Telefonica SaBME: TEF

Other relevant information - La sociedad remite una amplicación/modificación de la información financiera del primer semestre de 2026 registrada con anterioridad (Half-yearly financial reports and audit reports/limited audit review) - Semi-annual report in english

Jul 29, 2026 at 5:40 AM UTC · Issued by Telefonica SA

Report on limit ed review, Condensed

consolidated interim fin ancial statements

and Consolidated interim management report

for the six-month period ended June 3 0, 2026

«»

Telefonica

FIRST HALF 2O26

Tc'e Ionie a, S.A. and sua stdiarics c omposing the Tc‹c lamea Group

This version of ot/r report is a free translation of the original, which was prepared in Spanish. All possible care has been taken to ensure that the translation is an accurate representation of the origina/. However, in all matters of interpretation of information, v'iews or opin/ons, the original language version of our report takes precedence over this translation.

Report on limited review of condensed consolidated interim financial statements

To the shareholders of Telefénica, S.A.:

Introduction

We have performed a limited review of the accompanying condensed consolidated interim financial statements (hereinafter, the interim financial statements) of Telefénica, S.A. (hereinafter, the Parent company) and its subsidiaries composing the Telefénica Group (hereinafter, the Group), which comprise the statement of financial position as at 30 June 2026, and the income statement, statement of comprehensive income, statement of changes in equity, statement of cash flows and related notes, all condensed and consolidated, for the six-month period then ended. The Parent company's directors are responsible for the preparation of these interim financial statements in accordance with the requirements of International Accounting Standard (IAS) 34, Interim Financial Reporting, as adopted by the European Union, for the preparation of condensed interim financial statements, as provided in Article 12 of Royal Decree 1362/2007. Our responsibility is to express a conclusion on these interim financial statements based on our limited review.

Scope of review

We conducted our limited review in accordance with International Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A limited review of interim financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A limited review is substantially less in scope than an audit conducted in accordance with legislation governing the audit practice in Spain and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion on these interim financial statements.

COI3CIUSIOFI

Based on our limited review, that cannot be considered as an audit, nothing has come to our attention that causes us to believe that the accompanying interim financial statements for the six-month period ended 30 June 2026 have not been prepared, in all material respects, in accordance with the requirements of International Accounting Standard (IAS) 34, Interim Financial Reporting, as adopted by the European Union, as provided in Article 12 of Royal Decree 1362/2007, for the preparation of condensed interim financial statements.

wunmpwc.es

PricewaterhouseCoopers Auditores, S.L. Torre PwC, P.° de la Castellana zs9 B, z8 46 Madrid, España

Tel.: +34 915 684 4 / +34 9 2 021 111

R. M. Madrid, hoja M-63 988, folio 75, tomo 9.267, libro 8 054, seccion 3.° Inscrita en el R O.A C con el ndmero S0242 - NIF B-79031290

Emphasis of matter

We draw attention to note 2 of the interim financial statements, in which it is mentioned that these interim financial statements do not include all the information required in a complete set of consolidated financial statements prepared in accordance with International Financial Reporting Standards, as adopted by the European Union, and therefore the accompanying interim financial statements should be

read together with the consolidated annual accounts of the Group for the year ended 31 December 2025. Our conclusion is not modified in respect of this matter.

Other matters

Consolidated interim management report

The accompanying consolidated interim management report for the six-month period ended

30 June 2026 contains the explanations which the Parent company's directors consider appropriate regarding the principal events of this period and their impact on the interim financial statements presented, of which it does not form part, as well as the information required under the provisions of Article 15 of Royal Decree 1362/2007. We have verified that the accounting information contained in this management report is in agreement with that of the interim financial statements for the six-month period ended 30 June 2026. Our work as auditors is limited to checking the consolidated interim management report in accordance with the scope mentioned in this paragraph and does not include a review of information other than that obtained from Telefénica, S.A. and its subsidiaries composing the Telefénica Group' accounting records.

Preparation of this review report

This repo% has been prepared at the request of the Board of Directors of Telefénica, S.A. in relation to the publication of the half-yearly financial report required by Article 100 of Law 6/2023, of March 17, on Securities Markets and Investment Services.

Price âterhouseCoopers Auditores, S.L.

Vanesa Gonzalez Prieto

29 July 2026

2 Telefonica, S.A. and its subsidiaries composing the Telefonica Group

‌Index

Consolidated statements of financial position ........................................................................................... 3

Consolidated income statements.................................................................................................................... 4

Consolidated statements of comprehensive income................................................................................ 5

Consolidated statement of changes in equity............................................................................................. 6

Consolidated statements of cash flows ........................................................................................................ 8

Note 1. Background and general information .................................................................................................... 9

Note 2. Basis of presentation of the condensed consolidated financial statements................................... 9

Note 3. Accounting policies ................................................................................................................................. 17

Note 4. Segment financial information............................................................................................................... 19

Note 5. Intangible assets...................................................................................................................................... 24

Note 6. Goodwill .................................................................................................................................................... 25

Note 7. Property, plant and equipment .............................................................................................................. 26

Note 8. Associates and joint ventures ................................................................................................................ 27

Note 9. Related parties ......................................................................................................................................... 31

Note 10. Financial assets and other non-current assets.................................................................................. 34

Note 11. Inventories................................................................................................................................................ 35

Note 12. Receivables and other current assets ................................................................................................. 35

Note 13. Other current financial assets .............................................................................................................. 36

Note 14. Breakdown of financial assets by category ........................................................................................ 37

Note 15. Changes in equity and shareholder remuneration............................................................................ 39

Note 16. Financial liabilities................................................................................................................................... 43

Note 17. Derivative financial instruments ........................................................................................................... 45

Note 18. Payables and other non-current liabilities .......................................................................................... 45

Note 19. Payables and other current liabilities .................................................................................................. 46

Note 20. Provisions ............................................................................................................................................... 47

Note 21. Leases ...................................................................................................................................................... 48

Note 22. Average number of Group employees ............................................................................................... 49

Note 23. Other income and Other expenses..................................................................................................... 50

Note 24. Income tax matters................................................................................................................................ 50

Note 25. Cash flow detail ..................................................................................................................................... 52

Note 26. Other information .................................................................................................................................. 55

Note 27. Non-current assets and disposal groups classified as held for sale and discontinued operations............................................................................................................................................................... 57

Note 28. Events after the reporting period ........................................................................................................ 61

Note 29. Additional note for English translation................................................................................................ 61

Appendix I. Changes in the consolidation scope.............................................................................................. 62

Appendix II. Key regulatory issues....................................................................................................................... 62

Interim Consolidated Management Report....................................................................................................... 67

Consolidated results........................................................................................................................................... 67

Segment results .................................................................................................................................................. 71

Committed to sustainability............................................................................................................................... 81

Risk Factors.......................................................................................................................................................... 83

‌Telefónica Group Consolidated statements of financial position

Millions of euros	Notes	06/30/2026	12/31/2025
Assets
A) Non-current assets		68,762	70,012
Intangible assets	Note 5	8,867	9,112
Goodwill	Note 6	16,478	15,796
Property, plant and equipment	Note 7	17,493	18,158
Rights of use	Note 21	7,920	7,441
Investments accounted for by the equity method	Note 8	6,653	6,753
Financial assets and other non-current assets	Note 10	6,147	6,740
Deferred tax assets	Note 24	5,204	6,012
B) Current assets		19,834	22,005
Inventories	Note 11	892	862
Receivables and other current assets	Note 12	9,165	9,662
Tax receivables	Note 24	1,607	867
Other current financial assets	Note 13	2,156	870
Cash and cash equivalents	Note 14	5,149	6,564
Non-current assets and disposal groups held for sale	Note 27	865	3,180
Total assets (A+B)		88,597	92,017

	Notes	06/30/2026	12/31/2025
Equity and liabilities
A) Equity		18,315	17,808
Equity attributable to equity holders of the parent and other holders of equity instruments	Note 15	14,675	14,258
Equity attributable to non-controlling interests	Note 15	3,640	3,550
B) Non-current liabilities		48,734	49,372
Non-current financial liabilities	Note 16	29,548	30,120
Non-current lease liabilities	Note 21	5,942	5,644
Payables and other non-current liabilities	Note 18	4,390	3,912
Deferred tax liabilities	Note 24	2,190	2,518
Non-current provisions	Note 20	6,665	7,178
C) Current liabilities		21,547	24,837
Current financial liabilities	Note 16	4,223	4,219
Current lease liabilities	Note 21	1,981	1,938
Payables and other current liabilities	Note 19	11,751	12,942
Current tax payables	Note 24	944	950
Current provisions	Note 20	2,152	1,899
Liabilities associated with non-current assets and disposal groups held for sale	Note 27	497	2,889
Total equity and liabilities (A+B+C)		88,597	92,017

Unaudited data at June 30, 2026. The accompanying notes and appendices are an integral part of these condensed consolidated interim financial statements.

‌Telefónica Group Consolidated income statements

Millions of euros	Notes	January - June 2026	January - June 2025 (*)
Revenues	Note 4	16,392	16,112
Other income	Note 23	598	642
Supplies		(5,529)	(5,344)
Personnel expenses		(2,491)	(2,355)
Other expenses	Note 23	(3,467)	(3,465)
Depreciation and amortization	Notes 4, 5, 7 and 21	(3,497)	(3,413)
Operating income	Note 4	2,006	2,176
Share of income (loss) of investments accounted for by the equity method	Notes 4 and 8	(243)	(299)
Finance income		329	477
Finance costs		(1,111)	(1,104)
Net exchange differences		(150)	14
Net financial expense		(932)	(614)
Profit before tax		832	1,264
Corporate income tax	Note 24	(218)	(386)
Profit after tax from continuing operations		614	877
Profit after tax from discontinued operations	Note 27	(821)	(2,164)
Profit for the period		(207)	(1,286)
Attributable to equity holders of the Parent		(338)	(1,355)
From continuing operations		474	754
From discontinued operations		(812)	(2,110)
Attributable to non-controlling interests	Note 15	132	69
From continuing operations		141	123
From discontinued operations		(9)	(54)
Basic and diluted earnings per share attributable to equity holders of the parent (euros)		(0.09)	(0.26)
From continuing operations		0.05	0.11
From discontinued operations		(0.14)	(0.37)

Unaudited data. The accompanying notes and appendices are an integral part of these condensed consolidated interim financial statements.

