Orange Sa · EURONEXT:ORA
Orange Sa — France Telecom — Corporate Update (December 2004)
27 slides from Orange Sa's corporate update, Dec 17, 2004
Slide 1: Form 6-K France Telecom
SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 OF THE SECURITIES EXCHANGE ACT OF 1934 December 17, 2004 Commission File No. 1-14712 FRANCE TELECOM (Translation of registrant’s name into English) 6, place d’Alleray,
Slide 2: France Telecom Initial assessment of IFRS impact, December 17th, 2004
Franceassessment Initial DecemberTelecom 17th of IFRS , 2 0impact 04
Slide 3: Cautionary Statement
Cautionary This statements endorsed forward-looking which expectations, and as All The events adopted the uncertainties forward-looking presentation certain or changes, by circumstances in for will Statement the understandings, accordance may 2005 be European effects statements include: contains int
Slide 4: Agenda
KeyDebt Agenda Net Equity Income Other IFRSmessages communication impacts statement and Financialprogram result for 2005
Slide 5: Warning
Warning The All figures purposeare forward-looking company, ofthrough preliminary this presentation statements its Investor and unaudited included is Relation to drawinaDepartment, this preliminary presentation will picture do be available not of the reflect various toallcomment the consequences pos
Slide 6: International IFRS project: key messages
International IFRS France -A 2004 Training Steering Dedicated strong IFRS are Telecom “Enterprise the Committee program accounts teams accounting Financial is in on specifically will Project” all track chaired Reporting divisions standards be published started bydesigned the Standards toCFO in beand
Slide 7: Key messages on IFRS impacts
International Management No Distribution company Main Slight Net change impact Debt impacts increase increased statutory on oncapacity Financial decisions France cash-flow return on Free inthe equity accounts Cash by to IFRS Telecom’s will cc Reporting shareholders are Flow €6.5 still opening not un
Slide 8: Opening balance sheet: business combinations and IAS 32/39
Opening Business No Tangible Historical IAS Implementated The Cumulative Employee All restatement actuarial cumulative 32/39balance assets combinations cost benefits adoption translation gains maintained as of translation sheet of business and January losses options differences except differences co
Slide 9: Other issues: pension schemes and consolidation scope
Other Pension Employee Scope TP group issues ofschemes consolidation isbenefits fully with consolidated, are of nothe impact notgroup an issue forinas France other in in France French countries Telecom and GAAP, Poland are since defined due it to iscontribution controlled the social security plans (
Slide 10: Expected equity impact on January 1, 2004
Expected €11.6 French Reclassification +€5.4 +€1.2 Minority TDIRA -€0.6 Customers’ -€2.5 Connection -€0.5/1.0 Overall (1) (2) (3) Deferred Including IncludingTele-Invests Bn/-€1.2 Bn Bn(2) Bn(3) Bn GAAP impact interests Bn major relationship fees tax post-employment equity Bn on net of assets commit
Slide 11: Expected net debt impact on January 1, 2004
Expected €47.7 French €4.1 TDIRA Carry €1.5 Equant €2.0 -€0.8 Derivatives €1.3 Accrued €0.6/1.2 Minority €0.6 Of IFRS cc.€ Remaining after (1) (2) which See Including 57 Bn Equant Bn Net Bn(2) back GAAP CVR definition Bn Bn interests interests Impact minority debt(1) negative and CVR securitization
Slide 12: TDIRA treatment under IFRS
Expected French Perpetual IAS/IFRS Breakdown Interest opening Impact financial Debt Equity Increased Additional Already component component on GAAP charge priced balance statements Impact bonds interest the future interest between 2004 is inredeemable sheet cc. IFRS on based computed by charge cc.1/
Slide 13: Carry-back receivable treatment under IFRS
Expected French The IAS/IFRS Carry-back opening Impact financial Notional Carry Additional No future carry back on GAAP balance statements interest Impact back cash the future financial receivable 2004 out receivable sheet IFRS charge onIFRS net debt and sale debt: (no and sale financing with cash c
