 31, 2023) and 43 million euros
corresponding to the indefinite-term loan for the
acquisition of the fiber optic assets owned by Entel (46
million euros as of December 31, 2023, see Note 12).
\"Non-current payables and other liabilities\" and
\"Current payable and other liabilities\" at December 31,
2024 includes 433 million euros and 217 million euros,
respectively, of Telef\u00f3nica Espa\u00f1a with the associate
company Telef\u00f3nica Renting, S.A. (235 million euros
and 85 million euros, respectively, at December 31,
2023). Telef\u00f3nica Renting is a company of the
CaixaBank group (see Note 11). \"Revenue from
operations\" and \"Expenses from operation\" in 2024
includes 373 million euros and 455 million euros,
respectively, of Telef\u00f3nica Espa\u00f1a with this company
(243 million euros and 392 million euros for the year
2023).
Additionally \"Revenues from operations\" includes 28
million euros corresponding to the transactions of the
Group with the associate company HoldCo Infraco SpA
(63 million euros and 88 million euros in 2023 and 2022,
respectively) and 98 million euros with the associate
company Onnet Fibra Colombia, S.A.S. (140 million
euros in 2023).
\"Expenses from operations\" in 2024 includes 103 million
euros corresponding to the transactions of the Group
with the associate company HoldCo Infraco SpA (144
million euros and 121 million euros in 2023 and 2022,
respectively) and 81 million euros with the associate
company Onnet Fibra Colombia, S.A.S. (60 million euros
in 2023).
The main companies of the Telef\u00f3nica Group
The table below lists the main companies comprising the
Telef\u00f3nica Group at December 31, 2024 and the main
investments consolidated using the equity method.
Included for each company are the company name,
corporate purpose, country, functional currency, share
capital (in millions of functional currency units), the
Telef\u00f3nica Group\u2019s effective shareholding and the
company or companies through which the Group holds
a stake.", "dimensions": { "concept": "ifrs-full:DisclosureOfJointVenturesExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-854": { "value": "
Note 10. Associa tes and joint
ventures
The detail of investments accounted for by the equity
method and the share of (loss)/income of these
investments is the following:
% Holding
Investments accounted
for by the equity method
Share of (loss) income of investments
accounted for by the equity method
Millions of euros
12/31/2024
12/31/2023
2024
2023
2022
VMED O2 UK Limited
50%
7,641
7,774
89
(2,030)
292
Movistar Prosegur Alarmas
50%
213
230
(16)
(22)
(12)
FiBrasil Infraestructura e Fibra \u00d3tica, S.A.
50%
80
100
(1)
(4)
(8)
Unsere Gr\u00fcne Glasfaser (UGG)
50%
104
97
(77)
(55)
(64)
Opal Jvco Limited (nexfibre)
25%
94
55
(2)
(32)
26
Utiq, S.A.
25%
3
5
(4)
\u2014
\u2014
Others
8
4
(3)
(2)
(4)
Joint ventures
8,143
8,265
(14)
(2,145)
230
Daytona Midco, S.L. (Nabiax)
20%
\u2014
65
(7)
(1)
(1)
Adquira Espa\u00f1a, S.A.
44.44%
5
4
\u2014
\u2014
\u2014
HoldCo Infraco SpA. (Onnet Fibra Chile)
40%
119
150
(24)
7
\u2014
Alamo HoldCo S.L. (Onnet Fibra Colombia)
40%
11
14
(17)
(10)
(15)
Internet para todos S.A.C.
54.67%
57
55
\u2014
\u2014
(3)
Telef\u00f3nica Factoring Espa\u00f1a, S.A.
50%
8
7
4
4
4
Telef\u00f3nica Factoring do Brasil, Ltda.
50%
2
2
2
1
3
Telef\u00f3nica Factoring Peru, S.A.C.
50%
3
3
1
1
1
Telef\u00f3nica Factoring Colombia, S.A.
50%
1
1
1
1
1
Telef\u00f3nica Factoring M\u00e9xico, S.A.de C.V.
50%
\u2014
1
\u2014
\u2014
\u2014
Telef\u00f3nica Factoring Chile, SpA.
50%
1
1
\u2014
\u2014
\u2014
Telef\u00f3nica Factoring Ecuador, S.A.
50%
\u2014
\u2014
\u2014
\u2014
\u2014
Telef\u00f3nica Renting, S.A.
50%
9
1
4
\u2014
\u2014
Telef\u00f3nica Consumer Finance, Establecimiento
Financiero de Cr\u00e9dito, S.A.
50%
14
18
1
1
2
Movistar Consumer Finance Colombia SAS
50%
\u2014
\u2014
\u2014
(21)
(3)
Others
2
3
\u2014
\u2014
(2)
Associates
232
325
(35)
(17)
(13)
Total
8,375
8,590
(49)
(2,162)
217
The detail of the movement in investments accounted
for by the equity method in 2024 and 2023 is as follows:
Investments accounted for by the equity
method
Millions of
euros
Balance at 12/31/2022
11,587
Additions
236
Translation differences and other
comprehensive income (loss)
144
(Loss) income
(2,162)
Dividends
(1,218)
Transfers and others
3
Balance at 12/31/2023
8,590
Additions
160
Translation differences and other
comprehensive income (loss)
249
(Loss) income
(49)
Dividends
(520)
Transfers and others
(55)
Balance at 12/31/2024
8,375
Additions for the year ended December 31, 2024
includes the capital increase of 91 million euros in
Unsere Gr\u00fcne Glasfaser (UGG) (73 million euros for the
year 2023) and the capital increase in nexfibre
amounting to 38 million euros (33 million euros for the
year 2023, see Note 28).
Additions in 2023 included (70,960 million Chilean
pesos, equivalent to 73 million euros) corresponding to
the capital contribution made by Telef\u00f3nica Chile, S.A.
in HoldCo Infraco SpA (of which it owns 40% of the
capital) for the acquisition by InfraCo SpA (a subsidiary
of HoldCo InfraCo SpA) of the fiber optic assets owned
by Empresa Nacional de Telecomunicaciones S.A.
(\"Entel\") following its authorization by the National
Economic Prosecutor's Office on December 14, 2023.
\"Translation differences and other comprehensive
income (loss)\" for the year 2024 mainly includes the
impact of the pound sterling appreciation associated
with the investment in VMO2, amounting to 380 million
euros (219 million euros associated with sterling
appreciation for the year 2023) and the results of the
defined benefit pension plan in VMO2 amounting to 101
million euros (41 million euros for the year 2023). This
also includes losses imputed to equity on derivatives
financial instruments in Unsere Gr\u00fcne Glasfaser
amounting to 7 million euros ( 30 million euros gains for
the year 2023).
During the year ended December 31, 2024, dividends
amounting to 425 million pounds sterling, equivalent to
512 million euros, were received from VMO2 (1,000
million pounds sterling, equivalent to 1,154 million euros
during the year 2023, see Note 28). Additionally
included dividends amounting to 54 million euros from
Nabiax.
On November 7, 2024, Nabiax's majority shareholder,
Asterion Industrial Partners SGEIC, S.A. (\"Asterion\")
(80% stake), reached an agreement with the Aermont
Group to sell its shares in Nabiax. In compliance with
the provisions of the original shareholders' agreement
between Asterion and Telef\u00f3nica Infra, S.L. (which
owns the remaining 20%), Asterion has notified this
transaction to Telef\u00f3nica Infra, S.L. and has required it
to adhere to the aforementioned sale agreement.\u00a0In
2024 \"Transfers and others\" includes the
reclassification of the stake in Nabiax to \"Non-current
assets held for sale\" amounting to 58 million euros (see
Note 29.c and 30).
VMED O2 UK
Impairment of goodwill recorded by
VMO2 in 2023
As a result of the annual goodwill impairment test
analysis carried out by VMO2's management at the end
of 2023, VMO2 recorded an impairment of goodwill
amounting to 3,107 million pounds sterling
(approximately 3,572 million euros), mainly due to the
decrease in projected cash flows of VMO2 as a
consequence of the effects of macroeconomic
conditions and the competitive environment in the
United Kingdom and the increase in the discount rate
(WACC).
50% of this amount (approximately 1,786 million euros)
is reflected in Telef\u00f3nica's consolidated income
statement for the year 2023, as its share in the loss of
VMO2 accounted for by the equity method (see table
detailing the result from the equity method below).
The discount rate applied in the impairment test as of
December 31, 2023 was 7.5% after taxes. The terminal
growth rate considered was 1%.
Impairment analysis as of December 31,
2024
VMO2's management carried out the annual goodwill
impairment test at the end of 2024. Future cash flows
used in the value in use calculation were based on 10-
year financial forecasts included as a part of the
business plan approved by the VMO2 board of directors
for use in impairment testing, considering that in such
period the operating variables until the perpetuity
parameters are reached. This time horizon was used for
capital intensive projects such as the full fiber upgrade
plan.
As a result of this analysis, it has become clear that, as
of December 31, 2024, the value in use is above the
carrying amount of the cash-generating unit (CGU) to
which the goodwill is assigned, with a margin of around
800 million pounds sterling (around 965 million euros).
The growth projections and operating ratios included in
the estimation of the value in use are aligned with the
analyst ranges for comparable companies in the region.
In terms of revenue, despite the challenges of the
competitive environment, the strategic plan includes a
growth trend in long-term projections, in line with the
estimated evolution for the sector in the United
Kingdom. In relation to EBITDA margins two years
ahead, analyst estimates for comparable companies in
Europe are in a range of between 32% and 41%, while,
regarding long-term investment needs, the capex to
revenue ratio is in a range between 12% and 15%. The
WACC discount rate applied to the cash flow
projections stands at 7.7% at the end of December
2024. The perpetuity growth rate stands at 1%, below
the actual terminal growth forecast for the UK
economy. The analysis shows that the value in use is
higher than the book value of the investment at
December 31, 2024.
Regarding the sensitivity of the calculation to
reasonably possible variations in key assumptions:
\u2022 An increase of about 50 basis points over the WACC
rate used, of 7.7% would imply an impairment of
goodwill reported by VMO2 of around 1,700 million
pounds sterling (around 2,050 million euros).
\u2022 A decrease of around 25 basis points in the terminal
growth rate (1%), would have no impact on the
carrying amount of goodwill.
\u2022 Regarding the operating variables used, a decrease of
1 percentage point in the EBITDA margin or an
increase of 0.5 percentage points in the capex to
revenue ratio would have no impact on the carrying
amount of goodwill.
The carrying value of Telef\u00f3nica's equity-accounted
investment in VMO2 amounting to 7,641 million euros as
of December 31, 2024 (7,774 million euros as of
December\u00a031, 2023). Telef\u00f3nica has carried out an
additional analysis of the book value of its stake at the
end of the year, comparing it with its estimate of its
value in use. The key assumptions considered in the
calculation are the same as those used by VMO2 in
determining its value in use. As a result of this analysis,
no need to record any impairment has been identified.
Detail of the main items on the statements of financial
position and income statements of VMED O2 UK
Limited
Millions of euros
12/31/2024
12/31/2023
Non current assets
43,081
41,697
Intangible assets
7,682
8,379
Goodwill
21,404
20,427
Property, plant and equipment
10,994
10,011
Other non current assets
3,001
2,880
Current assets
5,166
4,758
Inventories
245
301
Current receivables and other current assets
2,900
2,882
Other current financial assets
660
567
Cash and cash equivalents
1,361
1,008
Total Assets
48,247
46,455
Non current liabilities
23,139
22,136
Non current financial liabilities
21,754
21,061
Non current lease liabilities
950
663
Other non current liabilities
435
412
Current liabilities
9,665
8,591
Current financial liabilities
4,970
4,165
Current lease liabilities
197
201
Other current liabilities
4,498
4,225
Total Liabilities
32,804
30,727
Equity attributable to non-controlling interests\u00a0 (100% VMO2)
252
261
Equity attributable to equity holders of the parent (100% VMO2)
15,191
15,467
50% Telef\u00f3nica Group
7,596
7,734
Acquisition costs
61
61
Other adjustments
(16)
(21)
Investments accounted for by the equity method
7,641
7,774
Millions of euros
2024
2023
2022
Revenues
12,616
12,547
12,155
Other operating income
516
516
551
Operating expenses
(8,665)
(8,632)
(8,305)
Impairment losses in goodwill
\u2014
(3,572)
\u2014
Depreciation and amortization (1)
(3,371)
(3,685)
(4,170)
Operating income (loss)
1,096
(2,826)
231
Share of income (loss) of investments accounted for by the equity method
4
2
1
Financial income
51
55
24
Financial expenses
(1,578)
(1,436)
(1,020)
Realized and unrealized gains on derivative instruments, net (2)
463
(924)
2,567
Foreign currency transaction losses, net
(34)
677
(1,296)
Net financial result
(1,098)
(1,628)
275
Result before taxation
2
(4,452)
507
Income tax
(22)
265
(15)
Result for the period
(20)
(4,187)
492
Attributable to non-controlling interests
(19)
\u2014
\u2014
Result for the period attributable to equity holders of the parent (100% VMO2)
(39)
(4,187)
492
50% attributable to Telef\u00f3nica Group
(20)
(2,094)
246
Share-based compensation (3)
1
8
14
Sale of a minority interest in Cornerstone (4)
112
76
\u2014
Other adjustments
(5)
(20)
32
Share of (loss) income of investments accounted for by the equity method
89
(2,030)
292
Other comprehensive income (100% VMO2)
(337)
(213)
(113)
(1) Includes amortization of the customer relationships recorded after the purchase price allocation, amounting to 1,012 million euros in 2024 (985 million euros
in 2023).
(2) VMO2\u00a0 entered into various derivative instruments to manage interest rate exposure and foreign currency exposure. Generally, VMO2 does not apply hedge
accounting to its derivative instruments. Accordingly, changes in the fair values of most of its derivatives are recorded in the finance results of its consolidated
income statement.
(3) Amount related to incentive awards held by certain employees of VMO2 associated with ordinary shares of Liberty Global and Telef\u00f3nica. Share-based
compensation expense is included in Operating expenses in the consolidated income statement of VMO2.
(4) In 2024 and 2023, VMO2 sold minority interests in its mobile towers joint operation Cornerstone. This amount reflects the change in the Telef\u00f3nica Group's
indirect ownership interest in Cornerstone (from\u00a0 25% to 16.67% in 2023, then 16.67% to 12.50% in 2024) and resulting from the inflow of resources from a third
party.
Commitments
Millions of euros
2025
2026
2027
2028
2029
Subsequent
years
Total
Purchase and other commitments
791
189
109
61
5
\u2014
1,155
Programming commitments
727
728
618
247
\u2014
\u2014
2,320
Network and connectivity commitments
773
112
31
29
24
204
1,173
Services agreements
236
231
197
175
180
77
1,096
Total commitments VMO2 (100%)
2,527
1,260
955
512
209
281
5,744
Purchase and other commitments include
unconditional and legally binding obligations related to
the purchase of customer premises and other
equipment and certain service-related commitments,
including call center, information technology and
maintenance services.
Programming commitments consist of obligations
associated with programming contracts that are
enforceable and legally binding that includes minimum
fees.
Network and connectivity commitments include service
commitments associated with the network extension
program in the U.K. and commitments associated with
the mobile virtual network operator (MVNO)
agreements.
On the date of constitution of the joint venture,
Telef\u00f3nica and Liberty Global entered with VMO2 into
certain service agreements included as \"Services
agreements\", either on a transitional or ongoing basis.
Likewise, Telef\u00f3nica licensed the use of Telef\u00f3nica and
O2 brand rights to VMO2 (see Note 29.c).
The breakdown of balances and transactions related to
associates and joint ventures recognized with VMO2 in
the consolidated statement of financial position and
consolidated income statement is as follows:
Millions of euros
12/31/2024
12/31/2023
Receivables and other assets from
associates and joint ventures
59
66
Payables and other liabilities to
associates and joint ventures
27
34
Millions of euros
2024
2023
2022
Revenue from operations
with associates and joint
ventures
135
134
130
Expenses from
operations with
associates and joint
ventures
44
63
63
Movistar Prosegur Alarmas
The breakdown of the key financial highlights of
Movistar Prosegur Alarmas group and the reconciliation
with the carrying amount in the Telef\u00f3nica Group at
December 31, 2024 and 2023 are as follows:
Millions of euros
12/31/2024
12/31/2023
Fixed assets
204
172
Other non-current assets
141
160
Non-current assets
345
332
Cash and equivalents
1
1
Other current assets
102
58
Current assets
103
59
Total assets
448
391
Non-current financial
liabilities
(205)
(175)
Other non-current liabilities
(78)
(63)
Non-current liabilities
(283)
(238)
Current financial liabilities
(100)
(102)
Other current liabilities
(65)
(43)
Current liabilities
(165)
(145)
Total liabilities
(448)
(383)
Net assets
\u2014
8
Purchase price allocation
Assets
42
76
Liabilities
(11)
(20)
Net assets
31
56
% Holding
50%
50%
Group\u2019s share in equity
15
32
Goodwill
198
198
Carrying amount in the
Telef\u00f3nica Group
213
230
Group UGG TopCo GmbH & Co KG
and UGG TopCo/HoldCo General
Partner GmbH (UGG Group)
Unsere Gr\u00fcne Glasfaser (UGG), is the joint venture of
Telef\u00f3nica (50%) and Allianz (50%), for the creation of
an independent operator for the deployment of fiber-
to-the-home (FTTH) in rural areas of Germany.
On December 4, 2024, UGG acquired Infrafibre
Germany (IFG), which owns a fiber network in Germany
and additionally two ISP brands, LEONET and
Breitbandversorgung Deutschland (BBV). This
transaction accelerates UGG's planned deployment
plan, replacing part of its future capex and reinforcing
its position as a provider of fiber optic infrastructure in
rural areas of Germany. UGG and IFG operate in 8
federal states (\"L\u00e4nder\"). The operation has been 100%
financed through the bank loan from UGG.
The summary of the magnitudes of the UGG Group and
the reconciliation with its carrying amount in the
Telef\u00f3nica Group at December 31, 2024 and 2023 are
shown below:
Millions of euros
12/31/2024
12/31/2023
Fixed assets
1,344
438
Other non-current assets
194
211
Non-current assets
1,538
649
Cash and equivalents
282
49
Other current assets
63
50
Current assets
345
99
Total assets
1,883
748
Non-current financial liabilities
(1,493)
(522)
Other non-current liabilities
(43)
(36)
Non-current liabilities
(1,536)
(558)
Current financial liabilities
(4)
(5)
Other current liabilities
(232)
(88)
Current liabilities
(236)
(93)
Total liabilities
(1,772)
(651)
Net assets
111
97
% Holding
50%
50%
Group\u2019s share in equity
55
49
Other adjustments
49
49
Carrying amount in the
Telef\u00f3nica Group
104
97
Commitments
The breakdown of purchase and other contractual
commitments of the UGG Group at December 31, 2024
is as follows:
Millions of euros
12/31/2024
Less than 1 year
431
1 to 3 years
305
3 to 5 years
275
More than five years
414
Total commitments UGG group (100%)
1,425
Opal Jvco Limited (nexfibre)
Opal Jvco Limited (nexfibre), the joint venture in which
Liberty Global and Telef\u00f3nica have a joint 50% stake
and Infrav\u00eda has the remaining 50%, aims to deploy
fiber-to-the-home (FTTH) in the UK. During 2024,
nexfibre has continued its fiber deployment.
The summary of the magnitudes of Opal Jvco Limited
and the reconciliation with its carrying amount in the
Telef\u00f3nica Group at December 31, 2024 and 2023 are
shown below:
Millions of euros
12/31/2024
12/31/2023
Fixed assets
1,833
840
Other non-current assets
185
98
Non-current assets
2,018
938
Cash and equivalents
37
23
Other current assets
62
54
Current assets
99
77
Total assets
2,117
1,015
Non-current financial liabilities
(1,453)
(593)
Other non-current liabilities
(3)
\u2014
Non-current liabilities
(1,456)
(593)
Current financial liabilities
(100)
(61)
Other current liabilities
(199)
(157)
Current liabilities
(299)
(218)
Total liabilities
(1,755)
(811)
Net assets
362
204
% Holding
25%
25%
Group\u2019s share in equity
90
51
Other adjustments
4
4
Carrying amount in the
Telef\u00f3nica Group
94
55
Commitments
The breakdown of purchase and other contractual
commitments of the Opal Jvco. Group at December 31
2024 is as follows:
Millions of euros
12/31/2024
Less than 1 year
678
1 to 3 years
122
3 to 5 years
67
More than five years
4
Total commitments Opal Jvco. group (100%)
871
Most of Opal Jvco. group's commitments are with
VMO2.
HoldCo Infraco SpA. (Onnet Fibra
Chile)
Holdco Infraco SpA, an associated company of the
Telef\u00f3nica Group through its subsidiary Telef\u00f3nica
Chile. S.A. (40%), provides telecommunications services
to wholesalers of fiber optic access to the home (FTTH)
and other services based on fiber optic infrastructure,
such as network construction, installation and
equipment of systems through its subsidiary Infraco
SpA.
The summary of the magnitudes of Holdco Infraco
Group and the reconciliation with its carrying amount in
the Telef\u00f3nica Group at December 31, 2024 and 2023
are shown below:
Millions of euros
12/31/2024
12/31/2023
Non-current assets
1,343
857
Cash and equivalents
11
27
Other current assets
84
182
Current assets
95
209
Total assets
1,438
1,066
Non-current financial liabilities
(892)
(521)
Other non-current liabilities
(304)
(293)
Non-current liabilities
(1,196)
(814)
Current financial liabilities
(34)
(3)
Other current liabilities
(102)
(78)
Current liabilities
(136)
(81)
Total liabilities
(1,332)
(895)
Net assets
106
171
Purchase price allocation
Assets
159
178
Liabilities
(43)
(48)
Net assets
116
130
% Holding
40%
40%
Group\u2019s share in equity
89
120
Other adjustments
30
30
Carrying amount in the
Telef\u00f3nica Group
119
150
Breakdown of balances and
transactions with associates and
joint ventures
The breakdown of items related to associates and joint
ventures recognized in the consolidated statements of
financial position and consolidated income statements
is as follows:
12/31/2024
12/31/2023
Millions of euros
Associates
Joint
ventures
Total
Associates
Joint
ventures
Total
Credits and other financial assets
244
2
246
263
2
265
Receivables and other assets (Note 14)
87
112
199
91
93
184
Financial liabilities
\u2014
10
10
\u2014
\u2014
\u2014
Non-current lease liabilities
60
9
69
37
\u2014
37
Non-current payables and other liabilities (Note 21)
433
1
434
236
4
240
Long-term contractual liabilities
31
52
83
44
54
98
Current lease liabilities
55
4
59
42
\u2014
42
Current payables and other liabilities (Note 22)
377
50
427
183
44
227
Short-term contractual liabilities
14
6
20
15
6
21
2024
2023
2022
Millions of euros
Associates
Joint
ventures
Total
Associates
Joint
ventures
Total
Associates
Joint
ventures
Total
Revenue from operations
520
251
771
473
223
696
209
251
460
Expenses from operations
677
136
813
634
136
770
199
116
315
Financial revenues
26
2
28
29
1
30
27
1
28
Financial expenses
45
1
46
9
7
16
1
9
10
\"Credits and other financial assets\" at December 31,
2024 includes loans granted and long-term trade
receivables amounting to 112 million euros and 14 million
euros, respectively by Colombia Telecomunicaciones,
S.A. ESP BIC to the associate company \u00c1lamo Holdco,
S.L. and it subsidiary Onnet Fibra Colombia S.A.S., (112
million euros and 29 million euros as of December 31,
2023, respectively). Additionally, this line includes at
December 31, 2024 long-term loans from Telef\u00f3nica
Chile to the associate company HoldCo Infraco, SpA
amounting to 118 million euros (121 million euros as of
December 31, 2023) of which 75 million euros
corresponds to the subordinated debt\u00a0 generated by
the sale of 40% of the fiber optic business (75 million
euros as of December 31, 2023) and 43 million euros
corresponding to the indefinite-term loan for the
acquisition of the fiber optic assets owned by Entel (46
million euros as of December 31, 2023, see Note 12).
\"Non-current payables and other liabilities\" and
\"Current payable and other liabilities\" at December 31,
2024 includes 433 million euros and 217 million euros,
respectively, of Telef\u00f3nica Espa\u00f1a with the associate
company Telef\u00f3nica Renting, S.A. (235 million euros
and 85 million euros, respectively, at December 31,
2023). Telef\u00f3nica Renting is a company of the
CaixaBank group (see Note 11). \"Revenue from
operations\" and \"Expenses from operation\" in 2024
includes 373 million euros and 455 million euros,
respectively, of Telef\u00f3nica Espa\u00f1a with this company
(243 million euros and 392 million euros for the year
2023).
Additionally \"Revenues from operations\" includes 28
million euros corresponding to the transactions of the
Group with the associate company HoldCo Infraco SpA
(63 million euros and 88 million euros in 2023 and 2022,
respectively) and 98 million euros with the associate
company Onnet Fibra Colombia, S.A.S. (140 million
euros in 2023).
\"Expenses from operations\" in 2024 includes 103 million
euros corresponding to the transactions of the Group
with the associate company HoldCo Infraco SpA (144
million euros and 121 million euros in 2023 and 2022,
respectively) and 81 million euros with the associate
company Onnet Fibra Colombia, S.A.S. (60 million euros
in 2023).
The main companies of the Telef\u00f3nica Group
The table below lists the main companies comprising the
Telef\u00f3nica Group at December 31, 2024 and the main
investments consolidated using the equity method.
Included for each company are the company name,
corporate purpose, country, functional currency, share
capital (in millions of functional currency units), the
Telef\u00f3nica Group\u2019s effective shareholding and the
company or companies through which the Group holds
a stake.", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInAssociatesExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-856": { "value": "
Note 11. Related parties
Transactions with related parties, as established in
current legislation and in Telef\u00f3nica's internal policies,
have been conducted in the ordinary course of the
Group's business and under market conditions.
Shareholders with representation on
the Board of Directors of Telef\u00f3nica,
S.A.
In 2024, the Company's shareholders represented on
the Board of Directors of Telef\u00f3nica, S.A. were Banco
Bilbao Vizcaya Argentaria, S.A. (BBVA), CaixaBank, S.A.
(ceased to be represented on the Board on April 12,
2024), Criteria Caixa, S.A.U. (obtained representation on
the Board on April 12, 2024), and Sociedad Estatal de
Participaciones Industriales (with representation on the
Board since May 8, 2024).
According to information provided by BBVA for the 2024
Annual Corporate Governance Report of Telef\u00f3nica S.A.,
corresponding to the fiscal year 2024, as of December
31, 2024, the BBVA's participation in the share capital of
Telef\u00f3nica, S.A. was 4.93%. Likewise, and in accordance
with the aforementioned information provided by BBVA,
the percentage of economic rights attributed to the
shares of Telef\u00f3nica, S.A. that were owned by BBVA as
of December 31, 2024, would increase by\u00a0 0.231%
without voting rights of the Company's share capital.
According to the information provided by Sociedad
Estatal de Participaciones Industriales (SEPI) for the
2024 Annual Corporate Governance Report of
Telef\u00f3nica, S.A., as of December 31, 2024, the
participation of the SEPI in the share capital of
Telef\u00f3nica, S.A. was 10%.
According to information provided by Criteria Caixa,
S.A.U. for the 2024 Annual Corporate Governance
Report of Telef\u00f3nica, S.A., as of December 31, 2024, the
participation of Criteria Caixa, S.A.U. (CriteriaCaixa) in
the share capital of Telef\u00f3nica, S.A., was 9.99%. Likewise,
and without this implying an incremental or additional
participation, Fundaci\u00f3n Bancaria Caixa d'Estalvis i
Pensions de Barcelona, as the sole shareholder of
Criteria Caixa, S.A.U., holds the same participation
indirectly.
Below is a summary of the relevant transactions of the
Telef\u00f3nica Group with the companies of BBVA,
CaixaBank, CriteriaCaixa and SEPI groups, other than
the payment of the dividend corresponding to its
participation.
Participated companies
On November 20, 2020, Telef\u00f3nica Innovaci\u00f3n Digital,
S.L.U. (previously called Telef\u00f3nica Digital Espa\u00f1a,
S.L.U.), and Compa\u00f1\u00eda Chilena de Inversiones, S.L., an
affiliated company of BBVA, entered into an agreement
related to the incorporation of a subsidiary in Colombia
with the aim of commercializing loans to consumers and
SME in such country. On January 5, 2021, this company
was incorporated as a 50/50 joint venture between the
two companies, under the name Movistar Consumer
Finance Colombia, S.A.S (see Note 10).
The Telef\u00f3nica Group and BBVA each hold a 44.44%
interest in the joint venture Adquira Espa\u00f1a, S.A. (see
Note 10).
The Telef\u00f3nica Group has a 50% interest in Telef\u00f3nica
Factoring Espa\u00f1a and its subsidiaries in Brazil, Peru,
Colombia, Mexico, Chile and Ecuador, accounted for by
the equity method (see Note 10), in which BBVA have
minority interests.
The accounting balances as of December 31, 2024 and
2023, as well as the accounting reflection of the
transactions carried out in 2024 and 2023 of Telef\u00f3nica
Group companies with the aforementioned associates
and joint ventures in which BBVA hold interests are
shown below:
Millions of euros
12/31/2024
12/31/2023
Receivables and other assets
5
9
Payables and other liabilities
80
10
Millions of euros
2024
2023
2022
Revenue from operations
13
16
12
Expenses from operations
2
\u2014
\u2014
Financial cost
1
1
1
Derivatives contracted with BBVA
The net fair value of the outstanding derivatives as of
December 31, 2024 contracted with BBVA\u00a0 amount to
106 million euros (net asset position) (52 million euros,
as of December 31, 2023 (net asset position)).
The nominal value of these derivatives amounted to
7,702 million euros, (9,797 million euros in 2023). As
explained in the 'Derivatives policy' section of Note 19,
this volume is so high because derivatives can be
applied several times to the same underlying asset for an
amount equal to its face value. As of December 31, 2024,
the derivatives contracted with BBVA account for
approximately 9% of the total amount of outstanding
derivatives contracted by the Group with external
counterparties (see Note 19).
The Company maintains various derivative financial
instruments settled by differences contracted with
BBVA (see Note 17).
At December 31, 2024, collateral guarantees on
derivatives from BBVA have been received, amount to
24 million euros (net liability position) (45 million euros
(net asset\u00a0 position), at December 31, 2023).
Other operations with BBVA
The impact on the consolidated income statement of the
Telef\u00f3nica Group of the rest of the operations with
BBVA in 2024 and 2023 is shown below:
BBVA
Millions of euros
2024
2023
Finance costs
33
42
Receipt of services
5
8
Purchase of goods
1
\u2014
Other expenses
\u2014
38
Total costs
39
88
Finance income
46
47
Dividends received (1)
30
21
Services rendered
88
48
Sale of goods
12
10
Other income
\u2014
3
Total revenues
176
129
(1)\u00a0 At December 31, 2024, Telef\u00f3nica held a 0.77% stake (0.76%
stake at December 31, 2023) in the share capital of Banco Bilbao
Vizcaya Argentaria, S.A. (see Note 12).
The following table shows the balance sheet positions of
these operations as of December 31, 2024 and 2023, as
well as the current guarantees and other off-balance
sheet positions.
BBVA
Millions of euros
December 31,
2024
December 31,
2023
Finance arrangements: loans,
capital contributions and others
(borrower)
173
191
Finance arrangements: loans and
capital contributions (lender)
441
696
Guarantees
118
239
The heading \"Finance arrangements: loans and capital
contributions (lender)\" for 2023 mainly included a
deposit set up by Telef\u00f3nica, S.A. of 600 million euros
maturing in January 2024.
Operations with CaixaBank
In mid-2021, a Fusion portfolio that included a rental
device came into force at Telef\u00f3nica Espa\u00f1a. The Group
has an agreement with CaixaBank to in turn rent these
devices (a model known as \"rent to rent\"), covered by a
framework financing agreement previously formalized
between Telef\u00f3nica and CaixaBank.
In the months of January to March 2024, until Caixabank
ceased to be a related party, the volume of these
operations with CaixaBank companies (mainly
Telef\u00f3nica Renting and CaixaBank Equipment Finance)
amounted to 139 million euros (393 million euros in the
2023 financial year) which involved 14 million euros in
financial expenses (33 million euros in the 2023 financial
year).
Likewise, the Group carries out other equipment rental
operations with CaixaBank (equipment at customers'
homes, such as routers or decoders). In the months of
January to March 2024, the volume of this equipment
leasing transactions was 29 million euros (117 million
euros in the 2023 financial year), with financial expenses
amounting to 3 million euros (6 million euros in the 2023
financial year).
Operations with CriteriaCaixa
Since the date on which it became considered a related
party, the Telef\u00f3nica Group has not carried out
significant transactions with CriteriaCaixa or the
companies controlled by CriteriaCaixa.
Operations with SEPI
Since the date on which it became considered a related
party, the Telef\u00f3nica Group has not carried out
significant transactions with SEPI or the companies
controlled by SEPI.
General State Administration
SEPI is an entity that is part of the Spanish State
Institutional Public Sector. In the ordinary course of
business and under market conditions, the Telef\u00f3nica
Group carries out transactions with entities of the
Spanish State Institutional Public Sector. In accordance
with the exemption provided for in IAS 24, the balances
and transactions with these entities are not detailed,
although the significant balances and transactions
maintained with them will be disclosed, where
applicable, in the notes to the financial statements.
Since the date on which SEPI became a related party,
the Telef\u00f3nica Group has not carried out any individually
significant transaction with entities belonging to the
Spanish State Institutional Public Sector.
Likewise, Appendix VI summarizes the main regulatory
aspects that affect the telecommunications sector in
Spain.
Other significant shareholders
During fiscal year 2024, the significant shareholders of
the Company without representation on the Board of
Directors of Telef\u00f3nica, S.A. were BlackRock, Inc. and
Public Investment Fund. These shareholders are not
considered a related party as they do not have
representation on the Board of Directors of Telef\u00f3nica,
S.A. nor exert significant influence on the company.
Based on the information notified by BlackRock, Inc. to
the CNMV on November 25, 2024, BlackRock, Inc.'s
participation in the share capital of Telef\u00f3nica, S.A. was
4.29%.
According to the data collected in the communication
sent by Public Investment Fund to the CNMV, as of
February 6, 2025, Green Bridge Investment Company
SCS (a company controlled by Saudi Telecom Company
and this in turn controlled by Public Investment Fund)
had a stake in the share capital of Telef\u00f3nica, S.A. of
9.97%.
Other related parties
The most significant balances and transactions with
associates and joint ventures are detailed in Note 10.
During 2024 and 2023, the Directors and senior
executives performed no transactions with Telef\u00f3nica,
S.A. or any Telef\u00f3nica Group company other than those
in the Group\u2019s normal trading activity and business.
Compensation and other benefits paid to members of
the Board of Directors and senior executives are detailed
in Note 29.g and Appendix II.
Telef\u00f3nica contracted a civil liability insurance scheme
(D&O) for Directors, managers and staff with similar
functions in the Telef\u00f3nica Group, with standard
conditions for these types of insurance and a premium
attributable to 2024 of 4,743,348 euros ( 5,565,729 euros
in 2023). This scheme provides coverage for Telef\u00f3nica,
S.A. and its subsidiaries in certain cases.
", "dimensions": { "concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-857": { "value": "
Note 12. Financial assets
and other non-current
assets
The breakdown of financial assets and other non-
current assets of the Telef\u00f3nica Group at December 31,
2024 and December 31, 2023 is as follows:
Millions of euros
12/31/2024
12/31/2023
Non-current financial
assets (Note 16)
5,339
5,201
Investments
585
616
Credits and other financial
assets
602
741
Deposits and guarantees
691
966
Trade receivables
945
1,049
Receivables for subleases
17
14
Impairment of trade
receivables
(106)
(125)
Long-term derivative financial
assets (Note 19)
2,605
1,940
Other non-current assets
2,064
2,067
Contractual assets (Note 23)
288
325
Deferred expenses (Note 23)
1,073
1,001
Long-term receivables for
taxes
315
354
Prepayments
388
387
Total
7,403
7,268
Non-current financial assets
The movement in investments, other long-term credits,
deposits and guarantees, trade receivables, long-term
receivables for subleases and impairment of trade
receivables in 2024 and 2023 , is as follows:
Millions of euros
Invest-
ments
Other long-
term credits
Deposits
and
guarantees
Trade
receivables
Long-term
receivables
for
subleases
Impairment
of trade
receivables
Balance at 12/31/2022
497
981
1,163
1,019
19
(128)
Additions
17
114
9
610
4
(38)
Disposals
(17)
(310)
(111)
(303)
(1)
16
Translation differences
(1)
(17)
30
37
\u2014
(11)
Fair value adjustments and financial updates
115
26
35
1
\u2014
\u2014
Transfers and other
5
(53)
(160)
(315)
(8)
36
Balance at 12/31/2023
616
741
966
1,049
14
(125)
Additions
30
132
11
623
11
(59)
Disposals
(150)
(107)
(18)
(366)
\u2014
34
Translation differences
(4)
(35)
(104)
(41)
(1)
18
Fair value adjustments and financial updates
94
10
23
(16)
\u2014
\u2014
Transfers and other
(1)
(139)
(187)
(304)
(7)
26
Balance at 12/31/2024
585
602
691
945
17
(106)
Investments
\u201cInvestments\u201d includes the fair value of investments in
companies where Telef\u00f3nica exercises no significant
influence or control and for which there is no specific
short-term disposal plan (see Note 3.i).
The Telef\u00f3nica Group\u2019s shareholding in Banco Bilbao
Vizcaya Argentaria, S.A. (BBVA) amounted to 417 million
euros (363 million euros at December\u00a031, 2023),
representing 0.77% of its share capital at December\u00a031,
2024 (0.76% at December 31, 2023).
At December\u00a031, 2023, Telef\u00f3nica maintained a 0.59%
stake in the share capital of China Unicom (Hong Kong)
Limited, valued at 103 million euros at that date.
Telef\u00f3nica sold in its entire stake in China Unicom (Hong
Kong) Limited during 2024, for an aggregate amount of
147 million euros (see Note 28). As a result of the
transaction, 110 million euros of losses from financial
assets measured at fair value through comprehensive
income were reclassified under retained earnings.
On June 21, 2023 the Company sold its total remaining
shares of Promotora de Informaciones, S.A. (PRISA).
Other long-term credits
This line item includes long-term financial assets of
Telef\u00f3nica Germany amounting to 120 million euros and
114 million euros at December 31, 2024 and 2023,
respectively, most of them related to reimbursement
rights to cover pension obligations of the company but
do not represent \"plan assets\" in accordance with IAS 19
(see Note 24).
Additionally, at December 31, 2024 this line includes 112
million euros of loans granted by Colombia
Telecomunicaciones, S.A. ESP BIC to the associate
company \u00c1lamo Holdco, S.L. (112 million euros as of
December 31, 2023, see Note 10).
Additions in 2023 included 44,187 million Chilean pesos
(46 million euros) corresponding to the indefinite-term
loan granted by Telef\u00f3nica Chile, S.A. to the associate
HoldCo Infraco, SpA for the acquisition of the fiber optic
assets owned by Entel (43 million euros at December 31,
2024, see Note 10). Additionally, at December 31, 2024
this line includes 75 million euros corresponding to the
subordinated debt granted by Telef\u00f3nica Chile to the
associate company HoldCo Infraco, SpA. generated by
the sale of 40% of the fiber optic business (75 million
euros as of December 31, 2023, see Note 10).
Additionally at December 31, 2024 includes the
collection right with a maturity of more than twelve
months arising from Telxius with American Tower
Corporation in June 2021 as a result of the sale of the
telecommunications towers division in Europe (Spain
and Germany) amounting to 90 million euros (269 million
euros in the long term at December 31, 2023). \"Short-
term credits\" includes the collection right with a maturity
of less than twelve months (see Note 15).
Disposals for the year 2023 included the collection of
financial instruments (Federal Treasury Certificates) of
Pegaso PCS, S.A. de C.V. amounting to 287 million euros,
acquired for the purpose of securing certain legal
proceedings with the Mexican tax Administration
Service. Derived from the judicial resolution that
exempts Pegaso PCS, S.A. de C.V. from securing the
amount in dispute, the aforementioned financial
instruments were cancelled (see Note 28).
The vast majority of long-term credits, recognized at
amortized cost (Note 16), are considered to be low credit
risk assets, therefore the impairment analysis was
carried out on the basis of expected credit losses in the
next twelve months.\u00a0
Deposits and guarantees
Telef\u00f3nica Brazil has non-current judicial deposits
amounting to 443 million euros (see Note 24) at
December 31, 2024 (531 million euros at December 31,
2023).
At December 31, 2024, there are deposits related to the
collateral guarantees on derivatives (CSA) signed by
Telef\u00f3nica, S.A. and its counterparties for the credit risk
management of derivatives amounting to 108 million
euros, of which an amount of 55 million euros
corresponds to cross currency swap (273 million euros at
December 31, 2023, not having cross currency swap).
In relation with collateral contracts, there is an additional
guarantee of 59,808 bonds issued by Telef\u00f3nica
Emisiones, S.A.U. deposited in a securities account
owned by Telef\u00f3nica, S.A. with a notional of 58 million
euros at December 31, 2024 (51,988 bonds for a nominal
amount of 47 million euros at December 31, 2023).
The vast majority of deposits and guarantees recognized
at amortized cost (Note 16), are considered to be low
credit risk assets, therefore the impairment analysis was
carried out on the basis of expected credit losses in the
next 12 months.
Trade receivables
At December 31, 2024 this line includes trade
receivables from Colombia Telecomunicaciones, S.A.
ESP BIC to the associate Onnet Fibra Colombia SAS,
amounting to 14 million euros and 29 million euros at
December 31, 2024 and December 31, 2023, respectively
(see Note 10).
At December 31, 2024 this line includes Telef\u00f3nica
Germany trade receivables at fair value through other
comprehensive income for an amount of 200 million
euros (280 million euros as of December 31, 2023, see
Note 16).
Note 16. Breakdown of financial assets
The breakdown of financial assets of the Telef\u00f3nica Group at December\u00a031, 2024 is as follows:
December 31, 2024
\u00a0
Fair value through profit
or loss
\u00a0Fair value through other
comprehensive income
\u00a0
Measurement hierarchy
\u00a0
\u00a0
\u00a0
Millions of euros
Held for
trading
Fair value
option
Debt
instru-
ments
Equity
instru-
ments
Hedges
Level 1
(Quoted
prices)
Level 2 (Other
directly
observable
market inputs)
Level 3
(Inputs not
based on
observable
market data)
Amortized
cost
Total
carrying
amount
Total fair
value
Non-current financial assets (Note 12)
247
\u2014
218
543
2,441
523
2,912
14
1,890
5,339
5,339
Investments
42
\u2014
\u2014
543
\u2014
478
107
\u2014
\u2014
585
585
Credits and other financial assets
41
\u2014
18
\u2014
\u2014
45
\u2014
14
543
602
602
Deposits and guarantees
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
691
691
691
Derivative instruments
164
\u2014
\u2014
\u2014
2,441
\u2014
2,605
\u2014
\u2014
2,605
2,605
Trade receivables
\u2014
\u2014
200
\u2014
\u2014
\u2014
200
\u2014
745
945
839
Trade receivables for subleases
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
17
17
17
Impairment of trade receivables
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(106)
(106)
\u2014
Current financial assets
367
\u2014
894
\u2014
371
312
1,320
\u2014
15,794
17,426
17,426
Trade receivables (Note 14)
\u2014
\u2014
850
\u2014
\u2014
\u2014
850
\u2014
9,762
10,612
7,564
Impairment of trade receivables (Note 14)
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(3,048)
(3,048)
\u2014
Other current financial assets (Note 15)
367
\u2014
44
\u2014
371
312
470
\u2014
1,018
1,800
1,800
Cash and cash equivalents
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
8,062
8,062
8,062
Total
614
\u2014
1,112
543
2,812
835
4,232
14
17,684
22,765
22,765
The calculation of the fair values of the Telef\u00f3nica Group's debt instruments required an estimate, for each currency and counterparty, of a credit spread curve using the prices
of the Group's bonds and credit derivatives.
The breakdown of financial assets of the Telef\u00f3nica Group at December\u00a031, 2023 was as follows:
December 31, 2023
\u00a0
Fair value through profit
or loss
\u00a0Fair value through other
comprehensive income
\u00a0
Measurement hierarchy
\u00a0
\u00a0
\u00a0
Millions of euros
Held for
trading
Fair value
option
Debt
instru-
ments
Equity
instru-
ments
Hedges
Level 1
(Quoted
prices)
Level 2
(Other
directly
observable
market
inputs)
Level 3
(Inputs not
based on
observable
market
data)
Amortized
cost
Total
carrying
amount
Total fair
value
Non-current financial assets (Note 12)
224
\u2014
289
578
1,785
537
2,326
13
2,325
5,201
5,201
Investments
38
\u2014
\u2014
578
\u2014
510
106
\u2014
\u2014
616
616
Credits and other financial assets
31
\u2014
9
\u2014
\u2014
27
\u2014
13
701
741
741
Deposits and guarantees
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
966
966
966
Derivative instruments
155
\u2014
\u2014
\u2014
1,785
\u2014
1,940
\u2014
\u2014
1,940
1,940
Trade receivables
\u2014
\u2014
280
\u2014
\u2014
\u2014
280
\u2014
769
1,049
924
Trade receivables for subleases
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
14
14
14
Impairment of trade receivables
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(125)
(125)
\u2014
Current financial assets
291
\u2014
945
\u2014
271
293
1,214
\u2014
14,152
15,659
15,659
Trade receivables (Note 14)
\u2014
\u2014
854
\u2014
\u2014
\u2014
854
\u2014
9,568
10,422
7,430
Impairment of trade receivables (Note 14)
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(2,992)
(2,992)
\u2014
Other current financial assets (Note 15)
291
\u2014
91
\u2014
271
293
360
\u2014
425
1,078
1,078
Cash and cash equivalents
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
7,151
7,151
7,151
Total
515
\u2014
1,234
578
2,056
830
3,540
13
16,477
20,860
20,860
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherNoncurrentAssetsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-861": { "value": "
The breakdown of financial assets and other non-
current assets of the Telef\u00f3nica Group at December 31,
2024 and December 31, 2023 is as follows:
Millions of euros
12/31/2024
12/31/2023
Non-current financial
assets (Note 16)
5,339
5,201
Investments
585
616
Credits and other financial
assets
602
741
Deposits and guarantees
691
966
Trade receivables
945
1,049
Receivables for subleases
17
14
Impairment of trade
receivables
(106)
(125)
Long-term derivative financial
assets (Note 19)
2,605
1,940
Other non-current assets
2,064
2,067
Contractual assets (Note 23)
288
325
Deferred expenses (Note 23)
1,073
1,001
Long-term receivables for
taxes
315
354
Prepayments
388
387
Total
7,403
7,268
Trade receivables
At December 31, 2024 this line includes trade
receivables from Colombia Telecomunicaciones, S.A.
ESP BIC to the associate Onnet Fibra Colombia SAS,
amounting to 14 million euros and 29 million euros at
December 31, 2024 and December 31, 2023, respectively
(see Note 10).
At December 31, 2024 this line includes Telef\u00f3nica
Germany trade receivables at fair value through other
comprehensive income for an amount of 200 million
euros (280 million euros as of December 31, 2023, see
Note 16).
Note 14. Receivables and other
current assets
The detail of receivables and other current assets of the
Tel\u00e9fonica Group at December 31, 2024 and December
31, 2023 is as follows:
Millions of euros
12/31/2024
12/31/2023
Receivables (Note 16)
7,564
7,430
Trade receivables
10,074
9,938
Impairment of trade receivables
(3,048)
(2,992)
Receivables from associates and joint ventures (Note 10)
163
139
Other receivables
375
345
Other current assets
2,881
2,702
Contractual assets (Note 23)
229
202
Capitalized costs (Note 23)
1,094
998
Prepayments
1,358
1,344
Short-term insurance and reinsurance contracts assets
164
113
Short-term insurance and reinsurance contracts assets from associates and joint ventures (Note 10)
36
45
Total
10,445
10,132
Prepayments at December 31, 2024 includes 599 million
euros (736 million euros at December\u00a031, 2023) of
advance payments for broadcasting rights for sporting
events not yet held. Of this amount, 442 million euros
(532 million euros at December\u00a031, 2023) correspond to
advance payments under executory contracts related to
future sports commitments (see Note 29.c).
The movement in impairment of trade receivables in
2024 and 2023 is as follows:
Millions of
euros
Impairment provision at December 31, 2022
2,891
Allowances
582
Transfers
48
Amounts applied
(481)
Translation differences and other
(48)
Impairment provision at December 31, 2023
2,992
Allowances
613
Transfers
27
Amounts applied
(527)
Translation differences and other
(57)
Impairment provision at December 31, 2024
3,048
Public-sector net trade receivables at December\u00a031,
2024 and 2023 amounted to 395 million euros and 526
million euros, respectively.\u00a0 \u00a0
The detail of the age of the accounts receivable
balances from customers and their corrections for
impairment as of December 31, 2024 and 2023 is as
follows:
12/31/2024
Millions of euros
Trade
receivables
Impairment
Unbilled receivables
2,844
(17)
Amount not overdue invoiced
2,913
(76)
Less than 90 days
855
(159)
Between 90 and 180 days
322
(133)
Between 180 and 360 days
500
(369)
More than 360 days
2,640
(2,294)
Total
10,074
(3,048)
12/31/2023
Millions of euros
Trade
receivables
Impairment
Unbilled receivables
2,755
(28)
Amount not overdue invoiced
2,920
(116)
Less than 90 days
994
(157)
Between 90 and 180 days
324
(135)
Between 180 and 360 days
523
(393)
More than 360 days
2,422
(2,163)
Total
9,938
(2,992)
Note 16. Breakdown of financial assets
The breakdown of financial assets of the Telef\u00f3nica Group at December\u00a031, 2024 is as follows:
December 31, 2024
\u00a0
Fair value through profit
or loss
\u00a0Fair value through other
comprehensive income
\u00a0
Measurement hierarchy
\u00a0
\u00a0
\u00a0
Millions of euros
Held for
trading
Fair value
option
Debt
instru-
ments
Equity
instru-
ments
Hedges
Level 1
(Quoted
prices)
Level 2 (Other
directly
observable
market inputs)
Level 3
(Inputs not
based on
observable
market data)
Amortized
cost
Total
carrying
amount
Total fair
value
Non-current financial assets (Note 12)
247
\u2014
218
543
2,441
523
2,912
14
1,890
5,339
5,339
Investments
42
\u2014
\u2014
543
\u2014
478
107
\u2014
\u2014
585
585
Credits and other financial assets
41
\u2014
18
\u2014
\u2014
45
\u2014
14
543
602
602
Deposits and guarantees
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
691
691
691
Derivative instruments
164
\u2014
\u2014
\u2014
2,441
\u2014
2,605
\u2014
\u2014
2,605
2,605
Trade receivables
\u2014
\u2014
200
\u2014
\u2014
\u2014
200
\u2014
745
945
839
Trade receivables for subleases
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
17
17
17
Impairment of trade receivables
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(106)
(106)
\u2014
Current financial assets
367
\u2014
894
\u2014
371
312
1,320
\u2014
15,794
17,426
17,426
Trade receivables (Note 14)
\u2014
\u2014
850
\u2014
\u2014
\u2014
850
\u2014
9,762
10,612
7,564
Impairment of trade receivables (Note 14)
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(3,048)
(3,048)
\u2014
Other current financial assets (Note 15)
367
\u2014
44
\u2014
371
312
470
\u2014
1,018
1,800
1,800
Cash and cash equivalents
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
8,062
8,062
8,062
Total
614
\u2014
1,112
543
2,812
835
4,232
14
17,684
22,765
22,765
The calculation of the fair values of the Telef\u00f3nica Group's debt instruments required an estimate, for each currency and counterparty, of a credit spread curve using the prices
of the Group's bonds and credit derivatives.
The breakdown of financial assets of the Telef\u00f3nica Group at December\u00a031, 2023 was as follows:
December 31, 2023
\u00a0
Fair value through profit
or loss
\u00a0Fair value through other
comprehensive income
\u00a0
Measurement hierarchy
\u00a0
\u00a0
\u00a0
Millions of euros
Held for
trading
Fair value
option
Debt
instru-
ments
Equity
instru-
ments
Hedges
Level 1
(Quoted
prices)
Level 2
(Other
directly
observable
market
inputs)
Level 3
(Inputs not
based on
observable
market
data)
Amortized
cost
Total
carrying
amount
Total fair
value
Non-current financial assets (Note 12)
224
\u2014
289
578
1,785
537
2,326
13
2,325
5,201
5,201
Investments
38
\u2014
\u2014
578
\u2014
510
106
\u2014
\u2014
616
616
Credits and other financial assets
31
\u2014
9
\u2014
\u2014
27
\u2014
13
701
741
741
Deposits and guarantees
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
966
966
966
Derivative instruments
155
\u2014
\u2014
\u2014
1,785
\u2014
1,940
\u2014
\u2014
1,940
1,940
Trade receivables
\u2014
\u2014
280
\u2014
\u2014
\u2014
280
\u2014
769
1,049
924
Trade receivables for subleases
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
14
14
14
Impairment of trade receivables
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(125)
(125)
\u2014
Current financial assets
291
\u2014
945
\u2014
271
293
1,214
\u2014
14,152
15,659
15,659
Trade receivables (Note 14)
\u2014
\u2014
854
\u2014
\u2014
\u2014
854
\u2014
9,568
10,422
7,430
Impairment of trade receivables (Note 14)
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(2,992)
(2,992)
\u2014
Other current financial assets (Note 15)
291
\u2014
91
\u2014
271
293
360
\u2014
425
1,078
1,078
Cash and cash equivalents
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
7,151
7,151
7,151
Total
515
\u2014
1,234
578
2,056
830
3,540
13
16,477
20,860
20,860
", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-860": { "value": "
The breakdown of financial assets and other non-
current assets of the Telef\u00f3nica Group at December 31,
2024 and December 31, 2023 is as follows:
Millions of euros
12/31/2024
12/31/2023
Non-current financial
assets (Note 16)
5,339
5,201
Investments
585
616
Credits and other financial
assets
602
741
Deposits and guarantees
691
966
Trade receivables
945
1,049
Receivables for subleases
17
14
Impairment of trade
receivables
(106)
(125)
Long-term derivative financial
assets (Note 19)
2,605
1,940
Other non-current assets
2,064
2,067
Contractual assets (Note 23)
288
325
Deferred expenses (Note 23)
1,073
1,001
Long-term receivables for
taxes
315
354
Prepayments
388
387
Total
7,403
7,268
Millions of euros
12/31/2024
12/31/2023
Short-term credits
893
192
Short-term deposits and
guarantees
139
209
Short-term derivative
financial assets (Note 19)
461
352
Other current financial assets
307
325
Total
1,800
1,078
\"Short-term credits\" includes at December 31, 2024, 544
million U.S. dollars (523 million euros at the closing
exchange rate) corresponding to the principal and
interest of the favorable award regarding the investment
dispute with the Republic of Colombia submitted to the
ICSID (see notes 2 and 29.a).
The impact on the consolidated income statement for
2024 amounted to 380 million U.S. dollars (358 million
euros) recorded under \"Other income\" (see Note 26) and
164 million U.S. dollars (154 million euros) registered in
\"Finance income\" (see Note 19).
Additionally, \"Short-term credits\" includes the collection
right with a maturity of less than twelve months arising
from Telxius with American Tower Corporation in June
2021 as a result of the sale of the telecommunications
towers division in Europe (Spain and Germany)
amounting to 90 million euros. \"Other long-term credits\"
includes the collection right with a maturity of more than
twelve months (see Note 12).\u00a0
Note 16. Breakdown of financial assets
The breakdown of financial assets of the Telef\u00f3nica Group at December\u00a031, 2024 is as follows:
December 31, 2024
\u00a0
Fair value through profit
or loss
\u00a0Fair value through other
comprehensive income
\u00a0
Measurement hierarchy
\u00a0
\u00a0
\u00a0
Millions of euros
Held for
trading
Fair value
option
Debt
instru-
ments
Equity
instru-
ments
Hedges
Level 1
(Quoted
prices)
Level 2 (Other
directly
observable
market inputs)
Level 3
(Inputs not
based on
observable
market data)
Amortized
cost
Total
carrying
amount
Total fair
value
Non-current financial assets (Note 12)
247
\u2014
218
543
2,441
523
2,912
14
1,890
5,339
5,339
Investments
42
\u2014
\u2014
543
\u2014
478
107
\u2014
\u2014
585
585
Credits and other financial assets
41
\u2014
18
\u2014
\u2014
45
\u2014
14
543
602
602
Deposits and guarantees
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
691
691
691
Derivative instruments
164
\u2014
\u2014
\u2014
2,441
\u2014
2,605
\u2014
\u2014
2,605
2,605
Trade receivables
\u2014
\u2014
200
\u2014
\u2014
\u2014
200
\u2014
745
945
839
Trade receivables for subleases
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
17
17
17
Impairment of trade receivables
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(106)
(106)
\u2014
Current financial assets
367
\u2014
894
\u2014
371
312
1,320
\u2014
15,794
17,426
17,426
Trade receivables (Note 14)
\u2014
\u2014
850
\u2014
\u2014
\u2014
850
\u2014
9,762
10,612
7,564
Impairment of trade receivables (Note 14)
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(3,048)
(3,048)
\u2014
Other current financial assets (Note 15)
367
\u2014
44
\u2014
371
312
470
\u2014
1,018
1,800
1,800
Cash and cash equivalents
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
8,062
8,062
8,062
Total
614
\u2014
1,112
543
2,812
835
4,232
14
17,684
22,765
22,765
The calculation of the fair values of the Telef\u00f3nica Group's debt instruments required an estimate, for each currency and counterparty, of a credit spread curve using the prices
of the Group's bonds and credit derivatives.
The breakdown of financial assets of the Telef\u00f3nica Group at December\u00a031, 2023 was as follows:
December 31, 2023
\u00a0
Fair value through profit
or loss
\u00a0Fair value through other
comprehensive income
\u00a0
Measurement hierarchy
\u00a0
\u00a0
\u00a0
Millions of euros
Held for
trading
Fair value
option
Debt
instru-
ments
Equity
instru-
ments
Hedges
Level 1
(Quoted
prices)
Level 2
(Other
directly
observable
market
inputs)
Level 3
(Inputs not
based on
observable
market
data)
Amortized
cost
Total
carrying
amount
Total fair
value
Non-current financial assets (Note 12)
224
\u2014
289
578
1,785
537
2,326
13
2,325
5,201
5,201
Investments
38
\u2014
\u2014
578
\u2014
510
106
\u2014
\u2014
616
616
Credits and other financial assets
31
\u2014
9
\u2014
\u2014
27
\u2014
13
701
741
741
Deposits and guarantees
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
966
966
966
Derivative instruments
155
\u2014
\u2014
\u2014
1,785
\u2014
1,940
\u2014
\u2014
1,940
1,940
Trade receivables
\u2014
\u2014
280
\u2014
\u2014
\u2014
280
\u2014
769
1,049
924
Trade receivables for subleases
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
14
14
14
Impairment of trade receivables
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(125)
(125)
\u2014
Current financial assets
291
\u2014
945
\u2014
271
293
1,214
\u2014
14,152
15,659
15,659
Trade receivables (Note 14)
\u2014
\u2014
854
\u2014
\u2014
\u2014
854
\u2014
9,568
10,422
7,430
Impairment of trade receivables (Note 14)
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(2,992)
(2,992)
\u2014
Other current financial assets (Note 15)
291
\u2014
91
\u2014
271
293
360
\u2014
425
1,078
1,078
Cash and cash equivalents
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
7,151
7,151
7,151
Total
515
\u2014
1,234
578
2,056
830
3,540
13
16,477
20,860
20,860
Millions of euros
Current
Non-current
Maturity
2025
2026
2027
2028
2029
Subse-
quent
years
Non-
current
total
Total
Debentures and bonds
3,559
2,046
4,019
2,006
2,422
17,203
27,696
31,255
Promissory notes & commercial
paper
1,276
12
3
19
10
129
173
1,449
Total Issues
4,835
2,058
4,022
2,025
2,432
17,332
27,869
32,704
Loans and other payables
556
389
643
277
565
1,584
3,458
4,014
Derivative instruments (Note 19)
199
160
562
376
283
484
1,865
2,064
Total
5,590
2,607
5,227
2,678
3,280
19,400
33,192
38,782
Evolution of derivative instruments\u00a0
The movement of the net position of derivatives during
the years ended December 31, 2024 and December 31,
2023 is as follows:
Millions of euros
Movement
in 2024
Movement
in 2023
Opening balance of assets/
(liabilities)
399
1,012
Financing payments
20
(33)
Financing proceeds
(385)
(20)
Interest (proceeds)/payments
(50)
97
Other (proceeds)/payments
123
87
Fair value adjustments through
other comprehensive income
1,108
(584)
Movements with a
corresponding entry under the
income statement
(253)
(57)
Translation differences
40
(115)
Other movements
\u2014
12
Closing balance of assets/
(liabilities)
1,002
399
The variation in 2024 represents a increase of 603
million euros of assets (decrease of 613 million euros of
assets in 2023) mainly due to the evolution of exchange
rate, mainly due to the appreciation of dollar and the
depreciation of the Brazilian real, netting the opposite
effect due to the increase of interest rates of dollar and
decrease of euro. These variations are mostly by a
similar impact and in the opposite direction in the hedge
accounting of the different issuances and loans in dollar
and euro currency of the Telef\u00f3nica Group.
As of December\u00a031, 2024 the derivatives portfolio
amounted to a net positive value of 1,002 million euros (a
net positive value of 399 as of December\u00a031, 2023). This
amount includes a net positive value of 914 million euros
due to hedges (cross currency swaps) to transfer
financial debt issued in foreign currency to local
currency (a positive value of 135 million euros at
December\u00a031, 2023 ).
The calculation of the fair values of the Telef\u00f3nica
Group\u2019s debt instruments required an estimate, for each
currency and counterparty, of a credit spread curve
using the prices of the Group\u2019s bonds and credit
derivatives.
The derivatives portfolio was measured through the
techniques and models normally used in the market,
based on money market curves and volatility prices
available in the markets.\u00a0 Additionally, the credit
valuation adjustment or net CVA per counterparty
(CVA+DVA) is calculated on that measurement as the
method used to measure the credit risks of the
counterparties and also Telef\u00f3nica for the purpose of
adjusting the fair value valuation of the derivatives. This
adjustment reflects the possibility of bankruptcy or
credit rating impairment of the counterparty and
Telef\u00f3nica.
Derivatives arranged by the Group at December\u00a031, 2024
are detailed in Appendix IV.
The breakdown of Telef\u00f3nica\u2019s hedges and other derivative instruments at December\u00a031, 2024 and December\u00a031, 2023, their fair value at year-end and the expected maturity
schedule is as set forth in the table below:
December 31, 2024
Millions of euros
Notional amount - Maturities (*)
Book value of the derivative and no-derivative instruments (**)
2025
2026
2027
Later
Total
Non-current
asset
Current
asset
Non-current
liabilities
Current
liabilities
Total
Derivative instruments of accounting hedges
(2,724)
2,408
1,293
3,133
4,110
(2,441)
(372)
1,526
67
(1,220)
Interest rate risk
(1,624)
1
1
(4,630)
(6,252)
(322)
(131)
545
20
112
Cash flow hedges
(2,150)
\u2014
\u2014
4,769
2,619
(12)
(22)
129
2
97
Fair value hedges
526
1
1
(9,399)
(8,871)
(310)
(109)
416
18
15
Exchange rate risk
(2,085)
2,331
714
5,324
6,284
(1,594)
(136)
837
43
(850)
Cash flow hedges
101
2,344
714
5,324
8,483
(1,594)
(54)
837
1
(810)
Fair value hedges
494
(13)
\u2014
\u2014
481
\u2014
(12)
\u2014
1
(11)
Net investment in a foreign business hedges
(2,680)
\u2014
\u2014
\u2014
(2,680)
\u2014
(70)
\u2014
41
(29)
Interest rate and exchange rate risk
985
76
578
2,439
4,078
(525)
(105)
144
4
(482)
Cash flow hedges
985
76
472
1,892
3,425
(400)
(104)
64
\u2014
(440)
Fair value hedges
\u2014
\u2014
106
547
653
(125)
(1)
80
4
(42)
Undesignated derivatives
(268)
(866)
(325)
(2,150)
(3,609)
(164)
(89)
339
132
218
Other derivatives of interest rate
(525)
(738)
(325)
(2,150)
(3,738)
(159)
(59)
330
8
120
Other derivatives of exchange rate
(125)
(521)
\u2014
\u2014
(646)
\u2014
(20)
9
9
(2)
Other derivatives
382
393
\u2014
\u2014
775
(5)
(10)
\u2014
115
100
Total derivative instruments
(2,992)
1,542
968
983
501
(2,605)
(461)
1,865
199
(1,002)
No derivatives instruments of accounting hedges (***)
\u2014
\u2014
\u2014
29
29
\u2014
\u2014
29
\u2014
29
Exchange rate risk
\u2014
\u2014
\u2014
29
29
\u2014
\u2014
29
\u2014
29
Fair value hedges
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Net investment in a foreign business hedges
\u2014
\u2014
\u2014
29
29
\u2014
\u2014
29
\u2014
29
(*) For interest rate hedges, the positive amount is in terms of \"fixed payment.\u201d For foreign currency hedges, a positive amount means payment in functional vs. foreign currency.
(**) Positive amounts indicate payables.
(***) Of the hedging instruments that are not derivatives, 29 million euros correspond to \"Loans and other debts\"\" (see Note 18).
December 31, 2023
Millions of euros
Notional amount - Maturities (*)
Book value of the derivative and no-derivative instruments (**)
2024
2025
2026
Later
Total
Non-
current
asset
Current
asset
Non-
current
liabilities
Current
liabilities
Total
Derivative instruments of accounting hedges
(3,225)
873
2,533
4,917
5,098
(1,785)
(272)
1,224
87
(746)
Interest rate risk
(1,190)
(123)
2
(4,070)
(5,381)
(334)
(163)
404
35
(58)
Cash flow hedges
(1,490)
(650)
\u2014
3,532
1,392
(16)
\u2014
83
35
102
Fair value hedges
300
527
2
(7,602)
(6,773)
(318)
(163)
321
\u2014
(160)
Exchange rate risk
(2,115)
\u2014
2,344
6,103
6,332
(1,124)
(69)
711
51
(431)
Cash flow hedges
657
\u2014
2,344
6,038
9,039
(1,124)
(38)
708
20
(434)
Fair value hedges
401
\u2014
\u2014
65
466
\u2014
(5)
3
20
18
Net investment in a foreign business hedges
(3,173)
\u2014
\u2014
\u2014
(3,173)
\u2014
(26)
\u2014
11
(15)
Interest rate and exchange rate risk
80
996
187
2,884
4,147
(327)
(40)
109
1
(257)
Cash flow hedges
80
996
9
2,339
3,424
(281)
(40)
35
1
(285)
Fair value hedges
\u2014
\u2014
178
545
723
(46)
\u2014
74
\u2014
28
Undesignated derivatives
396
(416)
(738)
(1,625)
(2,383)
(155)
(80)
433
149
347
Other derivatives of interest rate
(288)
(525)
(738)
(1,625)
(3,176)
(155)
(54)
399
14
204
Other derivatives of exchange rate
(123)
\u2014
\u2014
\u2014
(123)
\u2014
(14)
\u2014
13
(1)
Other derivatives
807
109
\u2014
\u2014
916
\u2014
(12)
34
122
144
Total derivative instruments
(2,829)
457
1,795
3,292
2,715
(1,940)
(352)
1,657
236
(399)
No derivatives instruments of accounting hedges (***)
\u2014
\u2014
\u2014
27
27
\u2014
\u2014
27
\u2014
27
Exchange rate risk
\u2014
\u2014
\u2014
27
27
\u2014
\u2014
27
\u2014
27
Fair value hedges
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Net investment in a foreign business hedges
\u2014
\u2014
\u2014
27
27
\u2014
\u2014
27
\u2014
27
(*) For interest rate hedges, the positive amount is in terms of \"fixed payment.\u201d For foreign currency hedges, a positive amount means payment in functional vs. foreign currency.\u00a0
(**) Positive amounts indicate payables.
(***) Of the hedging instruments that are not derivatives, 27 million euros correspond to \"Loans and other debts\" (see Note 18).\u00a0
The detail of hedged items by fair value hedges at December\u00a031, 2024 and December\u00a031, 2023 are as follows:
December 31, 2024
Millions of euros
Hedged items carrying amount
Accumulated amount in the hedged item adjusted by fair value hedge (*)
Interest
rate risk
Exchange
rate risk
Interest rate
and exchange
rate risk
Total
Interest
rate risk
Exchange
rate risk
Interest
rate and
exchange
rate risk
Total
Of which: accumulated amount of
any hedge item that have ceased to
be adjusted for gains and losses
Assets
55
259
\u2014
314
15
1
\u2014
16
\u2014
Financial assets and other non-current assets
55
13
\u2014
68
15
\u2014
\u2014
15
\u2014
Receivables and other current assets
\u2014
225
\u2014
225
\u2014
1
\u2014
1
\u2014
Other heading of assets
\u2014
21
\u2014
21
\u2014
\u2014
\u2014
\u2014
\u2014
Liabilities
9,195
1,314
1,594
12,103
(89)
15
39
(35)
37
Non-current financial liabilities
9,083
548
1,454
11,085
(89)
\u2014
39
(50)
31
Payables and other non-current liabilities
\u2014
50
\u2014
50
\u2014
1
\u2014
1
\u2014
Current financial liabilities
112
11
140
263
\u2014
\u2014
\u2014
\u2014
\u2014
Payables and other current liabilities
\u2014
705
\u2014
705
\u2014
14
\u2014
14
6
(*) Accumulated amount adjusted by fair value hedge is shown with negative sign when it reduces the value (lowest liability or lowest asset) and viceversa.
December 31, 2023
Millions of euros
Hedged items carrying amount
Accumulated amount in the hedged item adjusted by fair value hedge (*)
Interest
rate risk
Exchange
rate risk
Interest rate
and exchange
rate risk
Total
Interest rate
risk
Exchange
rate risk
Interest rate
and exchange
rate risk
Total
Of which: accumulated
amount of any hedge item
that have ceased to be
adjusted for gains and
losses
Assets
32
249
\u2014
281
(15)
\u2014
\u2014
(15)
\u2014
Financial assets and other non-current assets
28
96
\u2014
124
(14)
\u2014
\u2014
(14)
\u2014
Receivables and other current assets
\u2014
150
\u2014
150
\u2014
\u2014
\u2014
\u2014
\u2014
Other current financial assets
4
\u2014
\u2014
4
(1)
\u2014
\u2014
(1)
\u2014
Other heading of assets
\u2014
3
\u2014
3
\u2014
\u2014
\u2014
\u2014
\u2014
Liabilities
8,092
1,365
1,495
10,952
153
(8)
34
179
(9)
Non-current financial liabilities
8,009
452
1,397
9,858
153
\u2014
34
187
33
Payables and other non-current liabilities
\u2014
44
\u2014
44
\u2014
(1)
\u2014
(1)
\u2014
Current financial liabilities
83
10
98
191
\u2014
\u2014
\u2014
\u2014
\u2014
Payables and other current liabilities
\u2014
859
\u2014
859
\u2014
(7)
\u2014
(7)
(42)
(*) Accumulated amount adjusted by fair value hedge is shown with negative sign when it reduces the value (lowest liability or lowest asset) and vice versa.
The evolutions of hedges in equity at December\u00a031, 2024 and December\u00a031, 2023 are
as follows:
Millions of euros
Derivative instruments
No derivative
instruments
Total
Gross
amount
Tax effect
Total
hedges in
equity
Gains (losses) of cash flow hedges
Derivatives
- Net
investment
hedges
No
Derivatives -
Net
investment
hedges
Interest
rate risk
Exchange
rate risk
Exchange rate
and interest rate
risks
Balance at 12/31/2023
(56)
441
176
(100)
(11)
450
(137)
313
Changes in the fair value registered in equity
(8)
430
159
382
(1)
962
(252)
710
Transfer to the initial value of hedged item
1
\u2014
2
\u2014
\u2014
3
(1)
2
Transfer to the income statement of the period - the hedged future
cash flows are no longer expected to happen
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Transfer to the income statement of the period - the hedged item has
affected profit or loss
7
(710)
(166)
\u2014
\u2014
(869)
220
(649)
Total translation differences
3
(1)
\u2014
\u2014
\u2014
2
\u2014
2
Other movements
\u2014
\u2014
\u2014
26
\u2014
26
(16)
10
Balance at 12/31/2024
(53)
160
171
308
(12)
574
(186)
388
Amounts remaining in equity for continuing hedges
(24)
127
240
308
(12)
639
Amounts remaining in equity from any hedging relationship for which
hedge accounting is no longer applied
(29)
33
(69)
\u2014
\u2014
(65)
Balance at 12/31/2024
(53)
160
171
308
(12)
574
The total amount of \"Transfer to the income statements of the period - the hedged
item has affected profit or loss\" with an impact on financial results, reported under
\"Interest expenses\" amounted to +229 million euros (+240 million euros in 2023), see
detail of \"Net finance costs excluding foreign exchange differences and inflation
adjustments\" in this Note, and in exchange differences amounted to 633 million
euros (-324 million euros in 2023).
Millions of euros
Derivative instruments
No derivative
instruments
Total
Gross
amount
Tax effect
Total
hedges in
equity
Gains (losses) of cash flow hedges
Derivatives
- Net
investment
hedges
No Derivatives
- Net
investment
hedges
Interest
rate risk
Exchange
rate risk
Exchange rate and
interest rate risks
Balance at 12/31/2022
(37)
861
210
(30)
(9)
995
(270)
725
Changes in the fair value registered in equity
(49)
(445)
(66)
(66)
2
(624)
155
(469)
Transfer to the initial value of hedged item
1
6
13
\u2014
\u2014
20
(5)
15
Transfer to the income statement of the period - the hedged future
cash flows are no longer expected to happen
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Transfer to the income statement of the period - the hedged item
has affected profit or loss
32
19
19
\u2014
\u2014
70
(17)
53
Total translation differences
(3)
\u2014
\u2014
(1)
\u2014
(4)
\u2014
(4)
Other movements
\u2014
\u2014
\u2014
(3)
(4)
(7)
\u2014
(7)
Balance at 12/31/2023
(56)
441
176
(100)
(11)
450
(137)
313
Amounts remaining in equity for continuing hedges
(33)
408
250
(100)
(11)
514
Amounts remaining in equity from any hedging relationship for which
hedge accounting is no longer applied
(23)
33
(74)
\u2014
\u2014
(64)
Balance at 12/31/2023
(56)
441
176
(100)
(11)
450
The evolution of cost of hedging in equity in 2024 and 2023 are as follows:
Exchange rate risk
Millions of euros
Total gross amount
Tax effect
Total cost of hedging
in equity
A time-period related
hedge item
Balance at 12/31/2022
(25)
(25)
6
(19)
Changes in the fair value registered in equity
79
79
(20)
59
Transfer to the income statement of the period - the hedged item has affected profit or
loss
(9)
(9)
2
(7)
Balance at 12/31/2023
45
45
(12)
33
Changes in the fair value registered in equity
168
168
(42)
126
Transfer to the income statement of the period - the hedged item has affected profit or
loss
(10)
(10)
3
(7)
Balance at 12/31/2024
203
203
(51)
152
\u00a0 The details of the ineffective portion of accounting hedges with impact on the income statement in 2024 and 2023 are as follows:
2024
Millions of euros
Changes in fair value of the hedging
instrument
Changes in the fair value of hedges
item for the hedged risk
Ineffective portion hedged
registered in the income statement
Interest rate risk
(288)
(289)
1
Cash flow hedges
23
23
\u2014
Fair value hedges
(311)
(312)
1
Exchange rate risk
804
804
\u2014
Cash flow hedges
539
540
(1)
Exchange rate risk - fair value hedges
1
\u2014
1
Net investment hedges
264
264
\u2014
Interest rate and exchange rate risk
179
179
\u2014
Cash flow hedges
179
179
\u2014
Total
695
694
1
2023
Millions of euros
Changes in fair value of the hedging
instrument
Changes in the fair value of hedges
item for the hedged risk
Ineffective portion hedged
registered in the income statement
Interest rate risk
97
98
(1)
Cash flow hedges
(39)
(39)
\u2014
Fair value hedges
136
137
(1)
Exchange rate risk
(702)
(699)
(3)
Cash flow hedges
(409)
(406)
(3)
Net investment hedges
(293)
(293)
\u2014
Interest rate and exchange rate risk
(45)
(35)
(10)
Cash flow hedges
(45)
(35)
(10)
Total
(650)
(636)
(14)
Appendix IV: Financial instruments
The detail of the net financial debt arranged by the
Group (notional amount) by currency and interest rates
at December 31, 2024 is as follows:
Fair value
Millions of euros
2025
2026
2027
2028
2029
Subsequent
years
Notional
Underlying
debt (*)
Associated
derivatives
Total
Euro
(5,104)
2,946
3,829
2,216
2,455
15,625
21,967
15,429
7,614
23,043
Floating rate
1,567
1,432
228
340
563
3,592
7,722
1,970
9,409
11,379
Spread %
0.60
(0.13)
0.71
0.32
0.04
0.11
0.18
\u2014
\u2014
\u2014
Fixed rate
(6,671)
1,514
3,601
1,876
1,892
12,033
14,245
13,459
(1,795)
11,664
Interest rate %
2.70
1.42
1.16
1.78
2.22
1.95
2.00
\u2014
\u2014
\u2014
Rate cap
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Other european
currencies
Instruments in CZK
(93)
\u2014
\u2014
\u2014
\u2014
\u2014
(93)
\u2014
(92)
(92)
Floating rate
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Spread %
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Fixed rate
(93)
\u2014
\u2014
\u2014
\u2014
\u2014
(93)
\u2014
(92)
(92)
Interest rate %
3.70
\u2014
\u2014
\u2014
\u2014
\u2014
3.70
\u2014
\u2014
\u2014
Rate cap
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Instruments in GBP
(23)
(2)
(6)
(4)
\u2014
\u2014
(35)
910
(956)
(46)
Floating rate
2
\u2014
\u2014
\u2014
\u2014
\u2014
2
2
(4)
(2)
Spread %
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Fixed rate
(25)
(2)
(6)
(4)
\u2014
\u2014
(37)
908
(952)
(44)
Interest rate %
4.64
5.37
0.70
0.70
\u2014
\u2014
3.60
\u2014
\u2014
\u2014
Rate cap
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Instruments in CHF
(5)
\u2014
\u2014
\u2014
\u2014
\u2014
(5)
(14)
\u2014
(14)
Floating rate
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Spread %
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Fixed rate
(5)
\u2014
\u2014
\u2014
\u2014
\u2014
(5)
(14)
\u2014
(14)
Interest rate %
0.50
\u2014
\u2014
\u2014
\u2014
\u2014
0.50
\u2014
\u2014
\u2014
Rate cap
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
America
Instruments in USD
(1,284)
(1,391)
14
48
14
1,928
(671)
11,229
(12,395)
(1,166)
Floating rate
(20)
(1,664)
\u2014
29
\u2014
1,924
269
211
33
245
Spread %
(0.18)
0.35
\u2014
1.00
\u2014
\u2014
0.17
\u2014
\u2014
\u2014
Fixed rate
(1,264)
273
14
19
14
4
(940)
11,018
(12,429)
(1,411)
Interest rate %
2.61
4.26
3.25
10.17
10.17
3.89
3.06
\u2014
\u2014
\u2014
Rate cap
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Fair value
Millions of euros
2025
2026
2027
2028
2029
Subsequent
years
Notional
Underlying
debt(*)
Associated
derivatives
Total
Instruments in UYU
1
27
35
\u2014
\u2014
\u2014
63
58
7
65
Floating rate
\u2014
\u2014
35
\u2014
\u2014
\u2014
35
35
\u2014
35
Spread %
\u2014
\u2014
0.01
\u2014
\u2014
\u2014
0.01
\u2014
\u2014
\u2014
Fixed rate
1
27
\u2014
\u2014
\u2014
\u2014
28
23
7
30
Interest rate %
0.31
8.90
\u2014
\u2014
\u2014
\u2014
8.55
\u2014
\u2014
\u2014
Rate cap
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Instruments in ARS
(143)
\u2014
\u2014
\u2014
\u2014
\u2014
(143)
(158)
\u2014
(158)
Floating rate
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Spread %
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Fixed rate
(143)
\u2014
\u2014
\u2014
\u2014
\u2014
(143)
(158)
\u2014
(158)
Interest rate %
33.24
\u2014
\u2014
\u2014
\u2014
\u2014
33.24
\u2014
\u2014
\u2014
Rate cap
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Instruments in BRL
1,982
813
338
31
44
79
3,287
492
2,836
3,328
Floating rate
(803)
813
338
31
44
79
502
508
80
588
Spread %
0.92
0.04
1.30
0.23
0.16
0.14
0.59
\u2014
\u2014
\u2014
Fixed rate
2,785
\u2014
\u2014
\u2014
\u2014
\u2014
2,785
(16)
2,756
2,740
Interest rate %
9.47
\u2014
\u2014
\u2014
\u2014
\u2014
9.47
\u2014
\u2014
\u2014
Rate cap
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Instruments in CLP
(297)
317
96
104
37
405
663
(70)
778
708
Floating rate
(8)
230
48
104
37
255
667
110
578
688
Spread %
\u2014
1.46
1.99
1.66
2.13
(0.52)
0.81
\u2014
\u2014
\u2014
Fixed rate
(289)
87
48
\u2014
\u2014
150
(4)
(180)
200
20
Interest rate %
6.72
5.47
3.22
\u2014
\u2014
4.13
5.56
\u2014
\u2014
\u2014
Rate cap
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Instruments in UFC
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
117
(155)
(38)
Floating rate
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
117
(155)
(38)
Spread %
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Fixed rate
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Interest rate %
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Rate cap
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Instruments in PEN
355
167
145
\u2014
\u2014
\u2014
667
247
433
680
Floating rate
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Spread %
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Fixed rate
355
167
145
\u2014
\u2014
\u2014
667
247
433
680
Interest rate %
5.38
7.33
7.38
\u2014
\u2014
\u2014
6.30
\u2014
\u2014
\u2014
Rate cap
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Instruments in VAC
\u2014
\u2014
28
51
\u2014
20
99
100
\u2014
100
Floating rate
\u2014
\u2014
28
51
\u2014
20
99
100
\u2014
100
Spread %
\u2014
\u2014
3.63
3.03
\u2014
3.09
3.21
\u2014
\u2014
\u2014
Fixed rate
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Interest rate %
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Rate cap
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Fair value
Millions of euros
2025
2026
2027
2028
2029
Subsequent
years
Notional
Underlying
debt(*)
Associated
derivatives
TOTAL
Instruments in COP
154
212
105
17
57
470
1,015
357
710
1,067
Floating rate
(417)
225
105
17
24
470
424
443
(2)
441
Spread %
0.37
2.52
4.25
3.32
3.44
0.28
1.14
\u2014
\u2014
\u2014
Fixed rate
571
(13)
\u2014
\u2014
33
\u2014
591
(86)
712
626
Interest rate %
4.75
9.00
\u2014
\u2014
8.09
\u2014
5.03
\u2014
\u2014
\u2014
Rate cap
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Instruments in VEB
(129)
\u2014
\u2014
\u2014
\u2014
\u2014
(129)
(129)
\u2014
(129)
Floating rate
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Spread %
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Fixed rate
(129)
\u2014
\u2014
\u2014
\u2014
\u2014
(129)
(129)
\u2014
(129)
Interest rate %
55.44
\u2014
\u2014
\u2014
\u2014
\u2014
55.44
\u2014
\u2014
\u2014
Rate cap
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Instruments in MXN
(189)
12
\u2014
\u2014
\u2014
\u2014
(177)
(405)
218
(188)
Floating rate
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Spread %
1.02
\u2014
\u2014
\u2014
\u2014
\u2014
1.02
\u2014
\u2014
\u2014
Fixed rate
(189)
12
\u2014
\u2014
\u2014
\u2014
(177)
(405)
218
(188)
Interest rate %
10.20
8.80
\u2014
\u2014
\u2014
\u2014
10.12
\u2014
\u2014
\u2014
Rate cap
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
TOTAL
26,508
28,163
(1,002)
27,161
Floating rate
9,720
3,496
9,939
13,435
Fixed rate
16,788
24,667
(10,941)
13,726
(*) Includes all net financial debt adjustments
The table below shows the sensitivity to interest rates
originated by our position on interest rate swaps
categorized into instruments entered into for trading
purposes and instruments entered into for purposes
other than trading at December 31, 2024:
Interest rate swaps
Millions of euros
Maturity
Non trading accountant
purposes
2025
2026
2027
2028
2029
Subsequent
years
Total
Fair value
EUR
167
Fixed to floating
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
206
Receiving leg
\u2014
\u2014
\u2014
\u2014
\u2014
(2,583)
(2,583)
(7,143)
Average Interest Rate %
\u2014
\u2014
\u2014
\u2014
\u2014
1.74
1.74
Paying leg
\u2014
\u2014
\u2014
\u2014
\u2014
2,583
2,583
7,349
Average Spread %
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Floating to fixed
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
19
Receiving leg
\u2014
\u2014
\u2014
\u2014
\u2014
(1,133)
(1,133)
(2,106)
Average Spread %
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Paying leg
\u2014
\u2014
\u2014
\u2014
\u2014
1,133
1,133
2,125
Average Interest Rate %
\u2014
\u2014
\u2014
\u2014
\u2014
2.67
2.67
Floating to floating
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(58)
Receiving leg
(9,498)
\u2014
\u2014
\u2014
\u2014
\u2014
(9,498)
(9,565)
Average Spread %
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Paying leg
9,498
\u2014
\u2014
\u2014
\u2014
\u2014
9,498
9,507
Average Spread %
0.12
\u2014
\u2014
\u2014
\u2014
\u2014
0.12
Interest rate swaps
Millions of euros
Maturity
Trading accountant purposes
2025
2026
2027
2028
2029
Subsequent
years
Total
Fair
value
EUR
(933)
Fixed to floating
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(163)
Receiving leg
(775)
\u2014
(100)
(175)
\u2014
(4,938)
(5,988)
(4,882)
Average Interest Rate %
0.05
\u2014
0.76
0.69
\u2014
2.58
2.17
Paying leg
775
\u2014
100
175
\u2014
4,938
5,988
4,719
Average Spread %
2.95
\u2014
\u2014
\u2014
\u2014
\u2014
0.38
Floating to fixed
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(770)
Receiving leg
(2,504)
\u2014
(1,366)
\u2014
\u2014
(10,404)
(14,274)
(9,737)
Average Spread %
2.07
\u2014
\u2014
\u2014
\u2014
0.02
0.38
Paying leg
2,504
\u2014
1,366
\u2014
\u2014
10,404
14,274
8,967
Average Interest Rate %
0.06
\u2014
0.92
\u2014
\u2014
1.72
1.35
USD
1,224
Fixed to floating
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
1,224
Receiving leg
(434)
(3,858)
(4,473)
\u2014
\u2014
(9,550)
(18,316)
(9,972)
Average Interest Rate %
1.30
2.79
1.59
\u2014
\u2014
3.16
2.65
Paying leg
434
3,858
4,473
\u2014
\u2014
9,550
18,316
11,196
Average Spread %
1.03
2.78
0.97
\u2014
\u2014
\u2014
0.85
Millions of euros
Maturity
Trading accountant purposes
2025
2026
2027
2028
2029
Subsequent
years
Total
Fair
value
GBP
17
Fixed to floating
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
17
Receiving leg
\u2014
\u2014
\u2014
\u2014
(482)
\u2014
(482)
(468)
Average Interest Rate %
\u2014
\u2014
\u2014
\u2014
3.42
\u2014
3.42
Paying leg
\u2014
\u2014
\u2014
\u2014
482
\u2014
482
485
Average Spread %
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
CLP
(12)
Floating to fixed
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(13)
Receiving leg
\u2014
\u2014
\u2014
\u2014
\u2014
(150)
(150)
(147)
Average Spread %
\u2014
\u2014
\u2014
\u2014
\u2014
(0.57)
(0.57)
Paying leg
\u2014
\u2014
\u2014
\u2014
\u2014
150
150
134
Average Interest Rate %
\u2014
\u2014
\u2014
\u2014
\u2014
4.13
4.13
COP
(25)
Fixed to floating
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
2
Receiving leg
(58)
\u2014
\u2014
\u2014
\u2014
\u2014
(58)
(58)
Average Interest Rate %
5.77
\u2014
\u2014
\u2014
\u2014
\u2014
5.77
Paying leg
58
\u2014
\u2014
\u2014
\u2014
\u2014
58
60
Average Spread %
1.07
\u2014
\u2014
\u2014
\u2014
\u2014
1.07
Floating to fixed
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(27)
Receiving leg
(516)
\u2014
\u2014
\u2014
(33)
\u2014
(549)
(561)
Average Spread %
\u2014
\u2014
\u2014
\u2014
3.39
\u2014
0.21
Paying leg
516
\u2014
\u2014
\u2014
33
\u2014
549
534
Average Interest Rate %
3.18
\u2014
\u2014
\u2014
8.09
\u2014
3.48
Cash flows receivable or payable on derivative financial
instruments to be settled via the swap of nominals,
categorized by currency of collection/payment, along
with contractual maturities are as follows:
Millions of euros
2025
2026
2027
2028
2029
Subsequent
years
Total
Currency swaps
Receive
BRL
33
\u2014
\u2014
\u2014
\u2014
\u2014
33
Pay
BRL
(105)
\u2014
(7)
\u2014
\u2014
\u2014
(112)
Receive
CLP
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Pay
CLP
\u2014
(106)
\u2014
(104)
(37)
(405)
(652)
Receive
COP
411
\u2014
\u2014
\u2014
\u2014
\u2014
411
Pay
COP
(411)
(62)
\u2014
\u2014
\u2014
(411)
(884)
Receive
EUR
16
256
2,549
\u2014
\u2014
\u2014
2,821
Pay
EUR
(46)
(2,352)
(3,728)
\u2014
(448)
(6,255)
(12,829)
Receive
GBP
\u2014
603
\u2014
\u2014
482
\u2014
1,085
Pay
GBP
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Receive
JPY
\u2014
\u2014
\u2014
\u2014
\u2014
92
92
Pay
JPY
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Receive
UFC
\u2014
\u2014
\u2014
111
37
\u2014
148
Pay
UFC
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Receive
USD
621
2,125
3,800
\u2014
\u2014
7,626
14,172
Pay
USD
(514)
(260)
(2,598)
\u2014
\u2014
\u2014
(3,372)
TOTAL
5
204
16
7
34
647
913
The largest volume of cash flows collected in this table falls into the following currency pairs. The average exchange rates to which the settlements have been
closed are: EUR/GBP (0.83), EUR/USD (1.12) and USD/COP (3,755.96).