(*) Revised data to reflect the results of Telefónica Móviles Chile, Colombia Telecomunicaciones and Telefónica Móviles México, among other companies of smaller scale based in Hispanoamerica, as discontinued operations (see Note 27).

‌Telefónica Group Consolidated statements of comprehensive income

Millions of euros	January - June 2026	January - June 2025 (*)
Profit for the period	(207)	(1,286)
Other comprehensive (loss) income	2,114	1,189
(Losses) gains from financial assets measured at Fair value through comprehensive income	(1)	1
Income tax impact	-	1
Reclassification of (gains) losses included in the income statement	-	2
Income tax impact	-	-
	(1)	4
Gains (losses) on hedges	280	(896)
Income tax impact	(74)	229
Reclassification of (gains) losses included in the income statement	(293)	1,097
Income tax impact	88	(270)
	1	160
(Losses) gains on hedges costs	(3)	(32)
Income tax impact	2	8
Reclassification of (gains) losses included in the income statement	(4)	(4)
Income tax impact	1	1
	(4)	(27)
Share of gains (losses) recognized directly in equity of associates and others	(1)	(9)
Income tax impact	-	-
	(1)	(9)
Translation differences	2,112	890
Total other comprehensive income (loss) recognized in the period (Items that may be reclassified subsequently to profit or loss)	2,107	1,018
Actuarial gains (losses) and impact of limit on assets for defined benefit pension plans	15	18
Income tax impact	(4)	-
	11	18
(Losses) gains from financial assets measured at fair value through comprehensive income	(1)	146
Income tax impact	-	-
	(1)	146
Share of (losses) gains recognized directly in equity of associates	(3)	7
	(3)	7
Total other comprehensive income (loss) recognized in the period (Items that will not be reclassified subsequently to profit or loss)	7	171
Total comprehensive income (loss) recognized in the period	1,907	(97)
From continuing operations	1,372	283
From discontinued operations	535	(380)
Attributable to:
Equity holders of the parent and other holders of equity instruments	1,511	(240)
Non-controlling interests	396	143
	1,907	(97)

Unaudited data. The accompanying notes and appendices are an integral part of these condensed consolidated interim financial statements.

‌Telefónica Group Consolidated statements of changes in equity

Attributable to equity holders of the parent and other holders of equity instruments Fair value Equity of Non- Share Share Treasury Other equity Legal Retained financial associates Translation controlling Total Millions of euros capital premium Shares instruments reserve earnings assets Hedges and others differences Total interests equity
Financial position at December 31, 2025	5,670	3,521	(157)	7,550	1,150	16,505	(1)	760	(128)	(20,612)	14,258	3,550	17,808
Profit for the period	-	-	-	-	-	(338)	-	-	-	-	(338)	132	(207)
Other comprehensive income (loss) for the period	-	-	-	-	-	10	(2)	3	(9)	1,847	1,849	264	2,114
Total comprehensive income (loss) for the period	-	-	-	-	-	(328)	(2)	3	(9)	1,847	1,511	396	1,907
Dividends and distribution of profit (Note 15)	-	-	-	-	-	(844)	-	-	-	-	(844)	(64)	(908)
Net movement in treasury shares	-	-	(4)	-	-	(16)	-	-	-	-	(20)	-	(20)
Acquisitions and disposals of non-controlling interests and business combinations (Note 15)	-	-	-	-	-	(19)	-	-	-	-	(19)	(238)	(257)
Undated deeply subordinated securities (Note 15)	-	-	-	-	-	(200)	-	-	-	-	(200)	-	(200)
Other movements	-	-	-	-	-	(11)	-	-	-	-	(11)	(4)	(15)
Financial position at June 30, 2026	5,670	3,521	(161)	7,550	1,150	15,087	(3)	763	(137)	(18,765)	14,675	3,640	18,315

Unaudited data.

The accompanying notes and appendices are an integral part of these condensed consolidated interim financial statements.

Telefónica Group Consolidated statements of changes in equity

Attributable to equity holders of the parent and other holders of equity instruments Available- Equity of Non- Share Share Treasury Other equity Legal Retained for-sale associates Translation controlling Total Millions of euros capital premium Shares instruments reserve earnings investments Hedges and others differences Total interests equity
Financial position at December 31, 2024	5,670	3,521	(106)	7,550	1,150	22,609	(117)	389	(40)	(21,279)	19,347	3,402	22,749
Profit for the period	-	-	-	-	-	(1,355)	-	-	-	-	(1,355)	69	(1,286)
Other comprehensive income (loss) for the period	-	-	-	-	-	18	150	147	(29)	829	1,115	74	1,189
Total comprehensive income (loss) for the period	-	-	-	-	-	(1,337)	150	147	(29)	829	(240)	143	(97)
Dividends and distribution of profit (Note 15)	-	-	-	-	-	(1,691)	-	-	-	-	(1,691)	(49)	(1,740)
Net movement in treasury shares	-	-	(22)	-	-	(35)	-	-	-	-	(57)	-	(57)
Acquisitions and disposals of non-controlling interests and business combinations (Note 2)	-	-	-	-	-	84	-	-	-	-	84	197	281
Undated deeply subordinated securities	-	-	-	-	-	(139)	-	-	-	-	(139)	-	(139)
Other movements	-	-	-	-	-	(21)	-	-	-	-	(21)	(2)	(23)
Financial position at June 30, 2025	5,670	3,521	(128)	7,550	1,150	19,470	33	536	(69)	(20,450)	17,283	3,691	20,974

Unaudited data.

The accompanying notes and appendices are an integral part of these condensed consolidated interim financial statements.

‌Telefónica Group Consolidated statements of cash flows

Millions of euros	Notes	January - June 2026	January - June 2025 (*)
Cash received from operations	Note 25	20,506	19,992
Cash paid from operations	Note 25	(15,440)	(14,366)
Net payments of interest and other financial expenses net of dividends received	Note 25	(823)	(733)
Taxes (paid)/proceeds	Note 25	(248)	(254)
Net cash flow provided by operating activities from continuing operations	Note 25	3,995	4,639
Net cash flow provided by operating activities from discontinued operations	Note 25	(400)	(257)
Net cash flow provided by operating activities	Note 25	3,595	4,382
(Payments on investments)/proceeds from the sale in property, plant and equipment and intangible assets, net	Note 25	(2,260)	(2,457)
Proceeds/(payments) on disposals of companies, net of cash and cash equivalents	Note 25	266	728
Payments on investments in companies, net of cash and cash equivalents acquired	Note 25	(133)	(118)
Proceeds on financial investments not included under cash equivalents	Note 25	703	565
Payments on financial investments not included under cash equivalents	Note 25	(801)	(1,020)
(Payments)/proceeds for temporary financial investments		(547)	(1,001)
Net cash flow used in investing activities from continuing operations	Note 25	(2,772)	(3,303)
Net cash flow used in investing activities from discontinued operations	Note 25	(66)	(518)
Net cash flow used in investing activities	Note 25	(2,838)	(3,821)
Dividends paid	Note 25	(942)	(931)
(Payments)/proceeds from capital reduction/increase of non-controlling interests	Note 25	(10)	(122)
(Payments)/proceeds of treasury shares and other operations with shareholders and with minority interests	Note 25	(22)	(164)
Operations with other equity holders	Note 25	(281)	(188)
Proceeds on issuance of debentures and bonds, and other debts	Note 25	2,359	1,750
Proceeds on loans, borrowings and promissory notes	Note 25	321	492
Repayments of debentures and bonds, and other debts	Note 25	(1,857)	(1,127)
Repayments of loans, borrowings and promissory notes	Note 25	(492)	(565)
Lease principal payments	Note 21	(1,068)	(1,009)
Financed operating payments and investments in property, plant and equipment and intangible assets payments	Note 16	(108)	(31)
Net cash used in financing activities from continuing operations	Note 25	(2,100)	(1,895)
Net cash used in financing activities from discontinued operations	Note 25	(43)	(225)
Net cash used in financing activities	Note 25	(2,143)	(2,120)
Effect of changes in exchange rates		131	(105)
Cash reclassified to assets held for sale	Note 27	(160)	(16)
Net increase (decrease) in cash and cash equivalents during the period		(1,415)	(1,680)
Cash and cash equivalents at January 1	Note 14	6,564	8,062
Cash and cash equivalents at June 30	Note 14	5,149	6,382
Reconciliation of cash and cash equivalents with the statement of financial position
Balance at January 1	Note 14	6,564	8,062
Cash on hand and at banks		5,472	6,905
Other cash equivalents		1,092	1,157
Balance at June 30	Note 14	5,149	6,382
Cash on hand and at banks		3,700	4,900
Other cash equivalents		1,448	1,482

Unaudited data. The accompanying notes and appendices are an integral part of these condensed consolidated interim financial statements.

Telefónica, S.A. and subsidiaries composing the Telefónica Group

Notes to the condensed consolidated interim financial statements for the six-months ended June 30, 2026

‌Note 1. Background and general information

Telefónica, S.A. and its subsidiaries and investees (hereinafter "Telefónica", "the Company", the "Telefónica Group" or "the Group") make up a telecommunications group that operates mainly in four reference markets: Spain, Brazil, Germany and the United Kingdom. Telefónica offers a wide range of products and services based on state-of-the-art technologies. In addition to communication based on fibre and 5G networks, the Group provides digital services for residential customers (such as entertainment, home connectivity and security) and advanced solutions for businesses and public administrations, including cloud, cybersecurity, IoT, artificial intelligence and professional services. It also provides wholesale services to other operators.

The parent company of the Group is Telefónica, S.A., a public limited company incorporated on April 19, 1924

for an indefinite period. Its registered office is at calle Gran Vía 28, Madrid (Spain).

The main changes in the consolidation perimeter in the first half of 2026 are detailed in Appendix I.

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 wireline and wireless telephony services are provided under regulated rate and price systems. The main regulatory issues for the first half of 2026 are detailed in Appendix II.

‌Note 2. Basis of presentation of the condensed consolidated financial statements

The condensed consolidated interim financial statements for the six-month period ended June 30, 2026 (hereinafter, the "interim financial statements") have been prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting as well as in compliance with Article 12 of Royal Decree 1362/2007, of 19 October. As a result, these financial statements do not contain all the information and disclosures required for the preparation of complete annual consolidated financial statements and, accordingly, should be read in conjunction with the consolidated financial

statements for the year ended December 31, 2025 for a proper understanding thereof.

