Telefónica S A : 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

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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 Ion ie a, S.A. and sua stdiar ics c omp osing 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 1 PricewaterhouseCoopers Auditores, S.L. Torre PwC, P.° de la Castellana zs9 B, z8 4 6 Madrid, España Tel.: +34 9 1 5 68 4 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. (*) 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, 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 (*) 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). Debt indicators As calculated by the Group, net financial debt includes: Adding the following liabilities: Current and non-current financial liabilities in our consolidated statement of financial position (which includes the negative mark-to-market value of derivatives), 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 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: Cash and cash equivalents, Other current financial assets (which include short-term derivatives), Cash and other financial assets included in "Non-current assets and disposal groups classified as held for sale", The positive mark-to-market value of derivatives with a maturity beyond one year, 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. Mark-to-market adjustment by cash flow hedging activities related to debt. 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 (*) 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). ‌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 (*) 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. (*) 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). 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 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 cu rrent 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. Attention : This is an excerpt of the original content. 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