Millions of euros
2025
2026
2027
2028
2029
Subsequent
years
Total
\u00a0 Forwards
Receive
BRL
23
\u2014
\u2014
\u2014
\u2014
\u2014
23
Pay
BRL
(2,824)
\u2014
\u2014
\u2014
\u2014
\u2014
(2,824)
Receive
CLP
1
\u2014
\u2014
\u2014
\u2014
\u2014
1
Pay
CLP
(75)
\u2014
\u2014
\u2014
\u2014
\u2014
(75)
Receive
COP
49
13
\u2014
\u2014
\u2014
\u2014
62
Pay
COP
(199)
\u2014
\u2014
\u2014
\u2014
\u2014
(199)
Receive
CZK
93
\u2014
\u2014
\u2014
\u2014
\u2014
93
Pay
CZK
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Receive
EUR
4,350
266
\u2014
\u2014
\u2014
\u2014
4,616
Pay
EUR
(841)
\u2014
\u2014
\u2014
\u2014
\u2014
(841)
Receive
GBP
23
\u2014
\u2014
\u2014
\u2014
\u2014
23
Pay
GBP
(221)
\u2014
\u2014
\u2014
\u2014
\u2014
(221)
Receive
MXN
13
\u2014
\u2014
\u2014
\u2014
\u2014
13
Pay
MXN
(234)
\u2014
\u2014
\u2014
\u2014
\u2014
(234)
Receive
PEN
25
\u2014
\u2014
\u2014
\u2014
\u2014
25
Pay
PEN
(461)
(1)
\u2014
\u2014
\u2014
\u2014
(462)
Receive
USD
1,533
1
\u2014
\u2014
\u2014
\u2014
1,534
Pay
USD
(1,236)
(292)
\u2014
\u2014
\u2014
\u2014
(1,528)
Receive
UYU
28
\u2014
\u2014
\u2014
\u2014
\u2014
28
Pay
UYU
(35)
\u2014
\u2014
\u2014
\u2014
\u2014
(35)
TOTAL
12
(13)
\u2014
\u2014
\u2014
\u2014
(1)
The largest volume of cash flows collected in this table falls into the following currency pairs. The average exchange rates to which the settlements have been
closed are: EUR/GBP (0.83)), EUR/USD (1.08), USD/COP (4,457.11) and EUR/BRL (6.35).
", "dimensions": { "concept": "ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-859": { "value": "
The breakdown of financial assets and other non-
current assets of the Telef\u00f3nica Group at December 31,
2024 and December 31, 2023 is as follows:
Millions of euros
12/31/2024
12/31/2023
Non-current financial
assets (Note 16)
5,339
5,201
Investments
585
616
Credits and other financial
assets
602
741
Deposits and guarantees
691
966
Trade receivables
945
1,049
Receivables for subleases
17
14
Impairment of trade
receivables
(106)
(125)
Long-term derivative financial
assets (Note 19)
2,605
1,940
Other non-current assets
2,064
2,067
Contractual assets (Note 23)
288
325
Deferred expenses (Note 23)
1,073
1,001
Long-term receivables for
taxes
315
354
Prepayments
388
387
Total
7,403
7,268
Investments
\u201cInvestments\u201d includes the fair value of investments in
companies where Telef\u00f3nica exercises no significant
influence or control and for which there is no specific
short-term disposal plan (see Note 3.i).
The Telef\u00f3nica Group\u2019s shareholding in Banco Bilbao
Vizcaya Argentaria, S.A. (BBVA) amounted to 417 million
euros (363 million euros at December\u00a031, 2023),
representing 0.77% of its share capital at December\u00a031,
2024 (0.76% at December 31, 2023).
At December\u00a031, 2023, Telef\u00f3nica maintained a 0.59%
stake in the share capital of China Unicom (Hong Kong)
Limited, valued at 103 million euros at that date.
Telef\u00f3nica sold in its entire stake in China Unicom (Hong
Kong) Limited during 2024, for an aggregate amount of
147 million euros (see Note 28). As a result of the
transaction, 110 million euros of losses from financial
assets measured at fair value through comprehensive
income were reclassified under retained earnings.
On June 21, 2023 the Company sold its total remaining
shares of Promotora de Informaciones, S.A. (PRISA).
Note 16. Breakdown of financial assets
The breakdown of financial assets of the Telef\u00f3nica Group at December\u00a031, 2024 is as follows:
December 31, 2024
\u00a0
Fair value through profit
or loss
\u00a0Fair value through other
comprehensive income
\u00a0
Measurement hierarchy
\u00a0
\u00a0
\u00a0
Millions of euros
Held for
trading
Fair value
option
Debt
instru-
ments
Equity
instru-
ments
Hedges
Level 1
(Quoted
prices)
Level 2 (Other
directly
observable
market inputs)
Level 3
(Inputs not
based on
observable
market data)
Amortized
cost
Total
carrying
amount
Total fair
value
Non-current financial assets (Note 12)
247
\u2014
218
543
2,441
523
2,912
14
1,890
5,339
5,339
Investments
42
\u2014
\u2014
543
\u2014
478
107
\u2014
\u2014
585
585
Credits and other financial assets
41
\u2014
18
\u2014
\u2014
45
\u2014
14
543
602
602
Deposits and guarantees
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
691
691
691
Derivative instruments
164
\u2014
\u2014
\u2014
2,441
\u2014
2,605
\u2014
\u2014
2,605
2,605
Trade receivables
\u2014
\u2014
200
\u2014
\u2014
\u2014
200
\u2014
745
945
839
Trade receivables for subleases
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
17
17
17
Impairment of trade receivables
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(106)
(106)
\u2014
Current financial assets
367
\u2014
894
\u2014
371
312
1,320
\u2014
15,794
17,426
17,426
Trade receivables (Note 14)
\u2014
\u2014
850
\u2014
\u2014
\u2014
850
\u2014
9,762
10,612
7,564
Impairment of trade receivables (Note 14)
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(3,048)
(3,048)
\u2014
Other current financial assets (Note 15)
367
\u2014
44
\u2014
371
312
470
\u2014
1,018
1,800
1,800
Cash and cash equivalents
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
8,062
8,062
8,062
Total
614
\u2014
1,112
543
2,812
835
4,232
14
17,684
22,765
22,765
The calculation of the fair values of the Telef\u00f3nica Group's debt instruments required an estimate, for each currency and counterparty, of a credit spread curve using the prices
of the Group's bonds and credit derivatives.
The breakdown of financial assets of the Telef\u00f3nica Group at December\u00a031, 2023 was as follows:
December 31, 2023
\u00a0
Fair value through profit
or loss
\u00a0Fair value through other
comprehensive income
\u00a0
Measurement hierarchy
\u00a0
\u00a0
\u00a0
Millions of euros
Held for
trading
Fair value
option
Debt
instru-
ments
Equity
instru-
ments
Hedges
Level 1
(Quoted
prices)
Level 2
(Other
directly
observable
market
inputs)
Level 3
(Inputs not
based on
observable
market
data)
Amortized
cost
Total
carrying
amount
Total fair
value
Non-current financial assets (Note 12)
224
\u2014
289
578
1,785
537
2,326
13
2,325
5,201
5,201
Investments
38
\u2014
\u2014
578
\u2014
510
106
\u2014
\u2014
616
616
Credits and other financial assets
31
\u2014
9
\u2014
\u2014
27
\u2014
13
701
741
741
Deposits and guarantees
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
966
966
966
Derivative instruments
155
\u2014
\u2014
\u2014
1,785
\u2014
1,940
\u2014
\u2014
1,940
1,940
Trade receivables
\u2014
\u2014
280
\u2014
\u2014
\u2014
280
\u2014
769
1,049
924
Trade receivables for subleases
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
14
14
14
Impairment of trade receivables
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(125)
(125)
\u2014
Current financial assets
291
\u2014
945
\u2014
271
293
1,214
\u2014
14,152
15,659
15,659
Trade receivables (Note 14)
\u2014
\u2014
854
\u2014
\u2014
\u2014
854
\u2014
9,568
10,422
7,430
Impairment of trade receivables (Note 14)
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(2,992)
(2,992)
\u2014
Other current financial assets (Note 15)
291
\u2014
91
\u2014
271
293
360
\u2014
425
1,078
1,078
Cash and cash equivalents
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
7,151
7,151
7,151
Total
515
\u2014
1,234
578
2,056
830
3,540
13
16,477
20,860
20,860
", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-858": { "value": "
The breakdown of financial assets and other non-
current assets of the Telef\u00f3nica Group at December 31,
2024 and December 31, 2023 is as follows:
Millions of euros
12/31/2024
12/31/2023
Non-current financial
assets (Note 16)
5,339
5,201
Investments
585
616
Credits and other financial
assets
602
741
Deposits and guarantees
691
966
Trade receivables
945
1,049
Receivables for subleases
17
14
Impairment of trade
receivables
(106)
(125)
Long-term derivative financial
assets (Note 19)
2,605
1,940
Other non-current assets
2,064
2,067
Contractual assets (Note 23)
288
325
Deferred expenses (Note 23)
1,073
1,001
Long-term receivables for
taxes
315
354
Prepayments
388
387
Total
7,403
7,268
Tax payables and receivables
Current tax payables and receivables at December\u00a031,
2024 and 2023 are as follows:
Millions of euros
Balance at
12/31/2024
Balance at
12/31/2023
Tax payables
Tax withholdings
104
111
Indirect taxes
424
561
Social security
112
117
Current income taxes
payable
658
769
Other
316
311
Total
1,614
1,869
Millions of euros
Balance at
12/31/2024
Balance at
12/31/2023
Tax receivables
Indirect taxes
461
493
Current income taxes
receivable
392
598
Other
117
102
Total
970
1,193
\"Current income taxes payable\" as of December\u00a031, 2024
includes 549 million euros (660 million euros as of
December\u00a031, 2023) corresponding to Telef\u00f3nica del
Per\u00fa's legal proceedings related to corporate income tax
(see the section Tax litigation in Telef\u00f3nica del Per\u00fa in
this note).
", "dimensions": { "concept": "ifrs-full:DisclosureOfTaxReceivablesAndPayablesExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-864": { "value": "
Millions of euros
12/31/2024
12/31/2023
Non-current financial
assets (Note 16)
5,339
5,201
Investments
585
616
Credits and other financial
assets
602
741
Deposits and guarantees
691
966
Trade receivables
945
1,049
Receivables for subleases
17
14
Impairment of trade
receivables
(106)
(125)
Long-term derivative financial
assets (Note 19)
2,605
1,940
Other non-current assets
2,064
2,067
Contractual assets (Note 23)
288
325
Deferred expenses (Note 23)
1,073
1,001
Long-term receivables for
taxes
315
354
Prepayments
388
387
Total
7,403
7,268
", "dimensions": { "concept": "ifrs-full:DisclosureOfLoansAndAdvancesToBanksExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-863": { "value": "
Millions of euros
12/31/2024
12/31/2023
Non-current financial
assets (Note 16)
5,339
5,201
Investments
585
616
Credits and other financial
assets
602
741
Deposits and guarantees
691
966
Trade receivables
945
1,049
Receivables for subleases
17
14
Impairment of trade
receivables
(106)
(125)
Long-term derivative financial
assets (Note 19)
2,605
1,940
Other non-current assets
2,064
2,067
Contractual assets (Note 23)
288
325
Deferred expenses (Note 23)
1,073
1,001
Long-term receivables for
taxes
315
354
Prepayments
388
387
Total
7,403
7,268
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherAssetsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-862": { "value": "
Millions of euros
12/31/2024
12/31/2023
Non-current financial
assets (Note 16)
5,339
5,201
Investments
585
616
Credits and other financial
assets
602
741
Deposits and guarantees
691
966
Trade receivables
945
1,049
Receivables for subleases
17
14
Impairment of trade
receivables
(106)
(125)
Long-term derivative financial
assets (Note 19)
2,605
1,940
Other non-current assets
2,064
2,067
Contractual assets (Note 23)
288
325
Deferred expenses (Note 23)
1,073
1,001
Long-term receivables for
taxes
315
354
Prepayments
388
387
Total
7,403
7,268
", "dimensions": { "concept": "ifrs-full:DisclosureOfPrepaymentsAndOtherAssetsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-865": { "value": "
Millions of euros
Invest-
ments
Other long-
term credits
Deposits
and
guarantees
Trade
receivables
Long-term
receivables
for
subleases
Impairment
of trade
receivables
Balance at 12/31/2022
497
981
1,163
1,019
19
(128)
Additions
17
114
9
610
4
(38)
Disposals
(17)
(310)
(111)
(303)
(1)
16
Translation differences
(1)
(17)
30
37
\u2014
(11)
Fair value adjustments and financial updates
115
26
35
1
\u2014
\u2014
Transfers and other
5
(53)
(160)
(315)
(8)
36
Balance at 12/31/2023
616
741
966
1,049
14
(125)
Additions
30
132
11
623
11
(59)
Disposals
(150)
(107)
(18)
(366)
\u2014
34
Translation differences
(4)
(35)
(104)
(41)
(1)
18
Fair value adjustments and financial updates
94
10
23
(16)
\u2014
\u2014
Transfers and other
(1)
(139)
(187)
(304)
(7)
26
Balance at 12/31/2024
585
602
691
945
17
(106)
Note 16. Breakdown of financial assets
The breakdown of financial assets of the Telef\u00f3nica Group at December\u00a031, 2024 is as follows:
December 31, 2024
\u00a0
Fair value through profit
or loss
\u00a0Fair value through other
comprehensive income
\u00a0
Measurement hierarchy
\u00a0
\u00a0
\u00a0
Millions of euros
Held for
trading
Fair value
option
Debt
instru-
ments
Equity
instru-
ments
Hedges
Level 1
(Quoted
prices)
Level 2 (Other
directly
observable
market inputs)
Level 3
(Inputs not
based on
observable
market data)
Amortized
cost
Total
carrying
amount
Total fair
value
Non-current financial assets (Note 12)
247
\u2014
218
543
2,441
523
2,912
14
1,890
5,339
5,339
Investments
42
\u2014
\u2014
543
\u2014
478
107
\u2014
\u2014
585
585
Credits and other financial assets
41
\u2014
18
\u2014
\u2014
45
\u2014
14
543
602
602
Deposits and guarantees
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
691
691
691
Derivative instruments
164
\u2014
\u2014
\u2014
2,441
\u2014
2,605
\u2014
\u2014
2,605
2,605
Trade receivables
\u2014
\u2014
200
\u2014
\u2014
\u2014
200
\u2014
745
945
839
Trade receivables for subleases
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
17
17
17
Impairment of trade receivables
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(106)
(106)
\u2014
Current financial assets
367
\u2014
894
\u2014
371
312
1,320
\u2014
15,794
17,426
17,426
Trade receivables (Note 14)
\u2014
\u2014
850
\u2014
\u2014
\u2014
850
\u2014
9,762
10,612
7,564
Impairment of trade receivables (Note 14)
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(3,048)
(3,048)
\u2014
Other current financial assets (Note 15)
367
\u2014
44
\u2014
371
312
470
\u2014
1,018
1,800
1,800
Cash and cash equivalents
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
8,062
8,062
8,062
Total
614
\u2014
1,112
543
2,812
835
4,232
14
17,684
22,765
22,765
The calculation of the fair values of the Telef\u00f3nica Group's debt instruments required an estimate, for each currency and counterparty, of a credit spread curve using the prices
of the Group's bonds and credit derivatives.
The breakdown of financial assets of the Telef\u00f3nica Group at December\u00a031, 2023 was as follows:
December 31, 2023
\u00a0
Fair value through profit
or loss
\u00a0Fair value through other
comprehensive income
\u00a0
Measurement hierarchy
\u00a0
\u00a0
\u00a0
Millions of euros
Held for
trading
Fair value
option
Debt
instru-
ments
Equity
instru-
ments
Hedges
Level 1
(Quoted
prices)
Level 2
(Other
directly
observable
market
inputs)
Level 3
(Inputs not
based on
observable
market
data)
Amortized
cost
Total
carrying
amount
Total fair
value
Non-current financial assets (Note 12)
224
\u2014
289
578
1,785
537
2,326
13
2,325
5,201
5,201
Investments
38
\u2014
\u2014
578
\u2014
510
106
\u2014
\u2014
616
616
Credits and other financial assets
31
\u2014
9
\u2014
\u2014
27
\u2014
13
701
741
741
Deposits and guarantees
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
966
966
966
Derivative instruments
155
\u2014
\u2014
\u2014
1,785
\u2014
1,940
\u2014
\u2014
1,940
1,940
Trade receivables
\u2014
\u2014
280
\u2014
\u2014
\u2014
280
\u2014
769
1,049
924
Trade receivables for subleases
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
14
14
14
Impairment of trade receivables
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(125)
(125)
\u2014
Current financial assets
291
\u2014
945
\u2014
271
293
1,214
\u2014
14,152
15,659
15,659
Trade receivables (Note 14)
\u2014
\u2014
854
\u2014
\u2014
\u2014
854
\u2014
9,568
10,422
7,430
Impairment of trade receivables (Note 14)
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(2,992)
(2,992)
\u2014
Other current financial assets (Note 15)
291
\u2014
91
\u2014
271
293
360
\u2014
425
1,078
1,078
Cash and cash equivalents
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
7,151
7,151
7,151
Total
515
\u2014
1,234
578
2,056
830
3,540
13
16,477
20,860
20,860
", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-866": { "value": "
Other long-term credits
This line item includes long-term financial assets of
Telef\u00f3nica Germany amounting to 120 million euros and
114 million euros at December 31, 2024 and 2023,
respectively, most of them related to reimbursement
rights to cover pension obligations of the company but
do not represent \"plan assets\" in accordance with IAS 19
(see Note 24).
Additionally, at December 31, 2024 this line includes 112
million euros of loans granted by Colombia
Telecomunicaciones, S.A. ESP BIC to the associate
company \u00c1lamo Holdco, S.L. (112 million euros as of
December 31, 2023, see Note 10).
Additions in 2023 included 44,187 million Chilean pesos
(46 million euros) corresponding to the indefinite-term
loan granted by Telef\u00f3nica Chile, S.A. to the associate
HoldCo Infraco, SpA for the acquisition of the fiber optic
assets owned by Entel (43 million euros at December 31,
2024, see Note 10). Additionally, at December 31, 2024
this line includes 75 million euros corresponding to the
subordinated debt granted by Telef\u00f3nica Chile to the
associate company HoldCo Infraco, SpA. generated by
the sale of 40% of the fiber optic business (75 million
euros as of December 31, 2023, see Note 10).
Additionally at December 31, 2024 includes the
collection right with a maturity of more than twelve
months arising from Telxius with American Tower
Corporation in June 2021 as a result of the sale of the
telecommunications towers division in Europe (Spain
and Germany) amounting to 90 million euros (269 million
euros in the long term at December 31, 2023). \"Short-
term credits\" includes the collection right with a maturity
of less than twelve months (see Note 15).
Disposals for the year 2023 included the collection of
financial instruments (Federal Treasury Certificates) of
Pegaso PCS, S.A. de C.V. amounting to 287 million euros,
acquired for the purpose of securing certain legal
proceedings with the Mexican tax Administration
Service. Derived from the judicial resolution that
exempts Pegaso PCS, S.A. de C.V. from securing the
amount in dispute, the aforementioned financial
instruments were cancelled (see Note 28).
The vast majority of long-term credits, recognized at
amortized cost (Note 16), are considered to be low credit
risk assets, therefore the impairment analysis was
carried out on the basis of expected credit losses in the
next twelve months.", "dimensions": { "concept": "tef:DisclosureOfOtherLongTermCreditsTextBlock", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-867": { "value": "
Deposits and guarantees
Telef\u00f3nica Brazil has non-current judicial deposits
amounting to 443 million euros (see Note 24) at
December 31, 2024 (531 million euros at December 31,
2023).
At December 31, 2024, there are deposits related to the
collateral guarantees on derivatives (CSA) signed by
Telef\u00f3nica, S.A. and its counterparties for the credit risk
management of derivatives amounting to 108 million
euros, of which an amount of 55 million euros
corresponds to cross currency swap (273 million euros at
December 31, 2023, not having cross currency swap).
In relation with collateral contracts, there is an additional
guarantee of 59,808 bonds issued by Telef\u00f3nica
Emisiones, S.A.U. deposited in a securities account
owned by Telef\u00f3nica, S.A. with a notional of 58 million
euros at December 31, 2024 (51,988 bonds for a nominal
amount of 47 million euros at December 31, 2023).
The vast majority of deposits and guarantees recognized
at amortized cost (Note 16), are considered to be low
credit risk assets, therefore the impairment analysis was
carried out on the basis of expected credit losses in the
next 12 months.
", "dimensions": { "concept": "tef:DisclosureOfDepositsAndGuaranteesTextBlock", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-868": { "value": "
Note 13. Inventories
The detail of inventories of the Telef\u00f3nica Group at
December 31, 2024 and December 31, 2023 is as follows:
Millions of euros
12/31/2024
12/31/2023
Audiovisual rights
243
242
Mobile terminals and other
equipments
681
636
Other inventories
77
91
Other advance payments
\u2014
1
Inventories impairment
provision
(47)
(41)
Inventories
954
929
\"Audiovisual rights\" mainly includes rights to broadcast
films, television series and documentaries (see Note 3.j).", "dimensions": { "concept": "ifrs-full:DisclosureOfInventoriesExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-869": { "value": "
Note 14. Receivables and other
current assets
The detail of receivables and other current assets of the
Tel\u00e9fonica Group at December 31, 2024 and December
31, 2023 is as follows:
Millions of euros
12/31/2024
12/31/2023
Receivables (Note 16)
7,564
7,430
Trade receivables
10,074
9,938
Impairment of trade receivables
(3,048)
(2,992)
Receivables from associates and joint ventures (Note 10)
163
139
Other receivables
375
345
Other current assets
2,881
2,702
Contractual assets (Note 23)
229
202
Capitalized costs (Note 23)
1,094
998
Prepayments
1,358
1,344
Short-term insurance and reinsurance contracts assets
164
113
Short-term insurance and reinsurance contracts assets from associates and joint ventures (Note 10)
36
45
Total
10,445
10,132
Prepayments at December 31, 2024 includes 599 million
euros (736 million euros at December\u00a031, 2023) of
advance payments for broadcasting rights for sporting
events not yet held. Of this amount, 442 million euros
(532 million euros at December\u00a031, 2023) correspond to
advance payments under executory contracts related to
future sports commitments (see Note 29.c).
The movement in impairment of trade receivables in
2024 and 2023 is as follows:
Millions of
euros
Impairment provision at December 31, 2022
2,891
Allowances
582
Transfers
48
Amounts applied
(481)
Translation differences and other
(48)
Impairment provision at December 31, 2023
2,992
Allowances
613
Transfers
27
Amounts applied
(527)
Translation differences and other
(57)
Impairment provision at December 31, 2024
3,048
Public-sector net trade receivables at December\u00a031,
2024 and 2023 amounted to 395 million euros and 526
million euros, respectively.\u00a0 \u00a0
The detail of the age of the accounts receivable
balances from customers and their corrections for
impairment as of December 31, 2024 and 2023 is as
follows:
12/31/2024
Millions of euros
Trade
receivables
Impairment
Unbilled receivables
2,844
(17)
Amount not overdue invoiced
2,913
(76)
Less than 90 days
855
(159)
Between 90 and 180 days
322
(133)
Between 180 and 360 days
500
(369)
More than 360 days
2,640
(2,294)
Total
10,074
(3,048)
12/31/2023
Millions of euros
Trade
receivables
Impairment
Unbilled receivables
2,755
(28)
Amount not overdue invoiced
2,920
(116)
Less than 90 days
994
(157)
Between 90 and 180 days
324
(135)
Between 180 and 360 days
523
(393)
More than 360 days
2,422
(2,163)
Total
9,938
(2,992)
Note 15. Other current financial
assets
The breakdown of other financial current assets of the
Telef\u00f3nica Group at December 31, 2024 and December
31, 2023 is as follows:
Millions of euros
12/31/2024
12/31/2023
Short-term credits
893
192
Short-term deposits and
guarantees
139
209
Short-term derivative
financial assets (Note 19)
461
352
Other current financial assets
307
325
Total
1,800
1,078
\"Short-term credits\" includes at December 31, 2024, 544
million U.S. dollars (523 million euros at the closing
exchange rate) corresponding to the principal and
interest of the favorable award regarding the investment
dispute with the Republic of Colombia submitted to the
ICSID (see notes 2 and 29.a).
The impact on the consolidated income statement for
2024 amounted to 380 million U.S. dollars (358 million
euros) recorded under \"Other income\" (see Note 26) and
164 million U.S. dollars (154 million euros) registered in
\"Finance income\" (see Note 19).
Additionally, \"Short-term credits\" includes the collection
right with a maturity of less than twelve months arising
from Telxius with American Tower Corporation in June
2021 as a result of the sale of the telecommunications
towers division in Europe (Spain and Germany)
amounting to 90 million euros. \"Other long-term credits\"
includes the collection right with a maturity of more than
twelve months (see Note 12).\u00a0
At December 31, 2024 there are 39 million euros
registered in deposits (50 million euros at December 31,
2023), associated with collateral guarantees of
Telef\u00f3nica, S.A. classified as current according to the
maturity of the underlying derivative instruments which
they relate to.
The vast majority of short-term credits and deposits and
guarantees recognized at amortized cost and at fair
value with changes in \"Other comprehensive
income\" (Note 16) are considered to be low credit risk
assets.
\"Other current financial assets\" includes short-term
investments in financial instruments to cover
commitments undertaken by the Group\u2019s insurance
companies, amounted to 228 million euros at
December\u00a031, 2024 ( 187 million euros at December\u00a031,
2023) and were recorded at fair value.
Current financial assets that are highly liquid and have
maturity periods of three months or less from the date
contracted, and present an insignificant risk of value
changes, are recorded under \u201cCash and cash
equivalents\u201d on the accompanying consolidated
statement of financial position.", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherCurrentAssetsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-870": { "value": "
The detail of the age of the accounts receivable
balances from customers and their corrections for
impairment as of December 31, 2024 and 2023 is as
follows:
12/31/2024
Millions of euros
Trade
receivables
Impairment
Unbilled receivables
2,844
(17)
Amount not overdue invoiced
2,913
(76)
Less than 90 days
855
(159)
Between 90 and 180 days
322
(133)
Between 180 and 360 days
500
(369)
More than 360 days
2,640
(2,294)
Total
10,074
(3,048)
12/31/2023
Millions of euros
Trade
receivables
Impairment
Unbilled receivables
2,755
(28)
Amount not overdue invoiced
2,920
(116)
Less than 90 days
994
(157)
Between 90 and 180 days
324
(135)
Between 180 and 360 days
523
(393)
More than 360 days
2,422
(2,163)
Total
9,938
(2,992)
", "dimensions": { "concept": "ifrs-full:DisclosureOfAllowanceForCreditLossesExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-872": { "value": "
Note 16. Breakdown of financial assets
The breakdown of financial assets of the Telef\u00f3nica Group at December\u00a031, 2024 is as follows:
December 31, 2024
\u00a0
Fair value through profit
or loss
\u00a0Fair value through other
comprehensive income
\u00a0
Measurement hierarchy
\u00a0
\u00a0
\u00a0
Millions of euros
Held for
trading
Fair value
option
Debt
instru-
ments
Equity
instru-
ments
Hedges
Level 1
(Quoted
prices)
Level 2 (Other
directly
observable
market inputs)
Level 3
(Inputs not
based on
observable
market data)
Amortized
cost
Total
carrying
amount
Total fair
value
Non-current financial assets (Note 12)
247
\u2014
218
543
2,441
523
2,912
14
1,890
5,339
5,339
Investments
42
\u2014
\u2014
543
\u2014
478
107
\u2014
\u2014
585
585
Credits and other financial assets
41
\u2014
18
\u2014
\u2014
45
\u2014
14
543
602
602
Deposits and guarantees
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
691
691
691
Derivative instruments
164
\u2014
\u2014
\u2014
2,441
\u2014
2,605
\u2014
\u2014
2,605
2,605
Trade receivables
\u2014
\u2014
200
\u2014
\u2014
\u2014
200
\u2014
745
945
839
Trade receivables for subleases
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
17
17
17
Impairment of trade receivables
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(106)
(106)
\u2014
Current financial assets
367
\u2014
894
\u2014
371
312
1,320
\u2014
15,794
17,426
17,426
Trade receivables (Note 14)
\u2014
\u2014
850
\u2014
\u2014
\u2014
850
\u2014
9,762
10,612
7,564
Impairment of trade receivables (Note 14)
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(3,048)
(3,048)
\u2014
Other current financial assets (Note 15)
367
\u2014
44
\u2014
371
312
470
\u2014
1,018
1,800
1,800
Cash and cash equivalents
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
8,062
8,062
8,062
Total
614
\u2014
1,112
543
2,812
835
4,232
14
17,684
22,765
22,765
The calculation of the fair values of the Telef\u00f3nica Group's debt instruments required an estimate, for each currency and counterparty, of a credit spread curve using the prices
of the Group's bonds and credit derivatives.
The breakdown of financial assets of the Telef\u00f3nica Group at December\u00a031, 2023 was as follows:
December 31, 2023
\u00a0
Fair value through profit
or loss
\u00a0Fair value through other
comprehensive income
\u00a0
Measurement hierarchy
\u00a0
\u00a0
\u00a0
Millions of euros
Held for
trading
Fair value
option
Debt
instru-
ments
Equity
instru-
ments
Hedges
Level 1
(Quoted
prices)
Level 2
(Other
directly
observable
market
inputs)
Level 3
(Inputs not
based on
observable
market
data)
Amortized
cost
Total
carrying
amount
Total fair
value
Non-current financial assets (Note 12)
224
\u2014
289
578
1,785
537
2,326
13
2,325
5,201
5,201
Investments
38
\u2014
\u2014
578
\u2014
510
106
\u2014
\u2014
616
616
Credits and other financial assets
31
\u2014
9
\u2014
\u2014
27
\u2014
13
701
741
741
Deposits and guarantees
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
966
966
966
Derivative instruments
155
\u2014
\u2014
\u2014
1,785
\u2014
1,940
\u2014
\u2014
1,940
1,940
Trade receivables
\u2014
\u2014
280
\u2014
\u2014
\u2014
280
\u2014
769
1,049
924
Trade receivables for subleases
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
14
14
14
Impairment of trade receivables
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(125)
(125)
\u2014
Current financial assets
291
\u2014
945
\u2014
271
293
1,214
\u2014
14,152
15,659
15,659
Trade receivables (Note 14)
\u2014
\u2014
854
\u2014
\u2014
\u2014
854
\u2014
9,568
10,422
7,430
Impairment of trade receivables (Note 14)
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(2,992)
(2,992)
\u2014
Other current financial assets (Note 15)
291
\u2014
91
\u2014
271
293
360
\u2014
425
1,078
1,078
Cash and cash equivalents
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
7,151
7,151
7,151
Total
515
\u2014
1,234
578
2,056
830
3,540
13
16,477
20,860
20,860
", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-871": { "value": "
Note 16. Breakdown of financial assets
The breakdown of financial assets of the Telef\u00f3nica Group at December\u00a031, 2024 is as follows:
December 31, 2024
\u00a0
Fair value through profit
or loss
\u00a0Fair value through other
comprehensive income
\u00a0
Measurement hierarchy
\u00a0
\u00a0
\u00a0
Millions of euros
Held for
trading
Fair value
option
Debt
instru-
ments
Equity
instru-
ments
Hedges
Level 1
(Quoted
prices)
Level 2 (Other
directly
observable
market inputs)
Level 3
(Inputs not
based on
observable
market data)
Amortized
cost
Total
carrying
amount
Total fair
value
Non-current financial assets (Note 12)
247
\u2014
218
543
2,441
523
2,912
14
1,890
5,339
5,339
Investments
42
\u2014
\u2014
543
\u2014
478
107
\u2014
\u2014
585
585
Credits and other financial assets
41
\u2014
18
\u2014
\u2014
45
\u2014
14
543
602
602
Deposits and guarantees
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
691
691
691
Derivative instruments
164
\u2014
\u2014
\u2014
2,441
\u2014
2,605
\u2014
\u2014
2,605
2,605
Trade receivables
\u2014
\u2014
200
\u2014
\u2014
\u2014
200
\u2014
745
945
839
Trade receivables for subleases
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
17
17
17
Impairment of trade receivables
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(106)
(106)
\u2014
Current financial assets
367
\u2014
894
\u2014
371
312
1,320
\u2014
15,794
17,426
17,426
Trade receivables (Note 14)
\u2014
\u2014
850
\u2014
\u2014
\u2014
850
\u2014
9,762
10,612
7,564
Impairment of trade receivables (Note 14)
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(3,048)
(3,048)
\u2014
Other current financial assets (Note 15)
367
\u2014
44
\u2014
371
312
470
\u2014
1,018
1,800
1,800
Cash and cash equivalents
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
8,062
8,062
8,062
Total
614
\u2014
1,112
543
2,812
835
4,232
14
17,684
22,765
22,765
The calculation of the fair values of the Telef\u00f3nica Group's debt instruments required an estimate, for each currency and counterparty, of a credit spread curve using the prices
of the Group's bonds and credit derivatives.
The breakdown of financial assets of the Telef\u00f3nica Group at December\u00a031, 2023 was as follows:
December 31, 2023
\u00a0
Fair value through profit
or loss
\u00a0Fair value through other
comprehensive income
\u00a0
Measurement hierarchy
\u00a0
\u00a0
\u00a0
Millions of euros
Held for
trading
Fair value
option
Debt
instru-
ments
Equity
instru-
ments
Hedges
Level 1
(Quoted
prices)
Level 2
(Other
directly
observable
market
inputs)
Level 3
(Inputs not
based on
observable
market
data)
Amortized
cost
Total
carrying
amount
Total fair
value
Non-current financial assets (Note 12)
224
\u2014
289
578
1,785
537
2,326
13
2,325
5,201
5,201
Investments
38
\u2014
\u2014
578
\u2014
510
106
\u2014
\u2014
616
616
Credits and other financial assets
31
\u2014
9
\u2014
\u2014
27
\u2014
13
701
741
741
Deposits and guarantees
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
966
966
966
Derivative instruments
155
\u2014
\u2014
\u2014
1,785
\u2014
1,940
\u2014
\u2014
1,940
1,940
Trade receivables
\u2014
\u2014
280
\u2014
\u2014
\u2014
280
\u2014
769
1,049
924
Trade receivables for subleases
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
14
14
14
Impairment of trade receivables
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(125)
(125)
\u2014
Current financial assets
291
\u2014
945
\u2014
271
293
1,214
\u2014
14,152
15,659
15,659
Trade receivables (Note 14)
\u2014
\u2014
854
\u2014
\u2014
\u2014
854
\u2014
9,568
10,422
7,430
Impairment of trade receivables (Note 14)
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
(2,992)
(2,992)
\u2014
Other current financial assets (Note 15)
291
\u2014
91
\u2014
271
293
360
\u2014
425
1,078
1,078
Cash and cash equivalents
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
7,151
7,151
7,151
Total
515
\u2014
1,234
578
2,056
830
3,540
13
16,477
20,860
20,860
December 31, 2024
Fair value through profit
or loss
Measurement hierarchy
Millions of euros
Held for
trading
Fair value
option
Hedges
Level 1
(Quoted
prices)
Level 2
(Other
directly
observable
market
inputs)
Level 3
(Inputs not
based on
observable
market
data)
Liabilities at
amortized
cost
Total
carrying
amount
Total fair
value
Issues
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
32,704
32,704
31,638
Loans and other
payables
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
4,014
4,014
4,016
Derivative instruments
471
\u2014
1,593
\u2014
2,064
\u2014
\u2014
2,064
2,064
Total financial
liabilities
471
\u2014
1,593
\u2014
2,064
\u2014
36,718
38,782
37,718
December 31, 2023
Fair value through profit
or loss
Measurement hierarchy
Millions of euros
Held for
trading
Fair value
option
Hedges
Level 1
(Quoted
prices)
Level 2
(Other
directly
observable
market
inputs)
Level 3
(Inputs not
based on
observable
market
data)
Liabilities at
amortized
cost
Total
carrying
amount
Total fair
value
Issues
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
31,567
31,567
30,498
Loans and other
payables
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
3,601
3,601
3,602
Derivative instruments
582
\u2014
1,311
\u2014
1,893
\u2014
\u2014
1,893
1,893
Total financial
liabilities
582
\u2014
1,311
\u2014
1,893
\u2014
35,168
37,061
35,993
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-873": { "value": "
Note 17. Equity
a) Share capital and share premium
2024
At December 31, 2024, Telef\u00f3nica, S.A.\u00b4s share capital
amounted to 5,670,161,554 euros and is divided into
5,670,161,554 common shares, of a single series and with
a par value of one euro each, fully paid in. All the shares
of the Company have the same characteristics and carry
the same rights and obligations.\u00a0
The Board of Directors of Telef\u00f3nica, S.A. at its meeting
held on April 12, 2024, resolved to carry out the
implementation of the share capital reduction through
the cancellation of own shares approved by the Annual
General Shareholders\u2019 Meeting held on the same day.
The share capital of Telef\u00f3nica, S.A. was reduced in the
amount of 80,296,591 euros, through the cancellation of
80,296,591 own shares of the Company held as treasury
stock, with a nominal value of one euro each. The share
capital of the Company resulting from the reduction was
set at 5,670,161,554 euros corresponding to 5,670,161,554
shares with a nominal value of one euro each. Related to
the capital reduction the share premium was reduced by
230 million euros.
The reduction did not entail the return of contributions
to the shareholders since the Company was the owner
of the cancelled shares. The reduction was carried out
with a charge to unrestricted reserves, through the
allocation of a reserve for cancelled share capital in an
amount equal to the nominal value of the cancelled
shares (i.e. for an amount of 80,296,591 euros). This
reserve for cancelled share capital can only be used if
the same requirements as those applicable to the
reduction of share capital are met. Therefore, in
accordance with the Section 335.c) of the Corporate
Enterprises Act, the creditors of the Company cannot
claim the opposition right disclosed in article 334 of the
Corporate Enterprise Act.
On May 13, 2024, the deed relating to the share capital
reduction was registered in the Commercial Registry of
Madrid.
The shares of Telef\u00f3nica, S.A. are represented by book
entries that are listed on the Spanish Electronic Market
(within the selective Ibex 35 index) and on the four
Spanish Stock Exchanges (Madrid, Barcelona, Valencia
and Bilbao), as well as on the New York and Lima Stock
Exchanges (on these latter two Exchanges through
American Depositary Shares (ADSs), with each ADS
representing one share of the Company).
2023
At December 31, 2023, Telef\u00f3nica, S.A.\u00b4s share capital
amounted to 5,750,458,145 euros and was divided into
5,750,458,145 common shares, of a single series and
with a par value of one euro each, fully paid in.
The Board of Directors of Telef\u00f3nica, S.A. at its meeting
held on March 31, 2023, resolved to carry out the
implementation of the share capital reduction through
the cancellation of own shares approved by the Annual
General Shareholders\u2019 Meeting held on March 31, 2023.
The share capital of Telef\u00f3nica, S.A. was reduced in the
amount of 24,779,409 euros, through the cancellation of
24,779,409 own shares of the Company held as treasury
stock, with a nominal value of one euro each. The share
capital of the Company resulting from the reduction was
set at 5,750,458,145 euros corresponding to
5,750,458,145 shares with a nominal value of 1 euro each.
Related to the capital reduction the share premium was
reduced by 73 million euros.
The reduction of capital did not entail the return of
contributions to the shareholders since the Company
was the owner of the cancelled shares. The reduction
was carried out with a charge to unrestricted reserves,
through the allocation of a reserve for cancelled share
capital in an amount equal to the nominal value of the
cancelled shares (i.e. for an amount of 24,779,409 euros).
This reserve for cancelled share capital could only be
used if the same requirements as those applicable to the
reduction of share capital were met. Therefore, in
accordance with the Section 335.c) of the Corporate
Enterprises Act, the creditors of the Company could not
claim the opposition right disclosed in article 334 of the
Corporate Enterprise Act.
On April 17, 2023, the deed relating to the share capital
reduction was registered in the Commercial Registry of
Madrid.
Authorizations by Shareholders\u2019 Meeting
As regards the authorizations conferred in respect of the
share capital, the shareholders acting at the Ordinary
General Shareholders\u2019 Meeting held on June 12, 2020
resolved to delegate to the Board of Directors, as
broadly as required by Law, pursuant to the provisions of
Section 297.1.b) of the Companies Act, the power to
increase the share capital on one or more occasions and
at any time, within a period of five year from the date of
adoption of such resolution, by the maximum nominal
amount of 2,596,065,843 euros, equal to one-half of the
share capital of the Company on the date of adoption of
the resolution at the General Shareholders\u2019 Meeting,
issuing and floating the respective new shares for such
purpose with or without a premium, the consideration
for which will consist of monetary contributions, with
express provision for incomplete subscription of the
shares to be issued. The Board of Directors was also
authorized to exclude pre-emptive rights in whole or in
part, as provided in section 506 of the Companies Act.
However, the power to exclude pre-emptive rights is
limited to 20% of the share capital on the date on which
the resolution is adopted. In accordance with the above-
mentioned authorization, as of the end of fiscal year
2024, the Board would be authorized to increase the
share capital by the maximum nominal amount of
2,596,065,843 euros.
Furthermore, the shareholders acting at the Ordinary
General Shareholders\u2019 Meeting of Telef\u00f3nica, S.A. held
on June 12, 2020 delegated to the Board of Directors, in
accordance with the general rules governing the
issuance of debentures and pursuant to the provisions of
applicable law and the Company\u2019s By-Laws, the power
to issue securities, including preferred shares and
warrants, with the power to exclude the pre-emptive
rights of shareholders. The aforementioned securities
may be issued on one or more occasions, within a
maximum period of five years as from the date of
adoption of the resolution. The securities issued may be
debentures, bonds, notes and other fixed-income
securities, or debt instruments of a similar nature, or
hybrid instruments in any of the forms admitted by Law
(including, among others, preferred interests) both
simple and, in the case of debentures, bonds and hybrid
instruments, convertible into shares of the Company
and/or exchangeable for shares of the Company, of any
of the companies of its Group or of any other company
and/or giving the holders thereof an interest in the
corporate earnings. Such delegation also includes
warrants or other similar instruments that may entitle the
holders thereof, directly or indirectly, to subscribe for or
acquire newly-issued or outstanding shares, payable by
physical delivery or through differences. The aggregate
amount of the issuance or issuances of instruments that
may be approved in reliance on this delegation may not
exceed, at any time, 25,000 million euros or the
equivalent thereof in another currency. In the case of
notes and for purposes of the above-mentioned limits,
the outstanding balance of those issued in reliance on
the delegation shall be computed. In the case of
warrants, and also for the purpose of such limit, the sum
of the premiums and exercise prices of each issuance
shall be taken into account.\u00a0
Furthermore, under the aforementioned delegation
resolution, the shareholders at the Ordinary General
Shareholders\u2019 Meeting of Telef\u00f3nica, S.A. resolved to
authorize the Board of Directors to guarantee, in the
name of the Company, the issuance of the
aforementioned instruments issued by the Companies
belonging to its Group of Companies, within a maximum
period of five years as from the date of adoption of the
resolution.
Furthermore, on March 31, 2023, shareholders voted to
authorize the acquisition by the Board of Directors of
Telef\u00f3nica, S.A. treasury shares, up to the limits and
pursuant to the terms and conditions established at the
Shareholders\u2019 Meeting, within a maximum five-year
period from that date. However, it specified that in no
circumstances could the par value of the shares
acquired, added to that of the treasury shares already
held by Telef\u00f3nica, S.A. and by any of its controlled
subsidiaries, exceed the maximum legal percentage at
any time.
b) Dividends
Dividends distribution in 2024
Approval was given at the General Shareholders\u2019
Meeting of April 12, 2024 to pay a dividend in cash
charge to unrestricted reserves amounting to 0.30 euros
per share payable in two tranches.
On June 20, 2024, 0.15 euros per share was paid, for a
total amount of 846 million euros, and on December 19,
2024, a second payment of 0.15 euros amounting to 847
million euros.
Dividends distribution in 2023
Approval was given at the General Shareholders\u2019
Meeting of March 31, 2023 to pay a dividend in cash
charge to unrestricted reserves, in two tranches, for an
approximate amount of 0.30 euros per share.
On June 15, 2023, 0.15 euros per share was paid, for a
total amount of 851 million euros, and on December 14,
2023, a second payment of 0.15 euros amounting to 847
million euros.
Dividends distribution in 2022
Approval was given at the General Shareholders\u2019
Meeting of April 8 2022 to pay a dividend in two
tranches for an approximately amount of 0.30 euros per
share.
On June 22, 2022, took place the payment of a scrip
dividend of approximately 0.15 euros per share
consisting of the assignment of free allotment rights with
an irrevocable purchase commitment by the Company,
after the adoption of the corresponding corporate
resolutions.
At its meeting held on May 25, 2022, the Executive
Commission of Telef\u00f3nica, S.A. Board of Directors
agreed to carry out the execution of the increase in
paid-up capital, related to the shareholders
compensation by means of a scrip dividend. Thus, each
shareholder received one free allotment right for each
Telef\u00f3nica share held. Such free allotment rights were
traded on the Continuous Market in Spain during a
period of 15 calendar days. Once this trading period
ended, the shareholders of 25.54% of the free-of-charge
allotment rights accepted the irrevocable purchase
commitment assumed by Telef\u00f3nica, S.A. The payment
was made on June 16, 2022. The gross impact of this
dividend amounted to 213 million euros.
On the other hand, the shareholders of 74.46% of the
free-of-charge allotment rights were entitled, therefore,
to receive new shares of Telef\u00f3nica, S.A. So the final
number of shares issued after June 24, 2022 in the
capital increase was 135,464,591 shares with a nominal
value of 1 euro each.
On December 15, 2022 took place the payment of a
dividend of 0.15 euros per share amounting to 854
million euros.
Proposed distribution of results of the parent
company
Telef\u00f3nica, S.A. generated 563 million euros of profits in
2024.
The Company\u2019s Board of Directors will submit the
following proposed distribution of 2024 results for
approval at the Shareholders\u2019 Meeting:
Millions of euros
Legal reserve
\u2014
Unrestricted reserves
563
Total
563
c) Other equity instruments
Undated deeply subordinated securities
Unless specified otherwise, undated deeply
subordinated securities were issued by Telef\u00f3nica
Europe, B.V.
The characteristic of undated deeply subordinated
securities, the detail of the tender offer and the amounts
repurchased in the operations and the amount
amortized in advance, are the following (million euros):
Issue date
Annual
Fix
Variable
Exercisable
by issuer
12/31/2023
Tender
Offer
Amount
repurchased
Redemption
12/31/2024
09/18/2024 (1)
6.750%
from 09/07/31 rate
SWAP + spread
incremental
2031
200
03/15/2024 (1)
5.752%
from 04/15/32 rate
SWAP + spread
incremental
2032
1,100
9/7/2023 (1)
6.750%
from 09/07/31 rate
SWAP + spread
incremental
2031
750
750
2/2/2023 (1)
6.135%
from 05/03/30 rate
SWAP + spread
incremental
2030
1,000
1,000
11/23/2022 (1)
7.125%
from 11/23/28 rate
SWAP + spread
incremental
2028
750
750
11/24/2021 (2)
2.880%
from 05/24/28 rate
SWAP + spread
incremental
2028
750
750
2/12/2021 (2)
2.376%
from 05/12/29 rate
SWAP + spread
incremental
2029
1,000
1,000
2/5/2020 (1)
2.502%
from 05/05/27 rate
SWAP + spread
incremental
2027
500
500
09/24/2019
2.875%
from 09/24/27 rate
SWAP + spread
incremental
2027
500
500
03/14/2019
4.375%
from 03/14/25 rate
SWAP + spread
incremental
2025
1,300
1,300
(1,097)
(203)
\u2014
03/22/2018
3.875%
from 09/22/26 rate
SWAP + spread
incremental
2026
1,000
1,000
7,550
7,550
(1) Green undated deeply subordinated securities (see Note 29.d)
(2) Sustainable undated deeply subordinated securities (see Note 29.d)
In all issuances of undated deeply subordinated
securities (hybrid instruments), the issuer has an option
to defer the payment of coupons and holders of such
securities cannot call for payment.
As the repayment of principal and the payment of
coupons depend solely on Telef\u00f3nica\u2019s decision, these
undated deeply subordinated securities are equity
instruments and are presented under \u201cOther equity
instruments\u201d in the accompanying consolidated
statement of changes in equity.
In March 2024 Telef\u00f3nica Europe, B.V. carried out two
transactions on its hybrid capital: (a) a new issue
amounting to 1,100 million euros, guaranteed by
Telef\u00f3nica, S.A. (see Note 29.d) and (b) a tender offer on
a hybrid instruments, denominated in euros, with a first
call date in March 2025. The issuer accepted the
purchase in cash of the tendered securities in a principal
amount of 1,097 million euros.
In September 2024, Telef\u00f3nica Europe, B.V. carried out a
reopening of 750 million euros hybrid instruments issued
in September 2023 for an amount of\u00a0 200 million euros,
guaranteed by Telef\u00f3nica, S.A. (see Note 29.d).
In October 2024, Telef\u00f3nica Europe, B.V. exercised the
clean-up call option for the remaining hybrid
instruments with first non-call date March 2025, with an
aggregate principal amount of 203 million euros.
In 2024, the payment of the coupons related to hybrids
instruments, in an aggregate amount, net of tax effects,
of 249 million euros ( 239 million and 201 million euros in
2023 and 2022, respectively), was recorded as \u201cRetained
earnings\u201d in the consolidated statements of changes in
equity.\u00a0
d) Legal reserve
According to the article 274 of the consolidated text of
the Spanish Corporate Enterprises Act, companies must
transfer 10% of profit for the year to a legal reserve until
this reserve reaches at least 20% of share capital. The
legal reserve can be used to increase capital by the
amount exceeding 10% of the increased share capital
amount. Except for this purpose, until the legal reserve
exceeds the limit of 20% of share capital, it can only be
used to offset losses, if there are no other reserves
available.The General Shareholders' Meeting held on
April 12, 2024, approved the allocation of 91 million euros
to legal reserves against the results of the 2023 year. At
of December 31, 2024 the legal reserve amounts to 1,150
million euros representing 20.28% of the share capital at
the date.
e) Retained earnings
These reserves include undistributed profits of
companies constituting the consolidated Group minus
interim dividends paid against profit for the year,
actuarial gains and losses, the impact of the asset ceiling
on defined benefit plans and the payment of coupons
related to subordinated securities, if applicable.
These reserves also include revaluation reserves and the
reserve for canceled share capital. These reserves are
regulated by some restrictions for their distribution.
Revaluation reserves
The balance of Revaluation reserves arose as a result of
the revaluation made pursuant to Spanish Royal Decree-
Law 7/1996 of June 7, and may be used, free of tax, to
offset any losses incurred in the future and to increase
capital. It may also be allocated to unrestricted reserves,
provided that the capital gain has been realized.
The capital gain will be deemed to have been realized in
respect of the portion on which the depreciation was
recorded for accounting purposes or when the revalued
assets were transferred or recognized. In this respect, 2
million euros were reclassified to \u201cRetained earnings\u201d in
2024 (3 million euros in 2023) corresponding to
revaluation reserves subsequently considered to be
unrestricted. At December\u00a031, 2024, this reserve
amounted to 49 million euros ( 51 million euros at
December\u00a031, 2023).
Reserve for canceled share capital
In accordance with Section 335.c) of the Spanish
Corporate Enterprises Act and to render null and void
the right of opposition provided for in Section 334 of the
same Act, whenever the Company decreases capital, it
should record a reserve for canceled share capital for an
amount equal to the par value of the canceled shares,
which can only be used upon satisfaction of the same
requirements as those applicable to the reduction of
share capital. In 2024 was recorded in this account 80
million euros (25 million euros in 2023). The cumulative
amount as of December 31, 2024 is 1,059 million euros.
f) Translation differences
The breakdown of the accumulated contribution of
translation differences attributable to equity holders of
the parent at December 31 is as follows:
Millions of euros
2024
2023
2022
Brazilian real
(15,786)
(13,612)
(14,031)
Pound sterling
309
(97)
(322)
Venezuelan bolivar
(3,253)
(3,686)
(3,734)
Argentine peso
(1,112)
(2,011)
(1,364)
Other currencies
(1,437)
(1,280)
(1,272)
Total Group
(21,279)
(20,686)
(20,723)
The accumulated negative translation differences
corresponding to Telef\u00f3nica M\u00f3viles Argentina, S.A. (see
Note 31) amounted to 1,107 million euros as of December
31, 2024 (2,006 million euros as of December 31, 2023).
g) Adjustment on initial application
of IAS 21
The early adoption of the amendments to IAS 21
following its approval by the European Union in
November 2024 (see Note 3) has had a negative impact
on retained earnings amounting to 224 million euros and
a positive impact on translation differences amounting
to 366 million. The impact on the Group's Equity
amounted to 142 million euros.
h) Treasury share instruments
Telef\u00f3nica, S.A. held the following treasury shares at
December\u00a031, 2024, 2023 and 2022 :
Euros per share
Number of
shares
Acquisition price
Trading price
Market value(*)
%
Treasury shares at 12/31/2024
26,874,751
3.97
3.94
106
0.474%
Treasury shares at 12/31/2023
111,099,480
3.87
3.53
393
1.932%
Treasury shares at 12/31/2022
85,217,621
4.00
3.39
288
1.476%
(*) Millions of euros.
The following transactions involving treasury shares
were carried out in 2024, 2023 and 2022:
Number of shares
Treasury shares at 12/31/2021
139,329,370
Acquisitions
90,403,530
Scrip dividend
563,415
Employee share option plan
(5,391,956)
Capital reduction
(139,275,057)
Sales
(411,681)
Treasury shares at 12/31/2022
85,217,621
Acquisitions
60,070,274
Employee share option plan
(8,845,558)
Capital reduction
(24,779,409)
Sales
(563,448)
Treasury shares at 12/31/2023
111,099,480
Acquisitions
36,525,204
Employee share option plan
(19,909,898)
Capital reduction
(80,296,591)
Sales
(20,543,444)
Treasury shares at 12/31/2024
26,874,751
There were treasury shares purchases in 2024
amounting to 145 million euros (223 and 365 million
euros in 2023 and 2022, respectively)
The Company also has different derivative instruments,
to be settled by offset, on a nominal value equivalent to
173 million of Telef\u00f3nica shares, mainly contracted
through Banco Bilbao Vizcaya, recorded in the
statement of financial position at December 31, 2024 in
accordance with their maturity date and fair value (193
million euros at December 31, 2023).
i) Equity attributable to non-
controlling interests
\u201cEquity attributable to non-controlling interests\u201d
represents the share of non-controlling interests in the
equity and income or loss for the year of fully
consolidated Group companies. The movements in this
balance for the 2024 , 2023 and 2022 consolidated
statements of financial position are as follows:
Millions of euros
Balance
at
12/31/23
Sales of
non-
controlling
interests
and
inclusion of
companies
Acquisitions
of non-
controlling
interests and
exclusion of
companies
Dividends
paid
Profit/
(loss) for
the year
Change in
translation
differences
Other
movements
Balance
at
12/31/24
Telef\u00f4nica Brasil, S.A.
3,546
\u2014
(346)
(125)
226
(481)
14
2,834
Telef\u00f3nica Deutschland Holding, A.G.
1,286
\u2014
(1,057)
(17)
10
\u2014
2
224
Colombia Telecomunicaciones, S.A., ESP
BIC
362
\u2014
\u2014
\u2014
(25)
(32)
(8)
297
Other
50
\u2014
(47)
(3)
47
7
(7)
47
Total
5,244
\u2014
(1,450)
(145)
258
(506)
1
3,402
Millions of euros
Balance
at
12/31/22
Sales of
non-
controlling
interests
and
inclusion of
companies
Acquisitions
of non-
controlling
interests and
exclusion of
companies
Dividends
paid
Profit/
(loss) for
the year
Change in
translation
differences
Other
movements
Balance
at
12/31/23
Telef\u00f4nica Brasil, S.A.
3,399
\u2014
(111)
(158)
238
182
(4)
3,546
Telef\u00f3nica Deutschland Holding, A.G.
2,237
\u2014
(866)
(157)
71
\u2014
1
1,286
Colombia Telecomunicaciones, S.A., ESP
BIC
344
\u2014
\u2014
\u2014
(44)
70
(8)
362
Telxius Telecom, S.A.
599
\u2014
(585)
(28)
22
(19)
11
\u2014
Other
41
\u2014
(17)
(2)
31
\u2014
(3)
50
Total
6,620
\u2014
(1,579)
(345)
318
233
(3)
5,244
Millions of euros
Balance
at
12/31/21
Sales of
non-
controlling
interests
and
inclusion of
companies
Acquisitions
of non-
controlling
interests and
exclusion of
companies
Dividends
paid
Profit/
(loss) for
the year
Change in
translation
differences
Other
movements
Balance
at
12/31/22
Telef\u00f4nica Brasil, S.A.
3,106
\u2014
(86)
(241)
198
425
(3)
3,399
Telef\u00f3nica Deutschland Holding, A.G.
2,353
\u2014
(48)
(161)
68
\u2014
25
2,237
Colombia Telecomunicaciones, S.A., ESP
BIC
409
\u2014
\u2014
(7)
(4)
(47)
(7)
344
Telxius Telecom, S.A.
546
\u2014
\u2014
\u2014
50
13
(10)
599
Other
63
23
(44)
(2)
(4)
2
3
41
Total
6,477
23
(178)
(411)
308
393
8
6,620
2024
The 2024 movement mainly includes the impact of the
closing of the acquisition of Telef\u00f3nica Deutschland
shares associated with the Public Offering, as well as the
purchase of its own shares by Telef\u00f4nica Brasil.
Public Offers for the Acquisition of Shares of
Telef\u00f3nica Deutschland
On November 7, 2023, Telef\u00f3nica, through its subsidiary
Telef\u00f3nica Local Services GmbH, launched a partial
voluntary public offer for the acquisition of shares of
Telef\u00f3nica Deutschland Holding AG. The Offer
acceptance period began on December 5, 2023 and
ended on January 17, 2024.
On March 20, 2024 a public exclusion offer was
launched with the objective of acquiring the shares of
Telef\u00f3nica Deutschland that at that time were not
directly or indirectly owned by Telef\u00f3nica.
The cash outflow in 2024 of the purchases made has
amounted to 1,019 million euros (see Note 28).
In 2024 these operations produced an increase of 28
million euros in the equity attributed to the parent
company and a decrease of 1,057 million euros in the
equity attributed to minority interests (see Note 2).
2023
The 2023 movement mainly includes the impact of the
acquisition of KKR's stake in Telxius and the acquisition
by Telef\u00f3nica of shares of Telef\u00f3nica Deutschland
through a public tender Offer.
Acquisition of KKR's percentage stake in Telxius
In January 2023, once the corresponding regulatory and
competition approvals were obtained, Pontel
Participaciones, S.L. (\"Pontel\"), Telef\u00f3nica\u2019s subsidiary
held 83.35%\u00a0 by Telef\u00f3nica and 16.65% by Pontegadea
Inversiones, S.L., (\"Pontegadea\") acquired 40% of the
share capital of Telxius Telecom, S.A. from Taurus Bidco
S.\u00e0 r.l. (a company managed by KKR). As a result of the
transaction, Pontel, which held the remaining 60% of
Telxius Telecom, S.A.'s share capital, became the sole
shareholder of Telxius Telecom, S.A. Likewise,
Pontegadea increased its holding in Pontel to 30% and
Telef\u00f3nica kept a 70% stake.
Within the framework of this transaction and on the
same date, Pontel carried out a capital increase fully
subscribed and paid up by its shareholders in the
proportion agreed between them, in such a way that
both Telef\u00f3nica and Pontegadea paid out 111 million
euros.
Additionally, in January 2023 Telxius recovered the
credit amounting 876 million euros corresponding to the
income tax for the 2021 fiscal year. The amount was
distributed to its shareholders, with KKR receiving 351
million euros for 40% and Pontegadea receiving 88
million euros for 9.99% .
Subsequently, with effect from March 24, 2023, Telxius
Telecom, S.A. absorbed Pontel Participaciones, S.L.
The impact of these transactions on the consolidated
statement of changes in equity in 2023 was a reduction
in equity attributable to the parent company for an
amount of 46 million euros and a reduction in equity
attributable to minority interests for an amount of 585
million euros.
Public Offer for the Acquisition of Shares of
Telef\u00f3nica Deutschland
The cash outflow in 2023 of the direct purchases made
in the fiscal year amounted to 816 million euros (see
Notes 2 and 28).
2022
In 2022, \"sales of non-controlling interest and inclusion
of companies\" reflected the impact of the acquisition by
the consortion formed by CAA and Vauban of 45% of the
company Bluevia for 23 million euros (see Note 2).
Note 4 contains the revenues, EBITDA, Operating
income, capital expenditure and the main items of the
statement of financial position for the main segments of
the Telef\u00f3nica Group with non-controlling interests,
namely Telef\u00f3nica Brazil and Telef\u00f3nica Germany. The
detail of these figures for Colombia Telecomunicaciones
is as follows:
Millions of euros
Colombia Telecomunicaciones
2024
2023
2022
Revenues
1,449
1,497
1,517
EBITDA
391
359
569
Depreciation and amortization
(236)
(295)
(308)
Operating income
155
64
261
Capital Expenditure
201
125
261
Fixed Assets
1,215
1,234
1,116
Total allocated assets
2,921
2,936
2,696
Total allocated liabilities
2,395
2,258
2,001
The statements of cash flows of these companies are as follows:
Millions of euros
Telef\u00f3nica Brazil
2024
2023
2022
Net cash flow provided by operating activities
3,644
3,710
3,678
Net cash flow used in investing activities
(1,529)
(1,477)
(2,741)
Net cash flow used in financing activities
(1,557)
(1,709)
(1,674)
Millions of euros
Telef\u00f3nica Germany
2024
2023
2022
Net cash flow provided by operating activities
2,774
2,684
2,732
Net cash flow used in investing activities
(1,334)
(1,337)
(1,608)
Net cash flow used in financing activities
(1,586)
(1,498)
(1,339)
Millions of euros
Colombia Telecomunicaciones
2024
2023
2022
Net cash flow provided by operating activities
219
206
180
Net cash flow provided by (used in) investing activities
(101)
(144)
30
Net cash flow used in financing activities
(58)
(80)
(225)
", "dimensions": { "concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-874": { "value": "
a) Share capital and share premium
2024
At December 31, 2024, Telef\u00f3nica, S.A.\u00b4s share capital
amounted to 5,670,161,554 euros and is divided into
5,670,161,554 common shares, of a single series and with
a par value of one euro each, fully paid in. All the shares
of the Company have the same characteristics and carry
the same rights and obligations.\u00a0
The Board of Directors of Telef\u00f3nica, S.A. at its meeting
held on April 12, 2024, resolved to carry out the
implementation of the share capital reduction through
the cancellation of own shares approved by the Annual
General Shareholders\u2019 Meeting held on the same day.
The share capital of Telef\u00f3nica, S.A. was reduced in the
amount of 80,296,591 euros, through the cancellation of
80,296,591 own shares of the Company held as treasury
stock, with a nominal value of one euro each. The share
capital of the Company resulting from the reduction was
set at 5,670,161,554 euros corresponding to 5,670,161,554
shares with a nominal value of one euro each. Related to
the capital reduction the share premium was reduced by
230 million euros.
The reduction did not entail the return of contributions
to the shareholders since the Company was the owner
of the cancelled shares. The reduction was carried out
with a charge to unrestricted reserves, through the
allocation of a reserve for cancelled share capital in an
amount equal to the nominal value of the cancelled
shares (i.e. for an amount of 80,296,591 euros). This
reserve for cancelled share capital can only be used if
the same requirements as those applicable to the
reduction of share capital are met. Therefore, in
accordance with the Section 335.c) of the Corporate
Enterprises Act, the creditors of the Company cannot
claim the opposition right disclosed in article 334 of the
Corporate Enterprise Act.
On May 13, 2024, the deed relating to the share capital
reduction was registered in the Commercial Registry of
Madrid.
The shares of Telef\u00f3nica, S.A. are represented by book
entries that are listed on the Spanish Electronic Market
(within the selective Ibex 35 index) and on the four
Spanish Stock Exchanges (Madrid, Barcelona, Valencia
and Bilbao), as well as on the New York and Lima Stock
Exchanges (on these latter two Exchanges through
American Depositary Shares (ADSs), with each ADS
representing one share of the Company).
2023
At December 31, 2023, Telef\u00f3nica, S.A.\u00b4s share capital
amounted to 5,750,458,145 euros and was divided into
5,750,458,145 common shares, of a single series and
with a par value of one euro each, fully paid in.
The Board of Directors of Telef\u00f3nica, S.A. at its meeting
held on March 31, 2023, resolved to carry out the
implementation of the share capital reduction through
the cancellation of own shares approved by the Annual
General Shareholders\u2019 Meeting held on March 31, 2023.
The share capital of Telef\u00f3nica, S.A. was reduced in the
amount of 24,779,409 euros, through the cancellation of
24,779,409 own shares of the Company held as treasury
stock, with a nominal value of one euro each. The share
capital of the Company resulting from the reduction was
set at 5,750,458,145 euros corresponding to
5,750,458,145 shares with a nominal value of 1 euro each.
Related to the capital reduction the share premium was
reduced by 73 million euros.
The reduction of capital did not entail the return of
contributions to the shareholders since the Company
was the owner of the cancelled shares. The reduction
was carried out with a charge to unrestricted reserves,
through the allocation of a reserve for cancelled share
capital in an amount equal to the nominal value of the
cancelled shares (i.e. for an amount of 24,779,409 euros).
This reserve for cancelled share capital could only be
used if the same requirements as those applicable to the
reduction of share capital were met. Therefore, in
accordance with the Section 335.c) of the Corporate
Enterprises Act, the creditors of the Company could not
claim the opposition right disclosed in article 334 of the
Corporate Enterprise Act.
On April 17, 2023, the deed relating to the share capital
reduction was registered in the Commercial Registry of
Madrid.
Authorizations by Shareholders\u2019 Meeting
As regards the authorizations conferred in respect of the
share capital, the shareholders acting at the Ordinary
General Shareholders\u2019 Meeting held on June 12, 2020
resolved to delegate to the Board of Directors, as
broadly as required by Law, pursuant to the provisions of
Section 297.1.b) of the Companies Act, the power to
increase the share capital on one or more occasions and
at any time, within a period of five year from the date of
adoption of such resolution, by the maximum nominal
amount of 2,596,065,843 euros, equal to one-half of the
share capital of the Company on the date of adoption of
the resolution at the General Shareholders\u2019 Meeting,
issuing and floating the respective new shares for such
purpose with or without a premium, the consideration
for which will consist of monetary contributions, with
express provision for incomplete subscription of the
shares to be issued. The Board of Directors was also
authorized to exclude pre-emptive rights in whole or in
part, as provided in section 506 of the Companies Act.
However, the power to exclude pre-emptive rights is
limited to 20% of the share capital on the date on which
the resolution is adopted. In accordance with the above-
mentioned authorization, as of the end of fiscal year
2024, the Board would be authorized to increase the
share capital by the maximum nominal amount of
2,596,065,843 euros.
Furthermore, the shareholders acting at the Ordinary
General Shareholders\u2019 Meeting of Telef\u00f3nica, S.A. held
on June 12, 2020 delegated to the Board of Directors, in
accordance with the general rules governing the
issuance of debentures and pursuant to the provisions of
applicable law and the Company\u2019s By-Laws, the power
to issue securities, including preferred shares and
warrants, with the power to exclude the pre-emptive
rights of shareholders. The aforementioned securities
may be issued on one or more occasions, within a
maximum period of five years as from the date of
adoption of the resolution. The securities issued may be
debentures, bonds, notes and other fixed-income
securities, or debt instruments of a similar nature, or
hybrid instruments in any of the forms admitted by Law
(including, among others, preferred interests) both
simple and, in the case of debentures, bonds and hybrid
instruments, convertible into shares of the Company
and/or exchangeable for shares of the Company, of any
of the companies of its Group or of any other company
and/or giving the holders thereof an interest in the
corporate earnings. Such delegation also includes
warrants or other similar instruments that may entitle the
holders thereof, directly or indirectly, to subscribe for or
acquire newly-issued or outstanding shares, payable by
physical delivery or through differences. The aggregate
amount of the issuance or issuances of instruments that
may be approved in reliance on this delegation may not
exceed, at any time, 25,000 million euros or the
equivalent thereof in another currency. In the case of
notes and for purposes of the above-mentioned limits,
the outstanding balance of those issued in reliance on
the delegation shall be computed. In the case of
warrants, and also for the purpose of such limit, the sum
of the premiums and exercise prices of each issuance
shall be taken into account.\u00a0
Furthermore, under the aforementioned delegation
resolution, the shareholders at the Ordinary General
Shareholders\u2019 Meeting of Telef\u00f3nica, S.A. resolved to
authorize the Board of Directors to guarantee, in the
name of the Company, the issuance of the
aforementioned instruments issued by the Companies
belonging to its Group of Companies, within a maximum
period of five years as from the date of adoption of the
resolution.
Furthermore, on March 31, 2023, shareholders voted to
authorize the acquisition by the Board of Directors of
Telef\u00f3nica, S.A. treasury shares, up to the limits and
pursuant to the terms and conditions established at the
Shareholders\u2019 Meeting, within a maximum five-year
period from that date. However, it specified that in no
circumstances could the par value of the shares
acquired, added to that of the treasury shares already
held by Telef\u00f3nica, S.A. and by any of its controlled
subsidiaries, exceed the maximum legal percentage at
any time.", "dimensions": { "concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-875": { "value": "
b) Dividends
Dividends distribution in 2024
Approval was given at the General Shareholders\u2019
Meeting of April 12, 2024 to pay a dividend in cash
charge to unrestricted reserves amounting to 0.30 euros
per share payable in two tranches.
On June 20, 2024, 0.15 euros per share was paid, for a
total amount of 846 million euros, and on December 19,
2024, a second payment of 0.15 euros amounting to 847
million euros.
Dividends distribution in 2023
Approval was given at the General Shareholders\u2019
Meeting of March 31, 2023 to pay a dividend in cash
charge to unrestricted reserves, in two tranches, for an
approximate amount of 0.30 euros per share.
On June 15, 2023, 0.15 euros per share was paid, for a
total amount of 851 million euros, and on December 14,
2023, a second payment of 0.15 euros amounting to 847
million euros.
Dividends distribution in 2022
Approval was given at the General Shareholders\u2019
Meeting of April 8 2022 to pay a dividend in two
tranches for an approximately amount of 0.30 euros per
share.
On June 22, 2022, took place the payment of a scrip
dividend of approximately 0.15 euros per share
consisting of the assignment of free allotment rights with
an irrevocable purchase commitment by the Company,
after the adoption of the corresponding corporate
resolutions.
At its meeting held on May 25, 2022, the Executive
Commission of Telef\u00f3nica, S.A. Board of Directors
agreed to carry out the execution of the increase in
paid-up capital, related to the shareholders
compensation by means of a scrip dividend. Thus, each
shareholder received one free allotment right for each
Telef\u00f3nica share held. Such free allotment rights were
traded on the Continuous Market in Spain during a
period of 15 calendar days. Once this trading period
ended, the shareholders of 25.54% of the free-of-charge
allotment rights accepted the irrevocable purchase
commitment assumed by Telef\u00f3nica, S.A. The payment
was made on June 16, 2022. The gross impact of this
dividend amounted to 213 million euros.
On the other hand, the shareholders of 74.46% of the
free-of-charge allotment rights were entitled, therefore,
to receive new shares of Telef\u00f3nica, S.A. So the final
number of shares issued after June 24, 2022 in the
capital increase was 135,464,591 shares with a nominal
value of 1 euro each.
On December 15, 2022 took place the payment of a
dividend of 0.15 euros per share amounting to 854
million euros.
Proposed distribution of results of the parent
company
Telef\u00f3nica, S.A. generated 563 million euros of profits in
2024.
The Company\u2019s Board of Directors will submit the
following proposed distribution of 2024 results for
approval at the Shareholders\u2019 Meeting:
Millions of euros
Legal reserve
\u2014
Unrestricted reserves
563
Total
563
", "dimensions": { "concept": "ifrs-full:DisclosureOfDividendsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-876": { "value": "
d) Legal reserve
According to the article 274 of the consolidated text of
the Spanish Corporate Enterprises Act, companies must
transfer 10% of profit for the year to a legal reserve until
this reserve reaches at least 20% of share capital. The
legal reserve can be used to increase capital by the
amount exceeding 10% of the increased share capital
amount. Except for this purpose, until the legal reserve
exceeds the limit of 20% of share capital, it can only be
used to offset losses, if there are no other reserves
available.The General Shareholders' Meeting held on
April 12, 2024, approved the allocation of 91 million euros
to legal reserves against the results of the 2023 year. At
of December 31, 2024 the legal reserve amounts to 1,150
million euros representing 20.28% of the share capital at
the date.
e) Retained earnings
These reserves include undistributed profits of
companies constituting the consolidated Group minus
interim dividends paid against profit for the year,
actuarial gains and losses, the impact of the asset ceiling
on defined benefit plans and the payment of coupons
related to subordinated securities, if applicable.
These reserves also include revaluation reserves and the
reserve for canceled share capital. These reserves are
regulated by some restrictions for their distribution.
Revaluation reserves
The balance of Revaluation reserves arose as a result of
the revaluation made pursuant to Spanish Royal Decree-
Law 7/1996 of June 7, and may be used, free of tax, to
offset any losses incurred in the future and to increase
capital. It may also be allocated to unrestricted reserves,
provided that the capital gain has been realized.
The capital gain will be deemed to have been realized in
respect of the portion on which the depreciation was
recorded for accounting purposes or when the revalued
assets were transferred or recognized. In this respect, 2
million euros were reclassified to \u201cRetained earnings\u201d in
2024 (3 million euros in 2023) corresponding to
revaluation reserves subsequently considered to be
unrestricted. At December\u00a031, 2024, this reserve
amounted to 49 million euros ( 51 million euros at
December\u00a031, 2023).
Reserve for canceled share capital
In accordance with Section 335.c) of the Spanish
Corporate Enterprises Act and to render null and void
the right of opposition provided for in Section 334 of the
same Act, whenever the Company decreases capital, it
should record a reserve for canceled share capital for an
amount equal to the par value of the canceled shares,
which can only be used upon satisfaction of the same
requirements as those applicable to the reduction of
share capital. In 2024 was recorded in this account 80
million euros (25 million euros in 2023). The cumulative
amount as of December 31, 2024 is 1,059 million euros.
f) Translation differences
The breakdown of the accumulated contribution of
translation differences attributable to equity holders of
the parent at December 31 is as follows:
Millions of euros
2024
2023
2022
Brazilian real
(15,786)
(13,612)
(14,031)
Pound sterling
309
(97)
(322)
Venezuelan bolivar
(3,253)
(3,686)
(3,734)
Argentine peso
(1,112)
(2,011)
(1,364)
Other currencies
(1,437)
(1,280)
(1,272)
Total Group
(21,279)
(20,686)
(20,723)
The accumulated negative translation differences
corresponding to Telef\u00f3nica M\u00f3viles Argentina, S.A. (see
Note 31) amounted to 1,107 million euros as of December
31, 2024 (2,006 million euros as of December 31, 2023).
g) Adjustment on initial application
of IAS 21
The early adoption of the amendments to IAS 21
following its approval by the European Union in
November 2024 (see Note 3) has had a negative impact
on retained earnings amounting to 224 million euros and
a positive impact on translation differences amounting
to 366 million. The impact on the Group's Equity
amounted to 142 million euros.
", "dimensions": { "concept": "ifrs-full:DisclosureOfReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-877": { "value": "
h) Treasury share instruments
Telef\u00f3nica, S.A. held the following treasury shares at
December\u00a031, 2024, 2023 and 2022 :
Euros per share
Number of
shares
Acquisition price
Trading price
Market value(*)
%
Treasury shares at 12/31/2024
26,874,751
3.97
3.94
106
0.474%
Treasury shares at 12/31/2023
111,099,480
3.87
3.53
393
1.932%
Treasury shares at 12/31/2022
85,217,621
4.00
3.39
288
1.476%
(*) Millions of euros.
The following transactions involving treasury shares
were carried out in 2024, 2023 and 2022:
Number of shares
Treasury shares at 12/31/2021
139,329,370
Acquisitions
90,403,530
Scrip dividend
563,415
Employee share option plan
(5,391,956)
Capital reduction
(139,275,057)
Sales
(411,681)
Treasury shares at 12/31/2022
85,217,621
Acquisitions
60,070,274
Employee share option plan
(8,845,558)
Capital reduction
(24,779,409)
Sales
(563,448)
Treasury shares at 12/31/2023
111,099,480
Acquisitions
36,525,204
Employee share option plan
(19,909,898)
Capital reduction
(80,296,591)
Sales
(20,543,444)
Treasury shares at 12/31/2024
26,874,751
There were treasury shares purchases in 2024
amounting to 145 million euros (223 and 365 million
euros in 2023 and 2022, respectively)
The Company also has different derivative instruments,
to be settled by offset, on a nominal value equivalent to
173 million of Telef\u00f3nica shares, mainly contracted
through Banco Bilbao Vizcaya, recorded in the
statement of financial position at December 31, 2024 in
accordance with their maturity date and fair value (193
million euros at December 31, 2023).", "dimensions": { "concept": "ifrs-full:DisclosureOfTreasurySharesExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-878": { "value": "
i) Equity attributable to non-
controlling interests
\u201cEquity attributable to non-controlling interests\u201d
represents the share of non-controlling interests in the
equity and income or loss for the year of fully
consolidated Group companies. The movements in this
balance for the 2024 , 2023 and 2022 consolidated
statements of financial position are as follows:
Millions of euros
Balance
at
12/31/23
Sales of
non-
controlling
interests
and
inclusion of
companies
Acquisitions
of non-
controlling
interests and
exclusion of
companies
Dividends
paid
Profit/
(loss) for
the year
Change in
translation
differences
Other
movements
Balance
at
12/31/24
Telef\u00f4nica Brasil, S.A.
3,546
\u2014
(346)
(125)
226
(481)
14
2,834
Telef\u00f3nica Deutschland Holding, A.G.
1,286
\u2014
(1,057)
(17)
10
\u2014
2
224
Colombia Telecomunicaciones, S.A., ESP
BIC
362
\u2014
\u2014
\u2014
(25)
(32)
(8)
297
Other
50
\u2014
(47)
(3)
47
7
(7)
47
Total
5,244
\u2014
(1,450)
(145)
258
(506)
1
3,402
Millions of euros
Balance
at
12/31/22
Sales of
non-
controlling
interests
and
inclusion of
companies
Acquisitions
of non-
controlling
interests and
exclusion of
companies
Dividends
paid
Profit/
(loss) for
the year
Change in
translation
differences
Other
movements
Balance
at
12/31/23
Telef\u00f4nica Brasil, S.A.
3,399
\u2014
(111)
(158)
238
182
(4)
3,546
Telef\u00f3nica Deutschland Holding, A.G.
2,237
\u2014
(866)
(157)
71
\u2014
1
1,286
Colombia Telecomunicaciones, S.A., ESP
BIC
344
\u2014
\u2014
\u2014
(44)
70
(8)
362
Telxius Telecom, S.A.
599
\u2014
(585)
(28)
22
(19)
11
\u2014
Other
41
\u2014
(17)
(2)
31
\u2014
(3)
50
Total
6,620
\u2014
(1,579)
(345)
318
233
(3)
5,244
Millions of euros
Balance
at
12/31/21
Sales of
non-
controlling
interests
and
inclusion of
companies
Acquisitions
of non-
controlling
interests and
exclusion of
companies
Dividends
paid
Profit/
(loss) for
the year
Change in
translation
differences
Other
movements
Balance
at
12/31/22
Telef\u00f4nica Brasil, S.A.
3,106
\u2014
(86)
(241)
198
425
(3)
3,399
Telef\u00f3nica Deutschland Holding, A.G.
2,353
\u2014
(48)
(161)
68
\u2014
25
2,237
Colombia Telecomunicaciones, S.A., ESP
BIC
409
\u2014
\u2014
(7)
(4)
(47)
(7)
344
Telxius Telecom, S.A.
546
\u2014
\u2014
\u2014
50
13
(10)
599
Other
63
23
(44)
(2)
(4)
2
3
41
Total
6,477
23
(178)
(411)
308
393
8
6,620
2024
The 2024 movement mainly includes the impact of the
closing of the acquisition of Telef\u00f3nica Deutschland
shares associated with the Public Offering, as well as the
purchase of its own shares by Telef\u00f4nica Brasil.
Public Offers for the Acquisition of Shares of
Telef\u00f3nica Deutschland
On November 7, 2023, Telef\u00f3nica, through its subsidiary
Telef\u00f3nica Local Services GmbH, launched a partial
voluntary public offer for the acquisition of shares of
Telef\u00f3nica Deutschland Holding AG. The Offer
acceptance period began on December 5, 2023 and
ended on January 17, 2024.
On March 20, 2024 a public exclusion offer was
launched with the objective of acquiring the shares of
Telef\u00f3nica Deutschland that at that time were not
directly or indirectly owned by Telef\u00f3nica.
The cash outflow in 2024 of the purchases made has
amounted to 1,019 million euros (see Note 28).
In 2024 these operations produced an increase of 28
million euros in the equity attributed to the parent
company and a decrease of 1,057 million euros in the
equity attributed to minority interests (see Note 2).
2023
The 2023 movement mainly includes the impact of the
acquisition of KKR's stake in Telxius and the acquisition
by Telef\u00f3nica of shares of Telef\u00f3nica Deutschland
through a public tender Offer.
Acquisition of KKR's percentage stake in Telxius
In January 2023, once the corresponding regulatory and
competition approvals were obtained, Pontel
Participaciones, S.L. (\"Pontel\"), Telef\u00f3nica\u2019s subsidiary
held 83.35%\u00a0 by Telef\u00f3nica and 16.65% by Pontegadea
Inversiones, S.L., (\"Pontegadea\") acquired 40% of the
share capital of Telxius Telecom, S.A. from Taurus Bidco
S.\u00e0 r.l. (a company managed by KKR). As a result of the
transaction, Pontel, which held the remaining 60% of
Telxius Telecom, S.A.'s share capital, became the sole
shareholder of Telxius Telecom, S.A. Likewise,
Pontegadea increased its holding in Pontel to 30% and
Telef\u00f3nica kept a 70% stake.
Within the framework of this transaction and on the
same date, Pontel carried out a capital increase fully
subscribed and paid up by its shareholders in the
proportion agreed between them, in such a way that
both Telef\u00f3nica and Pontegadea paid out 111 million
euros.
Additionally, in January 2023 Telxius recovered the
credit amounting 876 million euros corresponding to the
income tax for the 2021 fiscal year. The amount was
distributed to its shareholders, with KKR receiving 351
million euros for 40% and Pontegadea receiving 88
million euros for 9.99% .
Subsequently, with effect from March 24, 2023, Telxius
Telecom, S.A. absorbed Pontel Participaciones, S.L.
The impact of these transactions on the consolidated
statement of changes in equity in 2023 was a reduction
in equity attributable to the parent company for an
amount of 46 million euros and a reduction in equity
attributable to minority interests for an amount of 585
million euros.
Public Offer for the Acquisition of Shares of
Telef\u00f3nica Deutschland
The cash outflow in 2023 of the direct purchases made
in the fiscal year amounted to 816 million euros (see
Notes 2 and 28).
2022
In 2022, \"sales of non-controlling interest and inclusion
of companies\" reflected the impact of the acquisition by
the consortion formed by CAA and Vauban of 45% of the
company Bluevia for 23 million euros (see Note 2).
Note 4 contains the revenues, EBITDA, Operating
income, capital expenditure and the main items of the
statement of financial position for the main segments of
the Telef\u00f3nica Group with non-controlling interests,
namely Telef\u00f3nica Brazil and Telef\u00f3nica Germany. The
detail of these figures for Colombia Telecomunicaciones
is as follows:
Millions of euros
Colombia Telecomunicaciones
2024
2023
2022
Revenues
1,449
1,497
1,517
EBITDA
391
359
569
Depreciation and amortization
(236)
(295)
(308)
Operating income
155
64
261
Capital Expenditure
201
125
261
Fixed Assets
1,215
1,234
1,116
Total allocated assets
2,921
2,936
2,696
Total allocated liabilities
2,395
2,258
2,001
The statements of cash flows of these companies are as follows:
Millions of euros
Telef\u00f3nica Brazil
2024
2023
2022
Net cash flow provided by operating activities
3,644
3,710
3,678
Net cash flow used in investing activities
(1,529)
(1,477)
(2,741)
Net cash flow used in financing activities
(1,557)
(1,709)
(1,674)
Millions of euros
Telef\u00f3nica Germany
2024
2023
2022
Net cash flow provided by operating activities
2,774
2,684
2,732
Net cash flow used in investing activities
(1,334)
(1,337)
(1,608)
Net cash flow used in financing activities
(1,586)
(1,498)
(1,339)
Millions of euros
Colombia Telecomunicaciones
2024
2023
2022
Net cash flow provided by operating activities
219
206
180
Net cash flow provided by (used in) investing activities
(101)
(144)
30
Net cash flow used in financing activities
(58)
(80)
(225)
", "dimensions": { "concept": "ifrs-full:DisclosureOfNoncontrollingInterestsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-879": { "value": "
Note 18. Financial liabilities
The breakdown of financial liabilities at December\u00a031,
2024 and the corresponding maturities schedule is as
follows:
Millions of euros
Current
Non-current
Maturity
2025
2026
2027
2028
2029
Subse-
quent
years
Non-
current
total
Total
Debentures and bonds
3,559
2,046
4,019
2,006
2,422
17,203
27,696
31,255
Promissory notes & commercial
paper
1,276
12
3
19
10
129
173
1,449
Total Issues
4,835
2,058
4,022
2,025
2,432
17,332
27,869
32,704
Loans and other payables
556
389
643
277
565
1,584
3,458
4,014
Derivative instruments (Note 19)
199
160
562
376
283
484
1,865
2,064
Total
5,590
2,607
5,227
2,678
3,280
19,400
33,192
38,782
The estimate of future payments for interest on these
financial liabilities at December 31, 2024 is as follows:
1,308 million euros in 2025, 1,187 million euros in 2026 ,
1,045 million euros in 2027, 979 million euros in 2028 , 888
million euros in 2029 and 6,932 million euros after 2029.
For floating rate financing, the Group mainly estimates
future interest using the forward curve of the various
currencies as of December 31, 2024.
Derivative instruments in the table above include the fair
value of derivatives classified as financial liabilities, i.e.
when they have a negative mark-to-market, yet
excluding the fair value of derivatives classified as
current financial assets (461 million euros, see Note 15)
and non-current financial assets ( 2,605 million euros,
see Note 12).
The heading \u201cFinanced operating payments and
investments in property, plant and equipment and
intangible assets payments\u201d, in the \u201cNet cash used in
financing activities\u201d flow of the consolidated statement
of cash flows (see Note 28) amounted to 222 million
euros corresponding mainly to financed spectrum
licenses ( 245 million euros in 2023 corresponding in its
totality to financed spectrum licenses).
The composition of the financial liabilities by category at
December\u00a031, 2024 and 2023 is as follows:
December 31, 2024
Fair value through profit
or loss
Measurement hierarchy
Millions of euros
Held for
trading
Fair value
option
Hedges
Level 1
(Quoted
prices)
Level 2
(Other
directly
observable
market
inputs)
Level 3
(Inputs not
based on
observable
market
data)
Liabilities at
amortized
cost
Total
carrying
amount
Total fair
value
Issues
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
32,704
32,704
31,638
Loans and other
payables
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
4,014
4,014
4,016
Derivative instruments
471
\u2014
1,593
\u2014
2,064
\u2014
\u2014
2,064
2,064
Total financial
liabilities
471
\u2014
1,593
\u2014
2,064
\u2014
36,718
38,782
37,718
December 31, 2023
Fair value through profit
or loss
Measurement hierarchy
Millions of euros
Held for
trading
Fair value
option
Hedges
Level 1
(Quoted
prices)
Level 2
(Other
directly
observable
market
inputs)
Level 3
(Inputs not
based on
observable
market
data)
Liabilities at
amortized
cost
Total
carrying
amount
Total fair
value
Issues
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
31,567
31,567
30,498
Loans and other
payables
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
3,601
3,601
3,602
Derivative instruments
582
\u2014
1,311
\u2014
1,893
\u2014
\u2014
1,893
1,893
Total financial
liabilities
582
\u2014
1,311
\u2014
1,893
\u2014
35,168
37,061
35,993
The calculation of the fair values of the Telef\u00f3nica
Group\u2019s debt instruments required an estimate of the
credit spread curve for each currency and
corresponding subsidiary using the prices of the Group\u2019s
bonds and credit derivatives.
At December 31, 2024, some of the financing arranged
by Telef\u00f3nica Group companies in Latin America (435
million euros in Peru), which amounted to approximately
1% of the Telef\u00f3nica Group\u2019s gross debt, was subject to
compliance with certain financial covenants. To date,
these covenants are being met and have no impact on
the debt of the Telef\u00f3nica Group companies. Due to the
absence of cross-defaults, breach of the covenants
would not affect the debt at Telef\u00f3nica, S.A. level.
Some of the financial liabilities of Telef\u00f3nica Group
includes adjustments in the amortized cost at December
31, 2024 and 2023 as a result of fair value interest rate
and exchange rate hedges.
Issues, promissory notes,
commercial paper, loans and other
payables
The movement in issues, promissory notes, commercial
paper, loans and other payables in 2024 and 2023
arising from financial activities is as follows:
Cash used in financing
activities
Millions of euros
Balance at
12/31/2023
Cash received
Cash paid
Translation
differences
and exchange
gains and
losses
Financial
updates
Other
movements
Balance at
12/31/2024
Issues
30,198
1,787
(1,140)
589
(109)
(70)
31,255
Promissory notes and
commercial paper
1,369
478
(409)
1
\u2014
10
1,449
Loans and other
payables
3,601
897
(694)
(54)
\u2014
264
4,014
Cash used in financing
activities
Millions of euros
Balance at
12/31/2022
Cash received
Cash paid
Translation
differences
and exchange
gains and
losses
Financial
updates
Other
movements
Balance at
12/31/2023
Issues
31,268
967
(1,910)
(302)
175
\u2014
30,198
Promissory notes
and commercial
paper
899
504
(43)
\u2014
\u2014
9
1,369
Loans and other
payables
4,544
1,183
(1,456)
26
1
(697)
3,601
Debentures and bonds
Financial updates of debenture and bond issues include
mainly the value adjustment of the basis adjustment
bonds due to their fair value hedges, impacted by
interest rate movements.