The accompanying interim financial statements were approved by the Company's Board of Directors at its meeting of July 28, 2026.

The figures in these interim financial statements are expressed in millions of euros, unless otherwise indicated, and may therefore be rounded.

Comparison of information

Comparisons in the accompanying interim financial statements refer to the six-month periods ended June 30, 2026 and 2025, except in the consolidated statement of financial position, which compares information at June 30, 2026 and at December 31,

2025.

In accordance with IFRS 5, the comparative income statement and statement of cash flows for the first half of 2025 have been restated to present the results of Telefónica Móviles Chile, Colombia Telecomunicaciones and Telefónica Móviles México, among other companies of smaller scale based in Hispanoamerica, as discontinued operations (see Note 27). In the interim financial statements for the first half of 2025 approved by the Board of Directors on July 29, 2025, Telefónica Móviles Argentina, Telefónica del Perú, Telefónica Móviles Uruguay, and Otecel (Telefónica Ecuador) were already presented as discontinued operations (see Note 27).

With respect to seasonality, the historical performance of consolidated operating results does not indicate that the operations of the Group, taken as a whole, are subject to significant variations between the first and second halves of the year.

Exchange rates evolution

Variation of average exchange rates versus euro	First half (2026 vs 2025)
Brazilian real	4.7%
Pound sterling	(2.9%)
Mexican peso	6.9%

Variation of closing exchange rates versus euro	06/30/2026 vs 12/31/2025
Brazilian real	9.7%
Pound sterling	1.3%
Mexican peso	6.3%

In the first half of 2026, excluding the impact of recycling to the income statement of negative translation differences following the sales of Telefónica Móviles Chile and Colombia Telecomunicaciones which are described below, a positive impact has been recorded on the Equity attributable to the shareholders of the Parent Company due to translation differences amounting to 1,251 million euros, due mainly to the appreciation of the Brazilian real (see Note 15).

In the first half of 2025, a negative impact of 529 million euros was recorded (excluding the recycling to the income statement of negative translation differences following the sales of Telefónica Móviles Argentina and Telefónica del Perú), mainly due to the depreciation of the pound sterling.

Sale of Colombia Telecomunicaciones On March 12, 2025, Telefónica Hispam reached an agreement to sell to Millicom Spain, S.L. all of its

shares in Colombia Telecomunicaciones S.A. E.S.P.

BIC, representing 67.5% of its share capital .

The closing of the transaction was subject to certain closing conditions, including obtaining the relevant regulatory approvals and agreements with the Colombian government - Ministry of Finance and Public Credit - and with Empresas Públicas de Medellín E.S.P. On November 13, 2025, the Superintendency of Industry and Commerce approved the business integration requested by Colombia Telecomunicaciones S.A. ESP BIC and Colombia Móvil S.A. ESP. On December 23, Millicom Colombia Holding, S.A.S. requested authorization to launch a tender offer for all the shares held by Telefónica Hispam in Colombia Telecomunicaciones

S.A. ESP BIC. Following these events, Colombia Telecomunicaciones was classified as a disposal group held for sale as of December 31, 2025 (see Note 27).

On February 5, 2026, after obtaining the corresponding regulatory approvals and fulfilling the established conditions, the transaction was completed.

The total price for the shares representing 67.5% of the share capital of Colombia Telecomunicaciones

S.A. E.S.P. was 214 million US dollars.

As a result of the transaction, the Group recycled to the income statement for the first half of 2026 the accumulated positive translation differences corresponding to Colombia Telecomunicaciones, amounting to 90 million euros (see Note 15).

	Million euros
Sale price	179
Provisions and costs of sale	(35)
Carrying value of net assets	(5)
Result of the transaction	149

Recycling of other comprehensive

income 43

Result of discontinued operations

(Note 27) 192

In accordance with IFRS 5, the results of Colombia Telecomunicaciones are presented within discontinued operations in these interim financial statements (see Note 27).

As a result of Colombia Telecomunicaciones being removed from the consolidation perimeter, equity attributable to non-controlling interests has been reduced by 184 million euros (see Note 15),

Sale of Telefónica Móviles Chile

On February 10, 2026, Inversiones Telefónica Internacional Holding SpA, a wholly owned subsidiary of Telefónica, S.A., transferred 100% of the share capital of Telefónica Móviles Chile S.A. ("Telefónica Chile") to NJJ Holding SAS and Millicom Spain S.L. The transaction was signed and closed simultaneously.

The sale price, subject to the usual adjustments for this type of transaction, included: (i) a cash payment of 50 million US dollars (42 million euros) made upon closing; (ii) a deferred payment of 340 million US dollars (approximately 286 million euros); and (iii) an additional payment of up to 150 million US dollars (approximately 132 million euros at the exchange rate of June 30, 2026) contingent upon the occurrence of certain events in the Chilean telecommunications market. As this amount is subject to future and uncertain conditions, it has not been included in the calculation of the transaction's result.

In June 2026, the parties concluded the review process of the aforementioned price adjustment, which also included a review of the payment terms. As a result of this process, Telefónica received a payment of 130 million US dollars (114 million euros) on June 30, 2026, and will receive a payment of 117 million US dollars (approximately 103 million euros at the exchange rate of June 30, 2026) on June 30, 2027.

Million euros

As a result of the transaction, the Group recycled to the income statement for the first half of 2026 the accumulated negative translation differences corresponding to Telefónica Chile, amounting to 686 million euros (see Note 15).

Sale price 244

Provisions and costs of sale (26)

Carrying value of net assets 488

Result of the transaction (270)

Recycling of other comprehensive

income (714)

Result of discontinued operations

(Note 27) (984)

In accordance with IFRS 5, the results of Telefónica Móviles Chile are presented within discontinued operations in these interim financial statements (see Note 27).

Sale of Telefónica Móviles Argentina

On February 24, 2025, TLH Holdco, S.L.U., a wholly-owned subsidiary of Telefónica, sold all the shares it held in Telefónica Móviles Argentina S.A. to Telecom Argentina S.A. The price of the transferred shares amounted to 1,245 million US dollars (approximately 1,189 million euros at the exchange rate on the date of the transaction). The signing and closing of the transaction took place simultaneously.

As a result of the transaction, the Group recycled to the income statement for the first half of 2025 the accumulated negative translation differences corresponding to Telefónica Móviles Argentina, amounting to 1,136 million euros, to 2025 results (Note 15).

Million euros

Sale price 1,189

Cash received (Note 25) 1,069 Loan from T.M. Argentina to TLH Holdco

assumed by the buyer 120

Provisions and costs of sale	(67)
Carrying value of net assets	1,201
Tax effect	(7)
Result of the transaction	(72)
Recycling of other comprehensive income	(1,152)
Result of discontinued operations (Note 27)	(1,224)

The obligations of the transaction mainly include the temporary transfer of use of certain trademarks owned by Telefónica.

In accordance with IFRS 5, the results of Telefónica Móviles Argentina are presented within discontinued operations in these interim financial statements (see Note 27).

Sale of Telefónica del Perú

On April 13, 2025, Telefónica Hispanoamérica, S.A., a wholly-owned subsidiary of Telefónica ("Telefónica Hispam"), sold all of the shares it held in Telefónica del Perú S.A.A. ("Telefónica del Perú"), representing approximately 99.3% of its share capital, to Integra Tec International Inc.

Additionally, Telefónica Hispam sold to the same acquiring entity the financial loans against Telefónica del Perú arising from the goodwill agreement dated

February 14, 2025. As part of the agreement, both parties agreed to keep the full amount of the undrawn loan at the disposal of Telefónica del Perú. In May 2025, Telefónica completed the disbursements committed on its part (see Note 25).

The transaction was signed and closed simultaneously. The purchase price for the shares and the loan amounted to 3.7 million Peruvian soles (approximately 900 thousand euros at the exchange rate on the date of the transaction).

As a result of the transaction, the Group recycled to the income statement for the first half of 2025 the accumulated negative translation differences corresponding to Telefónica del Perú, amounting to 222 million euros (Note 15).

Million euros
Sale price	1
Provisions and costs of sale	89
Carrying value of net assets and loans granted	437
Tax effect	(97)
Result of the transaction	(428)
Recycling of other comprehensive income	(236)
Result of discontinued operations (Note 27)	(664)

The result of the transaction includes 64 million euros write-off of Telefónica del Perú's commercial balances with the Telefónica Group companies.

In accordance with IFRS 5, the results of Telefónica del Perú are presented within discontinued operations in these interim financial statements (see Note 27).

Agreement for the sale of Telefónica Móviles México

On April 7, 2026, Telefónica Hispanoamérica, S.A., a wholly owned subsidiary of Telefónica, reached an agreement to sell to Melisa Acquisition, LLC (a consortium led by OXIO Inc. and Newfoundland Capital Management) all of its shares in Pegaso PCS,

S.A. de C.V. and Celular de Telefonía, S.A. de C.V. (collectively, "Telefónica México"), representing, directly and indirectly, 100% of the capital of both companies.

The agreement is part of the sale process of Telefónica México and is subject to the fulfilment of certain conditions agreed upon between the buyer and seller.

The transaction amount for Telefónica México is 450 million US dollar (approximately 389 million euros at the exchange rate on that date), and the corresponding price will be subject to the usual

adjustments for this type of transaction. The agreement is also subject to obtaining the relevant regulatory approvals.

In accordance with IFRS 5, Telefónica México has been classified as disposal group held for sale as of June 30, 2026. Its results are presented within discontinued operations in these interim financial statements (see Note 27).

Transformation programme of Telefónica Germany

Telefónica Germany has approved a transformation programme aimed at simplifying its organisational structure, increasing operational efficiency and adapting the company to evolving market conditions and technological developments.

As part of this programme, Telefónica Germany's management and employee representatives have reached an agreement on certain organisational and workforce measures. The approved actions include a plan to reduce up to 1,100 employees by the end of 2026, which will be implemented primarily through voluntary leaver programmes, taking social factors into account.

As a result of the workforce reduction plan and the related obligations, the Group recognised a provision of 265 million euros in the first half of 2026, corresponding to the present value of the estimated future cash outflows associated with the programme (see Note 20), with a corresponding charge recognised under Personnel expenses in the consolidated income statement.

Alternative measures not defined in IFRS

The Management of the Group uses a series of measures in its decision-making, in addition to those expressly defined in the IFRS, because they provide additional information useful to assess the Group's performance, solvency and liquidity. These measures should not be viewed in isolation or as a substitute for the measures presented according to the IFRS.

