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 April 15, 2005 Commission File No. 1-14712 FRANCE TELECOM (Translation of registrant’s name into English) 6, place d’Alleray, 755
Slide 2: France Telecom FY 2004 IFRS, April 14th 2005
France FY April, 200414th Telecom IFRS 2005
Slide 3: Cautionary Statement
Cautionary This Such technology uncertainties. results TOP changes and additional Telecom’s 2 international presentation programs, statements orinperformance specific financial the Statement and These competitive France market are operations. contains risks results not statements to Telecom’s condit
Slide 4: Agenda
Key figures French GAAP IFRS and IFRS guidance Income Statement Balance sheet 2005 new business segments Appendix Agenda 3
Slide 5: Key messages
Keychange Organic Positive Net No New Strategic 4 Debt messages business Cash impact priorities (+in6 guidance flow segments bnoneuros) unchanged Net Generation result fitted and Equity Group topotential company (+ Share 2bn maintained organization (euros) + 233impacts million consistent euros) andw
Slide 6: Key figures: French GAAP to IFRS
2004 Euros, French Revenues GAAP 18,261 Gross margin* Margin Net Equity Final *: 5 EBITDA Result debt Key figures Operating in (year 17,923 rate (year millions 47,157 figures Group proxy end) consistent end) 38.7% 46,158 French 15,681 Share IFRS 43,938 with 38.8% 2,784 GAAP 17,683 49,923 Dec, 3,017
Slide 7: Key figures: EPS and cash flow
2004 EPS 1.14 Organic 1.23 French 7.8 No IFRS 7.65 * 6 Cash impact (in Key Flow GAAP euros) Free figures onexcluding Cash organic French Flow* cash Equant GAAP (in generation billion CVR IFRSof payment potential euros) and excluding Disposals and Minorities buy out (Kulczyck put not included)
Slide 8: 2005 guidance
2005 French Pro Revenues REAA Operating Upper CAPEX of Net Gross Guidance Margin 7 10% forma debt Guidance Operating range Gross GAAP toto tounchanged, growth 12% Margin +3% sales REAA Below Upper Over IFRS of toof10% Over 5% 219 2005 range end priority bn +3% to 18.5 Below of euros 12% to 2005 bn r
Slide 9: Agenda
Key figures French GAAP IFRS and IFRS guidance Income Statement Balance sheet 2005 new business segments Appendix Agenda 8
Slide 10: Income statement: French GAAP to IFRS
2004 French Euros, A Non Ow Labour employee B -Share-based Discount sharing Amortization C Impairment Disposal Restructuring Associates Operating Gross 9 8,874 416 Revenues Gross Impairment External labour IFRS -Operating in 416 GAAP -costs Operating 8,850 of millions on profit Income +Income costs
Slide 11: A - Revenues reviewed
A—Revenues reviewed Euros, presentation) the Already Recog distribution France Equipment Connection Revenue Others expected relationship Scope Revenues consolidated proportional Mainly 10 transaction of Revenue in -(special Orange Fixed netting netted 5Recog share consolidation customer millions to
Slide 12: IFRS impact on revenues and margin
IFRS Euros, Non OPEX Revenues -Equipment through Connection Others Total Revenue 11345labour -+ Revenues in Margin 782 -345 third 5recognition millions share +44 +741 sales Gross fees neutral party +39 arrangements recognition -- 80 Op. 41 impact 0 - 80 impacts neutral - 352 +on352 Gross neutral Ope
Slide 13: B - From gross operating margin to operating income
B—From FY Margin Euros, REAA Revenue Capitalization Change Non Gross 12 2004 Operating operating Operating in (French inreconciliation millions REAA scope ofIncome GAAP Margin Margin, Margin of development torate consolidation Gross )now impact (IFRS) 18,261 slightly and Operating included others co
Slide 14: C - From French GAAP to IFRS operating income
C—From French Euros, Gross Share-based Discount Amortization Impairment Disposal Restructuring Associates Operating Equant € Ow Increased 13553m 519m €–operating €199m in 184m GAAP :exceptional IFRS of millions on volatility Gross income 30 Pages assets of share payment-Employee for -reconciliation
Slide 15: C' - Share-based payment
C’—Share-based Euros, FY Employee Stock Total -Discount employees Previously Mainly Linked 14 263 2004 -option in 416 to related millions on French Profit (IFRS below share plans toSharing payment, Orange State Operating 2) offers (IFRSPlacement to -2)280 employee Income - 136 andprofit Page sharing
Slide 16: TDIRA impact