At December\u00a031, 2024, the nominal amount of
outstanding debentures and bonds issues was 30,979
million euros (29,779 million euros at December\u00a031,
2023 ). Appendix III presents the characteristics of all
outstanding debentures and bond issues at the year-
end 2024 , and the significant issues made during the
year.
Telef\u00f3nica, S.A. has a full and unconditional guarantee
on issues made by Telef\u00f3nica Emisiones, S.A.U., and
Telef\u00f3nica Europe, B.V., both of which are wholly owned
finance subsidiaries of Telef\u00f3nica, S.A. No other
subsidiaries of Telef\u00f3nica, S.A. provide guarantees on
these issues.
Promissory notes and commercial paper
The main programs for issuance of promissory notes and
commercial paper are the following:
\u2022 At December\u00a031, 2024, Telef\u00f3nica Europe, B.V. had a
commercial paper issuance program guaranteed by
Telef\u00f3nica, S.A. for up to 5,000 million euros. The
outstanding balance of commercial paper issued
under this program at December\u00a031, 2024 was 1,165
million euros, issued at an average interest rate of
3.76% for 2024 (1,000 million euros issued in 2023 at
an average rate of 3.65% ).
\u2022 At December\u00a031, 2024, Telef\u00f3nica, S.A. had a corporate
promissory note program for 500 million euros
expandable to 2,000 million euros, with 35 million
euros of outstanding balance at December 31, 2024,
issued at an average interest rate of 3.65% for 2024
(no outstanding balance at December 31, 2023).
Interest-bearing debt
Other movements in \"Loans and other payables\" at
December 31, 2024 include collections and payments
related to collateral liabilities deposit associated with
Telef\u00f3nica, S.A. debt for a net amount of payments
amounting to 123 million euros (589 million euros for a
net amount of proceeds at December 31, 2023).
The average interest rate on outstanding loans and
other payables at December\u00a031, 2024 was 4.71% (4.47%
in 2023 ). This percentage does not include the impact
of hedges arranged by the Group.
The main financing transactions included under
\u201cInterest-bearing debt\u201d line outstanding at
December\u00a031, 2024 and 2023 and their nominal
amounts are provided in Appendix V.
Interest-bearing debt arranged or repaid in 2024 mainly
includes the following:
Description
Limit
12/31/2024\u00a0
(*) (million
euros)
Currency
Outstanding
balance
12/31/2024
(million euros)
Arrangement
date
Maturity date
Drawndown
2024
(million
euros)
Repayment
2024
(million euros)
Telef\u00f3nica, S.A.
Sustainability syndicated (1)
5,500
EUR
\u2014
03/15/2018
01/13/2029
\u2014
\u2014
Bilateral loan
\u2014
EUR
150
03/27/2024
07/31/2034
150
\u2014
Bilateral loan
\u2014
EUR
140
10/09/2024
10/31/2031
140
\u2014
Bilateral loan
\u2014
EUR
100
11/21/2024
12/16/2031
100
\u2014
Bluevia Fibra S.L.U.
Syndicated (2)
360
EUR
325
11/16/2022
12/20/2029
75
\u2014
Telxius Telecom, S.A.
Syndicated (3)
145
EUR
100
12/01/2023
12/04/2029
\u2014
\u2014
(1) The second one-year extension option for the Telef\u00f3nica, S.A. sustainability-linked syndicated credit facility for up to 5,500 million euros, was executed on
January 13, 2024, extending the maturity date to January 13, 2029.
(2) The second one-year extension option of the Bluev\u00eda Fibra S.L.U syndicated facility, for 360 million euros, was executed on December 20, 2024, with a
maturity extending the maturity date to December 20, 2029.
(3) On December 4, 2024, the first one-year extension option of the Telxius Telecom, S.A, syndicated facility, for 145 million euros, was executed extending the
maturity date to December 4, 2029. The facility has two annual extension options at Telxius Telecom, S.A. request with a maturity maximum up to 2030.
(*) Undrawn limit.
At December\u00a031, 2024 , the Telef\u00f3nica Group presented
availabilities of financing from different sources that
amounted to approximately 11,017 million euros (11,315
million euros at December\u00a031, 2023), of which 10,634
million euros will mature in more than twelve months.
Within these availabilities of financing, 10,593 million
euros are included, whose interests are linked to the
fulfillment of sustainability objectives. Of these, 4,343
million euros correspond to committed lines and
bilateral financing, 750 million euros correspond to the
sustainable syndicated loan of Telef\u00f3nica Germany
GmbH & Co. OHG (see Annex V) and 5,500 million
euros correspond to the sustainable syndicated loan of
Telef\u00f3nica, S.A. (see Note 29.d).
Loans by currency
The breakdown of \u201cLoans and other payables\u201d line by
currency at December\u00a031, 2024 and 2023, and the
equivalent value of foreign-currency loans in euros, is as
follows:
Outstanding balance (in millions)
Local Currency
Euros
Currency
12/31/2024
12/31/2023
12/31/2024
12/31/2023
Euro
2,685
2,266
2,685
2,266
U.S. dollar
393
389
378
352
Brazilian real
306
119
48
22
Colombian peso
1,794,020
1,402,872
391
332
Mexican peso
776
2,716
36
145
Uruguayan peso
2,905
5,455
63
126
Chilean Peso
310,338
247,252
300
255
Other currencies
113
103
Total Group
4,014
3,601
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-880": { "value": "
Millions of euros
Current
Non-current
Maturity
2025
2026
2027
2028
2029
Subse-
quent
years
Non-
current
total
Total
Debentures and bonds
3,559
2,046
4,019
2,006
2,422
17,203
27,696
31,255
Promissory notes & commercial
paper
1,276
12
3
19
10
129
173
1,449
Total Issues
4,835
2,058
4,022
2,025
2,432
17,332
27,869
32,704
Loans and other payables
556
389
643
277
565
1,584
3,458
4,014
Derivative instruments (Note 19)
199
160
562
376
283
484
1,865
2,064
Total
5,590
2,607
5,227
2,678
3,280
19,400
33,192
38,782
Issues, promissory notes,
commercial paper, loans and other
payables
The movement in issues, promissory notes, commercial
paper, loans and other payables in 2024 and 2023
arising from financial activities is as follows:
Cash used in financing
activities
Millions of euros
Balance at
12/31/2023
Cash received
Cash paid
Translation
differences
and exchange
gains and
losses
Financial
updates
Other
movements
Balance at
12/31/2024
Issues
30,198
1,787
(1,140)
589
(109)
(70)
31,255
Promissory notes and
commercial paper
1,369
478
(409)
1
\u2014
10
1,449
Loans and other
payables
3,601
897
(694)
(54)
\u2014
264
4,014
Cash used in financing
activities
Millions of euros
Balance at
12/31/2022
Cash received
Cash paid
Translation
differences
and exchange
gains and
losses
Financial
updates
Other
movements
Balance at
12/31/2023
Issues
31,268
967
(1,910)
(302)
175
\u2014
30,198
Promissory notes
and commercial
paper
899
504
(43)
\u2014
\u2014
9
1,369
Loans and other
payables
4,544
1,183
(1,456)
26
1
(697)
3,601
Interest-bearing debt
Other movements in \"Loans and other payables\" at
December 31, 2024 include collections and payments
related to collateral liabilities deposit associated with
Telef\u00f3nica, S.A. debt for a net amount of payments
amounting to 123 million euros (589 million euros for a
net amount of proceeds at December 31, 2023).
The average interest rate on outstanding loans and
other payables at December\u00a031, 2024 was 4.71% (4.47%
in 2023 ). This percentage does not include the impact
of hedges arranged by the Group.
The main financing transactions included under
\u201cInterest-bearing debt\u201d line outstanding at
December\u00a031, 2024 and 2023 and their nominal
amounts are provided in Appendix V.
Interest-bearing debt arranged or repaid in 2024 mainly
includes the following:
Description
Limit
12/31/2024\u00a0
(*) (million
euros)
Currency
Outstanding
balance
12/31/2024
(million euros)
Arrangement
date
Maturity date
Drawndown
2024
(million
euros)
Repayment
2024
(million euros)
Telef\u00f3nica, S.A.
Sustainability syndicated (1)
5,500
EUR
\u2014
03/15/2018
01/13/2029
\u2014
\u2014
Bilateral loan
\u2014
EUR
150
03/27/2024
07/31/2034
150
\u2014
Bilateral loan
\u2014
EUR
140
10/09/2024
10/31/2031
140
\u2014
Bilateral loan
\u2014
EUR
100
11/21/2024
12/16/2031
100
\u2014
Bluevia Fibra S.L.U.
Syndicated (2)
360
EUR
325
11/16/2022
12/20/2029
75
\u2014
Telxius Telecom, S.A.
Syndicated (3)
145
EUR
100
12/01/2023
12/04/2029
\u2014
\u2014
(1) The second one-year extension option for the Telef\u00f3nica, S.A. sustainability-linked syndicated credit facility for up to 5,500 million euros, was executed on
January 13, 2024, extending the maturity date to January 13, 2029.
(2) The second one-year extension option of the Bluev\u00eda Fibra S.L.U syndicated facility, for 360 million euros, was executed on December 20, 2024, with a
maturity extending the maturity date to December 20, 2029.
(3) On December 4, 2024, the first one-year extension option of the Telxius Telecom, S.A, syndicated facility, for 145 million euros, was executed extending the
maturity date to December 4, 2029. The facility has two annual extension options at Telxius Telecom, S.A. request with a maturity maximum up to 2030.
(*) Undrawn limit.
At December\u00a031, 2024 , the Telef\u00f3nica Group presented
availabilities of financing from different sources that
amounted to approximately 11,017 million euros (11,315
million euros at December\u00a031, 2023), of which 10,634
million euros will mature in more than twelve months.
Within these availabilities of financing, 10,593 million
euros are included, whose interests are linked to the
fulfillment of sustainability objectives. Of these, 4,343
million euros correspond to committed lines and
bilateral financing, 750 million euros correspond to the
sustainable syndicated loan of Telef\u00f3nica Germany
GmbH & Co. OHG (see Annex V) and 5,500 million
euros correspond to the sustainable syndicated loan of
Telef\u00f3nica, S.A. (see Note 29.d).
Loans by currency
The breakdown of \u201cLoans and other payables\u201d line by
currency at December\u00a031, 2024 and 2023, and the
equivalent value of foreign-currency loans in euros, is as
follows:
Outstanding balance (in millions)
Local Currency
Euros
Currency
12/31/2024
12/31/2023
12/31/2024
12/31/2023
Euro
2,685
2,266
2,685
2,266
U.S. dollar
393
389
378
352
Brazilian real
306
119
48
22
Colombian peso
1,794,020
1,402,872
391
332
Mexican peso
776
2,716
36
145
Uruguayan peso
2,905
5,455
63
126
Chilean Peso
310,338
247,252
300
255
Other currencies
113
103
Total Group
4,014
3,601
Appendix V: Interest-bearing debt
The main financing transactions at December 31, 2024
and 2023 and their nominal amounts are as follows:
Outstanding principal balance
(millions of euros)
Descriptive name summary
Current
limit\u00a0
(millions)
Currency
12/31/2024
12/31/2023
Arrangement
date
Maturity date
Telef\u00f3nica, S.A
Structured Financing (*)
62
USD
59
136
12/11/2015
03/11/2026
Structured Financing (*)
42
EUR
42
101
12/11/2015
03/11/2026
Sustainable syndicated (1)
5,500
EUR
\u2014
\u2014
03/15/2018
01/13/2029
Bilateral loan
\u2014
EUR
150
150
09/26/2022
12/15/2032
Bilateral loan
\u2014
EUR
125
125
12/23/2022
06/15/2033
Bilateral loan
\u2014
EUR
150
150
02/14/2023
09/29/2033
Bilateral loan
\u2014
EUR
150
\u2014
03/27/2024
07/31/2034
Bilateral loan
\u2014
EUR
140
\u2014
10/09/2024
10/31/2031
Bilateral loan
\u2014
EUR
100
\u2014
11/21/2024
12/16/2031
Telef\u00f3nica Germany GmbH & Co. OHG
EIB Financing
\u2014
EUR
33
108
06/13/2016
06/13/2025
Sustainable syndicated
750
EUR
\u2014
\u2014
12/17/2019
12/17/2026
EIB Financing (Tranche 1)
\u2014
EUR
250
300
12/18/2019
06/18/2029
EIB Financing (Tranche 2)
\u2014
EUR
125
150
01/14/2020
07/14/2029
Colombia Telecomunicaciones, S.A.
E.S.P.
Bilateral loan
\u2014
COP
109
118
07/06/2021
03/19/2025
Bluevia Fibra S.L.U.
Syndicated (2)
360
EUR
325
250
11/16/2022
12/20/2029
Telxius Telecom, S.A.
Syndicated (3)
145
EUR
100
100
12/01/2023
12/04/2029
Telef\u00f3nica M\u00f3viles Chile, S.A.
Bilateral loan
\u2014
USD
125
116
08/22/2023
08/22/2026
(1) The second one-year extension option for the Telef\u00f3nica, S.A. sustainability-linked syndicated credit facility for up to 5,500 million euros, was executed on
January 13, 2024, extending the maturity date to January 13, 2029.
(2) The second one-year extension option of the Bluev\u00eda Fibra S.L.U syndicated facility, for 360 million euros, was executed on December 20, 2024, with a
maturity extending the maturity date to December 20, 2029.
(3) On December 4, 2024, the first one-year extension option of the Telxius Telecom, S.A, syndicated facility, for 145 million euros, was executed extending the
maturity date to December 4, 2029. The facility has two annual extension options at Telxius Telecom, S.A. request with a maturity maximum up to 2030.
(*) Facility with amortization schedule, showing in the column \"Current limit\" the undrawn amount.", "dimensions": { "concept": "ifrs-full:DisclosureOfBorrowingsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-881": { "value": "
Issues, promissory notes,
commercial paper, loans and other
payables
The movement in issues, promissory notes, commercial
paper, loans and other payables in 2024 and 2023
arising from financial activities is as follows:
Cash used in financing
activities
Millions of euros
Balance at
12/31/2023
Cash received
Cash paid
Translation
differences
and exchange
gains and
losses
Financial
updates
Other
movements
Balance at
12/31/2024
Issues
30,198
1,787
(1,140)
589
(109)
(70)
31,255
Promissory notes and
commercial paper
1,369
478
(409)
1
\u2014
10
1,449
Loans and other
payables
3,601
897
(694)
(54)
\u2014
264
4,014
Cash used in financing
activities
Millions of euros
Balance at
12/31/2022
Cash received
Cash paid
Translation
differences
and exchange
gains and
losses
Financial
updates
Other
movements
Balance at
12/31/2023
Issues
31,268
967
(1,910)
(302)
175
\u2014
30,198
Promissory notes
and commercial
paper
899
504
(43)
\u2014
\u2014
9
1,369
Loans and other
payables
4,544
1,183
(1,456)
26
1
(697)
3,601
Interest-bearing debt
Other movements in \"Loans and other payables\" at
December 31, 2024 include collections and payments
related to collateral liabilities deposit associated with
Telef\u00f3nica, S.A. debt for a net amount of payments
amounting to 123 million euros (589 million euros for a
net amount of proceeds at December 31, 2023).
The average interest rate on outstanding loans and
other payables at December\u00a031, 2024 was 4.71% (4.47%
in 2023 ). This percentage does not include the impact
of hedges arranged by the Group.
The main financing transactions included under
\u201cInterest-bearing debt\u201d line outstanding at
December\u00a031, 2024 and 2023 and their nominal
amounts are provided in Appendix V.
Interest-bearing debt arranged or repaid in 2024 mainly
includes the following:
Description
Limit
12/31/2024\u00a0
(*) (million
euros)
Currency
Outstanding
balance
12/31/2024
(million euros)
Arrangement
date
Maturity date
Drawndown
2024
(million
euros)
Repayment
2024
(million euros)
Telef\u00f3nica, S.A.
Sustainability syndicated (1)
5,500
EUR
\u2014
03/15/2018
01/13/2029
\u2014
\u2014
Bilateral loan
\u2014
EUR
150
03/27/2024
07/31/2034
150
\u2014
Bilateral loan
\u2014
EUR
140
10/09/2024
10/31/2031
140
\u2014
Bilateral loan
\u2014
EUR
100
11/21/2024
12/16/2031
100
\u2014
Bluevia Fibra S.L.U.
Syndicated (2)
360
EUR
325
11/16/2022
12/20/2029
75
\u2014
Telxius Telecom, S.A.
Syndicated (3)
145
EUR
100
12/01/2023
12/04/2029
\u2014
\u2014
(1) The second one-year extension option for the Telef\u00f3nica, S.A. sustainability-linked syndicated credit facility for up to 5,500 million euros, was executed on
January 13, 2024, extending the maturity date to January 13, 2029.
(2) The second one-year extension option of the Bluev\u00eda Fibra S.L.U syndicated facility, for 360 million euros, was executed on December 20, 2024, with a
maturity extending the maturity date to December 20, 2029.
(3) On December 4, 2024, the first one-year extension option of the Telxius Telecom, S.A, syndicated facility, for 145 million euros, was executed extending the
maturity date to December 4, 2029. The facility has two annual extension options at Telxius Telecom, S.A. request with a maturity maximum up to 2030.
(*) Undrawn limit.
At December\u00a031, 2024 , the Telef\u00f3nica Group presented
availabilities of financing from different sources that
amounted to approximately 11,017 million euros (11,315
million euros at December\u00a031, 2023), of which 10,634
million euros will mature in more than twelve months.
Within these availabilities of financing, 10,593 million
euros are included, whose interests are linked to the
fulfillment of sustainability objectives. Of these, 4,343
million euros correspond to committed lines and
bilateral financing, 750 million euros correspond to the
sustainable syndicated loan of Telef\u00f3nica Germany
GmbH & Co. OHG (see Annex V) and 5,500 million
euros correspond to the sustainable syndicated loan of
Telef\u00f3nica, S.A. (see Note 29.d).
Loans by currency
The breakdown of \u201cLoans and other payables\u201d line by
currency at December\u00a031, 2024 and 2023, and the
equivalent value of foreign-currency loans in euros, is as
follows:
Outstanding balance (in millions)
Local Currency
Euros
Currency
12/31/2024
12/31/2023
12/31/2024
12/31/2023
Euro
2,685
2,266
2,685
2,266
U.S. dollar
393
389
378
352
Brazilian real
306
119
48
22
Colombian peso
1,794,020
1,402,872
391
332
Mexican peso
776
2,716
36
145
Uruguayan peso
2,905
5,455
63
126
Chilean Peso
310,338
247,252
300
255
Other currencies
113
103
Total Group
4,014
3,601
Appendix III: Debentures and
bonds
The detail and key features of outstanding debentures and bonds at December 31, 2024 are as follows (in millions of
euros):
Maturity (nominal)
Debentures and bonds
Currency
% Interest
rate
2025
2026
2027
2028
2029
Subsequent
years
Total
T. EUROPE BV SEP_00 BOND GLOBAL D
USD
8.250%
\u2014
\u2014
\u2014
\u2014
\u2014
1,203
1,203
TEBV FEB_03 EMTN FIXED TRANCHE B
EUR
5.875%
\u2014
\u2014
\u2014
\u2014
\u2014
500
500
Telef\u00f3nica Europe, B.V.
\u2014
\u2014
\u2014
\u2014
\u2014
1,703
1,703
TELEF. EMISIONES JANUARY 2017
EUR
1.528%
1,127
\u2014
\u2014
\u2014
\u2014
\u2014
1,127
TELEF. EMISIONES SEPTEMBER 2018
EUR
1.495%
892
\u2014
\u2014
\u2014
\u2014
\u2014
892
EMTN 02 GBP
GBP
5.375%
\u2014
603
\u2014
\u2014
\u2014
\u2014
603
TELEF. EMISIONES APRIL 2016
EUR
1.460%
\u2014
1,279
\u2014
\u2014
\u2014
\u2014
1,279
TELEF. EMISIONES JANUARY 2018
EUR
1.447%
\u2014
\u2014
1,000
\u2014
\u2014
\u2014
1,000
TELEF. EMISIONES MARCH 2017
USD
4.103%
\u2014
\u2014
1,202
\u2014
\u2014
\u2014
1,202
TELEF. EMISIONES MAY 2020
EUR
1.201%
\u2014
\u2014
1,250
\u2014
\u2014
\u2014
1,250
TELEF. EMISIONES JANUARY 2017
EUR
2.318%
\u2014
\u2014
\u2014
500
\u2014
\u2014
500
TELEF. EMISIONES SEPTEMBER 2017
EUR
1.715%
\u2014
\u2014
\u2014
1,250
\u2014
\u2014
1,250
TELEF. EMISIONES MARCH 2017
EUR
2.318%
\u2014
\u2014
\u2014
200
\u2014
\u2014
200
TELEF. EMISIONES MARCH 2019
EUR
1.788%
\u2014
\u2014
\u2014
\u2014
1,000
\u2014
1,000
EMTN GBP 10/08/2029 400 GBP
GBP
5.445%
\u2014
\u2014
\u2014
\u2014
482
\u2014
482
TELEF. EMISIONES OCTOBER 2014
EUR
2.932%
\u2014
\u2014
\u2014
\u2014
800
\u2014
800
TELEF. EMISIONES FEBRUARY 2020
EUR
0.664%
\u2014
\u2014
\u2014
\u2014
\u2014
1,000
1,000
TELEF. EMISIONES MAY 2022 (2)
EUR
2.592%
\u2014
\u2014
\u2014
\u2014
\u2014
1,000
1,000
TELEF. EMISIONES OCTOBER 2016
EUR
1.930%
\u2014
\u2014
\u2014
\u2014
\u2014
750
750
TELEF. EMISIONES MAY 2020
EUR
1.807%
\u2014
\u2014
\u2014
\u2014
\u2014
750
750
TELEF. EMISIONES JUNE 06 TRANCHE D
USD
7.045%
\u2014
\u2014
\u2014
\u2014
\u2014
1,924
1,924
TELEF. EMISIONES APRIL 2017
USD
4.900%
\u2014
\u2014
\u2014
\u2014
\u2014
192
192
TELEF. EMISIONES MARCH 2018
USD
4.665%
\u2014
\u2014
\u2014
\u2014
\u2014
481
481
TELEF. EMISIONES JULY 2019
EUR
1.957%
\u2014
\u2014
\u2014
\u2014
\u2014
500
500
TELEF. EMISIONES JULY 2020
EUR
1.864%
\u2014
\u2014
\u2014
\u2014
\u2014
500
500
TELEF. EMISIONES APRIL 2022
EUR
1.864%
\u2014
\u2014
\u2014
\u2014
\u2014
100
100
TELEF. EMISIONES MARCH 2017
USD
5.213%
\u2014
\u2014
\u2014
\u2014
\u2014
1,924
1,924
TELEF. EMISIONES APRIL 2017
USD
5.213%
\u2014
\u2014
\u2014
\u2014
\u2014
481
481
TELEF. EMISIONES MARCH 2018
USD
4.895%
\u2014
\u2014
\u2014
\u2014
\u2014
1,203
1,203
TELEF. EMISIONES MARCH 2019
USD
5.520%
\u2014
\u2014
\u2014
\u2014
\u2014
1,203
1,203
TELEF. EMISIONES DECEMBER 2016
EUR
4.000%
\u2014
\u2014
\u2014
\u2014
\u2014
150
150
TELEF. EMISIONES NOVEMBER 2023 (1)
EUR
4.183%
\u2014
\u2014
\u2014
\u2014
\u2014
850
850
TELEF. EMISIONES JANUARY 2024 (2)
EUR
3.698%
\u2014
\u2014
\u2014
\u2014
\u2014
1,000
1,000
TELEF. EMISIONES JANUARY 2024 (2)
EUR
4.055%
\u2014
\u2014
\u2014
\u2014
\u2014
750
750
Telef\u00f3nica Emisiones, S.A.U.\u00a0
2,019
1,882
3,452
1,950
2,282
14,758
26,343
Maturity
Debentures and bonds
Currency
% Interest
rate
2025
2026
2027
2028
2029
Subsequent
years
Total
Bond O
CLP
3.500%
68
\u2014
\u2014
\u2014
\u2014
\u2014
68
Bond Q
CLP
3.600%
\u2014
87
\u2014
\u2014
\u2014
\u2014
87
Bond 144 A
USD
3.537%
\u2014
\u2014
\u2014
\u2014
\u2014
396
396
Bond Serie T
UFC
4.200%
\u2014
\u2014
\u2014
105
\u2014
\u2014
105
Bond Serie X
UFC
3.950%
\u2014
\u2014
\u2014
\u2014
37
\u2014
37
Telef\u00f3nica M\u00f3viles Chile, S.A.
68
87
\u2014
105
37
396
693
Bond T. Peru 4th Program (19th Serie A)
N. SOL
VAC +
3.6250%
\u2014
\u2014
28
\u2014
\u2014
\u2014
28
Bond T. Peru 4th Program (19th Serie B)
N. SOL
VAC +
2.8750%
\u2014
\u2014
\u2014
22
\u2014
\u2014
22
Bond T. Peru 4th Program (37th Serie A)
N. SOL
VAC +
3.1250%
\u2014
\u2014
\u2014
21
\u2014
\u2014
21
Bond T. Peru 4th Program (19th Serie C)
N. SOL
VAC +
3.1875%
\u2014
\u2014
\u2014
9
\u2014
\u2014
9
Bond T. Peru 6th Program (17th Serie A)
N. SOL
VAC +
3.0938%
\u2014
\u2014
\u2014
\u2014
\u2014
20
20
Bond T. Peru 6th Program (16th Serie A)
N. SOL
5.500%
27
\u2014
\u2014
\u2014
\u2014
\u2014
27
Bond T. Peru 1st Private Program (1st Serie
A)
N. SOL
7.281%
\u2014
20
\u2014
\u2014
\u2014
\u2014
20
Bond T. Peru 1st Program International Issue
(1sr Serie A)
N. SOL
7.375%
145
145
145
\u2014
\u2014
\u2014
435
Telef\u00f3nica del Per\u00fa, S.A.
172
165
173
52
\u2014
20
582
Debentures (2)
BRL
CDI + 1.12%
233
\u2014
\u2014
\u2014
\u2014
\u2014
233
Debentures (2)
BRL
CDI + 1.35%
\u2014
\u2014
311
\u2014
\u2014
\u2014
311
Telef\u00f4nica Brasil, S.A.
233
\u2014
311
\u2014
\u2014
\u2014
544
BOND R144-A
USD
4.950%
\u2014
\u2014
\u2014
\u2014
\u2014
481
481
Bond C10
COP
IPC + 3.39%
\u2014
\u2014
\u2014
\u2014
33
\u2014
33
Colombia Telecomunicaciones, S.A, ESP
\u2014
\u2014
\u2014
\u2014
33
481
514
Bond
EUR
1.750%
600
\u2014
\u2014
\u2014
\u2014
\u2014
600
O2 Telef\u00f3nica Deutschland
Finanzierungs, GmbH
600
\u2014
\u2014
\u2014
\u2014
\u2014
600
Total Outstanding Debentures and
Bonds
3,092
2,134
3,936
2,107
2,352
17,358
30,979
(1) Debentures and green bonds (See Note 29.d)
(2) Debentures and sustainable bonds (See Note 29.d)
The main debentures and bonds issued by the Group in 2024 are as follows:
Nominal (millions)
Item
Date
Maturity
Date
Currency
Euros
Currency of
issuance
Coupon
Telef\u00f3nica Emisiones, S.A.U.
EMTN Bond (1)
01/24/2024
01/24/2032
1,000
1,000
EUR
3.698%
EMTN Bond (1)
01/24/2024
01/24/2036
750
750
EUR
4.055%
(1) Sustainable bonds (See Note 29. d)
", "dimensions": { "concept": "ifrs-full:DisclosureOfDebtSecuritiesExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-882": { "value": "
Note 19. Derivative financial
instruments and risk
management\u00a0policies
The Telef\u00f3nica Group is exposed to various financial
market risks as a result of: (i) its ordinary business
activity, (ii) debt incurred to finance its business, (iii) its
investments in companies, and (iv) other financial
instruments related to the above commitments.
The main market risks affecting the Group companies
are as follows:
\u2022 Exchange rate risk: arises primarily from: (i)
Telef\u00f3nica\u2019s international presence, through its
investments and businesses in countries that use
currencies other than the euro (primarily in Latin
America, but also in the United Kingdom), (ii) debt
denominated in currencies other than that of the
country where the business is conducted or the home
country of the company incurring such debt , and (iii)
for those trade receivables or payables in foreign
currency related to the company with the transaction
registered.\u00a0
\u2022 Interest rate risk : arises primarily in connection with
changes in interest rates affecting: (i) financial
expenses on floating-rate debt (or short-term debt
likely to be renewed), (ii) the value of long-term
liabilities at fixed interest rates and (iii) financial
expenses and principal payments of inflation-linked
financial instruments, considering interest rate risk as
the impact of changes in inflation rates.
\u2022 Share price risk: arises primarily from changes in the
value of the equity investments (that may be bought,
sold or otherwise involved in transactions), from
changes in the value of derivatives associated with
such investments, from changes in the value of
treasury shares and from changes in the value of
equity derivatives.
\u2022 Liquidity risk: arises due to a mismatch between
financing needs (including operating and financial
expenses, investment, debt redemptions and dividend
commitments) and sources of finance (including
revenues, divestments, credit lines from financial
institutions and capital market transactions). The cost
of finance could also be affected by movements in the
credit spreads (over benchmark rates) demanded by
lenders.
\u2022 Country risk: refers to the possible decline in the
value of assets, cash flows generated or cash flows
returned to the parent company as a result of political,
economic or social instability in the countries where
the Telef\u00f3nica Group operates, especially in Latin
America.\u00a0
\u2022 Credit risk: appears when a counterparty fails to meet
or delays its payment obligations in accordance with
the agreed terms, driving an impairment in an asset
due to: (i) solvency issues, or (ii) no intention to pay.
Risk management
The Telef\u00f3nica Group actively manages these risks
through the use of derivatives (primarily on exchange
rates, interest rates, credit, share prices and
commodities) and by incurring debt in local currencies,
where appropriate, with a view to optimize the financial
cost and to stabilizing cash flows, the income statement
and investments. In this way, it attempts to protect the
Telef\u00f3nica Group\u2019s solvency, facilitate financial planning
and take advantage of investment opportunities.
The Telef\u00f3nica Group manages its exchange rate risk
and interest rate risk in terms of net financial debt
(including leases under IFRS 16) plus commitments as
calculated by the Group. The Telef\u00f3nica Group believes
that these parameters are more appropriate to
understand its debt position. Net financial debt and net
financial debt plus commitments take into account the
impact of the Group\u2019s cash balance and cash
equivalents including derivatives positions with a
positive value linked to liabilities. Neither net financial
debt nor net financial debt plus commitments as
calculated by the Telef\u00f3nica Group should be
considered as a substitute for gross financial debt (the
sum of current and non-current interest-bearing debt).
For a more detailed description on reconciliation of net
financial debt and net financial debt plus commitments
to gross financial debt, see Note 2.
Exchange rate risk
The fundamental objective of the exchange rate risk
management policy is that, in event of depreciation in
foreign currencies relative to the euro, any potential
losses in the value of the EBITDA generated by the
businesses in such currencies (caused by depreciation
in exchange rates of a foreign currency relative to the
euro) are offset (to some extent) by savings from the
reduction in the euro value of debt denominated in such
currencies. This objective is also reflected on the
decrease of the sensitivity to exchange rate variations of
the net debt to EBITDA ratio, in order to protect the
Group's solvency. The degree of exchange rate hedging
varies depending on the type of investment and may
easily and actively be adjusted. For transactions of
purchase or sale of business in currencies other than
euro, additional hedges can be made on the estimated
prices of the transactions or on estimated cash flows
and EBITDA.
At December\u00a031, 2024, the net financial debt in Latin
American currencies was equivalent to approximately
5,436 million euros (6,535 million euros in 2023 ).
However, the Latin American currencies in which this
debt is denominated is not distributed in proportion to
the EBITDA generated in each currency. The future
effectiveness of the strategy described above as an
economic hedge of exchange rate risks therefore
depends on which currencies depreciate relative to the
euro.
Telef\u00f3nica occasionally takes out dollar-denominated
debt to hedge the euro-dollar intermediate component
in the relation Euro-Latin American currencies, either in
Spain (where such debt is associated with an
investment as long as it is considered to be an effective
hedge) or in the country itself, where the market for local
currency financing or hedges may be inadequate or
non-existent. At December\u00a031, 2024 , the Telef\u00f3nica
Group\u2019s net financial debt denominated in dollars to
hedge that component was equivalent to 1166 million
euros of asset position ( 657 million euros of asset
position in 2023).
At December\u00a031, 2024, net financial debt in pounds
sterling was equivalent to 46 million euros of asset
position ( 82 million euros at December\u00a031, 2023 ). As a
consequence of setting up in June 2021 of the joint
venture VMO2, the previous objective of maintaining
debt in pounds sterling in the consolidated balance
sheet of the Group of twice EBITDA has been modified,
as a result of changing the consolidation method of UK
assets (VMO2 is accounted for under the equity
method) and incorporating VMO2 to leverage higher
than the ratio of twice Debt EBITDA. The synthetic debt
target denominated in pounds will be directly related to
the flows that are expected to be repatriated from
VMO2.
The Telef\u00f3nica Group also manages exchange rate risk
by seeking to reduce the negative impact of any
exchange rate exposure on the income statement, as a
result of transactions recognized on the statement of
financial position sheet and highly probable transactions,
regardless of whether there are open positions. Such
open position exposure can arise for any of three
reasons: (i) a thin market for local derivatives or difficulty
in sourcing local currency finance which makes it
impossible to arrange a low-cost hedge (as in Argentina
and Venezuela), (ii) financing through intra-group loans,
where the accounting treatment of exchange rate risk is
different from that for financing through capital
contributions, and (iii) as the result of a deliberate policy
decision, to avoid the high cost of hedges that are not
warranted by expectations or high risk of depreciation.
The main transactions that generate or may generate
exchange rate risk (regardless of whether or not they
have an impact on the income statement) are, among
others, as follows: issues in currencies other than the
functional currency of the Group company, highly
probable transactions in other currencies, future cash
inflows in other currencies, investments and
divestments, provisions for collections or payments and
collections in foreign currency, the actual value of the
investments (subsidiaries) in currencies other than the
euro.
In 2024 , net foreign exchange results were obtained
from the management of the exchange rate (excluding
monetary correction) for a total positive net result of 113
million euros (positive net result of 124 million euros in
2023).
The following table illustrates the sensitivity of foreign
currency gains and sensitivity losses and of equity to
changes in exchange rates, where: a) in calculating the
impact on the income statement, the exchange rate
position affecting the income statement at the end of
2024 was considered constant during 2025; b) in
calculating the impact on equity, only monetary items
have been considered, namely debt and derivatives
such as hedges of net investment and loans to
subsidiaries related to the investment, breakdown of
which is considered constant in 2025 and identical to
that existing at the end of 2024. In both cases, Latin
American currencies are assumed to change their value
against the dollar and the rest of the currencies against
the euro by 10%.
Millions of euros
Currency
Change
Impact on the consolidated
income statement
Impact on
consolidated equity
All currencies vs EUR
10%
(42)
(298)
USD vs EUR
10%
(4)
(42)
Other currencies vs EUR
10%
1
\u2014
Latin American currencies vs USD
10%
(39)
(256)
All currencies vs EUR
(10%)
42
298
USD vs EUR
(10%)
4
42
Other currencies vs EUR
(10%)
(1)
\u2014
Latin American currencies vs USD
(10%)
39
256
The Group\u2019s monetary position in Venezuela at
December\u00a031, 2024 is a net asset position of 10,207
million Venezuelan digital bolivars equivalent to 120
million euros ( 19,900 million Venezuelan digital bolivars
equivalent to 113 million euros at December\u00a031, 2023).
The net monetary position exposure in 2024 has been an
asset position, which led to a higher financial expense of
67 million euros due to the effect of the monetary
correction for inflation during the year (161 million euros
of expense in 2023).
The impact of hyperinflation on the net monetary
position of the Group\u2019s subsidiaries in Argentina
represents a financial income amounting to 183\u00a0million
euros in 2024 (48 million euros in 2023 and 39 million
euros in 2022 of net result for both periods) and is
recorded under Exchange differences in the
consolidated income statement.
Interest rate risk
The main objective of the interest rate risk management
policy is to bring the Company's financing costs in line
with the budget for financial expenses for the current
year, as well as the current strategic plan. In accordance
with this objective, Telef\u00f3nica decided to actively adjust
the exposure of its debt to interest rates, i.e., the amount
of debt that would accrue interest at fixed rates and
variable rates.
In order to meet this target, Telef\u00f3nica mainly carried out
the following:
a) The interest rate of borrowings tied to a variable
interest rate was set.
b) Interest rate fluctuations of debt tied to a variable
interest rate were reduced.
c) Fixed rate debt instruments were converted into
variable market rate debt instruments.
These transactions may be carried out against an
existing underlying asset or those that are highly likely to
take place in the future (for example, a highly probable
future issue of debt).
The Telef\u00f3nica Group\u2019s financial expenses are exposed
to changes in interest rates. In 2024 the Euro, Brazilian
Real, British Pound, American Dollar, Chilean peso and
Colombian peso were the short-term rates that
accounted for most of the exposure. In nominal terms, at
December\u00a031, 2024 , 82.5% of Telef\u00f3nica\u2019s net financial
debt was pegged to fixed interest rates for a period
greater than one year, compared to 88.6% in 2023. Of
the remaining 17.5% (net debt at floating rates or at fixed
rates maturing within one year), no debt had interest
rates bounded in a period over one year, the same as on
December\u00a031, 2023.
In addition, early retirement and Individual Suspension
Plan liabilities (see Note 24) were discounted to present
value over the year, based on the curve for instruments
with very high credit quality. The variation of interest
rates during the year has led to a change in the market
value of these liabilities. However, this change was
nearly completely offset by a variation in the opposite
direction of the market value of the hedges on these
positions.
Net financial expenses amounted to 1,789 million euros
in 2024, decreasing 115 million euros compared to 2023.
The lower amount in 2024 is mainly due to the positive
impact of 154 million euros in interest associated with
the favorable award relating to the ICSID arbitration
procedure initiated by Telef\u00f3nica, S.A. in 2018 against
the Republic of Colombia.
To illustrate the sensitivity of the Company's net
financial expense to fluctuations in short-term interest
rates, on one hand a 100 basis point increase in interest
rates in all currencies in which Telef\u00f3nica has financial
positions at December\u00a031, 2024, and a 100 basis point
decrease in all currencies has been assumed, and on the
other hand a constant position equal to the position at
year-end has been considered.
To calculate the sensitivity of equity to fluctuations in
interest rates, on one hand a 100 basis point increase in
interest rates in all currencies and in all periods on the
yield curve in which Telef\u00f3nica has financial positions at
December\u00a031, 2024, and a 100 basis point decrease in all
currencies and all periods was assumed, and on the
other hand only positions with cash flow hedges were
considered, which are basically the only positions in
which changes in market value due to interest rate
fluctuations are recognized in equity.
Millions of euros
Change in basis points (bp)
Impact on
consolidated
income
statement
Impact on
consolidated
equity
+100bp
(41)
533
-100bp
41
(533)
Share price risk
The Telef\u00f3nica Group is exposed to changes in the value
of equity investments, of derivatives associated with
such investments, of share-based payments plans, of
treasury shares and of equity derivatives over treasury
shares.
According to the share-based payments plans (see Note
27), the shares to be delivered to employees under such
plan may be either Telef\u00f3nica, S.A. treasury shares,
acquired by itself or any of its Group companies, or
newly issued shares. The possibility of delivering shares
to beneficiaries of the plans in the future, implies a risk
since there could be an obligation to hand over a
maximum number of shares at the end of each phase,
whose acquisition (in the event of acquisition in the
market) in the future could imply a higher cash outflow
than required on the start date of each phase if the
share price is above the corresponding price on the
phase start date. In the event that new shares are issued
for delivery to the beneficiaries of the plan, there would
be a dilutive effect for ordinary shareholders of
Telef\u00f3nica as a result of the higher number of shares
delivered under such plan outstanding.
In 2021, the General Shareholder\u2019s Meeting approved a
Long-Term Incentive Plan allocated to Senior Executive
Officers of the Telef\u00f3nica Group consisting of the
delivery of shares of Telef\u00f3nica, S.A. This plan has a total
duration of five years and is divided into three mutually
exclusive cycles of three years each. Each of the cycles
commenced, respectively, in January 2021, 2022 and
2023. The first (2021) of the three cycles matured on
December 31, 2023 and the second cycle (2022)
matured on December 31, 2024 (see Note 27).
The 2022 Shareholder\u2019s Meeting approved a Global
Employee Incentive Share Purchase Plan for shares of
Telef\u00f3nica, S.A. for the Employees of the Telef\u00f3nica
Group, which delivered shares to its participants in 2024
(see Note 27).
Finally in 2024, the General Shareholder\u2019s Meeting
approved a Long-Term Incentive Plan allocated to
Senior Executive Officers of the Telef\u00f3nica Group
consisting of the delivery of shares of Telef\u00f3nica, S.A.
This plan has a total duration of five years and is divided
into 3 mutually exclusive cycles of three years each. The
first cycle is deemed to have started on January 1, 2024
(with delivery of the corresponding shares in 2027).
To reduce the risk associated with variations in share
price under these plans, Telef\u00f3nica could acquire
instruments that hedge the risk profile of some of these
plans.
In addition, the Group may use part of the treasury
shares of Telef\u00f3nica, S.A. held at December 31, 2024 to
cover shares deliverable under the outstanding Plans.
The net asset value of the treasury shares could
increase or decrease depending on variations in
Telef\u00f3nica, S.A.\u2019s share price.
Liquidity risk
The Telef\u00f3nica Group seeks to match the schedule for
its debt maturity payments to its capacity to generate
cash flows to meet these maturities, while allowing for
some flexibility. In practice, this has been translated into
two key principles:
1. The Telef\u00f3nica Group\u2019s average maturity of net
financial debt is intended to stay above six years or
be restored above that threshold in a reasonable
period of time if it eventually falls below it. This
principle is considered as a guideline when managing
debt and access to credit markets, but not a rigid
requirement. When calculating the average maturity
for the net financial debt, a portion of the undrawn
credit lines can be considered as offsetting the
shorter debt maturities, and extension options on
some financing facilities may be considered as
exercised, for calculation purposes.
2. The Telef\u00f3nica Group must be able to pay all
commitments over the next 12 months without
accessing new borrowing or tapping the capital
markets (drawing upon firm credit lines arranged with
banks), assuming budget projections are met.
At December\u00a031, 2024, the average maturity of net
financial debt ( 27,161 million euros) was 11.34 years
(including undrawn committed credit facilities).
At December\u00a031, 2024, financial liabilities (Note 18) and
lease liabilities (Note 20) scheduled to mature in 2024
amounted to 5,590 and 2,226 million euros, respectively.
These maturities are lower than the amount of funds
available, calculated as the sum of: a) cash and cash
equivalents and current financial assets; b) annual cash
generation projected for 2025, and c) undrawn credit
facilities arranged with banks whose original maturity is
over one year (an aggregate of 10,634 million euros at
December 31, 2024), providing flexibility to the
Telef\u00f3nica Group with regard to accessing capital or
credit markets in the next two years. For a further
description of the Telef\u00f3nica Group\u2019s liquidity and
capital resources in 2024 , see Note 18 and Appendix V.
Country risk
The Telef\u00f3nica Group managed or mitigated country risk
by pursuing two lines of action (in addition to its normal
business practices):
1. Partly matching assets to liabilities (those not
guaranteed by the Parent company) in the Telef\u00f3nica
Group\u2019s Latin American companies such that any
potential asset impairment would be accompanied
by a reduction in liabilities; and
2. Repatriating funds generated in Latin America that
are not required for the pursuit of new, profitable
business development opportunities in the region.
Regarding the first point, at December\u00a031, 2024 , the
Telef\u00f3nica Group\u2019s Latin American companies had net
financial debt not guaranteed by the Parent company of
1,768 million euros, which represents 6.5% of net
financial debt of the Group. Nevertheless, in certain
countries, such as Venezuela, there is a net cash balance
(instead of a net liability balance).
Regarding the net repatriation of funds to Spain, 364
million euros from Latin America companies have been
received in 2024. This amount includes aggregate
dividend collections of 377\u00a0million euros and fees for 266
million euros, partially offset by loans and capital
contributions made to subsidiaries in an aggregate
amount of 279\u00a0million euros.
Credit risk
The Telef\u00f3nica Group trades in derivatives with
creditworthy counterparties. Therefore, Telef\u00f3nica, S.A.
generally trades with credit entities whose \u201csenior debt\u201d
ratings are of at least \u201cA-\u201d or in case of Spanish entities in
line with the credit rating of the Kingdom of Spain. In
Spain, where most of the Group\u2019s derivatives portfolio is
held, there are netting agreements with financial
institutions, with debtor or creditor positions offset in
case of bankruptcy, limiting the risk to the net position. In
addition, the CDS (Credit Default Swap) of all the
counterparties with which Telef\u00f3nica, S.A. operates is
monitored at all times in order to assess the maximum
allowable CDS for operating at any given time.
Transactions are generally only carried out with
counterparties whose CDS is below the threshold.
Net CVA (CVA+DVA) or Credit Valuation Adjustment is
the method used to measure credit risk for both
counterparties and Telef\u00f3nica in order to determine the
fair value of the derivatives portfolio. This adjustment
reflects the probability of default or the deterioration of
the credit quality of both Telef\u00f3nica and its
counterparties. The simplified formula to calculate CVA
is Expected Exposure times Probability of Default times
Loss Given Default (LGD). In order to calculate these
variables standard market practices are used.
At the same time, and in order to address the credit risk,
Telef\u00f3nica considers the use of CDS, novations,
derivatives with break clauses and signing CSA's under
certain conditions.
For other subsidiaries, particularly those in Latin
America, assuming a stable sovereign rating provides a
ceiling which is below \u201cA\u201d, trades are with local financial
entities whose rating by local standards is considered to
be of high creditworthiness.
Meanwhile, with credit risk arising from cash and cash
equivalents, the Telef\u00f3nica Group places its cash
surpluses in high quality money-market assets. These
placements are regulated by a general framework,
revised annually. Counterparties are chosen according
to criteria of liquidity, solvency and diversification based
on the conditions of the market and countries where the
Group operates. The general framework sets: the
maximum amounts to be invested by counterparty
based on its rating (long-term debt rating) and the
instruments in which the surpluses may be invested
(money-market instruments). Additionally, for Treasury
surpluses managed at Telef\u00f3nica S.A, a criteria based on
CDS is also considered, similar to that used for the
selection of counterparties to operate with derivatives,
for the selection of counterparties for the placement of
those surpluses.
The Telef\u00f3nica Group considers customer credit risk
management as a key element to achieve its business
and customer base growth targets in a sustainable way.
This management approach relies on the active
evaluation of the risk-reward balance within the
commercial operations and on the adequate separation
between the risk ownership and risk management
functions.
Formal delegation of authority procedures and
management practices are implemented in the different
Group companies, taking into account benchmark risk
management techniques, adapted to the local
characteristics of each market. Commercial debtors that
may cause a relevant impact on the Telef\u00f3nica Group
consolidated financial statements and increased risk
profile products - due to customer target, term, channels
or other commercial characteristics - are subject to
specific management practices in order to mitigate the
exposure to credit risk.
This customer credit risk management model is
embedded in the day-to-day operational processes of
the different companies, where the credit risk
assessment guides both the product and services
available for the different customers and the collection
strategy.
The Telef\u00f3nica Group\u2019s maximum exposure to credit risk
is initially represented by the carrying amounts of the
financial assets and the guarantees given by the
Telef\u00f3nica Group.
Several Telef\u00f3nica Group companies provide operating
guarantees granted by external counterparties, which
are offered during their normal commercial activity, in
bids for licenses, permits and concessions, and spectrum
acquisitions. At December\u00a031, 2024 , these guarantees
amounted to approximately 7,526 million euros (7,316
million euros at December\u00a031, 2023 ).
Capital management
Telef\u00f3nica\u2019s corporate finance department takes into
consideration several factors for the evaluation of the
Telef\u00f3nica\u2019s capital structure, with the aim of
maintaining the solvency and creating value to the
shareholders.
The corporate finance department estimates the cost of
capital on a continuous basis through the monitoring of
the financial markets and the application of standard
industry approaches for calculating weighted average
cost of capital, or WACC, so that it can be applied in the
valuation of businesses in course and in the evaluation of
investment projects. In addition, Telef\u00f3nica also uses as
reference net financial debt (excluding items of a non-
recurring or exceptional nature) that allows for a
comfortable investment grade credit rating as assigned
by credit rating agencies, aiming at protecting credit
solvency and making it compatible with alternative uses
of cash flow that could arise at any time.
These general principles are refined by other
considerations and the application of specific variables,
such as country risk in the broadest sense, or the
volatility in cash flows generation that are considered,
when evaluating the financial structure of the Telef\u00f3nica
Group and its different areas.
Interest rate benchmark reform and
associated risks
In 2022, the transition was made to the new reference
indices affected as of December 31, 2022 (GBP Libor and
CHF Libor) and in June 2023 the one related to USD
Libor. Due to the need to incorporate substitute indices
(known as fallbacks) of the reference rates used in the
contracts, in 2021 Telef\u00f3nica, S.A. decided not to adhere
to the ISDA Protocol and has since negotiated bilateral
contracts with each affected counterparty. Thanks to
the decisions agreed in 2021 to manage the changes in
Libor, there have been no impacts from these changes,
no contractual modifications of derivative instruments or
impact on hedging relationships directly affected by the
reform. Thus, as of June 2023, all Libor indices have been
replaced by Libor Fallbacks for the entire portfolio
outstanding on that date.
Derivatives policy
At December\u00a031, 2024 , the nominal value of outstanding
derivatives with external counterparties amounted to
84,933 million euros equivalent, a 4.7% increase from
December\u00a031, 2023 ( 81,097 million euros equivalent).
This figure is inflated by the use in some cases of several
levels of derivatives applied to the nominal value of a
single underlying liability. For example, a foreign
currency loan can be hedged into floating rate, and then
each interest rate period can be fixed using a fixed rate
hedge, or FRA (Forward Rate Agreement) The high
volume is also due to the fact that when a derivative
transaction is canceled, the company may either cancel
the derivative or take the opposite position, which
cancels out the variability thereof. The second option is
usually chosen in order to cut costs. Even using such
techniques to reduce the position, it is still necessary to
take extreme care in the use of derivatives to avoid
potential problems arising through error or a failure to
understand the real position and its associated risks.
The main principles in the management of derivatives
are detailed below:
1) Derivatives based on a clearly identified hedged items.
Telef\u00f3nica\u2019s derivatives policy emphasizes the following
points:
\u2022 Acceptable underlyings include assets and liabilities,
profits, revenues and cash flows in either a company\u2019s
functional currency or another currency. These flows
can be contractual (debt and interest payments,
settlement of foreign currency payables, etc.),
reasonably certain or foreseeable (PP&E purchases,
future debt issues, commercial paper programs, etc.).
The acceptability of an underlying asset in the above
cases does not depend on whether it complies with
accounting rules requirements for hedge accounting,
as is required in the case of certain intra-group
transactions, for instance. Parent company
investments in subsidiaries with functional currencies
other than the euro also qualify as acceptable
underlying assets.
\u2022 Economic hedges are hedges that have a designated
underlying asset and that, under certain
circumstances, may offset the changes in the value of
the underlying asset. These economic hedges may not
always meet the requirements to be treated as hedges
for accounting purposes. The decision to arrange
these hedges if they do not meet certain requirements
will depend on the marginal impact on the income
statement and, therefore, on how far this may
compromise the goal of having a stable income
statement. In any case, the changes are recognized in
the income statement.
2) Matching of the hedged item to one side of the
derivative.
This matching basically applies to foreign currency debt
and derivatives hedging foreign currency payments by
Telef\u00f3nica Group subsidiaries. The aim is to eliminate
the risk arising from changes in foreign currency interest
rates. Nonetheless, even when the aim is to achieve
perfect hedging for all cash flows, the lack of liquidity in
certain markets, especially in Latin American currencies,
has meant that historically there have been mismatches
between the terms of the hedges and those of the debts
they are meant to hedge. The Telef\u00f3nica Group intends
to reduce these mismatches, provided that doing so
does not involve disproportionate costs. In this regard, if
adjustment does prove too costly, the financial timing of
the underlying asset in foreign currency will be modified
in order to minimize interest rate risk in foreign currency.
In certain cases, the timing of the underlying as defined
for derivative purposes may not be exactly the same as
the timing of the contractual underlying.
3) Matching the company contracting the derivative and
the company that owns the hedged item.
Generally, the aim is to ensure that the hedging
derivative and the hedged asset or liability belong to the
same company. Sometimes, however, the holding
companies (Telef\u00f3nica, S.A. and Telef\u00f3nica
Latinoam\u00e9rica Holding, S.L.) have arranged hedges on
behalf of a subsidiary that owns the underlying asset.
The main reasons for separating the hedge and the
underlying asset were the chance of differences in the
legal validity of local and international hedges (as a
result of unforeseen legal changes) and the different
credit ratings of the counterparties (of the Telef\u00f3nica
Group companies as well as those of the banks).
4) Ability to measure the derivative\u2019s fair value using the
valuation systems available to the Telef\u00f3nica Group.
Telef\u00f3nica uses several tools to evaluate and manage
the risk involved in derivatives and debt. Among these
tools are the Calypso system, extensively used in various
financial institutions, and the specialized libraries in the
MBRM financial calculation, both of which are
widespread throughout the market and have shown
proven reliability. In order to perform these calculations,
customary market techniques are used when
configuring the calculation methods, and information
from money market curves is used on a daily basis as
market inputs (swaps, depos, FRA, etc.) for interest rates,
official fixings for exchange rates and the interest rates
and volatility matrices for interest and exchange rates
that are listed in the multi-contributor systems, Reuters
and Bloomberg. For those yield curves that are less
liquid or whose prices published in Reuters and
Bloomberg are considered not to adequately reflect the
market situation, these curves will be requested from
relevant banks in these markets.
5) Sale of options only when there is an underlying
exposure.
Telef\u00f3nica considers the sale of options when: i) there is
an underlying exposure (on the consolidated statement
of financial position or associated with a highly probable
cash outflow) that would offset the potential loss for the
year if the counterparty exercised the option. This
exposure does not have to be treated as a purchased
option, but rather it can be another type of hedged item
(in these cases, hedge accounting does not apply since
this hedging instrument does not meet the criteria
required by accounting standards to treat the sale of
options as hedging instruments), or ii) the option is part
of a structure in which another derivative offsets any
loss. The sale of options is also permitted in option
structures where, at the moment they are taken out, the
net premium is either positive or zero.
For instance, it would be possible to sell short-term
options on interest rate swaps that entitle the
counterparty to receive a certain fixed interest rate,
below the level prevailing at the time the option was
sold. This would mean that if rates fell and the
counterparty exercised its option, the Group would swap
part of its debt from floating rate to a lower fixed rate,
having received a premium.
6) Hedge accounting.
The main risks that may qualify for hedge accounting are
as follows:
\u2022 Variations in market interest rates (either money-
market rates, credit spreads or both) that affect the
value of the underlying asset or the measurement of
the cash flows.
\u2022 Variations in exchange rates that change the value of
the underlying asset in the company\u2019s functional
currency and affect the measurement of the cash flow
in the functional currency.
\u2022 Variations in the valuation of any financial asset,
particularly shares of companies included in the
portfolio of \u201cEquity instruments\u201d.
\u2022 Variations in the price of commodities related to
contracts that the Group has with third parties.
Regarding the underlying:
\u2022 Hedges can cover all or part of the value of the
underlying.
\u2022 The risk to be hedged can be for the whole period of
the transaction or for only part of the period.
\u2022 The underlying may be a highly probable future
transaction, or a contractual underlying (loan, foreign
currency payment, investment, financial asset, etc.) or
a combination of both that defines an underlying with
a longer term.
The main coverage instruments used are:
\u2022 Forwards / NDF: they are used mainly for exchange
rate hedges related to commercial positions in foreign
currency. They can also be used to hedge financing in
foreign currency and net investment hedge in foreign
currency.
\u2022 Exchange Rate Options: in some cases, this type of
instruments can be used linked to future CapEx and
OpEx operations and investments and divestments in
foreign currency.
\u2022 Spots: for purchases and sales of currencies that are
made same day value or two days\u2019 value. Generally
used for operational needs or for divestments of
operations in foreign currency.
\u2022 Currency swaps: this type of transaction is generally
executed to hedge bonds issuance or loans issued in
foreign currency or net investment hedge.
\u2022 Interest Swaps / Interest Rate Options: these
instruments are used to manage the interest rate of
the debt portfolio. Their use of them is ruled by the
Financial Expenses Budget with the objective of its
fulfillment. Both the volume to be contracted and the
maturity of these products are determined by the
underlying assets to be hedged.
It is possible that in several markets the maturity, as
well as the low liquidity, does not allow to contract a
\"perfect\u201d hedge, but this circumstance will have to be
analyzed case by case.
\u2022 CDS: in order to manage the counterparty credit risk
or CVA / DVA, CDS operations can be arranged to
mitigate this risk.
\u2022 Derivatives of Commodities associated to:
\u25aa Price risk hedge (mainly Electricity) associated
with the Group's own contracts.
\u25aa Supporting the business lines that may need it and
always hedging the commercial risks of the signed
contracts. They would be settled by differences,
this is, in a non-deliverable format.
\u2022 Equity Derivatives: these are derivatives that address
strategic decisions or hedging needs, either to hedge
future investments or hedge existing risks. They
protect Telef\u00f3nica from the potential appreciation or
depreciation in the price of the shares they hold as
underlying.
Between the hedged item and the hedging instrument
there is an economic relationship, this is, in general
terms they move in opposite directions due to the same
risk or risk covered. In other words, there must be an
expectation that the value of the hedging instrument
and the value of the hedged item will change
systematically in opposite directions in response to the
movements of one of the following elements:
\u2022 the same underlying item; or
\u2022 Underlying items that are economically related in such
sense that they respond similarly to the risk that is
being hedged.
Depending on the complexity of the hedge relationship
and the way in which the hedge has been structured, a
quantitative or qualitative analysis will have to be
performed to demonstrate that there is an economic
relationship between the hedged item and the hedging
instrument.
This may on occasion mean that the hedging
instruments have longer terms than the related
contractual underlying. This happens when the
Telef\u00f3nica Group enters into long-term swaps, caps or
collars to protect the Group against interest rate
increases that may raise the financial expense of its
promissory notes, commercial paper and some floating
rate loans which mature earlier than their hedges. These
floating rate financing programs are highly likely to be
renewed and Telef\u00f3nica commits to this by defining the
underlying asset in a more general way as a floating rate
financing program whose term coincides with the
maturity of the hedge. In those cases in which the
underlying assets representing the risk hedged are
canceled or refinanced early, and if there is an open risk
with similar characteristics as the underlying asset that
was canceled or refinanced early, either because there
is new financing or because there is an underlying asset
with similar characteristics and risk profile, the hedge
may remain in force with the derivatives assigned
thereto and the risk will be subject to the hedge
arranged in the aforementioned refinancing. When
either of these situations occurs, the effectiveness of the
hedge will be reviewed taking into account the new
situation.
There can be three types of hedges:
\u2022 Fair value hedges.
\u2022 Cash flow hedges. Such hedges can be set at any
value of the risk to be hedged (interest rates,
exchange rates, etc.) or for a defined range (interest
rates between 2% and 4% , above 4%, etc.). In this last
case, the hedging instrument used is options.
\u2022 Hedges of net investment in consolidated foreign
subsidiaries. Generally, such hedges are arranged by
Telef\u00f3nica, S.A. and other Telef\u00f3nica holding
companies. Wherever possible, these hedges are
implemented through real debt in foreign currency.
Often, however, this is not always possible as many
Latin American currencies are non-convertible,
making it impossible for non-resident companies to
issue local currency debt. It may also be that, due to
the debt market deepness, the debt in the currency
concerned is not enough to accommodate the
required hedge, or that an acquisition is made in cash
with no need for market financing. In these
circumstances derivatives either forwards or cross-
currency swaps are mainly used to hedge the net
investment.
When using options, forwards or cross-currency swaps
as hedging instruments, the exclusion of the time value
of the option, the element at maturity of the forward and
the currency spread of the cross-currency swap of the
hedging relationship are evaluated on a case by case
basis, in order to be treated as hedge costs.
Hedges can comprise a combination of different
derivatives.
Management of accounting hedges is not static, and the
hedging relationship may change before maturity. The
interruption of the hedge accounting is possible within
the framework of the management of financial risks and
described in the internal document of \u201cfinancial risks
management and hedging strategy under IFRS 9\u201d. To
gauge the efficiency of transactions defined as
accounting hedges, the Group analyzes the extent to
which the changes in the fair value or in the cash flows
attributable to the hedged item would offset the
changes in fair value or cash flows attributable to the
hedged risk using a linear regression model
prospectively. To evaluate the effectiveness of hedges,
under IFRS 9, there is no numerical range under which it
is accepted that a hedge is effective and hence the
hedge accounting standards are applicable. Therefore,
Telef\u00f3nica considers that if there is an economic
relationship, not dominated by changes in credit risk and
if the appropriate hedging rationale has been
designated, the requirements for effectiveness are met.
However, at the moment when ineffectiveness arises,
Telef\u00f3nica will evaluate whether there is still an
economic relationship or whether the designated
hedging rationale is appropriate. The possible sources of
ineffectiveness that Telef\u00f3nica can have when
designing a hedging relationship and that will be
considered when establishing the hedging rationale are:
\u2022 The hedging instrument and the hedged item have
different maturity dates, initial dates, contract dates,
repricing dates, etc.
\u2022 The hedging instrument starts with initial value and a
financing effect is produced.
\u2022 When the underlying items have different sensitivity
and are not homogeneous, for example EURIBOR 3M
versus EURIBOR 6M.
The main guiding principles for risk management are laid
down by Telef\u00f3nica\u2019s Finance Department and
implemented by the company financial officers (who are
responsible for balancing the interests of each company
and those of the Telef\u00f3nica Group). The Corporate
Finance Department may allow exceptions to this policy
where these can be justified, normally when the market
is too thin for the volume of transactions required or on
clearly limited and small risks. New companies joining
the Telef\u00f3nica Group as a result of mergers or
acquisitions may also need time to adapt.
7) Cancellation of derivatives.
When a derivative transaction is canceled, the Company
may:
\u2022 Cancel the derivative and pay its market value.
\u2022 Take the opposite position which cancels out the
variability thereof, if cancellation costs are high or if it
is recommended for operating or business reasons.
Breakdown of financial results
The breakdown of the financial results recognized in
2024, 2023 and 2022 is as follows:
Millions of euros
2024
2023
2022
Interest income
486
516
384
Dividends received
39
29
25
Other financial income
326
349
894
Subtotal
851
894
1,303
Changes in fair value of asset derivatives at fair value through profit or loss
145
114
377
Changes in fair value of liability derivatives at fair value through profit or loss
(88)
(42)
(861)
Changes in the fair value of debt instruments and other assets at fair value to profit
or loss
4
4
8
Transfer from equity of results of cash flow hedges - future cash flows that are no
longer expected to happen
\u2014
\u2014
(2)
(Loss)/Gain on fair value hedges
(226)
246
(1,818)
Gain/(loss) on adjustment to items hedged by fair value hedges
224
(292)
1,763
Subtotal
59
30
(533)
Interest expenses
(1,796)
(1,606)
(1,548)
Financial expenses on lease liabilities (see Note 20)
(512)
(435)
(393)
Ineffective portion of cash flow hedges
(2)
(12)
(15)
Accretion of provisions and other liabilities
(389)
(489)
276
Other financial expenses
(229)
(297)
(317)
Subtotal
(2,928)
(2,839)
(1,997)
Net finance costs excluding foreign exchange differences and inflation
adjustments
(2,018)
(1,915)
(1,227)
\"Other financial income\" in 2024 includes 164 million U.S.
dollars (approximately 154 million euros) relating to the
favorable award of Telef\u00f3nica issued by ICSID against
the Republic of Colombia (see notes 2, 15 and 29.a).
Interest has been calculated from August 29, 2017 at a
compound rate of 5% per year.
\"Accretion of provisions and other liabilities\" in 2024
includes 406 million Brazilian Reais (70 million euros at
2024 average exchange rate) referring to the reversal of
the monetary update of the regulatory provisions of
Telef\u00f3nica Brasil reversed after the Concession
Migration Agreement signed between Telef\u00f3nica Brasil
and ANATEL (see notes 24.c and 29.a).
\"Other financial income\" in 2023 included 46 million
euros corresponding to the default interest as a result of
the final decisions in favor of Telef\u00f3nica Brazil about the
right to deduct the ICMS from the calculation basis of
PIS/COFINS (139 million euros in 2022).
\"Other financial income\" in 2022 included 526 million
euros corresponding to delayed interest after the
Agreement for the Execution of the Judgment of the
Audiencia Nacional issued on October 24, 2022 (see
Note 25, Inspections of the tax group in Spain).
\"(Loss)/Gain on fair value hedges\" includes mainly the
impact on income of fair value hedges contracted by
Telef\u00f3nica, S.A., which are similarly reflected under
\"Gain/(loss) on adjustment to items hedged by fair value
hedges\" and therefore, have no significant net impact on
the consolidated income statement. The movement in
both items in 2024 and in 2023 with respect to previous
years is the result of the variation of interest rates in the
exercise.
Evolution of derivative instruments\u00a0
The movement of the net position of derivatives during
the years ended December 31, 2024 and December 31,
2023 is as follows:
Millions of euros
Movement
in 2024
Movement
in 2023
Opening balance of assets/
(liabilities)
399
1,012
Financing payments
20
(33)
Financing proceeds
(385)
(20)
Interest (proceeds)/payments
(50)
97
Other (proceeds)/payments
123
87
Fair value adjustments through
other comprehensive income
1,108
(584)
Movements with a
corresponding entry under the
income statement
(253)
(57)
Translation differences
40
(115)
Other movements
\u2014
12
Closing balance of assets/
(liabilities)
1,002
399
The variation in 2024 represents a increase of 603
million euros of assets (decrease of 613 million euros of
assets in 2023) mainly due to the evolution of exchange
rate, mainly due to the appreciation of dollar and the
depreciation of the Brazilian real, netting the opposite
effect due to the increase of interest rates of dollar and
decrease of euro. These variations are mostly by a
similar impact and in the opposite direction in the hedge
accounting of the different issuances and loans in dollar
and euro currency of the Telef\u00f3nica Group.
As of December\u00a031, 2024 the derivatives portfolio
amounted to a net positive value of 1,002 million euros (a
net positive value of 399 as of December\u00a031, 2023). This
amount includes a net positive value of 914 million euros
due to hedges (cross currency swaps) to transfer
financial debt issued in foreign currency to local
currency (a positive value of 135 million euros at
December\u00a031, 2023 ).
The calculation of the fair values of the Telef\u00f3nica
Group\u2019s debt instruments required an estimate, for each
currency and counterparty, of a credit spread curve
using the prices of the Group\u2019s bonds and credit
derivatives.
The derivatives portfolio was measured through the
techniques and models normally used in the market,
based on money market curves and volatility prices
available in the markets.\u00a0 Additionally, the credit
valuation adjustment or net CVA per counterparty
(CVA+DVA) is calculated on that measurement as the
method used to measure the credit risks of the
counterparties and also Telef\u00f3nica for the purpose of
adjusting the fair value valuation of the derivatives. This
adjustment reflects the possibility of bankruptcy or
credit rating impairment of the counterparty and
Telef\u00f3nica.
Derivatives arranged by the Group at December\u00a031, 2024
are detailed in Appendix IV.
The breakdown of Telef\u00f3nica\u2019s hedges and other derivative instruments at December\u00a031, 2024 and December\u00a031, 2023, their fair value at year-end and the expected maturity
schedule is as set forth in the table below:
December 31, 2024
Millions of euros
Notional amount - Maturities (*)
Book value of the derivative and no-derivative instruments (**)
2025
2026
2027
Later
Total
Non-current
asset
Current
asset
Non-current
liabilities
Current
liabilities
Total
Derivative instruments of accounting hedges
(2,724)
2,408
1,293
3,133
4,110
(2,441)
(372)
1,526
67
(1,220)
Interest rate risk
(1,624)
1
1
(4,630)
(6,252)
(322)
(131)
545
20
112
Cash flow hedges
(2,150)
\u2014
\u2014
4,769
2,619
(12)
(22)
129
2
97
Fair value hedges
526
1
1
(9,399)
(8,871)
(310)
(109)
416
18
15
Exchange rate risk
(2,085)
2,331
714
5,324
6,284
(1,594)
(136)
837
43
(850)
Cash flow hedges
101
2,344
714
5,324
8,483
(1,594)
(54)
837
1
(810)
Fair value hedges
494
(13)
\u2014
\u2014
481
\u2014
(12)
\u2014
1
(11)
Net investment in a foreign business hedges
(2,680)
\u2014
\u2014
\u2014
(2,680)
\u2014
(70)
\u2014
41
(29)
Interest rate and exchange rate risk
985
76
578
2,439
4,078
(525)
(105)
144
4
(482)
Cash flow hedges
985
76
472
1,892
3,425
(400)
(104)
64
\u2014
(440)
Fair value hedges
\u2014
\u2014
106
547
653
(125)
(1)
80
4
(42)
Undesignated derivatives
(268)
(866)
(325)
(2,150)
(3,609)
(164)
(89)
339
132
218
Other derivatives of interest rate
(525)
(738)
(325)
(2,150)
(3,738)
(159)
(59)
330
8
120
Other derivatives of exchange rate
(125)
(521)
\u2014
\u2014
(646)
\u2014
(20)
9
9
(2)
Other derivatives
382
393
\u2014
\u2014
775
(5)
(10)
\u2014
115
100
Total derivative instruments
(2,992)
1,542
968
983
501
(2,605)
(461)
1,865
199
(1,002)
No derivatives instruments of accounting hedges (***)
\u2014
\u2014
\u2014
29
29
\u2014
\u2014
29
\u2014
29
Exchange rate risk
\u2014
\u2014
\u2014
29
29
\u2014
\u2014
29
\u2014
29
Fair value hedges
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Net investment in a foreign business hedges
\u2014
\u2014
\u2014
29
29
\u2014
\u2014
29
\u2014
29
(*) For interest rate hedges, the positive amount is in terms of \"fixed payment.\u201d For foreign currency hedges, a positive amount means payment in functional vs. foreign currency.
(**) Positive amounts indicate payables.
(***) Of the hedging instruments that are not derivatives, 29 million euros correspond to \"Loans and other debts\"\" (see Note 18).
December 31, 2023
Millions of euros
Notional amount - Maturities (*)
Book value of the derivative and no-derivative instruments (**)
2024
2025
2026
Later
Total
Non-
current
asset
Current
asset
Non-
current
liabilities
Current
liabilities
Total
Derivative instruments of accounting hedges
(3,225)
873
2,533
4,917
5,098
(1,785)
(272)
1,224
87
(746)
Interest rate risk
(1,190)
(123)
2
(4,070)
(5,381)
(334)
(163)
404
35
(58)
Cash flow hedges
(1,490)
(650)
\u2014
3,532
1,392
(16)
\u2014
83
35
102
Fair value hedges
300
527
2
(7,602)
(6,773)
(318)
(163)
321
\u2014
(160)
Exchange rate risk
(2,115)
\u2014
2,344
6,103
6,332
(1,124)
(69)
711
51
(431)
Cash flow hedges
657
\u2014
2,344
6,038
9,039
(1,124)
(38)
708
20
(434)
Fair value hedges
401
\u2014
\u2014
65
466
\u2014
(5)
3
20
18
Net investment in a foreign business hedges
(3,173)
\u2014
\u2014
\u2014
(3,173)
\u2014
(26)
\u2014
11
(15)
Interest rate and exchange rate risk
80
996
187
2,884
4,147
(327)
(40)
109
1
(257)
Cash flow hedges
80
996
9
2,339
3,424
(281)
(40)
35
1
(285)
Fair value hedges
\u2014
\u2014
178
545
723
(46)
\u2014
74
\u2014
28
Undesignated derivatives
396
(416)
(738)
(1,625)
(2,383)
(155)
(80)
433
149
347
Other derivatives of interest rate
(288)
(525)
(738)
(1,625)
(3,176)
(155)
(54)
399
14
204
Other derivatives of exchange rate
(123)
\u2014
\u2014
\u2014
(123)
\u2014
(14)
\u2014
13
(1)
Other derivatives
807
109
\u2014
\u2014
916
\u2014
(12)
34
122
144
Total derivative instruments
(2,829)
457
1,795
3,292
2,715
(1,940)
(352)
1,657
236
(399)
No derivatives instruments of accounting hedges (***)
\u2014
\u2014
\u2014
27
27
\u2014
\u2014
27
\u2014
27
Exchange rate risk
\u2014
\u2014
\u2014
27
27
\u2014
\u2014
27
\u2014
27
Fair value hedges
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Net investment in a foreign business hedges
\u2014
\u2014
\u2014
27
27
\u2014
\u2014
27
\u2014
27
(*) For interest rate hedges, the positive amount is in terms of \"fixed payment.\u201d For foreign currency hedges, a positive amount means payment in functional vs. foreign currency.\u00a0
(**) Positive amounts indicate payables.
(***) Of the hedging instruments that are not derivatives, 27 million euros correspond to \"Loans and other debts\" (see Note 18).\u00a0
The detail of hedged items by fair value hedges at December\u00a031, 2024 and December\u00a031, 2023 are as follows:
December 31, 2024
Millions of euros
Hedged items carrying amount
Accumulated amount in the hedged item adjusted by fair value hedge (*)
Interest
rate risk
Exchange
rate risk
Interest rate
and exchange
rate risk
Total
Interest
rate risk
Exchange
rate risk
Interest
rate and
exchange
rate risk
Total
Of which: accumulated amount of
any hedge item that have ceased to
be adjusted for gains and losses
Assets
55
259
\u2014
314
15
1
\u2014
16
\u2014
Financial assets and other non-current assets
55
13
\u2014
68
15
\u2014
\u2014
15
\u2014
Receivables and other current assets
\u2014
225
\u2014
225
\u2014
1
\u2014
1
\u2014
Other heading of assets
\u2014
21
\u2014
21
\u2014
\u2014
\u2014
\u2014
\u2014
Liabilities
9,195
1,314
1,594
12,103
(89)
15
39
(35)
37
Non-current financial liabilities
9,083
548
1,454
11,085
(89)
\u2014
39
(50)
31
Payables and other non-current liabilities
\u2014
50
\u2014
50
\u2014
1
\u2014
1
\u2014
Current financial liabilities
112
11
140
263
\u2014
\u2014
\u2014
\u2014
\u2014
Payables and other current liabilities
\u2014
705
\u2014
705
\u2014
14
\u2014
14
6
(*) Accumulated amount adjusted by fair value hedge is shown with negative sign when it reduces the value (lowest liability or lowest asset) and viceversa.
December 31, 2023
Millions of euros
Hedged items carrying amount
Accumulated amount in the hedged item adjusted by fair value hedge (*)
Interest
rate risk
Exchange
rate risk
Interest rate
and exchange
rate risk
Total
Interest rate
risk
Exchange
rate risk
Interest rate
and exchange
rate risk
Total
Of which: accumulated
amount of any hedge item
that have ceased to be
adjusted for gains and
losses
Assets
32
249
\u2014
281
(15)
\u2014
\u2014
(15)
\u2014
Financial assets and other non-current assets
28
96
\u2014
124
(14)
\u2014
\u2014
(14)
\u2014
Receivables and other current assets
\u2014
150
\u2014
150
\u2014
\u2014
\u2014
\u2014
\u2014
Other current financial assets
4
\u2014
\u2014
4
(1)
\u2014
\u2014
(1)
\u2014
Other heading of assets
\u2014
3
\u2014
3
\u2014
\u2014
\u2014
\u2014
\u2014
Liabilities
8,092
1,365
1,495
10,952
153
(8)
34
179
(9)
Non-current financial liabilities
8,009
452
1,397
9,858
153
\u2014
34
187
33
Payables and other non-current liabilities
\u2014
44
\u2014
44
\u2014
(1)
\u2014
(1)
\u2014
Current financial liabilities
83
10
98
191
\u2014
\u2014
\u2014
\u2014
\u2014
Payables and other current liabilities
\u2014
859
\u2014
859
\u2014
(7)
\u2014
(7)
(42)
(*) Accumulated amount adjusted by fair value hedge is shown with negative sign when it reduces the value (lowest liability or lowest asset) and vice versa.
The evolutions of hedges in equity at December\u00a031, 2024 and December\u00a031, 2023 are
as follows:
Millions of euros
Derivative instruments
No derivative
instruments
Total
Gross
amount
Tax effect
Total
hedges in
equity
Gains (losses) of cash flow hedges
Derivatives
- Net
investment
hedges
No
Derivatives -
Net
investment
hedges
Interest
rate risk
Exchange
rate risk
Exchange rate
and interest rate
risks
Balance at 12/31/2023
(56)
441
176
(100)
(11)
450
(137)
313
Changes in the fair value registered in equity
(8)
430
159
382
(1)
962
(252)
710
Transfer to the initial value of hedged item
1
\u2014
2
\u2014
\u2014
3
(1)
2
Transfer to the income statement of the period - the hedged future
cash flows are no longer expected to happen
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Transfer to the income statement of the period - the hedged item has
affected profit or loss
7
(710)
(166)
\u2014
\u2014
(869)
220
(649)
Total translation differences
3
(1)
\u2014
\u2014
\u2014
2
\u2014
2
Other movements
\u2014
\u2014
\u2014
26
\u2014
26
(16)
10
Balance at 12/31/2024
(53)
160
171
308
(12)
574
(186)
388
Amounts remaining in equity for continuing hedges
(24)
127
240
308
(12)
639
Amounts remaining in equity from any hedging relationship for which
hedge accounting is no longer applied
(29)
33
(69)
\u2014
\u2014
(65)
Balance at 12/31/2024
(53)
160
171
308
(12)
574
The total amount of \"Transfer to the income statements of the period - the hedged
item has affected profit or loss\" with an impact on financial results, reported under
\"Interest expenses\" amounted to +229 million euros (+240 million euros in 2023), see
detail of \"Net finance costs excluding foreign exchange differences and inflation
adjustments\" in this Note, and in exchange differences amounted to 633 million
euros (-324 million euros in 2023).
Millions of euros
Derivative instruments
No derivative
instruments
Total
Gross
amount
Tax effect
Total
hedges in
equity
Gains (losses) of cash flow hedges
Derivatives
- Net
investment
hedges
No Derivatives
- Net
investment
hedges
Interest
rate risk
Exchange
rate risk
Exchange rate and
interest rate risks
Balance at 12/31/2022
(37)
861
210
(30)
(9)
995
(270)
725
Changes in the fair value registered in equity
(49)
(445)
(66)
(66)
2
(624)
155
(469)
Transfer to the initial value of hedged item
1
6
13
\u2014
\u2014
20
(5)
15
Transfer to the income statement of the period - the hedged future
cash flows are no longer expected to happen
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Transfer to the income statement of the period - the hedged item
has affected profit or loss
32
19
19
\u2014
\u2014
70
(17)
53
Total translation differences
(3)
\u2014
\u2014
(1)
\u2014
(4)
\u2014
(4)
Other movements
\u2014
\u2014
\u2014
(3)
(4)
(7)
\u2014
(7)
Balance at 12/31/2023
(56)
441
176
(100)
(11)
450
(137)
313
Amounts remaining in equity for continuing hedges
(33)
408
250
(100)
(11)
514
Amounts remaining in equity from any hedging relationship for which
hedge accounting is no longer applied
(23)
33
(74)
\u2014
\u2014
(64)
Balance at 12/31/2023
(56)
441
176
(100)
(11)
450
The evolution of cost of hedging in equity in 2024 and 2023 are as follows:
Exchange rate risk
Millions of euros
Total gross amount
Tax effect
Total cost of hedging
in equity
A time-period related
hedge item
Balance at 12/31/2022
(25)
(25)
6
(19)
Changes in the fair value registered in equity
79
79
(20)
59
Transfer to the income statement of the period - the hedged item has affected profit or
loss
(9)
(9)
2
(7)
Balance at 12/31/2023
45
45
(12)
33
Changes in the fair value registered in equity
168
168
(42)
126
Transfer to the income statement of the period - the hedged item has affected profit or
loss
(10)
(10)
3
(7)
Balance at 12/31/2024
203
203
(51)
152
\u00a0 The details of the ineffective portion of accounting hedges with impact on the income statement in 2024 and 2023 are as follows:
2024
Millions of euros
Changes in fair value of the hedging
instrument
Changes in the fair value of hedges
item for the hedged risk
Ineffective portion hedged
registered in the income statement
Interest rate risk
(288)
(289)
1
Cash flow hedges
23
23
\u2014
Fair value hedges
(311)
(312)
1
Exchange rate risk
804
804
\u2014
Cash flow hedges
539
540
(1)
Exchange rate risk - fair value hedges
1
\u2014
1
Net investment hedges
264
264
\u2014
Interest rate and exchange rate risk
179
179
\u2014
Cash flow hedges
179
179
\u2014
Total
695
694
1
2023
Millions of euros
Changes in fair value of the hedging
instrument
Changes in the fair value of hedges
item for the hedged risk
Ineffective portion hedged
registered in the income statement
Interest rate risk
97
98
(1)
Cash flow hedges
(39)
(39)
\u2014
Fair value hedges
136
137
(1)
Exchange rate risk
(702)
(699)
(3)
Cash flow hedges
(409)
(406)
(3)
Net investment hedges
(293)
(293)
\u2014
Interest rate and exchange rate risk
(45)
(35)
(10)
Cash flow hedges
(45)
(35)
(10)
Total
(650)
(636)
(14)
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-883": { "value": "Exchange rate risk: arises primarily from: (i)
Telef\u00f3nica\u2019s international presence, through its
investments and businesses in countries that use
currencies other than the euro (primarily in Latin
America, but also in the United Kingdom), (ii) debt
denominated in currencies other than that of the
country where the business is conducted or the home
country of the company incurring such debt , and (iii)
for those trade receivables or payables in foreign
currency related to the company with the transaction
registered.\u00a0
\u2022 Interest rate risk : arises primarily in connection with
changes in interest rates affecting: (i) financial
expenses on floating-rate debt (or short-term debt
likely to be renewed), (ii) the value of long-term
liabilities at fixed interest rates and (iii) financial
expenses and principal payments of inflation-linked
financial instruments, considering interest rate risk as
the impact of changes in inflation rates.
\u2022 Share price risk: arises primarily from changes in the
value of the equity investments (that may be bought,
sold or otherwise involved in transactions), from
changes in the value of derivatives associated with
such investments, from changes in the value of
treasury shares and from changes in the value of
equity derivatives.Country risk: refers to the possible decline in the
value of assets, cash flows generated or cash flows
returned to the parent company as a result of political,
economic or social instability in the countries where
the Telef\u00f3nica Group operates, especially in Latin
America.
Exchange rate risk
The fundamental objective of the exchange rate risk
management policy is that, in event of depreciation in
foreign currencies relative to the euro, any potential
losses in the value of the EBITDA generated by the
businesses in such currencies (caused by depreciation
in exchange rates of a foreign currency relative to the
euro) are offset (to some extent) by savings from the
reduction in the euro value of debt denominated in such
currencies. This objective is also reflected on the
decrease of the sensitivity to exchange rate variations of
the net debt to EBITDA ratio, in order to protect the
Group's solvency. The degree of exchange rate hedging
varies depending on the type of investment and may
easily and actively be adjusted. For transactions of
purchase or sale of business in currencies other than
euro, additional hedges can be made on the estimated
prices of the transactions or on estimated cash flows
and EBITDA.
At December\u00a031, 2024, the net financial debt in Latin
American currencies was equivalent to approximately
5,436 million euros (6,535 million euros in 2023 ).
However, the Latin American currencies in which this
debt is denominated is not distributed in proportion to
the EBITDA generated in each currency. The future
effectiveness of the strategy described above as an
economic hedge of exchange rate risks therefore
depends on which currencies depreciate relative to the
euro.
Telef\u00f3nica occasionally takes out dollar-denominated
debt to hedge the euro-dollar intermediate component
in the relation Euro-Latin American currencies, either in
Spain (where such debt is associated with an
investment as long as it is considered to be an effective
hedge) or in the country itself, where the market for local
currency financing or hedges may be inadequate or
non-existent. At December\u00a031, 2024 , the Telef\u00f3nica
Group\u2019s net financial debt denominated in dollars to
hedge that component was equivalent to 1166 million
euros of asset position ( 657 million euros of asset
position in 2023).
At December\u00a031, 2024, net financial debt in pounds
sterling was equivalent to 46 million euros of asset
position ( 82 million euros at December\u00a031, 2023 ). As a
consequence of setting up in June 2021 of the joint
venture VMO2, the previous objective of maintaining
debt in pounds sterling in the consolidated balance
sheet of the Group of twice EBITDA has been modified,
as a result of changing the consolidation method of UK
assets (VMO2 is accounted for under the equity
method) and incorporating VMO2 to leverage higher
than the ratio of twice Debt EBITDA. The synthetic debt
target denominated in pounds will be directly related to
the flows that are expected to be repatriated from
VMO2.
The Telef\u00f3nica Group also manages exchange rate risk
by seeking to reduce the negative impact of any
exchange rate exposure on the income statement, as a
result of transactions recognized on the statement of
financial position sheet and highly probable transactions,
regardless of whether there are open positions. Such
open position exposure can arise for any of three
reasons: (i) a thin market for local derivatives or difficulty
in sourcing local currency finance which makes it
impossible to arrange a low-cost hedge (as in Argentina
and Venezuela), (ii) financing through intra-group loans,
where the accounting treatment of exchange rate risk is
different from that for financing through capital
contributions, and (iii) as the result of a deliberate policy
decision, to avoid the high cost of hedges that are not
warranted by expectations or high risk of depreciation.
The main transactions that generate or may generate
exchange rate risk (regardless of whether or not they
have an impact on the income statement) are, among
others, as follows: issues in currencies other than the
functional currency of the Group company, highly
probable transactions in other currencies, future cash
inflows in other currencies, investments and
divestments, provisions for collections or payments and
collections in foreign currency, the actual value of the
investments (subsidiaries) in currencies other than the
euro.
In 2024 , net foreign exchange results were obtained
from the management of the exchange rate (excluding
monetary correction) for a total positive net result of 113
million euros (positive net result of 124 million euros in
2023).
The following table illustrates the sensitivity of foreign
currency gains and sensitivity losses and of equity to
changes in exchange rates, where: a) in calculating the
impact on the income statement, the exchange rate
position affecting the income statement at the end of
2024 was considered constant during 2025; b) in
calculating the impact on equity, only monetary items
have been considered, namely debt and derivatives
such as hedges of net investment and loans to
subsidiaries related to the investment, breakdown of
which is considered constant in 2025 and identical to
that existing at the end of 2024. In both cases, Latin
American currencies are assumed to change their value
against the dollar and the rest of the currencies against
the euro by 10%
Millions of euros
Currency
Change
Impact on the consolidated
income statement
Impact on
consolidated equity
All currencies vs EUR
10%
(42)
(298)
USD vs EUR
10%
(4)
(42)
Other currencies vs EUR
10%
1
\u2014
Latin American currencies vs USD
10%
(39)
(256)
All currencies vs EUR
(10%)
42
298
USD vs EUR
(10%)
4
42
Other currencies vs EUR
(10%)
(1)
\u2014
Latin American currencies vs USD
(10%)
39
256
The Group\u2019s monetary position in Venezuela at
December\u00a031, 2024 is a net asset position of 10,207
million Venezuelan digital bolivars equivalent to 120
million euros ( 19,900 million Venezuelan digital bolivars
equivalent to 113 million euros at December\u00a031, 2023).
The net monetary position exposure in 2024 has been an
asset position, which led to a higher financial expense of
67 million euros due to the effect of the monetary
correction for inflation during the year (161 million euros
of expense in 2023).
The impact of hyperinflation on the net monetary
position of the Group\u2019s subsidiaries in Argentina
represents a financial income amounting to 183\u00a0million
euros in 2024 (48 million euros in 2023 and 39 million
euros in 2022 of net result for both periods) and is
recorded under Exchange differences in the
consolidated income statement.
Millions of euros
Change in basis points (bp)
Impact on
consolidated
income
statement
Impact on
consolidated
equity
+100bp
(41)
533
-100bp
41
(533)
Share price risk
The Telef\u00f3nica Group is exposed to changes in the value
of equity investments, of derivatives associated with
such investments, of share-based payments plans, of
treasury shares and of equity derivatives over treasury
shares.
According to the share-based payments plans (see Note
27), the shares to be delivered to employees under such
plan may be either Telef\u00f3nica, S.A. treasury shares,
acquired by itself or any of its Group companies, or
newly issued shares. The possibility of delivering shares
to beneficiaries of the plans in the future, implies a risk
since there could be an obligation to hand over a
maximum number of shares at the end of each phase,
whose acquisition (in the event of acquisition in the
market) in the future could imply a higher cash outflow
than required on the start date of each phase if the
share price is above the corresponding price on the
phase start date. In the event that new shares are issued
for delivery to the beneficiaries of the plan, there would
be a dilutive effect for ordinary shareholders of
Telef\u00f3nica as a result of the higher number of shares
delivered under such plan outstanding.
In 2021, the General Shareholder\u2019s Meeting approved a
Long-Term Incentive Plan allocated to Senior Executive
Officers of the Telef\u00f3nica Group consisting of the
delivery of shares of Telef\u00f3nica, S.A. This plan has a total
duration of five years and is divided into three mutually
exclusive cycles of three years each. Each of the cycles
commenced, respectively, in January 2021, 2022 and
2023. The first (2021) of the three cycles matured on
December 31, 2023 and the second cycle (2022)
matured on December 31, 2024 (see Note 27).
The 2022 Shareholder\u2019s Meeting approved a Global
Employee Incentive Share Purchase Plan for shares of
Telef\u00f3nica, S.A. for the Employees of the Telef\u00f3nica
Group, which delivered shares to its participants in 2024
(see Note 27).
Finally in 2024, the General Shareholder\u2019s Meeting
approved a Long-Term Incentive Plan allocated to
Senior Executive Officers of the Telef\u00f3nica Group
consisting of the delivery of shares of Telef\u00f3nica, S.A.
This plan has a total duration of five years and is divided
into 3 mutually exclusive cycles of three years each. The
first cycle is deemed to have started on January 1, 2024
(with delivery of the corresponding shares in 2027).
To reduce the risk associated with variations in share
price under these plans, Telef\u00f3nica could acquire
instruments that hedge the risk profile of some of these
plans.