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 OpCFaL

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 21).

EBITDAaL-CapEx ex spectrum (OpCFaL) is defined as EBITDAaL less investment in intangible assets and property, plant and equipment (CapEx), excluding those investments related to spectrum acquisitions.

The Group uses these measures internally to evaluate business performance, to establish operational and strategic objectives and in the budgeting process.

EBITDA, EBITDAaL and OpCFaL 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 OpCFaL with the Telefónica Group's Profit for the period for the half-year periods ended June 30, 2026 and 2025:

Millions of euros	January - June 2026	January - June 2025 (*)
Profit for the period	(207)	(1,286)
Profit for the period from discontinued operations	821	2,164
Profit for the period from continued operation	614	877
Corporate income tax	218	386
Profit before taxes	832	1,264
Net financial expense	932	614
Share of income (loss) of investments accounted for the equity method	243	299
Operating income	2,006	2,176
Depreciation and amortization	3,497	3,413
EBITDA	5,503	5,590
Leases amortization (Note 21)	(986)	(934)
Financial expenses on lease liabilities (Note 21)	(220)	(189)
Operating income before depreciation and amortization and after leases (EBITDAaL)	4,297	4,467
Capital expenditures in intangible assets (Note 5)	661	916
Capital expenditures in property, plant and equipment (Note 7)	1,248	1,192
CapEx	1,908	2,108
Spectrum acquisitions (Note 5)	-	(227)
CapEx excluding spectrum acquisitions	1,908	1,882
OpCFaL	2,389	2,585

(*) Revised data to present the results of Telefónica Móviles Chile, Colombia Telecomunicaciones and Telefónica Móviles México, among other companies of smaller scale based in Hispanoamerica, as discontinued operations (see Note 27).

The following tables present the reconciliation of EBITDA, EBITDAaL and OpCFaL to Operating income for each business segment for the six-month periods ended June 30, 2026 and 2025:

January - June 2026

Millions of euros	Telefónica Spain	Telefónica Brazil	Telefónica Germany	Other companies	Eliminations	Total Group
Operating income	1,283	905	(118)	(411)	348	2,006
Depreciation and amortization	1,018	1,310	1,031	155	(18)	3,497
EBITDA	2,301	2,215	913	(256)	330	5,503
Rights of use amortization	(289)	(327)	(363)	(18)	11	(986)
Financial expenses for leases	(31)	(147)	(41)	(2)	-	(220)
EBITDAaL	1,982	1,740	510	(276)	341	4,297
CapEx	720	772	349	68	-	1,908
Spectrum acquisitions	-	-	-	-	-	-
CapEx excluding spectrum acquisitions	720	772	349	68	-	1,908
OpCFaL	1,262	969	161	(344)	341	2,389

January - June 2025 (*)

Millions of euros	Telefónica Spain	Telefónica Brazil	Telefónica Germany	Other companies	Eliminations	Total Group
Operating income	1,221	733	236	(152)	139	2,176
Depreciation and amortization	1,033	1,190	1,043	162	(15)	3,413
EBITDA	2,254	1,924	1,278	10	125	5,590
Rights of use amortization	(294)	(289)	(345)	(16)	10	(934)
Financial expenses for leases	(22)	(133)	(33)	(2)	1	(189)
EBITDAaL	1,937	1,502	900	(8)	135	4,467
CapEx	712	685	614	97	-	2,108
Spectrum acquisitions	-	-	(207)	(20)	-	(227)
CapEx excluding spectrum acquisitions	712	685	407	78	-	1,882
OpCFaL	1,225	817	493	(86)	135	2,585

Debt indicators

As calculated by the Group, net financial debt includes:

Adding the following liabilities:
1. Current and non-current financial liabilities in our consolidated statement of financial position (which includes the negative mark-to-market value of derivatives),
2. Other liabilities included in "Payables and other non-current liabilities", "Payables and other current liabilities" and "Current tax payables" (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
3. Financial liabilities included in "Liabilities associated with non-current assets held for sale".
Subtracting the following amounts from the resulting amount of the preceding step:
1. Cash and cash equivalents,
2. Other current financial assets (which include short-term derivatives),
3. Cash and other financial assets included in "Non-current assets and disposal groups classified as held for sale",
4. The positive mark-to-market value of derivatives with a maturity beyond one year,
5. 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, instalments for the 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.
6. Mark-to-market adjustment by cash flow hedging activities related to debt.
7. Fair value of derivatives adjustment used for the economic hedging of gross commitments related to employee benefits.

The indicator net financial debt plus leases is calculated by adding lease liabilities calculated under IFRS 16 (including those corresponding to 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.

Net financial debt, net financial debt plus leases, net financial debt plus commitments and net financial debt plus leases plus commitments are considered meaningful for investors and analysts because they provide an analysis of our solvency using the same measures used by Management. They are used internally to calculate 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 details the reconciliation between financial liabilities according to the consolidated statement of financial position, the net financial debt, the net financial debt plus leases, the net financial debt plus commitments and the net financial debt plus leases plus commitments of the Group Telefónica as of June 30, 2026 and December 31, 2025:

Millions of euros	06/30/2026	12/31/2025
Non-current financial liabilities	29,548	30,120
Current financial liabilities	4,223	4,219
Financial liabilities (Note 16)	33,771	34,339
Cash and cash equivalents	(5,149)	(6,564)
Other assets included in "Other current financial assets"	(2,147)	(861)
Cash and other financial assets included in "Non-current assets and disposal groups classified as held for sale"	(174)	(96)
Positive mark-to-market value of long-term derivative instruments (notes 10 and 17)	(1,880)	(1,919)
Other liabilities included in "Payables and other non-current liabilities"	2,441	2,057
Other liabilities included in "Payables and other current liabilities" and "Current tax payables"	580	528
Other assets included in "Financial assets and other non-current assets"	(1,566)	(2,061)
Other assets included in "Receivables and other current assets"	(1,351)	(843)
Financial liabilities included in "Liabilities associated with non-current assets held for sale"	20	1,508
Mark-to-market adjustment by cash flow hedging activities related to debt	841	832
Fair value of derivatives adjustment used for the economic hedging of gross commitments related to employee benefits	(108)	(96)
Net financial debt	25,278	26,824
Lease liabilities	8,004	7,920
Net financial debt plus leases	33,282	34,744
Gross commitments related to employee benefits and associated economic hedging	6,586	6,918
Value of associated long-term assets	(132)	(129)
Tax benefits	(1,664)	(1,734)
Net commitments related to employee benefits	4,790	5,055
Net financial debt plus commitments	30,068	31,879
Net financial debt plus leases plus commitments (*)	38,072	39,799

(*) 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 27).

Free Cash Flow

Free Cash Flow from continuing operations is calculated from the "Net cash flow provided by operating activities from continuing operations" in the consolidated statement of cash flows (see Note 25), excluding payments of commitments related to employee benefits and dividends received from VMO2; 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 non-controlling interests, lease principal payments and hybrid instruments coupon payments.

For the calculation of Free Cash Flow for dividend, dividends received from VMO2 are included, and payments of commitments related to employee benefits are deducted.

The dividends received from VMO2 included in the calculation of Free Cash Flow for dividend depend on the cash generation of the VMO2 business during each period. No dividends were received from VMO2 in the first half of 2025 and 2026.

Free Cash Flow is considered 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's shareholders.

These measures are used internally by Group Management. However, they should not be considered as substitutes for the various net cash flows in the consolidated statement of cash flows.

The following table presents the reconciliation between the Telefónica Group's net cash flow provided by operating activities from continuing activities as reported in the consolidated statement of cash flows (see Note 25) and the Free Cash Flow total for the six-month periods ended June 30, 2026 and 2025:

Millions of euros	January - June 2026	January - June 2025 (*)
Net cash flow provided by operating activities from continuing operations (Note 25)	3,995	4,639
Except: payments of commitments related to employee benefits (Note 25)	594	499
Except: dividends received from VMO2 (Note 25)	-	-
(Payments on investments)/ Proceeds from the sale of property, plant and equipment and intangible assets, net (Note 25)	(2,260)	(2,457)
Except: Spectrum payments (Note 25)	-	50
Dividends paid to minority shareholders (Note 25)	(101)	(79)
Lease principal payments (notes 21 and 25)	(1,068)	(1,009)
Hybrid instruments coupon payments (Note 25)	(216)	(188)
Free Cash Flow from continuing operations	944	1,456
Dividends received from VMO2 (Note 25)	-	-
Payments of commitments related to employee benefits (Note 25)	(594)	(499)
Free Cash Flow for dividend	351	956
Free Cash Flow from discontinued operations	(536)	(850)
Free Cash Flow total	(185)	106

‌Note 3. Accounting policies

The accounting policies applied in the preparation of the interim financial statements for the six-month period ended June 30, 2026 are consistent with those used in the preparation of the Group's consolidated annual financial statements for the year ended December 31, 2025, except for the following new amendments to existing standards published by the International Accounting Standards Board (IASB) and endorsed by the European Union for application in

Europe, which are effective for annual periods beginning on or after January 1, 2026.

Amendments to IFRS 9 and IFRS 7 -Amendments to the Classification and Measurement of Financial Instruments Among other matters, these amendments include clarifications regarding the requirements for the recognition and derecognition of financial assets and financial liabilities, the treatment of certain financial

assets with features linked to ESG-related factors and other instruments with specific contractual provisions, as well as new disclosure requirements.

The application of these amendments has had no impact on the Group's interim financial statements, as the accounting policies currently applied are consistent with the clarifications introduced. With respect to the new disclosure requirements, the Group will take them into consideration in the preparation of the notes to its annual financial statements, where applicable.

Amendments to IFRS 9 and IFRS 7 -Contracts Referencing Nature-dependent Electricity

These amendments clarify the application of the own-use exception to certain contracts for the purchase and sale of electricity whose pricing depends on natural-source-related factors (nature-dependent electricity contracts) and introduce new disclosure requirements, among other matters.

The application of these amendments has had no impact on the Group's interim financial statements. The new disclosure requirements will be incorporated

into the preparation of the Group's annual financial statements, where applicable.

Annual Improvements to IFRS Accounting Standards - Volume 11

These improvements include clarifications, simplifications and corrections intended to enhance the consistency and understandability of certain requirements in existing standards, including IFRS 9 Financial Instruments, IFRS 10 Consolidated Financial Statements and IAS 7 Statement of Cash Flows.