2004 Euros, TDIRA Impact Carry Change Interests Foreign Total No 15 impact IFRS financial back in of (additional in exchange capitalized millions amortized Fair on financial interest interests Charges, Value gain interests charge on costs charges ofpaid (loss) tangible Derivatives net-- 20 –77 charg
Slide 17: Net income: French GAAP to IFRS
2004 French Euros, 12/31/04 Operating Total Current Other Income Employee Equity Goodwill Exceptional Minority Net IFRS 9,312 -Delta 3,210 233 3,017 16 3,625 2,477 193income/(loss) result million IFRS financial 12/31/04 mainly non-operating in GAAP taxes income Interests millions net amortization 3,
Slide 18: Agenda
Key figures French GAAP IFRS and IFRS guidance Income Statement Balance sheet 2005 new business segments Appendix Agenda 17
Slide 19: Equity reconciliation
Reconciliation Euros, Reclassification Goodwill TDIRA Minority Customers’ Revenue Others Equity *: Closing 18 Include in + under +1,267 balance 341 recognition interests millions amortization post-employment relationship French IFRS - 277 of +1,236 of sheet Equity commitment 01/01/04* minority 13,99
Slide 20: Net debt reconciliation
Reconciliation Euros, TDIRA Carry Equant -Derivatives cash Accrued Minority Other Net * 19892 Including debt collateral -+ back in 1068 CVR +38 interests under to interests millions 4,031 -+ Gross securitization and 168 +1,431 of French IFRS 2,049 associated + Net + Operating 3,994 commitments 01/01
Slide 21: Agenda
Key figures French GAAP IFRS and IFRS guidance Income Statement Balance sheet 2005 new business segments Appendix Agenda 20
Slide 22: New segmentation
New segmentation UK ROW Poland France Directories Enterprise Personal Home 21 business segments reflects FT new organization
Slide 23: New business segments 2004 IFRS key figures
New business Euros, Home Eliminations Revenues Gross 7,401 Margin CAPEX 22 8,076 Op Personal inrate 2,051 millions 22,440 33.0% 2,039 Total segments’ 2,702 Enterprise 20,564 407 39.3% 388 17,923 2004 8,235 824.8% Directories - 8 IFRS 5,141 978 41.6% -6,059 key 38.8% figures 46,158
Slide 24: Conclusion
Conclusion No Priority Next – 23Investor change impact steps remains Day on for in guidance cash return communication indeleveraging June generation to shareholders potential : 1Q05potential figures on April 28, 2005
Slide 25: Agenda
Key figures French GAAP IFRS and IFRS guidance Income Statement Balance sheet 2005 new business segments Appendix Agenda 24
Slide 26: Net result: French GAAP to IFRS
Reconciliation Euros, Customer Reversal Equant Share-Based Derivative and Deferred Other Net + between Difference French asset And—€ IFRS Ow impairment offer € employee*, *: option 25-149m €483m €57m -result 136m amortized :331m €–on impairment asset -in 206 GAAP tangible 375 TP shares 184m already
Slide 27: Organic cash flow
2004 Euros A GAAP B C D Free E Cash F Organic 7,794 excluding 26 (A+B-C+D+E+F) –-–- Orange Net Impact Equant ow Cash Financing Flow 7,646 inDisposals Cash cash Cash millions Disposals Flow excl. of & CVR provided provided Wanadoo investment Flow IFRS excl. disposals payment French of(Cash and financ
Slide 28: Revenue: Personal
Revenue Orange ORANGE Rest TP Wireless OTHER PERSONAL OPERATIONS Personal Eliminations 27 GROUP of the France INTERNATIONAL France UK Poland Rest telephony presentation World mobile ofOrange World Eliminations : UK personal
Slide 29: Revenue: Home
Revenue FIXED Access, WANADOO TP OTHER HOME Consumer Homes Subscription Calling On-line Carriers Domestic Other Home Fixed Eliminations 28 GROUP revenues consumer carrier Home line France Poland Rest usages LINE, services & portals services INTERNATIONAL presentation interconnection carrier services
Slide 30: Revenue: Enterprise and Directories
RevenueLINE, FIXED ENTERPRISE Directories WANADOO EQUANT Business 29 DIRECTORIES Eliminations presentation services Fixed networks DISTRIBUTION lineinTelephony telephony France : entreprise, Other Business in&France Directories Business NETWORKS networks services Other in Business France Global serv
Slide 31: Opening balance sheet at January 1, 2004
Opening No compared Business was combinations Historical Tangible circumstances, Implemented IAS 32/39 promulgated adoption Cumulative translation differences All retained Employee 30 GAAP) benefits restatement actuarial used 32/39 (noearnings balance assets in use to cost operations (reclassificati
Slide 32: Other issues: employee benefits and scope