In addition, the Group may use part of the treasury
shares of Telef\u00f3nica, S.A. held at December 31, 2024 to
cover shares deliverable under the outstanding Plans.
The net asset value of the treasury shares could
increase or decrease depending on variations in
Telef\u00f3nica, S.A.\u2019s share price.
Country risk
The Telef\u00f3nica Group managed or mitigated country risk
by pursuing two lines of action (in addition to its normal
business practices):
1. Partly matching assets to liabilities (those not
guaranteed by the Parent company) in the Telef\u00f3nica
Group\u2019s Latin American companies such that any
potential asset impairment would be accompanied
by a reduction in liabilities; and
2. Repatriating funds generated in Latin America that
are not required for the pursuit of new, profitable
business development opportunities in the region.
Regarding the first point, at December\u00a031, 2024 , the
Telef\u00f3nica Group\u2019s Latin American companies had net
financial debt not guaranteed by the Parent company of
1,768 million euros, which represents 6.5% of net
financial debt of the Group. Nevertheless, in certain
countries, such as Venezuela, there is a net cash balance
(instead of a net liability balance).
Regarding the net repatriation of funds to Spain, 364
million euros from Latin America companies have been
received in 2024. This amount includes aggregate
dividend collections of 377\u00a0million euros and fees for 266
million euros, partially offset by loans and capital
contributions made to subsidiaries in an aggregate
amount of 279\u00a0million euros.", "dimensions": { "concept": "ifrs-full:DisclosureOfMarketRiskExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-884": { "value": "Liquidity risk: arises due to a mismatch between
financing needs (including operating and financial
expenses, investment, debt redemptions and dividend
commitments) and sources of finance (including
revenues, divestments, credit lines from financial
institutions and capital market transactions). The cost
of finance could also be affected by movements in the
credit spreads (over benchmark rates) demanded by
lenders.
Liquidity risk
The Telef\u00f3nica Group seeks to match the schedule for
its debt maturity payments to its capacity to generate
cash flows to meet these maturities, while allowing for
some flexibility. In practice, this has been translated into
two key principles:
1. The Telef\u00f3nica Group\u2019s average maturity of net
financial debt is intended to stay above six years or
be restored above that threshold in a reasonable
period of time if it eventually falls below it. This
principle is considered as a guideline when managing
debt and access to credit markets, but not a rigid
requirement. When calculating the average maturity
for the net financial debt, a portion of the undrawn
credit lines can be considered as offsetting the
shorter debt maturities, and extension options on
some financing facilities may be considered as
exercised, for calculation purposes.
2. The Telef\u00f3nica Group must be able to pay all
commitments over the next 12 months without
accessing new borrowing or tapping the capital
markets (drawing upon firm credit lines arranged with
banks), assuming budget projections are met.
At December\u00a031, 2024, the average maturity of net
financial debt ( 27,161 million euros) was 11.34 years
(including undrawn committed credit facilities).
At December\u00a031, 2024, financial liabilities (Note 18) and
lease liabilities (Note 20) scheduled to mature in 2024
amounted to 5,590 and 2,226 million euros, respectively.
These maturities are lower than the amount of funds
available, calculated as the sum of: a) cash and cash
equivalents and current financial assets; b) annual cash
generation projected for 2025, and c) undrawn credit
facilities arranged with banks whose original maturity is
over one year (an aggregate of 10,634 million euros at
December 31, 2024), providing flexibility to the
Telef\u00f3nica Group with regard to accessing capital or
credit markets in the next two years. For a further
description of the Telef\u00f3nica Group\u2019s liquidity and
capital resources in 2024 , see Note 18 and Appendix V.", "dimensions": { "concept": "ifrs-full:DisclosureOfLiquidityRiskExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-885": { "value": "Credit risk: appears when a counterparty fails to meet
or delays its payment obligations in accordance with
the agreed terms, driving an impairment in an asset
due to: (i) solvency issues, or (ii) no intention to pay.
Credit risk
The Telef\u00f3nica Group trades in derivatives with
creditworthy counterparties. Therefore, Telef\u00f3nica, S.A.
generally trades with credit entities whose \u201csenior debt\u201d
ratings are of at least \u201cA-\u201d or in case of Spanish entities in
line with the credit rating of the Kingdom of Spain. In
Spain, where most of the Group\u2019s derivatives portfolio is
held, there are netting agreements with financial
institutions, with debtor or creditor positions offset in
case of bankruptcy, limiting the risk to the net position. In
addition, the CDS (Credit Default Swap) of all the
counterparties with which Telef\u00f3nica, S.A. operates is
monitored at all times in order to assess the maximum
allowable CDS for operating at any given time.
Transactions are generally only carried out with
counterparties whose CDS is below the threshold.
Net CVA (CVA+DVA) or Credit Valuation Adjustment is
the method used to measure credit risk for both
counterparties and Telef\u00f3nica in order to determine the
fair value of the derivatives portfolio. This adjustment
reflects the probability of default or the deterioration of
the credit quality of both Telef\u00f3nica and its
counterparties. The simplified formula to calculate CVA
is Expected Exposure times Probability of Default times
Loss Given Default (LGD). In order to calculate these
variables standard market practices are used.
At the same time, and in order to address the credit risk,
Telef\u00f3nica considers the use of CDS, novations,
derivatives with break clauses and signing CSA's under
certain conditions.
For other subsidiaries, particularly those in Latin
America, assuming a stable sovereign rating provides a
ceiling which is below \u201cA\u201d, trades are with local financial
entities whose rating by local standards is considered to
be of high creditworthiness.
Meanwhile, with credit risk arising from cash and cash
equivalents, the Telef\u00f3nica Group places its cash
surpluses in high quality money-market assets. These
placements are regulated by a general framework,
revised annually. Counterparties are chosen according
to criteria of liquidity, solvency and diversification based
on the conditions of the market and countries where the
Group operates. The general framework sets: the
maximum amounts to be invested by counterparty
based on its rating (long-term debt rating) and the
instruments in which the surpluses may be invested
(money-market instruments). Additionally, for Treasury
surpluses managed at Telef\u00f3nica S.A, a criteria based on
CDS is also considered, similar to that used for the
selection of counterparties to operate with derivatives,
for the selection of counterparties for the placement of
those surpluses.
The Telef\u00f3nica Group considers customer credit risk
management as a key element to achieve its business
and customer base growth targets in a sustainable way.
This management approach relies on the active
evaluation of the risk-reward balance within the
commercial operations and on the adequate separation
between the risk ownership and risk management
functions.
Formal delegation of authority procedures and
management practices are implemented in the different
Group companies, taking into account benchmark risk
management techniques, adapted to the local
characteristics of each market. Commercial debtors that
may cause a relevant impact on the Telef\u00f3nica Group
consolidated financial statements and increased risk
profile products - due to customer target, term, channels
or other commercial characteristics - are subject to
specific management practices in order to mitigate the
exposure to credit risk.
This customer credit risk management model is
embedded in the day-to-day operational processes of
the different companies, where the credit risk
assessment guides both the product and services
available for the different customers and the collection
strategy.
The Telef\u00f3nica Group\u2019s maximum exposure to credit risk
is initially represented by the carrying amounts of the
financial assets and the guarantees given by the
Telef\u00f3nica Group.
Several Telef\u00f3nica Group companies provide operating
guarantees granted by external counterparties, which
are offered during their normal commercial activity, in
bids for licenses, permits and concessions, and spectrum
acquisitions. At December\u00a031, 2024 , these guarantees
amounted to approximately 7,526 million euros (7,316
million euros at December\u00a031, 2023 ).", "dimensions": { "concept": "ifrs-full:DisclosureOfCreditRiskExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-886": { "value": "2226000000.0", "decimals": -6, "dimensions": { "concept": "ifrs-full:CurrentLeaseLiabilities", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2025-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-887": { "value": "
Capital management
Telef\u00f3nica\u2019s corporate finance department takes into
consideration several factors for the evaluation of the
Telef\u00f3nica\u2019s capital structure, with the aim of
maintaining the solvency and creating value to the
shareholders.
The corporate finance department estimates the cost of
capital on a continuous basis through the monitoring of
the financial markets and the application of standard
industry approaches for calculating weighted average
cost of capital, or WACC, so that it can be applied in the
valuation of businesses in course and in the evaluation of
investment projects. In addition, Telef\u00f3nica also uses as
reference net financial debt (excluding items of a non-
recurring or exceptional nature) that allows for a
comfortable investment grade credit rating as assigned
by credit rating agencies, aiming at protecting credit
solvency and making it compatible with alternative uses
of cash flow that could arise at any time.
These general principles are refined by other
considerations and the application of specific variables,
such as country risk in the broadest sense, or the
volatility in cash flows generation that are considered,
when evaluating the financial structure of the Telef\u00f3nica
Group and its different areas.
Interest rate benchmark reform and
associated risks
In 2022, the transition was made to the new reference
indices affected as of December 31, 2022 (GBP Libor and
CHF Libor) and in June 2023 the one related to USD
Libor. Due to the need to incorporate substitute indices
(known as fallbacks) of the reference rates used in the
contracts, in 2021 Telef\u00f3nica, S.A. decided not to adhere
to the ISDA Protocol and has since negotiated bilateral
contracts with each affected counterparty. Thanks to
the decisions agreed in 2021 to manage the changes in
Libor, there have been no impacts from these changes,
no contractual modifications of derivative instruments or
impact on hedging relationships directly affected by the
reform. Thus, as of June 2023, all Libor indices have been
replaced by Libor Fallbacks for the entire portfolio
outstanding on that date.
", "dimensions": { "concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-894": { "value": "
The breakdown of the financial results recognized in
2024, 2023 and 2022 is as follows:
Millions of euros
2024
2023
2022
Interest income
486
516
384
Dividends received
39
29
25
Other financial income
326
349
894
Subtotal
851
894
1,303
Changes in fair value of asset derivatives at fair value through profit or loss
145
114
377
Changes in fair value of liability derivatives at fair value through profit or loss
(88)
(42)
(861)
Changes in the fair value of debt instruments and other assets at fair value to profit
or loss
4
4
8
Transfer from equity of results of cash flow hedges - future cash flows that are no
longer expected to happen
\u2014
\u2014
(2)
(Loss)/Gain on fair value hedges
(226)
246
(1,818)
Gain/(loss) on adjustment to items hedged by fair value hedges
224
(292)
1,763
Subtotal
59
30
(533)
Interest expenses
(1,796)
(1,606)
(1,548)
Financial expenses on lease liabilities (see Note 20)
(512)
(435)
(393)
Ineffective portion of cash flow hedges
(2)
(12)
(15)
Accretion of provisions and other liabilities
(389)
(489)
276
Other financial expenses
(229)
(297)
(317)
Subtotal
(2,928)
(2,839)
(1,997)
Net finance costs excluding foreign exchange differences and inflation
adjustments
(2,018)
(1,915)
(1,227)
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-893": { "value": "
The breakdown of the financial results recognized in
2024, 2023 and 2022 is as follows:
Millions of euros
2024
2023
2022
Interest income
486
516
384
Dividends received
39
29
25
Other financial income
326
349
894
Subtotal
851
894
1,303
Changes in fair value of asset derivatives at fair value through profit or loss
145
114
377
Changes in fair value of liability derivatives at fair value through profit or loss
(88)
(42)
(861)
Changes in the fair value of debt instruments and other assets at fair value to profit
or loss
4
4
8
Transfer from equity of results of cash flow hedges - future cash flows that are no
longer expected to happen
\u2014
\u2014
(2)
(Loss)/Gain on fair value hedges
(226)
246
(1,818)
Gain/(loss) on adjustment to items hedged by fair value hedges
224
(292)
1,763
Subtotal
59
30
(533)
Interest expenses
(1,796)
(1,606)
(1,548)
Financial expenses on lease liabilities (see Note 20)
(512)
(435)
(393)
Ineffective portion of cash flow hedges
(2)
(12)
(15)
Accretion of provisions and other liabilities
(389)
(489)
276
Other financial expenses
(229)
(297)
(317)
Subtotal
(2,928)
(2,839)
(1,997)
Net finance costs excluding foreign exchange differences and inflation
adjustments
(2,018)
(1,915)
(1,227)
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceCostExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-892": { "value": "
The breakdown of the financial results recognized in
2024, 2023 and 2022 is as follows:
Millions of euros
2024
2023
2022
Interest income
486
516
384
Dividends received
39
29
25
Other financial income
326
349
894
Subtotal
851
894
1,303
Changes in fair value of asset derivatives at fair value through profit or loss
145
114
377
Changes in fair value of liability derivatives at fair value through profit or loss
(88)
(42)
(861)
Changes in the fair value of debt instruments and other assets at fair value to profit
or loss
4
4
8
Transfer from equity of results of cash flow hedges - future cash flows that are no
longer expected to happen
\u2014
\u2014
(2)
(Loss)/Gain on fair value hedges
(226)
246
(1,818)
Gain/(loss) on adjustment to items hedged by fair value hedges
224
(292)
1,763
Subtotal
59
30
(533)
Interest expenses
(1,796)
(1,606)
(1,548)
Financial expenses on lease liabilities (see Note 20)
(512)
(435)
(393)
Ineffective portion of cash flow hedges
(2)
(12)
(15)
Accretion of provisions and other liabilities
(389)
(489)
276
Other financial expenses
(229)
(297)
(317)
Subtotal
(2,928)
(2,839)
(1,997)
Net finance costs excluding foreign exchange differences and inflation
adjustments
(2,018)
(1,915)
(1,227)
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-891": { "value": "
The breakdown of the financial results recognized in
2024, 2023 and 2022 is as follows:
Millions of euros
2024
2023
2022
Interest income
486
516
384
Dividends received
39
29
25
Other financial income
326
349
894
Subtotal
851
894
1,303
Changes in fair value of asset derivatives at fair value through profit or loss
145
114
377
Changes in fair value of liability derivatives at fair value through profit or loss
(88)
(42)
(861)
Changes in the fair value of debt instruments and other assets at fair value to profit
or loss
4
4
8
Transfer from equity of results of cash flow hedges - future cash flows that are no
longer expected to happen
\u2014
\u2014
(2)
(Loss)/Gain on fair value hedges
(226)
246
(1,818)
Gain/(loss) on adjustment to items hedged by fair value hedges
224
(292)
1,763
Subtotal
59
30
(533)
Interest expenses
(1,796)
(1,606)
(1,548)
Financial expenses on lease liabilities (see Note 20)
(512)
(435)
(393)
Ineffective portion of cash flow hedges
(2)
(12)
(15)
Accretion of provisions and other liabilities
(389)
(489)
276
Other financial expenses
(229)
(297)
(317)
Subtotal
(2,928)
(2,839)
(1,997)
Net finance costs excluding foreign exchange differences and inflation
adjustments
(2,018)
(1,915)
(1,227)
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExpenseExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-890": { "value": "
The breakdown of the financial results recognized in
2024, 2023 and 2022 is as follows:
Millions of euros
2024
2023
2022
Interest income
486
516
384
Dividends received
39
29
25
Other financial income
326
349
894
Subtotal
851
894
1,303
Changes in fair value of asset derivatives at fair value through profit or loss
145
114
377
Changes in fair value of liability derivatives at fair value through profit or loss
(88)
(42)
(861)
Changes in the fair value of debt instruments and other assets at fair value to profit
or loss
4
4
8
Transfer from equity of results of cash flow hedges - future cash flows that are no
longer expected to happen
\u2014
\u2014
(2)
(Loss)/Gain on fair value hedges
(226)
246
(1,818)
Gain/(loss) on adjustment to items hedged by fair value hedges
224
(292)
1,763
Subtotal
59
30
(533)
Interest expenses
(1,796)
(1,606)
(1,548)
Financial expenses on lease liabilities (see Note 20)
(512)
(435)
(393)
Ineffective portion of cash flow hedges
(2)
(12)
(15)
Accretion of provisions and other liabilities
(389)
(489)
276
Other financial expenses
(229)
(297)
(317)
Subtotal
(2,928)
(2,839)
(1,997)
Net finance costs excluding foreign exchange differences and inflation
adjustments
(2,018)
(1,915)
(1,227)
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestExpenseExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-889": { "value": "
The breakdown of the financial results recognized in
2024, 2023 and 2022 is as follows:
Millions of euros
2024
2023
2022
Interest income
486
516
384
Dividends received
39
29
25
Other financial income
326
349
894
Subtotal
851
894
1,303
Changes in fair value of asset derivatives at fair value through profit or loss
145
114
377
Changes in fair value of liability derivatives at fair value through profit or loss
(88)
(42)
(861)
Changes in the fair value of debt instruments and other assets at fair value to profit
or loss
4
4
8
Transfer from equity of results of cash flow hedges - future cash flows that are no
longer expected to happen
\u2014
\u2014
(2)
(Loss)/Gain on fair value hedges
(226)
246
(1,818)
Gain/(loss) on adjustment to items hedged by fair value hedges
224
(292)
1,763
Subtotal
59
30
(533)
Interest expenses
(1,796)
(1,606)
(1,548)
Financial expenses on lease liabilities (see Note 20)
(512)
(435)
(393)
Ineffective portion of cash flow hedges
(2)
(12)
(15)
Accretion of provisions and other liabilities
(389)
(489)
276
Other financial expenses
(229)
(297)
(317)
Subtotal
(2,928)
(2,839)
(1,997)
Net finance costs excluding foreign exchange differences and inflation
adjustments
(2,018)
(1,915)
(1,227)
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExpenseExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-888": { "value": "
The breakdown of the financial results recognized in
2024, 2023 and 2022 is as follows:
Millions of euros
2024
2023
2022
Interest income
486
516
384
Dividends received
39
29
25
Other financial income
326
349
894
Subtotal
851
894
1,303
Changes in fair value of asset derivatives at fair value through profit or loss
145
114
377
Changes in fair value of liability derivatives at fair value through profit or loss
(88)
(42)
(861)
Changes in the fair value of debt instruments and other assets at fair value to profit
or loss
4
4
8
Transfer from equity of results of cash flow hedges - future cash flows that are no
longer expected to happen
\u2014
\u2014
(2)
(Loss)/Gain on fair value hedges
(226)
246
(1,818)
Gain/(loss) on adjustment to items hedged by fair value hedges
224
(292)
1,763
Subtotal
59
30
(533)
Interest expenses
(1,796)
(1,606)
(1,548)
Financial expenses on lease liabilities (see Note 20)
(512)
(435)
(393)
Ineffective portion of cash flow hedges
(2)
(12)
(15)
Accretion of provisions and other liabilities
(389)
(489)
276
Other financial expenses
(229)
(297)
(317)
Subtotal
(2,928)
(2,839)
(1,997)
Net finance costs excluding foreign exchange differences and inflation
adjustments
(2,018)
(1,915)
(1,227)
Note 26. Revenue and expenses
Other expenses
The breakdown of \u201cOther expenses\u201d is as follows:
Millions of euros
2024
2023
2022
Leases included in
\"Other expenses\" (1)
97
68
86
Other external
services
8,351
8,282
8,731
Taxes other than
income tax
831
753
834
Change in trade
provisions
719
734
693
Losses on disposal of
fixed assets, losses on
operations classified
as held for sale and\u00a0
sale of assets
1,525
33
124
Goodwill impairment
(Note 7)
866
58
\u2014
Other operating
expenses
165
370
273
Total
12,554
10,298
10,741
(1) According to IFRS 16, only short-term leases and leases involving low-value
assets or intangible assets are included (see Note 9).
\"Goodwill impairment\" in 2024 includes the impairment
of goodwill allocated to the cash-generating unit of Peru
(226 million euros), Chile (397 million euros), Telef\u00f3nica
Tech UK & Ireland (192 million euros) and the Be-terna
Group (51 million euros).
\"Goodwill impairment\" in 2023 included an impairment
of goodwill allocated to the Ecuador cash-generating
unit of 58 million euros.
\"Losses on disposal of fixed assets, losses on operations
classified as held for sale and sale of assets\" in 2024
includes mainly impairment losses on intangible assets
and property, plant and equipment in Telef\u00f3nica
Argentina amounting to 1,274 million euros (see Notes 2,
6 and 8), impairment losses on intangible assets of
Telef\u00f3nica del Per\u00fa amounting to 54 million euros (see
Notes 2 and 6), impairment losses on property, plant and
equipment of Pangea amounting to 108 million euros
(see Note 30) and the impairment of goodwill allocated
to the fiber optics business in Peru amounting to 34
million euros (see Note 30). In 2022 included impairment
losses on intangible assets and property, plant and
equipment of Telef\u00f3nica Argentina, for a total amount of
77 million euros.\u00a0
\"Other operating expenses\" in 2024 includes a lower
expense of 386 million Brazilian Reais (67 million euros at
the 2024 average exchange rate) referring to the
reversal of regulatory provisions of Telef\u00f3nica Brasil after
the Concession Migration Agreement signed between
Telef\u00f3nica Brasil and ANATEL (see notes 24.c and 29.a).
\u201cTaxes other than income tax\u201d includes the outstanding
credits related to the court decisions in favor of
Telef\u00f3nica Brasil which recognized the right to deduct
the ICMS from the calculation base of the PIS and
COFINS. In 2024 there has been no impact on \"Taxes
other than income tax\" having an impact of 51 million
euros and 73 million euros in 2023 and 2022,
respectively.
", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-898": { "value": "
Note 21. Payables and
other non-current
liabilities
The composition of \u201cPayables and other non-current
liabilities\u201d of the Telef\u00f3nica Group at December\u00a031, 2024
and December\u00a031, 2023 is as follows:
Millions of euros
12/31/2024
12/31/2023
Payables
1,850
1,913
Debt for spectrum acquisition
1,008
1,184
Payables to associates and
joint ventures (Note 10)
433
236
Trade payables
163
318
Other payables
246
175
Other non-current liabilities
1,843
1,692
Contractual liabilities (Note
23)
813
778
Deferred revenue
91
126
Non-current tax payables
938
784
Long-term insurance and
reinsurance contracts
liabilities to associates and
joint ventures (Note 10)
1
4
Total
3,693
3,605
\"Non-currrent debt for spectrum acquisition\" as of
December 31, 2024 and December 31, 2023, is detailed
below:
Millions of euros
12/31/2024
12/31/2023
Telef\u00f3nica Spain
63
69
Telef\u00f3nica Colombia
74
108
Telef\u00f3nica Brazil
177
211
Telef\u00f3nica Germany
690
791
Telef\u00f3nica Uruguay
4
5
Total
1,008
1,184
The outstanding liabilities at December 31, 2024 from the
acquisition of spectrum licenses by Telef\u00f3nica Brazil in
November 2021 amounted to 1,005 million Brazilian real
(156 million euros) including 942 million Brazilian reais
(146 million euros) classified as non-current. At
December 31, 2023, outstanding liabilities amounted to
1,301 million Brazilian reais (243 million euros at closing
exchange rate of 2023), including 949 million Brazilian
reais (177 million euros at closing exchange rate of 2023 )
classified as non-current.
In June 2019 Telef\u00f3nica Germany acquired a total of 90
MHz spectrum at a cost of 1,425 milli on euros. The
Company, like the other auction participants, reached an
agreement to defer payments in interest-free annual
installments until 2030, instead of an upfront one-time
payment (see Appendix VI). In 2024 and 2023, payments
amounting to 108 million euros have been made each
year (see Note 28). The current value of the debt at
December 31, 2024 amounted to 797 million euros ( 898
million euros at December 31, 2023), 690 million euros
have a maturity of more than twelve months (791 million
euros at December 31, 2023).
Payments for financed licenses for the years 2024 and
2023 amounted to 210 and 245 million euros,
respectively (see Note 28).
\"Non-current tax payables\" mainly includes balances of
Telef\u00f3nica Brasil regarding the rate of the
Telecommunications Inspection Fund (Fistel)
corresponding to the period 2020-2024 that jointly with
the financial interest accrued amounted to 4,714 million
Brazilian Reais (732 million euros) at December 31, 2024
(3,502 million Brazilian Reais, 655 million euros at
December 31, 2023). Any payment with respect to this
liability, according to the decisions of the Federal
Regional Court of the First Region, is suspended.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherNoncurrentLiabilitiesExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-897": { "value": "
Note 21. Payables and
other non-current
liabilities
The composition of \u201cPayables and other non-current
liabilities\u201d of the Telef\u00f3nica Group at December\u00a031, 2024
and December\u00a031, 2023 is as follows:
Millions of euros
12/31/2024
12/31/2023
Payables
1,850
1,913
Debt for spectrum acquisition
1,008
1,184
Payables to associates and
joint ventures (Note 10)
433
236
Trade payables
163
318
Other payables
246
175
Other non-current liabilities
1,843
1,692
Contractual liabilities (Note
23)
813
778
Deferred revenue
91
126
Non-current tax payables
938
784
Long-term insurance and
reinsurance contracts
liabilities to associates and
joint ventures (Note 10)
1
4
Total
3,693
3,605
\"Non-currrent debt for spectrum acquisition\" as of
December 31, 2024 and December 31, 2023, is detailed
below:
Millions of euros
12/31/2024
12/31/2023
Telef\u00f3nica Spain
63
69
Telef\u00f3nica Colombia
74
108
Telef\u00f3nica Brazil
177
211
Telef\u00f3nica Germany
690
791
Telef\u00f3nica Uruguay
4
5
Total
1,008
1,184
The outstanding liabilities at December 31, 2024 from the
acquisition of spectrum licenses by Telef\u00f3nica Brazil in
November 2021 amounted to 1,005 million Brazilian real
(156 million euros) including 942 million Brazilian reais
(146 million euros) classified as non-current. At
December 31, 2023, outstanding liabilities amounted to
1,301 million Brazilian reais (243 million euros at closing
exchange rate of 2023), including 949 million Brazilian
reais (177 million euros at closing exchange rate of 2023 )
classified as non-current.
In June 2019 Telef\u00f3nica Germany acquired a total of 90
MHz spectrum at a cost of 1,425 milli on euros. The
Company, like the other auction participants, reached an
agreement to defer payments in interest-free annual
installments until 2030, instead of an upfront one-time
payment (see Appendix VI). In 2024 and 2023, payments
amounting to 108 million euros have been made each
year (see Note 28). The current value of the debt at
December 31, 2024 amounted to 797 million euros ( 898
million euros at December 31, 2023), 690 million euros
have a maturity of more than twelve months (791 million
euros at December 31, 2023).
Payments for financed licenses for the years 2024 and
2023 amounted to 210 and 245 million euros,
respectively (see Note 28).
\"Non-current tax payables\" mainly includes balances of
Telef\u00f3nica Brasil regarding the rate of the
Telecommunications Inspection Fund (Fistel)
corresponding to the period 2020-2024 that jointly with
the financial interest accrued amounted to 4,714 million
Brazilian Reais (732 million euros) at December 31, 2024
(3,502 million Brazilian Reais, 655 million euros at
December 31, 2023). Any payment with respect to this
liability, according to the decisions of the Federal
Regional Court of the First Region, is suspended.
Note 22. Payables and
other current liabilities
The breakdown of \"Payables and other current liabilities\"
of the Telef\u00f3nica Group at December 31, 2024 and
December 31, 2023 is as follows:
Millions of euros
12/31/2024
12/31/2023
Payables
12,640
12,138
Trade payables
7,783
7,612
Payables to suppliers of property, plant and equipment
2,803
2,763
Debt for spectrum acquisition
227
218
Other payables
1,299
1,176
Dividends pending payment
121
166
Payables to associates and joint ventures (Note 10)
407
203
Other current liabilities
1,966
1,819
Contract liabilities (Note 23)
1,064
1,035
Deferred revenue
113
98
Advances received
533
465
Short-term insurance and reinsurance contracts liabilities
236
197
Short-term insurance and reinsurance contracts liabilities and other liabilities to associates and
joint ventures (Note 10)
20
24
Total
14,606
13,957
\"Current debt for spectrum acquisition\" as of
December\u00a031, 2024 and December\u00a031, 2023 , is detailed
below:
Millions of euros
12/31/2024
12/31/2023
Telef\u00f3nica Germany
107
107
Telef\u00f3nica Colombia
60
10
Telef\u00f3nica Brazil
10
66
Telef\u00f3nica Spain
32
7
Telef\u00f3nica Ecuador
15
16
Telef\u00f3nica Uruguay
3
12
Total
227
218
At December\u00a031, 2024 and December\u00a031, 2023 ,
\u201cPayables for spectrum acquisition\u201d, includes the debt
maturing within twelve months of the spectrum licenses
in Telef\u00f3nica Brazil acquired in November 2021 a nd the
spectrum licenses in Telef\u00f3nica Germany acquired in
June 2019 (see Note 21).
The composition of current \"Other payables\" at
December\u00a031, 2024 and December\u00a031, 2023 is as follows:
Millions of euros
12/31/2024
12/31/2023
Accrued employee benefits
610
621
Other non-financial non-
trade payables
689
555
Total
1,299
1,176
Other non-financial non-trade payables mainly comprise
liabilities associated with the continuing involvement in
portfolio sales made by Telef\u00f3nica Deutschland,
amounting to 481 million euros at December 31, 2024
(400 million euros at December 31, 2023).
Information on average payment
period to suppliers. Third additional
provision, \u201cInformation requirement\u201d
of Law 15/2010 of July 5, modified by
Law 18/2022, of September 28.
In accordance with the aforementioned Law 15/2010,
the following information corresponding to the Spanish
companies of the Telef\u00f3nica Group is disclosed:
Number of days
2024
2023
Weighted average maturity
period
51
51
Ratio of payments
52
53
Ratio of outstanding invoices
39
39
Millions of euros
Total payments
8,424
7,897
Outstanding invoices
1,221
1,211
On October 19, 2022, Law 18/2022, of September 28, on
the creation and growth of companies, came into force,
which modifies the third additional provision of Law
15/2010. The new standard establishes the obligation to
publish in annual accounts, in addition to the information
already required, the monetary volume and number of
invoices paid in a period less than the maximum
established in the late payment regulations, and the
percentage they represent of the total number of
invoices and on the total monetary payments to its
suppliers. This information for the 2024 and 2023
financial years is shown below:
2024
2023
Monetary volume of
invoices paid in a period
less than the maximum
established in the
regulations (millions of
euros)
5,406
4,558
Percentage of total
payments
64%
58%
Number of invoices paid
in a period less than the
maximum established in
the regulations
157,640
141,862
Percentage of the
total number of
invoices paid
58%
51%
The Telef\u00f3nica Group\u2019s Spanish companies adapted
their internal processes and payment schedules to the
provisions of Law 15/2010 (amended by Law 31/2014)
and Royal Decree-Law 4/2013, amending Law 3/2004,
which establishes measures against late payment in
commercial transactions. Engagement conditions with
commercial suppliers in 2024 included payment periods
of up to 60 days, according to the terms agreed
between the parties.
For efficiency purposes and in line with general business
practices, Telef\u00f3nica Group companies in Spain have
agreed payment schedules with suppliers, whereby
most of the payments are made on set days of each
month. Invoices falling due between two payment days
are settled on the following payment date in the
schedule.
Payments to Spanish suppliers in 2024 surpassing the
established legal limit were the result of circumstances
or incidents beyond the payment policies, mainly the
delay in issuing invoices (legal obligation of the supplier),
the closing of agreements with suppliers over the
delivery of goods or rendering of services, or occasional
processing issues.
The average payment period to suppliers of the
Telef\u00f3nica Group\u2019s companies in Spain in 2024,
calculated in accordance with the only additional
provision of the Resolution of the Instituto de
Contabilidad y Auditor\u00eda de Cuentas (Spanish
Accounting and Audit Institute) of January 29, 2016,
amounted to 51 days (51 days in 2023 ).", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherCurrentLiabilitiesExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-896": { "value": "
Note 21. Payables and
other non-current
liabilities
The composition of \u201cPayables and other non-current
liabilities\u201d of the Telef\u00f3nica Group at December\u00a031, 2024
and December\u00a031, 2023 is as follows:
Millions of euros
12/31/2024
12/31/2023
Payables
1,850
1,913
Debt for spectrum acquisition
1,008
1,184
Payables to associates and
joint ventures (Note 10)
433
236
Trade payables
163
318
Other payables
246
175
Other non-current liabilities
1,843
1,692
Contractual liabilities (Note
23)
813
778
Deferred revenue
91
126
Non-current tax payables
938
784
Long-term insurance and
reinsurance contracts
liabilities to associates and
joint ventures (Note 10)
1
4
Total
3,693
3,605
\"Non-currrent debt for spectrum acquisition\" as of
December 31, 2024 and December 31, 2023, is detailed
below:
Millions of euros
12/31/2024
12/31/2023
Telef\u00f3nica Spain
63
69
Telef\u00f3nica Colombia
74
108
Telef\u00f3nica Brazil
177
211
Telef\u00f3nica Germany
690
791
Telef\u00f3nica Uruguay
4
5
Total
1,008
1,184
The outstanding liabilities at December 31, 2024 from the
acquisition of spectrum licenses by Telef\u00f3nica Brazil in
November 2021 amounted to 1,005 million Brazilian real
(156 million euros) including 942 million Brazilian reais
(146 million euros) classified as non-current. At
December 31, 2023, outstanding liabilities amounted to
1,301 million Brazilian reais (243 million euros at closing
exchange rate of 2023), including 949 million Brazilian
reais (177 million euros at closing exchange rate of 2023 )
classified as non-current.
In June 2019 Telef\u00f3nica Germany acquired a total of 90
MHz spectrum at a cost of 1,425 milli on euros. The
Company, like the other auction participants, reached an
agreement to defer payments in interest-free annual
installments until 2030, instead of an upfront one-time
payment (see Appendix VI). In 2024 and 2023, payments
amounting to 108 million euros have been made each
year (see Note 28). The current value of the debt at
December 31, 2024 amounted to 797 million euros ( 898
million euros at December 31, 2023), 690 million euros
have a maturity of more than twelve months (791 million
euros at December 31, 2023).
Payments for financed licenses for the years 2024 and
2023 amounted to 210 and 245 million euros,
respectively (see Note 28).
\"Non-current tax payables\" mainly includes balances of
Telef\u00f3nica Brasil regarding the rate of the
Telecommunications Inspection Fund (Fistel)
corresponding to the period 2020-2024 that jointly with
the financial interest accrued amounted to 4,714 million
Brazilian Reais (732 million euros) at December 31, 2024
(3,502 million Brazilian Reais, 655 million euros at
December 31, 2023). Any payment with respect to this
liability, according to the decisions of the Federal
Regional Court of the First Region, is suspended.
Note 22. Payables and
other current liabilities
The breakdown of \"Payables and other current liabilities\"
of the Telef\u00f3nica Group at December 31, 2024 and
December 31, 2023 is as follows:
Millions of euros
12/31/2024
12/31/2023
Payables
12,640
12,138
Trade payables
7,783
7,612
Payables to suppliers of property, plant and equipment
2,803
2,763
Debt for spectrum acquisition
227
218
Other payables
1,299
1,176
Dividends pending payment
121
166
Payables to associates and joint ventures (Note 10)
407
203
Other current liabilities
1,966
1,819
Contract liabilities (Note 23)
1,064
1,035
Deferred revenue
113
98
Advances received
533
465
Short-term insurance and reinsurance contracts liabilities
236
197
Short-term insurance and reinsurance contracts liabilities and other liabilities to associates and
joint ventures (Note 10)
20
24
Total
14,606
13,957
\"Current debt for spectrum acquisition\" as of
December\u00a031, 2024 and December\u00a031, 2023 , is detailed
below:
Millions of euros
12/31/2024
12/31/2023
Telef\u00f3nica Germany
107
107
Telef\u00f3nica Colombia
60
10
Telef\u00f3nica Brazil
10
66
Telef\u00f3nica Spain
32
7
Telef\u00f3nica Ecuador
15
16
Telef\u00f3nica Uruguay
3
12
Total
227
218
At December\u00a031, 2024 and December\u00a031, 2023 ,
\u201cPayables for spectrum acquisition\u201d, includes the debt
maturing within twelve months of the spectrum licenses
in Telef\u00f3nica Brazil acquired in November 2021 a nd the
spectrum licenses in Telef\u00f3nica Germany acquired in
June 2019 (see Note 21).
The composition of current \"Other payables\" at
December\u00a031, 2024 and December\u00a031, 2023 is as follows:
Millions of euros
12/31/2024
12/31/2023
Accrued employee benefits
610
621
Other non-financial non-
trade payables
689
555
Total
1,299
1,176
Other non-financial non-trade payables mainly comprise
liabilities associated with the continuing involvement in
portfolio sales made by Telef\u00f3nica Deutschland,
amounting to 481 million euros at December 31, 2024
(400 million euros at December 31, 2023).
Information on average payment
period to suppliers. Third additional
provision, \u201cInformation requirement\u201d
of Law 15/2010 of July 5, modified by
Law 18/2022, of September 28.
In accordance with the aforementioned Law 15/2010,
the following information corresponding to the Spanish
companies of the Telef\u00f3nica Group is disclosed:
Number of days
2024
2023
Weighted average maturity
period
51
51
Ratio of payments
52
53
Ratio of outstanding invoices
39
39
Millions of euros
Total payments
8,424
7,897
Outstanding invoices
1,221
1,211
On October 19, 2022, Law 18/2022, of September 28, on
the creation and growth of companies, came into force,
which modifies the third additional provision of Law
15/2010. The new standard establishes the obligation to
publish in annual accounts, in addition to the information
already required, the monetary volume and number of
invoices paid in a period less than the maximum
established in the late payment regulations, and the
percentage they represent of the total number of
invoices and on the total monetary payments to its
suppliers. This information for the 2024 and 2023
financial years is shown below:
2024
2023
Monetary volume of
invoices paid in a period
less than the maximum
established in the
regulations (millions of
euros)
5,406
4,558
Percentage of total
payments
64%
58%
Number of invoices paid
in a period less than the
maximum established in
the regulations
157,640
141,862
Percentage of the
total number of
invoices paid
58%
51%
The Telef\u00f3nica Group\u2019s Spanish companies adapted
their internal processes and payment schedules to the
provisions of Law 15/2010 (amended by Law 31/2014)
and Royal Decree-Law 4/2013, amending Law 3/2004,
which establishes measures against late payment in
commercial transactions. Engagement conditions with
commercial suppliers in 2024 included payment periods
of up to 60 days, according to the terms agreed
between the parties.
For efficiency purposes and in line with general business
practices, Telef\u00f3nica Group companies in Spain have
agreed payment schedules with suppliers, whereby
most of the payments are made on set days of each
month. Invoices falling due between two payment days
are settled on the following payment date in the
schedule.
Payments to Spanish suppliers in 2024 surpassing the
established legal limit were the result of circumstances
or incidents beyond the payment policies, mainly the
delay in issuing invoices (legal obligation of the supplier),
the closing of agreements with suppliers over the
delivery of goods or rendering of services, or occasional
processing issues.
The average payment period to suppliers of the
Telef\u00f3nica Group\u2019s companies in Spain in 2024,
calculated in accordance with the only additional
provision of the Resolution of the Instituto de
Contabilidad y Auditor\u00eda de Cuentas (Spanish
Accounting and Audit Institute) of January 29, 2016,
amounted to 51 days (51 days in 2023 ).", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherPayablesExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-895": { "value": "
Note 21. Payables and
other non-current
liabilities
The composition of \u201cPayables and other non-current
liabilities\u201d of the Telef\u00f3nica Group at December\u00a031, 2024
and December\u00a031, 2023 is as follows:
Millions of euros
12/31/2024
12/31/2023
Payables
1,850
1,913
Debt for spectrum acquisition
1,008
1,184
Payables to associates and
joint ventures (Note 10)
433
236
Trade payables
163
318
Other payables
246
175
Other non-current liabilities
1,843
1,692
Contractual liabilities (Note
23)
813
778
Deferred revenue
91
126
Non-current tax payables
938
784
Long-term insurance and
reinsurance contracts
liabilities to associates and
joint ventures (Note 10)
1
4
Total
3,693
3,605
\"Non-currrent debt for spectrum acquisition\" as of
December 31, 2024 and December 31, 2023, is detailed
below:
Millions of euros
12/31/2024
12/31/2023
Telef\u00f3nica Spain
63
69
Telef\u00f3nica Colombia
74
108
Telef\u00f3nica Brazil
177
211
Telef\u00f3nica Germany
690
791
Telef\u00f3nica Uruguay
4
5
Total
1,008
1,184
The outstanding liabilities at December 31, 2024 from the
acquisition of spectrum licenses by Telef\u00f3nica Brazil in
November 2021 amounted to 1,005 million Brazilian real
(156 million euros) including 942 million Brazilian reais
(146 million euros) classified as non-current. At
December 31, 2023, outstanding liabilities amounted to
1,301 million Brazilian reais (243 million euros at closing
exchange rate of 2023), including 949 million Brazilian
reais (177 million euros at closing exchange rate of 2023 )
classified as non-current.
In June 2019 Telef\u00f3nica Germany acquired a total of 90
MHz spectrum at a cost of 1,425 milli on euros. The
Company, like the other auction participants, reached an
agreement to defer payments in interest-free annual
installments until 2030, instead of an upfront one-time
payment (see Appendix VI). In 2024 and 2023, payments
amounting to 108 million euros have been made each
year (see Note 28). The current value of the debt at
December 31, 2024 amounted to 797 million euros ( 898
million euros at December 31, 2023), 690 million euros
have a maturity of more than twelve months (791 million
euros at December 31, 2023).
Payments for financed licenses for the years 2024 and
2023 amounted to 210 and 245 million euros,
respectively (see Note 28).
\"Non-current tax payables\" mainly includes balances of
Telef\u00f3nica Brasil regarding the rate of the
Telecommunications Inspection Fund (Fistel)
corresponding to the period 2020-2024 that jointly with
the financial interest accrued amounted to 4,714 million
Brazilian Reais (732 million euros) at December 31, 2024
(3,502 million Brazilian Reais, 655 million euros at
December 31, 2023). Any payment with respect to this
liability, according to the decisions of the Federal
Regional Court of the First Region, is suspended.
Note 22. Payables and
other current liabilities
The breakdown of \"Payables and other current liabilities\"
of the Telef\u00f3nica Group at December 31, 2024 and
December 31, 2023 is as follows:
Millions of euros
12/31/2024
12/31/2023
Payables
12,640
12,138
Trade payables
7,783
7,612
Payables to suppliers of property, plant and equipment
2,803
2,763
Debt for spectrum acquisition
227
218
Other payables
1,299
1,176
Dividends pending payment
121
166
Payables to associates and joint ventures (Note 10)
407
203
Other current liabilities
1,966
1,819
Contract liabilities (Note 23)
1,064
1,035
Deferred revenue
113
98
Advances received
533
465
Short-term insurance and reinsurance contracts liabilities
236
197
Short-term insurance and reinsurance contracts liabilities and other liabilities to associates and
joint ventures (Note 10)
20
24
Total
14,606
13,957
\"Current debt for spectrum acquisition\" as of
December\u00a031, 2024 and December\u00a031, 2023 , is detailed
below:
Millions of euros
12/31/2024
12/31/2023
Telef\u00f3nica Germany
107
107
Telef\u00f3nica Colombia
60
10
Telef\u00f3nica Brazil
10
66
Telef\u00f3nica Spain
32
7
Telef\u00f3nica Ecuador
15
16
Telef\u00f3nica Uruguay
3
12
Total
227
218
At December\u00a031, 2024 and December\u00a031, 2023 ,
\u201cPayables for spectrum acquisition\u201d, includes the debt
maturing within twelve months of the spectrum licenses
in Telef\u00f3nica Brazil acquired in November 2021 a nd the
spectrum licenses in Telef\u00f3nica Germany acquired in
June 2019 (see Note 21).
The composition of current \"Other payables\" at
December\u00a031, 2024 and December\u00a031, 2023 is as follows:
Millions of euros
12/31/2024
12/31/2023
Accrued employee benefits
610
621
Other non-financial non-
trade payables
689
555
Total
1,299
1,176
Other non-financial non-trade payables mainly comprise
liabilities associated with the continuing involvement in
portfolio sales made by Telef\u00f3nica Deutschland,
amounting to 481 million euros at December 31, 2024
(400 million euros at December 31, 2023).
Information on average payment
period to suppliers. Third additional
provision, \u201cInformation requirement\u201d
of Law 15/2010 of July 5, modified by
Law 18/2022, of September 28.
In accordance with the aforementioned Law 15/2010,
the following information corresponding to the Spanish
companies of the Telef\u00f3nica Group is disclosed:
Number of days
2024
2023
Weighted average maturity
period
51
51
Ratio of payments
52
53
Ratio of outstanding invoices
39
39
Millions of euros
Total payments
8,424
7,897
Outstanding invoices
1,221
1,211
On October 19, 2022, Law 18/2022, of September 28, on
the creation and growth of companies, came into force,
which modifies the third additional provision of Law
15/2010. The new standard establishes the obligation to
publish in annual accounts, in addition to the information
already required, the monetary volume and number of
invoices paid in a period less than the maximum
established in the late payment regulations, and the
percentage they represent of the total number of
invoices and on the total monetary payments to its
suppliers. This information for the 2024 and 2023
financial years is shown below:
2024
2023
Monetary volume of
invoices paid in a period
less than the maximum
established in the
regulations (millions of
euros)
5,406
4,558
Percentage of total
payments
64%
58%
Number of invoices paid
in a period less than the
maximum established in
the regulations
157,640
141,862
Percentage of the
total number of
invoices paid
58%
51%
The Telef\u00f3nica Group\u2019s Spanish companies adapted
their internal processes and payment schedules to the
provisions of Law 15/2010 (amended by Law 31/2014)
and Royal Decree-Law 4/2013, amending Law 3/2004,
which establishes measures against late payment in
commercial transactions. Engagement conditions with
commercial suppliers in 2024 included payment periods
of up to 60 days, according to the terms agreed
between the parties.
For efficiency purposes and in line with general business
practices, Telef\u00f3nica Group companies in Spain have
agreed payment schedules with suppliers, whereby
most of the payments are made on set days of each
month. Invoices falling due between two payment days
are settled on the following payment date in the
schedule.
Payments to Spanish suppliers in 2024 surpassing the
established legal limit were the result of circumstances
or incidents beyond the payment policies, mainly the
delay in issuing invoices (legal obligation of the supplier),
the closing of agreements with suppliers over the
delivery of goods or rendering of services, or occasional
processing issues.
The average payment period to suppliers of the
Telef\u00f3nica Group\u2019s companies in Spain in 2024,
calculated in accordance with the only additional
provision of the Resolution of the Instituto de
Contabilidad y Auditor\u00eda de Cuentas (Spanish
Accounting and Audit Institute) of January 29, 2016,
amounted to 51 days (51 days in 2023 ).", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-899": { "value": "
Millions of euros
12/31/2024
12/31/2023
Payables
1,850
1,913
Debt for spectrum acquisition
1,008
1,184
Payables to associates and
joint ventures (Note 10)
433
236
Trade payables
163
318
Other payables
246
175
Other non-current liabilities
1,843
1,692
Contractual liabilities (Note
23)
813
778
Deferred revenue
91
126
Non-current tax payables
938
784
Long-term insurance and
reinsurance contracts
liabilities to associates and
joint ventures (Note 10)
1
4
Total
3,693
3,605
Millions of euros
12/31/2024
12/31/2023
Payables
12,640
12,138
Trade payables
7,783
7,612
Payables to suppliers of property, plant and equipment
2,803
2,763
Debt for spectrum acquisition
227
218
Other payables
1,299
1,176
Dividends pending payment
121
166
Payables to associates and joint ventures (Note 10)
407
203
Other current liabilities
1,966
1,819
Contract liabilities (Note 23)
1,064
1,035
Deferred revenue
113
98
Advances received
533
465
Short-term insurance and reinsurance contracts liabilities
236
197
Short-term insurance and reinsurance contracts liabilities and other liabilities to associates and
joint ventures (Note 10)
20
24
Total
14,606
13,957
", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredIncomeExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-900": { "value": "
Note 23. Breakdown of
contractual assets and
liabilities, and capitalized\u00a0costs
The movement of contractual assets and capitalized
costs in 2024 and 2023 is as follows:
Millions of euros
Balance at
12/31/2023
Additions
Disposals
Transfers
Balance at
12/31/2024
Long-term contractual assets (Note 12)
325
162
(10)
(189)
288
Contractual assets
326
162
(10)
(189)
289
Impairment losses
(1)
\u2014
\u2014
\u2014
(1)
Short-term contractual assets (Note 14)
202
268
(426)
189
229
Contractual assets
209
270
(426)
188
236
Impairment losses
(7)
(2)
\u2014
1
(7)
Total
527
430
(436)
\u2014
517
Millions of euros
Balance at
12/31/2022
Additions
Disposals
Transfers
Balance at
12/31/2023
Long-term contractual assets (Note 12)
359
118
(17)
(135)
325
Contractual assets
360
118
(17)
(135)
326
Impairment losses
(1)
\u2014
\u2014
\u2014
(1)
Short-term contractual assets (Note 14)
195
276
(403)
134
202
Contractual assets
202
277
(404)
134
209
Impairment losses
(7)
(1)
1
\u2014
(7)
Total
554
394
(420)
(1)
527
Once the amounts recognized as contract assets
become receivables, which normally occurs when they
are invoiced, they are transferred to the \"Trade
receivables\" heading. In this regard, the balance of the
contract assets account basically represents amounts
not yet due.
The movement of the deferred expenses in 2024 and
2023 is as follows:
Millions of euros
Balance at
12/31/2023
Additions
Disposals
Transfers
Translation
differences and
inflation
adjustments
Balance at
12/31/2024
Non-current capitalized costs (Note 12)
1,001
885
(5)
(764)
(44)
1,073
Of obtaining a contract
774
759
(5)
(601)
(56)
871
Of fulfilling a contract
227
126
\u2014
(163)
12
202
Impairment losses
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Current capitalized costs (Note 14)
998
671
(1,332)
761
(4)
1,094
Of obtaining a contract
815
573
(1,077)
599
(21)
889
Of fulfilling a contract
183
98
(255)
162
17
205
Impairment losses
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Total
1,999
1,556
(1,337)
(3)
(48)
2,167
Millions of euros
Balance at
12/31/2022
Additions
Disposals
Transfers
Translation
differences and
inflation
adjustments
Balance at
12/31/2023
Non-current capitalized costs
(Note 12)
854
838
(2)
(682)
(7)
1,001
Of obtaining a contract
610
694
(1)
(536)
7
774
Of fulfilling a contract
244
144
(1)
(146)
(14)
227
Impairment losses
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Current capitalized costs (Note
14)
885
620
(1,175)
684
(16)
998
Of obtaining a contract
710
534
(967)
538
\u2014
815
Of fulfilling a contract
175
86
(208)
146
(16)
183
Impairment losses
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Total
1,739
1,458
(1,177)
2
(23)
1,999
The movement of contractual liabilities of contracts with
customers in 2024 and 2023 is as follows:
Millions of euros
Balance at
12/31/2023
Additions
Disposals
(previous
years)
Disposals
(current
year)
Transfers
Translation
differences and
inflation
adjustments
Balance at
12/31/2024
Long-term contractual liabilities (Note
21)
778
250
(1)
\u2014
(222)
8
813
Short-term contractual liabilities (Note
22)
1,035
5,624
(969)
(4,809)
220
(37)
1,064
Total
1,813
5,874
(970)
(4,809)
(2)
(29)
1,877
Millions of euros
Balance at
12/31/2022
Additions
Disposals
(previous
years)
Disposals
(current
year)
Transfers
Translation
differences
and inflation
adjustments
Balance at
12/31/2023
Long-term contractual
liabilities (Note 21)
891
162
(2)
(1)
(279)
7
778
Short-term contractual
liabilities (Note 22)
1,038
5,374
(973)
(4,700)
286
10
1,035
Total
1,929
5,536
(975)
(4,701)
7
17
1,813
The maturity schedule of contractual liabilities at
December\u00a031, 2024 is as follows:
Millions of euros
2025
2026
2027
Subsequent
years
Total
Contractual liabilities, activation fees
8
3
2
2
15
Contractual liabilities, sales of prepay cards
560
\u2014
\u2014
\u2014
560
Contractual liabilities, services
214
34
15
96
359
Contractual liabilities, sales of handsets
34
6
\u2014
\u2014
40
Contractual liabilities, irrevocable rights to use
73
63
57
434
627
Other contractual liabilities
175
25
21
55
276
Maturity of performance obligations
1,064
131
95
587
1,877
", "dimensions": { "concept": "tef:DisclosuresOfContractualAssetsAndLiabilitiesAndDeferredExpensesTextBlock", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-901": { "value": "
Note 24. Provisions
The amounts of provisions in 2024 and 2023 are as
follows:
12/31/2024
12/31/2023
Millions of euros
Current
Non-current
Total
Current
Non-current
Total
Employee benefits
1,073
4,020
5,093
1,005
4,949
5,954
Termination plans
357
1,222
1,579
282
1,461
1,743
Post-employment defined benefit plans
10
329
339
12
428
440
Other benefits
706
2,469
3,175
711
3,060
3,771
Dismantling of assets
16
519
535
17
505
522
Other provisions
576
1,613
2,189
574
2,000
2,574
Total
1,665
6,152
7,817
1,596
7,454
9,050
a) Employee benefits
In 2024 the Group recorded a provision of 104 million
euros (1,538 million euros in 2023, of which 1,320 million
euros corresponded to Telef\u00f3nica Spain mainly relating
to the agreement reached with the most representative
Trade Unions for the execution of Collective
Redundancies, explained in Termination plans in this
note). The distribution by segment of the restructuring
costs, in terms of their impact on operating income, is as
follows:
Millions of euros
2024
2023
Telef\u00f3nica Spain
27
1,320
Telef\u00f3nica Germany
(1)
11
Telef\u00f3nica Hispam
61
128
Other companies
17
79
Total
104
1,538
Termination plans
The movement in provisions for termination plans in
2024 and 2023 is as follows:
Millions of euros
Total
Provisions for termination plans at
12/31/2022
376
Additions
1,520
Retirements/amount applied
(133)
Translation differences, inflation
adjustments and accretion
(20)
Provisions for termination plans at
12/31/2023
1,743
Additions
79
Retirements/amount applied
(311)
Translation differences, inflation
adjustments and accretion
68
Provisions for termination plans at
12/31/2024
1,579
Telef\u00f3nica Spain
On December 28, 2023 certain subsidiaries of Telef\u00f3nica
Spain, taking into account the concurrence of
productive, organizational and technical causes,
reached an agreement with the most representative
Trade Unions for the execution of collective
redundancies up to a total of 3,420 employees, to which
employees turned 56 years or older during 2024 and
with a seniority of more than 15 years were adhered (see
Note 2). This agreement was endorsed on January 3,
2024.
As a consequence of these agreements, a provision of
1,299 million euros were recorded, charged to the
personnel expenses heading of the consolidated income
statement in 2023. This provision stood at 1,248 million
euros at December 31, 2024, of which 231 million euros
were classified as current (107 million euros in 2023).
The discount rate used for this termination plan at
December\u00a031, 2024 was 2.76% with an average plan
length of 3.19 years.
Additionally, in 2023 the III Collective Bargaining
Agreement was signed, valid until December 31, 2026
and extendable for another year, with the aim of moving
towards a more digital, flexible company prepared for
future challenges in a highly competitive context and
deep transformation.
Post-employment defined benefit plans
The Group has a number of defined benefit plans in the
countries where it operates. The following tables
present the main data of these plans:
12/31/2024
Millions of euros
Germany
Brazil
Hispam
Others
Total
Obligation
226
544
75
17
862
Assets
(106)
(628)
\u2014
(17)
(751)
Net provision before asset ceiling
120
(84)
75
\u2014
111
Asset ceiling
\u2014
173
\u2014
\u2014
173
Total
120
89
75
\u2014
284
Net provision
130
113
90
6
339
Net assets
10
24
15
6
55
12/31/2023
Millions of euros
Germany
Brazil
Hispam
Others
Total
Obligation
236
764
74
15
1,089
Assets
(103)
(777)
\u2014
(14)
(894)
Net provision before asset ceiling
133
(13)
74
1
195
Asset ceiling
\u2014
200
\u2014
\u2014
200
Total
133
187
74
1
395
Net provision
143
201
86
10
440
Net assets
10
14
12
9
45
The movement in the present value of obligations in
2024 and 2023 is as follows:
Millions of euros
Germany
Brazil
Hispam
Other
Total
Present value of obligation at 12/31/2022
208
622
64
19
913
Translation differences
\u2014
27
4
\u2014
31
Current service cost
11
2
5
1
19
Interest cost
8
61
8
1
78
Actuarial losses and gains
15
101
2
\u2014
118
Benefits paid
(6)
(49)
(5)
(1)
(61)
Plan curtailments
\u2014
\u2014
(3)
\u2014
(3)
Other movements
\u2014
\u2014
(1)
(5)
(6)
Present value of obligation at 12/31/2023
236
764
74
15
1,089
First application of IAS 21
\u2014
\u2014
6
\u2014
6
Translation differences
\u2014
(119)
(10)
1
(128)
Current service cost
11
3
8
1
23
Interest cost
8
62
18
1
89
Actuarial losses and gains
(23)
(118)
(10)
\u2014
(151)
Benefits paid
(6)
(48)
(6)
(1)
(61)
Plan curtailments
\u2014
\u2014
(3)
\u2014
(3)
Other movements
\u2014
\u2014
(2)
\u2014
(2)
Present value of obligation at 12/31/2024
226
544
75
17
862
Movements in the fair value of plan assets in 2024 and
2023 are as follows:
Millions of euros
Germany
Brazil
Other
Total
Fair value of plan assets at 12/31/2022
101
751
18
870
Translation differences
\u2014
31
\u2014
31
Interest income
3
74
\u2014
77
Actuarial losses and gains
\u2014
(30)
\u2014
(30)
Company contributions
2
\u2014
\u2014
2
Benefits paid
(3)
(45)
\u2014
(48)
Transfers
\u2014
\u2014
(4)
(4)
Other movements
\u2014
(4)
\u2014
(4)
Fair value of plan assets at 12/31/2023
103
777
14
894
Translation differences
\u2014
(129)
1
(128)
Interest income
4
63
\u2014
67
Actuarial losses and gains
\u2014
(31)
\u2014
(31)
Company contributions
2
\u2014
\u2014
2
Benefits paid
(3)
(44)
\u2014
(47)
Transfers
(1)
\u2014
1
\u2014
Other movements
1
(8)
1
(6)
Fair value of plan assets at 12/31/2024
106
628
17
751
Telef\u00f3nica Brazil post-employment benefit plans
Telef\u00f3nica Brazil sponsors the following post-
employment benefit plans:
Plans
Management entity
Sponsor
Health plans
Plano de Assist\u00eancia M\u00e9dica ao Aposentado y
Programa de Coberturas Especiais (PAMA/PCE)
Funda\u00e7\u00e3o Sistel de
Seguridade Social
Telef\u00f4nica Brasil, jointly and severally with other
companies resulting from the privatization of
Telebr\u00e1s (Telecomunica\u00e7\u00f5es Brasileiras, S.A.)
Assistencia m\u00e9dica \u2013 Lei 9.656/98
Telef\u00f4nica Brasil
Telef\u00f4nica Brasil, Terra Networks, TGLog, TIS, IoTCo
Brasil and CloudCo Brasil
Pension plans
PBS Assistidos (PBS-A)
Funda\u00e7\u00e3o Sistel de
Seguridade Social
Telef\u00f4nica Brasil, jointly and severally with other
companies resulting from the privatization of
Telebr\u00e1s (Telecomunica\u00e7\u00f5es Brasileiras, S.A.)
CTB
Telef\u00f4nica Brasil
Telef\u00f4nica Brasil
Telef\u00f4nica BD
Vis\u00e3o Prev
Telef\u00f4nica Brasil
Planes VISAO
Vis\u00e3o Prev
Telef\u00f4nica Brasil, Terra Networks, TGLog, TIS, IoTCo
Brasil and CloudCo Brasil
The main actuarial assumptions used in valuing these
plans are as follows:
12/31/2024
12/31/2023
Discount rate
11.07% - 11.67%
8.90% - 9.18%
Nominal rate of salary
increase
4.57% - 6.60%
4.57% - 6.60%
Long term inflation rate
3.50%
3.50%
Growth rate for medical
costs
6.61%
6.61%
Mortality tables
AT 2000 M/F
AT 2000 M/F
The discount rate and growth rate for medical costs are
considered to be the most significant actuarial
assumptions with a reasonable possibility of fluctuations
depending on demographic and economic changes and
may significantly change the amount of the post-
employment benefit obligation. The sensitivity to
changes in these assumptions is shown below:
Present value of the
discounted obligation at the
current discount rate
Present value of the obligation
by increasing the discount rate
by 0.5%
Present value of the obligation
by reducing the discount rate
by 0.5%
Pension plans
304
295
313
Health plans
241
228
254
Total obligation
545
523
567
Present value of the obligation
at the current growth rate for
medical costs
Present value of the obligation
by increasing the rate by 1%
Present value of the obligation
by reducing the rate by 1%
Pension plans
304
304
304
Health plans
241
269
217
Total obligation
545
573
521
Other employee benefits
Telef\u00f3nica de Espa\u00f1a, Telef\u00f3nica M\u00f3viles Espa\u00f1a
and Telef\u00f3nica Soluciones Individual Suspension
Plans
In 2015 Telef\u00f3nica de Espa\u00f1a, S.A.U., Telef\u00f3nica M\u00f3viles
Espa\u00f1a, S.A.U. and Telef\u00f3nica Soluciones de Inform\u00e1tica
y Comunicaciones de Espa\u00f1a, S.A.U. signed the first
Collective Bargaining Agreement of Related Companies
(CEV). This agreement considered elements that
included a plan of measures for individual suspension of
the employment relationship in 2016 and 2017, applying
principles of voluntariness, universality, non-
discrimination and social responsibility. In December
2016, the Collective Bargaining Agreement of Related
Companies was extended until 2018 by virtue of the
provisions thereof. In September 2019 Telef\u00f3nica Espa\u00f1a
signed the second Collective Agreement of Related
Companies that includes, among other aspects, an
\"Individual Suspension Plan\" that was completely
voluntary for the year 2019, with the same conditions as
the previous one. In 2021, Telef\u00f3nica Espa\u00f1a signed a
Social Pact for Employment supported by the largest
trade unions, which contemplated an Individual
Suspension Plan of employment, fully voluntary.
These plans are based on mutual agreement between
the company and employees and entail the possibility of
voluntarily suspending the employment relationship for
an initial three-year period, renewable for consecutive
three-year periods until the retirement age. Employees
who meet the age and seniority requirements may enter
the Individual Suspension Plans (PSI) in the periods
opened for these purposes.
At the end of each period, the current value of the
forecast payment flows to meet the commitments of
these programs (applying certain hypotheses regarding
estimated number of accessions and future
reintegration ratio) is recognized. At 2024 and 2023
year-ends, this figure was calculated using the biometric
table PERM2020 published in the resolution of
December 17, 2020 combined with the invalidity table
published in the ministerial order of 1977 and a high
quality credit market based interest rate.
The provision at December\u00a031, 2024 amounted to 3,073
million euros (3,648 million euros at December\u00a031, 2023).
The discount rate used for these provisions at
December\u00a031, 2024 was 2.75% with an average plan
length of 2.73 years.
Sensitivity of the valuation
The table below shows the sensitivity of the value of
termination, post-employment and other obligations,
including the Individual Suspension Plans of Telef\u00f3nica
Group companies in Spain to changes in the discount
rate:
-100bps
+100 bps
Impact on
value
Impact on
income
statement
Impact on
value
Impact on\u00a0
income
statement
(127)
(127)
120
120
A 100 b.p. increase in the discount rate would reduce
the value of the liabilities by 120 million euros and have a
positive impact on the income statement of 120 million
euros before tax. On the other hand, a 100 b.p. decrease
in the discount rate would increase the value of the
liabilities by 127 million euros and have a negative impact
on the income statement of 127 million euros before tax.
The Telef\u00f3nica Group actively manages this position and
has arranged a derivatives portfolio to significantly
reduce the impact of changes in the discount rate (see
Note 19).
b) Provisions for dismantling of
assets
The movement of provision for dismantling of assets in
2024 and 2023 is as follows:
\u00a0
Millions of euros
Dismantling of assets at December 31,
2022
528
Additions
54
Accretion
23
Retirements/amount applied
(67)
Transfers
14
Translation differences and other
(30)
Dismantling of assets at December 31,
2023
522
Additions
38
Accretion
43
Retirements/amount applied
(48)
Transfers
4
Business combinations
1
Translation differences and other
(25)
Dismantling of assets at December 31,
2024
535
The detail by segments of provision for dismantling of
assets in 2024 and 2023 is as follows:
Millions of euros
12/31/2024
12/31/2023
Telef\u00f3nica Spain
14
16
Telef\u00f3nica Germany
360
354
Telef\u00f3nica Brazil
64
76
Telef\u00f3nica Hispam
97
76
Total
535
522
c) Other provisions
The movement in \u201cOther provisions\u201d in 2024 and 2023 is
as follows:
Millions of euros
Other provisions at December 31,
2022
2,630
Additions and accretion
809
Retirements/amount applied
(805)
Transfers
(16)
Translation differences and other
(44)
Other provisions at December 31,
2023
2,574
Additions and accretion
611
Retirements/amount applied
(702)
Transfers
(60)
Translation differences and other
(234)
Other provisions at December 31,
2024
2,189
The Group is exposed to risks of claims and litigation,
mainly related to tax and regulatory proceedings, and
labor and civil claims.\u00a0
Given the nature of the risks covered by these
provisions, no reliable schedule of potential payments, if
any, can be determined.
Telef\u00f3nica Brazil
Telef\u00f4nica Brasil, S.A. and its subsidiaries are party to
administrative and judicial proceedings and labor, tax
and civil claims filed in different courts. The Telef\u00f3nica
Group management based on the opinion of its legal
counsel, recognized provisions for proceedings for
which an unfavorable outcome is considered likely.
The balance of these provisions at December 31, 2024
and December 31, 2023 is shown in the following table:
Millions of euros
12/31/2024
12/31/2023
Tax proceedings
314
515
Regulatory proceedings
179
329
Labor claims
145
130
Civil proceedings
219
229
Amounts to be refunded to
customers
14
18
Provision for fines for
canceling lease agreements
6
8
Total
877
1,229
Additionally, Telef\u00f3nica Brazil recognized contingent
liabilities according to IFRS 3 generated on acquisition of
the controlling interest of Vivo Participa\u00e7oes in 2011,
GVT in 2015 and the mobile assets of Oi in 2022 (see
Note 5). These contingent liabilities amounted to 167
million euros at December\u00a031, 2024 (187 million euros at
December\u00a031, 2023).
The detail of provisions for tax proceedings by nature of
risk is as follows:
Millions of euros
12/31/2024
12/31/2023
Federal taxes
126
149
State taxes
72
248
Municipal taxes
21
9
FUST
95
109
Total
314
515
The breakdown of changes in provisions for tax
proceedings in 2024 and 2023 is as follows:
Millions of
euros
Balance at 12/31/2022
446
Movements with a corresponding entry
under operating income
16
Write-offs due to payment
(3)
Monetary updating
38
Translation differences
18
Balance at 12/31/2023
515
Movements with a corresponding entry
under operating income
7
Other additions/reversal
(84)
Write-offs due to payment
(12)
Business combination
9
Monetary updating
(46)
Translation differences
(75)
Balance at 12/31/2024
314
Group management and legal counsel understand that
losses are possible from tax contingencies in federal,
state, municipal and other taxes for an aggregated
amount of 40,850 million Brazilian reals ( 6,347 million
euros) as of December\u00a031, 2024 ( 36,963 million Brazilian
reals, 6,909 million euros as of December\u00a031, 2023). The
possible contingencies from the main income tax
proceedings (federal tax) are described in Note 25.
Noteworthy state tax-related contingencies include the
\"ICMS\" tax (see Note 25). Moreover, Telef\u00f3nica Brazil
presently has different open proceedings regarding the
Fundo de Universaliza\u00e7\u00e3o de Servi\u00e7os de
Telecomunica\u00e7\u00f5es (FUST, refer to Note 29).
With regard to regulatory proceedings, Telef\u00f3nica Brazil
is party to administrative proceedings against Agencia
Nacional de Telecomunica\u00e7\u00f5es (ANATEL) based on an
alleged failure to meet sector regulations and judicial
proceedings to contest sanctions applied by ANATEL at
the administrative level. Consolidated provisions totaled
1,151 million Brazilian reals (179 million euros) at
December 31, 2024 (1,761 million Brazilian reals, 329
million euros at December\u00a031, 2023).
In 2024, Telef\u00f3nica Brasil and ANATEL signed a self-
composition agreement regarding the switched fixed
telephone service (STFC) from the concession regime to
an authorization regime (see Notes 29.a and Appendix
VI). As a consequence of this agreement, regulatory
provisions amounted to 792 million Brazilian Reais (137
million euros) have been reversed with a corresponding
entry under Other expenses (386 million Brazilian Reais,
equivalent to 67 million euros, see note 26) and in
financial results (406 million Brazilian Reais, 70 million
euros, see note 19).
In addition, Group management and legal counsel
understand that losses are possible from regulatory
contingencies amounting to 3,067 million Brazilian reals
(476 million euros) at December\u00a031, 2024 (6,765 million
Brazilian reals, 1,264 million euros at December\u00a031, 2023.
The reduction in 2024 of these possible losses from
regulatory contingencies is mainly related to the self-
composition agreement signed by Telef\u00f3nica Brasil and
ANATEL described above.
In addition, Group management and legal counsel
understand that losses are possible from civil
proceedings, amounting to 311 million euros at
December\u00a031, 2024 ( 398 million euros at December\u00a031,
2023).
In some situations, in connection with a legal
requirement or presentation of guarantees, judicial
deposits are made to secure the continuance of the
claims under discussion. The judicial deposits by nature
of risk at December\u00a031, 2024 and December\u00a031, 2023 are
as follows:
Millions of euros
12/31/2024
12/31/2023
Tax proceedings
264
304
Labor claims
11
17
Civil proceedings
139
161
Regulatory proceedings
51
58
Garnishments
2
4
Total
467
544
Current
24
14
Non-current (see Note 12)
443
530
", "dimensions": { "concept": "ifrs-full:DisclosureOfProvisionsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-902": { "value": "
12/31/2024
12/31/2023
Millions of euros
Current
Non-current
Total
Current
Non-current
Total
Employee benefits
1,073
4,020
5,093
1,005
4,949
5,954
Termination plans
357
1,222
1,579
282
1,461
1,743
Post-employment defined benefit plans
10
329
339
12
428
440
Other benefits
706
2,469
3,175
711
3,060
3,771
Dismantling of assets
16
519
535
17
505
522
Other provisions
576
1,613
2,189
574
2,000
2,574
Total
1,665
6,152
7,817
1,596
7,454
9,050
a) Employee benefits
In 2024 the Group recorded a provision of 104 million
euros (1,538 million euros in 2023, of which 1,320 million
euros corresponded to Telef\u00f3nica Spain mainly relating
to the agreement reached with the most representative
Trade Unions for the execution of Collective
Redundancies, explained in Termination plans in this
note). The distribution by segment of the restructuring
costs, in terms of their impact on operating income, is as
follows:
Millions of euros
2024
2023
Telef\u00f3nica Spain
27
1,320
Telef\u00f3nica Germany
(1)
11
Telef\u00f3nica Hispam
61
128
Other companies
17
79
Total
104
1,538
Termination plans
The movement in provisions for termination plans in
2024 and 2023 is as follows:
Millions of euros
Total
Provisions for termination plans at
12/31/2022
376
Additions
1,520
Retirements/amount applied
(133)
Translation differences, inflation
adjustments and accretion
(20)
Provisions for termination plans at
12/31/2023
1,743
Additions
79
Retirements/amount applied
(311)
Translation differences, inflation
adjustments and accretion
68
Provisions for termination plans at
12/31/2024
1,579
Telef\u00f3nica Spain
On December 28, 2023 certain subsidiaries of Telef\u00f3nica
Spain, taking into account the concurrence of
productive, organizational and technical causes,
reached an agreement with the most representative
Trade Unions for the execution of collective
redundancies up to a total of 3,420 employees, to which
employees turned 56 years or older during 2024 and
with a seniority of more than 15 years were adhered (see
Note 2). This agreement was endorsed on January 3,
2024.
As a consequence of these agreements, a provision of
1,299 million euros were recorded, charged to the
personnel expenses heading of the consolidated income
statement in 2023. This provision stood at 1,248 million
euros at December 31, 2024, of which 231 million euros
were classified as current (107 million euros in 2023).
The discount rate used for this termination plan at
December\u00a031, 2024 was 2.76% with an average plan
length of 3.19 years.
Additionally, in 2023 the III Collective Bargaining
Agreement was signed, valid until December 31, 2026
and extendable for another year, with the aim of moving
towards a more digital, flexible company prepared for
future challenges in a highly competitive context and
deep transformation.
Post-employment defined benefit plans
The Group has a number of defined benefit plans in the
countries where it operates. The following tables
present the main data of these plans:
12/31/2024
Millions of euros
Germany
Brazil
Hispam
Others
Total
Obligation
226
544
75
17
862
Assets
(106)
(628)
\u2014
(17)
(751)
Net provision before asset ceiling
120
(84)
75
\u2014
111
Asset ceiling
\u2014
173
\u2014
\u2014
173
Total
120
89
75
\u2014
284
Net provision
130
113
90
6
339
Net assets
10
24
15
6
55
12/31/2023
Millions of euros
Germany
Brazil
Hispam
Others
Total
Obligation
236
764
74
15
1,089
Assets
(103)
(777)
\u2014
(14)
(894)
Net provision before asset ceiling
133
(13)
74
1
195
Asset ceiling
\u2014
200
\u2014
\u2014
200
Total
133
187
74
1
395
Net provision
143
201
86
10
440
Net assets
10
14
12
9
45
The movement in the present value of obligations in
2024 and 2023 is as follows:
Millions of euros
Germany
Brazil
Hispam
Other
Total
Present value of obligation at 12/31/2022
208
622
64
19
913
Translation differences
\u2014
27
4
\u2014
31
Current service cost
11
2
5
1
19
Interest cost
8
61
8
1
78
Actuarial losses and gains
15
101
2
\u2014
118
Benefits paid
(6)
(49)
(5)
(1)
(61)
Plan curtailments
\u2014
\u2014
(3)
\u2014
(3)
Other movements
\u2014
\u2014
(1)
(5)
(6)
Present value of obligation at 12/31/2023
236
764
74
15
1,089
First application of IAS 21
\u2014
\u2014
6
\u2014
6
Translation differences
\u2014
(119)
(10)
1
(128)
Current service cost
11
3
8
1
23
Interest cost
8
62
18
1
89
Actuarial losses and gains
(23)
(118)
(10)
\u2014
(151)
Benefits paid
(6)
(48)
(6)
(1)
(61)
Plan curtailments
\u2014
\u2014
(3)
\u2014
(3)
Other movements
\u2014
\u2014
(2)
\u2014
(2)
Present value of obligation at 12/31/2024
226
544
75
17
862
Movements in the fair value of plan assets in 2024 and
2023 are as follows:
Millions of euros
Germany
Brazil
Other
Total
Fair value of plan assets at 12/31/2022
101
751
18
870
Translation differences
\u2014
31
\u2014
31
Interest income
3
74
\u2014
77
Actuarial losses and gains
\u2014
(30)
\u2014
(30)
Company contributions
2
\u2014
\u2014
2
Benefits paid
(3)
(45)
\u2014
(48)
Transfers
\u2014
\u2014
(4)
(4)
Other movements
\u2014
(4)
\u2014
(4)
Fair value of plan assets at 12/31/2023
103
777
14
894
Translation differences
\u2014
(129)
1
(128)
Interest income
4
63
\u2014
67
Actuarial losses and gains
\u2014
(31)
\u2014
(31)
Company contributions
2
\u2014
\u2014
2
Benefits paid
(3)
(44)
\u2014
(47)
Transfers
(1)
\u2014
1
\u2014
Other movements
1
(8)
1
(6)
Fair value of plan assets at 12/31/2024
106
628
17
751
Telef\u00f3nica Brazil post-employment benefit plans
Telef\u00f3nica Brazil sponsors the following post-
employment benefit plans:
Plans
Management entity
Sponsor
Health plans
Plano de Assist\u00eancia M\u00e9dica ao Aposentado y
Programa de Coberturas Especiais (PAMA/PCE)
Funda\u00e7\u00e3o Sistel de
Seguridade Social
Telef\u00f4nica Brasil, jointly and severally with other
companies resulting from the privatization of
Telebr\u00e1s (Telecomunica\u00e7\u00f5es Brasileiras, S.A.)
Assistencia m\u00e9dica \u2013 Lei 9.656/98
Telef\u00f4nica Brasil
Telef\u00f4nica Brasil, Terra Networks, TGLog, TIS, IoTCo
Brasil and CloudCo Brasil
Pension plans
PBS Assistidos (PBS-A)
Funda\u00e7\u00e3o Sistel de
Seguridade Social
Telef\u00f4nica Brasil, jointly and severally with other
companies resulting from the privatization of
Telebr\u00e1s (Telecomunica\u00e7\u00f5es Brasileiras, S.A.)
CTB
Telef\u00f4nica Brasil
Telef\u00f4nica Brasil
Telef\u00f4nica BD
Vis\u00e3o Prev
Telef\u00f4nica Brasil
Planes VISAO
Vis\u00e3o Prev
Telef\u00f4nica Brasil, Terra Networks, TGLog, TIS, IoTCo
Brasil and CloudCo Brasil
The main actuarial assumptions used in valuing these
plans are as follows:
12/31/2024
12/31/2023
Discount rate
11.07% - 11.67%
8.90% - 9.18%
Nominal rate of salary
increase
4.57% - 6.60%
4.57% - 6.60%
Long term inflation rate
3.50%
3.50%
Growth rate for medical
costs
6.61%
6.61%
Mortality tables
AT 2000 M/F
AT 2000 M/F
The discount rate and growth rate for medical costs are
considered to be the most significant actuarial
assumptions with a reasonable possibility of fluctuations
depending on demographic and economic changes and
may significantly change the amount of the post-
employment benefit obligation. The sensitivity to
changes in these assumptions is shown below:
Present value of the
discounted obligation at the
current discount rate
Present value of the obligation
by increasing the discount rate
by 0.5%
Present value of the obligation
by reducing the discount rate
by 0.5%
Pension plans
304
295
313
Health plans
241
228
254
Total obligation
545
523
567
Present value of the obligation
at the current growth rate for
medical costs
Present value of the obligation
by increasing the rate by 1%
Present value of the obligation
by reducing the rate by 1%
Pension plans
304
304
304
Health plans
241
269
217
Total obligation
545
573
521
Other employee benefits
Telef\u00f3nica de Espa\u00f1a, Telef\u00f3nica M\u00f3viles Espa\u00f1a
and Telef\u00f3nica Soluciones Individual Suspension
Plans
In 2015 Telef\u00f3nica de Espa\u00f1a, S.A.U., Telef\u00f3nica M\u00f3viles
Espa\u00f1a, S.A.U. and Telef\u00f3nica Soluciones de Inform\u00e1tica
y Comunicaciones de Espa\u00f1a, S.A.U. signed the first
Collective Bargaining Agreement of Related Companies
(CEV). This agreement considered elements that
included a plan of measures for individual suspension of
the employment relationship in 2016 and 2017, applying
principles of voluntariness, universality, non-
discrimination and social responsibility. In December
2016, the Collective Bargaining Agreement of Related
Companies was extended until 2018 by virtue of the
provisions thereof. In September 2019 Telef\u00f3nica Espa\u00f1a
signed the second Collective Agreement of Related
Companies that includes, among other aspects, an
\"Individual Suspension Plan\" that was completely
voluntary for the year 2019, with the same conditions as
the previous one. In 2021, Telef\u00f3nica Espa\u00f1a signed a
Social Pact for Employment supported by the largest
trade unions, which contemplated an Individual
Suspension Plan of employment, fully voluntary.
These plans are based on mutual agreement between
the company and employees and entail the possibility of
voluntarily suspending the employment relationship for
an initial three-year period, renewable for consecutive
three-year periods until the retirement age. Employees
who meet the age and seniority requirements may enter
the Individual Suspension Plans (PSI) in the periods
opened for these purposes.
At the end of each period, the current value of the
forecast payment flows to meet the commitments of
these programs (applying certain hypotheses regarding
estimated number of accessions and future
reintegration ratio) is recognized. At 2024 and 2023
year-ends, this figure was calculated using the biometric
table PERM2020 published in the resolution of
December 17, 2020 combined with the invalidity table
published in the ministerial order of 1977 and a high
quality credit market based interest rate.
The provision at December\u00a031, 2024 amounted to 3,073
million euros (3,648 million euros at December\u00a031, 2023).
The discount rate used for these provisions at
December\u00a031, 2024 was 2.75% with an average plan
length of 2.73 years.
Sensitivity of the valuation
The table below shows the sensitivity of the value of
termination, post-employment and other obligations,
including the Individual Suspension Plans of Telef\u00f3nica
Group companies in Spain to changes in the discount
rate:
-100bps
+100 bps
Impact on
value
Impact on
income
statement
Impact on
value
Impact on\u00a0
income
statement
(127)
(127)
120
120
A 100 b.p. increase in the discount rate would reduce
the value of the liabilities by 120 million euros and have a
positive impact on the income statement of 120 million
euros before tax. On the other hand, a 100 b.p. decrease
in the discount rate would increase the value of the
liabilities by 127 million euros and have a negative impact
on the income statement of 127 million euros before tax.
The Telef\u00f3nica Group actively manages this position and
has arranged a derivatives portfolio to significantly
reduce the impact of changes in the discount rate (see
Note 19).
Appendix II: Board and Senior
Management Compensation
TELEF\u00d3NICA, S.A.
(Amounts in euros)
Directors
Salary1
Fixed
remunera
-tion 2
Allowances
3
Short-term
variable
remuneration 4
Remuneration
for belonging
to the Board
Committees5
Other
items6
Total
\u00a0
Mr. Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete L\u00f3pez 7
1,923,100
\u2014
\u2014
3,513,504
\u2014
6,207
5,442,811
Mr. Isidro Fain\u00e9 Casas
\u2014
200,000
\u2014
\u2014
80,000
\u2014
280,000
Mr. Jos\u00e9 Mar\u00eda Abril P\u00e9rez
\u2014
200,000
10,000
\u2014
91,200
\u2014
301,200
Mr. \u00c1ngel Vil\u00e1 Boix
1,600,000
\u2014
\u2014
2,436,000
\u2014
27,383
4,063,383
Ms. Mar\u00eda Luisa Garc\u00eda Blanco
\u2014
120,000
38,000
\u2014
33,600
\u2014
191,600
Mr. Peter L\u00f6scher
\u2014
120,000
26,000
\u2014
113,600
\u2014
259,600
Mr. Carlos Oca\u00f1a Orbis 8
\u2014
80,000
8,000
\u2014
60,800
\u2014
148,800
Ms. Ver\u00f3nica Pascual Bo\u00e9
\u2014
120,000
12,000
\u2014
11,200
\u2014
143,200
Mr. Francisco Javier de Paz Mancho
\u2014
120,000
25,000
\u2014
113,600
\u2014
258,600
Mr. Alejandro Reynal Ample
\u2014
120,000
\u2014
\u2014
\u2014
\u2014
120,000
Mr. Francisco Jos\u00e9 Riberas Mera
\u2014
120,000
\u2014
\u2014
\u2014
\u2014
120,000
Ms. Mar\u00eda Rotondo Urcola
\u2014
120,000
25,000
\u2014
22,400
\u2014
167,400
Ms. Claudia Sender Ram\u00edrez
\u2014
120,000
1,000
\u2014
80,000
\u2014
201,000
Ms. Solange Sobral Targa
\u2014
120,000
10,000
\u2014
11,200
\u2014
141,200
1Salary: Regarding Mr Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete L\u00f3pez and Mr \u00c1ngel Vil\u00e1 Boix, the amount includes the non-variable remuneration earned from their executive
functions.
2Fixed remuneration: Amount of the compensation in cash, with a pre-established payment periodicity, whether or not it can be consolidated over time, earned
by the member for his/her position on the Board, regardless of the effective attendance of the member to board meetings.
3 Allowances: Total amount of allowances for attending Advisory or Steering Committee meetings.
4Short-term variable remuneration (bonuses): Variable amount linked to the performance or achievement of a series of individual or group objectives
(quantitative or qualitative) within a period of time equal to or less than a year, corresponding to the year 2024 and to be paid in the year 2025. In reference to the
bonus corresponding to 2023, which was paid in 2024, Executive Board Member Mr Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete L\u00f3pez received 3,717,737 euros and Executive
Board Member Mr \u00c1ngel Vil\u00e1 Boix received 2,577,600 euros.
5Remuneration for belonging to the Board Committees: Amount of items other than allowances, which the directors are beneficiaries through their position on
the Executive Commission and the Advisory or Steering Committees, regardless of the effective attendance of the board member such Committee meetings.
6Other concepts: This includes, among others, the amounts received as remuneration in kind (general medical and dental coverage and vehicle insurance), paid
by Telef\u00f3nica, S.A.\u00a0
7 Mr.Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete L\u00f3pez ceased as Executive Chairman and Director of the Company on January 18, 2025. Likewise, on the same date, it was
agreed to co-opt Mr. Marc Thomas Murtra Millar as the new Executive Chairman of the Board of Directors of Telef\u00f3nica, S.A.
8 Mr. Carlos Oca\u00f1a Orbis was appointed Director of the Company on May 8, 2024.\u00a0
Ms. Carmen Garc\u00eda de Andr\u00e9s stood down as Board
Member on May 7, 2024. Mr. Jos\u00e9 Javier Echenique
Landir\u00edbar passed away on December 15, 2024.\u00a0
Payment received and/or accrued by them in 2024 is
detailed below:
(Amounts in euros)
Directors
Salary1
Fixed
remune-
ration 2
Allowances
3
Short-term
variable
remuneration
4
Remuneration
for belonging
to the Board
Committees5
Other
items6
Total
\u00a0
Mr. Jos\u00e9 Javier Echenique
Landir\u00edbar
\u2014
200,000
27,000
\u2014
113,600
\u2014
340,600
Ms. Carmen Garc\u00eda de Andr\u00e9s
\u2014
40,000
12,000
\u2014
7,467
\u2014
59,467
1 to 6: Definitions of these concepts are those included in the previous table.
The following table breaks down the amounts accrued
and/or received from other companies of the Telef\u00f3nica
Group other than Telef\u00f3nica, S.A. individually, by the
Board Members of the Company, by the performance of
executive functions or by their membership to the Board
of Directors of such companies:
OTHER COMPANIES OF THE TELEF\u00d3NICA GROUP
(Amounts in euros)
Directors
Salary1
Fixed
remune-
ration 2
Allowances3
Short-term
variable
remuneration 4
Remuneration for
belonging to the
Board Committees5
Other
items6
Total
Mr. Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete
L\u00f3pez 7
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Mr. Isidro Fain\u00e9 Casas
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Mr. Jos\u00e9 Mar\u00eda Abril P\u00e9rez
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Mr. \u00c1ngel Vil\u00e1 Boix
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Ms. Mar\u00eda Luisa Garc\u00eda Blanco
\u2014
\u2014
\u2014
\u2014
\u2014
87,500
87,500
Mr. Peter L\u00f6scher
\u2014
125,997
\u2014
\u2014
\u2014
\u2014
125,997
Mr. Carlos Oca\u00f1a Orbis 8
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Ms. Ver\u00f3nica Pascual Bo\u00e9
\u2014
90,000
\u2014
\u2014
\u2014
65,000
155,000
Mr. Francisco Javier de Paz Mancho
\u2014
173,159
\u2014
\u2014
\u2014
155,000
328,159
Mr. Alejandro Reynal Ample
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Mr. Francisco Jos\u00e9 Riberas Mera
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Ms. Mar\u00eda Rotondo Urcola
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Ms. Claudia Sender Ram\u00edrez
\u2014
\u2014
\u2014
\u2014
\u2014
132,500
132,500
Ms. Solange Sobral Targa
\u2014
85,659
\u2014
\u2014
\u2014
\u2014
85,659
1. Salary: Amount of non-variable remuneration earned by the Director from other companies of the Telef\u00f3nica Group for his/her executive functions.\u00a0
2. Fixed remuneration: Amount of the compensation in cash, with a pre-established payment periodicity, subject to consolidation over time or not, earned by the
member for his/her position on the boards of other companies of the Telef\u00f3nica Group.
3. Allowances: Total amount of the allowances for attending the board meetings of other companies of the Telef\u00f3nica Group.
4. Variable short-term remuneration (bonuses): Variable amount linked to the performance or achievement of a series of individual or group objectives
(quantitative or qualitative) within a period of time equal to or less than a year, corresponding to the year 2024 and to be paid in the year 2025 by other
companies of the Telef\u00f3nica Group.
5. Remuneration for belonging to the Board Committees of other companies of the Telef\u00f3nica Group: Amount of items other than allowances, which the directors
are beneficiaries through their position on the Advisory or Steering Committees of other companies of the Telef\u00f3nica Group, regardless of the effective
attendance of the board member such Committee meetings.
6. Other concepts: This includes, among others, the amounts received as remuneration in kind (general medical and dental coverage and vehicle insurance), paid
by other companies of the Telef\u00f3nica Group. Also included are the amounts received for membership of the Advisory Boards of Telef\u00f3nica Espa\u00f1a, Telef\u00f3nica
Hispanoam\u00e9rica, Telef\u00f3nica Tech and Telef\u00f3nica Ingenier\u00eda de Seguridad.
7 Mr.Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete L\u00f3pez ceased as Executive Chairman and Director of the Company on January 18, 2025. Likewise, on the same date, it was
agreed to co-opt Mr. Marc Thomas Murtra Millar as the new Executive Chairman of the Board of Directors of Telef\u00f3nica, S.A.
8\u00a0 Mr. Carlos Oca\u00f1a Orbis was appointed Director of the Company on May 8, 2024.
Ms. Carmen Garc\u00eda de Andr\u00e9s stood down as Board
Member on May 7, 2024. Mr. Jos\u00e9 Javier Echenique
Landir\u00edbar passed away on December 15, 2024. Payment
received and/or accrued by them with respect to the
other companies of the Telef\u00f3nica Group in 2024 is
detailed below:
(Amounts in euros)
Directors
Salary1
Fixed
remune-
ration 2
Allowances
3
Short-term
variable
remuneration
4
Remuneration
for belonging
to the Board
Committees5
Other
items6
Total
\u00a0
Mr. Jos\u00e9 Javier Echenique Landir\u00edbar
\u2014
90,000
\u2014
\u2014
\u2014
87,500
177,500
Ms. Carmen Garc\u00eda de Andr\u00e9s
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
1 to 6: Definitions of these concepts are those included in the previous table.