The adoption of these improvements has not had any significant impact on the accounting policies applied by the Group or on these interim financial statements.

New standards and amendments to standards issued but not effective as of June 30, 2026

At the date of preparation of the interim consolidated financial statements, the following IFRS and amendments had been published by the IASB, but their application was not mandatory:

Standards and Amendments to Standards

Mandatory application: annual periods beginning on or after

IFRS 18	Presentation and Disclosure in Financial Statements	January 1, 2027
IFRS 19 and subsequent amendments	Subsidiaries without Public Accountability: Disclosures	January 1, 2027
Amendments to IAS 21	Translation to a Hyperinflationary Presentation Currency	January 1, 2027
Amendments to IAS 28	Amendments to the Fair Value Option	January 1, 2027
IFRS 20	Regulatory Assets and Regulatory Liabilities	January 1, 2029

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.

During the period, the Group further progressed its assessment of the impacts arising from IFRS 18,

further analysing the new presentation and disclosure requirements, as well as identifying the changes required in reporting systems and processes. The assessment has also considered the changes introduced by the standard in relation to the presentation of cash flows, including the removal of certain classification options currently available for interest and dividends. Although the assessment is ongoing, the preliminary conclusions still suggest that adopting IFRS 18 will primarily affect the presentation of certain items in the statement of profit or loss and the statement of cash flows, with no impact on the recognition or measurement principles currently applied.

‌Note 4. Segment financial information

In 2026 the Telefónica Group is reporting financial information, both internally and externally, according to the following segments: Telefónica Spain, Telefónica Brazil, Telefónica Germany and VMO2 (accounted for under the equity method).

As part of its exit strategy from Hispanoamerica, in the first half of 2026 the Group sold its stakes in Telefónica Móviles Chile and in Colombia Telecomunicaciones and reached an agreement for the sale of Telefónica Móviles México (see Note 2). In 2025 the Group sold its stakes in Telefónica Móviles Argentina, Telefónica del Perú, Telefónica Móviles del Uruguay, and Otecel, among other companies based in Hispanoamerica. All of these companies are presented as discontinued operations in these interim financial statements (see notes 2 and 27).

As a result of these transactions and in accordance with IFRS 8, in 2025 the Group ceased to present "Telefónica Hispam" as a reportable segment. The companies of Telefónica Hispam that, as of June 30, 2026, were still part of the Telefónica Group and, following the analysis carried out in accordance with IFRS 5, have not been classified as a disposal group held for sale (primarily the Group's operator in Venezuela), are reported within Other Companies. This change has been applied to the first half of 2025 comparative figures. The other segments -Telefónica Spain, Telefónica Brazil, Telefónica Germany and VMO2- continue to be reported without modifications.

"Other companies" also includes, among others, Telefónica, S.A. and other holding companies, the Be-terna and Telefónica Tech UK & Ireland groups, the Telxius Group and the share of results of investments accounted for by the equity method of the fiber companies in which Telefónica Infra, S.L. holds a stake (see Note 8).

The segments referred to above include, according to their geographical location, the information relating to the range of products and services that Telefónica offers its customers, including communication services based on fiber and 5G networks, digital services for residential customers - such as entertainment, home connectivity and security - and advanced solutions for companies and public administrations, including cloud, cybersecurity, IoT, artificial intelligence and professional services, as well as wholesale services to other operators. Transactions between segments are carried out at market prices.

The Group centrally manages borrowing activities, mainly through Telefónica, S.A. and other companies not included in the segments, so most of the Group's financial assets and liabilities are reported under "Other companies". In addition, Telefónica, S.A. is the head of the Telefónica tax group in Spain. Therefore, a significant part of the deferred tax assets and liabilities are included under "Other companies". For these reasons, the results of the segments are disclosed up to 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 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 5 and 7) and acquisitions of rights of use (see Note 21) of the fully consolidated reportable segments:

January - June 2026
Millions of euros	Telefónica Spain	Telefónica Brazil	Telefónica Germany	VMO2	Other companies	Eliminations	Total Group
Revenues	6,513	5,195	3,693	-	2,101	(1,111)	16,392
External revenues	6,371	5,191	3,679	-	1,149	1	16,392
Inter-segment revenues	141	4	14	-	952	(1,112)	-
Other operating income and expenses (1)	(4,211)	(2,980)	(2,780)	-	(2,357)	1,440	(10,889)
EBITDA	2,301	2,215	913	-	(256)	330	5,503
Depreciation and amortization	(1,018)	(1,310)	(1,031)	-	(155)	18	(3,497)
Operating income	1,283	905	(118)	-	(411)	348	2,006
Share of (loss) income of investments accounted for by the equity method	(4)	-	-	(188)	(50)	-	(243)
Capital expenditures (CapEx)	720	772	349	-	68	-	1,908
Acquisitions of rights of use	1,109	206	399	-	14	(1)	1,728

(1) Other operating income and expenses includes "Other income", "Supplies", "Personnel expenses" and "Other expenses".

January - June 2025 (*)
Millions of euros	Telefónica Spain	Telefónica Brazil	Telefónica Germany	VMO2	Other companies	Eliminations	Total Group
Revenues	6,356	4,616	4,095	-	1,976	(931)	16,112
External revenues	6,219	4,611	4,080	-	1,189	12	16,112
Inter-segment revenues	136	5	15	-	787	(944)	-
Other operating income and expenses (1)	(4,102)	(2,693)	(2,817)	-	(1,966)	1,056	(10,523)
EBITDA	2,254	1,924	1,278	-	10	125	5,590
Depreciation and amortization	(1,033)	(1,190)	(1,043)	-	(162)	15	(3,413)
Operating income	1,221	733	236	-	(152)	139	2,176
Share of (loss) income of investments accounted for by the equity method	(10)	-	-	(215)	(75)	-	(299)
Capital expenditures (CapEx)	712	685	614	-	97	-	2,108
Acquisitions of rights of use	437	170	313	-	42	(4)	958

(1) Other operating income and expenses includes "Other income", "Supplies", "Personnel expenses" and "Other expenses".

(*) Revised data to reflect the results of Telefónica Móviles Chile, Colombia Telecomunicaciones and Telefónica Móviles México among other smaller companies based in Hispanoamérica, as discontinued operations (See Note 27).

The table below shows the income, CapEx and acquisitions of rights of use of VMED O2 UK Ltd (VMO2). VMO2 is a joint venture 50% owned by Telefónica and Liberty Group and is recorded under the equity method (see Note 8). The tables below show the information of the joint venture at 100%.

VMO2

Millions of euros	January - June 2026	January - June 2025
Revenues	5,522	5,944
Other operating income and expenses	(3,445)	(3,772)
Depreciation and amortization	(1,894)	(1,839)
Operating income	183	333
Share of income (loss) of investments accounted for by the equity method	(1)	1
Financial income	23	22
Financial expenses	(752)	(744)
Realised and unrealised gains on derivative instruments, net	128	(1,086)
Foreign currency transaction losses, net	(54)	922
Net financial expense	(655)	(887)
Result before taxation	(473)	(552)
Taxes	79	128
Result for the period	(394)	(424)
Attributable to non-controlling interests	18	(6)
Result for the period attributable to equity holders of the parent (100% VMO2)	(376)	(430)
50% attributable to Telefónica Group	(188)	(215)
Share of income (loss) of investments accounted for by the equity method	(188)	(215)
Capital expenditures (CapEx) (100% VMO2)	1,096	1,224
Acquisitions of rights of use (100% VMO2)	74	82

The segmentation of assets and liabilities of the reportable segments is as follows:

June 2026
Millions of euros	Telefónica Spain	Telefónica Brazil	Telefónica Germany	VMO2	Other companies	Eliminations	Total Group
Fixed assets	14,689	16,605	10,022	-	1,522	-	42,838
Rights of use	2,428	2,094	3,267	-	169	(38)	7,920
Investments accounted for by the equity method	202	3	-	6,212	236	-	6,653
Financial assets and other non-currents assets	1,551	1,242	581	-	3,630	(857)	6,147
Deferred tax assets	2,648	196	699	-	1,661	-	5,204
Other current financial assets	37	51	100	-	3,810	(1,842)	2,156
Total allocated assets excluding groups held for sale	28,661	24,874	17,169	6,212	17,706	(6,891)	87,732
Non-current financial liabilities	1,280	549	334	-	28,108	(723)	29,548
Non-current lease liabilities	1,798	1,710	2,397	-	44	(6)	5,942
Deferred tax liabilities	78	760	360	-	993	-	2,190
Current financial liabilities	409	58	684	-	6,769	(3,697)	4,223
Current lease liabilities	537	797	641	-	38	(32)	1,981
Total allocated liabilities excluding groups held for sale	17,254	10,775	8,801	-	39,850	(6,895)	69,785

December 2025
Millions of euros	Telefónica Spain	Telefónica Brazil	Telefónica Germany	VMO2	Other companies	Eliminations	Total Group
Fixed assets	14,647	15,337	10,326	-	2,756	-	43,066
Rights of use	1,622	2,027	3,250	-	590	(48)	7,441
Investments accounted for by the equity method	206	4	-	6,316	228	-	6,753
Financial assets and other non-currents assets	1,380	1,088	575	-	4,520	(823)	6,740
Deferred tax assets	2,789	239	669	-	2,315	-	6,012
Other current financial assets	41	34	98	-	2,157	(1,460)	870
Total allocated assets excluding groups held for sale	27,938	22,592	17,457	6,316	20,995	(6,462)	88,837
Non-current financial liabilities	1,054	504	387	-	28,898	(723)	30,120
Non-current lease liabilities	1,204	1,631	2,467	-	350	(9)	5,644
Deferred tax liabilities	76	758	335	-	1,349	-	2,518
Current financial liabilities	760	45	419	-	6,828	(3,833)	4,219
Current lease liabilities	358	755	662	-	201	(39)	1,938
Total allocated liabilities excluding groups held for sale	17,268	9,230	8,883	-	42,404	(6,464)	71,320

The detail of assets and liabilities of VMO2 is as follows (amounts corresponding to 100% of the company). The reconciliation of VMO2's net equity with the carrying amount of the investment in Telefónica is shown in Note 8.