Slide 14: Equant CVR treatment under IFRS
Expected French IAS/IFRS Equant As Any It financial opening Impact Classified Reclassification Paid isaincluded change on derivative on GAAP CVR July balance statements Impact as future the IFRS in 8th, ais in 2004 derivative the instrument: aaccounted the from income sheet IFRS 2004 on derivative v
Slide 15: Hedging derivatives and collateral under IFRS
French Hedging IAS/IFRS except Debt Derivatives Changes opening Impact financial IFRS Closing Currency Prepayment Increased Expected Cash is collateral Net currency on GAAP converted rate balance instruments in statements Impact to and debt volatility the future the are be of conversion interest 200
Slide 16: Minority purchase commitments under IFRS
Expected French IAS/IFRS Minority When same opening Impact financial Total Purchase Conditional Changes Limited Potential cc. €0.6/1.2 impact amount minority on GAAP impact balance in statements impact interests offers of Impact the future the Bn minority put: for (no 2004 present have on for made c
Slide 17: Income statement: equipment sales
Income IAS/IFRS French Equipment Distribution handset opening Impact financial But Impact: No material impact impact on GAAP statement: cc. sales balance statements the future on revenue on €0.4 impact remuneration in net future 2004 revenue accounting direct Bn sheet IFRS income revenue expected IF
Slide 18: Income statement: connection fees
Income French IAS/IFRS Generally FT Connection Related opening financial Impact Limited will No decided specific impact reflect on of GAAP statement: costs impact balance statements €FT the future on connection to guidance -0.5/-1.0 fees that recognises Cash 2004 have expected will sheet IFRS do rev
Slide 19: Income statement: customer relationships amortization
Income French IAS/IFRS Deferred Customer financial opening Retrospective Decrease Negative Impact No amortization impact on should GAAP statement: balance statements tax impact in relationships future the on EBIT liability future 2004 amortization reduce sheet and of IFRS as amortization more IFRS c
Slide 20: Income statement: stock options
Income French Stock IAS/IFRS France financial Impact opening The Discount New A Shows No Same reclassification compensation impact fair compensation plans, cash options the Telecom on GAAP statement: value balance statements offer offers future the cumulative on impact if any, the total granted 2004
Slide 21: Other IFRS impacts: R&D, goodwill, interest
IFRS No SAC’s Expensed R&D Goodwill Under Interest difference impact IFRS: French IFRS, and capitalization amortization asSRC’s incurred on development FT impairment with GAAP: GAAP, income has are French chosen under expensed interest amortization statement: testing costs Gaap French not expenses a
Slide 22: IFRS communication program 2005
2004 Preliminary Mid IFRS 1H End 2005 of April February results communication 1QApril July September preliminary final revenues 2005 2005 IFRS in 2005 2005 results French 2004 2005results program GAAP results for 2005
Slide 23: Conclusion: no impact on strategy and business performance
No impact on Company strategy and business performance Conclusion
Slide 24: Appendix
Appendix
Slide 25: Presentation of preliminary P&L: French GAAP vs IFRS
Presentation No French IFRS Sales Revenues Cost Personnel Selling, External Research Others Depreciation EBITDA Amortization Disposal Restructuring TDIRA Share Impairment Operating Current Other Interest Foreign Employees Sale/depreciation Financial Discounting Income Goodwill Profit Exceptional Net
Slide 26: Net debt definition: French GAAP and IFRS
Definition French IAS/IFRS Net -Total +Asset Cash, Accrued Liability debt gross derivatives cash GAAP isof will interests derivatives cash defined borrowing collateral equivalents Net be collateral defined Debt in Note (converted as: and8 marketable to theatfinancial hedging closing securities rate)
Slide 27: Signature
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. FRANCE TELECOM Date: December 17, 2004 By: / S/ PIERRE HILAIRE Name: Pierre Hilaire Title: Director of F