Additionally, the Executive Board Members have a series
of Assistance Services. Below, the contributions made
during 2024 are detailed for the Company to long-term
savings systems (Pension Plans and Social Welfare
Plan):
LONG-TERM SAVINGS SYSTEMS
(Amounts in euros)
Directors
Contributions for
fiscal year 2024
Mr. Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete L\u00f3pez1
673,085
Mr. \u00c1ngel Vil\u00e1 Boix
560,000
1 Mr.Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete L\u00f3pez ceased as Executive Chairman and
Director of the Company on January 18, 2025. Likewise, on the same date, it
was agreed to co-opt Mr. Marc Thomas Murtra Millar as the new Executive
Chairman of the Board of Directors of Telef\u00f3nica, S.A.
The breakdown of the long-term saving systems
includes contributions to Pension Plans, to the Benefit
Plan and to the Unit link-type Insurance, as set out
below:
(Amounts in euros)
Directors
Contribution
to Pension
Plans
Contribution
to Executive
Social
Welfare
Plan 1
Contributions
to Unit link-
type
Insurance/
Pension Plan
Surplus2
Mr. Jos\u00e9
Mar\u00eda
\u00c1lvarez-
Pallete
L\u00f3pez3
7,574
540,968
124,543
Mr. \u00c1ngel Vil\u00e1
Boix
6,721
487,840
65,439
1. Contributions to the Executive Social Welfare Plan established in 2006,
financed exclusively by the Company, to complement the current Pension
Plan, which involves defined contributions equivalent to a certain percentage
of the fixed remuneration of the Director, depending on the professional
levels in the organization of the Telef\u00f3nica Group.
2. Contributions to Unit link-type Insurance/Pension Plan Surplus: In 2015 and
2021, applicable law reduced the financial and tax limits of the contributions
to Pension Plans; for this reason, in order to compensate for the difference in
favor of the Beneficiaries, a Unit-link type group insurance policy was
arranged to channel such differences that occur during each fiscal year.
This Unit-link type insurance is arranged with the entity Occident GCO,
S.A.U. de Seguros y Reaseguros, and covers the same contingencies as
those of the \u201cPension Plan\u201d and the same exceptional liquidity events in case
of serious illness or long-term unemployment.
3 Mr.Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete L\u00f3pez ceased as Executive Chairman and
Director of the Company on January 18, 2025. Likewise, on the same date, it
was agreed to co-opt Mr. Marc Thomas Murtra Millar as the new Executive
Chairman of the Board of Directors of Telef\u00f3nica, S.A.
LIFE INSURANCE PREMIUMS
The 2024 amounts for life insurance premiums were as
follows:
(Amounts in euros)
Directors
Life insurance
premiums
Mr. Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete
L\u00f3pez1
41,708
Mr. \u00c1ngel Vil\u00e1 Boix
33,328
1 Mr.Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete L\u00f3pez ceased as Executive Chairman and
Director of the Company on January 18, 2025. Likewise, on the same date, it
was agreed to co-opt Mr. Marc Thomas Murtra Millar as the new Executive
Chairman of the Board of Directors of Telef\u00f3nica, S.A.
REMUNERATION PLANS BASED ON
SHARES
As regards to remuneration plans based on shares
(involving Executive Directors Mr. Jos\u00e9 Mar\u00eda \u00c1lvarez
Pallete-L\u00f3pez and Mr. \u00c1ngel Vil\u00e1 Boix), the following
long-term variable remuneration plans were in existence
during the year 2024:
The so-called Performance Share Plan (\"PSP\"), made up
of: the Long-Term Incentive Plan 2021-2025 (with
Second cycle (2022-2024) and Third cycle (2023-2025)
active) approved by the General Shareholders' Meeting
held on April 23, 2021, and the Long-Term Incentive Plan
2024-2028 (with First cycle (2024-2026) active),
approved by the General Shareholders' Meeting held on
April 12, 2024.
The Second cycle (2022-2024) of the Long-Term
Incentive Plan 2021-2025 started on January 1, 2022 and
ended on December 31, 2024.
In this cycle, a maximum of 1,740,000 shares were
allocated to the Executive Directors on January 1, 2022,
with a unit fair value of 2.9515 euros per share for FCF
(\"Free Cash Flow\"), 2.4316 euros for TSR (\"Total
Shareholder Return\") and 2.9515 euros for the CO2
Emission Neutralization and Reduction target.
At the end of the cycle, Kepler provided the Nominating,
Compensation and Corporate Governance Committee
with the calculation of Telef\u00f3nica's Total Shareholder
Return, which was 33.6% at the end of the period,
ranking fourth in the comparison group, i.e. above the
75th percentile according to the established scale of
achievement, and generating a weighted payout ratio of
50% linked to relative TSR.
With regard to the Free Cash Flow, after taking into
account the partial annual payments for 2022, 2023 and
2024, previously audited and approved by the
Telef\u00f3nica's Board of Directors at the proposal of the
Nominating, Compensation and Corporate Governance
Committee, the weighted payout ratio is 40%.\u00a0 The
assessment of the level of compliance was based on the
results of the audit by the Company\u2019s external and
internal auditors, which were first analyzed by the Audit
and Control Committee before being validated by the
Nominating, Compensation and Corporate Governance
Committee and approved by the Board of Directors.
Finally, in relation to the CO2 Emission Neutralization
and Reduction target, the Nominating, Compensation
and Corporate Governance Committee has regularly
monitored the level of CO2 Emissions Neutralization and,
after analyzing the report from the Corporate Affairs and
Sustainability Department, has determined the level of
achievement. The Nominating, Compensation and
Corporate Governance Committee was supported in
this evaluation function by the Sustainability and
Regulation Committee and the Audit and Control
Committee. In this respect, the minimum CO2 emission
reduction threshold that triggers the possibility of
assessing the degree of compliance with the CO2
Neutralization target has been met and therefore the
weighted payout ratio linked to CO2 Neutralization was
10%.
Taking into account the Relative TSR, Free Cash Flow
and CO2 Neutralization results, the weighted payout
ratio increased to 100%. Thus, at the end of the Plan's
cycle, the Chief Operating Officer (COO) Mr. \u00c1ngel Vil\u00e1
Boix is entitled to receive 745,000 gross shares.
In the case of Mr. Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete L\u00f3pez, due
to his termination as Executive Chairman, he will not
receive the delivery of shares corresponding to this
cycle (995,000 gross shares) but will receive an
equivalent settlement in cash.
Similarly, during the 2024 financial year, the Third cycle
(2023-2025) of the Long-Term Incentive Plan
2021-2025 and First cycle (2024-2026) of the Long-
Term Incentive Plan 2024-2028 were in force, starting
on January 1, 2023 and January 1, 2024 respectively and
ending on December 31, 2025 and December 31, 2026
respectively.
In relation to the Third cycle (2023-2025) of the Long-
Term Incentive Plan 2021-2025, the number of
Telef\u00f3nica, S.A. shares that could be delivered to the
participants, within the established maximum, is
conditioned and determined by the compliance with the
established objectives: 50% on the compliance with the
Total Shareholder Return (TSR) objective of Telef\u00f3nica,
S.A. shares, 40% on the Telef\u00f3nica Group's Free Cash
Flow (FCF) and 10% on the Neutralization and Reduction
of CO2 Emissions. On the other hand, in the First Cycle
(2024-2026) of the Long-Term Incentive Plan
2024-2028, the weight of CO2 Neutralization and
Emission Reduction has been reduced by half, giving
room to the target for the number of Women in
Executive Positions with a weight of 5%.
To determine compliance with the TSR target and
calculate the specific number of shares to be delivered
for this concept, the performance of the TSR on
Telef\u00f3nica, S.A.'s shares will be measured during the
measurement period of each three-year cycle, in relation
to the TSRs experienced by certain companies in the
telecommunications sector, weighted according to their
relevance to Telef\u00f3nica, S.A., which for purposes of the
Plan will constitute a comparison group (hereinafter the
\"Comparison Group\"). The companies included in the
Comparison Group are listed below: Am\u00e9rica M\u00f3vil, BT
Group, Deutsche Telekom, Orange, Telecom Italia,
Vodafone Group, Proximus, Koninklijke KPN, Millicom,
Swisscom, Telenor, TeliaSonera, TIM Brasil, and Liberty
Global.
With regard to complying with the TSR objective, the
number of shares to be delivered associated with
meeting this objective will range from 15% of the number
of theoretical shares assigned, assuming that the TSR
performance of Telef\u00f3nica, S.A. shares is at least the
median of the comparison group, to 50% if the
performance is in the third quartile or above in the
comparison group, with the percentage calculated by
linear interpolation for cases falling between the median
and third quartile.\u00a0
In order to determine the compliance with the FCF
objective and calculate the specific number of shares to
be delivered for this concept, the FCF level generated by
the Telef\u00f3nica Group during each year will be measured
and compared to the value set in the budgets approved
by the Board of Directors for each financial year.\u00a0
With regard to the FCF, for each of the cycles in force
during the financial year 2024, the Board of Directors, at
the proposal of the Nominating, Compensation and
Corporate Governance Committee, determined a scale
of achievement that includes a minimum threshold of
90% compliance, below which no incentive is paid and
compliance with which will entail the delivery of 20% of
the theoretical shares assigned, and a maximum level of
100% compliance, which will entail the delivery of 40% of
the theoretical shares assigned. In the case of the First
cycle (2024-2026) of the 2024-2028 Long-Term
Incentive Plan, includes a potential upside in case of
over achievement that may end in a payout of 60% at
the end of the cycle.
In order to determine compliance with the CO2 Emission
Neutralization and Reduction target and to calculate the
specific number of shares to be delivered for this item,
the level of CO2 Emissions Neutralization achieved at
the end of the cycle will be measured, with the incentive
being paid upon reaching a certain level of scope 1 + 2.
The level of direct and indirect CO2 emissions from our
daily activity shall be calculated according to the
following:
CO2 Emission = Activity Data\u00a0 x Emission Factor, where:
-\u00a0 Activity: Amount of energy, fuel, gas, etc. consumed by
the Company.
-\u00a0 Emission Factor: Amount of CO2 emitted to the
atmosphere by the consumption of each unit of activity.
The emission factor provided by official sources
(European Union, Ministries, CNMC, International Energy
Agency, etc.) is used for electricity and the GHG
Protocol emission factors are used for fuels.
At the beginning of the Third Cycle (2023-2025) of the
Long-Term Incentive Plan 2021-2025 and the First Cycle
(2024-2026) of the Long-Term Incentive Plan
2024-2028, the Board of Directors of Telef\u00f3nica, S.A., at
the proposal of the Nominating, Compensation and
Corporate Governance Committee, determined a scale
of achievement that includes a minimum threshold of
90% compliance, below which no incentive is paid and
compliance with which will entail the delivery of 5% of
the theoretical shares assigned, and a maximum level of
100% compliance, which will entail the delivery of 10% of
the theoretical shares assigned. In addition, a minimum
level of emission reductions of Scope 1 + 2 will need to
be achieved for the incentive to be paid.
In the case of Women in Executive Positions target for
the Long-Term Incentive Plan 2024-2028, the
proportion of Women Executives over the total
executives population will be measured at December 31,
2026.
In any case, 100% of the shares delivered under the Plan
to the Executive Directors and other Participants as
determined by the Board of Directors shall be subject to
a two-year holding period.
In addition, in accordance with the provisions of the
Remuneration Policy for Directors of Telef\u00f3nica, SA, the
Executive Directors must maintain (directly or indirectly)
a number of shares (including those delivered as
remuneration) equivalent to two years of their Gross
Fixed Remuneration, as long as they continue to belong
to the Board of Directors and perform executive
functions. Until such time as this requirement is met, the
holding period for any shares delivered under the Plan to
Executive Directors will be three years.
The maximum number of allocated shares to be
delivered in the event of maximum compliance with the
TSR (Total Shareholder Return), FCF (Free Cash Flow),
CO2 Emission Neutralization Reduction and Women in
Executive Positions targets of the active plans, as
applicable, is shown below.
PSP 2021-2025 - Third cycle / 2023-2025
Directors
Maximum number of
shares (*)
Mr. Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete L\u00f3pez
1,110,000
Mr. \u00c1ngel Vil\u00e1 Boix
831,000
(*) Maximum possible number of shares to be received in case of maximum completion of
TSR, FCF and Neutralization of CO2 Emissions\u00a0 target.
In any case, it is noted that no shares have been
delivered to the Chief Operating Officer (COO) Mr.
\u00c1ngel Vil\u00e1 Boix under the Third cycle (2023-2025) of the
Long-Term Incentive Plan 2021-2025 and that the above
table only reflects the number of potentially deliverable
shares, without in any way implying that all or part of the
shares will actually be delivered.
In the case of Mr. Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete L\u00f3pez, due
to his resignation as Executive Chairman, he will not
receive the delivery of shares corresponding to this
position but he will receive the equivalent part in cash
based on the time he has been with the Company.
PSP 2024-2028 - First cycle / 2024-2026
Directors
Maximum number of shares
(*)
Mr. Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete
L\u00f3pez
1,015,000
Mr. \u00c1ngel Vil\u00e1 Boix
760,000
(*) Maximum possible number of shares to be received in case of maximum completion of
TSR, FCF and Neutralization of CO2 Emissions target.\u00a0
In any case, it is noted that no shares have been
delivered to the Chief Operating Officer (COO) Mr.
\u00c1ngel Vil\u00e1 Boix under the First cycle (2024-2026) of the
Long-Term Incentive Plan 2024-2028 and that the
above table only reflects the number of potentially
deliverable shares, without in any way implying that all or
part of the shares will actually be delivered.
In the case of Mr. Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete L\u00f3pez, due
to his resignation as Executive Chairman, he will not
receive the delivery in shares corresponding to this
position but he will receive the equivalent part in cash
based on the time he has been with the Company.
In addition, it should be noted that the external Directors
of the Company do not receive and did not receive
remuneration during the year 2024 in concept of
pensions or life insurance, nor do they participate in
compensation plans referenced to the value of the share
price.\u00a0
Furthermore, the Company does not grant nor has
granted during the year 2024, an advance, loan or credit
in favor of its Board Members or its Senior Management,
complying with the requirements of the Sarbanes-Oxley
Act published in the United States, which is applicable to
Telef\u00f3nica as a listed company in this market.
Remuneration of the Company\u2019s
Senior Management
As for the Directors who made up the Senior
Management1 of the company in the year 2024,
excluding those who form an integral part of the Board
of Directors, have accrued a total amount of 8,528,820
euros during the 2024 fiscal year.
In addition, and in terms of long-term savings systems,
the contributions made by the Telef\u00f3nica Group during
the year 2024 to the Social Security Plan described in
the \"Income and expenditure\" note with regard to these
Directors increased to 947,676 euros; the contributions
corresponding to the Pension Plan increased to 212,885
euros; the contributions to the Seguro Unit link-Excess
Pension Fund increased to 113,293 euros.
Furthermore, the amount related to the remuneration in
kind (which includes the fees for life insurance and other
insurance, such as the general medical and dental
coverage, and vehicle insurance) was 144,788 euros.
On the other hand, regarding share-based remuneration
plans, during the year 2024, there were in force the
following long-term variable remuneration plans:
The so-called \"Performance Share Plan\" (\"PSP\"), made
up of: the Long-Term Incentive Plan 2021-2025 (with
Second cycle (2022-2024) and Third cycle (2023-2025)
active) approved by the General Shareholders' Meeting
held on April 23, 2021, and the Long-Term Incentive Plan
2024-2028 (with First cycle (2024-2026) active),
approved by the General Shareholders' Meeting held on
April 12, 2024.
The target measurement period of the Second cycle
(2022-2024) of the Long-Term Incentive Plan 2021-2025
started on January 1, 2022 and ended on December 31,
2024. The maximum number of shares allocated to be
delivered in the event of maximum compliance with the
TSR (\"Total Shareholder Return\"), FCF (\"Free Cash
Flow\") and CO2 Emission Neutralization and Reduction
targets set for the this cycle for all the Company's Senior
Executives was 1,241,015.
At the end of the this cycle, Kepler provided the
Nominating, Compensation and Corporate Governance
Committee with the calculation of Telef\u00f3nica's Total
Shareholder Return, which was 33.6% at the end of the
period, ranking fourth in the comparison group, i.e.
above the 75th percentile according to the established
scale of achievement, and generating a weighted payout
ratio of 50% linked to relative TSR.
In terms of Free Cash Flow, after taking into account the
partial annual payments for 2022, 2023 and 2024, the
weighted payout ratio is 40%. The assessment of the
level of compliance was based on the results of the audit
by the Company\u2019s external and internal auditors, which
were first analyzed by the Audit and Control Committee
before being validated by the Nominating,
Compensation and Corporate Governance Committee
and approved by the Board of Directors.
Finally, in relation to the CO2 Emission Neutralization
and Reduction target, the Nominating, Compensation
and Corporate Governance Committee has regularly
monitored the level of CO2 Emission Neutralization and,
after analyzing the report from the Corporate Affairs and
Sustainability Department, has determined the level of
achievement. The Nominating, Compensation and
Corporate Governance Committee was supported in
this evaluation function by the Sustainability and
Regulation Committee and the Audit and Control
Committee. In this respect, the minimum CO2 emission
reduction threshold that triggers the possibility of
assessing the degree of compliance with the CO2
Neutralization target has been met and therefore the
weighted payout ratio linked to CO2 Neutralization was
10%.
Taking into account the Relative TSR, Free Cash Flow
and CO2 Neutralization results, the weighted payout
ratio increased to 100%. Thus, at the end of the first
cycle of the Plan, the Company's Senior Executives are
entitled to receive 1,241,015 gross shares.
The target measurement period for the Third cycle
(2023-2025) of the Long-Term Incentive Plan
2021-2025 and First cycle (2024-2026) of the Long-
Term Incentive Plan 2024-2028 started on January 1,
2023 and January 1, 2024 respectively, and will end on
December 31, 2025 and December 31, 2026 respectively.
The maximum number of shares allocated to be
delivered in the event of maximum compliance with the
TSR (Total Shareholder Return), FCF (Free Cash Flow),
CO2 Emission Neutralization and Reduction and Women
in Executive Positions targets set for both cycles, as
applicable, for all the Company's Senior Executives is
1,378,418 in the Third cycle (2023-2025) of the Long-
Term Incentive Plan 2021-2025 and 1,250,041 in the First
cycle (2024-2026) of the Long-Term Incentive Plan
2024-2028.
(1) For these purposes, Senior Management is understood to be those
persons who perform, de jure or de facto, senior management functions
reporting directly to the Board of Directors or Executive Committees or
Managing Directors of the Company, including, in all cases, the person
responsible for Internal Audit.", "dimensions": { "concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-903": { "value": "
Telef\u00f3nica Brazil
Telef\u00f4nica Brasil, S.A. and its subsidiaries are party to
administrative and judicial proceedings and labor, tax
and civil claims filed in different courts. The Telef\u00f3nica
Group management based on the opinion of its legal
counsel, recognized provisions for proceedings for
which an unfavorable outcome is considered likely.
The balance of these provisions at December 31, 2024
and December 31, 2023 is shown in the following table:
Millions of euros
12/31/2024
12/31/2023
Tax proceedings
314
515
Regulatory proceedings
179
329
Labor claims
145
130
Civil proceedings
219
229
Amounts to be refunded to
customers
14
18
Provision for fines for
canceling lease agreements
6
8
Total
877
1,229
Additionally, Telef\u00f3nica Brazil recognized contingent
liabilities according to IFRS 3 generated on acquisition of
the controlling interest of Vivo Participa\u00e7oes in 2011,
GVT in 2015 and the mobile assets of Oi in 2022 (see
Note 5). These contingent liabilities amounted to 167
million euros at December\u00a031, 2024 (187 million euros at
December\u00a031, 2023).
The detail of provisions for tax proceedings by nature of
risk is as follows:
Millions of euros
12/31/2024
12/31/2023
Federal taxes
126
149
State taxes
72
248
Municipal taxes
21
9
FUST
95
109
Total
314
515
The breakdown of changes in provisions for tax
proceedings in 2024 and 2023 is as follows:
Millions of
euros
Balance at 12/31/2022
446
Movements with a corresponding entry
under operating income
16
Write-offs due to payment
(3)
Monetary updating
38
Translation differences
18
Balance at 12/31/2023
515
Movements with a corresponding entry
under operating income
7
Other additions/reversal
(84)
Write-offs due to payment
(12)
Business combination
9
Monetary updating
(46)
Translation differences
(75)
Balance at 12/31/2024
314
Group management and legal counsel understand that
losses are possible from tax contingencies in federal,
state, municipal and other taxes for an aggregated
amount of 40,850 million Brazilian reals ( 6,347 million
euros) as of December\u00a031, 2024 ( 36,963 million Brazilian
reals, 6,909 million euros as of December\u00a031, 2023). The
possible contingencies from the main income tax
proceedings (federal tax) are described in Note 25.
Noteworthy state tax-related contingencies include the
\"ICMS\" tax (see Note 25). Moreover, Telef\u00f3nica Brazil
presently has different open proceedings regarding the
Fundo de Universaliza\u00e7\u00e3o de Servi\u00e7os de
Telecomunica\u00e7\u00f5es (FUST, refer to Note 29).
With regard to regulatory proceedings, Telef\u00f3nica Brazil
is party to administrative proceedings against Agencia
Nacional de Telecomunica\u00e7\u00f5es (ANATEL) based on an
alleged failure to meet sector regulations and judicial
proceedings to contest sanctions applied by ANATEL at
the administrative level. Consolidated provisions totaled
1,151 million Brazilian reals (179 million euros) at
December 31, 2024 (1,761 million Brazilian reals, 329
million euros at December\u00a031, 2023).
In 2024, Telef\u00f3nica Brasil and ANATEL signed a self-
composition agreement regarding the switched fixed
telephone service (STFC) from the concession regime to
an authorization regime (see Notes 29.a and Appendix
VI). As a consequence of this agreement, regulatory
provisions amounted to 792 million Brazilian Reais (137
million euros) have been reversed with a corresponding
entry under Other expenses (386 million Brazilian Reais,
equivalent to 67 million euros, see note 26) and in
financial results (406 million Brazilian Reais, 70 million
euros, see note 19).
In addition, Group management and legal counsel
understand that losses are possible from regulatory
contingencies amounting to 3,067 million Brazilian reals
(476 million euros) at December\u00a031, 2024 (6,765 million
Brazilian reals, 1,264 million euros at December\u00a031, 2023.
The reduction in 2024 of these possible losses from
regulatory contingencies is mainly related to the self-
composition agreement signed by Telef\u00f3nica Brasil and
ANATEL described above.
In addition, Group management and legal counsel
understand that losses are possible from civil
proceedings, amounting to 311 million euros at
December\u00a031, 2024 ( 398 million euros at December\u00a031,
2023).
In some situations, in connection with a legal
requirement or presentation of guarantees, judicial
deposits are made to secure the continuance of the
claims under discussion. The judicial deposits by nature
of risk at December\u00a031, 2024 and December\u00a031, 2023 are
as follows:
Millions of euros
12/31/2024
12/31/2023
Tax proceedings
264
304
Labor claims
11
17
Civil proceedings
139
161
Regulatory proceedings
51
58
Garnishments
2
4
Total
467
544
Current
24
14
Non-current (see Note 12)
443
530
Tax deductibility of financial
goodwill in Spain
The tax regulations added article 12.5 to the Spanish
Corporate Income Tax Law, which came into force on
January 1, 2002. The article regulated the deductibility of
tax amortization of financial goodwill (fondo de
comercio) arising from the acquisition of non-Spanish
companies, which could be amortized over 20 years at
5% per annum.
Following the entry into force of the Laws 9/2011 of
August 19, 2011 and 16/2013 of October 29, 2013, the
amount of goodwill amortization deductible for tax
purposes under article 12.5 for the years 2011 to 2015
was reduced from 5% to 1%. The effect is temporary
because the 4% not amortized for five years ( 20% in
total) will be recovered extending the deduction period
from the initial 20 years to 25 years.
The Telef\u00f3nica Group, under this regulation, has been
amortizing for tax purposes the financial goodwill from
its investments, both direct and indirect, in O2, BellSouth
and Colombia Telecomunicaciones (prior to December
21, 2007) and Vivo (acquired in 2010). The positive
accumulated effect of the corresponding settlements of
corporate income tax from 2004 to the closing of
December\u00a031, 2024, was 2,368 million euros.\u00a0
In relation to this tax incentive, the European
Commission (EC) has in recent years commenced three
proceedings against the Spanish State, as it deems that
this tax benefit could constitute an example of state aid.
Although the EC itself acknowledged the validity of the
tax incentive for those investors that invested in
European companies for\u00a0 operations carried out before
December 21, 2007 in the first decision, and before May
21, 2011 for investments in other countries in the second
decision, in its third decision issued on October 15, 2014
it calls into question the applicability of the principle of
legitimate expectations in the application of the
incentive for indirect acquisitions, whatever the date of
acquisition may have been.
There are also doubts in the Spanish Courts about the
classification of the incentive as a deduction and its
maintenance in the case of subsequent transmission.
On October 6, 2021, the Court of Justice of the European
Union concluded that the European Commission
correctly classified the Spanish tax depreciation scheme
of the Fondo de Comercio as State aid incompatible
with the internal market for the First and Second
Decisions.
With regard to the recognition of legitimate expectations
for the First and Second decisions, the Court of Justice
of the European Union confirms its applicability.
The proceedings initiated on the Third Decision,
suspended until the resolution of the 1st and the 2nd
Decisions resumed on October 19, 2021. The General
Court of the Court of Justice of the European Union
issued a ruling on September 27, 2023 annulling the
Commission's Third Decision (EU) 2015/314, effective as
of the day of its publication. However, the proceedings
have not been finally concluded as the European
Commission appealed the ruling to the Court of Justice
of the European Union on December 14, 2023.
As a result of the execution of this Sentence, in
accordance with the opinion of the Company and its
advisors as to the likely outcome of the aforementioned
appeal, as well as that of the Constitutional Court on
Royal Decree Law 3/2016, Telef\u00f3nica could once again
have available (in addition to the 334 million euros
mentioned in the section \"Main changes registered in
2023\"), totally or partially, the tax credits for tax loss
carryforwards and deductions described under
\"Constitutional Court Ruling on Royal Decree Law
3/2016\" of this note.
The \"Tax and Customs Control Unit of the Spanish Tax
Authority\" (Dependencia de Control Tributario y
Aduanero de la Agencia Tributaria), in compliance with
the obligation set out in the EC Decision (EU) 2015/314,
recovered in March 2019, February 2021 and July 2023,
the amounts that had been deducted in connection with
the amortization of goodwill for the indirect acquisition
of non-resident companies from 2005 to 2015, 2016 to
2018 and 2019 to 2020, respectively. The amount paid
by Telef\u00f3nica after offsetting outstanding tax credits (tax
losses carryforward and deductions) amounted to 13.4
million euros. All settlements have been appealed by the
Company in the Spanish courts.
Notwithstanding the fact that Telef\u00f3nica understands
that the principle of legitimate expectations in relation to
this tax incentive applies, in relation to tax-amortized
goodwill through the purchase of some companies for
which the applicability of the legitimate expectations
principle is questioned, mainly Vivo, the Group has
decided to continue provisioning the amount of the
goodwill amortized for tax purposes, and not recovered
by the Administration which amounted to 480 million
euros as of December 31, 2024 (419 million euros as of
December 31, 2023).
Inspections of the tax group in Spain
In July 2019, new inspection procedures were initiated
for several of the companies belonging to Tax Group
24/90, of which Telef\u00f3nica, S.A. is the dominant
company. The periods audited for Corporate Income Tax
were the years 2014 to 2017.
The closing of the inspection procedure took place in
January 2022, with the Settlement Agreement being
notified, and which the Company challenged in an
economic-administrative procedure at the Central
Economic-Administrative Court due to the adjustments
with which it did not agree, mainly related to the \"juros
sobre el capital propio\". In December 2022, the
Company received a rejection resolution from the
Central Economic-Administrative Court, which was
challenged on the National High Court in February 2023.
The final decision is still pending.
In relation to the 2008-2011 inspection procedure, in July
2022 Telef\u00f3nica was notified of the Supreme Court's
decision rejecting the appeal for cassation filed by the
State Attorney's Office against the judgment of the
Audiencia Nacional (National High Court) of October\u00a029,
2021 . This confirmed the criteria used by Telef\u00f3nica, S.A.
for the use of tax losses carryforward and deductions in
relation to the liquidation agreements derived from the
Corporate Income Tax inspection of those years.
On October\u00a024, 2022 , an Agreement for the Execution of
the Judgment of the Audiencia Nacional (National High
Court) was issued, which orders the refund to Telef\u00f3nica
of an amount of 790 million euros for taxes paid in those
years, as well as an amount of 526 million euros as
delayed interest. Said amounts were collected on
October\u00a028, 2022.
In July 2023 new inspection procedures were initiated
with respect to several of the companies belonging to
Tax Group 24/90, of which Telef\u00f3nica, S.A. is the
dominant company. The taxes and periods being
audited were as follows: corporate income tax for the
years 2018 to 2021 and value added tax for the period
from May to December 2019 as well as for the years
2020 and 2021.
As a result of the ongoing inspection process and the
years still to be inspected, at the end of the financial year
2024, it is not estimated that there will be a need to
recognize additional liabilities in addition to those
described in the Consolidated Financial Statements.
Constitutional Court Ruling on Royal
Decree Law 3/2016
On January 18, 2024, the plenary session of the
Constitutional Court of Spain (\"TC\") unanimously
declared unconstitutional certain measures introduced
by Royal Decree-Law 3/2016 of December 2 on
corporate income tax. Specifically, the TC declared
unconstitutional the setting of stricter ceilings for the
offsetting of tax loss carryforwards, the introduction ex
novo of a limit on the application of double taxation
deductions, and the obligation to automatically integrate
into the tax base of the tax the impairment of holdings
that had been deducted in previous years. This ruling,
following the trend of previous TC rulings, points out
that, in the interest of legal certainty, the effects of the
declaration of unconstitutionality are limited.
However, because Telef\u00f3nica has submitted letters of
request for rectification for the financial years 2016
onwards of both the consolidated self-assessment tax
returns (Form 220) of the Tax Group 24/90 and the
individual self-assessment tax returns (Form 200) of the
Group companies affected by the measures deemed to
be unconstitutional, Telef\u00f3nica would not be affected by
any such limitation on the scope of the declaration of
unconstitutionality.
Furthermore, on December 21, 2024, Law 7/2024 of
December 20 was published in the Official State Gazette
(BOE), which, in addition to regulating a complementary
tax ensuring a minimum global tax rate for multinational
groups (transposing European Council Directive
2022/2523 of December 15), introduces other changes
to the corporate income tax in order to reverse the
effects of the partial annulment of the tax measures
introduced by Royal Decree-Law 3/2016 of December 2.
With effect from tax periods starting on or after January
1, 2024 and not yet concluded at the time the Law
7/2024 comes into force, the mandatory reversal regime
for impairments of securities on share capital or equity
that had been fiscally deductible prior to 2013 is
reinstated.
Specifically, the total amount of impairments that were
deductible before 2013 and are pending reversal as of
January 1, 2024 must be included in the tax base.
The reversal must be made, at a minimum, in equal parts
during each of the first three financial years starting from
January 1, 2024. It will be possible to offset the positive
income arising from this mandatory reversal with tax loss
carryforwards generated in years prior to 2021, without
the application of the 25% and 50% limits mentioned
earlier (although the general 70% limit will still apply).
As a result, the corporate income tax returns of the fiscal
group in Spain for the years 2016 to 2021 will be affected
by the aforementioned ruling. Given the current status of
the litigation related to the corporate income tax for
2016-2017 before the Spanish National Court, and the
conclusion of the tax inspection process for the years
2018 to 2021, it is expected that the Spanish tax
authorities will issue the corresponding enforcement
agreements when the inspection procedure concludes
in 2025.
Accordingly, Telef\u00f3nica, with the support of its external
advisors, based on the applicable financial reporting
framework, has taken into account the effects of the
unconstitutionality of Royal Decree-Law 3/2016 and Law
7/2024,
n its analysis of recoverability of deferred tax assets at
the end of 2024, this resulted mainly in the reversal of
impairment of portfolios that were tax-deductible in
periods starting prior to January 1, 2013 and their
integration in the taxable income base according to the
provisions of Article 12.3 of Royal Decree-Law 4/2004
and the new Law 7/2024.
The effects are shown in the section \"Main changes
registered in 2024\" in this note.
As a result of the execution of this TC ruling, as well as
the ruling from the General Court of the European Union
regarding the amortization of goodwill, Telef\u00f3nica could
once again have available (in addition to the 334 million
euros mentioned), either in whole or in part, the
following tax credits for tax loss carryforwards and
deductions used in the assessments of those years: for
tax loss carryforwards of the years 2002, 247 million
euros; 2004, 21 million euros; 2011, 615 million euros; and
2015, 1,503 million euros; and for deductions: for double
taxation for the years 2010 to 2020, 952 million euros; for
reinvestment for the years 2003 and 2011 to 2013, 23
million euros; for investments from 2003 to 2013, 476
million euros; for donations from the years 2009 to 2018,
260 million euros; for fixed assets in the Canary Islands
from 2010 to 2020, 101 million euros and due to the
reversal of temporary measures from 2015 to 2020, 29
million euros.
Tax litigation in Telef\u00f3nica Brazil
State taxes
The Telef\u00f3nica Group is involved in a range of tax
litigation in Brazil over direct and indirect taxes
(including those relating to GVT). This includes a number
of appeals relating to ICMS tax (a tax similar to VAT,
levied on telecommunications services). There is a
dispute with the Brazilian tax authorities over which
services should be subject to this tax.
To date the most significant issues have focused on the
requirement to collect ICMS on penalties charged to
customers for non-compliance, and complementary or
additional services to the basic telecommunications
services such as value-added services, modem rental,
and the application of this tax on the basic fee
(assinatura b\u00e1sica). In the case of the latter (assinatura
b\u00e1sica), the Supreme Court has established that the tax
is only payable in respect of assessments for periods
after October 2016.
All related procedures are being contested in all
instances (administrative and court proceedings). The
aggregate amount of the relevant proceedings, updated
to take into account interest, fines and other items, was
approximately 25,760 million Brazilian reais as of
December 31, 2024 (approximately 4,002 million euros at
the exchange rate on that date, see Note 24), 23,130
million Brazilian reais as of December 31, 2023
(approximately 4,323 million euros at the exchange rate
on that date). Telef\u00f3nica Brazil has obtained
independent expert reports supporting its position, i.e.,
that the aforesaid services are not subject to ICMS.
Federal taxes
In addition, there are possible contingencies in relation
to federal income taxes for a total amount of 36,723
million Brazilian reais as of December 31, 2024
(approximately 5,706 million euros at the exchange rate
on that date), compared to 30,379 million Brazilian reais
as of\u00a0 December 31, 2023 (approximately 5,678 million
euros at the exchange rate on that date), mainly related
to the tax amortizations in Brazil in the years between
2011 and 2021 with respect to goodwill originated in the
acquisitions of Vivo and GVT and their subsequent
mergers with Telef\u00f3nica Brasil. In relation to the tax
amortization of goodwill in 2024, the last assessment
received was for an amount of 4,018 million Brazilian
reais (approximately 624 million euros at the exchange
rate as of December 31, 2024). Telef\u00f3nica Brasil has
challenged the related assessments. These proceedings
are at the administrative and judicial stage and no
provisions have been made since the potential risk
associated with them has been classified as \"not
probable\" and Telef\u00f3nica Brazil has received
independent expert reports that support this view.
There are other probable contingencies in relation to the
federal income taxes for the total amount of 216 million
Brazilian reais as of December 31, 2024 (approximat ely
34 million euros a t the exchange rate as of December 31,
2024), compared to 198 million Brazilian reais as of\u00a0
December 31, 2023 (approximately 37 million euros at
the exchange rate on that date). The Company has
recognized a provision for this amount.
Tax litigation in Telef\u00f3nica del Per\u00fa
In relation to tax claims in Peru, it should be noted that
Telef\u00f3nica del Per\u00fa is party to numerous legal
proceedings (contentious administrative proceedings
(ACAs) and appeals (amparos)) for tax matters relating
to corporate income tax and VAT, mainly for the years
1998 to 2005, the most relevant being those
corresponding to the years 1998 to 2001 (relating to
corporate income tax, payments in advance, credit
balances, associated VAT, interest and applicable
penalties).
The evolution of the appeals of the different cases from
the period 1998 to 2001 has been uneven and complex
over the last few years, but we can highlight the second
instance Judgment of 2015, which was partially upheld;
the Supreme Court Judgments of 2019; the January
2020 Supreme Court Ruling, annulling the previous
rulings of 2000 and 2001 in relation to the provision for
doubtful debts; the Constitutional Court Rulings in 2021
in relation to the settlement of late payment interest,
partially upheld; and the Supreme Court Rulings of 2021
and 2022 on the credit balance from 1999 used in 2000.
On January 17 and 18, 2023, Telef\u00f3nica del Per\u00fa received
notifications of the judgments handed down by the
Supreme Court that resolved, in the last instance and
unfavorably to the Company (references to the
\u201cCompany\u201d in this section refer to Telef\u00f3nica del Per\u00fa),
the contentious administrative proceedings relating to
income tax for the years 1998, 2000 and 2001.
The rulings issued by the Fifth Chamber of
Constitutional and Social Transitory of the Supreme
Court do not contain any payment mandate to the
Company, as the rulings issued in the administrative
contentious proceedings were resolved on concepts
derived from a pronouncement of the Tax Court. At the
end of these proceedings - and any others that may be
applicable - the Tax Administration, through an
administrative act, will determine the amount of the
corresponding payment obligations.
Because there were certain adjustments on which the
rulings had been definitive since 2015 (positively for the
Company in relation to the deductibility of the rental of
public spaces and negatively in the case of the
deductibility of certain financial charges), the Company
previously recorded a provision with an impact on
income tax, the amount of which has been updated
periodically and constantly depending on the evolution
of the various proceedings and the applicable interest
rates.
In addition to the above, in June 2022 a new ruling was
received from the Tax Court in relation to the corporate
income tax of Telef\u00f3nica M\u00f3viles del Per\u00fa for 2000. This
ruling was favorable to the Company with respect to the
recognition of the tax value of certain network assets
and unfavorable with respect to the deductibility of the
exchange rate tax.
In relation to all these proceedings, the Group considers
that the initial amount claimed by the Peruvian
government has been exponentially increased by the
accrual of interest generated by the delay, not
attributable to the Company, of almost 20 years in
processing the lawsuits, meaning that almost 80% of the
total amount claimed is due to interest and fines. And all
this, despite the fact that in 2021 the Constitutional
Court itself ruled in favor of Telef\u00f3nica del Per\u00fa,
recognizing that it had been charged interest for delays
not attributable to the company.
For this and other reasons, the Group has been in
international arbitration before ICSID since March 2021
for various conducts of the Peruvian State in violation of
the Agreement for the Promotion and Reciprocal
Protection of Investments between Spain and Peru (see
Note 29.a)..
During the 2024 financial year, the partial execution of
the guarantees provided during the aforementioned
proceedings from 1998 to 2001 has finally taken place,
for a total amount of 1,105 million Peruvian soles,
equivalent to 272 million euros at the 2024 average
exchange rate.
The Company has recorded the necessary provisions for
the contingencies considered probable, leaving as
possible contingencies an amount of 517 million Peruvian
soles as of December 31, 2024, or approximately 132
million euros at the exchange rate on that date (587
million Peruvian soles as of December 31, 2023, or
approximately 143 million euros at the 2024 average
exchange rate).
The total provision for tax litigation in Peru, following the
payments made to date, as well as the use of credit
balance and the restatement of interest, have led to the
adjustment of the provision at December 31, 2024, which
amounts, including the amount corresponding to the
guaranteed letters paid and pending return, to 2,739
million Peruvian soles, or approximately 700 million
euros at the exchange rate as of December 31, 2024
( 3,117 million Peruvian soles as of December 31, 2023 or
approximately 761 million euros at the exchange rate on
that date).
Note 29. Other information
a) Litigation and arbitration
Telef\u00f3nica and its Group companies are party to several
legal proceedings which are currently in progress in the
courts of law and the arbitration bodies of the various
countries in which we are present.
Based on the advice of our legal counsel it is reasonable
to assume that these legal proceedings will not
materially affect the financial condition or solvency of
the Telef\u00f3nica Group.
The contingencies arising from the litigation and
commitments described below were evaluated (see
Note 3.n) when the consolidated financial statements for
the year ended December 31, 2024 were prepared. The
provisions recorded in respect of the commitments
taken as a whole are not material.
The following unresolved legal proceedings or those
underway in 2024 are highlighted (see Note 25 for
details of tax-related cases):
Appeal against the Decision by Agencia
Nacional de Telecomunica\u00e7\u00f5es (\u201cANATEL\u201d)
regarding the inclusion of interconnection and
network usage revenues in the Fundo de
Universaliza\u00e7\u00e3o de Servi\u00e7os de
Telecomunica\u00e7\u00f5es (\u201cFUST\u201d)
Vivo Group operators (currently Telef\u00f4nica Brasil, S.A.),
together with other cellular operators, appealed
ANATEL\u2019s Decision of December 16, 2005, to include
interconnection and network usage revenues and
expenses in the calculation of the amounts payable into
the FUST (Fundo de Universaliza\u00e7\u00e3o de Servi\u00e7os de
Telecomunica\u00e7\u00f5es) \u2013a fund which pays for the
obligations to provide Universal Service\u2013 with
retroactive application from 2000. On March 13, 2006,
Brasilia Federal Regional Court of the 1st Region granted
a precautionary measure which stopped the application
of ANATEL\u2019s decision. On March 6, 2007, a ruling in favor
of the wireless operators was issued, stating that it was
not appropriate to include the revenues received by
transfer from other operators in the taxable income for
the FUST\u2019s calculation and rejecting the retroactive
application of ANATEL\u2019s decision. On January 26, 2016,
ANATEL filed an appeal to overturn this Decision with
Brasilia Federal Regional Court of the 1st Region, which
was also dismissed. On May 10, 2017 ANATEL appealed
to the higher courts on the merits of the case.
At the same time, Telef\u00f4nica Brasil and Telef\u00f3nica
Empresas, S.A., together with other wireline operators
through ABRAFIX (Associa\u00e7\u00e3o Brasileira de
Concession\u00e1rias de Servi\u00e7o Telefonico Fixo Comutado)
appealed ANATEL\u2019s Decision of December 16, 2005, also
obtaining the precautionary measures requested. On
June 21, 2007, Brasilia Federal Regional Court of the 1st
Region ruled that it was not appropriate to include the
interconnection and network usage revenues in the
FUST\u2019s taxable income and rejected the retroactive
application of ANATEL\u2019s Decision. ANATEL filed an
appeal to overturn this ruling on April 29, 2008, before
Brasilia Federal Regional Court of the 1st Region, which
was dismissed on May 10, 2016. ANATEL filed an appeal
against this dismissal.
The fixed operators filed an appeal to clarify that
revenues obtained through interconnection and
dedicated line operation should not be included in the
calculation of the amounts payable to the FUST. In
addition, the court was also requested to rule on two
grounds which had not been analyzed in the initial
Decision: (i) that the FUST has become obsolete, among
other reasons, by the advance of mobile telephony; and
(ii) that amounts collected are not applied to the purpose
for which the FUST was created, since only a very low
percentage of the revenues collected by the FUST is
used to finance fixed telephony. Although the petition
for clarification was dismissed on August 23, 2016, the
court noted that the FUST should not be funded with
revenues from interconnection and dedicated line
operation. ABRAFIX appealed to the higher courts on
these two elements that had not been analyzed.
ANATEL appealed all the holdings of the ruling to the
higher courts.
The amount of the claim is quantified at 1% of the
interconnection revenues.
Decision by the High Court regarding the
acquisition by Telef\u00f3nica of shares in \u010cesk\u00fd
Telecom by way of a tender offer
Venten Management Limited (\"Venten\") and Lexburg
Enterprises Limited (\"Lexburg\") were non-controlling
shareholders of \u010cesk\u00fd Telecom. In September 2005,
both companies sold their shares to Telef\u00f3nica in a
mandatory tender offer. Subsequently, Venten and
Lexburg, in 2006 and 2009, respectively, filed actions
against Telef\u00f3nica claiming a higher price than the price
for which they sold their shares in the mandatory tender
offer.
On August 5, 2016, the hearing before the High Court in
Prague took place in order to decide the appeal against
the second decision of the Municipal Court, which had
been favorable to Telef\u00f3nica's position (as was also the
case with the first decision of the Municipal Court). At
the end of the hearing, the High Court announced the
second appellate decision by which it reversed the
second decision of the Municipal Court and ordered
Telef\u00f3nica to pay 644 million Czech korunas
(approximately 23 million euros) to Venten and 227
million Czech korunas (approximately 8 million euros) to
Lexburg, in each case plus interest.\u00a0
On December 28, 2016, the decision was notified to
Telef\u00f3nica. Telef\u00f3nica filed an extraordinary appeal,
requesting the suspension of the effects of the decision.
In March 2017, Telef\u00f3nica was notified of the decision of
the Supreme Court, which ordered the suspension of
the effects of the unfavorable decision to Telef\u00f3nica
issued by the High Court.
Venten and Lexburg filed with the Supreme Court a
motion to partially abolish the suspension of
enforceability of the Decision of the High Court in
Prague. On January 17, 2018, Telef\u00f3nica filed its response
seeking dismissal of such motion for lack of legal basis.
On February 14, 2019,\u00a0notification was given to
Telef\u00f3nica of the resolution of the Supreme Court which,
based on the extraordinary appeal filed by Telef\u00f3nica,
abolished the decision of the High Court in Prague dated
August 5, 2016 and remanded the case back to the High
Court.
In December 2021, the High Court of Prague confirmed
its appointment of an expert in order to produce a new
expert report to assess the reliability of market-based
price criteria used in the mandatory tender offer and
further technical issues discussed in this litigation,
including a new discounted cashflow valuation of the
shares of \u010cesk\u00fd Telecom in 2005.
After receiving the expert report, Telef\u00f3nica challenged
its findings on April 30, 2023. Hearings with respect to
this challenge were held in the High Court of Prague in
November and December 2023.
On February 20, 2025 a hearing of closing arguments
was held before the High Court of Prague.
Appeal against the resolution of ANATEL to
sanction Telef\u00f4nica Brasil for breaches of the
Fixed Telephony Regulation
In May 2018, Telef\u00f4nica Brasil filed a judicial action for
annulment against a resolution issued by ANATEL (the
National Telecommunications Agency of Brazil) in March
2018 concluding the administrative process for
determination of non-compliance with obligations
(Processo Administrativo para Apura\u00e7\u00e3o de
Descumprimento de Obriga\u00e7\u00f5es or \"PADO\")
investigating alleged infractions of the Fixed Telephony
Regulation by Telef\u00f4nica Brasil.\u00a0 \u00a0
This PADO investigation had been suspended during the
negotiations of the conduct adjustment term (Termo de
Ajustamento de Conduta or \"TAC\") between Telef\u00f4nica
Brasil and ANATEL relating to this and certain other
PADO investigations. Since the negotiations concluded
without agreement, the suspended PADO sanctioning
procedures were reactivated and finalized.
In its resolution of March 2018, ANATEL considered that
Telef\u00f4nica Brasil committed several infractions,
specifically those related to the inadequate notice of
suspension of services to defaulting users, the terms of
reactivation of services after payment of outstanding
amounts by defaulting users and the disagreement with
the terms of refunds claimed by users of the services.
The fine imposed by ANATEL and appealed by
Telef\u00f4nica Brasil is approximately 211 million Brazilian
reals (approximately 33 million euros based on the
exchange rate as of December 31, 2024), which
amounted to approximately 663 million Brazilian reals
after currency value updates and accrued interest as of
December 31, 2024 (approximately 103 million euros
based on the exchange rate as of December 31, 2024).
Telef\u00f4nica Brasil appealed the fine imposed by ANATEL
based, fundamentally, on the following arguments: (i)
ANATEL should have considered a smaller universe of
users to determine the fine and (ii) the calculation of the
fine is disproportionate and based on insufficient
grounds.
In December 2024, Telef\u00f4nica Brasil, ANATEL, the
Brazilian Federal Court of Accounts and the Brazilian
Ministry of Communications signed an agreement on
the terms and conditions for the adaptation of the
switched fixed telephone service concession contracts
to an authorization instrument (the Self-Composition
Agreement). Once the Self-Composition Agreement is
validated by the relevant court, the matter is expected to
be closed without payment of a fine by Telef\u00f4nica Brasil.
ICSID Arbitration Telef\u00f3nica, S.A. vs. Republic of
Colombia
In the local arbitration brought by Colombia against
Colombia Telecomunicaciones, on July 25, 2017, the
local arbitration tribunal ordered Colombia
Telecomunicaciones to pay 470 million euros as
economic compensation for the reversion of assets
related to voice services in relation to the concession
granted between 1994 and 2013.
On August 29, 2017, Colombia Telecomunicaciones\u2019s
share capital was increased in order to make the
payment ordered by the local arbitral award; Telef\u00f3nica,
S.A. contributed and disbursed an amount equivalent to
67.5% of the award\u2019s amount ( 317 million euros) and the
Colombian Government contributed an amount
equivalent to the remaining 32.5% (153 million euros).
On February 1, 2018, Telef\u00f3nica, S.A. filed a Request for
Arbitration against Colombia at the International Centre
for Settlement of Investment Disputes (\"ICSID\"), which
was formally registered on February 20, 2018.
The ICSID tribunal was constituted on February 26, 2019.
Colombia filed Preliminary Objections on Jurisdiction on
August 5, 2019. Telef\u00f3nica, S.A. responded to Colombia\u2019s
objections in its Claimant\u2019s Memorial on September 23,
2019, in which it also requested that Colombia pay
compensation for damages caused to Telef\u00f3nica, S.A.
On October 23, 2019, Colombia submitted its
Complementary Objections on Jurisdiction as well as a
request for Bifurcation, to which Telef\u00f3nica, S.A.
responded on November 29, 2019.
On January 24, 2020, the tribunal dismissed the request
for Bifurcation presented by Colombia, ordering the
continuation of the proceeding. A decision on the merits
of Telef\u00f3nica, S.A.\u2019s claim is pending.
On July 3, 2020, Colombia filed its reply to the claim filed
by Telef\u00f3nica before the ICSID.
On November 2, 2020, Telef\u00f3nica presented its
response to Colombia's reply.
After the hearing held in April 2021, on July 27, 2021 the
hearing of closing arguments was held.
On November 12, 2024, the tribunal issued an arbitration
award favorable to the interests of Telef\u00f3nica,
determining that Colombia failed to comply with its
obligation to grant fair and equitable treatment to
Telef\u00f3nica's investments under the applicable
investment treaty and ordering Colombia to pay the
amount of 380 million U.S. dollars (approximately 358
million euros at the exchange rate of November 12, 2024)
plus compound interest at a rate of 5% per year as
compensation for the damages caused (i.e., the entire
principal amount and interest sought by Telef\u00f3nica in
the dispute). In addition, the tribunal ordered Colombia
to pay Telef\u00f3nica\u2019s attorneys\u2019 fees with respect to the
arbitration proceedings, together with the
corresponding interest.
On November 27, 2024, the Republic of Colombia filed a
request with the ICSID to annul and suspend the award.
According to ICSID procedures, the request for a stay of
enforcement in the annulment proceeding provisionally
suspends the enforcement of the award until the new
tribunal decides on the request within a maximum
period of 30 days from its constitution. As of the date of
preparation of this Annual Report, the new tribunal has
not been constituted. The account receivable
associated with this award, amounting to 544\u00a0million U.S.
dollars (523\u00a0million euros based on the exchange rate as
of December 31, 2024), is recorded under \"Short-term
credits\". (see note 15).
Telef\u00f3nica's lawsuit against Millicom
International Cellular for default in the sale of
Telef\u00f3nica de Costa Rica
Telef\u00f3nica, S.A. (Telef\u00f3nica) and Millicom International
Cellular, S.A. (Millicom) reached an agreement on
February 20, 2019 for the purchase and sale of the entire
capital stock of Telef\u00f3nica de Costa Rica TC, S.A.
In March 2020, Telef\u00f3nica informed Millicom that, once
the pertinent regulatory authorizations had been
obtained and all the other conditions established in the
aforementioned agreement for the execution of the sale
had been completed, the execution of the contract and
the closing of the transaction should be in April 2020.
Millicom expressed its refusal to proceed with the
closing, arguing that the competent Costa Rican
administrative authorities had not issued the appropriate
authorization.
On May 25, 2020, Telef\u00f3nica filed a lawsuit against
Millicom before the New York Supreme Court,
considering that Millicom had breached the terms and
conditions established in the sale contract, demanding
compliance with the provisions of the aforementioned
agreement, and compensation for all damages that this
unjustified breach could cause to Telef\u00f3nica.
On June 29, 2020, Millicom filed a Motion to Dismiss, to
which Telef\u00f3nica replied on July 8, 2020.
On August 3, 2020, Telef\u00f3nica submitted an
amendment to the lawsuit, removing the requirement to
comply with the provisions of the sale and purchase
contract and requesting only compensation for all
damages that the unjustified breach of said agreement
could cause to Telef\u00f3nica.
On January 5, 2021, the Motion to Dismiss filed by
Millicom in June 2020 was dismissed by the New York
Supreme Court.
On February 24, 2023, both parties filed a \"motion for
summary judgment\" once the discovery period had
ended .
On February 13, 2024, the New York Supreme Court
issued a decision granting Telef\u00f3nica\u2019s motion for partial
summary judgment, concluding that Telef\u00f3nica is
entitled to compensatory damages and prejudgment
interest (approximately 140 million U.S. dollars) from
Millicom.
On August 5, 2024, Millicom filed its appellate brief with
the Appellate Division of the New York Supreme Court,
and Telef\u00f3nica filed its response on September 4, 2024.
On December 17, 2024, the Appellate Division issued a
decision and order upholding Telef\u00f3nica\u2019s entitlement to
summary judgment, but decided that the Supreme
Court had calculated the prejudgment interest
incorrectly and reduced the amount to be awarded to
Telef\u00f3nica accordingly.
On January 21, 2025, Telef\u00f3nica filed an appeal against
the decision of the Appellate Division of the New York
Supreme Court.
ICSID Arbitration Telef\u00f3nica, S.A. vs. Republic of
Peru
On February 5, 2021, Telef\u00f3nica filed a request for
arbitration against the Republic of Peru at the ICSID,
which was formally registered on March 12, 2021.
Telef\u00f3nica bases its claims on the Agreement for the
Promotion and Reciprocal Protection of Investments
between the Kingdom of Spain and the Republic of Peru
(\"APRPI\") signed on November 17, 1994. Telef\u00f3nica
argues that the Peruvian tax administration (called
Superintendencia Nacional de Aduanas y de
Administraci\u00f3n Tributaria, known as \"SUNAT\") and other
state bodies have failed to comply with the obligations
established in the APRPI, including by adopting arbitrary
and discriminatory actions.
It is requested that the defendant be ordered to fully
compensate Telef\u00f3nica for all damages suffered.
Once the Tribunal was constituted, on February 9, 2023,
Telef\u00f3nica filed a request for urgent injunctive relief
together with a request for injunctive relief, requesting
the suspension of the administrative litigation (acci\u00f3n
contencioso-administrativa or ACA) related to the
income tax for the years 1998, 2000 and 2001, as well as
the extension of the deadline for submission by
Telef\u00f3nica of the memorial or claim. Following response
of Peru, on February 16, 2023, the Tribunal ruled to
dismiss Telef\u00f3nica's request for urgent injunctive relief,
to establish the procedural calendar to process the
request for injunctive relief and to grant Telef\u00f3nica two
additional weeks to file the memorial or claim.
On March 2, 2023, Telef\u00f3nica filed a memorial on the
merits. On that date, the Republic of Peru filed
observations on the claimant's request for provisional
measures submitted by Telef\u00f3nica on February 9, 2023.
On March 24, 2023, the Tribunal held a hearing on the
claimant's request for provisional measures.
On May 11, 2023, the Tribunal issued Procedural Order
No. 5 concerning the defendant's request to address the
objections to jurisdiction as a preliminary question. As a
result, the objections to jurisdiction were joined to the
merits of the dispute.
On September 18, 2023, the defendant filed a counter-
memorial on the merits and a memorial on jurisdiction.
On December 22, 2023, the Tribunal issued Procedural
Order No. 6 concerning production of documents.
On March 29, 2024, Telef\u00f3nica filed a reply on the
merits, and on June 28, 2024, the Republic of Peru filed a
rejoinder on the merits and a reply on jurisdiction.
On July 16, 2024, following the resignation of the
arbitrator appointed by Peru, the Acting Secretary-
General notified the parties of the vacancy on the
Tribunal and the proceeding was temporarily suspended
pursuant to ICSID Arbitration Rule 10 (2).
On August 12, 2024, the proceedings resumed under
ICSID Arbitration Rule 12, following the appointment of
the new arbitrator by the Republic of Peru.
On August 20, 2024, the defendant filed a submission on
quantum.
The final hearing was held in the last weeks of February
2025.
Appeal against the ANATEL resolution on the
calculation of amounts for the renewal of radio
frequencies in Brazil associated with the
provision of the personal mobile services (filed
in 2013)
In 2013, Telef\u00f3nica Brasil filed a lawsuit against the
resolution of ANATEL which sets forth the calculation of
the amount to be paid by Telef\u00f3nica Brasil for the
renewal of radio frequencies associated with the
provision of personal mobile services, which has been
granted to Telef\u00f3nica Brasil for a period of fifteen years.
According to ANATEL the renewals, which must be
carried out every two years , should be accompanied by
a payment equivalent to 2% of all income derived from
the provision of personal mobile services, while
Telef\u00f3nica Brasil believes that the calculation must be
made with respect to the income derived from voice
services only, which would exclude data services and
interconnection revenues.
In February 2020, Telef\u00f3nica Brasil filed an appeal
before the Regional Federal Court of Brasilia after
obtaining an unfavorable ruling in the Court of First
Instance, which considered that the criteria defended by
ANATEL was the one to be followed.
As of December 31, 2024, the amount under litigation
was 896\u00a0million Brazilian reais (139 million euros based
on the exchange rate of such date), resulting from the
method of calculation of ANATEL that has been
appealed.
Appeal against the ANATEL resolution on the
calculation of amounts for the renewal of radio
frequencies in Brazil associated with the
provision of the personal mobile services (filed
in 2015)
In 2015, Telef\u00f3nica Brasil filed a lawsuit against the
resolution of ANATEL which sets forth the calculation of
the amount to be paid by Telef\u00f3nica Brasil for the
renewal of radio frequencies associated with the
provision of personal mobile services, which has been
granted to Telef\u00f3nica Brasil for a period of fifteen years.
According to ANATEL the renewals, which must be
carried out every two years, should be accompanied by
a payment equivalent to 2% of all income derived from
the provision of personal mobile services, while
Telef\u00f3nica Brasil believes that the calculation must be
made with respect to the income derived from voice
services only, which would exclude data services and
interconnection revenues.
In August 2016, Telef\u00f3nica Brasil filed an appeal before
the Regional Federal Court of Brasilia after obtaining an
unfavorable ruling in the Court of First Instance, which
considered that the criteria defended by ANATEL was
the one to be followed. The parties are currently waiting
for a judgment on the appeal.
As of December 31, 2024, the amount under litigation
was 229\u00a0million Brazilian reais (36\u00a0million euros based on
the exchange rate of such date), resulting from the
method of calculation of ANATEL that has been
appealed.
UK High Court claim by Phones 4 U Limited
against various mobile network operators and
other companies, among others, Telef\u00f3nica,
S.A., Telefonica O2 Holdings Limited and
Telefonica UK Limited
In late 2018, Phones 4U Limited (in administration)
(\u201cP4U\u201d) commenced a claim in the English High Court in
London against various mobile network operators:
Everything Everywhere, Deutsche Telekom, Orange,
Vodafone, Telef\u00f3nica, S.A., Telefonica O2 Holdings
Limited and Telefonica UK Limited (together the
\u201cDefendants\u201d).\u00a0
P4U carried on a business of selling mobile phones and
connections to the public, such connections being
supplied by mobile network operators including the
Defendants.\u00a0 In 2013 and 2014, the Defendants declined
to extend and / or terminated their contracts to supply
connections to P4U.
P4U went into administration in September 2014.
P4U alleges that the Defendants ceased to supply
connections because they had colluded between
themselves in contravention of the United Kingdom and
the European Union competition laws and asserts that it
has a basis to claim damages for breach of competition
law by all the Defendants. The Defendants deny all
P4U\u2019s allegations.
The claim commenced on December 18, 2018 by P4U.
The Defendants filed their initial defenses in the course
of April and May 2019, with P4U filing replies on October
18, 2019. The first case management conference took
place on March 2, 2020.
The trial was held between May and July 2022. On
November 10, 2023 the court issued a judgment,
concluding that none of the Defendants was in breach
of either UK or EU competition law.
On April 10, 2024, P4U filed an appeal, and the
Defendants filed a response on June 28, 2024.
The oral argument for the appeal is scheduled for May
2025.
b) Other proceeding
In October 2024, Telef\u00f3nica Venezolana, C.A.,
Telef\u00f3nica, S.A. and the United States Department of
Justice (\u201cDOJ\u201d) entered into a Deferred Prosecution
Agreement (\u201cDPA\u201d) to resolve a single charge of
conspiracy to violate the anti-bribery provisions of the
FCPA. The charge, made against Telef\u00f3nica Venezolana,
C.A., concerns conduct in and around 2014 and 2015
related to a Venezuelan government-sponsored
currency auction.
Telef\u00f3nica, S.A., is not a defendant in the matter but as
parent company of the Telef\u00f3nica Group has agreed to
certain terms and conditions under the DPA.
The terms of the DPA include, among other things,
requirements concerning a corporate compliance
program, annual reports concerning that program during
the term of the DPA and a monetary penalty of
85,260,000 U.S. dollars (approximately 81 million euros
at payment date). The DOJ has agreed that if all the
obligations under the DPA are fully complied with, then
DOJ will seek dismissal with prejudice of the charge
described above after the DPA concludes.
", "dimensions": { "concept": "ifrs-full:DisclosureOfContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-904": { "value": "
Note 25. Tax matters
Pursuant to a Ministerial Order dated December 27,
1989, Telef\u00f3nica, S.A. files consolidated tax returns in
Spain for certain Group companies. The consolidated
tax group comprised 47 companies at December\u00a031,
2024 ( 45 companies at December\u00a031, 2023 ).
This tax consolidation regime applies indefinitely
providing the companies continue to meet the
requirements set down in prevailing legislation, and that
application of the regime is not expressly waived.
Group companies which are resident in Spain and which
are not part of this consolidation regime and non-
resident companies file individual or aggregated tax
returns under the tax law applicable in each country.
Reconciliation of book profit before
taxes to taxable income
The reconciliation between book profit before tax and
the income tax expense from continuing operations for
2024, 2023 and 2022 is as follows:
Millions of euros
2024
2023
2022
Accounting profit before tax
557
(1,473)
2,960
Tax expense at prevailing statutory rate
102
(248)
797
Permanent differences
165
442
(793)
Changes in deferred tax charge due to changes in tax rates
2
\u2014
1
(Capitalization)/reversal of tax deduction and tax relief
(252)
(173)
88
(Capitalization)/reversal of loss carryforwards
(333)
(855)
197
Increase/(decrease) in tax expense arising from temporary differences
599
11
43
Other concepts
65
(76)
308
Corporate income tax
348
(899)
641
Breakdown of current/deferred tax expense
\u00a0
\u00a0
\u00a0
Current tax expense
519
473
(218)
Deferred tax expense
(171)
(1,372)
859
Total Corporate income tax
348
(899)
641
2024
Permanent differences for 2024 mainly included the
result of excluding goodwill impairment losses (see Note
26) from the reconciliation. Goodwill impairment losses
are part of the Accounting profit before tax but have no
effect on the consolidated Corporate income tax.
(Capitalization)/reversal of tax deduction and tax relief in
2024 mainly includes the activation of deferred tax
assets for deductions within the tax group of Telef\u00f3nica,
S.A. following the recoverability analysis at year-end,
amounting to 236 million euros, with a corresponding
deferred tax expense (see the section Main changes
registered in 2024 above in this note).
(Capitalization)/reversal of loss carryforwards in 2024
mainly includes the effect of the activation of tax credits
for tax loss carryforwards generated in previous years of
Telef\u00f3nica, S.A.amounting to 174 million euros,
Telef\u00f3nica Germany amounting to 127 million euros and
Group 3G UMTS Holding GmbH amounting to 106
million euros (see the section Main changes registered in
2024 above in this note).
The increase/(decrease) in tax expense arising from
temporary differences in 2024 mainly includes the
recognition of the deferred tax liability amounting to 535
million euros, following the reinstatement of the
mandatory reversal regime for impairment losses on
equity securities that had been tax-deductible prior to
2013 and were still pending reversal as of January 1, 2024
(see the section \"Main movements in deferred taxes
recognized in 2024\" of this note).
2023
Permanent differences for 2023 mainly included 477
million euros that result from excluding from the
reconciliation the share of loss of VMO2 accounted for
by the equity method (see Note 10). This result is part of
the Accounting profit before tax but has no effect on the
consolidated Corporate income tax.
(Capitalization)/reversal of tax deduction and tax relief in
2023 mainly included the reversal of deferred tax assets
for tax credits of the Telef\u00f3nica, S.A. tax group
amounting to 173 million euros, with a balancing entry in
deferred tax expense (see Main changes registered in
2023 above in this note).
(Capitalization)/reversal of loss carryforwards in 2023
mainly included the effect of the General Court
Judgment of September 27, 2023 that finally annuls the
Third Decision (EU) 2015/314 of the Commission (see Tax
deductibility of financial goodwill in Spain in this note)
with a corresponding entry under deferred tax assets
amounted to 334 million euros and the activation of tax
credits for tax loss carryforwards generated in previous
years of Telef\u00f3nica, S.A. for an amount of 368 million
euros, the recognition of tax credits for tax loss
carryforwards generated in previous years of Telef\u00f3nica
Germany amounting to 115 million euros and Group 3G
UMTS Holding GmbH amounting to 73 million euros (see
the section Main changes registered in 2023 above in
this note).
2022
\"Permanent differences\" for 2022, mainly included 651
million of income corresponding to the last corporate
simplification implemented in Brazil due to the approval
in 2021 of a new Telecommunications Law (Law 14.195 of
26 August 2021), the consequent repeal of Decree
2.617/1998, which abolishes the obligation to control a
telecommunications company through a Brazilian
company.
Likewise, as a result of the closure of the tax inspection
of Group 3G UMTS Holding GmbH for several years up
to 2015 and once it was confirmed that no adjustment
was proposed, the company has reversed the provision
that had been recorded for this purpose, with an impact
on Corporate income tax of 186 million euros and in
Finance income of 69 million euros. This movement has
not had any cash effect.
(Capitalization)/reversal of tax deduction and tax relief in
2022 mainly included the reversal of deferred tax assets
for tax credits of the Telef\u00f3nica, S.A. tax group
amounting to 112 million euros, with a balancing entry in
deferred tax expense.
(Capitalization)/reversal of loss carryforwards in 2022
mainly included the effect of unrecorded tax loss
carryforwards generated in the year and the reversal of
tax loss carryforwards generated in prior years of the
Telef\u00f3nica, S.A. tax group, amounting to 326 million
euros and 85 million euros, respectively. On the other
hand, the recognition of tax credits for tax loss
carryforwards generated in previous years of Telef\u00f3nica
Germany amounting to 76 million euros and Group 3G
UMTS Holding GmbH amounting to 76 million euros are
included too in (Capitalization)/reversal of loss
carryforwards in 2022.
Other items in 2022 mainly included an expense of 241
million euros as a result of the provision for tax
contingencies recorded during the year by Telef\u00f3nica
del Per\u00fa.
There are other probable contingencies in relation to the
federal income taxes for the total amount of 216 million
Brazilian reais as of December 31, 2024 (approximat ely
34 million euros a t the exchange rate as of December 31,
2024), compared to 198 million Brazilian reais as of\u00a0
December 31, 2023 (approximately 37 million euros at
the exchange rate on that date). The Company has
recognized a provision for this amount.
Years open for inspection in the
Group companies
The years open for review by the tax inspection
authorities for the main applicable taxes vary from one
consolidated company to another, based on each
country\u2019s tax legislation, taking into account their
respective statute of limitations periods. In Spain, years
from 2018 onwards are open to inspection.
In the other countries in which the Telef\u00f3nica Group has
a significant presence, the years open for inspection by
the relevant authorities are generally as follows:
\u2022 The last ten years in the United Kingdom.
\u2022 The last nine years in Germany.
\u2022 The last seven years in Argentina.
\u2022 The last six years in Venezuela and Colombia.
\u2022 The last five years in Brazil, Mexico, Uruguay and the
Netherlands.\u00a0
\u2022 The last four years in Peru and Ecuador.
\u2022 The last three years in Chile and the United States.
The tax inspection of the open years is not expected to
give rise to additional material liabilities for the Group.
Complementary Minimun Tax (Pillar
Two)
On December 21, 2024, the Official State Gazette
published Law 7/2024 of December 20, which
establishes a Complementary Tax to guarantee a
minimum global level of taxation for multinational groups
and large domestic groups, a Tax on the margin of
interest and fees of certain financial entities, and a Tax
on liquids for electronic cigarettes and other tobacco-
related products, as well as amendments to other tax
regulations (hereinafter, \"Law 7/2024\").
Law 7/2024 implements Pillar Two in Spain, establishing,
with retroactive effect for fiscal years starting on January
1, 2024, a Complementary Tax that ensures large
multinational groups are taxed at a minimum effective
rate of 15% wherever they operate.
The Telef\u00f3nica Group, as a large multinational group, is
subject to this Complementary Tax.
In this regard, the group has conducted an analysis of
the potential impacts that may arise from the application
of this tax in the 2024 financial year in those jurisdictions
where it is present, considering the application of the
Transitional Safe Harbours outlined in the Fourth
Transitional Provision of Law 7/2024 and, where
applicable, the full calculation.
These Transitional Safe Harbours aim to facilitate
adaptation to the Pillar Two regulations by stipulating
that the Complementary Tax will be zero if any of the
three regulated tests are met.
The tax expense in the consolidated accounts for 2024
related to jurisdictions where none of the safe harbour
tests are met does not have a significant impact, in
accordance with the application of the Pillar Two
legislation.
The Group applies the exemption to recognise and
disclose information on deferred tax assets and liabilities
arising from the implementation of Law 7/2024, as
provided in the amendments to IAS 12 issued in May
2023.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-905": { "value": "
Note 25. Tax matters
Deferred taxes movement
The movements in deferred taxes in the Telef\u00f3nica
Group in 2024 and 2023 are as follows:
Millions of euros
Deferred tax
assets
Deferred tax
liabilities
Balance at December 31
2023
6,240
2,702
First application of IAS 21
\u2014
(48)
Additions
1,418
1,028
Disposals
(928)
(811)
Transfers
27
26
Translation differences and
inflation adjustments
(89)
(2)
Company movements and
others
5
10
Balance at December 31
2024
6,673
2,905
Millions of euros
Deferred tax
assets
Deferred tax
liabilities
Balance at December 31,
2022
4,884
3,067
Additions
2,040
383
Disposals
(760)
(673)
Transfers
15
21
Translation differences and
inflation adjustments
61
(92)
Company movements and
others
\u2014
(4)
Balance at December 31,
2023
6,240
2,702
The Group assesses the recoverability of deferred tax
assets based on the future activities carried out by the
different companies, on tax regulations in the different
countries in which these companies operate, and on the
strategic decisions affecting the companies.
Main changes registered in 2024
In 2024 there were additions of deferred tax assets for
78 million euros as a result of the provisions recognized
during the year in relation to the various workforce
restructuring plans, other obligations with employees of
the companies include in the group in Spain and its
financial update (see Note 24). Likewise, disposals of
deferred tax assets in 2024 included the impact of the
materialization of these provisions and its financial
update, amounting to 255 million euros.
218 million euros of deferred tax assets were recorded
due to the application of Law 7/2024 of December 20,
which, in addition to regulating the Global minimum tax,
establishes the extension to 2024 and 2025 of the 50%
limitation on the use of individual tax loss carryforwards
for the year, which must be reversed in equal parts in
each of the ten years following the year in which they
are applied.
The abovementioned Law also re-establishes the
mandatory reversal regime for impairment losses on
securities representing capital or equity that had been
tax deductible prior to 2013 and were pending reversal
at January 1, 2024 (see section Constitutional Court
Ruling on Royal Decree Law 3/2016 in this Note).
The reversal must be done, at least, in equal parts in
each of the first three years beginning on or after
January 1, 2024, which has resulted in the recording of a
deferred tax liability of 535 million euros for the balance
outstanding at the beginning of 2024. The Company has
taken into account in its analysis of recoverability of
deferred tax assets at the end of 2024 the amount of
impairment losses deducted prior to 2013 that are
pending integration, quantifying the effects of their
return in the years. As a result, deferred tax assets
amounting to 410 million euros have been recorded as
additions.
Telef\u00f3nica Germany recognized tax credits for loss
carryforwards generated in previous years amounting to
127 million euros and applied tax loss carryforwards
amounting to 60 million euros in 2024. Furthermore,
Telef\u00f3nica Germany recognized additions of deferred
tax liabilities amounting to 40 million euros.
The additions of deferred tax assets included tax credits
recognized for 106 million euros by the German
company Group 3G UMTS Holding GmbH. Furthermore,
this company applied tax loss carryforwards in 2024
amounting to 83 million euros.
Telef\u00f3nica Brasil recognized additions of deferred tax
assets in the amount of 3 million euros, applied tax loss
carryforwards amounting to 65 million euros and
recognized disposals for temporary differences in the
amount of 4 million euros in 2024. Additionally, it
recognized additions of liabilities for deferred taxes
amounting to 178 million euros and disposals of deferred
tax liabilities amounting to 140 million euros.
Telef\u00f3nica Chile recognized additions of deferred tax
assets in the amount of 70 million euros and disposals of
deferred tax assets in the amount of 38 million euros in
2024. Additionally, recognized additions of deferred tax
liabilities in the amount of 8 million euros and disposals
of deferred tax liabilities amounting to 24 million euros.
Telef\u00f3nica Colombia recognized disposals of deferred
tax assets in the amount of 45 million euros in 2024.
Additionally, recognized disposals of deferred tax
liabilities in the amount of 11 million euros.
Likewise, in 2024, Telef\u00f3nica del Per\u00fa has reversed
deferred tax assets for loss carryforwards, amounting to
91000000 million euros (see Note 2).
Telef\u00f3nica Argentina recorded disposals in deferred tax
liabilities, and additions in deferred tax assets for
temporary differences, amounting to 332 million euros
and 141 million euros, respectively, mainly corresponding
to the tax effect of the impairment loss on intangible
assets and property, plant and equipment recorded at
the end of 2024 (see Note 2).
The movements relating to deferred taxes recognized
directly in equity in 2024 amounted to 29 million euros of
additions (net position of higher deferred tax liabilities)
and 115 million euros of disposals (net position of higher
deferred tax liabilities).
Likewise, the amount of recognized deferred tax
liabilities associated with investments in subsidiaries
amounted to 156 million euros as of December 31, 2024.
The amount of unrecognized deferred tax liabilities
associated with investments in subsidiaries amounted to
330 million euros as of December 31, 2024.
Main changes registered in 2023
Following the ruling of the General Court Judgment of
September 27, 2023 that finally annuls the Third
Decision (EU) 2015/314 of the Commission (see the
section \"Tax deductibility of financial goodwill in Spain\"
in this note) an addition of tax credits for tax loss
carryforwards was recognized with a balancing entry in
the income tax amounting to 334 million euros.
Likewise, as of December 31, 2023, the recoverability of
the deferred tax assets of the Tax Group in Spain has
been estimated, considering: i) the estimates of results
of the companies that make up the Tax Group; and ii) the
effects of RD 3/2016 (see Constitutional Court Judgment
on Royal Decree Law 3/2016 in this note). Following this
analysis, deferred tax assets were recorded for tax loss
carryforwards and deductions, with a counterpart in
income taxes, in the amount of 541 million euros.
Additionally, in 2023 there were additions of deferred tax
assets for 412 million euros as a result of the provisions
recognized during the year in relation to the various
workforce restructuring plans and other obligations with
employees of the companies include in the group in
Spain (see Note 24). Likewise, disposals of deferred tax
assets in 2023 included the impact of the materialization
of these provisions and its financial update, amounting
to 208 million euros.
Deferred tax assets were added in the amount of 306
million euros in Spain, as a consequence of Law
38/2022, of December 27, which establishes temporary
measures in determining the tax base under the tax
consolidation regime, limiting the amount of individual
tax loss carryforwards corresponding to fiscal year 2023
to 50% .
Telef\u00f3nica Germany recognized tax credits for loss
carryforwards generated in previous years amounting to
115 million euros and applied tax loss carryforwards
amounting to 41 million euros in 2023. Furthermore,
Telef\u00f3nica Germany recognized deferred tax liabilities
disposals amounting to 18 million euros.
The additions of deferred tax assets included tax credits
recognized for 73 million euros by the German company
Group 3G UMTS Holding GmbH. Furthermore, this
company applied tax loss carryforwards in 2023
amounting to 79 million euros.
Telef\u00f3nica Brasil recognized additions of deferred tax
assets in the amount of 23 million euros, applied tax loss
carryforwards amounting to 60 million euros and
recognized disposals for temporary differences in the
amount of 61 million euros in 2023. Additionally, it
recognized additions of liabilities for deferred taxes
amounting to 119 million euros and disposals of deferred
tax liabilities amounting to 266 million euros.
Telef\u00f3nica Chile recognized additions of deferred tax
assets in the amount of 94 million euros and disposals of
deferred tax assets in the amount of 18 million euros in
2023. Additionally, it recognized additions of deferred tax
liabilities in the amount of 48 million euros and disposals
of deferred tax liabilities amounting to 28 million euros.
Telef\u00f3nica Colombia recognized additions of deferred
tax assets in the amount of 9 million euros and disposals
of deferred tax assets in the amount of 66 million euros
in 2023. Additionally, it recognized disposals of deferred
tax liabilities in the amount of 13 million euros.
The movements relating to deferred taxes recognized
directly in equity in 2023 amounted to 2 million euros of
additions (net position of higher deferred tax liabilities)
and 194 million euros of disposals (net position of higher
deferred tax liabilities).
Likewise, the amount of recognized deferred tax
liabilities associated with investments in subsidiaries
amounted to 258 million euros as of December 31,
2023.The amount of unrecognized deferred tax liabilities
associated with investments in subsidiaries amounted to
233 million euros as of December 31, 2023 .
Expected realization of deferred tax
assets and liabilities
The estimated realization of deferred tax assets and
liabilities recognized in the consolidated statement of
financial position in 2024 is as follows:
Millions of euros
12/31/2024
Total
Less than 1
year
More than 1
year
Deferred tax assets
6,673
1,034
5,639
Deferred tax liabilities
2,905
295
2,610
Deferred tax assets
Deferred tax assets in the accompanying consolidated
statements of financial position include the tax loss
carryforwards, unused tax credits recognized and
deductible temporary differences recognized at the end
of the reporting period.
Millions of euros
12/31/2024
12/31/2023
Tax credits for loss
carryforwards
2,877
2,803
Unused tax deductions
1,000
733
Deferred tax assets for
temporary differences
2,796
2,704
Total deferred tax assets
6,673
6,240
Tax credits for loss carryforwards
The movements in Tax credits for loss carryforwards in
the Telef\u00f3nica Group in 2024 and 2023 are as follows:
Location of the company
(Millions of euros)
Balance at
12/31/2023
Additions
Reversals
Translation
differences and
other
Balance at 12/31/2024
Spain
1,110
183
(17)
1
1,277
Germany
879
234
(144)
1
970
Latin America
814
135
(230)
(89)
630
Total tax credits for loss
carryforwards
2,803
552
(391)
(87)
2,877
Location of the company
(Millions of euros)
Balance at
12/31/2022
Additions
Reversals
Translation
differences and
other
Balance at 12/31/2023
Spain
457
725
(75)
3
1,110
Germany
810
189
(120)
\u2014
879
Latin America
741
133
(113)
53
814
Other
3
\u2014
(3)
\u2014
\u2014
Total tax credits for loss
carryforwards
2,011
1,047
(311)
56
2,803
The Spanish tax group considers that unused tax loss
carryforwards in Spain, taking into account tax litigation
in which the group is involved, amounted to 5,426 million
euros at December\u00a031, 2024:
Millions of euros
Total
Less than
1 year
More than
1 year
Tax loss carryforwards
generated in the tax
group
3,439
868
2,571
Tax loss carryforwards
generated before
consolidation in the tax
group
1,987
\u2014
1,987
Total tax credits for loss carryforwards in Spain in the
statement of financial position at December 31, 2024
amounted to 1,277 million euros (1,110 million euros at
December 31, 2023). Total unrecognized tax credits for
loss carryforwards of the Spanish tax group amounted to
113 m illion euros ( 77 million euros at December 31, 2023).
These tax credits do not expire.
The Group companies in Germany have recognized 970
million euros of tax credits for loss carryforwards at
December\u00a031, 2024 (879 million euros at December 31,
2023). Total unrecognized tax credits for loss
carryforwards of these companies amount to 5,168
million euros (5,295 million euros at December 31, 2023).
These tax credits do not expire.
Recognized tax credits in the consolidated statement of
financial position arising from the Latin American
subsidiaries at December\u00a031, 2024 amounted to 630
million euros (814 million euros as of December 31, 2023).
Total unrecognized tax credits for tax loss carryforwards
in Latin America amounted to 797 million euros (841
million euros at December 31, 2023).
Deductions
The Group has recognized 1,000 million euros of tax
credits from deductions at December\u00a031, 2024, in Spain
(733 millIon euros in 2023), generated primarily from
R+D+i, double taxation, donations to non-profit
organizations and film productions. Total unrecognized
tax credits from deductions in Spain amounted to 123
million euros at December 31, 2024 (244 million euros as
of December 31, 2023).
Temporary differences
The sources of deferred tax assets and liabilities from
temporary differences recognized at December\u00a031, 2024
and 2023 are as follows:
Millions of euros
12/31/2024
12/31/2023
Goodwill and intangible
assets
652
787
Property, plant and
equipment
438
378
Personnel commitments
1,271
1,498
Provisions
960
1,062
Investments in subsidiaries,
associates and other
shareholdings
37
\u2014
Inventories and receivables
237
330
Rights of use
42
48
Lease liabilities
990
994
Other concepts
668
489
Total deferred tax assets
for temporary differences
5,295
5,586
Deferred tax assets and
liabilities offset
(2,499)
(2,882)
Total deferred tax assets
for temporary differences
registered in the
statement of financial
position
2,796
2,704
Millions of euros
12/31/2024
12/31/2023
Goodwill and intangible
assets
1,549
1,928
Property, plant and
equipment
854
1,105
Personnel commitments
2
2
Provisions
35
35
Investments in subsidiaries,
associates and other
shareholdings
1,225
746
Rights of use
997
1,023
Lease liabilities
2
2
Other concepts
740
743
Total deferred tax
liabilities for temporary
differences
5,404
5,584
Deferred tax assets and
liabilities offset
(2,499)
(2,882)
Total deferred tax
liabilities for temporary
differences registered in
the statement of financial
position
2,905
2,702
Deferred tax assets and liabilities are offset if a legally
enforceable right exists to offset current tax assets
against current tax liabilities and the deferred taxes
relate to the same taxable entity and the same taxation
authority.
The heading \"Other concepts\u201d of deferred tax assets for
temporary differences include, among others, the effect
of the 50% limitation on the use of individual negative
tax credits for loss carryforwards for the year of
companies under a tax consolidation regime in Spain
(see the section Main deferred tax movements recorded
in 2024 of this Note). \"Other concepts\" of deferred tax
liabilities for temporary differences include, among
others, the difference between the accounting and tax
values created by the value of financial derivatives and
assets and liabilities related to the recognition of income.
Total unrecognized tax credits from\u00a0 temporary
differences, mainly from Pegaso Pcs S.A. de C.V. and
Colombia Telecomunicaciones S.A. ESP BIC, amounted
to 886 million euros at December 31, 2024 (982 million
euros at December 31, 2023).
Tax deductibility of financial
goodwill in Spain
The tax regulations added article 12.5 to the Spanish
Corporate Income Tax Law, which came into force on
January 1, 2002. The article regulated the deductibility of
tax amortization of financial goodwill (fondo de
comercio) arising from the acquisition of non-Spanish
companies, which could be amortized over 20 years at
5% per annum.
Following the entry into force of the Laws 9/2011 of
August 19, 2011 and 16/2013 of October 29, 2013, the
amount of goodwill amortization deductible for tax
purposes under article 12.5 for the years 2011 to 2015
was reduced from 5% to 1%. The effect is temporary
because the 4% not amortized for five years ( 20% in
total) will be recovered extending the deduction period
from the initial 20 years to 25 years.
The Telef\u00f3nica Group, under this regulation, has been
amortizing for tax purposes the financial goodwill from
its investments, both direct and indirect, in O2, BellSouth
and Colombia Telecomunicaciones (prior to December
21, 2007) and Vivo (acquired in 2010). The positive
accumulated effect of the corresponding settlements of
corporate income tax from 2004 to the closing of
December\u00a031, 2024, was 2,368 million euros.\u00a0
In relation to this tax incentive, the European
Commission (EC) has in recent years commenced three
proceedings against the Spanish State, as it deems that
this tax benefit could constitute an example of state aid.
Although the EC itself acknowledged the validity of the
tax incentive for those investors that invested in
European companies for\u00a0 operations carried out before
December 21, 2007 in the first decision, and before May
21, 2011 for investments in other countries in the second
decision, in its third decision issued on October 15, 2014
it calls into question the applicability of the principle of
legitimate expectations in the application of the
incentive for indirect acquisitions, whatever the date of
acquisition may have been.
There are also doubts in the Spanish Courts about the
classification of the incentive as a deduction and its
maintenance in the case of subsequent transmission.
On October 6, 2021, the Court of Justice of the European
Union concluded that the European Commission
correctly classified the Spanish tax depreciation scheme
of the Fondo de Comercio as State aid incompatible
with the internal market for the First and Second
Decisions.
With regard to the recognition of legitimate expectations
for the First and Second decisions, the Court of Justice
of the European Union confirms its applicability.
The proceedings initiated on the Third Decision,
suspended until the resolution of the 1st and the 2nd
Decisions resumed on October 19, 2021. The General
Court of the Court of Justice of the European Union
issued a ruling on September 27, 2023 annulling the
Commission's Third Decision (EU) 2015/314, effective as
of the day of its publication. However, the proceedings
have not been finally concluded as the European
Commission appealed the ruling to the Court of Justice
of the European Union on December 14, 2023.
As a result of the execution of this Sentence, in
accordance with the opinion of the Company and its
advisors as to the likely outcome of the aforementioned
appeal, as well as that of the Constitutional Court on
Royal Decree Law 3/2016, Telef\u00f3nica could once again
have available (in addition to the 334 million euros
mentioned in the section \"Main changes registered in
2023\"), totally or partially, the tax credits for tax loss
carryforwards and deductions described under
\"Constitutional Court Ruling on Royal Decree Law
3/2016\" of this note.
The \"Tax and Customs Control Unit of the Spanish Tax
Authority\" (Dependencia de Control Tributario y
Aduanero de la Agencia Tributaria), in compliance with
the obligation set out in the EC Decision (EU) 2015/314,
recovered in March 2019, February 2021 and July 2023,
the amounts that had been deducted in connection with
the amortization of goodwill for the indirect acquisition
of non-resident companies from 2005 to 2015, 2016 to
2018 and 2019 to 2020, respectively. The amount paid
by Telef\u00f3nica after offsetting outstanding tax credits (tax
losses carryforward and deductions) amounted to 13.4
million euros. All settlements have been appealed by the
Company in the Spanish courts.
Notwithstanding the fact that Telef\u00f3nica understands
that the principle of legitimate expectations in relation to
this tax incentive applies, in relation to tax-amortized
goodwill through the purchase of some companies for
which the applicability of the legitimate expectations
principle is questioned, mainly Vivo, the Group has
decided to continue provisioning the amount of the
goodwill amortized for tax purposes, and not recovered
by the Administration which amounted to 480 million
euros as of December 31, 2024 (419 million euros as of
December 31, 2023).
Inspections of the tax group in Spain
In July 2019, new inspection procedures were initiated
for several of the companies belonging to Tax Group
24/90, of which Telef\u00f3nica, S.A. is the dominant
company. The periods audited for Corporate Income Tax
were the years 2014 to 2017.
The closing of the inspection procedure took place in
January 2022, with the Settlement Agreement being
notified, and which the Company challenged in an
economic-administrative procedure at the Central
Economic-Administrative Court due to the adjustments
with which it did not agree, mainly related to the \"juros
sobre el capital propio\". In December 2022, the
Company received a rejection resolution from the
Central Economic-Administrative Court, which was
challenged on the National High Court in February 2023.
The final decision is still pending.
In relation to the 2008-2011 inspection procedure, in July
2022 Telef\u00f3nica was notified of the Supreme Court's
decision rejecting the appeal for cassation filed by the
State Attorney's Office against the judgment of the
Audiencia Nacional (National High Court) of October\u00a029,
2021 . This confirmed the criteria used by Telef\u00f3nica, S.A.
for the use of tax losses carryforward and deductions in
relation to the liquidation agreements derived from the
Corporate Income Tax inspection of those years.
On October\u00a024, 2022 , an Agreement for the Execution of
the Judgment of the Audiencia Nacional (National High
Court) was issued, which orders the refund to Telef\u00f3nica
of an amount of 790 million euros for taxes paid in those
years, as well as an amount of 526 million euros as
delayed interest. Said amounts were collected on
October\u00a028, 2022.
In July 2023 new inspection procedures were initiated
with respect to several of the companies belonging to
Tax Group 24/90, of which Telef\u00f3nica, S.A. is the
dominant company. The taxes and periods being
audited were as follows: corporate income tax for the
years 2018 to 2021 and value added tax for the period
from May to December 2019 as well as for the years
2020 and 2021.
As a result of the ongoing inspection process and the
years still to be inspected, at the end of the financial year
2024, it is not estimated that there will be a need to
recognize additional liabilities in addition to those
described in the Consolidated Financial Statements.
Constitutional Court Ruling on Royal
Decree Law 3/2016
On January 18, 2024, the plenary session of the
Constitutional Court of Spain (\"TC\") unanimously
declared unconstitutional certain measures introduced
by Royal Decree-Law 3/2016 of December 2 on
corporate income tax. Specifically, the TC declared
unconstitutional the setting of stricter ceilings for the
offsetting of tax loss carryforwards, the introduction ex
novo of a limit on the application of double taxation
deductions, and the obligation to automatically integrate
into the tax base of the tax the impairment of holdings
that had been deducted in previous years. This ruling,
following the trend of previous TC rulings, points out
that, in the interest of legal certainty, the effects of the
declaration of unconstitutionality are limited.