VMO2

Millions of euros	06/30/2026	12/31/2025
Fixed assets	37,223	37,343
Rights of use	855	924
Financial assets and other non-currents assets	931	949
Deferred tax assets	660	558
Other current financial assets	383	357
Non-current assets and disposal groups held for sale	90	-
Total assets	43,653	43,663
Non-current financial liabilities	21,891	21,357
Non-current lease liabilities	762	805
Deferred tax liabilities	2	2
Current financial liabilities	4,373	4,192
Current lease liabilities	204	201
Total liabilities	31,571	31,320

The detail of revenues of the fully consolidated reportable segments is as follows:

Millions of euros Segments		January - June 2026				January - June 2025 (*)
Millions of euros Segments	Fixed	Mobile	Other and elims.	Total	Fixed	Mobile	Other and elims.	Total
T. Spain (1)				6,513				6,356
T. Germany	453	3,231	9	3,693	430	3,641	24	4,095
T. Brazil	1,490	3,705	-	5,195	1,348	3,268	-	4,616
Other and inter-segment eliminations	5	150	834	990	6	144	894	1,044
Total Group				16,392				16,112

(1) The detail of revenues for Telefónica Spain is shown in the table below.

Given the convergence reached at Telefónica Spain due to the high penetration of the convergent offers, the revenue breakdown by fixed and mobile is less relevant in this segment. For this reason, the following revenue breakdown is shown, which Management believes is more meaningful.

Millions of euros	January-June 2026	January-June 2025
Retailers	5,263	5,078
Wholesalers, mobile handsets and others	1,250	1,278
Telefónica Spain	6,513	6,356

‌Note 5. Intangible assets

The composition and movements in "intangible assets" in the first half of 2026 are as follows:

January-June 2026

Millions of euros	Balance at 12/31/2025	Additions	Amortization (*)	Transfers and others	Translation differences and inflation adjustments	Business acquisitions	Sale of companies	Balance at 06/30/2026
Service concession arrangements and licenses	4,360	-	(229)	347	187	-	(116)	4,548
Software	3,209	165	(700)	492	113	-	(59)	3,218
Customer base	57	-	(35)	-	1	9	-	33
Trademarks	157	-	(16)	-	7	3	-	151
Other intangible assets	521	6	(23)	1	1	1	-	508
Intangible assets in process	808	490	-	(859)	13	-	(42)	409
Total intangible assets	9,112	661	(1,003)	(20)	321	13	(218)	8,867

(*) Amortization for the period includes those related to Telefónica Móviles Chile up to its sale date, and those related to Telefónica Móviles México up to its classification as a disposal group held for sale. Excluding the impact of these companies, amortization of intangible assets amounted to 991 million euros.

"Business acquisitions" in the first half of 2026 includes 13 million euros corresponding to Altim Tecnologías de Información, S.L. (see Appendix I).

"Sale of companies" corresponds to the disposal of intangible assets from Telefónica Móviles Chile (see Note 2), which amounted to 218 million euros.

"Transfers and others" of service concession arrangements and licenses in the first half of 2026 includes the reclassification of intangible assets of Telefónica Móviles México to "Non-current assets and disposal groups held for sale" of the statement of financial position (see Notes 2 and 27), amounting to 60 million euros, respectively.

CapEx additions by segment are detailed in Note 4.

The gross cost, accumulated amortization and impairment losses of intangible assets at June 30, 2026 and December 31, 2025 are as follows:

Balance at June 30, 2026

Millions of euros	Gross cost	Accumulated amortization	Impairment losses	Intangible assets
Service concession arrangements and licenses	9,535	(4,987)	-	4,548
Software	18,251	(15,033)	-	3,218
Customer base	1,427	(1,395)	-	33
Trademarks	935	(784)	-	151
Other intangible assets	1,256	(745)	(3)	508
Intangible assets in process	409	-	-	409
Total intangible assets	31,814	(22,944)	(3)	8,867

Balance at December 31, 2025

Millions of euros	Gross cost	Accumulated amortization	Impairment losses	Intangible assets
Service concession arrangements and licenses	9,630	(5,269)	-	4,360
Software	17,886	(14,677)	-	3,209
Customer base	1,341	(1,284)	-	57
Trademarks	903	(746)	-	157
Other intangible assets	1,259	(734)	(3)	521
Intangible assets in process	808	-	-	808
Total intangible assets	31,827	(22,712)	(3)	9,112

‌Note 6. Goodwill

The movement in goodwill assigned to each Group segment was as follows:

January-June 2026

Millions of euros	Balance at 12/31/2025	Additions	Transfers	Exchange rate impact	Balance at 06/30/2026
Telefónica Spain	4,321	19	12	-	4,352
Telefónica Brazil	6,849	-	-	663	7,512
Telefónica Germany	4,396	-	-	-	4,396
Other companies	230	-	(12)	-	218
Total	15,796	19	-	663	16,478

The additions to Telefónica Spain correspond to the acquisition of Altim Tecnologías de Información, S.L. (see Appendix I).

In order to test for impairment, goodwill was allocated to the different cash-generating units (CGUs):

Millions of euros	06/30/2026	12/31/2025
Telefónica Spain	4,352	4,321
Telefónica Brazil	7,512	6,849
Telefónica Germany	4,396	4,396
Other companies	218	230
BE-terna	173	173
Others	45	57
TOTAL	16,478	15,796

At the end of 2025, the Group conducted its annual impairment test using the business plans of the various cash-generating units to which goodwill is allocated. These plans were approved by the Telefónica Board of Directors in the last quarter of

2025. As a result, as of December 31, 2025, an impairment of goodwill allocated to BE-terna's cash-generating unit was recorded in the amount of 58 million euros, to Telefónica Tech UK & Ireland in the amount of 254 million euros, and to Telefónica Chile in the amount of 174 million euros.

As of June 30, 2026, the Group assessed whether there were any indicators of impairment in the value of the cash-generating units, with particular focus on those whose recoverable amount was closest to their carrying amount as of December 31, 2025. This assessment included, among other factors, a review of the main operating indicators (both as of the end of the first half of 2026 and based on the most recent year-end forecasts), the evolution of the macroeconomic environment, and an analysis of changes in applicable discount rates and perpetuity growth rates.

As a result of this analysis, no indicators were identified that would justify the need to perform a new impairment test for these cash-generating units. The

Group will carry out its annual impairment test in the second half of the year.

‌Note 7. Property, plant and equipment

The composition and movements in "Property, plant and equipment" in the first half of 2026 are as follows:

January - June 2026

Millions of euros	Balance at 12/31/2025	Additions	Deprecia- tion (*)	Disposals	Transfers and others	Translation differences and inflation adjustments	Sale of companies	Balance at 06/30/2026
Land and buildings	2,102	22	(98)	(2)	(16)	61	(305)	1,764
Plant and machinery	14,368	331	(1,372)	(2)	729	456	(353)	14,158
Furniture, tools and other items	435	15	(67)	-	25	9	(10)	407
PP&E in progress	1,253	879	-	(6)	(850)	43	(155)	1,165
Total PP&E	18,158	1,248	(1,537)	(10)	(113)	569	(823)	17,493

(*) Depreciation for the period includes that related to Telefónica Móviles Chile up to its sale date, and that related to Telefónica Móviles México up to its classification as a disposal group held for sale. Excluding the impact of these companies, depreciation of property, plant and equipment amounted to 1,520 million euros.

"Sale of companies" corresponds to the disposal of property, plant and equipment from Telefónica Móviles Chile (see Note 2), with an impact of 823 million euros.

"Transfers and others" in the first half of 2026 includes the reclassification of property, plant and equipment of Telefónica Móviles México to "Non-current assets and disposal groups held for sale" of the statement of financial position (see notes 2 and 27), amounted to 61 million euros.

"Additions" of CapEx by segment are detailed in Note 4.

The gross cost, accumulated depreciation and impairment losses of property, plant and equipment in the first half of 2026 and December 31, 2025 are as follows:

Balance at June 30, 2026

Millions of euros	Gross cost	Accumulated depreciation	Impairment losses	PP&E
Land and buildings	5,297	(3,527)	(5)	1,764
Plant and machinery	62,201	(48,031)	(12)	14,158
Furniture, tools and other items	3,739	(3,330)	(3)	407
PP&E in progress	1,180	-	(16)	1,165
Total PP&E	72,418	(54,888)	(36)	17,493

Balance at December 31, 2025

Millions of euros	Gross cost	Accumulated depreciation	Impairment losses	PP&E
Land and buildings	6,353	(4,246)	(5)	2,102
Plant and machinery	63,792	(49,411)	(12)	14,368
Furniture, tools and other items	3,836	(3,398)	(3)	435
PP&E in progress	1,269	-	(16)	1,253
Total PP&E	75,250	(57,055)	(37)	18,158

‌Note 8. Associates 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:

Investments accounted for Share of (loss) income of investments % Holding by the equity method accounted for by the equity method January - June January - June
Millions of euros		06/30/2026	12/31/2025	2026	2025 (*)
VMED O2 UK Ltd	50%	6,212	6,316	(188)	(215)
Movistar Prosegur Alarmas	50%	198	202	(3)	(8)
Unsere Grüne Glasfaser	50%	28	-	(34)	(38)
Opal Jvco Limited (nexfibre)	25%	67	80	(23)	(38)
Utiq, S.A.	25%	3	4	(1)	(2)
Others		6	5	(3)	(3)
Joint ventures		6,514	6,607	(252)	(304)
Adquira España, S.A.	44.44%	5	5	-	-
HoldCo Infraco SpA. (Onnet Fibra Chile)	40%	108	112	-	(2)
Telefónica Factoring España, S.A.	50%	5	7	2	2
Telefónica Renting, S.A.	50%	13	15	6	4
Others		8	7	1	1
Associates		139	146	9	5
Total		6,653	6,753	(243)	(299)

Investments accounted for by the equity method	Millions of euros
Balance at 12-31-2025	6,753
Additions	94
Translation differences and other comprehensive income (loss)	83
Income (loss)	(243)
Dividends	(12)
Transfers and others	(22)
Balance at 06-30-2025	6,653

The detail of the movement in investments accounted for by the equity method in the first six months of 2026 is as follows:

"Additions" for the first half of 2026 include the capital increase of 83 million euros in Unsere Grüne Glasfaser and the capital increase in nexfibre amounting to 9 million euros (see Note 25).

"Translation differences and other comprehensive income (loss)" in the first half of 2026 mainly includes the impact of the pound sterling appreciation associated with the investment in VMO2, amounting to 88 million euros.