Other Employee Pension Scope TP Sonatel, 31 group issues ofschemes previously consolidation isbenefits fully with consolidated, are of noconsolidated the impact notgroup an issue forinas France other on in in France global French countries Telecom basis, and GAAP, Poland are is now since defined due
Slide 33: Definition of net debt
Definition French Net -IAS/IFRS + 32 Asset Cash, Accrued Liability debtcash derivatives GAAP isof will interests derivatives cash defined collateral equivalents Net be collateral defined Debt in theas: and financial Total marketable gross statements borrowing securities as: Total (converted gross bo
Slide 34: Net debt: TDIRA
Netdebt French Perpetual Breakdown IAS/IFRS Debt Impact Increased the 33 debt: component on GAAP amount TDIRA bonds interest the future between 2004 redeemable cc. IFRS (IAS charge IFRS 3/4 anfinancial 32) equity ofwhen balance the fornominal component the France statements sheet effective value Tel
Slide 35: Net debt: carry-back receivable
Net debt: French The Carry-back IAS/IFRS Additional Impact Notional 34 carry on GAAP interest Carry back the future financial receivable 2004 receivable back IFRS charge IFRS debt (IAS sale financial (no and balance sale 32 with cash carry-back / isIAS astatements accounted out guarantee sheet 18) s
Slide 36: Net debt: Equant CVR
Net debt: French IAS/IFRS Reclassification Impact 2004 Equant 35 on GAAP CVREquant thehave future is2004 aaccounted from IFRS derivative CVR been IFRS provision financial (IAS paid balance for instrument 39) inasJuly for statements a sheet provision risk 2004. As anda contingencies derivative for ri
Slide 37: Net debt: hedging instruments
Net debt: French Hedging except Debt IAS/IFRS flow IFRS Closing €1.1 Impact Increased Expected 36 Bn hedge isNet currency on GAAP converted rate Others instruments derivatives to debt volatility the future accounting) be conversion 2004 (on limited +€0.1Bn hedging IFRS at31/12/04) (income IFRS the a
Slide 38: Net debt: minority put options
Expected French Minority When IAS/IFRS same Purchase Total Conditional Impact Changes Limited Potential 37 impact amount minority on GAAP impact in impact interests offers Impact the future the put: for (no 2004 present have for made conditional for Orange IFRS on corresponding commitments purchase
Slide 39: Revenues: sales of equipment
Revenues: sales equipment IAS 18 through (1)—Revenue dealers recognition French Revenue 2004 38 GAAP channels IAS/IFRS The legal substance remuneration revenue are from analysis accounted impact: equipment of the of the commercial <€345m> for service commercial isdifferently) estimated rendered ; re
Slide 40: Revenues: content arrangements
Revenues: Arrangements arrangements French The When IAS/IFRS main Who 2004 39 legal sets determines has characteristic impact: itGAAP can the the analysis IAS be credit price <€352m> between argued 18the of (2)—Revenue ?risk ofspecifications the the that FT, ?; commercial No transaction the a impact
Slide 41: Revenues: connection fees
Revenues: French Under Connection IAS/IFRS Costs 2004 40 impact: related French GAAPIAS fees to <€80m> GAAP, 18 connection are(3)—Connection deferred connection that over can fees the not fees average and be costs capitalised expected related(and to customer connection therefore relationship amortis
Slide 42: Share-based payment
Share-based French Stock The IAS/IFRS plan 41 fair granted options GAAP valuecompensation after granted of stock November inoptions certain (IFRS 7,is2002) subsidiaries amortized 2) Discount over (Orange, offer the vesting of Wanadoo, shares period toEquant) employees as a compensation INoshould imp
Slide 43: Amortization of customer relationships
Amortization French Deferred IAS/IFRS Customer Retrospective Decrease Negative Impact 42 on should GAAP tax impact in relationships the future EBIT liability of 2004 amortization reduce customer of IFRS as€0.6 IFRS long infinancial accounted amortized 2005 Bn balance as relationships charge in custo
Slide 44: Other IFRS impacts: SAC, R&D, interest
IFRS SAC’s No Expensed R&D Goodwill Interest Under 43 difference impact IFRS, French and capitalization amortization asSRC’s incurred on development with GAAP: GAAP, income French under interest amortization statement: costs Gaap French expenses meeting accounting other + GAAP impairment are impacts
Slide 45: France Telecom FY 2004 IFRS
France FY April, 200414th Telecom IFRS 2005
Slide 46: 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: April 15, 2005 By: / S/ PIERRE HILAIRE Name: Pierre Hilaire Title: Director of Fina