However, because Telef\u00f3nica has submitted letters of
request for rectification for the financial years 2016
onwards of both the consolidated self-assessment tax
returns (Form 220) of the Tax Group 24/90 and the
individual self-assessment tax returns (Form 200) of the
Group companies affected by the measures deemed to
be unconstitutional, Telef\u00f3nica would not be affected by
any such limitation on the scope of the declaration of
unconstitutionality.
Furthermore, on December 21, 2024, Law 7/2024 of
December 20 was published in the Official State Gazette
(BOE), which, in addition to regulating a complementary
tax ensuring a minimum global tax rate for multinational
groups (transposing European Council Directive
2022/2523 of December 15), introduces other changes
to the corporate income tax in order to reverse the
effects of the partial annulment of the tax measures
introduced by Royal Decree-Law 3/2016 of December 2.
With effect from tax periods starting on or after January
1, 2024 and not yet concluded at the time the Law
7/2024 comes into force, the mandatory reversal regime
for impairments of securities on share capital or equity
that had been fiscally deductible prior to 2013 is
reinstated.
Specifically, the total amount of impairments that were
deductible before 2013 and are pending reversal as of
January 1, 2024 must be included in the tax base.
The reversal must be made, at a minimum, in equal parts
during each of the first three financial years starting from
January 1, 2024. It will be possible to offset the positive
income arising from this mandatory reversal with tax loss
carryforwards generated in years prior to 2021, without
the application of the 25% and 50% limits mentioned
earlier (although the general 70% limit will still apply).
As a result, the corporate income tax returns of the fiscal
group in Spain for the years 2016 to 2021 will be affected
by the aforementioned ruling. Given the current status of
the litigation related to the corporate income tax for
2016-2017 before the Spanish National Court, and the
conclusion of the tax inspection process for the years
2018 to 2021, it is expected that the Spanish tax
authorities will issue the corresponding enforcement
agreements when the inspection procedure concludes
in 2025.
Accordingly, Telef\u00f3nica, with the support of its external
advisors, based on the applicable financial reporting
framework, has taken into account the effects of the
unconstitutionality of Royal Decree-Law 3/2016 and Law
7/2024,
n its analysis of recoverability of deferred tax assets at
the end of 2024, this resulted mainly in the reversal of
impairment of portfolios that were tax-deductible in
periods starting prior to January 1, 2013 and their
integration in the taxable income base according to the
provisions of Article 12.3 of Royal Decree-Law 4/2004
and the new Law 7/2024.
The effects are shown in the section \"Main changes
registered in 2024\" in this note.
As a result of the execution of this TC ruling, as well as
the ruling from the General Court of the European Union
regarding the amortization of goodwill, Telef\u00f3nica could
once again have available (in addition to the 334 million
euros mentioned), either in whole or in part, the
following tax credits for tax loss carryforwards and
deductions used in the assessments of those years: for
tax loss carryforwards of the years 2002, 247 million
euros; 2004, 21 million euros; 2011, 615 million euros; and
2015, 1,503 million euros; and for deductions: for double
taxation for the years 2010 to 2020, 952 million euros; for
reinvestment for the years 2003 and 2011 to 2013, 23
million euros; for investments from 2003 to 2013, 476
million euros; for donations from the years 2009 to 2018,
260 million euros; for fixed assets in the Canary Islands
from 2010 to 2020, 101 million euros and due to the
reversal of temporary measures from 2015 to 2020, 29
million euros.
Tax litigation in Telef\u00f3nica Brazil
State taxes
The Telef\u00f3nica Group is involved in a range of tax
litigation in Brazil over direct and indirect taxes
(including those relating to GVT). This includes a number
of appeals relating to ICMS tax (a tax similar to VAT,
levied on telecommunications services). There is a
dispute with the Brazilian tax authorities over which
services should be subject to this tax.
To date the most significant issues have focused on the
requirement to collect ICMS on penalties charged to
customers for non-compliance, and complementary or
additional services to the basic telecommunications
services such as value-added services, modem rental,
and the application of this tax on the basic fee
(assinatura b\u00e1sica). In the case of the latter (assinatura
b\u00e1sica), the Supreme Court has established that the tax
is only payable in respect of assessments for periods
after October 2016.
All related procedures are being contested in all
instances (administrative and court proceedings). The
aggregate amount of the relevant proceedings, updated
to take into account interest, fines and other items, was
approximately 25,760 million Brazilian reais as of
December 31, 2024 (approximately 4,002 million euros at
the exchange rate on that date, see Note 24), 23,130
million Brazilian reais as of December 31, 2023
(approximately 4,323 million euros at the exchange rate
on that date). Telef\u00f3nica Brazil has obtained
independent expert reports supporting its position, i.e.,
that the aforesaid services are not subject to ICMS.
Federal taxes
In addition, there are possible contingencies in relation
to federal income taxes for a total amount of 36,723
million Brazilian reais as of December 31, 2024
(approximately 5,706 million euros at the exchange rate
on that date), compared to 30,379 million Brazilian reais
as of\u00a0 December 31, 2023 (approximately 5,678 million
euros at the exchange rate on that date), mainly related
to the tax amortizations in Brazil in the years between
2011 and 2021 with respect to goodwill originated in the
acquisitions of Vivo and GVT and their subsequent
mergers with Telef\u00f3nica Brasil. In relation to the tax
amortization of goodwill in 2024, the last assessment
received was for an amount of 4,018 million Brazilian
reais (approximately 624 million euros at the exchange
rate as of December 31, 2024). Telef\u00f3nica Brasil has
challenged the related assessments. These proceedings
are at the administrative and judicial stage and no
provisions have been made since the potential risk
associated with them has been classified as \"not
probable\" and Telef\u00f3nica Brazil has received
independent expert reports that support this view.
There are other probable contingencies in relation to the
federal income taxes for the total amount of 216 million
Brazilian reais as of December 31, 2024 (approximat ely
34 million euros a t the exchange rate as of December 31,
2024), compared to 198 million Brazilian reais as of\u00a0
December 31, 2023 (approximately 37 million euros at
the exchange rate on that date). The Company has
recognized a provision for this amount.
Tax litigation in Telef\u00f3nica del Per\u00fa
In relation to tax claims in Peru, it should be noted that
Telef\u00f3nica del Per\u00fa is party to numerous legal
proceedings (contentious administrative proceedings
(ACAs) and appeals (amparos)) for tax matters relating
to corporate income tax and VAT, mainly for the years
1998 to 2005, the most relevant being those
corresponding to the years 1998 to 2001 (relating to
corporate income tax, payments in advance, credit
balances, associated VAT, interest and applicable
penalties).
The evolution of the appeals of the different cases from
the period 1998 to 2001 has been uneven and complex
over the last few years, but we can highlight the second
instance Judgment of 2015, which was partially upheld;
the Supreme Court Judgments of 2019; the January
2020 Supreme Court Ruling, annulling the previous
rulings of 2000 and 2001 in relation to the provision for
doubtful debts; the Constitutional Court Rulings in 2021
in relation to the settlement of late payment interest,
partially upheld; and the Supreme Court Rulings of 2021
and 2022 on the credit balance from 1999 used in 2000.
On January 17 and 18, 2023, Telef\u00f3nica del Per\u00fa received
notifications of the judgments handed down by the
Supreme Court that resolved, in the last instance and
unfavorably to the Company (references to the
\u201cCompany\u201d in this section refer to Telef\u00f3nica del Per\u00fa),
the contentious administrative proceedings relating to
income tax for the years 1998, 2000 and 2001.
The rulings issued by the Fifth Chamber of
Constitutional and Social Transitory of the Supreme
Court do not contain any payment mandate to the
Company, as the rulings issued in the administrative
contentious proceedings were resolved on concepts
derived from a pronouncement of the Tax Court. At the
end of these proceedings - and any others that may be
applicable - the Tax Administration, through an
administrative act, will determine the amount of the
corresponding payment obligations.
Because there were certain adjustments on which the
rulings had been definitive since 2015 (positively for the
Company in relation to the deductibility of the rental of
public spaces and negatively in the case of the
deductibility of certain financial charges), the Company
previously recorded a provision with an impact on
income tax, the amount of which has been updated
periodically and constantly depending on the evolution
of the various proceedings and the applicable interest
rates.
In addition to the above, in June 2022 a new ruling was
received from the Tax Court in relation to the corporate
income tax of Telef\u00f3nica M\u00f3viles del Per\u00fa for 2000. This
ruling was favorable to the Company with respect to the
recognition of the tax value of certain network assets
and unfavorable with respect to the deductibility of the
exchange rate tax.
In relation to all these proceedings, the Group considers
that the initial amount claimed by the Peruvian
government has been exponentially increased by the
accrual of interest generated by the delay, not
attributable to the Company, of almost 20 years in
processing the lawsuits, meaning that almost 80% of the
total amount claimed is due to interest and fines. And all
this, despite the fact that in 2021 the Constitutional
Court itself ruled in favor of Telef\u00f3nica del Per\u00fa,
recognizing that it had been charged interest for delays
not attributable to the company.
For this and other reasons, the Group has been in
international arbitration before ICSID since March 2021
for various conducts of the Peruvian State in violation of
the Agreement for the Promotion and Reciprocal
Protection of Investments between Spain and Peru (see
Note 29.a)..
During the 2024 financial year, the partial execution of
the guarantees provided during the aforementioned
proceedings from 1998 to 2001 has finally taken place,
for a total amount of 1,105 million Peruvian soles,
equivalent to 272 million euros at the 2024 average
exchange rate.
The Company has recorded the necessary provisions for
the contingencies considered probable, leaving as
possible contingencies an amount of 517 million Peruvian
soles as of December 31, 2024, or approximately 132
million euros at the exchange rate on that date (587
million Peruvian soles as of December 31, 2023, or
approximately 143 million euros at the 2024 average
exchange rate).
The total provision for tax litigation in Peru, following the
payments made to date, as well as the use of credit
balance and the restatement of interest, have led to the
adjustment of the provision at December 31, 2024, which
amounts, including the amount corresponding to the
guaranteed letters paid and pending return, to 2,739
million Peruvian soles, or approximately 700 million
euros at the exchange rate as of December 31, 2024
( 3,117 million Peruvian soles as of December 31, 2023 or
approximately 761 million euros at the exchange rate on
that date).
Years open for inspection in the
Group companies
The years open for review by the tax inspection
authorities for the main applicable taxes vary from one
consolidated company to another, based on each
country\u2019s tax legislation, taking into account their
respective statute of limitations periods. In Spain, years
from 2018 onwards are open to inspection.
In the other countries in which the Telef\u00f3nica Group has
a significant presence, the years open for inspection by
the relevant authorities are generally as follows:
\u2022 The last ten years in the United Kingdom.
\u2022 The last nine years in Germany.
\u2022 The last seven years in Argentina.
\u2022 The last six years in Venezuela and Colombia.
\u2022 The last five years in Brazil, Mexico, Uruguay and the
Netherlands.\u00a0
\u2022 The last four years in Peru and Ecuador.
\u2022 The last three years in Chile and the United States.
The tax inspection of the open years is not expected to
give rise to additional material liabilities for the Group.
Complementary Minimun Tax (Pillar
Two)
On December 21, 2024, the Official State Gazette
published Law 7/2024 of December 20, which
establishes a Complementary Tax to guarantee a
minimum global level of taxation for multinational groups
and large domestic groups, a Tax on the margin of
interest and fees of certain financial entities, and a Tax
on liquids for electronic cigarettes and other tobacco-
related products, as well as amendments to other tax
regulations (hereinafter, \"Law 7/2024\").
Law 7/2024 implements Pillar Two in Spain, establishing,
with retroactive effect for fiscal years starting on January
1, 2024, a Complementary Tax that ensures large
multinational groups are taxed at a minimum effective
rate of 15% wherever they operate.
The Telef\u00f3nica Group, as a large multinational group, is
subject to this Complementary Tax.
In this regard, the group has conducted an analysis of
the potential impacts that may arise from the application
of this tax in the 2024 financial year in those jurisdictions
where it is present, considering the application of the
Transitional Safe Harbours outlined in the Fourth
Transitional Provision of Law 7/2024 and, where
applicable, the full calculation.
These Transitional Safe Harbours aim to facilitate
adaptation to the Pillar Two regulations by stipulating
that the Complementary Tax will be zero if any of the
three regulated tests are met.
The tax expense in the consolidated accounts for 2024
related to jurisdictions where none of the safe harbour
tests are met does not have a significant impact, in
accordance with the application of the Pillar Two
legislation.
The Group applies the exemption to recognise and
disclose information on deferred tax assets and liabilities
arising from the implementation of Law 7/2024, as
provided in the amendments to IAS 12 issued in May
2023.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-906": { "value": "
Note 26. Revenue and expenses
Revenues
The breakdown of Revenues for the years 2024 , 2023
and 2022 is as follows:
Millions of euros
2024
2023
2022
Revenues from rendering
of services
35,480
34,832
34,479
Lease revenues
79
71
76
Sale of goods
5,756
5,749
5,438
Total
41,315
40,652
39,993
\"Revenues from sale of goods\" mainly include the sale of
mobile handsets, also including those corresponding to
leases of terminals with a purchase option.\u00a0
In 2024, \"revenues from rendering of services\" included
212 million euros corresponding to insurance contracts
(212 million euros in 2023), after the adoption of IFRS 17
on January 1, 2023.
", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-910": { "value": "
Note 26. Revenue and expenses
Earnings per share
Basic earnings per share amounts are calculated by
dividing (a) the profit for the year attributable to equity
holders of the parent, adjusted for the net coupon
corresponding to the undated deeply subordinated
securities (see Note 17.c) by (b) the weighted average
number of ordinary shares outstanding during the year.
Diluted earnings per share amounts are calculated by
dividing the net profit for the year attributable to
ordinary equity holders of the parent, adjusted as
described above, by the weighted average number of
ordinary shares adjusted as described in the preceding
paragraph, plus the weighted average number of
ordinary shares that would be issued on the conversion
of all the dilutive potential ordinary shares into ordinary
shares.
Both basic and diluted earnings per share attributable to
equity holders of the parent are calculated based on the
following data:
Millions of euros
2024
2023
2022
(Loss) profit attributable to ordinary equity holders of the parent company
(49)
(892)
2,011
Adjustment for the coupon corresponding to perpetual subordinated
obligations
(359)
(339)
(279)
Tax effect
90
85
70
Total (loss) profit attributable to ordinary equity holders of the
parent for basic and diluted earnings per share
(318)
(1,146)
1,802
Number of shares (thousands)
2024
2023
2022
Weighted average number of ordinary shares for basic earnings per share\u00a0
(does not include treasury shares)
5,635,695
5,668,142
5,740,105
Telef\u00f3nica, S.A. plans of rights over shares
36,575
47,435
23,096
Weighted average number of ordinary shares outstanding for diluted
earnings per share (excluding treasury shares)
5,672,270
5,715,577
5,763,201
For the purposes of calculating the earnings per share
(basic and diluted) attributable to equity holders of the
parent, the weighted average number of shares
outstanding is retrospectively adjusted for transactions
that have changed the number of shares outstanding
without a corresponding change in resources, as if such
transactions had occurred at the beginning of the
earliest period presented. Such is the case of the bonus
share issues carried out to meet the scrip dividend (see
Note 17.b).
Thus, basic and diluted (loss) earnings per share
attributable to equity holders of the parent are as
follows:
(Loss) earnings per share
(euros)
2024
2023
2022
Basic
(0.06)
(0.20)
0.31
Diluted
(0.06)
(0.20)
0.31
", "dimensions": { "concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-909": { "value": "
Note 26. Revenue and expenses
Other expenses
The breakdown of \u201cOther expenses\u201d is as follows:
Millions of euros
2024
2023
2022
Leases included in
\"Other expenses\" (1)
97
68
86
Other external
services
8,351
8,282
8,731
Taxes other than
income tax
831
753
834
Change in trade
provisions
719
734
693
Losses on disposal of
fixed assets, losses on
operations classified
as held for sale and\u00a0
sale of assets
1,525
33
124
Goodwill impairment
(Note 7)
866
58
\u2014
Other operating
expenses
165
370
273
Total
12,554
10,298
10,741
(1) According to IFRS 16, only short-term leases and leases involving low-value
assets or intangible assets are included (see Note 9).
\"Goodwill impairment\" in 2024 includes the impairment
of goodwill allocated to the cash-generating unit of Peru
(226 million euros), Chile (397 million euros), Telef\u00f3nica
Tech UK & Ireland (192 million euros) and the Be-terna
Group (51 million euros).
\"Goodwill impairment\" in 2023 included an impairment
of goodwill allocated to the Ecuador cash-generating
unit of 58 million euros.
\"Losses on disposal of fixed assets, losses on operations
classified as held for sale and sale of assets\" in 2024
includes mainly impairment losses on intangible assets
and property, plant and equipment in Telef\u00f3nica
Argentina amounting to 1,274 million euros (see Notes 2,
6 and 8), impairment losses on intangible assets of
Telef\u00f3nica del Per\u00fa amounting to 54 million euros (see
Notes 2 and 6), impairment losses on property, plant and
equipment of Pangea amounting to 108 million euros
(see Note 30) and the impairment of goodwill allocated
to the fiber optics business in Peru amounting to 34
million euros (see Note 30). In 2022 included impairment
losses on intangible assets and property, plant and
equipment of Telef\u00f3nica Argentina, for a total amount of
77 million euros.\u00a0
\"Other operating expenses\" in 2024 includes a lower
expense of 386 million Brazilian Reais (67 million euros at
the 2024 average exchange rate) referring to the
reversal of regulatory provisions of Telef\u00f3nica Brasil after
the Concession Migration Agreement signed between
Telef\u00f3nica Brasil and ANATEL (see notes 24.c and 29.a).
\u201cTaxes other than income tax\u201d includes the outstanding
credits related to the court decisions in favor of
Telef\u00f3nica Brasil which recognized the right to deduct
the ICMS from the calculation base of the PIS and
COFINS. In 2024 there has been no impact on \"Taxes
other than income tax\" having an impact of 51 million
euros and 73 million euros in 2023 and 2022,
respectively.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingExpenseExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-908": { "value": "
Note 26. Revenue and expenses
Other income
The breakdown of \u201cOther income\u201d is as follows:
Millions of euros
2024
2023
2022
Own work capitalized
820
803
783
Gain on disposal of
businesses
47
24
205
Gain on disposal of
property, plant and
equipment
161
257
582
Gain on disposal of
intangible assets
\u2014
2
1
Government grants
39
27
16
Other operating
income
625
428
478
Total
1,692
1,541
2,065
\"Other operating income\" in 2024 included the amount
corresponding to the favorable award to Telef\u00f3nica
relating to the international arbitration proceeding
against the Republic of Colombia, which amounted to
approximately 380 million U.S. dollars (approximately
358 million euros, see notes 2, 15 and 29.a).
\"Gain on disposal of businesses\" in 2024 includes the
gain generated in the joint operation in Colombia (see
Note 5), which amounted to 47 million euros.
\"Gain on disposal of businesses\" in 2022 mainly included
the gain from the sale of fiber optics assets of Colombia
Telecomunicaciones, amounting to 162 million euros and
the gain from the establishment of the joint company for
the deployment of fiber in the United Kingdom
amounting to 20 million euros.
\"Gain on disposal of property, plant and equipment\"
includes the gains on sale and leaseback transactions,
which amounted to 17 million euros, 105 million euros
and 381 million euros in 2024, 2023 and 2022,
respectively (see Note 20).
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-907": { "value": "
Note 26. Revenue and expenses
Other income
The breakdown of \u201cOther income\u201d is as follows:
Millions of euros
2024
2023
2022
Own work capitalized
820
803
783
Gain on disposal of
businesses
47
24
205
Gain on disposal of
property, plant and
equipment
161
257
582
Gain on disposal of
intangible assets
\u2014
2
1
Government grants
39
27
16
Other operating
income
625
428
478
Total
1,692
1,541
2,065
\"Other operating income\" in 2024 included the amount
corresponding to the favorable award to Telef\u00f3nica
relating to the international arbitration proceeding
against the Republic of Colombia, which amounted to
approximately 380 million U.S. dollars (approximately
358 million euros, see notes 2, 15 and 29.a).
\"Gain on disposal of businesses\" in 2024 includes the
gain generated in the joint operation in Colombia (see
Note 5), which amounted to 47 million euros.
\"Gain on disposal of businesses\" in 2022 mainly included
the gain from the sale of fiber optics assets of Colombia
Telecomunicaciones, amounting to 162 million euros and
the gain from the establishment of the joint company for
the deployment of fiber in the United Kingdom
amounting to 20 million euros.
\"Gain on disposal of property, plant and equipment\"
includes the gains on sale and leaseback transactions,
which amounted to 17 million euros, 105 million euros
and 381 million euros in 2024, 2023 and 2022,
respectively (see Note 20).
Other expenses
The breakdown of \u201cOther expenses\u201d is as follows:
Millions of euros
2024
2023
2022
Leases included in
\"Other expenses\" (1)
97
68
86
Other external
services
8,351
8,282
8,731
Taxes other than
income tax
831
753
834
Change in trade
provisions
719
734
693
Losses on disposal of
fixed assets, losses on
operations classified
as held for sale and\u00a0
sale of assets
1,525
33
124
Goodwill impairment
(Note 7)
866
58
\u2014
Other operating
expenses
165
370
273
Total
12,554
10,298
10,741
(1) According to IFRS 16, only short-term leases and leases involving low-value
assets or intangible assets are included (see Note 9).
\"Goodwill impairment\" in 2024 includes the impairment
of goodwill allocated to the cash-generating unit of Peru
(226 million euros), Chile (397 million euros), Telef\u00f3nica
Tech UK & Ireland (192 million euros) and the Be-terna
Group (51 million euros).
\"Goodwill impairment\" in 2023 included an impairment
of goodwill allocated to the Ecuador cash-generating
unit of 58 million euros.
\"Losses on disposal of fixed assets, losses on operations
classified as held for sale and sale of assets\" in 2024
includes mainly impairment losses on intangible assets
and property, plant and equipment in Telef\u00f3nica
Argentina amounting to 1,274 million euros (see Notes 2,
6 and 8), impairment losses on intangible assets of
Telef\u00f3nica del Per\u00fa amounting to 54 million euros (see
Notes 2 and 6), impairment losses on property, plant and
equipment of Pangea amounting to 108 million euros
(see Note 30) and the impairment of goodwill allocated
to the fiber optics business in Peru amounting to 34
million euros (see Note 30). In 2022 included impairment
losses on intangible assets and property, plant and
equipment of Telef\u00f3nica Argentina, for a total amount of
77 million euros.\u00a0
\"Other operating expenses\" in 2024 includes a lower
expense of 386 million Brazilian Reais (67 million euros at
the 2024 average exchange rate) referring to the
reversal of regulatory provisions of Telef\u00f3nica Brasil after
the Concession Migration Agreement signed between
Telef\u00f3nica Brasil and ANATEL (see notes 24.c and 29.a).
\u201cTaxes other than income tax\u201d includes the outstanding
credits related to the court decisions in favor of
Telef\u00f3nica Brasil which recognized the right to deduct
the ICMS from the calculation base of the PIS and
COFINS. In 2024 there has been no impact on \"Taxes
other than income tax\" having an impact of 51 million
euros and 73 million euros in 2023 and 2022,
respectively.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExpenseExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-911": { "value": "
Millions of euros
2024
2023
2022
Own work capitalized
820
803
783
Gain on disposal of
businesses
47
24
205
Gain on disposal of
property, plant and
equipment
161
257
582
Gain on disposal of
intangible assets
\u2014
2
1
Government grants
39
27
16
Other operating
income
625
428
478
Total
1,692
1,541
2,065
", "dimensions": { "concept": "ifrs-full:DisclosureOfGovernmentGrantsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-912": { "value": "
Purchases and other contractual
commitments
The estimated payment schedule for purchases and
other contractual commitments (non-cancelable
without penalty cost) is as follows:
Millions of euros
Purchases and other
contractual commitments
Less than 1 year
4,204
1 to 3 years
4,008
3 to 5 years
1,441
More than 5 years
1,895
Total
11,548
The purchases and other contractual commitments in
the table above include 1,033 million euros
corresponding to power purchase agreements (PPAs),
mainly of Telef\u00f3nica Spain for the period from 2025 to
2031 and Telef\u00f3nica Germany for the period from 2025
to 2035 and 2040 (see Note 29.d). The Group uses
these contracts to purchase energy from renewable
sources, such as wind and solar, at generally fixed prices
(see Note 3.l).
Commitments for short-term leases and low value
leases amounted to 58 million euros as of December\u00a031,
2024. In addition, the Group has lease collection
commitments amounting to 5 million euros as of
December\u00a031, 2024.
Note 29. Other information
c) Commitments
Investment Framework Agreement between the
shareholders of Colombia Telecomunicaciones,
S.A. ESP BIC - Sale of shares
Pursuant to the Framework Investment Agreement
entered into between the shareholders of Colombia
Telecomunicaciones, S.A. ESP BIC: (a) if Telef\u00f3nica
decides to dispose or transfer of all or part of its
shareholding in Colombia Telecomunicaciones, S.A. ESP
BIC to third parties, Telef\u00f3nica commits that: (i) the
acquirer or transferee will be obliged to adhere to the
Framework Investment Agreement; and (ii) that the
acquirer or transferee will be obliged to present an offer
to purchase all of the shares in Colombia
Telecomunicaciones, S.A. ESP BIC held by the
Colombian Government (that amounts to 32.5% of the
share capital) at the same price and under the same
terms and conditions negotiated with Telef\u00f3nica and
through the procedure established by Law 226 of 1995
for the disposal of shares held by public entities and, (b)
if the Colombian Government transfers its shares in
Colombia Telecomunicaciones, S.A. ESP BIC under
certain circumstances, the Strategic Partner shall
subscribe with the acquirer of the shares a new
shareholders agreement which will have to be then
negotiated by the parties and which, as the case may be,
will include some of the rights currently held by the
Colombian Government under the Framework
Investment Agreement currently in force.
Agreement for the sale of the shares of
Telef\u00f3nica Gesti\u00f3n de Servicios Compartidos
Espa\u00f1a, S.A.U., Telef\u00f3nica Gesti\u00f3n de Servicios
Compartidos Argentina, S.A. and T-Gestiona
Servicios Contables y Capital Humano, S.A.C.
On March 1, 2016, a share purchase agreement between,
on one hand, Telef\u00f3nica, S.A., Telef\u00f3nica Servicios
Globales, S.L.U. and Telef\u00f3nica Gesti\u00f3n de Servicios
Compartidos Per\u00fa, S.A.C. (as sellers), and, on the other
hand, IBM Global Services Espa\u00f1a, S.A., IBM del Per\u00fa,
S.A.C., IBM Canada Limited and IBM Americas Holding,
LLC (as purchasers) for the sale of the companies
Telef\u00f3nica Gesti\u00f3n de Servicios Compartidos Espa\u00f1a,
S.A.U., Telef\u00f3nica Gesti\u00f3n de Servicios Compartidos
Argentina, S.A. and T-Gestiona Servicios Contables y
Capital Humano, S.A.C., for a total price of approximately
22 million euros, was ratified before Notary Public. This
share purchase agreement was subscribed on
December 31, 2015.
Following the aforementioned share purchase
agreement and in connection with the latter transaction,
also, on December 31, 2015, Telef\u00f3nica subscribed a
master services agreement with IBM for the outsourcing
of economic-financial and HR activities and functions to
be provided to the Telef\u00f3nica Group for an initial
duration of ten years and a total amount of
approximately 450 million euros. Most of the Telef\u00f3nica
Group\u2019s subsidiary companies adhered to that master
services agreement.
The master service agreement has been amended on
several occasions (on March 31, 2021, March 31, 2022,
July 29, 2022 and August 31, 2023). The most relevant
changes have affected the scope of services and
extended the term of the agreement.
On June 28, 2024, an additional amendment to the
master service agreement was signed. As a result of the
various amendments, the term of the master service
agreement may be extended up to 2031 for adhering
companies in Latin America or up to 2034 for adhering
companies in Spain.
Commitments derived from the agreements
reached for the acquisition of football (soccer)
related rights between Telef\u00f3nica (through its
affiliate Telef\u00f3nica Audiovisual Digital, S.L.U.)
and LaLiga, UEFA and RFEF
On July 2, 2020 Telef\u00f3nica signed an agreement for
acquiring the exclusive media rights in Spain of UEFA
Champions League and UEFA Europa League, as well as
the UEFA Europa Conference League (a new
competition to be separated from the UEFA Europa
League) and UEFA Youth League, for the cycle
comprising seasons 2021/2022, 2022/2023 and
2023/2024, (ending June 30, 2024).
The agreement guaranteed Telef\u00f3nica all media rights
with respect to the main European football competitions
for all its customers, both residential and non-residential
(hotels, restaurants, cafes, etc.).
The direct acquisition from UEFA of this \"premium\"
content allowed Telef\u00f3nica to continue designing and
selling its own produced channels and content with the
best European football that could be, likewise,
accessible to other operators in the market interested in
this content.\u00a0
The total award price for all competitions amounted to
975 million euros (i.e. 325 million euros for each of the
seasons 2021/2022, 2022/2023 and 2023/2024) which
amount is less than the license fees paid for the previous
cycle and without any year-to-year increase.
On December 13, 2021, Telef\u00f3nica was provisionally
awarded the exclusive broadcasting rights of 5 matches
per matchday of the Spanish First Division Football
League National Championship (\u201cLaLiga\u201d), for pay
television in the residential market, in Spain. Telef\u00f3nica
received the first pick on 18 matchdays of each season
and second pick on 17 matchdays, including the second
match of the season between Real Madrid and
Barcelona (Option D bis, Lot D.1 bis) .
Likewise, Telef\u00f3nica was awarded the exclusive
broadcasting rights of three matchdays, which contain
10 matches each matchday, including matches of Real
Madrid C.F., F.C. Barcelona and Club Atl\u00e9tico de Madrid
against the six first classified of the previous season; and
Valencia C.F., Athletic Club de Bilbao or Real Betis
Balompi\u00e9, if they were not among the aforementioned
first classified (Option D bis, Lot D.3 bis).
The award initially included all seasons between the
cycle 2022/2023 and 2026/2027 although the
2025/2026 and 2026/2027 seasons were subject to the
CNMC lifting or modifying a resolution that limited the
maximum duration of the contracts signed by Telef\u00f3nica
for the acquisition of sports rights (Expte. VC/0612/14).
The award was made at a price of 520\u00a0million euros for
each of the seasons.
The award was subject to the execution of an
agreement between Telef\u00f3nica and LaLiga with the
remaining terms and requirements established in the
LaLiga tender, which agreement was signed on January
19, 2022. This agreement was modified to adjust its
duration to the CNMC Competition Directorate\u2019s
interpretation of the maximum length of contracts for
the acquisition of exclusive sports rights (three years
from signature) within the above referenced procedure
(Expte. VC/0612/14). In this regard, LaLiga issued on
December 29, 2023, a new tender regarding those same
packages for seasons 2024/2025 (from January 20,
2025) and 2025/2026 and 2026/2027.
On January 19, 2024, Telef\u00f3nica Audiovisual Digital,
S.L.U. was awarded exclusive broadcasting rights for five
matches per matchday of the Spanish First Division
Football League National Championship for pay
television in the residential market in Spain. Telef\u00f3nica
Audiovisual will have first pick on 18 matchdays and
second pick on 17 matchdays (or the applicable portion
for the 2024/2025 season), including the second match
of the season between Real Madrid and Barcelona. In
addition, it has been awarded exclusive broadcasting
rights of one matchday for the 2024/2025 season and
three matchdays in the remaining seasons. The award
covers the 2024/2025 season, beginning January 20,
2025, as well as the 2025/2026 and 2026/2027 seasons.
The price has been set at 250\u00a0million euros for the
2024/2025 season and 520 million euros for each of the
2025/2026 and 2026/2027 seasons. The corresponding
agreement between Telef\u00f3nica Audiovisual Digital,
S.L.U. and LaLiga was signed on June 2, 2024.
On March 28, 2022, Telef\u00f3nica entered into an
agreement with the company DAZN for the distribution
of the so-called DAZN LaLiga Package. Such package
includes the remaining five football matches per match-
weekend of the Spanish First Division Football League
National Championship, in 35 out of 38 match-weekends
for exploitation on pay television for residential
subscribers in Spain (Option D bis, Package D.2 bis).
This is a non-exclusive agreement for five seasons, from
2022/2023 to 2026/2027. The agreed value amounts to
280\u00a0million euros for each of the seasons.In addition, on
July 29, 2022, Telef\u00f3nica signed a new contract with
LaLiga for the non-exclusive broadcasting of the
channel that broadcasts matches of the Second Division
of National Football Championship League for seasons
2022/2023, 2023/2024 and 2024/2025, with
Telef\u00f3nica\u2019s unilateral option to extend for two
additional seasons, with a variable cost that amounts to
approximately 16\u00a0million euros per season. On February
28, 2024, Telef\u00f3nica exercised an option to extend, and
the agreement was extended for seasons 2025/2026
and 2026/2027.
Similarly, on August 4, 2022, a contract was formalized
with LaLiga for the non-exclusive broadcast of the
LaLiga TV Bar Channel for non-residential subscribers
for the 2022/2023 season with a minimum guarantee of
29 million euros, being the final price variable. Likewise,
the contract for the 2023/2024 season was signed on
July 30, 2023, with a minimum guaranteed consideration
of approximately 29 million euros. The contract for the
2024/2025 season was signed on July 28, 2024, with a
similar minimum guaranteed consideration of
29700000.0 million euros.
On November 2, 2022, Telef\u00f3nica was also awarded by
Real Federaci\u00f3n Espa\u00f1ola de f\u00fatbol (RFEF) exclusive pay
television rights of Copa del Rey Competiton and
Supercopa de Espa\u00f1a for seasons 2022/2023,
2023/2024 and 2024/2025.
On June 13, 2023, Telef\u00f3nica submitted its offer for the
acquisition of the audiovisual rights of the UEFA
Champions League and UEFA Europa League, as well as
the UEFA Europa Conference League and the UEFA
Youth League (\"UEFA Competitions\") for the 2024/2025,
2025/2026 and 2026/2027 seasons, upon expiration of
the current contract.
UEFA awarded Telef\u00f3nica on August 1, 2023, with
exclusive media rights in Spain of UEFA Competitions for
residential subscribers during seasons 2024/2025,
2025/2026 and 2026/2027. The corresponding
agreements were signed on November 3, 2023.
The total award price for all competitions covered by
these agreements with UEFA amounted to 960 million
euros (i.e. 320 million euros for each of the seasons
2024/2025, 2025/2026 and 2026/2027).
Wholesale Access Services Agreement with
AT&T Mexico
On November 21, 2019, Pegaso PCS, S.A. de C.V.
(\u201cTelef\u00f3nica M\u00e9xico\u201d) and AT&T Comunicaciones
Digitales, S. de R.L. de C.V. (\u201cAT&T Mexico\u201d) entered into
a Wholesale Access Services Agreement (\u201cWholesale
Agreement\u201d), under which AT&T Mexico agreed to
provide wholesale wireless access to Telef\u00f3nica M\u00e9xico
on 3G, 4G and any other future technology available in
Mexico.
The Wholesale Agreement has a minimum duration of
eight years, renewable for additional consecutive
periods of three years . Such Wholesale Agreement
establishes a gradual migration of Telef\u00f3nica M\u00e9xico\u2019s
traffic to AT&T Mexico's access network over the first
three years of the agreement.
As set forth in the Wholesale Agreement such migration
was completed during the first half of 2022. As a result,
Telef\u00f3nica M\u00e9xico\u2019s wireless access infrastructure was
turned off and Telef\u00f3nica M\u00e9xico no longer uses the
licensed spectrum that it used in the past to operate its
network.
On April 24, 2024, Telef\u00f3nica M\u00e9xico and AT&T Mexico
entered into an Amended and Restated Wholesale
Access Services Agreement (\u201cAmended Wholesale
Agreement\u201d). Under the Amended Wholesale
Agreement, the term of the Wholesale Agreement was
extended and AT&T Mexico agreed to continue
providing wholesale wireless access to Telef\u00f3nica
M\u00e9xico with respect to\u00a0 3G, 4G, 5G and any other future
technology available in Mexico.
The Amended Wholesale Agreement has a minimum
duration of three years, expiring on\u00a0 November 20, 2027,
and may be renewed for additional consecutive periods
of three years.
Contracts for the provision of IT services with
Nabiax
In 2019 Telef\u00f3nica, S.A. signed an agreement for the sale
of a portfolio of eleven data center businesses to a
company (hereinafter \"Nabiax\") controlled by Asterion
Industrial Partners SGEIC, S.A.
At the same time as this sale, agreements were entered
into with Nabiax to provide housing services to the
Telef\u00f3nica Group, allowing Telef\u00f3nica to continue
providing housing services to its customers, in
accordance with its previous commitments.\u00a0Such
service provision agreements have an initial term of ten
years and include minimum consumption commitments
in terms of capacity. These commitments are consistent
with the Group's expected consumption volumes, while
prices are subject to review mechanisms based on
inflation and market reality.
On May 7, 2021, Asterion Industrial Partners SGEIC, S.A.
(\"Asterion\") and Telef\u00f3nica Infra (T. Infra), the
infrastructure unit of the Telef\u00f3nica Group, reached an
agreement for the contribution to Nabiax of four
additional data centers owned by the Telef\u00f3nica Group
(two of them located in Spain and two in Chile). In
exchange for the contribution of these four data centers,
T. Infra received a 20% equity stake in Nabiax. Once the
relevant authorizations and other conditions precedent
to the contribution of the two data centers located in
Spain were obtained, the partial closing of the
transaction took place as of July 21, 2021, whereby
Telef\u00f3nica Group contributed those data centers to
Nabiax, with T. Infra receiving in exchange a 13.94%
stake in Nabiax at this stage. The agreement was
complemented by the signing of a contract for the
provision to Telef\u00f3nica of housing services from those
two data centers under terms and conditions equivalent
to those established in the transaction executed in 2019,
for an initial period of ten years .
Once the conditions related to the contribution of the
two data centers located in Chile were fulfilled, on May
24, 2022, the complete closing of the transaction took
place, and T. Infra reached a 20% stake in Nabiax (see
Note 10) . The agreement was complemented by the
signing of a contract for the provision to Telef\u00f3nica of
housing services from those two data centers under
terms and conditions equivalent to those established in
the transaction executed in 2019, for an initial period
ending in 2031.
On June 13, 2023, the data centers owned by Nabiax
located in the Americas were sold to the investment
fund Actis. T. Infra owns a 20% stake in Nabiax. After this
transaction, Nabiax only owns data centers in Spain.
The data centers sold to Actis continue to provide
housing services to the Telef\u00f3nica Group under the
terms of the contracts signed in 2019, as Telef\u00f3nica, S.A.
waived its right to terminate the housing services
contracts upon the sale of the data centers.
On June 10, 2024, Telef\u00f3nica de Espa\u00f1a, S.A.U. and
Nabiax\u2019s subsidiary Digital DHF Iberia S.L signed an
addendum to the agreement for the provision of housing
services in Spain to, among other things, extend the
validity of the agreement until July 2034, but only with
respect to a data center in Alcal\u00e1 de Henares.
In June 2024, Asterion began a process to sell its 80%
stake in Nabiax. In accordance with the rights held by
Asterion under the Nabiax Shareholders Agreement,
Asterion negotiated the conditions of the sale and also
exercised its drag-along right over the 20% stake in
Nabiax owned by T. Infra. On November 7, 2024, a
purchase and sale agreement for 100% of the share
capital of Nabiax was signed with the investment fund
Aermont Capital. The closing of the transaction is
subject to obtaining regulatory approval and is expected
to be completed in the first quarter of 2025, with Nabiax
continuing to provide housing services to the Telef\u00f3nica
Group under the terms of the contracts signed in 2019.
50:50 joint venture with Liberty Global for the
combination of both groups' businesses in the
United Kingdom
On May 7, 2020, Telef\u00f3nica agreed to enter into a joint
venture with Liberty Global plc (\"Liberty Global\")
pursuant to a contribution agreement (as amended from
time to time, the \"Contribution Agreement\") between
Telef\u00f3nica, Telefonica O2 Holdings Limited, Liberty
Global, Liberty Global Europe 2 Limited and a newly
formed entity of which, after closing, each of Telef\u00f3nica
and Liberty Global would hold 50% of its share capital
named VMED O2 UK Limited.
After having obtained the clearance from the
Competition and Market Authority (the antitrust
authority in the UK) to complete this transaction and
having fulfilled all the other pre-closing conditions
included in the Contribution Agreement, the transaction
was completed on June 1, 2021. From such date,
Telef\u00f3nica and Liberty Global each hold an equal
number of shares in VMED O2 UK Limited; after: (i)
Telef\u00f3nica having contributed to VMED O2 UK Limited
its O2 mobile business in the United Kingdom and (ii)
Liberty Global having contributed its Virgin Media
business in the United Kingdom to VMED O2 UK Limited.
The corporate governance of VMED O2 UK Limited is
regulated by a shareholders' agreement, which was
entered into by the parties to the Contribution
Agreement on June 1, 2021\u00a0 and was amended on
November 15, 2023 (as amended from time to time, (the
\"Shareholders' Agreement\").
On the date of closing of the transaction, Telef\u00f3nica,
Liberty Global, and certain companies belonging to each
shareholder\u2019s corporate group entered into certain
services, reverse services, licensing and data protection
agreements with VMED O2 UK Limited and certain
entities belonging to the VMED O2 UK Limited group. In
particular, Telef\u00f3nica and Liberty Global agreed that
each shareholder\u2019s group would provide certain
services, either on a transitional or ongoing basis, to
VMED O2 UK Limited and its group. Finally, VMED O2 UK
Limited and its group would also provide certain services
to specific companies belonging to the corporate group
of each of its shareholders.
Pursuant to the terms of the above referred services
agreements, the transitional services that are to be
provided by the Telef\u00f3nica Group to VMED O2 UK
Limited would be provided for terms initially ranging
from 7 to 24 months (subsequently extended in some
cases to terms up to 40 months) while the ongoing
services that are to be provided by the Telef\u00f3nica Group
to VMED O2 UK Limited would be provided for periods of
two to six years, depending on the service. The services
provided by the Telef\u00f3nica Group to VMED O2 UK
Limited, under the agreements as amended, consist
primarily of technology and telecommunication services
that will be used by or will otherwise benefit VMED O2
UK Limited. In addition to providing VMED O2 UK Limited
with such services, the mobile operators of the
Telef\u00f3nica Group and VMED O2 UK Limited will maintain
their roaming commercial relationships in order to
reciprocally provide roaming services for their respective
customers.
Likewise, as of closing of the transaction Telef\u00f3nica
granted certain trademark license agreements to VMED
O2 UK Limited (the \u201cVMED O2 UK Limited Trademark
Licenses\u201d). Pursuant to the VMED O2 UK Limited
Trademark Licenses, Telef\u00f3nica Group licensed the use
of Telef\u00f3nica and O2 brand rights to VMED O2 UK
Limited.\u00a0
Investment Agreement with Allianz and
Telef\u00f3nica Germany
On October 29, 2020, Telef\u00f3nica Infra Germany GmbH
(\u201cTEF Infra Germany\u201d, a subsidiary indirectly wholly-
owned by Telef\u00f3nica through Telef\u00f3nica Infra, S.L.U.)
entered into an investment agreement (and related
contracts, including a partners\u2019 agreement which sets
forth the principles of corporate governance of the joint
venture) with several entities belonging to the Allianz
Group (\"Allianz\") and Telef\u00f3nica Germany 1.
Beteiligungsgesellschaft mbH (a subsidiary wholly-
owned by Telef\u00f3nica Germany GmbH & Co. OHG) (\u201cTEF
Germany\u201d) for the creation of a joint venture to deploy
Fiber-to-the-Home (FTTH) in Germany, pursuant to
which TEF Infra Germany and TEF Germany
conditionally agreed to invest up to 500 million euros
equity in total (400 million euros by TEF Infra Germany
and 100 million euros by TEF Germany) and Allianz
conditionally agreed to invest up to 1,000 million euros
through different sources of funding over a six year
period.
The closing of the transaction and the acquisition of the
joint control took place on December 18, 2020. The
registration of Allianz and TEF Germany as limited
partners of the joint venture in the German commercial
registry occurred on January 21, 2021. After the closing of
the transaction, the Allianz Group and the Telef\u00f3nica
Group each holds 50% in the joint venture under a co-
control governance model. Telef\u00f3nica Group\u2019s
ownership is held through TEF Infra Germany holding
40% and TEF Germany holding a 10% stake.
New long-term master services agreement in
the United Kingdom
On January 7, 2021, each of Telef\u00f3nica U.K. and
Vodafone U.K. entered into new Master Services
Agreements with Cornerstone Telecommunications
Infrastructure Limited (\u201cCTIL\u201d), their passive tower
network infrastructure partnership which was initially
50:50 jointly owned and operated by the two operators.
The new agreements came into effect on January 1,
2021, with initial terms of 8 years, with three additional 8-
year renewal periods.
CTIL was formed in 2012 through the consolidation of
both Telef\u00f3nica U.K. and Vodafone U.K.\u2019s existing basic
network infrastructure, including towers and masts,
which were transferred to the joint operation. CTIL
currently operates 14,200 macro sites with a 2.0x
tenancy ratio (including active sharing) and 1,400 micro
sites. CTIL also provides management services for the
anchor tenants for a further 5,100 third party sites
where their active equipment is deployed. Telef\u00f3nica's
stake in CTIL is currently held through VMED O2 UK
Limited (see Note 10), the joint venture between
Telef\u00f3nica and Liberty Global plc in the United Kingdom,
which on November 15, 2023 transferred an indirect
16.67% minority stake in CTIL to the UK-based
infrastructure fund GLIL Infrastructure LLP, and on
November 27, 2024 further transferred an additional
indirect 8.33% minority stake in CTIL to Equitix
Investment Management Limited.\u00a0
The new agreements do not materially impact existing
network agreements and will continue to allow CTIL to
primarily serve its shareholders as well as some third
parties.
Transaction between Colombia
Telecomunicaciones S.A. ESP BIC and
Kohlberg Kravis Roberts (\u201cKKR\u201d)
On July 16, 2021, Colombia Telecomunicaciones S.A. ESP
BIC and KKR entered into an agreement to sign the
following contracts:
(i) An assets purchase agreement for the fiber optic
assets owned by Colombia Telecomunicaciones S.A.
ESP BIC with a Colombian company controlled by KKR
(InfraCo, SpA), in consideration for an initial payment of
320\u00a0million U.S. dollars, which may be subject to post-
closing adjustments under usual conditions for this type
of operation. As well as a subsequent payment,
consisting of the possibility of receiving a higher
consideration from its result in network deployment
activities, for an amount of up to an additional 100\u00a0million
U.S. dollars.
(ii) A contract through which Colombia
Telecomunicaciones S.A. ESP BIC will acquire a 40%
stake in a Spanish company controlled by KKR, which it
holds the remaining 60%. The Colombia
Telecomunicaciones S.A. ESP BIC\u00b4s contribution would
be a portion of the consideration received from assets
purchase agreement for the fiber optic assets.
(iii) Several commercial contracts between Colombia
Telecomunicaciones S.A. ESP BIC and InfraCo, SpA for
the provision of wholesale connectivity services by
InfraCo, SpA to Colombia Telecomunicaciones S.A. ESP
BIC, deployment of fiber optic network and other related
services.
The signing of the contracts of numerals (i) and (iii), as
well as the execution of the aforementioned operations
contracts, was subject to the respective contractual
provisions and to the obtaining of the necessary
regulatory authorizations.
On January 11, 2022, after obtaining the necessary
regulatory authorizations and meeting certain agreed
conditions, the transaction was executed. Therefore,
Colombia Telecomunicaciones S.A. ESP BIC executed
the sale of fiber optic assets to Onnet Fibra Colombia
S.A.S. (\u201cOnnet\u201d), a company with which it also entered
into a series of commercial contracts by virtue of which
(i) Onnet will provide wholesale connectivity services to
Colombia Telecomunicaciones S.A. ESP BIC, and (ii)
Colombia Telecomunicaciones S.A. ESP BIC will provide
to Onnet fiber optic network deployment services and
other related services. Simultaneously, Colombia
Telecomunicaciones S.A. ESP BIC acquired shares
equivalent to a 40% in Alamo HoldCo S.L., a Spanish
company that owns 100% of Onnet's shares (see Note
10).
Agreement reached between Telef\u00f3nica Espa\u00f1a
Filiales, S.A.U. (Telef\u00f3nica Espa\u00f1a Filiales), T.
Infra, Vauban and Cr\u00e9dit Agricole Assurances
for the establishment of Bluevia Fibra
On July 25, 2022, Telef\u00f3nica Espa\u00f1a Filiales S.A.U,
Telef\u00f3nica Infra S.L.U. (T. Infra) and the consortium
formed by Vauban Infrastructure Partners (\"Vauban\")
and Cr\u00e9dit Agricole Assurances (\"CAA\") reached an
agreement for the establishment of a company, Bluevia
Fibra, S.L. (\"Bluevia\"), whose corporate purpose is the
deployment and commercialization of a fiber-to-the-
home (FTTH) network mainly in rural areas in Spain.
Once the relevant regulatory authorizations were
obtained, the closing of the transaction took place on
December 20, 2022.
After closing, the Telef\u00f3nica Group holds 55% of the
capital of Bluevia (30% through Telef\u00f3nica Espa\u00f1a
Filiales and 25% through T. Infra), with Vauban/CAA
holding the remaining 45%.
At closing, Bluevia purchased from Telef\u00f3nica Espa\u00f1a
3.9\u00a0million already passed real estate units, and agreed
to deploy 1.1\u00a0million additional units over the following
two years after closing, reaching a total footprint of
5\u00a0million passed real estate units. The 3.9\u00a0million already
passed real estate units acquired by Bluevia at closing
represented 14% of Telef\u00f3nica's FTTH network in Spain,
with Telef\u00f3nica Espa\u00f1a retaining ownership of the
remainder of the network. In addition, as part of the
transaction, the Telef\u00f3nica Group entered into a series
of service provision agreements with Bluevia which
entail the mutual provision and receipt of services by/to
Telef\u00f3nica Group and Bluevia. As part of the transaction
Telef\u00f3nica Group contributed equity funds to Bluevia in
the amount of approximately 1,247\u00a0million euros and the
Vauban/CAA consortium acquired 45% of Bluevia from
Telef\u00f3nica Espa\u00f1a for 1,021\u00a0million euros in cash (see
Note 2).
Agreement reached by T. Infra, Liberty Global
and InfraVia for the establishment of a fiber-to-
the-home (FTTH) joint venture in the United
Kingdom
On July 29, 2022, T. Infra, Liberty Global plc (\"Liberty
Global\") and InfraVia Capital Partners (\"InfraVia\")
reached an agreement for the establishment of a joint
venture, \"nexfibre\", for the deployment of fiber-to-the-
home (FTTH) to 5\u00a0million homes in the United Kingdom
not reached by VMED O2 UK Limited's (VMO2) network,
with potential for expansion to an additional 2\u00a0million
homes. The fiber network will offer wholesale FTTH
access to telecommunications service providers, with
VMO2 acting as the lead customer, as well as providing
a range of technical services.
Once the relevant regulatory authorizations were
obtained and the other conditions were fulfilled, the
closing of the transaction took place on December 15,
2022.
After closing, Liberty Global and T. Infra participate by
halves in a joint vehicle that holds a 50% interest in
nexfibre, with InfraVia owning the remaining 50%.
The business plan for the initial rollout to 5\u00a0million homes
envisages an investment of approximately 4,500\u00a0million
pounds sterling (approximately 5,426 million euros at the
exchange rate at December 31, 2024). The three
partners have funded their pro-rata share of equity
funding for the construction, totaling up to 1,400\u00a0million
pounds sterling (approximately 1,688 million euros at the
exchange rate at December 31, 2024). In addition,
nexfibre has entered into a facilities agreement with a
consortium of banks for an amount of up to 3,300\u00a0million
pounds sterling (approximately 3,979 million euros at the
exchange rate at December 31, 2024).
As part of the transaction, InfraVia has made and will
continue to make certain payments to Liberty Global and
T. Infra, a portion of which will be linked to the progress
of the construction of the network.
In support of its obligations to nexfibre, VMO2 continues
to extend network build contracts with various providers.
Agreements between Telef\u00f3nica de Espa\u00f1a, S.A.U.
(\"TdE\"), Telef\u00f3nica M\u00f3viles Espa\u00f1a, S.A.U. (\"TME\")
and Telef\u00f3nica Soluciones de Inform\u00e1tica y
Comunicaciones de Espa\u00f1a, S.A.U. (\"TSOL\" and
jointly with TdE and TME the \"Telef\u00f3nica Espa\u00f1a
Companies\") with Capgemini Espa\u00f1a, S.L., Inetum
Espa\u00f1a, S.A., Indra Soluciones Tecnolog\u00edas de la
Informaci\u00f3n S.L.U. and UTE \"Indra Soluciones
Tecnolog\u00edas de la Informaci\u00f3n S.L.U., Inetum
Espa\u00f1a S.A., Uni\u00f3n Temporal de Empresas Ley
18/1982 de 26 de mayo\".
In March 2024, the Telef\u00f3nica Espa\u00f1a Companies
entered into separate contracts with each of (i)
Capgemini Espa\u00f1a, S.L., (ii) Inetum Espa\u00f1a, S.A., (iii) Indra
Soluciones Tecnolog\u00edas de la Informaci\u00f3n S.L.U. and (iv)
UTE \"Indra Soluciones Tecnolog\u00edas de la informaci\u00f3n
S.L.U., Inetum Espa\u00f1a S.A., Uni\u00f3n Temporal de Empresas
Ley 18/1982 de 26 de mayo\" for the provision to the
Telef\u00f3nica Espa\u00f1a Companies of an IT transformation\u00a0
service (development, maintenance and operation of
applications, and infrastructure engineering services,
maintenance, and IT operations infrastructure), for
aggregate consideration of 582 million euros. The
counterparties\u2019 obligations to Telef\u00f3nica consist of
application and infrastructure development and
maintenance, as well as application and infrastructure
operation regarding the IT transformation service.
The agreements each have a duration of 7 years and will
be automatically extended up to a maximum of 2
additional years, absent prior notice by any of the
parties).
Agreement reached by Telef\u00f3nica Espa\u00f1a Filiales
and Vodafone ONO to incorporate a joint company
for the commercialization of a fiber-to-the-home
(FTTH) network
On November 7, 2024, Telef\u00f3nica Espa\u00f1a Filiales, S.A.U.
(Telef\u00f3nica Espa\u00f1a Filiales) reached an agreement with
Vodafone ONO, S.A.U. (Vodafone Espa\u00f1a) to incorporate
a joint company, whose main activity is the
commercialization of a fiber to the home (FTTH) network
for its shareholders, Telef\u00f3nica Espa\u00f1a Filiales and
Vodafone Espa\u00f1a, so that they can in turn provide retail
and wholesale broadband access services.
The joint company is expected to cover approximately
3.6 million premises, with assets that are currently part of
Telef\u00f3nica de Espa\u00f1a\u2019s FTTH network and that
represent approximately 12% of its national network. It is
estimated that the joint company will initially have
around 1.4 million clients, which implies a penetration
level of approximately 40%. As part of the transaction,
the agreements required to be executed are the
following: i) an investment agreement and transfer
agreements, all of them already signed on November 7,
2024, and ii) a shareholders agreement, master service
agreements, systems, monitoring and maintenance
services agreement, and a corporate service agreement
which regulates certain services of a diverse nature, all
of which will be entered into on the closing date.
After the closing of the transaction, Telef\u00f3nica Espa\u00f1a
Filiales will hold a 63% in the joint company and
Vodafone Espa\u00f1a the remaining 37%.", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-913": { "value": "
Headcount
The table below presents the breakdown of the
Telef\u00f3nica Group\u2019s average number of employees by
fully consolidated segment (see Note 4) in 2024, 2023
and 2022, together with total headcount at December
31 each year.
2024
2023
2022
Average
Year-end
Average
Year-end
Average
Year-end
Telef\u00f3nica Spain
19,055
18,305
21,342
21,443
21,099
20,947
Telef\u00f3nica Germany
7,464
7,589
7,232
7,367
7,029
7,099
Telef\u00f3nica Brazil
35,605
35,818
35,118
35,519
34,275
34,846
Telef\u00f3nica Hispam
28,191
27,569
29,715
29,087
30,232
29,994
Other companies
11,069
11,589
10,717
10,726
9,928
10,765
Total
101,384
100,870
104,124
104,142
102,563
103,651
At December\u00a031, 2024, approximately 40% of the final
headcount were women (approximately 39% at
December\u00a031, 2023).
At December\u00a031, 2024, the number of employees with
disabilities was 2,700 (2,572 employees at December\u00a031,
2023), of which 487 employees were in Spain (462
employees in 2023).", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutEmployeesExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-914": { "value": "-0.06", "decimals": 2, "dimensions": { "concept": "ifrs-full:BasicEarningsLossPerShare", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:EUR/xbrli:shares" } }, "f-915": { "value": "
Note 27. Long-term incentive plans
based on Telef\u00f3nica, S.A. shares
Long-term incentive plan based on
Telef\u00f3nica, S.A. shares: Performance
Share Plan 2021-2025
At the General Shareholders\u2019 Meeting held on April\u00a023,
2021, a long-term incentive plan was approved,
consisting of the delivery of shares of Telef\u00f3nica, S.A.
aimed at senior executive officers of the Telef\u00f3nica
Group, including the Executive Directors of Telef\u00f3nica,
S.A. The plan consists of the delivery to the participants
of a certain number of shares of Telef\u00f3nica, S.A. based
on compliance with the objectives established for each
of the cycles into which the plan is divided.
The number of shares to be delivered depends (i) 50%
on achievement of the total shareholder return (\"TSR\")
objective for shares of Telef\u00f3nica, S.A. with regard to the
TSRs of a comparison group made up of companies of
the telecommunication sector, weighted by its relevance
for Telef\u00f3nica, (ii) 40% on the generation of Free Cash
Flow of Telef\u00f3nica Group (\"FCF\"), and (iii) 10% on CO2
Emission Neutralization, in line with the goal set by the
Company.
The plan has a duration of five years and is divided into
three cycles of three years each. Performance
assesment is carried out on the basis of the evolution of
the share price, as well as the audited results of the
Company, prior to their validation by the Nominating,
Compensation and Corporate Governance Committee.
\u2022 The first cycle commenced on January 1, 2021 and
ended on December\u00a031, 2023. The maximum number
of shares assigned to this cycle of the plan was
19,425,499 and the outstanding shares at
December\u00a031, 2023 were 17,728,523, with the following
breakdown:
First cycle
No. of
shares
assigned
Outstanding
shares at
12/31/2023
Unit fair
value
(euros)
TSR Objective
9,712,749
8,864,262
2.64
FCF Objective
7,770,200
7,091,409
3.15
CO2 E.N. Objective
1,942,550
1,772,852
3.15
After considering the levels of performance during the
measurement period, a weighted achievement
coefficient of 89.45% was reached.
\u2022 The second cycle commenced on January\u00a01, 2022 and
ended on December\u00a031, 2024. The maximum number
of shares assigned to this cycle of the plan was
15,069,650 and the outstanding shares at
December\u00a031, 2024 were 13,851,509, with the following
breakdown:
Second cycle
No. of
shares
assigned
Outstanding
shares at
12/31/2024
Unit fair
value
(euros)
TSR Objective
7,534,825
6,925,755
2.43
FCF Objective
6,027,860
5,540,604
2.95
CO2 E.N. Objective
1,506,965
1,385,150
2.95
After considering the levels of performance during the
measurement period, a weighted achievement
coefficient of 100% was reached
\u2022 The third cycle commenced on January\u00a01, 2023 and
will end on December\u00a031, 2025. The maximum number
of shares assigned to this cycle of the plan was
16,618,564 and the outstanding shares at December\u00a031,
2024 were 15,856,658, with the following breakdown:
Third cycle
No. of
shares
assigned
Outstanding
shares at
12/31/2024
Unit fair
value
(euros)
TSR Objective
8,309,282
7,928,329
1.77
FCF Objective
6,647,426
6,342,664
2.81
CO2 E.N. Objective
1,661,856
1,585,665
2.81
Long-term incentive plan in
Telef\u00f3nica, S.A. shares: Performance
Share Plan 2024-2028
The General Shareholders' Meeting of Telef\u00f3nica, S.A.
held on April 12, 2024 approved a long-term incentive
plan consisting of the delivery of Telef\u00f3nica, S.A. shares
to executives of the Telef\u00f3nica Group, including the
Executive Directors of Telef\u00f3nica, S.A. The plan consists
of the delivery of a certain number of Telef\u00f3nica, S.A.
shares based on the fulfillment of the objectives
established for each of the cycles into which the plan is
divided.
The number of shares to be delivered depends on (i)
50% on the total shareholder return (\"TSR\") objective of
Telef\u00f3nica, S.A. shares being met; with respect to the
TSRs of a comparison group of companies in the
telecommunications sector weighted according to their
relevance to Telef\u00f3nica, (ii) 40% on the Telef\u00f3nica
Group's free cash flow generation (the \"FCF\"), (iii) 5% on
the Neutralization of CO2 Emissions and (iv) 5% on the
number of women in executive positions, in line with the
objective set by the Company.
The plan has a total duration of five years and is divided
into three cycles of three years each. The assessment of
the degree of compliance is carried out on the basis of
the evolution of the share price, as well as the results
audited by the Company's internal and external auditor,
prior to their validation by the Nominating,
Compensation and Corporate Governance Committee.
The first cycle of the plan began on January 1, 2024 and
will end on December 31, 2026. The maximum number of
shares assigned in this first cycle was 15,353,759, of
which 15,317,175 remained outstanding as of December
31, 2024, with the following breakdown:
First cycle
No. of
shares
assigned
Outstanding
shares at
12/31/2024
Unit fair
value
(euros)
TSR Objective
7,676,879
7,658,587
2.85
FCF Objective
6,141,504
6,126,870
3.42
CO2 E.N. Objective
767,688
765,859
3.42
Women in executive
positions
767,688
765,859
3.42
Long-term incentive plan based on
Telef\u00f3nica, S.A. shares: Talent for
the Future Share Plan 2021-2025
(TFSP)
At its meeting on March\u00a017, 2021, the Telef\u00f3nica, S.A.'s
Board of Directors agreed to launch a new installment of
the long-term incentive plan Talent for the Future Share
Plan.
The term of this plan was also five years and it is divided
into three cycles. As in the case of the Performance
Share Plan 2021-2025 described above, the number of
shares to deliver will depend (i) 50% on achievement of
the total shareholder return (\"TSR\") objective for shares
of Telef\u00f3nica, S.A. with regard to the TSRs of a
comparison group\u00a0 made up of companies of the
telecommunication sector, weighted by its relevance for
Telef\u00f3nica, (ii) 40% on the generation of Free Cash Flow
of Telef\u00f3nica Group (\"FCF\"), and (iii) 10% on CO2
Emission Neutralization, in line with the goal set by the
Company.
\u2022 The first cycle commenced on January\u00a01, 2021 and
ended on December\u00a031, 2023. The maximum number
of shares assigned to this cycle of the plan was
1,751,500 and the outstanding shares at December\u00a031,
2023 were 1,557,000, with the following breakdown:
First cycle
No. of
shares
assigned
Outstanding
shares at
12/31/2023
Unit fair
value
(euros)
TSR Objective
875,750
778,500
2.64
FCF Objective
700,600
622,800
3.15
CO2 E.N. Objective
175,150
155,700
3.15
After considering the levels of performance during the
measurement period, a weighted achievement
coefficient of 89.45% was reached.
\u2022 The second cycle commenced on January\u00a01, 2022 and
ended on December\u00a031, 2024 . The maximum number
of shares assigned to this cycle of the plan was
1,646,500 and the outstanding shares at December\u00a031,
2024 was 1,458,000, with the following breakdown:
Second cycle
No. of
shares
assigned
Outstanding
shares at
12/31/2024
Unit fair
value
(euros)
TSR Objective
823,250
729,000
2.43
FCF Objective
658,600
583,200
2.95
CO2 E.N. Objective
164,650
145,800
2.95
After considering the levels of performance during the
measurement period, a weighted achievement
coefficient of 100% was reached.
\u2022 The third cycle commenced on January\u00a01, 2023 and
will end on December 31, 2025. The maximum number
of shares assigned to this cycle of the plan was
1,771,500 and the outstanding shares at December\u00a031,
2024 was 1,663,000, with the following breakdown:
Third cycle
No. of
shares
assigned
Outstanding
shares at
12/31/2024
Unit fair
value
(euros)
TSR Objective
885,750
831,500
1.77
FCF Objective
708,600
665,200
2.81
CO2 E.N. Objective
177,150
166,300
2.81
Long-term incentive plan in shares
of Telef\u00f3nica, S.A.: Talent for the
Future Share Plan 2024-2028 (TFSP)
At its meeting on April 12, 2024,the Telef\u00f3nica, S.A.'s
Board of Directors agreed to launch a new installment of
the long-term incentive plan \"Talent for the Future Share
Plan\".
The term of this plan is also five years and it is divided
into three cycles. As in the case of the Performance
Share Plan 2024-2028 described above, the number of
shares to be delivered depends on (i) 50% on the total
shareholder return (\"TSR\") target of Telef\u00f3nica, S.A.
shares being met; with respect to the TSRs of a
comparison group of companies in the
telecommunications sector weighted according to their
relevance to Telef\u00f3nica, (ii) 40% on the Telef\u00f3nica
group's free cash flow generation (the \"FCF\"), (iii) 5% on
the Neutralization of CO2 Emissions and (iv) 5% on the
number of women in executive positions, in line with the
objective set by the Company.
The plan has a duration of five years and is divided into
three cycles of three years. Performance assessment
has been carried out based on the evolution of the stock
price and on the audited results of the Company
(audited both by internal and external audit teams) prior
to the approval by the Nominating, Compensation and
Corporate Governance Committee.
The first cycle of the plan began on January 1, 2024 and
will end on December 31, 2026. The maximum number of
shares assigned in this first cycle was 1,530,500 and the
outstanding shares at December 31, 2024 was 1,513,500,
with the following breakdown:
First cycle
No. of
shares
assigned
Outstanding
shares at
12/31/2024
Unit fair
value
(euros)
TSR Objective
765,250
756,750
2.85
FCF Objective
612,200
605,400
3.42
CO2 E.N. Objective
76,525
75,675
3.42
Women in executive
positions
76,525
75,675
3.42
Incentivized purchases of
Telef\u00f3nica, S.A. shares for
employees
The Telef\u00f3nica, S.A. Ordinary General Shareholders\u2019
meeting on April 8, 2022 approved a voluntary plan for
incentivized purchases of shares of Telef\u00f3nica, S.A. for
the employees of the Group. Under this Plan, employees
were offered the option to acquire Telef\u00f3nica, S.A.
shares during a twelve-month period, with the company
undertaking to deliver a certain number of free shares to
participants, subject to certain requirements. The
maximum amount that each employee could invest was
limited to 1,800 euros. The total number of free shares to
be delivered for the whole plan may never exceed 0.38%
of the share capital of Telef\u00f3nica, S.A. at the date of
approval of the plan at the General Shareholders'
Meeting.
The purchase period commenced in October 2022 and
ended in September 2023. In March 2024 the vesting
period of the plan will end.The plan's holding period
ended in March 2024 and 10,255,044 shares were
delivered to the Group's employees.
", "dimensions": { "concept": "ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-916": { "value": "
Note 28. Cash flow detail
Net cash flow provided by operating
activities
The detail of net cash flow provided by operating
activities is the following:
Millions of euros
2024
2023
2022
Cash received from operations
48,856
47,314
46,925
Cash paid from operations
(36,134)
(34,646)
(34,778)
Cash paid to suppliers
(30,360)
(29,188)
(29,509)
Cash paid to employees
(4,773)
(4,604)
(4,416)
Payments related to cancellation of commitments
(1,001)
(854)
(853)
Net payments of interest and other financial expenses net of dividends received
(1,060)
(565)
(292)
Net interest and other financial expenses paid
(1,620)
(1,811)
(1,236)
Dividends received
560
1,246
944
Taxes (payments)/proceeds
(668)
(454)
(92)
Net cash flow provided by operating activities
10,994
11,649
11,763
In 2024, dividends amounting to 425 million pounds
were received from VMED O2 UK Limited (see Note 10)
equivalent to 512 million euros (1,000 million pounds,
equivalent to 1,154 million euros in 2023 and 800 million
pounds, equivalent to 909 million euros in 2022).
In 2024, no payments have been made on account of
the Corporate Tax of the Tax Group of Telef\u00f3nica, S.A.
(198\u00a0million euros in 2023). In December 2024, after
executing a credit assignment contract signed with a
financial institution, 211\u00a0million euros were collected
corresponding to the 2023 installment (285\u00a0million euros
in 2023 corresponding to the 2022 installment).
Net cash flow used in investing
activities
The following is a detail of the items comprising the net
cash flow used in investing activities.
Millions of euros
2024
2023
2022
Proceeds from the sale in property, plant and equipment and intangible assets
269
310
842
Payments on investments in property, plant and equipment and intangible assets
(5,790)
(6,161)
(6,350)
(Payments on investments)/proceeds from the sale in property, plant and
equipment and intangible assets
(5,521)
(5,851)
(5,508)
Payments for non-financed spectrum in 2024 amounted to
46 million euros, mainly due to the payment of 23 million
euros for Telef\u00f3nica M\u00f3viles Uruguay and 21 million euros
for Otecel.
Payments for non-financed spectrum in 2023 amounted to
128 million euros, mainly due to the payment of 97 million
euros for Telef\u00f3nica M\u00f3viles Argentina and 20 million
euros for Telef\u00f3nica M\u00f3viles Espa\u00f1a.
Payments for non-financed spectrum in 2022 amounted to
27 million euros, mainly due to the payment of 11 million
euros for Telef\u00f3nica M\u00f3viles Argentina and 8 million euros
for Telef\u00f3nica M\u00f3viles Espa\u00f1a.
Millions of euros
2024
2023
2022
Tax associated with the sale of the tower division of Telxius
\u2014
876
\u2014
Constitution of VMO2
\u2014
\u2014
(256)
Sale of Telecommunications towers divisions of Telxius
48
90
2
Tax associated with the sale of InfraCo
\u2014
\u2014
(124)
Sale of Telef\u00f3nica M\u00f3viles El Salvador
\u2014
\u2014
116
Sale of fiber assets of Colombia Telecomunicaciones
8
\u2014
55
Deferred collection sale of T. Ireland
\u2014
\u2014
35
Sale of China Unicom shares (Note 12)
147
\u2014
\u2014
Others
17
38
57
Proceeds/(payments) on disposals of companies, net of cash and cash equivalents
disposed
220
1,004
(115)
Oi mobile assets acquisition (Note 2)
\u2014
(3)
(986)
Incremental acquisition (Note 5)
\u2014
\u2014
(178)
BE-terna acquisition (Note 5)
\u2014
(5)
(328)
IPNET acquisition (Note 5)
(10)
\u2014
\u2014
Capital increase of UGG TopCo (Note 10)
(91)
(73)
(50)
Capital increase of InfraCo Chile (Note 10)
(6)
(46)
\u2014
Loan to InfraCo Chile (Note 12)
\u2014
(46)
\u2014
Capital increase of nexfibre (Note 10)
(38)
(33)
\u2014
Others
(44)
(46)
(86)
Payments on investments in companies, net of cash and cash equivalents acquired
(189)
(252)
(1,628)
Millions of euros
2024
2023
2022
Collateral guarantees on derivatives
1,292
1,088
2,891
Bond sales in Argentina
91
9
\u2014
Legal deposits
12
31
3
Long-term financial instruments of Pegaso PCS (Note 12)
\u2014
287
\u2014
Others
18
17
73
Proceeds on financial investments not included under cash equivalents
1,413
1,432
2,967
Legal deposits
(10)
(16)
(4)
Collateral guarantees on derivatives
(987)
(1,402)
(2,195)
Bond purchases in Argentina
(170)
(42)
\u2014
Long-term financial instruments of Pegaso PCS
\u2014
\u2014
(260)
Others
(29)
(15)
(116)
Payments on financial investments not included under cash equivalents
(1,196)
(1,475)
(2,575)
Net proceeds/(payments) for temporary financial investments
50
856
1,532
Net proceeds/(payments) for temporary financial
investments mainly includes placements of treasury
surpluses not included in cash equivalents.
Net cash flow used in financing
activities
The following is a detail of the items comprising the net
cash flow used in financing activities.
Millions of euros
2024
2023
2022
Dividends paid to the shareholders of Telef\u00f3nica, S.A. (*)
(1,720)
(1,701)
(959)
Payments to non-controlling interests of Telef\u00f4nica Brasil, S.A.
(113)
(189)
(268)
Payments to non-controlling interests of Telef\u00f3nica Deutschland Holding, A.G.
(17)
(157)
(161)
Payments to non-controlling interests of Telxius Telecom, S.A.
\u2014
(76)
\u2014
Others
(37)
(16)
(9)
Dividends paid (see Note 17)
(1,887)
(2,139)
(1,397)
Share capital increase Pontel, S.L. (see Note 17.i)
\u2014
111
\u2014
Establishment of Bluevia Fibra (see notes 2 and 17.i)
\u2014
\u2014
1,021
Share capital decrease Telef\u00f4nica Brasil, S.A. (see Note 17.i)
(57)
\u2014
\u2014
Others
\u2014
2
1
(Payments)/proceeds from share capital decrease/increase with minority interests
(57)
113
1,022
Acquisition of 40% Telxius Telecom, S.A. from KKR (see Note 17.i)
\u2014
(224)
\u2014
Payment to KKR related to 2021 Income Tax of Telxius (Note 17.i)
\u2014
(351)
\u2014
Payment to Pontegadea related to 2021 Income Tax of Telxius (Note 17.i)
\u2014
(88)
\u2014
Own shares purchase of Telef\u00f3nica Brasil
(224)
(92)
(111)
Shares purchase of Telef\u00f3nica Deutschland (Note 2 and 17.i)
(1,019)
(816)
(48)
Transactions carried out by Telef\u00f3nica, S.A. (see Note 17.i)
(58)
(223)
(365)
Telef\u00f3nica Centroam\u00e9rica Inversiones, S.L. share premium (ECPN.) refund related to the
sale of T. Guatemala, T. Nicaragua and T. Panama
\u2014
\u2014
(44)
Others
\u2014
23
13
(Payments)/proceeds of treasury shares and other operations with shareholders
and with minority interests
(1,301)
(1,771)
(555)
Issuance of undated deeply subordinated securities (Note 17.c)
1,300
1,750
750
Acquisition and payment of undated deeply subordinated securities (Note 17.c)
(1,300)
(1,750)
(750)
Payment of the coupon related to the issuances of undated deeply\u00a0 subordinated
securities issued (see Note 17.c)
(346)
(329)
(268)
Operations with other equity holders
(346)
(329)
(268)
(*) This amount differs from that indicated in Note 17 because of withholding taxes deducted in the payment to certain major shareholders in accordance with
current legislation.
Millions of euros
2024
2023
2022
Issued under the EMTN program of Telef\u00f3nica Emisiones, S.A.U. (see Appendix III)
1,750
850
1,100
Issuance of Telef\u00f3nica M\u00f3viles Chile, S.A. (*) (see Appendix III)
37
114
\u2014
Issuance of Telef\u00f3nica Brasil, S.A. (*)
\u2014
\u2014
628
Others
\u2014
3
18
Proceeds on issue of debentures and bonds, and other debts
1,787
967
1,746
Disposal bilateral loans of Telef\u00f3nica, S.A. (see Note 18)
390
275
150
Syndicated provision of Telxius Telecom, S.A.
\u2014
100
100
Disposal bilateral loan of Telef\u00f3nica Brasil, S.A. (*)
\u2014
\u2014
199
Syndicated provision of Bluevia Fibra S.L. (see Note 18)
75
10
245
Settlement of nominal value of gross debt hedging derivatives
385
20
89
New promissory note debt (see Note 18)
478
504
7
Others
432
798
49
Proceeds on loans, borrowings and promissory notes (see Appendix V)
1,760
1,707
839
Repayments of debentures and bonds, and other debts
(1,140)
(1,910)
(3,541)
Amortization bilateral loans of Colombia Telecomunicaciones, S.A. ESP BIC (*)
\u2014
\u2014
(117)
Syndicated amortization by Telxius Telecom, S.A.
\u2014
\u2014
(70)
Settlement of nominal value of amortized debt hedging derivatives
(20)
33
(715)
Others
(1,103)
(1,498)
(2,175)
Repayments of loans, borrowings and promissory notes
(1,123)
(1,465)
(3,077)
Lease principal payments (Note 20)
(2,143)
(2,114)
(1,996)
Financed spectrum licenses payments (Note 21)
(90)
(133)
(549)
Payments for investments in spectrum use licenses financed without explicit interest
(Notes 2 and 21)
(120)
(112)
(108)
Other financed operational payments (Note 18)
(12)
\u2014
(41)
Financed operating payments and investments in property, plant and equipment
and intangible assets payments
(222)
(245)
(698)
(*) Data converted at the exchange rate at the end of each of the corresponding periods. The impact of the exchange rate with respect to the date of the
transaction is included in the \"Others\" line within the same sub-heading.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCashFlowStatementExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-917": { "value": "50000000.0", "decimals": -6, "dimensions": { "concept": "tef:ProceedsFromPaymentsForPlacementsOfCashSurplusesNotIncludedInCashEquivalents", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-918": { "value": "856000000.0", "decimals": -6, "dimensions": { "concept": "tef:ProceedsFromPaymentsForPlacementsOfCashSurplusesNotIncludedInCashEquivalents", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2023-01-01T00:00:00/2024-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-919": { "value": "1532000000.0", "decimals": -6, "dimensions": { "concept": "tef:ProceedsFromPaymentsForPlacementsOfCashSurplusesNotIncludedInCashEquivalents", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00", "unit": "iso4217:EUR" } }, "f-923": { "value": "
Note 29. Other information
g) Directors\u2019 and Senior Executives\u2019
compensation and other benefits
The compensation of the members of Telef\u00f3nica\u2019s Board
of Directors is governed by article 35 of the Company\u2019s
By-Laws, which provides that the annual amount of the
compensation to be paid thereby to all of the Directors in
their capacity as such, i.e., as members of the Board of
Directors and for the performance of the duty of
supervision and collective decision-making inherent in
such body, shall be fixed by the shareholders at the
General Shareholders' Meeting. The Board of Directors
shall determine the exact amount to be paid within such
limit and the distribution thereof among the Directors,
taking into account the duties and responsibilities
assigned to each Director, their membership on
Committees within the Board of Directors and other
objective circumstances that it deems relevant.
Furthermore, Executive Directors shall receive such
compensation as the Board determines for the
performance of executive duties delegated or entrusted
to them by the Board of Directors. Such compensation
shall conform to the Director compensation policy
approved by the shareholders at the General
Shareholders\u2019 Meeting.\u00a0
In accordance with the foregoing, the shareholders,
acting at the Ordinary General Shareholders\u2019 Meeting
held on April 11, 2003, set at 6\u00a0million euros the
maximum amount of annual gross compensation to be
received by the Board of Directors as a fixed allotment
and as attendance fees for attending the meetings of
the Advisory or Control Committees of the Board of
Directors. Thus, as regards fiscal year 2024, the total
amount of compensation accrued by the Directors of
Telef\u00f3nica, in their capacity as such, was 2,732,667
euros for the fixed allocation and for attendance fees.\u00a0
The compensation of the Directors of Telef\u00f3nica in their
capacity as members of the Board of Directors, of the
Executive Commission and/or of the Advisory or Control
Committees, consists of a fixed amount payable
monthly, and of attendance fees for attending the
meetings of the Advisory or Control Committees.
The amounts established in fiscal year \u00a0 2024 as fixed
amounts for belonging to the Board of Directors, the
Executive Commission and the Advisory or Control
Committees of Telef\u00f3nica, and the attendance fees for
attending meetings of the Advisory or Control
Committees of the Board of Directors, are indicated
below:
Compensation of the Board of Directors and of
the Committees thereof
Amounts in euros
Position
Board of
Directors
Executive
Commission
Advisory or
Control
Committees
(*)
Chairman
240,000
80,000
22,400
Vice chairman
200,000
80,000
\u2014
Executive
Member
\u2014
\u2014
\u2014
Proprietary
Member
120,000
80,000
11,200
Independent
Member
120,000
80,000
11,200
Other
external
120,000
80,000
11,200
(*) In addition, the amount of the attendance fee for each of the meetings of
the Advisory or Control Committees is 1,000 euros.\u00a0
In this regard, it is noted that Mr. Jos\u00e9 Mar\u00eda \u00c1lvarez-
Pallete L\u00f3pez (Executive Chairman until January 18,
2025), waived the receipt of the above amounts (i.e.,
240,000 euros as Chairman of the Board of Directors
and 80,000 euros as Chairman of the Executive
Commission).
Likewise, the fixed remuneration of 1,923,100 euros
established for the 2024 financial year related to
executive roles carried out by Mr. Jos\u00e9 Mar\u00eda \u00c1lvarez-
Pallete L\u00f3pez was equal to that received in the previous
eight years (i.e. 2023, 2022, 2021, 2020, 2019, 2018, 2017
and 2016), which was set in his capacity as Chief
Operating Officer, remaining invariably after his
appointment as Chairman in 2016.
The fixed remuneration, for his executive roles, of
1,600,000 euros that the Chief Operating Officer
(C.O.O.), Mr. \u00c1ngel Vil\u00e1 Boix, has established for the
2024\u00a0 financial year is equal to the one received in the
years 2023,2022, 2021, 2020 and 2019.
Individualized description
Appendix II provides an individual breakdown by item of
the compensation and benefits that the members of the
Board of Directors of the Company have accrued and/or
received from Telef\u00f3nica, S.A., and from other
companies of the Telef\u00f3nica Group during fiscal year
2024. Likewise, the compensation and benefits accrued
and/or received, during such year, by the members of
the Company's Senior Management are broken down.
Appendix II: Board and Senior
Management Compensation
TELEF\u00d3NICA, S.A.
(Amounts in euros)
Directors
Salary1
Fixed
remunera
-tion 2
Allowances
3
Short-term
variable
remuneration 4
Remuneration
for belonging
to the Board
Committees5
Other
items6
Total
\u00a0
Mr. Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete L\u00f3pez 7
1,923,100
\u2014
\u2014
3,513,504
\u2014
6,207
5,442,811
Mr. Isidro Fain\u00e9 Casas
\u2014
200,000
\u2014
\u2014
80,000
\u2014
280,000
Mr. Jos\u00e9 Mar\u00eda Abril P\u00e9rez
\u2014
200,000
10,000
\u2014
91,200
\u2014
301,200
Mr. \u00c1ngel Vil\u00e1 Boix
1,600,000
\u2014
\u2014
2,436,000
\u2014
27,383
4,063,383
Ms. Mar\u00eda Luisa Garc\u00eda Blanco
\u2014
120,000
38,000
\u2014
33,600
\u2014
191,600
Mr. Peter L\u00f6scher
\u2014
120,000
26,000
\u2014
113,600
\u2014
259,600
Mr. Carlos Oca\u00f1a Orbis 8
\u2014
80,000
8,000
\u2014
60,800
\u2014
148,800
Ms. Ver\u00f3nica Pascual Bo\u00e9
\u2014
120,000
12,000
\u2014
11,200
\u2014
143,200
Mr. Francisco Javier de Paz Mancho
\u2014
120,000
25,000
\u2014
113,600
\u2014
258,600
Mr. Alejandro Reynal Ample
\u2014
120,000
\u2014
\u2014
\u2014
\u2014
120,000
Mr. Francisco Jos\u00e9 Riberas Mera
\u2014
120,000
\u2014
\u2014
\u2014
\u2014
120,000
Ms. Mar\u00eda Rotondo Urcola
\u2014
120,000
25,000
\u2014
22,400
\u2014
167,400
Ms. Claudia Sender Ram\u00edrez
\u2014
120,000
1,000
\u2014
80,000
\u2014
201,000
Ms. Solange Sobral Targa
\u2014
120,000
10,000
\u2014
11,200
\u2014
141,200
1Salary: Regarding Mr Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete L\u00f3pez and Mr \u00c1ngel Vil\u00e1 Boix, the amount includes the non-variable remuneration earned from their executive
functions.
2Fixed remuneration: Amount of the compensation in cash, with a pre-established payment periodicity, whether or not it can be consolidated over time, earned
by the member for his/her position on the Board, regardless of the effective attendance of the member to board meetings.
3 Allowances: Total amount of allowances for attending Advisory or Steering Committee meetings.
4Short-term variable remuneration (bonuses): Variable amount linked to the performance or achievement of a series of individual or group objectives
(quantitative or qualitative) within a period of time equal to or less than a year, corresponding to the year 2024 and to be paid in the year 2025. In reference to the
bonus corresponding to 2023, which was paid in 2024, Executive Board Member Mr Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete L\u00f3pez received 3,717,737 euros and Executive
Board Member Mr \u00c1ngel Vil\u00e1 Boix received 2,577,600 euros.
5Remuneration for belonging to the Board Committees: Amount of items other than allowances, which the directors are beneficiaries through their position on
the Executive Commission and the Advisory or Steering Committees, regardless of the effective attendance of the board member such Committee meetings.
6Other concepts: This includes, among others, the amounts received as remuneration in kind (general medical and dental coverage and vehicle insurance), paid
by Telef\u00f3nica, S.A.\u00a0
7 Mr.Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete L\u00f3pez ceased as Executive Chairman and Director of the Company on January 18, 2025. Likewise, on the same date, it was
agreed to co-opt Mr. Marc Thomas Murtra Millar as the new Executive Chairman of the Board of Directors of Telef\u00f3nica, S.A.
8 Mr. Carlos Oca\u00f1a Orbis was appointed Director of the Company on May 8, 2024.\u00a0
Ms. Carmen Garc\u00eda de Andr\u00e9s stood down as Board
Member on May 7, 2024. Mr. Jos\u00e9 Javier Echenique
Landir\u00edbar passed away on December 15, 2024.\u00a0
Payment received and/or accrued by them in 2024 is
detailed below:
(Amounts in euros)
Directors
Salary1
Fixed
remune-
ration 2
Allowances
3
Short-term
variable
remuneration
4
Remuneration
for belonging
to the Board
Committees5
Other
items6
Total
\u00a0
Mr. Jos\u00e9 Javier Echenique
Landir\u00edbar
\u2014
200,000
27,000
\u2014
113,600
\u2014
340,600
Ms. Carmen Garc\u00eda de Andr\u00e9s
\u2014
40,000
12,000
\u2014
7,467
\u2014
59,467
1 to 6: Definitions of these concepts are those included in the previous table.
The following table breaks down the amounts accrued
and/or received from other companies of the Telef\u00f3nica
Group other than Telef\u00f3nica, S.A. individually, by the
Board Members of the Company, by the performance of
executive functions or by their membership to the Board
of Directors of such companies:
OTHER COMPANIES OF THE TELEF\u00d3NICA GROUP
(Amounts in euros)
Directors
Salary1
Fixed
remune-
ration 2
Allowances3
Short-term
variable
remuneration 4
Remuneration for
belonging to the
Board Committees5
Other
items6
Total
Mr. Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete
L\u00f3pez 7
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Mr. Isidro Fain\u00e9 Casas
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Mr. Jos\u00e9 Mar\u00eda Abril P\u00e9rez
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Mr. \u00c1ngel Vil\u00e1 Boix
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Ms. Mar\u00eda Luisa Garc\u00eda Blanco
\u2014
\u2014
\u2014
\u2014
\u2014
87,500
87,500
Mr. Peter L\u00f6scher
\u2014
125,997
\u2014
\u2014
\u2014
\u2014
125,997
Mr. Carlos Oca\u00f1a Orbis 8
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Ms. Ver\u00f3nica Pascual Bo\u00e9
\u2014
90,000
\u2014
\u2014
\u2014
65,000
155,000
Mr. Francisco Javier de Paz Mancho
\u2014
173,159
\u2014
\u2014
\u2014
155,000
328,159
Mr. Alejandro Reynal Ample
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Mr. Francisco Jos\u00e9 Riberas Mera
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Ms. Mar\u00eda Rotondo Urcola
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
Ms. Claudia Sender Ram\u00edrez
\u2014
\u2014
\u2014
\u2014
\u2014
132,500
132,500
Ms. Solange Sobral Targa
\u2014
85,659
\u2014
\u2014
\u2014
\u2014
85,659
1. Salary: Amount of non-variable remuneration earned by the Director from other companies of the Telef\u00f3nica Group for his/her executive functions.\u00a0
2. Fixed remuneration: Amount of the compensation in cash, with a pre-established payment periodicity, subject to consolidation over time or not, earned by the
member for his/her position on the boards of other companies of the Telef\u00f3nica Group.
3. Allowances: Total amount of the allowances for attending the board meetings of other companies of the Telef\u00f3nica Group.
4. Variable short-term remuneration (bonuses): Variable amount linked to the performance or achievement of a series of individual or group objectives
(quantitative or qualitative) within a period of time equal to or less than a year, corresponding to the year 2024 and to be paid in the year 2025 by other
companies of the Telef\u00f3nica Group.
5. Remuneration for belonging to the Board Committees of other companies of the Telef\u00f3nica Group: Amount of items other than allowances, which the directors
are beneficiaries through their position on the Advisory or Steering Committees of other companies of the Telef\u00f3nica Group, regardless of the effective
attendance of the board member such Committee meetings.
6. Other concepts: This includes, among others, the amounts received as remuneration in kind (general medical and dental coverage and vehicle insurance), paid
by other companies of the Telef\u00f3nica Group. Also included are the amounts received for membership of the Advisory Boards of Telef\u00f3nica Espa\u00f1a, Telef\u00f3nica
Hispanoam\u00e9rica, Telef\u00f3nica Tech and Telef\u00f3nica Ingenier\u00eda de Seguridad.
7 Mr.Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete L\u00f3pez ceased as Executive Chairman and Director of the Company on January 18, 2025. Likewise, on the same date, it was
agreed to co-opt Mr. Marc Thomas Murtra Millar as the new Executive Chairman of the Board of Directors of Telef\u00f3nica, S.A.
8\u00a0 Mr. Carlos Oca\u00f1a Orbis was appointed Director of the Company on May 8, 2024.
Ms. Carmen Garc\u00eda de Andr\u00e9s stood down as Board
Member on May 7, 2024. Mr. Jos\u00e9 Javier Echenique
Landir\u00edbar passed away on December 15, 2024. Payment
received and/or accrued by them with respect to the
other companies of the Telef\u00f3nica Group in 2024 is
detailed below:
(Amounts in euros)
Directors
Salary1
Fixed
remune-
ration 2
Allowances
3
Short-term
variable
remuneration
4
Remuneration
for belonging
to the Board
Committees5
Other
items6
Total
\u00a0
Mr. Jos\u00e9 Javier Echenique Landir\u00edbar
\u2014
90,000
\u2014
\u2014
\u2014
87,500
177,500
Ms. Carmen Garc\u00eda de Andr\u00e9s
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
\u2014
1 to 6: Definitions of these concepts are those included in the previous table.