On February 18, 2026, nexfibre reached an agreement to acquire 100% of the share capital of Substantial Topco Limited ("Netomnia"), the second largest full fibre altnet in the United Kingdom. The closing of the transaction is subject to obtaining the corresponding regulatory approvals. On July 1, 2026, the UK Competition and Markets Authority (CMA) announced that the deal will move to a second phase of review, following a request from Telefónica, Liberty Global and InfraVia Capital to accelerate the process.

VMO2

Millions of euros	06/30/2026	12/31/2025
Non current assets	39,669	39,774
Intangible assets	6,333	6,828
Goodwill	20,235	19,967
Property, plant and equipment	10,655	10,548
Other non current assets	2,446	2,431
Current assets	3,984	3,889
Inventories	196	199
Current receivables and other current assets	2,691	2,676
Other current financial assets	383	357
Cash and cash equivalents	624	657
Non-current assets classified as held for sale	90	-
Total Assets	43,653	43,663
Non current liabilities	23,088	22,686
Non current financial liabilities	21,891	21,357
Non-current lease liabilities	762	805
Other non current liabilities	435	524
Current liabilities	8,483	8,634
Current financial liabilities	4,373	4,192
Current lease liabilities	204	201
Other current liabilities	3,906	4,241
Total liabilities	31,571	31,320
Equity attributable to non-controlling interests	(222)	(168)
Equity attributable to equity holders of the parent (100% VMO2)	12,304	12,511
50% Telefónica Group	6,152	6,255
Acquisition costs	61	61
Other adjustments	(1)	-
Investments accounted for by the equity method	6,212	6,316

Detail of the main items of the statement of financial position and income statement of VMED O2 UK Ltd.

Millions of euros	January -June 2026	January -June 2025
Revenues	5,522	5,944
Other operating income	242	260
Operating expenses	(3,687)	(4,032)
Depreciation and amortization (1)	(1,894)	(1,839)
Operating income	183	333
Share of income (loss) of investments accounted for by the equity method	(1)	1
Financial income	23	22
Financial expenses	(752)	(744)
Realised and unrealised gains on derivative instruments, net (2)	128	(1,086)
Foreign currency transaction losses, net	(54)	922
Net financial expense	(655)	(887)
Result before taxation	(473)	(552)
Taxes	79	128
Result for the period	(394)	(424)
Attributable to non-controlling interests	18	(6)
Result for the period attributable to equity holders of the parent (100% VMO2)	(376)	(430)
50% attributable to Telefónica Group	(188)	(215)
Share of (loss) income of investments accounted for by the equity method	(188)	(215)
Other comprehensive income (100% VMO2)	(418)	(429)

Includes amortization of the customer relationships recorded after the purchase price allocation, amounting to 599 million euros in the first half of 2026 (509 million euros in the first half of 2025).
VMO2 entered into various derivative instruments to manage interest rate exposure and foreign currency exposure. Generally, VMO2 does not apply hedge accounting to their derivative instruments. Accordingly, changes in the fair values of most of their derivatives are recorded in finance results of their consolidated income statement.

Evaluation of indicators of impairment of the investment as of June 30, 2026

VMO2 management conducted the annual goodwill impairment test at the end of 2025. As a result of this analysis, VMO2 recorded an impairment of goodwill amounting to 1.022 million pounds sterling (1,170 million euros),

In accordance with IAS 28, as of June 30, 2026, the Group assessed whether there was any objective evidence of impairment of its net investment in VMO2, with reference to the impairment test conducted at the end of the 2025 financial year. Within this framework, the relevant aspects of the investment in VMO2 as of June 30, 2026, were evaluated based on the company's current internal indicators and external factors.

During the first half of 2026, VMO2's key financial indicators did not show any significant deviations from the forecasts used in the impairment test performed at the end of 2025. In addition, the evolution of the macroeconomic environment, changes in discount rates, and variations in applicable perpetual growth rates were analyzed. Based on this analysis, no indicators were identified that would justify the need to perform a new impairment test on the investment in VMO2 as of the end of June 2026

VMO2 will perform its annual goodwill impairment test in the second half of the year.

Commitments

Millions of euros	2026	2027	2028	2029	2030	2031	Thereafter	Total
Purchase and other commitments	626	456	271	80	61	44	72	1,610
Programming commitments	360	609	249	2	-	-	-	1,220
Network and connectivity commitments	644	311	308	283	262	130	215	2,153
Service agreements	115	196	176	180	75	-	-	742
Total commitments VMO2 (100%)	1,745	1,572	1,004	545	398	174	287	5,725

Breakdown of balances and transactions of Telefónica Group companies with VMO2

Millions of euros	06/30/2026	12/31/2025
Receivables and other assets	53	60
Payables and other liabilities	31	22
Short-term contractual liabilities	1	-

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:

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:

Millions of euros	January -June 2026	January -June 2025
Revenue from operations	92	86
Expenses from operations	17	24

Millions of euros	06/30/2026 12/31/2025
Millions of euros	Joint Joint Associates ventures Total Associates ventures Total
Credits and other financial assets	23	2	25	137	6	143
Receivables and other assets (Note 12)	36	89	125	103	95	198
Non-current lease liabilities	67	3	70	55	5	60
Non-current payables and other liabilities (Note 18)	656	-	656	603	-	603
Long-term contractual liabilities	-	53	53	-	53	53
Current lease liabilities	61	5	66	72	4	76
Current payables and other liabilities (Note 19)	827	37	864	780	28	808
Short-term contractual liabilities	-	1	1	-	6	6

January - June 2026 January - June 2025 Joint Joint Millions of euros Associates ventures Total Associates ventures Total
Revenue from operations	242	151	393	221	144	365
Expenses from operations	391	23	414	320	66	386
Financial revenues	4	-	4	-	1	1
Financial expenses	33	1	34	27	1	28

(*) Revised data to reflect the results of Telefónica Móviles Chile, Colombia Telecomunicaciones and Telefónica Móviles México among other smaller companies based in Latin America, as discontinued operations (See Note 27)..

"Credits and other financial assets" at June 30, 2026 includes 23 million euros of long-term credits to Onnet Fibra Chile (122 million euros at December 31, 2025). In the first half of 2026, a payment of 106 million euros was received (see Note 25).

"Non-current payables and other liabilities" and "Current payables and other liabilities" at June 30, 2026 includes 656 million euros and 633 million euros, respectively of Telefónica España with Telefónica Renting, S.A. (602 million euros and 418 million euros, respectively, at December 31, 2025).

Additionally, "Current payables and other liabilities" at June 30, 2026 includes 193 million euros of Telefónica España with Telefónica Factoring España, S.A. (329 million euros at December 31, 2025).

"Revenue from operations" and "Expenses from operations" in the first half of 2026 include 234 million euros and 389 million euros, respectively, of Telefónica España with Telefónica Renting, S.A. (212 million euros and 318 million euros, respectively, in the first half of 2025).

‌Note 9. Related parties

Transactions with related parties, as established in current legislation and in Telefónica's internal regulations, 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 Telefónica, S.A.

The Company's significant shareholders as of June 30, 2026, with representation on the Board of Directors of Telefónica, S.A., are Criteria Caixa, S.A.U. ("Criteria Caixa"), the State Industrial Holdings Company ("SEPI"), and Green Bridge Investment Company

SCS / STC Group. On June 30, 2026, Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) ceased to be considered a significant shareholder, having had representation on the Board of Directors of Telefónica,

S.A. until March 26, 2026.

According to information provided by SEPI for the 2025 Annual Corporate Governance Report of Telefónica, S.A., as of December 31, 2025, the participation of the SEPI in the share capital of Telefónica, S.A. was 10%. As of June 30, 2026, no update to such shareholding has been reported, according to publicly available information.

According to information provided by Criteria Caixa for the 2025 Annual Corporate Governance Report of Telefónica, S.A., as of December 31, 2025, the participation of Criteria Caixa in the share capital of Telefónica, S.A., was 9.99%. As of June 30, 2026, no update to such shareholding has been reported, according to publicly available information. Likewise, and without this implying an incremental or additional participation, Fundación Bancaria Caixa d'Estalvis i Pensions de Barcelona, as the sole shareholder of Criteria Caixa, S.A.U., holds the same participation indirectly.

According to information provided by Public Investment Fund for the 2025 Annual Corporate Governance Report of Telefónica, S.A., as of December 31, 2025, the Public Investment Fund's stake in the share capital of Telefónica, S.A. was 9.97%. As of June 30, 2026, no update to such shareholding has been reported, according to publicly available information. The Public Investment Fund's indirect stake is held through Green Bridge Investment Company SCS (a company controlled by Saudi Telecom Company, which in turn is controlled by the Public Investment Fund).

Below is a summary of the relevant transactions of the Telefónica Group with companies belonging to the Criteria Caixa, SEPI, Green Bridge Investment Company SCS / STC and BBVA groups, excluding the payment of the dividend corresponding to its stake.

Associated companies and joint ventures participated by BBVA

The impact on the income statement of the transactions of Telefónica Group companies with their associated companies and joint ventures in which BBVA also participates are shown below:

Millions of euros	January -March 2026 (*)	January - June 2025
Revenue from operations	4	7
Expenses from operations	1	1
Finance cost from operations	-	1

(*) BBVA ceased to be considered a related party on March 26, 2026, after ceasing to have representation on the Board of Directors of Telefónica, S.A.

Other operations with BBVA

The impact on the consolidated income statement of the Telefónica Group due to the rest of the operations with BBVA is shown below:

Millions of euros	January -March 2026 (*)	January - June 2025
Finance costs	3	16
Receipt of services	-	3
Other expenses	-	-
Total costs	4	18
Finance income	-	8
Dividends received	-	18
Services rendered	10	33
Sale of goods	2	9
Other income	-	1
Total revenues	12	68

(*) BBVA ceased to be considered a related party on March 26, 2026, after ceasing to have representation on the Board of Directors of Telefónica, S.A.

Operations with Criteria Caixa

In the first half of 2026 the Telefónica Group has not carried out significant transactions with Criteria Caixa and the companies controlled by Criteria Caixa.

Operations with Green Bridge Investment Company SCS / STC Group

In the first half of 2026 the Telefónica Group has not carried out any significant transactions with Green Bridge Investment Company SCS or companies controlled by STC Group.

Operations with SEPI

In the first half of 2026 the Telefónica Group has not carried out significant transactions with SEPI and the companies controlled by SEPI.

Spanish General State Administration and State Institutional Public Sector

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 Telefónica Group carries out transactions with bodies and entities belonging to the Spanish General State Administration and the State Institutional Public Sector. In accordance with the exemption provided for in IAS 24, the balances and transactions with these bodies and 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.

The Telefónica Group has not carried out any transactions with bodies and entities belonging to the Spanish General State Administration and the State Institutional Public Sector that, considered individually, have had a significant impact on the consolidated income statement for the first half of 2026.

On June 25, 2026, Telefónica Infra agreed to the constitution of Gigafactoría Española de Inteligencia Artificial, S.L. (AIGF), an entity in which the Sociedad Española para la Transformación Tecnológica, E.P.E. participates (see note 26).

Appendix II summarizes the main regulatory aspects that affect the telecommunications sector in Spain, in relation to the information in this regard included in Appendix VI of the consolidated financial statements corresponding to the year 2025.

Other significant shareholders

During the first half of 2026, BlackRock, Inc. was a significant shareholder. This shareholder is not considered a related party as it has no representation on the Board of Directors of Telefónica, S.A. and does not exercise significant influence over the Company.

According to the data included in the communication submitted by BlackRock, Inc. to the CNMV (Spanish National Securities Market Commission) as of June 23, 2026, BlackRock, Inc.'s stake in the share capital of Telefónica, S.A. was 6.241%, including the percentage of voting rights attributed to shares and those generated through financial instruments.

Likewise, according to the data collected in the communication sent by BBVA to the CNMV, as of June 30, 2026, BBVA's stake in the share capital of Telefónica, S.A. was 1.965%, therefore ceasing to be considered a significant shareholder of the company.

Other related parties

Transactions with associates and joint ventures are described in Note 8.

During the first half of 2026 and 2025, no transactions were carried out by the Directors or Senior Management with Telefónica, S.A. or with a Telefónica Group company, other than those arising from the ordinary course of business of the Group.

Directors' and Senior Executives' compensation and other information

Pursuant to the disclosure established in Circular 3/2018, of June 28, of the Comisión Nacional del Mercado de Valores (the Spanish National Securities commission, or "CNMV"), on periodic reporting by issuers, the compensation and benefits paid to members of the Company's Board of Directors in the first six months of 2026 and 2025 are as follows.

Directors Thousands of euros	January -June 2026	January -June 2025
Remuneration for belonging to the Board of Directors and/or Board Committees	1,483	1,596
Salary	1,687	1,723
Variable Remuneration in cash (1)	2,818	2,269
Remuneration Systems based on shares (2)	-	-
Severance Payments	-	40,903
Long-Term Savings Systems	518	543
Other Concepts	200	273
Total	6,706	47,307

(1 ) The proportional amount of the target variable remuneration corresponding to the period from January to June 2026 has been disclosed. However, the final amount of this variable remuneration for financial year 2026 will be determined according to the level of achievement of the established objectives, as approved by the Company's Board of Directors during the first quarter of 2027, following a favourable report from the Nomination, Compensation and Corporate Governance Committee.

It is also noted that, during the first half of 2026, the shares accrued as of December 31, 2025, were delivered to the Chief Operating Officer (C.O.O.). These shares corresponded to the third cycle (2023-2025) of the Long-Term Incentive Plan (Performance Share Plan - PSP), which commenced on January 1, 2023 and ended on December 31, 2025, as described in the Company's 2025 Annual Financial Report.

In addition, the total amounts accrued to Senior Executives of the Company, excluding those that are also members of the Board of Directors, for all items in the first six months of 2026 and 2025 are as follows.

Senior Executives

Thousands of euros

January - June

2026

January - June

2025

Total compensation paid to Senior Executives(3)

3,092

4,749

The "Total compensation paid to Senior Executives" section includes the total amount accrued for all items (excluding the amount of the remuneration systems based on shares) during the first six months of fiscal years 2026 and 2025. Additionally, it is also noted that in the first half of 2026, the shares accrued as of December 31, 2025, corresponding to the third cycle (2023-2025) of the Long-Term Incentive Plan (Performance Share Plan - PSP), which began on January 1, 2023 and ended on December 31, 2025, were delivered to the Senior Executives, as stated in the Company's 2025 Annual Financial Report.

‌Note 10. Financial assets and other non-current assets

The breakdown of financial assets and other non-current assets of the Telefónica Group at June 30, 2026 and December 31, 2025 is as follows:

Millions of euros	06/30/2026	12/31/2025
Non-current financial assets (Note 14)	4,483	5,114
Investments	202	186
Credits and other financial assets	830	1,168
Deposits and guarantees	564	876
Trade receivables	1,014	1,072
Receivables for subleases	15	9
Impairment of trade receivables	(23)	(116)
Long-term derivative financial assets (Note 17)	1,880	1,919
Other non-current assets	1,664	1,625
Contractual assets	303	305
Deferred expenses	866	893
Long-term receivables for taxes	148	133
Prepayments	348	295
Total	6,147	6,740

As of June 30, 2026, the amount of investments in financial instruments to cover the commitments acquired by the Group's insurance companies amounts to 369 million euros (333 million euros at December 31, 2025), of which 37 million euros (292 million euros at December 31, 2025) are classified in "Credits and other financial assets" and 332 million euros (41 million euros at December 31, 2025) in "Other current financial assets", see Note 13.

"Deposits and guarantees" includes at June 30, 2026, 27 million euros associated with collateral guarantees of Telefónica, S.A., classified as non-current according to the maturity of the underlying derivative instruments to which they relate (309 million euros at December 31, 2025).

‌Note 11. Inventories

The detail of inventories of the Telefónica Group at June 30, 2026 and December 31, 2025 is as follows:

Millions of euros	06/30/2026	12/31/2025
Audiovisual rights, handsets and other inventories	923	900
Inventories impairment provision	(31)	(38)
Inventories	892	862

‌Note 12. Receivables and other current assets

The detail of receivables and other current assets of the Telefonica Group at June 30, 2026, December 31, 2025 is as follows:

Millions of euros	06/30/2026	12/31/2025
Receivables (Note 14)	6,466	7,187
Trade receivables	6,989	7,902
Impairment of trade receivables	(853)	(1,133)
Receivables from associates and joint ventures (Note 8)	117	188
Other receivables	213	229
Other current assets	2,699	2,475
Contractual assets	223	233
Capitalized costs	705	848
Prepayments	1,636	1,288
Short-term insurance and reinsurance contracts assets	127	96
Short-term insurance and reinsurance contracts assets from associates and joint ventures (Note 8)	8	10
Total	9,165	9,662

In the first half of 2026 the impact of impairment of trade receivables in the consolidated income statement (see Note 23) amounted to 230 million euros (218 million euros in the first half of 2025).

‌Note 13. Other current financial assets

The breakdown of other current financial assets of the Telefónica Group at June 30, 2026 and December 31, 2025 is as follows:

Millions of euros	06/30/2026	12/31/2025
Short-term credits	917	222
Short-term deposits and guarantees	532	207
Short-term derivative financial assets (Note 17)	261	279
Other current financial assets	447	162
Total	2,156	870

"Short-term credits" at June 30, 2026 includes fixed term accounts engaged by Telefónica, S.A. with several bank entities amounting to 751 million euros.

"Short-term deposits and guarantees" at June 30, 2026 includes 465 million euros associated with collateral guarantees of Telefónica, S.A., classified as current according to the maturity of the underlying derivative instruments to which they relate (144 million euros at December 31, 2025).

As of June 30, 2026, there were investments in financial instruments to cover commitments undertaken by the Group's insurance companies amounting to 369 million euros (333 million euros at December 31, 2025) of which 332 million euros (41 million euros at December 31, 2025) are classified in "Other current financial assets" and 37 million euros (292 million euros at December 31, 2025) are classified in "Credits and other financial assets", see Note 10 .

‌Note 14. Breakdown of financial assets by category

The breakdown of financial assets of the Telefónica Group at June 30, 2026 and December 31, 2025 is as follows:

June 30, 2026

Fair value Fair value through other through profit or comprehensive loss income Measurement hierarchy (*) Fair Debt Equity Amor- Total Total Held for value instru- instrum tized carrying fair Millions of euros trading option ments ents Hedges Level 1 Level 2 Level 3 cost amount value
Non-current financial assets (Note 10)	250	-	183	118	1,774	177	2,146	2	2,158	4,483	4,483
Investments	84	-	-	118	-	117	82	2	-	202	202
Credits and other financial assets	60	-	-	-	-	60	-	-	770	830	830
Deposits and guarantees	-	-	-	-	-	-	-	-	564	564	564
Derivative instruments (Note 17)	106	-	-	-	1,774	-	1,880	-	-	1,880	1,880
Trade receivables	-	-	183	-	-	-	183	-	831	1,014	991
Trade receivables for subleases	-	-	-	-	-	-	-	-	15	15	15
Impairment of trade receivables	-	-	-	-	-	-	-	-	(23)	(23)	-
Current financial assets	401	-	714	-	228	351	983	9	12,428	13,771	13,771
Trade receivables (Note 12)	-	-	714	-	-	-	714	-	6,605	7,319	6,466
Impairment of trade receivables (Note 12)	-	-	-	-	-	-	-	-	(853)	(853)	-
Other current financial assets (Note 13)	401	-	-	-	228	351	269	9	1,527	2,156	2,156
Cash and cash equivalents	-	-	-	-	-	-	-	-	5,149	5,149	5,149
Total	651	-	897	118	2,002	528	3,128	11	14,586	18,254	18,254

(*) Level 1: Quoted prices; Level 2: Other directly observable market inputs; Level 3: Inputs not based on observable market data.

At June 30, 2026, there were deposits related to the collateral guarantees (CSA) on derivatives signed by Telefónica, S.A. and its counterparties for the credit risk management of derivatives amounting to 492 million euros, of which an amount of 179 million euros corresponds to cross currency swap (453 million euros of which an amount of 228 million euros corresponds to cross currency swap at December 31, 2025).

In addition, 44,558 bonds issued by Telefónica Emisiones, S.A.U. are deposited in a securities account of Telefónica S.A. linked to these collateral contracts as guarantee for a nominal amount of 39 million euros (60,328 bonds for a nominal amount of 51 million euros at December 31, 2025).

The calculation of the fair values of the Telefónica 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.

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