Additionally, the Executive Board Members have a series
of Assistance Services. Below, the contributions made
during 2024 are detailed for the Company to long-term
savings systems (Pension Plans and Social Welfare
Plan):
LONG-TERM SAVINGS SYSTEMS
(Amounts in euros)
Directors
Contributions for
fiscal year 2024
Mr. Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete L\u00f3pez1
673,085
Mr. \u00c1ngel Vil\u00e1 Boix
560,000
1 Mr.Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete L\u00f3pez ceased as Executive Chairman and
Director of the Company on January 18, 2025. Likewise, on the same date, it
was agreed to co-opt Mr. Marc Thomas Murtra Millar as the new Executive
Chairman of the Board of Directors of Telef\u00f3nica, S.A.
The breakdown of the long-term saving systems
includes contributions to Pension Plans, to the Benefit
Plan and to the Unit link-type Insurance, as set out
below:
(Amounts in euros)
Directors
Contribution
to Pension
Plans
Contribution
to Executive
Social
Welfare
Plan 1
Contributions
to Unit link-
type
Insurance/
Pension Plan
Surplus2
Mr. Jos\u00e9
Mar\u00eda
\u00c1lvarez-
Pallete
L\u00f3pez3
7,574
540,968
124,543
Mr. \u00c1ngel Vil\u00e1
Boix
6,721
487,840
65,439
1. Contributions to the Executive Social Welfare Plan established in 2006,
financed exclusively by the Company, to complement the current Pension
Plan, which involves defined contributions equivalent to a certain percentage
of the fixed remuneration of the Director, depending on the professional
levels in the organization of the Telef\u00f3nica Group.
2. Contributions to Unit link-type Insurance/Pension Plan Surplus: In 2015 and
2021, applicable law reduced the financial and tax limits of the contributions
to Pension Plans; for this reason, in order to compensate for the difference in
favor of the Beneficiaries, a Unit-link type group insurance policy was
arranged to channel such differences that occur during each fiscal year.
This Unit-link type insurance is arranged with the entity Occident GCO,
S.A.U. de Seguros y Reaseguros, and covers the same contingencies as
those of the \u201cPension Plan\u201d and the same exceptional liquidity events in case
of serious illness or long-term unemployment.
3 Mr.Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete L\u00f3pez ceased as Executive Chairman and
Director of the Company on January 18, 2025. Likewise, on the same date, it
was agreed to co-opt Mr. Marc Thomas Murtra Millar as the new Executive
Chairman of the Board of Directors of Telef\u00f3nica, S.A.
LIFE INSURANCE PREMIUMS
The 2024 amounts for life insurance premiums were as
follows:
(Amounts in euros)
Directors
Life insurance
premiums
Mr. Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete
L\u00f3pez1
41,708
Mr. \u00c1ngel Vil\u00e1 Boix
33,328
1 Mr.Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete L\u00f3pez ceased as Executive Chairman and
Director of the Company on January 18, 2025. Likewise, on the same date, it
was agreed to co-opt Mr. Marc Thomas Murtra Millar as the new Executive
Chairman of the Board of Directors of Telef\u00f3nica, S.A.
REMUNERATION PLANS BASED ON
SHARES
As regards to remuneration plans based on shares
(involving Executive Directors Mr. Jos\u00e9 Mar\u00eda \u00c1lvarez
Pallete-L\u00f3pez and Mr. \u00c1ngel Vil\u00e1 Boix), the following
long-term variable remuneration plans were in existence
during the year 2024:
The so-called Performance Share Plan (\"PSP\"), made up
of: the Long-Term Incentive Plan 2021-2025 (with
Second cycle (2022-2024) and Third cycle (2023-2025)
active) approved by the General Shareholders' Meeting
held on April 23, 2021, and the Long-Term Incentive Plan
2024-2028 (with First cycle (2024-2026) active),
approved by the General Shareholders' Meeting held on
April 12, 2024.
The Second cycle (2022-2024) of the Long-Term
Incentive Plan 2021-2025 started on January 1, 2022 and
ended on December 31, 2024.
In this cycle, a maximum of 1,740,000 shares were
allocated to the Executive Directors on January 1, 2022,
with a unit fair value of 2.9515 euros per share for FCF
(\"Free Cash Flow\"), 2.4316 euros for TSR (\"Total
Shareholder Return\") and 2.9515 euros for the CO2
Emission Neutralization and Reduction target.
At the end of the cycle, Kepler provided the Nominating,
Compensation and Corporate Governance Committee
with the calculation of Telef\u00f3nica's Total Shareholder
Return, which was 33.6% at the end of the period,
ranking fourth in the comparison group, i.e. above the
75th percentile according to the established scale of
achievement, and generating a weighted payout ratio of
50% linked to relative TSR.
With regard to the Free Cash Flow, after taking into
account the partial annual payments for 2022, 2023 and
2024, previously audited and approved by the
Telef\u00f3nica's Board of Directors at the proposal of the
Nominating, Compensation and Corporate Governance
Committee, the weighted payout ratio is 40%.\u00a0 The
assessment of the level of compliance was based on the
results of the audit by the Company\u2019s external and
internal auditors, which were first analyzed by the Audit
and Control Committee before being validated by the
Nominating, Compensation and Corporate Governance
Committee and approved by the Board of Directors.
Finally, in relation to the CO2 Emission Neutralization
and Reduction target, the Nominating, Compensation
and Corporate Governance Committee has regularly
monitored the level of CO2 Emissions Neutralization and,
after analyzing the report from the Corporate Affairs and
Sustainability Department, has determined the level of
achievement. The Nominating, Compensation and
Corporate Governance Committee was supported in
this evaluation function by the Sustainability and
Regulation Committee and the Audit and Control
Committee. In this respect, the minimum CO2 emission
reduction threshold that triggers the possibility of
assessing the degree of compliance with the CO2
Neutralization target has been met and therefore the
weighted payout ratio linked to CO2 Neutralization was
10%.
Taking into account the Relative TSR, Free Cash Flow
and CO2 Neutralization results, the weighted payout
ratio increased to 100%. Thus, at the end of the Plan's
cycle, the Chief Operating Officer (COO) Mr. \u00c1ngel Vil\u00e1
Boix is entitled to receive 745,000 gross shares.
In the case of Mr. Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete L\u00f3pez, due
to his termination as Executive Chairman, he will not
receive the delivery of shares corresponding to this
cycle (995,000 gross shares) but will receive an
equivalent settlement in cash.
Similarly, during the 2024 financial year, the Third cycle
(2023-2025) of the Long-Term Incentive Plan
2021-2025 and First cycle (2024-2026) of the Long-
Term Incentive Plan 2024-2028 were in force, starting
on January 1, 2023 and January 1, 2024 respectively and
ending on December 31, 2025 and December 31, 2026
respectively.
In relation to the Third cycle (2023-2025) of the Long-
Term Incentive Plan 2021-2025, the number of
Telef\u00f3nica, S.A. shares that could be delivered to the
participants, within the established maximum, is
conditioned and determined by the compliance with the
established objectives: 50% on the compliance with the
Total Shareholder Return (TSR) objective of Telef\u00f3nica,
S.A. shares, 40% on the Telef\u00f3nica Group's Free Cash
Flow (FCF) and 10% on the Neutralization and Reduction
of CO2 Emissions. On the other hand, in the First Cycle
(2024-2026) of the Long-Term Incentive Plan
2024-2028, the weight of CO2 Neutralization and
Emission Reduction has been reduced by half, giving
room to the target for the number of Women in
Executive Positions with a weight of 5%.
To determine compliance with the TSR target and
calculate the specific number of shares to be delivered
for this concept, the performance of the TSR on
Telef\u00f3nica, S.A.'s shares will be measured during the
measurement period of each three-year cycle, in relation
to the TSRs experienced by certain companies in the
telecommunications sector, weighted according to their
relevance to Telef\u00f3nica, S.A., which for purposes of the
Plan will constitute a comparison group (hereinafter the
\"Comparison Group\"). The companies included in the
Comparison Group are listed below: Am\u00e9rica M\u00f3vil, BT
Group, Deutsche Telekom, Orange, Telecom Italia,
Vodafone Group, Proximus, Koninklijke KPN, Millicom,
Swisscom, Telenor, TeliaSonera, TIM Brasil, and Liberty
Global.
With regard to complying with the TSR objective, the
number of shares to be delivered associated with
meeting this objective will range from 15% of the number
of theoretical shares assigned, assuming that the TSR
performance of Telef\u00f3nica, S.A. shares is at least the
median of the comparison group, to 50% if the
performance is in the third quartile or above in the
comparison group, with the percentage calculated by
linear interpolation for cases falling between the median
and third quartile.\u00a0
In order to determine the compliance with the FCF
objective and calculate the specific number of shares to
be delivered for this concept, the FCF level generated by
the Telef\u00f3nica Group during each year will be measured
and compared to the value set in the budgets approved
by the Board of Directors for each financial year.\u00a0
With regard to the FCF, for each of the cycles in force
during the financial year 2024, the Board of Directors, at
the proposal of the Nominating, Compensation and
Corporate Governance Committee, determined a scale
of achievement that includes a minimum threshold of
90% compliance, below which no incentive is paid and
compliance with which will entail the delivery of 20% of
the theoretical shares assigned, and a maximum level of
100% compliance, which will entail the delivery of 40% of
the theoretical shares assigned. In the case of the First
cycle (2024-2026) of the 2024-2028 Long-Term
Incentive Plan, includes a potential upside in case of
over achievement that may end in a payout of 60% at
the end of the cycle.
In order to determine compliance with the CO2 Emission
Neutralization and Reduction target and to calculate the
specific number of shares to be delivered for this item,
the level of CO2 Emissions Neutralization achieved at
the end of the cycle will be measured, with the incentive
being paid upon reaching a certain level of scope 1 + 2.
The level of direct and indirect CO2 emissions from our
daily activity shall be calculated according to the
following:
CO2 Emission = Activity Data\u00a0 x Emission Factor, where:
-\u00a0 Activity: Amount of energy, fuel, gas, etc. consumed by
the Company.
-\u00a0 Emission Factor: Amount of CO2 emitted to the
atmosphere by the consumption of each unit of activity.
The emission factor provided by official sources
(European Union, Ministries, CNMC, International Energy
Agency, etc.) is used for electricity and the GHG
Protocol emission factors are used for fuels.
At the beginning of the Third Cycle (2023-2025) of the
Long-Term Incentive Plan 2021-2025 and the First Cycle
(2024-2026) of the Long-Term Incentive Plan
2024-2028, the Board of Directors of Telef\u00f3nica, S.A., at
the proposal of the Nominating, Compensation and
Corporate Governance Committee, determined a scale
of achievement that includes a minimum threshold of
90% compliance, below which no incentive is paid and
compliance with which will entail the delivery of 5% of
the theoretical shares assigned, and a maximum level of
100% compliance, which will entail the delivery of 10% of
the theoretical shares assigned. In addition, a minimum
level of emission reductions of Scope 1 + 2 will need to
be achieved for the incentive to be paid.
In the case of Women in Executive Positions target for
the Long-Term Incentive Plan 2024-2028, the
proportion of Women Executives over the total
executives population will be measured at December 31,
2026.
In any case, 100% of the shares delivered under the Plan
to the Executive Directors and other Participants as
determined by the Board of Directors shall be subject to
a two-year holding period.
In addition, in accordance with the provisions of the
Remuneration Policy for Directors of Telef\u00f3nica, SA, the
Executive Directors must maintain (directly or indirectly)
a number of shares (including those delivered as
remuneration) equivalent to two years of their Gross
Fixed Remuneration, as long as they continue to belong
to the Board of Directors and perform executive
functions. Until such time as this requirement is met, the
holding period for any shares delivered under the Plan to
Executive Directors will be three years.
The maximum number of allocated shares to be
delivered in the event of maximum compliance with the
TSR (Total Shareholder Return), FCF (Free Cash Flow),
CO2 Emission Neutralization Reduction and Women in
Executive Positions targets of the active plans, as
applicable, is shown below.
PSP 2021-2025 - Third cycle / 2023-2025
Directors
Maximum number of
shares (*)
Mr. Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete L\u00f3pez
1,110,000
Mr. \u00c1ngel Vil\u00e1 Boix
831,000
(*) Maximum possible number of shares to be received in case of maximum completion of
TSR, FCF and Neutralization of CO2 Emissions\u00a0 target.
In any case, it is noted that no shares have been
delivered to the Chief Operating Officer (COO) Mr.
\u00c1ngel Vil\u00e1 Boix under the Third cycle (2023-2025) of the
Long-Term Incentive Plan 2021-2025 and that the above
table only reflects the number of potentially deliverable
shares, without in any way implying that all or part of the
shares will actually be delivered.
In the case of Mr. Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete L\u00f3pez, due
to his resignation as Executive Chairman, he will not
receive the delivery of shares corresponding to this
position but he will receive the equivalent part in cash
based on the time he has been with the Company.
PSP 2024-2028 - First cycle / 2024-2026
Directors
Maximum number of shares
(*)
Mr. Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete
L\u00f3pez
1,015,000
Mr. \u00c1ngel Vil\u00e1 Boix
760,000
(*) Maximum possible number of shares to be received in case of maximum completion of
TSR, FCF and Neutralization of CO2 Emissions target.\u00a0
In any case, it is noted that no shares have been
delivered to the Chief Operating Officer (COO) Mr.
\u00c1ngel Vil\u00e1 Boix under the First cycle (2024-2026) of the
Long-Term Incentive Plan 2024-2028 and that the
above table only reflects the number of potentially
deliverable shares, without in any way implying that all or
part of the shares will actually be delivered.
In the case of Mr. Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete L\u00f3pez, due
to his resignation as Executive Chairman, he will not
receive the delivery in shares corresponding to this
position but he will receive the equivalent part in cash
based on the time he has been with the Company.
In addition, it should be noted that the external Directors
of the Company do not receive and did not receive
remuneration during the year 2024 in concept of
pensions or life insurance, nor do they participate in
compensation plans referenced to the value of the share
price.\u00a0
Furthermore, the Company does not grant nor has
granted during the year 2024, an advance, loan or credit
in favor of its Board Members or its Senior Management,
complying with the requirements of the Sarbanes-Oxley
Act published in the United States, which is applicable to
Telef\u00f3nica as a listed company in this market.
Remuneration of the Company\u2019s
Senior Management
As for the Directors who made up the Senior
Management1 of the company in the year 2024,
excluding those who form an integral part of the Board
of Directors, have accrued a total amount of 8,528,820
euros during the 2024 fiscal year.
In addition, and in terms of long-term savings systems,
the contributions made by the Telef\u00f3nica Group during
the year 2024 to the Social Security Plan described in
the \"Income and expenditure\" note with regard to these
Directors increased to 947,676 euros; the contributions
corresponding to the Pension Plan increased to 212,885
euros; the contributions to the Seguro Unit link-Excess
Pension Fund increased to 113,293 euros.
Furthermore, the amount related to the remuneration in
kind (which includes the fees for life insurance and other
insurance, such as the general medical and dental
coverage, and vehicle insurance) was 144,788 euros.
On the other hand, regarding share-based remuneration
plans, during the year 2024, there were in force the
following long-term variable remuneration plans:
The so-called \"Performance Share Plan\" (\"PSP\"), made
up of: the Long-Term Incentive Plan 2021-2025 (with
Second cycle (2022-2024) and Third cycle (2023-2025)
active) approved by the General Shareholders' Meeting
held on April 23, 2021, and the Long-Term Incentive Plan
2024-2028 (with First cycle (2024-2026) active),
approved by the General Shareholders' Meeting held on
April 12, 2024.
The target measurement period of the Second cycle
(2022-2024) of the Long-Term Incentive Plan 2021-2025
started on January 1, 2022 and ended on December 31,
2024. The maximum number of shares allocated to be
delivered in the event of maximum compliance with the
TSR (\"Total Shareholder Return\"), FCF (\"Free Cash
Flow\") and CO2 Emission Neutralization and Reduction
targets set for the this cycle for all the Company's Senior
Executives was 1,241,015.
At the end of the this cycle, Kepler provided the
Nominating, Compensation and Corporate Governance
Committee with the calculation of Telef\u00f3nica's Total
Shareholder Return, which was 33.6% at the end of the
period, ranking fourth in the comparison group, i.e.
above the 75th percentile according to the established
scale of achievement, and generating a weighted payout
ratio of 50% linked to relative TSR.
In terms of Free Cash Flow, after taking into account the
partial annual payments for 2022, 2023 and 2024, the
weighted payout ratio is 40%. The assessment of the
level of compliance was based on the results of the audit
by the Company\u2019s external and internal auditors, which
were first analyzed by the Audit and Control Committee
before being validated by the Nominating,
Compensation and Corporate Governance Committee
and approved by the Board of Directors.
Finally, in relation to the CO2 Emission Neutralization
and Reduction target, the Nominating, Compensation
and Corporate Governance Committee has regularly
monitored the level of CO2 Emission Neutralization and,
after analyzing the report from the Corporate Affairs and
Sustainability Department, has determined the level of
achievement. The Nominating, Compensation and
Corporate Governance Committee was supported in
this evaluation function by the Sustainability and
Regulation Committee and the Audit and Control
Committee. In this respect, the minimum CO2 emission
reduction threshold that triggers the possibility of
assessing the degree of compliance with the CO2
Neutralization target has been met and therefore the
weighted payout ratio linked to CO2 Neutralization was
10%.
Taking into account the Relative TSR, Free Cash Flow
and CO2 Neutralization results, the weighted payout
ratio increased to 100%. Thus, at the end of the first
cycle of the Plan, the Company's Senior Executives are
entitled to receive 1,241,015 gross shares.
The target measurement period for the Third cycle
(2023-2025) of the Long-Term Incentive Plan
2021-2025 and First cycle (2024-2026) of the Long-
Term Incentive Plan 2024-2028 started on January 1,
2023 and January 1, 2024 respectively, and will end on
December 31, 2025 and December 31, 2026 respectively.
The maximum number of shares allocated to be
delivered in the event of maximum compliance with the
TSR (Total Shareholder Return), FCF (Free Cash Flow),
CO2 Emission Neutralization and Reduction and Women
in Executive Positions targets set for both cycles, as
applicable, for all the Company's Senior Executives is
1,378,418 in the Third cycle (2023-2025) of the Long-
Term Incentive Plan 2021-2025 and 1,250,041 in the First
cycle (2024-2026) of the Long-Term Incentive Plan
2024-2028.
(1) For these purposes, Senior Management is understood to be those
persons who perform, de jure or de facto, senior management functions
reporting directly to the Board of Directors or Executive Committees or
Managing Directors of the Company, including, in all cases, the person
responsible for Internal Audit.", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-922": { "value": "
Note 29. Other information
d) Environmental and climate change
matters
Environmental management of the Group
Commitment to protect the environment is part of the
Company's general strategy and is the responsibility of
the Board of Directors. The performance in this area is
regularly supervised by the Sustainability and Regulation
Committee as well as by the Global Sustainability (ESG)
Office in coordination with the global areas responsible
for executing this strategy alongside the business units.
The Group has a Global Environment and Energy Policy,
and externally certified environmental management
systems in accordance with ISO 14001 in the Group
operators. The environment is a cross-cutting issue
throughout the Company, involving both operational
and management areas as well as business and
innovation areas.
The Telef\u00f3nica Group has contracted, both locally and
globally, several insurance programs in order to mitigate
the possible occurrence of an incident stemming from
the risks of environmental liability and/or natural
disasters.
Managing environmental impact and energy
consumption is a strategic priority and carbon reduction
targets are part of the variable remuneration of the
Company employees, including the Executive
Committee. In addition, Telef\u00f3nica, S.A.'s long-term
share-based incentive plans 2021-2025 and 2024-2028
(see Note 27) include CO2 Emission Neutralization
targets.
Climate change and energy
In managing climate change, Telef\u00f3nica identifies
adaptation and mitigation measures and new
opportunities for growth and development. To analyze
climate risks, the guidelines established in the Corporate
Sustainability Reporting Directive (CSRD) are followed.
In this way, the risks (physical and transition) and
potentially material climate opportunities for the
Company have been identified, considering various
scenarios and time horizons.
Telef\u00f3nica integrates the risks and opportunities
identified in its business model through the Climate
Action Plan, which defines the roadmap to achieve net
zero emissions by 2040.
For Telef\u00f3nica, it is a priority to keep energy
consumption stable despite the sharp increase in the
digitalization of society and, therefore, in data traffic
transmitted through the networks. The Group's Energy
Efficiency Plan therefore includes initiatives such as
network modernization, with investments in fiber optics
(more efficient) that replace the copper network, or 5G.
The Company's decarbonization requires not only
maximum efficiency in the use of energy, but also that it
comes from renewable sources. Telef\u00f3nica's Renewable
Energy Plan contemplates different solutions such as
self-generation, the purchase of renewable electricity
with a guarantee of origin and long-term power
purchase agreements (PPAs, see Note 26), and
prioritizes renewable electricity sources, defines the
strategy that allows us to reduce operating costs and
reduces exposure to fluctuations in electricity prices.
Currently, most of the electricity consumption in
Telef\u00f3nica\u2019s facilities comes from renewable sources.
Financing linked to sustainability criteria
Telef\u00f3nica's Sustainable Financing Framework is aligned
with the International Capital Markets Association
(ICMA) Green, Social and Sustainable Bond Principles,
as well as the Green Lending Principles and the Social
Loans of the LMA (Loan Market Association), the APLMA
(Asian Pacific Loan Market Association) and the LSTA
(Loan Syndications and Trading Association), and it is
linked to the United Nations Sustainable Development
Goals.
In addition to senior green bonds and hybrid
instruments, the Group uses other sustainable banking
financing tools, such as loans and credits linked to
sustainability objectives, such as emissions reduction or
gender equality. The Group's main syndicated loan is
also linked to the performance of sustainability
indicators.
In 2024, the Company has maintained an active
presence in the capital market with several issues,
successfully raising a total of 3,050 million euros of debt
in green format throughout the year (2,600 million euros
in 2023). In January 2024, Telef\u00f3nica launched an
issuance split into two tranches, for an aggregate
amount of 1,750 million euros (see Appendix III). In March
2024, a green hybrid instrument was issued for an
amount of 1,100 million euros (Note 17.c). In September
2024, a reopening of the 750 million euros hybrid bond
issued in September 2023 took place for an amount of
200 million euros.
In terms of bank financing, Telef\u00f3nica has an undrawn
syndicated loan linked to sustainability indicators, signed
at the beginning of 2022, amounting to 5,500 million
euros (see Note 18 and Annex V).
In addition, the Group has committed lines and bilateral
financing with numerous financial entities, reaching a
total volume of 4,343 million euros at the end of 2024,
the interest applied to which is also linked to the
fulfillment of sustainability objectives.
Overall, as at December\u00a031, 2024, the Group's
sustainable financing amounts to 21,447 million euros
(18,796 million euros as at December 31, 2023), broken
down as follows:
Millions of euros
Financial liabilities
4,804
Senior sustainable bond of Telef\u00f3nica
Emisiones 2022 (Appendix III)
1,000
Senior green bond of Telef\u00f3nica Emisiones
2023 (Appendix III)
850
Senior sustainable bond of Telef\u00f3nica
Emisiones 2024 (Appendix III)
1,000
Senior sustainable bond of Telef\u00f3nica
Emisiones 2024 (Appendix III)
750
Sustainability linked bonds of Telef\u00f3nica Brazil
(Appendix III)
544
Sustainability linked facilities of Colombia
Telecomunicaciones
270
Sustainability linked facilities of Telef\u00f3nica,
S.A.
390
Undated deeply subordinated securities
(hybrid instruments) (Note 17.c)
6,050
Undrawn facilities at December 31, 2024
(Note 18)
10,593
Sustainability linked facility of Telef\u00f3nica,
S.A.
5,500
Sustainability linked facility of Telefonica
Germany
750
Sustainability linked bilateral facilities
4,343
Total financing linked to sustainability
criteria
21,447
", "dimensions": { "concept": "tef:DisclosureOfEnvironmentalAspectsTextBlock", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-921": { "value": "
Note 29. Other information
e) Auditors\u2019 fees
The services entrusted to the auditors comply with the
independence requirements established by the Spanish
Audit Law 22/2015 of July 20, as well as with the rules of
the Securities and Exchange Commission (SEC) and the
Public Company Accounting Oversight Board (PCAOB),
both of the United States of America.
\u00a0
The expenses accrued by the Group, in respect of the
fees for services rendered to the various member firms
of the PwC network, of which PricewaterhouseCoopers
Auditores, S.L. (\"PwC Auditores, S.L.\"), the auditors of
Telef\u00f3nica, S.A., forms part, amounted to 22.11 million
euros and 20.02 million euros in 2024 and 2023 ,
respectively.\u00a0
The detail of these amounts is as follows:
2024
Millions of euros
PwC
Auditores,
S.L.
Other
companies
PwC network
Total
Audit services
8.47
11.91
20.38
Audit-related
services
1.33
0.40
1.73
Total
9.80
12.31
22.11
2023
Millions of euros
PwC
Auditores,
S.L.
Other
companies
PwC network
Total
Audit services
8.13
10.48
18.61
Audit-related
services
1.01
0.40
1.41
Total
9.14
10.88
20.02
Audit services include audit fees with respect to the
individual and consolidated financial statements of
Telef\u00f3nica, S.A. and its subsidiaries, as well as the review
of interim financial statements. These Audit services also
include the integrated audit of the financial statements
for the annual report on Form 20-F filed with the US SEC
for those entities currently required, including therefore,
the audit of the internal control over financial reporting
to comply with the requirements of the Sarbanes-Oxley
Act of 2002 (Section 404). It also includes audit work
related to legal and regulatory requirements that the
auditor is required to perform as part of its role.
The main items included in Audit-related services relate
to the verification of the Consolidated Statement of
Non-Financial Information and Sustainability
information, the review of financial information required
by regulators, the issuance of agreed-upon procedures
reports on financial reporting, the issuance of comfort
letters, the review of allocation and impact reports of
green finance instruments, the special European report
on the Solvency and Financial Condition Review under
the Solvency II regulatory framework and the reasonable
assurance report on the system of Internal Control over
Financial Reporting (ICFR).
In 2024 and 2023, the Principal Auditor has performed
services other than those mentioned above for a total
amount of 0.004 and 0.002 million euros, respectively.
PwC Auditores, S.L., has provided the following
services to the Group in 2024 and 2023: the individual
and consolidated financial statements audit, the
review of interim financial statements, the integrated
audit of the financial statements for the annual report
on Form 20-F filed with the US SEC, the audit of the
internal control over financial reporting in order to
comply with the requirements of the Sarbanes-Oxley
Act of 2002 (Section 404), the verification of the
Consolidated Statement of Non-Financial Information
and Sustainability information, the issuance of
comfort letters, the issuance of agreed upon
procedures reports on financial reporting, the review
of allocation and impact reports of green finance
instruments, the special European report on the
Solvency and Financial Condition Review under the
Solvency II regulatory framework and the reasonable
assurance report on the system of Internal Control
over Financial Reporting (ICFR).
The expenses accrued to other audit firms, which are
not part of the international PwC network and which
have provided audit services to the companies included
in the consolidation of the Group for the year 2024 have
amounted to a total of 1.61 million euros (1.77 million
euros in 2023), the details of the audit services
correspond to 1.01 million euros ( 0.94 million euros in
2023).", "dimensions": { "concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-920": { "value": "
Note 29. Other information
f) Trade and other guarantees
The Company is required to issue trade guarantees and
deposits for concession and spectrum tender bids (see
Note 19) and in the ordinary course of its business. No
significant additional liabilities in the accompanying
consolidated financial statements are expected to arise
from guarantees and deposits issued.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCollateralExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-924": { "value": "
Note 30. Operations classified
as\u00a0held\u00a0for\u00a0sale
The breakdown of non-current assets and disposal
groups held for sale and liabilities associated at
December\u00a031, 2024 and December\u00a031, 2023 is as follows:
Millions of euros
12/31/2024
12/31/2023
Fiber optic assets in Peru
77
273
Goodwill (Note 7)
\u2014
34
Property, plant and equipment
(Note 8)
33
198
Others
44
41
Investment in Nabiax
58
\u2014
Other assets
3
\u2014
Non-current assets and
disposal groups held for sale
138
273
Millions of euros
12/31/2024
12/31/2023
Liabilities associated with Fiber
optic assets in Peru
33
37
Liabilities associated with non-
current assets and disposal
groups held for sale
33
37
Fiber optic business in Peru
On July\u00a06, 2023, Telef\u00f3nica Hispanoam\u00e9rica, S.A.U.
entered into share subscription agreements with a
subsidiary of KKR and Entel Per\u00fa for the entry of both
companies, with 54% and 10% respectively, into the
share capital of Pangea, the wholesale fiber optic
company in Peru. After the admittance of the regulatory
authorizations with conditions by the regulator in
September 2024, the closing of the transaction is
pending of the final agreement between the parties.
Following the analysis of recoverability of Pangea's
assets at the end of 2024, an impairment loss of tangible
fixed assets amounting to 108 million euros has been
recorded (see Note 26), as well as a reversal of deferred
tax assets amounting to 13 million euros.
Also in July 2023, Telef\u00f3nica del Per\u00fa, S.A.A. and Entel
agreed to sell certain assets of their fiber-to-the-home
infrastructure to Pangea. In 2024, the scope of this
agreement was redefined, ruling out the contribution of
fiber assets by Telef\u00f3nica del Per\u00fa, S.A.A., which
resulted in the reclassification of 118 million euros to
Property, plant and equipment (see Note 8).
As a result of the goodwill impairment test, an
impairment of 34 million euros was recorded in 2024
(see Note 26), corresponding to the goodwill allocated to
the business subject to the previous agreement.
Investment in Nabiax
On November 8, 2024, Nabiax's majority shareholder,
Asterion (80% stake), reached an agreement with the
Aermont Group to sell its shares in Nabiax. In compliance
with the provisions of the original shareholders'
agreement between Asterion and Telef\u00f3nica Infra, S.L.
(which owns the remaining 20%), Asterion has notified
this transaction to Telef\u00f3nica Infra, S.L. and has required
it to adhere to the aforementioned sale agreement (see
Note 10).
", "dimensions": { "concept": "ifrs-full:DisclosureOfNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-925": { "value": "
Note 31. Events after
the\u00a0reporting\u00a0period
The following events regarding the Telef\u00f3nica Group
took place between December\u00a031, 2024 and the date of
authorization for issue of the accompanying
consolidated financial statements:
\u2022 On January 10, 2025, Telef\u00f3nica Germany GmbH & Co.
OHG completed the early termination of its 750 million
euros sustainability-linked syndicated credit facility
signed on December 17, 2019 and originally scheduled
to mature in 2026.
\u2022 On January 13, 2025, Telef\u00f3nica, S.A. signed an
extension with respect to its sustainability-linked
syndicated credit facility for up to 5,500 million euros
for an additional year (extending the maturity date to
January 13, 2030). Additionally, Telef\u00f3nica signed 2
extension options for 1 additional year each, permitting
Telef\u00f3nica, S.A.,to extend the maturity date of the
credit facility to January 13, 2032.
\u2022 On January 15, 2025, Telef\u00f3nica, S.A. signed a bilateral
loan in the amount of 125 million euros maturing on
January 15, 2035. As of the date, there was no
outstanding amount under this bilateral loan.
\u2022 On January 16, 2025, Telef\u00f3nica, S.A. through its
wholly-owned subsidiary Telef\u00f3nica Emisiones, S.A.U.,
launched in the Euro market under its EMTN
Programme an issuance of Notes guaranteed by
Telef\u00f3nica, S.A. in a principal amount of 1,000 million
euros. This issue, due on January 23, 2034, pays an
annual coupon of 3.724% and was issued at par. The
settlement of the issuance took place on January 23,
2025.
\u2022 On January 17, 2025, Telef\u00f3nica Emisiones, S.A.U.
redeemed 1,250 million euros of its notes issued on
January 17, 2017. These notes were guaranteed by
Telef\u00f3nica, S.A.
\u2022 On January 18, 2025, Telef\u00f3nica, S.A. in view of its new
shareholding structure and that some of its relevant
shareholders expressed the convenience of
embarking on a new stage in the executive
chairmanship, Telef\u00f3nica\u2019s Board of Directors, which
met on the aforementioned date to assess the
situation, under the chairmanship of Mr. Jos\u00e9 Mar\u00eda
\u00c1lvarez-Pallete, adopted, following a favorable report
from the Nominating, Compensation and Corporate
Governance Committee, the following resolutions:
\u25e6 To agree on the orderly renewal of the Company's
chairmanship, in order to adapt it to its new
shareholding structure.
\u25e6 To approve the termination of the contract signed
with Mr. Jos\u00e9 Mar\u00eda \u00c1lvarez-Pallete as Executive
Chairman of Telef\u00f3nica\u2019s Board of Directors, and to
request from him, in accordance with the provisions
of Article 12.2.a) of the Regulations of the Board of
Directors, his resignation from his position as
Director. Mr. \u00c1lvarez-Pallete, in response to said
request, tendered his resignation as a Director,
which was accepted by the Board of Directors.
\u25e6 In order to guarantee an adequate replacement in
the executive chairmanship of the Company, to
approve the appointment by co-optation of Mr.
Marc Thomas Murtra Millar, as Executive Director of
the Company, also appointing him as Executive
Chairman of the Board of Directors and delegating
to him all the powers that may be delegated by the
Board of Directors, to be exercised jointly and
severally. Mr. Murtra accepted his appointment as
Executive Chairman of Telef\u00f3nica, on this same
date.
\u2022 On January 29, 2025, the Board of Directors of
Telef\u00f3nica, S.A., resolved with the abstention of the
Executive Directors and upon proposal of the
Nominating, Compensation and Corporate
Governance Committee, to appoint Mr. Peter L\u00f6scher
as Lead Independent Director. On the same date, the
Audit and Control Committee resolved\u00a0 to appoint the
Independent Director Ms. Mar\u00eda Luisa Garc\u00eda Blanco
as Chairwoman of that Committee.
\u2022 On February 14, 2025 the Board of Directors of
Telef\u00f3nica del Per\u00fa, S.A.A. (\u201cTelef\u00f3nica del Per\u00fa\u201d), with
the aim of achieving an orderly restructuring of the
liabilities of said company, resolved to invoke the
Ordinary Insolvency Procedure, established under the
Peruvian law (Ley General del Sistema Concursal)
with respect to Telef\u00f3nica del Per\u00fa. The invocation of
said insolvency procedure is focused on the financial
and operational restructuring within the framework of
the applicable insolvency law. Thus, the protection of
the insolvency framework, established by the Ley
General del Sistema Concursal, will allow Telef\u00f3nica
del Per\u00fa for an orderly restructuring of liabilities with
the arrangement of its creditors. In order to facilitate
the invocation of the Ordinary Insolvency Procedure,
Telef\u00f3nica Hispanoam\u00e9rica has granted a credit
facility of up to 1,549\u00a0million Peruvian soles
(approximately 394\u00a0million euros at an estimated
average rate of 3.93 Peruvian soles per euro), subject
to strict conditionality and with a maturity of 18
months, to meet exclusively operational cash
requirements of Telef\u00f3nica del Per\u00fa. The financial
situation of Telef\u00f3nica del Per\u00fa has been very
negatively affected by tax contingencies that are more
than 20 years old (see Note 25, as well as by
administrative decisions that have placed the
company in a competitive disadvantage within a
particularly challenging market environment. In
relation to the abovementioned tax contingencies,
Telef\u00f3nica is currently in arbitration before the
International Centre for Settlement of Investment
Disputes (ICSID)(see Note 29.a). As previously
informed to the market, Telef\u00f3nica reiterated that
Telef\u00f3nica del Per\u00fa\u2019s liabilities are not guaranteed by
any other company of the Telef\u00f3nica Group.
Telef\u00f3nica will continue to explore strategic
alternatives with regard to its investment in Telef\u00f3nica
del Per\u00fa.
\u2022 On February 24, 2025, Telef\u00f3nica's subsidiary TLH
Holdco, S.L.U., a company 100% owned by Telef\u00f3nica,
sold all the shares that it held in Telef\u00f3nica M\u00f3viles
Argentina, S.A. representing\u00a0 99.999625% of its share
capital and of the entire share capital of its operations
in Argentina to Telecom Argentina S.A. The total price
for 100% of the shares transferred amounts to
1,245\u00a0million U.S. dollars (approximately 1,189\u00a0million
euros at the date of the transaction). The signing and
closing of the transaction took place simultaneously.
The carrying amount of Telef\u00f3nica M\u00f3viles Argentina's
net assets as of December 31, 2024 amounted to 1,175
million euros (see Note 2).
As a result of the transaction, the Group will reclassify
to 2025 results the accumulated negative translation
differences corresponding to Telef\u00f3nica M\u00f3viles
Argentina, which as of December 31, 2024 amounted
to 1,107 million euros (Note 17.f).
", "dimensions": { "concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-926": { "value": "
Appendix I: Scope of consolidation
The main companies of the Telef\u00f3nica Group
The table below lists the main companies comprising the
Telef\u00f3nica Group at December 31, 2024 and the main
investments consolidated using the equity method.
Included for each company are the company name,
corporate purpose, country, functional currency, share
capital (in millions of functional currency units), the
Telef\u00f3nica Group\u2019s effective shareholding and the
company or companies through which the Group holds
a stake.
Parent Company
Telef\u00f3nica, S.A.
Name and corporate purpose
Country
Currency
Capital
%Telef\u00f3nica
Group
Holding Company
Telef\u00f3nica Spain
Telef\u00f3nica de Espa\u00f1a, S.A.U.
Telecommunications service provider
Spain
EUR
1,024
100%
Telef\u00f3nica, S.A.
Telef\u00f3nica M\u00f3viles Espa\u00f1a, S.A.U.
Wireless communications services provider
Spain
EUR
209
100%
Telef\u00f3nica, S.A.
Teleinform\u00e1tica y Comunicaciones, S.A.U. (Telyco)
Promotion, marketing and distribution of telephone
and telematic equipment and services
Spain
EUR
8
100%
Telef\u00f3nica Espa\u00f1a
Filiales, S.A.U.
Telef\u00f3nica Soluciones de Inform\u00e1tica y Com. de
Espa\u00f1a S.A.U.
Telecommunications systems, networks and
infrastructure engineering
Spain
EUR
2
100%
Telef\u00f3nica de Espa\u00f1a,
S.A.U.
Telef\u00f3nica Soluciones de Outsourcing, S.A.U.
Promotion and networks management
Spain
EUR
1
100%
Telef\u00f3nica Espa\u00f1a
Filiales, S.A.U.
Telef\u00f3nica Servicios Integrales de Distribuci\u00f3n S.A.U.
Logistic service provider
Spain
EUR
2
100%
Telef\u00f3nica de Espa\u00f1a,
S.A.U.
Telef\u00f3nica Espa\u00f1a Filiales, S.A.U.
Organization and operation of multimedia service-
related business
Spain
EUR
226
100%
Telef\u00f3nica, S.A.
Telef\u00f3nica Servicios Audiovisuales, S.A.U.
Provision of all type of audiovisual telecommunications
services
Spain
EUR
6
100%
Telef\u00f3nica Espa\u00f1a
Filiales, S.A.U.
Telef\u00f3nica Broadcast Services, S.L.U.
DSNG-based transmission and operation services
Spain
EUR
\u2014
100%
Telef\u00f3nica Espa\u00f1a
Filiales, S.A.U.
Telef\u00f3nica\u00a0 Audiovisual Digital, S.L.U.
Provision of all type of audiovisual telecommunications
services
Spain
EUR
46
100%
Telef\u00f3nica Espa\u00f1a
Filiales, S.A.U.
Telef\u00f3nica Global Technology, S.A.U.
Global management and operation of IT systems
Spain
EUR
16
100%
Telef\u00f3nica Espa\u00f1a
Filiales, S.A.U.
Telef\u00f3nica Educaci\u00f3n Digital, S.L.U.
Vertical e-learning portal
Spain
EUR
1
100%
Telef\u00f3nica Espa\u00f1a
Filiales, S.A.U.
Bluevia Fibra, S.L.
Operations and exploitation of FTTH network and other
connectivity services.
Spain
EUR
68
55%
Telef\u00f3nica Espa\u00f1a
Filiales, S.A.U. (30%)
Telef\u00f3nica Infra,\u00a0 S.L.U.\u00a0
(25%)
Name and corporate purpose
Country
Currency
Capital
%Telef\u00f3nica
Group
Holding Company
Telef\u00f3nica Spain (cont.)
Solar360 Soluciones de Instalacion y Mantenimiento
S.L.
Marketing and management in the installation, sale
and maintenance of photovoltaic equipment
Spain
EUR
\u2014
51%
Telef\u00f3nica de Espa\u00f1a,
S.A.U.
Telef\u00f3nica Ingenier\u00eda de Seguridad, S.A.U.
Security services and systems
Spain
EUR
5
100%
Telef\u00f3nica Espa\u00f1a
Filiales, S.A.U.
Compa\u00f1\u00eda Mayorista de Fibra S.L.
Provision of telecommunications services through
FTTH network operation
Spain
EUR
\u2014
100%
Telef\u00f3nica Espa\u00f1a
Filiales, S.A.U.
Telef\u00f3nica Germany
Telef\u00f3nica Deutschland Holding A.G
Holding company
Germany
EUR
2,975
96.85%
Telef\u00f3nica Germany
Holdings Limited
(69.22%)
Telef\u00f3nica Local
Services GmbH
(27.63%)
Telef\u00f3nica Germany GmbH & Co. OHG
Wireless communications services operator
Germany
EUR
51
96.85%
Telef\u00f3nica Deutschland
Holding A.G (96.84%)
T. Germany
Management, GmbH
(0.01%)\u00a0 \u00a0
E-Plus Service GmbH
Wireless communications services operator
Germany
EUR
\u2014
96.85%
Telef\u00f3nica Germany
GmbH & Co. OHG
Telef\u00f3nica Germany Business Sales GmbH
Technological and consulting services in Big Data
provider
Germany
EUR
\u2014
96.85%
Telef\u00f3nica Germany
GmbH & Co. OHG
O2 Telef\u00f3nica Deutschland Finanzierungs GmbH
Integrated cash management, consulting and financial
support for Group companies
Germany
EUR
\u2014
96.85%
Telef\u00f3nica Germany
GmbH & Co. OHG
Telef\u00f3nica Germany 1. Beteiligungsgesellschaft mbH
Holding company
Germany
EUR
5
96.85%
Telef\u00f3nica Germany
GmbH & Co. OHG
Ortel Mobile GmbH
Provision of international mobile communications
services
Germany
EUR
\u2014
96.85%
Telef\u00f3nica Germany
GmbH & Co. OHG
Telef\u00f3nica Germany Retail GmbH
Office machinery, computers, peripheral equipment
and software
Germany
EUR
\u2014
96.85%
Telef\u00f3nica Germany
GmbH & Co. OHG
AY YILDIZ Communications GmbH
Telecommunications service provider
Germany
EUR
\u2014
96.85%
Telef\u00f3nica Germany
GmbH & Co. OHG
TCHIBO Mobilfunk GmbH & Co.
Marketing and sales of mobile services
Germany
EUR
7
48.42%
Telef\u00f3nica Germany
GmbH & Co. OHG
Telef\u00f3nica Brazil
Telef\u00f4nica Brasil, S.A.
Wireline telephony operator
Brazil
BRL
62,071
76.49%
Telef\u00f3nica
Latinoam\u00e9rica Holding,
S.L.U. (37.34%)
Telef\u00f3nica, S.A.
(38.90%)
Telef\u00f3nica Chile, S.A.
(0.06%)
Terra Networks Brasil, Ltda.
ISP and portal
Brazil
BRL
317
76.49%
Telef\u00f4nica Brasil, S.A.
Telef\u00f4nica Infraestructura e Seguran\u00e7a Ltda.
Security services and systems
Brazil
BRL
321
76.49%
Terra Networks Brasil,
Ltda.
Name and corporate purpose
Country
Currency
Capital
%Telef\u00f3nica
Group
Holding Company
Telef\u00f3nica Brazil (cont.)
Vivo ventures fundo de investimento em participacoes
multiestrategia.
Investment funds
Brazil
BRL
145
76.96%
Telef\u00f4nica Brasil, S.A.
(74.96%)
Telefonica Open
Innovation S.L.U.
(2.00%)
Vale Sa\u00fade, Administradora de Cart\u00f5es Ltda.
Provision of health services
Brazil
BRL
7
76.49%
POP Internet Ltda.
Telef\u00f4nica Cloud e Tecnologia do Brasil S.A.
Cybersecurity, electronic information security and IT
consultancy
Brazil
BRL
104
88.24%
Telef\u00f4nica Brasil, S.A.
(44.13%)
Telef\u00f3nica
Cybersecurity & Cloud
Tech S.L.\u00a0 (44.11%)
IPNET Servi\u00e7os em Nuvem e Desenvolvimento de
Sistemas Ltda
Software and systems resale, professional services and
project management
Brazil
BRL
31
88.24%
Telef\u00f4nica Cloud e
Tecnologia do Brasil
S.A.
IPNET USA, LLC
Software and systems resale, professional services and
project management
USA
USD
1
88.24%
Telef\u00f4nica Cloud e
Tecnologia do Brasil
S.A.
Telef\u00f3nica Hispam
Telef\u00f3nica Hispanoam\u00e9rica, S.A.U.
Holding company
Spain
EUR
108
100%
Telef\u00f3nica, S.A.
TLH Holdco, S.L.U.
Holding company
Spain
EUR
87
100%
Telef\u00f3nica, S.A.
Telef\u00f3nica Venezolana, C.A.
Wireless communications operator
Venezuela
VED
1,905
100%
Telef\u00f3nica
Hispanoam\u00e9rica, S.A.U.
(97.13%)
Comtel
Comunicaciones
Telef\u00f3nicas, S.A.
(2.87%)
Colombia Telecomunicaciones S.A. ESP BIC
Communications services operator
Colombia
COP
3,410
67.5%
Telef\u00f3nica
Hispanoam\u00e9rica, S.A.U.
Operaciones Tecnol\u00f3gicas y Comerciales S.A.S
Communications services operator
Colombia
COP
3,330
67.5%
Colombia
Telecomunicaciones
S.A. ESP BIC
Unired Colombia S.A.S
Service provider related to telecommunications
Colombia
COP
12,826
33.75%
Colombia
Telecomunicaciones
S.A. ESP BIC
Pegaso Pcs S.A. de C.V.
Communications services operator
Mexico
MXN
3,241
100%
Telef\u00f3nica
Hispanoam\u00e9rica, S.A.U.
(99.98%)
Celular de Telefon\u00eda
S.A. de CV. (0.02%)
Celular de Telefon\u00eda S.A. de CV.
Consulting services
Mexico
MXN
2,650
100%
Pegaso Pcs S.A. de CV.
(67.65%)
Telef\u00f3nica
Hispanoam\u00e9rica, S.A.
(32.35%)
Terra Networks M\u00e9xico, S.A. de C.V.
ISP, portal and real-time financial information services
Mexico
MXN
305
100%
Telef\u00f3nica
Hispanoam\u00e9rica, S.A.U.
Fisatel M\u00e9xico, S.A. de C.V. SOFOM E.N.R.
Integrated cash mangement, consulting and financial
support for Group companies
Mexico
MXN
1,805
100%
Telef\u00f3nica
Hispanoam\u00e9rica, S.A.U.
(99.99%)
Pegaso Pcs S.A. de CV.
(0.01%)
Otecel, S.A.
Wireless communications services provider
Ecuador
USD
183
100%
Telef\u00f3nica
Hispanoam\u00e9rica, S.A.U.
Telef\u00f3nica M\u00f3viles Argentina, S.A.
Telecommunications service provider
Argentina
ARS
188,019
100%
TLH Holdco, S.L.U.
Name and corporate purpose
Country
Currency
Capital
%Telef\u00f3nica
Group
Holding Company
Telef\u00f3nica Hispam (cont.)
Telef\u00f3nica M\u00f3viles Chile, S.A.
Wireless communications services operator
Chile
CLP
1,631,069
100%
Inversiones Telef\u00f3nica
Internacional Holding
SpA. (99.14%)
Telef\u00f3nica
Hispanoam\u00e9rica, S.A.U.\u00a0
(0.86%)
Telef\u00f3nica Chile, S.A.
Local and international long distance telephony
services provider
Chile
CLP
874,773
99.39%
Telef\u00f3nica M\u00f3viles
Chile, S.A.
Telef\u00f3nica Chile Holdings, S.L.U.
Holding Company
Spain
EUR
\u2014
100%
Telef\u00f3nica
Hispanoam\u00e9rica, S.A.U.
Telef\u00f3nica Empresas Chile S.A.
Provision of voice and data telephone communications
services
Chile
CLP
103,756
99.39%
Telef\u00f3nica Chile, S.A.
Telef\u00f3nica Chile Servicios Corporativos Limitada
HUB service provider
Chile
CLP
3
99.69%
Telef\u00f3nica Chile, S.A.
(49.54%)
Telef\u00f3nica Empresas
Chile S.A. (1.30%)
Telef\u00f3nica M\u00f3viles
Chile, S.A. (48.85%)
Inversiones Telef\u00f3nica Internacional Holding, SpA.
Holding Company
Chile
CLP
511
100%
Telef\u00f3nica Chile
Holdings S.L.
Telef\u00f3nica del Per\u00fa, S.A.A.
Local, domestic and international long distance
telephone service provider
Peru
PEN
831
99.32%
Telef\u00f3nica
Hispanoam\u00e9rica, S.A.
Media Networks Latin America, S.A.C
Telecommunications research activities and proyects
Peru
PEN
158
100%
Telef\u00f3nica
Latinoam\u00e9rica Holding,
S.L.U.
Pangeaco, S.A.C
Fibre rollout and capacity service provision
Peru
PEN
4
100%
Telef\u00f3nica
Hispanoam\u00e9rica, S.A.U.
(99.99%)
Telef\u00f3nica
Latinoam\u00e9rica Holding,
S.L.U. (0.01%)
Telef\u00f3nica M\u00f3viles del Uruguay, S.A.
Wireless communications and services operator
Uruguay
UYU
1,107
100%
Telef\u00f3nica
Hispanoam\u00e9rica, S.A.U.
Other companies
Telef\u00f3nica Infra,\u00a0 S.L.U.
Holding company
Spain
EUR
12
100%
Telef\u00f3nica , S.A.
Telef\u00f3nica Infra Germany GmbH
Broadband telecommunications operator
Germany
EUR
\u2014
100%
Telef\u00f3nica Infra,\u00a0 S.L.U.\u00a0
Telef\u00f3nica O2 Holdings Ltd.
Holding company
United
Kingdom
GBP
9
100%
Telef\u00f3nica, S.A.\u00a0
(99.99%)
Telef\u00f3nica Capital
S.A.U. (0.01%)
MmO2 Ltd.
Holding company
United
Kingdom
GBP
\u2014
100%
Telef\u00f3nica O2 Holding
Ltd.
Telef\u00f3nica Germany Holdings Ltd.
Holding company
United
Kingdom
EUR
3,463
100%
O2 (Europe) Ltd.
O2 (Europe) Ltd.
Holding company
United
Kingdom
EUR
6,895
100%
Telef\u00f3nica, S.A.
Telef\u00f3nica International Holding, B.V
Holding company
Netherlands
EUR
\u2014
100%
Telef\u00f3nica
Latinoam\u00e9rica Holding,
S.L.
Telef\u00f3nica Latinoam\u00e9rica Holding, S.L.U.
Holding company
Spain
EUR
291
100%
\u00a0 \u00a0 \u00a0Telef\u00f3nica, S.A.
Telef\u00f3nica Global Solutions, S.L.U.
International service provider
Spain
EUR
1
100%
Telef\u00f3nica, S.A
Name and corporate purpose
Country
Currency
Capital
%Telef\u00f3nica
Group
Holding Company
Other companies (cont.)
Telefonica Global Solutions USA, Inc.
Provision of telecommunications services
USA
USD
202
100%
Telef\u00f3nica Global
Solutions, S.L.U.
Telef\u00f3nica Global Solutions Germany GmbH.
International service provider
Germany
EUR
\u2014
100%
Telef\u00f3nica Global
Solutions, S.L.U.
Telef\u00f3nica Global Solutions M\u00e9xico, S.A. de C.V.
Carrying out research activities and projects in the field
of telecommunications
Mexico
MXN
67
100%
Telef\u00f3nica Global
Solutions, S.L.U.
Telef\u00f3nica Innovaci\u00f3n Digital, S.L.U.
Carrying out research activities and services in the field
of telecommunications. Holding company
Spain
EUR
28
100%
Telef\u00f3nica, S.A
Telef\u00f3nica Digital Ltd.
Developer Telco Services
United
Kingdom
GBP
45
100%
Telef\u00f3nica Innovaci\u00f3n
Digital, S.L.U.
Telefonica Open Innovation S.L.U.
Talent identification and development in ICT.
Spain
EUR
2
100%
Telef\u00f3nica Innovaci\u00f3n
Digital, S.L.U.
Wayra Chile Tecnolog\u00eda e Innovaci\u00f3n SpA
Technological innovation based business project
development
Chile
CLP
29,899
100%
Telefonica Open
Innovation S.L.U.
Wayra Brasil Desenvolvedora e Apoiadora de Projetos
Ltda
Technological innovation based business project
development
Brazil
BRL
52
100%
Telefonica Open
Innovation S.L.U.
(99.99%)
Telef\u00f3nica Innovaci\u00f3n
Digital, S.L.U. (0.01%)
WY Telecom, S.A. de C.V.
Talent identification and development in ICT
Mexico
MXN
134
100%
Telefonica Open
Innovation S.L.U.
(99.99%)
Telef\u00f3nica Innovaci\u00f3n
Digital, S.L.U. (0.01%)
Wayra Argentina, S.A.
Talent identification and development in ICT
Argentina
ARS
7,607
100%
Telefonica Open
Innovation S.L.U. (95%)
Telef\u00f3nica, S.A. (5%)
Wayra Colombia, S.A.S.
Technological innovation based business project
development
Colombia
COP
2,304
100%
Telefonica Open
Innovation S.L.U.
Proyecto Wayra, C.A.
Commercial, industrial and mercantile activities
Venezuela
VED
13
100%
Telef\u00f3nica Venezolana,
C.A.
Wayra Per\u00fa Aceleradora de Proyectos, S.A.C.
Technological innovation based business project
development
Peru
PEN
28
100%
Telefonica Open
Innovation S.L.U.
Wayra UK Ltd.
Technological innovation based business project
development
United
Kingdom
GBP
\u2014
100%
Telefonica Open
Innovation S.L.U.
Terra Networks Argentina, S.A.
ISP and portal
Argentina
ARS
287
100%
Telef\u00f3nica
Latinoam\u00e9rica Holding,
S.L. (99.99%)
Telef\u00f3nica International
Holding, B.V. (0.01%)
Telfisa Global, B.V.
Integrated cash management, consulting and financial
support for Group companies
Netherlands
EUR
\u2014
100%
Telef\u00f3nica, S.A.
Telef\u00f3nica Global Activities Holding, B.V.
Holding Company
Netherlands
EUR
\u2014
100%
Telfisa Global, B.V.
Telef\u00f3nica Global Services, GmbH
Purchasing services
Germany
EUR
\u2014
100%
Group 3G UMTS
Holding, GmbH
Telef\u00f3nica Global Roaming, GmbH
Optimization of network traffic
Germany
EUR
\u2014
100%
Telef\u00f3nica Global
Services, GmbH
Group 3G UMTS Holding GmbH
Holding Company
Germany
EUR
250
100%
Telef\u00f3nica Global
Activities Holdings, B.V
Name and corporate purpose
Country
Currency
Capital
%Telef\u00f3nica
Group
Holding Company
Other companies (cont.)
QUAM GmbH.
IT facilities management activities
Germany
EUR
250
100%
Group 3G UMTS
Holding GmbH
Telef\u00f3nica Compras Electr\u00f3nicas, S.L.U.
Development and provision of information Society
services
Spain
EUR
\u2014
100%
Telef\u00f3nica Global
Services, GmbH
Telefonica Iot & Big Data Tech S.A.U.
Provision of telemarketing services
Spain
EUR
1
100%
Telef\u00f3nica Tech S.L.U.
Geprom Software Engineering S.L.U.
Technical engineering services and other consultancy
activities
Spain
EUR
\u2014
100%
Telefonica Iot & Big
Data Tech S.A.U.
Geprom Software Engineering\u00a0 S.A. de C.V.
Technical engineering services and other consultancy
activities
Mexico
MXN
\u2014
100%
Geprom Software
Engineering S.L.U.
TIS Hispanoam\u00e9rica, S.L.U.
Security services and systems
Spain
EUR
1
100%
Telef\u00f3nica, S.A.
Telef\u00f3nica Capital, S.A.U.
Finance company
Spain
EUR
7
100%
Telef\u00f3nica, S.A.
Lotca Servicios Integrales, S.L.U.
Aircraft ownership and operation
Spain
EUR
18
100%
Telef\u00f3nica, S.A.
Fonditel Pensiones, Entidad Gestora de Fondos de
Pensiones, S.A
Administration of pension funds
Spain
EUR
16
70%
Telef\u00f3nica Capital,
S.A.U.
Fonditel Gesti\u00f3n, Soc. Gestora de Instituciones de
Inversi\u00f3n Colectiva, S.A.U.
Administration and representation of collective
investment schemes
Spain
EUR
2
100%
Telef\u00f3nica Capital,
S.A.U.
Telef\u00f3nica Luxembourg Holding, S.\u00e0.r.L.
Holding company
Luxembourg
EUR
3
100%
Telef\u00f3nica, S.A.
Nova Casiopea RE S.A.
Reinsurance
Luxembourg
EUR
15
100%
Telef\u00f3nica Luxembourg
Holding, S.\u00e0.r.L.
Telef\u00f3nica Seguros y Reaseguros Compa\u00f1\u00eda
Aseguradora, S.A.U.
Conducting direct insurance business
Spain
EUR
24
100%
Telef\u00f3nica Luxembourg
Holding, S.\u00e0.r.L.
Telef\u00f3nica Finanzas, S.A.U.
Integrated cash management, consulting and financial
support for Group companies
Spain
EUR
3
100%
Telef\u00f3nica, S.A.
Telef\u00f3nica Corredur\u00eda de Seguros y Reaseguros
Compa\u00f1\u00eda de Mediaci\u00f3n, S.A.
Distribution, promotion or preparation of insurance
contracts
Spain
EUR
\u2014
100%
Telef\u00f3nica Finanzas,
S.A.U. (TELFISA)
(83.33%)
Telef\u00f3nica, S.A. (16.67%)
Telef\u00f3nica Europe, B.V.
Fund raising in capital markets
Netherlands
EUR
\u2014
100%
Telef\u00f3nica, S.A.
Telef\u00f3nica Participaciones, S.A.U.
Financial debt instrument issuer
Spain
EUR
\u2014
100%
Telef\u00f3nica, S.A.
Telef\u00f3nica Emisiones, S.A.U.
Financial debt instrument issuer
Spain
EUR
\u2014
100%
Telef\u00f3nica, S.A.
Alian\u00e7a Atl\u00e2ntica Holding B.V.
Holding company
Netherlands
EUR
40
88.24%
Telef\u00f3nica, S.A. (50%)
Telef\u00f4nica Brasil, S.A.
(38.24%)
Telef\u00f3nica Servi\u00e7os Empresariais do BRASIL, Ltda.
Management and administrative services rendered
Brazil
BRL
63
100%
Telef\u00f3nica Servicios
Globales, S.L.U.
Telef\u00f3nica Gesti\u00f3n Integral de Edificios y Servicios
S.L.U.
Management and administrative services rendered
Spain
EUR
\u2014
100%
Telef\u00f3nica Servicios
Globales, S.L.U.
O2 Worldwide Limited
Wireless telecommunications activities
United
Kingdom
GBP
\u2014
100%
Telef\u00f3nica, S.A.
Name and corporate purpose
Country
Currency
Capital
%Telef\u00f3nica
Group
Holding Company
Other companies (cont.)
Telef\u00f3nica Servicios Globales, S.L.U.
Holding company
Spain
EUR
1
100%
Telef\u00f3nica, S.A.
Telef\u00f3nica Holding Atticus, B.V.
Holding company
Netherlands
EUR
\u2014
100%
Telef\u00f3nica
Latinoam\u00e9rica Holding,
S.L.U.
Telef\u00f3nica Soluciones de Criptograf\u00eda, S.A.U.
Engineering, research and development
Spain
EUR
1
100%
Telef\u00f3nica, S.A.
Cryptography & Security Systems S.L.U.
Software programming activities
Spain
EUR
\u2014
100%
Telef\u00f3nica Soluciones
de Criptograf\u00eda, S.A.U.
Telef\u00f3nica Centroam\u00e9rica Inversiones ,S.L.
Communications services provider
Spain
EUR
\u2014
60%
Telef\u00f3nica, S.A.
Telef\u00f3nica Tech S.L.U.
Holding company
Spain
EUR
67
100%
Telef\u00f3nica, S.A.
Telef\u00f3nica Cybersecurity & Cloud Tech S.L.U.
Cybersecurity, electronic information security and IT
consultancy
Spain
EUR
34
100%
Telef\u00f3nica Tech S.L.U.
Telef\u00f3nica Cybersecurity & Cloud Tech Chile SpA.
Cybersecurity, electronic information security and IT
consulting
Chile
CLP
20,540
100%
Telef\u00f3nica
Cybersecurity & Cloud
Tech S.L.U.
Telef\u00f3nica Tech Inc.
Cybersecurity, electronic information security and IT
consulting
USA
USD
7
100%
Telef\u00f3nica
Cybersecurity & Cloud
Tech S.L.U.
Audertis Audit Services S.L.U.
Provision of audit services in the areas of security,
privacy and data protection
Spain
EUR
\u2014
100%
Telef\u00f3nica
Cybersecurity & Cloud
Tech S.L.U.
Govertis Advisory Services S.L.U.
Cybersecurity, electronic information security and IT
consulting
Spain
EUR
\u2014
100%
Telef\u00f3nica
Cybersecurity & Cloud
Tech S.L.U.
Telefonica Tech Colombia, SAS
Cybersecurity, electronic information security and IT
consulting
Colombia
COP
406
100%
Telef\u00f3nica
Cybersecurity & Cloud
Tech S.L.U.
Telefonica Cybersecurity Tech Mexico, S.A de C.V.
Cybersecurity, electronic information security and IT
consulting
Mexico
MXN
80
100%
Telef\u00f3nica
Cybersecurity & Cloud
Tech S.L.U. (60.47%)
Telefonica Iot & Big
Data Tech S.A. (39.53%)
Telef\u00f4nica Ciberseguran\u00e7a e Tecnolog\u00eda do Brasil Ltda
Cybersecurity, electronic information security and IT
consulting
Brazil
BRL
26
100%
Telef\u00f3nica
Cybersecurity & Cloud
Tech S.L.U.
Telef\u00f3nica Tech Per\u00fa S.A.C.
Cybersecurity, electronic information security and IT
consulting
Peru
PEN
30
100%
Telef\u00f3nica Tech S.L.U.
Telef\u00f3nica Cybersecurity & Cloud Tech Deutschland
GmbH
Cybersecurity, electronic information security and IT
consulting
Germany
EUR
\u2014
100%
Telef\u00f3nica
Cybersecurity & Cloud
Tech S.L.U.
Acens Technologies, S.L.U.
Holding housing and telecommunications solutions
Service provider
Spain
EUR
2
100%
Telef\u00f3nica
Cybersecurity & Cloud
Tech S.L.U.
Altostratus Solutions, S.L.U.
Provision of IT services
Spain
EUR
\u2014
100%
Telef\u00f3nica
Cybersecurity & Cloud
Tech S.L.U.
Telef\u00f3nica Tech UK & Ireland, Limited
Holding company
United
Kingdom
GBP
14
100%
Telef\u00f3nica
Cybersecurity & Cloud
Tech S.L.U.
Telef\u00f3nica Tech UK Holdings Limited
Holding company
United
Kingdom
GBP
\u2014
100%
Telef\u00f3nica Tech UK &
Ireland, Limited
Name and corporate purpose
Country
Currency
Capital
%Telef\u00f3nica
Group
Holding Company
Other companies (cont.)
Telef\u00f3nica Tech UK TOG Limited\u00a0
Headquarters activities
United
Kingdom
GBP
\u2014
100%
Telef\u00f3nica Tech UK
Holdings Limited
Telef\u00f3nica Tech UK Managed Services Limited
Information technology, management and IT services
consultancy
United
Kingdom
GBP
\u2014
100%
Telef\u00f3nica Tech UK
TOG Limited
Telef\u00f3nica Tech UK Limited
Information technology, management and IT services
consultancy
United
Kingdom
GBP
\u2014
100%
Telef\u00f3nica Tech UK
TOG Limited
Telef\u00f3nica Tech Northern Ireland Holdings Limited
Other computer service activities
United
Kingdom
GBP
\u2014
100%
Telef\u00f3nica Tech UK &
Ireland, Limited
Telef\u00f3nica Tech Communication & Collaboration
Limited
Other computer service activities
United
Kingdom
GBP
\u2014
100%
Telef\u00f3nica Tech
Northern Ireland
Holdings Limited
Telef\u00f3nica Tech Northern Ireland Limited
Other computer service activities
United
Kingdom
GBP
\u2014
100%
Telef\u00f3nica Tech
Northern Ireland
Holdings Limited\u00a0
Telef\u00f3nica Tech Ireland Limited
Provision of IT services
Ireland
EUR
\u2014
100%
Telef\u00f3nica Tech
Northern Ireland
Holdings Limited
Telef\u00f3nica Tech Ocean Limited
Holding company
United
Kingdom
GBP
\u2014
100%
Telef\u00f3nica Tech UK &
Ireland, Limited.
Perpetual Topco Limited
Holding company
United
Kingdom
GBP
4
100%
Telef\u00f3nica Tech UK &
Ireland Limited
Perpetual Midco Limited
Holding company
United
Kingdom
GBP
4
100%
Perpetual Topco
Limited
Perpetual Bidco Limited
Holding company
United
Kingdom
GBP
3
100%
Perpetual Midco
Limited
Incremental Group Holdings Limited
Holding company
United
Kingdom
GBP
1
100%
Perpetual Bidco
Limited
Redspire Limited
Software development and information technology
consultancy activities
United
Kingdom
GBP
\u2014
100%
Incremental Group
Holdings Limited
Telef\u00f3nica Tech UK Business Applications Limited
Information technology consultancy activities and
other services
United
Kingdom
GBP
\u2014
100%
Incremental Group
Holdings Limited
Adatis Group Limited
Holding company
United
Kingdom
GBP
\u2014
100%
Incremental Group
Holdings Limited
Telef\u00f3nica Tech UK Data & AI Limited
Information technology consultancy activities
United
Kingdom
GBP
\u2014
100%
Adatis Group Limited
Telef\u00f3nica Tech Bulgaria Limited
Information technology consultancy activities
Bulgaria
BGN
\u2014
100%
Telef\u00f3nica Tech UK
Data & AI Limited
Telef\u00f3nica Tech India Private Limited
Information technology consultancy activities
India
INR
\u2014
100%
Telef\u00f3nica Tech UK &
Ireland, Limited
(99.99%)
Telef\u00f3nica Tech UK
Limited (0.01%)
Telef\u00f3nica Tech UK Data & AI MS Limited\u00a0
Information technology consultancy activities
United
Kingdom
GBP
\u2014
100%
Adatis Group Limited
BE-terna Enhancement GmbH
Holding company and provision of marketing,
consultancy, implementation and commercialisation
services for software and IT technologies
Germany
EUR
\u2014
100%
Telef\u00f3nica
Cybersecurity & Cloud
Tech S.L.U.
BE-terna\u00a0Germany GmbH
Holding company
Germany
EUR
\u2014
100%
BE-terna\u00a0Enhancement
GmbH
BE-terna AB (Sweden)
Technology services
Sweden
SEK
\u2014
100%
BE-terna\u00a0Enhancement
GmbH
Name and corporate purpose
Country
Currency
Capital
%Telef\u00f3nica
Group
Holding Company
Other companies (cont.)
BE-terna Automation AG
Technology services
Switzerland
CHF
\u2014
100%
BE-terna\u00a0Enhancement
GmbH
BE-terna ApS
Computer programming activities
Denmark
DKK
\u2014
100%
BE-terna\u00a0Enhancement
GmbH
BE-terna B.V. (Netherlands)
Technology services
Netherlands
EUR
\u2014
100%
BE-terna ApS
BE-terna\u00a0GmbH (Leipzig)
Software production, electronic data processing,
consultancy, services and project management
Germany
EUR
\u2014
100%
BE-terna\u00a0Germany
GmbH
BE-terna\u00a0Austria GmbH
Holding company
Austria
EUR
\u2014
100%
BE-terna\u00a0Enhancement
GmbH
BE-terna\u00a0GmbH (Innsbruck)
Services in automatic data processing and information
technology
Austria
EUR
\u2014
100%
BE-terna\u00a0Austria GmbH
Pipol A/S
Conduct business with international implementation of
business-oriented software solutions
Denmark
DKK
1
100%
BE-terna\u00a0Enhancement
GmbH
BE-terna\u00a0A/S (Norway)
Computer programming activities
Norway
NOK
\u2014
100%
BE-terna\u00a0Enhancement
GmbH
BE-terna\u00a0Business Solutions GmbH
Software development and consulting, distribution of
corresponding products, systems and processes
Germany
EUR
\u2014
100%
BE-terna\u00a0GmbH
(Innsbruck)
BE-terna\u00a0Industry Solutions GmbH
Sales, implementation and maintenance of
international ERP products
Germany
EUR
\u2014
100%
BE-terna\u00a0GmbH
(Innsbruck)
BE-terna\u00a0AG (Switzerland)
Service provision, analysis and optimisation of business
processes, selection of business software and
implementation of ERP solutions
Switzerland
CHF
\u2014
100%
BE-terna\u00a0GmbH
(Innsbruck)
BE-terna\u00a0SRL
Services in automatic data processing and information
technology
Italy
EUR
\u2014
100%
BE-terna\u00a0GmbH
(Innsbruck)
BE-terna\u00a0Adriatic d.o.o
Holding company
Slovenia
EUR
\u2014
100%
BE-terna\u00a0Austria GmbH
BE-terna d.o.o. (Serbia)
Technology services
Serbia
RSD
14
100%
BE-terna\u00a0Adriatic d.o.o
BE-terna\u00a0d.o.o (Slovenia)
Technology services
Slovenia
EUR
\u2014
100%
BE-terna\u00a0Adriatic d.o.o
BE-terna\u00a0d.o.o (Croatia)
Technology services
Croatia
EUR
2
100%
BE-terna\u00a0Adriatic d.o.o
Telxius Telecom, S.A.
Telecommunications service provider
Spain
EUR
260
70%
Telef\u00f3nica, S.A.
Telxius Cable Am\u00e9rica, S.A.
Provision of high bandwidth communications services
Uruguay
USD
291
70%
Telxius Telecom, S.A.
Telxius Cable Espa\u00f1a, S.L.U.
Establishment and operation of any kind of
communications infrastructure and/or network
Spain
EUR
5
70%
Telxius Telecom, S.A.
Telxius Cable Rep\u00fablica Dominicana, S.A.S.
Telecommunications service provider
Dominican
Republic
USD
6
70%
Telxius Cable Am\u00e9rica,
S.A. (69.30%)
Telxius Cable Espa\u00f1a,
S.L.U. (0.70%)
Telxius Cable Argentina, S.A.
Operation and deployment of telecommunications
infraestructure
Argentina
USD
78
70%
Telxius Cable Am\u00e9rica,
S.A. (66.50%)
Telxius Cable Espa\u00f1a,
S.L.U. (3.50%)
Telxius Cable Panam\u00e1, S.A.
Installation and operation of telecommunications
networks for wholesalers
Panama
USD
10
70%
Telxius Cable Am\u00e9rica,
S.A.
Name and corporate purpose
Country
Currency
Capital
%Telef\u00f3nica
Group
Holding Company
Other companies (cont.)
Telxius Cable Puerto Rico, Inc.
High capacity optical fibre network communications
services
Puerto Rico
USD
14
70%
Telxius Cable Am\u00e9rica,
S.A.
Telxius Cable USA, Inc.
High bandwidth communications services
USA
USD
58
70%
Telxius Telecom, S.A.
Telxius Cable Ecuador, S.A.
Sale of usage of data transmission capacity via an
underwater optical fibre network
Ecuador
USD
5
70%
Telxius Cable Am\u00e9rica,
S.A.
Telxius Cable Chile, S.A.
Involvement in businesses related to public or private
telecommunications services
Chile
USD
26
70%
Telxius Cable Am\u00e9rica,
S.A.
Telxius Cable Guatemala, S.A.
Installation and operation of telecommunications
networks for wholesalers
Guatemala
USD
20
70%
Telxius Cable Am\u00e9rica,
S.A.
Telxius Cable Per\u00fa, S.A.C.
Involvement in the operation and deployment of
international telecommunications services via
underwater cables and others means
Peru
USD
20
70%
Telxius Cable Am\u00e9rica,
S.A.
Telxius Cable Colombia, S.A.
Supply of data transmission capacity via underwater
cable system
Colombia
USD
4
70%
Telxius Cable Am\u00e9rica,
S.A. (66.49%)
Telxius Cable Chile, S.A.
(1.17%)
Telxius Cable Per\u00fa,
S.A.C. (1.17%)
Telxius Cable
Guatemala, S.A. (1.16%)
Telxius Cable
Argentina, S.A. (0.01%)
Telxius Cable Brasil Participa\u00e7oes, Ltda.
Holding company
Brazil
USD
62
70%
Telxius Cable Am\u00e9rica,
S.A.
Telxius Cable Brasil, Ltda.
Operation and deployment of telecommunications
infrastructures
Brazil
USD
74
70%
Telxius Cable Brasil
Participa\u00e7oes, Ltda.
Telxius Cable Bolivia, S.A.
Establishment and operation of any kind of
communications infrastructure and/or network
Bolivia
USD
2
70%
Telxius Cable Am\u00e9rica,
S.A. (68.9%)
Telxius Cable Espa\u00f1a,
S.L.U. (0.55%)
Telxius Cable
Argentina, S.A. (0.55%)
Telxius M\u00e9xico, S.R.L. DE C.V
Establishment and operation of any kind of
communications infrastructure and/or network
Mexico
USD
\u2014
70%
Telxius Cable Am\u00e9rica,
S.A. (69.98%)
Telxius Cable Espa\u00f1a,
S.L.U. (0.02%)
Telef\u00f3nica Local Services GmbH
Holding company
Germany
EUR
\u2014
100%
Telef\u00f3nica, S.A.
Companies accounted for using the equity method
VMED O2 UK Limited
Integrated provider of fixed and mobile services
United
Kingdom
GBP
\u2014
50%
Telef\u00f3nica O2 Holdings\u00a0
Limited
FiBrasil Infraestrutura e Fibra \u00d3tica S.A.
Fibre wholesale supplier
Brazil
BRL
189
44.12%
Telef\u00f4nica Brasil, S.A.
(19.12%)
Telef\u00f3nica Infra S.L.U.
(25%)
VivaE Educa\u00e7\u00e3o Digital S.A.
Training for professional and management
development
Brazil
BRL
33
38.24%
Telef\u00f4nica Brasil, S.A.
Gud Comercializadora de Energia S.A.
Energy trading company
Brazil
BRL
21
38.24%
Telef\u00f4nica Brasil, S.A.
HoldCo InfraCo SpA
Investment in money and/or securities
Chile
CLP
135,534
39.76%
Telef\u00f3nica Chile, S.A.
Name and corporate purpose
Country
Currency
Capital
%Telef\u00f3nica
Group
Holding Company
Companies accounted for using the equity method
(cont.)
Infraco SpA.
Operation of physical fibre optic infrastructure
Chile
CLP
246,002
39.76%
HoldCo InfraCo SpA
Telef\u00f3nica Factoring Espa\u00f1a, S.A.
Factoring services provider
Spain
EUR
5
50.00%
Telef\u00f3nica, S.A.
Telef\u00f3nica Factoring Do Brasil, Ltda.
Factoring services provider
Brazil
BRL
5
50%
Telef\u00f3nica, S.A. (40%)
Telef\u00f3nica Factoring
Espa\u00f1a, S.A. (10%)
Telef\u00f3nica Factoring Mexico, S.A. de C.V. SOFOM ENR
Factoring services provider
Mexico
MXN
\u2014
50%
Telef\u00f3nica, S.A.
(40.50%)
Telef\u00f3nica Factoring
Espa\u00f1a, S.A. (9.50%)
Telef\u00f3nica Factoring Per\u00fa, S.A.C.
Factoring services provider
Peru
PEN
6
50%
Telef\u00f3nica, S.A.
(40.50%)
Telef\u00f3nica Factoring
Espa\u00f1a, S.A. (9.50%)
Telef\u00f3nica Factoring Colombia, S.A.
Factoring services provider
Colombia
COP
4,000
50%
Telef\u00f3nica, S.A.
(40.50%)
Telef\u00f3nica Factoring
Espa\u00f1a, S.A. (9.50%)
Telef\u00f3nica Factoring Chile, SpA.
Factoring services provider
Chile
CLP
547
50%
Telef\u00f3nica Factoring
Espa\u00f1a, S.A.
Telef\u00f3nica Consumer Finance, Establecimiento
Financiero de Cr\u00e9dito, S.A.
Specialised credit institution
Spain
EUR
5
50%
Telef\u00f3nica, S.A.
Movistar Consumer Finance Colombia SAS.
Specialised credit institution
Colombia
COP
6,000
50%
Telef\u00f3nica Innovaci\u00f3n
Digital, S.L.U.
Alamo Holdco S.L.
Holding company
Spain
EUR
\u2014
27%
Colombia
Telecomunicaciones
S.A. ESP BIC\u00a0
ONNET Fibra Colombia S.A.S.
Fibre wholesale supplier
Colombia
COP
56,307
27%
Alamo Holdco S.L.
Internet para todos S.A.C
Telecommunications service provider
Peru
PEN
364
54.30%
Telef\u00f3nica del Per\u00fa,
S.A.A.
Movistar Prosegur Alarmas, S.L.
Private security services
Spain
EUR
\u2014
50%
Telef\u00f3nica Espa\u00f1a
Filiales, S.A.U.
Prosegur Soluciones S.A.U.
Private security services
Spain
EUR
\u2014
50%
Movistar Prosegur
Alarmas, S.L.
Buend\u00eda Estudios, S.L.
Service provision related to film and video production
activities
Spain
EUR
\u2014
50%
Telef\u00f3nica\u00a0 Audiovisual
Digital, S.L.U.
Buend\u00eda Estudios Uno, S.L.U.
Service provision related to film and video production
activities
Spain
EUR
\u2014
50%
Buend\u00eda Estudios, S.L.
Buend\u00eda Estudios Dos, S.L.U.
Service provision related to film and video production
activities
Spain
EUR
\u2014
50%
Buend\u00eda Estudios, S.L.
Buend\u00eda Estudios Canarias, S.L.U
Service provision related to film and video production
activities
Spain
EUR
\u2014
50%
Buend\u00eda Estudios, S.L.
Buend\u00eda Estudios Bizkaia, S.L.U.
Service provision related to film and video production
activities
Spain
EUR
\u2014
50%
Buend\u00eda Estudios, S.L.
Solar360 de Repsol y Movistar S.L.
Development and marketing of photovoltaic self-
consumption products and/or services
Spain
EUR
\u2014
50%
Telef\u00f3nica de Espa\u00f1a,
S.A.U.
Name and corporate purpose
Country
Currency
Capital
%Telef\u00f3nica
Group
Holding Company
Companies accounted for using the equity method
(cont.)
UGG TopCo/HoldCo General Partner GmbH.
Holding company
Germany
EUR
\u2014
49.68%
Telef\u00f3nica Infra
Germany GmbH. (40%)
Telef\u00f3nica Germany 1.
Beteiligungsgesellschaf
t mbH. (9,68%)
UGG TopCo GmbH & Co KG
Holding company
Germany
EUR
\u2014
49.68%
Telef\u00f3nica Infra
Germany GmbH. (40%)
Telef\u00f3nica Germany 1.
Beteiligungsgesellschaf
t mbH. (9.68%)
UGG HoldCo GmbH& Co KG
Holding company
Germany
EUR
\u2014
49.68%
UGG TopCo GmbH &
Co KG
UGG General Partner GmbH
Holding company
Germany
EUR
\u2014
49.68%
UGG HoldCo GmbH&
Co KG
Unsere Gr\u00fcne Glasfaser GmbH & Co KG
Broadband telecommunications operator
Germany
EUR
\u2014
49.68%
UGG HoldCo GmbH&
Co KG
Infrafibre Germany GmbH
B2B technology industry
Germany
EUR
2
49.68%
Unsere Gr\u00fcne Glasfaser
GmbH & Co KG
Daytona Midco S.L.
Securities transactions
Spain
EUR
\u2014
20%
Telef\u00f3nica Infra,\u00a0 S.L.U.\u00a0
Digital Data Centre BidCo, SLU.
Management and administration of equity securities
Spain
EUR
4
20%
Daytona Midco S.L.
Telef\u00f3nica Renting, S.A.
Purchase, sale and leasing of all kinds of movable
property and provision of services ancillary to the
leasing thereof
Spain
EUR
1
50%
Telef\u00f3nica, S.A.
Opal Holdco Limited
Holding company
United
Kingdom
GBP
2
50%
Telef\u00f3nica Infra, S.L.U.
Opal Jvco Limited
Holding company
United
Kingdom
GBP
4
25%
Opal Holdco Limited
Utiq, S.A.
Technology solutions for digital advertising
Belgium
EUR
22
25%
Telef\u00f3nica Innovaci\u00f3n
Digital, S.L.U.
Main changes in the scope of consolidation for the year 2024
Acquisition of new companies
Companies/Segment/Subsidiaries
Country
Date of
inclusion
% Acquisition
Telef\u00f3nica Brazil
IPNET Servi\u00e7os em Nuvem e Desenvolvimento de Sistemas Ltda
Software and systems resale, professional services and project management
Brazil
06/30/2024
88.24%
IPNET USA, LLC
Software and systems resale, professional services and project management
USA
06/30/2024
88.24%
Companies accounted for using the equity method
Infrafibre Germany GmbH
B2B technology industry
Germany
12/31/2024
49.68%
Incorporation of companies
Companies/Segment/Subsidiaries
Country
Date of
incorporation
% Acquisition
Telef\u00f3nica Spain
Compa\u00f1\u00eda Mayorista de Fibra S.L.
Provision of telecommunications services through FTTH network operation
Spain
10/31/2024
100%
Telef\u00f3nica Hispam
Unired Colombia S.A.S
Service provider related to telecommunications
Colombia
08/31/2024
33.75%
Companies accounted for using the equity method
Gud Comercializadora de Energia S.A.
Energy trading company
Brazil
02/29/2024
38.24%
Merged companies
Companies/Segment/Subsidiaries
Country
Date
Surviving
company
Telef\u00f3nica Hispam
Telef\u00f3nica de Argentina, S.A.
Telecommunications service provider
Argentina
03/31/2024
Telef\u00f3nica
M\u00f3viles
Argentina, S.A.
Other companies
BE-terna Acceleration GmbH
Holding company
Germany
08/31/2024
BE-terna
Enhancement
GmbH (before
BE-terna
Acceleration
Holding GmbH)
BE-terna\u00a0Enhancement GmbH
Holding company
Germany
08/31/2024
BE-terna
Enhancement
GmbH (before
BE-terna
Acceleration
Holding GmbH)
Liquidated companies
Companies/Segment/Subsidiaries
Country
Deconsolidation date
% Shareholding
Telef\u00f3nica Spain
TBSC Barcelona Producciones, S.L.U.
Provision of audiovisual telecommunications services
Spain
12/31/2024
100%
Other companies
O2 International Holdings Ltd.
Holding company
United
Kingdom
07/31/2024
100%
Terra Networks Per\u00fa, S.A.
ISP and portal
Peru
10/31/2024
100%
Companies accounted for using the equity method
Mobile Financial Services Holding SPRL
Financial services
Belgium
06/30/2024
50%
Divestment companies
Companies/Segment/Subsidiaries
Country
Deconsolidation date
% Sold
Companies accounted for using the equity method
Cornerstone Telecommunications Infrastructure Limited
Mobile phone towers
United
Kingdom
12/31/2024
4.17%
Main changes in the scope of consolidation for the year 2023
Acquisition of new companies
Companies/Segment/Subsidiaries
Country
Date of
inclusion
% Acquisition
Telef\u00f3nica Brazil
Vale Sa\u00fade, Administradora de Cart\u00f5es Ltda.
Provision of health services
Brazil
03/31/2023
75.29%
Other companies
Telxius Telecom, S.A.
Telecommunications service provider
Spain
01/31/2023
40%
Cryptography & Security Systems S.L.U.
Software programming activities
Spain
01/31/2023
100%
Telef\u00f3nica Local Services GmbH
Holding company
Germany
10/31/2023
100%
Incorporation of companies
Companies/Segment/Subsidiaries
Country
Date of
incorporation
% Acquisition
Other companies
BE-terna\u00a0SRL
Services in automatic data processing and information technology
Italy
04/30/2023
100%
Telxius M\u00e9xico, S.R.L. DE C.V
Establishment and operation of any kind of communications infrastructure and/or
network
Mexico
11/30/2023
70%
Companies accounted for using the equity method
Utiq, S.A.
Technology solutions for digital advertising
Belgium
03/31/2023
25%
Merged companies
Companies/Segment/Subsidiaries
Country
Date
Surviving
company
Telef\u00f3nica Brazil
Garliava RJ Infraestrutura e Redes de Telecomunicacoes S.A.
Wireline telephony operator
Brazil
02/28/2023
Telef\u00f4nica
Brasil, S.A.
Vita IT Com\u00e9rcio e Servi\u00e7os de Solu\u00e7\u00f5es em TI Ltda.
Technical support, maintenance and other IT services
Brazil
11/30/2023
Telef\u00f4nica
Infraestructura
e Seguran\u00e7a
Ltda.
Other companies
Pontel Participaciones, S.L.
Holding company
Spain
03/31/2023
Telxius
Telecom, S.A.
Tempotel, Empresa de Trabajo Temporal, S.A.U.
Temporary employment agency
Spain
10/31/2023
Telef\u00f3nica
Gesti\u00f3n Integral
de Edificios y
Servicios S.L.U.
Telef\u00f3nica Investigaci\u00f3n y Desarrollo, S.A.U.
Telecommunications research activities and projects
Spain
10/31/2023
Telef\u00f3nica
Innovaci\u00f3n
Digital, S.L.U.
Companies accounted for using the equity method
Buend\u00eda Producci\u00f3n, S.L.
Service provision related to film and video production activities
Spain
10/31/2023
Buend\u00eda
Estudios, S.L.
Divestment companies
Companies/Segment/Subsidiaries
Country
Deconsolidation date
% Sold
Other companies
Pontel Participaciones, S.L.
Holding company
Spain
01/31/2023
13.35%
Companies accounted for using the equity method
The Smart Steps Data Technology Company
Big data services in China
China
05/31/2023
33.75%
Cornerstone Telecommunications Infrastructure Limited
Mobile phone towers
United
Kingdom
11/30/2023
8.33%
Liquidated companies
Companies/Segment/Subsidiaries
Country
Deconsolidation date
% Shareholding
Other companies
Kumo Analytics Limited
Information technology consultancy activities
United
Kingdom
01/31/2023
100%
iHackLabs Ltd.
Cybersecurity, electronic information security and IT consulting
United
Kingdom
09/30/2023
100%
O2 (Netherlands ) Holdings BV.
Holding company
Netherlands
11/30/2023
100%
Telfin Ireland DAC.
Intragroup financing
Ireland
11/30/2023
100%
", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInSubsidiariesExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f-927": { "value": "
Appendix VI: Key regulatory
issues and concessions and
licenses held by the Telef\u00f3nica
Group
Regulations
As a digital telecommunications operator, the Telef\u00f3nica
Group is subject to sector-specific telecommunications
regulations, general competition law and a variety of
other regulations, including privacy and security, which
can have a direct and material effect on the Group\u2019s
business areas. The extent to which telecommunications
regulations apply to the Telef\u00f3nica Group depends
largely on the nature of its activities in a particular
country, with traditional fixed telephony services and
fixed broadband usually subject to stricter regulations.
In order to provide services and operate its networks and
to use spectrum, the Telef\u00f3nica Group must obtain
general authorizations, concessions and/or licenses from
the pertinent authorities in each country in which the
Group operates (hereinafter referred to as national
regulatory authorities or NRAs). The Group is also
required to obtain radio frequency licenses for its mobile
operations.
This section describes the legislative framework and the
recent legislative key developments in the most relevant
countries and regions in which the Group has significant
interests. Many of the legislative changes and the
adoption of regulatory measures by sector-specific
regulators which are described in this section are in the
process of being adopted and, therefore, have not yet
concluded.
Electronic Communication Regulation in the
European Union
By Directive (EU) 2018/1972, of December 11, 2018, the
European Code of Electronic Communications (EECC in
its acronym in English) was approved by the European
Parliament and the Council.
The Code includes measures to stimulate investment on
very high capacity network (VHCN), modernization of the
provisions of the Universal Service and certain changes
in the regulation of services with the aim of balancing
the supply conditions (Level Playing Field) between
telecom operators and OTTs. In addition, some
improvements are included for the coordination of
spectrum management processes throughout the EU as
well as a harmonization of licenses duration up to at least
20 years.
The Commission will review the operation of this
Directive and send a report to the European Parliament
and the Council by December 21, 2025.
In accordance with the provisions of the EECC, the
Relevant Market Recommendation (RMR) adopted in
December 2020, identifies the relevant markets within
the electronic communication sector that are
susceptible of ex ante regulation by the NRAs. The NRAs
should assess the competitive conditions of these
markets and where appropriate, designate operators as
having significant market power (SMP) and impose
obligations. The markets susceptible to ex ante
regulation were reduced from 4 to 2: wholesale local
access provided at a fixed location market (m1) and
wholesale dedicated capacity market (m2).
Nevertheless, NRAs are still able to analyze any other
market that according to national circumstances might
deemed to be uncompetitive.
In relation to the maximum cap at European level for
both fixed and mobile termination rates (FTRs/MTRs),
since the adoption of a Delegated Act, by the EC, on
December 18, 2020, the maximum rates applicable are
those included in the correspondent glide paths per
country, with the aim of converging to 0.2 euro cents per
minute for mobile termination and to 0.07 euro cents per
minute in the case of fixed rates as of January 1, 2024.
The Commission, in consultation with BEREC, will review
the Delegated Act by December 2025 and review
whether EU \u2013 wide tariffs are still necessary. If EU \u2013 wide
tariffs are no longer necessary, NRAs will be able to carry
out their own market analysis.
Additionally, the European Council has approved the
Recovery and Resilience Mechanism (RRM), with
European funds of 750 billion euros until 2025 as a
central pillar of the European Digital Transformation (at
least 20% of funds devoted to digitalization) initiatives
which can receive support to advance connectivity and
the digitalization of society.
Telecom Single Market\u00a0
EU Regulation 2015/2120 of the EP and of the Council of
November 25, 2015, lays down measures basically
concerning open Internet access (Net Neutrality) and
roaming on public mobile communications networks
within the Union.
\u2022 Roaming: On April 13, 2022, the new Regulation on
international roaming in the European Union was
published in the Official Journal of the EU and being
directly binding for Member States as it entered into
force on July 1, 2022. From this date the new regulation
maintains \u201cRoaming like at Home\u201d and includes a price
cap glide path for maximum wholesale rates for voice,
data and SMS. This reviewed regulation also includes
new provisions on transparency and Quality of
services. This regulation is set to expire in 2032,
though it is foreseen review in 2025 to assess market
evolution. For this 2025 review, the EC started a
process to analyze wholesale roaming costs together
with the Euro rate for mobile termination (MTRs). By
June 30, 2025, the Commission shall, after consulting
the Body of European Regulators for Electronic
Communications\u00a0 (BEREC), submit a report to the
European Parliament and the Council, followed, if
appropriate, by a legislative proposal to amend the
Regulation. \u00a0
\u2022 Net Neutrality: Under the principle of network
neutrality applicable to Internet access services area,
network operators are not permitted to establish
technical or commercial restrictions regarding the
devices that can be connected or the services, or
applications and contents that can be accessed or
distributed through the Internet by the end user. It also
refers to the non-discriminatory behavior (e.g. non-
anticompetitive) to be adopted by operators regarding
the different types of Internet traffic circulating
through their networks.
BEREC has updated the Guidelines on the
Implementation of the Open Internet Regulation.
Reviewed guidelines prohibit non application agnostic
price differentiation, resulting in near prohibition of zero
rating and sponsored data commercial practices.
Telefonica does not expect a commercial impact in
current portfolio of services.
On April 30, 2023, the EC submitted a report assessing
the regulatory implementation of the OIR to the
European Parliament and to the Council thereon. The EC
concluded the principle based Open Internet Regulation
remains relevant and fit for purpose, proposing to keep
OIR unchanged. The EC shall deliver a new assessment
report in four years\u2019 time, by April 30, 2027, including,
needed be, appropriate proposals to amend the
Regulation.\u00a0
Digital Single Market\u00a0
Among the most relevant regulatory initiatives we can
find the following:\u00a0
\u2022 Content Package:\u00a0
\u25e6 On November 28, 2018, the audiovisual Directive
(AVMS) was published in the Official Journal of the
European Union. The text came into force on
December 19, and had to be transposed into national
law in the EU member States by September 19,
2020. Among the main novelties of the regulation, it
includes greater protection of children, limits on
advertising and boost to European production. Rules
will apply to television channel and also to video-on-
demand platforms and distribution of videos, as well
as to live broadcasts on these platforms. In particular
video sharing platforms will be obliged to reserve at
least 30% of European production in their video
catalogs on demand. In addition, Member States
may impose financing obligations to providers of
VOD services established in another Member State
but offering services in their countries.
\u25e6 The Geo-Blocking Regulation forbids any
unjustified geographically-based restrictions which
undermine online shopping and cross-border sales.
Audiovisual\u00a0 services are excluded from the scope of
the Regulation and territorial licenses and legitimate
geo-blocking practices are considered justified
protection tools for the European audiovisual
industry. On December 13, 2023, European
Parliament adopted a Resolution on the
implementation of the 2018 Geo-blocking Regulation
in the Digital Single Market, maintaining that the
eventual inclusion of audiovisual services in the
scope of the Geo-blocking Regulation would result
in a significant loss of revenue, putting investment in
new content at risk, while eroding contractual
freedom and reducing cultural diversity in content
production, distribution, promotion and exhibition.
European Commission will present its Second
Implementation Report on the application of the
Regulation and its overall impact on the Internal
Market in 2025. \u00a0 \u00a0
\u25e6 European Commission issued a Recommendation
on combating online piracy of live content on
May 4, 2023 . The Recommendation acknowledges
that sports and other live events such as concerts
contribute to a diverse European cultural scene and
to economic growth and job creation in the EU. The
Recommendation proposes some measures (1) to
ensure prompt treatment of notices related to
unauthorized retransmissions of live sports events
during the transmission in order to minimize the
harms caused by the illegal streaming, (2)\u00a0 to
encourage the use of dynamic blocking injunctions
tailored to live events based on successful
experiences in some Member States and (3) to
enhance cooperation amongst competent
authorities in the fight against piracy, including
cross-border cooperation. The Recommendation
also sets up a monitoring system by which European
Commission and European Observatory on
Infringements of Intellectual Property Rights (EUIPO
Observatory) will assess the impact of the
recommended measures by November 17, 2025 and
decide whether additional legislative measures are
necessary in view of technological developments.
\u2022 Regulations on the Digital Services and the
Digital Markets:
The Digital Services Act 2022/2065 of October 19,
2022 and the Digital Markets Act 2022/1925 of
September 14, 2022 were adopted and published in
the Official Journal of the EU.
In relation to the new Digital Services regulation,
obligations will apply throughout the EU to all digital
services that connect consumers to goods, services or
content, such as:
\u2022 Rules on the removal of illegal goods, services or
content online.
\u2022 Safeguards for users whose contents have been
removed by error by the platforms.
\u2022 Obligation for the platforms to adopt measures to
avoid the abuse of their systems.
\u2022 Transparency measures with a wide scope.
\u2022 New powers to control the operation of the platforms.
\u2022 New rules on the traceability of companies in online
markets.
\u2022 Cooperation process between authorities to ensure
compliance and adoption of measures.
In February 2024, the obligations established for
intermediary providers came into force.
In November 2024, the European Commission
adopted an implementing act setting out the
rules and templates for transparency reporting
to ensure that all relevant providers provide
clear and comparable information on their
content moderation practices. Providers will
have to start collecting data from July 2025,
with the first harmonized reports to be
published in 2026.
For its part, the Digital Markets regulation, is in force
since May 2, 2023, and its main goal is preventing the
so called \u201cgatekeepers\u201d from imposing unfair
conditions on end users and at ensuring the openness
of important digital services, its main provisions are:
\u2022 It will only apply to the main platform providers more
prone to incur in unfair practices and ensuring
contestability in a set of core platform services.
\u2022 It establishes quantitative thresholds for the
designation of \"gate keepers\".
\u2022 It requires \"gate keepers\" to take action in a proactive
manner.
\u2022 The regulation foresees mechanisms for the
Commission to designate new \"gatekeepers\" below
the thresholds; to add new services and obligations;
and to impose structural or behavioral remedies for
systematic non-compliance through a market
investigation.
\u2022 The EC can impose fines of up to 10%of the company's
total worldwide annual turnover or 20% in the event of
repeated infringements.
Artificial Intelligence Act.
Regulation (EU) 2024/1689 on AI entered into force on
August 1, 2024, and will be fully applicable two years
later, with some exceptions: prohibitions will enter into
force after six months, governance rules and obligations
for general purpose AI models will apply after twelve
months, and rules for AI systems- embedded in
regulated products- will apply after 36 months. To ease
the transition to the new regulatory framework, the
Commission has launched the AI Pact, a voluntary
initiative that aims to support future implementation and
invites developers to comply with the key obligations of
the AI Act in advance. Telef\u00f3nica has signed the
European Pact.
The AI regulation is based on a risk-based approach. The
higher the risk of the AI system, the stricter the
obligations. There are even use cases that are directly
prohibited. For systems that are classified as high-risk
and predefined as such in the Law, some obligations are
stablished called the \u201cminimum requirements\u201d that have
to be complied before putting the system into the
market and once the system is being commercialized.
For other AI systems, which are not classified as high
risk, voluntary measures apply. Different types of actors
are distinguished in the value chain: AI system suppliers,
importers/distributors and system users, each with
different responsibilities. The most onerous obligations
are imposed on the IA providers.
Providers of generative AI must maintain the technical
documentation of the model, provide information to
other providers who integrate the model, respect EU
copyright law and publish a detailed summary of the
content used for training, and cooperate with the
Commission and national authorities. Providers of
models with systemic risk are also required to conduct
assessments according to standardized protocols,
assess and mitigate systemic risk at EU level, maintain
serious incident reports, conduct adversarial testing and
ensure an adequate level of cyber protection. The
development of codes of conduct at EU level is
encouraged and facilitated to contribute to the proper
implementation of the regulation.
In September 2024, Telef\u00f3nica signed the AI Pact,
committing to start applying the principles of the AI Act
ahead of its entry into application, namely 3 core actions:
(1) having an AI governance strategy to foster AI uptake,
(2) mapping high-risk AI systems and (3) promoting AI
literacy and awareness among employees.
Telef\u00f3nica is also contributing to the development of the
first Code of Practice for general-purpose AI models
(GPAI), which will detail the AI Act provisions for
providers of general-purpose AI models & general-
purpose AI models with systemic risks and will help AI
companies to demonstrate compliance with the AI Act.
Data Protection
In relation with Data Protection & Privacy, the new
General Data Protection Regulation (GDPR) of April 27,
2016, directly applicable in all member States in Europe
from May 25, 2018, introduced administrative fines of up
to 4% of an undertaking\u2019s annual global turnover of the
preceding financial year for breaching the new data
protection rules. Spain, Germany and the United
Kingdom have adopted implementing measures of this
Regulation.\u00a0
In April 2024, the European Parliament voted its position
on the GDPR Procedural Rules Regulation. In June 2024,
the European Council adopted its Common Approach on
the proposed Regulation. Trilogue negotiations between
both Institutions have followed. The future Regulation
aims to improve cross-border cooperation between
National Data Protection Authorities (DPAs) with a
targeted harmonization of key aspects of the
administrative procedures in cross-border cases. The
Regulation will complement GDPR, without amending
GDPR substantial elements, nor rights of data subjects
neither obligations of data controllers and processors.
The Regulation will be adopted following Ordinary
Legislative Procedure, requiring final agreement
between both EU Co-Legislators, European Parliament
and Council.
In parallel, European Commission issued its Second
Report on the application of GDPR in July 2024. The
Report states that GDPR continues to ensure strong
protection for data subjects and risk-based obligations
for controllers and processors. The Report also identifies
some priority areas to improve the application of the
GDPR (e.g., robust enforcement, cooperation between
Data Protection Authorities and coherent application of
EU digital rules). The Report refers to the Proposal for a
Regulation on e-Privacy \u201cthat has been under
negotiation for several years\u201d and states that reflection is
needed on the next steps for this initiative, including its
relationship with the GDPR.
On January 10, 2017, the EC put forward its Proposal for a
Regulation on ePrivacy, to replace the current Directive
2002/58/EC on privacy in the electronic
communications sector and complement the GDPR. The
EC proposal also introduces administrative fines of up to
4% of an undertaking\u2019s annual global turnover of the
preceding financial year for breaching new regulation.
After lengthy and unsuccessful negotiations, the new
Commission is expected to withdraw the proposed
Regulation in 2025.
Regarding International Transfers of Data, in July 2023
the European Commission adopted the new EU-US Data
Privacy Framework, which established the adequate
level of protection to be afforded to personal data
transferred from the EU to the US companies signatories
of the new EU-US Data Privacy Framework principles.
On October 9, 2024, the European Commission
conducted the first review to monitor relevant
developments in the U.S. and verify whether all elements
of the U.S. legal framework are working effectively in
practice. Periodic reviews will be carried out thereafter,
at least every four years.
The EU-US Data Privacy Framework is the third try after
its predecessors, the 2000 Safe Harbour and the 2016
Privacy Shield, were considered invalid by the European
Court of Justice.
The new EU-US Data Privacy Framework is administered
by US Department of Commerce, which processes
applications for self-certification and monitors whether
signatory companies continue to comply with EU-US
Data Privacy Framework principles, thus continue to
meet the certification requirements as an \u201cadequate
company\u201d.
Compliance by US signatory companies with their
obligations under the EU-US Data Privacy Framework
will be enforced by the US Federal Trade Commission.
In December 2024, the European Data Protection Board
(EDPB), composed by representatives of the relevant
National Data Protection Authorities, published
Guidelines about data transfers to third country
Authorities (in case of collecting crime evidence,
checking financial transactions or approving new
medications) and approved a new European Data
Protection Seal.
Radio spectrum policy
The European Electronic Communications Code grants
the Radio Spectrum Committee (RSC) the powers to
harmonize the use of spectrum bands, for the provision
of electronic communications services and lays down
the rules governing the process through which Member
States authorize those bands to specific users. It also
mandates Member States to allow the use of sufficiently
large blocks of the 3400-3800 MHz band, and at least 1
GHz in the 24,25-27,5 GHz band, in order to facilitate the
roll-out of 5G.
Assignment processes have been completed across our
European footprint in the 3400-3800 MHz band, with
Telef\u00f3nica securing at least 70 MHz in each market (see
table at the end for details).
Regarding the 24,25-27,5 GHz band, it is available in
Germany through local licenses awarded on a first-
come-first-served basis. In Spain, a competitive tender
took place in December 2022 and Telef\u00f3nica secured a
national license of 1 GHz .
Once the harmonization and assignment of the priority
bands for 5G (700 MHz, 3500 MHz and 26 GHz) has
been nearly completed, the European institutions are
beginning the process to identify new bands that in a
2025-2030 horizon may be available for the provision of
wireless broadband services. Among the most relevant
bands for Telef\u00f3nica are the 470-694 MHz and the
6425-7125 MHz bands, which have been regionally
identified at the ITU world conference in 2023, and the
3800-4200 MHz band. As part of that process the RSC
approved in December 2024 a mandate to the CEPT
with a view to the harmonization of the 6425-7125 MHz
band, and CEPT approved in November 2024 the
response to the mandate from the RSC on the use of the
3800-4200 MHz band for local low and mid-power
networks.
EU competition law
European competition provisions have the force of law in
the Member States and, therefore, are applicable to our
operations in those States.
The Treaty on the Functioning of the European Union
(TFEU) prohibits \u201cconcerted practices\u201d and any
agreement between companies that may affect trade
between Member States and that restricts or has the
objective of restricting competition in domestic market.
The Treaty also prohibits any abuse of dominant position
within the European Union or any considerable part
thereof that may affect trade between Member States.
The EU Merger Regulation requires that all mergers,
acquisitions and joint ventures involving companies that
meet certain turnover thresholds are subject to review
by the EC rather than the national competition
authorities. In accordance with the amended
Community Merger Regulation, market concentrations
that significantly impede effective competition in the
market will be prohibited. The European Commission has
the authority to apply the EU framework for the defense
of the competition.
There are similar competition rules in the legislation of
each Member State. Those responsible for ensuring
compliance are the national competition authorities.
In addition, in 2023 the EU on Foreign Subsidies
Regulation introduced a notification-based procedure to
investigate concentrations and public procurement
procedures of very high monetary value involving
financial contributions granted by non-EU governments
to EU and non-EU companies.\u00a0
Spain
General regulatory framework
The legal framework for the regulation of the
telecommunications sector in Spain is governed by the
General Telecommunications Law (11/2022) of June 28,
transposing the implementation of the \"EECC\" into
national law.
The Delegated Act, approved by the European
Commission in December 2020, sets the maximum
applicable rates for mobile termination at 0.2 euro cents
per minute as of January 1, 2024, and for fixed
termination at 0.07 euro cents per minute as of July 1,
2021.
The Market and Competition National Commission, or
CNMC, created by the Law 3/2013, assumed in 2013 its
role as telecommunications and audiovisual service
regulator in Spain. This organism is also the competition
authority in Spain and the national regulatory authority
for transport, postal services and energy.
The main licenses and concessions held by Telef\u00f3nica in
Spain are listed at the end of this Appendix VI under the
title \u201cMain concessions and licenses held by the
Telef\u00f3nica Group\u201d.
Market analysis
The following are the most relevant markets in which
Telef\u00f3nica is deemed to have Significant Market
Power (SMP).
Fixed markets
Wholesale fixed access and call origination market
On January 17, 2017, the CNMC approved the definition
and the analysis of the market for access and call
origination on fixed networks. Considering that
Telef\u00f3nica has SMP, the CNMC imposed specific
obligations to Telef\u00f3nica regarding the provision of
origination services, preselection and wholesale access
service to the telephone line on a cost-oriented bases,
and regarding the implementation of an accounting
system. Telef\u00f3nica was imposed, among others, the
obligation of no discrimination, transparency and
separation of accounts. In July 2024, the CNMC
approved the deregulation of this market.\u00a0 \u00a0
Wholesale (physical) to network infrastructure
access and wholesale broadband access
On October 7, 2021, CNMC has completed the latest
broadband market analysis (1/2020, 3b/2014 markets).
The most remarkable aspects stated by CNMC are:
\u2022 To expand the competitive area in new generation
networks, from 66 to 696 municipalities, which
represent the 70.5% where the Spanish population
lives. In these areas the obligation to offer a wholesale
broadband access service (NEBA) will not be imposed
on Telef\u00f3nica\u2019s fiber network.
\u2022 In the remaining municipalities, CNMC requires
Telef\u00f3nica to provide other operators with a virtual
disaggregated access service (local NEBA) and a
wholesale broadband access service (NEBA) on its
fiber network.
\u2022 Throughout the whole territory, CNMC decided to
maintain the obligation by which Telef\u00f3nica must
provide wholesale access service to its civil
infrastructure (ducts, conduits and poles).
High-quality wholesale access market in a fixed location
On March 29, 2022, the CNMC approved the definition
and analysis of the market for high quality wholesale
access provided at a fixed location considering that
Telef\u00f3nica has SMP and imposed obligations regarding
access to terminal leased lines, business bitstream
access, access to civil works infrastructure and
economic replicability. It also imposed, among others,
the obligation of non-discrimination, transparency and
separation of accounts.
In September 2024, the CNMC proposed a modification
to the economic replicability methodology of
Telef\u00f3nica's retail broadband offers. The modifications
introduced aim to simplify the methodology by defining a
higher level of grouping in the flagship products when
determining replicability, and removing restrictions on
configuring promotional actions, as well as the
obligations for prior notification of the launch of new
products and promotions.
The final resolution was approved on February 4, 2025
with its publication in the Official State Gazette (BOE).
On December 20, 2024 the CNMC has published a
public consultation with the market analysis 1/2020 and
3b/2014 proposing the deregulation of Telef\u00f3nica\u2019s fiber
network access obligations, as well as associated
obligations such as economic replicability. The public
consultation period extends until the end of February
2025, and the final resolution is expected to take place at
the end of the first half of 2025.
Likewise, on December 20, 2024, the CNMC has also
published a public consultation with the analysis of a
new relevant market for access to physical
infrastructures, maintaining the existing framework of
regulated access obligations to Telef\u00f3nica\u2019s civil
infrastructures with cost-oriented prices and under
transparent and non-discriminatory conditions existing
in the scope of the 1/2020 market.
The public consultation period runs until the end of
February 2025, and the final decision is expected in the
second half of 2025.
Wholesale access to submarine cable infrastructure
In July 2024, the final resolution of the CNMC's market
analysis proposal to deregulate wholesale access to
Telef\u00f3nica de Espa\u00f1a\u2019s submarine cable infrastructure
was approved. As a result, Telef\u00f3nica de Espa\u00f1a will no
longer be considered as an SMP operator with respect
to its submarine trunk routes and all current obligations
were lifted within 6 months of such approval.
Universal service obligations
On February 6, 2023, the Minister for Economic Affairs
and Digital Transformation issued the Ministerial Order
designating Telef\u00f3nica de Espa\u00f1a, S.A.U. as the operator
responsible for the provision of the services included in
Article 37.1 of the General Telecommunications Law:
adequate broadband internet access service at a fixed
location with a minimum download speed of 10 Mbps as
well as voice communications services at a fixed
location. The territorial scope of the designation is the
entire national territory and the designation is made for a
period beginning at zero hours on February 10, 2023 and
ending at zero hours on January 1, 2025.\u00a0
In December 2024, the Secretary of State for
Telecommunications submitted to public consultation
the tender specifications for the designation of the
operator responsible for providing the services included
in the universal service, as well as the possible
expression of interest of operators to participate in such
a tender.
The final designation of the operator responsible for the
provision of the above services is expected to take place
during the first quarter of 2025.
Spectrum
On February 22, 2021, Telef\u00f3nica Espa\u00f1a acquired a 10
MHz block in the 3.4-3.8 GHz band for 21 million euros.
With this spectrum acquisition, Telef\u00f3nica completes
100 MHz which corresponds to the maximum carrier
width in the 5G standard. In order for all the operators to
have contiguous frequency blocks and ensure a more
efficient use of the spectrum to deploy 5G technology
and associated services, the Ministry of Economic Affairs
and Digital Transformation adopted a resolution for the
reorganization of the 3.4-3.8 GHz band. Regarding the
700 MHz band, Telef\u00f3nica Espa\u00f1a acquired 2x10 MHz
for 310\u00a0million euros in the spectrum auction which took
place in July 2021.
Additionally, Telef\u00f3nica has already extended its
administrative concessions in the 3.4-3.6 GHz band
(2x20 MHz) and the 2.1 GHz band ( 2x5 MHz+ 5 MHz) until
2030.
Telef\u00f3nica was awarded with 5 blocks of 200 MHz for an
amount of 20 million euros in the auction of the 26 GHz
band that took place on the December 21, 2022 The
licences were formalized in May 2023.
Pursuant to the provisions of the Second Transitory
Provision of the General Telecommunications Law,
Telef\u00f3nica M\u00f3viles Espa\u00f1a has requested the extension
of the spectrum concessions to a total term of 40 years.
The Ministry of Economic Affairs and Digital
Transformation submitted for public consultation a draft
Ministerial Order modifying the duration of the
concessions.
Last June 2024, the Ministerial Order was finally
approved.
Telef\u00f3nica M\u00f3viles Espa\u00f1a acquired 20 MHz in the 3500
MHz band in the secondary spectrum market after the
approval of Orange and M\u00e1sM\u00f3vil merger process.
Approval of the transfer by the Secretary of State for
Telecommunications will be effective as of January 1,
2025.
In addition, Telef\u00f3nica M\u00f3viles Espa\u00f1a and DIGI have
agreed to mutualize their spectrum in the 3500 MHz
band, giving both operators the right to use 140 MHz of
contiguous spectrum. The mutualization agreement
between the two operators was approved by the
Secretary of State for Telecommunications in December
2024.
5G cybersecurity
Royal Decree-Law 6/2023, of December 19, which
approves urgent measures for the execution of the
Recovery, Transformation and Resilience Plan, includes
in its fifth final provision the modification of Royal
Decree-Law 7/2022, of March 29, on requirements to
guarantee the security of fifth generation (5G) electronic
communications networks and services
The main amendments refer to:
\u2022 The need to request authorization for installation and
modifications to the 5G access network in areas
identified as \"critical\".
\u2022 The obligation to have two suppliers as part of the
supply chain diversification strategy is limited
exclusively to the radio access network. In any case,
the Administration reserves the right to modify the
diversification strategy of the operators for security
reasons.
\u2022 Certain elements, functions and systems of both the
core of the network and the control and management
systems and support services may be located outside
the national territory, provided that the Ministry of
Digital Transformation can exercise its powers of
inspection and sanctioning regime so that it can carry
out a comprehensive verification of the functioning,
operability and conditions of use of such critical
elements of a 5G network and, if necessary, adopt
precautionary or definitive measures on them.
In addition, on December 21, 2023 the Secretary of State
for Telecommunications and Digital Infrastructures
submitted for public consultation the draft Royal Decree
approving the 5G National Security Scheme (ENS5G),
which includes the risk analysis and mitigation strategies.
The approval of the ENS5G Royal Decree came into
force on May 1, 2024.
Contribution to RTVE funding
In August 2009, the Radio and Television Corporation
Finance Law (Ley de Financiaci\u00f3n de la Corporaci\u00f3n de
Radio y Television Espa\u00f1ola) was approved establishing
that: (i) telecommunication operators which operate
nationwide or at least in more than one region, have to
pay a fixed annual contribution of 0.9% of the invoiced
operating income of the year (excluding the revenues of
the wholesale reference market), and (ii) the
concessionaire companies and providers of TV services
which operate nationwide or at least in more than one
region have to pay an annual fixed contribution to the
RTVE funding as follows: (a) 3% on the gross revenue of
the year for open concessionaire companies or TV
services providers; and (b) 1.5% on the gross revenue of
the year for concessionaire companies to provide Pay TV
services.
Contributions made to the funding of RTVE were
appealed by Telef\u00f3nica Espa\u00f1a and Telef\u00f3nica M\u00f3viles
Espa\u00f1a. The proceedings are currently on hold waiting
for the ruling on (i) a prejudicial question submitted by
the National High Court to the Court of Justice of the
European Union; and (ii) also on an unconstitutionality
question submitted to the Spanish Constitutional Court
regarding compliance of the underlying law with the
European legislation and the Spanish Constitution.
The Audiovisual Communications General Law includes
a provision to withdraw the 0.9% of the invoiced
operating income contribution to RTVE funding which
entered in force by January 1, 2023.
Acquisition of Distribuidora de Televisi\u00f3n Digital, S.A.
(DTS)
The Resolution of the CNMC of April 22, 2015 authorized
the acquisition of the exclusive control of DTS
(Distribuidor Oficial de Televisi\u00f3n, S.A.) by Telef\u00f3nica de
Contenidos, S.A.U. As a result of such authorization, the
new entity assumed a set of commitments for a five-year
period, which briefly are: i) the obligation to make
available a wholesale offer of channels with premium
content, that allows the replicability of Telef\u00f3nica retail
Pay TV offer; ii) the prohibition of including a period of
permanence clause in contracts for Pay TV packages; iii)
the prohibition of attract DTS customers for a period of
two months; iv) the obligation to keep at least three
international routes uncongested with three Internet
Connectivity Providers; and v) the prohibition of
formalizing exclusive contracts exceeding three years
with content providers.
In July 2020, the CNMC agreed to extend for three years
most of the commitments to which the authorization of
the concentration between Telef\u00f3nica and DTS was
subordinated in 2015.
Telef\u00f3nica Spain appealed the CNMC's extension
decision and although the Sixth Section of the
Administrative Chamber of the National Court of Appeals
issued a dismissal decision, Telef\u00f3nica Spain has
appealed this decision in cassation before the Supreme
Court. This cassation appeal (n\u00ba 3655/2023) was
admitted for processing on July 13, 2023, and is pending
to be scheduled for voting and ruling.
In May 2023, having elapsed such extension of three
additional years, the commitments to which the
authorization of the merger between Telef\u00f3nica Spain
and DTS was subordinated in 2015 have definitively
expired.
Germany
General regulatory framework
The European Union legislative framework was
implemented in Germany at the end of June 2004, by
the approval of Telecommunications Act
(Telekommunikationsgesetz). The Telecommunications
Act has been repeatedly amended over the last years,
most recently through the transposition of the European
Code of Electronic Communications (EECC) into
German law with effect from December 1, 2021. The
national regulatory authority responsible for regulation of
electronic communication networks and services is the
Bundesnetzagentur, or BNetzA.
The main licenses and concessions held by Telef\u00f3nica in
Germany are listed at the end of this Appendix VI under
the title \u201cMain concessions and licenses held by the
Telef\u00f3nica Group\u201d.
Spectrum
In May 2024, the BNetzA continued the procedure for
the provision of frequencies in the 800 MHz, 1,800 MHz
and 2,600 MHz ranges with the publication of the
consultation draft of a final decision (draft decision) and
made this available for consultation until July 8, 2024.
The draft decision is based on the BNetzA's framework
conditions from September 2023 and the comments
received on the same. The draft decision provides for the
existing frequency usage rights in the above-mentioned
frequency ranges, which expire at the end of 2025, to be
extended for a transitional period of five years in an initial
action plan.
In a second set of actions, a larger procedural framework
is to be established for utilisation from 2031 onwards,
including rights of use and new frequency ranges that
expire in 2033 or become newly available for mobile
communications in the coming years; a decision on this
set of actions is planned for 2028.
The Telef\u00f3nica Deutschland Group commented on the
draft decision. A final decision in the frequency provision
procedure is expected in the first quarter of 2025.
Regarding the coverage requirements resulting from the
2019 frequency auction, the Telef\u00f3nica Deutschland
Group notified the BNetzA at the beginning of January
2023 that it had fulfilled the obligations due at the end of
2022 to cover households and major routes, and to
commission 1,000 5G base stations and base stations in
500 white spots, respectively, in line with the obligations.
The notification was reviewed by the BNetzA. In
September 2023, the BNetzA determined that the
Telef\u00f3nica Deutschland Group had fulfilled the
obligation to supply households and 1,000 5G base
stations on time. With regard to the sites along the major
routes and in white spots that were not fulfilled on time,
the BNetzA sent a further consultation letter to the
Telef\u00f3nica Deutschland Group regarding their non-
fulfilment and subsequent fulfilment. With regard to a
few sites where the BNetzA assumes that the Telef\u00f3nica
Deutschland Group is responsible for the delay, the
BNetzA opened a further hearing in September 2023 as
part of a fine procedure. Both proceedings are still
ongoing.
Regarding the coverage requirements to cover further
traffic routes due at the end of 2024, the Telef\u00f3nica
Deutschland Group notified the BNetzA in January 2025
that it had fulfilled the obligations in line with the
obligations. The notification is still being reviewed.
Regarding the coverage requirements resulting from the
2019 frequency auction, the Telef\u00f3nica Deutschland
Group, the Deutsche Telekom Group and the Vodafone
Group in July 2021 entered into a cooperation for the
joint construction of additional radio towers and masts,
as well as their technical support and use. The
cooperation is designed to meet coverage obligations,
especially for transport routes and in rural areas, where
frequency holders are allowed to enter into cooperation
agreements to fulfil these obligations.
In November 2021, the Telef\u00f3nica Deutschland Group
concluded an agreement with the Deutsche Telekom
Group on active shared network usage at \u201cgrey spots\u201d,
which are areas in which only one mobile network
operator offers mobile network access to its customers.
A similar agreement with the Vodafone Group has been
concluded on January 25, 2022. In both cooperation
agreements, live operations were launched in the third
quarter of 2022 with reciprocal access to the first mobile
network sites.
On August 26, 2024, the Cologne Administrative Court
ruled that the BNetzA decision of November 26, 2018,
was unlawful due to concerns of bias and influence by a
federal ministry; this decision was on the allocation and
auction rules for the auction conducted in 2019 of the
frequencies in the 2 GHz and 3.6 GHz ranges. The
BNetzA was obliged by the court to issue a new decision.
The grounds for the judgement would allow the BNetzA
to reissue the previous decision with a new statement of
reasons.
On August 2, 2023, the 1&1 Group publicly disclosed it
had concluded a binding preliminary contract for a long-
term, exclusive national roaming partnership with
Vodafone Group, in which the parties were obligated to
conclude a final national roaming cooperation as quickly
as possible. This cooperation includes the non-
discriminatory provision of national roaming services in
areas not yet covered by the new 1&1 mobile network
and in particular includes access to the 5G network of
Vodafone Group, including mobile communication
standards 2G and 4G and future mobile communication
standards and technologies.
On August 23, 2024, the 1&1 Group announced the final
signing of the national roaming cooperation with the
Vodafone Group and the launch of national roaming for
new 1&1 customers on the Vodafone Group network in
areas not yet served by the 1&1 Group itself starting
August 29, 2024. Existing 1&1 customers who previously
used the Telef\u00f3nica Deutschland Group network are to
be migrated to the Vodafone Group network by
December 31, 2025.
Market reviews
The EU Commission\u2019s delegated act on termination rates
entered into force on July 1, 2021 and the approved
charges have been amended accordingly:
Mobile termination rates (MTR)
Due to the delegated act a charge of 0.20 euro cents per
minute applies from January 1, 2024. This charge applies
to all German providers of these services.
Fixed termination rates (FTR)
FTRs have been subject to a charge of 0.07 euro cents
per minute since July 1, 2021. This charge applies to all
German providers of these services.
United Kingdom
General legislative framework
The EU Regulatory Framework was implemented in the
United Kingdom by the Communications Act in 2003.
The Office of Communications, or Ofcom, is designated
as the NRA responsible for the regulation of electronic
communications networks and services. Under the terms
of the Withdrawal Agreement, the UK implemented the
2020 Electronic Communications and Wireless
Telegraphy Regulation (Amendment) (European
Electronic Communications Code and EU Exit) which
made amendments to the Communications Act, with
effect from December 21, 2020, in order to transpose the
EECC into UK law.
The main licenses and concessions held by Telef\u00f3nica in
the United Kingdom are listed at the end of this Appendix
VI under the title \u201cMain concessions and licenses held by
the Telef\u00f3nica Group\u201d. These licenses are part now of
the joint venture with Liberty Global plc (VMED O2 UK
Limited) (see Note 2).
Wholesale price regulation
Mobile termination rates (MTR)\u00a0
Following a market review, mobile termination rates for
all mobile providers, including the four national mobile
communications operators are subject to controls based
on the pure long-run incremental cost approach (\"pure
LRIC\"). In its 2021-2026 price control decisions, Ofcom
set a charge control, with the prevailing rate as of April 1,
2024 set at 0.468ppm.
However, termination rates for calls originating outside
the UK must be no more than the reciprocal termination
rate charged by the relevant international telecoms
provider for a call originating in the UK, or the MCT
provider\u2019s domestic rate, whichever is the higher.
MTR caps will be updated on April 1, 2025 based on
inflation (CPI measured for 12 months at December 31,
2024) plus X, with X specified as + 1.5%.
Ofcom is expected to begin consulting on the regulation
of these markets for 2026-2031 during the summer of
2025.
Fixed termination rates (FTR)\u00a0
Similar to MTRs Annual indexation to CPI applies to
prevailing FTRs, but with no \u201cX\u201d adjustment based on the
same time period for CPI. VMO2\u2019s current FTR is
0.0356ppm from April 1, 2024.
The review of fixed termination rates will take place at
the same time as MTRs are reviewed.
Spectrum\u00a0
Following an agreement between the Government and
industry to provide for a \u201cShared Rural Network\u201d, the
mobile operators, including Telefonica United Kingdom,
agreed to amend their 900 and 1,800 MHz licenses to
provide for 88% geographic coverage by 2024 and 90%
geographic coverage by 2026. Telef\u00f3nica UK achieved
its coverage objective by the mid-2024 target date.\u00a0 \u00a0
Ofcom has announced that it will start the award of
26GHz and 40GHz mmwave spectrum in the third
quarter of 2025.
In December 2024, Ofcom launched a consultation
which reviews the annual licence fees paid for 900 MHz,
1800 MHz, and 2100 MHz spectrum. Ofcom\u2019s initial
proposal was a 14.8% reduction in the fees currently paid
by Telef\u00f3nica UK.
Brazil
General legislative framework
The delivery of telecommunications services in Brazil is
subject to regulation under the regulatory framework
provided in the General Telecommunications Law
enacted in July 1997. The National Agency for
Telecommunications (Ag\u00eancia Nacional de
Telecomunica\u00e7\u00f5es or ANATEL), is the principal
regulatory authority for the Brazilian telecommunications
sector. On October 4, 2019, Law 13.879/2019 was
published, introducing significant changes to the
telecommunications framework.
Brazilian competition regulation is based on Law No.
12529 of November 30, 2011. The Administrative Council
for Economic Defense, or CADE, is the agency in charge
of enforcing the competition rules. The antitrust law
establishes a pre-merger notification regime for
concentration transactions, with turnover thresholds
(one participant with gross revenue of 750 million
Brazilian reals in Brazil and other participant with gross
revenue of 75 million Brazilian reals in Brazil) and
maximum time length for merger review procedure (240
days, extendable to 330 days).On October 18, 2016,
CADE issued the Resolution No 17, which changed the
rules concerning the mandatory notification of the so
called \u2018associative agreements\u2019. The new regulation
tends to reduce notifications of associative agreements
that do not raise antitrust concerns.
Licenses
The main licenses and concessions of spectrum held by
Telef\u00f3nica in Brazil are listed at the end of this Appendix
VI.
In the state of S\u00e3o Paulo, Telef\u00f4nica Brasil provides fixed
telephony services (STFC) under the so-called public
regime, through a concession agreement which is
expected to remain in force until December 31, 2025. On
October 4, 2019, Law 13.879/2019 (resulting from PLC
79/2016) was published. This Law introduces changes to
the telecommunications regulatory framework by
allowing fixed-line concessions operators to migrate
from a concession regime for limited time (in which the
underlying assets reverts to the government at the end
of the concession) to an authorization regime.
On July 5, 2022, and according to the Law, ANATEL
presented a methodology with an estimation of the
economic value associated with the migration of the
concession regime to authorization.This methodology
was validated by the Federal Court of Accounts (\"TCU\"
for its acronym in Portuguese) on March 22, 2023, with
the consideration that ANATEL should envisage the
market value for the valuation of reversible assets.
ANATEL re-evaluated the service adequacy balance
(from concession to authorization) based on the
indications presented by the TCU, presenting a new
economic value estimate that was approved on July 24,
2023.
Telef\u00f4nica Brasil had to validate this value within 120
days. However, given the possibility that in processes
involving arbitration and migration an agreement could
be reached between ANATEL and Telef\u00f4nica Brasil,
which should be agreed with the TCU, ANATEL agreed
to Telef\u00f4nica Brasil's request to suspend the
aforementioned 120 days term. Likewise, it sent to the
TCU the request for a Consensual Solution for the
resolution of the existing conflict between ANATEL and
Telef\u00f4nica Brasil registered under Process No.
036.366/2023-4.
On January 23, 2024, TCU approved ANATEL\u2019s request
for a friendly settlement, which resulted in the creation
of negotiating committee.
On December 16, 2024, Telef\u00f4nica Brasil, ANATEL, the
TCU and the Brazilian Ministry of Communications
signed an agreement on the terms and conditions for the
adaptation of the STFC concession contracts to an
authorization instrument (the Self-Composition
Agreement).
The Self-Composition Agreement includes several key
conditions: (i) Telef\u00f4nica Brasil is required to make
specific investments on terms established under the
agreement; (ii) Telef\u00f4nica Brasil must maintain the
provision of fixed-line telephone services in certain
locations without adequate competition within the
concession area until December 31, 2028; (iii) all pending
administrative and judicial proceedings related to the
concession at ANATEL or in the courts must be resolved,
and Telef\u00f4nica Brasil must withdraw any cases filed
against the regulator; and (iv) Telef\u00f4nica Brasil must
commit to fulfilling public interest pledges for up to ten
years as part of the adaptation process.
Completion of the migration to the authorization regime
is conditioned upon the signing of a Single Term of
Authorization with ANATEL, compiling all previous
licenses into one single title, which is expected to occur
in the first quarter of 2025.
On April 8, 2021, the Ministry of Telecommunications and
ANATEL approved the Resolution No. 744, which adopts
the Regulation for the Continuity of the Provision of
Fixed Commuted Telephony Service for Use by the
General Public (\"STFC\") under the Public Regime -
RCON. This Regulation established that at the end of
Telef\u00f4nica Brasil\u2019s STFC concession, the assets
belonging to its patrimony (which are used for the
provision of multiple services including the STFC under
the public regime) will be subject to a contract between
the company and the new concessionaire or the Federal
Government, to transfer their right of use under fair and
reasonable economic conditions.
On the other hand, the assets that are indispensable and
exclusively used to ensure the continuity of the provision
of STFC under the public regime, will have their
possession reverted to the Federal Government through
compensation and under the terms of the RCON. It
should be noted that these assets constitute residual
and decreasing assets of the company's assets.
In this way, the Concessionaire's assets, at the end of the
concession contract on December 31, 2025, will not be
susceptible to the reversal of its ownership to the Union.
The assignment of the use of shared assets and the
possession of exclusive assets of the STFC is now
defined by means of specific contracts already provided
for in the operational manual of the RCON, approved by
Decision No. 269/2021/COUN/SCO.
After the adoption of Resolution No. 744, the obligation
to submit a list of reversible assets (\"RBR\") to ANATEL is
merely informative with the objective of maintaining
transparency of the assets used by the Concessionaire
in the provision of STFC under the public regime.
Nevertheless, it is important to emphasize that in the
scope of administrative proceeding TC n\u00ba.
003.342/2022-0, in progress at the TCU, a technical
report stated that the RCON should be reviewed, such
understanding shall still be submitted to the court\u2019s
ruling. The process was suspended by decision of the
minister in charge.
With the approval of the adjustment term with ANATEL
and TCU, Telef\u00f4nica Brasil no longer has any reversible
assets, so this discussion no longer affects us. However,
the TCU can still review the RCON.
In the other Brazilian states, Telef\u00f4nica Brasil provides
local, international and long-distance STFC, personal
mobile service (SMP) and broadband multimedia
communication services (which include the provision of
fixed broadband connection) and pay TV services, all
under the private regime.
On June 17, 2020, the Decree that regulates Law
13,879/2019 was published. The Decree 10,402/2020
allows the renewal of existing licenses. Previously, only a
single license renewal was allowed for the same period.
Currently, the successive renewals will be made in a
competitive process at market price. The renewal
amount can be converted, totally or partially, into
investment commitments.
Regarding the extension of the 850 MHz band
authorizations, if the legal and regulatory requirements
are met, ANATEL agreed to extend the current
authorizations for the use of radio frequencies in Bands A
and B, proposing their approval, on a primary basis, until
November 29, 2028. However, specific conditions for
renewal, including those related to the economic
valuation criteria and obligations, were challenged by
the affected service providers (including Telef\u00f4nica
Brasil).
After ANATEL dismissed the appeals filed by the
providers, ANATEL referred the case to the federal court
of accounts of Brazil (\u201cTCU\u201d), and in September 2022,
TCU decided that the possibility of successive
extensions brought by Law 13.879/19 should be
considered as an exception, applicable only when
certain requirements are met (art. 167 of Law 13.879/19
and article 12 of decree 10.402/20). Telef\u00f4nica Brasil
appealed that decision, defending the successive
extension of licenses as a rule and not as an exception, in
accordance to Law 13.879/19.
In addition, on December 8, 2022, ANATEL revoked
Telef\u00f4nica Brasil\u00b4s 450 MHz spectrum authorization (451
- 458 MHz and 461 - 468 MHz) covering the states of
Alagoas, Cear\u00e1, Minas Gerais, Para\u00edba, Pernambuco
Piau\u00ed, Rio Grande do Norte, Sergipe and part of S\u00e3o
Paulo. The decision was motivated by the fact that
Telef\u00f4nica Brasil could not provide evidence of service
activation in the 450 MHz band as a result of the
unavailability of 450 MHz devices ecosystem and of the
waiver clause contained in the tender notice, interpreted
by ANATEL as meaning that the waiver would operate
automatically in case of non-activation of the frequency
within the contractual term. Previously, on September
2022, ANATEL revoked authorizations held by other
providers.
In 2022, Telef\u00f4nica Brasil acquired part of the mobile
assets of \u201cOi\u201d, which resulted in additional spectrum
authorizations in 900, 1800, and 2100 MHz. These assets
were grouped into a Special Purpose Entity called
\u201cGarliava RJ Infraestructura e Redes de
Telecomunica\u00e7\u00f5es S.A.\", which was fully incorporated
into the company in 2023.
In April 2023, ANATEL determined that the
authorizations of the Telef\u00f4nica Brasil, in the 900 MHz
band should not be extended (with the exception of the
region of Minas Gerais and authorizations acquired from
\"Oi\"), alleging that the efficient use of this spectrum had
not been properly demonstrated, since the low capacity
associated with this band (2.5 + 2.5 MHz) imposes
limitations on its effective use. The non-renewal of these
900 MHz licenses, however, does not affect the services
currently provided by the company. Also in April 2023,
ANATEL decided to renew the 1,800 MHz licenses of the
Telef\u00f4nica Brasil until 2032.
In August 2023, ANATEL also renewed the 900 MHz and
1800 MHz Telef\u00f4nica Brasil licenses in part of the state
of Minas Gerais (PGO sector 2) until 2032. The 900 MHz
and 1800 MHz Telef\u00f4nica Brasil licenses in the rest of the
State of Minas Gerais (PGO sector 3), were already
renewed by ANATEL in April 2020 and expire in 2035.
In addition, in the same month, ANATEL decided to
renew the 2100 MHz Telef\u00f4nica Brasil licenses until April
2038. This is the first extension foreseen in the contract
and bidding process that originated these authorizations.
TCU\u2019s technical area did not identify any evidence of
irrational or inappropriate use of the bands that would
ultimately justify refusing to extend the terms of these
authorizations. On the other hand, it noted the need to
adjust Article 31 of Resolution 757/2022 in order to
maintain in the new proposed maximum validity periods.
However, the final position of the TCU is still awaited.
In November 2021, ANATEL held the greatest spectrum
auction in its history, with 700 MHz, 2.3 GHz, 3.5 GHz
and 26 GHz lots. On that occasion, Telef\u00f4nica Brasil
acquired 3.5 GHz and 26 GHz national licenses (100 MHz
and 600 MHz bandwidths, respectively). The company
also won regional 2.3 GHz licenses, with 50 MHz
bandwidth in Southeast Region (except Sao Paulo state
and PGO Sector 3) and 40 MHz bandwidth in Sao Paulo
state, North and Midwest Regions (except PGO Sectors
22 and 25). These licenses guarantee the necessary
spectrum to provide 5G services and are valid for 20
years, renewable under existing legal conditions at the
end of this time.
Interconnection, tariffs and prices
Interconnection among public networks is mandatory in
Brazil. Generally, parties can freely negotiate the terms
and conditions about technical points, economic
discounts and rights/obligations, of the interconnection
agreements. Interconnection rates for fixed network
operators identified as operators with significant market
power (SMP) (Resolution No. 588/2012) are defined by
ANATEL; the interconnection rates for the use of mobile
operators' networks (Resolution No. 438/2006), may be
agreed between the parties. However, if the parties fail
to reach a consensus, particularly regarding charges to
fixed operators (Resolution No. 576/2011), ANATEL
imposes the rates to be used. The mobile termination
market is based on the model of incremental costs and,
pursuant to applicable laws, variations in VU-M must be
reflected in VC1 (retail price paid by users for local fixed-
mobile calls). Regarding VC2 and VC3 (retail price paid
by users for national long distance fixed-mobile calls),
variations in VU-M no longer need to impact these
values, as is still the case of VC1. In March 2020, ANATEL
approved Resolution No. 724, which established the
Standard for the implementation and monitoring of tariff
freedom in the Fixed Telephone Service (STFC) for use
by the general public, in the National Long-Distance
mode. Since then, the company has been free to
determine domestic long-distance fees according to the
market.
The Telef\u00f3nica Group, including VIVO, has been
identified as an operator with SMP in the following
markets: (i) fixed network infrastructure access for data
transmission in copper pairs or coaxial cables at speeds
up to 12 MBps in the region of S\u00e3o Paulo; (ii) wholesale
fixed network infrastructure to transport local and long
distance transmission at speeds up to 34 MBps in the
region of S\u00e3o Paulo; (iii) passive ducts and trenches
infrastructure throughout Brazil; (iv) call termination on
mobile network in Brazil; (v) in the fixed call termination
market in the region of S\u00e3o Paulo; and (vi) national
roaming market throughout Brazil.
ANATEL's Resolution no. 694/2018 in July 2018 changed
the PGMC, which, besides others changes, recognized a
new relevant wholesale market of high capacity data
transport services with speeds higher than 34 Mbps, in
which Telef\u00f3nica Brazil is established as SMP
throughout the country.
In addition, operators without SMP are no longer entitled
to charge fixed termination fees up to 20% higher than
the highest fee adopted by fixed operators with SMP in
the same region, since the publication of the Resolution
no. 694/2018 in July 2018.\u00a0
Further, ANATEL\u2019s Resolution No. 694 of July 17, 2018,
changed article 41 of the Appendix II of the General Plan
of Competition Goals (PGMC), and established the Bill
and Keep between SMP and the non-SMP operators as
50/50%, from February 24, 2018. Accordingly, the VU-M
values (in Brazilian reals) for 2024 applicable to
Telef\u00f3nica Brazil are the following: (i) Region I: 0,01472;
(ii) Region 2: 0,01599; and (iii) Region 3: 0,01738,
nevertheless Telef\u00f3nica Brazil can reach an agreement
for higher values with other operators.
Since the publication of the Public Consultation 64 on
the 6th of November, 2023, PGMC is under a revision
process carried out by ANATEL, who is proposing
inclusions of new relevant wholesale markets, alterations
in the others and updating of SMP operators. The
consultation period ended in April 2024, and the
approval of the new PGMC is scheduled for the second
half of 2025.
Regulation on Universal Service
Currently, only Fixed Switched Telephony Services are
subject to universalization obligations. These obligations
are established in the General Plan of Universalization
Targets (PGMU) and can be reviewed every five years.\u00a0
Mexico
General regulatory framework
In Mexico, telecommunication services are regulated by
the Constitution, the Federal Telecommunication and
Broadcasting Law (LFT y R), and the promulgated
Federal Law of Economic Competition, in addition to
specific regulations issued by the Federal
Telecommunications Institute (IFT). This agency has
played a role in the regulation, supervision, and
promotion of these sectors, as well as in the
implementation of asymmetric measures to prevent anti-
competitive practices.\u00a0 These measures include the
framework interconnection agreement and a set of
reference offers for: MVNOs, roaming and local loop
unbundling. In 2014, Telef\u00f3nica M\u00e9xico used some
reference offers.
On December 20, 2024, a constitutional reform was
published, which reorganizes the federal public
administration by eliminating 16 autonomous bodies,
including the IFT, whose powers will be assumed by
agencies of the Federal Executive. Telecommunications
and broadcasting regulation will be managed by a new
agency \u2013 the Digital Transformation and
Telecommunications Agency \u2013 while economic
competition will be assigned to an antitrust authority. In
addition, key functions such as the granting and
revocation of concessions will be concentrated in the
executive branch. Although the IFT's previous
asymmetrical policies and regulations will remain in force
until the new authority modifies them, this reform
represents a significant structural change that poses
regulatory and operational challenges.
Notwithstanding the above, the issuance of the
secondary legislation that will define the new agencies
and their organizational structure is still pending. Under
the terms of the reform, the abolition of the IFT will not
take effect until 180 days after the publication of such
legislation.
Licenses
Pegaso PCS, S.A. de C.V. (Pegaso PCS) has a Single
Concessions which allows to provide any
telecommunication services technically feasible.
Wholesale Agreement.
Telef\u00f3nica M\u00e9xico has extended until 2030 the term of
the\u00a0 \"Wholesale Access Services Agreement\" signed in
2019, through which AT&T M\u00e9xico provides Telef\u00f3nica
with access to its 3G, 4G, and 5G networks. Since the
beginning of the traffic migration in 2020, Telef\u00f3nica
M\u00e9xico\u2019s customers have had access to AT&T\u2019s network,
guaranteeing quality of service and data privacy.
Notwithstanding the foregoing, Telef\u00f3nica M\u00e9xico
continues to operate all other elements of its network,
such as the transport and core network, which
integrates all other platforms necessary to provide
services to its customers in a completely independent
and unrestricted manner.
Prices and tariffs
Tariffs charged to customers are not regulated. They are
set by companies and must be registered with the IFT, in
order to be enforced.
Interconnection
On November 14, 2023, the NRA published the mobile
termination rates (MTRs) that it will use to resolve MTR
disputes for the years 2024, 2025 and 2026. For 2024,
these were established for the Preponderant Economic
Agent (Radiom\u00f3vil Dipsa, S.A. de C.V.- Telcel-) at
0.013900 pesos per minute, while for mobile non-
preponderants it will be 0.044972 pesos per minute.
These rates were calculated using the cost model
developed with the same pure cost methodology
previously used, but with new criteria and variables.
Foreign ownership/restrictions on transfer of
ownership
Since the amendments to the Constitution published in
June 2013 foreign investment (FDI) up to one hundred
percent in telecommunications is allowed.
Chile
General regulatory framework\u00a0
The General Telecommunications Law No. 18168 of 1982,
as amended, establishes the legal framework for the
provision of telecommunications services in Chile. The
main regulatory authority in Chile is SUBTEL (the Under-
Secretary of Telecommunications).
The principal regulation concerning competition in Chile
is Decree No. 211 of 1973, whose current text was
established in Law Decree No. 1 of 2005 (Ministerio of
Econom\u00eda, Fomento y Reconstrucci\u00f3n). The Competition
Court follows and determines infringements of
competition law. Law N\u00ba. 20.945 was published on
August 30, 2016 increasing the administrative fines up to
30% of the sales relating to the product line or services
associated with the infringement during the period in
which the alleged infringement took place, or up to the
double of the economic profit reached by the
infringement.
Other relevant laws that have an impact on the
operation are Law No. 20,808, which protects the free
choice of users in cable, Internet or telephony services,
Law No. 21,046 that establishes the obligation of a
guaranteed minimum speed of Internet access; Law No.
21,245, that establishes the obligation to provide the
Automatic National Roaming service in certain areas;
Law No. 19.496 concerning consumer data protection;
Law No. 19,628 on the protection of personal data, and
Law No. 21,542 allowing the protection of critical
infrastructure by the Army in case of serious or imminent
danger.
Licenses\u00a0
The main licenses and concessions to use spectrum are
shown in the table at the end of this Annex.\u00a0
Additionally, Telef\u00f3nica Chile has been granted licenses
of public local phone services, Voice Over Internet
Protocol services, concessions of international long
distance and concessions to install and exploit the
national fiber optic network and mobile satellite. 2.6 GHz
and 700 MHz concessions established an obligation for
Telef\u00f3nica M\u00f3viles Chile to provide a wholesale service
to MVNOs, under a non-discriminatory and complete
reference offer (including prices). This same obligation
extends to the new 5G technology recently deployed.
On December 5, 2019, the TDLC notified resolution 59
through which it modified the 60 MHz spectrum cap,
establishing percentage caps by macrobands. Against
this resolution, claims were filed by some operators and
Conadecus, which were partially accepted by the
Supreme Court on July 13, 2020, in the sense of: i)
maintaining the percentage caps set by the TDLC, with
the exception of the low macroband (up to 1 GHz) which
went from 32% to 30%, and ii) establishing certain
complementary measures to the Mobile Network
Operators such as, national mandatory and temporary
roaming; or keeping an offer of facilities and resale plans
for MVNOs permanently available and updated, among
others. \u00a0
On February 16, 2021, the auction for the 3.5GHz band,
initiated in 2020, was completed and Telef\u00f3nica M\u00f3viles
Chile has been awarded 50MHz. On October 2, 2021, the
decree granting the concession to Telef\u00f3nica M\u00f3viles
Chile in the 3.35-3.40 GHz band was published in the
Chilean Official Gazette. From that date, the terms
conferred started as follows: (i) 30 years period of the
concession and (ii) implementation of the terms for the
start of service of the 5G project (12 months for stage 1,
24 months for stage 2, and 36 months for stage 3).
Telef\u00f3nica M\u00f3viles Chile completed the deployment of
all base stations corresponding to phase 1, 2 and 3 of the
5G project.
In October 2023, Subtel called for a second 5G tender to
award 50 MHz in the 3,400 - 3,600 MHz band. The
award was made at the end of June 2024, in favor of
Claro de Chile SpA.
Prices and tariffs
Public telecommunication services prices and prices for
intermediate telecommunication services are freely
established by operators, unless there is an express
resolution by Chile's Competition Court on existing
conditions in the market confirming that there is not
enough competition. Additionally, maximum prices for
interconnection services (access charges for network
use, mainly) are subject to tariff regulation for all
operators, being set by stipulated procedures.
In June 2023, Subtel requested the Tribunal de Defensa
de la Libre Competencia to review the services subject
to tariff regulation and its resolution is still pending.
Ministries set maximum tariffs under efficient operator
model basis.
Maximum interconnection tariffs for telephony services
are set every five years jointly by the Ministry of
Transport and Telecommunications and the Ministry of
Economy.
Interconnection
Interconnection is obligatory for all license holders with
the same type of public telecommunications services
and between telephony public services and intermediate
services that provide international long distance
services. Every five years, SUBTEL sets the applicable
tariffs for services provided through the interconnected
networks.
On May 9, 2019, a Tariff Decree regarding fixed
termination rate (Decree N\u00ba 115/2019), was adopted for
the 2019-2024 period. The tariff decree for the period
2019-2024, entered into force retroactively in May 2019
and represents a 65% drop from the previous value to
reach a value of 1.3 CLP per minute during normal
business hours. The current fixed decree remains in
force by virtue of the provisions of Law No. 21.637, which
establishes that a new single tariff process must be
carried out for groups of fixed concessionaires. Subtel
has already initiated this new single tariff process for
groups of fixed concessionaires. Subtel has already
initiated this new single tariff process for groups of fixed
companies, corresponding to Group 1, which is formed
by Telef\u00f3nica Chile, and VTR/ Claro. The definitive
technical bases for this new process were issued by
Subtel on June 17, 2024. The companies submitted their
tariff studies on November 4, 2024, and are awaiting the
regulator's response on March 4, 2025. In the meantime,
during the duration of this new process, Telef\u00f3nica Chile
must continue to apply the same rates, duly indexed,
applicable under the current tariff decree, without
having to apply them retroactively.
Regarding mobile termination rates, in 2019 a decree
was issued, which will be applicable for the next 5 years,
The average tariff which will apply until 2024 was 1.8
CLP per minute (0.0024 euros, without VAT, based on
the exchange rate as of February 6, 2019, to be charged
on a per second basis). The validity of the new tariff
decree starts on January 26, 2019.\u00a0 A new tariff decree is
in the process of being approved by the Comptroller\u2019s
Office, whose tariffs, once published, will be retroactive
to January 27, 2024, and will be in effect for the entire
five-year period 2024-2029.
Argentina\u00a0
General regulatory framework\u00a0
The basic legal framework for the provision of
telecommunications services in Argentina is set forth in
the Law \u201cArgentina Digital\u201d No. 27078 issued on January
7, 2015. This legal framework declared of public interest
the development and regulation of information
technology, communications and its associated
resources (ICT's). Thus, this law became the specific
regulatory regime for the free market, including rules on
interconnection, universal service and radio spectrum,
and setting out the principles of network neutrality and
giving to the technological, informational and
communicational companies the possibility of providing
broadcasting services (except satellite infrastructure),
and setting a single license system.
Additionally, the Government approved the Decree No.
267/2015, published in the Official Gazette on January 4,
2016, which amended the Argentina Digital Act creating
the National Communication Agency (ENACOM), which
is the continuation of the Federal Authority for ICTs
(Autoridad Federal de Tecnolog\u00edas de la Informaci\u00f3n y
las Comunicaciones).
By the Decree of Need and Urgency No. 690/2020
(\"DNU 690/2020\"), it was resolved to amend Law 27078,
establishing that Information and Communication
Technology Services and Access to telecommunications
networks for and among licensees are essential and
strategic public services. At the same time, it determined
that the prices of ICT essential and strategic public
services will be regulated by the authority. Finally, it
incorporated mobile communication services as public
services. In connection with DNU 690/2020, Telef\u00f3nica
de Argentina, S.A. and Telef\u00f3nica M\u00f3viles Argentina, S.A.
(collectively, \u201cTelef\u00f3nica\u201d) were forced to file a lawsuit
against the Argentine State, in connection with a series
of contracts for licenses to provide services and
spectrum use authorizations entered into between
Telef\u00f3nica and the Argentine State, including the
licenses resulting from the 2014 spectrum auction.\u00a0
Finally, DNU 302/24 repealed DNU 690/2020 and
amended the following articles of Law 27078: Article 48,
which eliminated price regulation; Article 54, which was
amended to leave only the basic telephone service as a
public service; and finally, Article 15 of the Law, which
was repealed. Finally, in August 2023, the injunction was
again extended until February 2, 2024. The lawsuit
initiated by Telef\u00f3nica Argentina is ongoing as of the
date of this Annual Report.\u00a0
Licenses
The main licenses and concessions to use spectrum are
shown in the table at the end of this Annex.
Additionally, Telef\u00f3nica de Argentina has licenses for an
indefinite period of time for the provision of
communications services; local telephone services; long-
distance national and international, telex, international
communication and data transfer services; national and
international value-added services, and other
telecommunication services provided by the different
license agreements entered into with the National State,
and administrative acts entered into with the National
State.
Roaming
By means of Law 27.497 (BO 10/01/2019) the Economic
Complementation Agreement No.35 between the States
part of Mercosur and the Republic of Chile was
approved, which includes the Commercial Agreement
between the Republic of Chile and the Republic of
Argentina by which these countries are obligated to
implement the international roaming services in the
territory of the other party with the same tariffs or prices
they charge for the mobile services in their own country.
Finally, by means of Resolution ENACOM 927/2020, the
International Roaming Regime between the Republic of
Argentina and the Republic of Chile was approved,
establishing as from August 29, 2020, the price for
international roaming service between the two countries
as a local service.
Law 27.740 (BO 02/05/2024) approved the Agreement
for the Elimination of International Roaming Charges for
End Users of Mercosur- Argentina, Brazil, Uruguay, and
Paraguay, signed on July 17, 2019.
This agreement establishes, among other things, that
mobile service providers must apply to their end users
the same prices they charge in their own country,
according to the modality and plan contracted by each
one.
The technical implementing regulations are still pending,
so the agreement can be effectively implemented.
Prices and tariffs
With the enactment of DNU 302/ 2024, which
supersedes DNU 690/ 2020, licensees are now able to
freely set their own prices, on fair and reasonable, terms
to cover exploitation costs and aim to an efficient
provision and a reasonable operation margin. In this
sense, the Authority of Application no longer has to
authorize them.
On December 21, 2020, the BO published the ENACOM
Resolution No. 1467/2020, which regulates the
Mandatory Universal Basic Provision (PBU) for fixed and
mobile telephone services, internet services and radio
broadcasting by subscription through physical or radio
links. Both the PBU benefits and the prices are
established by the control authority. Only a certain group
of persons who are covered by the cases set by the
regulation (social plans beneficiaries, unemployed, etc.)
may have access to the PBU. Although DNU 690/ 2020
has repealed the requirement for the establishment of
the PBU, Resolution ENACOM 1467/ 2020 on the
establishment of the PBU has not been repealed to date.\u00a0
Interconnection
The National Entity of Communications (ENACOM) has
the power to control interconnection prices and tariffs,
and also to set them in order to the general costs or
other compensation mechanism.
The Ministry of Modernization issued resolution
286/2018 establishing a new interconnection regulation.
Based on this, ENACOM set a local origination or
termination rate in the Fixed Telephony Service's
networks equivalent to 0.0045 dollars per minute, for the
local transit service an interim rate equivalent 0.0010
dollars per minute and for the service of long distance
transport an interim rate equivalent to 0.0027 dollars per
minute. A rate of 0.0108 dollars per minute applies to
local origination or termination services in mobile
networks. For all cases, the second was set as the
appraisal unit of measurement.
Colombia
General regulatory framework
In Colombia there are different agencies responsible for
decision-making in the Information Technology and
Communications sector (ICT), among them are the
Ministry of Information and Communication
Technologies (MinTIC), the Communications Regulation
Commission (CRC), the National Spectrum Agency
(ANE), the Superintendence of Industry and Commerce
(SIC).
Through Law 1341 of July 30, 2009, principles and
concepts applicable to Information societies and the
Organization of Information and Communications
Technologies -ICT- are defined, the National Spectrum
Agency is created and other provisions are issued and
establishes the general framework for the formulation of
public policies in the Information Technology and
Communications sector. This Law was amended by Law
1978 of 2019, ICT sector is modernized, the competences
are distributed and a single regulator is created, with the
purpose of encouraging investment in the sector and
focus on connectivity, creating more and better services,
as well as unifying the regulatory framework and
strengthening public television and radio.
Likewise, article 10 of Law 1341 of 2009 establishes the
general rating regime for the provision of
telecommunications networks and services, this rating is
understood to be formally assorted, when the interested
party is registered in the ICT register, provided by Article
15 of the abovementioned Law, in the same way. With
the reform of this Law carried out with the Law 1978 of
2019, the subscription television service is included as
provision of telecommunications networks and services
and by virtue of the provisions of the transition regime
established by such last mentioned regulation, the
operators that to date of its publication, had concession
contracts for the provision of television can qualify for
general authorization and provide services in an
environment of technological neutrality. In addition,
telecommunication services continue to be public
services in charge of the State, and Internet access has
been declared an essential public service by Law 2108 of
2021.
Also, in accordance with the provisions of Article 11 of the
Law 1341 of 2009, the use of the spectrum requires prior,
express and granted permission by the MinTIC. As of
2019, with the amendment of Article 8 of the Law 1978,
the validity of the use permit is extended of spectrum
and its renewal from 10 to 20 years. The regulation
provides that the granting or renewal of the permit to
use a segment of the radio spectrum will result in
payment, in favor of the Information and
Communications Technology Fund and in charge of the
permit holder. With the amendment of 2019, this
consideration may be partially paid, up to 60% of the
total amount, through the execution of obligations to do,
to expand the quality, capacity and coverage of the
service, which benefits the poor and vulnerable
population, or in remote areas, in public schools located
in rural areas and other official institutions such as health
centers and public libraries, as well as providing
emergency networks.
On the other hand, the Colombian competition law is
included in Law No. 155/1959, Decree No. 2153/1992 and
Law No. 1340/2009 on restrictive trade practices.
Licenses
The main concessions and licenses for spectrum use are
reflected in the table, at the end of the Annex.
Telefonica applied in 2021 for the renewal of the permit
for 15 MHz of spectrum in the 1900 MHz band, which
was valid until October 18, 2021. For the renewal, on
October 19, 2021 the MinTIC issued the resolution 2803
setting the price of renewal for 20 years .Telef\u00f3nica
appealed this resolution and the Ministry resolved,
through Resolution 2143 of 2022, to decrease the
renewal cost and eliminate the technological update
obligations considered in the resolution of October 2021.
Telef\u00f3nica filed a request for direct revocation of the
Resolution 2143, which was denied through Resolution
4454 of 2022.
On the other hand, the company has processed in June
2023, the renewal of the permit for 30 MHz in the AWS
band that was assigned in resolutions 2625 and 4121 of
2013. Likewise, in September 2023, it processed the
renewal of the permits for 25 MHz in the 850 MHz band
and 15 MHz in the 1900 band that were assigned
through resolution 597 of 2014. The national norm allows
that while the definitive conditions of these renewals are
closed, the spectrum is used normally. For the AWS
band, MinTIC renewed the license by Resolution No.
01053 of April 2024, and resolved the appeal filed by
Resolution No. 3046 of August 2024. For the 850 and
1900 MHz bands, by Resolution No. 2657 of July 2024,
MinTIC renewed the authorization for 18 months, from
March 29, 2024, to September 28, 2025, for 132,437
million Colombian pesos (approximately 29 million euros
at the exchange rate of December 31, 2024).
In 2022, the MinTIC determined the maximum spectrum
caps per provider of telecommunications networks and
services for use in terrestrial mobile services (IMT)
setting them at: 50 MHz for the low bands (below 1 GHz),
100 MHz for the medium bands (between 1 GHz and
below 3 GHz), and 100 MHz for the medium-high bands
(between 3 GHz and 6 GHz). In 2023, the MinTIC
established that the calculation of the caps includes
companies belonging to the same group of companies.
Then, through MinTIC Resolutions 3947, 4138 and 4185
of 2023, it was declared open and established the
requirements, conditions and procedure for the
objective selection process through the auction
mechanism, to grant permits for the use of the radio
spectrum at national level, in the 700 MHz, 1900 MHz,
extended AWS, 2500 MHz and 3500 MHz bands. The
spectrum available was: 10 MHz in the 700 MHz and
1900 MHz bands, 30 MHz in the 2500 MHz and
extended AWS bands, and 320 MHz in the 3500 MHz
band.\u00a0
In the auction conditions, the MinTIC accepted a
recommendation from the competition authority not to
allow Claro, as the dominant operator, to choose its
location within the 3.5GHz band, so the Ministry defined
it after the other participants chose their location.
The MinTIC held the auction on December 20, 2023 and
Telef\u00f3nica participated and acquired, in joint venture
with Tigo (Colombia M\u00f3vil S.A. E.S.P.), a block of 80 MHz
in the 3.5 GHz band for the reserve value of 318\u00a0billion
pesos, which includes the amount to be recognized for
obligations to do. The acquired block has coverage
obligations in primary and secondary roads, as well as to
connect educational institutions through optical fiber,
which must be executed within a maximum term of 18
months, extendable to 24 months in some cases. The
maximum value to be recognized by the Ministry for the
execution of these obligations is 69\u00a0billion pesos. The
other 3 blocks were assigned to Claro, WOM and
Telecall, the new operator, and also include obligations
to perform.
By Resolution No. 497 of February 2024, the MinTIC
granted UT Movistar Tigo the authorization to use the
frequency spectrum. The teams of both companies are
working to fulfill the obligations of the authorization.
On the other hand, Tigo and Telef\u00f3nica created the
Temporary Union UNIRED, which will manage the
spectrum use permits to be used by the single mobile
access network company. MinTIC, through Resolution
No. 5194 of December 13, 2024, approved the
assignment of the spectrum use permit held by Tigo in
the 700 MHz band.
Interconnection
Mobile and fixed operators in Colombia have the right to
interconnect to other operators\u2019 networks. Before the
intervention of regulatory authorities, operators must
attempt direct negotiations. Interconnection must assure
compliance with the objectives of non-discriminatory
treatment, transparency, prices based on costs plus a
reasonable profit and promotion of competition.
The conditions for access, use and interconnection of
telecommunication networks are defined by the CRC in
Resolution 6522 of 2022. This standard defines the
signaling conditions that include the mandatory use of
the SIP protocol in at least one node of the network;\u00a0
access conditions on the part of content and application
providers (PCA) or Technology Integrators for the
provision of content. This resolution modifies some
articles of user protection regime, in relation to the
sending SMS and USSD for commercial and advertising
purposes, while establishing new obligations for
assignees of short codes, and modifying the content of
the Basic Interconnection Offer (OBI) was also changed
with regards to the guarantees, establishing the option
of prepayment and the obligation to update them.
In addition, the remuneration conditions for mobile
services are in accordance with CRC 7007 of 2022. The
charges for termination in mobile networks, termination
of text messages, and the remuneration of National
Automatic Roaming and OMVs are reduced.\u00a0 Bill and
Keep will apply on remuneration of termination in mobile
networks and SMS from May 1, 2025; it does not apply to
the use of mobile networks by technology integrators,
PCAs and international long-distance providers.
Prices and tariffs
The Technologies of Information and Communications
Law provides for a free pricing system for
communication services, unless there are market failures
or quality problems. From 2016 retail tariffs for fix to
mobile calls are no longer regulated except for TIGO
(one of the commercial names under which Colombia
Movil operates) which still holds concession for the
provision of personal communication services (PCS's).
Peru
General regulatory framework
The provision of telecommunications services in Peru is
governed by the Telecommunications Law, its General
Regulation and related regulations. In July 2012, the
Peruvian Congress approved the Law of Promotion of
the Broad Band and Construction of the National Fiber
Optic Backbone, Law No. 29904. This Law declared both
(i) the construction of a National Fiber Optic Backbone
available to the government to make possible the
connectivity by the broad band; and (ii) the access and
use of the infrastructure associated with the public
services of energy and hydrocarbon to facilitate the
display of the telecommunication network for the
provision of the broad band of public necessity. In
addition, Law No. 29904 implied that operators of
electric, transport and hydrocarbon infrastructure
projects would have to install fiber optic that would be
available to the government and given in concession to
telecommunication operators. Also, this law established
that a percentage of the capacity of the National Fiber
Optic Backbone would be reserved to the government
to satisfy its necessities. Additionally, this Law
incorporated the obligation of the Internet services
providers to comply with the Net Neutrality regulations.
In this sense, the NRA, the Organismo Supervisor de las
Telecomunicaciones (OSIPTEL), adopted regulations
aimed at providing clear guidelines on the
implementation of the net neutrality regime adopted in
Peru in 2012 that are in force since January 1, 2017.
Law No. 30083 was approved in September 2013, which
seeks to strengthen competition in the public mobile
market service by introducing MVNOs and mobile rural
infrastructure operators (MRIO). Regulations developing
the Act were published in August 2015.
In June 2023, Law 31809, Law for the Promotion of a
Connected Peru, was approved, which seeks to
establish measures to implement technological
renovation and reduce the digital gap. The Law provides
for a comprehensive review of the regulatory framework
by OSIPTEL, with a view to its simplification, among
other measures.
The general competition framework in Peru is based on
the Legislative Decree No. 1034. This Law it is applied, in
the telecommunication sector, by OSIPTEL.
In November 2019, the government approved the Prior
Control of Business Concentration Operations,
applicable for those mergers, acquisitions, constitution of
joint ventures or the acquisition of productive assets of
economic agents that produce effects that restrict
competition in the National territory. This regulation
entered into force in March 2021.
In compliance with such regulatory framework, on
September 28, 2023, the request for approval of the
share subscription agreements for the entry of a
subsidiary of Kohlberg Kravis Roberts - KKR & Co, Inc.
and Entel Per\u00fa S.A. in the capital stock of Pangeaco
S.A.C., the Peruvian fiber optic wholesale company
incorporated on March 4, 2020, was filed before
INDECOPI. The application was admitted with conditions
for processing by INDECOPI in September 2024.
Licenses
The main licenses and concessions to use spectrum are
shown in the table at the end of this Annex. \u00a0
Telef\u00f3nica del Per\u00fa S.A.A faces six concession renewal
processes which correspond to requests made between
2014 and 2020, all of them are pending of decisions on
the part of the Ministry of Transportation and
Communications (\u201cMTC\u201d). These concessions, according
with Peruvian legislation, remain valid while the
proceedings are still ongoing.
One of these renewal processes corresponds to the
fourth gradual renewal of the concessions for the
provision of fixed telephony services, which must be
reevaluated as Telef\u00f3nica del Per\u00fa S.A.A won the
arbitration process against the MTC's decision to deny
this renewal.
The cable distribution broadcasting service concessions
were renewed in May 2016 until March 2032 and 2033,
respectively.
On November 2020, the Ministry of Transportation and
Communications granted Pangeaco, S.A.C. concession
for the provision of telecommunications public services
for a 20-year term, renewable. This Group company was
created in March 2020 in order to provide all kind of
telecommunications services, as well as to acquire, have
and exploit telecommunications infrastructure. The
company signed on January 15, 2021 the respective
concession contract.
With regards to 5G, in August 2024, the Peruvian
government approved Legislative Decree 1627 which
allows a special mechanism for the direct allocation of
5G spectrum without the need for a public tender in
exchange for investment commitments, as long as the
demand does not exceed the available spectrum. To this
end, the MTC will make calls for interested parties to
submit their expressions of interest. The MTC has hired
the consultant in charge of the recovery of the band 3.5
GHz and published the draft regulation of the legislative
decree in December 2024. It is estimated that in the first
half of 2025 the MTC will carry out the special allocation
mechanism for the 3.5 GHz spectrum. Operators with
assigned spectrum in this band that submit an
Expression of Interest, will surrender this spectrum
which is valued in order to discount it from the
commitments to be assumed for the new spectrum.
Wholesale regulation for Major Suppliers
OSIPTEL reviews the markets identified as priority (fixed
Internet, mobile, pay TV and circuits) every 3 years in
order to determine the existence of major suppliers
(companies with market power) in such markets and to
impose obligations such as infrastructure sharing and
services resale. On June 17, 2021, OSIPTEL resolved to
declare Telef\u00f3nica del Per\u00fa S.A.A. and its Economic
Group in the country as an important provider in the
wholesale Pay TV market in 10 regional markets.
Telef\u00f3nica del Per\u00fa S.A.A. won an appeal for
reconsideration against this decision, eliminating the
obligation of sharing/reselling content. Currently, the
review of the process of determination of important
suppliers in the fixed Internet market is in progress,
market in which Telef\u00f3nica del Per\u00fa S.A.A. and its
economic Group in the country have been declared
important suppliers in fixed Internet via xDSL and/or HFC
technologies for speeds lower than 50 Mbps at national
level in the last review carried out in 2019. In November
2024, OSIPTEL published a draft resolution concluding
that there would be no major providers in the fixed fiber
internet market.
Prices and tariffs
Tariffs for fixed local telephony and long distance
services are adjusted every three months considering
services baskets, pursuant to a price cap formula from
inflation and a productivity and must be approved by
OSIPTEL in accordance with a price cap formula based
on a productivity factor. For the period from September
2022 to August 2025, the productivity factor applicable
to the tariff adjustments corresponding to the quarters
September - November, December - February and
March - May of each year would be equal to inflation (no
tariff adjustments will be made).\u00a0 Likewise, for the tariff
adjustment corresponding to the June - August quarter,
a reference productivity factor equivalent to -2.95% is
considered; in this case, only if the annual variation of
inflation is higher or lower than the absolute value of the
reference factor +/- 1% will the respective tariff
adjustment be made. OSIPTEL has started a new
process of setting the productivity factor for the period
from September 2025 to August 2028.
Rates charged by mobile providers to their customers
have been subject to a free tariff regime supervised by
OSIPTEL. Tariffs must be reported to OSIPTEL prior to
implementation. On 2011, OSIPTEL approved a new price
cap system by which the operators of fixed services
determine the rates of the local fixed-mobile calls.
Such tariff is adjusted periodically for Telef\u00f3nica del Per\u00fa
S.A.A. each time the mobile interconnection charge is
adjusted. In June 2024, OSIPTEL published the
adjustment of this cap rate, deciding to hold its value in
0.0004 PEN per second without VAT. Likewise, pursuant
to the provisions of Law 31487, OSIPTEL initiated a
process to set and/or review the cap rates for service
reconnection and those derived from the rules of
conditions of use.
In October 2024, it set the maximum rate for
reconnection of the service at 3.88 PEN, excluding VAT.
OSIPTEL has suspended the application of said tariff
until February 14, 2025, while it is evaluating appeals filed
by Telef\u00f3nica del Per\u00fa S.A.A. and other operators on this
decision.
Interconnection
On May 2022, OSIPTEL published the amendment of the
MTR, at 0.00129 U.S. dollars per minute rated at the
second, which is applicable as of May 4, 2022 and
applies to all mobile service operators.
In June 2023, OSIPTEL, after 4 years since the last
revision, published the rule that established the new
value for 5 interconnection charges: (i) fixed
interconnection charge; (ii) local switched transport; (iii)
national long distance switched transport; (iv)
interconnection links and; (v) network adequacy. These
charges became effective as of June 5, 2022 and are
applicable to all operators that provide interconnection
services.
Main concessions and licenses held by the Telef\u00f3nica Group
The following tables list the concessions and licenses as of December 31, 2024 to use spectrum for mobile
services and selected other applications in each country.
EUROPE
Frequency
Bandwidth (MHz)
Year of Exp. Date
Spain
700 MHz
20
2041
(1)
800 MHz
20
2041
(2)
900 MHz
29.6
2040
(2)
1800 MHz
40
2038
(2)
1900 MHz (TDD)
5
2040
(2)
2100 MHz
29.6
2040
(2)
2600 MHz
40
2040
(2)
2600 MHz
20
(3)
2040
(2)
2600 MHz (TDD)
10
(4)
2040
(2)
3.5 GHz (TDD)
40
2040
(2)
3.5 GHz (TDD)
10
2048
(2)
3.5 GHz (TDD)
50
2048
(2)
26 GHz
1,000
2043
(1)
United Kingdom (5)
700 MHz
20
Indefinite
800 MHz
20
Indefinite
900 MHz
34.8
Indefinite
1800 MHz
11.6
Indefinite
1900 MHz (TDD)
5
2029
(6)
2100 MHz
20
Indefinite
2300 MHz (TDD)
40
Indefinite
2600 MHz (TDD)
25
Indefinite
3.5 GHz (TDD)
40
Indefinite
3.5 GHz (TDD)
40
Indefinite
Germany
700 MHz
20
2033
800 MHz
20
2025
900 MHz
20
2033
1800 MHz
20
2033
1800 MHz
20
2025
1900 MHz (TDD)
5
2025
2100 MHz (TDD)
14.2
2025
2100 MHz
10
2040
2100 MHz
30
2025
2600 MHz
60
2025
2600 MHz (TDD)
20
2025
3.5 GHz (TDD)
70
2040
(1) Initial term can be extended for 20 additional years.
(2) License extended 10 additional years by Ministerial Order of 20th June
2024.
(3) Regional licenses in Madrid and Melilla.
(4) National license excluding 2 regions (Madrid and Melilla).
(5) These licenses are part of the joint venture with Liberty Global plc (VMED
O2 UK Limited).
(6) It will expire in April 2029 after the 2024 announcement. This band has not
been implemented for mobile use and will be allocated to other applications
in accordance with ECC Decision (20)02.
BRAZIL (1)
Frequency
Bandwidth (MHz)
Year of Exp. Date
700 MHz
20
2029
850 MHz
25
(2)
2028
(3)
900 MHz
5-10
(4)
2032-2035
(5)
1800 MHz
20-80
(6)
2032-2035
(5)
2100 MHz
30-60
(6)
2038
2300 MHz (TDD)
40-50
(7)
2041
2500 MHz
40
(8)
2027-2031
(9)
3.5 GHz (TDD)
100
2041
26 GHz
600
2041
(1) Telef\u00f4nica Brasil uses high and low frequency spectrum in all regions of Brazil.
(2) States of AC, AM, AP, BA, DF, ES, GO, MA, MG, MS, MT, PA, PR, RJ, RO, RR,
RS, SC, SE, SP and TO - except for sectors PGO 3, 22, 25, 30 and 33
(3) Current licenses expire in 2028. ANATEL decided to limit their renewal until
2028, due to a future mandatory refarming process.
(4) 10 MHz in the State of MG; 5 MHz in the States of AM, RR, AP, PA, MA, BA,
SE and SP - except for municipalities with CN 11.
(5) Regional licenses: expiration and renewal dates depend on the region.
(6) Bandwidth varies by region.
(7) 50 MHz in the southeastern region of Brazil (except the state of SP and
Sector 3 of PGO); 40 MHz in the state of SP (except Sector 33 of PGO), and
in the northern and central-western regions of Brazil (except Sectors 22 and
25 of PGO).
(8) 40 MHz is the most common bandwidth but may increase up to 60 MHz in
some regions.
(9) The initial term of Band X will expire in 2027 and Band P in 2031.
HISPANOAM\u00c9RICA
Frequency
Bandwidth (MHz)
Year of Exp. Date
Argentina
700 MHz
20
2033
850 MHz (AMBA)
30
Indefinite
850 MHz (Sur)
25
Indefinite
1900 MHz (AMBA)
20
Indefinite
1900 MHz (Norte)
50
Indefinite
1900 MHz (Sur)
25
Indefinite
1700 MHz/2100 MHz
20
2033
2600 MHz
30
2035
(1)
3.5 GHz (TDD)
50
2043
Chile
700 MHz
20
2045
850 MHz
25
Indefinite
1900 MHz
20
2032
(2)
2600 MHz
40
2043
2600 MHz (TDD)
12
2038
(3)
3.5 GHz (TDD)
50
2051
Colombia
700 MHz
20
2040
(4')
850 MHz
25
2025
(4)
1700 MHz/2100 MHz
30
2025
(4)
1900 MHz
15
2025
(4)
1900 MHz
15
2041
(5)
3.5 GHz (TDD)
80
2044
(4')
HISPANOAM\u00c9RICA
Frequency
Bandwidth (MHz)
Year of Exp. Date
Ecuador
850 MHz
25
2025
(5')
1900 MHz
60
2025
(5')
Peru
450 MHz (Lima and Callao)
10
2028
(6)
700 MHz
30
2036
850 MHz
25
2030
(6')
900 MHz (Lima and Callao)
10
2028
900 MHz (Rest of provinces)
16
2028
1700 MHz/2100 MHz
40
2033
1900 MHz (Lima and Callao)
25
2030
1900 MHz (Rest of provinces)
25
2018
(7)
3.5 GHz
50
2027
Uruguay
700 MHz
30
2037
850 MHz
25
2044
(8)
1900 MHz
20
2042/2044
(8')
1900 MHz
40
2033
2600 MHz
40
2045
3.5 GHz (TDD)
100
2048
Venezuela
850 MHz
25
2027
(9)
1900 MHz
50
2027
(9)
1700 MHz/2100 MHz
20
2027
(9)
2600 MHz
40
2029
3.5 GHz
50
2026
(10)
(1) Covering 65% of the population.\u00a0
(2) 10MHz sold in 2021 as a result of the \u2018Subtel\u2019 (Chilean National Regulator) proposal to comply with the High Court resolution (June 2018) that mandates
operators to return certain amount of spectrum they acquired in the 700MHz auction in 2014.
(3) Only in Metropolitan Region.
(4) Spectrum licenses extended until September 2025.
(4') Spectrum licenses part of the UTE with Tigo Colombia.
(5) Renewed for 20 years.
(5') Concesion extended until February 2025. Pending final renewal
conditions.
(6) Spectrum returned except in the Provinces of Lima and Callao
(6') Provinces of Lima and Callao: expiration date of March 2030; rest of provinces in December 2030.
(7) In process of renewal. Extension requested on May 30, 2016. According to the regulation, the license maintains its validity until the Ministry of Transport and
Communications decides over the request presented
(8) 25 MHz has been renewed for 20 years until 2044.
(8')10 MHz has been renewed for 20 years until\u00a0 2044; 10 MHz has been
renewed for 20 years until in 2042.
(9) Renewed for 5 years.
(10) Available for Fixed Wireless Access licenses.
Telef\u00f3nica seeks\u00a0to use its spectrum in the most efficient
way, implementing 5G and LTE-Advanced where
possible.
Besides the spectrum assets included in the above
tables, Telef\u00f3nica owns other assets of spectrum used
for other services in higher frequency ranges (above 6
GHz), including access transport.
ANNEX 1
BRAZIL'S SPECTRUM PORTFOLIO: MEANING OF THE STATES, REGIONS AND SECTORS ACRONYMS
Acronym
State
AC
Acre
AL
Alagoas
AP
Amap\u00e1
AM
Amazonas
BA
Bahia
CE
Ceara
DF
Distrito Federal
ES
Esp\u00edrito Santo
GO
Goi\u00e1s
MA
Maranh\u00e3o
MT
Mato Grosso
MS
Mato Grosso do Sul
MG
Minas Gerais
PA
Par\u00e1
PB
Para\u00edba
PR
Paran\u00e1
PE
Pernambuco
PI
Piau\u00ed
RJ
Rio de Janeiro
RN
Rio Grande do Norte
RS
Rio Grande do Sul
RO
Rond\u00f4nia
RR
Roraima
SC
Santa Catarina
SP
S\u00e3o Paulo
SE
Sergipe
TO
Tocantins
Regions
States & towns included in the regions
1
\u00a0 SP (City)
2
\u00a0 SP (Interior)
2'
\u00a0 SP - towns of sector 33 of the GPLG
3
\u00a0 RJ and ES
4
\u00a0 MG
4'
\u00a0 MG - towns of sector 3 of the GPLG
5
\u00a0 PR and SC
5'
\u00a0 PR - towns of sector 20 of the GPLG
6
\u00a0 RS
6'
\u00a0 RS - towns of sector 30 of the GPLG
7
\u00a0 AC, DF, GO, MS, MT, RO and TO
7'
\u00a0 GO - towns of sector 25 of the GPLG
7''
\u00a0 MS - towns of sector 22 of the GPLG
8
\u00a0 AM, AP, MA, PA and RR
9
\u00a0 BA and SE
10
\u00a0 AL, CE, PB, PE, PI and RN
Sectors
GPLG -\u00a0 general plan of the licenses granted\u00a0 (geographic areas that correspond to the sectors)
1
RJ
2
MG - except towns included in sector 3
3
MG -\u00a0 towns of Arapor\u00e3, Ara\u00fajo, Campina Verde, Campo Florido, Campos Altos, Can\u00e1lopis, Capin\u00f3polis, Carmo do Parana\u00edba,
Carneirinhos, Centralina, Comendador Gomes, Concei\u00e7\u00e3o das Alagoas, C\u00f3rrego Danta, Cruzeiro da Fortaleza, Delta, Frutal,
Gurinhat\u00e3, Ibiraci, Igaratinga, Iguatama, Indian\u00f3polis, Ipia\u00e7\u00fa, Itapagipe, Ituiutaba, Iturama, Lagamar, Lagoa Formosa, Lagoa
Grande, Limeira D'Oeste, Luz, Maravilhas, Moema, Monte Alegre de Minas, Monte Santo de Minas, Nova Ponte, Nova Serrana,
Papagaios, Par\u00e1 de Minas, Patos de Minas, Pedrin\u00f3polis, Pequi, Perdig\u00e3o, Pirajuba, Pitangui, Planura, Prata, Presidente
Oleg\u00e1rio, Rio Parana\u00edba, Santa Juliana, Santa Vit\u00f3ria, S\u00e3o Francisco de Sales, S\u00e3o Jos\u00e9 da Varginha, Tupaciguara, Uberaba,
Uberl\u00e2ndia, Uni\u00e3o de Minas and Vazante
4
ES
5
BA
6
SE
7
AL
8
PE
9
PB
10
RN
11
CE
12
PI
13
MA
14
PA
15
AP
16
AM
17
RR
18
SC
19
PR - except towns included of sector 20
20
PR - towns of Londrina and Tamarana
21
MS - except the town integrating of sector 22
22
MS - town of Parana\u00edba
23
MT
24
TO and GO - except towns included in sector 25
25
GO - towns of Buriti Alegre, Cachoeira Dourada, Inaciol\u00e2ndia, Itumbiara, Paranaiguara and S\u00e3o Sim\u00e3o
26
DF
27
RO
28
AC
29
RS
30
RS - towns of Pelotas, Cap\u00e3o do Le\u00e3o, Morro Redondo and Turu\u00e7u
31
SP - except the towns included in sector 33
33
SP - towns of Altin\u00f3polis, Aramina, Batatais, Brodosqui, Buritizal, Cajuru, C\u00e1ssia dos Coqueiros, Col\u00f4mbia, Franca, Gua\u00edra,
Guar\u00e1, Ipu\u00e3, Ituverava, Jardin\u00f3polis, Miguel\u00f3polis, Morro Agudo, Nuporanga, Orl\u00e2ndia, Ribeir\u00e3o Corrente, Sales de Oliveira,
Santa Cruz da Esperan\u00e7a, Santo Ant\u00f4nio da Alegria and S\u00e3o Joaquim da Barra
", "dimensions": { "concept": "ifrs-full:DisclosureOfServiceConcessionArrangementsExplanatory", "language": "en", "entity": "scheme:549300EEJH4FEPDBBR25", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } } } }